diff --git a/AGENTS.md b/AGENTS.md index c9afaa80c..00c31b182 100644 --- a/AGENTS.md +++ b/AGENTS.md @@ -586,7 +586,7 @@ Default agentic path is checklist map-nav (`nav/`): PLANNER (`plan_query`) → H 2. Filters by `allowed_chunk_types` (data_type parameter) 3. Hydrates `connect_to` targets (related table chunks inlined into text) 4. Cleans asset path references from content -5. Attaches citation: `{document_id, chunk_id, source_file_name, section_path}` +5. Public projection builds `source`: `{document_id, source_file_name, section_path}` plus `page_nums` for `chunk_type=page` when present ### Small Corpus Optimization @@ -666,12 +666,14 @@ cd apps/worker && uv run worker.py # Celery worker ### Debug Scripts (Worker) +PDF/PPT debug is track-split (not a single all-format one-shot): + | Script | Purpose | |:---|:---| -| `debug_parse.py` | Unified parsing debug: all formats, `--stop-at profile/hierarchy/full`, `--run-db` | -| `debug_agentic_e2e.py` | End-to-end agentic retrieval test | -| `debug_profiler.py` | Document profiler testing | -| `debug_toc_detection.py` | TOC detection and hierarchy building | +| `debug_text_track.py` | TEXT-TRACK (`chunk`) staged debug: `--stop-at profile/mineru/hierarchy/full`, `--clean` | +| `page_memory/debug_pm_stage0..5.py` | PAGE-TRACK (`page_memory`) staged debug (bootstrap → finalize); shared `--clean` wipes output dir | +| `debug_retrieval.py` | Retrieval debug | +| `_debug_publish.py` | Optional `--run-db` publish helper for the scripts above | ### Quality Checks diff --git a/apps/api/app/data/demo_documents/financial-goog-10-k-2025/chunks.json b/apps/api/app/data/demo_documents/financial-goog-10-k-2025/chunks.json index e319a5f90..ee4605510 100644 --- a/apps/api/app/data/demo_documents/financial-goog-10-k-2025/chunks.json +++ b/apps/api/app/data/demo_documents/financial-goog-10-k-2025/chunks.json @@ -1,17 +1,125 @@ { "chunks": [ { - "chunk_id": "node_14237151-cfc8-5cef-8b10-1c0875146af8", - "type": "page", - "content": "UNITED STATES\nSECURITIES AND EXCHANGE COMMISSION\nWashington, D.C. 20549\n___________________________________________\nFORM 10-K\n___________________________________________\n(Mark One)\n☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\nFor the fiscal year ended December 31, 2025\nOR\n☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\nFor the transition period from to .\nCommission file number: 001-37580\n___________________________________________\nAlphabet Inc.\n(Exact name of registrant as specified in its charter)\n___________________________________________\nDelaware 61-1767919\n(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)\n1600 Amphitheatre Parkway\nMountain View, CA 94043\n(Address of principal executive offices, including zip code)\n(650) 253-0000\n(Registrant's telephone number, including area code)\nSecurities registered pursuant to Section 12(b) of the Act:\nTitle of each class Trading Symbol(s) Name of each exchange on which registered\nClass A Common Stock, $0.001 par value GOOGL Nasdaq Stock Market LLC\n(Nasdaq Global Select Market)\nClass C Capital Stock, $0.001 par value GOOG Nasdaq Stock Market LLC\n(Nasdaq Global Select Market)\n2.375% Senior Notes due 2028 — Nasdaq Stock Market LLC\n2.500% Senior Notes due 2029 — Nasdaq Stock Market LLC\n2.875% Senior Notes due 2031 — Nasdaq Stock Market LLC\n3.000% Senior Notes due 2033 — Nasdaq Stock Market LLC\n3.125% Senior Notes due 2034 — Nasdaq Stock Market LLC\n3.375% Senior Notes due 2037 — Nasdaq Stock Market LLC\n3.500% Senior Notes due 2038 — Nasdaq Stock Market LLC\n4.000% Senior Notes due 2044 — Nasdaq Stock Market LLC\n3.875% Senior Notes due 2045 — Nasdaq Stock Market LLC\n4.000% Senior Notes due 2054 — Nasdaq Stock Market LLC\n4.375% Senior Notes due 2064 — Nasdaq Stock Market LLC\nSecurities registered pursuant to Section 12(g) of the Act:\nTitle of each class\nNone\n___________________________________________\nIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities\nAct. Yes ☒ No ☐\nIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the\nAct. Yes ☐ No ☒", - "path": "GOOG 10-K 2025.pdf/p1", - "metadata": { - "length": 2310, - "summary": "UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________ FORM 10-K ___________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the f...", - "page_nums": [ - 1 + "chunk_id": "node_217640bb-3ccf-5be6-8937-f6e219d188d5", + "type": "page", + "content": "UNITED STATES\nSECURITIES AND EXCHANGE COMMISSION\nWashington, D.C. 20549\n___________________________________________\nFORM 10-K \n___________________________________________\n(Mark One)\n☒\nANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\nFor the fiscal year ended December 31, 2025 \nOR\n☐\nTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\nFor the transition period from to .\nCommission file number: 001-37580 \n___________________________________________\nAlphabet Inc. \n(Exact name of registrant as specified in its charter)\n___________________________________________\nDelaware\n61-1767919\n(State or other jurisdiction of incorporation or organization)\n(I.R.S. Employer Identification No.)\n1600 Amphitheatre Parkway \nMountain View, CA 94043 \n(Address of principal executive offices, including zip code)\n(650) 253-0000 \n(Registrant's telephone number, including area code)\nSecurities registered pursuant to Section 12(b) of the Act:\nTitle of each class\nTrading Symbol(s)\nName of each exchange on which registered\nClass A Common Stock, $0.001 par value\nGOOGL\nNasdaq Stock Market LLC\n(Nasdaq Global Select Market)\nClass C Capital Stock, $0.001 par value\nGOOG\nNasdaq Stock Market LLC\n(Nasdaq Global Select Market)\n2.375% Senior Notes due 2028\n—\nNasdaq Stock Market LLC\n2.500% Senior Notes due 2029\n—\nNasdaq Stock Market LLC\n2.875% Senior Notes due 2031\n—\nNasdaq Stock Market LLC\n3.000% Senior Notes due 2033\n—\nNasdaq Stock Market LLC\n3.125% Senior Notes due 2034\n—\nNasdaq Stock Market LLC\n3.375% Senior Notes due 2037\n—\nNasdaq Stock Market LLC\n3.500% Senior Notes due 2038\n—\nNasdaq Stock Market LLC\n4.000% Senior Notes due 2044\n—\nNasdaq Stock Market LLC\n3.875% Senior Notes due 2045\n—\nNasdaq Stock Market LLC\n4.000% Senior Notes due 2054\n—\nNasdaq Stock Market LLC\n4.375% Senior Notes due 2064\n—\nNasdaq Stock Market LLC\nSecurities registered pursuant to Section 12(g) of the Act:\nTitle of each class\nNone\n___________________________________________\nIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities \nAct. Yes ☒ No ☐\nIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the \nAct. Yes ☐ No ☒\n\nIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities \nExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such \nreports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐\nIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted \npursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that \nthe registrant was required to submit such files). Yes ☒ No ☐\nIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller \nreporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller \nreporting company,” and \"emerging growth company\" in Rule 12b-2 of the Exchange Act.\nLarge accelerated filer\n☒\n \nAccelerated filer\n☐\nNon-accelerated filer\n☐\nSmaller reporting company\n☐\nEmerging growth company\n☐\nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for \ncomplying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. \n☐\nIndicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the \neffectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by \nthe registered public accounting firm that prepared or issued its audit report. ☒\nIf securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the \nregistrant included in the filing reflect the correction of an error to previously issued financial statements. ☐\nIndicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based \ncompensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ \nIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒\nAs of June 30, 2025, the aggregate market value of shares held by non-affiliates of the registrant (based upon the closing sale \nprices of such shares on the Nasdaq Global Select Market on June 30, 2025) was approximately $1.9 trillion. For purposes of \ncalculating the aggregate market value of shares held by non-affiliates, we have assumed that all outstanding shares are held by \nnon-affiliates, except for shares held by each of our executive officers, directors, and 5% or greater stockholders. In the case of 5% \nor greater stockholders, we have not deemed such stockholders to be affiliates unless there are facts and circumstances which \nwould indicate that such stockholders exercise any control over our company, or unless they hold 10% or more of our outstanding \ncommon stock. These assumptions should not be deemed to constitute an admission that all executive officers, directors, and 5% or \ngreater stockholders are, in fact, affiliates of our company, or that there are not other persons who may be deemed to be affiliates of \nour company. Further information concerning shareholdings of our officers, directors, and principal stockholders is included or \nincorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K.\nAs of January 28, 2026, there were 5,822 million shares of Alphabet’s Class A stock outstanding, 837 million shares of Alphabet’s \nClass B stock outstanding, and 5,438 million shares of the Alphabet’s Class C stock outstanding.\n___________________________________________\nDOCUMENTS INCORPORATED BY REFERENCE\nPortions of the registrant’s Proxy Statement for the 2026 Annual Meeting of Stockholders are incorporated herein by reference in \nPart III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and \nExchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2025.\n\nAlphabet Inc.\nForm 10-K\nFor the Fiscal Year Ended December 31, 2025 \nTABLE OF CONTENTS\n \n \nPage\nNote About Forward-Looking Statements\n3\nPART I\nItem 1.\nBusiness\n3\nItem 1A.\nRisk Factors\n9\nItem 1B.\nUnresolved Staff Comments\n23\nItem 1C.\nCybersecurity\n23\nItem 2.\nProperties\n24\nItem 3.\nLegal Proceedings\n24\nItem 4.\nMine Safety Disclosures\n24\nPART II\nItem 5.\nMarket for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases \nof Equity Securities\n25\nItem 6.\n[Reserved]\n27\nItem 7.\nManagement’s Discussion and Analysis of Financial Condition and Results of Operations\n28\nItem 7A.\nQuantitative and Qualitative Disclosures About Market Risk\n41\nItem 8.\nFinancial Statements and Supplementary Data\n44\nItem 9.\nChanges in and Disagreements With Accountants on Accounting and Financial Disclosure\n89\nItem 9A.\nControls and Procedures\n89\nItem 9B.\nOther Information\n89\nItem 9C.\nDisclosure Regarding Foreign Jurisdictions that Prevent Inspections\n90\nPART III\nItem 10.\nDirectors, Executive Officers, and Corporate Governance\n91\nItem 11.\nExecutive Compensation\n91\nItem 12.\nSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder \nMatters\n91\nItem 13.\nCertain Relationships and Related Transactions, and Director Independence\n91\nItem 14.\nPrincipal Accountant Fees and Services\n91\nPART IV\nItem 15.\nExhibits, Financial Statement Schedules\n92\nItem 16.\nForm 10-K Summary\n96\nSignatures\nTable of Contents\nAlphabet Inc.\n2.\n\nNote About Forward-Looking Statements\nThis Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private \nSecurities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as, but \nare not limited to, \"anticipates,\" \"believes,\" \"could,\" \"estimates,\" \"expects,\" \"intends,\" \"may,\" \"plans,\" \"predicts,\" \n\"projects,\" \"will be,\" \"will continue,\" \"will likely result,\" and similar expressions. These include, among other things, \nexpectations regarding the growth of our business and revenues, including factors that may impact such growth, and \nfluctuations in our revenues and margins; statements relating to plans, expectations, and trends about our core \nbusiness metrics, costs and expenses, capital expenditures, sources of funding, products and services, strategic \nbusiness transactions, and other aspects of our business operations and strategies; statements regarding the global \nmacroeconomic and regulatory environment; as well as other statements regarding our future operations, financial \ncondition and prospects, and actual or potential risk and liability exposures. Forward-looking statements may appear \nthroughout this report and other documents we file with the Securities and Exchange Commission (SEC), including \nwithout limitation, the following sections: Part I, Item 1 \"Business;\" Part I, Item 1A \"Risk Factors;\" and Part II, Item 7 \n\"Management's Discussion and Analysis of Financial Condition and Results of Operations.\" These forward-looking \nstatements are based on current expectations and assumptions that are subject to risks and uncertainties, which could \ncause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could \ncause or contribute to such differences include, but are not limited to, those discussed in this Annual Report on Form \n10-K, including the risks discussed in Part I, Item 1A \"Risk Factors\" and the trends discussed in Part II, Item 7 \n\"Management's Discussion and Analysis of Financial Condition and Results of Operations,\" and those discussed in \nother documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any \nrevision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers \nare cautioned not to place undue reliance on such forward-looking statements.\nAs used herein, \"Alphabet,\" \"the company,\" \"we,\" \"us,\" \"our,\" and similar terms include Alphabet Inc. and its \nsubsidiaries, unless the context indicates otherwise.\n\"Alphabet,\" \"Google,\" and other trademarks of ours appearing in this report are our property. We do not intend our \nuse or display of other companies' trade names or trademarks to imply an endorsement or sponsorship of us by such \ncompanies, or any relationship with any of these companies.\nPART I\nITEM 1.\nBUSINESS\nOverview\nAs our founders Larry and Sergey wrote in the original founders' letter, \"Google is not a conventional company. \nWe do not intend to become one.\" That unconventional spirit has been a driving force throughout our history, inspiring \nus to tackle big problems and invest in moonshots. It led us to be a pioneer in the development of artificial intelligence \n(AI) and, since 2016, be an AI-first company. We continue this work under the leadership of Alphabet and Google CEO, \nSundar Pichai.\nAlphabet is a collection of businesses — the largest of which is Google. We report Google in two segments, \nGoogle Services and Google Cloud, and all non-Google businesses collectively as Other Bets. Supporting these \nbusinesses, we have centralized certain AI-related research and development focused on advanced research in AI and \ndeveloping the frontier models that serve our businesses, which is reported in Alphabet-level activities. Alphabet's \nstructure is about helping each of our businesses prosper through strong leaders and independence.\nAccess and Technology for Everyone\nThe Internet is one of the world’s most powerful equalizers; it propels ideas, people, and businesses large and \nsmall. Our mission to organize the world’s information and make it universally accessible and useful is as relevant \ntoday as it was when we were founded in 1998. Since then, we have evolved from a company that helps people find \nanswers to a company that also helps people get things done. \nWe are focused on building an even more helpful Google for everyone, and we aspire to give everyone the tools \nthey need to increase their knowledge, health, happiness, and success. Google Search helps people find information \nand make sense of the world in more natural and intuitive ways, with trillions of searches on Google every year. \nYouTube provides people with entertainment, information, and opportunities to learn something new and helps support \nthe creator economy through the YouTube Partner Program. Google Cloud helps customers build for the future, \nimprove productivity, reduce costs, and unlock new growth engines. We continually innovate and build new products \nand features to help our users, partners, customers, and communities and have invested more than $200 billion in \nresearch and development in the last five years in support of these efforts.\nTable of Contents\nAlphabet Inc.\n3.\n\nMaking AI Helpful for Everyone\nWe believe AI is a profound platform shift that can bring meaningful and positive change to people and societies \nacross the world, and to our business. We aim to build the most advanced, safe, and responsible AI through our full-\nstack approach, which spans AI-optimized infrastructure; world-class research, including models and tooling; and our \nproducts and platforms that bring AI to billions of people, developers, and enterprises.\nAt the foundation of our full-stack approach is our AI-optimized infrastructure — a key differentiator enabling us to \npower our own products, such as Search and YouTube, and support the services we provide to our Google Cloud \ncustomers. Our technical infrastructure allows us to use and offer our customers a range of AI accelerator options, \nincluding specialized Graphics Processing Units (GPUs) and our own custom-built Tensor Processing Units (TPUs), \nsuch as Ironwood, our seventh-generation TPU. We are focused on driving efficiencies in our data centers, allowing us \nto leverage our technical infrastructure to deliver our products and services at an increasing scale while simultaneously \nenabling world-class research and model development.\nOver the last decade, our research teams have pushed the boundaries of AI forward, which is displayed through \nGemini 3, our most intelligent AI model yet. Designed to deliver advanced multimodal understanding, Gemini 3 \nrepresents our most capable iteration of agentic and generative coding technologies. Gemini 3 integrates enhanced \nreasoning capabilities to support visualizations and interactive user experiences across our product ecosystem, \nincluding Search and the Gemini app. \n As technology continues to improve rapidly, we are focused on bringing our latest AI advances to our products \nand platforms. We continue to help our users access information and knowledge, express themselves, and get things \ndone by embedding the power of generative AI and Gemini into our products and platforms. Today, all 15 of our half-\nbillion-user products — including seven with two billion users — use our Gemini models. For our Google Cloud \ncustomers, our offerings are helping organizations stay at the forefront of innovation with solutions such as Gemini \nEnterprise and Gemini for Google Workspace. \nGuided by our AI principles, we believe our approach to AI must be both bold and responsible. That means \ndeveloping AI in a way that maximizes the positive benefits to society while addressing its potential challenges. \nMoonshots\nMany companies get comfortable doing what they have always done, making only incremental changes. This \nincrementalism leads to irrelevance over time, especially in technology, where change tends to be revolutionary, not \nevolutionary. \nOur early investments in AI started out as moonshots but are now incorporated into our core products and central \nto future developments. In Other Bets, our fully autonomous driving technology company, Waymo, is now providing \nfully autonomous, paid ride-hailing services to customers in multiple cities. Isomorphic Labs is reimagining the drug \ndiscovery process from first principles, applying AI to accelerate the development of new medicines. We continue to \nlook toward the future and to invest for the long term, most notably for the application of AI to our products and \nservices, as well as other frontier technologies such as quantum computing.\nPrivacy and Security\nWe make it a priority to protect the privacy and security of our products, users, and customers, even if there are \nnear-term financial consequences. We do this by continuously investing in building products that are secure by default; \nstrictly upholding responsible data practices that emphasize privacy by design; and building easy-to-use settings that \nput people in control. We are continually enhancing these efforts over time, whether by enabling users to auto-delete \ntheir data, applying privacy technologies like on-device processing, giving people tools to control their experience, or \nadvancing anti-malware, anti-phishing, and password security features.\nGoogle\nFor reporting purposes Google comprises two segments: Google Services and Google Cloud.\nGoogle Services\nServing Our Users\nWe have always been committed to building helpful products that can improve the lives of millions of people \nworldwide. Our product innovations are what make our services widely used, and our brand one of the most \nrecognized in the world. Google Services' core products and platforms include ads, Android, Chrome, devices, Gmail, \nGoogle Drive, Google Gemini, Google Maps, Google Photos, Google Play, Search, and YouTube, with broad and \ngrowing adoption by users around the world.\nTable of Contents\nAlphabet Inc.\n4.\n\nOur products and services have come a long way since the company was founded more than 25 years ago. \nWhile Google Search started as a way to find web pages, organized into ten blue links, we have driven technical \nadvancements and product innovations that have transformed Google Search into a dynamic, multimodal experience. \nLarge language models have made it possible to express more natural language queries, vastly improving the types of \nquestions users can ask, and the quality of results. For example, AI Overviews makes it easier to ask Google anything \nand get a helpful response. AI Mode allows users to ask more nuanced questions that might have previously taken \nmultiple searches, using Gemini’s advanced reasoning, thinking, and multimodal capabilities.\nThis drive to make information more accessible and helpful has led us over the years to improve the discovery \nand creation of digital content both on the web and through platforms like Google Play and YouTube. People are \nconsuming many forms of digital content, including watching long and short form videos and podcasts, streaming TV, \nplaying games, listening to music, reading books, and using apps. Working with content creators and partners, we \ncontinue to build new ways for people around the world to create and find great digital content.\nFueling all of these great digital experiences are extraordinary platforms and devices. That is why we continue to \ninvest in platforms like our Android mobile operating system, Chrome browser, and Chrome operating system, as well \nas our family of devices. We see tremendous potential for devices to be helpful and make people's lives easier by \ncombining the best of our AI, software, and hardware. This potential is reflected in our latest generation of devices, \nsuch as the new Pixel 10 series and the Pixel Watch 4. Creating products and services that people rely on every day is \na journey that we are investing in for the long-term.\nHow We Make Money\nWe have built world-class advertising technologies for advertisers, agencies, and publishers to power their digital \nmarketing businesses. Our advertising solutions help millions of companies grow their businesses through our wide \nrange of products across devices and formats, and we aim to ensure positive user experiences by serving the right ads \nat the right time and by building deep partnerships with brands and agencies. AI has been foundational to our \nadvertising business for more than a decade. Products like Demand Gen, Performance Max, and Product Studio use \nthe full power of our AI to help advertisers find untapped and incremental conversion opportunities.\nGoogle Services generates revenues primarily by delivering both performance and brand advertising that appears \non Google Search & other properties, YouTube, and Google Network partners' properties (\"Google Network \nproperties\"). We continue to invest in both performance and brand advertising and seek to improve the measurability of \nadvertising so advertisers understand the effectiveness of their campaigns.\n•\nPerformance advertising creates and delivers relevant ads that users will click on leading to direct \nengagement with advertisers. Performance advertising lets our advertisers connect with users while driving \nmeasurable results. Our ads tools allow performance advertisers to create simple text-based ads.\n•\nBrand advertising helps enhance users' awareness of and affinity for advertisers' products and services, \nthrough videos, text, images, and other interactive ads that run across various devices. We help brand \nadvertisers deliver digital videos and other types of ads to specific audiences for their brand-building marketing \ncampaigns. \nWe have allocated substantial resources to stopping bad advertising practices and protecting users on the web. \nWe focus on creating the best advertising experiences for our users and advertisers in many ways, including filtering \nout invalid traffic, removing billions of bad ads from our systems every year, and closely monitoring the sites, apps, and \nvideos where ads appear and blocklisting them when necessary to ensure that ads do not fund bad content.\nIn addition, Google Services generates revenues from products and services beyond advertising, including:\n•\nconsumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV, \nYouTube Music and Premium, and NFL Sunday Ticket, as well as Google One, which offers access to our \nmost capable Gemini models;\n•\nplatforms, which primarily include revenues from Google Play sales of apps and in-app purchases; and\n•\ndevices, which primarily include sales of the Pixel family of devices.\nGoogle Cloud\nThrough our Google Cloud Platform and Google Workspace offerings, Google Cloud generates revenues \nprimarily from consumption-based fees and subscriptions for infrastructure, platform, applications, and other cloud \nservices. Customers use Google Cloud in multiple ways such as:\nTable of Contents\nAlphabet Inc.\n5.\n\n•\nAI-optimized Infrastructure: runs on our Cloud, at the edge, or in customers' data centers. It can be used to \nmigrate and modernize information technology (IT) systems and to train and serve various types of AI \nmodels. Our AI infrastructure delivers cost-performance for AI workloads. We offer a range of AI accelerators, \nincluding our custom TPUs and specialized GPUs, as well as AI-optimized storage offerings, and efficient AI \nsoftware. \n•\nDeveloper Platform: delivers a fully managed AI development platform, through Vertex AI, for accessing, \ntuning, augmenting, and deploying custom models and agents, helping customers build applications with more \nthan 200 foundation models, including our Gemini family, third-party, and open models.\n•\nCybersecurity: provides AI-powered threat intelligence and cybersecurity solutions to help customers detect, \nanalyze, protect against, and respond to a broad range of cybersecurity threats.\n•\nData and Analytics: enables customers to migrate, clean, prepare, and feed data into their models. Our data \nplatform also unifies data lakes, data warehouses, data governance, and advanced machine learning into a \nsingle platform that helps users analyze data using AI models across any cloud.\n•\nAgents: \n◦\nGemini Enterprise: empowers teams to discover, create, share, and run AI agents all in one secure \nplatform, bringing the best of Google AI to employees through an intuitive chat interface, helping to \nautomate workflows and drive smarter business outcomes.\n◦\nGemini for Google Workspace: brings our AI-powered agents into Gmail, Docs, Sheets, and more to \nhelp users write, organize, visualize, accelerate workflows, and have more productive meetings.\nOther Bets\n Across Alphabet, we are also using technology to try to solve big problems that affect a wide variety of industries, \nincluding transportation and health technology. Alphabet’s investment in the portfolio of Other Bets includes businesses \nthat are at various stages of development, ranging from those in the research and development phase, such as X, our \nmoonshot factory focused on developing breakthrough technologies, to those that are scaling commercialization, such \nas Waymo, which is expanding to more cities domestically, entering international markets, and further scaling \noperations. \nOther Bets operate as independent companies and some of them have their own boards with independent \nmembers and outside investors. While these early-stage businesses naturally come with considerable uncertainty, \nsome of them are already generating revenue and making important strides in their industries. Revenues from Other \nBets are generated primarily from the sale of autonomous transportation and internet services.\nCompetition\nOur business is characterized by rapid change as well as new and disruptive technologies. We face formidable \ncompetition in every aspect of our business, including but not limited to, from:\n•\ngeneral purpose search engines and information services;\n•\nvertical search engines and e-commerce providers for queries on topics such as those related to travel, jobs, \nand health, which users may navigate directly to rather than go through Google;\n•\nonline advertising platforms and networks, including online shopping and streaming services;\n•\nother forms of advertising, such as billboards, magazines, newspapers, radio, and television, as our \nadvertisers typically advertise in multiple media, both online and offline;\n•\ndigital content and application platform providers;\n•\nproviders of enterprise cloud services;\n•\nAI model developers and providers of AI products and services;\n•\ncompanies that design, manufacture, and market consumer hardware products, including businesses that \nhave developed proprietary platforms;\n•\nproviders of digital video services; \n•\nsocial networks, which users may rely on for product or service referrals, rather than seeking information \nthrough traditional search engines; and\n•\nproviders of workspace communication and connectivity products. \nTable of Contents\nAlphabet Inc.\n6.\n\nCompeting successfully depends heavily on our ability to continually develop and distribute innovative products \nand technologies to the marketplace across our businesses. For example, for advertising, competing successfully \ndepends on attracting and retaining:\n•\nusers, for whom other products and services are literally one click away, on the basis of the relevance of our \nadvertising, as well as the general usefulness, security, and availability of our products and services;\n•\nadvertisers, primarily based on our ability to generate sales leads, and ultimately customers, and to deliver \ntheir advertisements in an efficient and effective manner across a variety of distribution channels even as \ntrends in advertising mediums and user preferences change; and\n•\ncontent providers, primarily based on the quality of our advertiser base, our ability to help these partners \ngenerate revenues from advertising, and the terms of our agreements with them.\nFor additional information about competition, see Item 1A Risk Factors of this Annual Report on Form 10-K. \nCulture and Workforce\nOur people are critical for our continued success, so we work hard to create an environment where employees \ncan have fulfilling careers and perform at a high level. We offer industry-leading benefits and programs to take care of \nthe diverse needs of our employees and their families, including opportunities for career growth and development, \nresources to support their financial health, and access to excellent healthcare choices. Our competitive compensation \nprograms help us to attract and retain key talent, and we will continue to invest in recruiting talented people to technical \nand non-technical roles and rewarding them well. We provide a variety of high-quality training and support to managers \nto build and strengthen their capabilities — ranging from courses for new managers, to learning resources that help \nthem provide feedback and manage performance, to coaching and individual support.\nAs of December 31, 2025, Alphabet had 190,820 employees. We have work councils and statutory employee \nrepresentation obligations in certain countries, and we are committed to supporting protected labor rights, maintaining \nan open culture, and listening to our employees. \nWhen appropriate we partner with outside companies on a contractual basis to provide a specialized service or to \ntemporarily cover a short-term need. The employees of our suppliers and staffing partners — vendors and temporary \nstaff, respectively — and independent contractors who are self-employed, make up our extended workforce. We \nchoose our partners and staffing agencies carefully, and review their compliance with Google’s Supplier Code of \nConduct.\nGovernment Regulation\nWe are subject to numerous United States (US) federal, state, and local, as well as foreign laws, and regulations \ncovering a wide variety of subjects, and the scope of this coverage continues to broaden with continuing new legal and \nregulatory developments in the US and internationally. Like other companies in the technology industry, we face \nincreasingly heightened scrutiny from both US and foreign governments with respect to our compliance with laws and \nregulations. Many of these laws and regulations are evolving and their applicability and scope, as interpreted by the \ncourts, remain uncertain. Particularly with regard to AI; competition; consumer protection; content moderation, \nincluding access restrictions for minors; data privacy and security; intellectual property; news publications; and \nsustainability and other social matters, we have seen an increase in new and evolving laws and regulations, as well as \nrelated enforcement actions and investigations, being proposed and implemented in recent years by legislative and \nregulatory bodies around the world. As we have seen in recent years, different laws and regulations on the same topic \nmay not always have the same requirements (and sometimes may seem to have conflicting requirements), and even \nwhen requirements overlap, the rules are not always consistently implemented, interpreted, and enforced from \njurisdiction to jurisdiction.\nOur compliance with these laws and regulations may be onerous and could, individually or in the aggregate, \nincrease our cost of doing business, make our products and services less useful, limit our ability to pursue certain \nbusiness practices or offer certain products and services (either in certain geographies or at all), cause us to change \nour business models and operations, affect our competitive position relative to our peers, or otherwise harm our \nbusiness, reputation, financial condition, and operating results.\nFor additional information about government regulation applicable to our business, see Item 1A Risk Factors; \nTrends in Our Business and Financial Effect in Part II, Item 7; and Legal Matters in Note 10 of the Notes to \nConsolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.\nTable of Contents\nAlphabet Inc.\n7.\n\nIntellectual Property\nWe rely on intellectual property such as trademarks, copyrights, patents, and trade secrets, as well as \nconfidentiality procedures and contractual provisions, to protect our proprietary technology and our brand. We have \nregistered, and applied for the registration of, US and international trademarks, service marks, domain names, and \ncopyrights. We have also filed patent applications in the US and foreign countries covering certain of our technology, \nand acquired patent assets to supplement our portfolio. We have licensed in the past, and expect that we may license \nin the future, certain of our rights to other parties. For additional information, see Item 1A Risk Factors of this Annual \nReport on Form 10-K.\nAvailable Information\nOur website is located at www.abc.xyz, and our investor relations website is located at www.abc.xyz/investor. \nAccess to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our \nProxy Statements, and any amendments to these reports, is available on our investor relations website, free of charge, \nafter we file or furnish them with the SEC and they are available on the SEC's website at www.sec.gov.\nWe webcast our earnings calls, as well as certain events we participate in or host with members of the investment \ncommunity, via our investor relations YouTube channel and website. Our investor relations website also provides \nnotifications of news or announcements regarding our financial performance and other items that may be material or of \ninterest to our investors, including SEC filings, investor events, press and earnings releases, and blogs. We also share \nGoogle news and product updates on Google's Keyword blog at https://www.blog.google/ and News From Google \npage on X at x.com/NewsFromGoogle, and our executive officers may also use certain social media channels, such as \nX and LinkedIn, to communicate information about earnings results and company updates, which may be of interest or \nmaterial to our investors. Further, corporate governance information, including our certificate of incorporation, bylaws, \ncorporate governance guidelines, board committee charters, and code of conduct, is also available on our investor \nrelations website under the heading \"Governance.\" The information contained on, or that may be accessed through our \nwebsites or our executive officers' social media channels, is not incorporated by reference into this Annual Report on \nForm 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to \nbe inactive textual references only.\nTable of Contents\nAlphabet Inc.\n8.\n\nITEM 1A.\nRISK FACTORS\nOur operations and financial results are subject to various risks and uncertainties, including but not limited to \nthose described below, which could harm our business, reputation, financial condition, and operating results, and may \naffect the trading price and price volatility of our Class A and Class C stock.\nRisks Specific to our Company\nWe generate a significant portion of our revenues from advertising. Reduced spending by advertisers, a \nloss of partners, shifts in online advertising, new and evolving advertising formats, or new or existing \ntechnologies that block ads online or affect our ability to personalize ads could harm our business.\nWe generated more than 70% of total revenues from online advertising in 2025. Many of our advertisers, \ncompanies that distribute our products and services, digital publishers, and content providers can terminate their \ncontracts with us at any time. These partners may not continue to do business with us if we do not create more value \n(such as increased numbers of users or customers, new sales leads, increased brand awareness, or more effective \nmonetization) than their available alternatives. \nWe believe AI is quickly reshaping the advertising industry, including how ads are delivered online, and we and \nour competitors are constantly adjusting to meet this shift and provide new and evolving advertising formats. There is \nno assurance that we will adapt effectively and competitively to meet this shift, and that such advertising formats, \nstrategies, and offerings will be successful.\nChanges to our advertising policies and data privacy practices, as well as changes to other companies' \nadvertising or data privacy practices have in the past, and may in the future, affect the advertising services that we are \nable to provide. In addition, technologies have been developed that make personalized ads more difficult, or that block \nthe display of ads altogether, and some providers of online services have integrated technologies that could impair the \navailability and functionality of third-party digital advertising. Failing to provide superior value or deliver advertisements \neffectively and competitively could harm our business, reputation, financial condition, and operating results.\nExpenditures by advertisers tend to correlate with overall economic conditions. Adverse macroeconomic \nconditions have affected, and may in the future affect, the demand for advertising, resulting in fluctuations in the \namounts our advertisers spend on advertising, which could harm our financial condition and operating results.\nOur increasing investment in new businesses, products, services, and technologies is inherently risky, \nand could divert management attention and harm our business, financial condition, and operating results. \nWe have invested and expect to expand our investment in new businesses, products, services, and technologies \nin a wide range of industries beyond online advertising. The investments that we are making across our businesses — \nsuch as building AI-optimized infrastructure, including our custom TPUs, and integrating AI capabilities into new and \nexisting products and services — reflect our ongoing efforts to innovate and provide products and services that are \nhelpful to users, advertisers, publishers, customers, content providers, and distribution partners. Our investments \nultimately may not be commercially viable or may not result in an adequate return of capital and, in pursuing new \nstrategies, we may incur unanticipated liabilities. \nTo meet the compute capacity demands of AI training and inference, as well as traditional cloud computing \nservices, we are entering into significant leasing arrangements with third party operators, which may increase costs \nand operational complexity. We also have a number of large, long-duration commercial agreements, which could \nincrease our liabilities and obligations in the event of nonperformance by us, our counterparties, or vendors. In such \nnonperformance or an industry downturn, we may incur additional liabilities, have excess capacity that we cannot \neasily redeploy, and not receive payments from our counterparties or customers.\nWe have invested and expect to significantly expand our investment in property and equipment, including our \ntechnical infrastructure, and we expect these assets to benefit our business over their estimated useful lives. Changes \nin facts and circumstances such as changes to historical asset performance, expected technology advancements, and \nfuture network deployment plans could change the period over which we expect to benefit from the asset and impact \nour financial condition and operating results.\nInnovations in our products and services could also result in changes to user and customer behavior and affect \nour revenue trends. These endeavors involve significant risks and uncertainties, including diversion of resources and \nmanagement attention from current operations, different monetization models, and the use of alternative investment, \ngovernance, or compensation structures that may fail to adequately align incentives across the company or otherwise \naccomplish their objectives.\nTable of Contents\nAlphabet Inc.\n9.\n\nWithin Google Services, we continue to invest heavily in devices, including our smartphones, home devices, and \nwearables, which is a highly competitive market with frequent introduction of new products and services, rapid \nadoption of technological advancements by competitors, increased market saturation in developed countries, short \nproduct life cycles, evolving industry standards, continual improvement in performance characteristics, and price and \nfeature sensitivity on the part of consumers and businesses. There can be no assurance we will be able to provide \ndevices that compete effectively. \nWithin Google Cloud, we devote significant resources to develop and deploy our enterprise-ready cloud services, \nincluding Google Cloud Platform and Google Workspace, and we are advancing our AI platforms and models to \nsupport these tools and technologies, including the development of our custom TPUs and how we deliver them to our \ncustomers. We are incurring significant and increasing costs and new liabilities, including contingent liabilities, to build \nand maintain infrastructure to support cloud computing services, invest in cybersecurity, and hire talent. Meanwhile, \nour competitors are rapidly developing and deploying cloud-based services and capacity. Pricing and delivery models, \nwhich are subject to increasing regulatory scrutiny and requirements, are competitive and constantly evolving, and we \nmay therefore not achieve our business objectives. Further, our business with financial services, healthcare, and public \nsector customers may present additional risks, including regulatory compliance risks. For instance, we may be subject \nto government audits and cost reviews, and any failure to comply or any deficiencies found may expose us to legal, \nfinancial, and reputational risks. Evolving laws and regulations may require us to make new capital investments, build \nnew products, and seek partners to deliver localized services in other countries, and we may not be able to meet \nsovereign operating requirements.\nWithin Other Bets, we are investing significantly in areas such as life sciences and transportation, among others. \nThese investment areas face intense competition from large, experienced, and well-funded competitors, and our \nofferings, many of which involve the development of new and emerging technologies, may not be successful, or be \nable to compete effectively or operate at sufficient levels of profitability. \nIn addition, new and evolving products and services, including those that use AI, raise ethical, technological, \nlegal, regulatory, and other challenges, which could harm our brands and demand for our products and services. \nBecause all of these investment areas are inherently risky, no assurance can be given that such strategies and \nofferings will be successful or will not harm our reputation, financial condition, and operating results. \nWe face intense competition. If we do not continue to innovate and provide products and services that \nare useful to users, customers, and other partners, we may not remain competitive, which could harm our \nbusiness, financial condition, and operating results. \nOur business environment is rapidly evolving and intensely competitive. Our businesses face changing \ntechnologies, shifting user needs, and frequent introductions of rival products and services. To compete successfully, \nwe must accurately anticipate technology developments and deliver innovative, relevant, and useful products, services, \nand technologies in a timely manner. For example, with the rise of AI in recent years, we have increasingly focused our \ninvestments in building powerful AI tools and AI enhancements to our existing products and services to better cater to \nour users, customers, and other partners. As our businesses evolve, the competitive pressure to innovate will \nencompass a wider range of products and services. We must continue to invest significant resources in technical \ninfrastructure, including the development of our custom TPUs, and research and development, including through \nacquisitions, in order to enhance our technology, products, and services. \nWe have many competitors in different industries. Our current and potential domestic and international \ncompetitors range from large and established companies to emerging start-ups. Some competitors have longer \noperating histories and well-established relationships in various sectors. They can use their experience and resources \nin ways that could affect our competitive position, including by making acquisitions and entering into other strategic \narrangements; continuing to invest heavily in technical infrastructure, research and development, and in talent; \ninitiating intellectual property and competition claims (whether or not meritorious); and continuing to compete for users, \nadvertisers, customers, and content providers. Further, discrepancies in enforcement of existing laws may enable our \nlesser known competitors to aggressively interpret those laws without commensurate scrutiny, thereby affording them \ncompetitive advantages. Our competitors may also be able to innovate and provide products and services faster or \nmore cost effectively than we can or may foresee the need for products and services before we do. \nWe are developing frontier generative AI models and building AI capabilities into products and services across the \ncompany, tailoring them to the evolving preferences of our users and customers. AI technology and services are highly \ncompetitive, rapidly evolving, and require significant investment, including technical infrastructure, development, and \noperational costs. Our ability to deploy certain AI technologies critical for our products and services and for our \nbusiness strategy may depend on the availability and pricing of third-party equipment and other technical infrastructure \noperations costs, including network capacity, energy, and equipment costs. Additionally, other companies may develop \nTable of Contents\nAlphabet Inc.\n10.\n\nAI products and technologies that are similar or superior to our technologies or more cost-effective to develop or \ndeploy. Other companies may also have (or in the future may obtain) patents or other proprietary rights that would \nprevent, limit, or interfere with our ability to make, use, or sell our own AI products and services.\nOur financial condition and operating results may also suffer if our products and services are not responsive in a \ntimely manner to the evolving needs and desires of our users, advertisers, publishers, customers, and content \nproviders, or if we miscalculate those needs and desires and invest significantly in areas that fail to gain sufficient \nmarket traction. As new and existing technologies continue to develop, competitors and new entrants may be able to \noffer experiences that are, or that are perceived to be, substantially similar to or better than ours, and the consumers \nmay change how they obtain information online, potentially reducing the utility of our existing products and services. \nThese technologies could reduce usage of our products and services, and force us to compete in different ways and \nexpend significant resources to develop and operate equal or better products and services. Competitors' success in \nproviding compelling products and services or in attracting and retaining users, advertisers, publishers, customers, and \ncontent providers could harm our financial condition and operating results. \nOur revenue growth rate could decline over time, and we may experience downward pressure on our \noperating margin in the future. \nOur revenue growth rate could decline over time as a result of a number of factors, including changes in customer \nusage and demand for our existing products and increasing demand for competing technologies; changes in the \ndevices and modalities used to access our products and services; changes in geographic mix; deceleration or declines \nin advertiser spending; competition; decreases in the pricing of our products and services; ongoing product and policy \nchanges; and shifts to lower priced products and services. \nWe may experience downward pressure on our operating margin resulting from a variety of factors. These include \nincreasing costs for many aspects of our business resulting from a higher level of investment in technical infrastructure, \nincreasing regulations, and increasing competition. Certain of our costs and expenses are relatively fixed and may not \ncorrelate to changes in revenue, and we may also not be able to continue to drive efficiencies at the rate we have in \nthe past. We may also face margin compression from an increase in the mix of lower-margin products and services, in \nparticular from the continued expansion of our business into new fields, including products and services such as \nGoogle Cloud, our devices, and consumer subscription products, as well as significant investments in Other Bets. For \ninstance, margins on our devices have had, and may continue to have, an adverse effect on our consolidated margins \ndue to pricing pressures and higher cost of sales. Due to these factors and the evolving nature of our business, our \nhistorical revenue growth rate and historical operating margin may not be indicative of our future performance. For \nadditional information, see Trends in Our Business and Financial Effect and Revenues and Monetization Metrics in \nPart II, Item 7 of this Annual Report on Form 10-K. \nOur intellectual property rights are valuable, and any inability to protect them could reduce the value of \nour products, services, and brands as well as affect our ability to compete. \nOur patents, trademarks, trade secrets, copyrights, and other intellectual property rights are important assets for \nus. Various events outside of our control pose a threat to our intellectual property rights, as well as to our products, \nservices, and technologies. For example, effective intellectual property protection may not be available in every country \nin which our products and services are distributed or made available through the Internet. Also, the efforts we have \ntaken and may take in the future to protect our proprietary rights, including obtaining copyright and patent protections \nfor our important innovations, including AI innovations, may not be sufficient or effective. There is also the possibility \nthat an issued patent may be deemed invalid or unenforceable. \nWe also seek to maintain certain intellectual property as trade secrets. The confidentiality of such trade secrets \nand other sensitive information could be compromised, which could cause us to lose the competitive advantage \nresulting from these trade secrets. We also face risks associated with our trademarks. For example, there is a risk that \nthe word \"Google\" could become so commonly used that it becomes synonymous with the word \"search.\" Some courts \nhave ruled that \"Google\" is a protectable trademark, but it is possible that other courts, particularly those outside of the \nUS, may reach a different determination. If this happens, we could lose protection for this trademark. \nAny significant impairment of our intellectual property rights could harm our business and ability to compete. \nProtecting our intellectual property rights is costly and time consuming; any increase in unauthorized use could make it \nmore expensive to do business and harm our financial condition and operating results. \nOur business depends on strong brands, and failing to maintain and enhance our brands would hurt our \nability to expand our base of users, advertisers, customers, content providers, and other partners. \nOur strong brands have significantly contributed to the success of our business. Maintaining and enhancing the \nbrands within Google Services, Google Cloud, and Other Bets increases our ability to enter new categories and launch \nTable of Contents\nAlphabet Inc.\n11.\n\nnew and innovative products and services that better serve the needs of our users, advertisers, customers, content \nproviders, and other partners. Our brands have been, and may in the future be, harmed by a number of factors, \nincluding, among others, reputational issues, third-party content shared on our platforms, data privacy and security \nissues and developments, issues in delivering age-appropriate experiences to minors, and product or technical \nperformance failures. For example, if we fail to respond appropriately to the sharing of misinformation or objectionable \ncontent on our services or products or objectionable practices by advertisers, or otherwise to adequately address user \nconcerns, our users may lose confidence in our brands. Furthermore, failure to maintain and enhance our brands could \nharm our business, reputation, financial condition, and operating results. Our success will depend largely on our ability \nto remain a technology leader and continue to provide high-quality, trustworthy, innovative products and services that \nare truly useful and play a valuable role in a range of settings. \nWe face a number of manufacturing and supply chain risks that could affect our ability to supply our \nproducts and services and harm our business, financial condition, and operating results. \nWe rely on contract manufacturers to manufacture or assemble our devices as well as servers and networking \nequipment used in our technical infrastructure, certain components of which we may supply. We also rely on third \nparties to supply components and distribute our products and services. Our business could be harmed if we are not \nable to engage these companies with the necessary capabilities or capacity on reasonable terms, or if those we \nengage fail to meet their obligations (whether due to financial difficulties or other reasons), or make adverse changes \nin the pricing or other material terms of our arrangements with them. \nWe have experienced and may in the future experience supply shortages, price increases, quality issues, or \nlonger lead times that could harm our operations, driven by raw material or component availability, manufacturing \ncapacity, labor shortages, industry allocations, logistics capacity, inflation, foreign currency exchange rates, tariffs, \nsanctions and export controls, trade disputes and barriers, forced labor concerns, sourcing requirements, geopolitical \ntensions, armed conflicts, natural disasters or pandemics, the effects of climate change, power and transmission \navailability, and significant changes in the financial or business condition of our suppliers. Some of the components we \nuse in our technical infrastructure and our devices are available from only one or limited sources, and we may not be \nable to find replacement vendors on favorable terms in the event of a supply chain disruption. A significant supply \ninterruption that affects us or our vendors could delay critical data center or network infrastructure upgrades or \nexpansions and delay consumer product availability. \nOur ability to scale our technical infrastructure is increasingly constrained by the availability of power, water, and \nland. For example, energy supply is constrained globally due to the significant increase in demand for and limited \navailability of energy to power AI compute. Securing this capacity involves entering into complex, long-lead-time \narrangements. Additionally, manufacturing and supply of servers and network equipment for our technical \ninfrastructure, particularly for specialized AI chips, is limited to a small number of qualified suppliers. Extended or \nunforeseen disruptions at these suppliers could impact our ability to meet customer demand. Failure to secure \nsufficient capacity in a timely manner would limit our ability to train models and serve Cloud customers.\nWe may enter into long-term contracts for materials and products that commit us to significant terms and \nconditions. We may face costs for materials and products that are not consumed due to market demand, technological \nchange, excess or obsolete inventory, changed consumer preferences, quality, product recalls, and warranty issues. \nCertain of our competitors may negotiate more favorable contractual terms based on volume and other commitments \nthat may provide them with competitive advantages and may affect our supply. For example, industry supply capacity \nfor AI accelerators, including GPUs as well as our custom-built TPUs, is highly competitive and rapidly evolving. If we \nare unable to negotiate favorable contractual terms or our competitors claim the supply or capacity first, we may face \nincreased costs and supply constraints, which could harm our business, financial condition, and operating results.\nOur devices have had, and in the future may have, quality issues resulting from design, manufacturing, or \noperations. Sometimes, these issues may be caused by components we purchase from other manufacturers or \nsuppliers. In addition, quality issues with equipment used in our technical infrastructure could constrain our capacity to \nsupport the delivery and continued development of our products and services. If the quality of our products and \nservices does not meet expectations, we lack the capacity to deliver them, or our products or services are defective or \nrequire a corrective action or recall, it could harm our business, reputation, financial condition, and operating results. \nWe require our suppliers and business partners to comply with laws and, where applicable, our company policies \nand practices, such as the Google Supplier Code of Conduct, regarding workplace and employment practices, data \nsecurity, environmental compliance, and intellectual property licensing, but we do not control them or their practices. \nViolations of law or unethical business practices could result in supply chain disruptions, canceled orders, harm to key \nrelationships, and damage to our reputation. Their failure to procure necessary license rights to intellectual property \ncould affect our ability to sell our products or services and expose us to litigation or financial claims. \nTable of Contents\nAlphabet Inc.\n12.\n\nInterruption to, interference with, or failure of our complex information technology and communications \nsystems could hurt our ability to effectively provide our products and services, which could harm our \nreputation, financial condition, and operating results. \nThe availability of our products and services and fulfillment of our customer contracts depend on the continuing \noperation of our information technology and communications systems. Our systems are vulnerable to damage, \ninterference, or interruption from modifications or upgrades, terrorist attacks, state-sponsored attacks, natural disasters \nor pandemics, geopolitical tensions or armed conflicts, export controls and sanctions, tariffs and non-tariff trade \nbarriers, the effects of climate change, power and transmission availability challenges, utility outages, \ntelecommunications failures, computer viruses, software bugs, cyber attacks, supply-chain attacks, computer denial of \nservice attacks, phishing schemes, or other attempts to harm or access our systems. Some of our data centers are \nlocated in areas with a high risk of major earthquakes or other natural disasters. Our data centers are also subject to \nbreak-ins, sabotage, and intentional acts of vandalism, and, in some cases, to potential disruptions resulting from \nproblems experienced by facility operators or disruptions as a result of geopolitical tensions and conflicts happening in \nthe area. Some of our systems are not fully redundant, and disaster recovery planning cannot account for all \neventualities. The occurrence of a natural disaster or pandemic, closure of a facility, or other unanticipated problems \naffecting our data centers could result in lengthy interruptions in our service. In addition, our products and services are \nhighly technical and complex and have contained in the past, and may contain in the future, errors or vulnerabilities, \nwhich could result in interruptions in or failure of our services or systems. Any of these incidents could impede or \nprevent us from effectively offering products and providing services, which could harm our business, reputation, \nfinancial condition, and operating results. \nOur international operations expose us to additional risks that could harm our business, reputation, \nfinancial condition, and operating results.\nOur international operations are significant to our revenues and net income, and we plan to continue growing \ninternationally. International revenues accounted for approximately 52% of consolidated revenues in 2025. In addition \nto risks described elsewhere in this section, our international operations expose us to other risks, including:\n•\nrestrictions on foreign ownership and investments, and stringent foreign exchange controls that might prevent \nus from repatriating cash earned in countries outside the US;\n•\nsanctions, tariffs, import and export controls, other market access barriers, political unrest, geopolitical \ntensions, changes in regimes, or armed conflict (such as ongoing conflicts in the Middle East and Ukraine), \nany of which may affect our business continuity, increase our operating costs, limit demand for our products \nand services, limit our ability to source components or final products, or prevent or impede us from operating in \ncertain jurisdictions, complying with local laws, or offering products or services;\n•\nlonger payment cycles in some countries, increased credit risk, and higher levels of payment fraud;\n•\nan evolving foreign policy landscape that could harm our revenues and could subject us to litigation, new \nregulatory costs and challenges (including new customer requirements), uncertainty regarding regulatory \noutcomes, and other liabilities under local laws that may not offer due process or clear legal precedent;\n•\nanti-corruption laws, such as the US Foreign Corrupt Practices Act, and other local laws prohibiting certain \npayments to government officials, violations of which could result in civil and criminal penalties; and\n•\ndifferent employee/employer relationships; different labor laws, regulations, and labor practices; and other \nchallenges caused by distance, language, local expertise, and cultural differences, increasing the complexity \nof doing business in multiple jurisdictions.\nBecause we conduct business in currencies other than US dollars but report our financial results in US dollars, we \nhave faced, and will continue to face, exposure to fluctuations in foreign currency exchange rates. Although we hedge \na portion of our international currency exposure, significant fluctuations in exchange rates between the US dollar and \nforeign currencies have and may in the future adversely affect our revenues and earnings. Hedging programs are also \ninherently risky and could expose us to additional risks that could harm our financial condition and operating results. \nDisruptions in our ability to access future financing or manage our indebtedness could adversely affect \nour ability to execute our strategy and harm our financial condition.\nWe may from time to time access capital markets for debt or seek to enter into other forms of financing, such as \nleases. Any difficulty in accessing capital markets, entering into other forms of financing on favorable terms, or \nmanaging our existing indebtedness could increase our costs of financing and restrict our ability to invest in our \nbusiness. Furthermore, the combination of our current and any future indebtedness, including obligations arising under \nTable of Contents\nAlphabet Inc.\n13.\n\nleases, backstops, guarantees, and potential liabilities from large commercial agreements, could harm our financial \ncondition and reduce our financial and business flexibility.\nWe are exposed to fluctuations in the fair values of our investments and, in some instances, our financial \nstatements incorporate inherently subjective valuation methodologies. \nThe fair value of our debt and equity investments may in the future be, and certain investments have been in the \npast, negatively affected by liquidity, credit deterioration or losses, performance and financial results of the underlying \nentities, foreign exchange rates, changes in interest rates, the effect of new or changing regulations, the stock market \nin general, or other factors. As a result of these factors, the value of our investments could significantly decline, which \ncould harm our financial condition and operating results.\nWe measure certain of our non-marketable equity and debt securities, and certain other instruments including \nstock-based compensation (SBC) awards of Other Bet companies, at fair value on a nonrecurring basis, which is \ninherently subjective and requires management judgment and estimation. Gains and losses on non-marketable equity \nsecurities are recognized in other income (expense), net (OI&E), which increases the volatility of our OI&E. The \nunrealized gains and losses or impairments we record from fair value remeasurements in any particular period may \ndiffer significantly from the gains and losses we ultimately realize on such investments. Changes in fair value on SBC \nawards are recognized primarily through operating expenses.\nRisks Related to our Industry \nIssues in the development and use of AI may result in reputational harm and increased liability exposure. \nOur evolving AI-enabled products and services may give rise to risks related to harmful content, inaccuracies, \ndiscrimination, intellectual property infringement or misappropriation, violation of rights of publicity, defamation, data \nprivacy, cybersecurity, minor protection, and other issues. As a result of these and other challenges associated with \ninnovative technologies, our implementation of AI systems could subject us to competitive harm, regulatory action, \nlegal liability (including under new and proposed legislation and regulations), new applications of existing data \nprotection, privacy, intellectual property, and other laws, and brand or reputational harm. \nSome uses of AI will present ethical issues and may have broad effects on society. In order to implement AI \nresponsibly and minimize unintended harmful effects, we have already devoted and will continue to invest significant \nresources to develop, test, and maintain our products and services, but we may not be able to identify or resolve all AI-\nrelated issues, deficiencies, and failures before they arise. Unintended consequences, uses, or customization of our AI \ntools and systems may negatively affect human rights, privacy, employment, or other social concerns, which may result \nin claims, lawsuits, brand or reputational harm, and increased regulatory scrutiny, any of which could harm our \nbusiness, financial condition, and operating results.\nPeople access our products and services through a variety of platforms and devices that continue to \nevolve with the advancement of technology and user preferences. If manufacturers and users do not widely \nadopt versions of our products and services developed for these interfaces, our business could be harmed. \nWhile the modalities used to access information is evolving, people access our products and services through a \ngrowing variety of devices such as phones, laptops and tablets, video game consoles, voice-activated speakers, \nwearables (including virtual reality and augmented reality devices), automobiles, and television-streaming devices. Our \nproducts and services may be less popular on some interfaces. Each manufacturer or distributor may establish unique \ntechnical standards for its devices, and our products and services may not be available or may only be available with \nlimited functionality for our users or our advertisers on these devices as a result. Some manufacturers may also elect \nnot to include our products on their devices. \nIt is hard to predict the challenges we may encounter in adapting our products and services and developing \ncompetitive new products and services. We expect to continue to devote significant resources to creating and \nsupporting products and services across multiple platforms and devices. Failing to attract and retain a substantial \nnumber of device manufacturers, suppliers, distributors, developers, and users, or failing to develop products and \ntechnologies that work well on new devices and platforms, could harm our business, financial condition, and operating \nresults and ability to capture future business opportunities. \nProblematic content on our platforms, including low-quality user-generated content, web spam, content \nfarms, and other violations of our guidelines could affect the quality of our services, which could harm our \nreputation and deter our current and potential users from using our products and services. \nWe, like others in the industry, face violations of our content guidelines across our platforms, including \nsophisticated attempts by bad actors to manipulate our hosting and advertising systems to fraudulently generate \nrevenues, or to otherwise generate traffic that does not represent genuine user interest or intent. While we invest \nTable of Contents\nAlphabet Inc.\n14.\n\nsignificantly in efforts to promote high-quality and relevant results and to detect and prevent low-quality content and \ninvalid traffic, we have been unable and may continue to be unable to detect and prevent all such abuses or promote \nuniformly high-quality content. Increased use of AI in our offerings and internal systems may create new instances of \nproblematic content and increased potential for misuse and abuse.\nMany websites violate or attempt to violate our guidelines, including by seeking to inappropriately rank higher in \nsearch results than our search engine's assessment of their relevance and utility would rank them. Such efforts have \naffected, and may continue to affect, the quality of content on our platforms and lead them to display false, misleading, \nor undesirable content. Although English-language web spam in our search results has been reduced, and web spam \nin most other languages is limited, we expect web spammers will continue to seek inappropriate ways to improve their \nrankings. Although we continue to invest in and deploy proprietary technology to detect and prevent web spam on our \nplatforms and to evolve our policies to address emerging threats, there is no guarantee that our technology and policy \nenforcement will always be successful, and our users may have negative experiences that make them less likely to \nuse our platforms. We face legal and regulatory challenges to our efforts to address low-quality content, and our ability \nto address it may be constrained or made more costly through added compliance requirements. We also face other \nchallenges to the quality of our search results from low-quality and irrelevant content websites, including content farms, \nwhich are websites that generate large quantities of low-quality content in an effort to improve their search rankings. \nWe are continually launching algorithmic changes designed to detect and prevent these efforts, but we may not always \nbe successful. We also face other challenges on our platforms, including attempted election interference; fraud, \ncontent inappropriate for minors, misleading or deceptive information, and other types of potentially harmful content. \nIf we fail to either detect and prevent an increase in problematic content or effectively promote high-quality \ncontent, it could hurt our reputation for delivering relevant information or reduce use of our platforms, harming our \nfinancial condition and operating results. It may also subject us to litigation and regulatory actions, which could result in \nmonetary penalties and damages and divert management's time and attention.\nData privacy and security concerns relating to our technology and our practices could harm our \nreputation, cause us to incur significant liability, and deter current and potential users or customers from \nusing our products and services. Computer viruses, software bugs or defects, security breaches, and attacks \non our systems could result in the improper disclosure and use of user data and interference with our users' \nand customers' ability to use our products and services, harming our business and reputation. \nConcerns about, including the adequacy of, our practices with regard to the collection, use, governance, \ndisclosure, or security of personal data or other data-privacy-related matters, even if unfounded, could harm our \nbusiness, reputation, financial condition, and operating results. Our policies and practices may change over time as \nexpectations and regulations regarding privacy and data change. \nOur products and services involve the storage, handling, and transmission of proprietary and other sensitive \ninformation. Malicious software such as viruses, software bugs, theft, misuse, defects, vulnerabilities in our products \nand services, as well as cyber attacks, phishing schemes, and other types of security attacks, which increasingly use \nAI, expose us to a risk of loss or improper use and disclosure of such information, which could result in litigation and \nother potential liabilities, including regulatory fines and penalties, as well as reputational harm. Additionally, our \nproducts incorporate highly technical and complex technologies, and thus our technologies and software have \ncontained, and are likely in the future to contain, undetected errors, bugs, or vulnerabilities. We continue to add new \nfeatures involving AI to our offerings and internal systems, and features that rely on AI may be susceptible to \nunanticipated security threats as our and the market's understanding of AI-centric security risks and protection \nmethods continue to develop. We have in the past discovered, and may in the future discover, some errors in our \nsoftware code only after we have released the code. Systems and control failures, security breaches, failure to comply \nwith our privacy policies, and inadvertent disclosure of user data could result in regulatory and legal exposure, \nseriously harm our reputation, brand, and business, and impair our ability to attract and retain users or customers. \nSuch incidents have occurred in the past and may continue to occur due to the scale and nature of our products and \nservices. While there is no guarantee that such incidents will not cause significant damage, we expect to continue to \nexpend significant resources to maintain security protections that limit the effect of bugs, theft, misuse, and security \nvulnerabilities or breaches. \nWe experience cyber attacks and other attempts to gain unauthorized access to our systems on a regular basis. \nCyber attacks continue to evolve in sophistication and volume, and inherently may be difficult to detect for long periods \nof time. The development and implementation of AI technologies may further increase our exposure to or exacerbate \nthe risks of cyber attacks or other security incidents, particularly where such technologies are exploited by third parties \nto breach our or other parties' systems, including when such technologies are used to target our employees or \nimpersonate members of senior management in order to gain unauthorized access to our systems. We have also \nseen, and will continue to see, industry-wide software supply chain vulnerabilities and attacks on telecommunications \nTable of Contents\nAlphabet Inc.\n15.\n\nand other critical infrastructure, which could affect our or other parties' systems. We expect to continue to experience \nsuch incidents or vulnerabilities in the future. Our efforts to prevent security incidents and address undesirable activity \non our platform may require us to spend additional resources to prepare and defend against such threats, and could \nalso increase the risk of retaliatory attack. In addition, we face the risk of cyber attacks and data exfiltration or \ncompromise by nation-states and state-sponsored actors. These attacks may target us or our customers, particularly \nour public sector customers (including federal, state, and local governments). Geopolitical tensions or armed conflicts, \nsuch as the ongoing conflict in the Middle East and Ukraine, may increase these risks. \nWe may experience security and privacy issues, whether due to employee or insider error or malfeasance, \nsystem errors, or vulnerabilities in our or other parties' systems. While we may not determine some of these issues to \nbe material when they occur and may remedy them quickly, there is no guarantee that these issues will not ultimately \nresult in significant legal, financial, and reputational harm, including government inquiries, enforcement actions, \nlitigation, and negative publicity. There is also no guarantee that a series of related issues may not be determined to be \nmaterial at a later date in the aggregate, even if they may not be material individually at the time of their occurrence. \nBecause the techniques used to obtain unauthorized access to, disable, or degrade service provided by or otherwise \nsabotage systems change frequently and often are recognized only after being launched against a target, even taking \nall reasonable precautions, including those required by law, we have been unable in the past and may continue to be \nunable to anticipate or detect certain attacks or vulnerabilities or implement adequate preventative measures. \nFurther, if any partners with whom we share user or other customer information fail to implement adequate data-\nsecurity practices, fail to comply with our terms and policies, or otherwise suffer a network or other security breach, our \nusers' data may be improperly accessed, used, or disclosed. If an actual or perceived breach of our or our business \npartners' or service providers' security occurs, the market perception of the effectiveness of our security measures \nwould be harmed, we could lose users and customers, our trade secrets or those of our business partners may be \ncompromised, and we may be exposed to significant legal and financial risks, including legal claims (which may \ninclude class-action litigation) and regulatory actions, fines, and penalties. Any of the foregoing consequences could \nharm our business, reputation, financial condition, and operating results. \nWhile we have dedicated significant resources to privacy and security incident response capabilities, including \ndedicated worldwide incident response teams, our response process, particularly during times of a natural disaster or \npandemic, may not be adequate, may fail to accurately assess the severity of an incident, may not be fast enough to \nprevent or limit harm, or may fail to sufficiently remediate an incident. As a result, we may suffer significant legal, \nreputational, or financial exposure, which could harm our business, financial condition, and operating results. \nFor additional information, see also our risk factor on privacy and data protection regulations under 'Risks Related \nto Laws, Regulations, and Policies' below.\nOur ongoing investments in safety, security, and content review will likely continue to identify abuse of \nour platforms and misuse of user data. \nIn addition to our efforts to prevent and mitigate cyber attacks, we are making significant investments in safety, \nsecurity, and review efforts to combat misuse of our services and unauthorized access to user data by third parties, \nincluding investigation and review of platform applications that could access the information of users of our services. \nAs a result of these efforts, we have in the past discovered, and may in the future discover, incidents of unnecessary \naccess to or misuse of user data or other undesirable activity by third parties. However, we may not have discovered, \nand may in the future not discover, all such incidents or activity, whether as a result of our data limitations, including \nour lack of visibility over our encrypted services, the scale of activity on our platform, or other factors, including factors \noutside of our control such as a natural disaster or pandemic, and we may learn of such incidents or activity via third \nparties. Such incidents and activities may include the use of user data or our systems in a manner inconsistent with our \nterms, contracts, or policies, the existence of false or undesirable user accounts, election interference, improper ad \npurchases, activities that threaten people's safety on- or off-line, or instances of spamming, scraping, or spreading \ndisinformation. While we may not determine some of these incidents to be material at the time they occurred and we \nmay remedy them quickly, there is no guarantee that these issues will not ultimately result in significant legal, financial, \nand reputational harm, including government inquiries and enforcement actions, litigation, and negative publicity. There \nis also no guarantee that a series of related issues may not be determined to be material at a later date in the \naggregate, even if they may not be material individually at the time of their occurrence. \nWe may also be unsuccessful in our efforts to enforce our policies or otherwise prevent or remediate any such \nincidents. Any of the foregoing developments may negatively affect user trust and engagement, harm our reputation \nand brands, require us to change our business practices in ways that harm our business operations, and adversely \naffect our business and financial results. Any such developments may also subject us to additional litigation and \nTable of Contents\nAlphabet Inc.\n16.\n\nregulatory inquiries, which could result in monetary penalties and damages, divert management's time and attention, \nand lead to enhanced regulatory oversight. \nOur business depends on continued and unimpeded access to the Internet by us and our users. Internet \naccess providers may be able to restrict, block, degrade, or charge for access to certain of our products and \nservices, which could lead to additional expenses and the loss of users and advertisers. \nOur products and services depend on the ability of our users to access the Internet, and certain of our products \nrequire significant network capacity to work effectively. Currently, this access is provided by companies that have \nsignificant market power in the broadband and internet access marketplace, including incumbent telephone \ncompanies, cable companies, mobile communications companies, and government-owned service providers. Some of \nthese providers have taken, or have stated that they may take, measures that could degrade, disrupt, or increase the \ncost of user access to certain of our products by restricting or prohibiting the use of their infrastructure to support or \nfacilitate our offerings, by charging increased fees to us or our users to provide our offerings, or by providing our \ncompetitors preferential access. Some jurisdictions have adopted regulations prohibiting certain forms of discrimination \nby internet access providers; however, substantial uncertainty exists in the US and elsewhere regarding such \nprotections. In addition, in some jurisdictions, our products and services have been subject to government-initiated \nrestrictions or blockages. These could harm existing key relationships, including with our users, customers, \nadvertisers, and content providers, and impair our ability to attract new ones; harm our reputation; and increase costs, \nthereby negatively affecting our business. \nRisks Related to Laws, Regulations, and Policies \nWe are subject to a variety of new, existing, and changing laws and regulations worldwide that could \nharm our business, and will likely be subject to an even broader scope of laws and regulations as we continue \nto expand our business. \nWe are subject to numerous US federal and state as well as foreign laws and regulations covering a wide variety \nof subjects, and our introduction of new businesses, products, services, and technologies will likely continue to subject \nus to additional laws and regulations. In recent years, governments around the world have proposed and adopted a \nlarge number of new laws and regulations relevant to the digital economy, particularly in the areas of data privacy and \nsecurity, competition, AI, and online content. The costs of compliance with these measures are high and are likely to \nincrease in the future, including as a result of differing, and sometimes conflicting, laws and regulations. \nNew or changing laws and regulations, or interpretations or applications of existing laws and regulations in a \nmanner inconsistent with our interpretations of such laws and regulations or our practices, have resulted in, and may \ncontinue to result in, less useful products and services, altered business models and operations, limited ability to \npursue certain business practices or offer certain products and services, substantial costs, and civil or criminal liability. \nExamples include laws and regulations regarding: \n•\nCompetition and technology platforms' business practices: Laws and regulations focused on large \ntechnology platforms, including the Digital Markets Act in the European Union (EU) and the Act on Promotion \nof Competition for Specified Smartphone Software in Japan; regulations and legal settlements in the US, \nSouth Korea, and elsewhere that affect Google Play's billing policies, fees, and business model; as well as \nlitigation and new and expected regulations in a range of jurisdictions.\n•\nAI: Laws and regulations focused on the development, use, and provision of AI technologies and other digital \nproducts and services, which could result in monetary penalties or other regulatory actions. For example, the \nEU AI Act came into force on August 1, 2024, and will generally become fully applicable after a two-year \ntransitional period (although certain obligations have already taken effect). The EU AI Act introduces various \nrequirements for AI systems and models placed on the market in the EU, including specific transparency, \nsafety, and copyright requirements for general purpose AI systems and the models on which those systems \nare based. Various countries, including Brazil, India, Japan, South Korea, Singapore, and Vietnam, have also \nenacted or are considering enacting regulations focused on AI. In the US, an increasing amount of legislative \nand regulatory activity regarding AI is taking place at the state level. In 2025, state legislatures considered \nmore than 1,000 AI-related bills, including on fundamental model research and development, synthetic media, \nalgorithmic decision-making, and many others, and took a variety of approaches to AI regulation. For instance, \nin 2025, California and New York passed the Transparency in Frontier Artificial Intelligence Act and the \nResponsible AI Safety and Education Act, respectively, each of which imposes safety and reporting obligations \non developers of frontier models. At the same time, the White House's Executive Order, Removing Barriers to \nAmerican Leadership in Artificial Intelligence, prioritizes deregulation, while its AI Action Plan emphasizes \naccelerating American innovation leadership. \nTable of Contents\nAlphabet Inc.\n17.\n\n•\nData privacy, collection, processing, and portability: Laws and regulations further restricting the collection, \nprocessing, or sharing of user or advertising-related data, including privacy and data protection laws; laws \naffecting the processing of children's data (as discussed further below), data breach notification laws; laws \nlimiting data transfers (including data localization laws); laws limiting use of data for AI training; and laws \nrequiring data portability. \n•\nCopyright and other intellectual property: Copyright and related laws, including the EU Directive on \nCopyright in the Digital Single Market and European Economic Area transpositions, which have introduced \nnew licensing regimes, increase liability with respect to content uploaded by users or linked to from our \nplatforms, or create property rights in news publications that could require payments to news agencies and \npublishers, which may result in other regulatory actions. The scope of the text and data mining exception is \nbeing challenged before courts in the EU, which could harm some aspects of our business. \n•\nContent moderation: Various laws covering content moderation and removal, and related disclosure \nobligations, such as the EU's Digital Services Act, Florida's Senate Bill 7072 and Texas' House Bill 20, and \nlaws and proposed legislation in Singapore, Australia, and the United Kingdom (UK) that impose penalties for \nfailure to remove certain types of content or require disclosure of information about the operation of our \nservices and algorithms, which may make it harder for services like Google Search and YouTube to detect and \nlimit low-quality, deceptive, or harmful content, or, on the other hand, may impinge on the rights of free \nexpression and access to content. Additionally, new regulations apply to online child safety, including access \nand content restrictions as well as other limitations for minors, which may also conflict with rights of free \nexpression and access to information. These regulations could result in our having to modify our products and \nservices and monitor minors' experiences on our products and services.\n•\nConsumer protection: Consumer protection laws, including the EU's New Deal for Consumers, which could \nresult in monetary penalties and create a range of new compliance obligations.\nIn addition, the applicability and scope of these and other laws and regulations, as interpreted by courts, \nregulators, or administrative bodies, remain uncertain and could be interpreted in ways that harm our business. For \nexample, we rely on statutory safe harbors, like those set forth in the Digital Millennium Copyright Act and Section 230 \nof the Communications Decency Act in the US and the Digital Services Act in Europe, to protect against liability for \nvarious linking, caching, ranking, recommending, and hosting activities. Legislation or court rulings affecting these safe \nharbors may harm us and may impose significant operational challenges. There are legislative proposals and pending \nlitigation in the US, EU, and around the world that could diminish or eliminate safe harbor protection for websites and \nonline platforms. Our development, use, and commercialization of AI products and services (including our \nimplementation of AI in our offerings and internal systems) could subject us to regulatory action and legal liability, \nincluding under specific legislation regulating AI, as well as new applications of existing data protection, cybersecurity, \nprivacy, intellectual property, and other laws.\nFurther, we are subject to evolving laws, regulations, policies, and international accords relating to matters \nbeyond our core products and services, including environmental sustainability, climate change, human capital, and \nemployment matters. In response, we have implemented robust programs and initiatives and adopted reporting \nframeworks and principles that may require considerable investments. For instance, AI's energy and water demands \nhave made efforts to reduce our emissions more complex and challenging across every level. We cannot guarantee \nthat our initiatives will be fully realized on the timelines we expect or at all, and projects that are completed as planned \nmay not achieve the results we anticipate.\nWe are and may continue to be subject to claims, lawsuits, regulatory and government inquiries and \ninvestigations, enforcement actions, consent orders, and other forms of regulatory scrutiny and legal liability, \nincluding competition matters, that could harm our business, reputation, financial condition, and operating \nresults.\nWe are subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings, \nand orders involving competition, intellectual property, data privacy and security, tax and related compliance, labor and \nemployment, commercial disputes, content generated by our users, goods and services offered by advertisers or \npublishers using our platforms, design of our products and services, personal injury and other tort and nuisance \ntheories, consumer protection claims, including how we moderate content on our platforms, AI, and other matters.\nThe US Department of Justice (DOJ), various states, and other plaintiffs have filed, and may continue to file in the \nfuture, several antitrust lawsuits about aspects of our business, including our advertising technologies and practices, \nthe operation and distribution of Google Search, and the operation and distribution of Android operating system and \nPlay Store. If we are unsuccessful in these lawsuits, we could face significant expenses to implement the remedies, \nand such costs and alterations could harm our business, reputation, financial condition, and operating results.\nTable of Contents\nAlphabet Inc.\n18.\n\nFor example, the DOJ and a number of state Attorneys General filed a lawsuit concerning our Search and Search \nadvertising practices and our compliance with US antitrust laws. In August 2024, the US District Court for the District of \nColumbia ruled against Google, and in December 2025, entered a final judgment requiring remedies, which, among \nother things, imposes restrictions on how we distribute our services and requires us to share certain search data with \nand offer syndication services to certain competitors. In January 2026, we appealed the final judgment and moved to \npause implementation of certain remedies. In February 2026, the DOJ and state Attorneys General also appealed. \nFurthermore, in December 2020, a number of state Attorneys General, led by the Texas Attorney General, filed a \nlawsuit in the US District Court for the Eastern District of Texas concerning our advertising technology and our \ncompliance with US antitrust laws and other laws. In January 2023, the DOJ and a number of state Attorneys General \nsued in the Eastern District of Virginia alleging similar antitrust violations relating to our advertising technology. In April \n2025, the presiding judge issued a mixed decision in the DOJ case against us, ruling that neither our advertiser tools \nnor the DoubleClick and AdMeld acquisitions were anticompetitive, but that our publisher tools unfairly excluded rivals. \nA separate proceeding to determine remedies, the range of which varies widely, took place in September 2025 with the \nparties presenting differing remedy proposals. The DOJ's remedy proposal includes structural remedies that could \nharm our business. Closing arguments were held in November 2025, and we are awaiting a final judgment. After that \njudgment, we plan to appeal the adverse portion of the April 2025 decision and potentially aspects of the remedies \ndecision. A trial in the state Attorneys General case in the Eastern District of Texas will take place after a decision on \nremedies is issued in the DOJ advertising technology case, and could result in remedies that could harm our business, \nreputation, financial condition, and operating results. \nIn addition to these regulatory proceedings, private individual and collective actions that overlap with claims \npursued by regulators are pending in the US and in several other jurisdictions. Adverse results in these or similar future \nlawsuits may include awards of monetary damages and remedies that could harm our business, reputation, financial \ncondition, and operating results.\nOther regulatory agencies in the US and around the world, including competition enforcers, consumer protection \nagencies, and data protection authorities, have challenged and may continue to challenge our business practices and \ncompliance with laws and regulations. We are cooperating with these investigations and defending litigation or \nappealing decisions where appropriate.\nWe are also subject to a variety of claims including product warranty, product liability, and consumer protection \nclaims related to product defects, among other litigation, and we may also be subject to claims involving health and \nsafety, hazardous materials usage, other environmental effects, AI training, development, and commercialization, or \nservice disruptions or failures. Claims have been brought, and we expect will continue to be brought, against us for \ndefamation, negligence, breaches of contract, patent, copyright, and trademark infringement, unfair competition, \nunlawful activity, torts, privacy rights violations, fraud, or other legal theories based on the nature and content of \ninformation available on or via our services, the design and effect of our products and services, or due to our \ninvolvement in hosting, transmitting, marketing, branding, or providing access to content created by third parties.\nVarious laws, regulations, investigations, enforcement lawsuits, and regulatory actions have involved in the past, \nand may in the future result in substantial fines and penalties, injunctive relief, ongoing monitoring and auditing \nobligations, changes to our products and services, alterations to our business models and operations, including \ndivestiture, and collateral related civil litigation or other adverse consequences. Any of these legal proceedings could \nalso result in legal costs, diversion of management resources, and negative publicity, all of which could harm our \nbusiness, reputation, financial condition, and operating results.\nEstimating liabilities for our pending proceedings is a complex, fact-specific, and speculative process that requires \nsignificant judgment, and the amounts we are ultimately liable for may differ from our estimates. The resolution of one \nor more such proceedings has resulted in, and may in the future result in, additional substantial fines, penalties, \ninjunctions, and other sanctions that could harm our business, reputation, financial condition, and operating results. \nFor additional information about the ongoing material legal proceedings to which we are subject, see Legal \nProceedings in Item 3 of this Annual Report on Form 10-K.\nPrivacy, data protection, data usage, and portability regulations are complex and rapidly evolving areas. \nAny failure or alleged failure to comply with these laws could harm our business, reputation, financial \ncondition, and operating results. \nAuthorities around the world have adopted and are considering a number of legislative and regulatory proposals \nconcerning data protection, data usage and portability, and encryption of user data. Additionally, the increasing \nadoption of AI technologies, which rely on the collection of large amounts of data and use of such data for training \npurposes, has led data protection authorities around the world to consider and adopt new and evolving interpretations \nTable of Contents\nAlphabet Inc.\n19.\n\nof data protection laws, imposing specific obligations with respect to the processing of personal data, including \nrequired notices, consents, and opt-outs. Further, the increased risk of inadvertent disclosure of confidential \ninformation or personal data in connection with the utilization of AI technologies may result in stronger regulatory \nscrutiny, leading to legal and regulatory investigations and enforcement actions that could harm our business, even if \nunfounded. Adverse legal rulings, legislation, or regulation have resulted in, and may continue to result in, fines and \norders requiring that we change our practices, which have had and could continue to have an adverse effect on how \nwe provide services, harming our business, reputation, financial condition, and operating results. These laws and \nregulations are evolving and subject to interpretation, and compliance obligations could cause us to incur substantial \ncosts or harm the quality and operations of our products and services in ways that harm our business. Examples of \nthese laws include: \n•\nThe EU General Data Protection Regulation and the UK General Data Protection Regulations, which apply to \nall of our activities conducted from an establishment in the EU or the UK, respectively, or related to products \nand services that we offer to EU or the UK users or customers, respectively, or the monitoring of their behavior \nin the EU or the UK, respectively.\n•\nVarious US federal, US state, and foreign privacy laws related to the processing and security of personal data, \nincluding (1) comprehensive privacy laws that provide data privacy rights (including, in California, a private \nright of action in the event of a data breach resulting from our failure to implement and maintain reasonable \nsecurity procedures and practices) and impose significant obligations on controllers and processors of \nconsumer data; (2) laws imposing obligations on businesses that collect or disclose biometric information \n(including, in Colorado, Illinois, Texas, and Washington); (3) laws governing the collection and processing of \nchildren and minor's data and how companies provide age-appropriate online experiences (including, in the \nUS, the Children's Online Privacy Protection Act of 1998; the pending Children and Teens' Online Privacy \nProtection Act (COPPA 2.0); similar US state laws related to children's privacy, such as the New York Child \nData Protection Act; and the UK's Age-Appropriate Design Code); and (4) laws regulating internet-connected \ndevices (such as, in California, the Internet of Things Security Law).\n•\nThe EU's Digital Markets Act, which requires in-scope companies to obtain user consent for combining data \nacross certain products and require search engines to share anonymized data with rival companies, among \nother changes; and the EU Data Act, which introduces new data portability requirements with respect to \nconnected products (i.e., 'internet of things' products) and related services, as well as interoperability \nobligations on data processing services. \nFurther, we are subject to evolving laws and regulations that dictate whether, how, and under what circumstances \nwe can transfer, process, or receive personal data, as well as ongoing enforcement actions from supervisory \nauthorities related to cross-border transfers of personal data. The validity of various data transfer mechanisms we \ncurrently rely upon remains subject to legal, regulatory, and political developments globally, which may require us to \nadapt our existing arrangements.\nWe face, and may continue to face, intellectual property infringement or misappropriation, violation of \nrights of publicity, and other claims that could be costly to defend, result in significant damage awards or \nother costs (including indemnification awards), and limit our ability to use certain technologies. \nWe, like other internet, technology, and media companies, are frequently subject to litigation based on allegations \nof infringement or other violations of intellectual property rights, including patent, copyright, trade secrets, and \ntrademarks. Parties have also sought broad injunctive relief against us by filing claims in US and international courts \nand the US International Trade Commission (ITC) for exclusion and cease-and-desist orders. In addition, patent-\nholding companies may frequently seek to generate income from patents they have obtained by bringing claims \nagainst us. As we continue to expand our business, intellectual property claims against us have increased and may \ncontinue to increase as we develop and acquire new products, services, and technologies, including AI technologies. \nAdverse results in any of these lawsuits may include awards of monetary damages, costly royalty or licensing \nagreements (if licenses are available at all), or orders limiting our ability to sell our products and services in the US or \nelsewhere, including by preventing us from offering certain features, functionalities, products, or services in certain \njurisdictions. They may also cause us to change our business practices in ways that could result in a loss of revenues \nfor us and otherwise harm our business. \nMany of our agreements with our customers and partners, including certain suppliers, require us to defend \nagainst certain intellectual property infringement claims and in some cases indemnify them for certain intellectual \nproperty infringement claims against them, which could result in increased costs for defending such claims or \nsignificant damages if there were an adverse ruling in any such claims. Such customers and partners may also \ndiscontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could \nTable of Contents\nAlphabet Inc.\n20.\n\nresult in loss of revenues and harm our business. Moreover, intellectual property indemnities provided to us by our \nsuppliers, when obtainable, may not cover all damages and losses suffered by us and our customers arising from \nintellectual property infringement claims. Furthermore, in connection with our divestitures, we have agreed, and may in \nthe future agree, to provide indemnification for certain potential liabilities, including those associated with intellectual \nproperty claims. Regardless of their merits, intellectual property claims are often time consuming and expensive to \nlitigate or settle. To the extent such claims are successful, they could harm our business, including our product and \nservice offerings, financial condition, and operating results. \nWe could be subject to changes in tax rates, the adoption of new US or international tax legislation, or \nexposure to additional tax liabilities. \nWe are subject to a variety of taxes and tax collection obligations in the US and numerous foreign jurisdictions. \nOur effective tax rates are affected by a variety of factors, including changes in the mix of earnings in jurisdictions with \ndifferent statutory tax rates, net gains and losses on hedges and related transactions under our foreign exchange risk \nmanagement program, changes in our stock price for shares issued as employee compensation, changes in the \nvaluation of our deferred tax assets or liabilities, and the application of different provisions of tax laws or changes in tax \nlaws, regulations, or accounting principles (including changes in the interpretation of existing laws). Further, if we are \nunable or fail to collect taxes on behalf of customers, employees, and partners as the withholding agent, we could \nbecome liable for taxes that are levied against third parties. \nWe are subject to regular review and audit by both domestic and foreign tax authorities. As a result, we have \nreceived, and may in the future receive, assessments in multiple jurisdictions, on various tax-related assertions, such \nas transfer-pricing adjustments or permanent-establishment claims. Any adverse outcome of such a review or audit \ncould harm our financial condition and operating results, require adverse changes to our business practices, or subject \nus to additional litigation and regulatory inquiries. In addition, the determination of our worldwide provision for income \ntaxes and other tax liabilities requires significant judgment and often involves uncertainty. Although we believe our \nestimates are reasonable, the ultimate tax outcome may differ from the amounts recorded in our financial statements \nand may affect our financial results in the period or periods for which such determination is made. \nFurther, due to shifting economic and political conditions, tax policies, laws, or rates in various jurisdictions may \nbe subject to significant changes in ways that could harm our financial condition and operating results. For example, \nvarious jurisdictions around the world have enacted or are considering revenue-based taxes such as digital services \ntaxes and other targeted taxes, which could lead to inconsistent and potentially overlapping international tax regimes. \nThe US has imposed a 1% excise tax on the fair market value of shares repurchased, which could increase in the \nfuture. Over 140 countries are negotiating changes to international tax policies led by the Organization for Economic \nCooperation and Development (OECD), including a 15% global minimum tax rate. In January 2026, the OECD \nannounced a \"Side-by-Side Safe Harbor\" that exempts US operations of US-parented companies from global minimum \ntax rules. Adoption of minimum tax rules outside the US could increase our effective tax rate and cash tax payments.\nRisks Related to Ownership of Our Stock \nWe cannot guarantee that any share repurchase program or dividend program will be continuously active \nor fully consummated or will enhance long-term stockholder value, and share repurchases or dividends could \nincrease the volatility of our stock prices and could diminish our cash reserves.\nWe engage in share repurchases of our Class A and Class C stock from time to time in accordance with \nauthorizations from the Board of Directors of Alphabet. Our repurchase program does not have an expiration date and \ndoes not obligate Alphabet to repurchase any specific dollar amount or to acquire any specific number of shares. Our \ncash dividend program pays regular cash dividends to our Class A, Class B, and Class C stockholders. Any and all \nfuture cash dividends are subject to declaration by our Board of Directors in its sole discretion, and in accordance with \nthe requirements of any applicable laws, rules, and regulations, including the Delaware General Corporation Law. Our \ncash dividend program does not require, and our Board of Directors may decide not to declare, a cash dividend each \nquarter, and does not obligate our Board of Directors to declare a dividend at any specific dollar amount per share. Any \nsuch decision by our Board of Directors may depend on a variety of factors that it may deem relevant, including but not \nlimited to our earnings, liquidity, financial condition, other capital deployment opportunities, level of indebtedness, and \ngeneral market conditions. Our share repurchases and dividends could affect our share trading prices, increase their \nvolatility, reduce our cash reserves and may be suspended or terminated at any time, which may result in a decrease \nin the trading prices of our stock. \nThe concentration of our stock ownership limits our stockholders' ability to influence corporate matters. \nOur Class B stock has 10 votes per share, our Class A stock has one vote per share, and our Class C stock has \nno voting rights. As of December 31, 2025, Larry Page and Sergey Brin beneficially owned approximately 89.3% of our \nTable of Contents\nAlphabet Inc.\n21.\n\noutstanding Class B stock, which represented approximately 52.7% of the voting power of our outstanding common \nstock. Through their stock ownership, Larry and Sergey have significant influence over all matters requiring \nstockholder approval, including the election of directors and significant corporate transactions, such as a merger or \nother sale of our company or our assets, for the foreseeable future. In addition, because our Class C stock carries no \nvoting rights (except as required by applicable law), the issuance of the Class C stock, including in future stock-based \nacquisition transactions and to fund employee equity incentive programs, could continue Larry and Sergey's current \nrelative voting power and their ability to elect all of our directors and to determine the outcome of most matters \nsubmitted to a vote of our stockholders. The share repurchases made pursuant to our repurchase program may also \naffect Larry and Sergey's relative voting power. This concentrated control limits or severely restricts other stockholders' \nability to influence corporate matters and we may take actions that some of our stockholders do not view as beneficial, \nwhich could reduce the market price of our Class A stock and our Class C stock. \nProvisions in our charter documents and under Delaware law could discourage a takeover that \nstockholders may consider favorable. \nProvisions in Alphabet's certificate of incorporation and bylaws may have the effect of delaying or preventing a \nchange of control or changes in our management. These provisions include the following: \n•\nOur Board of Directors has the right to elect directors to fill a vacancy created by the expansion of the Board of \nDirectors or the resignation, death, or removal of a director.\n•\nOur stockholders may not act by written consent, which makes it difficult to take certain actions without holding \na stockholders' meeting.\n•\nOur certificate of incorporation prohibits cumulative voting in the election of directors. This limits the ability of \nminority stockholders to elect director candidates.\n•\nStockholders must provide advance notice to nominate individuals for election to the Board of Directors or to \npropose matters that can be acted upon at a stockholders' meeting. These provisions may discourage or deter \na potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or \notherwise attempting to obtain control of our company. \n•\nOur Board of Directors may issue, without stockholder approval, shares of undesignated preferred stock, \nwhich makes it possible for our Board of Directors to issue preferred stock with voting or other rights or \npreferences that could impede the success of any attempt to acquire us. \nAs a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions. Under Delaware \nlaw, a corporation may not engage in a business combination with any holder of 15% or more of its outstanding voting \nstock unless the holder has held the stock for three years or, among other things, the Board of Directors has approved \nthe transaction. Our Board of Directors could rely on Delaware law to prevent or delay an acquisition of us. \nGeneral Risks \nOur operating results may fluctuate, which makes our results difficult to predict and could cause our \nresults to fall short of expectations. \nOur operating results have fluctuated, and may in the future fluctuate, as a result of a number of factors, many \noutside of our control, including the cyclical nature and seasonality in our business and geopolitical events. As a result, \ncomparing our operating results (including our expenses as a percentage of our revenues) on a period-to-period basis \nmay not be meaningful, and our past results should not be relied on as an indication of our future performance. \nConsequently, our operating results in future quarters may fall below expectations. \nAcquisitions, joint ventures, investments, and divestitures could result in operating difficulties, dilution, \nand other consequences that could harm our business, financial condition, and operating results. \nAcquisitions, joint ventures, investments, and divestitures are important elements of our overall corporate strategy \nand use of capital, and these transactions could be material to our financial condition and operating results. We expect \nto continue to evaluate and enter into discussions regarding a wide array of such potential strategic arrangements, \nwhich could create unforeseen operating difficulties and expenditures. Some of the areas where we face risks include: \n•\ndiversion of management time and focus from operating our business to challenges related to acquisitions and \nother strategic arrangements; \n•\nfailure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions \nplaced upon approval, either of which could, among other things, delay or prevent us from completing a \ntransaction, result in the payment of fees or penalties to a counterparty, or otherwise restrict our ability to \nTable of Contents\nAlphabet Inc.\n22.\n\nrealize the expected financial or strategic goals of a transaction; or investigations or litigation by governmental \nauthorities related to our acquisitions, investments, and other strategic arrangements;\n•\nfailure to successfully integrate the acquired operations, technologies, services, and personnel (including \ncultural integration and retention of employees) and further develop the acquired business or technology; \n•\nimplementation of controls (or remediation of deficiencies), procedures, and policies at the acquired company; \n•\nintegration of the acquired company's accounting and other administrative systems, and the coordination of \nproduct, engineering, and sales and marketing functions;\n•\ntransition of operations, users, and customers onto our existing platforms;\n•\nin the case of foreign acquisitions, the need to integrate operations across different cultures and languages \nand to address the particular economic, currency, political, and regulatory risks associated with specific \ncountries; \n•\nfailure to accomplish commercial, strategic, or financial objectives with respect to investments, joint ventures, \nand other strategic arrangements;\n•\nfailure to realize the value of investments and joint ventures due to a lack of liquidity or an inability to identify \nbuyers or negotiate favorable terms for intended divestitures;\n•\nliability for activities of the acquired company before the acquisition, including intellectual property infringement \nclaims, data privacy and security issues, violations of laws, commercial disputes, tax liabilities, warranty \nclaims, product liabilities, and other known and unknown liabilities; and\n•\nlitigation or other claims in connection with the acquired company, including claims from terminated \nemployees, customers, former stockholders, or other third parties.\nOur failure to address these risks or other problems encountered in connection with our past or future acquisitions \nand other strategic arrangements could cause us to fail to realize their anticipated benefits, incur unanticipated \nliabilities, and harm our business generally. \nOur acquisitions and other strategic arrangements could also result in dilutive issuances of our equity securities, \nthe incurrence of debt, contingent liabilities, or amortization expenses, or impairment of goodwill or purchased long-\nlived assets, and restructuring charges, any of which could harm our financial condition and operating results. Also, the \nanticipated benefits or value of our acquisitions, investments, and other strategic arrangements may not materialize. In \nconnection with our divestitures and certain strategic arrangements, we have agreed, and may in the future agree, to \nprovide indemnification for certain potential liabilities, which could harm our financial condition and operating results. \nWe rely on highly skilled personnel and, if we are unable to retain or motivate key personnel, hire \nqualified personnel, or maintain and continue to adapt our corporate culture, we may not be able to grow or \noperate effectively. \nOur performance and future success depends in large part upon the continued service of key technical leads as \nwell as members of our senior management team. For instance, Sundar Pichai is critical to the overall management of \nAlphabet and its subsidiaries and plays an important role in the development of our technology, maintaining our \nculture, and setting our strategic direction. \nOur ability to compete effectively and our future success depend on our continuing to identify, hire, develop, \nmotivate, and retain highly skilled personnel for all areas of our organization. Competition in our industry for qualified \nemployees, particularly AI talent, is intense, and certain of our competitors have directly targeted, and may continue to \ntarget, our employees. In addition, our compensation arrangements, such as our equity award programs, may not \nalways be successful in attracting new employees and retaining and motivating our existing employees. Immigration \npolicy and regulatory changes, and uncertainty regarding such policies and regulations, may also affect our ability to \nhire, mobilize, or retain some of our global talent. All of our executive officers and key employees are at-will \nemployees, and we do not maintain any key-person life insurance policies.\nWe believe that our corporate culture fosters innovation, creativity, and teamwork. As our organization grows and \nevolves, we may need to adapt our corporate culture and work environments to ever-changing circumstances, and \nthese changes could affect our ability to compete effectively or have an adverse effect on our corporate culture.\nITEM 1B.\nUNRESOLVED STAFF COMMENTS\nNot applicable.\nITEM 1C. CYBERSECURITY\nTable of Contents\nAlphabet Inc.\n23.\n\nWe maintain a comprehensive process for identifying, assessing, and managing material risks from cybersecurity \nthreats as part of our broader risk management system and processes. For example, some risks include our software \nsupply chain and other third-party dependencies, vulnerabilities in our products and services, theft of our intellectual \nproperty, and attempts to compromise our infrastructure. We obtain input, as appropriate, for our cybersecurity risk \nmanagement program on the security industry and threat trends from multiple external experts and internal threat \nintelligence teams. Teams of dedicated privacy, safety, and security professionals oversee cybersecurity risk \nmanagement and mitigation, incident prevention, detection, and remediation. These teams comprise professionals with \ndeep cybersecurity expertise across multiple industries and are led by our Vice President of Privacy, Safety, and \nSecurity, who has more than 20 years of experience, including roles in technology infrastructure for two other large \npublic companies. Our executive leadership team, along with input from the above teams, are responsible for our \noverall enterprise risk management system and processes and regularly consider cybersecurity risks in the context of \nother material risks to the company.\nAs part of our cybersecurity risk management process, our incident management teams track and log privacy and \nsecurity incidents across Alphabet, our vendors, and other third-party service providers to remediate and resolve any \nsuch incidents. Significant incidents are reviewed regularly by a cross-functional working group to determine whether \nfurther escalation is appropriate. Any incident assessed as potentially being or potentially becoming material is \npromptly escalated for further assessment, and then reported to designated members of our senior management. We \nconsult with outside counsel as appropriate, including on materiality analysis and disclosure matters, and our senior \nmanagement makes the final materiality determinations and disclosure and other compliance decisions. Our \nmanagement apprises Alphabet’s independent public accounting firm of relevant matters and developments.\nThe Risk and Compliance Committee has oversight responsibility for risks and incidents relating to cybersecurity \nthreats, including compliance with disclosure requirements, cooperation with law enforcement, and related effects on \nfinancial and other risks, and it reports any findings and recommendations, as appropriate, to the full Board for \nconsideration. Senior management regularly discusses cybersecurity risks and trends and, should they arise, any \nmaterial incidents with the Risk and Compliance Committee. Internal Audit maintains a dedicated cybersecurity \nauditing team that independently tests our cybersecurity controls. \nOur business strategy, results of operations and financial condition have not been materially affected by risks from \ncybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide \nassurance that they will not be materially affected in the future by such risks or any future material incidents. For more \ninformation on our cybersecurity related risks, see Item 1A Risk Factors of this Annual Report on Form 10-K.\nITEM 2.\nPROPERTIES\nOur headquarters are located in Mountain View, California. We own and lease office facilities and data centers \naround the world, primarily in Asia, Europe, and North America. We believe our existing facilities are in good condition \nand suitable for the conduct of our business.\nITEM 3.\nLEGAL PROCEEDINGS\nFor a description of our material pending legal proceedings, see Legal Matters in Note 10 of the Notes to \nConsolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is \nincorporated herein by reference.\nITEM 4.\nMINE SAFETY DISCLOSURES\nNot applicable.\nTable of Contents\nAlphabet Inc.\n24.\n\nPART II\nITEM 5.\nMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND \nISSUER PURCHASES OF EQUITY SECURITIES\nAs of October 2, 2015, Alphabet Inc. became the successor issuer of Google Inc. pursuant to Rule 12g-3(a) under \nthe Exchange Act. Our Class A stock has been listed on the Nasdaq Global Select Market under the symbol “GOOG” \nsince August 19, 2004, and under the symbol \"GOOGL\" since April 3, 2014. Prior to August 19, 2004, there was no \npublic market for our stock. Our Class B stock is neither listed nor traded. Our Class C stock has been listed on the \nNasdaq Global Select Market under the symbol “GOOG” since April 3, 2014.\nHolders of Record\nAs of December 31, 2025, there were approximately 5,861 and 1,611 stockholders of record of our Class A stock \nand Class C stock, respectively. Because many of our shares of Class A stock and Class C stock are held by brokers \nand other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders \nrepresented by these record holders. As of December 31, 2025, there were approximately 57 stockholders of record of \nour Class B stock.\nDividend Program\nDividend payments to stockholders of Class A, Class B, and Class C shares were $4.8 billion, $703 million, and \n$4.5 billion, respectively, for the year ended December 31, 2025. The company intends to pay quarterly cash dividends \nin the future, subject to review and approval by the company’s Board of Directors in its sole discretion. We regularly \nevaluate our cash and capital structure, including the size, pace, and form of capital return to stockholders.\nIssuer Purchases of Equity Securities\nThe following table presents information with respect to Alphabet's repurchases of Class A and Class C stock \nduring the quarter ended December 31, 2025: \nPeriod\nTotal Number of \nClass A Shares \nPurchased \n(in thousands)(1)\nTotal Number of \nClass C Shares \nPurchased \n(in thousands)(1)\nAverage Price \nPaid per \nClass A \nShare(2)\nAverage Price \nPaid per \nClass C \nShare(2)\nTotal Number of \nShares \nPurchased as \nPart of Publicly \nAnnounced \nPrograms\n(in thousands)(1)\nApproximate \nDollar Value of \nShares that May \nYet Be Purchased \nUnder the \nProgram \n(in millions)\nOctober 1 - 31\n \n841 \n13,305 $ \n253.20 $ \n255.03 \n14,146 $ \n71,231 \nNovember 1 - 30\n \n209 \n5,885 $ \n286.00 $ \n281.46 \n6,094 $ \n69,503 \nDecember 1 - 31\n \n0 \n0 $ \n0.00 $ \n0.00 \n0 $ \n69,503 \nTotal\n \n1,050 \n19,190 \n \n20,240 \n(1)\nIn April 2024, the company's Board of Directors authorized a $70.0 billion share repurchase program for its Class A and Class \nC shares. In April 2025, the company's Board of Directors authorized an additional $70.0 billion share repurchase program for \nits Class A and Class C shares. Repurchases are being executed from time to time, subject to general business and market \nconditions and other investment opportunities, through open market purchases or privately negotiated transactions, including \nthrough Rule 10b5-1 plans. The repurchase programs do not have an expiration date. For additional information related to \nshare repurchases, see Note 11 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on \nForm 10-K.\n(2)\nAverage price paid per share includes costs associated with the repurchases.\nTable of Contents\nAlphabet Inc.\n25.\n\nStock Performance Graphs\nThe graph below matches Alphabet Inc. Class A's cumulative five-year total stockholder return on common stock \nwith the cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet \nComposite index. The graph tracks the performance of a $100 investment in our common stock and in each index \n(with the reinvestment of all dividends) from December 31, 2020, to December 31, 2025. The returns shown are based \non historical results and are not intended to suggest future performance.\nCOMPARISON OF CUMULATIVE 5-YEAR TOTAL RETURN*\nALPHABET INC. CLASS A COMMON STOCK\nAmong Alphabet Inc., the S&P 500 Index, the\nNASDAQ Composite Index, and the RDG Internet Composite Index\nAlphabet Inc. Class A\nS&P 500\nNASDAQ Composite\nRDG Internet Composite\n12/20\n3/21\n6/21\n9/21\n12/21\n3/22\n6/22\n9/22\n12/22\n3/23\n6/23\n9/23\n12/23\n3/24\n6/24\n9/24\n12/24\n3/25\n6/25\n9/25\n12/25\n$0\n$50\n$100\n$150\n$200\n$250\n$300\n$350\n$400\n*$100 invested on December 31, 2020, in stock or index, including reinvestment of dividends. \nCopyright© 2026 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.\nTable of Contents\nAlphabet Inc.\n26.\n\nThe graph below matches Alphabet Inc. Class C's cumulative five-year total stockholder return on capital stock \nwith the cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet \nComposite index. The graph tracks the performance of a $100 investment in our Class C capital stock and in each \nindex (with the reinvestment of all dividends) from December 31, 2020, to December 31, 2025. The returns shown are \nbased on historical results and are not intended to suggest future performance.\nCOMPARISON OF CUMULATIVE 5-YEAR TOTAL RETURN*\nALPHABET INC. CLASS C CAPITAL STOCK\nAmong Alphabet Inc., the S&P 500 Index, the\nNASDAQ Composite Index, and the RDG Internet Composite Index\nAlphabet Inc. Class C\nS&P 500\nNASDAQ Composite\nRDG Internet Composite\n12/20\n3/21\n6/21\n9/21\n12/21\n3/22\n6/22\n9/22\n12/22\n3/23\n6/23\n9/23\n12/23\n3/24\n6/24\n9/24\n12/24\n3/25\n6/25\n9/25\n12/25\n$0\n$50\n$100\n$150\n$200\n$250\n$300\n$350\n$400\n*$100 invested on December 31, 2020, in stock or in index, including reinvestment of dividends.\nCopyright© 2026 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.\nITEM 6.\n[Reserved]\nTable of Contents\nAlphabet Inc.\n27.\n\nITEM 7.\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF \nOPERATIONS\nPlease read the following discussion and analysis of our financial condition and results of operations together with \n“Note about Forward-Looking Statements,” Part I, Item 1 \"Business,\" Part I, Item 1A \"Risk Factors,\" and our \nconsolidated financial statements and related notes included under Item 8 of this Annual Report on Form 10-K. \nThe following section generally discusses 2025 results compared to 2024 results. Discussion of 2024 results \ncompared to 2023 results to the extent not included in this report can be found in Item 7 of our 2024 Annual Report on \nForm 10-K.\nUnderstanding Alphabet’s Financial Results\nAlphabet is a collection of businesses — the largest of which is Google. We report Google in two segments, \nGoogle Services and Google Cloud, and all non-Google businesses collectively as Other Bets. Supporting these \nbusinesses, we have centralized certain AI-related research and development focused on advanced research in AI and \ndeveloping the frontier models that serve our businesses, which is reported in Alphabet-level activities. For further \ndetails on our segments, see Part I, Item 1 Business and Note 15 of the Notes to Consolidated Financial Statements \nincluded in Item 8 of this Annual Report on Form 10-K.\nTrends in Our Business and Financial Effect\nThe following long-term trends have contributed to the results of our consolidated operations, and we anticipate \nthat they will continue to affect our future results:\n•\nAs we continue to grow our business and meet the evolving behaviors and needs of our users and \ncustomers, our revenue growth and mix along with our cost and margin profiles are being influenced by a \nnumber of factors, including:\nExpanded AI Offerings in our Products and Services: The continuing evolution of the online world has \ncontributed to the growth of our business. We expect that this evolution, including user engagement with AI \nproducts and services, will continue to benefit our business and our revenues. As we continue to incorporate AI \ninto our products and services, such as with AI Overviews and AI Mode in Search, and with enterprise AI solutions \non our Google Cloud Platform, we may monetize differently than our historical consumer and enterprise offerings \nwhich could affect revenue growth rates and margin trends. When developing new products and services we \ngenerally focus first on user experience and then on monetization. At the same time, we face increasing \ncompetition, including from other developers and providers of AI products and services, which may affect our \nrevenues.\nIncreasing Revenues Beyond Advertising: Revenues from cloud, consumer subscriptions, platforms, and \ndevices, which may have differing characteristics than our advertising revenues, have grown over time. Certain of \nthese revenues have been growing at a rate higher than our advertising revenues, becoming a larger percentage \nof our consolidated revenues, and we expect this trend to continue. The margins on these revenues vary \nsignificantly and are generally lower than the margins on our advertising revenues.\nIncreased Investment in Technical Infrastructure: We continue to invest in capital expenditures as we scale \nour technical infrastructure, in particular for AI, to meet the demand of our users and enterprise customers and to \nsupport research internally. We invested heavily in capital expenditures in 2025 and in 2026, we expect to \nsignificantly increase, relative to 2025, our investment in our technical infrastructure, including servers and \nnetwork equipment, and data centers. The costs associated with operating our technical infrastructure - \ndepreciation, energy, equipment, and network capacity - are expected to significantly increase as developing and \nserving AI offerings require more compute power than our historical consumer and enterprise offerings. While our \ntechnical infrastructure costs increase, we expect to continue to drive efficiencies in our data centers, for example, \nthrough the design of our AI models and our TPU and GPU-based technical infrastructure.\nContinued Investment in Intellectual Property through R&D and Acquisitions: We continue to make \nsignificant research and development investments in areas of strategic focus as we seek to develop new, \ninnovative offerings, and improve our existing offerings across our businesses. Acquisitions and strategic \ninvestments remain important elements in our use of capital and contribute to the breadth and depth of our \nofferings, expand our expertise in engineering and other functional areas, and build strong partnerships around \nstrategic initiatives.\nTraffic Acquisition Costs Growth and Rate Changes: We expect traffic acquisition costs (\"TAC\") paid to our \ndistribution partners and Google Network partners to increase as our advertising revenues grow. Our overall TAC \nas a percentage of our advertising revenues (\"TAC rate\") has been decreasing primarily due to a revenue mix \nTable of Contents\nAlphabet Inc.\n28.\n\nshift from Google Network properties to Google Search & other properties. Our TAC rate will continue to be \naffected by changes in device mix; geographic mix; partner agreement terms; partner mix; the percentage of \nqueries channeled through paid access points; product mix; the relative revenue growth rates of advertising \nrevenues from different channels; and revenue share terms. \n•\nWe have raised capital through external financing in the form of debt and we may continue to seek \ndebt or other forms of financing in the future to support our capital and operating needs.\nIn 2025, we raised capital through the issuance of debt and we expect to continue to assess the use of debt and \nother forms of financing in the future. We expect to continue to enter into finance leases, primarily for data centers. \nAdditionally, in 2025, we provided credit support, such as through backstops and guarantees, to certain infrastructure \nrelated counterparties and may continue to provide additional credit support in the future.\n•\nWe face an evolving regulatory environment, and we are subject to claims, lawsuits, investigations, \nand other forms of potential legal liability, which could affect our business practices and financial results.\nChanges in social, political, economic, tax, and regulatory conditions or in laws and policies governing a wide \nrange of topics and related legal matters, including investigations, lawsuits, and regulatory actions, have resulted in \nfines and caused us to change our business practices. As the regulatory environment continues to evolve, we may \ncontinue to incur fines and we expect increased costs associated with compliance, modifications to our products and \nservices, and limitations on our ability to pursue certain business practices. For additional information, see Part I, Item \n1A Risk Factors and Legal Matters in Note 10 of the Notes to Consolidated Financial Statements included in Item 8 of \nthis Annual Report on Form 10-K.\nRevenues and Monetization Metrics\nWe generate revenues by delivering relevant, cost-effective online advertising; cloud-based solutions that provide \nenterprise customers of all sizes with infrastructure, platform services, and applications; and sales of other products \nand services, such as fees received for subscription-based products, apps and in-app purchases, and devices. For \nadditional information on how we recognize revenue, see Note 1 of the Notes to Consolidated Financial Statements \nincluded in Item 8 of this Annual Report on Form 10-K.\nIn addition to the long-term trends and their financial effect on our business discussed above, fluctuations in our \nrevenues have been and may continue to be affected by a combination of factors, including:\n•\nchanges in foreign currency exchange rates;\n•\nchanges in pricing, such as those resulting from changes in fee structures, discounts, and customer incentives;\n•\ngeneral economic conditions and various external dynamics, including geopolitical events, regulations, and \nother measures and their effect on advertiser, consumer, and enterprise spending; \n•\nnew product, service, and market launches; and\n•\nseasonality.\nAdditionally, fluctuations in our revenues generated from advertising (\"Google advertising\"), other sources \n(\"Google subscriptions, platforms, and devices\"), Google Cloud, and Other Bets have been, and may continue to be, \naffected by other factors unique to each set of revenues, as described below.\nGoogle Services\nGoogle Services revenues consist of Google advertising as well as Google subscriptions, platforms, and devices \nrevenues.\nGoogle Advertising\nGoogle advertising revenues are comprised of the following: \n•\nGoogle Search & other, which includes revenues generated on Google search properties (including revenues \nfrom traffic generated by search distribution partners who use Google.com as their default search in browsers, \ntoolbars, etc.), and other Google owned and operated properties like Gmail, Google Maps, and Google Play;\n•\nYouTube ads, which includes revenues generated on YouTube properties; and\n•\nGoogle Network, which includes revenues generated on Google Network properties participating in AdMob, \nAdSense, and Google Ad Manager.\nTable of Contents\nAlphabet Inc.\n29.\n\nWe use certain metrics to track how well traffic across various properties is monetized as it relates to our \nadvertising revenues: paid clicks and cost-per-click pertain to traffic on Google Search & other properties, while \nimpressions and cost-per-impression pertain to traffic on our Google Network properties.\nPaid clicks represent engagement by users and include clicks on advertisements by end-users on Google search \nproperties and other Google owned and operated properties including Gmail, Google Maps, and Google Play. Cost-\nper-click is defined as click-driven revenues divided by our total number of paid clicks and represents the average \namount we charge advertisers for each engagement by users.\nImpressions include impressions displayed to users on Google Network properties participating primarily in \nAdMob, AdSense, and Google Ad Manager. Cost-per-impression is defined as impression-based and click-based \nrevenues divided by our total number of impressions, and represents the average amount we charge advertisers for \neach impression displayed to users.\nAs our business evolves, we periodically review, refine, and update our methodologies for monitoring, gathering, \nand counting the number of paid clicks and the number of impressions, and for identifying the revenues generated by \nthe corresponding click and impression activity.\nFluctuations in our advertising revenues, as well as the change in paid clicks and cost-per-click on Google Search \n& other properties and the change in impressions and cost-per-impression on Google Network properties and the \ncorrelation between these items have been, and may continue to be, affected by factors in addition to the general \nfactors described above, such as:\n•\nadvertiser competition for keywords;\n•\nchanges in advertising quality, formats, delivery, or policy;\n•\nchanges in device mix;\n•\nseasonal fluctuations in internet usage, advertising expenditures, and underlying business trends, such as \ntraditional retail seasonality; and\n•\ntraffic growth in emerging markets compared to more mature markets and across various verticals and \nchannels.\nGoogle Subscriptions, Platforms, and Devices\nGoogle subscriptions, platforms, and devices revenues are comprised of the following:\n•\nconsumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV, \nYouTube Music and Premium, and NFL Sunday Ticket, as well as Google One, which offers access to our \nmost capable Gemini models;\n•\nplatforms, which primarily include revenues from Google Play sales of apps and in-app purchases;\n•\ndevices, which primarily include sales of the Pixel family of devices; and\n•\nother products and services.\nFluctuations in our Google subscriptions, platforms, and devices revenues have been, and may continue to be, \naffected by factors in addition to the general factors described above, such as changes in customer usage and \ndemand, number of subscribers, and the timing of product launches.\nGoogle Cloud\nGoogle Cloud revenues are comprised of the following:\n•\nGoogle Cloud Platform primarily generates consumption-based fees and subscriptions for infrastructure, \nplatform, and other services. These services provide access to solutions such as AI offerings including our \nenterprise AI infrastructure, Vertex AI platform, and Gemini Enterprise; cybersecurity offerings; and data and \nanalytics solutions;\n•\nGoogle Workspace includes subscriptions for cloud-based communication and collaboration tools for \nenterprises, such as Gmail, Docs, Calendar, Drive, and Meet, with integrated features like Gemini for Google \nWorkspace; and\n•\nother enterprise services.\nFluctuations in our Google Cloud revenues have been, and may continue to be, affected by factors in addition to \nthe general factors described above, such as changes in customer usage, demand, and supply availability.\nTable of Contents\nAlphabet Inc.\n30.\n\nOther Bets\nRevenues from Other Bets are generated primarily from the sale of autonomous transportation services and \ninternet services.\nCosts and Expenses\nOur cost structure has two components: cost of revenues and operating expenses. Our operating expenses \ninclude costs related to research and development, sales and marketing, and general and administrative functions. \nCertain of our costs and expenses, including those associated with the operation of our technical infrastructure as well \nas components of our operating expenses, are generally less variable in nature and may not correlate to changes in \nrevenue. Additionally, fluctuations in employee compensation expenses may not directly correlate with changes in \nheadcount, due to factors such as annual SBC awards that vest over time.\nCost of Revenues\nCost of revenues is comprised of TAC and other costs of revenues.\n•\nTAC includes: \n◦\namounts paid to our distribution partners who make available our search access points and other ad-\nsupported services. Our distribution partners include browser providers, mobile carriers, original \nequipment manufacturers, and software developers; and\n◦\namounts paid to Google Network partners primarily for ads displayed on their properties.\n•\nOther cost of revenues primarily includes:\n◦\ncontent acquisition costs, which are payments to content providers from whom we license video and \nother content for distribution, primarily related to YouTube (we pay fees to these content providers \nbased on revenues generated, subscriber counts, or a flat fee);\n◦\ndepreciation expense, primarily related to our technical infrastructure;\n◦\nemployee compensation expenses related to our technical infrastructure and other operations such as \ncontent review and customer and product support;\n◦\ninventory and other costs related to the devices we sell; and\n◦\nother technical infrastructure operations costs, including energy, equipment, and network capacity \ncosts.\nTAC as a percentage of revenues generated from ads placed on Google Network properties are significantly \nhigher than TAC as a percentage of revenues generated from ads placed on Google Search & other properties, \nbecause most of the advertiser revenues from ads served on Google Network properties are paid as TAC to our \nGoogle Network partners.\nOperating Expenses\nOperating expenses are generally incurred during our normal course of business, which we categorize as either \nresearch and development, sales and marketing, or general and administrative.\nThe main components of our research and development expenses are:\n•\ndepreciation expense, primarily related to our technical infrastructure;\n•\nemployee compensation expenses for engineering and technical employees responsible for research and \ndevelopment related to our existing and new products and services; \n•\nother technical infrastructure operations costs, including energy, equipment, and network capacity costs; and\n•\nthird-party services fees primarily relating to consulting and outsourced services in support of our engineering \nand product development efforts.\nThe main components of our sales and marketing expenses are:\n•\nemployee compensation expenses for employees engaged in sales and marketing, sales support, and certain \ncustomer service functions; and\n•\nspend relating to our advertising and promotional activities in support of our products and services.\nThe main components of our general and administrative expenses are:\nTable of Contents\nAlphabet Inc.\n31.\n\n•\nemployee compensation expenses for employees in finance, human resources, information technology, legal, \nand other administrative support functions; \n•\nexpenses relating to legal and other matters, including certain fines and settlements; and \n•\nthird-party services fees, including audit, consulting, outside legal, and other outsourced administrative \nservices.\nOther Income (Expense), Net \nOI&E, net primarily consists of interest income (expense), the effect of foreign currency exchange gains (losses), \nnet gains (losses) and impairment on our marketable and non-marketable securities and income (loss) and impairment \nfrom our equity method investments.\nFor additional information, including how we account for our investments and factors that can drive fluctuations in \nthe value of our investments, see Note 1 and Note 3 of the Notes to Consolidated Financial Statements included in \nItem 8 as well as Item 7A Quantitative and Qualitative Disclosures About Market Risk of this Annual Report on Form \n10-K.\nProvision for Income Taxes \nProvision for income taxes represents the estimated amount of federal, state, and foreign income taxes incurred \nin the US and the many jurisdictions in which we operate. The provision includes the effect of reserve provisions and \nchanges to reserves that are considered appropriate as well as the related net interest and penalties.\nFor additional information, including a reconciliation of the US federal statutory rate to our effective tax rate, see \nNote 14 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.\nExecutive Overview\nThe following table summarizes consolidated financial results (in millions, except for per share information and \npercentages):\nYear Ended December 31,\n2024\n2025\n$ Change\n% Change\nConsolidated revenues\n$ 350,018 \n$ 402,836 \n$ \n52,818 \n 15 %\nCost of revenues\n$ 146,306 \n$ 162,535 \n$ \n16,229 \n 11 %\nOperating expenses\n$ 91,322 \n$ 111,262 \n$ \n19,940 \n 22 %\nOperating income\n$ 112,390 \n$ 129,039 \n$ \n16,649 \n 15 %\nOperating margin\n 32 %\n 32 %\n 0 %\nOther income (expense), net\n$ \n7,425 \n$ 29,787 \n$ \n22,362 \n 301 %\nNet income\n$ 100,118 \n$ 132,170 \n$ \n32,052 \n 32 %\nDiluted net income per share(1)\n$ \n8.04 \n$ \n10.81 \n$ \n2.77 \n 34 %\n(1) \nFor additional information on the calculation of diluted net income per share, see Note 12 of the Notes to Consolidated \nFinancial Statements included in Item 8 of this Annual Report on Form 10-K.\n•\nRevenues were $402.8 billion, an increase of 15% year over year, primarily driven by an increase in Google \nServices revenues of $37.8 billion, or 12%, and an increase in Google Cloud revenues of $15.5 billion, or 36%.\n•\nCost of revenues was $162.5 billion, an increase of 11% year over year, primarily driven by increases in TAC, \ncontent acquisition costs, and depreciation expense. \n•\nOperating expenses were $111.3 billion, an increase of 22% year over year, primarily driven by increases in \nemployee compensation expenses, expenses related to legal and other matters, and depreciation expense.\nOther Information:\nTable of Contents\nAlphabet Inc.\n32.\n\n•\nIn 2025, we entered into definitive agreements to acquire Wiz, a leading cloud security platform, for $32.0 \nbillion, and Intersect, a provider of data center and energy infrastructure solutions, for $4.8 billion in cash plus \nthe assumption of debt. Both acquisitions are expected to close in 2026, subject to customary closing \nconditions, including the receipt of regulatory approvals.\n•\nIn 2025, we issued senior unsecured notes for net proceeds of $37.3 billion, to be used for general corporate \npurposes.\n•\nOI&E of $29.8 billion for the year ended December 31, 2025 included net gains on equity securities of $24.1 \nbillion, primarily related to unrealized gains on our non-marketable equity securities.\n•\nOther Bets operating loss of $7.5 billion for the year ended December 31, 2025 included a $2.1 billion \nemployee compensation charge recognized in the fourth quarter for Waymo, primarily reflected in research \nand development expenses, based on estimated stock valuation. In February 2026, Waymo announced an \ninvestment round of $16.0 billion, the significant majority of which was funded by Alphabet. \n•\nChanges to U.S. tax law enacted on July 4, 2025, allow, among other things, for immediate expensing of \ndomestic research and experimentation costs and accelerated depreciation on eligible capital expenditures, \nthe effects of which are included in operating cash flows for the year ended December 31, 2025.\n•\nRepurchases of Class A and Class C shares were $6.5 billion and $38.9 billion, respectively, totaling $45.4 \nbillion for the year ended December 31, 2025.\n•\nOperating cash flow was $164.7 billion for the year ended December 31, 2025.\n•\nCapital expenditures, which primarily reflected investments in technical infrastructure, were $91.4 billion for the \nyear ended December 31, 2025.\n•\nAs of December 31, 2025, we had 190,820 employees.\nWe are monitoring ongoing developments surrounding international trade and the macroeconomic environment. \nAs a result of volatility in international trade and financial markets, we may experience direct and indirect effects on our \nbusiness, operations, and financial results. Our past results may not be indicative of our future performance, and our \nfinancial results may differ materially from historical trends.\nFinancial Results\nRevenues\nThe following table presents revenues by type (in millions):\nYear Ended December 31,\n2024\n2025\nGoogle Search & other\n$ \n198,084 $ \n224,532 \nYouTube ads\n \n36,147 \n40,367 \nGoogle Network\n \n30,359 \n29,792 \nGoogle advertising\n \n264,590 \n294,691 \nGoogle subscriptions, platforms, and devices\n \n40,340 \n48,030 \nGoogle Services total\n \n304,930 \n342,721 \nGoogle Cloud\n \n43,229 \n58,705 \nOther Bets\n \n1,648 \n1,537 \nHedging gains (losses)\n \n211 \n(127) \nTotal revenues\n$ \n350,018 $ \n402,836 \nGoogle Services\nGoogle Advertising\nGoogle Search & other\nGoogle Search & other revenues increased $26.4 billion from 2024 to 2025. The overall growth was driven by \ninterrelated factors including increases in search queries resulting from growth in user adoption and usage on mobile \ndevices; growth in advertiser spending; and improvements we have made in ad formats and delivery.\nTable of Contents\nAlphabet Inc.\n33.\n\nYouTube ads\nYouTube ads revenues increased $4.2 billion from 2024 to 2025. The growth was driven by our direct response \nadvertising products followed by our brand advertising products, both of which benefited from increased spending by \nour advertisers.\nGoogle Network\nGoogle Network revenues decreased $567 million from 2024 to 2025, primarily due to a decrease in AdSense \nrevenues, partially offset by an increase in AdMob revenues. \nMonetization Metrics\nThe following table presents changes in monetization metrics for Google Search & other revenues (paid clicks \nand cost-per-click) and Google Network revenues (impressions and cost-per-impression), expressed as a percentage, \nfrom 2024 to 2025:\nGoogle Search & other\nPaid clicks change\n 6 %\nCost-per-click change\n 7 %\nGoogle Network\nImpressions change\n (7) %\nCost-per-impression change\n 7 %\nChanges in paid clicks and impressions are driven by a number of interrelated factors, including changes in \nadvertiser spending; ongoing product and policy changes; and, as it relates to paid clicks, fluctuations in search \nqueries resulting from changes in user adoption and usage, primarily on mobile devices.\nChanges in cost-per-click and cost-per-impression are driven by a number of interrelated factors including \nchanges in device mix, geographic mix, advertiser spending, ongoing product and policy changes, product mix, \nproperty mix, and changes in foreign currency exchange rates.\nGoogle Subscriptions, Platforms, and Devices\nGoogle subscriptions, platforms, and devices revenues increased $7.7 billion from 2024 to 2025. The growth was \nprimarily driven by an increase in subscriptions revenues. This increase was primarily due to the contribution from \ngrowth in paid subscriptions across both YouTube services and Google One.\nGoogle Cloud\nGoogle Cloud revenues increased $15.5 billion from 2024 to 2025, primarily driven by growth in Google Cloud \nPlatform largely from infrastructure and platform services.\nRevenues by Geography\nThe following table presents revenues by geography as a percentage of revenues, determined based on the \naddresses of our customers:\n \nYear Ended December 31,\n \n2024\n2025\nUnited States\n 49 %\n 48 %\nEMEA(1)\n 29 %\n 29 %\nAPAC(1)\n 16 %\n 17 %\nOther Americas(1)\n 6 %\n 6 %\nHedging gains (losses)\n 0 %\n 0 %\n(1)\nRegions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America (\"Other \nAmericas\").\nFor additional information, see Note 2 of the Notes to Consolidated Financial Statements included in Item 8 of this \nAnnual Report on Form 10-K.\nCosts and Expenses\nTable of Contents\nAlphabet Inc.\n34.\n\nCost of Revenues\nThe following table presents cost of revenues, including TAC (in millions, except percentages):\n \nYear Ended December 31,\n \n2024\n2025\nTAC\n$ \n54,900 \n$ \n59,926 \nOther cost of revenues\n \n91,406 \n \n102,609 \nTotal cost of revenues\n$ \n146,306 \n$ \n162,535 \nTotal cost of revenues as a percentage of revenues\n 42 %\n 40 %\nCost of revenues increased $16.2 billion from 2024 to 2025 due to an increase in other cost of revenues and TAC \nof $11.2 billion and $5.0 billion, respectively.\nThe increase in TAC from 2024 to 2025 was largely due to an increase in TAC paid to distribution partners, \nprimarily driven by growth in revenues subject to TAC. The TAC rate decreased from 20.7% to 20.3% from 2024 to \n2025, primarily due to a revenue mix shift from Google Network properties to Google Search & other properties. The \nTAC rates on Google Search & other and Google Network revenues were substantially consistent from 2024 to 2025.\nThe increase in other cost of revenues from 2024 to 2025 was primarily due to increases in content acquisition \ncosts, largely for YouTube, depreciation expense, and other technical infrastructure operations costs.\nResearch and Development\nThe following table presents research and development expenses (in millions, except percentages):\n \nYear Ended December 31,\n \n2024\n2025\nResearch and development expenses\n$ \n49,326 \n$ \n61,087 \nResearch and development expenses as a percentage of revenues\n 14 %\n 15 %\nResearch and development expenses increased $11.8 billion from 2024 to 2025, primarily driven by increases in \nemployee compensation expenses of $6.9 billion and depreciation expense of $2.4 billion. The increase in employee \ncompensation expenses was primarily driven by an increase in SBC expenses of $4.2 billion, which included an \nincrease in a valuation-based compensation charge related to Waymo.\nSales and Marketing\nThe following table presents sales and marketing expenses (in millions, except percentages):\n \nYear Ended December 31,\n \n2024\n2025\nSales and marketing expenses\n$ \n27,808 \n$ \n28,693 \nSales and marketing expenses as a percentage of revenues\n 8 %\n 7 %\nSales and marketing expenses increased $885 million from 2024 to 2025, primarily driven by an increase in \nadvertising and promotional activities of $1.2 billion, partially offset by a decrease in employee compensation expenses \nof $214 million.\nGeneral and Administrative\nThe following table presents general and administrative expenses (in millions, except percentages):\n \nYear Ended December 31,\n \n2024\n2025\nGeneral and administrative expenses\n$ \n14,188 \n$ \n21,482 \nGeneral and administrative expenses as a percentage of revenues\n 4 %\n 5 %\nGeneral and administrative expenses increased $7.3 billion from 2024 to 2025, primarily driven by an increase in \nexpenses related to legal and other matters of $6.2 billion, largely the result of the $3.5 billion EC fine accrued in the \nthird quarter of 2025 and a $1.4 billion legal accrual made in the second quarter of 2025.\nTable of Contents\nAlphabet Inc.\n35.\n\nSegment Profitability\nWe report our segment results as Google Services, Google Cloud, and Other Bets. Additionally, certain costs are \nnot allocated to our segments because they represent Alphabet-level activities. For further details on our segments, \nsee Part I, Item 1 Business and Note 15 of the Notes to Consolidated Financial Statements included in Item 8 of this \nAnnual Report on Form 10-K.\nThe following table presents segment operating income (loss) (in millions).\nYear Ended December 31,\n2024\n2025\nOperating income (loss):\nGoogle Services\n$ \n121,263 $ \n139,404 \nGoogle Cloud\n \n6,112 \n13,910 \nOther Bets\n \n(4,444) \n(7,515) \nAlphabet-level activities(1)\n \n(10,541) \n(16,760) \nTotal income from operations\n$ \n112,390 $ \n129,039 \n(1)\nAlphabet-level activities primarily reflect expenses related to our shared AI research and development.\nGoogle Services\nGoogle Services operating income increased $18.1 billion from 2024 to 2025. The increase in operating income \nwas primarily driven by an increase in revenues, partially offset by an increase in expenses related to legal and other \nmatters, TAC, and content acquisition costs.\nGoogle Cloud\nGoogle Cloud operating income increased $7.8 billion from 2024 to 2025. The increase in operating income was \nprimarily driven by an increase in revenues, partially offset by increases in usage costs for technical infrastructure and \nemployee compensation expenses.\nOther Bets \nOther Bets operating loss increased $3.1 billion from 2024 to 2025. The increase in operating loss was primarily \ndriven by an increase in employee compensation expenses largely due to an increase in a valuation-based \ncompensation charge related to Waymo.\nOther Income (Expense), Net\nThe following table presents OI&E, (in millions):\n \nYear Ended December 31,\n \n2024\n2025\nInterest income\n$ \n4,482 $ \n4,337 \nInterest expense\n \n(268) \n(736) \nForeign currency exchange gain (loss), net\n \n(409) \n(382) \nGain (loss) on debt securities, net\n \n(1,043) \n540 \nGain (loss) on equity securities, net\n \n3,714 \n24,080 \nIncome (loss) and impairment from equity method investments, net\n \n(188) \n281 \nOther\n \n1,137 \n1,667 \nOther income (expense), net\n$ \n7,425 $ \n29,787 \nOI&E, net increased $22.4 billion from 2024 to 2025, primarily due to increases in net unrealized gains on equity \nsecurities resulting from fair value adjustments on non-marketable equity securities.\nFor additional information, see Note 3 and Note 7 of the Notes to Consolidated Financial Statements included in \nItem 8 of this Annual Report on Form 10-K.\nTable of Contents\nAlphabet Inc.\n36.\n\nProvision for Income Taxes\nThe following table presents provision for income taxes (in millions, except effective tax rate):\n \nYear Ended December 31,\n \n2024\n2025\nIncome before provision for income taxes\n$ \n119,815 \n$ \n158,826 \nProvision for income taxes\n$ \n19,697 \n$ \n26,656 \nEffective tax rate\n 16.4 %\n 16.8 %\nThe effective tax rate increased from 2024 to 2025. This increase was primarily due to a decrease in the US \nFederal Foreign Derived Intangible Income tax deduction, a non-deductible EC fine and legal settlement in the US, \npartially offset by changes in prior period tax positions.\nChanges to US tax law enacted on July 4, 2025, allow for immediate expensing of domestic research and \nexperimentation costs, accelerated depreciation on eligible capital expenditures, and other tax law changes impacting \n2025 with certain changes effective in 2026. These changes are reflected in our results for the year ended \nDecember 31, 2025.\nThe OECD is coordinating negotiations among more than 140 countries with the goal of achieving consensus \naround substantial changes to international tax policies, including the implementation of a minimum global effective tax \nrate of 15%. Some countries have already implemented the legislation effective January 1, 2024. This did not have a \nmaterial effect on our income tax provision for the 2025 fiscal year.\nIn January 2026, the OECD introduced new guidance including a \"Side-by-Side Safe Harbor\" which, if elected, \nexempts U.S. domestic operations from being taxed by global minimum tax rules. However, it does not exempt foreign \nsubsidiaries from local minimum tax requirements if implemented. As more countries enact these global minimum tax \nrules, our effective tax rate and cash tax payments could increase.\nFinancial Condition\nCash, Cash Equivalents, and Marketable Securities\nAs of December 31, 2025, we had $126.8 billion in cash, cash equivalents, and short-term marketable securities. \nCash equivalents and marketable securities are comprised of time deposits, money market funds, highly liquid \ngovernment bonds, corporate debt securities, mortgage-backed and asset-backed securities, and marketable equity \nsecurities.\nSources, Uses of Cash and Related Trends\nOur principal sources of liquidity are cash, cash equivalents, and marketable securities, as well as the cash flow \nthat we generate from operations. The primary use of capital continues to be to invest for the long-term growth of the \nbusiness. We regularly evaluate our cash and capital structure, including the size, pace, and form of capital return to \nstockholders.\nThe following table presents cash flows (in millions):\n \nYear Ended December 31,\n \n2024\n2025\nNet cash provided by operating activities\n$ \n125,299 $ \n164,713 \nNet cash used in investing activities\n$ \n(45,536) $ \n(120,291) \nNet cash used in financing activities\n$ \n(79,733) $ \n(37,388) \nCash Provided by Operating Activities\nOur largest source of cash provided by operations are advertising revenues generated by Google Search & other \nproperties, YouTube properties, and Google Network properties. In Google Services, we also generate cash through \nconsumer subscriptions, the sale of apps and in-app purchases, and devices. In Google Cloud, we generate cash \nthrough consumption-based fees and subscriptions for infrastructure, platform, applications, and other cloud services.\nOur primary uses of cash from operating activities include payments to distribution and Google Network partners, \nto employees for compensation, and to content providers. Other uses of cash from operating activities include \npayments to suppliers for devices, to tax authorities for income taxes, and other general corporate expenditures.\nTable of Contents\nAlphabet Inc.\n37.\n\nNet cash provided by operating activities increased from 2024 to 2025 due to an increase in cash received from \ncustomers, partially offset by an increase in cash payments for cost of revenues and operating expenses.\nCash Used in Investing Activities\nCash provided by investing activities consists primarily of maturities and sales of investments in marketable and \nnon-marketable securities. Cash used in investing activities consists primarily of purchases of marketable and non-\nmarketable securities, purchases of property and equipment, and payments for acquisitions.\nNet cash used in investing activities increased from 2024 to 2025, primarily due to an increase in purchases of \nproperty and equipment, driven by investments in technical infrastructure, and a decrease in maturities and sales of \nmarketable securities. \nCash Used in Financing Activities\nCash provided by financing activities consists primarily of proceeds from issuance of debt and proceeds from the \nsale of interests in consolidated entities. Cash used in financing activities consists primarily of repurchases of stock, \nrepayments of debt, net payments related to stock-based award activities, and dividend payments.\nNet cash used in financing activities decreased from 2024 to 2025 due to an increase in proceeds from issuance \nof debt and a decrease in repurchases of stock, partially offset by repayments of debt.\nLiquidity and Material Cash Requirements\nWe expect existing cash, cash equivalents, short-term marketable securities, and cash flows from operations and \nfinancing activities to continue to be sufficient to fund our operating activities and cash commitments for investing and \nfinancing activities for at least the next 12 months, and thereafter for the foreseeable future.\nCapital Expenditures and Leases\nWe make investments in land, buildings, and servers and network equipment through purchases of property and \nequipment and lease arrangements to provide capacity for the growth of our services and products.\nCapital Expenditures\nOur capital investments in property and equipment consist primarily of the following major categories:\n•\ntechnical infrastructure, which consists of our investments in servers and network equipment, data center land, \nand building construction and improvements; and\n•\noffice facilities, ground-up development projects, and building improvements.\nAssets not yet in service are those that are not ready for their intended use, including assets in the process of \nconstruction or assembly, and consist primarily of technical infrastructure. The time frame from date of purchase to \nplacement in service of these assets may extend from months to years. For example, our data center construction \nprojects are generally multi-year projects with multiple phases, where we acquire land and buildings, construct \nbuildings, and secure and install servers and network equipment.\nDuring the years ended December 31, 2024 and 2025, we spent $52.5 billion and $91.4 billion on capital \nexpenditures, respectively. In 2026, we expect to significantly increase, relative to 2025, our investment in our technical \ninfrastructure, including servers and network equipment, and data centers. Depreciation of our property and equipment \ncommences when such assets are ready for their intended use. For the years ended December 31, 2024 and 2025, \nour depreciation on property and equipment was $15.3 billion and $21.1 billion, respectively.\nLeases \nAs of December 31, 2025, the amount of total undiscounted future lease payments under operating leases was \n$18.3 billion, of which $3.3 billion is short-term, and total undiscounted future lease payments under finance leases \nwas $2.9 billion, of which $491 million is short-term.\nAs of December 31, 2025, we have entered into leases primarily related to data centers that have not yet \ncommenced with short-term and long-term future lease payments of $5.8 billion and $52.7 billion, respectively. These \nleases will commence between 2026 and 2031 with non-cancelable lease terms primarily between one and 25 years.\nIn January 2026, we executed a power purchase agreement which we expect to be accounted for as a lease \nresulting in future payments depending on certain agreement terms of $9.9 billion between 2027 and 2047. If certain \ncontractual conditions for the project are not met, we would instead make a one-time payment of approximately \n$3.5 billion and assume ownership of the power generating assets.\nTable of Contents\nAlphabet Inc.\n38.\n\nFor additional information on leases, see Note 4 of the Notes to Consolidated Financial Statements included in \nItem 8 of this Annual Report on Form 10-K.\nFinancing\nAs of December 31, 2025, we had senior unsecured notes outstanding with a total carrying value of $48.5 billion, \nof which $2.0 billion was short-term. The associated short-term and long-term future interest payments were \n$1.8 billion and $35.7 billion, respectively. \nDuring 2025, we issued $22.5 billion of US dollar-denominated senior unsecured notes and €13.25 billion of euro-\ndenominated senior unsecured notes for general corporate purposes, comprised of the following:\n•\nMay 2025: We issued $5.0 billion of US dollar-denominated fixed-rate senior unsecured notes with a weighted-\naverage coupon rate of 4.89%, and a weighted-average maturity of approximately 24 years. We also issued \n€6.75 billion of euro-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of \n3.31%, and a weighted-average maturity of approximately 14 years. \n•\nNovember 2025: We issued $500 million of US dollar-denominated floating-rate senior unsecured notes and \n$17.0 billion of US dollar-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate \nof 4.92% and a weighted-average maturity of approximately 20 years. We also issued €6.5 billion of euro-\ndenominated fixed-rate senior unsecured notes with a weighted-average coupon rate of 3.44% and a \nweighted-average maturity of approximately 16 years.\nAs of December 31, 2025, we had $10.0 billion of revolving credit facilities, $4.0 billion expiring in April 2026 and \n$6.0 billion expiring in April 2030. No amounts have been borrowed under the credit facilities. We also have a \ncommercial paper program of up to $25.0 billion, which is used for general corporate purposes. As of December 31, \n2025, we had no commercial paper outstanding.\nFor additional information, see Note 6 of the Notes to Consolidated Financial Statements included in Item 8 of this \nAnnual Report on Form 10-K.\nWe use contract manufacturers for our technical infrastructure and device assembly and may supply them with \ncomponents purchased directly from suppliers. Certain of these arrangements result in a portion of the cash received \nfrom and paid to contract manufacturers to be presented as financing activities on the Consolidated Statements of \nCash Flows included in Item 8 of this Annual Report on Form 10-K.\nShare Repurchase Program\nDuring 2025, we repurchased and subsequently retired 240 million shares for $45.4 billion.\nIn April 2024, the company's Board of Directors authorized a $70.0 billion share repurchase program for its Class \nA and Class C shares. In April 2025, the company's Board of Directors authorized an additional $70.0 billion share \nrepurchase program for its Class A and Class C shares. As of December 31, 2025, $69.5 billion remained available for \nClass A and Class C share repurchases.\nFor additional information, see Note 11 of the Notes to Consolidated Financial Statements included in Item 8 of \nthis Annual Report on Form 10-K.\nDividend Program\nDuring the year ended December 31, 2025, total cash dividends were $4.8 billion for Class A, $703 million for \nClass B, and $4.5 billion for Class C shares, respectively.\nIn April 2025, the company's Board of Directors increased the quarterly cash dividend by 5% to $0.21 per share of \noutstanding Class A, Class B, and Class C shares.\nThe company has declared a quarterly cash dividend in the current quarter, and intends to pay quarterly cash \ndividends in the future, subject to review and approval by the company’s Board of Directors in its sole discretion.\nAccrued Legal and Regulatory\nAs of December 31, 2025, we had short-term accrued legal and regulatory fines and settlements of $15.6 billion. \nThis amount primarily included EC fines, in addition to accruals related to other legal matters and regulatory fines and \nsettlements. For additional information, see Note 10 of the Notes to Consolidated Financial Statements included in \nItem 8 of this Annual Report on Form 10-K.\nTable of Contents\nAlphabet Inc.\n39.\n\nTaxes\nAs of December 31, 2025, we had long-term income taxes payable of $9.5 billion primarily related to \nunrecognized tax benefits. The timing and amount of any payment related to these unrecognized tax benefits are \nuncertain and cannot be estimated.\nPurchase Commitments and Other Contractual Obligations\nWe have material purchase commitments and other contractual obligations primarily related to energy take-or-pay \ncontracts, licenses (including content licenses), and technical infrastructure and inventory orders. As of December 31, \n2025, the total for these commitments was $149.1 billion, of which $113.0 billion was short-term, mostly related to \ntechnical infrastructure and inventory orders. These amounts reflect commitments and obligations through open \npurchase orders as well as the non-cancelable portion or the minimum cancellation fee in certain agreements. For \nthose agreements with variable terms, we do not estimate the non-cancelable obligation beyond any minimum \nquantities and/or pricing as of December 31, 2025. In certain instances, the amount of our contractual obligations may \nchange based on the expected timing of order fulfillment from our suppliers. For additional information related to our \ncontent licenses, see Note 10 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual \nReport on Form 10-K.\nAs of December 31, 2025, we provided backstops in the form of financial guarantees and credit derivatives with \nmaximum potential amount of future payments of $5.7 billion and $16.9 billion, respectively. For additional information \non credit derivatives and financial guarantees, see Note 3 and Note 10 of the Notes to Consolidated Financial \nStatements included in Item 8 of this Annual Report on Form 10-K.\nIn addition, we regularly enter into multi-year, non-cancellable power purchase agreements with third-party \nsuppliers that do not include a minimum dollar commitment. The amounts to be paid under these agreements are \nbased on the actual volumes to be generated and are not readily determinable.\nWe may experience increases in the costs associated with our purchase commitments and other contractual \nobligations as a result of ongoing developments surrounding international trade. For details on risks related to our \nmanufacturing and supply chain and other risks, refer to Part 1, Item 1A, \"Risk Factors\" of this Annual Report on Form \n10-K.\nPending Acquisitions\nIn March 2025, we entered into a definitive agreement to acquire Wiz, Inc. (\"Wiz\"), a leading cloud security \nplatform, for $32.0 billion, subject to closing adjustments, in an all-cash transaction. The acquisition of Wiz is expected \nto close in 2026, subject to customary closing conditions, including the receipt of regulatory approvals. \nIn December 2025, we entered into a definitive agreement to acquire Intersect, which provides data center and \nenergy infrastructure solutions, for $4.8 billion in cash, plus the assumption of debt. The acquisition of Intersect is \nexpected to close in the first half of 2026, subject to customary closing conditions.\nFor additional information, see Note 8 of the Notes to Consolidated Financial Statements included in Item 8 of this \nAnnual Report on Form 10-K.\nCritical Accounting Estimates\nWe prepare our consolidated financial statements in accordance with GAAP. In doing so, we have to make \nestimates and assumptions. Our critical accounting estimates are those estimates that involve a significant level of \nuncertainty at the time the estimate was made, and changes in them have had or are reasonably likely to have a \nmaterial effect on our financial condition or results of operations. Accordingly, actual results could differ materially from \nour estimates. We base our estimates on past experience and other assumptions that we believe are reasonable \nunder the circumstances, and we evaluate these estimates on an ongoing basis. We have reviewed our critical \naccounting estimates with the Audit Committee of our Board of Directors.\nFor a summary of significant accounting policies and the effect on our financial statements, see Note 1 of the \nNotes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.\nFair Value Measurements of Non-Marketable Equity Securities\nWe measure certain financial instruments at fair value on a nonrecurring basis, consisting primarily of our non-\nmarketable equity securities. These investments are accounted for under the measurement alternative method (\"the \nmeasurement alternative\") and are measured at cost, less impairment, subject to upward and downward adjustments \nresulting from observable price changes for identical or similar investments of the same issuer. These adjustments \nrequire quantitative assessments of the fair value of our securities, which may require the use of unobservable inputs. \nTable of Contents\nAlphabet Inc.\n40.\n\nAdjustments are determined primarily based on a market approach as of the transaction date and involve the use of \nestimates using the best information available, which may include cash flow projections or other available market data.\nNon-marketable equity securities are also evaluated for impairment, based on qualitative factors including the \ncompanies' financial and liquidity position and access to capital resources, among others. When indicators of \nimpairment exist, we prepare quantitative measurements of the fair value of our equity investments using a market \napproach or an income approach, which requires judgment and the use of unobservable inputs, including discount \nrates, investee revenues and costs, and comparable market data of private and public companies, among others. \nWhen the quantitative remeasurements of fair value indicate an impairment exists, we write down the investment to its \ncurrent fair value.\nProperty and Equipment\nWe assess the reasonableness of the useful lives of our property and equipment periodically or when events \nindicate a change is necessary. To determine the useful lives of our technical infrastructure, we rely on multiple inputs, \nincluding historical asset performance, expected technology advancements, and our future infrastructure deployment \nplans. Any change in the estimated useful lives is recognized on a prospective basis.\nIncome Taxes\nWe are subject to income taxes in the US and foreign jurisdictions. Significant judgment is required in evaluating \nour uncertain tax positions and determining our provision for income taxes.\nRecording an uncertain tax position involves various qualitative considerations, including evaluation of \ncomparable and resolved tax exposures, applicability of tax laws, and likelihood of settlement. We evaluate uncertain \ntax positions periodically, considering changes in facts and circumstances, such as new regulations or recent judicial \nopinions, as well as the status of audit activities by taxing authorities. Although we believe we have adequately \nreserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not \nbe different. To the extent that the final tax outcome of these matters is different than the amounts recorded, such \ndifferences will affect the provision for income taxes and the effective tax rate in the period in which such determination \nis made.\nThe provision for income taxes includes the effect of reserve provisions and changes to reserves as well as the \nrelated net interest and penalties. In addition, we are subject to the continuous examination of our income tax returns \nby the Internal Revenue Service (IRS) and other tax authorities which may assert assessments against us. We \nregularly assess the likelihood of adverse outcomes resulting from these examinations and assessments to determine \nthe adequacy of our provision for income taxes.\nLoss Contingencies\nWe are subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings, \nand consent orders involving competition, intellectual property, data privacy and security, tax and related compliance, \nlabor and employment, commercial disputes, content generated by our users, goods and services offered by \nadvertisers or publishers using our platforms, personal injury, consumer protection, and other matters. Certain of these \nmatters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we \nbelieve that it is probable that a loss has been incurred and the amount can be reasonably estimated. If we determine \nthat a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the possible loss in Note \n10 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. \nWe evaluate, on a regular basis, developments in our legal matters that could affect the amount of liability that \nhas been previously accrued, and the matters and related reasonably possible losses disclosed, and make \nadjustments as necessary. Significant judgment is required to determine both the likelihood and the estimated amount \nof a loss related to such matters. Until the final resolution of such matters, there may be an exposure to loss in excess \nof the amount recorded, and such amounts could be material.\nITEM 7A.\nQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\nWe are exposed to financial market risks, including changes in foreign currency exchange rates, interest rates, \nand equity investment risks. \nForeign Currency Exchange Risk\nWe transact business globally in multiple currencies. International revenues, foreign-denominated monetary \nassets and liabilities, and investments in foreign subsidiaries expose us to the risk of fluctuations in foreign exchange \nrates against the US dollar. Principal currency exposures include the Australian dollar, British pound, Canadian \ndollar, Euro, and Japanese yen. \nTable of Contents\nAlphabet Inc.\n41.\n\nWe monitor our foreign currency exposures and hedge foreign exchange risks with derivative and non-derivative \ninstruments, including forwards, options (including collars), cross-currency swaps, and foreign currency-denominated \ndebt. Gains or losses on these foreign currency exposures are generally offset by corresponding gains or losses on the \nderivative and non-derivative instruments.\nConsidering historical trends in foreign exchange rates, we determined that it was reasonably possible that \nadverse changes in exchange rates of 10% could be experienced. We performed a sensitivity analysis on our foreign \ncurrency exposures to estimate the potential impact of this adverse 10% change. The estimated effects on our \nfinancial position would be as follows (in millions):\nAs of December 31,\nImpact\n2024\n2025\nForeign currency risk\nForeign denominated monetary assets and liabilities(1)\nOI&E\n$ \n135 $ \n671 \nCash flow hedges of foreign currency revenue(2)\nAOCI\n$ \n1,627 $ \n2,096 \nNet investment hedges of investments in foreign subsidiaries(3)\nAOCI\n$ \n660 $ \n2,942 \n(1)\nAfter consideration of the effect of derivative contracts.\n(2)\nThe change in accumulated other comprehensive income (AOCI) would be expected to offset a corresponding foreign \ncurrency change in forecasted hedged revenues when recognized.\n(3)\nThe change in AOCI would be expected to offset a corresponding foreign currency translation gain or loss from our \ninvestments in foreign subsidiaries. \nInterest Rate Risk\nWe are exposed to interest rate risk related to our investment portfolio and outstanding debt.\nOur Corporate Treasury investment strategy is to achieve a return that will allow us to preserve capital and \nmaintain liquidity. By policy, we limit the amount of credit exposure within our investment portfolio to any one issuer. \nOur investments in both fixed rate and floating rate interest earning securities carry a degree of interest rate risk. Fixed \nrate securities may have their fair market value adversely affected due to a rise in interest rates, while floating rate \nsecurities may produce less income than predicted if interest rates fall. Unrealized gains and losses on our marketable \ndebt securities are primarily due to interest rate fluctuations as compared to interest rates at the time of purchase. For \ncertain fixed and floating rate debt securities, we have elected the fair value option for which changes in fair value are \nrecorded in OI&E. We measure securities for which we have not elected the fair value option at fair value with gains \nand losses recorded in AOCI until the securities are sold, less any expected credit losses. \nWe use value-at-risk (VaR) analysis to determine the potential effect of fluctuations in interest rates on the value \nof our investment portfolio. The VaR is the expected loss in fair value, for a given confidence interval, for our \ninvestment portfolio due to adverse movements in interest rates. We use a variance/covariance VaR model with 95% \nconfidence interval. The estimated one-day loss in fair value of our investment portfolio as of December 31, 2024 and \n2025 are shown below (in millions):\n \nAs of December 31,\n12-Month Average \nAs of December 31,\n \n2024\n2025\n2024\n2025\nRisk category - interest rate\n$ \n208 $ \n162 $ \n230 $ \n184 \nActual future gains and losses associated with our investment portfolio may differ materially from the sensitivity \nanalyses performed as of December 31, 2024 and 2025 due to the inherent limitations associated with predicting the \ntiming and amount of changes in interest rates and our actual exposures and positions. VaR analysis is not intended to \nrepresent actual losses but is used as a risk estimation.\nAdditionally, we had senior unsecured notes outstanding with a total carrying value of $11.9 billion and $48.5 \nbillion as of December 31, 2024 and 2025, respectively. As our senior unsecured notes primarily bear interest at fixed \nrates and are recorded at amortized cost, interest rate fluctuations generally do not affect our consolidated financial \nstatements. However, the fair value of the notes will fluctuate with movement in market interest rates.\nEquity Investment Risk\nOur marketable and non-marketable equity securities are subject to a wide variety of market-related risks that \ncould substantially reduce or increase the fair value of our holdings.\nTable of Contents\nAlphabet Inc.\n42.\n\nOur marketable equity securities are primarily publicly traded stocks or funds and our non-marketable equity \nsecurities are primarily investments in privately held companies, some of which are in the startup or development \nstages.\nWe record marketable equity securities at fair value subject to market price volatility. These securities represent \n$5.1 billion and $6.3 billion of our investments as of December 31, 2024 and 2025, respectively. A hypothetical adverse \nprice change of 10% on our December 31, 2025 balance would decrease the fair value of marketable equity securities \nby $631 million. From time to time, we may enter into derivatives to hedge the market price risk on certain of our \nmarketable equity securities.\nOur non-marketable equity securities not accounted for under the equity method are primarily adjusted to fair \nvalue for observable transactions for identical or similar investments of the same issuer or impairment (referred to as \nthe measurement alternative). The fair value measured at the time of the observable transaction is not necessarily an \nindication of the current fair value as of the balance sheet date. These investments, especially those that are in the \nearly stages, are inherently risky because the technologies or products these companies have under development are \ntypically in the early phases and may never materialize, and they may experience a decline in financial condition, \nwhich could result in a loss of a substantial part of our investment in these companies. Valuations of our equity \ninvestments in private companies are inherently more complex due to the lack of readily available market data and \nobservable transactions at lower valuations could result in significant losses. In addition, global economic conditions \ncould result in additional volatility. The success of our investment in any private company is also typically dependent on \nthe likelihood of our ability to realize appreciation in the value of investments through liquidity events such as public \nofferings, acquisitions, private sales, or other market events. Changes in the valuation of non-marketable equity \nsecurities may not directly correlate with changes in valuation of marketable equity securities. As of December 31, \n2024 and 2025, the carrying value of our non-marketable equity securities, which were accounted for under the \nmeasurement alternative, was $35.2 billion and $64.1 billion, respectively. \nThe carrying values of our equity method investments, which totaled approximately $2.0 billion and $2.5 billion as \nof December 31, 2024 and 2025, respectively, generally do not fluctuate based on market price changes. However, \nthese investments could be impaired if the carrying value exceeds the fair value and is not expected to recover.\nFor additional information about our equity investments, see Note 1 and Note 3 of the Notes to Consolidated \nFinancial Statements included in Item 8 of this Annual Report on Form 10-K.\nTable of Contents\nAlphabet Inc.\n43.\n\nITEM 8.\nFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\nAlphabet Inc.\nINDEX TO CONSOLIDATED FINANCIAL STATEMENTS\n \nPage\nReports of Independent Registered Public Accounting Firm (PCAOB ID: 42)\n45\nFinancial Statements:\nConsolidated Balance Sheets\n48\nConsolidated Statements of Income\n49\nConsolidated Statements of Comprehensive Income\n50\nConsolidated Statements of Stockholders’ Equity\n51\nConsolidated Statements of Cash Flows\n52\nNotes to Consolidated Financial Statements\n53\nTable of Contents\nAlphabet Inc.\n44.\n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\nTo the Stockholders and the Board of Directors of Alphabet Inc.\nOpinion on the Financial Statements\nWe have audited the accompanying consolidated balance sheets of Alphabet Inc. (the Company) as of December 31, \n2024 and 2025, the related consolidated statements of income, comprehensive income, stockholders' equity and cash \nflows for each of the three years in the period ended December 31, 2025, and the related notes and financial \nstatement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”). In \nour opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the \nCompany at December 31, 2024 and 2025, and the results of its operations and its cash flows for each of the three \nyears in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United \nStates) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria \nestablished in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the \nTreadway Commission (2013 framework), and our report dated February 4, 2026 expressed an unqualified opinion \nthereon.\nBasis for Opinion\nThese financial statements are the responsibility of the Company's management. Our responsibility is to express an \nopinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with \nthe PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal \nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and \nperform the audit to obtain reasonable assurance about whether the financial statements are free of material \nmisstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material \nmisstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to \nthose risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in \nthe financial statements. Our audits also included evaluating the accounting principles used and significant estimates \nmade by management, as well as evaluating the overall presentation of the financial statements. We believe that our \naudits provide a reasonable basis for our opinion.\nCritical Audit Matter\nThe critical audit matter communicated below is a matter arising from the current period audit of the financial \nstatements that was communicated or required to be communicated to the audit committee and that: (1) relates to \naccounts or disclosures that are material to the financial statements and (2) involved our especially challenging, \nsubjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion \non the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter \nbelow, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\nTable of Contents\nAlphabet Inc.\n45.\n\nLoss Contingencies \nDescription of \nthe Matter\nThe Company is subject to claims, lawsuits, regulatory and government inquiries and \ninvestigations, other proceedings, and consent orders. As described in Note 10 to the consolidated \nfinancial statements, such claims, lawsuits, regulatory and government inquiries and investigations, \nother proceedings, and consent orders could result in adverse consequences.\nSignificant judgment is required to determine both the likelihood and the estimated amount of a \nloss related to such matters. Auditing management’s accounting for and disclosure of loss \ncontingencies from these matters involved challenging and subjective auditor judgment in \nassessing the Company’s evaluation of the probability of a loss, and the estimated amount or \nrange of loss.\nHow We \nAddressed the \nMatter in Our \nAudit\nWe tested relevant controls over the identified risks associated with management’s accounting for \nand disclosure of these matters. This included controls over management’s assessment of the \nprobability of incurrence of a loss and whether the loss or range of loss was reasonably estimable \nand the development of related disclosures.\nOur audit procedures included, among others, gaining an understanding of previous rulings and the \nstatus of ongoing lawsuits, reviewing letters from internal and external legal counsel addressing the \nmatters, meeting with internal legal counsel to discuss the allegations, and obtaining a \nrepresentation letter from management on these matters. We also evaluated the Company’s \ndisclosures in relation to these matters.\n/s/ Ernst & Young LLP\nWe have served as the Company's auditor since 1999.\nSan Jose, California\nFebruary 4, 2026\nTable of Contents\nAlphabet Inc.\n46.\n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\nTo the Stockholders and the Board of Directors of Alphabet Inc.\nOpinion on Internal Control Over Financial Reporting\nWe have audited Alphabet Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria \nestablished in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the \nTreadway Commission (2013 framework) (the COSO criteria). In our opinion, Alphabet Inc. (the Company) maintained, \nin all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO \ncriteria.\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United \nStates) (PCAOB), the 2025 consolidated financial statements of the Company and our report dated February 4, 2026 \nexpressed an unqualified opinion thereon. \nBasis for Opinion\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its \nassessment of the effectiveness of internal control over financial reporting included in the accompanying \nManagement’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the \nCompany’s internal control over financial reporting based on our audit. We are a public accounting firm registered with \nthe PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal \nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and \nperform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was \nmaintained in all material respects.\nOur audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a \nmaterial weakness exists, testing and evaluating the design and operating effectiveness of internal control based on \nthe assessed risk, and performing such other procedures as we considered necessary in the circumstances. We \nbelieve that our audit provides a reasonable basis for our opinion.\nDefinition and Limitations of Internal Control Over Financial Reporting\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding \nthe reliability of financial reporting and the preparation of financial statements for external purposes in accordance with \ngenerally accepted accounting principles. A company’s internal control over financial reporting includes those policies \nand procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the \ntransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are \nrecorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting \nprinciples, and that receipts and expenditures of the company are being made only in accordance with authorizations \nof management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely \ndetection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on \nthe financial statements.\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. \nAlso, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become \ninadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may \ndeteriorate.\n/s/ Ernst & Young LLP\nSan Jose, California\nFebruary 4, 2026\nTable of Contents\nAlphabet Inc.\n47.\n\nAlphabet Inc.\nCONSOLIDATED BALANCE SHEETS\n(in millions, except par value per share amounts)\nAs of December 31,\n2024\n2025\nAssets\nCurrent assets:\nCash and cash equivalents\n$ \n23,466 $ \n30,708 \nMarketable securities\n \n72,191 \n96,135 \nTotal cash, cash equivalents, and marketable securities\n \n95,657 \n126,843 \nAccounts receivable, net\n \n52,340 \n62,886 \nOther current assets\n \n15,714 \n16,309 \nTotal current assets\n \n163,711 \n206,038 \nNon-marketable securities\n \n37,982 \n68,687 \nDeferred income taxes\n \n17,180 \n9,113 \nProperty and equipment, net\n \n171,036 \n246,597 \nOperating lease assets\n \n13,588 \n15,221 \nGoodwill\n \n31,885 \n33,380 \nOther non-current assets\n \n14,874 \n16,245 \nTotal assets\n$ \n450,256 $ \n595,281 \nLiabilities and Stockholders’ Equity\nCurrent liabilities:\nAccounts payable\n$ \n7,987 $ \n12,200 \nAccrued compensation and benefits\n \n15,069 \n17,546 \nAccrued expenses and other current liabilities\n \n51,228 \n55,557 \nAccrued revenue share\n \n9,802 \n10,864 \nDeferred revenue\n \n5,036 \n6,578 \nTotal current liabilities\n \n89,122 \n102,745 \nLong-term debt\n \n10,883 \n46,547 \nIncome taxes payable, non-current\n \n8,782 \n9,531 \nOperating lease liabilities\n \n11,691 \n12,744 \nOther long-term liabilities\n \n4,694 \n8,449 \nTotal liabilities\n \n125,172 \n180,016 \nCommitments and Contingencies (Note 10)\nStockholders’ equity:\nPreferred stock, $0.001 par value per share, 100 shares authorized; no \nshares issued and outstanding\n \n0 \n0 \nClass A, Class B, and Class C stock and additional paid-in capital, $0.001 \npar value per share: 300,000 shares authorized (Class A 180,000, Class B \n60,000, Class C 60,000); 12,211 (Class A 5,835, Class B 861, Class C \n5,515) and 12,088 (Class A 5,822, Class B 837, Class C 5,429) shares \nissued and outstanding\n \n84,800 \n93,126 \nAccumulated other comprehensive income (loss)\n \n(4,800) \n(1,916) \nRetained earnings\n \n245,084 \n324,055 \nTotal stockholders’ equity\n \n325,084 \n415,265 \nTotal liabilities and stockholders’ equity\n$ \n450,256 $ \n595,281 \nSee accompanying notes.\nTable of Contents\nAlphabet Inc.\n48.\n\nAlphabet Inc.\nCONSOLIDATED STATEMENTS OF INCOME\n(in millions, except per share amounts)\n \nYear Ended December 31,\n \n2023\n2024\n2025\nRevenues\n$ \n307,394 $ \n350,018 $ \n402,836 \nCosts and expenses:\nCost of revenues\n \n133,332 \n146,306 \n162,535 \nResearch and development\n \n45,427 \n49,326 \n61,087 \nSales and marketing\n \n27,917 \n27,808 \n28,693 \nGeneral and administrative\n \n16,425 \n14,188 \n21,482 \nTotal costs and expenses\n \n223,101 \n237,628 \n273,797 \nIncome from operations\n \n84,293 \n112,390 \n129,039 \nOther income (expense), net\n \n1,424 \n7,425 \n29,787 \nIncome before income taxes\n \n85,717 \n119,815 \n158,826 \nProvision for income taxes\n \n11,922 \n19,697 \n26,656 \nNet income\n$ \n73,795 $ \n100,118 $ \n132,170 \nBasic net income per share (Note 12)\n$ \n5.84 $ \n8.13 $ \n10.91 \nDiluted net income per share (Note 12)\n$ \n5.80 $ \n8.04 $ \n10.81 \nSee accompanying notes.\nTable of Contents\nAlphabet Inc.\n49.\n\nAlphabet Inc.\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n(in millions)\n \nYear Ended December 31,\n \n2023\n2024\n2025\nNet income\n$ \n73,795 $ \n100,118 $ \n132,170 \nOther comprehensive income (loss):\nChange in foreign currency translation adjustment, net of income tax \nbenefit (expense) of $63, $(49) and $180\n \n735 \n(1,673) \n2,522 \nAvailable-for-sale investments:\nChange in net unrealized gains (losses)\n \n1,344 \n(116) \n1,146 \nLess: reclassification adjustment for net (gains) losses included in \nnet income\n \n1,168 \n782 \n(169) \nNet change, net of income tax benefit (expense) of $(698), $(190), \nand $(276)\n \n2,512 \n666 \n977 \nCash flow hedges:\nChange in net unrealized gains (losses)\n \n168 \n775 \n(779) \nLess: reclassification adjustment for net (gains) losses included in \nnet income\n \n(214) \n(166) \n164 \nNet change, net of income tax benefit (expense) of $2, $(151), and \n$174\n \n(46) \n609 \n(615) \nOther comprehensive income (loss)\n \n3,201 \n(398) \n2,884 \nComprehensive income\n$ \n76,996 $ \n99,720 $ \n135,054 \nSee accompanying notes.\nTable of Contents\nAlphabet Inc.\n50.\n\nAlphabet Inc.\nCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY\n(in millions)\n \nClass A, Class B, Class C \nStock and\nAdditional Paid-In Capital\nAccumulated\nOther\nComprehensive\nIncome (Loss)\nRetained\nEarnings\nTotal\nStockholders’\nEquity\n \nShares\nAmount\nBalance as of December 31, 2022\n \n12,849 $ \n68,184 $ \n(7,603) $ \n195,563 $ \n256,144 \nStock issued\n \n139 \n0 \n0 \n0 \n0 \nStock-based compensation\n \n0 \n22,578 \n0 \n0 \n22,578 \nTax withholding related to vesting of \nrestricted stock units and other\n \n0 \n(10,164) \n0 \n9 \n(10,155) \nRepurchases of stock\n \n(528) \n(4,064) \n0 \n(58,120) \n(62,184) \nNet income\n \n0 \n0 \n0 \n73,795 \n73,795 \nOther comprehensive income (loss)\n \n0 \n0 \n3,201 \n0 \n3,201 \nBalance as of December 31, 2023\n \n12,460 \n76,534 \n(4,402) \n211,247 \n283,379 \nStock issued\n \n130 \n0 \n0 \n0 \n0 \nStock-based compensation\n \n0 \n22,937 \n0 \n0 \n22,937 \nTax withholding related to vesting of \nrestricted stock units and other\n \n0 \n(12,507) \n0 \n(16) \n(12,523) \nRepurchases of stock\n \n(379) \n(3,359) \n0 \n(58,688) \n(62,047) \nDividends and dividend equivalents \ndeclared ($0.60 per share)\n \n0 \n41 \n0 \n(7,577) \n(7,536) \nSale of interest in consolidated entities\n \n0 \n1,154 \n0 \n0 \n1,154 \nNet income\n \n0 \n0 \n0 \n100,118 \n100,118 \nOther comprehensive income (loss)\n \n0 \n0 \n(398) \n0 \n(398) \nBalance as of December 31, 2024\n \n12,211 \n84,800 \n(4,800) \n245,084 \n325,084 \nStock issued\n \n117 \n0 \n0 \n0 \n0 \nStock-based compensation\n \n0 \n25,130 \n0 \n0 \n25,130 \nTax withholding related to vesting of \nrestricted stock units and other\n \n0 \n(14,842) \n0 \n0 \n(14,842) \nRepurchases of stock\n \n(240) \n(2,514) \n0 \n(42,884) \n(45,398) \nDividends and dividend equivalents \ndeclared ($0.83 per share)\n \n0 \n152 \n0 \n(10,315) \n(10,163) \nSale of interest in consolidated entities\n \n0 \n400 \n0 \n0 \n400 \nNet income\n \n0 \n0 \n0 \n132,170 \n132,170 \nOther comprehensive income (loss)\n \n0 \n0 \n2,884 \n0 \n2,884 \nBalance as of December 31, 2025\n \n12,088 $ \n93,126 $ \n(1,916) $ \n324,055 $ \n415,265 \nSee accompanying notes.\nTable of Contents\nAlphabet Inc.\n51.\n\nAlphabet Inc.\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n(in millions)\n \nYear Ended December 31,\n \n2023\n2024\n2025\nOperating activities\nNet income\n$ \n73,795 $ \n100,118 $ \n132,170 \nAdjustments:\nDepreciation of property and equipment\n \n11,946 \n15,311 \n21,136 \nStock-based compensation expense\n \n22,460 \n22,785 \n24,953 \nDeferred income taxes\n \n(7,763) \n(5,257) \n8,348 \nLoss (gain) on debt and equity securities, net\n \n823 \n(2,671) \n(24,620) \nOther\n \n4,330 \n3,419 \n2,108 \nChanges in assets and liabilities, net of effects of acquisitions:\nAccounts receivable, net\n \n(7,833) \n(5,891) \n(8,779) \nIncome taxes, net\n \n523 \n(2,418) \n(3,226) \nOther assets\n \n(2,143) \n(1,397) \n(4,542) \nAccounts payable\n \n664 \n359 \n907 \nAccrued expenses and other liabilities\n \n3,937 \n(1,161) \n12,939 \nAccrued revenue share\n \n482 \n1,059 \n899 \nDeferred revenue\n \n525 \n1,043 \n2,420 \nNet cash provided by operating activities\n \n101,746 \n125,299 \n164,713 \nInvesting activities\nPurchases of property and equipment\n \n(32,251) \n(52,535) \n(91,447) \nPurchases of marketable securities\n \n(77,858) \n(86,679) \n(103,773) \nMaturities and sales of marketable securities\n \n86,672 \n103,428 \n83,240 \nPurchases of non-marketable securities\n \n(3,027) \n(5,034) \n(5,716) \nMaturities and sales of non-marketable securities\n \n947 \n882 \n1,367 \nAcquisitions, net of cash acquired, and purchases of intangible assets\n \n(495) \n(2,931) \n(1,592) \nOther investing activities\n \n(1,051) \n(2,667) \n(2,370) \nNet cash used in investing activities\n \n(27,063) \n(45,536) \n(120,291) \nFinancing activities\nNet payments related to stock-based award activities\n \n(9,837) \n(12,190) \n(14,167) \nRepurchases of stock\n \n(61,504) \n(62,222) \n(45,709) \nDividend payments\n \n0 \n(7,363) \n(10,049) \nProceeds from issuance of debt, net of costs\n \n10,790 \n13,589 \n64,564 \nRepayments of debt\n \n(11,550) \n(12,701) \n(32,427) \nProceeds from sale of interest in consolidated entities, net\n \n8 \n1,154 \n400 \nNet cash used in financing activities\n \n(72,093) \n(79,733) \n(37,388) \nEffect of exchange rate changes on cash and cash equivalents\n \n(421) \n(612) \n208 \nNet increase (decrease) in cash and cash equivalents\n \n2,169 \n(582) \n7,242 \nCash and cash equivalents at beginning of period\n \n21,879 \n24,048 \n23,466 \nCash and cash equivalents at end of period\n$ \n24,048 $ \n23,466 $ \n30,708 \nSupplemental disclosures of non-cash investing activities:\nPurchases of property and equipment included in accrued liabilities and \naccounts payable\n$ \n7,435 $ \n10,326 $ \n15,090 \nSee accompanying notes.\nTable of Contents\nAlphabet Inc.\n52.\n\nAlphabet Inc.\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 1. Summary of Significant Accounting Policies\nNature of Operations\nGoogle was incorporated in California in September 1998 and re-incorporated in the State of Delaware in August \n2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. (\"Alphabet\") became \nthe successor issuer to Google.\nWe generate revenues by delivering relevant, cost-effective online advertising; cloud-based solutions that provide \nenterprise customers of all sizes with infrastructure, platform services, and applications; and sales of other products \nand services, such as fees received for subscription-based products, apps and in-app purchases, and devices.\nBasis of Consolidation\nThe consolidated financial statements of Alphabet include the accounts of Alphabet and entities consolidated \nunder the variable interest and voting models. Intercompany balances and transactions have been eliminated.\nUse of Estimates\nPreparation of consolidated financial statements in conformity with GAAP requires us to make estimates and \nassumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. \nActual results could differ materially from these estimates due to uncertainties. On an ongoing basis, we evaluate our \nestimates, including those related to the allowance for credit losses; contingent liabilities; fair values of financial \ninstruments and goodwill; income taxes; inventory; and useful lives of property and equipment, among others. We \nbase our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, and the \nresults of which form the basis for making judgments about the carrying values of assets and liabilities.\nRevenue Recognition\nRevenues are recognized when control of the promised goods or services is transferred to our customers, and \nthe collectibility of an amount that we expect in exchange for those goods or services is probable. Sales and other \nsimilar taxes are excluded from revenues. \nGoogle Advertising\nGoogle advertising revenues consist of revenues from:\n•\nGoogle Search and other properties, including revenues from traffic generated by search distribution partners \nwho use Google.com as their default search in browsers, toolbars, etc. and other Google owned and operated \nproperties like Gmail, Google Maps, and Google Play;\n•\nYouTube properties; and\n•\nGoogle Network properties, including revenues from Google Network properties participating in AdMob, \nAdSense, and Google Ad Manager.\nOur customers generally purchase advertising inventory through Google Ads, Google Ad Manager, Google \nDisplay & Video 360, and Google Marketing Platform, among others.\nWe offer advertising by delivering both performance and brand advertising. We recognize revenues for \nperformance advertising when a user engages with the advertisement. For brand advertising, we recognize revenues \nwhen the ad is displayed, or a user views the ad.\nFor ads placed on Google Network properties, we evaluate whether we are the principal (i.e., report revenues on \na gross basis) or agent (i.e., report revenues on a net basis). Generally, we report advertising revenues for ads placed \non Google Network properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues, \nand amounts paid to Google Network partners are recorded as cost of revenues. Where we are the principal, we \ncontrol the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to \nmonetize the advertising inventory before it is transferred to our customers and is further supported by us being \nprimarily responsible to our customers and having a level of discretion in establishing pricing.\nGoogle Subscriptions, Platforms, and Devices\nGoogle subscriptions, platforms, and devices revenues consist of revenues from:\nTable of Contents\nAlphabet Inc.\n53.\n\n•\nconsumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV, \nYouTube Music and Premium, and NFL Sunday Ticket, as well as Google One, which offers access to our \nmost capable Gemini models;\n•\nplatforms, which primarily include revenues from Google Play sales of apps and in-app purchases;\n•\ndevices, which primarily include sales of the Pixel family of devices; and\n•\nother products and services.\nSubscription revenues are recognized ratably over the period of the subscription, primarily monthly. We report \nrevenues from Google Play sales of apps and in-app purchases on a net basis because our performance obligation is \nto facilitate a transaction between app developers and end users for which we earn a service fee. \nGoogle Cloud\nGoogle Cloud revenues consist of revenues from:\n•\nGoogle Cloud Platform primarily generates consumption-based fees and subscriptions for infrastructure, \nplatform, and other services. These services provide access to solutions such as AI offerings including our \nenterprise AI infrastructure, Vertex AI platform, and Gemini Enterprise; cybersecurity offerings; and data and \nanalytics solutions;\n•\nGoogle Workspace includes subscriptions for cloud-based communication and collaboration tools for \nenterprises, such as Gmail, Docs, Calendar, Drive, and Meet, with integrated features like Gemini for Google \nWorkspace; and\n•\nother enterprise services.\nOur cloud services are generally provided on either a consumption or subscription basis and may have contract \nterms longer than a year. Revenues related to cloud services provided on a consumption basis are recognized when \nthe customer utilizes the services, based on the quantity of services consumed using the relative standalone selling \nprice allocation. Revenues related to cloud services provided on a subscription basis are recognized ratably over the \ncontract term as the customer receives and consumes the benefits of the cloud services.\nArrangements with Multiple Performance Obligations\nOur contracts with customers may include multiple performance obligations. For such arrangements, we allocate \nrevenues to each performance obligation based on its relative standalone selling price. We generally determine \nstandalone selling prices based on observable prices of our products and services sold or priced separately in \ncomparable circumstances to similar customers.\nCustomer Incentives and Credits\nCertain customers receive cash-based incentives or credits, which are accounted for as variable consideration. \nWe estimate these amounts based on the expected amount to be provided to customers and reduce revenues. We \nbelieve that there will not be significant changes to our estimates of variable consideration related to customer \nincentives and credits.\nSales Commissions\nWe expense sales commissions when incurred when the period of the expected benefit is one year or less. We \nrecognize an asset for certain sales commissions and amortize if the expected benefit period is greater than one year. \nThese costs are recorded within sales and marketing expenses.\nCost of Revenues\nCost of revenues consists of TAC and other costs of revenues.\n•\nTAC includes:\n◦\namounts paid to our distribution partners who make available our search access points and other ad-\nsupported services. Our distribution partners include browser providers, mobile carriers, original \nequipment manufacturers, and software developers; and\n◦\namounts paid to Google Network partners primarily for ads displayed on their properties.\n•\nOther cost of revenues includes:\nTable of Contents\nAlphabet Inc.\n54.\n\n◦\ncontent acquisition costs, which are payments to content providers from whom we license video and \nother content for distribution, primarily related to YouTube (we pay fees to these content providers \nbased on revenues generated, subscriber counts, or a flat fee);\n◦\ndepreciation expense, primarily related to our technical infrastructure;\n◦\nemployee compensation expenses related to our technical infrastructure and other operations such as \ncontent review and customer and product support;\n◦\ninventory and other costs related to the devices we sell; and\n◦\nother technical infrastructure operations costs, including energy, equipment, and network capacity \ncosts.\nSoftware Development Costs\nWe expense software development costs, including costs to develop software products or the software \ncomponent of products to be sold, leased, or marketed to external users, before technological feasibility is reached. \nTechnological feasibility is typically reached shortly before the release of such products. As a result, development costs \nthat meet the criteria for capitalization were not material for the periods presented.\nSoftware development costs also include costs to develop software to be used solely to meet internal needs and \ncloud-based applications used to deliver our services. We capitalize development costs related to these software \napplications once the preliminary project stage is complete and it is probable that the project will be completed and the \nsoftware will be used to perform the function intended. Costs capitalized for developing such software applications \nwere not material for the periods presented.\nStock-Based Compensation\nStock-based compensation (SBC) primarily consists of Alphabet restricted stock units (RSUs). RSUs are equity \nclassified and measured at the fair market value of the underlying stock at the grant date. We recognize RSU expense \nusing the straight-line attribution method over the requisite service period and account for forfeitures as they occur. \nRSUs are awarded dividend equivalents, which are subject to the same vesting conditions as the underlying award, \nand settled in Class C shares.\nFor RSUs, shares are issued on the vesting dates net of the applicable statutory income tax withholding to be \npaid by us on behalf of our employees. As a result, fewer shares are issued than the number of RSUs vested, and the \nincome tax withholding is recorded as a reduction to additional paid-in capital.\nAdditionally, SBC includes other stock-based awards, such as performance stock units (PSUs) that include \nmarket conditions and awards that may be settled in cash or the stock of certain Other Bet companies. PSUs and \ncertain awards granted by Other Bet companies are equity classified and expense is recognized over the requisite \nservice period. Certain awards granted by Other Bet companies are liability classified and remeasured at fair value \nthrough settlement. The fair value of awards granted by Other Bet companies is based on the equity valuation of the \nrespective Other Bet company.\nAdvertising and Promotional Expenses\nWe expense advertising and promotional costs in the period in which they are incurred. For the years ended \nDecember 31, 2023, 2024, and 2025, advertising and promotional expenses totaled approximately $8.7 billion, $8.7 \nbillion, and $9.9 billion, respectively.\nFair Value Measurements \nFair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a \nliability in an orderly transaction between market participants. Assets and liabilities recorded at fair value are measured \nand classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in \nthe market used to measure fair value:\nLevel 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active \nmarkets.\nLevel 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for \nidentical or similar instruments in markets that are not active, and model-based valuation techniques for which all \nsignificant inputs are observable in the market or can be derived from observable market data. Where applicable, \nthese models project future cash flows and discount the future amounts to a present value using market-based \nobservable inputs including interest rate curves, foreign exchange rates, and credit ratings.\nTable of Contents\nAlphabet Inc.\n55.\n\nLevel 3 - Unobservable inputs that are supported by little or no market activities.\nThe fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of \nunobservable inputs when measuring fair value. The determination of fair value involves the use of appropriate \nvaluation methods and relevant inputs into valuation models.\nOur financial assets and liabilities that are measured at fair value on a recurring basis include cash equivalents, \nmarketable securities, and derivative financial instruments. Our financial assets measured at fair value on a \nnonrecurring basis include non-marketable equity securities. Other financial assets and liabilities are carried at cost \nwith fair value disclosed, if required.\nWe measure certain other instruments, and certain assets and liabilities acquired in a business combination, also \nat fair value on a nonrecurring basis.\nFinancial Instruments\nOur financial instruments include cash, cash equivalents, marketable and non-marketable securities, derivative \nfinancial instruments, financial guarantees, accounts receivable, and convertible notes.\nCredit Risks\nWe are subject to concentration of credit risk primarily from cash equivalents, marketable debt securities, \nderivative financial instruments, including foreign exchange contracts, accounts receivable, and convertible notes. We \nmanage the concentration of our credit risk exposure through timely assessment of our counterparty creditworthiness, \ncredit limits, and use of collateral management. Foreign exchange contracts are transacted with various financial \ninstitutions with high credit standing. Accounts receivable are typically unsecured and are derived from revenues \nearned from customers located around the world. We manage the concentration of our credit risk exposure by \nperforming ongoing evaluations to determine customer credit and we limit the amount of credit we extend. We \ngenerally do not require collateral from our customers.\nCash Equivalents\nWe invest excess cash primarily in asset-backed and mortgage-backed securities, corporate debt securities, \ngovernment bonds, money market funds, and time deposits.\nMarketable Securities\nWe classify all marketable debt securities that have effective maturities of three months or less from the date of \npurchase as cash equivalents and those with effective maturities of greater than three months as marketable \nsecurities. We determine the appropriate classification of our investments in marketable debt securities at the time of \npurchase and reevaluate such designation at each balance sheet date. We have classified and accounted for our \nmarketable debt securities as available-for-sale. After consideration of our risk versus reward objectives, as well as our \nliquidity requirements, we may sell these debt securities prior to their effective maturities. As we view these securities \nas available to support current operations, we classify highly liquid securities with maturities beyond 12 months as \ncurrent assets under the caption marketable securities. We carry these securities at fair value, and report the \nunrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for the changes in allowance \nfor expected credit losses, which are recorded in OI&E. For certain marketable debt securities we have elected the fair \nvalue option, for which changes in fair value are recorded in OI&E. We determine any realized gains and losses on the \nsale of marketable debt securities on a specific identification method, and we record such gains and losses as a \ncomponent of OI&E.\nOur investments in marketable equity securities are measured at fair value with the related gains and losses, \nincluding unrealized, recognized in OI&E. \nNon-Marketable Securities\nNon-marketable securities primarily consist of equity securities. We account for non-marketable equity securities \nthrough which we exercise significant influence but do not have control over the investee under the equity method. \nOther non-marketable equity securities that we hold are primarily accounted for under the measurement alternative. \nUnder the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus \nchanges resulting from observable price changes in orderly transactions for identical or similar investments of the \nsame issuer. Adjustments are determined primarily based on a market approach as of the transaction date and are \nrecorded as a component of OI&E.\nNon-marketable securities that do not have effective contractual maturity dates are classified as other non-\ncurrent assets.\nTable of Contents\nAlphabet Inc.\n56.\n\nDerivative Financial Instruments\nSee Note 3 for the accounting policy pertaining to derivative financial instruments. \nFinancial Guarantees\nIn certain arrangements, we provide reimbursements for costs incurred by third parties during power generation \nproject development phases if specified trigger events occur. We recognize a noncontingent liability for the fair value of \nour obligation to stand ready to perform, reported in other long-term liabilities. We also recognize a contingent liability \nwhen it becomes probable that a payment will be required and the amount can be reasonably estimated.\nAccounts Receivable\nOur payment terms for accounts receivable vary by the types and locations of our customers and the products or \nservices offered. The term between invoicing and when payment is due is not significant. Additionally, accounts \nreceivable includes amounts for services performed in advance of the right to invoice the customer.\nWe maintain an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts \nreceivable, and changes in such are classified as general and administrative expense. We assess collectibility by \nreviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when \nwe identify specific customers with known disputes or collectibility issues. With respect to current accounts receivables, \nwe elected to assume that current conditions as of the balance sheet date do not change for the remaining life of the \nasset. In determining the amount of the allowance for credit losses for those assets, we adjust historical loss \ninformation to reflect current market conditions and customer-specific information to the extent that historical loss \ninformation does not reflect current conditions.\nConvertible Notes\nOur investments in convertible notes are primarily recorded at amortized cost which includes unpaid principal \nbalances, deferred origination costs, and any related discount or premium, net of allowances for credit losses, and are \nincluded within other non-current assets.\nOther\nOur financial instruments also include debt and equity investments in companies with which we also entered into \ncommercial arrangements at or near the same time. For these transactions, judgment is required in assessing the \nsubstance of the arrangements, including assessing whether the components of the arrangements should be \naccounted for as separate transactions under the applicable GAAP, and determining the value of the components of \nthe arrangements, including the fair value of the investments. Additionally, if our investment in such companies \nbecomes impaired, we may need to re-evaluate the accounting for the commercial arrangement, including reducing \nany remaining performance obligations.\nImpairment of Investments\nWe periodically review our debt securities with unrealized gains and losses recorded as a component of \nstockholders' equity and non-marketable equity securities for impairment. \nFor debt securities in an unrealized loss position, we determine whether a credit loss exists. The credit loss is \nestimated by considering available information relevant to the collectibility of the security and information about past \nevents, current conditions, and reasonable and supportable forecasts. Any credit loss is recorded as a charge to OI&E, \nnot to exceed the amount of the unrealized loss. Unrealized losses other than the credit loss are recognized in AOCI. If \nwe have an intent to sell, or if it is more likely than not that we will be required to sell a debt security in an unrealized \nloss position before recovery of its amortized cost basis, we will write down the security to its fair value and record the \ncorresponding charge as a component of OI&E.\nFor non-marketable equity securities, including equity method investments, we consider whether impairment \nindicators exist by evaluating the companies' financial and liquidity position and access to capital resources, among \nother indicators. If the assessment indicates that the investment is impaired, we write down the investment to its fair \nvalue by recording the corresponding charge as a component of OI&E. We prepare quantitative measurements of the \nfair value of our equity investments using a market approach or an income approach.\nInventory\nInventory consists primarily of finished goods and is stated at the lower of cost and net realizable value. Cost is \ngenerally computed using the first-in, first-out method.\nTable of Contents\nAlphabet Inc.\n57.\n\nVariable Interest Entities\nWe determine at the inception of each arrangement whether an entity in which we have made an investment or in \nwhich we have other variable interests is considered a variable interest entity (VIE). We consolidate VIEs when we are \nthe primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct activities that most \nsignificantly affect the economic performance of the VIE and have the obligation to absorb the majority of their losses \nor benefits. If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a \nVIE in accordance with applicable GAAP.\nPeriodically, we assess whether any changes in our interest or relationship with the entity affect our determination \nof whether the entity is a VIE and, if so, whether we are the primary beneficiary. \nProperty and Equipment\nProperty and equipment is comprised of technical infrastructure, office space, corporate and other assets \ncurrently in service, and assets not yet in service. Technical infrastructure includes data center land, buildings and \nleasehold improvements, and servers and network equipment. Office space includes office land, buildings, and \nleasehold improvements. Assets not yet in service are those that are not ready for their intended use, including data \ncenter buildings and servers in the process of construction or assembly. \nProperty and equipment are stated at cost less accumulated depreciation. Depreciation commences once assets \nare ready for their intended use and is recorded using the straight-line method over the estimated useful lives of the \nassets, which we regularly evaluate for factors such as technological obsolescence and our planned use and \nutilization. We depreciate data center and office buildings over periods of seven to 40 years. We depreciate servers \nand network equipment generally over a period of six years. We depreciate corporate and other assets over periods of \ntwo to 25 years. We depreciate leasehold improvements over the shorter of the remaining lease term or the estimated \nuseful lives of the assets. Land is not depreciated. \nGoodwill\nWe allocate goodwill to reporting units based on the expected benefit from the business combination. We \nevaluate our reporting units periodically, as well as when changes in our operating segments occur. For changes in \nreporting units, we reassign goodwill using a relative fair value allocation approach. We test our goodwill for \nimpairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be \nimpaired. Goodwill impairments were not material for the periods presented.\nLeases\nWe determine if an arrangement is a lease at inception. Our lease agreements generally contain lease and non-\nlease components. Payments under our lease arrangements are primarily fixed. Non-lease components primarily \ninclude payments for maintenance and utilities. We combine fixed payments for non-lease components with lease \npayments and account for them together as a single lease component which increases the amount of our lease assets \nand liabilities.\nCertain lease agreements contain variable payments, which are expensed as incurred and not included in the \nlease assets and liabilities. These amounts primarily include payments affected by the Consumer Price Index, and \npayments for maintenance and utilities.\nLease assets and liabilities are recognized at the present value of the future lease payments at the lease \ncommencement date. The interest rate used to determine the present value of the future lease payments is our \nincremental borrowing rate, because the interest rate implicit in our leases is not readily determinable. Our incremental \nborrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, \nand in economic environments where the leased asset is located. Our lease terms and payments include periods \nunder options to purchase, extend, or terminate the lease when it is reasonably certain that we will exercise that \noption. We generally use the base, non-cancelable, lease term when determining the lease assets and liabilities. \nLease assets also include any prepaid lease payments and lease incentives.\nThe current portion of our operating lease liabilities is included in accrued expenses and other current liabilities, \nand the long-term portion is included in operating lease liabilities. Finance lease assets are included in property and \nequipment, net. Finance lease liabilities are included in accrued expenses and other current liabilities or other long-\nterm liabilities.\nOperating lease expense (excluding variable lease costs) is recognized on a straight-line basis over the lease \nterm. Finance lease expense is recognized on a straight-line basis over the shorter of the lease term or the useful life \nof the asset, and interest expense is recognized based on the incremental borrowing rate.\nTable of Contents\nAlphabet Inc.\n58.\n\nImpairment of Long-Lived Assets\nWe review leases, property and equipment, and intangible assets, excluding goodwill, for impairment when \nevents or changes in circumstances indicate the carrying amount may not be recoverable. The evaluation is performed \nat the lowest level of identifiable cash flows independent of other assets. We measure recoverability of these assets by \ncomparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected \nto generate. If the carrying value of the assets or asset group is not recoverable, the impairment recognized is \nmeasured as the amount by which the carrying value exceeds its fair value.\nIncome Taxes\nWe account for income taxes using the asset and liability method, under which we recognize the amount of taxes \npayable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of \nevents that have been recognized in our financial statements or tax returns. We measure current and deferred tax \nassets and liabilities based on provisions of enacted tax law. We evaluate the likelihood of future realization of our \ndeferred tax assets based on all available evidence and establish a valuation allowance to reduce deferred tax assets \nwhen it is more likely than not that they will not be realized or release a valuation allowance to increase deferred tax \nassets when it is more likely than not that they will be realized. We have elected to account for the tax effects of the \nglobal intangible low tax income provision as a current period expense.\nWe recognize the financial statement effects of a tax position when it is more likely than not that, based on \ntechnical merits, the position will be sustained upon examination. The tax benefits of the position recognized in the \nfinancial statements are then measured based on the largest amount of benefit that is greater than 50% likely to be \nrealized upon settlement with a taxing authority. In addition, we recognize interest and penalties related to \nunrecognized tax benefits as a component of the income tax provision.\nBusiness Combinations\nWe include the results of operations of the businesses that we acquire as of the acquisition date. We allocate the \npurchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values, \nexcept for revenue contracts acquired, which are recognized in accordance with our revenue recognition policy. The \nexcess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. \nAcquisition-related expenses are recognized separately from the business combination and are expensed as incurred.\nForeign Currency\nWe translate the financial statements of our international subsidiaries to US dollars using month-end exchange \nrates for assets and liabilities, and average rates for the period derived from month-end exchange rates for revenues, \ncosts, and expenses. We record translation gains and losses in AOCI as a component of stockholders’ equity. We \nreflect net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to \nfunctional currency as a component of foreign currency exchange gain (loss) in OI&E.\nRecently Issued Accounting Pronouncements Not Yet Adopted\nIn November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update \n(ASU) 2024-03 \"Income Statement: Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic \n220-40)\" to improve the disclosures about an entity’s expenses. Upon adoption, we will be required to disclose in the \nnotes to the financial statements a disaggregation of certain expense categories included within the relevant expense \ncaptions on the consolidated statements of income. The standard is effective for our 2027 annual period, and our \ninterim periods beginning in 2028, with early adoption permitted. The standard can be applied either prospectively or \nretrospectively. We are currently assessing adoption timing, the method of adoption, and the effect that the updated \nstandard will have on our financial statement disclosures.\nIn September 2025, the FASB issued ASU 2025-06 \"Intangibles: Goodwill and Other‒Internal-Use Software \n(Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software\" to modernize the accounting \nfor software costs under Subtopic 350-40, Intangibles‒Goodwill and Other‒Internal-Use Software (referred to as \n“internal-use software”). Upon adoption, we will be required to account for internal-use software under the updated \ncapitalization criteria. The standard is effective for our interim and annual 2028 periods, with early adoption permitted. \nThe standard can be applied either prospectively, retrospectively, or under a modified transition approach. We are \ncurrently assessing adoption timing, the method of adoption, and the effect that the updated standard will have on our \nconsolidated financial statements.\nRecently Adopted Accounting Pronouncements\nTable of Contents\nAlphabet Inc.\n59.\n\nIn December 2023, the FASB issued ASU 2023-09 \"Income Taxes (Topics 740): Improvements to Income Tax \nDisclosures\" which expands the disclosure requirements for income taxes. We adopted this ASU for our 2025 annual \nperiod with the comparative periods updated to reflect additional disclosures. See Note 14 for the revised disclosures \nconsistent with the new standard.\nPrior Period Reclassifications\nCertain amounts in prior periods have been reclassified to conform with current period presentation.\nNote 2. Revenues \nDisaggregated Revenues\nThe following table presents revenues disaggregated by type (in millions):\nYear Ended December 31,\n2023\n2024\n2025\nGoogle Search & other\n$ \n175,033 $ \n198,084 $ \n224,532 \nYouTube ads\n \n31,510 \n36,147 \n40,367 \nGoogle Network\n \n31,312 \n30,359 \n29,792 \nGoogle advertising\n \n237,855 \n264,590 \n294,691 \nGoogle subscriptions, platforms, and devices\n \n34,688 \n40,340 \n48,030 \nGoogle Services total\n \n272,543 \n304,930 \n342,721 \nGoogle Cloud\n \n33,088 \n43,229 \n58,705 \nOther Bets\n \n1,527 \n1,648 \n1,537 \nHedging gains (losses)\n \n236 \n211 \n(127) \nTotal revenues\n$ \n307,394 $ \n350,018 $ \n402,836 \nNo individual customer or groups of affiliated customers represented more than 10% of our revenues in 2023, \n2024, or 2025. \nThe following table presents revenues disaggregated by geography, based on the addresses of our customers (in \nmillions):\nYear Ended December 31,\n \n2023\n2024\n2025\nUnited States\n$ 146,286 \n 47 % $ 170,447 \n 49 % $ 194,229 \n 48 %\nEMEA(1)\n \n91,038 \n 30 \n \n102,127 \n 29 \n \n117,152 \n 29 \nAPAC(1)\n \n51,514 \n 17 \n \n56,815 \n 16 \n \n67,680 \n 17 \nOther Americas(1)\n \n18,320 \n 6 \n \n20,418 \n 6 \n \n23,902 \n 6 \nHedging gains (losses)\n \n236 \n 0 \n \n211 \n 0 \n \n(127) \n 0 \nTotal revenues\n$ 307,394 100 % $ 350,018 100 % $ 402,836 100 %\n(1)\nRegions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America (\"Other \nAmericas\").\nRevenue Backlog\nAs of December 31, 2025, we had $242.8 billion of remaining performance obligations (“revenue backlog\"), \nprimarily related to Google Cloud. Revenue backlog represents commitments in customer contracts that have not yet \nbeen recognized as revenue. We expect to recognize just over 50% of the revenue backlog as revenues over the next \n24 months with the remainder to be recognized thereafter. The estimated revenue backlog and timing of revenue \nrecognition for these commitments is largely driven by contract duration, our ability to deliver in accordance with \nrelevant contract terms, and when our customers utilize services. Revenue backlog includes related deferred revenue \ncurrently recorded as well as amounts that will be invoiced in future periods, and excludes contracts with an original \nexpected term of one year or less and cancellable contracts.\nDeferred Revenues\nWe record deferred revenues when cash payments are received or due in advance of our performance, including \namounts which are refundable. Deferred revenues primarily relate to Google Cloud and Google subscriptions, \nplatforms, and devices. Total deferred revenue as of December 31, 2024 was $6.0 billion, of which $4.6 billion was \nTable of Contents\nAlphabet Inc.\n60.\n\nrecognized as revenues for the year ended December 31, 2025. Total deferred revenue as of December 31, 2025 was \n$8.6 billion. \nNote 3. Financial Instruments \nFair Value Measurements\nInvestments Measured at Fair Value on a Recurring Basis\nCash equivalents and marketable equity securities are measured at fair value and classified within Level 1 and \nLevel 2 in the fair value hierarchy, because we use quoted prices for identical assets in active markets or inputs that \nare based upon quoted prices for similar instruments in active markets.\nDebt securities are measured at fair value and classified within Level 2 in the fair value hierarchy, because we use \nquoted market prices to the extent available or alternative pricing sources and models utilizing market observable \ninputs to determine fair value.\nThe following tables summarize our cash, cash equivalents, and marketable securities measured at fair value on \na recurring basis (in millions):\nAs of December 31, 2024\nQuoted Prices in\nActive Markets\nfor Identical Assets\n(Level 1)\nSignificant Other\nObservable Inputs\n(Level 2)\nTotal\nCash\n$ \n12,407 \nCash equivalents:\nMoney market funds\n$ \n8,154 $ \n0 $ \n8,154 \nTime deposits\n \n0 \n2,081 \n2,081 \nGovernment bonds\n \n0 \n746 \n746 \nCorporate debt securities\n \n0 \n78 \n78 \nTotal cash and cash equivalents\n \n8,154 \n2,905 \n23,466 \nMarketable securities:\nMarketable equity securities(1)\n4,708\n105\n4,813\nTime deposits\n \n0 \n136 \n136 \nGovernment bonds\n0\n28,709\n28,709\nCorporate debt securities\n0\n21,116\n21,116\nMortgage-backed and asset-backed securities\n0\n17,417\n17,417\nTotal marketable securities\n \n4,708 \n67,483 \n72,191 \nTotal\n$ \n12,862 $ \n70,388 $ \n95,657 \n(1)\nThe long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of $266 million as of \nDecember 31, 2024 is included within other non-current assets. \nTable of Contents\nAlphabet Inc.\n61.\n\nAs of December 31, 2025\nQuoted Prices in\nActive Markets\nfor Identical Assets\n(Level 1)\nSignificant Other\nObservable Inputs\n(Level 2)\nTotal\nCash\n$ \n15,305 \nCash equivalents:\nMoney market funds\n$ \n11,349 $ \n0 $ \n11,349 \nTime deposits\n \n0 \n3,353 \n3,353 \nGovernment bonds\n \n0 \n602 \n602 \nCorporate debt securities\n \n0 \n99 \n99 \nTotal cash and cash equivalents\n \n11,349 \n4,054 \n30,708 \nMarketable securities:\nMarketable equity securities\n4,402\n1,911\n6,313\nTime deposits\n \n0 \n0 \n0 \nGovernment bonds\n0\n50,549\n50,549\nCorporate debt securities\n0\n21,565\n21,565\nMortgage-backed and asset-backed securities\n0\n17,708\n17,708\nTotal marketable securities\n \n4,402 \n91,733 \n96,135 \nTotal\n$ \n15,751 $ \n95,787 $ \n126,843 \nInvestments Measured at Fair Value on a Nonrecurring Basis\nNon-marketable equity securities accounted for under the measurement alternative are investments in privately \nheld companies without readily determinable market values. The carrying value of these non-marketable equity \nsecurities is adjusted upward or downward to fair value upon observable transactions for identical or similar \ninvestments of the same issuer or impairment. Non-marketable equity securities that have been remeasured during the \nperiod based on observable transactions are classified within Level 2 or Level 3 in the fair value hierarchy, and \nremeasurements due to impairment are classified within Level 3. Our valuation methods include option pricing models, \nmarket comparable approach, and common stock equivalent method, which may include a combination of the \nobservable transaction price at the transaction date and other unobservable inputs including volatility, expected time to \nexit, risk free rate, and the rights and obligations of the securities we hold. These inputs vary significantly based on \ninvestment type.\nAs of December 31, 2025, the carrying value of our non-marketable equity securities accounted for under the \nmeasurement alternative was $64.1 billion, of which $45.6 billion were remeasured at fair value during the year ended \nDecember 31, 2025, and were primarily classified within Level 2 of the fair value hierarchy at the time of measurement.\nDebt and Equity Securities\nDebt Securities\nThe following table summarizes the estimated fair value of investments in available-for-sale marketable debt \nsecurities by effective contractual maturity dates (in millions):\nAs of\nDecember 31, 2025\nDue in 1 year or less\n$ \n26,735 \nDue in 1 year through 5 years\n \n37,001 \nDue in 5 years through 10 years\n \n12,769 \nDue after 10 years\n \n13,317 \nTotal\n$ \n89,822 \nThe following tables present fair values and gross unrealized gains and losses recorded to AOCI, less any \nexpected credit losses, aggregated by investment category (in millions):\nTable of Contents\nAlphabet Inc.\n62.\n\nAs of December 31, 2024\nAdjusted Cost\nGross \nUnrealized \nGains\nGross \nUnrealized \nLosses\nFair Value\nTime deposits\n$ \n2,217 $ \n0 $ \n0 $ \n2,217 \nGovernment bonds\n27,551\n \n83 \n(214) \n27,420 \nCorporate debt securities\n \n18,300 \n79 \n(222) \n18,157 \nMortgage-backed and asset-backed securities\n \n14,437 \n63 \n(385) \n14,115 \nTotal investments with fair value change \nreflected in other comprehensive income\n$ \n62,505 $ \n225 $ \n(821) $ \n61,909 \nAs of December 31, 2025\nAdjusted Cost\nGross \nUnrealized \nGains\nGross \nUnrealized \nLosses\nFair Value\nTime deposits\n$ \n3,353 $ \n0 $ \n0 $ \n3,353 \nGovernment bonds\n49,087\n \n443 \n(26) \n49,504 \nCorporate debt securities\n \n18,346 \n242 \n(32) \n18,556 \nMortgage-backed and asset-backed securities\n \n14,337 \n174 \n(128) \n14,383 \nTotal investments with fair value change \nreflected in other comprehensive income\n$ \n85,123 $ \n859 $ \n(186) $ \n85,796 \nThe following tables present fair values and gross unrealized losses recorded to AOCI, aggregated by \ninvestment category and the length of time that individual securities have been in a continuous loss position (in \nmillions):\n \nAs of December 31, 2024\n \nLess than 12 Months\n12 Months or Greater\nTotal\n \nFair Value\nUnrealized\nLoss\nFair Value\nUnrealized\nLoss\nFair Value\nUnrealized\nLoss\nGovernment bonds\n$ \n11,119 $ \n(126) $ \n2,576 $ \n(88) $ \n13,695 $ \n(214) \nCorporate debt securities\n \n4,228 \n(17) \n6,838 \n(168) \n11,066 \n(185) \nMortgage-backed and asset-backed \nsecurities\n \n5,222 \n(106) \n3,813 \n(279) \n9,035 \n(385) \nTotal\n$ \n20,569 $ \n(249) $ \n13,227 $ \n(535) $ \n33,796 $ \n(784) \n \nAs of December 31, 2025\n \nLess than 12 Months\n12 Months or Greater\nTotal\n \nFair Value\nUnrealized\nLoss\nFair Value\nUnrealized\nLoss\nFair Value\nUnrealized\nLoss\nGovernment bonds\n$ \n4,230 $ \n(9) $ \n1,174 $ \n(17) $ \n5,404 $ \n(26) \nCorporate debt securities\n \n915 \n0 \n2,429 \n(24) \n3,344 \n(24) \nMortgage-backed and asset-backed \nsecurities\n \n1,377 \n(4) \n3,035 \n(124) \n4,412 \n(128) \nTotal\n$ \n6,522 $ \n(13) $ \n6,638 $ \n(165) $ \n13,160 $ \n(178) \nTable of Contents\nAlphabet Inc.\n63.\n\nWe determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification \nmethod. For certain marketable debt securities, we have elected the fair value option for which changes in fair value \nare recorded in OI&E. The fair value option was elected for these securities to align with the unrealized gains and \nlosses from related derivative contracts. \nThe following table summarizes gains and losses for debt securities, reflected as a component of OI&E (in \nmillions):\nYear Ended December 31,\n2023\n2024\n2025\nUnrealized gain (loss) on fair value option debt securities\n$ \n386 $ \n30 $ \n254 \nGross realized gain on debt securities\n \n182 \n482 \n572 \nGross realized loss on debt securities\n \n(1,833) \n(1,553) \n(316) \n(Increase) decrease in allowance for credit losses\n \n50 \n(2) \n30 \nTotal gain (loss) on debt securities recognized in other income \n(expense), net\n$ \n(1,215) $ \n(1,043) $ \n540 \nNon-marketable Securities\nOur non-marketable securities primarily consist of non-marketable equity securities accounted for under the \nmeasurement alternative. The carrying value is measured at the total initial cost plus the cumulative net upward and \ndownward adjustments (including impairments). We account for non-marketable equity securities through which we \nexercise significant influence but do not have control over the investee under the equity method. Certain of our non-\nmarketable securities include our investments in VIEs where we are not the primary beneficiary. See Note 5 for further \ndetails on VIEs.\nRealized net gain (loss) on equity securities sold during the period reflects the difference between the sale \nproceeds and the carrying value of the equity securities at the beginning of the period or the purchase date, if later. \nAll gains and losses, including impairments, are included as components of OI&E. \nThe carrying values for non-marketable securities are summarized below (in millions):\nAs of December 31,\n2024\n2025\nNon-marketable securities:\nTotal initial cost of non-marketable equity securities accounted for under the \nmeasurement alternative\n$ \n20,940 $ \n28,429 \nCumulative upward adjustments\n \n22,709 \n44,485 \nCumulative downward adjustments (including impairments)\n \n(8,431) \n(8,820) \nCarrying value of non-marketable equity securities accounted for under the \nmeasurement alternative\n \n35,218 \n64,094 \nEquity method investments and other \n \n2,764 \n4,593 \nTotal non-marketable securities\n$ \n37,982 $ \n68,687 \nGains and Losses on Equity Securities\nGains and losses (including impairments), net, for equity securities included in OI&E are summarized below (in \nmillions):\nTable of Contents\nAlphabet Inc.\n64.\n\nYear Ended December 31,\n \n2023\n2024\n2025\nGross unrealized gain on non-marketable equity securities \naccounted for under the measurement alternative\n$ \n1,806 $ \n5,582 $ \n22,666 \nGross unrealized loss (including impairments) on non-\nmarketable equity securities accounted for under the \nmeasurement alternative\n \n(2,894) \n(2,210) \n(1,271) \nUnrealized net gain (loss) on non-marketable equity \nsecurities accounted for under the measurement alternative\n \n(1,088) \n3,372 \n21,395 \nUnrealized net gain (loss) on marketable and other equity \nsecurities\n \n790 \n156 \n1,907 \nRealized net gain (loss) on marketable and non-marketable \nequity securities sold during the period\n \n690 \n186 \n778 \nTotal gain (loss) on equity securities in other income \n(expense), net (1)\n$ \n392 $ \n3,714 $ \n24,080 \n(1) Excludes income (loss) and impairment from equity method investments. Refer to Note 7 for further details.\nCumulative net gains (losses), calculated as the difference between the sales price and purchase price, \nrepresent the total net gains (losses) recognized after the initial purchase date. This represents the total economic \nimpact of the investment, regardless of when the gains or losses were previously recognized. Cumulative net gains on \nequity securities sold were $748 million and $387 million for the years ended December 31, 2024 and 2025, \nrespectively.\nDerivative Financial Instruments\nWe primarily use derivative instruments to manage risks relating to our ongoing business operations, including \nforeign currencies, interest rates, commodity prices, credit exposures, and market prices of certain marketable equity \nsecurities. Additionally, we enter into derivatives to enhance investment returns. We also enter into derivatives as a \nresult of agreements with third parties to backstop certain obligations related to data center leases. These backstop \nagreements are accounted for as credit derivatives.\nWe recognize derivative instruments in the Consolidated Balance Sheets at fair value and classify them primarily \nwithin Level 2 in the fair value hierarchy. We present our foreign currency collars (an option strategy comprised of a \ncombination of purchased and written options) at net fair values and present all other derivatives at gross fair values. \nThe accounting treatment for derivatives is based on the intended use and hedge designation.\nCash Flow Hedges\nWe designate foreign currency forwards and options (including collars) as cash flow hedges to hedge certain \nforecasted revenue transactions denominated in currencies other than the US dollar. These contracts have maturities \nof 24 months or less.\nCash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI and \nreclassified to revenue when the hedged item is recognized in earnings. Hedge components excluded from our \nassessment of hedge effectiveness are amortized on a straight-line basis over the life of the hedging instrument in \nrevenues. The difference between fair value changes of the excluded component and the amount amortized to \nrevenues is recorded in AOCI.\nAs of December 31, 2025, the net accumulated loss on our foreign currency cash flow hedges before tax effect \nwas $60 million, which is expected to be reclassified from AOCI into revenues within the next 12 months.\nAdditionally, we may designate interest rate derivatives as cash flow hedges to manage our exposure to certain \ninterest rate risks. Changes in the fair value of these derivatives are deferred in AOCI and reclassified to OI&E when \nthe hedged item is recognized in earnings. \nFair Value Hedges\nWe designate foreign currency forwards as fair value hedges to hedge foreign currency risks for our marketable \ndebt securities denominated in currencies other than the US dollar. Fair value hedge amounts included and excluded \nfrom the assessment of hedge effectiveness are recognized in OI&E.\nNet Investment Hedges\nWe designate foreign currency forwards, options (including collars), cross-currency swaps, and foreign currency-\ndenominated debt as net investment hedges to hedge the foreign currency risks related to our investments in foreign \nTable of Contents\nAlphabet Inc.\n65.\n\nsubsidiaries. Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in \nAOCI. \nChanges in the fair value of hedge components of forward and option contracts that are excluded from the \nassessment of hedge effectiveness are recognized in OI&E. Hedge components of cross-currency swaps that are \nexcluded from the assessment of hedge effectiveness are amortized over the life of the hedging instrument and \nrecognized in OI&E. The difference between fair value changes of the excluded component and the amount amortized \nto OI&E is recorded in AOCI.\nWe had no foreign currency-denominated debt as of December 31, 2024 and $15.4 billion carrying value of \nforeign currency-denominated debt designated as net investment hedges as of December 31, 2025.\nDerivatives Not Designated as Hedging Instruments\nWe enter into derivatives not designated as hedging instruments to manage risks related to our ongoing business \noperations. The primary risk managed is foreign exchange risk related to the remeasurement of monetary assets or \nliabilities denominated in currencies other than the functional currency of a subsidiary. Gains and losses on these \nforeign exchange derivatives are recorded within the “foreign currency exchange gain (loss), net” component of OI&E. \nWe also enter into derivatives to manage other risks, to enhance investment returns, and as a result of \nagreements with certain third parties to backstop certain obligations relating to data center leases. Gains and losses \narising from other derivatives are primarily reflected within the “other” component of OI&E. See Note 7 for further \ndetails. \nThe gross notional amounts of outstanding derivative instruments were as follows (in millions):\nAs of December 31,\n2024\n2025\nDerivatives designated as hedging instruments:\nForeign exchange contracts\nCash flow hedges\n$ \n20,315 $ \n23,852 \nFair value hedges\n$ \n1,562 $ \n0 \nNet investment hedges\n$ \n6,986 $ \n14,203 \nDerivatives not designated as hedging instruments:\nForeign exchange contracts\n$ \n44,227 $ \n56,085 \nCredit derivatives(1)\n$ \n0 $ \n16,940 \nOther contracts\n$ \n15,082 $ \n15,900 \n(1) \nNotional amounts for credit derivatives are the backstop obligations related to certain third-party data center leases and \nrepresent the maximum potential amount of future payments that could be required in the event of certain default scenarios \nover remaining agreement periods of up to 15 years. In the event we are required to make payments under certain backstop \nobligations, we may receive equity in or cash payments from certain counterparties, the amounts for which are not reflected in \nthe notional amounts for credit derivatives. See Note 5 for further details.\nThe fair values of outstanding derivative instruments were as follows (in millions):\n \nAs of December 31, 2024\nAs of December 31, 2025\n \nAssets(1)\nLiabilities(2)\nAssets(1)\nLiabilities(2)\nDerivatives designated as hedging instruments:\nForeign exchange contracts\n$ \n1,054 $ \n0 $ \n316 $ \n197 \nDerivatives not designated as hedging \ninstruments:\nForeign exchange contracts\n \n200 \n593 \n92 \n84 \nOther contracts\n \n474 \n19 \n324 \n98 \nTotal derivatives not designated as hedging \ninstruments\n \n674 \n612 \n416 \n182 \nTotal\n$ \n1,728 $ \n612 $ \n732 $ \n379 \n(1) \nDerivative assets are recorded as other current and non-current assets.\n(2) \nDerivative liabilities are recorded as accrued expenses and other liabilities, current and non-current.\nTable of Contents\nAlphabet Inc.\n66.\n\nThe gains (losses) on derivatives and non-derivative financial instruments in cash flow hedging and net \ninvestment hedging relationships recognized in other comprehensive income are summarized below (in millions):\n \nYear Ended December 31,\n2023\n2024\n2025\nCash flow hedging relationship:\nForeign exchange and other contracts\nAmount included in the assessment of effectiveness\n$ \n90 $ \n857 $ \n(978) \nAmount excluded from the assessment of \neffectiveness\n \n84 \n77 \n(45) \nNet investment hedging relationship:\nAmounts included in the assessment of effectiveness\nForeign exchange contracts\n \n(287) \n223 \n(765) \nForeign currency-denominated debt\n \n0 \n0 \n(393) \nAmounts excluded from the assessment of \neffectiveness\nForeign exchange contracts\n \n0 \n0 \n11 \nTotal\n$ \n(113) $ \n1,157 $ \n(2,170) \nThe table below presents the gains (losses) of derivatives included on the Consolidated Statements of Income: \n(in millions):\nYear Ended December 31,\n2023\n2024\n2025\nRevenues\nOther \nincome \n(expense), \nnet\nRevenues\nOther \nincome \n(expense), \nnet\nRevenues\nOther \nincome \n(expense), \nnet\nTotal amounts included on the Consolidated \nStatements of Income\n$ 307,394 $ \n1,424 $ 350,018 $ \n7,425 $ 402,836 $ 29,787 \nEffect of cash flow hedges:\nForeign exchange contracts\nAmount included in the assessment of \neffectiveness\n \n213 \n0 \n174 \n0 \n(233) \n0 \nAmount excluded from the assessment \nof effectiveness\n \n24 \n0 \n37 \n0 \n107 \n0 \nEffect of fair value hedges:\nForeign exchange contracts\nHedged items\n \n0 \n59 \n0 \n(59) \n0 \n(9) \nAmount included in the assessment of \neffectiveness\n \n0 \n(59) \n0 \n58 \n0 \n9 \nAmount excluded from the assessment \nof effectiveness\n \n0 \n15 \n0 \n13 \n0 \n1 \nEffect of net investment hedges:\nForeign exchange contracts\nAmount excluded from the assessment \nof effectiveness\n \n0 \n187 \n0 \n137 \n0 \n189 \nEffect of non-designated hedges:\nForeign exchange contracts\n \n0 \n7 \n0\n \n335 \n0 \n445 \nOther contracts\n \n0 \n53 \n0 \n174 \n0 \n(148) \nTotal gains (losses)\n$ \n237 $ \n262 $ \n211 $ \n658 $ \n(126) $ \n487 \nTable of Contents\nAlphabet Inc.\n67.\n\nOffsetting of Derivatives\nWe enter into master netting arrangements and collateral security arrangements to reduce credit risk. Cash \ncollateral received related to derivative instruments under our collateral security arrangements are included in other \ncurrent assets with a corresponding liability. Cash and non-cash collateral pledged related to derivative instruments \nunder our collateral security arrangements are primarily included in other current assets.\nThe gross amounts of derivative instruments subject to master netting arrangements with various \ncounterparties, and cash and non-cash collateral received and pledged under such agreements were as follows (in \nmillions):\nAs of December 31, 2024\nGross Amounts Not Offset in \nthe Consolidated Balance \nSheets, but Have Legal Rights \nto Offset\nGross \nAmounts \nRecognized\nGross \nAmounts \nOffset in the \nConsolidated \nBalance \nSheets\nNet Amounts \nPresented in \nthe \nConsolidated \nBalance \nSheets\nFinancial \nInstruments(1)\nCash and \nNon-Cash \nCollateral \nReceived or \nPledged\nNet Amounts\nDerivatives assets\n$ \n1,776 $ \n(48) $ \n1,728 $ \n(516) $ \n(721) $ \n491 \nDerivatives liabilities\n$ \n660 $ \n(48) $ \n612 $ \n(516) $ \n(9) $ \n87 \nAs of December 31, 2025\nGross Amounts Not Offset in \nthe Consolidated Balance \nSheets, but Have Legal Rights \nto Offset\nGross \nAmounts\nRecognized\nGross \nAmounts \nOffset in the \nConsolidated \nBalance \nSheets\nNet Amounts \nPresented in \nthe \nConsolidated \nBalance \nSheets\nFinancial \nInstruments(1)\nCash and \nNon-Cash \nCollateral \nReceived or \nPledged\nNet Amounts\nDerivatives assets\n$ \n842 $ \n(110) $ \n732 $ \n(140) $ \n(231) $ \n361 \nDerivatives liabilities\n$ \n489 $ \n(110) $ \n379 $ \n(140) $ \n(15) $ \n224 \n(1) \nThe balances as of December 31, 2024 and 2025 were related to derivatives allowed to be net settled in accordance with our \nmaster netting agreements.\nNote 4. Leases \nWe have entered into operating and finance lease agreements primarily for data centers, land, and offices \nthroughout the world with varying lease terms.\nComponents of lease costs were as follows (in millions):\nYear Ended December 31,\n2023\n2024\n2025\nOperating lease cost\n$ \n3,362 $ \n3,304 $ \n3,345 \nFinance lease cost:\nAmortization of lease assets\n \n469 \n413 \n553 \nInterest on lease liabilities\n \n35 \n31 \n65 \nFinance lease cost\n \n504 \n444 \n618 \nVariable lease cost\n \n1,182 \n1,425 \n1,739 \nTotal lease cost\n$ \n5,048 $ \n5,173 $ \n5,702 \nTable of Contents\nAlphabet Inc.\n68.\n\nSupplemental information related to leases was as follows (in millions):\nDecember 31,\n2024\n2025\nWeighted-average remaining lease term:\nOperating leases\n7.8 years\n7.6 years\nFinance leases\n10.4 years\n8.3 years\nWeighted-average discount rate:\nOperating leases\n 3.4 %\n 3.6 %\nFinance leases\n 2.8 %\n 3.1 %\nDecember 31,\n2024\n2025\nOperating leases:\nOperating lease assets\n$ \n13,588 $ \n15,221 \nAccrued expenses and other liabilities\n$ \n2,887 $ \n3,209 \nOperating lease liabilities\n \n11,691 \n12,744 \nTotal operating lease liabilities\n$ \n14,578 $ \n15,954 \nFinance leases:\nProperty and equipment, at cost\n$ \n4,622 $ \n6,822 \nAccumulated depreciation\n \n(2,037) \n(2,025) \nProperty and equipment, net\n$ \n2,585 $ \n4,797 \nAccrued expenses and other liabilities\n$ \n235 $ \n441 \nOther long-term liabilities\n \n1,442 \n2,059 \nTotal finance lease liabilities\n$ \n1,677 $ \n2,500 \nYear Ended December 31,\n2023\n2024\n2025\nCash payments for lease liabilities:\nOperating cash flows used for operating leases\n$ \n3,173 $ \n3,425 $ \n3,370 \nOperating cash flows used for finance leases\n$ \n35 $ \n31 $ \n65 \nFinancing cash flows used for finance leases(1)\n$ \n705 $ \n405 $ \n1,988 \nAssets obtained in exchange for lease liabilities:\nOperating leases\n$ \n2,877 $ \n2,510 $ \n4,070 \nFinance leases\n$ \n564 $ \n313 $ \n1,606 \n(1)\nFinancing cash flows used for financing leases are included within financing activities as repayments of debt. The year ended \nDecember 31, 2025 includes $1.1 billion of prepayments for finance leases not yet commenced.\nTable of Contents\nAlphabet Inc.\n69.\n\nFuture lease payments as of December 31, 2025 were as follows (in millions):\nOperating \nLeases\nFinance \nLeases\n2026\n$ \n3,275 $ \n491 \n2027\n \n3,082 \n345 \n2028\n \n2,510 \n335 \n2029\n \n2,061 \n314 \n2030\n \n1,669 \n241 \nThereafter\n \n5,654 \n1,143 \nTotal undiscounted lease payments\n \n18,251 \n2,869 \nLess: imputed interest\n \n(2,297) \n(369) \nTotal lease liability balance\n$ \n15,954 $ \n2,500 \nAs of December 31, 2025, we have entered into leases primarily related to data centers that have not yet \ncommenced with short-term and long-term future lease payments of $5.8 billion and $52.7 billion, respectively, that are \nnot yet recorded. These leases will commence between 2026 and 2031 with non-cancelable lease terms primarily \nbetween one and 25 years.\nIn January 2026, we executed a power purchase agreement which we expect to be accounted for as a lease \nresulting in future payments depending on certain agreement terms of $9.9 billion between 2027 and 2047. If certain \ncontractual conditions for the project are not met, we would instead make a one-time payment of approximately \n$3.5 billion and assume ownership of the power generating assets.\nNote 5. Variable Interest Entities \nConsolidated VIEs\nWe consolidate VIEs in which we hold a variable interest and are the primary beneficiary. The results of \noperations and financial position of these VIEs are included in our consolidated financial statements. \nFor certain consolidated VIEs, their assets are not available to us, and their creditors do not have recourse to us. \nAs of December 31, 2024 and 2025, assets that can only be used to settle obligations of these VIEs were $8.7 billion \nand $5.6 billion, respectively, and are primarily included in cash and cash equivalents. As of December 31, 2024 and \n2025, liabilities for which creditors only have recourse to the VIEs were $2.3 billion and $2.0 billion, respectively. We \nmay continue to fund ongoing operations, including the potential funding of employee compensation programs, of \ncertain VIEs that are included within Other Bets.\nIn February 2026, Waymo, a consolidated VIE, announced an investment round of $16.0 billion, the significant \nmajority of which was funded by Alphabet. Investments from external parties will be accounted for as equity \ntransactions and will result in recognition of noncontrolling interests.\nTotal noncontrolling interests (NCI) in our consolidated subsidiaries were $4.2 billion and $3.4 billion as of \nDecember 31, 2024 and 2025, respectively, of which $1.1 billion and $841 million were redeemable noncontrolling \ninterests (RNCI) as of December 31, 2024 and 2025, respectively. NCI and RNCI are included within additional paid-in \ncapital. Net loss attributable to noncontrolling interests was not material for any period presented and is included within \nthe \"other\" component of OI&E. See Note 7 for further details on OI&E.\nUnconsolidated VIEs\nWe hold various forms of interests in Variable Interest Entities (VIEs), including certain of our investments in \nprivate companies and renewable energy entities, certain leases and credit backstops with data center entities, and \ncertain backstops with energy infrastructure entities. Because we have determined that we do not direct the activities \nthat most significantly impact the economic performance of these entities, we are not the primary beneficiary. \nTherefore, these VIEs are not consolidated within our financial statements.\nOur investments in private companies and renewable energy VIEs are primarily accounted for as non-marketable \nsecurities under the measurement alternative or the equity method. The carrying value of these investments are \nincluded within non-marketable securities on our Consolidated Balance Sheets. See Note 3 for further details on \ninvestments. The maximum exposure to these VIEs is generally limited to the current carrying value plus future funding \ncommitments. As of December 31, 2024 and 2025, future funding commitments were $1.5 billion and $1.1 billion, \nrespectively.\nTable of Contents\nAlphabet Inc.\n70.\n\nLeases with data center leasing VIEs are accounted for as finance leases and are included within total lease \nobligations disclosed in Note 4. The maximum exposure arising from leases with VIEs is limited to the net carrying \nvalue of commenced finance lease assets, plus the undiscounted future obligations for leases that have not yet \ncommenced. See Note 4 for further details on leases.\nCredit backstops we have provided to data center VIEs are accounted for as credit derivatives. The maximum \nexposure arising from credit backstops with VIEs is limited to the financial risk over the remaining period of the \narrangements, as reflected by the credit derivative notional value. See Note 3 for further details on credit derivatives.\nBackstop agreements we have provided to energy infrastructure VIEs are accounted for as financial guarantees. \nThe maximum exposure to these VIEs is limited to the potential amount of future payments under these arrangements. \nSee Note 10 for further details on financial guarantees.\nNote 6. Debt \nShort-Term Debt\nWe have a commercial paper program of up to $25.0 billion, which is used for general corporate purposes. We \nhad $2.3 billion of commercial paper outstanding with a weighted-average effective interest rate of 4.4% as of \nDecember 31, 2024 and no commercial paper outstanding as of December 31, 2025. The fair value of the commercial \npaper approximated its carrying value as of December 31, 2024.\nOur short-term debt balance also includes the current portion of certain long-term debt.\nLong-Term Debt\nDuring 2025, we issued $22.5 billion of US dollar-denominated senior unsecured notes and €13.25 billion of euro-\ndenominated senior unsecured notes for general corporate purposes.\nIn May 2025, we issued $5.0 billion of US dollar-denominated fixed-rate senior unsecured notes with a weighted-\naverage coupon rate of 4.89%, and a weighted-average maturity of approximately 24 years. Additionally, in May 2025, \nwe issued €6.75 billion of euro-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of \n3.31%, and a weighted-average maturity of approximately 14 years. \nIn November 2025, we issued $500 million of US dollar-denominated floating-rate senior unsecured notes and \n$17.0 billion of US dollar-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of \n4.92% and a weighted-average maturity of approximately 20 years. Additionally in November 2025, we issued €6.5 \nbillion of euro-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of 3.44% and a \nweighted-average maturity of approximately 16 years.\nTotal outstanding long-term debt is summarized below (in millions, except percentages):\nEffective Interest \nRate\nAs of December 31,\nMaturity\nCoupon Rate\n2024\n2025\nDebt\n2016 US dollar notes\n2026\n2.00%\n2.23%\n$ \n2,000 $ \n2,000 \n2020 US dollar notes\n2027 - 2060\n0.80% - 2.25%\n0.93% - 2.33%\n \n10,000 \n9,000 \n2025 US dollar notes(1)\n2028 - 2075\n3.88% - 5.70%\n4.00% - 5.79%\n \n0 \n22,500 \n2025 Euro notes(2)\n2028 - 2064\n2.38% - 4.38%\n2.57% - 4.51%\n \n0 \n15,585 \n Total face value of long-term debt\n \n12,000 \n49,085 \nUnamortized discount and debt \nissuance costs(2)\n \n(118) \n(542) \nLess: current portion of long-term \nnotes(3)\n \n(999) \n(1,996) \n Total long-term debt\n$ \n10,883 $ \n46,547 \n(1)\nIncludes $500 million of floating-rate notes due in 2028. Interest is calculated using the compounded Secured Overnight \nFinancing Rate (SOFR) plus 0.52%, reset quarterly.\n(2)\nPrincipal, unamortized discount, and debt issuance costs for the euro-denominated notes include the effect of foreign \nexchange rates.\n(3)\nTotal current portion of long-term debt is included within accrued expenses and other current liabilities. See Note 7 for further \ndetails.\nTable of Contents\nAlphabet Inc.\n71.\n\nThe notes in the table above are senior unsecured obligations and rank equally with each other. We may redeem \nthe fixed-rate notes at any time in whole or in part at specified redemption prices. The floating-rate notes are not \nredeemable prior to maturity. Interest is payable quarterly for the floating-rate notes, semi-annually for the US dollar-\ndenominated fixed-rate notes, and annually for the euro-denominated fixed-rate notes. The effective interest rates are \nbased on proceeds received and contractual interest payments.\nThe total estimated fair value of the outstanding notes was approximately $9.0 billion and $45.6 billion as of \nDecember 31, 2024 and December 31, 2025, respectively. The fair value was determined based on observable market \nprices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fair value \nhierarchy.\nAs of December 31, 2025, the future principal payments for long-term debt were as follows (in millions):\n2026\n$ \n2,000 \n2027\n1,000\n2028\n2,676\n2029\n1,764\n2030\n5,500\nThereafter\n36,145\nTotal\n$ \n49,085 \nCredit Facility\nAs of December 31, 2025, we had $10.0 billion of revolving credit facilities, of which $4.0 billion expires in April \n2026 and $6.0 billion expires in April 2030. The interest rates for all credit facilities are determined based on a formula \nusing certain market rates. No amounts were outstanding under the credit facilities as of December 31, 2024 and \n2025.\nNote 7. Supplemental Financial Statement Information \nAccounts Receivable\nThe allowance for credit losses on accounts receivable was $879 million and $924 million as of December 31, \n2024 and 2025, respectively.\nProperty and Equipment, Net\nProperty and equipment, net, consisted of the following (in millions):\nAs of December 31,\n2024\n2025\nTechnical infrastructure(1)\n$ \n141,852 $ \n203,679 \nOffice space\n \n45,403 \n48,348 \nCorporate and other assets\n \n12,574 \n14,463 \nProperty and equipment, in service\n \n199,829 \n266,490 \nLess: accumulated depreciation\n \n(79,390) \n(98,485) \nAdd: assets not yet in service\n \n50,597 \n78,592 \nProperty and equipment, net\n$ \n171,036 $ \n246,597 \n(1) \nAs of December 31, 2024 and 2025, approximately 60% of technical infrastructure assets were comprised of servers and \nnetwork equipment. The remaining balance was comprised of data center land and buildings and related assets.\nAccrued Expenses and Other Current Liabilities\nAccrued expenses and other current liabilities consisted of the following (in millions):\nTable of Contents\nAlphabet Inc.\n72.\n\nAs of December 31,\n2024\n2025\nAccrued fines and settlements(1)\n$ \n9,830 $ \n15,594 \nAccrued purchases of property and equipment\n \n7,104 \n8,877 \nAccrued customer liabilities\n \n4,304 \n5,029 \nPayables to brokers for unsettled investment trades\n \n3,866 \n950 \nIncome taxes payable, net\n \n2,905 \n523 \nOther accrued expenses and current liabilities\n \n23,219 \n24,584 \nAccrued expenses and other current liabilities\n$ \n51,228 $ \n55,557 \n(1) \nSee Legal Matters in Note 10 for further details.\nAccumulated Other Comprehensive Income (Loss)\nComponents of AOCI, net of income tax, were as follows (in millions):\nForeign Currency \nTranslation \nAdjustments\nUnrealized Gains \n(Losses) on \nAvailable-for-Sale \nInvestments\nUnrealized \nGains (Losses) \non Cash Flow \nHedges\nTotal\nBalance as of December 31, 2022\n$ \n(4,142) $ \n(3,477) $ \n16 $ \n(7,603) \nOther comprehensive income (loss) before \nreclassifications\n \n735 \n1,344 \n84 \n2,163 \nAmounts excluded from the assessment of \nhedge effectiveness recorded in AOCI\n \n0 \n0 \n84 \n84 \nAmounts reclassified from AOCI\n \n0 \n1,168 \n(214) \n954 \nOther comprehensive income (loss)\n \n735 \n2,512 \n(46) \n3,201 \nBalance as of December 31, 2023\n \n(3,407) \n(965) \n(30) \n(4,402) \nOther comprehensive income (loss) before \nreclassifications\n \n(1,673) \n(116) \n698 \n(1,091) \nAmounts excluded from the assessment of \nhedge effectiveness recorded in AOCI\n \n0 \n0 \n77 \n77 \nAmounts reclassified from AOCI\n \n0 \n782 \n(166) \n616 \nOther comprehensive income (loss)\n \n(1,673) \n666 \n609 \n(398) \nBalance as of December 31, 2024\n \n(5,080) \n(299) \n579 \n(4,800) \nOther comprehensive income (loss) before \nreclassifications\n \n2,511 \n1,146 \n(734) \n2,923 \nAmounts excluded from the assessment of \nhedge effectiveness recorded in AOCI\n \n11 \n0 \n(45) \n(34) \nAmounts reclassified from AOCI\n \n0 \n(169) \n164 \n(5) \nOther comprehensive income (loss)\n \n2,522 \n977 \n(615) \n2,884 \nBalance as of December 31, 2025\n$ \n(2,558) $ \n678 $ \n(36) $ \n(1,916) \nThe effects on net income of amounts reclassified from AOCI were as follows (in millions):\nTable of Contents\nAlphabet Inc.\n73.\n\nYear Ended December 31,\n AOCI Components\nLocation\n2023\n2024\n2025\nUnrealized gains (losses) on available-for-sale investments\nOther income (expense), net\n$ \n(1,497) $ \n(1,008) $ \n213 \nBenefit (provision) for income \ntaxes\n \n329 \n \n226 \n \n(44) \nNet of income tax\n \n(1,168) \n(782) \n169 \nUnrealized gains (losses) on cash flow hedges\nForeign exchange contracts\nRevenue\n \n213 \n \n174 \n \n(233) \nInterest rate contracts\nOther income (expense), net\n \n6 \n \n1 \n \n1 \nBenefit (provision) for income \ntaxes\n \n(5) \n(9) \n68 \nNet of income tax\n \n214 \n \n166 \n \n(164) \nTotal amount reclassified, net of income tax\n$ \n(954) $ \n(616) $ \n5 \nOther Income (Expense), Net \nComponents of OI&E were as follows (in millions): \n \nYear Ended December 31,\n \n2023\n2024\n2025\nInterest income\n$ \n3,865 $ \n4,482 $ \n4,337 \nInterest expense(1)\n \n(308) \n(268) \n(736) \nForeign currency exchange gain (loss), net\n \n(1,238) \n(409) \n(382) \nGain (loss) on debt securities, net\n \n(1,215) \n(1,043) \n540 \nGain (loss) on equity securities, net\n \n392 \n3,714 \n24,080 \nIncome (loss) and impairment from equity method investments, net\n \n(628) \n(188) \n281 \nOther\n \n556 \n1,137 \n1,667 \nOther income (expense), net\n$ \n1,424 $ \n7,425 $ \n29,787 \n(1) \nInterest expense is net of interest capitalized of $181 million, $194 million, and $447 million for the years ended December 31, \n2023, 2024, and 2025, respectively.\nNote 8. Acquisitions\nPending Acquisitions\nIn March 2025, we entered into a definitive agreement to acquire Wiz, a leading cloud security platform, for \n$32.0 billion, subject to closing adjustments, in an all-cash transaction. The acquisition of Wiz is expected to close in \n2026, subject to customary closing conditions, including the receipt of regulatory approvals. Upon the close of the \nacquisition, Wiz will be part of the Google Cloud segment.\nIn December 2025, we entered into a definitive agreement to acquire Intersect, which provides data center and \nenergy infrastructure solutions, for $4.8 billion in cash, plus the assumption of debt. The acquisition of Intersect is \nexpected to close in the first half of 2026, subject to customary closing conditions.\nNote 9. Goodwill\nChanges in the carrying amount of goodwill for the years ended December 31, 2024 and 2025 were as follows \n(in millions):\nTable of Contents\nAlphabet Inc.\n74.\n\nGoogle \nServices\nGoogle Cloud\nOther Bets\nTotal\nBalance as of December 31, 2023\n$ \n21,118 $ \n7,199 $ \n881 $ \n29,198 \nAdditions\n \n2,441 \n295 \n0 \n2,736 \nForeign currency translation and other adjustments\n \n(38) \n(4) \n(7) \n(49) \nBalance as of December 31, 2024\n \n23,521 \n7,490 \n874 \n31,885 \nAdditions\n \n1,269 \n163 \n0 \n1,432 \nForeign currency translation and other adjustments\n \n80 \n7 \n(24) \n63 \nBalance as of December 31, 2025\n$ \n24,870 $ \n7,660 $ \n850 $ \n33,380 \nNote 10. Commitments and Contingencies \nCommitments\nWe have certain content licensing agreements with future fixed or minimum guaranteed commitments of \n$7.7 billion as of December 31, 2025, of which the majority is paid quarterly through the first quarter of 2030.\nFinancial Guarantees\nWe provide financial guarantees to certain counterparties, in the form of backstop agreements with varying terms \nthrough August 2026. These backstop agreements support counterparty procurement of long-lead time equipment for \nour future power purchase agreements. As of December 31, 2025, our maximum potential amount of future payments \nunder these guarantees was $5.7 billion, upon which we may receive certain assets. The fair value of these obligations \nwas not material. \nIndemnifications\nIn the normal course of business, including to facilitate transactions in our services and products and corporate \nactivities, we indemnify certain parties, including advertisers, Google Network partners, distribution partners, \ncustomers of Google Cloud offerings, lessors, and service providers with respect to certain matters. We have agreed \nto defend and/or indemnify certain parties against losses arising from a breach of representations or covenants, or out \nof intellectual property infringement or other claims made against certain parties. Several of these agreements limit the \ntime within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into \nindemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations \nto our agents.\nIt is not possible to make a reasonable estimate of the maximum potential amount under these indemnification \nagreements due to the unique facts and circumstances involved in each particular agreement. Additionally, the \npayments we have made under such agreements have not had a material adverse effect on our results of operations, \ncash flows, or financial position. However, to the extent that valid indemnification claims arise in the future, future \npayments by us could be significant and could have a material adverse effect on our results of operations or cash flows \nin a particular period.\nAs of December 31, 2025, we did not have any material indemnification claims that were probable or reasonably \npossible.\nLegal Matters\nWe record a liability when we believe that it is probable that a loss has been incurred, and the amount can be \nreasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be \nestimated, we disclose the reasonably possible loss. We evaluate developments in our legal matters that could affect \nthe amount of liability that has been previously accrued, and the matters and related reasonably possible losses \ndisclosed, and make adjustments as appropriate.\nCertain outstanding matters seek speculative, substantial, or indeterminate monetary amounts, substantial \nchanges to our business practices and products, or structural remedies. Significant judgment is required to determine \nboth the likelihood of there being a loss and the estimated amount of a loss related to such matters, and we may be \nunable to estimate the reasonably possible loss or range of losses. The outcomes of outstanding legal matters are \ninherently unpredictable and subject to significant uncertainties, and could, either individually or in aggregate, have a \nmaterial adverse effect.\nWe expense legal fees in the period in which they are incurred.\nTable of Contents\nAlphabet Inc.\n75.\n\nAntitrust Matters\nWe are subject to formal and informal inquiries and investigations as well as litigation on various competition \nmatters by regulatory authorities and private parties in the US, Europe, and other jurisdictions globally, including the \nfollowing:\n•\nShopping: In June 2017, the EC announced its decision that certain actions taken by Google relating to its \ndisplay and ranking of shopping search results and ads infringed European antitrust laws and imposed a €2.4 \nbillion fine. In 2024, we made a cash payment of $3.0 billion for the fine. \n•\nAndroid: In July 2018, the EC announced its decision that certain provisions in Google's Android-related \ndistribution agreements infringed European antitrust laws, imposed a €4.3 billion fine, and directed the \ntermination of the conduct at issue. We appealed the EC decision and implemented changes to certain of our \nAndroid distribution practices. In September 2022, the General Court affirmed the EC decision but reduced the \nfine from €4.3 billion to €4.1 billion. We subsequently appealed the General Court's affirmation of the EC \ndecision with the European Court of Justice, which remains pending. In 2018, we recognized a charge of \n$5.1 billion for the fine, which we reduced by $217 million in 2022.\n•\nAdSense for Search: In March 2019, the EC announced its decision that certain provisions in Google's \nagreements with AdSense for Search partners infringed European antitrust laws, imposed a €1.5 billion fine, \nand directed actions related to AdSense for Search partners' agreements, which we implemented prior to the \ndecision. In 2019, we recognized a charge of $1.7 billion for the fine and appealed the EC decision. In \nSeptember 2024, the General Court overturned the EC decision and annulled the €1.5 billion fine. The EC has \nappealed the General Court's decision with the European Court of Justice.\n•\nSearch: In October 2020, the DOJ and a number of state Attorneys General filed a lawsuit in the US District \nCourt for the District of Columbia concerning Google's Search and Search advertising practices and its \ncompliance with US antitrust laws. In August 2024, the US District Court for the District of Columbia ruled \nagainst Google. A final judgment was entered in December 2025, which, among other things, imposes \nrestrictions on how Google distributes its services and requires Google to share certain search data with and \noffer syndication services to certain competitors. In January 2026, we appealed the final judgment and moved \nto pause implementation of certain remedies. In February 2026, the DOJ and state Attorneys General also \nappealed. \nFurther, in June 2022, the Australian Competition and Consumer Commission (ACCC) opened an investigation \ninto Search distribution practices. In August 2025, we agreed to a settlement with the ACCC requiring, among \nother things, changes to our Android agreements. We recognized a charge in the second quarter of 2025, and \nthe settlement was approved by the court in December 2025.\nIn October 2023, the Japanese Fair Trade Commission (JFTC) opened an investigation into Search \ndistribution practices. In April 2025, the JFTC issued a cease-and-desist order requiring us to make changes to \nour Android agreements to ensure they are consistent with Japanese antitrust law. The JFTC did not impose \nmonetary penalties. \n•\nAdvertising Technology: In December 2020, a number of state Attorneys General filed a lawsuit in the US \nDistrict Court for the Eastern District of Texas concerning Google's advertising technology and its compliance \nwith US antitrust laws and state deceptive trade laws. In January 2023, the DOJ, along with a number of state \nAttorneys General, filed a lawsuit in the US District Court for the Eastern District of Virginia concerning \nGoogle's advertising technology and its compliance with US antitrust laws, and a number of additional state \nAttorneys General subsequently joined the lawsuit. In April 2025, the US District Court for the Eastern District \nof Virginia issued a mixed decision in the DOJ case against Google, ruling that neither Google's advertiser \ntools nor the DoubleClick and AdMeld acquisitions were anticompetitive, but that Google's publisher tools \nunfairly excluded rivals. A separate proceeding to determine remedies, the range of which vary widely, took \nplace in September 2025, with the parties presenting differing remedy proposals. The DOJ's remedy proposal \nincludes structural remedies that could have a material adverse effect on our business. Closing arguments \nwere held in November 2025, and we are awaiting a final judgment. After that judgment, we plan to appeal the \nadverse portion of the April 2025 decision and potentially aspects of the remedies decision. A trial in the state \nAttorneys General case in the Eastern District of Texas will take place after a decision on remedies is issued in \nthe DOJ case. Given the nature of these matters, we cannot estimate a possible loss.\nFurther, in September 2025, the EC announced its decision that Google had infringed European competition \nlaws through \"self-preferencing\" practices on the buy-side and the sell-side relating to Google's advertising \ntechnology business. The EC decision imposed a €3.0 billion fine and directed Google to cease and desist the \nalleged \"self-preferencing\" practices. We appealed the ruling in November 2025. We recognized a charge of \nTable of Contents\nAlphabet Inc.\n76.\n\n$3.5 billion in the third quarter of 2025, and we placed bank guarantees in the fourth quarter of 2025 in lieu of \ncash payment.\nIn September 2024, the UK also issued a Statement of Objections concerning Google's advertising technology \nand its compliance with UK antitrust laws, to which we responded.\n•\nGoogle Play: In July 2021, a number of state Attorneys General filed a lawsuit in the US District Court for the \nNorthern District of California concerning Google’s operation of Android and Google Play and its compliance \nwith US antitrust laws and state antitrust and consumer protection laws. In September 2023, we reached a \nsettlement in principle with 50 state Attorneys General and three territories and recognized a charge. The court \npreliminarily approved the settlement in November 2025, and final approval remains pending before the court. \nIn May 2024, we funded the settlement amount to an escrow agent. \nIn December 2023, a California jury delivered a verdict against Google in Epic Games v. Google related to \nGoogle Play's business. Epic did not seek monetary damages. The presiding judge issued a remedies \ndecision in October 2024, ordering a variety of alterations to our business models and operations and \ncontractual agreements for Android and Google Play. We appealed the judgment, including the jury verdict and \naspects of the remedies ordered, and in July 2025, the Court of Appeals denied our appeal. We are in the \nprocess of appealing that decision to the US Supreme Court, and we implemented the ordered remedies in \nOctober 2025 while the appeal is pending. In October 2025, we reached a settlement with Epic to modify the \nremedies in this case and resolve certain other lawsuits Epic has filed regarding Google Play's business. The \nsettlement is contingent on the court approving a proposed modified injunction. Epic and Google filed a joint \nmotion to modify the injunction in November 2025, which is currently pending before the court. \n•\nEuropean Digital Markets Act: In March 2024, the EC opened two investigations regarding Google's \ncompliance with certain provisions of the EU's Digital Markets Act relating to Google Play and Search. In \nMarch 2025, the EC issued preliminary findings of non-compliance in both investigations, to which we \nresponded. Given the nature of this matter, we cannot estimate a possible loss.\nIn addition to these antitrust proceedings, private individual and collective actions that overlap with claims \npursued by regulatory authorities are pending in the US and in several other jurisdictions, including across Europe. \nGiven the nature of these matters, we cannot estimate a possible loss.\nWe believe we have strong arguments against these open claims and will defend ourselves vigorously. We \ncontinue to cooperate with federal and state regulators in the US, the EC, and other regulators around the world.\nPrivacy Matters\nWe are subject to a number of privacy-related laws and regulations, and we currently are party to a number of \nprivacy investigations and lawsuits ongoing in multiple jurisdictions. For example, there are ongoing investigations and \nlitigation in the US and the EU, including those relating to our collection and use of location information, the choices we \noffer users, and advertising practices, which could result in significant fines, judgments, and product changes. In \nOctober 2025, we finalized a $1.4 billion settlement of certain privacy matters.\nPatent and Intellectual Property Claims\nWe have had patent, copyright, trade secret, and trademark infringement lawsuits filed against us claiming that \ncertain of our products, services, and technologies infringe others' intellectual property rights. Adverse results in these \nlawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders \npreventing us from offering certain features, functionalities, products, or services. As a result, we may have to change \nour business practices and develop non-infringing products or technologies, which could result in a loss of revenues for \nus and otherwise harm our business. In addition, the ITC has increasingly become an important forum to litigate \nintellectual property disputes because an ultimate loss in an ITC action can result in a prohibition on importing \ninfringing products into the US. Because the US is an important market, a prohibition on importation could have an \nadverse effect on us, including preventing us from importing many important products into the US or necessitating \nworkarounds that may limit certain features of our products. Further, our customers and partners may discontinue the \nuse of our products, services, and technologies, as a result of injunctions or otherwise, which could result in loss of \nrevenues and adversely affect our business.\nOther\nWe are subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings, \nand consent orders involving competition, intellectual property, data privacy and security, tax and related compliance, \nlabor and employment, commercial disputes, content generated by our users, goods and services offered by \nadvertisers or publishers using our platforms, design of our products and services, personal injury and other tort and \nnuisance theories, consumer protection, including how we moderate content on our platforms, AI, and other matters. \nTable of Contents\nAlphabet Inc.\n77.\n\nFor example, we periodically have data incidents that we report to relevant regulators as required by law. Such claims, \nconsent orders, lawsuits, regulatory and government investigations, and other proceedings could result in substantial \nfines and penalties, injunctive relief, ongoing monitoring and auditing obligations, changes to our products and \nservices, alterations to our business models and operations, and collateral related civil litigation or other adverse \nconsequences, all of which could harm our business, reputation, financial condition, and operating results.\nWe have ongoing legal matters relating to Russia. For example, some matters concern civil judgments that \ninclude compounding penalties imposed upon us in connection with disputes regarding the termination of accounts, \nincluding those of sanctioned parties. We do not expect these ongoing legal matters will have a material adverse \neffect.\nNon-Income Taxes\nWe are under audit by various domestic and foreign tax authorities with regards to non-income tax matters. The \nsubject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to the \nsale of our products and services in these jurisdictions and the tax treatment of certain employee benefits. We accrue \nnon-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when \na loss is probable and reasonably estimable. If we determine that a loss is reasonably possible and the loss or range of \nloss can be estimated, we disclose the reasonably possible loss. Due to the inherent complexity and uncertainty of \nthese matters and judicial process in certain jurisdictions, the final outcome may be materially different from our \nexpectations.\nSee Note 14 for further details regarding income tax contingencies.\nNote 11. Stockholders' Equity \nClass A and Class B Common Stock and Class C Capital Stock\nOur Board of Directors has authorized three classes of stock, Class A and Class B common stock, and Class C \ncapital stock. The rights of the holders of each class of our common and capital stock are identical, except with respect \nto voting. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock \nis entitled to 10 votes per share. Class C capital stock has no voting rights, except as required by applicable law. \nShares of Class B common stock may be converted at any time at the option of the stockholder and automatically \nconvert upon sale or transfer to Class A common stock.\nShare Repurchases\nIn the years ended December 31, 2023, 2024, and 2025, we continued to repurchase both Class A and Class C \nshares in a manner deemed in the best interest of the company and its stockholders, taking into account the economic \ncost and prevailing market conditions, including the relative trading prices and volumes of the Class A and Class C \nshares. In April 2024, the company's Board of Directors authorized a $70.0 billion share repurchase program for its \nClass A and Class C shares. In April 2025, the company's Board of Directors authorized an additional $70.0 billion \nshare repurchase program for its Class A and Class C shares. As of December 31, 2025, $69.5 billion remained \navailable for Class A and Class C share repurchases.\nThe following table presents Class A and Class C shares repurchased and subsequently retired (in millions):\nYear Ended December 31,\n2023\n2024\n2025\nShares\nAmount\nShares\nAmount\nShares\nAmount\nClass A share repurchases\n78\n$ \n9,316 \n73\n$ 11,855 \n37\n$ \n6,501 \nClass C share repurchases\n450\n \n52,868 \n306\n \n50,192 \n203\n \n38,897 \nTotal share repurchases(1)\n528\n$ 62,184 \n379\n$ 62,047 \n240\n$ 45,398 \n(1) Shares repurchased include any unsettled repurchases.\nRepurchases are executed from time to time, subject to general business and market conditions and other \ninvestment opportunities, through open market purchases or privately negotiated transactions, including through Rule \n10b5-1 plans. The repurchase programs do not have an expiration date.\nDividends\nDuring the year ended December 31, 2025, total cash dividends were $4.8 billion for Class A, $703 million for \nClass B, and $4.5 billion for Class C shares, respectively.\nTable of Contents\nAlphabet Inc.\n78.\n\nIn April 2025, the company's Board of Directors increased the quarterly cash dividend by 5% to $0.21 per share of \noutstanding Class A, Class B, and Class C shares.\nThe company has declared a quarterly cash dividend in the current quarter, and intends to pay quarterly cash \ndividends in the future, subject to review and approval by the company’s Board of Directors in its sole discretion.\nNote 12. Net Income Per Share \nWe compute net income per share of Class A, Class B, and Class C stock using the two-class method. Basic net \nincome per share is computed using the weighted-average number of shares outstanding during the period. Diluted net \nincome per share is computed using the weighted-average number of shares and the effect of potentially dilutive \nsecurities outstanding during the period. Potentially dilutive securities consist of RSUs and other contingently issuable \nshares. The dilutive effect of outstanding RSUs and other contingently issuable shares is reflected in diluted earnings \nper share by application of the treasury stock method. The computation of the diluted net income per share of Class A \nstock assumes the conversion of Class B stock, while the diluted net income per share of Class B stock does not \nassume the conversion of those shares.\nIn accordance with our certificate of incorporation, the rights, including the liquidation and dividend rights, of the \nholders of our Class A, Class B, and Class C stock are identical, except with respect to voting. Furthermore, there are \na number of safeguards built into our certificate of incorporation, as well as Delaware law, which preclude our Board of \nDirectors from declaring or paying unequal per share dividends on our Class A, Class B, and Class C stock. \nSpecifically, Delaware law provides that amendments to our certificate of incorporation which would have the effect of \nadversely altering the rights, powers, or preferences of a given class of stock must be approved by the class of stock \nadversely affected by the proposed amendment. In addition, our certificate of incorporation provides that before any \nsuch amendment may be put to a stockholder vote, it must be approved by the unanimous consent of our Board of \nDirectors.\nImmaterial differences in net income per share across our Class A, Class B, and Class C shares may arise due to \nthe allocation of distributed earnings, which is based on the holders as of the record date, compared with the allocation \nof undistributed earnings and number of shares, which is based on the weighted average shares outstanding over the \nperiods.\nTable of Contents\nAlphabet Inc.\n79.\n\nThe following tables set forth the computation of basic and diluted net income per share of Class A, Class B, and \nClass C stock (in millions, except per share amounts):\n \n \nYear Ended December 31, 2023\n \nClass A\nClass B\nClass C\nConsolidated\nBasic net income per share:\nNumerator\nAllocation of distributed earnings (cash dividends paid)\n$ \n0 $ \n0 $ \n0 $ \n0 \nAllocation of undistributed earnings \n \n34,601 \n5,124 \n34,070 \n73,795 \nNet income\n$ \n34,601 $ \n5,124 $ \n34,070 $ \n73,795 \nDenominator\nNumber of shares used in per share computation\n \n5,922 \n877 \n5,831 \n12,630 \nBasic net income per share\n$ \n5.84 $ \n5.84 $ \n5.84 $ \n5.84 \nDiluted net income per share:\nNumerator\nAllocation of total earnings for basic computation \n$ \n34,601 $ \n5,124 $ \n34,070 $ \n73,795 \nReallocation of total earnings as a result of conversion of \nClass B to Class A shares\n \n5,124 \n0 \n0 \n_(1)\nReallocation of undistributed earnings\n \n(287) \n(37) \n287 \n_(1)\nNet income\n$ \n39,438 $ \n5,087 $ \n34,357 $ \n73,795 \nDenominator\nNumber of shares used in basic computation\n \n5,922 \n877 \n5,831 \n12,630 \nWeighted-average effect of dilutive securities\nAdd:\nConversion of Class B to Class A shares outstanding\n \n877 \n0 \n0 \n_(1)\nRestricted stock units and other contingently issuable \nshares\n \n0 \n0 \n92 \n92 \nNumber of shares used in per share computation\n \n6,799 \n877 \n5,923 \n12,722 \nDiluted net income per share\n$ \n5.80 $ \n5.80 $ \n5.80 $ \n5.80 \n(1) Not applicable for consolidated net income per share.\nTable of Contents\nAlphabet Inc.\n80.\n\nYear Ended December 31, 2024\n \nClass A\nClass B\nClass C\nConsolidated\nBasic net income per share:\nNumerator\nAllocation of distributed earnings (cash dividends paid)\n$ \n3,509 $ \n519 $ \n3,335 $ \n7,363 \nAllocation of undistributed earnings \n \n44,085 \n6,520 \n42,150 \n92,755 \nNet income\n$ \n47,594 $ \n7,039 $ \n45,485 $ \n100,118 \nDenominator\nNumber of shares used in per share computation\n \n5,855 \n866 \n5,598 \n12,319 \nBasic net income per share\n$ \n8.13 $ \n8.13 $ \n8.13 $ \n8.13 \nDiluted net income per share:\nNumerator\nAllocation of total earnings for basic computation \n$ \n47,594 $ \n7,039 $ \n45,485 $ \n100,118 \nReallocation of total earnings as a result of conversion of \nClass B to Class A shares\n \n7,039 \n0 \n0 \n_(1)\nReallocation of undistributed earnings\n \n(520) \n(67) \n520 \n_(1)\nNet income\n$ \n54,113 $ \n6,972 $ \n46,005 $ \n100,118 \nDenominator\nNumber of shares used in basic computation\n \n5,855 \n866 \n5,598 \n12,319 \nWeighted-average effect of dilutive securities\nAdd:\nConversion of Class B to Class A shares outstanding\n \n866 \n0 \n0 \n_(1)\nRestricted stock units and other contingently issuable \nshares\n \n0 \n0 \n128 \n128 \nNumber of shares used in per share computation\n \n6,721 \n866 \n5,726 \n12,447 \nDiluted net income per share\n$ \n8.05 $ \n8.05 $ \n8.03 $ \n8.04 \n(1) Not applicable for consolidated net income per share.\nTable of Contents\nAlphabet Inc.\n81.\n\nYear Ended December 31, 2025\n \nClass A\nClass B\nClass C\nConsolidated\nBasic net income per share:\nNumerator\nAllocation of distributed earnings (cash dividends paid)\n$ \n4,832 $ \n703 $ \n4,514 $ \n10,049 \nAllocation of undistributed earnings \n \n58,682 \n8,557 \n54,882 \n122,121 \nNet income\n$ \n63,514 $ \n9,260 $ \n59,396 $ \n132,170 \nDenominator\nNumber of shares used in per share computation\n \n5,822 \n849 \n5,445 \n12,116 \nBasic net income per share\n$ \n10.91 $ \n10.91 $ \n10.91 $ \n10.91 \nDiluted net income per share:\nNumerator\nAllocation of total earnings for basic computation \n$ \n63,514 $ \n9,260 $ \n59,396 $ \n132,170 \nReallocation of total earnings as a result of conversion of \nClass B to Class A shares\n \n9,260 \n0 \n0 \n_(1)\nReallocation of undistributed earnings\n \n(627) \n(79) \n627 \n_(1)\nNet income\n$ \n72,147 $ \n9,181 $ \n60,023 $ \n132,170 \nDenominator\nNumber of shares used in basic computation\n \n5,822 \n849 \n5,445 \n12,116 \nWeighted-average effect of dilutive securities\nAdd:\nConversion of Class B to Class A shares outstanding\n \n849 \n0 \n0 \n_(1)\nRestricted stock units and other contingently issuable \nshares\n \n0 \n0 \n114 \n114 \nNumber of shares used in per share computation\n \n6,671 \n849 \n5,559 \n12,230 \nDiluted net income per share\n$ \n10.82 $ \n10.81 $ \n10.80 $ \n10.81 \n(1)\nNot applicable for consolidated net income per share.\nNote 13. Compensation Plans \nStock Plans\nOur stock plans include the Alphabet Amended and Restated 2021 Stock Plan (\"Alphabet 2021 Stock Plan\") and \nOther Bets stock-based plans. Under our stock plans, RSUs and other types of awards may be granted. Under the \nAlphabet 2021 Stock Plan, an RSU award is an agreement to issue shares of our Class C stock at the time the award \nvests. RSUs generally vest over four years contingent upon employment on the vesting date. RSUs are awarded \ndividend equivalents, which are subject to the same vesting conditions as the underlying award, and settled in Class C \nshares.\nAs of December 31, 2025, there were 534 million shares of Class C stock reserved for future issuance under the \nAlphabet 2021 Stock Plan.\nStock-Based Compensation\nFor the years ended December 31, 2023, 2024, and 2025, total SBC expense was $22.1 billion, $22.8 billion, and \n$27.1 billion, including amounts associated with awards we expect to settle in Alphabet stock of $21.7 billion, $22.0 \nbillion, and $24.1 billion, respectively.\nFor the years ended December 31, 2023, 2024, and 2025, we recognized tax benefits on total SBC expense, \nwhich are reflected in the provision for income taxes, of $4.5 billion, $4.6 billion, and $5.0 billion, respectively.\nFor the years ended December 31, 2023, 2024, and 2025, tax benefit realized related to awards vested or \nexercised during the period was $5.6 billion, $6.8 billion, and $8.1 billion, respectively. These amounts do not include \nthe indirect effects of stock-based awards, which primarily relate to the research and development tax credit.\nTable of Contents\nAlphabet Inc.\n82.\n\nStock-Based Award Activities\nThe following table summarizes the activities for unvested Alphabet RSUs, which include dividend equivalents \nawarded to holders of unvested stock, for the year ended December 31, 2025 (in millions, except per share amounts):\n \n Number of \nShares\nWeighted-\nAverage\nGrant-Date\nFair Value\nUnvested as of December 31, 2024\n \n299 $ \n122.77 \nGranted\n \n198 $ \n188.82 \nVested\n \n(181) $ \n133.90 \nForfeited/canceled\n \n(34) $ \n142.33 \nUnvested as of December 31, 2025\n \n282 $ \n159.75 \nThe weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2023 and \n2024 was $97.59 and $140.04, respectively. Total fair value of RSUs, as of their respective vesting dates, during the \nyears ended December 31, 2023, 2024, and 2025, were $26.6 billion, $33.3 billion, and $39.7 billion, respectively.\nAs of December 31, 2025, there was $42.9 billion of unrecognized compensation cost related to unvested RSUs. \nThis amount is expected to be recognized over a weighted-average period of 2.6 years. \nNote 14. Income Taxes \nIncome from continuing operations before income taxes consisted of the following (in millions):\nYear Ended December 31,\n \n2023\n2024\n2025\nDomestic operations\n$ \n73,600 $ \n108,076 $ \n143,591 \nForeign operations\n \n12,117 \n11,739 \n15,235 \nTotal\n$ \n85,717 $ \n119,815 $ \n158,826 \nProvision for income taxes consisted of the following (in millions):\nYear Ended December 31,\n \n2023\n2024\n2025\nCurrent:\nFederal and state\n$ \n15,716 $ \n21,101 $ \n13,378 \nForeign\n \n3,935 \n3,852 \n5,028 \nTotal\n \n19,651 \n24,953 \n18,406 \nDeferred:\nFederal and state\n \n(7,482) \n(5,350) \n8,243 \nForeign\n \n(247) \n94 \n7 \nTotal\n \n(7,729) \n(5,256) \n8,250 \nProvision for income taxes\n$ \n11,922 $ \n19,697 $ \n26,656 \nTable of Contents\nAlphabet Inc.\n83.\n\nThe reconciliation of federal statutory income tax rate to our effective income tax rate was as follows:\nYear Ended December 31,\n \n2023\n2024\n2025\nUS federal statutory rate\n \n18,001 \n 21.0 % \n25,161 \n 21.0 % \n33,353 \n 21.0 %\nState and local income taxes, net of federal \nincome tax effect(1)\n \n823 \n 1.0 % \n1,199 \n 1.0 % \n1,606 \n 1.0 %\nForeign tax effects:\nBrazil:\nWithholding taxes\n \n1,064 \n 1.2 % \n1,041 \n 0.9 % \n1,384 \n 0.9 %\nOther\n \n62 \n 0.1 % \n12 \n 0.0 % \n23 \n 0.0 %\nOther foreign jurisdictions\n \n(74) \n (0.1) % \n353 \n 0.3 % \n396 \n 0.2 %\nEffect of change in tax laws or rates enacted in \nthe current period\n \n(829) \n (1.0) % \n0 \n 0.0 % \n0 \n 0.0 %\nEffect of cross-border tax laws:\nForeign-derived intangible income deduction\n \n(3,980) \n (4.6) % \n(4,568) \n (3.8) % \n(3,931) \n (2.5) %\nOther\n \n215 \n 0.2 % \n321 \n 0.3 % \n295 \n 0.2 %\nTax credits:\nFederal research credit\n \n(1,575) \n (1.8) % \n(1,792) \n (1.5) % \n(2,088) \n (1.3) %\nForeign tax credits\n \n(1,396) \n (1.6) % \n(1,373) \n (1.1) % \n(1,684) \n (1.1) %\nOther\n \n(498) \n (0.6) % \n(198) \n (0.2) % \n(98) \n (0.1) %\nChanges in valuation allowances\n \n513 \n 0.6 % \n603 \n 0.5 % \n1,170 \n 0.7 %\nNontaxable or nondeductible items:\nStock-based compensation expense\n \n(602) \n (0.7) % \n(1,743) \n (1.5) % \n(2,601) \n (1.6) %\nOther\n \n169 \n 0.2 % \n203 \n 0.2 % \n955 \n 0.6 %\nChanges in unrecognized tax benefits\n \n432 \n 0.5 % \n689 \n 0.6 % \n(1,123) \n (0.7) %\nOther adjustments\n \n(403) \n (0.5) % \n(211) \n (0.2) % \n(1,002) \n (0.6) %\nTotal\n$ 11,922 \n 13.9 % $ 19,697 \n 16.4 % $ 26,656 \n 16.8 %\n(1) \nThe tax effect in this category primarily reflects state and local taxes in New York state, New York city, Pennsylvania, \nMinnesota, Illinois, New Jersey and Wisconsin.\nIn 2023, the IRS issued a rule change allowing taxpayers to temporarily apply the regulations in effect prior to \n2022 related to US federal foreign tax credits as well as a separate rule change with guidance on the capitalization and \namortization of research and development expenses. A cumulative one-time adjustment for these tax rule changes was \nrecorded in 2023.\nChanges to US tax law enacted on July 4, 2025, allow for immediate expensing of domestic research and \nexperimentation costs, accelerated depreciation on eligible capital expenditures, and other tax law changes impacting \n2025 with certain changes effective in 2026. These changes are reflected in our results for the year ended \nDecember 31, 2025.\nTable of Contents\nAlphabet Inc.\n84.\n\nDeferred Income Taxes\nDeferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets \nand liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components \nof our deferred tax assets and liabilities were as follows (in millions):\nAs of December 31,\n2024\n2025\nDeferred tax assets:\nAccrued employee benefits\n$ \n1,834 $ \n1,951 \nAccruals and reserves not currently deductible\n \n2,552 \n3,570 \nTax credits\n \n6,384 \n7,314 \nNet operating losses\n \n3,472 \n4,953 \nOperating leases\n \n3,336 \n3,337 \nCapitalized research and development\n \n25,903 \n24,758 \nOther\n \n1,376 \n2,143 \nTotal deferred tax assets\n \n44,857 \n48,026 \nValuation allowance\n \n(11,493) \n(13,942) \nTotal deferred tax assets net of valuation allowance\n \n33,364 \n34,084 \nDeferred tax liabilities:\nProperty and equipment, net\n \n(9,932) \n(13,256) \nNet investment gains\n \n(2,978) \n(8,242) \nOperating leases\n \n(2,986) \n(3,103) \nOther\n \n(1,008) \n(1,289) \nTotal deferred tax liabilities\n \n(16,904) \n(25,890) \nNet deferred tax assets (liabilities)\n$ \n16,460 $ \n8,194 \nAs of December 31, 2025, our federal, state, and foreign net operating loss carryforwards for income tax \npurposes were approximately $13.0 billion, $25.1 billion, and $2.9 billion respectively. If not utilized, the federal, foreign \nand state net operating loss carryforwards will all begin to expire in 2026. It is more likely than not that the majority of \nthe net operating loss carryforwards will not be realized. The net operating loss carryforwards are subject to various \nannual limitations under the tax laws of the different jurisdictions.\nAs of December 31, 2025, our Federal and California research and development credit carryforwards for income \ntax purposes were approximately $771 million and $6.4 billion, respectively. If not utilized, the Federal research and \ndevelopment credit will begin to expire in 2037 and the California research and development credit can be carried over \nindefinitely. We believe the majority of the federal tax credit and state tax credit is not likely to be realized.\nAs of December 31, 2025, our investment tax credit carryforwards for state income tax purposes were \napproximately $1.3 billion and will begin to expire in 2033. We use the flow-through method of accounting for \ninvestment tax credits. We believe this tax credit is not likely to be realized.\nAs of December 31, 2025, we maintained a valuation allowance with respect to California deferred tax assets, \ncertain federal net operating losses, certain state net operating losses and tax credits, net deferred tax assets relating \nto certain Other Bet companies, and certain foreign net operating losses that we believe are not likely to be realized. \nWe continue to reassess the remaining valuation allowance quarterly, and if future evidence allows for a partial or full \nrelease of the valuation allowance, a tax benefit will be recorded accordingly. \nTable of Contents\nAlphabet Inc.\n85.\n\nCash paid for income taxes, net of refunds, were as follows (in millions):\nYear Ended December 31,\n2023\n2024\n2025\nUS federal\n$ \n13,689 $ \n19,921 $ \n13,658 \nUS state and local\n \n1,224 \n2,697 \n2,919 \nForeign:\nBrazil\n \n1,264 \n1,101 \n1,368 \nOther\n \n2,987 \n3,634 \n3,581 \nTotal foreign\n \n4,251 \n4,735 \n4,949 \nTotal cash paid for income taxes, net of refunds\n$ \n19,164 $ \n27,353 $ \n21,526 \nUncertain Tax Positions\nThe following table summarizes the activity related to our gross unrecognized tax benefits (in millions):\n \n2023\n2024\n2025\nBeginning gross unrecognized tax benefits\n$ \n7,055 $ \n9,438 $ \n12,619 \nIncreases related to prior year tax positions\n \n740 \n896 \n278 \nDecreases related to prior year tax positions\n \n(682) \n(83) \n(1,301) \nDecreases related to settlement with tax authorities\n \n(21) \n(311) \n(2,183) \nIncreases related to current year tax positions\n \n2,346 \n2,679 \n2,099 \nEnding gross unrecognized tax benefits\n$ \n9,438 $ \n12,619 $ \n11,512 \nYear Ended December 31,\nWe are subject to income taxes in the US and foreign jurisdictions. Significant judgment is required in evaluating \nour uncertain tax positions and determining our provision for income taxes. The total amount of gross unrecognized tax \nbenefits was $9.4 billion, $12.6 billion, and $11.5 billion as of December 31, 2023, 2024, and 2025, respectively, of \nwhich $7.4 billion, $10.0 billion, and $9.7 billion, if recognized, would affect our effective tax rate, respectively. \nAs of December 31, 2024 and 2025, we accrued $1.1 billion and $1.2 billion in interest and penalties in provision \nfor income taxes, respectively.\nWe are subject to the continuous examination of our income tax returns by the IRS and other tax authorities. The \nIRS is currently examining our 2019 through 2021 tax returns. We have also received tax assessments in multiple \nforeign jurisdictions asserting transfer pricing adjustments or permanent establishment. We continue to defend such \nclaims as presented.\nWe regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the \nadequacy of our provision for income taxes. We continue to monitor the progress of ongoing discussions with tax \nauthorities and the effect, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions.\nWe believe that an adequate provision has been made for any adjustments that may result from tax examinations. \nHowever, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are \nresolved in a manner not consistent with management's expectations, we could be required to adjust our provision for \nincome taxes in the period such resolutions occur. \nNote 15. Information about Segments and Geographic Areas \nWe report our segment results as Google Services, Google Cloud, and Other Bets:\n•\nGoogle Services includes products and services such as ads, Android, Chrome, devices, Google Maps, \nGoogle Play, Search, and YouTube. Google Services generates revenues primarily from advertising; fees \nreceived for consumer subscription-based products such as YouTube TV, YouTube Music and Premium, and \nNFL Sunday Ticket, as well as Google One; the sale of apps and in-app purchases; and devices.\n•\nGoogle Cloud includes infrastructure and platform services, applications, and other services for enterprise \ncustomers. Google Cloud generates revenues primarily from consumption-based fees and subscriptions \nreceived for Google Cloud Platform services, Google Workspace communication and collaboration tools, and \nother enterprise services.\nTable of Contents\nAlphabet Inc.\n86.\n\n•\nOther Bets is a combination of multiple operating segments that are not individually material. Revenues from \nOther Bets are generated primarily from the sale of autonomous transportation services and internet services.\nRevenues, certain costs, such as costs associated with content and traffic acquisition, certain engineering \nactivities, and devices, as well as certain operating expenses are directly attributable to our segments. Due to the \nintegrated nature of Alphabet, other costs and expenses, such as technical infrastructure and office facilities, are \nmanaged centrally at a consolidated level. These costs, including the associated depreciation, are allocated to \noperating segments as a service cost generally based on usage, headcount, or revenue.\nCertain costs are not allocated to our segments because they represent Alphabet-level activities. These costs \nprimarily include: \n•\ncertain AI-focused shared research and development activities, including employee compensation expenses \nand technical infrastructure usage costs associated with the development of our general AI models; \n•\ncorporate initiatives such as our philanthropic activities; and\n•\ncorporate shared costs such as certain finance, human resource, and legal costs, including certain fines and \nsettlements. \nCharges associated with employee severance and office space reductions are also not allocated to our segments. \nAdditionally, hedging gains (losses) related to revenue are not allocated to our segments.\nOur Chief Operating Decision Maker (CODM) is our Chief Executive Officer, Sundar Pichai. Our CODM uses \nsegment operating income (loss) to allocate resources to our segments in our annual planning process and to assess \nthe performance of our segments, primarily by monitoring actual results versus the annual plan. Our operating \nsegments are not evaluated using asset information.\nThe following table presents revenue, profitability, and expense information about our segments (in millions):\nYear Ended December 31,\n2023\n2024\n2025\nRevenues:\nGoogle Services\n$ \n272,543 $ \n304,930 $ \n342,721 \nGoogle Cloud\n \n33,088 \n43,229 \n58,705 \nOther Bets\n \n1,527 \n1,648 \n1,537 \nHedging gains (losses)\n \n236 \n211 \n(127) \nTotal revenues\n$ \n307,394 $ \n350,018 $ \n402,836 \nOperating income (loss):\nGoogle Services\n$ \n95,858 $ \n121,263 $ \n139,404 \nGoogle Cloud\n \n1,716 \n6,112 \n13,910 \nOther Bets\n \n(4,095) \n(4,444) \n(7,515) \nAlphabet-level activities\n \n(9,186) \n(10,541) \n(16,760) \nTotal income from operations\n$ \n84,293 $ \n112,390 $ \n129,039 \nSupplemental information about segment expenses:\nGoogle Services:\nEmployee compensation expenses\n$ \n46,224 $ \n44,560 $ \n45,124 \nOther costs and expenses\n \n130,461 \n139,107 \n158,193 \nTotal Google Services costs and expenses\n$ \n176,685 $ \n183,667 $ \n203,317 \nGoogle Cloud:\nEmployee compensation expenses\n$ \n19,054 $ \n20,519 $ \n22,078 \nOther costs and expenses\n \n12,318 \n16,598 \n22,717 \nTotal Google Cloud costs and expenses\n$ \n31,372 $ \n37,117 $ \n44,795 \nTable of Contents\nAlphabet Inc.\n87.\n\nGoogle Services and Google Cloud employee compensation expenses include the costs associated with direct \nand allocated employees. Google Services and Google Cloud other costs and expenses primarily include direct costs, \nsuch as advertising and promotional activities, legal and other matters, and third-party services fees as well as \nallocated costs, such as technical infrastructure and office facilities usage costs. Additionally, Google Services other \ncosts and expenses include content and traffic acquisition costs and device costs.\nSee Note 2 for further details relating to revenues by geography.\nThe following table presents long-lived assets by geographic area, which includes property and equipment, net \nand operating lease assets (in millions):\nAs of December 31,\n \n2024\n2025\nLong-lived assets:\nUnited States\n$ \n138,993 $ \n195,337 \nInternational\n \n45,631 \n66,481 \nTotal long-lived assets\n$ \n184,624 $ \n261,818 \nNote 16. Subsequent Event\nIn January 2026, we recognized approximately $32.0 billion of unrealized gains in our non-marketable \ninvestments. These unrealized gains reflect an estimated increase in the fair value measurement following observable \ntransactions that occurred in January 2026, and are subject to change as we finalize related valuations. See Note 3 \nand Note 7 for further details on equity investments and OI&E.\nTable of Contents\nAlphabet Inc.\n88.\n\nITEM 9.\nCHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL \nDISCLOSURE\nNone.\nITEM 9A.\nCONTROLS AND PROCEDURES\nEvaluation of Disclosure Controls and Procedures\nOur management, with the participation of our chief executive officer and chief financial officer, evaluated the \neffectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of the \nend of the period covered by this Annual Report on Form 10-K.\nBased on this evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, \n2025, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to \nprovide reasonable assurance that information we are required to disclose in reports that we file or submit under the \nExchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules \nand forms, and that such information is accumulated and communicated to our management, including our chief \nexecutive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.\nChanges in Internal Control over Financial Reporting\nThere have been no changes in our internal control over financial reporting that occurred during the quarter \nended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal \ncontrol over financial reporting. \nManagement’s Report on Internal Control over Financial Reporting\nOur management is responsible for establishing and maintaining adequate internal control over financial \nreporting, as defined in Rule 13a-15(f) of the Exchange Act. Our management conducted an evaluation of the \neffectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated \nFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). \nBased on this evaluation, management concluded that our internal control over financial reporting was effective as of \nDecember 31, 2025. Management reviewed the results of its assessment with our Audit Committee. The effectiveness \nof our internal control over financial reporting as of December 31, 2025 has been audited by Ernst & Young LLP, an \nindependent registered public accounting firm, as stated in its report which is included in Item 8 of this Annual Report \non Form 10-K.\nLimitations on Effectiveness of Controls and Procedures\nIn designing and evaluating the disclosure controls and procedures, management recognizes that any controls \nand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the \ndesired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there \nare resource constraints and that management is required to apply its judgment in evaluating the benefits of possible \ncontrols and procedures relative to their costs.\nITEM 9B.\nOTHER INFORMATION\n10b5-1 Trading Plans\nDuring the quarter ended December 31, 2025, the following Section 16 director and officer adopted, modified, or \nterminated a \"Rule 10b5-1 trading arrangement\" (as defined in Item 408 of Regulation S-K of the Exchange Act):\n•\nJohn Hennessy, Chair of the Board of Directors, through the John L. Hennessy & Andrea J. Hennessy \nRevocable Trust, adopted a new trading plan on November 10, 2025 (with the first trade under the new plan \nscheduled for March 15, 2026). The trading plan will be effective until March 15, 2027 to sell up to 8,400 \nshares of Class C Capital Stock and up to 4,200 shares of Class A Common Stock.\n•\nRuth M. Porat, President and Chief Investment Officer, adopted a new trading plan on November 29, 2025 \n(with the first trade under the new plan scheduled for March 2, 2026). The trading plan is scheduled to be in \neffect until March 2, 2027 to sell up to 154,486 shares (gross, plus any dividend equivalent units) of Class C \nCapital Stock issued upon the vesting of Ruth's Alphabet 2021 Performance Stock Units, as adjusted based on \nperformance (shares sold are net of tax withholding).\nThere were no \"non-Rule 10b5-1 trading arrangements\" (as defined in Item 408 of Regulation S-K of the \nExchange Act) adopted, modified, or terminated during the quarter ended December 31, 2025 by our directors and \nSection 16 officers. Each of the Rule 10b5-1 trading arrangements are in accordance with our Policy Against Insider \nTable of Contents\nAlphabet Inc.\n89.\n\nTrading and actual sale transactions made pursuant to such trading arrangements will be disclosed publicly in Section \n16 filings with the SEC in accordance with applicable securities laws, rules, and regulations.\nRequired Disclosure Pursuant to Section 13(r) of the Exchange Act\nAs previously disclosed, Google LLC, a subsidiary of Alphabet, filed notifications with the Russian Federal \nSecurity Service (FSB) pursuant to Russian encryption control requirements, which must be complied with prior to the \nimport of covered items. The information provided pursuant to Section 13(r) of the Exchange Act in Part II, Item 5 of \nour Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 is incorporated herein by reference.\nITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS\nNot applicable.\nTable of Contents\nAlphabet Inc.\n90.\n\nPART III\nITEM 10.\nDIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE\nThe information required by this item will be included under the caption \"Directors, Executive Officers, and \nCorporate Governance\" in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC \nwithin 120 days of the fiscal year ended December 31, 2025 (2026 Proxy Statement) and is incorporated herein by \nreference. The information required by this item regarding delinquent filers pursuant to Item 405 of Regulation S-K will \nbe included under the caption \"Delinquent Section 16(a) Reports\" in the 2026 Proxy Statement and is incorporated \nherein by reference.\nWe have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of \nsecurities of Alphabet by directors, officers, and employees that we believe are reasonably designed to promote \ncompliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards. Our insider \ntrading policy states, among other things, that our directors, officers, and employees are prohibited from trading in such \nsecurities while in possession of material, nonpublic information. The foregoing summary of our insider trading policies \nand procedures does not purport to be complete and is qualified by reference to our Policy Against Insider Trading filed \nas Exhibit 19.1 to our 2024 Annual Report on Form 10-K and incorporated by reference herein.\nITEM 11.\nEXECUTIVE COMPENSATION\nThe information required by this item will be included under the captions \"Director Compensation,\" \"Executive \nCompensation\" and \"Directors, Executive Officers, and Corporate Governance—Corporate Governance and Board \nMatters—Compensation Committee Interlocks and Insider Participation\" in the 2026 Proxy Statement and is \nincorporated herein by reference, except as to information disclosed therein pursuant to Item 402(v) of Regulation S-K \nrelating to pay versus performance.\nITEM 12.\nSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED \nSTOCKHOLDER MATTERS\nThe information required by this item will be included under the captions \"Common Stock Ownership of Certain \nBeneficial Owners and Management\" and \"Equity Compensation Plan Information\" in the 2026 Proxy Statement and is \nincorporated herein by reference.\nITEM 13.\nCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE\nThe information required by this item will be included under the captions \"Certain Relationships and Related \nTransactions\" and \"Directors, Executive Officers, and Corporate Governance—Corporate Governance and Board \nMatters—Director Independence\" in the 2026 Proxy Statement and is incorporated herein by reference.\nITEM 14.\nPRINCIPAL ACCOUNTANT FEES AND SERVICES\nThe information required by this item will be included under the caption \"Independent Registered Public \nAccounting Firm\" in the 2026 Proxy Statement and is incorporated herein by reference.\nTable of Contents\nAlphabet Inc.\n91.\n\nPART IV\nITEM 15.\nEXHIBITS, FINANCIAL STATEMENT SCHEDULES\nWe have filed the following documents as part of this Annual Report on Form 10-K:\n1. Consolidated Financial Statements\nReports of Independent Registered Public Accounting Firm\n45\nFinancial Statements:\nConsolidated Balance Sheets\n48\nConsolidated Statements of Income\n49\nConsolidated Statements of Comprehensive Income\n50\nConsolidated Statements of Stockholders’ Equity\n51\nConsolidated Statements of Cash Flows\n52\nNotes to Consolidated Financial Statements\n53\n2. Financial Statement Schedules\nSchedule II: Valuation and Qualifying Accounts\nThe table below details the activity of the allowance for credit losses and sales credits for the years ended \nDecember 31, 2023, 2024, and 2025 (in millions):\nBalance at\nBeginning of Year\nAdditions\nUsage\nBalance at\nEnd of Year\nYear ended December 31, 2023\n$ \n1,213 $ \n3,115 $ \n(2,737) $ \n1,591 \nYear ended December 31, 2024\n$ \n1,591 $ \n2,895 $ \n(2,850) $ \n1,636 \nYear ended December 31, 2025\n$ \n1,636 $ \n4,128 $ \n(3,408) $ \n2,356 \nNote:\nAdditions to the allowance for credit losses are charged to expense. Additions to the allowance for sales credits are \ncharged against revenues.\nAll other schedules have been omitted because they are not required, not applicable, or the required information \nis otherwise included.\n3. Exhibits\n2.01\nAgreement and Plan of Merger, dated \nOctober 2, 2015, by and among Google Inc., \nthe Registrant and Maple Technologies Inc.\nCurrent Report on Form 8-K \n(File No. 001-37580) \nOctober 2, 2015\n3.01\nAmended and Restated Certificate of \nIncorporation of the Registrant\nCurrent Report on Form 8-K \n(File No. 001-37580) \nJune 3, 2022\n3.02\nAmended and Restated Bylaws of the \nRegistrant, dated October 19, 2022\nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 25, 2022\n4.01\nSpecimen Class A Common Stock certificate\nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n4.02\nSpecimen Class C Capital Stock certificate\nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n4.03\nu\nAlphabet Inc. Deferred Compensation Plan\nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n4.04\nTransfer Restriction Agreement, dated \nOctober 2, 2015, between the Registrant and \nLarry Page and certain of his affiliates \nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n4.05\nTransfer Restriction Agreement, dated \nOctober 2, 2015, between the Registrant and \nSergey Brin and certain of his affiliates \nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n4.06\nJoinder Agreement, dated December 31, \n2021, among the Registrant, Sergey Brin and \ncertain of his affiliates \nAnnual Report on Form 10-K \n(File No. 001-37580)\nFebruary 2, 2022\nExhibit\nNumber\nDescription\nIncorporated by reference herein\nForm\nDate\nTable of Contents\nAlphabet Inc.\n92.\n\n4.07\nTransfer Restriction Agreement, dated \nOctober 2, 2015, between the Registrant and \nEric E. Schmidt and certain of its affiliates\nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n4.08\nClass C Undertaking, dated October 2, 2015, \nexecuted by the Registrant\nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n4.09\nIndenture, dated February 12, 2016, between \nthe Registrant and The Bank of New York \nMellon Trust Company, N.A., as Trustee\nRegistration Statement on \nForm S-3 \n(File No. 333-209510)\nFebruary 12, 2016\n4.10\nRegistrant Registration Rights Agreement \ndated December 14, 2015\nRegistration Statement on \nForm S-3 \n(File No. 333-209518)\nFebruary 12, 2016\n4.11\nFirst Supplemental Indenture, dated April 27, \n2016, between the Registrant and The Bank \nof New York Mellon Trust Company, N.A., as \ntrustee\nCurrent Report on Form 8-K\n(File No. 001-37580)\nApril 27, 2016\n4.12\nForm of the Registrant’s 1.998% Note due \n2026\nCurrent Report on Form 8-K \n(File No. 001-37580)\nAugust 9, 2016\n4.13\nForm of Global Note representing the \nRegistrant’s 0.800% notes due 2027\nCurrent Report on Form 8-K \n(File No. 001-37580)\nAugust 5, 2020\n4.14\nForm of Global Note representing the \nRegistrant’s 1.100% notes due 2030\nCurrent Report on Form 8-K \n(File No. 001-37580)\nAugust 5, 2020\n4.15\nForm of Global Note representing the \nRegistrant’s 1.900% notes due 2040\nCurrent Report on Form 8-K \n(File No. 001-37580)\nAugust 5, 2020\n4.16\nForm of Global Note representing the \nRegistrant’s 2.050% notes due 2050\nCurrent Report on Form 8-K \n(File No. 001-37580)\nAugust 5, 2020\n4.17\nForm of Global Note representing the \nRegistrant’s 2.250% notes due 2060\nCurrent Report on Form 8-K \n(File No. 001-37580)\nAugust 5, 2020\n4.18\nForm of Global Note representing the \nRegistrant’s 4.000% notes due 2030\nCurrent Report on Form 8-K \n(File No. 001-37580)\nMay 1, 2025\n4.19\nForm of Global Note representing the \nRegistrant’s 4.500% notes due 2035\nCurrent Report on Form 8-K \n(File No. 001-37580)\nMay 1, 2025\n4.20\nForm of Global Note representing the \nRegistrant’s 5.250% notes due 2055\nCurrent Report on Form 8-K \n(File No. 001-37580)\nMay 1, 2025\n4.21\nForm of Global Note representing the \nRegistrant’s 5.300% notes due 2065\nCurrent Report on Form 8-K \n(File No. 001-37580)\nMay 1, 2025\n4.22\nForm of Global Note representing the \nRegistrant’s 2.500% notes due 2029\nCurrent Report on Form 8-K \n(File No. 001-37580)\nMay 6, 2025\n4.23\nForm of Global Note representing the \nRegistrant’s 3.000% notes due 2033\nCurrent Report on Form 8-K \n(File No. 001-37580)\nMay 6, 2025\n4.24\nForm of Global Note representing the \nRegistrant’s 3.375% notes due 2037\nCurrent Report on Form 8-K \n(File No. 001-37580)\nMay 6, 2025\n4.25\nForm of Global Note representing the \nRegistrant’s 3.875% notes due 2045\nCurrent Report on Form 8-K \n(File No. 001-37580)\nMay 6, 2025\n4.26\nForm of Global Note representing the \nRegistrant’s 4.000% notes due 2054\nCurrent Report on Form 8-K \n(File No. 001-37580)\nMay 6, 2025\n4.27\nForm of Global Note representing the \nRegistrant’s 2.375% notes due 2028\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.28\nForm of Global Note representing the \nRegistrant’s 2.875% notes due 2031\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.29\nForm of Global Note representing the \nRegistrant’s 3.125% notes due 2034\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.30\nForm of Global Note representing the \nRegistrant’s 3.500% notes due 2038\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.31\nForm of Global Note representing the \nRegistrant’s 4.000% notes due 2044\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\nExhibit\nNumber\nDescription\nIncorporated by reference herein\nForm\nDate\nTable of Contents\nAlphabet Inc.\n93.\n\n4.32\nForm of Global Note representing the \nRegistrant’s 4.375% notes due 2064\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.33\nForm of Global Note representing the \nRegistrant’s floating rate notes due 2028\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.34\nForm of Global Note representing the \nRegistrant’s 3.875% notes due 2028\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.35\nForm of Global Note representing the \nRegistrant’s 4.100% notes due 2030\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.36\nForm of Global Note representing the \nRegistrant’s 4.375% notes due 2032\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.37\nForm of Global Note representing the \nRegistrant’s 4.700% notes due 2035\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.38\nForm of Global Note representing the \nRegistrant’s 5.350% notes due 2045\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.39\nForm of Global Note representing the \nRegistrant’s 5.450% notes due 2055\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.40\nForm of Global Note representing the \nRegistrant’s 5.700% notes due 2075\nCurrent Report on Form 8-K \n(File No. 001-37580)\nNovember 6, 2025\n4.41\nDescription of Registrant’s Securities\nAnnual Report on Form 10-K \n(File No. 001-37580)\nFebruary 3, 2023\n10.01\nu\nForm of Indemnification Agreement entered \ninto between the Registrant, its affiliates and \nits directors and officers \nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n10.02\nu\nForm of Offer Letter for Directors\nAnnual Report on Form 10-K \n(File No. 001-37580)\nJanuary 31, 2024\n10.03\nu\nLetter Agreement dated June 3, 2024, \nbetween Anat Ashkenazi and Alphabet\nCurrent Report on Form 8-K \n(File No. 001-37580)\nJune 7, 2024\n10.04\nu\nCompensation Plan Agreement, dated \nOctober 2, 2015, between Google Inc. and \nthe Registrant\nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n10.05\nu\nDirector Arrangements Agreement, dated \nOctober 2, 2015, between Google Inc. and \nthe Registrant\nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n10.06\nu\nAlphabet Inc. Deferred Compensation Plan\nCurrent Report on Form 8-K \n(File No. 001-37580)\nOctober 2, 2015\n10.07\nu\nAlphabet Inc. Amended and Restated 2012 \nStock Plan\nCurrent Report on Form 8-K\n(File No. 001-37580)\nJune 5, 2020\n10.07.1\nu\nAlphabet Inc. Amended and Restated 2012 \nStock Plan - Form of Alphabet Restricted \nStock Unit Agreement\nAnnual Report on Form 10-K\n(File No. 001-37580)\nFebruary 4, 2020\n10.08\nu\nAlphabet Inc. Amended and Restated 2021 \nStock Plan\nCurrent Report on Form 8-K \n(file No. 001-37580)\nJune 8, 2023\n10.08.1\nu\nAlphabet Inc. Amended and Restated 2021 \nStock Plan - Form of Alphabet Restricted \nStock Unit Agreement\nQuarterly Report on Form 10-\nQ (file No. 001-37580)\nJuly 28, 2021\n10.08.2\nu\nAlphabet Inc. Amended and Restated 2021 \nStock Plan - Form of Alphabet Restricted \nStock Unit Agreement\nQuarterly Report on Form 10-\nQ (File No. 001-37580)\nJuly 26, 2023\n10.08.3\nu\nAlphabet Inc. Amended and Restated 2021 \nStock Plan – Form of Alphabet Restricted \nStock Unit Agreement\nQuarterly Report on Form 10-\nQ (File No. 001-37580)\nApril 26, 2024\n10.08.4\nu\nAlphabet Inc. Amended and Restated 2021 \nStock Plan - Form of Alphabet 2022 CEO \nPerformance Stock Unit Agreement\nAnnual Report on Form 10-K \n(File No. 001-37580) \nFebruary 3, 2023\nExhibit\nNumber\nDescription\nIncorporated by reference herein\nForm\nDate\nTable of Contents\nAlphabet Inc.\n94.\n\n10.08.5\nu\nAlphabet Inc. Amended and Restated 2021 \nStock Plan – Form of Alphabet CEO \nPerformance Stock Unit Agreement\nQuarterly Report on Form 10-\nQ (File No. 001-37580)\nApril 26, 2024\n10.08.6\nu\nAlphabet Inc. Amended and Restated 2021 \nStock Plan - Form of Alphabet 2022 Non-\nCEO Performance Stock Unit Agreement\nAnnual Report on Form 10-K\n(File No. 001-37580)\nFebruary 2, 2022\n10.08.7\nu\nAlphabet Inc. Amended and Restated 2021 \nStock Plan - Form of Alphabet 2023 Non-\nCEO Performance Stock Unit Agreement\nQuarterly Report on Form 10-\nQ (File No. 001-37580)\nJuly 26, 2023\n10.08.8\nu\nAlphabet Inc. Amended and Restated 2021 \nStock Plan – Form of Alphabet Non-CEO \nPerformance Stock Unit Agreement\nQuarterly Report on Form 10-\nQ (File No. 001-37580)\nApril 26, 2024\n10.09\nu\nAlphabet Inc. Company Bonus Plan, as \namended\nAnnual Report on Form 10-K\n(File No. 001-37350)\nFebruary 2, 2023\n19.01\nAlphabet Inc. Policy Against Insider Trading\nAnnual Report on Form 10-K\n(File No. 001-37350)\nFebruary 5, 2025\n21.01\n*\nSubsidiaries of the Registrant\n23.01\n*\nConsent of Independent Registered Public \nAccounting Firm\n24.01\n*\nPower of Attorney (incorporated by reference \nto the signature page of this Annual Report \non Form 10-K)\n31.01\n*\nCertification of Chief Executive Officer \npursuant to Exchange Act Rules 13a-14(a) \nand 15d-14(a), as adopted pursuant to \nSection 302 of the Sarbanes-Oxley Act of \n2002\n31.02\n*\nCertification of Chief Financial Officer \npursuant to Exchange Act Rules 13a-14(a) \nand 15d-14(a), as adopted pursuant to \nSection 302 of the Sarbanes-Oxley Act of \n2002\n32.01\n‡\nCertifications of Chief Executive Officer and \nChief Financial Officer pursuant to 18 U.S.C. \nSection 1350, as adopted pursuant to \nSection 906 of the Sarbanes-Oxley Act of \n2002\n97.01\nu\nClawback Policy\nAnnual Report on Form 10-K\n(File No. 001-37350)\nJanuary 31, 2024\n101.INS\n*\nInline XBRL Instance Document - the \ninstance document does not appear in the \nInteractive Data File because its XBRL tags \nare embedded within the Inline XBRL \ndocument\n101.SCH\n*\nInline XBRL Taxonomy Extension Schema \nDocument\n101.CAL\n*\nInline XBRL Taxonomy Extension Calculation \nLinkbase Document\n101.DEF\n*\nInline XBRL Taxonomy Extension Definition \nLinkbase Document\n101.LAB\n*\nInline XBRL Taxonomy Extension Label \nLinkbase Document\n101.PRE\n*\nInline XBRL Taxonomy Extension \nPresentation Linkbase Document\n104\n*\nCover Page Interactive Data File (embedded \nwithin the Inline XBRL document and \ncontained in Exhibit 101)\nExhibit\nNumber\nDescription\nIncorporated by reference herein\nForm\nDate\nTable of Contents\nAlphabet Inc.\n95.\n\n_________________\nu\nIndicates management compensatory plan, contract, or arrangement.\n*\nFiled herewith.\n‡\nFurnished herewith.\nITEM 16.\nFORM 10-K SUMMARY\nNone.\nTable of Contents\nAlphabet Inc.\n96.\n\nSIGNATURES\nPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has \nduly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.\nDate: February 4, 2026 \n \nALPHABET INC.\nBy:\n/S/ SUNDAR PICHAI \nSundar Pichai\nChief Executive Officer\n(Principal Executive Officer of the Registrant)\nPOWER OF ATTORNEY\nKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes \nand appoints Sundar Pichai and Anat Ashkenazi, jointly and severally, his or her attorney-in-fact, with the power of \nsubstitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and \nto file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange \nCommission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or \nsubstitutes, may do or cause to be done by virtue hereof.\nPursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been \nsigned below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.\n \n \nTable of Contents\nAlphabet Inc.\n97.\n\nSignature\nTitle\nDate\n/S/ SUNDAR PICHAI\nChief Executive Officer and Director (Principal \nExecutive Officer)\nFebruary 4, 2026\nSundar Pichai\n/S/ ANAT ASHKENAZI \nSenior Vice President and Chief Financial \nOfficer (Principal Financial Officer)\nFebruary 4, 2026\nAnat Ashkenazi\n/S/ AMIE THUENER O'TOOLE \nVice President, Corporate Controller and \nPrincipal Accounting Officer\nFebruary 4, 2026\nAmie Thuener O'Toole\n/S/ FRANCES H. ARNOLD \nDirector\nFebruary 4, 2026\nFrances H. Arnold\n/S/ SERGEY BRIN \nCo-Founder and Director\nFebruary 4, 2026\nSergey Brin\n/S/ R. MARTIN CHAVEZ \nDirector\nFebruary 4, 2026\nR. Martin Chávez\n/S/ L. JOHN DOERR \nDirector\nFebruary 4, 2026\nL. John Doerr\n/S/ ROGER W. FERGUSON JR. \nDirector\nFebruary 4, 2026\nRoger W. Ferguson Jr.\n/S/ JOHN L. HENNESSY \nDirector, Chair\nFebruary 4, 2026\nJohn L. Hennessy\n/S/ LARRY PAGE \nCo-Founder and Director\nFebruary 4, 2026\nLarry Page\n/S/ K. RAM SHRIRAM \nDirector\nFebruary 4, 2026\nK. Ram Shriram\n/S/ ROBIN L. WASHINGTON \nDirector\nFebruary 4, 2026\nRobin L. Washington\nTable of Contents\nAlphabet Inc.\n98.", + "path": "GOOG 10-K 2025.pdf/Root", + "metadata": { + "length": 350271, + "summary": "This section, titled 'Root', serves as the cover page and introductory material for Alphabet Inc.'s Form 10-K Annual Report for the fiscal year ended December 31, 2025. It identifies the registrant (Alphabet Inc.), its jurisdiction of incorporation (Delaware), principal address, and tax identification number. The section also lists all securities registered under Section 12(b) of the Securities Exchange Act of 1934, including Class A and Class C Common Stock with their respective trading symbols (GOOGL and GOOG), and a comprehensive list of Senior Notes due between 2028 and 2064, all registered on the Nasdaq Stock Market LLC. Additionally, it includes check-boxes indicating the company's status as a large accelerated filer and confirms that it is not a shell company.", + "page_nums": [ + 1, + 2, + 3, + 4, + 5, + 6, + 7, + 8, + 9, + 10, + 11, + 12, + 13, + 14, + 15, + 16, + 17, + 18, + 19, + 20, + 21, + 22, + 23, + 24, + 25, + 26, + 27, + 28, + 29, + 30, + 31, + 32, + 33, + 34, + 35, + 36, + 37, + 38, + 39, + 40, + 41, + 42, + 43, + 44, + 45, + 46, + 47, + 48, + 49, + 50, + 51, + 52, + 53, + 54, + 55, + 56, + 57, + 58, + 59, + 60, + 61, + 62, + 63, + 64, + 65, + 66, + 67, + 68, + 69, + 70, + 71, + 72, + 73, + 74, + 75, + 76, + 77, + 78, + 79, + 80, + 81, + 82, + 83, + 84, + 85, + 86, + 87, + 88, + 89, + 90, + 91, + 92, + 93, + 94, + 95, + 96, + 97, + 98, + 99 + ], + "keywords": [ + "United States", + "Securities and Exchange Commission", + "Washington, D.C.", + "Alphabet Inc.", + "Delaware", + "1600 Amphitheatre Parkway", + "Mountain View, CA 94043", + "Nasdaq Stock Market LLC", + "Nasdaq Global Select Market" ], - "keywords": [], "connect_to": [], "page_assets": [ { @@ -21,24 +129,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bbf5dab0-5d6a-56b0-958c-8a7e3f9707d5", - "type": "page", - "content": "Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities\nExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such\nreports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐\nIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted\npursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that\nthe registrant was required to submit such files). Yes ☒ No ☐\nIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller\nreporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller\nreporting company,” and \"emerging growth company\" in Rule 12b-2 of the Exchange Act.\nLarge accelerated filer ☒ Accelerated filer ☐\nNon-accelerated filer ☐ Smaller reporting company ☐\nEmerging growth company ☐\nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for\ncomplying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.\n☐\nIndicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the\neffectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by\nthe registered public accounting firm that prepared or issued its audit report. ☒\nIf securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the\nregistrant included in the filing reflect the correction of an error to previously issued financial statements. ☐\nIndicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based\ncompensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐\nIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒\nAs of June 30, 2025 , the aggregate market value of shares held by non-affiliates of the registrant (based upon the closing sale\nprices of such shares on the Nasdaq Global Select Market on June 30, 2025 ) was approximately $1.9 trillion . For purposes of\ncalculating the aggregate market value of shares held by non-affiliates, we have assumed that all outstanding shares are held by\nnon-affiliates, except for shares held by each of our executive officers, directors, and 5% or greater stockholders. In the case of 5%\nor greater stockholders, we have not deemed such stockholders to be affiliates unless there are facts and circumstances which\nwould indicate that such stockholders exercise any control over our company, or unless they hold 10% or more of our outstanding\ncommon stock. These assumptions should not be deemed to constitute an admission that all executive officers, directors, and 5% or\ngreater stockholders are, in fact, affiliates of our company, or that there are not other persons who may be deemed to be affiliates of\nour company. Further information concerning shareholdings of our officers, directors, and principal stockholders is included or\nincorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K.\nAs of January 28, 2026, there wer e 5,822 million shares of Alphabet’s Class A stock outstanding, 837 million shares of Alphabet’s\nClass B stock outstanding, and 5,438 million shares of the Alphabet’s Class C stock outstanding.\n___________________________________________\nDOCUMENTS INCORPORATED BY REFERENCE\nPortions of the registrant’s Proxy Statement for the 2026 Annual Meeting of Stockholders are incorporated herein by reference in\nPart III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and\nExchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2025.", - "path": "GOOG 10-K 2025.pdf/p2", - "metadata": { - "length": 4307, - "summary": "Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)...", - "page_nums": [ - 2 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 2, "artifact_ref": "page_citation_assets/page-2.png", @@ -46,24 +137,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ff3c59fc-f648-5bc0-bf1f-83a7402057c7", - "type": "page", - "content": "Alphabet Inc.\nForm 10-K\nFor the Fiscal Year Ended December 31, 2025\nTABLE OF CONTENTS\n Page\nNote About Forward-Looking Statements 3\nPART I\nItem 1. Business 3\nItem 1A. Risk Factors 9\nItem 1B. Unresolved Staff Comments 23\nItem 1C. Cybersecurity 23\nItem 2. Properties 24\nItem 3. Legal Proceedings 24\nItem 4. Mine Safety Disclosures 24\nPART II\nItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases\nof Equity Securities\n25\nItem 6. [Reserved] 27\nItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28\nItem 7A. Quantitative and Qualitative Disclosures About Market Risk 41\nItem 8. Financial Statements and Supplementary Data 44\nItem 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 89\nItem 9A. Controls and Procedures 89\nItem 9B. Other Information 89\nItem 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 90\nPART III\nItem 10. Directors, Executive Officers, and Corporate Governance 91\nItem 11. Executive Compensation 91\nItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder\nMatters\n91\nItem 13. Certain Relationships and Related Transactions, and Director Independence 91\nItem 14. Principal Accountant Fees and Services 91\nPART IV\nItem 15. Exhibits, Financial Statement Schedules 92\nItem 16. Form 10-K Summary 96\nSignatures\nTable of Contents Alphabet Inc.\n2.", - "path": "GOOG 10-K 2025.pdf/p3", - "metadata": { - "length": 1440, - "summary": "Alphabet Inc. Form 10-K For the Fiscal Year Ended December 31, 2025 TABLE OF CONTENTS Page Note About Forward-Looking Statements 3 PART I Item 1. Business 3 Item 1A. Risk Factors 9 Item 1B. Unresolved Staff Comments 23 Item 1C. Cybersecurity 23 Item 2. Properties 24 Item 3. Le...", - "page_nums": [ - 3 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 3, "artifact_ref": "page_citation_assets/page-3.png", @@ -71,24 +145,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_0434f89b-86e7-5d14-894f-2e37815fd920", - "type": "page", - "content": "Note About Forward-Looking Statements\nThis Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private\nSecurities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as, but\nare not limited to, \"anticipates,\" \"believes,\" \"could,\" \"estimates,\" \"expects,\" \"intends,\" \"may,\" \"plans,\" \"predicts,\"\n\"projects,\" \"will be,\" \"will continue,\" \"will likely result,\" and similar expressions. These include, among other things,\nexpectations regarding the growth of our business and revenues, including factors that may impact such growth, and\nfluctuations in our revenues and margins ; statements relating to plans, expectations , and trends about our core\nbusiness metrics, costs and expenses , capital expenditures, sources of funding, products and services, strategic\nbusiness transactions, and other aspects of our business operations and strategies; statements regarding the global\nmacroeconomic and regulatory environment; as well as other statements regarding our future operations, financial\ncondition and prospects, and actual or potential risk and liability exposures. Forward-looking statements may appear\nthroughout this report and other documents we file with the Securities and Exchange Commission (SEC), including\nwithout limitation, the following sections: Part I, Item 1 \"Business;\" Part I, Item 1A \"Risk Factors;\" and Part II, Item 7\n\"Management's Discussion and Analysis of Financial Condition and Results of Operations.\" These forward-looking\nstatements are based on current expectations and assumptions that are subject to risks and uncertainties, which could\ncause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could\ncause or contribute to such differences include, but are not limited to, those discussed in this Annual Report on Form\n10-K, including the risks discussed in Part I, Item 1A \"Risk Factors\" and the trends discussed in Part II, Item 7\n\"Management's Discussion and Analysis of Financial Condition and Results of Operations,\" and those discussed in\nother documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any\nrevision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers\nare cautioned not to place undue reliance on such forward-looking statements.\nAs used herein, \"Alphabet,\" \"the company,\" \"we,\" \"us,\" \"our,\" and similar terms include Alphabet Inc. and its\nsubsidiaries, unless the context indicates otherwise.\n\"Alphabet,\" \"Google,\" and other trademarks of ours appearing in this report are our property. We do not intend our\nuse or display of other companies' trade names or trademarks to imply an endorsement or sponsorship of us by such\ncompanies, or any relationship with any of these companies.\nPART I\nITEM 1. BUSINESS\nOverview\nAs our founders Larry and Sergey wrote in the original founders' letter, \"Google is not a conventional company.\nWe do not intend to become one.\" That unconventional spirit has been a driving force throughout our history, inspiring\nus to tackle big problems and invest in moonshots. It led us to be a pioneer in the development of artificial intelligence\n(AI) and, since 2016, be an AI-first company. We continue this work under the leadership of Alphabet and Google CEO,\nSundar Pichai.\nAlphabet is a collection of businesses — the largest of which is Google. We report Google in two segments,\nGoogle Services and Google Cloud, and all non-Google businesses collectively as Other Bets . Supporting these\nbusinesses, we have centralized certain AI-related research and development focused on advanced research in AI and\ndeveloping the frontier models that serve our businesses, which is reported in Alphabet-level activities. Alphabet's\nstructure is about helping each of our businesses prosper through strong leaders and independence.\nAccess and Technology for Everyone\nThe Internet is one of the world’s most powerful equalizers; it propels ideas, people, and businesses large and\nsmall. Our mission to organize the world’s information and make it universally accessible and useful is as relevant\ntoday as it was when we were founded in 1998. Since then, we have evolved from a company that helps people find\nanswers to a company that also helps people get things done.\nWe are focused on building an even more helpful Google for everyone, and we aspire to give everyone the tools\nthey need to increase their knowledge, health, happiness, and success. Google Search helps people find information\nand make sense of the world in more natural and intuitive ways, with trillions of searches on Google every year.\nYouTube provides people with entertainment, information, and opportunities to learn something new and helps support\nthe creator economy through the YouTube Partner Program. Google Cloud helps customers build for the future ,\nimprove productivity, reduce costs, and unlock new growth engines. We continually innovate and build new products\nand features to help our users, partners, customers, and communities and have invested more than $200 billion in\nresearch and development in the last five years in support of these efforts.\nTable of Contents Alphabet Inc.\n3.", - "path": "GOOG 10-K 2025.pdf/p4", - "metadata": { - "length": 5292, - "summary": "Note About Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as, but are not limited to...", - "page_nums": [ - 4 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 4, "artifact_ref": "page_citation_assets/page-4.png", @@ -96,24 +153,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_eb0429cb-f7fd-517e-aca2-7741c0bdf066", - "type": "page", - "content": "Making AI Helpful for Everyone\nWe believe AI is a profound platform shift that can bring meaningful and positive change to people and societies\nacross the world, and to our business . We aim to build the most advanced, safe, and responsible AI through our full-\nstack approach, which spans AI-optimized infrastructure; world-class research, including models and tooling; and our\nproducts and platforms that bring AI to billions of people, developers, and enterprises.\nAt the foundation of our full-stack approach is our AI-optimized infrastructure — a key differentiator enabling us to\npower our own products, such as Search and YouTube, and support the services we provide to our Google Cloud\ncustomers. Our technical infrastru cture allows us to use and offer our customers a range of AI accelerator options,\nincluding specialized Graphics Processing Units (GPUs) and our own custom-built Tensor Processing Units (TPUs),\nsuch as Ironwood, our seventh-generation TPU. We are focused on driving efficiencies in our data centers, allowing us\nto leverage our technical infrastructure to deliver our products and services at an increasing scale while simultaneously\nenabling world-class research and model development.\nOver the last decade, our research teams have pushed the boundaries of AI for ward, which is displayed through\nGemini 3, our most intelligent AI model yet . Designed to deliver advanced multimodal understanding, Gemini 3\nrepresents our most capable iteration of agentic and generative coding technologies. Gemini 3 integrates enhanced\nreasoning capabilities to support visualizations and interactive user experiences across our product ecosystem,\nincluding Search and the Gemini app.\n As technology continues to improve rapidly, we are focused on bringing our latest AI advances to our products\nand platforms. We continue to help our users access information and knowledge, express themselves, and get things\ndone by embedding the power of generative AI and Gemini into our products and platforms. Today, all 15 of our half-\nbillion-user products — including seven with two billion users — use our Gemini models. For our Google Cloud\ncustomers, our offerings are helping organizations stay at the forefront of innovation with solutions such as Gemini\nEnterprise and Gemini for Google Workspace.\nGuided by our AI principles, we believe our approach to AI must be both bold and responsible. That means\ndeveloping AI in a way that maximizes the positive benefits to society while addressing its potential challenges.\nMoonshots\nMany companies get comfortable doing what they have always done, making only incremental changes. This\nincrementalism leads to irrelevance over time, especially in technology, where change tends to be revolutionary, not\nevolutionary.\nOur early investments in AI started out as moonshots but are now incorporated into our core products and central\nto future developments. In Other Bets, our fully autonomous driving technology company, Waymo, is now providing\nfully autonomous, paid ride-hailing services to customers in multiple cities. Isomorphic Labs is reimagining the drug\ndiscovery process from first principles, applying AI to accelerate the development of new medicines. We continue to\nlook toward the future and to invest for the long term, most notably for the application of AI to our products and\nservices, as well as other frontier technologies such as quantum computing.\nPrivacy and Security\nWe make it a priority to protect the privacy and security of our products, users, and customers, even if there are\nnear-term financial consequences. We do this by continuously investing in building products that are secure by default;\nstrictly upholding responsible data practices that emphasize privacy by design; and building easy-to-use settings that\nput people in control. We are continually enhancing these efforts over time, whether by enabling users to auto-delete\ntheir data, applying privacy technologies like on-device processing, giving people tools to control their experience, or\nadvancing anti-malware, anti-phishing, and password security features.\nGoogle\nFor reporting purposes Google comprises two segments: Google Services and Google Cloud.\nGoogle Services\nServing Our Users\nWe have always been committed to building helpful products that can improve the lives of millions of people\nworldwide. Our product innovations are what make our services widely used, and our brand one of the most\nrecognized in the world. Google Services' core products and platforms include ads, Android, Chrome, devices, Gmail,\nGoogle Drive, Google Gemini, Google Maps, Google Photos, Google Play, Search, and YouTube, with broad and\ngrowing adoption by users around the world.\nTable of Contents Alphabet Inc.\n4.", - "path": "GOOG 10-K 2025.pdf/p5", - "metadata": { - "length": 4761, - "summary": "Making AI Helpful for Everyone We believe AI is a profound platform shift that can bring meaningful and positive change to people and societies across the world, and to our business . We aim to build the most advanced, safe, and responsible AI through our full- stack approach,...", - "page_nums": [ - 5 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 5, "artifact_ref": "page_citation_assets/page-5.png", @@ -121,24 +161,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4d60f0fd-ca43-5243-be35-f2849b9dd816", - "type": "page", - "content": "Our products and services have come a long way since the company was founded more than 25 years ago.\nWhile Google Search started as a way to find web pages, organized into ten blue links, we have driven technical\nadvancements and product innovations that have transformed Google Search into a dynamic, multimodal experience.\nLarge language models have made it possible to express more natural language queries, vastly improving the types of\nquestions users can ask, and the quality of results. For example, AI Overviews makes it easier to ask Google anything\nand get a helpful response. AI Mode allows users to ask more nuanced questions that might have previously taken\nmultiple searches, using Gemini’s advanced reasoning, thinking, and multimodal capabilities.\nThis drive to make information more accessible and helpful has led us over the years to improve the discovery\nand creation of digital content both on the web and through platforms like Google Play and YouTube. People are\nconsuming many forms of digital content, including watching long and short form videos and podcasts, streaming TV,\nplaying games, listening to music, reading books, and using apps. Working with content creators and partners, we\ncontinue to build new ways for people around the world to create and find great digital content.\nFueling all of these great digital experiences are extraordinary platforms and devices. That is why we continue to\ninvest in platforms like our Android mobile operating system, Chrome browser, and Chrome operating system, as well\nas our family of devices. We see tremendous potential for devices to be helpful and make people's lives easier by\ncombining the best of our AI, software, and hardware. This potential is reflected in our latest generation of devices,\nsuch as the new Pixel 10 series and the Pixel Watch 4. Creating products and services that people rely on every day is\na journey that we are investing in for the long-term.\nHow We Make Money\nWe have built world-class advertising technologies for advertisers, agencies, and publishers to power their digital\nmarketing businesses. Our advertising solutions help millions of companies grow their businesses through our wide\nrange of products across devices and formats, and we aim to ensure positive user experiences by serving the right ads\nat the right time and by building deep partnerships with brands and agencies. AI has been foundational to our\nadvertising business for more than a decade. Products like Demand Gen, Performance Max, and Product Studio use\nthe full power of our AI to help advertisers find untapped and incremental conversion opportunities.\nGoogle Services generates revenues primarily by delivering both performance and brand advertising that appears\non Google Search & other properties, YouTube, and Google Network partners' properties (\"Google Network\nproperties\"). We continue to invest in both performance and brand advertising and seek to improve the measurability of\nadvertising so advertisers understand the effectiveness of their campaigns.\n• Performance advertising creates and delivers relevant ads that users will click on leading to direct\nengagement with advertisers. Performance advertising lets our advertisers connect with users while driving\nmeasurable results. Our ads tools allow performance advertisers to create simple text-based ads.\n• Brand advertising helps enhance users' awareness of and affinity for advertisers' products and services,\nthrough videos, text, images, and other interactive ads that run across various devices. We help brand\nadvertisers deliver digital videos and other types of ads to specific audiences for their brand-building marketing\ncampaigns.\nWe have allocated substantial resources to stopping bad advertising practices and protecting users on the web.\nWe focus on creating the best advertising experiences for our users and advertisers in many ways, including filtering\nout invalid traffic, removing billions of bad ads from our systems every year, and closely monitoring the sites, apps, and\nvideos where ads appear and blocklisting them when necessary to ensure that ads do not fund bad content.\nIn addition, Google Services generates revenues from products and services beyond advertising, including:\n• consumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV,\nYouTube Music and Premium, and NFL Sunday Ticket, as well as Google One, which offers access to our\nmost capable Gemini models;\n• platforms, which primarily include revenues from Google Play sales of apps and in-app purchases; and\n• devices, which primarily include sales of the Pixel family of devices.\nGoogle Cloud\nThrough our Google Cloud Platform and Google Workspace offerings, Google Cloud generates revenues\nprimarily from consumption-based fees and subscriptions for infrastructure, platform, applications, and other cloud\nservices. Customers use Google Cloud in multiple ways such as:\nTable of Contents Alphabet Inc.\n5.", - "path": "GOOG 10-K 2025.pdf/p6", - "metadata": { - "length": 4983, - "summary": "Our products and services have come a long way since the company was founded more than 25 years ago. While Google Search started as a way to find web pages, organized into ten blue links, we have driven technical advancements and product innovations that have transformed Googl...", - "page_nums": [ - 6 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 6, "artifact_ref": "page_citation_assets/page-6.png", @@ -146,24 +169,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b4ddaf6c-5032-5f1a-9f09-617bd39b2f78", - "type": "page", - "content": "• AI-optimized Infrastructure: runs on our Cloud, at the edge, or in customers' data centers. It can be used to\nmigrate and modernize information technology (IT) systems and to train and serve various types of AI\nmodels. Our AI infrastructure delivers cost-performance for AI workloads. We offer a range of AI accelerators,\nincluding our custom TPUs and specialized GPUs, as well as AI-optimized storage offerings, and efficient AI\nsoftware.\n• Developer Platform: delivers a fully managed AI development platform, through Vertex AI, for accessing,\ntuning, augmenting, and deploying custom models and agents, helping customers build applications with more\nthan 200 foundation models, including our Gemini family, third-party, and open models.\n• Cybersecurity: provides AI-powered threat intelligence and cybersecurity solutions to help customers detect,\nanalyze, protect against, and respond to a broad range of cybersecurity threats.\n• Data and Analytics: enables customers to migrate, clean, prepare, and feed data into their models. Our data\nplatform also unifies data lakes, data warehouses, data governance, and advanced machine learning into a\nsingle platform that helps users analyze data using AI models across any cloud.\n• Agents:\n◦ Gemini Enterprise: empowers teams to discover, create, share, and run AI agents all in one secure\nplatform, bringing the best of Google AI to employees through an intuitive chat interface, helping to\nautomate workflows and drive smarter business outcomes.\n◦ Gemini for Google Workspace: brings our AI-powered agents into Gmail, Docs, Sheets, and more to\nhelp users write, organize, visualize, accelerate workflows, and have more productive meetings.\nOther Bets\n Across Alphabet, we are also using technology to try to solve big problems that affect a wide variety of industries,\nincluding transportation and health technology. Alphabet’s investment in the portfolio of Other Bets includes businesses\nthat are at various stages of development, ranging from those in the research and development phase, such as X, our\nmoonshot factory focused on developing breakthrough technologies, to those that are scaling commercialization , such\nas Waymo , which is expanding to more cities domestically, entering international markets, and further scaling\noperations.\nOther Bets operate as independent companies and some of them have their own boards with independent\nmembers and outside investors. While these early-stage businesses naturally come with considerable uncertainty,\nsome of them are already generating revenue and making important strides in their industries. Revenues from Other\nBets are generated primarily from the sale of autonomous transportation and internet services.\nCompetition\nOur business is characterized by rapid change as well as new and disruptive technologies. We face formidable\ncompetition in every aspect of our business, including but not limited to, from:\n• general purpose search engines and information services;\n• vertical search engines and e-commerce providers for queries on topics such as those related to travel, jobs,\nand health, which users may navigate directly to rather than go through Google;\n• online advertising platforms and networks, including online shopping and streaming services;\n• other forms of advertising, such as billboards, magazines, newspapers, radio, and television, as our\nadvertisers typically advertise in multiple media, both online and offline;\n• digital content and application platform providers;\n• providers of enterprise cloud services;\n• AI model developers and providers of AI products and services;\n• companies that design, manufacture, and market consumer hardware products, including businesses that\nhave developed proprietary platforms;\n• providers of digital video services;\n• social networks, which users may rely on for product or service referrals, rather than seeking information\nthrough traditional search engines; and\n• providers of workspace communication and connectivity products.\nTable of Contents Alphabet Inc.\n6.", - "path": "GOOG 10-K 2025.pdf/p7", - "metadata": { - "length": 4036, - "summary": "• AI-optimized Infrastructure: runs on our Cloud, at the edge, or in customers' data centers. It can be used to migrate and modernize information technology (IT) systems and to train and serve various types of AI models. Our AI infrastructure delivers cost-performance for AI w...", - "page_nums": [ - 7 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 7, "artifact_ref": "page_citation_assets/page-7.png", @@ -171,24 +177,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7c2b058b-27dd-59ac-8afd-b4e57d2384a4", - "type": "page", - "content": "Competing successfully depends heavily on our ability to continually develop and distribute innovative products\nand technologies to the marketplace across our businesses. For example, for advertising, competing successfully\ndepends on attracting and retaining:\n• users, for whom other products and services are literally one click away, on the basis of the relevance of our\nadvertising, as well as the general usefulness, security, and availability of our products and services;\n• advertisers, primarily based on our ability to generate sales leads, and ultimately customers, and to deliver\ntheir advertisements in an efficient and effective manner across a variety of distribution channels even as\ntrends in advertising mediums and user preferences change; and\n• content providers, primarily based on the quality of our advertiser base, our ability to help these partners\ngenerate revenues from advertising, and the terms of our agreements with them.\nFor additional information about competition, see Item 1A Risk Factors of this Annual Report on Form 10-K.\nCulture and Workforce\nOur people are critical for our continued success, so we work hard to create an environment where employees\ncan have fulfilling careers and perform at a high level. We offer industry-leading benefits and programs to take care of\nthe diverse needs of our employees and their families, including opportunities for career growth and development,\nresources to support their financial health, and access to excellent healthcare choices. Our competitive compensation\nprograms help us to attract and retain key talent, and we will continue to invest in recruiting talented people to technical\nand non-technical roles and rewarding them well. We provide a variety of high-quality training and support to managers\nto build and strengthen their capabilities — ranging from courses for new managers, to learning resources that help\nthem provide feedback and manage performance, to coaching and individual support.\nAs of December 31, 2025 , Alphabet had 190,820 employees. We have work councils and statutory employee\nrepresentation obligations in certain countries, and we are committed to supporting protected labor rights, maintaining\nan open culture, and listening to our employees.\nWhen appropriate we partner with outside companies on a contractual basis to provide a specialized service or to\ntemporarily cover a short-term need. The employees of our suppliers and staffing partners — vendors and temporary\nstaff, respectively — and independent contractors who are self-employed, make up our extended workforce. We\nchoose our partners and staffing agencies carefully, and review their compliance with Google’s Supplier Code of\nConduct.\nGovernment Regulation\nWe are subject to numerous United States (US) federal, state, and local, as well as foreign laws, and regulations\ncovering a wide variety of subjects, and the scope of this coverage continues to broaden with continuing new legal and\nregulatory developments in the US and internationally. Like other companies in the technology industry, we face\nincreasingly heightened scrutiny from both US and foreign governments with respect to our compliance with laws and\nregulations. Many of these laws and regulations are evolving and their applicability and scope, as interpreted by the\ncourts, remain uncertain. Particularly with regard to AI; competition; consumer protection; content moderation,\nincluding access restrictions for minors; data privacy and security; intellectual property; news publications; and\nsustainability and other social matters, we have seen an increase in new and evolving laws and regulations, as well as\nrelated enforcement actions and investigations, being proposed and implemented in recent years by legislative and\nregulatory bodies around the world. As we have seen in recent years, different laws and regulations on the same topic\nmay not always have the same requirements ( and sometimes may seem to have conflicting requirements) , and even\nwhen requirements overlap, the rules are not always consistently implemented, interpreted, and enforced from\njurisdiction to jurisdiction.\nOur compliance with these laws and regulations may be onerous and could, individually or in the aggregate,\nincrease our cost of doing business, make our products and services less useful, limit our ability to pursue certain\nbusiness practices or offer certain products and services (either in certain geographies or at all), cause us to change\nour business models and operations, affect our competitive position relative to our peers, or otherwise harm our\nbusiness, reputation, financial condition, and operating results.\nFor additional information about government regulation applicable to our business, see Item 1A Risk Factors;\nTrends in Our Business and Financial Effect in Part II, Item 7; and Legal Matters in Note 10 of the Notes to\nConsolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.\nTable of Contents Alphabet Inc.\n7.", - "path": "GOOG 10-K 2025.pdf/p8", - "metadata": { - "length": 5018, - "summary": "Competing successfully depends heavily on our ability to continually develop and distribute innovative products and technologies to the marketplace across our businesses. For example, for advertising, competing successfully depends on attracting and retaining: • users, for who...", - "page_nums": [ - 8 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 8, "artifact_ref": "page_citation_assets/page-8.png", @@ -196,24 +185,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ea1e8307-eea4-548d-b2bb-2bb7435d98f6", - "type": "page", - "content": "Intellectual Property\nWe rely on intellectual property such as trademarks, copyrights, patents, and trade secrets, as well as\nconfidentiality procedures and contractual provisions, to protect our proprietary technology and our brand. We have\nregistered, and applied for the registration of, US and international trademarks, service marks, domain names, and\ncopyrights. We have also filed patent applications in the US and foreign countries covering certain of our technology,\nand acquired patent assets to supplement our portfolio. We have licensed in the past, and expect that we may license\nin the future, certain of our rights to other parties. For additional information, see Item 1A Risk Factors of this Annual\nReport on Form 10-K.\nAvailable Information\nOur website is located at www.abc.xyz, and our investor relations website is located at www.abc.xyz/investor.\nAccess to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our\nProxy Statements, and any amendments to these reports, is available on our investor relations website, free of charge,\nafter we file or furnish them with the SEC and they are available on the SEC's website at www.sec.gov.\nWe webcast our earnings calls, as well as certain events we participate in or host with members of the investment\ncommunity, via our investor relations YouTube channel and website. Our investor relations website also provides\nnotifications of news or announcements regarding our financial performance and other items that may be material or of\ninterest to our investors, including SEC filings, investor events, press and earnings releases, and blogs. We also share\nGoogle news and product updates on Google's Keyword blog at https://www.blog.google/ and News From Google\npage on X at x.com/NewsFromGoogle, and our executive officers may also use certain social media channels, such as\nX and LinkedIn, to communicate information about earnings results and company updates, which may be of interest or\nmaterial to our investors. Further, corporate governance information, including our certificate of incorporation, bylaws,\ncorporate governance guidelines, board committee charters, and code of conduct, is also available on our investor\nrelations website under the heading \"Governance.\" The information contained on, or that may be accessed through our\nwebsites or our executive officers' social media channels, is not incorporated by reference into this Annual Report on\nForm 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to\nbe inactive textual references only.\nTable of Contents Alphabet Inc.\n8.", - "path": "GOOG 10-K 2025.pdf/p9", - "metadata": { - "length": 2665, - "summary": "Intellectual Property We rely on intellectual property such as trademarks, copyrights, patents, and trade secrets, as well as confidentiality procedures and contractual provisions, to protect our proprietary technology and our brand. We have registered, and applied for the reg...", - "page_nums": [ - 9 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 9, "artifact_ref": "page_citation_assets/page-9.png", @@ -221,24 +193,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9e3a07f3-9664-5052-ab15-b9834b333a22", - "type": "page", - "content": "ITEM 1A. RISK FACTORS\nOur operations and financial results are subject to various risks and uncertainties, including but not limited to\nthose described below, which could harm our business, reputation, financial condition, and operating results, and may\naffect the trading price and price volatility of our Class A and Class C stock.\nRisks Specific to our Company\nWe generate a significant portion of our revenues from advertising. Reduced spending by advertisers, a\nloss of partners, shifts in online advertising, new and evolving advertising formats, or new or existing\ntechnologies that block ads online or affect our ability to personalize ads could harm our business.\nWe generated more than 70% of total revenues from online advertising in 2025 . Many of our advertisers,\ncompanies that distribute our products and services, digital publishers, and content providers can terminate their\ncontracts with us at any time. These partners may not continue to do business with us if we do not create more value\n(such as increased numbers of users or customers, new sales leads, increased brand awareness, or more effective\nmonetization) than their available alternatives.\nWe believe AI is quickly reshaping the advertising industry, including how ads are delivered online, and we and\nour competitors are constantly adjusting to meet this shift and provide new and evolving advertising formats. There is\nno assurance that we will adapt effectively and competitively to meet this shift, and that such advertising formats,\nstrategies, and offerings will be successful.\nChanges to our advertising policies and data privacy practices, as well as changes to other companies'\nadvertising or data privacy practices have in the past, and may in the future, affect the advertising services that we are\nable to provide. In addition, technologies have been developed that make personalized ads more difficult, or that block\nthe display of ads altogether, and some providers of online services have integrated technologies that could impair the\navailability and functionality of third-party digital advertising. Failing to provide superior value or deliver advertisements\neffectively and competitively could harm our business, reputation, financial condition, and operating results.\nExpenditures by advertisers tend to correlate with overall economic conditions. Adverse macroeconomic\nconditions have affected, and may in the future affect, the demand for advertising, resulting in fluctuations in the\namounts our advertisers spend on advertising, which could harm our financial condition and operating results.\nOur increasing investment in new businesses, products, services, and technologies is inherently risky,\nand could divert management attention and harm our business, financial condition, and operating results.\nWe have invested and expect to expand our investment in new businesses, products, services, and technologies\nin a wide range of industries beyond online advertising. The investments that we are making across our businesses —\nsuch as building AI-optimized infrastructure, including our custom TPUs, and integrating AI capabilities into new and\nexisting products and services — reflect our ongoing efforts to innovate and provide products and services that are\nhelpful to users, advertisers, publishers, customers, content providers, and distribution partners. Our investments\nultimately may not be commercially viable or may not result in an adequate return of capital and, in pursuing new\nstrategies, we may incur unanticipated liabilities.\nTo meet the compute capacity demands of AI training and inference, as well as traditional cloud computing\nservices, we are entering into significant leasing arrangements with third party operators, which may increase costs\nand operational complexity. We also have a number of large, long-duration commercial agreements , which could\nincrease our liabilities and obligations in the event of nonperformance by us, our counterparties, or vendors. In such\nnonperformance or an industry downturn, we may incur additional liabilities, have excess capacity that we cannot\neasily redeploy, and not receive payments from our counterparties or customers.\nWe have invested and expect to significantly expand our investment in property and equipment, including our\ntechnical infrastructure, and we expect these assets to benefit our business over their estimated useful lives. Changes\nin facts and circumstances such as changes to historical asset performance, expected technology advancements, and\nfuture network deployment plans could change the period over which we expect to benefit from the asset and impact\nour financial condition and operating results.\nInnovations in our products and services could also result in changes to user and customer behavior and affect\nour revenue trends. These endeavors involve significant risks and uncertainties, including diversion of resources and\nmanagement attention from current operations, different monetization models, and the use of alternative investment,\ngovernance, or compensation structures that may fail to adequately align incentives across the company or otherwise\naccomplish their objectives.\nTable of Contents Alphabet Inc.\n9.", - "path": "GOOG 10-K 2025.pdf/p10", - "metadata": { - "length": 5225, - "summary": "ITEM 1A. RISK FACTORS Our operations and financial results are subject to various risks and uncertainties, including but not limited to those described below, which could harm our business, reputation, financial condition, and operating results, and may affect the trading pric...", - "page_nums": [ - 10 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 10, "artifact_ref": "page_citation_assets/page-10.png", @@ -246,24 +201,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b272e43d-1004-5c23-8ceb-a5ae77dde4e5", - "type": "page", - "content": "Within Google Services, we continue to invest heavily in devices, including our smartphones, home devices, and\nwearables, which is a highly competitive market with frequent introduction of new products and services, rapid\nadoption of technological advance ments by competitors, increased market saturation in developed countries, short\nproduct life cycles, evolving industry standards, continual improvement in performance characteristics, and price and\nfeature sensitivity on the part of consumers and businesses. There can be no assurance we will be able to provide\ndevices that compete effectively.\nWithin Google Cloud, we devote significant resources to develop and deploy our enterprise-ready cloud services,\nincluding Google Cloud Platform and Google Workspace, and we are advancing our AI platforms and models to\nsupport these tools and technologies, including the development of our custom TPUs and how we deliver them to our\ncustomers. We are incurring significant and increasing costs and new liabilities, including contingent liabilities, to build\nand maintain infrastructure to support cloud computing services, invest in cybersecurity, and hire talent. Meanwhile,\nour competitors are rapidly developing and deploying cloud-based services and capacity. Pricing and delivery models,\nwhich are subject to increasing regulatory scrutiny and requirements, are competitive and constantly evolving, and we\nmay therefore not achieve our business objectives. Further, our business with financial services, healthcare, and public\nsector customers may present additional risks, including regulatory compliance risks. For instance, we may be subject\nto government audits and cost reviews, and any failure to comply or any deficiencies found may expose us to legal,\nfinancial, and reputational risks. Evolving laws and regulations may require us to make new capital investments, build\nnew products, and seek partners to deliver localized services in other countries, and we may not be able to meet\nsovereign operating requirements.\nWithin Other Bets, we are investing significantly in areas such as life sciences and transportation, among others.\nThese investment areas face intense competition from large, experienced, and well-funded competitors, and our\nofferings, many of which involve the development of new and emerging technologies, may not be successful, or be\nable to compete effectively or operate at sufficient levels of profitability.\nIn addition, new and evolving products and services, including those that use AI, raise ethical, technological,\nlegal, regulatory, and other challenges, which could harm our brands and demand for our products and services.\nBecause all of these investment areas are inherently risky, no assurance can be given that such strategies and\nofferings will be successful or will not harm our reputation, financial condition, and operating results.\nWe face intense competition. If we do not continue to innovate and provide products and services that\nare useful to users, customers, and other partners, we may not remain competitive, which could harm our\nbusiness, financial condition, and operating results.\nOur business environment is rapidly evolving and intensely competitive. Our businesses face changing\ntechnologies, shifting user needs, and frequent introductions of rival products and services. To compete successfully,\nwe must accurately anticipate technology developments and deliver innovative, relevant, and useful products, services,\nand technologies in a timely manner. For example, with the rise of AI in recent years, we have increasingly focused our\ninvestments in building powerful AI tools and AI enhancements to our existing products and services to better cater to\nour users, customers, and other partners. As our businesses evolve, the competitive pressure to innovate will\nencompass a wider range of products and services. We must continue to invest significant resources in technical\ninfrastructure, including the development of our custom TPUs, and research and development, including through\nacquisitions, in order to enhance our technology, products, and services.\nWe have many competitors in different industries. Our current and potential domestic and international\ncompetitors range from large and established companies to emerging start-ups. Some competitors have longer\noperating histories and well-established relationships in various sectors. They can use their experience and resources\nin ways that could affect our competitive position, including by making acquisitions and entering into other strategic\narrangements; continuing to invest heavily in technical infrastructure, research and development, and in talent;\ninitiating intellectual property and competition claims (whether or not meritorious); and continuing to compete for users,\nadvertisers, customers, and content providers. Further, discrepancies in enforcement of existing laws may enable our\nlesser known competitors to aggressively interpret those laws without commensurate scrutiny, thereby affording them\ncompetitive advantages. Our competitors may also be able to innovate and provide products and services faster or\nmore cost effectively than we can or may foresee the need for products and services before we do.\nWe are developing frontier generative AI models and building AI capabilities into products and services across the\ncompany, tailoring them to the evolving preferences of our users and customers. AI technology and services are highly\ncompetitive, rapidly evolving, and require significant investment, including technical infrastructure, development, and\noperational costs. Our ability to deploy certain AI technologies critical for our products and services and for our\nbusiness strategy may depend on the availability and pricing of third-party equipment and other technical infrastructure\noperations costs, including network capacity, energy, and equipment costs. Additionally, other companies may develop\nTable of Contents Alphabet Inc.\n10.", - "path": "GOOG 10-K 2025.pdf/p11", - "metadata": { - "length": 6001, - "summary": "Within Google Services, we continue to invest heavily in devices, including our smartphones, home devices, and wearables, which is a highly competitive market with frequent introduction of new products and services, rapid adoption of technological advance ments by competitors,...", - "page_nums": [ - 11 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 11, "artifact_ref": "page_citation_assets/page-11.png", @@ -271,24 +209,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e282ba8e-4938-5ade-9708-1fb46f6cce95", - "type": "page", - "content": "AI products and technologies that are similar or superior to our technologies or more cost-effective to develop or\ndeploy. Other companies may also have (or in the future may obtain) patents or other proprietary rights that would\nprevent, limit, or interfere with our ability to make, use, or sell our own AI products and services.\nOur financial condition and operating results may also suffer if our products and services are not responsive in a\ntimely manner to the evolving needs and desires of our users, advertisers, publishers, customers, and content\nproviders, or if we miscalculate those needs and desires and invest significantly in areas that fail to gain sufficient\nmarket traction. As new and existing technologies continue to develop, competitors and new entrants may be able to\noffer experiences that are, or that are perceived to be, substantially similar to or better than ours, and the consumers\nmay change how they obtain information online, potentially reducing the utility of our existing products and services.\nThese technologies could reduce usage of our products and services, and force us to compete in different ways and\nexpend significant resources to develop and operate equal or better products and services. Competitors' success in\nproviding compelling products and services or in attracting and retaining users, advertisers, publishers, customers, and\ncontent providers could harm our financial condition and operating results.\nOur revenue growth rate could decline over time, and we may experience downward pressure on our\noperating margin in the future.\nOur revenue growth rate could decline over time as a result of a number of factors, including changes in customer\nusage and demand for our existing products and increasing demand for competing technologies ; changes in the\ndevices and modalities used to access our products and services; changes in geographic mix; deceleration or declines\nin advertiser spending; competition; decreases in the pricing of our products and services; ongoing product and policy\nchanges; and shifts to lower priced products and services.\nWe may experience downward pressure on our operating margin resulting from a variety of factors. These include\nincreasing costs for many aspects of our business resulting from a higher level of investment in technical infrastructure,\nincreasing regulations, and increasing competition. Certain of our costs and expenses are relatively fixed and may not\ncorrelate to changes in revenue, and we may also not be able to continue to drive efficiencies at the rate we have in\nthe past. We may also face margin compression from an increase in the mix of lower-margin products and services, in\nparticular from the continued expansion of our business into new fields, including products and services such as\nGoogle Cloud, our devices, and consumer subscription products, as well as significant investments in Other Bets. For\ninstance, margins on our devices have had, and may continue to have, an adverse effect on our consolidated margins\ndue to pricing pressures and higher cost of sales. Due to these factors and the evolving nature of our business, our\nhistorical revenue growth rate and historical operating margin may not be indicative of our future performance. For\nadditional information, see Trends in Our Business and Financial Effect and Revenues and Monetization Metrics in\nPart II, Item 7 of this Annual Report on Form 10-K.\nOur intellectual property rights are valuable, and any inability to protect them could reduce the value of\nour products, services, and brands as well as affect our ability to compete.\nOur patents, trademarks, trade secrets, copyrights, and other intellectual property rights are important assets for\nus. Various events outside of our control pose a threat to our intellectual property rights, as well as to our products,\nservices, and technologies. For example, effective intellectual property protection may not be available in every country\nin which our products and services are distributed or made available through the Internet. Also, the efforts we have\ntaken and may take in the future to protect our proprietary rights, including obtaining copyright and patent protections\nfor our important innovations, including AI innovations, may not be sufficient or effective. There is also the possibility\nthat an issued patent may be deemed invalid or unenforceable.\nWe also seek to maintain certain intellectual property as trade secrets. The confidentiality of such trade secrets\nand other sensitive information could be compromised, which could cause us to lose the competitive advantage\nresulting from these trade secrets. We also face risks associated with our trademarks. For example, there is a risk that\nthe word \"Google\" could become so commonly used that it becomes synonymous with the word \"search.\" Some courts\nhave ruled that \"Google\" is a protectable trademark, but it is possible that other courts, particularly those outside of the\nUS, may reach a different determination. If this happens, we could lose protection for this trademark.\nAny significant impairment of our intellectual property rights could harm our business and ability to compete.\nProtecting our intellectual property rights is costly and time consuming; any increase in unauthorized use could make it\nmore expensive to do business and harm our financial condition and operating results.\nOur business depends on strong brands, and failing to maintain and enhance our brands would hurt our\nability to expand our base of users, advertisers, customers, content providers, and other partners.\nOur strong brands have significantly contributed to the success of our business. Maintaining and enhancing the\nbrands within Google Services, Google Cloud, and Other Bets increases our ability to enter new categories and launch\nTable of Contents Alphabet Inc.\n11.", - "path": "GOOG 10-K 2025.pdf/p12", - "metadata": { - "length": 5867, - "summary": "AI products and technologies that are similar or superior to our technologies or more cost-effective to develop or deploy. Other companies may also have (or in the future may obtain) patents or other proprietary rights that would prevent, limit, or interfere with our ability t...", - "page_nums": [ - 12 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 12, "artifact_ref": "page_citation_assets/page-12.png", @@ -296,24 +217,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8256ae82-eae4-57f1-bc42-ce5b83e5f35d", - "type": "page", - "content": "new and innovative products and services that better serve the needs of our users, advertisers, customers, content\nproviders, and other partners. Our brands have been, and may in the future be, harmed by a number of factors,\nincluding, among others, reputational issues , third-party content shared on our platforms, data privacy and security\nissues and developments, issues in delivering age-appropriate experiences to minors, and product or technical\nperformance failures. For example, if we fail to respond appropriately to the sharing of misinformation or objectionable\ncontent on our services or products or objectionable practices by advertisers, or otherwise to adequately address user\nconcerns, our users may lose confidence in our brands. Furthermore, failure to maintain and enhance our brands could\nharm our business, reputation, financial condition, and operating results. Our success will depend largely on our ability\nto remain a technology leader and continue to provide high-quality, trustworthy, innovative products and services that\nare truly useful and play a valuable role in a range of settings.\nWe face a number of manufacturing and supply chain risks that could affect our ability to supply our\nproducts and services and harm our business, financial condition, and operating results.\nWe rely on contract manufacturers to manufacture or assemble our devices as well as servers and networking\nequipment used in our technical infrastructure, certain components of which we may supply. We also rely on third\nparties to supply components and distribute our products and services. Our business could be harmed if we are not\nable to engage these companies with the necessary capabilities or capacity on reasonable terms, or if those we\nengage fail to meet their obligations (whether due to financial difficulties or other reasons), or make adverse changes\nin the pricing or other material terms of our arrangements with them.\nWe have experienced and may in the future experience supply shortages, price increases, quality issues, or\nlonger lead times that could harm our operations, driven by raw material or component availability, manufacturing\ncapacity, labor shortages, industry allocations, logistics capacity, inflation, foreign currency exchange rates, tariffs,\nsanctions and export controls, trade disputes and barriers, forced labor concerns, sourcing requirements, geopolitical\ntensions, armed conflicts, natural disasters or pandemics, the effects of climate change, power and transmission\navailability, and significant changes in the financial or business condition of our suppliers. Some of the components we\nuse in our technical infrastructure and our devices are available from only one or limited sources, and we may not be\nable to find replacement vendors on favorable terms in the event of a supply chain disruption. A significant supply\ninterruption that affects us or our vendors could delay critical data center or network infrastructure upgrades or\nexpansions and delay consumer product availability.\nOur ability to scale our technical infrastructure is increasingly constrained by the availability of power, water, and\nland. For example, energy supply is constrained globally due to the significant increase in demand for and limited\navailability of energy to power AI compute. Securing this capacity involves entering into complex, long-lead-time\narrangements. Additionally, manufacturing and supply of servers and network equipment for our technical\ninfrastructure, particularly for specialized AI chips, is limited to a small number of qualified suppliers. Extended or\nunforeseen disruptions at these suppliers could impact our ability to meet customer demand. Failure to secure\nsufficient capacity in a timely manner would limit our ability to train models and serve Cloud customers.\nWe may enter into long-term contracts for materials and products that commit us to significant terms and\nconditions. We may face costs for materials and products that are not consumed due to market demand, technological\nchange, excess or obsolete inventory, changed consumer preferences, quality, product recalls, and warranty issues.\nCertain of our competitors may negotiate more favorable contractual terms based on volume and other commitments\nthat may provide them with competitive advantages and may affect our supply. For example, industry supply capacity\nfor AI accelerators, including GPUs as well as our custom-built TPUs, is highly competitive and rapidly evolving. If we\nare unable to negotiate favorable contractual terms or our competitors claim the supply or capacity first, we may face\nincreased costs and supply constraints, which could harm our business, financial condition, and operating results.\nOur devices have had, and in the future may have, quality issues resulting from design, manufacturing, or\noperations. Sometimes, these issues may be caused by components we purchase from other manufacturers or\nsuppliers. In addition, quality issues with equipment used in our technical infrastructure could constrain our capacity to\nsupport the delivery and continued development of our products and services. If the quality of our products and\nservices does not meet expectations, we lack the capacity to deliver them , or our products or services are defective or\nrequire a corrective action or recall, it could harm our business, reputation, financial condition, and operating results.\nWe require our suppliers and business partners to comply with laws and, where applicable, our company policies\nand practices, such as the Google Supplier Code of Conduct, regarding workplace and employment practices, data\nsecurity, environmental compliance, and intellectual property licensing, but we do not control them or their practices.\nViolations of law or unethical business practices could result in supply chain disruptions, canceled orders, harm to key\nrelationships, and damage to our reputation. Their failure to procure necessary license rights to intellectual property\ncould affect our ability to sell our products or services and expose us to litigation or financial claims.\nTable of Contents Alphabet Inc.\n12.", - "path": "GOOG 10-K 2025.pdf/p13", - "metadata": { - "length": 6160, - "summary": "new and innovative products and services that better serve the needs of our users, advertisers, customers, content providers, and other partners. Our brands have been, and may in the future be, harmed by a number of factors, including, among others, reputational issues , third...", - "page_nums": [ - 13 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 13, "artifact_ref": "page_citation_assets/page-13.png", @@ -321,24 +225,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_579fae70-6241-502a-b5c7-a215077cf46f", - "type": "page", - "content": "Interruption to, interference with, or failure of our complex information technology and communications\nsystems could hurt our ability to effectively provide our products and services, which could harm our\nreputation, financial condition, and operating results.\nThe availability of our products and services and fulfillment of our customer contracts depend on the continuing\noperation of our information technology and communications systems. Our systems are vulnerable to damage,\ninterference, or interruption from modifications or upgrades, terrorist attacks, state-sponsored attacks, natural disasters\nor pandemics, geopolitical tensions or armed conflicts, export controls and sanctions, tariffs and non-tariff trade\nbarriers, the effects of climate change, power and transmission availability challenges, utility outages,\ntelecommunications failures, computer viruses, software bugs, cyber attacks, supply-chain attacks, computer denial of\nservice attacks, phishing schemes, or other attempts to harm or access our systems. Some of our data centers are\nlocated in areas with a high risk of major earthquakes or other natural disasters. Our data centers are also subject to\nbreak-ins, sabotage, and intentional acts of vandalism, and, in some cases, to potential disruptions resulting from\nproblems experienced by facility operators or disruptions as a result of geopolitical tensions and conflicts happening in\nthe area. Some of our systems are not fully redundant, and disaster recovery planning cannot account for all\neventualities. The occurrence of a natural disaster or pandemic, closure of a facility, or other unanticipated problems\naffecting our data centers could result in lengthy interruptions in our service. In addition, our products and services are\nhighly technical and complex and have contained in the past, and may contain in the future, errors or vulnerabilities,\nwhich could result in interruptions in or failure of our services or systems. Any of these incidents could impede or\nprevent us from effectively offering products and providing services, which could harm our business, reputation,\nfinancial condition, and operating results.\nOur international operations expose us to additional risks that could harm our business, reputation,\nfinancial condition, and operating results.\nOur international operations are significant to our revenues and net income, and we plan to continue growing\ninternationally. International revenues accounted for approximately 52% of consolidated revenues in 2025. In addition\nto risks described elsewhere in this section, our international operations expose us to other risks, including:\n• restrictions on foreign ownership and investments, and stringent foreign exchange controls that might prevent\nus from repatriating cash earned in countries outside the US;\n• sanctions, tariffs, import and export controls, other market access barriers, political unrest, geopolitical\ntensions, changes in regimes, or armed conflict (such as ongoing conflicts in the Middle East and Ukraine),\nany of which may affect our business continuity, increase our operating costs, limit demand for our products\nand services, limit our ability to source components or final products, or prevent or impede us from operating in\ncertain jurisdictions, complying with local laws, or offering products or services;\n• longer payment cycles in some countries, increased credit risk, and higher levels of payment fraud;\n• an evolving foreign policy landscape that could harm our revenues and could subject us to litigation, new\nregulatory costs and challenges (including new customer requirements), uncertainty regarding regulatory\noutcomes, and other liabilities under local laws that may not offer due process or clear legal precedent;\n• anti-corruption laws, such as the US Foreign Corrupt Practices Act, and other local laws prohibiting certain\npayments to government officials, violations of which could result in civil and criminal penalties; and\n• different employee/employer relationships; different labor laws, regulations, and labor practices; and other\nchallenges caused by distance, language, local expertise, and cultural differences, increasing the complexity\nof doing business in multiple jurisdictions.\nBecause we conduct business in currencies other than US dollars but report our financial results in US dollars, we\nhave faced, and will continue to face, exposure to fluctuations in foreign currency exchange rates. Although we hedge\na portion of our international currency exposure, significant fluctuations in exchange rates between the US dollar and\nforeign currencies have and may in the future adversely affect our revenues and earnings. Hedging programs are also\ninherently risky and could expose us to additional risks that could harm our financial condition and operating results.\nDisruptions in our ability to access future financing or manage our indebtedness could adversely affect\nour ability to execute our strategy and harm our financial condition.\nWe may from time to time access capital markets for debt or seek to enter into other forms of financing, such as\nleases. Any difficulty in accessing capital markets, entering into other forms of financing on favorable terms, or\nmanaging our existing indebtedness could increase our costs of financing and restrict our ability to invest in our\nbusiness. Furthermore, the combination of our current and any future indebtedness, including o bligations arising under\nTable of Contents Alphabet Inc.\n13.", - "path": "GOOG 10-K 2025.pdf/p14", - "metadata": { - "length": 5507, - "summary": "Interruption to, interference with, or failure of our complex information technology and communications systems could hurt our ability to effectively provide our products and services, which could harm our reputation, financial condition, and operating results. The availabilit...", - "page_nums": [ - 14 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 14, "artifact_ref": "page_citation_assets/page-14.png", @@ -346,24 +233,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2c16c87f-1ac3-5126-9e52-ad099c123b06", - "type": "page", - "content": "leases, backstops, guarantees, and potential liabilities from large commercial agreements, could harm our financial\ncondition and reduce our financial and business flexibility.\nWe are exposed to fluctuations in the fair values of our investments and, in some instances, our financial\nstatements incorporate inherently subjective valuation methodologies.\nThe fair value of our debt and equity investments may in the future be, and certain investments have been in the\npast, negatively affected by liquidity, credit deterioration or losses, performance and financial results of the underlying\nentities, foreign exchange rates, changes in interest rates, the effect of new or changing regulations, the stock market\nin general, or other factors. As a result of these factors, the value of our investments could significantly decline, which\ncould harm our financial condition and operating results.\nWe measure certain of our non-marketable equity and debt securities, and certain other instruments including\nstock-based compensation (SBC) awards of Other Bet companies , at fair value on a nonrecurring basis, which is\ninherently subjective and requires management judgment and estimation. Gains and losses on non-marketable equity\nsecurities are recognized in other income (expense ), net (OI&E) , which increases the volatility of our OI&E. The\nunrealized gains and losses or impairments we record from fair value remeasurements in any particular period may\ndiffer significantly from the gains and losses we ultimately realize on such investments. Changes in fair value on SBC\nawards are recognized primarily through operating expenses.\nRisks Related to our Industry\nIssues in the development and use of AI may result in reputational harm and increased liability exposure.\nOur evolving AI-enabled products and services may give rise to risks related to harmful content, inaccuracies,\ndiscrimination, intellectual property infringement or misappropriation, violation of rights of publicity, defamation, data\nprivacy, cybersecurity, minor protection, and other issues. As a result of these and other challenges associated with\ninnovative technologies, our implementation of AI systems could subject us to competitive harm, regulatory action,\nlegal liability (including under new and proposed legislation and regulations), new applications of existing data\nprotection, privacy, intellectual property, and other laws, and brand or reputational harm.\nSome uses of AI will present ethical issues and may have broad effects on society. In order to implement AI\nresponsibly and minimize unintended harmful effects, we have already devoted and will continue to invest significant\nresources to develop, test, and maintain our products and services, but we may not be able to identify or resolve all AI-\nrelated issues, deficiencies, and failures before they arise. Unintended consequences, uses, or customization of our AI\ntools and systems may negatively affect human rights, privacy, employment, or other social concerns, which may result\nin claims, lawsuits, brand or reputational harm, and increased regulatory scrutiny, any of which could harm our\nbusiness, financial condition, and operating results.\nPeople access our products and services through a variety of platforms and devices that continue to\nevolve with the advancement of technology and user preferences. If manufacturers and users do not widely\nadopt versions of our products and services developed for these interfaces, our business could be harmed.\nWhile the modalities used to access information is evolving, people access our products and services through a\ngrowing variety of devices such as phones, laptops and tablets, video game consoles, voice-activated speakers,\nwearables (including virtual reality and augmented reality devices), automobiles, and television-streaming devices. Our\nproducts and services may be less popular on some interfaces. Each manufacturer or distributor may establish unique\ntechnical standards for its devices, and our products and services may not be available or may only be available with\nlimited functionality for our users or our advertisers on these devices as a result. Some manufacturers may also elect\nnot to include our products on their devices.\nIt is hard to predict the challenges we may encounter in adapting our products and services and developing\ncompetitive new products and services. We expect to continue to devote significant resources to creating and\nsupporting products and services across multiple platforms and devices. Failing to attract and retain a substantial\nnumber of device manufacturers, suppliers, distributors, developers, and users, or failing to develop products and\ntechnologies that work well on new devices and platforms, could harm our business, financial condition, and operating\nresults and ability to capture future business opportunities.\nProblematic content on our platforms, including low-quality user-generated content, web spam, content\nfarms, and other violations of our guidelines could affect the quality of our services, which could harm our\nreputation and deter our current and potential users from using our products and services.\nWe, like others in the industry, face violations of our content guidelines across our platforms, including\nsophisticated attempts by bad actors to manipulate our hosting and advertising systems to fraudulently generate\nrevenues, or to otherwise generate traffic that does not represent genuine user interest or intent. While we invest\nTable of Contents Alphabet Inc.\n14.", - "path": "GOOG 10-K 2025.pdf/p15", - "metadata": { - "length": 5548, - "summary": "leases, backstops, guarantees, and potential liabilities from large commercial agreements, could harm our financial condition and reduce our financial and business flexibility. We are exposed to fluctuations in the fair values of our investments and, in some instances, our fin...", - "page_nums": [ - 15 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 15, "artifact_ref": "page_citation_assets/page-15.png", @@ -371,24 +241,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f6e11859-869c-5a31-9ff3-6e7d2de682ca", - "type": "page", - "content": "significantly in efforts to promote high-quality and relevant results and to detect and prevent low-quality content and\ninvalid traffic, we have been unable and may continue to be unable to detect and prevent all such abuses or promote\nuniformly high-quality content. Increased use of AI in our offerings and internal systems may create new instances of\nproblematic content and increased potential for misuse and abuse.\nMany websites violate or attempt to violate our guidelines, including by seeking to inappropriately rank higher in\nsearch results than our search engine's assessment of their relevance and utility would rank them. Such efforts have\naffected, and may continue to affect, the quality of content on our platforms and lead them to display false, misleading,\nor undesirable content. Although English-language web spam in our search results has been reduced, and web spam\nin most other languages is limited, we expect web spammers will continue to seek inappropriate ways to improve their\nrankings. Although we continue to invest in and deploy proprietary technology to detect and prevent web spam on our\nplatforms and to evolve our policies to address emerging threats, there is no guarantee that our technology and policy\nenforcement will always be successful, and our users may have negative experiences that make them less likely to\nuse our platforms. We face legal and regulatory challenges to our efforts to address low-quality content, and our ability\nto address it may be constrained or made more costly through added compliance requirements. We also face other\nchallenges to the quality of our search results from low-quality and irrelevant content websites, including content farms,\nwhich are websites that generate large quantities of low-quality content in an effort to improve their search rankings.\nWe are continually launching algorithmic changes designed to detect and prevent these efforts, but we may not always\nbe successful. We also face other challenges on our platforms, including attempted election interference; fraud,\ncontent inappropriate for minors, misleading or deceptive information, and other types of potentially harmful content.\nIf we fail to either detect and prevent an increase in problematic content or effectively promote high-quality\ncontent, it could hurt our reputation for delivering relevant information or reduce use of our platforms, harming our\nfinancial condition and operating results. It may also subject us to litigation and regulatory actions, which could result in\nmonetary penalties and damages and divert management's time and attention.\nData privacy and security concerns relating to our technology and our practices could harm our\nreputation, cause us to incur significant liability, and deter current and potential users or customers from\nusing our products and services. Computer viruses, software bugs or defects, security breaches, and attacks\non our systems could result in the improper disclosure and use of user data and interference with our users'\nand customers' ability to use our products and services, harming our business and reputation.\nConcerns about, including the adequacy of, our practices with regard to the collection, use, governance,\ndisclosure, or security of personal data or other data-privacy-related matters, even if unfounded, could harm our\nbusiness, reputation, financial condition, and operating results. Our policies and practices may change over time as\nexpectations and regulations regarding privacy and data change.\nOur products and services involve the storage, handling, and transmission of proprietary and other sensitive\ninformation. Malicious software such as viruses, software bugs, theft, misuse, defects, vulnerabilities in our products\nand services, as well as cyber attacks, phishing schemes, and other types of security attacks, which increasingly use\nAI, expose us to a risk of loss or improper use and disclosure of such information, which could result in litigation and\nother potential liabilities, including regulatory fines and penalties, as well as reputational harm. Additionally, our\nproducts incorporate highly technical and complex technologies, and thus our technologies and software have\ncontained, and are likely in the future to contain, undetected errors, bugs, or vulnerabilities. We continue to add new\nfeatures involving AI to our offerings and internal systems, and features that rely on AI may be susceptible to\nunanticipated security threats as our and the market's understanding of AI-centric security risks and protection\nmethods continue to develop. We have in the past discovered, and may in the future discover, some errors in our\nsoftware code only after we have released the code. Systems and control failures, security breaches, failure to comply\nwith our privacy policies, and inadvertent disclosure of user data could result in regulatory and legal exposure,\nseriously harm our reputation, brand, and business, and impair our ability to attract and retain users or customers.\nSuch incidents have occurred in the past and may continue to occur due to the scale and nature of our products and\nservices. While there is no guarantee that such incidents will not cause significant damage, we expect to continue to\nexpend significant resources to maintain security protections that limit the effect of bugs, theft, misuse, and security\nvulnerabilities or breaches.\nWe experience cyber attacks and other attempts to gain unauthorized access to our systems on a regular basis.\nCyber attacks continue to evolve in sophistication and volume, and inherently may be difficult to detect for long periods\nof time. The development and implementation of AI technologies may further increase our exposure to or exacerbate\nthe risks of cyber attacks or other security incidents, particularly where such technologies are exploited by third parties\nto breach our or other parties' systems, including when such technologies are used to target our employees or\nimpersonate members of senior management in order to gain unauthorized access to our systems. We have also\nseen, and will continue to see, industry-wide software supply chain vulnerabilities and attacks on telecommunications\nTable of Contents Alphabet Inc.\n15.", - "path": "GOOG 10-K 2025.pdf/p16", - "metadata": { - "length": 6246, - "summary": "significantly in efforts to promote high-quality and relevant results and to detect and prevent low-quality content and invalid traffic, we have been unable and may continue to be unable to detect and prevent all such abuses or promote uniformly high-quality content. Increased...", - "page_nums": [ - 16 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 16, "artifact_ref": "page_citation_assets/page-16.png", @@ -396,24 +249,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7c864348-2ed6-5772-b483-9b707b5925e4", - "type": "page", - "content": "and other critical infrastructure, which could affect our or other parties' systems. We expect to continue to experience\nsuch incidents or vulnerabilities in the future. Our efforts to prevent security incidents and address undesirable activity\non our platform may require us to spend additional resources to prepare and defend against such threats, and could\nalso increase the risk of retaliatory attack. In addition, we face the risk of cyber attacks and data exfiltration or\ncompromise by nation-states and state-sponsored actors. These attacks may target us or our customers, particularly\nour public sector customers (including federal, state, and local governments). Geopolitical tensions or armed conflicts,\nsuch as the ongoing conflict in the Middle East and Ukraine, may increase these risks.\nWe may experience security and privacy issues, whether due to employee or insider error or malfeasance,\nsystem errors, or vulnerabilities in our or other parties' systems. While we may not determine some of these issues to\nbe material when they occur and may remedy them quickly, there is no guarantee that these issues will not ultimately\nresult in significant legal, financial, and reputational harm, including government inquiries, enforcement actions,\nlitigation, and negative publicity. There is also no guarantee that a series of related issues may not be determined to be\nmaterial at a later date in the aggregate, even if they may not be material individually at the time of their occurrence.\nBecause the techniques used to obtain unauthorized access to, disable, or degrade service provided by or otherwise\nsabotage systems change frequently and often are recognized only after being launched against a target, even taking\nall reasonable precautions, including those required by law, we have been unable in the past and may continue to be\nunable to anticipate or detect certain attacks or vulnerabilities or implement adequate preventative measures.\nFurther, if any partners with whom we share user or other customer information fail to implement adequate data-\nsecurity practices, fail to comply with our terms and policies, or otherwise suffer a network or other security breach, our\nusers' data may be improperly accessed, used, or disclosed. If an actual or perceived breach of our or our business\npartners' or service providers' security occurs, the market perception of the effectiveness of our security measures\nwould be harmed, we could lose users and customers, our trade secrets or those of our business partners may be\ncompromised, and we may be exposed to significant legal and financial risks, including legal claims (which may\ninclude class-action litigation) and regulatory actions, fines, and penalties. Any of the foregoing consequences could\nharm our business, reputation, financial condition, and operating results.\nWhile we have dedicated significant resources to privacy and security incident response capabilities, including\ndedicated worldwide incident response teams, our response process, particularly during times of a natural disaster or\npandemic, may not be adequate, may fail to accurately assess the severity of an incident, may not be fast enough to\nprevent or limit harm, or may fail to sufficiently remediate an incident. As a result, we may suffer significant legal,\nreputational, or financial exposure, which could harm our business, financial condition, and operating results.\nFor additional information, see also our risk factor on privacy and data protection regulations under 'Risks Related\nto Laws, Regulations, and Policies' below.\nOur ongoing investments in safety, security, and content review will likely continue to identify abuse of\nour platforms and misuse of user data.\nIn addition to our efforts to prevent and mitigate cyber attacks, we are making significant investments in safety,\nsecurity, and review efforts to combat misuse of our services and unauthorized access to user data by third parties,\nincluding investigation and review of platform applications that could access the information of users of our services.\nAs a result of these efforts, we have in the past discovered, and may in the future discover, incidents of unnecessary\naccess to or misuse of user data or other undesirable activity by third parties. However, we may not have discovered,\nand may in the future not discover, all such incidents or activity, whether as a result of our data limitations, including\nour lack of visibility over our encrypted services, the scale of activity on our platform, or other factors, including factors\noutside of our control such as a natural disaster or pandemic, and we may learn of such incidents or activity via third\nparties. Such incidents and activities may include the use of user data or our systems in a manner inconsistent with our\nterms, contracts, or policies, the existence of false or undesirable user accounts, election interference, improper ad\npurchases, activities that threaten people's safety on- or off-line, or instances of spamming, scraping, or spreading\ndisinformation. While we may not determine some of these incidents to be material at the time they occurred and we\nmay remedy them quickly, there is no guarantee that these issues will not ultimately result in significant legal, financial,\nand reputational harm, including government inquiries and enforcement actions, litigation, and negative publicity. There\nis also no guarantee that a series of related issues may not be determined to be material at a later date in the\naggregate, even if they may not be material individually at the time of their occurrence.\nWe may also be unsuccessful in our efforts to enforce our policies or otherwise prevent or remediate any such\nincidents. Any of the foregoing developments may negatively affect user trust and engagement, harm our reputation\nand brands, require us to change our business practices in ways that harm our business operations, and adversely\naffect our business and financial results. Any such developments may also subject us to additional litigation and\nTable of Contents Alphabet Inc.\n16.", - "path": "GOOG 10-K 2025.pdf/p17", - "metadata": { - "length": 6095, - "summary": "and other critical infrastructure, which could affect our or other parties' systems. We expect to continue to experience such incidents or vulnerabilities in the future. Our efforts to prevent security incidents and address undesirable activity on our platform may require us t...", - "page_nums": [ - 17 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 17, "artifact_ref": "page_citation_assets/page-17.png", @@ -421,24 +257,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_70451c2c-d7e8-5f67-a5e3-0754123b7d33", - "type": "page", - "content": "regulatory inquiries, which could result in monetary penalties and damages, divert management's time and attention,\nand lead to enhanced regulatory oversight.\nOur business depends on continued and unimpeded access to the Internet by us and our users. Internet\naccess providers may be able to restrict, block, degrade, or charge for access to certain of our products and\nservices, which could lead to additional expenses and the loss of users and advertisers.\nOur products and services depend on the ability of our users to access the Internet, and certain of our products\nrequire significant network capacity to work effectively. Currently, this access is provided by companies that have\nsignificant market power in the broadband and internet access marketplace, including incumbent telephone\ncompanies, cable companies, mobile communications companies, and government-owned service providers. Some of\nthese providers have taken, or have stated that they may take, measures that could degrade, disrupt, or increase the\ncost of user access to certain of our products by restricting or prohibiting the use of their infrastructure to support or\nfacilitate our offerings, by charging increased fees to us or our users to provide our offerings, or by providing our\ncompetitors preferential access. Some jurisdictions have adopted regulations prohibiting certain forms of discrimination\nby internet access providers; however, substantial uncertainty exists in the US and elsewhere regarding such\nprotections. In addition, in some jurisdictions, our products and services have been subject to government-initiated\nrestrictions or blockages. These could harm existing key relationships, including with our users, customers,\nadvertisers, and content providers, and impair our ability to attract new ones; harm our reputation; and increase costs,\nthereby negatively affecting our business.\nRisks Related to Laws, Regulations, and Policies\nWe are subject to a variety of new, existing, and changing laws and regulations worldwide that could\nharm our business, and will likely be subject to an even broader scope of laws and regulations as we continue\nto expand our business.\nWe are subject to numerous US federal and state as well as foreign laws and regulations covering a wide variety\nof subjects, and our introduction of new businesses, products, services, and technologies will likely continue to subject\nus to additional laws and regulations. In recent years, governments around the world have proposed and adopted a\nlarge number of new laws and regulations relevant to the digital economy, particularly in the areas of data privacy and\nsecurity, competition, AI, and online content. The costs of compliance with these measures are high and are likely to\nincrease in the future, including as a result of differing, and sometimes conflicting, laws and regulations.\nNew or changing laws and regulations, or interpretations or applications of existing laws and regulations in a\nmanner inconsistent with our interpretations of such laws and regulations or our practices, have resulted in, and may\ncontinue to result in, less useful products and services, altered business models and operations, limited ability to\npursue certain business practices or offer certain products and services, substantial costs, and civil or criminal liability.\nExamples include laws and regulations regarding:\n• Competition and technology platforms' business practices: Laws and regulations focused on large\ntechnology platforms, including the Digital Markets Act in the European Union (EU) and the Act on Promotion\nof Competition for Specified Smartphone Software in Japan; regulations and legal settlements in the U S,\nSouth Korea, and elsewhere that affect Google Play's billing policies, fees, and business model; as well as\nlitigation and new and expected regulations in a range of jurisdictions.\n• AI: Laws and regulations focused on the development, use, and provision of AI technologies and other digital\nproducts and services, which could result in monetary penalties or other regulatory actions. For example, the\nEU AI Act came into force on August 1, 2024, and will generally become fully applicable after a two-year\ntransitional period (although certain obligations have already taken effect). The EU AI Act introduces various\nrequirements for AI systems and models placed on the market in the EU, including specific transparency,\nsafety, and copyright requirements for general purpose AI systems and the models on which those systems\nare based. Various countries, including Brazil, India, Japan, South Korea, Singapore, and Vietnam, have also\nenacted or are considering enacting regulations focused on AI. In the US, an increasing amount of legislative\nand regulatory activity regarding AI is taking place at the state level. In 2025, state legislatures considered\nmore than 1,000 AI-related bills, including on fundamental model research and development, synthetic media,\nalgorithmic decision-making, and many others, and took a variety of approaches to AI regulation. For instance,\nin 2025, California and New York passed the Transparency in Frontier Artificial Intelligence Act and the\nResponsible AI Safety and Education Act, respectively, each of which imposes safety and reporting obligations\non developers of frontier models. At the same time, the White House's Executive Order, Removing Barriers to\nAmerican Leadership in Artificial Intelligence, prioritizes deregulation, while its AI Action Plan emphasizes\naccelerating American innovation leadership.\nTable of Contents Alphabet Inc.\n17.", - "path": "GOOG 10-K 2025.pdf/p18", - "metadata": { - "length": 5580, - "summary": "regulatory inquiries, which could result in monetary penalties and damages, divert management's time and attention, and lead to enhanced regulatory oversight. Our business depends on continued and unimpeded access to the Internet by us and our users. Internet access providers...", - "page_nums": [ - 18 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 18, "artifact_ref": "page_citation_assets/page-18.png", @@ -446,24 +265,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_09924037-337b-53bf-8470-85a050defa88", - "type": "page", - "content": "• Data privacy, collection, processing, and portability: Laws and regulations further restricting the collection,\nprocessing, or sharing of user or advertising-related data, including privacy and data protection laws; laws\naffecting the processing of children's data (as discussed further below), data breach notification laws; laws\nlimiting data transfers (including data localization laws); laws limiting use of data for AI training; and laws\nrequiring data portability.\n• Copyright and other intellectual property: Copyright and related laws, including the EU Directive on\nCopyright in the Digital Single Market and European Economic Area transpositions, which have introduced\nnew licensing regimes, increase liability with respect to content uploaded by users or linked to from our\nplatforms, or create property rights in news publications that could require payments to news agencies and\npublishers, which may result in other regulatory actions. The scope of the text and data mining exception is\nbeing challenged before courts in the EU, which could harm some aspects of our business.\n• Content moderation: Various laws covering content moderation and removal, and related disclosure\nobligations, such as the EU's Digital Services Act, Florida's Senate Bill 7072 and Texas' House Bill 20, and\nlaws and proposed legislation in Singapore, Australia, and the United Kingdom (UK) that impose penalties for\nfailure to remove certain types of content or require disclosure of information about the operation of our\nservices and algorithms, which may make it harder for services like Google Search and YouTube to detect and\nlimit low-quality, deceptive, or harmful content, or, on the other hand, may impinge on the rights of free\nexpression and access to content. Additionally, new regulations apply to online child safety, including access\nand content restrictions as well as other limitations for minors, which may also conflict with rights of free\nexpression and access to information. These regulations could result in our having to modify our products and\nservices and monitor minors' experiences on our products and services.\n• Consumer protection: Consumer protection laws, including the EU's New Deal for Consumers, which could\nresult in monetary penalties and create a range of new compliance obligations.\nIn addition, the applicability and scope of these and other laws and regulations, as interpreted by courts,\nregulators, or administrative bodies, remain uncertain and could be interpreted in ways that harm our business. For\nexample, we rely on statutory safe harbors, like those set forth in the Digital Millennium Copyright Act and Section 230\nof the Communications Decency Act in the US and the Digital Services Act in Europe, to protect against liability for\nvarious linking, caching, ranking, recommending, and hosting activities. Legislation or court rulings affecting these safe\nharbors may harm us and may impose significant operational challenges. There are legislative proposals and pending\nlitigation in the US, EU, and around the world that could diminish or eliminate safe harbor protection for websites and\nonline platforms. Our development, use, and commercialization of AI products and services (including our\nimplementation of AI in our offerings and internal systems) could subject us to regulatory action and legal liability,\nincluding under specific legislation regulating AI, as well as new applications of existing data protection, cybersecurity,\nprivacy, intellectual property, and other laws.\nFurther, we are subject to evolving laws, regulations, policies, and international accords relating to matters\nbeyond our core products and services, including environmental sustainability, climate change, human capital, and\nemployment matters. In response, we have implemented robust programs and initiatives and adopted reporting\nframeworks and principles that may require considerable investments. For instance, AI's energy and water demands\nhave made efforts to reduce our emissions more complex and challenging across every level. We cannot guarantee\nthat our initiatives will be fully realized on the timelines we expect or at all, and projects that are completed as planned\nmay not achieve the results we anticipate.\nWe are and may continue to be subject to claims, lawsuits, regulatory and government inquiries and\ninvestigations, enforcement actions, consent orders, and other forms of regulatory scrutiny and legal liability,\nincluding competition matters, that could harm our business, reputation, financial condition, and operating\nresults.\nWe are subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings,\nand orders involving competition, intellectual property, data privacy and security, tax and related compliance, labor and\nemployment, commercial disputes, content generated by our users, goods and services offered by advertisers or\npublishers using our platforms, design of our products and services, personal injury and other tort and nuisance\ntheories, consumer protection claims, including how we moderate content on our platforms, AI, and other matters.\nThe US Department of Justice (DOJ), various states, and other plaintiffs have filed, and may continue to file in the\nfuture, several antitrust lawsuits about aspects of our business, including our advertising technologies and practices,\nthe operation and distribution of Google Search, and the operation and distribution of Android operating system and\nPlay Store. If we are unsuccessful in these lawsuits, we could face significant expenses to implement the remedies,\nand such costs and alterations could harm our business, reputation, financial condition, and operating results.\nTable of Contents Alphabet Inc.\n18.", - "path": "GOOG 10-K 2025.pdf/p19", - "metadata": { - "length": 5772, - "summary": "• Data privacy, collection, processing, and portability: Laws and regulations further restricting the collection, processing, or sharing of user or advertising-related data, including privacy and data protection laws; laws affecting the processing of children's data (as discus...", - "page_nums": [ - 19 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 19, "artifact_ref": "page_citation_assets/page-19.png", @@ -471,24 +273,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f67919c4-57e2-5ea1-ba45-2cba8e1830c1", - "type": "page", - "content": "For example, the DOJ and a number of state Attorneys General filed a lawsuit concerning our Search and Search\nadvertising practices and our compliance with US antitrust laws. In August 2024, the US District Court for the District of\nColumbia ruled against Google, and in December 2025, entered a final judgment requiring remedies, which, among\nother things, imposes restrictions on how we distribute our services and requires us to share certain search data with\nand offer syndication services to certain competitors. In January 2026, we appealed the final judgment and moved to\npause implementation of certain remedies. In February 2026, the DOJ and state Attorneys General also appealed.\nFurthermore, in December 2020, a number of state Attorneys General, led by the Texas Attorney General, filed a\nlawsuit in the US District Court for the Eastern District of Texas concerning our advertising technology and our\ncompliance with US antitrust laws and other laws. In January 2023, the DOJ and a number of state Attorneys General\nsued in the Eastern District of Virginia alleging similar antitrust violations relating to our advertising technology. In April\n2025, the presiding judge issued a mixed decision in the DOJ case against us, ruling that neither our advertiser tools\nnor the DoubleClick and AdMeld acquisitions were anticompetitive, but that our publisher tools unfairly excluded rivals.\nA separate proceeding to determine remedies, the range of which varies widely, took place in September 2025 with the\nparties presenting differing remedy proposals. The DOJ's remedy proposal includes structural remedies that could\nharm our business. Closing arguments were held in November 2025, and we are awaiting a final judgment. After that\njudgment, we plan to appeal the adverse portion of the April 2025 decision and potentially aspects of the remedies\ndecision. A trial in the state Attorneys General case in the Eastern District of Texas will take place after a decision on\nremedies is issued in the DOJ advertising technology case, and could result in remedies that could harm our business,\nreputation, financial condition, and operating results.\nIn addition to these regulatory proceedings, private individual and collective actions that overlap with claims\npursued by regulators are pending in the US and in several other jurisdictions. Adverse results in these or similar future\nlawsuits may include awards of monetary damages and remedies that could harm our business, reputation, financial\ncondition, and operating results.\nOther regulatory agencies in the US and around the world, including competition enforcers, consumer protection\nagencies, and data protection authorities, have challenged and may continue to challenge our business practices and\ncompliance with laws and regulations. We are cooperating with these investigations and defending litigation or\nappealing decisions where appropriate.\nWe are also subject to a variety of claims including product warranty, product liability, and consumer protection\nclaims related to product defects, among other litigation, and we may also be subject to claims involving health and\nsafety, hazardous materials usage, other environmental effects, AI training, development, and commercialization, or\nservice disruptions or failures. Claims have been brought, and we expect will continue to be brought, against us for\ndefamation, negligence, breaches of contract, patent, copyright, and trademark infringement, unfair competition,\nunlawful activity, torts, privacy rights violations, fraud, or other legal theories based on the nature and content of\ninformation available on or via our services, the design and effect of our products and services, or due to our\ninvolvement in hosting, transmitting, marketing, branding, or providing access to content created by third parties.\nVarious laws, regulations, investigations, enforcement lawsuits, and regulatory actions have involved in the past,\nand may in the future result in substantial fines and penalties, injunctive relief, ongoing monitoring and auditing\nobligations, changes to our products and services, alterations to our business models and operations, including\ndivestiture, and collateral related civil litigation or other adverse consequences. Any of these legal proceedings could\nalso result in legal costs, diversion of management resources, and negative publicity, all of which could harm our\nbusiness, reputation, financial condition, and operating results.\nEstimating liabilities for our pending proceedings is a complex, fact-specific, and speculative process that requires\nsignificant judgment, and the amounts we are ultimately liable for may differ from our estimates. The resolution of one\nor more such proceedings has resulted in, and may in the future result in, additional substantial fines, penalties,\ninjunctions, and other sanctions that could harm our business, reputation, financial condition, and operating results.\nFor additional information about the ongoing material legal proceedings to which we are subject, see Legal\nProceedings in Item 3 of this Annual Report on Form 10-K.\nPrivacy, data protection, data usage, and portability regulations are complex and rapidly evolving areas.\nAny failure or alleged failure to comply with these laws could harm our business, reputation, financial\ncondition, and operating results.\nAuthorities around the world have adopted and are considering a number of legislative and regulatory proposals\nconcerning data protection, data usage and portability, and encryption of user data. Additionally, the increasing\nadoption of AI technologies, which rely on the collection of large amounts of data and use of such data for training\npurposes, has led data protection authorities around the world to consider and adopt new and evolving interpretations\nTable of Contents Alphabet Inc.\n19.", - "path": "GOOG 10-K 2025.pdf/p20", - "metadata": { - "length": 5858, - "summary": "For example, the DOJ and a number of state Attorneys General filed a lawsuit concerning our Search and Search advertising practices and our compliance with US antitrust laws. In August 2024, the US District Court for the District of Columbia ruled against Google, and in Decemb...", - "page_nums": [ - 20 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 20, "artifact_ref": "page_citation_assets/page-20.png", @@ -496,24 +281,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7ab6c923-a417-509b-83e6-d433ca679de7", - "type": "page", - "content": "of data protection laws, imposing specific obligations with respect to the processing of personal data, including\nrequired notices, consents, and opt-outs. Further, the increased risk of inadvertent disclosure of confidential\ninformation or personal data in connection with the utilization of AI technologies may result in stronger regulatory\nscrutiny, leading to legal and regulatory investigations and enforcement actions that could harm our business, even if\nunfounded. Adverse legal rulings, legislation, or regulation have resulted in, and may continue to result in, fines and\norders requiring that we change our practices, which have had and could continue to have an adverse effect on how\nwe provide services, harming our business, reputation, financial condition, and operating results. These laws and\nregulations are evolving and subject to interpretation, and compliance obligations could cause us to incur substantial\ncosts or harm the quality and operations of our products and services in ways that harm our business. Examples of\nthese laws include:\n• The EU General Data Protection Regulation and the UK General Data Protection Regulations, which apply to\nall of our activities conducted from an establishment in the EU or the UK, respectively, or related to products\nand services that we offer to EU or the UK users or customers, respectively, or the monitoring of their behavior\nin the EU or the UK, respectively.\n• Various US federal, US state, and foreign privacy laws related to the processing and security of personal data,\nincluding (1) comprehensive privacy laws that provide data privacy rights (including, in California, a private\nright of action in the event of a data breach resulting from our failure to implement and maintain reasonable\nsecurity procedures and practices) and impose significant obligations on controllers and processors of\nconsumer data; (2) laws imposing obligations on businesses that collect or disclose biometric information\n(including, in Colorado, Illinois, Texas, and Washington); (3) laws governing the collection and processing of\nchildren and minor's data and how companies provide age-appropriate online experiences (including, in the\nUS, the Children's Online Privacy Protection Act of 1998; the pending Children and Teens' Online Privacy\nProtection Act (COPPA 2.0); similar US state laws related to children's privacy, such as the New York Child\nData Protection Act; and the UK's Age-Appropriate Design Code); and (4) laws regulating internet-connected\ndevices (such as, in California, the Internet of Things Security Law).\n• The EU's Digital Markets Act, which requires in-scope companies to obtain user consent for combining data\nacross certain products and require search engines to share anonymized data with rival companies, among\nother changes; and the EU Data Act, which introduces new data portability requirements with respect to\nconnected products (i.e., 'internet of things' products) and related services, as well as interoperability\nobligations on data processing services.\nFurther, we are subject to evolving laws and regulations that dictate whether, how, and under what circumstances\nwe can transfer, process, or receive personal data, as well as ongoing enforcement actions from supervisory\nauthorities related to cross-border transfers of personal data. The validity of various data transfer mechanisms we\ncurrently rely upon remains subject to legal, regulatory, and political developments globally, which may require us to\nadapt our existing arrangements.\nWe face, and may continue to face, intellectual property infringement or misappropriation, violation of\nrights of publicity, and other claims that could be costly to defend, result in significant damage awards or\nother costs (including indemnification awards), and limit our ability to use certain technologies.\nWe, like other internet, technology, and media companies, are frequently subject to litigation based on allegations\nof infringement or other violations of intellectual property rights, including patent, copyright, trade secrets, and\ntrademarks. Parties have also sought broad injunctive relief against us by filing claims in US and international courts\nand the US International Trade Commission (ITC) for exclusion and cease-and-desist orders. In addition, patent-\nholding companies may frequently seek to generate income from patents they have obtained by bringing claims\nagainst us. As we continue to expand our business, intellectual property claims against us have increased and may\ncontinue to increase as we develop and acquire new products, services, and technologies, including AI technologies.\nAdverse results in any of these lawsuits may include awards of monetary damages, costly royalty or licensing\nagreements (if licenses are available at all), or orders limiting our ability to sell our products and services in the US or\nelsewhere, including by preventing us from offering certain features, functionalities, products, or services in certain\njurisdictions. They may also cause us to change our business practices in ways that could result in a loss of revenues\nfor us and otherwise harm our business.\nMany of our agreements with our customers and partners, including certain suppliers, require us to defend\nagainst certain intellectual property infringement claims and in some cases indemnify them for certain intellectual\nproperty infringement claims against them, which could result in increased costs for defending such claims or\nsignificant damages if there were an adverse ruling in any such claims. Such customers and partners may also\ndiscontinue the use of our products, services, and technologies, as a result of injunctions or otherwise, which could\nTable of Contents Alphabet Inc.\n20.", - "path": "GOOG 10-K 2025.pdf/p21", - "metadata": { - "length": 5756, - "summary": "of data protection laws, imposing specific obligations with respect to the processing of personal data, including required notices, consents, and opt-outs. Further, the increased risk of inadvertent disclosure of confidential information or personal data in connection with the...", - "page_nums": [ - 21 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 21, "artifact_ref": "page_citation_assets/page-21.png", @@ -521,24 +289,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ce780e82-4359-5518-8f94-31ec92b7e82a", - "type": "page", - "content": "result in loss of revenues and harm our business. Moreover, intellectual property indemnities provided to us by our\nsuppliers, when obtainable, may not cover all damages and losses suffered by us and our customers arising from\nintellectual property infringement claims. Furthermore, in connection with our divestitures, we have agreed, and may in\nthe future agree, to provide indemnification for certain potential liabilities, including those associated with intellectual\nproperty claims. Regardless of their merits, intellectual property claims are often time consuming and expensive to\nlitigate or settle. To the extent such claims are successful, they could harm our business, including our product and\nservice offerings, financial condition, and operating results.\nWe could be subject to changes in tax rates, the adoption of new US or international tax legislation, or\nexposure to additional tax liabilities.\nWe are subject to a variety of taxes and tax collection obligations in the US and numerous foreign jurisdictions.\nOur effective tax rates are affected by a variety of factors, including changes in the mix of earnings in jurisdictions with\ndifferent statutory tax rates, net gains and losses on hedges and related transactions under our foreign exchange risk\nmanagement program, changes in our stock price for shares issued as employee compensation, changes in the\nvaluation of our deferred tax assets or liabilities, and the application of different provisions of tax laws or changes in tax\nlaws, regulations, or accounting principles (including changes in the interpretation of existing laws). Further, if we are\nunable or fail to collect taxes on behalf of customers, employees, and partners as the withholding agent, we could\nbecome liable for taxes that are levied against third parties.\nWe are subject to regular review and audit by both domestic and foreign tax authorities. As a result, we have\nreceived, and may in the future receive, assessments in multiple jurisdictions, on various tax-related assertions, such\nas transfer-pricing adjustments or permanent-establishment claims. Any adverse outcome of such a review or audit\ncould harm our financial condition and operating results, require adverse changes to our business practices, or subject\nus to additional litigation and regulatory inquiries. In addition, the determination of our worldwide provision for income\ntaxes and other tax liabilities requires significant judgment and often involves uncertainty. Although we believe our\nestimates are reasonable, the ultimate tax outcome may differ from the amounts recorded in our financial statements\nand may affect our financial results in the period or periods for which such determination is made.\nFurther, due to shifting economic and political conditions, tax policies, laws, or rates in various jurisdictions may\nbe subject to significant changes in ways that could harm our financial condition and operating results. For example,\nvarious jurisdictions around the world have enacted or are considering revenue-based taxes such as digital services\ntaxes and other targeted taxes, which could lead to inconsistent and potentially overlapping international tax regimes.\nThe US has imposed a 1% excise tax on the fair market value of shares repurchased, which could increase in the\nfuture. Over 140 countries are negotiating changes to international tax policies led by the Organization for Economic\nCooperation and Development (OECD), including a 15% global minimum tax rate. In January 2026, the OECD\nannounced a \"Side-by-Side Safe Harbor\" that exempts US operations of US-parented companies from global minimum\ntax rules. Adoption of minimum tax rules outside the US could increase our effective tax rate and cash tax payments.\nRisks Related to Ownership of Our Stock\nWe cannot guarantee that any share repurchase program or dividend program will be continuously active\nor fully consummated or will enhance long-term stockholder value, and share repurchases or dividends could\nincrease the volatility of our stock prices and could diminish our cash reserves.\nWe engage in share repurchases of our Class A and Class C stock from time to time in accordance with\nauthorizations from the Board of Directors of Alphabet. Our repurchase program does not have an expiration date and\ndoes not obligate Alphabet to repurchase any specific dollar amount or to acquire any specific number of shares. Our\ncash dividend program pays regular cash dividends to our Class A, Class B, and Class C stockholders. Any and all\nfuture cash dividends are subject to declaration by our Board of Directors in its sole discretion, and in accordance with\nthe requirements of any applicable laws, rules, and regulations, including the Delaware General Corporation Law. Our\ncash dividend program does not require, and our Board of Directors may decide not to declare, a cash dividend each\nquarter, and does not obligate our Board of Directors to declare a dividend at any specific dollar amount per share. Any\nsuch decision by our Board of Directors may depend on a variety of factors that it may deem relevant, including but not\nlimited to our earnings, liquidity, financial condition, other capital deployment opportunities, level of indebtedness, and\ngeneral market conditions. Our share repurchases and dividends could affect our share trading prices, increase their\nvolatility, reduce our cash reserves and may be suspended or terminated at any time, which may result in a decrease\nin the trading prices of our stock.\nThe concentration of our stock ownership limits our stockholders' ability to influence corporate matters.\nOur Class B stock has 10 votes per share, our Class A stock has one vote per share, and our Class C stock has\nno voting rights. As of December 31, 2025, Larry Page and Sergey Brin beneficially owned approximately 89.3% of our\nTable of Contents Alphabet Inc.\n21.", - "path": "GOOG 10-K 2025.pdf/p22", - "metadata": { - "length": 5891, - "summary": "result in loss of revenues and harm our business. Moreover, intellectual property indemnities provided to us by our suppliers, when obtainable, may not cover all damages and losses suffered by us and our customers arising from intellectual property infringement claims. Further...", - "page_nums": [ - 22 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 22, "artifact_ref": "page_citation_assets/page-22.png", @@ -546,24 +297,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3adf3075-6d61-571d-8ff8-1154acda3ab0", - "type": "page", - "content": "outstanding Class B stock, which represented approximately 52.7% of the voting power of our outstanding common\nstock. Through their stock ownership, Larry and Sergey have significant influence over all matters requiring\nstockholder approval, including the election of directors and significant corporate transactions, such as a merger or\nother sale of our company or our assets, for the foreseeable future. In addition, because our Class C stock carries no\nvoting rights (except as required by applicable law), the issuance of the Class C stock, including in future stock-based\nacquisition transactions and to fund employee equity incentive programs, could continue Larry and Sergey's current\nrelative voting power and their ability to elect all of our directors and to determine the outcome of most matters\nsubmitted to a vote of our stockholders. The share repurchases made pursuant to our repurchase program may also\naffect Larry and Sergey's relative voting power. This concentrated control limits or severely restricts other stockholders'\nability to influence corporate matters and we may take actions that some of our stockholders do not view as beneficial,\nwhich could reduce the market price of our Class A stock and our Class C stock.\nProvisions in our charter documents and under Delaware law could discourage a takeover that\nstockholders may consider favorable.\nProvisions in Alphabet's certificate of incorporation and bylaws may have the effect of delaying or preventing a\nchange of control or changes in our management. These provisions include the following:\n• Our Board of Directors has the right to elect directors to fill a vacancy created by the expansion of the Board of\nDirectors or the resignation, death, or removal of a director.\n• Our stockholders may not act by written consent, which makes it difficult to take certain actions without holding\na stockholders' meeting.\n• Our certificate of incorporation prohibits cumulative voting in the election of directors. This limits the ability of\nminority stockholders to elect director candidates.\n• Stockholders must provide advance notice to nominate individuals for election to the Board of Directors or to\npropose matters that can be acted upon at a stockholders' meeting. These provisions may discourage or deter\na potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or\notherwise attempting to obtain control of our company.\n• Our Board of Directors may issue, without stockholder approval, shares of undesignated preferred stock,\nwhich makes it possible for our Board of Directors to issue preferred stock with voting or other rights or\npreferences that could impede the success of any attempt to acquire us.\nAs a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions. Under Delaware\nlaw, a corporation may not engage in a business combination with any holder of 15% or more of its outstanding voting\nstock unless the holder has held the stock for three years or, among other things, the Board of Directors has approved\nthe transaction. Our Board of Directors could rely on Delaware law to prevent or delay an acquisition of us.\nGeneral Risks\nOur operating results may fluctuate, which makes our results difficult to predict and could cause our\nresults to fall short of expectations.\nOur operating results have fluctuated, and may in the future fluctuate, as a result of a number of factors, many\noutside of our control, including the cyclical nature and seasonality in our business and geopolitical events. As a result,\ncomparing our operating results (including our expenses as a percentage of our revenues) on a period-to-period basis\nmay not be meaningful, and our past results should not be relied on as an indication of our future performance.\nConsequently, our operating results in future quarters may fall below expectations.\nAcquisitions, joint ventures, investments, and divestitures could result in operating difficulties, dilution,\nand other consequences that could harm our business, financial condition, and operating results.\nAcquisitions, joint ventures, investments, and divestitures are important elements of our overall corporate strategy\nand use of capital, and these transactions could be material to our financial condition and operating results. We expect\nto continue to evaluate and enter into discussions regarding a wide array of such potential strategic arrangements,\nwhich could create unforeseen operating difficulties and expenditures. Some of the areas where we face risks include:\n• diversion of management time and focus from operating our business to challenges related to acquisitions and\nother strategic arrangements;\n• failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions\nplaced upon approval, either of which could, among other things, delay or prevent us from completing a\ntransaction, result in the payment of fees or penalties to a counterparty, or otherwise restrict our ability to\nTable of Contents Alphabet Inc.\n22.", - "path": "GOOG 10-K 2025.pdf/p23", - "metadata": { - "length": 5083, - "summary": "outstanding Class B stock, which represented approximately 52.7% of the voting power of our outstanding common stock. Through their stock ownership, Larry and Sergey have significant influence over all matters requiring stockholder approval, including the election of directors...", - "page_nums": [ - 23 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 23, "artifact_ref": "page_citation_assets/page-23.png", @@ -571,24 +305,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_12b60510-7de5-5082-b8e9-c09ce75cc401", - "type": "page", - "content": "realize the expected financial or strategic goals of a transaction; or investigations or litigation by governmental\nauthorities related to our acquisitions, investments, and other strategic arrangements;\n• failure to successfully integrate the acquired operations, technologies, services, and personnel (including\ncultural integration and retention of employees) and further develop the acquired business or technology;\n• implementation of controls (or remediation of deficiencies), procedures, and policies at the acquired company;\n• integration of the acquired company's accounting and other administrative systems, and the coordination of\nproduct, engineering, and sales and marketing functions;\n• transition of operations, users, and customers onto our existing platforms;\n• in the case of foreign acquisitions, the need to integrate operations across different cultures and languages\nand to address the particular economic, currency, political, and regulatory risks associated with specific\ncountries;\n• failure to accomplish commercial, strategic, or financial objectives with respect to investments, joint ventures,\nand other strategic arrangements;\n• failure to realize the value of investments and joint ventures due to a lack of liquidity or an inability to identify\nbuyers or negotiate favorable terms for intended divestitures;\n• liability for activities of the acquired company before the acquisition, including intellectual property infringement\nclaims, data privacy and security issues, violations of laws, commercial disputes, tax liabilities, warranty\nclaims, product liabilities, and other known and unknown liabilities; and\n• litigation or other claims in connection with the acquired company, including claims from terminated\nemployees, customers, former stockholders, or other third parties.\nOur failure to address these risks or other problems encountered in connection with our past or future acquisitions\nand other strategic arrangements could cause us to fail to realize their anticipated benefits, incur unanticipated\nliabilities, and harm our business generally.\nOur acquisitions and other strategic arrangements could also result in dilutive issuances of our equity securities,\nthe incurrence of debt, contingent liabilities, or amortization expenses, or impairment of goodwill or purchased long-\nlived assets, and restructuring charges, any of which could harm our financial condition and operating results. Also, the\nanticipated benefits or value of our acquisitions, investments, and other strategic arrangements may not materialize. In\nconnection with our divestitures and certain strategic arrangements, we have agreed, and may in the future agree, to\nprovide indemnification for certain potential liabilities, which could harm our financial condition and operating results.\nWe rely on highly skilled personnel and, if we are unable to retain or motivate key personnel, hire\nqualified personnel, or maintain and continue to adapt our corporate culture, we may not be able to grow or\noperate effectively.\nOur performance and future success depends in large part upon the continued service of key technical leads as\nwell as members of our senior management team. For instance, Sundar Pichai is critical to the overall management of\nAlphabet and its subsidiaries and plays an important role in the development of our technology, maintaining our\nculture, and setting our strategic direction.\nOur ability to compete effectively and our future success depend on our continuing to identify, hire, develop,\nmotivate, and retain highly skilled personnel for all areas of our organization. Competition in our industry for qualified\nemployees, particularly AI talent, is intense, and certain of our competitors have directly targeted, and may continue to\ntarget, our employees. In addition, our compensation arrangements, such as our equity award programs, may not\nalways be successful in attracting new employees and retaining and motivating our existing employees. Immigration\npolicy and regulatory changes, and uncertainty regarding such policies and regulations, may also affect our ability to\nhire, mobilize, or retain some of our global talent. All of our executive officers and key employees are at-will\nemployees, and we do not maintain any key-person life insurance policies.\nWe believe that our corporate culture fosters innovation, creativity, and teamwork. As our organization grows and\nevolves, we may need to adapt our corporate culture and work environments to ever-changing circumstances, and\nthese changes could affect our ability to compete effectively or have an adverse effect on our corporate culture.\nITEM 1B. UNRESOLVED STAFF COMMENTS\nNot applicable.\nITEM 1C. CYBERSECURITY\nTable of Contents Alphabet Inc.\n23.", - "path": "GOOG 10-K 2025.pdf/p24", - "metadata": { - "length": 4755, - "summary": "realize the expected financial or strategic goals of a transaction; or investigations or litigation by governmental authorities related to our acquisitions, investments, and other strategic arrangements; • failure to successfully integrate the acquired operations, technologies...", - "page_nums": [ - 24 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 24, "artifact_ref": "page_citation_assets/page-24.png", @@ -596,24 +313,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_522ebcb9-0d0f-5dff-9b47-d1a485d50d61", - "type": "page", - "content": "We maintain a comprehensive process for iden tifying, assessing, and managing material risks from cybersecurity\nthreats as part of our broader risk management system and processes. For example, some risks include our software\nsupply chain and other third-party dependencies, vulnerabilities in our products and services, theft of our intellectual\nproperty, and attempts to compromise our infrastructure. We obtain input, as appropriate, for our cybersecurity risk\nmanagement program on the security industry and threat trends from multiple external experts and internal threat\nintelligence teams. Teams of dedicated privacy, safety, and security professionals oversee cybersecurity risk\nmanagement and mitigation, incident prevention, detection, and remediation. These teams comprise professionals with\ndeep cybersecurity expertise across multiple industries and are led by our Vice President of Privacy, Safety, and\nSecurity, who has more than 20 years of experience, including roles in technology infrastructure for two other large\npublic companies . Our executive leadership team, along with input from the above teams, are responsible for our\noverall enterprise risk management system and processes and regularly consider cybersecurity risks in the context of\nother material risks to the company.\nAs part of our cybersecurity risk management process, our incident management teams track and log privacy and\nsecurity incidents across Alphabet, our vendors, and other third-party service providers to remediate and resolve any\nsuch incidents. Significant incidents are reviewed regularly by a cross-functional working group to determine whether\nfurther escalation is appropriate. Any incident assessed as potentially being or potentially becoming material is\npromptly escalated for further assessment, and then reported to designated members of our senior management. We\nconsult with outside counsel as appropriate, including on materiality analysis and disclosure matters, and our senior\nmanagement makes the final materiality determinations and disclosure and other compliance decisions. Our\nmanagement apprises Alphabet’s independent public accounting firm of relevant matters and developments.\nThe Risk and Compliance Committee has oversight responsibility for risks and incidents relating to cybersecurity\nthreats, including compliance with disclosure requirements, cooperation with law enforcement, and related effects on\nfinancial and other risks, and it reports any findings and recommendations, as appropriate, to the full Board for\nconsideration. Senior management regularly discusses cyber security risks and trends and, should they arise, any\nmaterial incidents with the Risk and Compliance Committee. Internal Audit maintains a dedicated cybersecurity\nauditing team that independently tests our cybersecurity controls.\nOur business strategy, results of operations and financial condition have not been materially affected by risks from\ncybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide\nassurance that they will not be materially affected in the future by such risks or any future material incidents . For more\ninformation on our cybersecurity related risks, see Item 1A Risk Factors of this Annual Report on Form 10-K.\nITEM 2. PROPERTIES\nOur headquarters are located in Mountain View, California. We own and lease office facilities and data centers\naround the world, primarily in Asia, Europe, and North America. We believe our existing facilities are in good condition\nand suitable for the conduct of our business.\nITEM 3. LEGAL PROCEEDINGS\nFor a description of our material pending legal proceedings, see Legal Matters in Note 10 of the Notes to\nConsolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is\nincorporated herein by reference.\nITEM 4. MINE SAFETY DISCLOSURES\nNot applicable.\nTable of Contents Alphabet Inc.\n24.", - "path": "GOOG 10-K 2025.pdf/p25", - "metadata": { - "length": 3959, - "summary": "We maintain a comprehensive process for iden tifying, assessing, and managing material risks from cybersecurity threats as part of our broader risk management system and processes. For example, some risks include our software supply chain and other third-party dependencies, vu...", - "page_nums": [ - 25 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 25, "artifact_ref": "page_citation_assets/page-25.png", @@ -621,24 +321,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2ae06334-1254-54f7-8c6c-eb1d1ac83217", - "type": "page", - "content": "PART II\nITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND\nISSUER PURCHASES OF EQUITY SECURITIES\nAs of October 2, 2015, Alphabet Inc. became the successor issuer of Google Inc. pursuant to Rule 12g-3(a) under\nthe Exchange Act. Our Class A stock has been listed on the Nasdaq Global Select Market under the symbol “GOOG”\nsince August 19, 2004, and under the symbol \"GOOGL\" since April 3, 2014. Prior to August 19, 2004, there was no\npublic market for our stock. Our Class B stock is neither listed nor traded. Our Class C stock has been listed on the\nNasdaq Global Select Market under the symbol “GOOG” since April 3, 2014.\nHolders of Record\nAs of December 31, 2025, there were approximately 5,861 and 1,611 stockholders of record of our Class A stock\nand Class C stock, respectively. Because many of our shares of Class A stock and Class C stock are held by brokers\nand other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders\nrepresented by these record holders. As of December 31, 2025, there were approximately 57 stockholders of record of\nour Class B stock.\nDividend Program\nDividend payments to stockholders of Class A, Class B, and Class C shares were $4.8 billion, $703 million, and\n$4.5 billion, respectively, for the year ended December 31, 2025. The company intends to pay quarterly cash dividends\nin the future, subject to review and approval by the company’s Board of Directors in its sole discretion. We regularly\nevaluate our cash and capital structure, including the size, pace, and form of capital return to stockholders.\nIssuer Purchases of Equity Securities\nThe following table presents information with respect to Alphabet's repurchases of Class A and Class C stock\nduring the quarter ended December 31, 2025:\nPeriod\nTotal Number of\nClass A Shares\nPurchased\n(in thousands)(1)\nTotal Number of\nClass C Shares\nPurchased\n(in thousands)(1)\nAverage Price\nPaid per\nClass A\nShare(2)\nAverage Price\nPaid per\nClass C\nShare(2)\nTotal Number of\nShares\nPurchased as\nPart of Publicly\nAnnounced\nPrograms\n(in thousands)(1)\nApproximate\nDollar Value of\nShares that May\nYet Be Purchased\nUnder the\nProgram\n(in millions)\nOctober 1 - 31 841 13,305 $ 253.20 $ 255.03 14,146 $ 71,231\nNovember 1 - 30 209 5,885 $ 286.00 $ 281.46 6,094 $ 69,503\nDecember 1 - 31 0 0 $ 0.00 $ 0.00 0 $ 69,503\nTotal 1,050 19,190 20,240\n(1) In April 2024, the company's Board of Directors authorized a $70.0 billion share repurchase program for its Class A and Class\nC shares. In April 2025, the company's Board of Directors authorized an additional $70.0 billion share repurchase program for\nits Class A and Class C shares. Repurchases are being executed from time to time, subject to general business and market\nconditions and other investment opportunities, through open market purchases or privately negotiated transactions, including\nthrough Rule 10b5-1 plans. The repurchase programs do not have an expiration date. For additional information related to\nshare repurchases, see Note 11 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on\nForm 10-K.\n(2) Average price paid per share includes costs associated with the repurchases.\nTable of Contents Alphabet Inc.\n25.", - "path": "GOOG 10-K 2025.pdf/p26", - "metadata": { - "length": 3273, - "summary": "PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES As of October 2, 2015, Alphabet Inc. became the successor issuer of Google Inc. pursuant to Rule 12g-3(a) under the Exchange Act. Our Class A stock has...", - "page_nums": [ - 26 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 26, "artifact_ref": "page_citation_assets/page-26.png", @@ -646,24 +329,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_913a8e0f-7da6-5e2e-a1e5-d46a752ed9f1", - "type": "page", - "content": "Stock Performance Graphs\nThe graph below matches Alphabet Inc. Class A's cumulative five-year total stockholder return on common stock\nwith the cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet\nComposite index. The graph tracks the performance of a $100 investment in our common stock and in each index\n(with the reinvestment of all dividends) from December 31, 2020, to December 31, 2025. The returns shown are based\non historical results and are not intended to suggest future performance.\nCOMPARISON OF CUMULATIVE 5-YEAR TOTAL RETURN*\nALPHABET INC. CLASS A COMMON STOCK\nAmong Alphabet Inc., the S&P 500 Index, the\nNASDAQ Composite Index, and the RDG Internet Composite Index\nAlphabet Inc. Class A S&P 500 NASDAQ Composite\nRDG Internet Composite\n12/203/216/219/2112/213/226/229/2212/223/236/239/2312/233/246/249/2412/243/256/259/2512/25\n$0\n$50\n$100\n$150\n$200\n$250\n$300\n$350\n$400\n*$100 invested on December 31, 2020, in stock or index, including reinvestment of dividends.\nCopyright© 2026 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.\nTable of Contents Alphabet Inc.\n26.", - "path": "GOOG 10-K 2025.pdf/p27", - "metadata": { - "length": 1142, - "summary": "Stock Performance Graphs The graph below matches Alphabet Inc. Class A's cumulative five-year total stockholder return on common stock with the cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet Composite index. The graph tracks the...", - "page_nums": [ - 27 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 27, "artifact_ref": "page_citation_assets/page-27.png", @@ -671,24 +337,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1662cfb3-1327-5e3b-a87c-5d931e627aad", - "type": "page", - "content": "The graph below matches Alphabet Inc. Class C's cumulative five-year total stockholder return on capital stock\nwith the cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet\nComposite index. The graph tracks the performance of a $100 investment in our Class C capital stock and in each\nindex (with the reinvestment of all dividends) from December 31, 2020, to December 31, 2025. The returns shown are\nbased on historical results and are not intended to suggest future performance.\nCOMPARISON OF CUMULATIVE 5-YEAR TOTAL RETURN*\nALPHABET INC. CLASS C CAPITAL STOCK\nAmong Alphabet Inc., the S&P 500 Index, the\nNASDAQ Composite Index, and the RDG Internet Composite Index\nAlphabet Inc. Class C S&P 500 NASDAQ Composite\nRDG Internet Composite\n12/203/216/219/2112/213/226/229/2212/223/236/239/2312/233/246/249/2412/243/256/259/2512/25\n$0\n$50\n$100\n$150\n$200\n$250\n$300\n$350\n$400\n*$100 invested on December 31, 2020, in stock or in index, including reinvestment of dividends.\nCopyright© 2026 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.\nITEM 6. [Reserved]\nTable of Contents Alphabet Inc.\n27.", - "path": "GOOG 10-K 2025.pdf/p28", - "metadata": { - "length": 1150, - "summary": "The graph below matches Alphabet Inc. Class C's cumulative five-year total stockholder return on capital stock with the cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet Composite index. The graph tracks the performance of a $100 i...", - "page_nums": [ - 28 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 28, "artifact_ref": "page_citation_assets/page-28.png", @@ -696,24 +345,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c7ca904e-7985-5cd8-9b1d-039c4bdbb3f6", - "type": "page", - "content": "ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF\nOPERATIONS\nPlease read the following discussion and analysis of our financial condition and results of operations together with\n“Note about Forward-Looking Statements,” Part I, Item 1 \"Business,\" Part I, Item 1A \"Risk Factors,\" and our\nconsolidated financial statements and related notes included under Item 8 of this Annual Report on Form 10-K.\nThe following section generally discusses 2025 results compared to 2024 results. Discussion of 2024 results\ncompared to 2023 results to the extent not included in this report can be found in Item 7 of our 2024 Annual Report on\nForm 10-K.\nUnderstanding Alphabet’s Financial Results\nAlphabet is a collection of business es — the largest of which is Google. We report Google in two segments,\nGoogle Services and Google Cloud, and all non-Google businesses collectively as Other Bets. Supporting these\nbusinesses, we have centralized certain AI-related research and development focused on advanced research in AI and\ndeveloping the frontier models that serve our businesses, which is reported in Alphabet-level activities. For further\ndetails on our segments, see Part I, Item 1 Business and Note 15 of the Notes to Consolidated Financial Statements\nincluded in Item 8 of this Annual Report on Form 10-K.\nTrends in Our Business and Financial Effect\nThe following long-term trends have contributed to the results of our consolidated operations, and we anticipate\nthat they will continue to affect our future results:\n• As we continue to grow our business and meet the evolving behaviors and needs of our users and\ncustomers, our revenue growth and mix along with our cost and margin profiles are being influenced by a\nnumber of factors, including:\nExpanded AI Offerings in our Products and Services: The continuing evolution of the online world has\ncontributed to the growth of our business. We expect that this evolution, including user engagement with AI\nproducts and services, will continue to benefit our business and our revenues. As we continue to incorporate AI\ninto our products and services, such as with AI Overviews and AI Mode in Search, and with enterprise AI solutions\non our Google Cloud Platform, we may monetize differently than our historical consumer and enterprise offerings\nwhich could affect revenue growth rates and margin trends. When developing new products and services we\ngenerally focus first on user experience and then on monetization. At the same time , we face increasing\ncompetition, including from other developers and providers of AI products and services, which may affect our\nrevenues.\nIncreasing Revenues Beyond Advertising: Revenues from cloud, consumer subscriptions, platforms, and\ndevices, which may have differing characteristics than our advertising revenues, have grown over time. Certain of\nthese revenues have been growing at a rate higher than our advertising revenues, becoming a larger percentage\nof our consolidated revenues, and we expect this trend to continue. The margins on these revenues vary\nsignificantly and are generally lower than the margins on our advertising revenues.\nIncreased Investment in Technical Infrastructure : We continue to invest in capital expenditures as we scale\nour technical infrastructure, in particular for AI, to meet the demand of our users and enterprise customers and to\nsupport research internally . We invested heavily in capital expenditures in 2025 and in 2026, we expect to\nsignificantly increase , relative to 2025, our i nvestment in our technical infrastructure, including servers and\nnetwork equipment, and data centers. The costs associated with operating our technical infrastructure -\ndepreciation, energy, equipment, and network capacity - are expected to significantly increase as developing and\nserving AI offerings require more compute power than our historical consumer and enterprise offerings. While our\ntechnical infrastructure costs increase, we expect to continue to drive efficiencies in our data centers, for example,\nthrough the design of our AI models and our TPU and GPU-based technical infrastructure.\nContinued Investment in Intellectual Property through R&D and Acquisitions: We continue to make\nsignificant research and development investments in areas of strategic focus as we seek to develop new,\ninnovative offerings, and improve our existing offerings across our businesse s. A cquisitions and strategic\ninvestments remain important elements in our use of capital and contribute to the breadth and depth of our\nofferings, expand our expertise in engineering and other functional areas, and build strong partnerships around\nstrategic initiatives.\nTraffic Acquisition Costs Growth and Rate Changes: We expect traffic acquisition costs (\"TAC\") paid to our\ndistribution partners and Google Network partners to increase as our advertising revenues grow. Our overall TAC\nas a percentage of our advertising revenues (\"TAC rate\") has been decreasing primarily due to a revenue mix\nTable of Contents Alphabet Inc.\n28.", - "path": "GOOG 10-K 2025.pdf/p29", - "metadata": { - "length": 5065, - "summary": "ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Please read the following discussion and analysis of our financial condition and results of operations together with “Note about Forward-Looking Statements,” Part I, Item 1 \"Business,...", - "page_nums": [ - 29 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 29, "artifact_ref": "page_citation_assets/page-29.png", @@ -721,24 +353,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_0ed18b8c-ccea-5b73-8f54-743ef5649cbd", - "type": "page", - "content": "shift from Google Network properties to Google Search & other properties. Our TAC rate will continue to be\naffected by changes in device mix; geographic mix; partner agreement terms; partner mix; the percentage of\nqueries channeled through paid access points; product mix; the relative revenue growth rates of advertising\nrevenues from different channels; and revenue share terms.\n• We have raised capital through external financing in the form of debt and we may continue to seek\ndebt or other forms of financing in the future to support our capital and operating needs.\nIn 2025, we raised capital through the issuance of debt and we expect to continue to assess the use of debt and\nother forms of financing in the future. We expect to continue to enter into finance leases, primarily for data centers.\nAdditionally, in 2025, we provided credit support, such as through backstops and guarantees, to certain infrastructure\nrelated counterparties and may continue to provide additional credit support in the future.\n• We face an evolving regulatory environment, and we are subject to claims, lawsuits, investigations,\nand other forms of potential legal liability, which could affect our business practices and financial results.\nChanges in social, political, economic, tax, and regulatory conditions or in laws and policies governing a wide\nrange of topics and related legal matters, including investigations, lawsuits, and regulatory actions, have resulted in\nfines and caused us to change our business practices. As the regulatory environment continues to evolve, we may\ncontinue to incur fines and we expect increased costs associated with compliance, modifications to our products and\nservices, and limitations on our ability to pursue certain business practices. For additional information, see Part I, Item\n1A Risk Factors and Legal Matters in Note 10 of the Notes to Consolidated Financial Statements included in Item 8 of\nthis Annual Report on Form 10-K.\nRevenues and Monetization Metrics\nWe generate revenues by delivering relevant, cost-effective online advertising; cloud-based solutions that provide\nenterprise customers of all sizes with infrastructure, platform services, and applications; and sales of other products\nand services, such as fees received for subscription-based products, apps and in-app purchases, and devices. For\nadditional information on how we recognize revenue, see Note 1 of the Notes to Consolidated Financial Statements\nincluded in Item 8 of this Annual Report on Form 10-K.\nIn addition to the long-term trends and their financial effect on our business discussed above, fluctuations in our\nrevenues have been and may continue to be affected by a combination of factors, including:\n• changes in foreign currency exchange rates;\n• changes in pricing, such as those resulting from changes in fee structures, discounts, and customer incentives;\n• general economic conditions and various external dynamics, including geopolitical events, regulations, and\nother measures and their effect on advertiser, consumer, and enterprise spending;\n• new product, service, and market launches; and\n• seasonality.\nAdditionally, fluctuations in our revenues generated from advertising (\"Google advertising\"), other sources\n(\"Google subscriptions, platforms, and devices\"), Google Cloud, and Other Bets have been, and may continue to be,\naffected by other factors unique to each set of revenues, as described below.\nGoogle Services\nGoogle Services revenues consist of Google advertising as well as Google subscriptions, platforms, and devices\nrevenues.\nGoogle Advertising\nGoogle advertising revenues are comprised of the following:\n• Google Search & other, which includes revenues generated on Google search properties (including revenues\nfrom traffic generated by search distribution partners who use Google.com as their default search in browsers,\ntoolbars, etc.), and other Google owned and operated properties like Gmail, Google Maps, and Google Play;\n• YouTube ads, which includes revenues generated on YouTube properties; and\n• Google Network, which includes revenues generated on Google Network properties participating in AdMob,\nAdSense, and Google Ad Manager.\nTable of Contents Alphabet Inc.\n29.", - "path": "GOOG 10-K 2025.pdf/p30", - "metadata": { - "length": 4224, - "summary": "shift from Google Network properties to Google Search & other properties. Our TAC rate will continue to be affected by changes in device mix; geographic mix; partner agreement terms; partner mix; the percentage of queries channeled through paid access points; product mix; the...", - "page_nums": [ - 30 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 30, "artifact_ref": "page_citation_assets/page-30.png", @@ -746,24 +361,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_70ad756b-d1e8-5246-b2fe-a395152c6a30", - "type": "page", - "content": "We use certain metrics to track how well traffic across various properties is monetized as it relates to our\nadvertising revenues: paid clicks and cost-per-click pertain to traffic on Google Search & other properties, while\nimpressions and cost-per-impression pertain to traffic on our Google Network properties.\nPaid clicks represent engagement by users and include clicks on advertisements by end-users on Google search\nproperties and other Google owned and operated properties including Gmail, Google Maps, and Google Play. Cost-\nper-click is defined as click-driven revenues divided by our total number of paid clicks and represents the average\namount we charge advertisers for each engagement by users.\nImpressions include impressions displayed to users on Google Network properties participating primarily in\nAdMob, AdSense, and Google Ad Manager. Cost-per-impression is defined as impression-based and click-based\nrevenues divided by our total number of impressions, and represents the average amount we charge advertisers for\neach impression displayed to users.\nAs our business evolves, we periodically review, refine, and update our methodologies for monitoring, gathering,\nand counting the number of paid clicks and the number of impressions, and for identifying the revenues generated by\nthe corresponding click and impression activity.\nFluctuations in our advertising revenues, as well as the change in paid clicks and cost-per-click on Google Search\n& other properties and the change in impressions and cost-per-impression on Google Network properties and the\ncorrelation between these items have been, and may continue to be, affected by factors in addition to the general\nfactors described above, such as:\n• advertiser competition for keywords;\n• changes in advertising quality, formats, delivery, or policy;\n• changes in device mix;\n• seasonal fluctuations in internet usage, advertising expenditures, and underlying business trends, such as\ntraditional retail seasonality; and\n• traffic growth in emerging markets compared to more mature markets and across various verticals and\nchannels.\nGoogle Subscriptions, Platforms, and Devices\nGoogle subscriptions, platforms, and devices revenues are comprised of the following:\n• consumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV,\nYouTube Music and Premium, and NFL Sunday Ticket, as well as Google One , which offers access to our\nmost capable Gemini models;\n• platforms, which primarily include revenues from Google Play sales of apps and in-app purchases;\n• devices, which primarily include sales of the Pixel family of devices; and\n• other products and services.\nFluctuations in our Google subscriptions, platforms, and devices revenues have been, and may continue to be,\naffected by factors in addition to the general factors described above, such as changes in customer usage and\ndemand, number of subscribers, and the timing of product launches.\nGoogle Cloud\nGoogle Cloud revenues are comprised of the following:\n• Google Cloud Platform primarily generates consumption-based fees and subscriptions for infrastructure,\nplatform, and other services. These services provide access to solutions such as AI offerings including our\nenterprise AI infrastructure, Vertex AI platform, and Gemini Enterprise; cybersecurity offerings; and data and\nanalytics solutions;\n• Google Workspace includes subscriptions for cloud-based communication and collaboration tools for\nenterprises, such as Gmail, Docs, Calendar, Drive, and Meet, with integrated features like Gemini for Google\nWorkspace; and\n• other enterprise services.\nFluctuations in our Google Cloud revenues have been, and may continue to be, affected by factors in addition to\nthe general factors described above, such as changes in customer usage, demand, and supply availability.\nTable of Contents Alphabet Inc.\n30.", - "path": "GOOG 10-K 2025.pdf/p31", - "metadata": { - "length": 3879, - "summary": "We use certain metrics to track how well traffic across various properties is monetized as it relates to our advertising revenues: paid clicks and cost-per-click pertain to traffic on Google Search & other properties, while impressions and cost-per-impression pertain to traffi...", - "page_nums": [ - 31 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 31, "artifact_ref": "page_citation_assets/page-31.png", @@ -771,24 +369,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_25535813-1b03-5b5f-ba15-5f676f28ad24", - "type": "page", - "content": "Other Bets\nRevenues from Other Bets are generated primarily from the sale of autonomous transportation services and\ninternet services.\nCosts and Expenses\nOur cost structure has two components: cost of revenues and operating expenses. Our operating expenses\ninclude costs related to research and development, sales and marketing, and general and administrative functions.\nCertain of our costs and expenses, including those associated with the operation of our technical infrastructure as well\nas components of our operating expenses, are generally less variable in nature and may not correlate to changes in\nrevenue. Additionally, fluctuations in employee compensation expenses may not directly correlate with changes in\nheadcount, due to factors such as annual SBC awards that vest over time.\nCost of Revenues\nCost of revenues is comprised of TAC and other costs of revenues.\n• TAC includes:\n◦ amounts paid to our distribution partners who make available our search access points and other ad-\nsupported services. Our distribution partners include browser providers, mobile carriers, original\nequipment manufacturers, and software developers; and\n◦ amounts paid to Google Network partners primarily for ads displayed on their properties.\n• Other cost of revenues primarily includes:\n◦ content acquisition costs, which are payments to content providers from whom we license video and\nother content for distribution, primarily related to YouTube (we pay fees to these content providers\nbased on revenues generated, subscriber counts, or a flat fee);\n◦ depreciation expense, primarily related to our technical infrastructure;\n◦ employee compensation expenses related to our technical infrastructure and other operations such as\ncontent review and customer and product support;\n◦ inventory and other costs related to the devices we sell; and\n◦ other technical infrastructure operations costs, including energy, equipment, and network capacity\ncosts.\nTAC as a percentage of revenues generated from ads placed on Google Network properties are significantly\nhigher than TAC as a percentage of revenues generated from ads placed on Google Search & other properties,\nbecause most of the advertiser revenues from ads served on Google Network properties are paid as TAC to our\nGoogle Network partners.\nOperating Expenses\nOperating expenses are generally incurred during our normal course of business, which we categorize as either\nresearch and development, sales and marketing, or general and administrative.\nThe main components of our research and development expenses are:\n• depreciation expense, primarily related to our technical infrastructure;\n• employee compensation expenses for engineering and technical employees responsible for research and\ndevelopment related to our existing and new products and services;\n• other technical infrastructure operations costs, including energy, equipment, and network capacity costs; and\n• third-party services fees primarily relating to consulting and outsourced services in support of our engineering\nand product development efforts.\nThe main components of our sales and marketing expenses are:\n• employee compensation expenses for employees engaged in sales and marketing, sales support, and certain\ncustomer service functions; and\n• spend relating to our advertising and promotional activities in support of our products and services.\nThe main components of our general and administrative expenses are:\nTable of Contents Alphabet Inc.\n31.", - "path": "GOOG 10-K 2025.pdf/p32", - "metadata": { - "length": 3474, - "summary": "Other Bets Revenues from Other Bets are generated primarily from the sale of autonomous transportation services and internet services. Costs and Expenses Our cost structure has two components: cost of revenues and operating expenses. Our operating expenses include costs relate...", - "page_nums": [ - 32 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 32, "artifact_ref": "page_citation_assets/page-32.png", @@ -796,24 +377,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_09d2ff2d-f519-5e4a-9691-82ef2d8d6ce4", - "type": "page", - "content": "• employee compensation expenses for employees in finance, human resources, information technology, legal,\nand other administrative support functions;\n• expenses relating to legal and other matters, including certain fines and settlements; and\n• third-party services fees, including audit, consulting, outside legal, and other outsourced administrative\nservices.\nOther Income (Expense), Net\nOI&E, net primarily consists of interest income (expense), the effect of foreign currency exchange gains (losses),\nnet gains (losses) and impairment on our marketable and non-marketable securities and income (loss) and impairment\nfrom our equity method investments.\nFor additional information, including how we account for our investments and factors that can drive fluctuations in\nthe value of our investments, see Note 1 and Note 3 of the Notes to Consolidated Financial Statements included in\nItem 8 as well as Item 7A Quantitative and Qualitative Disclosures About Market Risk of this Annual Report on Form\n10-K.\nProvision for Income Taxes\nProvision for income taxes represents the estimated amount of federal, state, and foreign income taxes incurred\nin the US and the many jurisdictions in which we operate. The provision includes the effect of reserve provisions and\nchanges to reserves that are considered appropriate as well as the related net interest and penalties.\nFor additional information, including a reconciliation of the US federal statutory rate to our effective tax rate, see\nNote 14 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.\nExecutive Overview\nThe following table summarizes consolidated financial results (in millions, except for per share information and\npercentages):\nYear Ended December 31,\n2024 2025 $ Change % Change\nConsolidated revenues $ 350,018 $ 402,836 $ 52,818 15 %\nCost of revenues $ 146,306 $ 162,535 $ 16,229 11 %\nOperating expenses $ 91,322 $ 111,262 $ 19,940 22 %\nOperating income $ 112,390 $ 129,039 $ 16,649 15 %\nOperating margin 32 % 32 % 0 %\nOther income (expense), net $ 7,425 $ 29,787 $ 22,362 301 %\nNet income $ 100,118 $ 132,170 $ 32,052 32 %\nDiluted net income per share(1) $ 8.04 $ 10.81 $ 2.77 34 %\n(1) For additional information on the calculation of diluted net income per share, see Note 12 of the Notes to Consolidated\nFinancial Statements included in Item 8 of this Annual Report on Form 10-K.\n• Revenues were $402.8 billion, an increase of 15% year over year, primarily driven by an increase in Google\nServices revenues of $37.8 billion, or 12%, and an increase in Google Cloud revenues of $15.5 billion, or 36%.\n• Cost of revenues was $162.5 billion, an increase of 11% year over year, primarily driven by increases in TAC,\ncontent acquisition costs, and depreciation expense.\n• Operating expenses were $111.3 billion, an increase of 22% year over year, primarily driven by increases in\nemployee compensation expenses, expenses related to legal and other matters, and depreciation expense.\nOther Information:\nTable of Contents Alphabet Inc.\n32.", - "path": "GOOG 10-K 2025.pdf/p33", - "metadata": { - "length": 3066, - "summary": "• employee compensation expenses for employees in finance, human resources, information technology, legal, and other administrative support functions; • expenses relating to legal and other matters, including certain fines and settlements; and • third-party services fees, incl...", - "page_nums": [ - 33 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 33, "artifact_ref": "page_citation_assets/page-33.png", @@ -821,24 +385,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bfd3ddd8-72f7-5f15-b291-ec95da559bca", - "type": "page", - "content": "• In 2025 , we entered into definitive agreements to acquire Wiz, a leading cloud security platform, for $32.0\nbillion, and Intersect, a provider of data center and energy infrastructure solutions, for $4.8 billion in cash plus\nthe assumption of debt. Both acquisitions are expected to close in 2026, subject to customary closing\nconditions, including the receipt of regulatory approvals.\n• In 2025, we issued senior unsecured notes for net proceeds of $37.3 billion, to be used for general corporate\npurposes.\n• OI&E of $29.8 billion for the year ended December 31, 2025 included net gains on equity securities of $ 24.1\nbillion, primarily related to unrealized gains on our non-marketable equity securities.\n• Other Bets operating loss of $7.5 billion for the year ended December 31, 2025 included a $2.1 billion\nemployee compensation charge recognized in the fourth quarter for Waymo, primarily reflected in research\nand development expenses, based on estimated stock valuation. In February 2026, Waymo announced an\ninvestment round of $16.0 billion, the significant majority of which was funded by Alphabet.\n• Changes to U.S. tax law enacted on July 4, 2025, allow, among other things, for immediate expensing of\ndomestic research and experimentation costs and accelerated depreciation on eligible capital expenditures,\nthe effects of which are included in operating cash flows for the year ended December 31, 2025.\n• Repurchases of Class A and Class C shares were $6.5 billion and $38.9 billion, respectively, totaling $45.4\nbillion for the year ended December 31, 2025.\n• Operating cash flow was $164.7 billion for the year ended December 31, 2025.\n• Capital expenditures, which primarily reflected investments in technical infrastructure, were $91.4 billion for the\nyear ended December 31, 2025.\n• As of December 31, 2025, we had 190,820 employees.\nWe are monitoring ongoing developments surrounding international trade and the macroeconomic environment.\nAs a result of volatility in international trade and financial markets, we may experience direct and indirect effects on our\nbusiness, operations, and financial results. Our past results may not be indicative of our future performance, and our\nfinancial results may differ materially from historical trends.\nFinancial Results\nRevenues\nThe following table presents revenues by type (in millions):\nYear Ended December 31,\n2024 2025\nGoogle Search & other $ 198,084 $ 224,532\nYouTube ads 36,147 40,367\nGoogle Network 30,359 29,792\nGoogle advertising 264,590 294,691\nGoogle subscriptions, platforms, and devices 40,340 48,030\nGoogle Services total 304,930 342,721\nGoogle Cloud 43,229 58,705\nOther Bets 1,648 1,537\nHedging gains (losses) 211 (127)\nTotal revenues $ 350,018 $ 402,836\nGoogle Services\nGoogle Advertising\nGoogle Search & other\nGoogle Search & other revenues increased $26.4 billion from 2024 to 2025. The overall growth was driven by\ninterrelated factors including increases in search queries resulting from growth in user adoption and usage on mobile\ndevices; growth in advertiser spending; and improvements we have made in ad formats and delivery.\nTable of Contents Alphabet Inc.\n33.", - "path": "GOOG 10-K 2025.pdf/p34", - "metadata": { - "length": 3172, - "summary": "• In 2025 , we entered into definitive agreements to acquire Wiz, a leading cloud security platform, for $32.0 billion, and Intersect, a provider of data center and energy infrastructure solutions, for $4.8 billion in cash plus the assumption of debt. Both acquisitions are exp...", - "page_nums": [ - 34 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 34, "artifact_ref": "page_citation_assets/page-34.png", @@ -846,24 +393,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6c791b91-ea88-584d-ab81-cfe6dff37e43", - "type": "page", - "content": "YouTube ads\nYouTube ads revenues increased $4.2 billion from 2024 to 2025. The growth was driven by our direct response\nadvertising products followed by our brand advertising products, both of which benefited from increased spending by\nour advertisers.\nGoogle Network\nGoogle Network revenues decreased $567 million from 2024 to 2025, primarily due to a decrease in AdSense\nrevenues, partially offset by an increase in AdMob revenues.\nMonetization Metrics\nThe following table presents changes in monetization metrics for Google Search & other revenues (paid clicks\nand cost-per-click) and Google Network revenues (impressions and cost-per-impression), expressed as a percentage,\nfrom 2024 to 2025:\nGoogle Search & other\nPaid clicks change 6 %\nCost-per-click change 7 %\nGoogle Network\nImpressions change (7) %\nCost-per-impression change 7 %\nChanges in paid clicks and impressions are driven by a number of interrelated factors, including changes in\nadvertiser spending; ongoing product and policy changes; and, as it relates to paid clicks, fluctuations in search\nqueries resulting from changes in user adoption and usage, primarily on mobile devices.\nChanges in cost-per-click and cost-per-impression are driven by a number of interrelated factors including\nchanges in device mix, geographic mix, advertiser spending, ongoing product and policy changes, product mix,\nproperty mix, and changes in foreign currency exchange rates.\nGoogle Subscriptions, Platforms, and Devices\nGoogle subscriptions, platforms, and devices revenues increased $7.7 billion from 2024 to 2025. The growth was\nprimarily driven by an increase in subscriptions revenues . This increase was primarily due to the contribution from\ngrowth in paid subscriptions across both YouTube services and Google One.\nGoogle Cloud\nGoogle Cloud revenues increased $15.5 billion from 2024 to 2025, primarily driven by growth in Google Cloud\nPlatform largely from infrastructure and platform services.\nRevenues by Geography\nThe following table presents revenues by geography as a percentage of revenues, determined based on the\naddresses of our customers:\n Year Ended December 31,\n 2024 2025\nUnited States 49 % 48 %\nEMEA(1) 29 % 29 %\nAPAC(1) 16 % 17 %\nOther Americas(1) 6 % 6 %\nHedging gains (losses) 0 % 0 %\n(1) Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America (\"Other\nAmericas\").\nFor additional information, see Note 2 of the Notes to Consolidated Financial Statements included in Item 8 of this\nAnnual Report on Form 10-K.\nCosts and Expenses\nTable of Contents Alphabet Inc.\n34.", - "path": "GOOG 10-K 2025.pdf/p35", - "metadata": { - "length": 2611, - "summary": "YouTube ads YouTube ads revenues increased $4.2 billion from 2024 to 2025. The growth was driven by our direct response advertising products followed by our brand advertising products, both of which benefited from increased spending by our advertisers. Google Network Google Ne...", - "page_nums": [ - 35 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 35, "artifact_ref": "page_citation_assets/page-35.png", @@ -871,24 +401,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c131c8d7-8dd8-58d5-9315-89ae65441d67", - "type": "page", - "content": "Cost of Revenues\nThe following table presents cost of revenues, including TAC (in millions, except percentages):\n Year Ended December 31,\n 2024 2025\nTAC $ 54,900 $ 59,926\nOther cost of revenues 91,406 102,609\nTotal cost of revenues $ 146,306 $ 162,535\nTotal cost of revenues as a percentage of revenues 42 % 40 %\nCost of revenues increased $16.2 billion from 2024 to 2025 due to an increase in other cost of revenues and TAC\nof $11.2 billion and $5.0 billion, respectively.\nThe increase in TAC from 2024 to 2025 was largely due to an increase in TAC paid to distribution partners,\nprimarily driven by growth in revenues subject to TAC. The TAC rate decreased from 20.7% to 20.3% from 2024 to\n2025, primarily due to a revenue mix shift from Google Network properties to Google Search & other properties. The\nTAC rates on Google Search & other and Google Network revenues were substantially consistent from 2024 to 2025.\nThe increase in other cost of revenues from 2024 to 2025 was primarily due to increases in content acquisition\ncosts, largely for YouTube, depreciation expense, and other technical infrastructure operations costs.\nResearch and Development\nThe following table presents research and development expenses (in millions, except percentages):\n Year Ended December 31,\n 2024 2025\nResearch and development expenses $ 49,326 $ 61,087\nResearch and development expenses as a percentage of revenues 14 % 15 %\nResearch and development expenses increased $11.8 billion from 2024 to 2025, primarily driven by increases in\nemployee compensation expenses of $6.9 billion and depreciation expense of $2.4 billion. The increase in employee\ncompensation expenses was primarily driven by an incr ease in SBC exp enses of $4.2 billion, w hich included an\nincrease in a valuation-based compensation charge related to Waymo.\nSales and Marketing\nThe following table presents sales and marketing expenses (in millions, except percentages):\n Year Ended December 31,\n 2024 2025\nSales and marketing expenses $ 27,808 $ 28,693\nSales and marketing expenses as a percentage of revenues 8 % 7 %\nSales and marketing expenses increased $885 million from 2024 to 2025, primarily driven by an increase in\nadvertising and promotional activities of $1.2 billion, partially offset by a decrease in employee compensation expenses\nof $214 million.\nGeneral and Administrative\nThe following table presents general and administrative expenses (in millions, except percentages):\n Year Ended December 31,\n 2024 2025\nGeneral and administrative expenses $ 14,188 $ 21,482\nGeneral and administrative expenses as a percentage of revenues 4 % 5 %\nGeneral and administrative expenses increased $7.3 billion from 2024 to 2025, primarily driven by an increase in\nexpenses related to legal and other matters of $6.2 billion, largely the result of the $3.5 billion EC fine accrued in the\nthird quarter of 2025 and a $1.4 billion legal accrual made in the second quarter of 2025.\nTable of Contents Alphabet Inc.\n35.", - "path": "GOOG 10-K 2025.pdf/p36", - "metadata": { - "length": 2987, - "summary": "Cost of Revenues The following table presents cost of revenues, including TAC (in millions, except percentages): Year Ended December 31, 2024 2025 TAC $ 54,900 $ 59,926 Other cost of revenues 91,406 102,609 Total cost of revenues $ 146,306 $ 162,535 Total cost of revenues as a...", - "page_nums": [ - 36 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 36, "artifact_ref": "page_citation_assets/page-36.png", @@ -896,24 +409,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f9fef096-a6c6-5efb-8cf1-93f94e9cfa2f", - "type": "page", - "content": "Segment Profitability\nWe report our segment results as Google Services, Google Cloud, and Other Bets. Additionally, certain costs are\nnot allocated to our segments because they represent Alphabet-level activities. For further details on our segments,\nsee Part I, Item 1 Business and Note 15 of the Notes to Consolidated Financial Statements included in Item 8 of this\nAnnual Report on Form 10-K.\nThe following table presents segment operating income (loss) (in millions).\nYear Ended December 31,\n2024 2025\nOperating income (loss):\nGoogle Services $ 121,263 $ 139,404\nGoogle Cloud 6,112 13,910\nOther Bets (4,444) (7,515)\nAlphabet-level activities(1) (10,541) (16,760)\nTotal income from operations $ 112,390 $ 129,039\n(1) Alphabet-level activities primarily reflect expenses related to our shared AI research and development.\nGoogle Services\nGoogle Services operating income increased $18.1 billion from 2024 to 2025. The increase in operating income\nwas primarily driven by an increase in revenues, partially offset by an increase in expenses related to legal and other\nmatters, TAC, and content acquisition costs.\nGoogle Cloud\nGoogle Cloud operating income increased $7.8 billion from 2024 to 2025. The increase in operating income was\nprimarily driven by an increase in revenues, partially offset by increases in usage costs for technical infrastructure and\nemployee compensation expenses.\nOther Bets\nOther Bets operating loss increased $3.1 billion from 2024 to 2025. The increase in operating loss was primarily\ndriven by an increase in employee compensation expenses largely due to an increase in a valuation-based\ncompensation charge related to Waymo.\nOther Income (Expense), Net\nThe following table presents OI&E, (in millions):\n Year Ended December 31,\n 2024 2025\nInterest income $ 4,482 $ 4,337\nInterest expense (268) (736)\nForeign currency exchange gain (loss), net (409) (382)\nGain (loss) on debt securities, net (1,043) 540\nGain (loss) on equity securities, net 3,714 24,080\nIncome (loss) and impairment from equity method investments, net (188) 281\nOther 1,137 1,667\nOther income (expense), net $ 7,425 $ 29,787\nOI&E, net increased $22.4 billion from 2024 to 2025, primarily due to increases in net unrealized gains on equity\nsecurities resulting from fair value adjustments on non-marketable equity securities.\nFor additional information, see Note 3 and Note 7 of the Notes to Consolidated Financial Statements included in\nItem 8 of this Annual Report on Form 10-K.\nTable of Contents Alphabet Inc.\n36.", - "path": "GOOG 10-K 2025.pdf/p37", - "metadata": { - "length": 2532, - "summary": "Segment Profitability We report our segment results as Google Services, Google Cloud, and Other Bets. Additionally, certain costs are not allocated to our segments because they represent Alphabet-level activities. For further details on our segments, see Part I, Item 1 Busines...", - "page_nums": [ - 37 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 37, "artifact_ref": "page_citation_assets/page-37.png", @@ -921,24 +417,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_306844e4-279a-5b2f-9db1-cf5e10edc105", - "type": "page", - "content": "Provision for Income Taxes\nThe following table presents provision for income taxes (in millions, except effective tax rate):\n Year Ended December 31,\n 2024 2025\nIncome before provision for income taxes $ 119,815 $ 158,826\nProvision for income taxes $ 19,697 $ 26,656\nEffective tax rate 16.4 % 16.8 %\nThe effective tax rate increased from 2024 to 2025. This increase was primarily due to a decrease in the US\nFederal Foreign Derived Intangible Income tax deduction, a non-deductible EC fine and legal settlement in the US,\npartially offset by changes in prior period tax positions.\nChanges to US tax law enacted on July 4, 2025, allow for immediate expensing of domestic research and\nexperimentation costs, accelerated depreciation on eligible capital expenditures, and other tax law changes impacting\n2025 with certain changes effective in 2026. These changes are reflected in our results for the year ended\nDecember 31, 2025.\nThe OECD is coordinating negotiations among more than 140 countries with the goal of achieving consensus\naround substantial changes to international tax policies, including the implementation of a minimum global effective tax\nrate of 15%. Some countries have already implemented the legislation effective January 1, 2024 . This did not have a\nmaterial effect on our income tax provision for the 2025 fiscal year.\nIn January 2026, the OECD introduced new guidance including a \"Side-by-Side Safe Harbor\" which, if elected,\nexempts U.S. domestic operations from being taxed by global minimum tax rules. However, it does not exempt foreign\nsubsidiaries from local minimum tax requirements if implemented. As more countries enact these global minimum tax\nrules, our effective tax rate and cash tax payments could increase.\nFinancial Condition\nCash, Cash Equivalents, and Marketable Securities\nAs of December 31, 2025, we had $126.8 billion in cash, cash equivalents, and short-term marketable securities.\nCash equivalents and marketable securities a re comprised of time deposits, money market funds, highly liquid\ngovernment bonds, corporate debt securities, mortgage-backed and asset-backed securities, and marketable equity\nsecurities.\nSources, Uses of Cash and Related Trends\nOur principal sources of liquidity are cash, cash equivalents, and marketable securities, as well as the cash flow\nthat we generate from operations. The primary use of capital continues to be to invest for the long-term growth of the\nbusiness. We regularly evaluate our cash and capital structure, including the size, pace, and form of capital return to\nstockholders.\nThe following table presents cash flows (in millions):\n Year Ended December 31,\n 2024 2025\nNet cash provided by operating activities $ 125,299 $ 164,713\nNet cash used in investing activities $ (45,536) $ (120,291)\nNet cash used in financing activities $ (79,733) $ (37,388)\nCash Provided by Operating Activities\nOur largest source of cash provided by operations are advertising revenues generated by Google Search & other\nproperties, YouTube properties, and Google Network properties. In Google Services, we also generate cash through\nconsumer subscriptions, the sale of apps and in-app purchases, and devices. In Google Cloud, we generate cash\nthrough consumption-based fees and subscriptions for infrastructure, platform, applications, and other cloud services.\nOur primary uses of cash from operating activities include payments to distribution and Google Network partners,\nto employees for compensation, and to content providers. Other uses of cash from operating activities include\npayments to suppliers for devices, to tax authorities for income taxes, and other general corporate expenditures.\nTable of Contents Alphabet Inc.\n37.", - "path": "GOOG 10-K 2025.pdf/p38", - "metadata": { - "length": 3708, - "summary": "Provision for Income Taxes The following table presents provision for income taxes (in millions, except effective tax rate): Year Ended December 31, 2024 2025 Income before provision for income taxes $ 119,815 $ 158,826 Provision for income taxes $ 19,697 $ 26,656 Effective ta...", - "page_nums": [ - 38 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 38, "artifact_ref": "page_citation_assets/page-38.png", @@ -946,24 +425,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_19619cb9-42b5-5565-a6d3-45f1712002bb", - "type": "page", - "content": "Net cash provided by operating activities increased from 2024 to 2025 due to an increase in cash received from\ncustomers, partially offset by an increase in cash payments for cost of revenues and operating expenses.\nCash Used in Investing Activities\nCash provided by investing activities consists primarily of maturities and sales of investments in marketable and\nnon-marketable securities. Cash used in investing activities consists primarily of purchases of marketable and non-\nmarketable securities, purchases of property and equipment, and payments for acquisitions.\nNet cash used in investing activities increased from 2024 to 2025, primarily due to an increase in purchases of\nproperty and equipment, driven by investments in technical infrastructure, and a decrease in maturities and sales of\nmarketable securities.\nCash Used in Financing Activities\nCash provided by financing activities consists primarily of proceeds from issuance of debt and proceeds from the\nsale of interests in consolidated entities. Cash used in financing activities consists primarily of repurchases of stock,\nrepayments of debt, net payments related to stock-based award activities, and dividend payments.\nNet cash used in financing activities decreased from 2024 to 2025 due to an increase in proceeds from issuance\nof debt and a decrease in repurchases of stock, partially offset by repayments of debt.\nLiquidity and Material Cash Requirements\nWe expect existing cash, cash equivalents, short-term marketable securities, and cash flows from operations and\nfinancing activities to continue to be sufficient to fund our operating activities and cash commitments for investing and\nfinancing activities for at least the next 12 months, and thereafter for the foreseeable future.\nCapital Expenditures and Leases\nWe make investments in land, buildings, and servers and network equipment through purchases of property and\nequipment and lease arrangements to provide capacity for the growth of our services and products.\nCapital Expenditures\nOur capital investments in property and equipment consist primarily of the following major categories:\n• technical infrastructure, which consists of our investments in servers and network equipment, data center land,\nand building construction and improvements; and\n• office facilities, ground-up development projects, and building improvements.\nAssets not yet in service are those that are not ready for their intended use , including assets in the process of\nconstruction or assembly, and consist primarily of technical infrastructure. The time frame from date of purchase to\nplacement in service of these assets may extend from months to years. For example, our data center construction\nprojects are generally multi-year projects with multiple phases, where we acquire land and buildings, construct\nbuildings, and secure and install servers and network equipment.\nDuring the years ended December 31, 2024 and 2025, we spent $52.5 billion and $91.4 billion on capital\nexpenditures, respectively. In 2026, we expect to significantly increase, relative to 2025, our investment in our technical\ninfrastructure, including servers and network equipment, and data centers. Depreciation of our property and equipment\ncommences when such assets are ready for their intended use. For the years ended December 31, 2024 and 2025,\nour depreciation on property and equipment was $15.3 billion and $21.1 billion, respectively.\nLeases\nAs of December 31, 2025 , the amount of total undiscounted future lease payments under operating leases was\n$18.3 billion, of which $3.3 billion is short-term , and total undiscounted future lease payments under finance leases\nwas $2.9 billion, of which $491 million is short-term.\nAs of December 31, 2025 , we have entered into leases primarily related to data centers that have not yet\ncommenced with short-term and long-term future lease payments of $5.8 billion and $52.7 billion, respectively. These\nleases will commence between 2026 and 2031 with non-cancelable lease terms primarily between one and 25 years.\nIn January 2026, we executed a power purchase agreement which we expect to be accounted for as a lease\nresulting in future payments depending on certain agreement terms of $9.9 billion between 2027 and 2047. If certain\ncontractual conditions for the project are not met, we would instead make a one-time payment of approximately\n$3.5 billion and assume ownership of the power generating assets.\nTable of Contents Alphabet Inc.\n38.", - "path": "GOOG 10-K 2025.pdf/p39", - "metadata": { - "length": 4494, - "summary": "Net cash provided by operating activities increased from 2024 to 2025 due to an increase in cash received from customers, partially offset by an increase in cash payments for cost of revenues and operating expenses. Cash Used in Investing Activities Cash provided by investing...", - "page_nums": [ - 39 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 39, "artifact_ref": "page_citation_assets/page-39.png", @@ -971,24 +433,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ab7c6645-5c85-5fdf-a538-f89a08a3706d", - "type": "page", - "content": "For additional information on leases, see Note 4 of the Notes to Consolidated Financial Statements included in\nItem 8 of this Annual Report on Form 10-K.\nFinancing\nAs of December 31, 2025, we had senior unsecured notes outstanding with a total carrying value of $48.5 billion,\nof which $2.0 billion was short-term. The associated short-term and long-term future interest payments were\n$1.8 billion and $35.7 billion, respectively.\nDuring 2025, we issued $22.5 billion of US dollar-denominated senior unsecured notes and €13.25 billion of euro-\ndenominated senior unsecured notes for general corporate purposes, comprised of the following:\n• May 2025: We issued $5.0 billion of US dollar-denominated fixed-rate senior unsecured notes with a weighted-\naverage coupon rate of 4.89%, and a weighted-average maturity of approximately 24 years. We also issued\n€6.75 billion of euro-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of\n3.31%, and a weighted-average maturity of approximately 14 years.\n• November 2025: We issued $500 million of US dollar-denominated floating-rate senior unsecured notes and\n$17.0 billion of US dollar-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate\nof 4.92% and a weighted-average maturity of approximately 20 years . We also issued €6.5 billion of euro-\ndenominated fixed-rate senior unsecured notes with a weighted-average coupon rate of 3.44% and a\nweighted-average maturity of approximately 16 years.\nAs of December 31, 2025, we had $10.0 billion of revolving credit facilities, $4.0 billion expiring in April 2026 and\n$6.0 billion expiring in April 2030 . No amounts have been borrowed under the credit facilities. We also have a\ncommercial paper program of up to $25.0 billion, which is used for general corporate purposes. As of December 31,\n2025, we had no commercial paper outstanding.\nFor additional information, see Note 6 of the Notes to Consolidated Financial Statements included in Item 8 of this\nAnnual Report on Form 10-K.\nWe use contract manufacturers for our technical infrastructure and device assembly and may supply them with\ncomponents purchased directly from suppliers. Certain of these arrangements result in a portion of the cash received\nfrom and paid to contract manufacturers to be presented as financing activities on the Consolidated Statements of\nCash Flows included in Item 8 of this Annual Report on Form 10-K.\nShare Repurchase Program\nDuring 2025, we repurchased and subsequently retired 240 million shares for $45.4 billion.\nIn April 2024, the company's Board of Directors authorized a $70.0 billion share repurchase program for its Class\nA and Class C shares. In April 2025, the company's Board of Directors authorized an additional $70.0 billion share\nrepurchase program for its Class A and Class C shares. As of December 31, 2025, $69.5 billion remained available for\nClass A and Class C share repurchases.\nFor additional information, see Note 11 of the Notes to Consolidated Financial Statements included in Item 8 of\nthis Annual Report on Form 10-K.\nDividend Program\nDuring the year ended December 31, 2025 , total cash dividends were $4.8 billion for Class A , $703 million for\nClass B, and $4.5 billion for Class C shares, respectively.\nIn April 2025, the company's Board of Directors increased the quarterly cash dividend by 5% to $0.21 per share of\noutstanding Class A, Class B, and Class C shares.\nThe company has declared a quarterly cash dividend in the current quarter, and intends to pay quarterly cash\ndividends in the future, subject to review and approval by the company’s Board of Directors in its sole discretion.\nAccrued Legal and Regulatory\nAs of December 31, 2025, we had short-term accrued legal and regulatory fines and settlements of $15.6 billion.\nThis amount primarily included EC fines, in addition to accruals related to other legal matters and regulatory fines and\nsettlements. For additional information, see Note 10 of the Notes to Consolidated Financial Statements included in\nItem 8 of this Annual Report on Form 10-K.\nTable of Contents Alphabet Inc.\n39.", - "path": "GOOG 10-K 2025.pdf/p40", - "metadata": { - "length": 4123, - "summary": "For additional information on leases, see Note 4 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Financing As of December 31, 2025, we had senior unsecured notes outstanding with a total carrying value of $48.5 billion,...", - "page_nums": [ - 40 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 40, "artifact_ref": "page_citation_assets/page-40.png", @@ -996,24 +441,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9c948915-ba25-5233-9ecb-c6445f38b6e3", - "type": "page", - "content": "Taxes\nAs of December 31, 2025 , we had long-term income taxes payable of $9.5 billion primarily related to\nunrecognized tax benefits. The timing and amount of any payment related to these unrecognized tax benefits are\nuncertain and cannot be estimated.\nPurchase Commitments and Other Contractual Obligations\nWe have material purchase commitments and other contractual obligations primarily related to energy take-or-pay\ncontracts, licenses (including content licenses), and technical infrastructure and inventory orders. As of December 31,\n2025, the total for these commitments was $149.1 billion , of which $113.0 billion was short-term, mostly related to\ntechnical infrastructure and inventory orders . These amounts reflect commitments and obligations through open\npurchase orders as well as the non-cancelable portion or the minimum cancellation fee in certain agreements. For\nthose agreements with variable terms, we do not estimate the non-cancelable obligation beyond any minimum\nquantities and/or pricing as of December 31, 2025. In certain instances, the amount of our contractual obligations may\nchange based on the expected timing of order fulfillment from our suppliers. For additional information related to our\ncontent licenses, see Note 10 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual\nReport on Form 10-K.\nAs of December 31, 2025, we provided backstops in the form of financial guarantees and credit derivatives with\nmaximum potential amount of future payments of $5.7 billion and $16.9 billion, respectively. For additional information\non credit derivatives and financial guarantees, see Note 3 and Note 10 of the Notes to Consolidated Financial\nStatements included in Item 8 of this Annual Report on Form 10-K.\nIn addition, we regularly enter into multi-year, non-cancellable power purchase agreements with third-party\nsuppliers that do not include a minimum dollar commitment. The amounts to be paid under these agreements are\nbased on the actual volumes to be generated and are not readily determinable.\nWe may experience increases in the costs associated with our purchase commitments and other contractual\nobligations as a result of ongoing developments surrounding international trade. For details on risks related to our\nmanufacturing and supply chain and other risks, refer to Part 1, Item 1A, \"Risk Factors\" of this Annual Report on Form\n10-K.\nPending Acquisitions\nIn March 2025, we entered into a definitive agreement to acquire Wiz, Inc. (\"Wiz\"), a leading cloud security\nplatform, for $32.0 billion, subject to closing adjustments, in an all-cash transaction. The acquisition of Wiz is expected\nto close in 2026, subject to customary closing conditions, including the receipt of regulatory approvals.\nIn December 2025, we entered into a definitive agreement to acquire Intersect, which provides data center and\nenergy infrastructure solutions, for $4.8 billion in cash, plus the assumption of debt . The acquisition of Intersect is\nexpected to close in the first half of 2026, subject to customary closing conditions.\nFor additional information, see Note 8 of the Notes to Consolidated Financial Statements included in Item 8 of this\nAnnual Report on Form 10-K.\nCritical Accounting Estimates\nWe prepare our consolidated financial statements in accordance with GAAP. In doing so, we have to make\nestimates and assumptions. Our critical accounting estimates are those estimates that involve a significant level of\nuncertainty at the time the estimate was made, and changes in them have had or are reasonably likely to have a\nmaterial effect on our financial condition or results of operations. Accordingly, actual results could differ materially from\nour estimates. We base our estimates on past experience and other assumptions that we believe are reasonable\nunder the circumstances, and we evaluate these estimates on an ongoing basis. We have reviewed our critical\naccounting estimates with the Audit Committee of our Board of Directors.\nFor a summary of significant accounting policies and the effect on our financial statements, see Note 1 of the\nNotes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.\nFair Value Measurements of Non-Marketable Equity Securities\nWe measure certain financial instruments at fair value on a nonrecurring basis, consisting primarily of our non-\nmarketable equity securities. These investments are accounted for under the measurement alternative method (\"the\nmeasurement alternative\") and are measured at cost, less impairment, subject to upward and downward adjustments\nresulting from observable price changes for identical or similar investments of the same issuer. These adjustments\nrequire quantitative assessments of the fair value of our securities, which may require the use of unobservable inputs.\nTable of Contents Alphabet Inc.\n40.", - "path": "GOOG 10-K 2025.pdf/p41", - "metadata": { - "length": 4890, - "summary": "Taxes As of December 31, 2025 , we had long-term income taxes payable of $9.5 billion primarily related to unrecognized tax benefits. The timing and amount of any payment related to these unrecognized tax benefits are uncertain and cannot be estimated. Purchase Commitments and...", - "page_nums": [ - 41 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 41, "artifact_ref": "page_citation_assets/page-41.png", @@ -1021,24 +449,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2b34ffea-eebd-525d-abc6-af409aa30c78", - "type": "page", - "content": "Adjustments are determined primarily based on a market approach as of the transaction date and involve the use of\nestimates using the best information available, which may include cash flow projections or other available market data.\nNon-marketable equity securities are also evaluated for impairment, based on qualitative factors including the\ncompanies' financial and liquidity position and access to capital resources, among others. When indicators of\nimpairment exist, we prepare quantitative measurements of the fair value of our equity investments using a market\napproach or an income approach, which requires judgment and the use of unobservable inputs, including discount\nrates, investee revenues and costs, and comparable market data of private and public companies, among others.\nWhen the quantitative remeasurements of fair value indicate an impairment exists, we write down the investment to its\ncurrent fair value.\nProperty and Equipment\nWe assess the reasonableness of the useful lives of our property and equipment periodically or when events\nindicate a change is necessary. To determine the useful lives of our technical infrastructure, we rely on multiple inputs,\nincluding historical asset performance, expected technology advancements , and our future infrastructure deployment\nplans. Any change in the estimated useful lives is recognized on a prospective basis.\nIncome Taxes\nWe are subject to income taxes in the US and foreign jurisdictions. Significant judgment is required in evaluating\nour uncertain tax positions and determining our provision for income taxes.\nRecording an uncertain tax position involves various qualitative considerations, including evaluation of\ncomparable and resolved tax exposures, applicability of tax laws, and likelihood of settlement. We evaluate uncertain\ntax positions periodically, considering changes in facts and circumstances, such as new regulations or recent judicial\nopinions, as well as the status of audit activities by taxing authorities. Although we believe we have adequately\nreserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not\nbe different. To the extent that the final tax outcome of these matters is different than the amounts recorded, such\ndifferences will affect the provision for income taxes and the effective tax rate in the period in which such determination\nis made.\nThe provision for income taxes includes the effect of reserve provisions and changes to reserves as well as the\nrelated net interest and penalties. In addition, we are subject to the continuous examination of our income tax returns\nby the Internal Revenue Service (IRS) and other tax authorities which may assert assessments against us. We\nregularly assess the likelihood of adverse outcomes resulting from these examinations and assessments to determine\nthe adequacy of our provision for income taxes.\nLoss Contingencies\nWe are subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings,\nand consent orders involving competition, intellectual property, data privacy and security, tax and related compliance,\nlabor and employment, commercial disputes, content generated by our users, goods and services offered by\nadvertisers or publishers using our platforms, personal injury, consumer protection, and other matters. Certain of these\nmatters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we\nbelieve that it is probable that a loss has been incurred and the amount can be reasonably estimated. If we determine\nthat a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the possible loss in Note\n10 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.\nWe evaluate, on a regular basis, developments in our legal matters that could affect the amount of liability that\nhas been previously accrued, and the matters and related reasonably possible losses disclosed, and make\nadjustments as necessary. Significant judgment is required to determine both the likelihood and the estimated amount\nof a loss related to such matters. Until the final resolution of such matters, there may be an exposure to loss in excess\nof the amount recorded, and such amounts could be material.\nITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\nWe are exposed to financial market risk s, including changes in foreign currency exchange rates, interest rates,\nand equity investment risks.\nForeign Currency Exchange Risk\nWe transact business globally in multiple currencies. International revenues, foreign-denominated monetary\nassets and liabilities, and investments in foreign subsidiaries expose us to the risk of fluctuations in foreign exchange\nrates against the US dollar. Principal currency exposures include the Australian dollar, British pound, Canadian\ndollar, Euro, and Japanese yen.\nTable of Contents Alphabet Inc.\n41.", - "path": "GOOG 10-K 2025.pdf/p42", - "metadata": { - "length": 5025, - "summary": "Adjustments are determined primarily based on a market approach as of the transaction date and involve the use of estimates using the best information available, which may include cash flow projections or other available market data. Non-marketable equity securities are also e...", - "page_nums": [ - 42 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 42, "artifact_ref": "page_citation_assets/page-42.png", @@ -1046,24 +457,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_644ef73c-ec3e-549d-86d2-62a8b3b52031", - "type": "page", - "content": "We monitor our foreign currency exposures and hedge foreign exchange risks with derivative and non-derivative\ninstruments, including forwards, options (including collars), cross-currency swaps, and foreign currency-denominated\ndebt. Gains or losses on these foreign currency exposures are generally offset by corresponding gains or losses on the\nderivative and non-derivative instruments.\nConsidering historical trends in foreign exchange rates, we determined that it was reasonably possible that\nadverse changes in exchange rates of 10% could be experienced. We performed a sensitivity analysis on our foreign\ncurrency exposures to estimate the potential impact of this adverse 10% change. The estimated effects on our\nfinancial position would be as follows (in millions):\nAs of December 31,\nImpact 2024 2025\nForeign currency risk\nForeign denominated monetary assets and liabilities(1) OI&E $ 135 $ 671\nCash flow hedges of foreign currency revenue(2) AOCI $ 1,627 $ 2,096\nNet investment hedges of investments in foreign subsidiaries(3) AOCI $ 660 $ 2,942\n(1) After consideration of the effect of derivative contracts.\n(2) The change in accumulated other comprehensive income (AOCI) would be expected to offset a corresponding foreign\ncurrency change in forecasted hedged revenues when recognized.\n(3) The change in AOCI would be expected to offset a corresponding foreign currency translation gain or loss from our\ninvestments in foreign subsidiaries.\nInterest Rate Risk\nWe are exposed to interest rate risk related to our investment portfolio and outstanding debt.\nOur Corporate Treasury investment strategy is to achieve a return that w ill allow us to preserve capital and\nmaintain liquidity. By policy, we limit the amount of credit exposure within our investment portfolio to any one issuer.\nOur investments in both fixed rate and floating rate interest earning securities carry a degree of interest rate risk. Fixed\nrate securities may have their fair market value adversely affected due to a rise in interest rates, while floating rate\nsecurities may produce less income than predicted if interest rates fall. Unrealized gains and losses on our marketable\ndebt securities are primarily due to interest rate fluctuations as compared to interest rates at the time of purchase. For\ncertain fixed and floating rate debt securities, we have elected the fair value option for which changes in fair value are\nrecorded in OI&E. We measure securities for which we have not elected the fair value option at fair value with gains\nand losses recorded in AOCI until the securities are sold, less any expected credit losses.\nWe use value-at-risk (VaR) analysis to determine the potential effect of fluctuations in interest rates on the value\nof our investment portfolio. The VaR is the expected loss in fair value, for a given confidence interval, for our\ninvestment portfolio due to adverse movements in interest rates. We use a variance/covariance VaR model with 95%\nconfidence interval. The estimated one-day loss in fair value of our investment portfolio as of December 31, 2024 and\n2025 are shown below (in millions):\n As of December 31,\n12-Month Average\nAs of December 31,\n 2024 2025 2024 2025\nRisk category - interest rate $ 208 $ 162 $ 230 $ 184\nActual future gains and losses associated with our investment portfolio may differ materially from the sensitivity\nanalyses performed as of December 31, 2024 and 2025 due to the inherent limitations associated with predicting the\ntiming and amount of changes in interest rates and our actual exposures and positions. VaR analysis is not intended to\nrepresent actual losses but is used as a risk estimation.\nAdditionally, we had senior unsecured notes outstanding with a total carrying value of $11.9 billion and $48.5\nbillion as of December 31, 2024 and 2025, respectively. As our senior unsecured notes primarily bear interest at fixed\nrates and are recorded at amortized cost, interest rate fluctuations generally do not affect our consolidated financial\nstatements. However, the fair value of the notes will fluctuate with movement in market interest rates.\nEquity Investment Risk\nOur marketable and non-marketable equity securities are subject to a wide variety of market-related risks that\ncould substantially reduce or increase the fair value of our holdings.\nTable of Contents Alphabet Inc.\n42.", - "path": "GOOG 10-K 2025.pdf/p43", - "metadata": { - "length": 4350, - "summary": "We monitor our foreign currency exposures and hedge foreign exchange risks with derivative and non-derivative instruments, including forwards, options (including collars), cross-currency swaps, and foreign currency-denominated debt. Gains or losses on these foreign currency ex...", - "page_nums": [ - 43 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 43, "artifact_ref": "page_citation_assets/page-43.png", @@ -1071,24 +465,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bc3d7d47-ac2d-530a-9927-d48689b805ce", - "type": "page", - "content": "Our marketable equity securities are primarily publicly traded stocks or funds and our non-marketable equity\nsecurities are primarily investments in privately held companies , some of which are in the startup or development\nstages.\nWe record marketable equity securities at fair value subject to market price volatility. These securities represent\n$5.1 billion and $6.3 billion of our investments as of December 31, 2024 and 2025, respectively. A hypothetical adverse\nprice change of 10% on our December 31, 2025 balance would decrease the fair value of marketable equity securities\nby $631 million . From time to time, we may enter into derivatives to hedge the market price risk on certain of our\nmarketable equity securities.\nOur non-marketable equity securities not accounted for under the equity method are primarily adjusted to fair\nvalue for observable transactions for identical or similar investments of the same issuer or impairment (referred to as\nthe measurement alternative). The fair value measured at the time of the observable transaction is not necessarily an\nindication of the current fair value as of the balance sheet date. These investments, especially those that are in the\nearly stages, are inherently risky because the technologies or products these companies have under development are\ntypically in the early phases and may never materialize, and they may experience a decline in financial condition,\nwhich could result in a loss of a substantial part of our investment in these companies. Valuations of our equity\ninvestments in private companies are inherently more complex due to the lack of readily available market data and\nobservable transactions at lower valuations could result in significant losses. In addition, global economic conditions\ncould result in additional volatility. The success of our investment in any private company is also typically dependent on\nthe likelihood of our ability to realize appreciation in the value of investments through liquidity events such as public\nofferings, acquisitions, private sales, or other market events. Changes in the valuation of non-marketable equity\nsecurities may not directly correlate with changes in valuation of marketable equity securities. As of December 31,\n2024 and 2025, the carrying value of our non-marketable equity securities, which were accounted for under the\nmeasurement alternative, was $35.2 billion and $64.1 billion, respectively.\nThe carrying values of our equity method investments, which totaled approximately $2.0 billion and $2.5 billion as\nof December 31, 2024 and 2025, respectively, generally do not fluctuate based on market price changes. However,\nthese investments could be impaired if the carrying value exceeds the fair value and is not expected to recover.\nFor additional information about our equity investments, see Note 1 and Note 3 of the Notes to Consolidated\nFinancial Statements included in Item 8 of this Annual Report on Form 10-K.\nTable of Contents Alphabet Inc.\n43.", - "path": "GOOG 10-K 2025.pdf/p44", - "metadata": { - "length": 2997, - "summary": "Our marketable equity securities are primarily publicly traded stocks or funds and our non-marketable equity securities are primarily investments in privately held companies , some of which are in the startup or development stages. We record marketable equity securities at fai...", - "page_nums": [ - 44 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 44, "artifact_ref": "page_citation_assets/page-44.png", @@ -1096,24 +473,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7b43b029-d6c4-50b1-b6e5-9fc2398f12bd", - "type": "page", - "content": "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA\nAlphabet Inc.\nINDEX TO CONSOLIDATED FINANCIAL STATEMENTS\n Page\nReports of Independent Registered Public Accounting Firm (PCAOB ID: 42) 45\nFinancial Statements:\nConsolidated Balance Sheets 48\nConsolidated Statements of Income 49\nConsolidated Statements of Comprehensive Income 50\nConsolidated Statements of Stockholders’ Equity 51\nConsolidated Statements of Cash Flows 52\nNotes to Consolidated Financial Statements 53\nTable of Contents Alphabet Inc.\n44.", - "path": "GOOG 10-K 2025.pdf/p45", - "metadata": { - "length": 504, - "summary": "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Alphabet Inc. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42) 45 Financial Statements: Consolidated Balance Sheets 48 Consolidated Statements of Income 4...", - "page_nums": [ - 45 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 45, "artifact_ref": "page_citation_assets/page-45.png", @@ -1121,24 +481,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_aa6113a5-90e2-576e-b29e-89e195b830a4", - "type": "page", - "content": "REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\nTo the Stockholders and the Board of Directors of Alphabet Inc.\nOpinion on the Financial Statements\nWe have audited the accompanying consolidated balance sheets of Alphabet Inc. (the Company) as of December 31,\n2024 and 2025, the related consolidated statements of income, comprehensive income, stockholders' equity and cash\nflows for each of the three years in the period ended December 31, 2025 , and the related notes and financial\nstatement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”). In\nour opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the\nCompany at December 31, 2024 and 2025, and the results of its operations and its cash flows for each of the three\nyears in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United\nStates) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria\nestablished in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the\nTreadway Commission (2013 framework), and our report dated February 4, 2026 expressed an unqualified opinion\nthereon.\nBasis for Opinion\nThese financial statements are the responsibility of the Company's management. Our responsibility is to express an\nopinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with\nthe PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and\nperform the audit to obtain reasonable assurance about whether the financial statements are free of material\nmisstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material\nmisstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to\nthose risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in\nthe financial statements. Our audits also included evaluating the accounting principles used and significant estimates\nmade by management, as well as evaluating the overall presentation of the financial statements. We believe that our\naudits provide a reasonable basis for our opinion.\nCritical Audit Matter\nThe critical audit matter communicated below is a matter arising from the current period audit of the financial\nstatements that was communicated or required to be communicated to the audit committee and that: (1) relates to\naccounts or disclosures that are material to the financial statements and (2) involved our especially challenging,\nsubjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion\non the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter\nbelow, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\nTable of Contents Alphabet Inc.\n45.", - "path": "GOOG 10-K 2025.pdf/p46", - "metadata": { - "length": 3504, - "summary": "REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Alphabet Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Alphabet Inc. (the Company) as of December 31, 2024 and 2...", - "page_nums": [ - 46 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 46, "artifact_ref": "page_citation_assets/page-46.png", @@ -1146,24 +489,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d715bd54-bc34-5771-9c7c-391b0fe6d7c2", - "type": "page", - "content": "Loss Contingencies\nDescription of\nthe Matter\nThe Company is subject to claims, lawsuits, regulatory and government inquiries and\ninvestigations, other proceedings, and consent orders. As described in Note 10 to the consolidated\nfinancial statements, such claims, lawsuits, regulatory and government inquiries and investigations,\nother proceedings, and consent orders could result in adverse consequences.\nSignificant judgment is required to determine both the likelihood and the estimated amount of a\nloss related to such matters. Auditing management’s accounting for and disclosure of loss\ncontingencies from these matters involved challenging and subjective auditor judgment in\nassessing the Company’s evaluation of the probability of a loss, and the estimated amount or\nrange of loss.\nHow We\nAddressed the\nMatter in Our\nAudit\nWe tested relevant controls over the identified risks associated with management’s accounting for\nand disclosure of these matters. This included controls over management’s assessment of the\nprobability of incurrence of a loss and whether the loss or range of loss was reasonably estimable\nand the development of related disclosures.\nOur audit procedures included, among others, gaining an understanding of previous rulings and the\nstatus of ongoing lawsuits, reviewing letters from internal and external legal counsel addressing the\nmatters, meeting with internal legal counsel to discuss the allegations, and obtaining a\nrepresentation letter from management on these matters. We also evaluated the Company’s\ndisclosures in relation to these matters.\n/s/ Ernst & Young LLP\nWe have served as the Company's auditor since 1999.\nSan Jose, California\nFebruary 4, 2026\nTable of Contents Alphabet Inc.\n46.", - "path": "GOOG 10-K 2025.pdf/p47", - "metadata": { - "length": 1728, - "summary": "Loss Contingencies Description of the Matter The Company is subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings, and consent orders. As described in Note 10 to the consolidated financial statements, such claims, lawsuits, regu...", - "page_nums": [ - 47 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 47, "artifact_ref": "page_citation_assets/page-47.png", @@ -1171,24 +497,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_606064fa-88a1-5a11-bf4c-98ea3e633168", - "type": "page", - "content": "REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\nTo the Stockholders and the Board of Directors of Alphabet Inc.\nOpinion on Internal Control Over Financial Reporting\nWe have audited Alphabet Inc.’s internal control over financial reporting as of December 31, 2025 , based on criteria\nestablished in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the\nTreadway Commission (2013 framework) (the COSO criteria). In our opinion, Alphabet Inc. (the Company) maintained,\nin all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO\ncriteria.\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United\nStates) (PCAOB), the 2025 consolidated financial statements of the Company and our report dated February 4, 2026\nexpressed an unqualified opinion thereon.\nBasis for Opinion\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its\nassessment of the effectiveness of internal control over financial reporting included in the accompanying\nManagement’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the\nCompany’s internal control over financial reporting based on our audit. We are a public accounting firm registered with\nthe PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and\nperform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was\nmaintained in all material respects.\nOur audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a\nmaterial weakness exists, testing and evaluating the design and operating effectiveness of internal control based on\nthe assessed risk, and performing such other procedures as we considered necessary in the circumstances. We\nbelieve that our audit provides a reasonable basis for our opinion.\nDefinition and Limitations of Internal Control Over Financial Reporting\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding\nthe reliability of financial reporting and the preparation of financial statements for external purposes in accordance with\ngenerally accepted accounting principles. A company’s internal control over financial reporting includes those policies\nand procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the\ntransactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are\nrecorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting\nprinciples, and that receipts and expenditures of the company are being made only in accordance with authorizations\nof management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely\ndetection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on\nthe financial statements.\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.\nAlso, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become\ninadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may\ndeteriorate.\n/s/ Ernst & Young LLP\nSan Jose, California\nFebruary 4, 2026\nTable of Contents Alphabet Inc.\n47.", - "path": "GOOG 10-K 2025.pdf/p48", - "metadata": { - "length": 3923, - "summary": "REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Alphabet Inc. Opinion on Internal Control Over Financial Reporting We have audited Alphabet Inc.’s internal control over financial reporting as of December 31, 2025 , base...", - "page_nums": [ - 48 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 48, "artifact_ref": "page_citation_assets/page-48.png", @@ -1196,24 +505,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_003f60ad-ff1b-51e8-a23f-ecddeb9735de", - "type": "page", - "content": "Alphabet Inc.\nCONSOLIDATED BALANCE SHEETS\n(in millions, except par value per share amounts)\nAs of December 31,\n2024 2025\nAssets\nCurrent assets:\nCash and cash equivalents $ 23,466 $ 30,708\nMarketable securities 72,191 96,135\nTotal cash, cash equivalents, and marketable securities 95,657 126,843\nAccounts receivable, net 52,340 62,886\nOther current assets 15,714 16,309\nTotal current assets 163,711 206,038\nNon-marketable securities 37,982 68,687\nDeferred income taxes 17,180 9,113\nProperty and equipment, net 171,036 246,597\nOperating lease assets 13,588 15,221\nGoodwill 31,885 33,380\nOther non-current assets 14,874 16,245\nTotal assets $ 450,256 $ 595,281\nLiabilities and Stockholders’ Equity\nCurrent liabilities:\nAccounts payable $ 7,987 $ 12,200\nAccrued compensation and benefits 15,069 17,546\nAccrued expenses and other current liabilities 51,228 55,557\nAccrued revenue share 9,802 10,864\nDeferred revenue 5,036 6,578\nTotal current liabilities 89,122 102,745\nLong-term debt 10,883 46,547\nIncome taxes payable, non-current 8,782 9,531\nOperating lease liabilities 11,691 12,744\nOther long-term liabilities 4,694 8,449\nTotal liabilities 125,172 180,016\nCommitments and Contingencies (Note 10)\nStockholders’ equity:\nPreferred stock, $0.001 par value per share, 100 shares authorized; no\nshares issued and outstanding 0 0\nClass A, Class B, and Class C stock and additional paid-in capital, $0.001\npar value per share: 300,000 shares authorized (Class A 180,000, Class B\n60,000, Class C 60,000); 12,211 (Class A 5,835, Class B 861, Class C\n5,515) and 12,088 (Class A 5,822, Class B 837, Class C 5,429) shares\nissued and outstanding 84,800 93,126\nAccumulated other comprehensive income (loss) (4,800) (1,916)\nRetained earnings 245,084 324,055\nTotal stockholders’ equity 325,084 415,265\nTotal liabilities and stockholders’ equity $ 450,256 $ 595,281\nSee accompanying notes.\nTable of Contents Alphabet Inc.\n48.", - "path": "GOOG 10-K 2025.pdf/p49", - "metadata": { - "length": 1957, - "summary": "Alphabet Inc. CONSOLIDATED BALANCE SHEETS (in millions, except par value per share amounts) As of December 31, 2024 2025 Assets Current assets: Cash and cash equivalents $ 23,466 $ 30,708 Marketable securities 72,191 96,135 Total cash, cash equivalents, and marketable securiti...", - "page_nums": [ - 49 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 49, "artifact_ref": "page_citation_assets/page-49.png", @@ -1221,24 +513,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4f85c732-3969-5808-ad1c-0cd1554991ba", - "type": "page", - "content": "Alphabet Inc.\nCONSOLIDATED STATEMENTS OF INCOME\n(in millions, except per share amounts)\n Year Ended December 31,\n 2023 2024 2025\nRevenues $ 307,394 $ 350,018 $ 402,836\nCosts and expenses:\nCost of revenues 133,332 146,306 162,535\nResearch and development 45,427 49,326 61,087\nSales and marketing 27,917 27,808 28,693\nGeneral and administrative 16,425 14,188 21,482\nTotal costs and expenses 223,101 237,628 273,797\nIncome from operations 84,293 112,390 129,039\nOther income (expense), net 1,424 7,425 29,787\nIncome before income taxes 85,717 119,815 158,826\nProvision for income taxes 11,922 19,697 26,656\nNet income $ 73,795 $ 100,118 $ 132,170\nBasic net income per share (Note 12) $ 5.84 $ 8.13 $ 10.91\nDiluted net income per share (Note 12) $ 5.80 $ 8.04 $ 10.81\nSee accompanying notes.\nTable of Contents Alphabet Inc.\n49.", - "path": "GOOG 10-K 2025.pdf/p50", - "metadata": { - "length": 850, - "summary": "Alphabet Inc. CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share amounts) Year Ended December 31, 2023 2024 2025 Revenues $ 307,394 $ 350,018 $ 402,836 Costs and expenses: Cost of revenues 133,332 146,306 162,535 Research and development 45,427 49,326 61,087 Sale...", - "page_nums": [ - 50 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 50, "artifact_ref": "page_citation_assets/page-50.png", @@ -1246,24 +521,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1eb5d071-e3c5-543d-ac61-7c7bfd5da44a", - "type": "page", - "content": "Alphabet Inc.\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n(in millions)\n Year Ended December 31,\n 2023 2024 2025\nNet income $ 73,795 $ 100,118 $ 132,170\nOther comprehensive income (loss):\nChange in foreign currency translation adjustment, net of income tax\nbenefit (expense) of $63, $(49) and $180 735 (1,673) 2,522\nAvailable-for-sale investments:\nChange in net unrealized gains (losses) 1,344 (116) 1,146\nLess: reclassification adjustment for net (gains) losses included in\nnet income 1,168 782 (169)\nNet change, net of income tax benefit (expense) of $(698), $(190),\nand $(276) 2,512 666 977\nCash flow hedges:\nChange in net unrealized gains (losses) 168 775 (779)\nLess: reclassification adjustment for net (gains) losses included in\nnet income (214) (166) 164\nNet change, net of income tax benefit (expense) of $2, $(151), and\n$174 (46) 609 (615)\nOther comprehensive income (loss) 3,201 (398) 2,884\nComprehensive income $ 76,996 $ 99,720 $ 135,054\nSee accompanying notes.\nTable of Contents Alphabet Inc.\n50.", - "path": "GOOG 10-K 2025.pdf/p51", - "metadata": { - "length": 1037, - "summary": "Alphabet Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Year Ended December 31, 2023 2024 2025 Net income $ 73,795 $ 100,118 $ 132,170 Other comprehensive income (loss): Change in foreign currency translation adjustment, net of income tax benefit (expense)...", - "page_nums": [ - 51 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 51, "artifact_ref": "page_citation_assets/page-51.png", @@ -1271,24 +529,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2fd44f68-c230-5661-bcea-91a2daf07bbc", - "type": "page", - "content": "Alphabet Inc.\nCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY\n(in millions)\n\nClass A, Class B, Class C\nStock and\nAdditional Paid-In Capital\nAccumulated\nOther\nComprehensive\nIncome (Loss)\nRetained\nEarnings\nTotal\nStockholders’\nEquity Shares Amount\nBalance as of December 31, 2022 12,849 $ 68,184 $ (7,603) $ 195,563 $ 256,144\nStock issued 139 0 0 0 0\nStock-based compensation 0 22,578 0 0 22,578\nTax withholding related to vesting of\nrestricted stock units and other 0 (10,164) 0 9 (10,155)\nRepurchases of stock (528) (4,064) 0 (58,120) (62,184)\nNet income 0 0 0 73,795 73,795\nOther comprehensive income (loss) 0 0 3,201 0 3,201\nBalance as of December 31, 2023 12,460 76,534 (4,402) 211,247 283,379\nStock issued 130 0 0 0 0\nStock-based compensation 0 22,937 0 0 22,937\nTax withholding related to vesting of\nrestricted stock units and other 0 (12,507) 0 (16) (12,523)\nRepurchases of stock (379) (3,359) 0 (58,688) (62,047)\nDividends and dividend equivalents\ndeclared ($0.60 per share) 0 41 0 (7,577) (7,536)\nSale of interest in consolidated entities 0 1,154 0 0 1,154\nNet income 0 0 0 100,118 100,118\nOther comprehensive income (loss) 0 0 (398) 0 (398)\nBalance as of December 31, 2024 12,211 84,800 (4,800) 245,084 325,084\nStock issued 117 0 0 0 0\nStock-based compensation 0 25,130 0 0 25,130\nTax withholding related to vesting of\nrestricted stock units and other 0 (14,842) 0 0 (14,842)\nRepurchases of stock (240) (2,514) 0 (42,884) (45,398)\nDividends and dividend equivalents\ndeclared ($0.83 per share) 0 152 0 (10,315) (10,163)\nSale of interest in consolidated entities 0 400 0 0 400\nNet income 0 0 0 132,170 132,170\nOther comprehensive income (loss) 0 0 2,884 0 2,884\nBalance as of December 31, 2025 12,088 $ 93,126 $ (1,916) $ 324,055 $ 415,265\nSee accompanying notes.\nTable of Contents Alphabet Inc.\n51.", - "path": "GOOG 10-K 2025.pdf/p52", - "metadata": { - "length": 1927, - "summary": "Alphabet Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in millions) Class A, Class B, Class C Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Stockholders’ Equity Shares Amount Balance as of December 31, 2022 1...", - "page_nums": [ - 52 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 52, "artifact_ref": "page_citation_assets/page-52.png", @@ -1296,24 +537,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fc35bc9f-1f83-5339-b533-765f7e44cb79", - "type": "page", - "content": "Alphabet Inc.\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n(in millions)\n Year Ended December 31,\n 2023 2024 2025\nOperating activities\nNet income $ 73,795 $ 100,118 $ 132,170\nAdjustments:\nDepreciation of property and equipment 11,946 15,311 21,136\nStock-based compensation expense 22,460 22,785 24,953\nDeferred income taxes (7,763) (5,257) 8,348\nLoss (gain) on debt and equity securities, net 823 (2,671) (24,620)\nOther 4,330 3,419 2,108\nChanges in assets and liabilities, net of effects of acquisitions:\nAccounts receivable, net (7,833) (5,891) (8,779)\nIncome taxes, net 523 (2,418) (3,226)\nOther assets (2,143) (1,397) (4,542)\nAccounts payable 664 359 907\nAccrued expenses and other liabilities 3,937 (1,161) 12,939\nAccrued revenue share 482 1,059 899\nDeferred revenue 525 1,043 2,420\nNet cash provided by operating activities 101,746 125,299 164,713\nInvesting activities\nPurchases of property and equipment (32,251) (52,535) (91,447)\nPurchases of marketable securities (77,858) (86,679) (103,773)\nMaturities and sales of marketable securities 86,672 103,428 83,240\nPurchases of non-marketable securities (3,027) (5,034) (5,716)\nMaturities and sales of non-marketable securities 947 882 1,367\nAcquisitions, net of cash acquired, and purchases of intangible assets (495) (2,931) (1,592)\nOther investing activities (1,051) (2,667) (2,370)\nNet cash used in investing activities (27,063) (45,536) (120,291)\nFinancing activities\nNet payments related to stock-based award activities (9,837) (12,190) (14,167)\nRepurchases of stock (61,504) (62,222) (45,709)\nDividend payments 0 (7,363) (10,049)\nProceeds from issuance of debt, net of costs 10,790 13,589 64,564\nRepayments of debt (11,550) (12,701) (32,427)\nProceeds from sale of interest in consolidated entities, net 8 1,154 400\nNet cash used in financing activities (72,093) (79,733) (37,388)\nEffect of exchange rate changes on cash and cash equivalents (421) (612) 208\nNet increase (decrease) in cash and cash equivalents 2,169 (582) 7,242\nCash and cash equivalents at beginning of period 21,879 24,048 23,466\nCash and cash equivalents at end of period $ 24,048 $ 23,466 $ 30,708\nSupplemental disclosures of non-cash investing activities:\nPurchases of property and equipment included in accrued liabilities and\naccounts payable $ 7,435 $ 10,326 $ 15,090\nSee accompanying notes.\nTable of Contents Alphabet Inc.\n52.", - "path": "GOOG 10-K 2025.pdf/p53", - "metadata": { - "length": 2447, - "summary": "Alphabet Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2023 2024 2025 Operating activities Net income $ 73,795 $ 100,118 $ 132,170 Adjustments: Depreciation of property and equipment 11,946 15,311 21,136 Stock-based compensation expense 22,46...", - "page_nums": [ - 53 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 53, "artifact_ref": "page_citation_assets/page-53.png", @@ -1321,24 +545,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_905f325e-04d2-5de0-93f5-d62f2749c9d2", - "type": "page", - "content": "Alphabet Inc.\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\nNote 1. Summary of Significant Accounting Policies\nNature of Operations\nGoogle was incorporated in California in September 1998 and re-incorporated in the State of Delaware in August\n2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. (\"Alphabet\") became\nthe successor issuer to Google.\nWe generate revenues by delivering relevant, cost-effective online advertising; cloud-based solutions that provide\nenterprise customers of all sizes with infrastructure, platform services, and applications; and sales of other products\nand services, such as fees received for subscription-based products, apps and in-app purchases, and devices.\nBasis of Consolidation\nThe consolidated financial statements of Alphabet include the accounts of Alphabet and entities consolidated\nunder the variable interest and voting models. Intercompany balances and transactions have been eliminated.\nUse of Estimates\nPreparation of consolidated financial statements in conformity with GAAP requires us to make estimates and\nassumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes.\nActual results could differ materially from these estimates due to uncertainties. On an ongoing basis, we evaluate our\nestimates, including those related to the allowance for credit losses; contingent liabilities ; fair values of financial\ninstruments and goodwill ; income taxes; inventory; and useful lives of property and equipment , among others. We\nbase our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, and the\nresults of which form the basis for making judgments about the carrying values of assets and liabilities.\nRevenue Recognition\nRevenues are recognized when control of the promised goods or services is transferred to our customers, and\nthe collectibility of an amount that we expect in exchange for those goods or services is probable. Sales and other\nsimilar taxes are excluded from revenues.\nGoogle Advertising\nGoogle advertising revenues consist of revenues from:\n• Google Search and other properties, including revenues from traffic generated by search distribution partners\nwho use Google.com as their default search in browsers, toolbars, etc. and other Google owned and operated\nproperties like Gmail, Google Maps, and Google Play;\n• YouTube properties; and\n• Google Network properties, including revenues from Google Network properties participating in AdMob,\nAdSense, and Google Ad Manager.\nOur customers generally purchase advertising inventory through Google Ads, Google Ad Manager, Google\nDisplay & Video 360, and Google Marketing Platform, among others.\nWe offer advertising by delivering both performance and brand advertising. We recognize revenues for\nperformance advertising when a user engages with the advertisement. For brand advertising, we recognize revenues\nwhen the ad is displayed, or a user views the ad.\nFor ads placed on Google Network properties, we evaluate whether we are the principal (i.e., report revenues on\na gross basis) or agent (i.e., report revenues on a net basis). Generally, we report advertising revenues for ads placed\non Google Network properties on a gross basis, that is, the amounts billed to our customers are recorded as revenues,\nand amounts paid to Google Network partners are recorded as cost of revenues. Where we are the principal, we\ncontrol the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to\nmonetize the advertising inventory before it is transferred to our customers and is further supported by us being\nprimarily responsible to our customers and having a level of discretion in establishing pricing.\nGoogle Subscriptions, Platforms, and Devices\nGoogle subscriptions, platforms, and devices revenues consist of revenues from:\nTable of Contents Alphabet Inc.\n53.", - "path": "GOOG 10-K 2025.pdf/p54", - "metadata": { - "length": 3968, - "summary": "Alphabet Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies Nature of Operations Google was incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. In 2015, we implemented a holdi...", - "page_nums": [ - 54 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 54, "artifact_ref": "page_citation_assets/page-54.png", @@ -1346,24 +553,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e15a55a2-bf82-5fd8-b098-477f65b67afc", - "type": "page", - "content": "• consumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV,\nYouTube Music and Premium, and NFL Sunday Ticket, as well as Google One, which offers access to our\nmost capable Gemini models;\n• platforms, which primarily include revenues from Google Play sales of apps and in-app purchases;\n• devices, which primarily include sales of the Pixel family of devices; and\n• other products and services.\nSubscription revenues are recognized ratably over the period of the subscription, primarily monthly. We report\nrevenues from Google Play sales of apps and in-app purchases on a net basis because our performance obligation is\nto facilitate a transaction between app developers and end users for which we earn a service fee.\nGoogle Cloud\nGoogle Cloud revenues consist of revenues from:\n• Google Cloud Platform primarily generates consumption-based fees and subscriptions for infrastructure,\nplatform, and other services. These services provide access to solutions such as AI offerings including our\nenterprise AI infrastructure, Vertex AI platform, and Gemini Enterprise; cybersecurity offerings; and data and\nanalytics solutions;\n• Google Workspace includes subscriptions for cloud-based communication and collaboration tools for\nenterprises, such as Gmail, Docs, Calendar, Drive, and Meet, with integrated features like Gemini for Google\nWorkspace; and\n• other enterprise services.\nOur cloud services are generally provided on either a consumption or subscription basis and may have contract\nterms longer than a year. Revenues related to cloud services provided on a consumption basis are recognized when\nthe customer utilizes the services, based on the quantity of services consumed using the relative standalone selling\nprice allocation. Revenues related to cloud services provided on a subscription basis are recognized ratably over the\ncontract term as the customer receives and consumes the benefits of the cloud services.\nArrangements with Multiple Performance Obligations\nOur contracts with customers may include multiple performance obligations. For such arrangements, we allocate\nrevenues to each performance obligation based on its relative standalone selling price. We generally determine\nstandalone selling prices based on observable prices of our products and services sold or priced separately in\ncomparable circumstances to similar customers.\nCustomer Incentives and Credits\nCertain customers receive cash-based incentives or credits, which are accounted for as variable consideration.\nWe estimate these amounts based on the expected amount to be provided to customers and reduce revenues. We\nbelieve that there will not be significant changes to our estimates of variable consideration related to customer\nincentives and credits.\nSales Commissions\nWe expense sales commissions when incurred when the period of the expected benefit is one year or less. We\nrecognize an asset for certain sales commissions and amortize if the expected benefit period is greater than one year.\nThese costs are recorded within sales and marketing expenses.\nCost of Revenues\nCost of revenues consists of TAC and other costs of revenues.\n• TAC includes:\n◦ amounts paid to our distribution partners who make available our search access points and other ad-\nsupported services. Our distribution partners include browser providers, mobile carriers, original\nequipment manufacturers, and software developers; and\n◦ amounts paid to Google Network partners primarily for ads displayed on their properties.\n• Other cost of revenues includes:\nTable of Contents Alphabet Inc.\n54.", - "path": "GOOG 10-K 2025.pdf/p55", - "metadata": { - "length": 3601, - "summary": "• consumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket, as well as Google One, which offers access to our most capable Gemini models; • platforms, which primarily include revenues f...", - "page_nums": [ - 55 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 55, "artifact_ref": "page_citation_assets/page-55.png", @@ -1371,24 +561,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ec2c93f3-3338-585f-a683-dbe39cfc9f67", - "type": "page", - "content": "◦ content acquisition costs, which are payments to content providers from whom we license video and\nother content for distribution, primarily related to YouTube (we pay fees to these content providers\nbased on revenues generated, subscriber counts, or a flat fee);\n◦ depreciation expense, primarily related to our technical infrastructure;\n◦ employee compensation expenses related to our technical infrastructure and other operations such as\ncontent review and customer and product support;\n◦ inventory and other costs related to the devices we sell; and\n◦ other technical infrastructure operations costs, including energy, equipment, and network capacity\ncosts.\nSoftware Development Costs\nWe expense software development costs, including costs to develop software products or the software\ncomponent of products to be sold, leased, or marketed to external users, before technological feasibility is reached.\nTechnological feasibility is typically reached shortly before the release of such products. As a result, development costs\nthat meet the criteria for capitalization were not material for the periods presented.\nSoftware development costs also include costs to develop software to be used solely to meet internal needs and\ncloud-based applications used to deliver our services. We capitalize development costs related to these software\napplications once the preliminary project stage is complete and it is probable that the project will be completed and the\nsoftware will be used to perform the function intended. Costs capitalized for developing such software applications\nwere not material for the periods presented.\nStock-Based Compensation\nStock-based compensation (SBC) primarily consists of Alphabet restricted stock units (RSUs). RSUs are equity\nclassified and measured at the fair market value of the underlying stock at the grant date. We recognize RSU expense\nusing the straight-line attribution method over the requisite service period and account for forfeitures as they occur.\nRSUs are awarded dividend equivalents, which are subject to the same vesting conditions as the underlying award,\nand settled in Class C shares.\nFor RSUs, shares are issued on the vesting dates net of the applicable statutory income tax withholding to be\npaid by us on behalf of our employees. As a result, fewer shares are issued than the number of RSUs ve sted, and the\nincome tax withholding is recorded as a reduction to additional paid-in capital.\nAdditionally, SBC includes other stock-based awards, such as performance stock units (PSUs) that include\nmarket conditions and awards that may be settled in cash or the stock of certain Other Bet companies. PSUs and\ncertain awards granted by Other Bet companies are equity classified and expense is recognized over the requisite\nservice period. Certain awards granted by Other Bet companies are liability classified and remeasured at fair value\nthrough settlement. The fair value of awards granted by Other Bet companies is based on the equity valuation of the\nrespective Other Bet company.\nAdvertising and Promotional Expenses\nWe expense advertising and promotional costs in the period in which they are incurred. For the years ended\nDecember 31, 2023 , 2024, and 2025, advertising and promotional expenses totaled approximately $8.7 billion, $8.7\nbillion, and $9.9 billion, respectively.\nFair Value Measurements\nFair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a\nliability in an orderly transaction between market participants. Assets and liabilities recorded at fair value are measured\nand classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in\nthe market used to measure fair value:\nLevel 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active\nmarkets.\nLevel 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for\nidentical or similar instruments in markets that are not active, and model-based valuation techniques for which all\nsignificant inputs are observable in the market or can be derived from observable market data. Where applicable,\nthese models project future cash flows and discount the future amounts to a present value using market-based\nobservable inputs including interest rate curves, foreign exchange rates, and credit ratings.\nTable of Contents Alphabet Inc.\n55.", - "path": "GOOG 10-K 2025.pdf/p56", - "metadata": { - "length": 4465, - "summary": "◦ content acquisition costs, which are payments to content providers from whom we license video and other content for distribution, primarily related to YouTube (we pay fees to these content providers based on revenues generated, subscriber counts, or a flat fee); ◦ depreciati...", - "page_nums": [ - 56 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 56, "artifact_ref": "page_citation_assets/page-56.png", @@ -1396,24 +569,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_dc4f3d2b-97c7-54b7-b6f6-850771da7a20", - "type": "page", - "content": "Level 3 - Unobservable inputs that are supported by little or no market activities.\nThe fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of\nunobservable inputs when measuring fair value. The determination of fair value involves the use of appropriate\nvaluation methods and relevant inputs into valuation models.\nOur financial assets and liabilities that are measured at fair value on a recurring basis include cash equivalents,\nmarketable securities, and derivative financial instruments . Our financial assets measured at fair value on a\nnonrecurring basis include non-marketable equity securities. Other financial assets and liabilities are carried at cost\nwith fair value disclosed, if required.\nWe measure certain other instruments, and certain assets and liabilities acquired in a business combination, also\nat fair value on a nonrecurring basis.\nFinancial Instruments\nOur financial instruments include cash, cash equivalents, marketable and non-marketable securities, derivative\nfinancial instruments, financial guarantees, accounts receivable, and convertible notes.\nCredit Risks\nWe are subject to concentration of credit risk primarily from cash equivalents, marketable debt securities,\nderivative financial instruments, including foreign exchange contracts , accounts receivable, and convertible notes. We\nmanage the concentration of our credit risk exposure through timely assessment of our counterparty creditworthiness,\ncredit limits, and use of collateral management. Foreign exchange contracts are transacted with various financial\ninstitutions with high credit standing. Accounts receivable are typically unsecured and are derived from revenues\nearned from customers located around the world. We manage the concentration of our credit risk exposure by\nperforming ongoing evaluations to determine customer credit and we limit the amount of credit we extend. We\ngenerally do not require collateral from our customers.\nCash Equivalents\nWe invest excess cash primarily in asset-backed and mortgage-backed securities, corporate debt securities,\ngovernment bonds, money market funds, and time deposits.\nMarketable Securities\nWe classify all marketable debt securities that have effective maturities of three months or less from the date of\npurchase as cash equivalents and those with effective maturities of greater than three months as marketable\nsecurities. We determine the appropriate classification of our investments in marketable debt securities at the time of\npurchase and reevaluate such designation at each balance sheet date . We have classified and accounted for our\nmarketable debt securities as available-for-sale. After consideration of our risk versus reward objectives, as well as our\nliquidity requirements, we may sell these debt securities prior to their effective maturities. As we view these securities\nas available to support current operations, we classify highly liquid securities with maturities beyond 12 months as\ncurrent assets under the caption marketable securities. We carry these securities at fair value, and report the\nunrealized gains and losses, net of taxes, as a component of stockholders’ equity, except for the changes in allowance\nfor expected credit losses, which are recorded in OI&E. For certain marketable debt securities we have elected the fair\nvalue option, for which changes in fair value are recorded in OI&E. We determine any realized gains and losses on the\nsale of marketable debt securities on a specific identification method, and we record such gains and losses as a\ncomponent of OI&E.\nOur investments in marketable equity securities are measured at fair value with the related gains and losses,\nincluding unrealized, recognized in OI&E.\nNon-Marketable Securities\nNon-marketable securities primarily consist of equity securities. We account for non-marketable equity securities\nthrough which we exercise significant influence but do not have control over the investee under the equity method.\nOther non-marketable equity securities that we hold are primarily accounted for under the measurement alternative.\nUnder the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus\nchanges resulting from observable price changes in orderly transactions for identical or similar investments of the\nsame issuer. Adjustments are determined primarily based on a market approach as of the transaction date and are\nrecorded as a component of OI&E.\nNon-marketable securities that do not have effective contractual maturity dates are classified as other non-\ncurrent assets.\nTable of Contents Alphabet Inc.\n56.", - "path": "GOOG 10-K 2025.pdf/p57", - "metadata": { - "length": 4663, - "summary": "Level 3 - Unobservable inputs that are supported by little or no market activities. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The determination of fair value invol...", - "page_nums": [ - 57 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 57, "artifact_ref": "page_citation_assets/page-57.png", @@ -1421,24 +577,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_de3bb8f8-b4ce-5b42-ad63-299d1ec4bcf7", - "type": "page", - "content": "Derivative Financial Instruments\nSee Note 3 for the accounting policy pertaining to derivative financial instruments.\nFinancial Guarantees\nIn certain arrangements, we provide reimbursements for costs incurred by third parties during power generation\nproject development phases if specified trigger events occur. We recognize a noncontingent liability for the fair value of\nour obligation to stand ready to perform, reported in other long-term liabilities. We also recognize a contingent liability\nwhen it becomes probable that a payment will be required and the amount can be reasonably estimated.\nAccounts Receivable\nOur payment terms for accounts receivable vary by the types and locations of our customers and the products or\nservices offered. The term between invoicing and when payment is due is not significant. Additionally, accounts\nreceivable includes amounts for services performed in advance of the right to invoice the customer.\nWe maintain an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts\nreceivable, and changes in such are classified as general and administrative expense. We assess collectibility by\nreviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when\nwe identify specific customers with known disputes or collectibility issues. With respect to current accounts receivables,\nwe elected to assume that current conditions as of the balance sheet date do not change for the remaining life of the\nasset. In determining the amount of the allowance for credit losses for those assets, we adjust historical loss\ninformation to reflect current market conditions and customer-specific information to the extent t hat historical loss\ninformation does not reflect current conditions.\nConvertible Notes\nOur investments in convertible notes are primarily recorded at amortized cost which includes unpaid principal\nbalances, deferred origination costs, and any related discount or premium, net of allowances for credit losses, and are\nincluded within other non-current assets.\nOther\nOur financial instruments also include debt and equity investments in companies with which we also entered into\ncommercial arrangements at or near the same time. For these transactions, judgment is required in assessing the\nsubstance of the arrangements, including assessing whether the components of the arrangements should be\naccounted for as separate transactions under the applicable GAAP, and determining the value of the components of\nthe arrangements, including the fair value of the investments. Additionally, if our investment in such companies\nbecomes impaired, we may need to re-evaluate the accounting for the commercial arrangement, including reducing\nany remaining performance obligations.\nImpairment of Investments\nWe periodically review our debt securities with unrealized gains and losses recorded as a component of\nstockholders' equity and non-marketable equity securities for impairment.\nFor debt securities in an unrealized loss position, we determine whether a credit loss exists. The credit loss is\nestimated by considering available information relevant to the collectibility of the security and information about past\nevents, current conditions, and reasonable and supportable forecasts. Any credit loss is recorded as a charge to OI&E,\nnot to exceed the amount of the unrealized loss. Unrealized losses other than the credit loss are recognized in AOCI. If\nwe have an intent to sell, or if it is more likely than not that we will be required to sell a debt security in an unrealized\nloss position before recovery of its amortized cost basis, we will write down the security to its fair value and record the\ncorresponding charge as a component of OI&E.\nFor non-marketable equity securities, including equity method investments, we consider whether impairment\nindicators exist by evaluating the companies' financial and liquidity position and access to capital resources, among\nother indicators. If the assessment indicates that the investment is impaired, we write down the investment to its fair\nvalue by recording the corresponding charge as a component of OI&E. We prepare quantitative measurements of the\nfair value of our equity investments using a market approach or an income approach.\nInventory\nInventory consists primarily of finished goods and is stated at the lower of cost and net realizable value. Cost is\ngenerally computed using the first-in, first-out method.\nTable of Contents Alphabet Inc.\n57.", - "path": "GOOG 10-K 2025.pdf/p58", - "metadata": { - "length": 4539, - "summary": "Derivative Financial Instruments See Note 3 for the accounting policy pertaining to derivative financial instruments. Financial Guarantees In certain arrangements, we provide reimbursements for costs incurred by third parties during power generation project development phases...", - "page_nums": [ - 58 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 58, "artifact_ref": "page_citation_assets/page-58.png", @@ -1446,24 +585,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_95ad4d11-6b37-5ec5-9555-b0f531a90795", - "type": "page", - "content": "Variable Interest Entities\nWe determine at the inception of each arrangement whether an entity in which we have made an investment or in\nwhich we have other variable interests is considered a variable interest entity (VIE). We consolidate VIEs when we are\nthe primary beneficiary. We are the primary beneficiary of a VIE when we have the power to direct activities that most\nsignificantly affect the economic performance of the VIE and have the obligation to absorb the majority of their losses\nor benefits. If we are not the primary beneficiary in a VIE, we account for the investment or other variable interests in a\nVIE in accordance with applicable GAAP.\nPeriodically, we assess whether any changes in our interest or relationship with the entity affect our determination\nof whether the entity is a VIE and, if so, whether we are the primary beneficiary.\nProperty and Equipment\nProperty and equipment is comprised of technical infrastructure, office space, corporate and other assets\ncurrently in service, and assets not yet in service. Technical infrastructure includes data center land, buildings and\nleasehold improvements, and servers and network equipment. Office space includes office land, buildings , and\nleasehold improvements. Assets not yet in service are those that are not ready for their intended use , including data\ncenter buildings and servers in the process of construction or assembly.\nProperty and equipment are stated at cost less accumulated depreciation. Depreciation commences once assets\nare ready for their intended use and is recorded using the straight-line method over the estimated useful lives of the\nassets, which we regularly evaluate for factors such as technological obsolescence and our planned use and\nutilization. We depreciate data center and office buildings over periods of seven to 40 years. We depreciate servers\nand network equipment generally over a period of six years. We depreciate corporate and other assets over periods of\ntwo to 25 years. We depreciate leasehold improvements over the shorter of the remaining lease term or the estimated\nuseful lives of the assets. Land is not depreciated.\nGoodwill\nWe allocate goodwill to reporting units based on the expected benefit from the business combination. We\nevaluate our reporting units periodically, as well as when changes in our operating segments occur. For changes in\nreporting units, we reassign goodwill using a relative fair value allocation approach. We test our goodwill for\nimpairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be\nimpaired. Goodwill impairments were not material for the periods presented.\nLeases\nWe determine if an arrangement is a lease at inception. Our lease agreements generally contain lease and non-\nlease components. Payments under our lease arrangements are primarily fixed. Non-lease components primarily\ninclude payments for maintenance and utilities. We combine fixed payments for non-lease components with lease\npayments and account for them together as a single lease component which increases the amount of our lease assets\nand liabilities.\nCertain lease agreements contain variable payments, which are expensed as incurred and not included in the\nlease assets and liabilities. These amounts primarily include payments affected by the Consumer Price Index, and\npayments for maintenance and utilities.\nLease assets and liabilities are recognized at the present value of the future lease payments at the lease\ncommencement date. The interest rate used to determine the present value of the future lease payments is our\nincremental borrowing rate, because the interest rate implicit in our leases is not readily determinable. Our incremental\nborrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments,\nand in economic environments where the leased asset is located. Our lease terms and payments include periods\nunder options to purchase, extend, or terminate the lease when it is reasonably certain that we will exercise that\noption. We generally use the base, non-cancelable, lease term when determining the lease assets and liabilities.\nLease assets also include any prepaid lease payments and lease incentives.\nThe current portion of our operating lease liabilities is included in accrued expenses and other current liabilities,\nand the long-term portion is included in operating lease liabilities. Finance lease assets are included in property and\nequipment, net. Finance lease liabilities are included in accrued expenses and other current liabilities or other long-\nterm liabilities.\nOperating lease expense (excluding variable lease costs) is recognized on a straight-line basis over the lease\nterm. Finance lease expense is recognized on a straight-line basis over the shorter of the lease term or the useful life\nof the asset, and interest expense is recognized based on the incremental borrowing rate.\nTable of Contents Alphabet Inc.\n58.", - "path": "GOOG 10-K 2025.pdf/p59", - "metadata": { - "length": 5009, - "summary": "Variable Interest Entities We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests is considered a variable interest entity (VIE). We consolidate VIEs when we are the primary beneficia...", - "page_nums": [ - 59 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 59, "artifact_ref": "page_citation_assets/page-59.png", @@ -1471,24 +593,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e77436af-68a1-55d3-93f9-3a5da19cddb6", - "type": "page", - "content": "Impairment of Long-Lived Assets\nWe review leases, property and equipment, and intangible assets, excluding goodwill, for impairment when\nevents or changes in circumstances indicate the carrying amount may not be recoverable. The evaluation is performed\nat the lowest level of identifiable cash flows independent of other assets. We measure recoverability of these assets by\ncomparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected\nto generate. If the carrying value of the assets or asset group is not recoverable, the impairment recognized is\nmeasured as the amount by which the carrying value exceeds its fair value.\nIncome Taxes\nWe account for income taxes using the asset and liability method, under which we recognize the amount of taxes\npayable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of\nevents that have been recognized in our financial statements or tax returns. We measure current and deferred tax\nassets and liabilities based on provisions of enacted tax law. We evaluate the likelihood of future realization of our\ndeferred tax assets based on all available evidence and establish a valuation allowance to reduce deferred tax assets\nwhen it is more likely than not that they will not be realized or release a valuation allowance to increase deferred tax\nassets when it is more likely than not that they will be realized. We have elected to account for the tax effects of the\nglobal intangible low tax income provision as a current period expense.\nWe recognize the financial statement effects of a tax position when it is more likely than not that, based on\ntechnical merits, the position will be sustained upon examination. The tax benefits of the position recognized in the\nfinancial statements are then measured based on the largest amount of benefit that is greater than 50% likely to be\nrealized upon settlement with a taxing authority. In addition, we recognize interest and penalties related to\nunrecognized tax benefits as a component of the income tax provision.\nBusiness Combinations\nWe include the results of operations of the businesses that we acquire as of the acquisition date. We allocate the\npurchase price of the acquisitions to the assets acquired and liabilities assumed based on their estimated fair values,\nexcept for revenue contracts acquired, which are recognized in accordance with our revenue recognition policy. The\nexcess of the purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill.\nAcquisition-related expenses are recognized separately from the business combination and are expensed as incurred.\nForeign Currency\nWe translate the financial statements of our international subsidiaries to US dollars using month-end exchange\nrates for assets and liabilities, and average rates for the period derived from month-end exchange rates for revenues,\ncosts, and expenses. We record translation gains and losses in AOCI as a component of stockholders’ equity. We\nreflect net foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to\nfunctional currency as a component of foreign currency exchange gain (loss) in OI&E.\nRecently Issued Accounting Pronouncements Not Yet Adopted\nIn November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update\n(ASU) 2024-03 \"Income Statement: Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic\n220-40)\" to improve the disclosures about an entity’s expenses. Upon adoption, we will be required to disclose in the\nnotes to the financial statements a disaggregation of certain expense categories included within the relevant expense\ncaptions on the consolidated statements of income. The standard is effective for our 2027 annual period, and our\ninterim periods beginning in 2028, with early adoption permitted. The standard can be applied either prospectively or\nretrospectively. We are currently assessing adoption timing, the method of adoption, and the effect that the updated\nstandard will have on our financial statement disclosures.\nIn September 2025, the FASB issued ASU 2025-06 \"Intangibles: Goodwill and Other‒Internal-Use Software\n(Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software\" to modernize the accounting\nfor software costs under Subtopic 350-40, Intangibles‒Goodwill and Other‒Internal-Use Software (referred to as\n“internal-use software”). Upon adoption, we will be required to account for internal-use software under the updated\ncapitalization criteria. The standard is effective for our interim and annual 2028 periods, with early adoption permitted.\nThe standard can be applied either prospectively, retrospectively, or under a modified transition approach. We are\ncurrently assessing adoption timing, the method of adoption, and the effect that the updated standard will have on our\nconsolidated financial statements.\nRecently Adopted Accounting Pronouncements\nTable of Contents Alphabet Inc.\n59.", - "path": "GOOG 10-K 2025.pdf/p60", - "metadata": { - "length": 5096, - "summary": "Impairment of Long-Lived Assets We review leases, property and equipment, and intangible assets, excluding goodwill, for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. The evaluation is performed at the lowest level of i...", - "page_nums": [ - 60 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 60, "artifact_ref": "page_citation_assets/page-60.png", @@ -1496,24 +601,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1be6773d-62a8-59a2-abfa-f308cade47ad", - "type": "page", - "content": "In December 2023, the FASB issued ASU 2023-09 \"Income Taxes (Topics 740): Improvements to Income Tax\nDisclosures\" which expands the disclosure requirements for income taxes. We adopted this ASU for our 2025 annual\nperiod with the comparative periods updated to reflect additional disclosures. See Note 14 for the revised disclosures\nconsistent with the new standard.\nPrior Period Reclassifications\nCertain amounts in prior periods have been reclassified to conform with current period presentation.\nNote 2. Revenues\nDisaggregated Revenues\nThe following table presents revenues disaggregated by type (in millions):\nYear Ended December 31,\n2023 2024 2025\nGoogle Search & other $ 175,033 $ 198,084 $ 224,532\nYouTube ads 31,510 36,147 40,367\nGoogle Network 31,312 30,359 29,792\nGoogle advertising 237,855 264,590 294,691\nGoogle subscriptions, platforms, and devices 34,688 40,340 48,030\nGoogle Services total 272,543 304,930 342,721\nGoogle Cloud 33,088 43,229 58,705\nOther Bets 1,527 1,648 1,537\nHedging gains (losses) 236 211 (127)\nTotal revenues $ 307,394 $ 350,018 $ 402,836\nNo individual customer or groups of affiliated customers represented more than 10% of our revenues in 2023,\n2024, or 2025.\nThe following table presents revenues disaggregated by geography, based on the addresses of our customers (in\nmillions):\nYear Ended December 31,\n 2023 2024 2025\nUnited States $ 146,286 47 % $ 170,447 49 % $ 194,229 48 %\nEMEA(1) 91,038 30 102,127 29 117,152 29\nAPAC(1) 51,514 17 56,815 16 67,680 17\nOther Americas(1) 18,320 6 20,418 6 23,902 6\nHedging gains (losses) 236 0 211 0 (127) 0\nTotal revenues $ 307,394 100 % $ 350,018 100 % $ 402,836 100 %\n(1) Regions represent Europe, the Middle East, and Africa (EMEA); Asia-Pacific (APAC); and Canada and Latin America (\"Other\nAmericas\").\nRevenue Backlog\nAs of December 31, 2025 , we had $242.8 billion of remaining performance obligations (“revenue backlog\"),\nprimarily related to Google Cloud. Revenue backlog represents commitments in customer contracts that have not yet\nbeen recognized as revenue. We expect to recognize just over 50% of the revenue backlog as revenues over the next\n24 months with the remainder to be recognized thereafter. The estimated revenue backlog and timing of revenue\nrecognition for these commitments is largely drive n b y contract duration, our ability to deliver in accordance with\nrelevant contract terms, and when our customers utilize services. Revenue backlog includes related deferred revenue\ncurrently recorded as well as amounts that will be invoiced in future periods, and excludes contracts with an original\nexpected term of one year or less and cancellable contracts.\nDeferred Revenues\nWe record deferred revenues when cash payments are received or due in advance of our performance, including\namounts which are refundable. Deferred revenues primarily relate to Google Cloud and Google subscriptions,\nplatforms, and devices. Total deferred revenue as of December 31, 2024 was $6.0 billion, of which $4.6 billion was\nTable of Contents Alphabet Inc.\n60.", - "path": "GOOG 10-K 2025.pdf/p61", - "metadata": { - "length": 3102, - "summary": "In December 2023, the FASB issued ASU 2023-09 \"Income Taxes (Topics 740): Improvements to Income Tax Disclosures\" which expands the disclosure requirements for income taxes. We adopted this ASU for our 2025 annual period with the comparative periods updated to reflect addition...", - "page_nums": [ - 61 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 61, "artifact_ref": "page_citation_assets/page-61.png", @@ -1521,24 +609,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3863b336-4763-5374-99f7-8354149925b3", - "type": "page", - "content": "recognized as revenues for the year ended December 31, 2025. Total deferred revenue as of December 31, 2025 was\n$8.6 billion.\nNote 3. Financial Instruments\nFair Value Measurements\nInvestments Measured at Fair Value on a Recurring Basis\nCash equivalents and marketable equity securities are measured at fair value and classified within Level 1 and\nLevel 2 in the fair value hierarchy, because we use quoted prices for identical assets in active markets or inputs that\nare based upon quoted prices for similar instruments in active markets.\nDebt securities are measured at fair value and classified within Level 2 in the fair value hierarchy, because we use\nquoted market prices to the extent available or alternative pricing sources and models utilizing market observable\ninputs to determine fair value.\nThe following tables summarize our cash, cash equivalents, and marketable securities measured at fair value on\na recurring basis (in millions):\nAs of December 31, 2024\nQuoted Prices in\nActive Markets\nfor Identical Assets\n(Level 1)\nSignificant Other\nObservable Inputs\n(Level 2) Total\nCash $ 12,407\nCash equivalents:\nMoney market funds $ 8,154 $ 0 $ 8,154\nTime deposits 0 2,081 2,081\nGovernment bonds 0 746 746\nCorporate debt securities 0 78 78\nTotal cash and cash equivalents 8,154 2,905 23,466\nMarketable securities:\nMarketable equity securities(1) 4,708 105 4,813\nTime deposits 0 136 136\nGovernment bonds 0 28,709 28,709\nCorporate debt securities 0 21,116 21,116\nMortgage-backed and asset-backed securities 0 17,417 17,417\nTotal marketable securities 4,708 67,483 72,191\nTotal $ 12,862 $ 70,388 $ 95,657\n(1) The long-term portion of marketable equity securities (subject to long-term lock-up restrictions) of $266 million as of\nDecember 31, 2024 is included within other non-current assets.\nTable of Contents Alphabet Inc.\n61.", - "path": "GOOG 10-K 2025.pdf/p62", - "metadata": { - "length": 1852, - "summary": "recognized as revenues for the year ended December 31, 2025. Total deferred revenue as of December 31, 2025 was $8.6 billion. Note 3. Financial Instruments Fair Value Measurements Investments Measured at Fair Value on a Recurring Basis Cash equivalents and marketable equity se...", - "page_nums": [ - 62 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 62, "artifact_ref": "page_citation_assets/page-62.png", @@ -1546,24 +617,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_61c2d1ac-f0d4-5a61-b837-35bcca94c463", - "type": "page", - "content": "As of December 31, 2025\nQuoted Prices in\nActive Markets\nfor Identical Assets\n(Level 1)\nSignificant Other\nObservable Inputs\n(Level 2) Total\nCash $ 15,305\nCash equivalents:\nMoney market funds $ 11,349 $ 0 $ 11,349\nTime deposits 0 3,353 3,353\nGovernment bonds 0 602 602\nCorporate debt securities 0 99 99\nTotal cash and cash equivalents 11,349 4,054 30,708\nMarketable securities:\nMarketable equity securities 4,402 1,911 6,313\nTime deposits 0 0 0\nGovernment bonds 0 50,549 50,549\nCorporate debt securities 0 21,565 21,565\nMortgage-backed and asset-backed securities 0 17,708 17,708\nTotal marketable securities 4,402 91,733 96,135\nTotal $ 15,751 $ 95,787 $ 126,843\nInvestments Measured at Fair Value on a Nonrecurring Basis\nNon-marketable equity securities accounted for under the measurement alternative are investments in privately\nheld companies without readily determinable market values. The carrying value of these non-marketable equity\nsecurities is adjusted upward or downward to fair value upon observable transactions for identical or similar\ninvestments of the same issuer or impairment. Non-marketable equity securities that have been remeasured during the\nperiod based on observable transactions are classified within Level 2 or Level 3 in the fair value hierarchy, and\nremeasurements due to impairment are classified within Level 3. Our valuation methods include option pricing models,\nmarket comparable approach, and common stock equivalent method, which may include a combination of the\nobservable transaction price at the transaction date and other unobservable inputs including volatility, expected time to\nexit, risk free rate, and the rights and obligations of the securities we hold. These inputs vary significantly based on\ninvestment type.\nAs of December 31, 2025 , the carrying value of our non-marketable equity securities accounted for under the\nmeasurement alternative was $64.1 billion, of which $45.6 billion were remeasured at fair value during the year ended\nDecember 31, 2025, and were primarily classified within Level 2 of the fair value hierarchy at the time of measurement.\nDebt and Equity Securities\nDebt Securities\nThe following table summarizes the estimated fair value of investments in available-for-sale marketable debt\nsecurities by effective contractual maturity dates (in millions):\nAs of\nDecember 31, 2025\nDue in 1 year or less $ 26,735\nDue in 1 year through 5 years 37,001\nDue in 5 years through 10 years 12,769\nDue after 10 years 13,317\nTotal $ 89,822\nThe following tables present fair values and gross unrealized gains and losses recorded to AOCI, less any\nexpected credit losses, aggregated by investment category (in millions):\nTable of Contents Alphabet Inc.\n62.", - "path": "GOOG 10-K 2025.pdf/p63", - "metadata": { - "length": 2733, - "summary": "As of December 31, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Cash $ 15,305 Cash equivalents: Money market funds $ 11,349 $ 0 $ 11,349 Time deposits 0 3,353 3,353 Government bonds 0 602 602 Corporate...", - "page_nums": [ - 63 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 63, "artifact_ref": "page_citation_assets/page-63.png", @@ -1571,24 +625,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_cacc2ac0-9bf7-5984-b9c4-3676e50c8eed", - "type": "page", - "content": "As of December 31, 2024\nAdjusted Cost\nGross\nUnrealized\nGains\nGross\nUnrealized\nLosses Fair Value\nTime deposits $ 2,217 $ 0 $ 0 $ 2,217\nGovernment bonds 27,551 83 (214) 27,420\nCorporate debt securities 18,300 79 (222) 18,157\nMortgage-backed and asset-backed securities 14,437 63 (385) 14,115\nTotal investments with fair value change\nreflected in other comprehensive income $ 62,505 $ 225 $ (821) $ 61,909\nAs of December 31, 2025\nAdjusted Cost\nGross\nUnrealized\nGains\nGross\nUnrealized\nLosses Fair Value\nTime deposits $ 3,353 $ 0 $ 0 $ 3,353\nGovernment bonds 49,087 443 (26) 49,504\nCorporate debt securities 18,346 242 (32) 18,556\nMortgage-backed and asset-backed securities 14,337 174 (128) 14,383\nTotal investments with fair value change\nreflected in other comprehensive income $ 85,123 $ 859 $ (186) $ 85,796\nThe following tables present fair values and gross unrealized losses recorded to AOCI, aggregated by\ninvestment category and the length of time that individual securities have been in a continuous loss position (in\nmillions):\n As of December 31, 2024\n Less than 12 Months 12 Months or Greater Total\n Fair Value\nUnrealized\nLoss Fair Value\nUnrealized\nLoss Fair Value\nUnrealized\nLoss\nGovernment bonds $ 11,119 $ (126) $ 2,576 $ (88) $ 13,695 $ (214)\nCorporate debt securities 4,228 (17) 6,838 (168) 11,066 (185)\nMortgage-backed and asset-backed\nsecurities 5,222 (106) 3,813 (279) 9,035 (385)\nTotal $ 20,569 $ (249) $ 13,227 $ (535) $ 33,796 $ (784)\n As of December 31, 2025\n Less than 12 Months 12 Months or Greater Total\n Fair Value\nUnrealized\nLoss Fair Value\nUnrealized\nLoss Fair Value\nUnrealized\nLoss\nGovernment bonds $ 4,230 $ (9) $ 1,174 $ (17) $ 5,404 $ (26)\nCorporate debt securities 915 0 2,429 (24) 3,344 (24)\nMortgage-backed and asset-backed\nsecurities 1,377 (4) 3,035 (124) 4,412 (128)\nTotal $ 6,522 $ (13) $ 6,638 $ (165) $ 13,160 $ (178)\nTable of Contents Alphabet Inc.\n63.", - "path": "GOOG 10-K 2025.pdf/p64", - "metadata": { - "length": 1936, - "summary": "As of December 31, 2024 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Time deposits $ 2,217 $ 0 $ 0 $ 2,217 Government bonds 27,551 83 (214) 27,420 Corporate debt securities 18,300 79 (222) 18,157 Mortgage-backed and asset-backed securities 14,437 63...", - "page_nums": [ - 64 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 64, "artifact_ref": "page_citation_assets/page-64.png", @@ -1596,24 +633,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ea787d9e-e139-55c9-b4fa-23f75e3ff3a3", - "type": "page", - "content": "We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification\nmethod. For certain marketable debt securities, we have elected the fair value option for which changes in fair value\nare recorded in OI&E. The fair value option was elected for these securities to align with the unrealized gains and\nlosses from related derivative contracts.\nThe following table summarizes gains and losses for debt securities, reflected as a component of OI&E (in\nmillions):\nYear Ended December 31,\n 2023 2024 2025\nUnrealized gain (loss) on fair value option debt securities $ 386 $ 30 $ 254\nGross realized gain on debt securities 182 482 572\nGross realized loss on debt securities (1,833) (1,553) (316)\n(Increase) decrease in allowance for credit losses 50 (2) 30\nTotal gain (loss) on debt securities recognized in other income\n(expense), net $ (1,215) $ (1,043) $ 540\nNon-marketable Securities\nOur non-marketable securities primarily consist of non-marketable equity securities accounted for under the\nmeasurement alternative. The carrying value is measured at the total initial cost plus the cumulative net upward and\ndownward adjustments (including impairments). We account for non-marketable equity securities through which we\nexercise significant influence but do not have control over the investee under the equity method. Certain of our non-\nmarketable securities include our investments in VIEs where we are not the primary beneficiary. See Note 5 for further\ndetails on VIEs.\nRealized net gain (loss) on equity securities sold during the period reflects the difference between the sale\nproceeds and the carrying value of the equity securities at the beginning of the period or the purchase date, if later.\nAll gains and losses, including impairments, are included as components of OI&E.\nThe carrying values for non-marketable securities are summarized below (in millions):\nAs of December 31,\n2024 2025\nNon-marketable securities:\nTotal initial cost of non-marketable equity securities accounted for under the\nmeasurement alternative $ 20,940 $ 28,429\nCumulative upward adjustments 22,709 44,485\nCumulative downward adjustments (including impairments) (8,431) (8,820)\nCarrying value of non-marketable equity securities accounted for under the\nmeasurement alternative 35,218 64,094\nEquity method investments and other 2,764 4,593\nTotal non-marketable securities $ 37,982 $ 68,687\nGains and Losses on Equity Securities\nGains and losses (including impairments), net, for equity securities included in OI&E are summarized below (in\nmillions):\nTable of Contents Alphabet Inc.\n64.", - "path": "GOOG 10-K 2025.pdf/p65", - "metadata": { - "length": 2634, - "summary": "We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification method. For certain marketable debt securities, we have elected the fair value option for which changes in fair value are recorded in OI&E. The fair value option...", - "page_nums": [ - 65 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 65, "artifact_ref": "page_citation_assets/page-65.png", @@ -1621,24 +641,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8bc42b4d-57b9-5a20-9bf5-4f61b76c7db5", - "type": "page", - "content": "Year Ended December 31,\n 2023 2024 2025\nGross unrealized gain on non-marketable equity securities\naccounted for under the measurement alternative $ 1,806 $ 5,582 $ 22,666\nGross unrealized loss (including impairments) on non-\nmarketable equity securities accounted for under the\nmeasurement alternative (2,894) (2,210) (1,271)\nUnrealized net gain (loss) on non-marketable equity\nsecurities accounted for under the measurement alternative (1,088) 3,372 21,395\nUnrealized net gain (loss) on marketable and other equity\nsecurities 790 156 1,907\nRealized net gain (loss) on marketable and non-marketable\nequity securities sold during the period 690 186 778\nTotal gain (loss) on equity securities in other income\n(expense), net (1) $ 392 $ 3,714 $ 24,080\n(1) Excludes income (loss) and impairment from equity method investments. Refer to Note 7 for further details.\nCumulative net gains (losses), calculated as the difference between the sales price and purchase price,\nrepresent the total net gains (losses) recognized after the initial purchase date. This represents the total economic\nimpact of the investment, regardless of when the gains or losses were previously recognized. Cumulative net gains on\nequity securities sold were $748 million and $387 million for the years ended December 31, 2024 and 2025,\nrespectively.\nDerivative Financial Instruments\nWe primarily use derivative instruments to manage risks relating to our ongoing business operations, including\nforeign currencies, interest rates, commodity prices, credit exposures, and market prices of certain marketable equity\nsecurities. Additionally, we enter into derivatives to enhance investment returns. We also enter into derivatives as a\nresult of agreements with third parties to backstop certain obligations related to data center leases. These backstop\nagreements are accounted for as credit derivatives.\nWe recognize derivative instruments in the Consolidated Balance Sheets at fair value and classify them primarily\nwithin Level 2 in the fair value hierarchy. We present our foreign currency collars (an option strategy comprised of a\ncombination of purchased and written options) at net fair values and present all other derivatives at gross fair values.\nThe accounting treatment for derivatives is based on the intended use and hedge designation.\nCash Flow Hedges\nWe designate foreign currency forwards and options (including collars) as cash flow hedges to hedge certain\nforecasted revenue transactions denominated in currencies other than the US dollar. These contracts have maturities\nof 24 months or less.\nCash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI and\nreclassified to revenue when the hedged item is recognized in earnings. Hedge components excluded from our\nassessment of hedge effectiveness are amortized on a straight-line basis over the life of the hedging instrument in\nrevenues. The difference between fair value changes of the excluded component and the amount amortized to\nrevenues is recorded in AOCI.\nAs of December 31, 2025, the net accumulated loss on our foreign currency cash flow hedges before tax effect\nwas $60 million, which is expected to be reclassified from AOCI into revenues within the next 12 months.\nAdditionally, we may designate interest rate derivatives as cash flow hedges to manage our exposure to certain\ninterest rate risks. Changes in the fair value of these derivatives are deferred in AOCI and reclassified to OI&E when\nthe hedged item is recognized in earnings.\nFair Value Hedges\nWe designate foreign currency forwards as fair value hedges to hedge foreign currency risks for our marketable\ndebt securities denominated in currencies other than the US dollar. Fair value hedge amounts included and excluded\nfrom the assessment of hedge effectiveness are recognized in OI&E.\nNet Investment Hedges\nWe designate foreign currency forwards, options (including collars), cross-currency swaps, and foreign currency-\ndenominated debt as net investment hedges to hedge the foreign currency risks related to our investments in foreign\nTable of Contents Alphabet Inc.\n65.", - "path": "GOOG 10-K 2025.pdf/p66", - "metadata": { - "length": 4142, - "summary": "Year Ended December 31, 2023 2024 2025 Gross unrealized gain on non-marketable equity securities accounted for under the measurement alternative $ 1,806 $ 5,582 $ 22,666 Gross unrealized loss (including impairments) on non- marketable equity securities accounted for under the...", - "page_nums": [ - 66 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 66, "artifact_ref": "page_citation_assets/page-66.png", @@ -1646,24 +649,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3912da10-7675-5f0e-afb5-31abe0d1b576", - "type": "page", - "content": "subsidiaries. Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in\nAOCI.\nChanges in the fair value of hedge components of forward and option contracts that are excluded from the\nassessment of hedge effectiveness are recognized in OI&E. Hedge components of cross-currency swaps that are\nexcluded from the assessment of hedge effectiveness are amortized over the life of the hedging instrument and\nrecognized in OI&E. The difference between fair value changes of the excluded component and the amount amortized\nto OI&E is recorded in AOCI.\nWe had no foreign currency-denominated debt as of December 31, 2024 and $15.4 billion carrying value of\nforeign currency-denominated debt designated as net investment hedges as of December 31, 2025.\nDerivatives Not Designated as Hedging Instruments\nWe enter into derivatives not designated as hedging instruments to manage risks related to our ongoing business\noperations. The primary risk managed is foreign exchange risk related to the remeasurement of monetary assets or\nliabilities denominated in currencies other than the functional currency of a subsidiary. Gains and losses on these\nforeign exchange derivatives are recorded within the “foreign currency exchange gain (loss), net” component of OI&E.\nWe also enter into derivatives to manage other risks, to enhance investment returns, and as a result of\nagreements with certain third parties to backstop certain obligations relating to data center leases. Gains and losses\narising from other derivatives are primarily reflected within the “other” component of OI&E. See Note 7 for further\ndetails.\nThe gross notional amounts of outstanding derivative instruments were as follows (in millions):\nAs of December 31,\n2024 2025\nDerivatives designated as hedging instruments:\nForeign exchange contracts\nCash flow hedges $ 20,315 $ 23,852\nFair value hedges $ 1,562 $ 0\nNet investment hedges $ 6,986 $ 14,203\nDerivatives not designated as hedging instruments:\nForeign exchange contracts $ 44,227 $ 56,085\nCredit derivatives(1) $ 0 $ 16,940\nOther contracts $ 15,082 $ 15,900\n(1) Notional amounts for credit derivatives are the backstop obligations related to certain third-party data center leases and\nrepresent the maximum potential amount of future payments that could be required in the event of certain default scenarios\nover remaining agreement periods of up t o 15 years. In the event we are required to make payments under certain backstop\nobligations, we may receive equity in or cash payments from certain counterparties , the amounts for which are not reflected in\nthe notional amounts for credit derivatives. See Note 5 for further details.\nThe fair values of outstanding derivative instruments were as follows (in millions):\n As of December 31, 2024 As of December 31, 2025\n Assets(1) Liabilities(2) Assets(1) Liabilities(2)\nDerivatives designated as hedging instruments:\nForeign exchange contracts $ 1,054 $ 0 $ 316 $ 197\nDerivatives not designated as hedging\ninstruments:\nForeign exchange contracts 200 593 92 84\nOther contracts 474 19 324 98\nTotal derivatives not designated as hedging\ninstruments 674 612 416 182\nTotal $ 1,728 $ 612 $ 732 $ 379\n(1) Derivative assets are recorded as other current and non-current assets.\n(2) Derivative liabilities are recorded as accrued expenses and other liabilities, current and non-current.\nTable of Contents Alphabet Inc.\n66.", - "path": "GOOG 10-K 2025.pdf/p67", - "metadata": { - "length": 3429, - "summary": "subsidiaries. Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in AOCI. Changes in the fair value of hedge components of forward and option contracts that are excluded from the assessment of hedge effectiveness are recognized in OI&...", - "page_nums": [ - 67 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 67, "artifact_ref": "page_citation_assets/page-67.png", @@ -1671,24 +657,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2c79d602-d791-5e8d-bcbe-20ed9f7f13ce", - "type": "page", - "content": "The gains (losses) on derivatives and non-derivative financial instruments in cash flow hedging and net\ninvestment hedging relationships recognized in other comprehensive income are summarized below (in millions):\n Year Ended December 31,\n2023 2024 2025\nCash flow hedging relationship:\nForeign exchange and other contracts\nAmount included in the assessment of effectiveness $ 90 $ 857 $ (978)\nAmount excluded from the assessment of\neffectiveness 84 77 (45)\nNet investment hedging relationship:\nAmounts included in the assessment of effectiveness\nForeign exchange contracts (287) 223 (765)\nForeign currency-denominated debt 0 0 (393)\nAmounts excluded from the assessment of\neffectiveness\nForeign exchange contracts 0 0 11\nTotal $ (113) $ 1,157 $ (2,170)\nThe table below presents the gains (losses) of derivatives included on the Consolidated Statements of Income:\n(in millions):\nYear Ended December 31,\n2023 2024 2025\nRevenues\nOther\nincome\n(expense),\nnet Revenues\nOther\nincome\n(expense),\nnet Revenues\nOther\nincome\n(expense),\nnet\nTotal amounts included on the Consolidated\nStatements of Income $ 307,394 $ 1,424 $ 350,018 $ 7,425 $ 402,836 $ 29,787\nEffect of cash flow hedges:\nForeign exchange contracts\nAmount included in the assessment of\neffectiveness 213 0 174 0 (233) 0\nAmount excluded from the assessment\nof effectiveness 24 0 37 0 107 0\nEffect of fair value hedges:\nForeign exchange contracts\nHedged items 0 59 0 (59) 0 (9)\nAmount included in the assessment of\neffectiveness 0 (59) 0 58 0 9\nAmount excluded from the assessment\nof effectiveness 0 15 0 13 0 1\nEffect of net investment hedges:\nForeign exchange contracts\nAmount excluded from the assessment\nof effectiveness 0 187 0 137 0 189\nEffect of non-designated hedges:\nForeign exchange contracts 0 7 0 335 0 445\nOther contracts 0 53 0 174 0 (148)\nTotal gains (losses) $ 237 $ 262 $ 211 $ 658 $ (126) $ 487\nTable of Contents Alphabet Inc.\n67.", - "path": "GOOG 10-K 2025.pdf/p68", - "metadata": { - "length": 1960, - "summary": "The gains (losses) on derivatives and non-derivative financial instruments in cash flow hedging and net investment hedging relationships recognized in other comprehensive income are summarized below (in millions): Year Ended December 31, 2023 2024 2025 Cash flow hedging relati...", - "page_nums": [ - 68 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 68, "artifact_ref": "page_citation_assets/page-68.png", @@ -1696,24 +665,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3cc946c2-0474-5489-a0f8-197a7748e430", - "type": "page", - "content": "Offsetting of Derivatives\nWe enter into master netting arrangements and collateral security arrangements to reduce credit risk. Cash\ncollateral received related to derivative instruments under our collateral security arrangements are included in other\ncurrent assets with a corresponding liability. Cash and non-cash collateral pledged related to derivative instruments\nunder our collateral security arrangements are primarily included in other current assets.\nThe gross amounts of derivative instruments subject to master netting arrangements with various\ncounterparties, and cash and non-cash collateral received and pledged under such agreements were as follows (in\nmillions):\nAs of December 31, 2024\nGross Amounts Not Offset in\nthe Consolidated Balance\nSheets, but Have Legal Rights\nto Offset\nGross\nAmounts\nRecognized\nGross\nAmounts\nOffset in the\nConsolidated\nBalance\nSheets\nNet Amounts\nPresented in\nthe\nConsolidated\nBalance\nSheets\nFinancial\nInstruments(1)\nCash and\nNon-Cash\nCollateral\nReceived or\nPledged Net Amounts\nDerivatives assets $ 1,776 $ (48) $ 1,728 $ (516) $ (721) $ 491\nDerivatives liabilities $ 660 $ (48) $ 612 $ (516) $ (9) $ 87\nAs of December 31, 2025\nGross Amounts Not Offset in\nthe Consolidated Balance\nSheets, but Have Legal Rights\nto Offset\nGross\nAmounts\nRecognized\nGross\nAmounts\nOffset in the\nConsolidated\nBalance\nSheets\nNet Amounts\nPresented in\nthe\nConsolidated\nBalance\nSheets\nFinancial\nInstruments(1)\nCash and\nNon-Cash\nCollateral\nReceived or\nPledged Net Amounts\nDerivatives assets $ 842 $ (110) $ 732 $ (140) $ (231) $ 361\nDerivatives liabilities $ 489 $ (110) $ 379 $ (140) $ (15) $ 224\n(1) The balances as of December 31, 2024 and 2025 were related to derivatives allowed to be net settled in accordance with our\nmaster netting agreements.\nNote 4. Leases\nWe have entered into operating and finance lease agreements primarily for data centers, land, and offices\nthroughout the world with varying lease terms.\nComponents of lease costs were as follows (in millions):\nYear Ended December 31,\n2023 2024 2025\nOperating lease cost $ 3,362 $ 3,304 $ 3,345\nFinance lease cost:\nAmortization of lease assets 469 413 553\nInterest on lease liabilities 35 31 65\nFinance lease cost 504 444 618\nVariable lease cost 1,182 1,425 1,739\nTotal lease cost $ 5,048 $ 5,173 $ 5,702\nTable of Contents Alphabet Inc.\n68.", - "path": "GOOG 10-K 2025.pdf/p69", - "metadata": { - "length": 2337, - "summary": "Offsetting of Derivatives We enter into master netting arrangements and collateral security arrangements to reduce credit risk. Cash collateral received related to derivative instruments under our collateral security arrangements are included in other current assets with a cor...", - "page_nums": [ - 69 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 69, "artifact_ref": "page_citation_assets/page-69.png", @@ -1721,24 +673,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_cd9bfdde-a893-5a64-8780-78951b12a79b", - "type": "page", - "content": "Supplemental information related to leases was as follows (in millions):\nDecember 31,\n2024 2025\nWeighted-average remaining lease term:\nOperating leases 7.8 years 7.6 years\nFinance leases 10.4 years 8.3 years\nWeighted-average discount rate:\nOperating leases 3.4 % 3.6 %\nFinance leases 2.8 % 3.1 %\nDecember 31,\n2024 2025\nOperating leases:\nOperating lease assets $ 13,588 $ 15,221\nAccrued expenses and other liabilities $ 2,887 $ 3,209\nOperating lease liabilities 11,691 12,744\nTotal operating lease liabilities $ 14,578 $ 15,954\nFinance leases:\nProperty and equipment, at cost $ 4,622 $ 6,822\nAccumulated depreciation (2,037) (2,025)\nProperty and equipment, net $ 2,585 $ 4,797\nAccrued expenses and other liabilities $ 235 $ 441\nOther long-term liabilities 1,442 2,059\nTotal finance lease liabilities $ 1,677 $ 2,500\nYear Ended December 31,\n2023 2024 2025\nCash payments for lease liabilities:\nOperating cash flows used for operating leases $ 3,173 $ 3,425 $ 3,370\nOperating cash flows used for finance leases $ 35 $ 31 $ 65\nFinancing cash flows used for finance leases(1) $ 705 $ 405 $ 1,988\nAssets obtained in exchange for lease liabilities:\nOperating leases $ 2,877 $ 2,510 $ 4,070\nFinance leases $ 564 $ 313 $ 1,606\n(1) Financing cash flows used for financing leases are included within financing activities as repayments of debt. The year ended\nDecember 31, 2025 includes $1.1 billion of prepayments for finance leases not yet commenced.\nTable of Contents Alphabet Inc.\n69.", - "path": "GOOG 10-K 2025.pdf/p70", - "metadata": { - "length": 1485, - "summary": "Supplemental information related to leases was as follows (in millions): December 31, 2024 2025 Weighted-average remaining lease term: Operating leases 7.8 years 7.6 years Finance leases 10.4 years 8.3 years Weighted-average discount rate: Operating leases 3.4 % 3.6 % Finance...", - "page_nums": [ - 70 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 70, "artifact_ref": "page_citation_assets/page-70.png", @@ -1746,24 +681,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5a390c0a-bea3-5c70-8ec4-95f99389ba85", - "type": "page", - "content": "Future lease payments as of December 31, 2025 were as follows (in millions):\nOperating\nLeases\nFinance\nLeases\n2026 $ 3,275 $ 491\n2027 3,082 345\n2028 2,510 335\n2029 2,061 314\n2030 1,669 241\nThereafter 5,654 1,143\nTotal undiscounted lease payments 18,251 2,869\nLess: imputed interest (2,297) (369)\nTotal lease liability balance $ 15,954 $ 2,500\nAs of December 31, 2025 , we have entered into leases primarily related to data centers that have not yet\ncommenced with short-term and long-term future lease payments of $5.8 billion and $52.7 billion, respectively, that are\nnot yet recorded . These leases will commence between 2026 and 2031 with non-cancelable lease terms primarily\nbetween one and 25 years.\nIn January 2026 , we executed a power purchase agreement which we expect to be accounted for as a lease\nresulting in future payments depending on certain agreement terms of $9.9 billion between 2027 and 2047. If certain\ncontractual conditions for the project are not met, we would instead make a one-time payment of approximately\n$3.5 billion and assume ownership of the power generating assets.\nNote 5. Variable Interest Entities\nConsolidated VIEs\nWe consolidate VIEs in which we hold a variable interest and are the primary beneficiary. The results of\noperations and financial position of these VIEs are included in our consolidated financial statements.\nFor certain consolidated VIEs, their assets are not available to us, and their creditors do not have recourse to us.\nAs of December 31, 2024 and 2025, assets that can only be used to settle obligations of these VIEs were $8.7 billion\nand $5.6 billion, respectively, and are primarily included in cash and cash equivalents. As of December 31, 2024 and\n2025, liabilities for which creditors only have recourse to the VIEs were $2.3 billion and $2.0 billion, respectively. We\nmay continue to fund ongoing operations, including the potential funding of employee compensation programs, of\ncertain VIEs that are included within Other Bets.\nIn February 2026, Waymo, a consolidated VIE, announced an investment round of $16.0 billion, the significant\nmajority of which was funded by Alphabet. Investments from external parties will be accounted for as equity\ntransactions and will result in recognition of noncontrolling interests.\nTotal noncontrolling interests (NCI) in our consolidated subsidiaries were $4.2 billion and $3.4 billion as of\nDecember 31, 2024 and 2025, respectively, of which $1.1 billion and $841 million were redeemable noncont rolling\ninterests (RNCI) as of December 31, 2024 and 2025, respectively. NCI and RNCI are included within additional paid-in\ncapital. Net loss attributable to noncontrolling interests was not material for any period presented and is included within\nthe \"other\" component of OI&E. See Note 7 for further details on OI&E.\nUnconsolidated VIEs\nWe hold various forms of interests in Variable Interest Entities (VIEs), including certain of our investments in\nprivate companies and renewable energy entities, certain leases and credit backstops with data center entities, and\ncertain backstops with energy infrastructure entities. Because we have determined that we do not direct the activities\nthat most significantly impact the economic performance of these entities, we are not the primary beneficiary.\nTherefore, these VIEs are not consolidated within our financial statements.\nOur investments in private companies and renewable energy VIEs are primarily accounted for as non-marketable\nsecurities under the measurement alternative or the equity method. The carrying value of these investments are\nincluded within non-marketable securities on our Consolidated Balance Sheets. See Note 3 for further details on\ninvestments. The maximum exposure to these VIEs is generally limited to the current carrying value plus future funding\ncommitments. As of December 31, 2024 and 2025, future funding commitments were $1.5 billion and $1.1 billion ,\nrespectively.\nTable of Contents Alphabet Inc.\n70.", - "path": "GOOG 10-K 2025.pdf/p71", - "metadata": { - "length": 4017, - "summary": "Future lease payments as of December 31, 2025 were as follows (in millions): Operating Leases Finance Leases 2026 $ 3,275 $ 491 2027 3,082 345 2028 2,510 335 2029 2,061 314 2030 1,669 241 Thereafter 5,654 1,143 Total undiscounted lease payments 18,251 2,869 Less: imputed inter...", - "page_nums": [ - 71 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 71, "artifact_ref": "page_citation_assets/page-71.png", @@ -1771,24 +689,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d7dd04bd-65cd-5b8b-a16a-d25e108ca8a1", - "type": "page", - "content": "Leases with data center leasing VIEs are accounted for as finance leases and are included within total lease\nobligations disclosed in Note 4. The maximum exposure arising from leases with VIEs is limited to the net carrying\nvalue of commenced finance lease assets, plus the undiscounted future obligations for leases that have not yet\ncommenced. See Note 4 for further details on leases.\nCredit backstops we have provided to data center VIEs are accounted for as credit derivatives. The maximum\nexposure arising from credit backstops with VIEs is limited to the financial risk over the remaining period of the\narrangements, as reflected by the credit derivative notional value. See Note 3 for further details on credit derivatives.\nBackstop agreements we have provided to energy infrastructure VIEs are accounted for as financial guarantees.\nThe maximum exposure to these VIEs is limited to the potential amount of future payments under these arrangements.\nSee Note 10 for further details on financial guarantees.\nNote 6. Debt\nShort-Term Debt\nWe have a commercial paper program of up to $25.0 billion, which is used for general corporate purposes. We\nhad $2.3 billion of commercial paper outstanding with a weighted-average effective interest rate of 4.4% as of\nDecember 31, 2024 and no commercial paper outstanding as of December 31, 2025. The fair value of the commercial\npaper approximated its carrying value as of December 31, 2024.\nOur short-term debt balance also includes the current portion of certain long-term debt.\nLong-Term Debt\nDuring 2025, we issued $22.5 billion of US dollar-denominated senior unsecured notes and €13.25 billion of euro-\ndenominated senior unsecured notes for general corporate purposes.\nIn May 2025, we issued $5.0 billion of US dollar-denominated fixed-rate senior unsecured notes with a weighted-\naverage coupon rate of 4.89%, and a weighted-average maturity of approximately 24 years. Additionally, in May 2025,\nwe issued €6.75 billion of euro-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of\n3.31%, and a weighted-average maturity of approximately 14 years.\nIn November 2025, we issued $500 million of US dollar-denominated floating-rate senior unsecured notes and\n$17.0 billion of US dollar-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of\n4.92% and a weighted-average maturity of approximately 20 years. Additionally in November 2025, we issued €6.5\nbillion of euro-denominated fixed-rate senior unsecured notes with a weighted-average coupon rate of 3.44% and a\nweighted-average maturity of approximately 16 years.\nTotal outstanding long-term debt is summarized below (in millions, except percentages):\nEffective Interest\nRate\nAs of December 31,\nMaturity Coupon Rate 2024 2025\nDebt\n2016 US dollar notes 2026 2.00% 2.23% $ 2,000 $ 2,000\n2020 US dollar notes 2027 - 2060 0.80% - 2.25% 0.93% - 2.33% 10,000 9,000\n2025 US dollar notes(1) 2028 - 2075 3.88% - 5.70% 4.00% - 5.79% 0 22,500\n2025 Euro notes(2) 2028 - 2064 2.38% - 4.38% 2.57% - 4.51% 0 15,585\n Total face value of long-term debt 12,000 49,085\nUnamortized discount and debt\nissuance costs(2) (118) (542)\nLess: current portion of long-term\nnotes(3) (999) (1,996)\n Total long-term debt $ 10,883 $ 46,547\n(1) Includes $500 million of floating-rate notes due in 2028. Interest is calculated using the compounded Secured Overnight\nFinancing Rate (SOFR) plus 0.52%, reset quarterly.\n(2) Principal, unamortized discount, and debt issuance costs for the euro-denominated notes include the effect of foreign\nexchange rates.\n(3) Total current portion of long-term debt is included within accrued expenses and other current liabilities. See Note 7 for further\ndetails.\nTable of Contents Alphabet Inc.\n71.", - "path": "GOOG 10-K 2025.pdf/p72", - "metadata": { - "length": 3793, - "summary": "Leases with data center leasing VIEs are accounted for as finance leases and are included within total lease obligations disclosed in Note 4. The maximum exposure arising from leases with VIEs is limited to the net carrying value of commenced finance lease assets, plus the und...", - "page_nums": [ - 72 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 72, "artifact_ref": "page_citation_assets/page-72.png", @@ -1796,49 +697,15 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d069a93c-89ad-52c6-88e1-dc3debc7f09e", - "type": "page", - "content": "The notes in the table above are senior unsecured obligations and rank equally with each other. We may redeem\nthe fixed-rate notes at any time in whole or in part at specified redemption prices. The floating-rate notes are not\nredeemable prior to maturity. Interest is payable quarterly for the floating-rate notes, semi-annually for the US dollar-\ndenominated fixed-rate notes, and annually for the euro-denominated fixed-rate notes. The effective interest rates are\nbased on proceeds received and contractual interest payments.\nThe total estimated fair value of the outstanding notes was approximately $9.0 billion and $45.6 billion as of\nDecember 31, 2024 and December 31, 2025, respectively. The fair value was determined based on observable market\nprices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fair value\nhierarchy.\nAs of December 31, 2025, the future principal payments for long-term debt were as follows (in millions):\n2026 $ 2,000\n2027 1,000\n2028 2,676\n2029 1,764\n2030 5,500\nThereafter 36,145\nTotal $ 49,085\nCredit Facility\nAs of December 31, 2025 , we had $10.0 billion of revolving credit facilities, of which $4.0 billion expires in April\n2026 and $6.0 billion expires in April 2030. The interest rates for all credit facilities are determined based on a formula\nusing certain market rates . No amounts were outstanding under the credit facilities as of December 31, 2024 and\n2025.\nNote 7. Supplemental Financial Statement Information\nAccounts Receivable\nThe allowance for credit losses on accounts receivable was $879 million and $924 million as of December 31,\n2024 and 2025, respectively.\nProperty and Equipment, Net\nProperty and equipment, net, consisted of the following (in millions):\nAs of December 31,\n2024 2025\nTechnical infrastructure(1) $ 141,852 $ 203,679\nOffice space 45,403 48,348\nCorporate and other assets 12,574 14,463\nProperty and equipment, in service 199,829 266,490\nLess: accumulated depreciation (79,390) (98,485)\nAdd: assets not yet in service 50,597 78,592\nProperty and equipment, net $ 171,036 $ 246,597\n(1) As of December 31, 2024 and 2025, a pproximately 60% of technical infrastructure assets were comprised of servers and\nnetwork equipment. The remaining balance was comprised of data center land and buildings and related assets.\nAccrued Expenses and Other Current Liabilities\nAccrued expenses and other current liabilities consisted of the following (in millions):\nTable of Contents Alphabet Inc.\n72.", - "path": "GOOG 10-K 2025.pdf/p73", - "metadata": { - "length": 2517, - "summary": "The notes in the table above are senior unsecured obligations and rank equally with each other. We may redeem the fixed-rate notes at any time in whole or in part at specified redemption prices. The floating-rate notes are not redeemable prior to maturity. Interest is payable...", - "page_nums": [ - 73 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 73, - "artifact_ref": "page_citation_assets/page-73.png", - "content_type": "image/png", - "source": "knowhere-rendered-page-citation-source", - "width": 1224, - "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4c9389d3-397f-57be-b189-64c7adcddba9", - "type": "page", - "content": "As of December 31,\n2024 2025\nAccrued fines and settlements(1) $ 9,830 $ 15,594\nAccrued purchases of property and equipment 7,104 8,877\nAccrued customer liabilities 4,304 5,029\nPayables to brokers for unsettled investment trades 3,866 950\nIncome taxes payable, net 2,905 523\nOther accrued expenses and current liabilities 23,219 24,584\nAccrued expenses and other current liabilities $ 51,228 $ 55,557\n(1) See Legal Matters in Note 10 for further details.\nAccumulated Other Comprehensive Income (Loss)\nComponents of AOCI, net of income tax, were as follows (in millions):\nForeign Currency\nTranslation\nAdjustments\nUnrealized Gains\n(Losses) on\nAvailable-for-Sale\nInvestments\nUnrealized\nGains (Losses)\non Cash Flow\nHedges Total\nBalance as of December 31, 2022 $ (4,142) $ (3,477) $ 16 $ (7,603)\nOther comprehensive income (loss) before\nreclassifications 735 1,344 84 2,163\nAmounts excluded from the assessment of\nhedge effectiveness recorded in AOCI 0 0 84 84\nAmounts reclassified from AOCI 0 1,168 (214) 954\nOther comprehensive income (loss) 735 2,512 (46) 3,201\nBalance as of December 31, 2023 (3,407) (965) (30) (4,402)\nOther comprehensive income (loss) before\nreclassifications (1,673) (116) 698 (1,091)\nAmounts excluded from the assessment of\nhedge effectiveness recorded in AOCI 0 0 77 77\nAmounts reclassified from AOCI 0 782 (166) 616\nOther comprehensive income (loss) (1,673) 666 609 (398)\nBalance as of December 31, 2024 (5,080) (299) 579 (4,800)\nOther comprehensive income (loss) before\nreclassifications 2,511 1,146 (734) 2,923\nAmounts excluded from the assessment of\nhedge effectiveness recorded in AOCI 11 0 (45) (34)\nAmounts reclassified from AOCI 0 (169) 164 (5)\nOther comprehensive income (loss) 2,522 977 (615) 2,884\nBalance as of December 31, 2025 $ (2,558) $ 678 $ (36) $ (1,916)\nThe effects on net income of amounts reclassified from AOCI were as follows (in millions):\nTable of Contents Alphabet Inc.\n73.", - "path": "GOOG 10-K 2025.pdf/p74", - "metadata": { - "length": 1986, - "summary": "As of December 31, 2024 2025 Accrued fines and settlements(1) $ 9,830 $ 15,594 Accrued purchases of property and equipment 7,104 8,877 Accrued customer liabilities 4,304 5,029 Payables to brokers for unsettled investment trades 3,866 950 Income taxes payable, net 2,905 523 Oth...", - "page_nums": [ - 74 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + "artifact_ref": "page_citation_assets/page-73.png", + "content_type": "image/png", + "source": "knowhere-rendered-page-citation-source", + "width": 1224, + "height": 1584 + }, { "page_num": 74, "artifact_ref": "page_citation_assets/page-74.png", @@ -1846,24 +713,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_81df29c0-e104-51d5-a4f5-f1c5958ad20c", - "type": "page", - "content": "Year Ended December 31,\n AOCI Components Location 2023 2024 2025\nUnrealized gains (losses) on available-for-sale investments\nOther income (expense), net $ (1,497) $ (1,008) $ 213\nBenefit (provision) for income\ntaxes 329 226 (44)\nNet of income tax (1,168) (782) 169\nUnrealized gains (losses) on cash flow hedges\nForeign exchange contracts Revenue 213 174 (233)\nInterest rate contracts Other income (expense), net 6 1 1\nBenefit (provision) for income\ntaxes (5) (9) 68\nNet of income tax 214 166 (164)\nTotal amount reclassified, net of income tax $ (954) $ (616) $ 5\nOther Income (Expense), Net\nComponents of OI&E were as follows (in millions):\n Year Ended December 31,\n 2023 2024 2025\nInterest income $ 3,865 $ 4,482 $ 4,337\nInterest expense(1) (308) (268) (736)\nForeign currency exchange gain (loss), net (1,238) (409) (382)\nGain (loss) on debt securities, net (1,215) (1,043) 540\nGain (loss) on equity securities, net 392 3,714 24,080\nIncome (loss) and impairment from equity method investments, net (628) (188) 281\nOther 556 1,137 1,667\nOther income (expense), net $ 1,424 $ 7,425 $ 29,787\n(1) Interest expense is net of interest capitalized of $181 million, $194 million, and $447 million for the years ended December 31,\n2023, 2024, and 2025, respectively.\nNote 8. Acquisitions\nPending Acquisitions\nIn March 2025, we entered into a definitive agreement to acquire Wiz, a leading cloud security platform, for\n$32.0 billion, subject to closing adjustments, in an all-cash transaction. The acquisition of Wiz is expected to close in\n2026, subject to customary closing conditions, including the receipt of regulatory approval s. Upon the close of the\nacquisition, Wiz will be part of the Google Cloud segment.\nIn December 2025, we entered into a definitive agreement to acquire Intersect, which provides data center and\nenergy infrastructure solutions, for $4.8 billion in cash, plus the assumption of deb t. The acquisition of Intersect is\nexpected to close in the first half of 2026, subject to customary closing conditions.\nNote 9. Goodwill\nChanges in the carrying amount of goodwill for the years ended December 31, 2024 and 2025 were as follows\n(in millions):\nTable of Contents Alphabet Inc.\n74.", - "path": "GOOG 10-K 2025.pdf/p75", - "metadata": { - "length": 2241, - "summary": "Year Ended December 31, AOCI Components Location 2023 2024 2025 Unrealized gains (losses) on available-for-sale investments Other income (expense), net $ (1,497) $ (1,008) $ 213 Benefit (provision) for income taxes 329 226 (44) Net of income tax (1,168) (782) 169 Unrealized ga...", - "page_nums": [ - 75 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 75, "artifact_ref": "page_citation_assets/page-75.png", @@ -1871,24 +721,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c89d28cc-7aea-55bb-8d3e-244fb6e491d8", - "type": "page", - "content": "Google\nServices Google Cloud Other Bets Total\nBalance as of December 31, 2023 $ 21,118 $ 7,199 $ 881 $ 29,198\nAdditions 2,441 295 0 2,736\nForeign currency translation and other adjustments (38) (4) (7) (49)\nBalance as of December 31, 2024 23,521 7,490 874 31,885\nAdditions 1,269 163 0 1,432\nForeign currency translation and other adjustments 80 7 (24) 63\nBalance as of December 31, 2025 $ 24,870 $ 7,660 $ 850 $ 33,380\nNote 10. Commitments and Contingencies\nCommitments\nWe have certain content licensing agreements with future fixed or minimum guaranteed commitments of\n$7.7 billion as of December 31, 2025, of which the majority is paid quarterly through the first quarter of 2030.\nFinancial Guarantees\nWe provide financial guarantees to certain counterparties, in the form of backstop agreements with varying terms\nthrough August 2026. These backstop agreements support counterparty procurement of long-lead time equipment for\nour future power purchase agreements. As of December 31, 2025, our maximum potential amount of future payments\nunder these guarantees was $5.7 billion, upon which we may receive certain assets. The fair value of these obligations\nwas not material.\nIndemnifications\nIn the normal course of business, including to facilitate transactions in our services and products and corporate\nactivities, we indemnify certain parties, including advertisers, Google Network partners, distribution partners,\ncustomers of Google Cloud offerings, lessors, and service providers with respect to certain matters. We have agreed\nto defend and/or indemnify certain parties against losses arising from a breach of representations or covenants, or out\nof intellectual property infringement or other claims made against certain parties. Several of these agreements limit the\ntime within which an indemnification claim can be made and the amount of the claim. In addition, we have entered into\nindemnification agreements with our officers and directors, and our bylaws contain similar indemnification obligations\nto our agents.\nIt is not possible to make a reasonable estimate of the maximum potential amount under these indemnification\nagreements due to the unique facts and circumstances involved in each particular agreement. Additionally, the\npayments we have made under such agreements have not had a material adverse effect on our results of operations,\ncash flows, or financial position. However, to the extent that valid indemnification claims arise in the future, future\npayments by us could be significant and could have a material adverse effect on our results of operations or cash flows\nin a particular period.\nAs of December 31, 2025, we did not have any material indemnification claims that were probable or reasonably\npossible.\nLegal Matters\nWe record a liability when we believe that it is probable that a loss has been incurred, and the amount can be\nreasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be\nestimated, we disclose the reasonably possible loss. We evaluate developments in our legal matters that could affect\nthe amount of liability that has been previously accrued, and the matters and related reasonably possible losses\ndisclosed, and make adjustments as appropriate.\nCertain outstanding matters seek speculative, substantial, or indeterminate monetary amounts, substantial\nchanges to our business practices and products, or structural remedies. Significant judgment is required to determine\nboth the likelihood of there being a loss and the estimated amount of a loss related to such matters, and we may be\nunable to estimate the reasonably possible loss or range of losses. The outcomes of outstanding legal matters are\ninherently unpredictable and subject to significant uncertainties, and could, either individually or in aggregate, have a\nmaterial adverse effect.\nWe expense legal fees in the period in which they are incurred.\nTable of Contents Alphabet Inc.\n75.", - "path": "GOOG 10-K 2025.pdf/p76", - "metadata": { - "length": 3983, - "summary": "Google Services Google Cloud Other Bets Total Balance as of December 31, 2023 $ 21,118 $ 7,199 $ 881 $ 29,198 Additions 2,441 295 0 2,736 Foreign currency translation and other adjustments (38) (4) (7) (49) Balance as of December 31, 2024 23,521 7,490 874 31,885 Additions 1,26...", - "page_nums": [ - 76 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 76, "artifact_ref": "page_citation_assets/page-76.png", @@ -1896,24 +729,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3ab2185b-7272-578d-9d20-8847c095e7a6", - "type": "page", - "content": "Antitrust Matters\nWe are subject to formal and informal inquiries and investigations as well as litigation on various competition\nmatters by regulatory authorities and private parties in the US, Europe, and other jurisdictions globally, including the\nfollowing:\n• Shopping: In June 2017, the EC announced its decision that certain actions taken by Google relating to its\ndisplay and ranking of shopping search results and ads infringed European antitrust laws and imposed a €2.4\nbillion fine. In 2024, we made a cash payment of $3.0 billion for the fine.\n• Android: In July 2018, the EC announced its decision that certain provisions in Google's Android-related\ndistribution agreements infringed European antitrust laws, imposed a €4.3 billion fine, and directed the\ntermination of the conduct at issue. We appealed the EC decision and implemented changes to certain of our\nAndroid distribution practices. In September 2022, the General Court affirmed the EC decision but reduced the\nfine from €4.3 billion to €4.1 billion . We subsequently appealed the General Court's affirmation of the EC\ndecision with the European Court of Justice, which remains pending . In 2018, we recognized a charge of\n$5.1 billion for the fine, which we reduced by $217 million in 2022.\n• AdSense for Search: In March 2019, the EC announced its decision that certain provisions in Google's\nagreements with AdSense for Search partners infringed European antitrust laws, imposed a €1.5 billion fine,\nand directed actions related to AdSense for Search partners' agreements, which we implemented prior to the\ndecision. In 2019, we recognized a charge of $1.7 billion for the fine and appealed the EC decision. In\nSeptember 2024, the General Court overturned the EC decision and annulled the €1.5 billion fine. The EC has\nappealed the General Court's decision with the European Court of Justice.\n• Search: In October 2020, the DOJ and a number of state Attorneys General filed a lawsuit in the US District\nCourt for the District of Columbia concerning Google's Search and Search advertising practices and its\ncompliance with US antitrust laws. In August 2024, the US District Court for the District of Columbia ruled\nagainst Google. A final judgment was entered in December 2025, which, among other things, imposes\nrestrictions on how Google distributes its services and requires Google to share certain search data with and\noffer syndication services to certain competitors. In January 2026, we appealed the final judgment and moved\nto pause implementation of certain remedies. In February 2026, the DOJ and state Attorne ys General also\nappealed.\nFurther, in June 2022, the Australian Competition and Consumer Commission (ACCC) opened an investigation\ninto Search distribution practices. In August 2025, we agreed to a settlement with the ACCC requiring, among\nother things, changes to our Android agreements. We recognized a charge in the second quarter of 2025, and\nthe settlement was approved by the court in December 2025.\nIn October 2023, the Japanese Fair Trade Commission (JFTC) opened an investigation into Search\ndistribution practices. In April 2025, the JFTC issued a cease-and-desist order requiring us to make changes to\nour Android agreements to ensure they are consistent with Japanese antitrust law . The JFTC did not impose\nmonetary penalties.\n• Advertising Technology: In December 2020, a number of state Attorneys General filed a lawsuit in the US\nDistrict Court for the Eastern District of Texas concerning Google's advertising technology and its compliance\nwith US antitrust laws and state deceptive trade laws. In January 2023, the DOJ, along with a number of state\nAttorneys General, filed a lawsuit in the US District Court for the Eastern District of Virginia concerning\nGoogle's advertising technology and its compliance with US antitrust laws, and a number of additional state\nAttorneys General subsequently joined the lawsuit. In April 2025, the US District Court for the Eastern District\nof Virginia issued a mixed decision in the DOJ case against Google, ruling th at neither Google's advertiser\ntools nor the DoubleClick and AdMeld acquisitions were anticompetitive, but that Google's publisher tools\nunfairly excluded rivals. A separate proceeding to determine remedies, the range of which vary widely, took\nplace in September 2025, with the parties presenting differing remedy proposals. The DOJ's remedy proposal\nincludes structural remedies that could have a material adverse effect on our business. Closing arguments\nwere held in November 2025, and we are awaiting a final judgment. After that judgment, we plan to appeal the\nadverse portion of the April 2025 decision and potentially aspects of the remedies decision. A trial in the state\nAttorneys General case in the Eastern District of Texas will take place after a decision on remedies is issued in\nthe DOJ case. Given the nature of these matters, we cannot estimate a possible loss.\nFurther, in September 2025, the EC announced its decision that Google had infringed European competition\nlaws through \"self-preferencing\" practices on the buy-side and the sell-side relating to Google's advertising\ntechnology business. The EC decision imposed a €3.0 billion fine and directed Google to cease and desist the\nalleged \"self-preferencing\" practices. We appealed the ruling in November 2025. We recognized a charge of\nTable of Contents Alphabet Inc.\n76.", - "path": "GOOG 10-K 2025.pdf/p77", - "metadata": { - "length": 5418, - "summary": "Antitrust Matters We are subject to formal and informal inquiries and investigations as well as litigation on various competition matters by regulatory authorities and private parties in the US, Europe, and other jurisdictions globally, including the following: • Shopping: In...", - "page_nums": [ - 77 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 77, "artifact_ref": "page_citation_assets/page-77.png", @@ -1921,24 +737,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_dcf0d7ff-cd2f-59cc-a009-5b44d1cee2d6", - "type": "page", - "content": "$3.5 billion in the third quarter of 2025, and we placed bank guarantees in the fourth quarter of 2025 in lieu of\ncash payment.\nIn September 2024, the UK also issued a Statement of Objections concerning Google's advertising technology\nand its compliance with UK antitrust laws, to which we responded.\n• Google Play: In July 2021, a number of state Attorneys General filed a lawsuit in the US District Court for the\nNorthern District of California concerning Google’s operation of Android and Google Play and its compliance\nwith US antitrust laws and state antitrust and consumer protection laws. In September 2023, we reached a\nsettlement in principle with 50 state Attorneys General and three territories and recognized a charge. The court\npreliminarily approved the settlement in November 2025, and final approval remains pending before the court.\nIn May 2024, we funded the settlement amount to an escrow agent.\nIn December 2023, a California jury delivered a verdict against Google in Epic Games v. Google related to\nGoogle Play's business. Epic did not seek monetary damages. The presiding judge issued a remedies\ndecision in October 2024, ordering a variety of alterations to our business models and operations and\ncontractual agreements for Android and Google Play. We appealed the judgment, including the jury verdict and\naspects of the remedies ordered, and in July 2025, the Court of Appeals denied our appeal. We are in the\nprocess of appealing that decision to the US Supreme Court, and we implemented the ordered remedies in\nOctober 2025 while the appeal is pending. In October 2025, we reached a settlement with Epic to modify the\nremedies in this case and resolve certain other lawsuits Epic has filed regarding Google Play's business. The\nsettlement is contingent on the court approving a proposed modified injunction. Epic and Google filed a joint\nmotion to modify the injunction in November 2025, which is currently pending before the court.\n• European Digital Markets Act: In March 2024, the EC opened two investigations regarding Google's\ncompliance with certain provisions of the EU's Digital Markets Act relating to Google Play and Search. In\nMarch 2025, the EC issued preliminary findings of non-compliance in both investigations, to which we\nresponded. Given the nature of this matter, we cannot estimate a possible loss.\nIn addition to these antitrust proceedings, private individual and collective actions that overlap with claims\npursued by regulatory authorities are pending in the US and in several other jurisdictions, including across Europe.\nGiven the nature of these matters, we cannot estimate a possible loss.\nWe believe we have strong arguments against these open claims and will defend ourselves vigorously. We\ncontinue to cooperate with federal and state regulators in the US, the EC, and other regulators around the world.\nPrivacy Matters\nWe are subject to a number of privacy-related laws and regulations, and we currently are party to a number of\nprivacy investigations and lawsuits ongoing in multiple jurisdictions. For example, there are ongoing investigations and\nlitigation in the US and the EU, including those relating to our collection and use of location information, the choices we\noffer users, and advertising practices, which could result in significant fines, judgments, and product changes. In\nOctober 2025, we finalized a $1.4 billion settlement of certain privacy matters.\nPatent and Intellectual Property Claims\nWe have had patent, copyright, trade secret, and trademark infringement lawsuits filed against us claiming that\ncertain of our products, services, and technologies infringe others' intellectual property rights. Adverse results in these\nlawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders\npreventing us from offering certain features, functionalities, products, or services. As a result, we may have to change\nour business practices and develop non-infringing products or technologies, which could result in a loss of revenues for\nus and otherwise harm our business. In addition, the ITC has increasingly become an important forum to litigate\nintellectual property disputes because an ultimate loss in an ITC action can result in a prohibition on importing\ninfringing products into the US. Because the US is an important market, a prohibition on importation could have an\nadverse effect on us, including preventing us from importing many important products into the US or necessitating\nworkarounds that may limit certain features of our products. Further, our customers and partners may discontinue the\nuse of our products, services, and technologies, as a result of injunctions or otherwise, which could result in loss of\nrevenues and adversely affect our business.\nOther\nWe are subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings,\nand consent orders involving c ompetition, intellectual property, data privacy and security, tax and related compliance,\nlabor and employment, commercial disputes, content generated by our users, goods and services offered by\nadvertisers or publishers using our platforms, design of our products and services, personal injury and other tort and\nnuisance theories, consumer protection, including how we moderate content on our platforms, AI, and other matters.\nTable of Contents Alphabet Inc.\n77.", - "path": "GOOG 10-K 2025.pdf/p78", - "metadata": { - "length": 5411, - "summary": "$3.5 billion in the third quarter of 2025, and we placed bank guarantees in the fourth quarter of 2025 in lieu of cash payment. In September 2024, the UK also issued a Statement of Objections concerning Google's advertising technology and its compliance with UK antitrust laws,...", - "page_nums": [ - 78 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 78, "artifact_ref": "page_citation_assets/page-78.png", @@ -1946,24 +745,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7672612a-95bd-527a-867b-dd6ae687b412", - "type": "page", - "content": "For example, we periodically have data incidents that we report to relevant regulators as required by law. Such claims,\nconsent orders, lawsuits, regulatory and government investigations, and other proceedings could result in substantial\nfines and penalties, injunctive relief, ongoing monitoring and auditing obligations, changes to our products and\nservices, alterations to our business models and operations, and collateral related civil litigation or other adverse\nconsequences, all of which could harm our business, reputation, financial condition, and operating results.\nWe have ongoing legal matters relating to Russia. For example, some matters concern civil judgments that\ninclude compounding penalties imposed upon us in connection with disputes regarding the termination of accounts,\nincluding those of sanctioned parties. We do not expect these ongoing legal matters will have a material adverse\neffect.\nNon-Income Taxes\nWe are under audit by various domestic and foreign tax authorities with regards to non-income tax matters. The\nsubject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rate applied to the\nsale of our products and services in these jurisdictions and the tax treatment of certain employee benefits. We accrue\nnon-income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities when\na loss is probable and reasonably estimable. If we determine that a loss is reasonably possible and the loss or range of\nloss can be estimated, we disclose the reasonably possible loss. Due to the inherent complexity and uncertainty of\nthese matters and judicial process in certain jurisdictions, the final outcome may be materially different from our\nexpectations.\nSee Note 14 for further details regarding income tax contingencies.\nNote 11. Stockholders' Equity\nClass A and Class B Common Stock and Class C Capital Stock\nOur Board of Directors has authorized three classes of stock, Class A and Class B common stock, and Class C\ncapital stock. The rights of the holders of each class of our common and capital stock are identical, except with respect\nto voting. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock\nis entitled to 10 votes per share. Class C capital stock has no voting rights, except as required by applicable law.\nShares of Class B common stock may be converted at any time at the option of the stockholder and automatically\nconvert upon sale or transfer to Class A common stock.\nShare Repurchases\nIn the years ended December 31, 2023, 2024, and 2025, we continued to repurchase both Class A and Class C\nshares in a manner deemed in the best interest of the company and its stockholders, taking into account the economic\ncost and prevailing market conditions, including the relative trading prices and volumes of the Class A and Class C\nshares. In April 2024, the company's Board of Directors authorized a $70.0 billion share repurchase program for its\nClass A and Class C shares. In April 2025, the company's Board of Directors authorized an additional $70.0 billion\nshare repurchase program for its Class A and Class C shares. As of December 31, 2025 , $69.5 billion remained\navailable for Class A and Class C share repurchases.\nThe following table presents Class A and Class C shares repurchased and subsequently retired (in millions):\nYear Ended December 31,\n2023 2024 2025\nShares Amount Shares Amount Shares Amount\nClass A share repurchases 78 $ 9,316 73 $ 11,855 37 $ 6,501\nClass C share repurchases 450 52,868 306 50,192 203 38,897\nTotal share repurchases(1) 528 $ 62,184 379 $ 62,047 240 $ 45,398\n(1) Shares repurchased include any unsettled repurchases.\nRepurchases are executed from time to time, subject to general business and market conditions and other\ninvestment opportunities, through open market purchases or privately negotiated transactions, including through Rule\n10b5-1 plans. The repurchase programs do not have an expiration date.\nDividends\nDuring the year ended December 31, 2025 , total cash dividends were $4.8 billion for Class A , $703 million for\nClass B, and $4.5 billion for Class C shares, respectively.\nTable of Contents Alphabet Inc.\n78.", - "path": "GOOG 10-K 2025.pdf/p79", - "metadata": { - "length": 4261, - "summary": "For example, we periodically have data incidents that we report to relevant regulators as required by law. Such claims, consent orders, lawsuits, regulatory and government investigations, and other proceedings could result in substantial fines and penalties, injunctive relief,...", - "page_nums": [ - 79 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 79, "artifact_ref": "page_citation_assets/page-79.png", @@ -1971,24 +753,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2484c530-1d37-54a1-b39f-28eeb42dc930", - "type": "page", - "content": "In April 2025, the company's Board of Directors increased the quarterly cash dividend by 5% to $0.21 per share of\noutstanding Class A, Class B, and Class C shares.\nThe company has declared a quarterly cash dividend in the current quarter, and intends to pay quarterly cash\ndividends in the future, subject to review and approval by the company’s Board of Directors in its sole discretion.\nNote 12. Net Income Per Share\nWe compute net income per share of Class A, Class B, and Class C stock using the two-class method. Basic net\nincome per share is computed using the weighted-average number of shares outstanding during the period. Diluted net\nincome per share is computed using the weighted-average number of shares and the effect of potentially dilutive\nsecurities outstanding during the period. Potentially dilutive securities consist of RSUs and other contingently issuable\nshares. The dilutive effect of outstanding RSUs and other contingently issuable shares is reflected in diluted earnings\nper share by application of the treasury stock method. The computation of the diluted net income per share of Class A\nstock assumes the conversion of Class B stock, while the diluted net income per share of Class B stock does not\nassume the conversion of those shares.\nIn accordance with our certificate of incorporation, the rights, including the liquidation and dividend rights, of the\nholders of our Class A, Class B, and Class C stock are identical, except with respect to voting. Furthermore, there are\na number of safeguards built into our certificate of incorporation, as well as Delaware law, which preclude our Board of\nDirectors from declaring or paying unequal per share dividends on our Class A, Class B, and Class C stock.\nSpecifically, Delaware law provides that amendments to our certificate of incorporation which would have the effect of\nadversely altering the rights, powers, or preferences of a given class of stock must be approved by the class of stock\nadversely affected by the proposed amendment. In addition, our certificate of incorporation provides that before any\nsuch amendment may be put to a stockholder vote, it must be approved by the unanimous consent of our Board of\nDirectors.\nImmaterial differences in net income per share across our Class A, Class B, and Class C shares may arise due to\nthe allocation of distributed earnings, which is based on the holders as of the record date, compared with the allocation\nof undistributed earnings and number of shares, which is based on the weighted average shares outstanding over the\nperiods.\nTable of Contents Alphabet Inc.\n79.", - "path": "GOOG 10-K 2025.pdf/p80", - "metadata": { - "length": 2606, - "summary": "In April 2025, the company's Board of Directors increased the quarterly cash dividend by 5% to $0.21 per share of outstanding Class A, Class B, and Class C shares. The company has declared a quarterly cash dividend in the current quarter, and intends to pay quarterly cash divi...", - "page_nums": [ - 80 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 80, "artifact_ref": "page_citation_assets/page-80.png", @@ -1996,24 +761,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1662d758-1bb3-51fc-8a2b-010674e8c237", - "type": "page", - "content": "The following tables set forth the computation of basic and diluted net income per share of Class A, Class B, and\nClass C stock (in millions, except per share amounts):\n\n Year Ended December 31, 2023\n Class A Class B Class C Consolidated\nBasic net income per share:\nNumerator\nAllocation of distributed earnings (cash dividends paid) $ 0 $ 0 $ 0 $ 0\nAllocation of undistributed earnings 34,601 5,124 34,070 73,795\nNet income $ 34,601 $ 5,124 $ 34,070 $ 73,795\nDenominator\nNumber of shares used in per share computation 5,922 877 5,831 12,630\nBasic net income per share $ 5.84 $ 5.84 $ 5.84 $ 5.84\nDiluted net income per share:\nNumerator\nAllocation of total earnings for basic computation $ 34,601 $ 5,124 $ 34,070 $ 73,795\nReallocation of total earnings as a result of conversion of\nClass B to Class A shares 5,124 0 0 _(1)\nReallocation of undistributed earnings (287) (37) 287 _(1)\nNet income $ 39,438 $ 5,087 $ 34,357 $ 73,795\nDenominator\nNumber of shares used in basic computation 5,922 877 5,831 12,630\nWeighted-average effect of dilutive securities\nAdd:\nConversion of Class B to Class A shares outstanding 877 0 0 _(1)\nRestricted stock units and other contingently issuable\nshares 0 0 92 92\nNumber of shares used in per share computation 6,799 877 5,923 12,722\nDiluted net income per share $ 5.80 $ 5.80 $ 5.80 $ 5.80\n(1) Not applicable for consolidated net income per share.\nTable of Contents Alphabet Inc.\n80.", - "path": "GOOG 10-K 2025.pdf/p81", - "metadata": { - "length": 1449, - "summary": "The following tables set forth the computation of basic and diluted net income per share of Class A, Class B, and Class C stock (in millions, except per share amounts): Year Ended December 31, 2023 Class A Class B Class C Consolidated Basic net income per share: Numerator Allo...", - "page_nums": [ - 81 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 81, "artifact_ref": "page_citation_assets/page-81.png", @@ -2021,24 +769,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_180a3fdb-481f-5804-b126-5280bf24056c", - "type": "page", - "content": "Year Ended December 31, 2024\n Class A Class B Class C Consolidated\nBasic net income per share:\nNumerator\nAllocation of distributed earnings (cash dividends paid) $ 3,509 $ 519 $ 3,335 $ 7,363\nAllocation of undistributed earnings 44,085 6,520 42,150 92,755\nNet income $ 47,594 $ 7,039 $ 45,485 $ 100,118\nDenominator\nNumber of shares used in per share computation 5,855 866 5,598 12,319\nBasic net income per share $ 8.13 $ 8.13 $ 8.13 $ 8.13\nDiluted net income per share:\nNumerator\nAllocation of total earnings for basic computation $ 47,594 $ 7,039 $ 45,485 $ 100,118\nReallocation of total earnings as a result of conversion of\nClass B to Class A shares 7,039 0 0 _(1)\nReallocation of undistributed earnings (520) (67) 520 _(1)\nNet income $ 54,113 $ 6,972 $ 46,005 $ 100,118\nDenominator\nNumber of shares used in basic computation 5,855 866 5,598 12,319\nWeighted-average effect of dilutive securities\nAdd:\nConversion of Class B to Class A shares outstanding 866 0 0 _(1)\nRestricted stock units and other contingently issuable\nshares 0 0 128 128\nNumber of shares used in per share computation 6,721 866 5,726 12,447\nDiluted net income per share $ 8.05 $ 8.05 $ 8.03 $ 8.04\n(1) Not applicable for consolidated net income per share.\nTable of Contents Alphabet Inc.\n81.", - "path": "GOOG 10-K 2025.pdf/p82", - "metadata": { - "length": 1297, - "summary": "Year Ended December 31, 2024 Class A Class B Class C Consolidated Basic net income per share: Numerator Allocation of distributed earnings (cash dividends paid) $ 3,509 $ 519 $ 3,335 $ 7,363 Allocation of undistributed earnings 44,085 6,520 42,150 92,755 Net income $ 47,594 $...", - "page_nums": [ - 82 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 82, "artifact_ref": "page_citation_assets/page-82.png", @@ -2046,24 +777,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_49831507-0296-5bf7-9a8f-d4efe05c4352", - "type": "page", - "content": "Year Ended December 31, 2025\n Class A Class B Class C Consolidated\nBasic net income per share:\nNumerator\nAllocation of distributed earnings (cash dividends paid) $ 4,832 $ 703 $ 4,514 $ 10,049\nAllocation of undistributed earnings 58,682 8,557 54,882 122,121\nNet income $ 63,514 $ 9,260 $ 59,396 $ 132,170\nDenominator\nNumber of shares used in per share computation 5,822 849 5,445 12,116\nBasic net income per share $ 10.91 $ 10.91 $ 10.91 $ 10.91\nDiluted net income per share:\nNumerator\nAllocation of total earnings for basic computation $ 63,514 $ 9,260 $ 59,396 $ 132,170\nReallocation of total earnings as a result of conversion of\nClass B to Class A shares 9,260 0 0 _(1)\nReallocation of undistributed earnings (627) (79) 627 _(1)\nNet income $ 72,147 $ 9,181 $ 60,023 $ 132,170\nDenominator\nNumber of shares used in basic computation 5,822 849 5,445 12,116\nWeighted-average effect of dilutive securities\nAdd:\nConversion of Class B to Class A shares outstanding 849 0 0 _(1)\nRestricted stock units and other contingently issuable\nshares 0 0 114 114\nNumber of shares used in per share computation 6,671 849 5,559 12,230\nDiluted net income per share $ 10.82 $ 10.81 $ 10.80 $ 10.81\n(1) Not applicable for consolidated net income per share.\nNote 13. Compensation Plans\nStock Plans\nOur stock plans include the Alphabet Amended and Restated 2021 Stock Plan (\"Alphabet 2021 Stock Plan\") and\nOther Bets stock-based plans. Under our stock plans, RSUs and other types of awards may be granted. Under the\nAlphabet 2021 Stock Plan, an RSU award is an agreement to issue shares of our Class C stock at the time the award\nvests. RSUs generally vest over four years contingent upon employment on the vesting date. RSUs are awarded\ndividend equivalents, which are subject to the same vesting conditions as the underlying award, and settled in Class C\nshares.\nAs of December 31, 2025, there were 534 million shares of Class C stock reserved for future issuance under the\nAlphabet 2021 Stock Plan.\nStock-Based Compensation\nFor the years ended December 31, 2023, 2024, and 2025, total SBC expense was $22.1 billion, $22.8 billion, and\n$27.1 billion, including amounts associated with awards we expect to settle in Alphabet stock of $21.7 billion, $22.0\nbillion, and $24.1 billion, respectively.\nFor the years ended December 31, 2023 , 2024, and 2025, we recognized tax benefits on total SBC expense,\nwhich are reflected in the provision for income taxes, of $4.5 billion, $4.6 billion, and $5.0 billion, respectively.\nFor the years ended December 31, 2023 , 2024, and 2025, tax benefit realized related to awards vested or\nexercised during the period was $5.6 billion, $6.8 billion, and $8.1 billion, respectively. These amounts do not include\nthe indirect effects of stock-based awards, which primarily relate to the research and development tax credit.\nTable of Contents Alphabet Inc.\n82.", - "path": "GOOG 10-K 2025.pdf/p83", - "metadata": { - "length": 2905, - "summary": "Year Ended December 31, 2025 Class A Class B Class C Consolidated Basic net income per share: Numerator Allocation of distributed earnings (cash dividends paid) $ 4,832 $ 703 $ 4,514 $ 10,049 Allocation of undistributed earnings 58,682 8,557 54,882 122,121 Net income $ 63,514...", - "page_nums": [ - 83 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 83, "artifact_ref": "page_citation_assets/page-83.png", @@ -2071,24 +785,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f09af09d-c179-58d5-9ae9-8f6acba32d43", - "type": "page", - "content": "Stock-Based Award Activities\nThe following table summarizes the activities for unvested Alphabet RSUs, which include dividend equivalents\nawarded to holders of unvested stock, for the year ended December 31, 2025 (in millions, except per share amounts):\n\n Number of\nShares\nWeighted-\nAverage\nGrant-Date\nFair Value\nUnvested as of December 31, 2024 299 $ 122.77\nGranted 198 $ 188.82\nVested (181) $ 133.90\nForfeited/canceled (34) $ 142.33\nUnvested as of December 31, 2025 282 $ 159.75\nThe weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2023 and\n2024 was $97.59 and $140.04, respectively. Total fair value of RSUs, as of their respective vesting dates, during the\nyears ended December 31, 2023, 2024, and 2025, were $26.6 billion, $33.3 billion, and $39.7 billion, respectively.\nAs of December 31, 2025, there was $42.9 billion of unrecognized compensation cost related to unvested RSUs.\nThis amount is expected to be recognized over a weighted-average period of 2.6 years.\nNote 14. Income Taxes\nIncome from continuing operations before income taxes consisted of the following (in millions):\nYear Ended December 31,\n 2023 2024 2025\nDomestic operations $ 73,600 $ 108,076 $ 143,591\nForeign operations 12,117 11,739 15,235\nTotal $ 85,717 $ 119,815 $ 158,826\nProvision for income taxes consisted of the following (in millions):\nYear Ended December 31,\n 2023 2024 2025\nCurrent:\nFederal and state $ 15,716 $ 21,101 $ 13,378\nForeign 3,935 3,852 5,028\nTotal 19,651 24,953 18,406\nDeferred:\nFederal and state (7,482) (5,350) 8,243\nForeign (247) 94 7\nTotal (7,729) (5,256) 8,250\nProvision for income taxes $ 11,922 $ 19,697 $ 26,656\nTable of Contents Alphabet Inc.\n83.", - "path": "GOOG 10-K 2025.pdf/p84", - "metadata": { - "length": 1726, - "summary": "Stock-Based Award Activities The following table summarizes the activities for unvested Alphabet RSUs, which include dividend equivalents awarded to holders of unvested stock, for the year ended December 31, 2025 (in millions, except per share amounts): Number of Shares Weight...", - "page_nums": [ - 84 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 84, "artifact_ref": "page_citation_assets/page-84.png", @@ -2096,24 +793,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_10022c8e-9ffd-5908-89de-5acc56be46d8", - "type": "page", - "content": "The reconciliation of federal statutory income tax rate to our effective income tax rate was as follows:\nYear Ended December 31,\n 2023 2024 2025\nUS federal statutory rate 18,001 21.0 % 25,161 21.0 % 33,353 21.0 %\nState and local income taxes, net of federal\nincome tax effect(1) 823 1.0 % 1,199 1.0 % 1,606 1.0 %\nForeign tax effects:\nBrazil:\nWithholding taxes 1,064 1.2 % 1,041 0.9 % 1,384 0.9 %\nOther 62 0.1 % 12 0.0 % 23 0.0 %\nOther foreign jurisdictions (74) (0.1) % 353 0.3 % 396 0.2 %\nEffect of change in tax laws or rates enacted in\nthe current period (829) (1.0) % 0 0.0 % 0 0.0 %\nEffect of cross-border tax laws:\nForeign-derived intangible income deduction (3,980) (4.6) % (4,568) (3.8) % (3,931) (2.5) %\nOther 215 0.2 % 321 0.3 % 295 0.2 %\nTax credits:\nFederal research credit (1,575) (1.8) % (1,792) (1.5) % (2,088) (1.3) %\nForeign tax credits (1,396) (1.6) % (1,373) (1.1) % (1,684) (1.1) %\nOther (498) (0.6) % (198) (0.2) % (98) (0.1) %\nChanges in valuation allowances 513 0.6 % 603 0.5 % 1,170 0.7 %\nNontaxable or nondeductible items:\nStock-based compensation expense (602) (0.7) % (1,743) (1.5) % (2,601) (1.6) %\nOther 169 0.2 % 203 0.2 % 955 0.6 %\nChanges in unrecognized tax benefits 432 0.5 % 689 0.6 % (1,123) (0.7) %\nOther adjustments (403) (0.5) % (211) (0.2) % (1,002) (0.6) %\nTotal $ 11,922 13.9 % $ 19,697 16.4 % $ 26,656 16.8 %\n(1) The tax e ffect in this category primarily reflects state and local taxes in New York state, New York city, Pennsylvania,\nMinnesota, Illinois, New Jersey and Wisconsin.\nIn 2023, the IRS issued a rule change allowing taxpayers to temporarily apply the regulations in effect prior to\n2022 related to US federal foreign tax credits as well as a separate rule change with guidance on the capitalization and\namortization of research and development expenses. A cumulative one-time adjustment for these tax rule changes was\nrecorded in 2023.\nChanges to US tax law enacted on July 4, 2025, allow for immediate expensing of domestic research and\nexperimentation costs, accelerated depreciation on eligible capital expenditures, and other tax law changes impacting\n2025 with certain changes effective in 2026. These changes are reflected in our results for the year ended\nDecember 31, 2025.\nTable of Contents Alphabet Inc.\n84.", - "path": "GOOG 10-K 2025.pdf/p85", - "metadata": { - "length": 2372, - "summary": "The reconciliation of federal statutory income tax rate to our effective income tax rate was as follows: Year Ended December 31, 2023 2024 2025 US federal statutory rate 18,001 21.0 % 25,161 21.0 % 33,353 21.0 % State and local income taxes, net of federal income tax effect(1)...", - "page_nums": [ - 85 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 85, "artifact_ref": "page_citation_assets/page-85.png", @@ -2121,24 +801,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_583e517b-b664-5f5c-a09e-480f75e474ed", - "type": "page", - "content": "Deferred Income Taxes\nDeferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets\nand liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components\nof our deferred tax assets and liabilities were as follows (in millions):\nAs of December 31,\n2024 2025\nDeferred tax assets:\nAccrued employee benefits $ 1,834 $ 1,951\nAccruals and reserves not currently deductible 2,552 3,570\nTax credits 6,384 7,314\nNet operating losses 3,472 4,953\nOperating leases 3,336 3,337\nCapitalized research and development 25,903 24,758\nOther 1,376 2,143\nTotal deferred tax assets 44,857 48,026\nValuation allowance (11,493) (13,942)\nTotal deferred tax assets net of valuation allowance 33,364 34,084\nDeferred tax liabilities:\nProperty and equipment, net (9,932) (13,256)\nNet investment gains (2,978) (8,242)\nOperating leases (2,986) (3,103)\nOther (1,008) (1,289)\nTotal deferred tax liabilities (16,904) (25,890)\nNet deferred tax assets (liabilities) $ 16,460 $ 8,194\nAs of December 31, 2025 , our federal, state, and foreign net operating loss carryforwards for income tax\npurposes were approximately $13.0 billion, $25.1 billion, and $2.9 billion respectively. If not utilized, the federal, foreign\nand state net operating loss carryforwards will all begin to expire in 2026. It is more likely than not that the majority of\nthe net operating loss carryforwards will not be realized. The net operating loss carryforwards are subject to various\nannual limitations under the tax laws of the different jurisdictions.\nAs of December 31, 2025, our Federal and California research and development credit carryforwards for income\ntax purposes were approximately $771 million and $6.4 billion, respectively. If not utilized, the Federal research and\ndevelopment credit will begin to expire in 2037 and the California research and development credit can be carried over\nindefinitely. We believe the majority of the federal tax credit and state tax credit is not likely to be realized.\nAs of December 31, 2025 , our investment tax credit carryforwards for state income tax purposes were\napproximately $1.3 billion and will begin to expire in 2033. We use the flow-through method of accounting for\ninvestment tax credits. We believe this tax credit is not likely to be realized.\nAs of December 31, 2025 , we maintained a valuation allowance with respect to California deferred tax assets,\ncertain federal net operating losses, certain state net operating losses and tax credits, net deferred tax assets relating\nto certain Other Bet companies , and certain foreign net operating losses that we believe are not likely to be realized.\nWe continue to reassess the remaining valuation allowance quarterly, and if future evidence allows for a partial or full\nrelease of the valuation allowance, a tax benefit will be recorded accordingly.\nTable of Contents Alphabet Inc.\n85.", - "path": "GOOG 10-K 2025.pdf/p86", - "metadata": { - "length": 2963, - "summary": "Deferred Income Taxes Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets...", - "page_nums": [ - 86 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 86, "artifact_ref": "page_citation_assets/page-86.png", @@ -2146,24 +809,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_844d8fe9-8cd8-529d-9d6d-5bb3e68a42af", - "type": "page", - "content": "Cash paid for income taxes, net of refunds, were as follows (in millions):\nYear Ended December 31,\n2023 2024 2025\nUS federal $ 13,689 $ 19,921 $ 13,658\nUS state and local 1,224 2,697 2,919\nForeign:\nBrazil 1,264 1,101 1,368\nOther 2,987 3,634 3,581\nTotal foreign 4,251 4,735 4,949\nTotal cash paid for income taxes, net of refunds $ 19,164 $ 27,353 $ 21,526\nUncertain Tax Positions\nThe following table summarizes the activity related to our gross unrecognized tax benefits (in millions):\n 2023 2024 2025\nBeginning gross unrecognized tax benefits $ 7,055 $ 9,438 $ 12,619\nIncreases related to prior year tax positions 740 896 278\nDecreases related to prior year tax positions (682) (83) (1,301)\nDecreases related to settlement with tax authorities (21) (311) (2,183)\nIncreases related to current year tax positions 2,346 2,679 2,099\nEnding gross unrecognized tax benefits $ 9,438 $ 12,619 $ 11,512\nYear Ended December 31,\nWe are subject to income taxes in the US and foreign jurisdictions. Significant judgment is required in evaluating\nour uncertain tax positions and determining our provision for income taxes. The total amount of gross unrecognized tax\nbenefits was $9.4 billion, $12.6 billion, and $11.5 billion as of December 31, 2023 , 2024, and 2025, respectively, of\nwhich $7.4 billion, $10.0 billion, and $9.7 billion, if recognized, would affect our effective tax rate, respectively.\nAs of December 31, 2024 and 2025, we accrued $1.1 billion and $1.2 billion in interest and penalties in provision\nfor income taxes, respectively.\nWe are subject to the continuous examination of our income tax returns by the IRS and other tax authorities. The\nIRS is currently examining our 2019 through 2021 tax returns. We have also received tax assessments in multiple\nforeign jurisdictions asserting transfer pricing adjustments or permanent establishment. We continue to defend such\nclaims as presented.\nWe regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the\nadequacy of our provision for income taxes. We continue to monitor the progress of ongoing discussions with tax\nauthorities and the effect, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions.\nWe believe that an adequate provision has been made for any adjustments that may result from tax examinations.\nHowever, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are\nresolved in a manner not consistent with management's expectations, we could be required to adjust our provision for\nincome taxes in the period such resolutions occur.\nNote 15. Information about Segments and Geographic Areas\nWe report our segment results as Google Services, Google Cloud, and Other Bets:\n• Google Services includes products and services such as ads, Android, Chrome, devices, Google Maps,\nGoogle Play, Search, and YouTube. Google Services generates revenues primarily from advertising; fees\nreceived for consumer subscription-based products such as YouTube TV, YouTube Music and Premium, and\nNFL Sunday Ticket, as well as Google One; the sale of apps and in-app purchases; and devices.\n• Google Cloud includes infrastructure and platform services, applications, and other services for enterprise\ncustomers. Google Cloud generates revenues primarily from consumption-based fees and subscriptions\nreceived for Google Cloud Platform services, Google Workspace communication and collaboration tools, and\nother enterprise services.\nTable of Contents Alphabet Inc.\n86.", - "path": "GOOG 10-K 2025.pdf/p87", - "metadata": { - "length": 3576, - "summary": "Cash paid for income taxes, net of refunds, were as follows (in millions): Year Ended December 31, 2023 2024 2025 US federal $ 13,689 $ 19,921 $ 13,658 US state and local 1,224 2,697 2,919 Foreign: Brazil 1,264 1,101 1,368 Other 2,987 3,634 3,581 Total foreign 4,251 4,735 4,94...", - "page_nums": [ - 87 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 87, "artifact_ref": "page_citation_assets/page-87.png", @@ -2171,24 +817,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9a867b22-6364-5d03-86c6-7c3d4ff9636b", - "type": "page", - "content": "• Other Bets is a combination of multiple operating segments that are not individually material. Revenues from\nOther Bets are generated primarily from the sale of autonomous transportation services and internet services.\nRevenues, certain costs, such as costs associated with content and traffic acquisition, certain engineering\nactivities, and devices, as well as certain operating expenses are directly attributable to our segments. Due to the\nintegrated nature of Alphabet, other costs and expenses, such as technical infrastructure and office facilities, are\nmanaged centrally at a consolidated level. These costs, including the associated depreciation, are allocated to\noperating segments as a service cost generally based on usage, headcount, or revenue.\nCertain costs are not allocated to our segments because they represent Alphabet-level activities. These costs\nprimarily include:\n• certain AI-focused shared research and development activities, including employee compensation expenses\nand technical infrastructure usage costs associated with the development of our general AI models;\n• corporate initiatives such as our philanthropic activities; and\n• corporate shared costs such as certain finance, human resource, and legal costs, including certain fines and\nsettlements.\nCharges associated with employee severance and office space reductions are also not allocated to our segments.\nAdditionally, hedging gains (losses) related to revenue are not allocated to our segments.\nOur Chief Operating Decision Maker (CODM) is our Chief Executive Officer, Sundar Pichai. Our CODM uses\nsegment operating income (loss) to allocate resources to our segments in our annual planning process and to assess\nthe performance of our segments, primarily by monitoring actual results versus the annual plan. Our operating\nsegments are not evaluated using asset information.\nThe following table presents revenue, profitability, and expense information about our segments (in millions):\nYear Ended December 31,\n2023 2024 2025\nRevenues:\nGoogle Services $ 272,543 $ 304,930 $ 342,721\nGoogle Cloud 33,088 43,229 58,705\nOther Bets 1,527 1,648 1,537\nHedging gains (losses) 236 211 (127)\nTotal revenues $ 307,394 $ 350,018 $ 402,836\nOperating income (loss):\nGoogle Services $ 95,858 $ 121,263 $ 139,404\nGoogle Cloud 1,716 6,112 13,910\nOther Bets (4,095) (4,444) (7,515)\nAlphabet-level activities (9,186) (10,541) (16,760)\nTotal income from operations $ 84,293 $ 112,390 $ 129,039\nSupplemental information about segment expenses:\nGoogle Services:\nEmployee compensation expenses $ 46,224 $ 44,560 $ 45,124\nOther costs and expenses 130,461 139,107 158,193\nTotal Google Services costs and expenses $ 176,685 $ 183,667 $ 203,317\nGoogle Cloud:\nEmployee compensation expenses $ 19,054 $ 20,519 $ 22,078\nOther costs and expenses 12,318 16,598 22,717\nTotal Google Cloud costs and expenses $ 31,372 $ 37,117 $ 44,795\nTable of Contents Alphabet Inc.\n87.", - "path": "GOOG 10-K 2025.pdf/p88", - "metadata": { - "length": 2951, - "summary": "• Other Bets is a combination of multiple operating segments that are not individually material. Revenues from Other Bets are generated primarily from the sale of autonomous transportation services and internet services. Revenues, certain costs, such as costs associated with c...", - "page_nums": [ - 88 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 88, "artifact_ref": "page_citation_assets/page-88.png", @@ -2196,24 +825,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c4856b16-ec83-560e-b1f4-ad006e2e6708", - "type": "page", - "content": "Google Services and Google Cloud employee compensation expenses include the costs associated with direct\nand allocated employees. Google Services and Google Cloud other costs and expenses primarily include direct costs,\nsuch as advertising and promotional activities , legal and other matters, and third-party services fees as well as\nallocated costs, such as technical infrastructure and office facilities usage costs. Additionally, Google Services other\ncosts and expenses include content and traffic acquisition costs and device costs.\nSee Note 2 for further details relating to revenues by geography.\nThe following table presents long-lived assets by geographic area, which includes property and equipment, net\nand operating lease assets (in millions):\nAs of December 31,\n 2024 2025\nLong-lived assets:\nUnited States $ 138,993 $ 195,337\nInternational 45,631 66,481\nTotal long-lived assets $ 184,624 $ 261,818\nNote 16. Subsequent Event\nIn January 2026, we recognized approximately $32.0 billion of unrealized gains in our non-marketable\ninvestments. These unrealized gains reflect an estimated increase in the fair value measurement following observable\ntransactions that occurred in January 2026, and are subject to change as we finalize related valuations. See Note 3\nand Note 7 for further details on equity investments and OI&E.\nTable of Contents Alphabet Inc.\n88.", - "path": "GOOG 10-K 2025.pdf/p89", - "metadata": { - "length": 1379, - "summary": "Google Services and Google Cloud employee compensation expenses include the costs associated with direct and allocated employees. Google Services and Google Cloud other costs and expenses primarily include direct costs, such as advertising and promotional activities , legal an...", - "page_nums": [ - 89 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 89, "artifact_ref": "page_citation_assets/page-89.png", @@ -2221,24 +833,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_41b13257-56c3-53a5-afd2-b77183dd78c9", - "type": "page", - "content": "ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL\nDISCLOSURE\nNone.\nITEM 9A. CONTROLS AND PROCEDURES\nEvaluation of Disclosure Controls and Procedures\nOur management, with the participation of our chief executive officer and chief financial officer, evaluated the\neffectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of the\nend of the period covered by this Annual Report on Form 10-K.\nBased on this evaluation, our chief executive officer and chief financial officer concluded that, as of December 31,\n2025, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to\nprovide reasonable assurance that information we are required to disclose in reports that we file or submit under the\nExchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules\nand forms, and that such information is accumulated and communicated to our management, including our chief\nexecutive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.\nChanges in Internal Control over Financial Reporting\nThere have been no changes in our internal control over financial reporting that occurred during the quarter\nended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal\ncontrol over financial reporting.\nManagement’s Report on Internal Control over Financial Reporting\nOur management is responsible for establishing and maintaining adequate internal control over financial\nreporting, as defined in Rule 13a-15(f) of the Exchange Act. Our management conducted an evaluation of the\neffectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated\nFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).\nBased on this evaluation, management concluded that our internal control over financial reporting was effective as of\nDecember 31, 2025. Management reviewed the results of its assessment with our Audit Committee. The effectiveness\nof our internal control over financial reporting as of December 31, 2025 has been audited by Ernst & Young LLP, an\nindependent registered public accounting firm, as stated in its report which is included in Item 8 of this Annual Report\non Form 10-K.\nLimitations on Effectiveness of Controls and Procedures\nIn designing and evaluating the disclosure controls and procedures, management recognizes that any controls\nand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the\ndesired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there\nare resource constraints and that management is required to apply its judgment in evaluating the benefits of possible\ncontrols and procedures relative to their costs.\nITEM 9B. OTHER INFORMATION\n10b5-1 Trading Plans\nDuring the quarter ended December 31, 2025, the following Section 16 director and officer adopted, modified, or\nterminated a \"Rule 10b5-1 trading arrangement\" (as defined in Item 408 of Regulation S-K of the Exchange Act):\n• John Hennessy , Chair of the Board of Directors , through the John L. Hennessy & Andrea J. Hennessy\nRevocable Trust, adopted a new trading plan on November 10, 2025 (with the first trade under the new plan\nscheduled for March 15, 2026). The trading plan will be effective until March 15, 2027 to sell up to 8,400\nshares of Class C Capital Stock and up to 4,200 shares of Class A Common Stock.\n• Ruth M. Porat , President and Chief Investment Officer , adopted a new trading plan on November 29, 2025\n(with the first trade under the new plan scheduled for March 2, 2026). The trading plan is scheduled to be in\neffect until March 2, 2027 to sell up to 154,486 shares (gross, plus any dividend equivalent units) of Class C\nCapital Stock issued upon the vesting of Ruth's Alphabet 2021 Performance Stock Units, as adjusted based on\nperformance (shares sold are net of tax withholding).\nThere were no \"non-Rule 10b5-1 trading arrangements\" (as defined in Item 408 of Regulation S-K of the\nExchange Act) adopted, modified, or terminated during the quarter ended December 31, 2025 by our directors and\nSection 16 officers. Each of the Rule 10b5-1 trading arrangements are in accordance with our Policy Against Insider\nTable of Contents Alphabet Inc.\n89.", - "path": "GOOG 10-K 2025.pdf/p90", - "metadata": { - "length": 4544, - "summary": "ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participation of our chief executive officer and chief financial office...", - "page_nums": [ - 90 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 90, "artifact_ref": "page_citation_assets/page-90.png", @@ -2246,24 +841,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5959ba83-48cd-5da4-9ecd-8356802b8d73", - "type": "page", - "content": "Trading and actual sale transactions made pursuant to such trading arrangements will be disclosed publicly in Section\n16 filings with the SEC in accordance with applicable securities laws, rules, and regulations.\nRequired Disclosure Pursuant to Section 13(r) of the Exchange Act\nAs previously disclosed, Google LLC, a subsidiary of Alphabet, filed notifications with the Russian Federal\nSecurity Service (FSB) pursuant to Russian encryption control requirements, which must be complied with prior to the\nimport of covered items. The information provided pursuant to Section 13(r) of the Exchange Act in Part II, Item 5 of\nour Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 is incorporated herein by reference.\nITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS\nNot applicable.\nTable of Contents Alphabet Inc.\n90.", - "path": "GOOG 10-K 2025.pdf/p91", - "metadata": { - "length": 863, - "summary": "Trading and actual sale transactions made pursuant to such trading arrangements will be disclosed publicly in Section 16 filings with the SEC in accordance with applicable securities laws, rules, and regulations. Required Disclosure Pursuant to Section 13(r) of the Exchange Ac...", - "page_nums": [ - 91 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 91, "artifact_ref": "page_citation_assets/page-91.png", @@ -2271,24 +849,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_be46ea96-c529-543b-8fb3-7b78350e2ff2", - "type": "page", - "content": "PART III\nITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE\nThe information required by this item will be included under the caption \"Directors, Executive Officers, and\nCorporate Governance\" in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC\nwithin 120 days of the fiscal year ended December 31, 2025 (2026 Proxy Statement) and is incorporated herein by\nreference. The information required by this item regarding delinquent filers pursuant to Item 405 of Regulation S-K will\nbe included under the caption \"Delinquent Section 16(a) Reports\" in the 2026 Proxy Statement and is incorporated\nherein by reference.\nWe have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of\nsecurities of Alphabet by directors, officers, and employees that we believe are reasonably designed to promote\ncompliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards. Our insider\ntrading policy states, among other things, that our directors, officers, and employees are prohibited from trading in such\nsecurities while in possession of material, nonpublic information. The foregoing summary of our insider trading policies\nand procedures does not purport to be complete and is qualified by reference to our Policy Against Insider Trading filed\nas Exhibit 19.1 to our 2024 Annual Report on Form 10-K and incorporated by reference herein.\nITEM 11. EXECUTIVE COMPENSATION\nThe information required by this item will be included under the captions \"Director Compensation,\" \"Executive\nCompensation\" and \"Directors, Executive Officers, and Corporate Governance—Corporate Governance and Board\nMatters—Compensation Committee Interlocks and Insider Participation\" in the 2026 Proxy Statement and is\nincorporated herein by reference, except as to information disclosed therein pursuant to Item 402(v) of Regulation S-K\nrelating to pay versus performance.\nITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED\nSTOCKHOLDER MATTERS\nThe information required by this item will be included under the captions \"Common Stock Ownership of Certain\nBeneficial Owners and Management\" and \"Equity Compensation Plan Information\" in the 2026 Proxy Statement and is\nincorporated herein by reference.\nITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE\nThe information required by this item will be included under the captions \"Certain Relationships and Related\nTransactions\" and \"Directors, Executive Officers, and Corporate Governance—Corporate Governance and Board\nMatters—Director Independence\" in the 2026 Proxy Statement and is incorporated herein by reference.\nITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES\nThe information required by this item will be included under the caption \"Independent Registered Public\nAccounting Firm\" in the 2026 Proxy Statement and is incorporated herein by reference.\nTable of Contents Alphabet Inc.\n91.", - "path": "GOOG 10-K 2025.pdf/p92", - "metadata": { - "length": 2998, - "summary": "PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE The information required by this item will be included under the caption \"Directors, Executive Officers, and Corporate Governance\" in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be...", - "page_nums": [ - 92 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 92, "artifact_ref": "page_citation_assets/page-92.png", @@ -2296,24 +857,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9cbd830d-1c1f-569f-b699-fd7da4cee1a3", - "type": "page", - "content": "PART IV\nITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES\nWe have filed the following documents as part of this Annual Report on Form 10-K:\n1. Consolidated Financial Statements\nReports of Independent Registered Public Accounting Firm 45\nFinancial Statements:\nConsolidated Balance Sheets 48\nConsolidated Statements of Income 49\nConsolidated Statements of Comprehensive Income 50\nConsolidated Statements of Stockholders’ Equity 51\nConsolidated Statements of Cash Flows 52\nNotes to Consolidated Financial Statements 53\n2. Financial Statement Schedules\nSchedule II: Valuation and Qualifying Accounts\nThe table below details the activity of the allowance for credit losses and sales credits for the years ended\nDecember 31, 2023, 2024, and 2025 (in millions):\nBalance at\nBeginning of Year Additions Usage\nBalance at\nEnd of Year\nYear ended December 31, 2023 $ 1,213 $ 3,115 $ (2,737) $ 1,591\nYear ended December 31, 2024 $ 1,591 $ 2,895 $ (2,850) $ 1,636\nYear ended December 31, 2025 $ 1,636 $ 4,128 $ (3,408) $ 2,356\nNote: Additions to the allowance for credit losses are charged to expense. Additions to the allowance for sales credits are\ncharged against revenues.\nAll other schedules have been omitted because they are not required, not applicable, or the required information\nis otherwise included.\n3. Exhibits\n2.01 Agreement and Plan of Merger, dated\nOctober 2, 2015, by and among Google Inc.,\nthe Registrant and Maple Technologies Inc.\nCurrent Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n3.01 Amended and Restated Certificate of\nIncorporation of the Registrant\nCurrent Report on Form 8-K\n(File No. 001-37580)\nJune 3, 2022\n3.02 Amended and Restated Bylaws of the\nRegistrant, dated October 19, 2022\nCurrent Report on Form 8-K\n(File No. 001-37580)\nOctober 25, 2022\n4.01 Specimen Class A Common Stock certificate Current Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n4.02 Specimen Class C Capital Stock certificate Current Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n4.03 u Alphabet Inc. Deferred Compensation Plan Current Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n4.04 Transfer Restriction Agreement, dated\nOctober 2, 2015, between the Registrant and\nLarry Page and certain of his affiliates\nCurrent Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n4.05 Transfer Restriction Agreement, dated\nOctober 2, 2015, between the Registrant and\nSergey Brin and certain of his affiliates\nCurrent Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n4.06 Joinder Agreement, dated December 31,\n2021, among the Registrant, Sergey Brin and\ncertain of his affiliates\nAnnual Report on Form 10-K\n(File No. 001-37580)\nFebruary 2, 2022\nExhibit\nNumber Description\nIncorporated by reference herein\nForm Date\nTable of Contents Alphabet Inc.\n92.", - "path": "GOOG 10-K 2025.pdf/p93", - "metadata": { - "length": 2778, - "summary": "PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES We have filed the following documents as part of this Annual Report on Form 10-K: 1. Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm 45 Financial Statements: Consolidated Balanc...", - "page_nums": [ - 93 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 93, "artifact_ref": "page_citation_assets/page-93.png", @@ -2321,24 +865,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8b86049c-2494-5780-8a5a-156ab5487919", - "type": "page", - "content": "4.07 Transfer Restriction Agreement, dated\nOctober 2, 2015, between the Registrant and\nEric E. Schmidt and certain of its affiliates\nCurrent Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n4.08 Class C Undertaking, dated October 2, 2015,\nexecuted by the Registrant\nCurrent Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n4.09 Indenture, dated February 12, 2016, between\nthe Registrant and The Bank of New York\nMellon Trust Company, N.A., as Trustee\nRegistration Statement on\nForm S-3\n(File No. 333-209510)\nFebruary 12, 2016\n4.10 Registrant Registration Rights Agreement\ndated December 14, 2015\nRegistration Statement on\nForm S-3\n(File No. 333-209518)\nFebruary 12, 2016\n4.11 First Supplemental Indenture, dated April 27,\n2016, between the Registrant and The Bank\nof New York Mellon Trust Company, N.A., as\ntrustee\nCurrent Report on Form 8-K\n(File No. 001-37580)\nApril 27, 2016\n4.12 Form of the Registrant’s 1.998% Note due\n2026\nCurrent Report on Form 8-K\n(File No. 001-37580)\nAugust 9, 2016\n4.13 Form of Global Note representing the\nRegistrant’s 0.800% notes due 2027\nCurrent Report on Form 8-K\n(File No. 001-37580)\nAugust 5, 2020\n4.14 Form of Global Note representing the\nRegistrant’s 1.100% notes due 2030\nCurrent Report on Form 8-K\n(File No. 001-37580)\nAugust 5, 2020\n4.15 Form of Global Note representing the\nRegistrant’s 1.900% notes due 2040\nCurrent Report on Form 8-K\n(File No. 001-37580)\nAugust 5, 2020\n4.16 Form of Global Note representing the\nRegistrant’s 2.050% notes due 2050\nCurrent Report on Form 8-K\n(File No. 001-37580)\nAugust 5, 2020\n4.17 Form of Global Note representing the\nRegistrant’s 2.250% notes due 2060\nCurrent Report on Form 8-K\n(File No. 001-37580)\nAugust 5, 2020\n4.18 Form of Global Note representing the\nRegistrant’s 4.000% notes due 2030\nCurrent Report on Form 8-K\n(File No. 001-37580)\nMay 1, 2025\n4.19 Form of Global Note representing the\nRegistrant’s 4.500% notes due 2035\nCurrent Report on Form 8-K\n(File No. 001-37580)\nMay 1, 2025\n4.20 Form of Global Note representing the\nRegistrant’s 5.250% notes due 2055\nCurrent Report on Form 8-K\n(File No. 001-37580)\nMay 1, 2025\n4.21 Form of Global Note representing the\nRegistrant’s 5.300% notes due 2065\nCurrent Report on Form 8-K\n(File No. 001-37580)\nMay 1, 2025\n4.22 Form of Global Note representing the\nRegistrant’s 2.500% notes due 2029\nCurrent Report on Form 8-K\n(File No. 001-37580)\nMay 6, 2025\n4.23 Form of Global Note representing the\nRegistrant’s 3.000% notes due 2033\nCurrent Report on Form 8-K\n(File No. 001-37580)\nMay 6, 2025\n4.24 Form of Global Note representing the\nRegistrant’s 3.375% notes due 2037\nCurrent Report on Form 8-K\n(File No. 001-37580)\nMay 6, 2025\n4.25 Form of Global Note representing the\nRegistrant’s 3.875% notes due 2045\nCurrent Report on Form 8-K\n(File No. 001-37580)\nMay 6, 2025\n4.26 Form of Global Note representing the\nRegistrant’s 4.000% notes due 2054\nCurrent Report on Form 8-K\n(File No. 001-37580)\nMay 6, 2025\n4.27 Form of Global Note representing the\nRegistrant’s 2.375% notes due 2028\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.28 Form of Global Note representing the\nRegistrant’s 2.875% notes due 2031\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.29 Form of Global Note representing the\nRegistrant’s 3.125% notes due 2034\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.30 Form of Global Note representing the\nRegistrant’s 3.500% notes due 2038\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.31 Form of Global Note representing the\nRegistrant’s 4.000% notes due 2044\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\nExhibit\nNumber Description\nIncorporated by reference herein\nForm Date\nTable of Contents Alphabet Inc.\n93.", - "path": "GOOG 10-K 2025.pdf/p94", - "metadata": { - "length": 3754, - "summary": "4.07 Transfer Restriction Agreement, dated October 2, 2015, between the Registrant and Eric E. Schmidt and certain of its affiliates Current Report on Form 8-K (File No. 001-37580) October 2, 2015 4.08 Class C Undertaking, dated October 2, 2015, executed by the Registrant Curr...", - "page_nums": [ - 94 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 94, "artifact_ref": "page_citation_assets/page-94.png", @@ -2346,24 +873,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c92252b1-d756-557b-8d4b-67316e53ec88", - "type": "page", - "content": "4.32 Form of Global Note representing the\nRegistrant’s 4.375% notes due 2064\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.33 Form of Global Note representing the\nRegistrant’s floating rate notes due 2028\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.34 Form of Global Note representing the\nRegistrant’s 3.875% notes due 2028\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.35 Form of Global Note representing the\nRegistrant’s 4.100% notes due 2030\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.36 Form of Global Note representing the\nRegistrant’s 4.375% notes due 2032\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.37 Form of Global Note representing the\nRegistrant’s 4.700% notes due 2035\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.38 Form of Global Note representing the\nRegistrant’s 5.350% notes due 2045\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.39 Form of Global Note representing the\nRegistrant’s 5.450% notes due 2055\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.40 Form of Global Note representing the\nRegistrant’s 5.700% notes due 2075\nCurrent Report on Form 8-K\n(File No. 001-37580)\nNovember 6, 2025\n4.41 Description of Registrant’s Securities Annual Report on Form 10-K\n(File No. 001-37580)\nFebruary 3, 2023\n10.01 u Form of Indemnification Agreement entered\ninto between the Registrant, its affiliates and\nits directors and officers\nCurrent Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n10.02 u Form of Offer Letter for Directors Annual Report on Form 10-K\n(File No. 001-37580)\nJanuary 31, 2024\n10.03 u Letter Agreement dated June 3, 2024,\nbetween Anat Ashkenazi and Alphabet\nCurrent Report on Form 8-K\n(File No. 001-37580)\nJune 7, 2024\n10.04 u Compensation Plan Agreement, dated\nOctober 2, 2015, between Google Inc. and\nthe Registrant\nCurrent Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n10.05 u Director Arrangements Agreement, dated\nOctober 2, 2015, between Google Inc. and\nthe Registrant\nCurrent Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n10.06 u Alphabet Inc. Deferred Compensation Plan Current Report on Form 8-K\n(File No. 001-37580)\nOctober 2, 2015\n10.07 u Alphabet Inc. Amended and Restated 2012\nStock Plan\nCurrent Report on Form 8-K\n(File No. 001-37580)\nJune 5, 2020\n10.07.1 u Alphabet Inc. Amended and Restated 2012\nStock Plan - Form of Alphabet Restricted\nStock Unit Agreement\nAnnual Report on Form 10-K\n(File No. 001-37580)\nFebruary 4, 2020\n10.08 u Alphabet Inc. Amended and Restated 2021\nStock Plan\nCurrent Report on Form 8-K\n(file No. 001-37580)\nJune 8, 2023\n10.08.1 u Alphabet Inc. Amended and Restated 2021\nStock Plan - Form of Alphabet Restricted\nStock Unit Agreement\nQuarterly Report on Form 10-\nQ (file No. 001-37580)\nJuly 28, 2021\n10.08.2 u Alphabet Inc. Amended and Restated 2021\nStock Plan - Form of Alphabet Restricted\nStock Unit Agreement\nQuarterly Report on Form 10-\nQ (File No. 001-37580)\nJuly 26, 2023\n10.08.3 u Alphabet Inc. Amended and Restated 2021\nStock Plan – Form of Alphabet Restricted\nStock Unit Agreement\nQuarterly Report on Form 10-\nQ (File No. 001-37580)\nApril 26, 2024\n10.08.4 u Alphabet Inc. Amended and Restated 2021\nStock Plan - Form of Alphabet 2022 CEO\nPerformance Stock Unit Agreement\nAnnual Report on Form 10-K\n(File No. 001-37580)\nFebruary 3, 2023\nExhibit\nNumber Description\nIncorporated by reference herein\nForm Date\nTable of Contents Alphabet Inc.\n94.", - "path": "GOOG 10-K 2025.pdf/p95", - "metadata": { - "length": 3520, - "summary": "4.32 Form of Global Note representing the Registrant’s 4.375% notes due 2064 Current Report on Form 8-K (File No. 001-37580) November 6, 2025 4.33 Form of Global Note representing the Registrant’s floating rate notes due 2028 Current Report on Form 8-K (File No. 001-37580) Nov...", - "page_nums": [ - 95 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 95, "artifact_ref": "page_citation_assets/page-95.png", @@ -2371,24 +881,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d52f60a1-6905-59d9-b6b4-4386fd670df2", - "type": "page", - "content": "10.08.5 u Alphabet Inc. Amended and Restated 2021\nStock Plan – Form of Alphabet CEO\nPerformance Stock Unit Agreement\nQuarterly Report on Form 10-\nQ (File No. 001-37580)\nApril 26, 2024\n10.08.6 u Alphabet Inc. Amended and Restated 2021\nStock Plan - Form of Alphabet 2022 Non-\nCEO Performance Stock Unit Agreement\nAnnual Report on Form 10-K\n(File No. 001-37580)\nFebruary 2, 2022\n10.08.7 u Alphabet Inc. Amended and Restated 2021\nStock Plan - Form of Alphabet 2023 Non-\nCEO Performance Stock Unit Agreement\nQuarterly Report on Form 10-\nQ (File No. 001-37580)\nJuly 26, 2023\n10.08.8 u Alphabet Inc. Amended and Restated 2021\nStock Plan – Form of Alphabet Non-CEO\nPerformance Stock Unit Agreement\nQuarterly Report on Form 10-\nQ (File No. 001-37580)\nApril 26, 2024\n10.09 u Alphabet Inc. Company Bonus Plan, as\namended\nAnnual Report on Form 10-K\n(File No. 001-37350)\nFebruary 2, 2023\n19.01 Alphabet Inc. Policy Against Insider Trading Annual Report on Form 10-K\n(File No. 001-37350)\nFebruary 5, 2025\n21.01 * Subsidiaries of the Registrant\n23.01 * Consent of Independent Registered Public\nAccounting Firm\n24.01 * Power of Attorney (incorporated by reference\nto the signature page of this Annual Report\non Form 10-K)\n31.01 * Certification of Chief Executive Officer\npursuant to Exchange Act Rules 13a-14(a)\nand 15d-14(a), as adopted pursuant to\nSection 302 of the Sarbanes-Oxley Act of\n2002\n31.02 * Certification of Chief Financial Officer\npursuant to Exchange Act Rules 13a-14(a)\nand 15d-14(a), as adopted pursuant to\nSection 302 of the Sarbanes-Oxley Act of\n2002\n32.01 ‡ Certifications of Chief Executive Officer and\nChief Financial Officer pursuant to 18 U.S.C.\nSection 1350, as adopted pursuant to\nSection 906 of the Sarbanes-Oxley Act of\n2002\n97.01 u Clawback Policy Annual Report on Form 10-K\n(File No. 001-37350)\nJanuary 31, 2024\n101.INS * Inline XBRL Instance Document - the\ninstance document does not appear in the\nInteractive Data File because its XBRL tags\nare embedded within the Inline XBRL\ndocument\n101.SCH * Inline XBRL Taxonomy Extension Schema\nDocument\n101.CAL * Inline XBRL Taxonomy Extension Calculation\nLinkbase Document\n101.DEF * Inline XBRL Taxonomy Extension Definition\nLinkbase Document\n101.LAB * Inline XBRL Taxonomy Extension Label\nLinkbase Document\n101.PRE * Inline XBRL Taxonomy Extension\nPresentation Linkbase Document\n104 * Cover Page Interactive Data File (embedded\nwithin the Inline XBRL document and\ncontained in Exhibit 101)\nExhibit\nNumber Description\nIncorporated by reference herein\nForm Date\nTable of Contents Alphabet Inc.\n95.", - "path": "GOOG 10-K 2025.pdf/p96", - "metadata": { - "length": 2553, - "summary": "10.08.5 u Alphabet Inc. Amended and Restated 2021 Stock Plan – Form of Alphabet CEO Performance Stock Unit Agreement Quarterly Report on Form 10- Q (File No. 001-37580) April 26, 2024 10.08.6 u Alphabet Inc. Amended and Restated 2021 Stock Plan - Form of Alphabet 2022 Non- CEO...", - "page_nums": [ - 96 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 96, "artifact_ref": "page_citation_assets/page-96.png", @@ -2396,24 +889,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fec65334-b201-5b46-a64f-96e21fb35408", - "type": "page", - "content": "_________________\nu Indicates management compensatory plan, contract, or arrangement.\n* Filed herewith.\n‡ Furnished herewith.\nITEM 16. FORM 10-K SUMMARY\nNone.\nTable of Contents Alphabet Inc.\n96.", - "path": "GOOG 10-K 2025.pdf/p97", - "metadata": { - "length": 194, - "summary": "_________________ u Indicates management compensatory plan, contract, or arrangement. * Filed herewith. ‡ Furnished herewith. ITEM 16. FORM 10-K SUMMARY None. Table of Contents Alphabet Inc. 96.", - "page_nums": [ - 97 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 97, "artifact_ref": "page_citation_assets/page-97.png", @@ -2421,24 +897,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c00ea05f-2542-588f-a73e-dafe0c0c50e4", - "type": "page", - "content": "SIGNATURES\nPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has\nduly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.\nDate: February 4, 2026\n\nALPHABET INC.\nBy: /S/ SUNDAR PICHAI\nSundar Pichai\nChief Executive Officer\n(Principal Executive Officer of the Registrant)\nPOWER OF ATTORNEY\nKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes\nand appoints Sundar Pichai and Anat Ashkenazi, jointly and severally, his or her attorney-in-fact, with the power of\nsubstitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and\nto file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange\nCommission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or\nsubstitutes, may do or cause to be done by virtue hereof.\nPursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been\nsigned below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.\n\n\nTable of Contents Alphabet Inc.\n97.", - "path": "GOOG 10-K 2025.pdf/p98", - "metadata": { - "length": 1289, - "summary": "SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. Date: February 4, 2026 ALPHABET INC....", - "page_nums": [ - 98 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 98, "artifact_ref": "page_citation_assets/page-98.png", @@ -2446,24 +905,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_339cfae0-3111-554e-9fb5-af98004842d1", - "type": "page", - "content": "Signature Title Date\n/S/ SUNDAR PICHAI\nChief Executive Officer and Director (Principal\nExecutive Officer) February 4, 2026\nSundar Pichai\n/S/ ANAT ASHKENAZI\nSenior Vice President and Chief Financial\nOfficer (Principal Financial Officer) February 4, 2026\nAnat Ashkenazi\n/S/ AMIE THUENER O'TOOLE\nVice President, Corporate Controller and\nPrincipal Accounting Officer February 4, 2026\nAmie Thuener O'Toole\n/S/ FRANCES H. ARNOLD Director February 4, 2026\nFrances H. Arnold\n/S/ SERGEY BRIN Co-Founder and Director February 4, 2026\nSergey Brin\n/S/ R. MARTIN CHAVEZ Director February 4, 2026\nR. Martin Chávez\n/S/ L. JOHN DOERR Director February 4, 2026\nL. John Doerr\n/S/ ROGER W. FERGUSON JR. Director February 4, 2026\nRoger W. Ferguson Jr.\n/S/ JOHN L. HENNESSY Director, Chair February 4, 2026\nJohn L. Hennessy\n/S/ LARRY PAGE Co-Founder and Director February 4, 2026\nLarry Page\n/S/ K. RAM SHRIRAM Director February 4, 2026\nK. Ram Shriram\n/S/ ROBIN L. WASHINGTON Director February 4, 2026\nRobin L. Washington\nTable of Contents Alphabet Inc.\n98.", - "path": "GOOG 10-K 2025.pdf/p99", - "metadata": { - "length": 1128, - "summary": "Signature Title Date /S/ SUNDAR PICHAI Chief Executive Officer and Director (Principal Executive Officer) February 4, 2026 Sundar Pichai /S/ ANAT ASHKENAZI Senior Vice President and Chief Financial Officer (Principal Financial Officer) February 4, 2026 Anat Ashkenazi /S/ AMIE...", - "page_nums": [ - 99 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 99, "artifact_ref": "page_citation_assets/page-99.png", diff --git a/apps/api/app/data/demo_documents/financial-goog-10-k-2025/doc_nav.json b/apps/api/app/data/demo_documents/financial-goog-10-k-2025/doc_nav.json index d47fc7efb..96c1a2991 100644 --- a/apps/api/app/data/demo_documents/financial-goog-10-k-2025/doc_nav.json +++ b/apps/api/app/data/demo_documents/financial-goog-10-k-2025/doc_nav.json @@ -2,804 +2,20 @@ "version": "1.0", "file_name": "GOOG 10-K 2025.pdf", "stats": { - "total_chunks": 99, + "total_chunks": 1, "text_chunks": 0, "image_chunks": 0, "table_chunks": 0, - "page_chunks": 99, + "page_chunks": 1, "max_depth": 1 }, "sections": [ { - "title": "p1", - "path": "GOOG 10-K 2025.pdf/p1", + "title": "Root", + "path": "GOOG 10-K 2025.pdf/Root", "level": 1, - "summary": "UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________ FORM 10-K ___________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the f...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p2", - "path": "GOOG 10-K 2025.pdf/p2", - "level": 1, - "summary": "Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p3", - "path": "GOOG 10-K 2025.pdf/p3", - "level": 1, - "summary": "Alphabet Inc. Form 10-K For the Fiscal Year Ended December 31, 2025 TABLE OF CONTENTS Page Note About Forward-Looking Statements 3 PART I Item 1. Business 3 Item 1A. Risk Factors 9 Item 1B. Unresolved Staff Comments 23 Item 1C. Cybersecurity 23 Item 2. Properties 24 Item 3. Le...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p4", - "path": "GOOG 10-K 2025.pdf/p4", - "level": 1, - "summary": "Note About Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as, but are not limited to...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p5", - "path": "GOOG 10-K 2025.pdf/p5", - "level": 1, - "summary": "Making AI Helpful for Everyone We believe AI is a profound platform shift that can bring meaningful and positive change to people and societies across the world, and to our business . We aim to build the most advanced, safe, and responsible AI through our full- stack approach,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p6", - "path": "GOOG 10-K 2025.pdf/p6", - "level": 1, - "summary": "Our products and services have come a long way since the company was founded more than 25 years ago. While Google Search started as a way to find web pages, organized into ten blue links, we have driven technical advancements and product innovations that have transformed Googl...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p7", - "path": "GOOG 10-K 2025.pdf/p7", - "level": 1, - "summary": "• AI-optimized Infrastructure: runs on our Cloud, at the edge, or in customers' data centers. It can be used to migrate and modernize information technology (IT) systems and to train and serve various types of AI models. Our AI infrastructure delivers cost-performance for AI w...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p8", - "path": "GOOG 10-K 2025.pdf/p8", - "level": 1, - "summary": "Competing successfully depends heavily on our ability to continually develop and distribute innovative products and technologies to the marketplace across our businesses. For example, for advertising, competing successfully depends on attracting and retaining: • users, for who...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p9", - "path": "GOOG 10-K 2025.pdf/p9", - "level": 1, - "summary": "Intellectual Property We rely on intellectual property such as trademarks, copyrights, patents, and trade secrets, as well as confidentiality procedures and contractual provisions, to protect our proprietary technology and our brand. We have registered, and applied for the reg...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p10", - "path": "GOOG 10-K 2025.pdf/p10", - "level": 1, - "summary": "ITEM 1A. RISK FACTORS Our operations and financial results are subject to various risks and uncertainties, including but not limited to those described below, which could harm our business, reputation, financial condition, and operating results, and may affect the trading pric...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p11", - "path": "GOOG 10-K 2025.pdf/p11", - "level": 1, - "summary": "Within Google Services, we continue to invest heavily in devices, including our smartphones, home devices, and wearables, which is a highly competitive market with frequent introduction of new products and services, rapid adoption of technological advance ments by competitors,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p12", - "path": "GOOG 10-K 2025.pdf/p12", - "level": 1, - "summary": "AI products and technologies that are similar or superior to our technologies or more cost-effective to develop or deploy. Other companies may also have (or in the future may obtain) patents or other proprietary rights that would prevent, limit, or interfere with our ability t...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p13", - "path": "GOOG 10-K 2025.pdf/p13", - "level": 1, - "summary": "new and innovative products and services that better serve the needs of our users, advertisers, customers, content providers, and other partners. Our brands have been, and may in the future be, harmed by a number of factors, including, among others, reputational issues , third...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p14", - "path": "GOOG 10-K 2025.pdf/p14", - "level": 1, - "summary": "Interruption to, interference with, or failure of our complex information technology and communications systems could hurt our ability to effectively provide our products and services, which could harm our reputation, financial condition, and operating results. The availabilit...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p15", - "path": "GOOG 10-K 2025.pdf/p15", - "level": 1, - "summary": "leases, backstops, guarantees, and potential liabilities from large commercial agreements, could harm our financial condition and reduce our financial and business flexibility. We are exposed to fluctuations in the fair values of our investments and, in some instances, our fin...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p16", - "path": "GOOG 10-K 2025.pdf/p16", - "level": 1, - "summary": "significantly in efforts to promote high-quality and relevant results and to detect and prevent low-quality content and invalid traffic, we have been unable and may continue to be unable to detect and prevent all such abuses or promote uniformly high-quality content. Increased...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p17", - "path": "GOOG 10-K 2025.pdf/p17", - "level": 1, - "summary": "and other critical infrastructure, which could affect our or other parties' systems. We expect to continue to experience such incidents or vulnerabilities in the future. Our efforts to prevent security incidents and address undesirable activity on our platform may require us t...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p18", - "path": "GOOG 10-K 2025.pdf/p18", - "level": 1, - "summary": "regulatory inquiries, which could result in monetary penalties and damages, divert management's time and attention, and lead to enhanced regulatory oversight. Our business depends on continued and unimpeded access to the Internet by us and our users. Internet access providers...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p19", - "path": "GOOG 10-K 2025.pdf/p19", - "level": 1, - "summary": "• Data privacy, collection, processing, and portability: Laws and regulations further restricting the collection, processing, or sharing of user or advertising-related data, including privacy and data protection laws; laws affecting the processing of children's data (as discus...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p20", - "path": "GOOG 10-K 2025.pdf/p20", - "level": 1, - "summary": "For example, the DOJ and a number of state Attorneys General filed a lawsuit concerning our Search and Search advertising practices and our compliance with US antitrust laws. In August 2024, the US District Court for the District of Columbia ruled against Google, and in Decemb...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p21", - "path": "GOOG 10-K 2025.pdf/p21", - "level": 1, - "summary": "of data protection laws, imposing specific obligations with respect to the processing of personal data, including required notices, consents, and opt-outs. Further, the increased risk of inadvertent disclosure of confidential information or personal data in connection with the...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p22", - "path": "GOOG 10-K 2025.pdf/p22", - "level": 1, - "summary": "result in loss of revenues and harm our business. Moreover, intellectual property indemnities provided to us by our suppliers, when obtainable, may not cover all damages and losses suffered by us and our customers arising from intellectual property infringement claims. Further...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p23", - "path": "GOOG 10-K 2025.pdf/p23", - "level": 1, - "summary": "outstanding Class B stock, which represented approximately 52.7% of the voting power of our outstanding common stock. 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For example, some risks include our software supply chain and other third-party dependencies, vu...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p26", - "path": "GOOG 10-K 2025.pdf/p26", - "level": 1, - "summary": "PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES As of October 2, 2015, Alphabet Inc. became the successor issuer of Google Inc. pursuant to Rule 12g-3(a) under the Exchange Act. Our Class A stock has...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p27", - "path": "GOOG 10-K 2025.pdf/p27", - "level": 1, - "summary": "Stock Performance Graphs The graph below matches Alphabet Inc. Class A's cumulative five-year total stockholder return on common stock with the cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet Composite index. The graph tracks the...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p28", - "path": "GOOG 10-K 2025.pdf/p28", - "level": 1, - "summary": "The graph below matches Alphabet Inc. Class C's cumulative five-year total stockholder return on capital stock with the cumulative total returns of the S&P 500 index, the NASDAQ Composite index, and the RDG Internet Composite index. The graph tracks the performance of a $100 i...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p29", - "path": "GOOG 10-K 2025.pdf/p29", - "level": 1, - "summary": "ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Please read the following discussion and analysis of our financial condition and results of operations together with “Note about Forward-Looking Statements,” Part I, Item 1 \"Business,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p30", - "path": "GOOG 10-K 2025.pdf/p30", - "level": 1, - "summary": "shift from Google Network properties to Google Search & other properties. Our TAC rate will continue to be affected by changes in device mix; geographic mix; partner agreement terms; partner mix; the percentage of queries channeled through paid access points; product mix; the...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p31", - "path": "GOOG 10-K 2025.pdf/p31", - "level": 1, - "summary": "We use certain metrics to track how well traffic across various properties is monetized as it relates to our advertising revenues: paid clicks and cost-per-click pertain to traffic on Google Search & other properties, while impressions and cost-per-impression pertain to traffi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p32", - "path": "GOOG 10-K 2025.pdf/p32", - "level": 1, - "summary": "Other Bets Revenues from Other Bets are generated primarily from the sale of autonomous transportation services and internet services. Costs and Expenses Our cost structure has two components: cost of revenues and operating expenses. Our operating expenses include costs relate...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p33", - "path": "GOOG 10-K 2025.pdf/p33", - "level": 1, - "summary": "• employee compensation expenses for employees in finance, human resources, information technology, legal, and other administrative support functions; • expenses relating to legal and other matters, including certain fines and settlements; and • third-party services fees, incl...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p34", - "path": "GOOG 10-K 2025.pdf/p34", - "level": 1, - "summary": "• In 2025 , we entered into definitive agreements to acquire Wiz, a leading cloud security platform, for $32.0 billion, and Intersect, a provider of data center and energy infrastructure solutions, for $4.8 billion in cash plus the assumption of debt. Both acquisitions are exp...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p35", - "path": "GOOG 10-K 2025.pdf/p35", - "level": 1, - "summary": "YouTube ads YouTube ads revenues increased $4.2 billion from 2024 to 2025. The growth was driven by our direct response advertising products followed by our brand advertising products, both of which benefited from increased spending by our advertisers. Google Network Google Ne...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p36", - "path": "GOOG 10-K 2025.pdf/p36", - "level": 1, - "summary": "Cost of Revenues The following table presents cost of revenues, including TAC (in millions, except percentages): Year Ended December 31, 2024 2025 TAC $ 54,900 $ 59,926 Other cost of revenues 91,406 102,609 Total cost of revenues $ 146,306 $ 162,535 Total cost of revenues as a...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p37", - "path": "GOOG 10-K 2025.pdf/p37", - "level": 1, - "summary": "Segment Profitability We report our segment results as Google Services, Google Cloud, and Other Bets. Additionally, certain costs are not allocated to our segments because they represent Alphabet-level activities. For further details on our segments, see Part I, Item 1 Busines...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p38", - "path": "GOOG 10-K 2025.pdf/p38", - "level": 1, - "summary": "Provision for Income Taxes The following table presents provision for income taxes (in millions, except effective tax rate): Year Ended December 31, 2024 2025 Income before provision for income taxes $ 119,815 $ 158,826 Provision for income taxes $ 19,697 $ 26,656 Effective ta...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p39", - "path": "GOOG 10-K 2025.pdf/p39", - "level": 1, - "summary": "Net cash provided by operating activities increased from 2024 to 2025 due to an increase in cash received from customers, partially offset by an increase in cash payments for cost of revenues and operating expenses. Cash Used in Investing Activities Cash provided by investing...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p40", - "path": "GOOG 10-K 2025.pdf/p40", - "level": 1, - "summary": "For additional information on leases, see Note 4 of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K. Financing As of December 31, 2025, we had senior unsecured notes outstanding with a total carrying value of $48.5 billion,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p41", - "path": "GOOG 10-K 2025.pdf/p41", - "level": 1, - "summary": "Taxes As of December 31, 2025 , we had long-term income taxes payable of $9.5 billion primarily related to unrecognized tax benefits. The timing and amount of any payment related to these unrecognized tax benefits are uncertain and cannot be estimated. Purchase Commitments and...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p42", - "path": "GOOG 10-K 2025.pdf/p42", - "level": 1, - "summary": "Adjustments are determined primarily based on a market approach as of the transaction date and involve the use of estimates using the best information available, which may include cash flow projections or other available market data. Non-marketable equity securities are also e...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p43", - "path": "GOOG 10-K 2025.pdf/p43", - "level": 1, - "summary": "We monitor our foreign currency exposures and hedge foreign exchange risks with derivative and non-derivative instruments, including forwards, options (including collars), cross-currency swaps, and foreign currency-denominated debt. Gains or losses on these foreign currency ex...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p44", - "path": "GOOG 10-K 2025.pdf/p44", - "level": 1, - "summary": "Our marketable equity securities are primarily publicly traded stocks or funds and our non-marketable equity securities are primarily investments in privately held companies , some of which are in the startup or development stages. We record marketable equity securities at fai...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p45", - "path": "GOOG 10-K 2025.pdf/p45", - "level": 1, - "summary": "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Alphabet Inc. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42) 45 Financial Statements: Consolidated Balance Sheets 48 Consolidated Statements of Income 4...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p46", - "path": "GOOG 10-K 2025.pdf/p46", - "level": 1, - "summary": "REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Alphabet Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Alphabet Inc. (the Company) as of December 31, 2024 and 2...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p47", - "path": "GOOG 10-K 2025.pdf/p47", - "level": 1, - "summary": "Loss Contingencies Description of the Matter The Company is subject to claims, lawsuits, regulatory and government inquiries and investigations, other proceedings, and consent orders. As described in Note 10 to the consolidated financial statements, such claims, lawsuits, regu...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p48", - "path": "GOOG 10-K 2025.pdf/p48", - "level": 1, - "summary": "REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Alphabet Inc. Opinion on Internal Control Over Financial Reporting We have audited Alphabet Inc.’s internal control over financial reporting as of December 31, 2025 , base...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p49", - "path": "GOOG 10-K 2025.pdf/p49", - "level": 1, - "summary": "Alphabet Inc. CONSOLIDATED BALANCE SHEETS (in millions, except par value per share amounts) As of December 31, 2024 2025 Assets Current assets: Cash and cash equivalents $ 23,466 $ 30,708 Marketable securities 72,191 96,135 Total cash, cash equivalents, and marketable securiti...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p50", - "path": "GOOG 10-K 2025.pdf/p50", - "level": 1, - "summary": "Alphabet Inc. CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share amounts) Year Ended December 31, 2023 2024 2025 Revenues $ 307,394 $ 350,018 $ 402,836 Costs and expenses: Cost of revenues 133,332 146,306 162,535 Research and development 45,427 49,326 61,087 Sale...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p51", - "path": "GOOG 10-K 2025.pdf/p51", - "level": 1, - "summary": "Alphabet Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Year Ended December 31, 2023 2024 2025 Net income $ 73,795 $ 100,118 $ 132,170 Other comprehensive income (loss): Change in foreign currency translation adjustment, net of income tax benefit (expense)...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p52", - "path": "GOOG 10-K 2025.pdf/p52", - "level": 1, - "summary": "Alphabet Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in millions) Class A, Class B, Class C Stock and Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Stockholders’ Equity Shares Amount Balance as of December 31, 2022 1...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p53", - "path": "GOOG 10-K 2025.pdf/p53", - "level": 1, - "summary": "Alphabet Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2023 2024 2025 Operating activities Net income $ 73,795 $ 100,118 $ 132,170 Adjustments: Depreciation of property and equipment 11,946 15,311 21,136 Stock-based compensation expense 22,46...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p54", - "path": "GOOG 10-K 2025.pdf/p54", - "level": 1, - "summary": "Alphabet Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Summary of Significant Accounting Policies Nature of Operations Google was incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. In 2015, we implemented a holdi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p55", - "path": "GOOG 10-K 2025.pdf/p55", - "level": 1, - "summary": "• consumer subscriptions, which primarily include revenues from YouTube services, such as YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket, as well as Google One, which offers access to our most capable Gemini models; • platforms, which primarily include revenues f...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p56", - "path": "GOOG 10-K 2025.pdf/p56", - "level": 1, - "summary": "◦ content acquisition costs, which are payments to content providers from whom we license video and other content for distribution, primarily related to YouTube (we pay fees to these content providers based on revenues generated, subscriber counts, or a flat fee); ◦ depreciati...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p57", - "path": "GOOG 10-K 2025.pdf/p57", - "level": 1, - "summary": "Level 3 - Unobservable inputs that are supported by little or no market activities. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The determination of fair value invol...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p58", - "path": "GOOG 10-K 2025.pdf/p58", - "level": 1, - "summary": "Derivative Financial Instruments See Note 3 for the accounting policy pertaining to derivative financial instruments. Financial Guarantees In certain arrangements, we provide reimbursements for costs incurred by third parties during power generation project development phases...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p59", - "path": "GOOG 10-K 2025.pdf/p59", - "level": 1, - "summary": "Variable Interest Entities We determine at the inception of each arrangement whether an entity in which we have made an investment or in which we have other variable interests is considered a variable interest entity (VIE). We consolidate VIEs when we are the primary beneficia...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p60", - "path": "GOOG 10-K 2025.pdf/p60", - "level": 1, - "summary": "Impairment of Long-Lived Assets We review leases, property and equipment, and intangible assets, excluding goodwill, for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. The evaluation is performed at the lowest level of i...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p61", - "path": "GOOG 10-K 2025.pdf/p61", - "level": 1, - "summary": "In December 2023, the FASB issued ASU 2023-09 \"Income Taxes (Topics 740): Improvements to Income Tax Disclosures\" which expands the disclosure requirements for income taxes. We adopted this ASU for our 2025 annual period with the comparative periods updated to reflect addition...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p62", - "path": "GOOG 10-K 2025.pdf/p62", - "level": 1, - "summary": "recognized as revenues for the year ended December 31, 2025. Total deferred revenue as of December 31, 2025 was $8.6 billion. Note 3. Financial Instruments Fair Value Measurements Investments Measured at Fair Value on a Recurring Basis Cash equivalents and marketable equity se...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p63", - "path": "GOOG 10-K 2025.pdf/p63", - "level": 1, - "summary": "As of December 31, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Cash $ 15,305 Cash equivalents: Money market funds $ 11,349 $ 0 $ 11,349 Time deposits 0 3,353 3,353 Government bonds 0 602 602 Corporate...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p64", - "path": "GOOG 10-K 2025.pdf/p64", - "level": 1, - "summary": "As of December 31, 2024 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Time deposits $ 2,217 $ 0 $ 0 $ 2,217 Government bonds 27,551 83 (214) 27,420 Corporate debt securities 18,300 79 (222) 18,157 Mortgage-backed and asset-backed securities 14,437 63...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p65", - "path": "GOOG 10-K 2025.pdf/p65", - "level": 1, - "summary": "We determine realized gains or losses on the sale or extinguishment of debt securities on a specific identification method. For certain marketable debt securities, we have elected the fair value option for which changes in fair value are recorded in OI&E. The fair value option...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p66", - "path": "GOOG 10-K 2025.pdf/p66", - "level": 1, - "summary": "Year Ended December 31, 2023 2024 2025 Gross unrealized gain on non-marketable equity securities accounted for under the measurement alternative $ 1,806 $ 5,582 $ 22,666 Gross unrealized loss (including impairments) on non- marketable equity securities accounted for under the...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p67", - "path": "GOOG 10-K 2025.pdf/p67", - "level": 1, - "summary": "subsidiaries. Net investment hedge amounts included in the assessment of hedge effectiveness are recognized in AOCI. Changes in the fair value of hedge components of forward and option contracts that are excluded from the assessment of hedge effectiveness are recognized in OI&...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p68", - "path": "GOOG 10-K 2025.pdf/p68", - "level": 1, - "summary": "The gains (losses) on derivatives and non-derivative financial instruments in cash flow hedging and net investment hedging relationships recognized in other comprehensive income are summarized below (in millions): Year Ended December 31, 2023 2024 2025 Cash flow hedging relati...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p69", - "path": "GOOG 10-K 2025.pdf/p69", - "level": 1, - "summary": "Offsetting of Derivatives We enter into master netting arrangements and collateral security arrangements to reduce credit risk. Cash collateral received related to derivative instruments under our collateral security arrangements are included in other current assets with a cor...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p70", - "path": "GOOG 10-K 2025.pdf/p70", - "level": 1, - "summary": "Supplemental information related to leases was as follows (in millions): December 31, 2024 2025 Weighted-average remaining lease term: Operating leases 7.8 years 7.6 years Finance leases 10.4 years 8.3 years Weighted-average discount rate: Operating leases 3.4 % 3.6 % Finance...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p71", - "path": "GOOG 10-K 2025.pdf/p71", - "level": 1, - "summary": "Future lease payments as of December 31, 2025 were as follows (in millions): Operating Leases Finance Leases 2026 $ 3,275 $ 491 2027 3,082 345 2028 2,510 335 2029 2,061 314 2030 1,669 241 Thereafter 5,654 1,143 Total undiscounted lease payments 18,251 2,869 Less: imputed inter...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p72", - "path": "GOOG 10-K 2025.pdf/p72", - "level": 1, - "summary": "Leases with data center leasing VIEs are accounted for as finance leases and are included within total lease obligations disclosed in Note 4. The maximum exposure arising from leases with VIEs is limited to the net carrying value of commenced finance lease assets, plus the und...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p73", - "path": "GOOG 10-K 2025.pdf/p73", - "level": 1, - "summary": "The notes in the table above are senior unsecured obligations and rank equally with each other. We may redeem the fixed-rate notes at any time in whole or in part at specified redemption prices. The floating-rate notes are not redeemable prior to maturity. Interest is payable...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p74", - "path": "GOOG 10-K 2025.pdf/p74", - "level": 1, - "summary": "As of December 31, 2024 2025 Accrued fines and settlements(1) $ 9,830 $ 15,594 Accrued purchases of property and equipment 7,104 8,877 Accrued customer liabilities 4,304 5,029 Payables to brokers for unsettled investment trades 3,866 950 Income taxes payable, net 2,905 523 Oth...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p75", - "path": "GOOG 10-K 2025.pdf/p75", - "level": 1, - "summary": "Year Ended December 31, AOCI Components Location 2023 2024 2025 Unrealized gains (losses) on available-for-sale investments Other income (expense), net $ (1,497) $ (1,008) $ 213 Benefit (provision) for income taxes 329 226 (44) Net of income tax (1,168) (782) 169 Unrealized ga...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p76", - "path": "GOOG 10-K 2025.pdf/p76", - "level": 1, - "summary": "Google Services Google Cloud Other Bets Total Balance as of December 31, 2023 $ 21,118 $ 7,199 $ 881 $ 29,198 Additions 2,441 295 0 2,736 Foreign currency translation and other adjustments (38) (4) (7) (49) Balance as of December 31, 2024 23,521 7,490 874 31,885 Additions 1,26...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p77", - "path": "GOOG 10-K 2025.pdf/p77", - "level": 1, - "summary": "Antitrust Matters We are subject to formal and informal inquiries and investigations as well as litigation on various competition matters by regulatory authorities and private parties in the US, Europe, and other jurisdictions globally, including the following: • Shopping: In...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p78", - "path": "GOOG 10-K 2025.pdf/p78", - "level": 1, - "summary": "$3.5 billion in the third quarter of 2025, and we placed bank guarantees in the fourth quarter of 2025 in lieu of cash payment. In September 2024, the UK also issued a Statement of Objections concerning Google's advertising technology and its compliance with UK antitrust laws,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p79", - "path": "GOOG 10-K 2025.pdf/p79", - "level": 1, - "summary": "For example, we periodically have data incidents that we report to relevant regulators as required by law. Such claims, consent orders, lawsuits, regulatory and government investigations, and other proceedings could result in substantial fines and penalties, injunctive relief,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p80", - "path": "GOOG 10-K 2025.pdf/p80", - "level": 1, - "summary": "In April 2025, the company's Board of Directors increased the quarterly cash dividend by 5% to $0.21 per share of outstanding Class A, Class B, and Class C shares. The company has declared a quarterly cash dividend in the current quarter, and intends to pay quarterly cash divi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p81", - "path": "GOOG 10-K 2025.pdf/p81", - "level": 1, - "summary": "The following tables set forth the computation of basic and diluted net income per share of Class A, Class B, and Class C stock (in millions, except per share amounts): Year Ended December 31, 2023 Class A Class B Class C Consolidated Basic net income per share: Numerator Allo...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p82", - "path": "GOOG 10-K 2025.pdf/p82", - "level": 1, - "summary": "Year Ended December 31, 2024 Class A Class B Class C Consolidated Basic net income per share: Numerator Allocation of distributed earnings (cash dividends paid) $ 3,509 $ 519 $ 3,335 $ 7,363 Allocation of undistributed earnings 44,085 6,520 42,150 92,755 Net income $ 47,594 $...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p83", - "path": "GOOG 10-K 2025.pdf/p83", - "level": 1, - "summary": "Year Ended December 31, 2025 Class A Class B Class C Consolidated Basic net income per share: Numerator Allocation of distributed earnings (cash dividends paid) $ 4,832 $ 703 $ 4,514 $ 10,049 Allocation of undistributed earnings 58,682 8,557 54,882 122,121 Net income $ 63,514...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p84", - "path": "GOOG 10-K 2025.pdf/p84", - "level": 1, - "summary": "Stock-Based Award Activities The following table summarizes the activities for unvested Alphabet RSUs, which include dividend equivalents awarded to holders of unvested stock, for the year ended December 31, 2025 (in millions, except per share amounts): Number of Shares Weight...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p85", - "path": "GOOG 10-K 2025.pdf/p85", - "level": 1, - "summary": "The reconciliation of federal statutory income tax rate to our effective income tax rate was as follows: Year Ended December 31, 2023 2024 2025 US federal statutory rate 18,001 21.0 % 25,161 21.0 % 33,353 21.0 % State and local income taxes, net of federal income tax effect(1)...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p86", - "path": "GOOG 10-K 2025.pdf/p86", - "level": 1, - "summary": "Deferred Income Taxes Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p87", - "path": "GOOG 10-K 2025.pdf/p87", - "level": 1, - "summary": "Cash paid for income taxes, net of refunds, were as follows (in millions): Year Ended December 31, 2023 2024 2025 US federal $ 13,689 $ 19,921 $ 13,658 US state and local 1,224 2,697 2,919 Foreign: Brazil 1,264 1,101 1,368 Other 2,987 3,634 3,581 Total foreign 4,251 4,735 4,94...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p88", - "path": "GOOG 10-K 2025.pdf/p88", - "level": 1, - "summary": "• Other Bets is a combination of multiple operating segments that are not individually material. Revenues from Other Bets are generated primarily from the sale of autonomous transportation services and internet services. Revenues, certain costs, such as costs associated with c...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p89", - "path": "GOOG 10-K 2025.pdf/p89", - "level": 1, - "summary": "Google Services and Google Cloud employee compensation expenses include the costs associated with direct and allocated employees. Google Services and Google Cloud other costs and expenses primarily include direct costs, such as advertising and promotional activities , legal an...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p90", - "path": "GOOG 10-K 2025.pdf/p90", - "level": 1, - "summary": "ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participation of our chief executive officer and chief financial office...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p91", - "path": "GOOG 10-K 2025.pdf/p91", - "level": 1, - "summary": "Trading and actual sale transactions made pursuant to such trading arrangements will be disclosed publicly in Section 16 filings with the SEC in accordance with applicable securities laws, rules, and regulations. Required Disclosure Pursuant to Section 13(r) of the Exchange Ac...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p92", - "path": "GOOG 10-K 2025.pdf/p92", - "level": 1, - "summary": "PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE The information required by this item will be included under the caption \"Directors, Executive Officers, and Corporate Governance\" in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p93", - "path": "GOOG 10-K 2025.pdf/p93", - "level": 1, - "summary": "PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES We have filed the following documents as part of this Annual Report on Form 10-K: 1. Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm 45 Financial Statements: Consolidated Balanc...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p94", - "path": "GOOG 10-K 2025.pdf/p94", - "level": 1, - "summary": "4.07 Transfer Restriction Agreement, dated October 2, 2015, between the Registrant and Eric E. Schmidt and certain of its affiliates Current Report on Form 8-K (File No. 001-37580) October 2, 2015 4.08 Class C Undertaking, dated October 2, 2015, executed by the Registrant Curr...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p95", - "path": "GOOG 10-K 2025.pdf/p95", - "level": 1, - "summary": "4.32 Form of Global Note representing the Registrant’s 4.375% notes due 2064 Current Report on Form 8-K (File No. 001-37580) November 6, 2025 4.33 Form of Global Note representing the Registrant’s floating rate notes due 2028 Current Report on Form 8-K (File No. 001-37580) Nov...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p96", - "path": "GOOG 10-K 2025.pdf/p96", - "level": 1, - "summary": "10.08.5 u Alphabet Inc. Amended and Restated 2021 Stock Plan – Form of Alphabet CEO Performance Stock Unit Agreement Quarterly Report on Form 10- Q (File No. 001-37580) April 26, 2024 10.08.6 u Alphabet Inc. Amended and Restated 2021 Stock Plan - Form of Alphabet 2022 Non- CEO...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p97", - "path": "GOOG 10-K 2025.pdf/p97", - "level": 1, - "summary": "_________________ u Indicates management compensatory plan, contract, or arrangement. * Filed herewith. ‡ Furnished herewith. ITEM 16. FORM 10-K SUMMARY None. Table of Contents Alphabet Inc. 96.", - "chunk_count": 1, - "children": [] - }, - { - "title": "p98", - "path": "GOOG 10-K 2025.pdf/p98", - "level": 1, - "summary": "SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. Date: February 4, 2026 ALPHABET INC....", - "chunk_count": 1, - "children": [] - }, - { - "title": "p99", - "path": "GOOG 10-K 2025.pdf/p99", - "level": 1, - "summary": "Signature Title Date /S/ SUNDAR PICHAI Chief Executive Officer and Director (Principal Executive Officer) February 4, 2026 Sundar Pichai /S/ ANAT ASHKENAZI Senior Vice President and Chief Financial Officer (Principal Financial Officer) February 4, 2026 Anat Ashkenazi /S/ AMIE...", - "chunk_count": 1, + "summary": "This section, titled 'Root', serves as the cover page and introductory material for Alphabet Inc.'s Form 10-K Annual Report for the fiscal year ended December 31, 2025. It identifies the registrant (Alphabet Inc.), its jurisdiction of incorporation (Delaware), principal address, and tax identification number. The section also lists all securities registered under Section 12(b) of the Securities Exchange Act of 1934, including Class A and Class C Common Stock with their respective trading symbols (GOOGL and GOOG), and a comprehensive list of Senior Notes due between 2028 and 2064, all registered on the Nasdaq Stock Market LLC. Additionally, it includes check-boxes indicating the company's status as a large accelerated filer and confirms that it is not a shell company.", + "chunk_count": 99, "children": [] } ], diff --git a/apps/api/app/data/demo_documents/financial-goog-10-k-2025/manifest.json b/apps/api/app/data/demo_documents/financial-goog-10-k-2025/manifest.json index 6595ee545..4688b045c 100644 --- a/apps/api/app/data/demo_documents/financial-goog-10-k-2025/manifest.json +++ b/apps/api/app/data/demo_documents/financial-goog-10-k-2025/manifest.json @@ -204,112 +204,14 @@ } }, "statistics": { - "total_chunks": 99, + "total_chunks": 1, "text_chunks": 0, "image_chunks": 0, "table_chunks": 0, - "page_chunks": 99, + "page_chunks": 1, "total_pages": null }, "HIERARCHY": { - "p1": {}, - "p2": {}, - "p3": {}, - "p4": {}, - "p5": {}, - "p6": {}, - "p7": {}, - "p8": {}, - "p9": {}, - "p10": {}, - "p11": {}, - "p12": {}, - "p13": {}, - "p14": {}, - "p15": {}, - "p16": {}, - "p17": {}, - "p18": {}, - "p19": {}, - "p20": {}, - "p21": {}, - "p22": {}, - "p23": {}, - "p24": {}, - "p25": {}, - "p26": {}, - "p27": {}, - "p28": {}, - "p29": {}, - "p30": {}, - "p31": {}, - "p32": {}, - "p33": {}, - "p34": {}, - "p35": {}, - "p36": {}, - "p37": {}, - "p38": {}, - "p39": {}, - "p40": {}, - "p41": {}, - "p42": {}, - "p43": {}, - "p44": {}, - "p45": {}, - "p46": {}, - "p47": {}, - "p48": {}, - "p49": {}, - "p50": {}, - "p51": {}, - "p52": {}, - "p53": {}, - "p54": {}, - "p55": {}, - "p56": {}, - "p57": {}, - "p58": {}, - "p59": {}, - "p60": {}, - "p61": {}, - "p62": {}, - "p63": {}, - "p64": {}, - "p65": {}, - "p66": {}, - "p67": {}, - "p68": {}, - "p69": {}, - "p70": {}, - "p71": {}, - "p72": {}, - "p73": {}, - "p74": {}, - "p75": {}, - "p76": {}, - "p77": {}, - "p78": {}, - "p79": {}, - "p80": {}, - "p81": {}, - "p82": {}, - "p83": {}, - "p84": {}, - "p85": {}, - "p86": {}, - "p87": {}, - "p88": {}, - "p89": {}, - "p90": {}, - "p91": {}, - "p92": {}, - "p93": {}, - "p94": {}, - "p95": {}, - "p96": {}, - "p97": {}, - "p98": {}, - "p99": {} + "Root": {} } } diff --git a/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/chunks.json b/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/chunks.json index b376fa32f..f3bcfca77 100644 --- a/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/chunks.json +++ b/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/chunks.json @@ -1,17 +1,23 @@ { "chunks": [ { - "chunk_id": "node_ca727e2b-f4f9-585b-bb6d-2f11341e4f6a", + "chunk_id": "node_2e329ae5-c0f1-5c9d-8221-3c49e2dca35e", "type": "page", - "content": "1\n\nMeta Platforms, Inc. (META)\nFirst Quarter 2026 Results Conference Call\nApril 29th, 2026\n\nKenneth Dorell, Director, Investor Relations\n\nThank you. Good afternoon and welcome to Meta Platforms’ first quarter 2026 earnings\nconference call. Joining me today to discuss our results are Mark Zuckerberg, CEO and Susan Li,\nCFO.\n\nOur remarks today will include forward‐looking statements, which are based on assumptions as of\ntoday. Actual results may differ materially as a result of various factors including those set forth in\ntoday’s earnings press release, and in our annual report on Form 10-K filed with the SEC. We\nundertake no obligation to update any forward-looking statement.\n\nDuring this call we will present both GAAP and certain non‐GAAP financial measures. A\nreconciliation of GAAP to non‐GAAP measures is included in today’s earnings press release. The\nearnings press release and an accompanying investor presentation are availa ble on our website at\ninvestor.atmeta.com.\n\nAnd now, I’d like to turn the call over to Mark.\n\nMark Zuckerberg, CEO\n\nHey everyone, thanks for joining today. We had a strong quarter for our community, our business,\nand our progress towards AI.\n\nMore than 3.5 billion people use at least one of our apps every day. We saw a small decrease in\ntotal family dailies due to internet outages in Iran and blocks in Russia, but otherwise trends\nacross our apps are strong. Daily and monthly actives on Instagram and Facebook continue to\ngrow, with video driving all-time high engagement across both apps. WhatsApp continues to see\nstrong momentum too, including in the US. And Threads continues on its trajectory to be the\nleading app in its category.\n\nOur biggest milestone so far this year has been the release of our Muse family of models and our\nfirst model, Muse Spark, along with a significantly upgraded new version of Meta AI. This was the\nfirst release from Meta Superintelligence Labs, and it shows that our work is on track to build a\nleading lab.\n\nOver the past 10 months, we have built the strongest research team in the industry, and\nestablished the scientific and technical foundations to scale very advanced models. Spark is just\none step on that scaling ladder and we are already training even more advanced models. But Spark\nhas already made Meta AI a world-class assistant that leads in several areas related to our vision\nof personal superintelligence, including visual understanding, health, shopping, social content,\nlocal, creating games, and more. We're hearing very positive feedback on it so far. We've seen\nlarge increases in Meta AI use since releasing the updates, and the Meta AI app has consistently\nbeen near the top of the app stores as well.\n\nNow that we have a strong model we can develop more novel products as well. Since I first wrote\nabout our vision for personal superintelligence last year, we've been focused on delivering", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p1", + "content": "1 \n \nMeta Platforms, Inc. (META) \nFirst Quarter 2026 Results Conference Call \nApril 29th, 2026 \n \nKenneth Dorell, Director, Investor Relations \n \nThank you. Good afternoon and welcome to Meta Platforms’ first quarter 2026 earnings \nconference call. Joining me today to discuss our results are Mark Zuckerberg, CEO and Susan Li, \nCFO. \n \nOur remarks today will include forward‐looking statements, which are based on assumptions as of \ntoday. Actual results may differ materially as a result of various factors including those set forth in \ntoday’s earnings press release, and in our annual report on Form 10-K filed with the SEC. We \nundertake no obligation to update any forward-looking statement. \n \nDuring this call we will present both GAAP and certain non‐GAAP financial measures. A \nreconciliation of GAAP to non‐GAAP measures is included in today’s earnings press release. The \nearnings press release and an accompanying investor presentation are available on our website at \ninvestor.atmeta.com. \n \nAnd now, I’d like to turn the call over to Mark. \n \nMark Zuckerberg, CEO \n \nHey everyone, thanks for joining today. We had a strong quarter for our community, our business, \nand our progress towards AI. \n \nMore than 3.5 billion people use at least one of our apps every day. We saw a small decrease in \ntotal family dailies due to internet outages in Iran and blocks in Russia, but otherwise trends \nacross our apps are strong. Daily and monthly actives on Instagram and Facebook continue to \ngrow, with video driving all-time high engagement across both apps. WhatsApp continues to see \nstrong momentum too, including in the US. And Threads continues on its trajectory to be the \nleading app in its category. \n \nOur biggest milestone so far this year has been the release of our Muse family of models and our \nfirst model, Muse Spark, along with a significantly upgraded new version of Meta AI. This was the \nfirst release from Meta Superintelligence Labs, and it shows that our work is on track to build a \nleading lab. \n \nOver the past 10 months, we have built the strongest research team in the industry, and \nestablished the scientific and technical foundations to scale very advanced models. Spark is just \none step on that scaling ladder and we are already training even more advanced models. But Spark \nhas already made Meta AI a world-class assistant that leads in several areas related to our vision \nof personal superintelligence, including visual understanding, health, shopping, social content, \nlocal, creating games, and more. We're hearing very positive feedback on it so far. We've seen \nlarge increases in Meta AI use since releasing the updates, and the Meta AI app has consistently \nbeen near the top of the app stores as well. \n \nNow that we have a strong model we can develop more novel products as well. Since I first wrote \nabout our vision for personal superintelligence last year, we've been focused on delivering", + "path": "Meta Q1 2026 Earnings Call Transcript.pdf/Root/Kenneth Dorell, Director, Investor Relations", "metadata": { - "length": 2895, - "summary": "1 Meta Platforms, Inc. (META) First Quarter 2026 Results Conference Call April 29th, 2026 Kenneth Dorell, Director, Investor Relations Thank you. Good afternoon and welcome to Meta Platforms’ first quarter 2026 earnings conference call. Joining me today to discuss our results...", + "length": 2945, + "summary": "Kenneth Dorell, Director of Investor Relations, welcomes participants to Meta Platforms' first quarter 2026 earnings conference call. He introduces the speakers, Mark Zuckerberg (CEO) and Susan Li (CFO), and outlines the call's scope, including forward-looking statements, GAAP and non-GAAP financial measures, and where to find supporting materials like the press release and investor presentation. The section concludes with him handing over the call to Mark Zuckerberg.", "page_nums": [ 1 ], - "keywords": [], + "keywords": [ + "Meta Platforms, Inc.", + "META", + "Kenneth Dorell", + "Mark Zuckerberg", + "Susan Li" + ], "connect_to": [], "page_assets": [ { @@ -26,19 +32,46 @@ } }, { - "chunk_id": "node_17bb8855-017c-50fc-a63a-4e3446805d90", + "chunk_id": "node_6fc5d540-6e67-506b-9479-570cf9cadea5", "type": "page", - "content": "2\n\npersonal and business agents to billions of people around the world. Our goal is not just to deliver\nMeta AI as an assistant, but to deliver agents that can understand your goals and then work day\nand night to help you achieve them.\n\nMy view of AI is very different from many others in the industry. I hear a lot of people out there\ntalk about how AI is going to replace people. Instead, I think that AI is going to amplify people's\nability to do what you want -- whether that's to improve your health, your learning, your\nrelationships, your ability to achieve your personal and career goals and more. My view is that\nhuman progress has always been driven by people pursuing their individual aspirations, and I\nbelieve that this will continue to be true in the future. People will be more important in the future,\nnot less. Meta believes in empowering individuals. Those are the kinds of products we're going to\nbuild, and I believe they're going to be some of the most important and valuable products of all\ntime.\n\nWe are building a personal agent focused on helping people achieve the diverse goals in their lives.\nWe are also building a business agent focused on helping entrepreneurs and businesses across the\nworld use our tools and others to grow their efforts, reach new customers, and serve existing\ncustomers better. These agents will work together to form an ecosystem, and whether you use\nour personal or business agents to achieve your goals, I believe that the future will see a massive\nincrease in entrepreneurship from people creating new things that they've always wanted to exist\nbut previously didn't have the tools to bring into the world. We're already testing an early version\nof business AIs, and weekly conversations have grown 10x since the start of this year.\n\nWe're also working on using Spark and our upcoming models to improve our recommendation\nsystems and core business in Facebook, Instagram, and ads. Right now, our apps primarily help\npeople accomplish three important goals: connecting with people, learning about the world, and\nentertainment. But we've always wanted our apps to understand more of people's goals so we can\nhelp improve their lives in all the ways that they want. These new AI models wil l let us understand\nthis in more detail. So instead of just looking at statistical patterns of what types of people engage\nwith what content, for the first time in Meta's history we're going to be able to develop a first -\nprinciples understanding of what you care about and what each piece of content i n our system is\nabout so that way we can show you more useful things for what you're trying to accomplish. We'll\nalso be able to create personalized content specifically for people to help you achieve your goals\nas well.\n\nSince our recommendation systems are operating at such large scale, we'll phase in this new\nresearch and technology over time. But the trend over the last few years seems clear that we are\nseeing an increasing return on the amount that we can improve engag ement for people and value\nfor advertisers. This encourages us to continue investing heavily in what we expect will provide\nincreasing value over the coming years as well.\n\nOn that note, we are increasing our infrastructure capex forecast for this year. Most of that is due\nto higher component costs, particularly memory pricing. But every sign that we’re seeing in our\nown work and across the industry gives us confidence in this investment. That said, we are very\nfocused on increasing the efficiency of our investments. And as part of that, we're rolling out more\nthan 1GW of our own custom silicon that we're developing with Broadcom as well as significant\namounts of AMD chips to compliment the new Nvidia systems that we're rolling out as well. One\nof the primary goals of our Meta Compute initiative is to lead the industry in efficiency of building\ncompute, and we expect that will be a strategic advantage over time.", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p2", + "content": "[SAME-AS Meta Q1 2026 Earnings Call Transcript.pdf/Root/Kenneth Dorell, Director, Investor Relations p1]\n\n2 \n \npersonal and business agents to billions of people around the world. Our goal is not just to deliver \nMeta AI as an assistant, but to deliver agents that can understand your goals and then work day \nand night to help you achieve them. \n \nMy view of AI is very different from many others in the industry. I hear a lot of people out there \ntalk about how AI is going to replace people. Instead, I think that AI is going to amplify people's \nability to do what you want -- whether that's to improve your health, your learning, your \nrelationships, your ability to achieve your personal and career goals and more. My view is that \nhuman progress has always been driven by people pursuing their individual aspirations, and I \nbelieve that this will continue to be true in the future. People will be more important in the future, \nnot less. Meta believes in empowering individuals. Those are the kinds of products we're going to \nbuild, and I believe they're going to be some of the most important and valuable products of all \ntime. \n \nWe are building a personal agent focused on helping people achieve the diverse goals in their lives. \nWe are also building a business agent focused on helping entrepreneurs and businesses across the \nworld use our tools and others to grow their efforts, reach new customers, and serve existing \ncustomers better. These agents will work together to form an ecosystem, and whether you use \nour personal or business agents to achieve your goals, I believe that the future will see a massive \nincrease in entrepreneurship from people creating new things that they've always wanted to exist \nbut previously didn't have the tools to bring into the world. We're already testing an early version \nof business AIs, and weekly conversations have grown 10x since the start of this year. \n \nWe're also working on using Spark and our upcoming models to improve our recommendation \nsystems and core business in Facebook, Instagram, and ads. Right now, our apps primarily help \npeople accomplish three important goals: connecting with people, learning about the world, and \nentertainment. But we've always wanted our apps to understand more of people's goals so we can \nhelp improve their lives in all the ways that they want. These new AI models will let us understand \nthis in more detail. So instead of just looking at statistical patterns of what types of people engage \nwith what content, for the first time in Meta's history we're going to be able to develop a first-\nprinciples understanding of what you care about and what each piece of content in our system is \nabout so that way we can show you more useful things for what you're trying to accomplish. We'll \nalso be able to create personalized content specifically for people to help you achieve your goals \nas well. \n \nSince our recommendation systems are operating at such large scale, we'll phase in this new \nresearch and technology over time. But the trend over the last few years seems clear that we are \nseeing an increasing return on the amount that we can improve engagement for people and value \nfor advertisers. This encourages us to continue investing heavily in what we expect will provide \nincreasing value over the coming years as well. \n \nOn that note, we are increasing our infrastructure capex forecast for this year. Most of that is due \nto higher component costs, particularly memory pricing. But every sign that we’re seeing in our \nown work and across the industry gives us confidence in this investment. That said, we are very \nfocused on increasing the efficiency of our investments. And as part of that, we're rolling out more \nthan 1GW of our own custom silicon that we're developing with Broadcom as well as significant \namounts of AMD chips to compliment the new Nvidia systems that we're rolling out as well. One \nof the primary goals of our Meta Compute initiative is to lead the industry in efficiency of building \ncompute, and we expect that will be a strategic advantage over time.", + "path": "Meta Q1 2026 Earnings Call Transcript.pdf/Root/Mark Zuckerberg, CEO", "metadata": { - "length": 3951, - "summary": "2 personal and business agents to billions of people around the world. Our goal is not just to deliver Meta AI as an assistant, but to deliver agents that can understand your goals and then work day and night to help you achieve them. My view of AI is very different from many...", + "length": 4102, + "summary": "Mark Zuckerberg, CEO of Meta Platforms, Inc., discusses the company's strong performance in Q1 2026, highlighting over 3.5 billion daily active users across its family of apps. He details the release of the Muse family of AI models and the upgraded Meta AI assistant from Meta Superintelligence Labs. Zuckerberg outlines his vision for personal and business agents designed to amplify human capabilities rather than replace people, and mentions plans to integrate these models into recommendation systems for Facebook and Instagram. The section concludes with an update on infrastructure investments, including increased capex due to memory costs and the rollout of custom silicon developed with Broadcom alongside AMD and Nvidia chips.", "page_nums": [ + 1, 2 ], - "keywords": [], + "keywords": [ + "Meta Platforms, Inc.", + "META", + "Mark Zuckerberg", + "Susan Li", + "Iran", + "Russia", + "Instagram", + "Facebook", + "WhatsApp", + "Threads", + "Muse", + "Muse Spark", + "Meta AI", + "Meta Superintelligence Labs", + "Broadcom", + "AMD", + "Nvidia" + ], "connect_to": [], "page_assets": [ + { + "page_num": 1, + "artifact_ref": "page_citation_assets/page-1.png", + "content_type": "image/png", + "source": "knowhere-rendered-page-citation-source", + "width": 1224, + "height": 1584 + }, { "page_num": 2, "artifact_ref": "page_citation_assets/page-2.png", @@ -51,17 +84,50 @@ } }, { - "chunk_id": "node_96a04eee-1fee-597c-84fa-4861f3dc2cf3", + "chunk_id": "node_67d5113c-7fb8-535b-a197-117cbf5602e1", "type": "page", - "content": "3\n\nTalking about building physical goods at scale, our AI glasses continue to perform well with the\nnumber of people using them daily tripling year-over-year. This continues to be one of the fastest-\ngrowing categories of consumer electronics ever. We released Ray-Ban Meta Optics this quarter,\ndesigned for all-day wear rather than primarily as sunglasses. And building on our release of\nOakley last year, we have some exciting new partnerships and styles that I think are going to have\nthe potential to reach even more people coming later this year.\n\nAll of our glasses are designed to easily update to use our newest AI models and features. I'm also\nreally excited to see the glasses evolve from being able to answer questions to being able to be a\npersonal agent that's with you all day long, helping you remember things and achieve your goals.\n\nBeyond glasses, I am excited for more of our metaverse efforts to be powered by the AI models\nwe're training as well. We remain the biggest investor in the VR space across the in dustry, but we\nare focused on making our VR business sustainable as we invest more in other areas like AI and\nglasses.\n\nBefore wrapping, I want to talk for a moment about how AI is transforming our work. We're seeing\nmore and more examples where one or two people are building something in a week that would\nhave previously taken dozens of people months. I want to make sure that Meta is the best place in\nthe world for these types of people to come and make an impact. We're building the next\nevolution of our company around these people. There's a lot that we can do to enable this: building\nthe best infrastructure for creating and delivering products at scale, streamlining our teams so\nthey aren't bigger than they need to be, recognizing and rewarding the people who are having\noutsized impacts, and setting ourselves up to try many more ideas and take on many new projects\nin the future. Of course we'll continue pushing to increase our efficiency as well, but overall I think\nthe future is about building many more higher quality things than we've ever built before.\n\nAlright, that is what I wanted to cover today. We are living through a historic technological\ntransformation. We are among the few companies positioned to shape the future, and we are on\ntrack to do that. I'm looking forward to delivering personal superintelligence to bi llions of people.\nAnd as always, I'm grateful for the hard work of our teams, and to all of you for being on this\njourney with us.\n\nSusan Li, CFO\n\nThanks Mark and good afternoon everyone.\n\nLet’s begin with our segment results. All comparisons are on a year-over-year basis unless\notherwise noted.\n\nWe estimate 3.56 billion people used at least one of our Family of Apps on a daily basis in March,\nwhich declined slightly from December due to internet disruptions in Iran and a restriction on\naccess to WhatsApp in Russia. Absent these impacts, growth in Family Daily Active People would\nhave been positive quarter-over-quarter.\n\nQ1 Total Family of Apps revenue was $55.9 billion, up 33% year -over-year.\n\nQ1 Family of Apps ad revenue was $55.0 billion, up 33% or 29% on a constant currency basis.", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p3", + "content": "3 \n \nTalking about building physical goods at scale, our AI glasses continue to perform well with the \nnumber of people using them daily tripling year-over-year. This continues to be one of the fastest-\ngrowing categories of consumer electronics ever. We released Ray-Ban Meta Optics this quarter, \ndesigned for all-day wear rather than primarily as sunglasses. And building on our release of \nOakley last year, we have some exciting new partnerships and styles that I think are going to have \nthe potential to reach even more people coming later this year. \n \nAll of our glasses are designed to easily update to use our newest AI models and features. I'm also \nreally excited to see the glasses evolve from being able to answer questions to being able to be a \npersonal agent that's with you all day long, helping you remember things and achieve your goals. \n \nBeyond glasses, I am excited for more of our metaverse efforts to be powered by the AI models \nwe're training as well. We remain the biggest investor in the VR space across the industry, but we \nare focused on making our VR business sustainable as we invest more in other areas like AI and \nglasses. \n \nBefore wrapping, I want to talk for a moment about how AI is transforming our work. We're seeing \nmore and more examples where one or two people are building something in a week that would \nhave previously taken dozens of people months. I want to make sure that Meta is the best place in \nthe world for these types of people to come and make an impact. We're building the next \nevolution of our company around these people. There's a lot that we can do to enable this: building \nthe best infrastructure for creating and delivering products at scale, streamlining our teams so \nthey aren't bigger than they need to be, recognizing and rewarding the people who are having \noutsized impacts, and setting ourselves up to try many more ideas and take on many new projects \nin the future. Of course we'll continue pushing to increase our efficiency as well, but overall I think \nthe future is about building many more higher quality things than we've ever built before. \n \nAlright, that is what I wanted to cover today. We are living through a historic technological \ntransformation. We are among the few companies positioned to shape the future, and we are on \ntrack to do that. I'm looking forward to delivering personal superintelligence to billions of people. \nAnd as always, I'm grateful for the hard work of our teams, and to all of you for being on this \njourney with us. \n \nSusan Li, CFO \n \nThanks Mark and good afternoon everyone. \n \nLet’s begin with our segment results. All comparisons are on a year-over-year basis unless \notherwise noted. \n \nWe estimate 3.56 billion people used at least one of our Family of Apps on a daily basis in March, \nwhich declined slightly from December due to internet disruptions in Iran and a restriction on \naccess to WhatsApp in Russia. Absent these impacts, growth in Family Daily Active People would \nhave been positive quarter-over-quarter. \n \nQ1 Total Family of Apps revenue was $55.9 billion, up 33% year-over-year. \n \nQ1 Family of Apps ad revenue was $55.0 billion, up 33% or 29% on a constant currency basis.\n\n4 \n \nIn Q1, the total number of ad impressions served across our services increased 19%. Impression \ngrowth was healthy across all regions, driven primarily by growth in engagement and users, as well \nas ad load optimizations. The global average price per ad increased 12% year-over-year in Q1, with \nbroad-based growth as we benefited from ad performance improvements, better macro \nconditions versus Q1 of last year, and currency tailwinds in international regions. This was partially \noffset by strong impression growth, including from lower monetizing regions. \n \nFamily of Apps other revenue was $885 million, up 74%, driven primarily by WhatsApp paid \nmessaging and subscriptions revenue. \n \nWithin our Reality Labs segment, Q1 revenue was $402 million, down 2% year-over-year due to \nlower Quest headset sales, which were partially offset by continued strong growth in AI glasses \nrevenue. \n \nMoving now to our consolidated results. \n \nQ1 total revenue was $56.3 billion, up 33% or 29% on a constant currency basis. \n \nQ1 total expenses were $33.4 billion, up 35% compared to last year. Year-over-year growth was \ndriven mainly by infrastructure costs and employee compensation. \n \nThe growth in infrastructure costs was due to higher depreciation, data center operating costs, \nand third party cloud spend. \n \nThe growth in employee compensation was driven by technical hires we’ve added over the past \nyear, particularly AI talent. \n \nWe ended Q1 with over 77,900 employees, down 1% from Q4 as the impact of headcount \noptimization efforts in certain functions was partially offset by hiring in priority areas of \nmonetization and infrastructure. \n \nFirst quarter operating income was $22.9 billion, representing a 41% operating margin. \n \nQ1 interest and other income was -$1.1 billion, driven by unrealized losses on our equity \ninvestments. \n \nOur tax rate for the quarter was -23%, which was favorably impacted by a tax benefit of $8.03 \nbillion. This benefit partially relieves the $15.93 billion non-cash tax charge we recorded in the \nthird quarter of 2025, which reflects updated guidance from the US Treasury issued in February \n2026 regarding the tax treatment of previously capitalized R&D expenditures in the United \nStates. Absent the tax benefit, our Q1 tax rate would have been 14%. \n \nNet income was $26.8 billion or $10.44 per share. Absent the tax benefit, our net income and EPS \nwould have been $18.7 billion and $7.31, respectively. \n \nCapital expenditures, including principal payments on finance leases, were $19.8 billion, driven by \ninvestments in servers, data centers, and network infrastructure. \n \nFree cash flow was $12.4 billion. We ended the quarter with $81.2 billion in cash and marketable \nsecurities and $58.7 billion in debt.\n\n5 \n \n \nTurning now to the business performance. There are two primary factors that drive our revenue \nperformance: our ability to deliver engaging experiences for our community, and our effectiveness \nat monetizing that engagement over time. \n \nOn the first, we’re continuing to see significant gains from our content recommendation \ninitiatives. \n \nOn Instagram, the ranking improvements that we made in Q1 drove a 10% lift in Reels time spent. \n \nOn Facebook, total video time increased more than 8% globally in Q1, the largest quarter-over-\nquarter gain in four years. Within the US & Canada, ranking improvements we made drove a 9% \nincrease in video watch time on Facebook in Q1. \n \nThese gains are benefiting from advances we’re making across the full stack. \n \nStarting with data, we doubled the length of user interaction sequences we use for training on \nInstagram in Q1 and increased the richness of how each user interaction is described, enabling our \nsystems to develop a deeper understanding of user interests. \n \nWithin our models, we’ve significantly increased the speed with which our ranking models index \nnew posts, which is enabling us to recommend them sooner after they are published. We’re also \napplying more advanced content understanding techniques, which is enabling us to quickly \nidentify posts that may be interesting to someone, even if they haven’t engaged with a lot of \nsimilar content. These and other improvements have enabled us to increase the diversity and \nrecency of recommended content, with same-day posts now representing more than 30% of \nrecommended Reels on both Instagram and Facebook, more than double the levels one year ago. \n \nWe’re also using AI to unlock more inventory by auto-translating and dubbing videos into a \nviewer’s local language, enabling us to recommend a more diverse set of content. Over half a \nbillion users on each of Facebook and Instagram are now watching AI-translated videos weekly. \n \nLooking forward, we’re making several investments we expect will deliver more valuable \nrecommendations. \n \nThis year, we will continue scaling up our models in several dimensions, including their size and \ncomplexity, while incorporating LLMs to deepen content understanding across our platform. This \nwill enable us to better match people to a wider variety of content aligned to their interests. \n \nAt the same time, we are executing on our longer-term efforts to develop the next generation of \nour recommendation systems. This includes building foundation models that power organic \ncontent and ads recommendations, as well as developing LLM-based recommender systems. Our \nfocus this year is validating the model architectures and techniques in these domains before we \nscale them out in future years. \n \nAside from our recommendations work, we are focused on deploying the models from Meta \nSuperintelligence Labs to enable a new set of product experiences. \n \nWe’re seeing encouraging results within Meta AI since we began powering responses with the first \nmodel from MSL, Muse Spark. In tests we ran leading up to the launch, we saw meaningful\n\n6 \n \nengagement gains that accelerated week-over-week with each new iteration of the model. We’re \nseeing similar gains within Meta AI following the broad roll out of our new model, with double-digit \npercent increases in Meta AI sessions per user. Muse Spark is now powering Meta AI in direct chat \nthreads across our Family of Apps, as well as the standalone Meta AI app and website, giving \nbillions of people globally access to our latest model. \n \nOverall, we’re very encouraged by the momentum within our research and product roadmap and \nlook forward to sharing more detail on what we’re building over the course of this year. \n \nTurning to the second driver of our revenue performance: increasing monetization efficiency. \n \nThe first part of this work is optimizing the level of ads within organic engagement. \n \nHere, we continue to enhance our systems to show ads at the optimal time and location. In Q1, we \nalso expanded availability of ads on our newer surfaces, including bringing ads on Threads to \npeople in more markets. On WhatsApp, we are making good progress with the roll out of ads in \nStatus, with hundreds of millions of people now viewing them daily. \n \nMoving to the second part of increasing monetization efficiency: improving performance for the \nbusinesses who use our services. To do so, we’re deploying AI more deeply across each layer of \nour systems and tools. \n \nWithin our ads systems, we’re delivering performance gains as we deploy more complex and \npredictive models. \n \nIn Q1, enhancements we made to Lattice’s modeling and learning techniques, along with advances \nin our GEM model architecture, drove a more than 6% increase in conversion rate for landing page \nview ads. \n \nIn addition, we’ve been investing in more performant inference models for when we’re serving ads. \nIn the second half of last year, we began rolling out our new Adaptive Ranking Model, which is an \nLLM-scale ads recommender model that we use for inference. This model improves our inference \nROI by routing requests to more compute intensive inference models when it determines there is \na higher probability of conversion. In Q1, we expanded coverage of our Adaptive Ranking model to \nsupport offsite conversions, which drove a 1.6% increase in conversion rates across the major \nsurfaces on Facebook and Instagram. \n \nWe’re also leveraging AI to make it easier for businesses to manage their campaigns, develop ad \ncreative, and engage with customers. \n \nThe Meta AI business assistant has now been fully rolled out to all eligible advertisers on \nsupported Meta buying surfaces, providing personalized recommendations to advertisers, \nresolving account issues, and surfacing campaign insights to help optimize results. Performance \nhas been strong since we began testing the assistant in Q4, with common account issues being \nresolved at a 20% higher rate. \n \nThis week, we’re also introducing Meta ads AI connectors in open beta, providing advertisers the \nability to connect their Meta ad account directly to an AI agent. We've always supported \nadvertisers both on our platform and through tools like the Marketing API — now we're extending\n\n7 \n \nthat to AI so businesses and agencies can analyze and optimize campaigns with the tools they’re \nalready using. \n \nUsage of our ad creative tools is also scaling, with more than 8 million advertisers using at least \none of our gen AI ad creative tools and particularly strong adoption among small and medium-\nsized advertisers. These tools are benefiting performance as well, with advertisers using our video \ngeneration feature seeing more than 3% higher conversion rates in tests. \n \nWe’re also seeing good traction in using AI to facilitate customer engagement. In Q1, we expanded \nBusiness AIs on WhatsApp to SMBs across Latin America and Indonesia, as well as on Messenger \nin Asia-Pacific. We now have more than 10 million conversations each week being facilitated \nthrough Business AIs, up from 1 million at the start of the year. We’ll further expand access to \nmore countries this quarter while adding more capabilities to the AIs. \n \nWe also continue to invest in the Value Optimization suite, which helps advertisers maximize their \nReturn on Ad Spend by prioritizing the highest-value conversions rather than optimizing solely for \nthe most conversions at the lowest cost. Adoption by businesses has been strong following \nperformance improvements we’ve made over the past year, with the annual revenue run-rate of \nour value optimization suite now over $20B, more than doubling year-over-year. \n \nLast, I want to touch on our commerce efforts. \n \nPeople discover products on our platforms through ads and organic posts, with brands \nincreasingly turning to creators to promote their products. This is contributing to rapid growth in \nour partnership ads product, with its revenue run-rate more than doubling year-over-year in Q1 to \n$10 billion. \n \nTo support the product discovery and purchasing happening through creators, we’re expanding \nour solutions beyond ads. Last month, we rolled out our affiliate partnerships offering on \nFacebook to more test partners, so creators can tag products from participating retailers on their \nposts and earn a commission when someone makes a purchase. We have also started testing \nsimilar experiences on Instagram. \n \nWe see a real opportunity to help people more easily discover and buy products within our \nservices, particularly as we incorporate AI deeply across our platforms. \n \nNext, I would like to discuss our approach to capital allocation. \n \nCompute is becoming increasingly important as it determines the quality of the services we can \nprovide, including powering more capable models and delivering innovative new products. It is \nalso becoming more critical to how we work at Meta, as we are entering a world where employees \nare managing agents to help them generate new ideas, run experiments, execute tasks, and build \nproducts. \n \nWe are investing aggressively to meet our infrastructure needs and ensure we maximize our \nstrategic flexibility over the coming years. This includes substantially expanding our own data \ncenter footprint and striking deals throughout the supply chain to secure necessary components \nfor future capacity. We are also signing cloud deals that will come online over the course of this \nyear and 2027, allowing us to scale more quickly. These multi-year cloud deals and our\n\n8 \n \ninfrastructure purchase agreements drove a $107 billion step up in our contractual commitments \nthis quarter. \n \nOur investments will support our training needs for future models, and most importantly, provide \nus the inference capacity necessary to deliver personal and business agents to billions of people \naround the world, along with several other AI product experiences we’re developing. \n \nAs we grow our infrastructure spend, we remain committed to operating efficiently, and we \nrecently shared internally that we plan to reduce the size of our employee base in May. We believe \na leaner operating model will allow us to move more quickly while also helping to offset the \nsubstantial investments we’re making. \n \nMoving to our financial outlook. \n \nWe expect second quarter 2026 total revenue to be in the range of $58-61 billion. Our guidance \nassumes foreign currency is an approximately 2% tailwind to year-over-year total revenue growth, \nbased on current exchange rates. \n \nTurning to the expense and capex outlooks. \n \nWe expect full year 2026 total expenses to be in the range of $162-169 billion, unchanged from \nour prior outlook. \n \nWe continue to expect to deliver operating income this year that is above 2025 operating income. \n \nWe anticipate 2026 capital expenditures, including principal payments on finance leases, to be in \nthe range of $125-145 billion, increased from our prior range of $115-135 billion. This reflects our \nexpectations for higher component pricing this year and, to a lesser extent, additional data center \ncosts to support future year capacity. \n \nAbsent any changes to our tax landscape, we expect our tax rate for the remaining quarters of \n2026 to be between 13-16%. \n \nLastly, we continue to monitor active legal and regulatory matters, including headwinds in the EU \nand the US that could significantly impact our business and financial results. For example, we \ncontinue to see scrutiny on youth-related issues and have additional trials scheduled for this year \nin the US, which may ultimately result in a material loss. \n \nIn closing, Q1 was a solid start to the year, with strong execution across our core ads and \nengagement initiatives. We’re also making exciting progress on our AI research and product \nefforts and expect to build on that momentum over the course of this year. \n \nWith that, Krista, let’s open up the call for questions. \n \nOperator: \nThank you. We will now open the lines for a question and answer session. To \nask a question, please press star one on your touch tone phone. To withdraw \nyour question again, press star one. \n \n \nPlease limit yourself to one question. Please pick up your handset before \nasking your question to ensure clarity. If you are streaming today’s call, please\n\n9 \n \nmute your computer speakers. And your first question comes from Brian \nNowak with Morgan Stanley. Please go ahead. \n \nBrian Nowak: \nThanks for taking my question. Mark, I wanted to ask you just about the level of \ninvestment you’re making and sort of the signposts you’re watching to ensure \nyou’re going to generate ROIC on all these investments behind Muse and the \nother products. \n \n \nSo if you could just sort of let us know some of the key factors you’re watching \nover the next 12 to 24 months, whether it’s Meta AI, Muse advances, core \nalgorithm, what are you sort of watching foremost just to make sure that \nyou’re on the right path to generating healthy ROIC on all this CapEx and \ninfrastructure spend? \n \nMark Zuckerberg: That’s a very technical question for basically where -- the things that we’re \nwatching are to make sure that we’re on track building leading models and \nleading products. The formula for our company has always been build \nexperiences that can get to billions of people and focus on monetizing them \nonce you get to scale. \n \n \nThat’s -- we’re seeing a little bit of that here where basically we invest in \nadvance to build leading models, and we convert that into leading products. \nAnd then we think that these are going to be some of the most important \nproducts that get built over the next decade. \n \n \nSo I think just like anything else that we’ve done over time the basic milestones \nthat I look at are around, first, technically, are we delivering the quality to \nenable a great product; then second, when you have the product, how is it \nscaling; and then third, you look at the monetization and then you drive up the \nefficiency of it towards increasing profitability. \n \n \nI don’t -- I mean like I don’t think we have a very precise plan for exactly how \neach product is going to scale month-over-month or anything like that. \n \n \nBut I think we have a sense of the shape of where these things need to be. And \nI think if you look at the usage of these and the quality of the products and the \nquality of the models that are out there and the use that other frontier models \nare getting and the trajectory of that, I’m quite comfortable that, A, the lab that \nwe’re building is on track to be a leading lab in the world. \n \n \nI think Muse Spark was a very high-quality model. It powers Meta AI which I \nthink is now a world-class assistant. \n \n \nWe have an ability to be able to grow that and have a large amount of \nengagement. And over the coming quarters, we’re just going to be tracking \nhow do our next set of training runs go. How do our products scale? How \nexcited are we about the products in the pipeline? Where right now we’re very \nexcited.\n\n10 \n \n \nAnd then we’ll also ramp up monetization over that period of time as well. So I \nthink that those are the set of things that I look at. I think for the kind of \nspecific financial questions, I think Susan can jump in if there’s anything more \nto add. \n \nOperator: \nYour next question comes from the line of Mark Shmulik with Bernstein. Please \ngo ahead. \n \nMark Shmulik: \nYes, thanks for taking the questions. Mark, I guess now that we’ve got Muse \nSpark kind of out there launched, how are you thinking about the team’s focus \nhere kind of divided on to further model training runs and kind of further \nspecialization in that personal intelligence goal versus product launches and \nkind of shipping more product out the door? And Susan, I guess, kind of as a \nfollow-up to Brian’s question, I know it’s too early to discuss 2027 CapEx. \n \n \nBut we’ve had peers mention tonight a potential significant step-up. Any way \nto think about dimensionalizing kind of how we think about some of the returns \nor traction this year and how it might affect the 2027 spend? Thanks. \n \nMark Zuckerberg: I mean I think the roadmap from the team is -- has been pretty consistent. So \nwe have the research team which is focused on scaling increasingly intelligent \nmodels with capabilities for the specific things that we’re focused on which are \nbusiness and personal agents. \n \n \nSo we’re -- we just released our first model, and I talked about in my comments \nhow we’re climbing the scaling ladder towards greater capabilities and scale for \nthe models. That work continues. \n \n \nWe have our next set of more advanced models in training now. And that is -- \nthat work will, I think, just continue. I mean that’s a loop. I don’t think we’re \ngoing to be done with that anytime soon. \n \n \nWe’re going to have teams that are just consistently focused on training more \nintelligent and more capable models in the ways that we want. Then we have \nour product team, and that team is now really unlocked to be able to build \nthings on top of our models because we now have a very strong model. \n \n \nSo before this, we had been prototyping a bunch of things using other different \nmodels, whether it was our previous older models or kind of using the APIs \nfrom other companies. And now we’re unlocked to be able to go build things \nand get them to scale on top of our own models. So I think you will see that \nover some period of time. \n \n \nI tried in my opening remarks to give a bit of a sense of where we’re going, but I \nthink that more of the details of that will become clear over the coming \nmonths. And I think that these are just both loops that we’ll iterate on. We’ll \nkeep on iterating on the intelligence. \n \n \nWe’ll keep on working on building new products and scaling the products. And \nthen as we get to product market fit, we’re also going to increasingly focus on\n\n11 \n \nbuilding the businesses around them and decreasing the costs. And this is kind \nof how we’ve done everything over the last 20 years of running the company, \nand that is basically the plan. \n \nSusan Li: \nMark, on your second question, we aren’t providing a specific outlook for 2027 \nCapEx. And we are, frankly, undergoing a very dynamic planning process \nourselves as we’re working through what our capacity needs will be over the \ncoming years. \n \n \nOur experience so far has been that we have continued to underestimate our \ncompute needs even as we have been ramping capacity significantly as the \nadvances in AI have continued and our teams continue to identify compelling \nnew projects and initiatives. And now too, there are very compelling internal \nuse cases. \n \n \nSo our expectation is that compute will become even more central to the \nbusiness going forward. And it will be critical to determining the quality of the \nmodels we develop, the types of products we can introduce, how productive \nwe can be as an organization. \n \n \nSo we’re going to continue building out our infrastructure with flexibility in \nmind. And if we end up not needing as much as we anticipate, we can choose to \nbring it online more slowly or reduce our spending in future years as we grow \ninto the capacity that we’re building now. \n \nOperator: \nYour next question comes from the line of Eric Sheridan with Goldman Sachs. \nPlease go ahead. \n \nEric Sheridan: \nThanks so much for taking the question. Maybe if I can build out on one of the \ntopics that was discussed in the prepared remarks. But just the opportunity set \nthat sits in front of the company with respect to putting agentic compute in \nfront of both consumers and enterprises. \n \n \nYou’ve long been associated with sort of the consumer landscape. And I am \ncurious about how you’re thinking about extensions of the media engagement \nparts of your business model and the commerce parts of the business model to \nbecome more agentic over time. \n \n \nBut what do you see also as the opportunity set that sits in front of you across \nSMBs and enterprises where historically, you maybe haven’t had as much \nproduct velocity? Thanks so much. \n \nSusan Li: \nThanks, Eric. So I would say in the near term, obviously the sort of biggest \nfocuses are some of the areas that you mentioned around deepening sort of \nengagement, obviously with our existing community and user base, making ad \nexperiences meaningfully more personalized, more engaging, more valuable, \nhelping SMBs find and engage with customers across our platform. \n \n \nThose are some of the, I think, most intuitive and adjacent opportunities to the \nbusiness that we have today. And then, of course, as we are able to build out\n\n12 \n \nmore agentic capabilities, enabling agents to help people be more productive, \nbut also agents for businesses and enabling, frankly, those agents to interact \nwith each other and build what we hope will be a thriving commerce ecosystem \non our platform. \n \n \nSo I would say some of these are a little bit further out, especially in that latter \ncategory of things. Again, the focus is on building personal superintelligence, \nbuilding a consumer agent that can work for you and help you get things done. \nThat right now is a consumer experience that we’re focused on, but we think \nthere will be clear monetization opportunities over time. You can imagine \ncommission structures or a premium offering. And on the business side, we’re \nseeing a large opportunity, of course, around agents and scaling our business \nAI initiatives. \n \n \nI think I mentioned earlier in my remarks that there are over 10 million weekly \nconversations between people and business AIs on our messaging platforms. \nThat’s up from 1 million at the start of the year, and we’re going to continue \nexpanding globally in Q2. And business AIs today are currently free for most \nbusinesses on our messaging apps. \n \n \nBut as we make more progress, we expect that we will also work towards \nestablishing a longer-term monetization model. And we’ll also consider other \nservices that we can offer to businesses in the future, but we don’t have \nanything more to share today. \n \nOperator: \nYour next question comes from the line of Youssef Squali with Truist \nSecurities. Please go ahead. \n \nYoussef Squali: \nGreat, thank you very much for taking the questions. Maybe one for Mark and \none for Susan. Mark, Ray-Ban, Oakley AI glasses continue to perform really well \nfor you guys, but EssilorLuxottica owns and manages a lot more brands. \n \n \nWhat are the gating factors to see the launch of additional glasses under these \nother brands this year? And what would be a successful year for you as you \nlook back at 2026, maybe in terms of units sold? \n \n \nAnd then Susan, on that 10% RIF, how much of that is due to efficiencies for \nmaybe AI implementation versus just the need to stay fit? And as you look at \nyour employee needs over time how do you see that growing maybe relative to \nyour overall top line growth? Thank you very much. \n \nSusan Li: \nI can go ahead and take both of those. I might answer your second question \nfirst. And I’m just trying to make sure I got all of the parts of the question. \n \n \nSo in terms of what the sort of kind of the optimal size of the company, I think, \nover time we don’t really know what the optimal size of the company will be in \nthe future. I think there’s a lot of change right now with AI capabilities \nadvancing rapidly.\n\n13 \n \n \nWe’re very focused on leveraging AI tools to substantially increase our \nproductivity, and we’re seeing that reflected in the accelerating output from \nour engineers. And we’re generally approaching -- we’re approaching this with \na bias toward wanting to use these tools to build even more products and \nservices than we would have before. \n \n \nAt the same time we’re making very significant investments in infrastructure, \nand we are very focused on continuing to operate efficiently. \n \n \nSo I think we will be continuously evaluating how we’re structured just to make \nsure we’re best set up to deliver against our priorities over the coming years. So \nthat is, I think, your second question. The first question was about the AI \nglasses. \n \n \nWe have -- we’re continuing to see strong growth in, obviously the AI glasses \nsales over the course of Q1. Demand for the expanded portfolio lineup has \ngenerally been quite strong, and we’re seeing sales shift now from the prior \ngeneration of Ray-Ban Metas to the latest generation which I think speaks to \nthe value of the improved features like extended battery life and features like \nhigher resolution video capture. \n \n \nSo we’re pretty excited about the progress we’ve made with glasses. We see \nstrong interest now in the Meta Ray-Ban Displays with the Meta Neural Band. \n \n \nSo that’s an encouraging sign that there is consumer appetite for display \nglasses which is kind of the next generation of how this product evolves. And \nyes, so I think this is an area that we will continue to be -- that we continue to \nbe excited about and are investing in. \n \nOperator: \nYour next question comes from the line of Justin Post with Bank of America. \nPlease go ahead. \n \nJustin Post: \nGreat, thanks for taking my question. Mark, it took about 10 months to get \nMuse Spark out. I think it’s a pretty good pace. Just help us understand what \nkind of unlock that is for some of the new products you’re developing? And \nhow is the product cadence going to be over the next nine months on either \nconsumer or business enterprise products built on top of that model? \n \nMark Zuckerberg: I mean the field is moving pretty quickly. So I mean I’m very happy that we’re -- \nI think the lab that has gone the fastest from standing up the lab to having a \nvery kind of widely accepted as strong model. So I think that’s good. \n \n \nI take that as a very significant validation of the effort that the team is working \nwell together, that the infrastructure is working, that the effort is on track. And \nI think that that’s basically the main thing that we’ve learned over the last \nquarter that I would take away is like where and we started what is this pretty \nbig bet, and it’s on track for our plan. \n \n \nIn terms of what exactly the cadence is going to be. It’s tough for me to say \nboth because I don’t really want to share competitively sensitive information\n\n14 \n \nand because I think some of the stuff we are more focused on quality than \nhitting a specific date. \n \n \nI mean on the research side, this is research, right? We are trying novel things. \nYou don’t exactly know when they’re going to land. And on the product side, I \nthink we care a lot about just having -- let me put it this way. \n \n \nThere’s a lot of agents out there, right, that people are building for different \nthings. And there aren’t that many that I would want to give to my mother. And \nI think getting to like that quality bar is something that I care about more than \nhitting a specific week for launching or something like that. \n \n \nSo -- but with that said, I mean we’re in a zone here where the teams don’t \ncheck in with me like once a quarter, like we make meaningful progress day \nover day. I think that’s part of the fun of developing in this world is that people \ncan make very rapid progress. Small groups of people and teams can make very \nrapid progress. \n \n \nSo I think we’re going to see a lot of innovation. The timing of this call is it’s \ngood in some ways because the Muse Spark release, I think, was positive. The \nMeta AI first release, I think, is positive. \n \n \nI think that that shows that we’re on track. I’m trying to kind of paint a picture \nof the very high-level direction that we’re going in, but I think that the picture is \ngoing to come into focus a lot more over the subsequent quarters. \n \nOperator: \nYour next question comes from the line of Ross Sandler with Barclays. Please \ngo ahead. \n \nRoss Sandler: \nYes. Mark, just sort of related to that last answer, but there’s a lot of new \nconsumer applications kind of cropping up everything from like an OpenClaw to \nsomething a little bit more consumer friendly that you would build for your \nmom, like you said, with like Poke or Dreamer which you recently acquired. \n \n \nSo how are these new ideas, I guess, changing your view around the direction \nthat core Meta AI or Dreamer or kind of your overall agentic strategy needs to \ngo? And then the second part of it would be, do you think the lab will stay in \nthis consumer lane? Or do you think you need -- or you want to go down the \nroute that others are going down with code writing and like the recursive self-\nimprovement loop and in that direction kind of in parallel, just thoughts on \nthat? Thank you. \n \nMark Zuckerberg: Yes. So look, on the OpenClaw and other agents, I think that they give you a \nvery exciting glimpse of what types of things should be possible. \n \n \nNow they’re pretty rough systems today. And to set up OpenClaw you need to \nlike install a computer locally and then get into a terminal and configure a bunch \nof things that, again, like there’s -- maybe there’s hundreds of thousands of \npeople or small numbers of millions of people who can do that. But what we’re\n\n15 \n \ntalking about is delivering personal superintelligence for billions of people \naround the world. \n \n \nSo how do you make a version of that experience that is a lot more polished and \ndialed and easy and that has all the infrastructure basically done for people \nalready and that just works. And that’s kind of what we’re focused on, on the \nconsumer side. And I’m really excited about that. \n \n \nI think if you had something like that, that worked quite a bit better than those \nsystems and was easy enough that people could just get then I think you go \nfrom having something that hundreds of thousands or millions of people are \ngoing to use to something that is going to be addressable to billions of people. \nAnd that has been our primary focus from day one of the lab is being able to \ndeliver something like that as a product, and I think it’s just going to be very \nexciting. \n \n \nBy the way, the same thing is true for businesses, right? I mean there’s the \npersonal version of this but there’s also a lot of people’s goals are they want to \ncreate things, right? They want to create websites. They want to create \nproducts. They want to grow their products. \n \n \nThese are all things that good agents are going to be able to help people do \nwhich I think is partially why this is so exciting. And in my opening comments, I \ntalked about how today we can handle a few goals for people, they’re big goals, \nright? We can help people stay connected with people they care about, learn \nabout the world. These are big things that people care about. But they’re not \nthe only things that people care about. \n \n \nAnd one of the things that I would love for our products to be able to do is just \nunderstand people’s goals specifically and then be able to just go work on them \nfor them, and check back in and whenever you have questions that you need \nanswered. So whether those are personal goals or you’re trying to create a \nbusiness or do work. \n \n \nI think that this is like -- this is stuff that I think literally every person in the \nworld is going to want some version of it. And also, I think it is something that \nscales where the more you want to get out of it, I think people are going to also \nbe willing to pay a lot of money to have premium or high compute versions of it. \nSo I think that this is like, it’s a very exciting area. \n \n \nBut I think what you all should be waiting to see is like whether we can build the \nversion that really like just works and how effective we are at converting people \nwho are using our products into being hundreds of millions and then billions of \npeople using this stuff. And then over time how can we effectively convert that \ninto something that’s increasingly profitable by monetizing it and getting the \ncosts down. \n \n \nSo I think that that’s the roadmap of what we need to do. You asked about \nwhether we’re primarily focused on consumers or also recursive self-\nimprovement. I think that we’ve talked about two main goals for the team.\n\n16 \n \n \n \nI mean one is this kind of agents version vision of what we’re doing. The other is \nthat self-improvement is really important because you can’t build a leading AI \nproduct if you don’t have leading models. So -- and you’re not going to have \nleading models in the future if your models can’t improve themselves, right? \n \n \nSo you’re getting to a point where today, the models are still able to learn from \npeople -- and then I think at some point, the models will have to improve \nthemselves. And that’s how the growth is going to -- and improvement in the \nmodels is going to happen. And if you don’t -- if we don’t have an ability to do \nthat, then we or anyone else, I think the companies that don’t do that are not \ngoing to be leading labs, they’re not going to produce leading products. \n \n \nSo I think that is a table stakes thing that we are focused on. Now does that \nmake us a developer tools company? Not necessarily. \n \n \nI mean I’m not against having an API or coding tools or anything like that. But \nit’s not our primary focus. But I actually think people conflate coding with self-\nimprovement more than they should. Coding is one ingredient for the model \nself improving. \n \n \nIt’s not the only thing. And we are focused on all of the parts that are going to \nbe necessary for self-improvement in service of the personal superintelligence \nvision that we have for people and businesses. \n \nOperator: \nYour next question comes from the line of Ron Josey with Citigroup. Please go \nahead. \n \nRonald Josey: \nGreat, thanks for taking my question. Mark, maybe a quick follow-up to a prior \nquestion around personal agents and business agents. And with Spark Muse \nnow live and more models in development, do you look at the personal agent \nopportunity which we talked about earlier on the call more of a short-term, \nmedium-term, long-term goal, I’m sure it’s a never-ending goal, but when we \nsee a product, is the question short or medium term? \n \nAnd then Susan, I think the ranking recommendation model improvements are \nvery impressive to see, given the size and scale of both Instagram and \nFacebook. Could you help us understand just how doubling the length of these \ninteraction sequences can drive greater usage? There’s a thesis out there that \nmaybe some of the rating recommendation improvements are long in the \ntooth. So it seems if there’s a lot more room to go. So any help there would be \nhelpful. Thank you. \n \nMark Zuckerberg: I mean I think that the agents work, there’s going to be short-term versions of \nit, but then I think that there’s going to be massive upside for delivering more \nintelligence and more capabilities in the models. And you’re kind of seeing this \nacross the industry.\n\n17 \n \n \nEach month, each generation of models, they just have more capabilities and \ncan do more things and people absorb it and are able to get more superpowers \nand it’s awesome. It’s like the most exciting time in the industry. \n \n \nSo I think of the agents as the product vehicle for delivering that capability to \npeople. And we certainly -- I think this year is going to be a key period for \nestablishing that as the vehicle for how people are going to use this, but then \nthe model improvement, I think, is going to be something that’s going to go on \nfor a very long time. So there’s a lot to do here in both the short, medium, and \nlong term. \n \nSusan Li: \nAnd then on your second question which I think is about the ranking and \nrecommendations improvements that we talked about in our -- that I talked \nabout in my earlier remarks, I think first of all, there is still a lot of room to \ncontinue improving recommendations over the rest of the year, and we expect \nwe’ll be able to do that to drive additional engagement on both Facebook and \nInstagram. \n \nA couple of the things. First, we’re going to continue to improve our data \ninfrastructure that’s going to allow our models to train on more data. And we’re \nadding more detail to how we describe the content that users have engaged \nwith in the past and scaling up the complexity of our model architecture to take \nadvantage of those larger data sets like using even longer histories of content \ninteractions, and that should all be in service of improving the overall quality of \nrecommendations. \n \n \nWe also are focused on making the recommendations even more personalized \nand more relevant to any given users interest. There’s work we’re doing to \nredesign our content retrieval system to show more content that matches the \nfull range of a user’s interests and to tailor the diversity of the topics we \nrecommend to the broadness of someone’s interests. \n \n \nSo someone with particularly concentrated interests might see relatively more \nof that content while people with a broader set of interests might see kind of a \ngreater range in the topics that we show them. And then finally, we’re \ncontinuing to make improvements to our sort of LLM based tune-your-\nalgorithm features that allow users to provide more granular natural language \nfeedback on what they want to see more of or less of in their feed. \n \n \nSo the sort of the kind of the sequence length which is the thing that you called \nout is one of really many improvements we made in Q1, and there is a big \nroadmap of further improvements going forward. \n \nOperator: \nYour next question comes from the line of Doug Anmuth with JPMorgan. \nPlease go ahead, \n \nDouglas Anmuth: Thanks so much for taking the questions. Mark, how do you think about the \nstep up as you go from leveraging smaller models in the ad business to Muse \nSpark and future large language models going forward, what are some of the \nkey unlocks across engagement and monetization? And then on Manus, can\n\n18 \n \nyou just talk at all about the strategic importance and the role in developing \nagentic products for Meta and then just current status around the tech and the \ndeal. \n \nSusan Li: \nI’ll take that question. On Manus, we’re still working through the details. So we \ndon’t have an update right now. \n \n \nOn your first question which is about going from leveraging smaller models in \nthe ads business to kind of the ads models growing. There’s already some work \nunderway, and I think I alluded to some of this in my earlier remarks, even kind \nof in the current landscape of the ads roadmap, where we’re basically trying to \nadvance the architecture here to allow sort of -- to allow us to leverage the \nabilities of larger models. \n \n \nHistorically, we haven’t used larger model architectures like GEM for inference \nbecause their size and complexity would make them too cost prohibitive. And \nthe way we drive performance from those models is by using them to transfer \nknowledge to smaller, more lightweight models that are used at run time. \n \n \nThe inference models are bound by strict latency requirements since they need \nto find the right ad within milliseconds, and that has, again, historically \nprevented us from meaningfully sizing up -- scaling up their size and \ncomplexity. \n \n \nBut in the second half of last year, we introduced a new adaptive ranking model \nwhich enables us to leverage LLM scale model complexity of a trillion \nparameters, and we made advances in the model architecture and codesign the \nsystem with the underlying silicon, so it maintains the sub-second speed that is \nrequired to serve ads at scale. \n \n \nWe also developed an approach that intelligently routes request more \ncompute-intensive inference models if it determines that there is a higher \nprobability of conversion and that lets us drive both better performance and \nincreased inference ROI. \n \n \nSo there’s a lot of work being done there before we even sort of incorporate \nmore of the LLM work into our underlying ads ranking models. \n \nOperator: \nWe have time for one more question, Ken Gawrelski with Wells Fargo. Your line \nis open. \n \nKenneth Gawrelski: \nThank you very much. Two, if I may. First, if I -- you talked on the Muse \nSpark launch. You’ve talked about two categories or two verticals. You talked \nabout health and wellness and shopping. Can I dive a little bit -- ask you to dive \na little deeper into the latter on the shopping and commerce side? \n \n \nAnd maybe if you could -- were there any learnings in the 2021, ‘22 phase \nwhere you pushed deeper into commerce on Instagram and on Facebook? Any \nlearnings from that period that you might apply? Is there an opportunity for a \nnext-gen marketplace-type business in commerce?\n\n19 \n \n \n \nAnd then the second, please, maybe, Susan, can you talk a little bit about -- \nbased on your model improvements and the content recommendations, where \n-- how much visibility do you think you have to kind of the growth trajectory on \nthe core business? \n \n \nYou continue to grow at basically double the pace of the industry despite being \na very large share of the industry. Could you just talk about a little bit about \nyour visibility into that continued performance? Thank you. \n \nMark Zuckerberg: Yes. So I might give you a somewhat loftier answer to the question. You’re \nasking about shopping. \n \n \nI think it’s sort of an interesting example of the way in which the work that \nwe’re doing is different than what I think others are doing out there. These \nproducts, they -- AI agents get better when you fully optimize the stack. \n \n \nThat’s why we believe that we need to be a company that builds frontier \nmodels in addition to building the agents. And then in order to do that, you, of \ncourse, need to build your infrastructure in order to be able to do that well. \n \n \nSo we’re undertaking this large investment to be able to do that top to bottom. \nAnd I think a lot of the way to think about the investment that we’re making is a \nbet that the individual things that people care about and that people are going \nto be more important in the future. And that’s sort of like -- and I think it should \nbe a pretty obvious thing to say. \n \n \nBut I think so much of the rhetoric around AI in the industry is around like a \ncompany trying to build some kind of centralized thing that like does all the \nproductive work in society in some way or something like that. And that just is \nvery different from how we see the world. \n \n \nLike our vision for the future is one where society makes progress by \nindividuals pursuing their own aspirations. And some people care about big \ngrand things like curing diseases. And a lot of people care about personal things \nlike finding the right shirt for my daughter. And I just think that we want to -- \nwe’re going to build things that help deliver this vision for personal agents for \npeople. \n \n \nAnd I think that part of the lane and what is interesting and differentiated about \nwhat we’re doing is that that’s just so different from how I hear everyone else \ntalking about the work that we’re doing. So even though I think some of these \nideas, they seem like they should be so obvious. \n \n \nI actually think that our approach of trying to empower individuals and building \nconsumer things is just in the details extremely different from what others are \ndoing. And shopping might be one kind of specific example that I think is going \nto have interest in commercial implications. And I think people -- consumers \nare going to like it.\n\n20 \n \n \nBut I don’t hear any other labs out there talking about how they’re building an \nAI that’s really good at shopping. And I think that the reason for that is like not \nbecause shopping is the most important thing by itself, but because like \nempowering people to do the things that matter in their lives, whether that’s \nlocal or understanding social context, or shopping or personal health things or \nunderstanding what’s going on around them visually which is going to be really \nimportant on the glasses. These are all elements of the personal super \nintelligence vision. \n \n \nI think like a lot of this, and when you’re thinking about kind of the investment \nin Meta over time I think you should think about it as coming down to these set \nof values around what do we want AI to do in society. And if what you want it \nto do is empower individuals and build a world where the AI is in service to \nindividual’s goals, then that is what we are going to build, and I think it’s going \nto be incredibly valuable. \n \nSusan Li: \nGosh, I almost wish we could end on that answer, but I will answer the second \nquestion which I think kind of has two versions. \n \n \nOne is a version of like what’s the revenue outlook? And obviously we gave the \nQ2 guide which embeds, I think, both a range of kind of macro outcomes, but \nalso the work that we’ve -- the ongoing work that we have to continue \nimproving both the sort of usage and engagement on our family of apps and \nthen our ability to continue making the ads better and more performant. \n \n \nI think the second question is maybe more of a -- the second version of that \nquestion is more of a higher-level question about kind of the overall trajectory \nof the roadmap here. And one of the things I will say, having been working on \nthis for a very long time I’m always really impressed by the team’s ability to \ncontinue to advance the state of the art here. And our planning process now is, \nI think, really fine-tuned around this. \n \n \nSo I’ve mentioned on a couple of calls, the budgeting process in which we run a \nvery sort of ROI-based process to make sure that we are funding all of the ads \ninitiatives that we think will drive growth in future years. And that’s something \nthat is both quite dialed in. \n \n \nAnd I think that our ability to measure the impact of that has been pretty \nrobust, and it’s been a very important driver of our ads revenue growth, and \nthat continues to be a process that again, we ran in this past budget and -- as \nfar as we can -- as we have line of sight, we feel good about the investment \nopportunities ahead of us. \n \nKenneth Dorell: \nGreat. Thank you everyone, for joining us today. We look forward to speaking \nwith you again soon. \n \nOperator: \nThis concludes today’s conference call. Thank you for joining. And you may now \ndisconnect.", + "path": "Meta Q1 2026 Earnings Call Transcript.pdf/Root/Susan Li, CFO", "metadata": { - "length": 3173, - "summary": "3 Talking about building physical goods at scale, our AI glasses continue to perform well with the number of people using them daily tripling year-over-year. This continues to be one of the fastest- growing categories of consumer electronics ever. We released Ray-Ban Meta Opti...", + "length": 52305, + "summary": "This section covers the financial results for Meta's first quarter. It details segment performance, including a 33% year-over-year increase in Family of Apps revenue to $55.9 billion and a slight decline in Reality Labs revenue to $402 million. Consolidated results show total revenue of $56.3 billion and net income of $26.8 billion. The CFO also discusses business performance drivers like content recommendations and monetization efficiency, highlighting growth on Instagram Reels and Facebook video time, as well as advancements in AI-powered ad tools and commerce initiatives.", "page_nums": [ - 3 + 3, + 4, + 5, + 6, + 7, + 8, + 9, + 10, + 11, + 12, + 13, + 14, + 15, + 16, + 17, + 18, + 19, + 20 + ], + "keywords": [ + "Susan Li", + "Mark", + "Meta", + "Family of Apps", + "WhatsApp", + "Reality Labs", + "Instagram", + "Facebook", + "Threads", + "Messenger", + "Lattice", + "GEM", + "Meta Superintelligence Labs", + "MSL", + "Muse Spark" ], - "keywords": [], "connect_to": [], "page_assets": [ { @@ -71,24 +137,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bc78c209-d4c0-592e-bc87-ddf5ee4ffab4", - "type": "page", - "content": "4\n\nIn Q1, the total number of ad impressions served across our services increased 19%. Impression\ngrowth was healthy across all regions, driven primarily by growth in engagement and users, as well\nas ad load optimizations. The global average price per ad increased 12% year-over-year in Q1, with\nbroad-based growth as we benefited from ad performance improvements, better macro\nconditions versus Q1 of last year, and currency tailwinds in international regions. This was partially\noffset by strong impression growth, including from lower monetizing regions.\n\nFamily of Apps other revenue was $885 million, up 74%, driven primarily by WhatsApp paid\nmessaging and subscriptions revenue.\n\nWithin our Reality Labs segment, Q1 revenue was $402 million, down 2% year -over-year due to\nlower Quest headset sales, which were partially offset by continued strong growth in AI glasses\nrevenue.\n\nMoving now to our consolidated results.\n\nQ1 total revenue was $56.3 billion, up 33% or 29% on a constant currency basis.\n\nQ1 total expenses were $33.4 billion, up 35% compared to last year. Year-over-year growth was\ndriven mainly by infrastructure costs and employee compensation.\n\nThe growth in infrastructure costs was due to higher depreciation, data center operating costs,\nand third party cloud spend.\n\nThe growth in employee compensation was driven by technical hires we’ve added over the past\nyear, particularly AI talent.\n\nWe ended Q1 with over 77,900 employees, down 1% from Q4 as the impact of headcount\noptimization efforts in certain functions was partially offset by hiring in priority areas of\nmonetization and infrastructure.\n\nFirst quarter operating income was $22.9 billion, representing a 41% operating margin.\n\nQ1 interest and other income was -$1.1 billion, driven by unrealized losses on our equity\ninvestments.\n\nOur tax rate for the quarter was -23%, which was favorably impacted by a tax benefit of $8.03\nbillion. This benefit partially relieves the $15.93 billion non-cash tax charge we recorded in the\nthird quarter of 2025, which reflects updated guidance from the US Treasury issued in February\n2026 regarding the tax treatment of previously capitalized R&D expenditures in the U nited\nStates. Absent the tax benefit, our Q1 tax rate would have been 14%.\n\nNet income was $26.8 billion or $10.44 per share. Absent the tax benefit, our net income and EPS\nwould have been $18.7 billion and $7.31, respectively.\n\nCapital expenditures, including principal payments on finance leases, were $19.8 billion, driven by\ninvestments in servers, data centers, and network infrastructure.\n\nFree cash flow was $12.4 billion. We ended the quarter with $81.2 billion in cash and marketable\nsecurities and $58.7 billion in debt.", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p4", - "metadata": { - "length": 2722, - "summary": "4 In Q1, the total number of ad impressions served across our services increased 19%. Impression growth was healthy across all regions, driven primarily by growth in engagement and users, as well as ad load optimizations. The global average price per ad increased 12% year-over...", - "page_nums": [ - 4 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 4, "artifact_ref": "page_citation_assets/page-4.png", @@ -96,24 +145,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2597f48f-e854-5147-a528-4ca1afc6fed4", - "type": "page", - "content": "5\n\n\nTurning now to the business performance. There are two primary factors that drive our revenue\nperformance: our ability to deliver engaging experiences for our community, and our effectiveness\nat monetizing that engagement over time.\n\nOn the first, we’re continuing to see significant gains from our content recommendation\ninitiatives.\n\nOn Instagram, the ranking improvements that we made in Q1 drove a 10% lift in Reels time spent.\n\nOn Facebook, total video time increased more than 8% globally in Q1, the largest quarter -over-\nquarter gain in four years. Within the US & Canada, ranking improvements we made drove a 9%\nincrease in video watch time on Facebook in Q1.\n\nThese gains are benefiting from advances we’re making across the full stack.\n\nStarting with data, we doubled the length of user interaction sequences we use for training on\nInstagram in Q1 and increased the richness of how each user interaction is described, enabling our\nsystems to develop a deeper understanding of user interests.\n\nWithin our models, we’ve significantly increased the speed with which our ranking models index\nnew posts, which is enabling us to recommend them sooner after they are published. We’re also\napplying more advanced content understanding techniques, which is e nabling us to quickly\nidentify posts that may be interesting to someone, even if they haven’t engaged with a lot of\nsimilar content. These and other improvements have enabled us to increase the diversity and\nrecency of recommended content, with same-day posts now representing more than 30% of\nrecommended Reels on both Instagram and Facebook, more than double the levels one year ago.\n\nWe’re also using AI to unlock more inventory by auto-translating and dubbing videos into a\nviewer’s local language, enabling us to recommend a more diverse set of content. Over half a\nbillion users on each of Facebook and Instagram are now watching AI-translated videos weekly.\n\nLooking forward, we’re making several investments we expect will deliver more valuable\nrecommendations.\n\nThis year, we will continue scaling up our models in several dimensions, including their size and\ncomplexity, while incorporating LLMs to deepen content understanding across our platform. This\nwill enable us to better match people to a wider variety of content aligned to their interests.\n\nAt the same time, we are executing on our longer-term efforts to develop the next generation of\nour recommendation systems. This includes building foundation models that power organic\ncontent and ads recommendations, as well as developing LLM-based recommender systems. Our\nfocus this year is validating the model architectures and techniques in these domains before we\nscale them out in future years.\n\nAside from our recommendations work, we are focused on deploying the models from Meta\nSuperintelligence Labs to enable a new set of product experiences .\n\nWe’re seeing encouraging results within Meta AI since we began powering responses with the first\nmodel from MSL, Muse Spark. In tests we ran leading up to the launch, we saw meaningful", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p5", - "metadata": { - "length": 3068, - "summary": "5 Turning now to the business performance. There are two primary factors that drive our revenue performance: our ability to deliver engaging experiences for our community, and our effectiveness at monetizing that engagement over time. On the first, we’re continuing to see sign...", - "page_nums": [ - 5 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 5, "artifact_ref": "page_citation_assets/page-5.png", @@ -121,24 +153,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fffc0c93-81b2-5563-8ccd-9874111883fb", - "type": "page", - "content": "6\n\nengagement gains that accelerated week-over-week with each new iteration of the model. We’re\nseeing similar gains within Meta AI following the broad roll out of our new model, with double -digit\npercent increases in Meta AI sessions per user. Muse Spark is now powering Meta AI in direct chat\nthreads across our Family of Apps, as well as the standalone Meta AI app and website, giving\nbillions of people globally access to our latest model.\n\nOverall, we’re very encouraged by the momentum within our research and product roadmap and\nlook forward to sharing more detail on what we’re building over the course of this year.\n\nTurning to the second driver of our revenue performance: increasing monetization efficiency.\n\nThe first part of this work is optimizing the level of ads within organic engagement.\n\nHere, we continue to enhance our systems to show ads at the optimal time and location. In Q1, we\nalso expanded availability of ads on our newer surfaces, including bringing ads on Threads to\npeople in more markets. On WhatsApp, we are making good progress with the roll out of ads in\nStatus, with hundreds of millions of people now viewing them daily.\n\nMoving to the second part of increasing monetization efficiency: improving performance for the\nbusinesses who use our services. To do so, we’re deploying AI more deeply across each layer of\nour systems and tools.\n\nWithin our ads systems, we’re delivering performance gains as we deploy more complex and\npredictive models.\n\nIn Q1, enhancements we made to Lattice’s modeling and learning techniques, along with advances\nin our GEM model architecture, drove a more than 6% increase in conversion rate for landing page\nview ads.\n\nIn addition, we’ve been investing in more performant inference models for when we’re serving ads.\nIn the second half of last year, we began rolling out our new Adaptive Ranking Model, which is an\nLLM-scale ads recommender model that we use for inference. This model improves our inference\nROI by routing requests to more compute intensive inference models when it determines there is\na higher probability of conversion. In Q1, we expanded coverage of our Adaptive Ranking model to\nsupport offsite conversions, which drove a 1.6% increase in conversion rates across the major\nsurfaces on Facebook and Instagram.\n\nWe’re also leveraging AI to make it easier for businesses to manage their campaigns, develop ad\ncreative, and engage with customers.\n\nThe Meta AI business assistant has now been fully rolled out to all eligible advertisers on\nsupported Meta buying surfaces, providing personalized recommendations to advertisers,\nresolving account issues, and surfacing campaign insights to help optimize re sults. Performance\nhas been strong since we began testing the assistant in Q4, with common account issues being\nresolved at a 20% higher rate.\n\nThis week, we’re also introducing Meta ads AI connectors in open beta, providing advertisers the\nability to connect their Meta ad account directly to an AI agent. We've always supported\nadvertisers both on our platform and through tools like the Marketing API — now we're extending", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p6", - "metadata": { - "length": 3115, - "summary": "6 engagement gains that accelerated week-over-week with each new iteration of the model. We’re seeing similar gains within Meta AI following the broad roll out of our new model, with double -digit percent increases in Meta AI sessions per user. Muse Spark is now powering Meta...", - "page_nums": [ - 6 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 6, "artifact_ref": "page_citation_assets/page-6.png", @@ -146,24 +161,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_080d439b-6d79-53f3-a371-8708a7fc2efc", - "type": "page", - "content": "7\n\nthat to AI so businesses and agencies can analyze and optimize campaigns with the tools they’re\nalready using.\n\nUsage of our ad creative tools is also scaling, with more than 8 million advertisers using at least\none of our gen AI ad creative tools and particularly strong adoption among small and medium -\nsized advertisers. These tools are benefiting performance as well, with advertisers using our video\ngeneration feature seeing more than 3% higher conversion rates in tests.\n\nWe’re also seeing good traction in using AI to facilitate customer engagement. In Q1, we expanded\nBusiness AIs on WhatsApp to SMBs across Latin America and Indonesia, as well as on Messenger\nin Asia-Pacific. We now have more than 10 million conversations each week being facilitated\nthrough Business AIs, up from 1 million at the start of the year. We’ll further expand access to\nmore countries this quarter while adding more capabilities to the AIs.\n\nWe also continue to invest in the Value Optimization suite, which helps advertisers maximize their\nReturn on Ad Spend by prioritizing the highest-value conversions rather than optimizing solely for\nthe most conversions at the lowest cost. Adoption by businesses has been strong following\nperformance improvements we’ve made over the past year, with the annual revenue run -rate of\nour value optimization suite now over $20B, more than doubling year -over-year.\n\nLast, I want to touch on our commerce efforts.\n\nPeople discover products on our platforms through ads and organic posts, with brands\nincreasingly turning to creators to promote their products. This is contributing to rapid growth in\nour partnership ads product, with its revenue run-rate more than doubling year-over-year in Q1 to\n$10 billion.\n\nTo support the product discovery and purchasing happening through creators, we’re expanding\nour solutions beyond ads. Last month, we rolled out our affiliate partnerships offering on\nFacebook to more test partners, so creators can tag products from participating retailers on their\nposts and earn a commission when someone makes a purchase. We have also started testing\nsimilar experiences on Instagram.\n\nWe see a real opportunity to help people more easily discover and buy products within our\nservices, particularly as we incorporate AI deeply across our platforms.\n\nNext, I would like to discuss our approach to capital allocation.\n\nCompute is becoming increasingly important as it determines the quality of the services we can\nprovide, including powering more capable models and delivering innovative new products. It is\nalso becoming more critical to how we work at Meta, as we are enter ing a world where employees\nare managing agents to help them generate new ideas, run experiments, execute tasks, and build\nproducts.\n\nWe are investing aggressively to meet our infrastructure needs and ensure we maximize our\nstrategic flexibility over the coming years. This includes substantially expanding our own data\ncenter footprint and striking deals throughout the supply chain to sec ure necessary components\nfor future capacity. We are also signing cloud deals that will come online over the course of this\nyear and 2027, allowing us to scale more quickly. These multi -year cloud deals and our", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p7", - "metadata": { - "length": 3237, - "summary": "7 that to AI so businesses and agencies can analyze and optimize campaigns with the tools they’re already using. Usage of our ad creative tools is also scaling, with more than 8 million advertisers using at least one of our gen AI ad creative tools and particularly strong adop...", - "page_nums": [ - 7 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 7, "artifact_ref": "page_citation_assets/page-7.png", @@ -171,24 +169,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_676a485a-9608-5eaa-aa7e-618c6b765935", - "type": "page", - "content": "8\n\ninfrastructure purchase agreements drove a $107 billion step up in our contractual commitments\nthis quarter.\n\nOur investments will support our training needs for future models, and most importantly, provide\nus the inference capacity necessary to deliver personal and business agents to billions of people\naround the world, along with several other AI product experiences we’re developing.\n\nAs we grow our infrastructure spend, we remain committed to operating efficiently, and we\nrecently shared internally that we plan to reduce the size of our employee base in May. We believe\na leaner operating model will allow us to move more quickly while a lso helping to offset the\nsubstantial investments we’re making.\n\nMoving to our financial outlook.\n\nWe expect second quarter 2026 total revenue to be in the range of $58 -61 billion. Our guidance\nassumes foreign currency is an approximately 2% tailwind to year-over-year total revenue growth,\nbased on current exchange rates.\n\nTurning to the expense and capex outlooks.\n\nWe expect full year 2026 total expenses to be in the range of $162 -169 billion, unchanged from\nour prior outlook.\n\nWe continue to expect to deliver operating income this year that is above 2025 operating income.\n\nWe anticipate 2026 capital expenditures, including principal payments on finance leases, to be in\nthe range of $125-145 billion, increased from our prior range of $115-135 billion. This reflects our\nexpectations for higher component pricing this year and, to a lesser extent, additional data center\ncosts to support future year capacity.\n\nAbsent any changes to our tax landscape, we expect our tax rate for the remaining quarters of\n2026 to be between 13-16%.\n\nLastly, we continue to monitor active legal and regulatory matters, including headwinds in the EU\nand the US that could significantly impact our business and financial results. For example, we\ncontinue to see scrutiny on youth-related issues and have additional trials scheduled for this year\nin the US, which may ultimately result in a material loss.\n\nIn closing, Q1 was a solid start to the year, with strong execution across our core ads and\nengagement initiatives. We’re also making exciting progress on our AI research and product\nefforts and expect to build on that momentum over the course of this year.\n\nWith that, Krista, let’s open up the call for questions.\n\nOperator: Thank you. We will now open the lines for a question and answer session. To\nask a question, please press star one on your touch tone phone. To withdraw\nyour question again, press star one.\n\n Please limit yourself to one question. Please pick up your handset before\nasking your question to ensure clarity. If you are streaming today’s call, please", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p8", - "metadata": { - "length": 2721, - "summary": "8 infrastructure purchase agreements drove a $107 billion step up in our contractual commitments this quarter. Our investments will support our training needs for future models, and most importantly, provide us the inference capacity necessary to deliver personal and business...", - "page_nums": [ - 8 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 8, "artifact_ref": "page_citation_assets/page-8.png", @@ -196,24 +177,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5d1fd8a8-449b-5e6c-bf48-2c6503cfd730", - "type": "page", - "content": "9\n\nmute your computer speakers. And your first question comes from Brian\nNowak with Morgan Stanley. Please go ahead.\n\nBrian Nowak: Thanks for taking my question. Mark, I wanted to ask you just about the level of\ninvestment you’re making and sort of the signposts you’re watching to ensure\nyou’re going to generate ROIC on all these investments behind Muse and the\nother products.\n\n So if you could just sort of let us know some of the key factors you’re watching\nover the next 12 to 24 months, whether it’s Meta AI, Muse advances, core\nalgorithm, what are you sort of watching foremost just to make sure that\nyou’re on the right path to generating healthy ROIC on all this CapEx and\ninfrastructure spend?\n\nMark Zuckerberg: That’s a very technical question for basically where -- the things that we’re\nwatching are to make sure that we’re on track building leading models and\nleading products. The formula for our company has always been build\nexperiences that can get to billions of people and focus on monetizing them\nonce you get to scale.\n\n That’s -- we’re seeing a little bit of that here where basically we invest in\nadvance to build leading models, and we convert that into leading products.\nAnd then we think that these are going to be some of the most important\nproducts that get built over the next decade.\n\n So I think just like anything else that we’ve done over time the basic milestones\nthat I look at are around, first, technically, are we delivering the quality to\nenable a great product; then second, when you have the product, how is it\nscaling; and then third, you look at the monetization and then you drive up the\nefficiency of it towards increasing profitability.\n\n I don’t -- I mean like I don’t think we have a very precise plan for exactly how\neach product is going to scale month-over-month or anything like that.\n\n But I think we have a sense of the shape of where these things need to be. And\nI think if you look at the usage of these and the quality of the products and the\nquality of the models that are out there and the use that other frontier models\nare getting and the trajectory of that, I’m quite comfortable that, A, the lab that\nwe’re building is on track to be a leading lab in the world.\n\n I think Muse Spark was a very high-quality model. It powers Meta AI which I\nthink is now a world-class assistant.\n\n We have an ability to be able to grow that and have a large amount of\nengagement. And over the coming quarters, we’re just going to be tracking\nhow do our next set of training runs go. How do our products scale? How\nexcited are we about the products in the pipeline? Where right now we’re very\nexcited.", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p9", - "metadata": { - "length": 2647, - "summary": "9 mute your computer speakers. And your first question comes from Brian Nowak with Morgan Stanley. Please go ahead. Brian Nowak: Thanks for taking my question. Mark, I wanted to ask you just about the level of investment you’re making and sort of the signposts you’re watching...", - "page_nums": [ - 9 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 9, "artifact_ref": "page_citation_assets/page-9.png", @@ -221,24 +185,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4b3e9be1-d15d-50f1-b486-78f3900bd54e", - "type": "page", - "content": "10\n\n And then we’ll also ramp up monetization over that period of time as well. So I\nthink that those are the set of things that I look at. I think for the kind of\nspecific financial questions, I think Susan can jump in if there’s anything more\nto add.\n\nOperator: Your next question comes from the line of Mark Shmulik with Bernstein. Please\ngo ahead.\n\nMark Shmulik: Yes, thanks for taking the questions. Mark, I guess now that we’ve got Muse\nSpark kind of out there launched, how are you thinking about the team’s focus\nhere kind of divided on to further model training runs and kind of further\nspecialization in that personal intelligence goal versus product launches and\nkind of shipping more product out the door? And Susan, I guess, kind of as a\nfollow-up to Brian’s question, I know it’s too early to discuss 2027 CapEx.\n\n But we’ve had peers mention tonight a potential significant step-up. Any way\nto think about dimensionalizing kind of how we think about some of the returns\nor traction this year and how it might affect the 2027 spend? Thanks.\n\nMark Zuckerberg: I mean I think the roadmap from the team is -- has been pretty consistent. So\nwe have the research team which is focused on scaling increasingly intelligent\nmodels with capabilities for the specific things that we’re focused on which are\nbusiness and personal agents.\n\n So we’re -- we just released our first model, and I talked about in my comments\nhow we’re climbing the scaling ladder towards greater capabilities and scale for\nthe models. That work continues.\n\n We have our next set of more advanced models in training now. And that is --\nthat work will, I think, just continue. I mean that’s a loop. I don’t think we’re\ngoing to be done with that anytime soon.\n\n We’re going to have teams that are just consistently focused on training more\nintelligent and more capable models in the ways that we want. Then we have\nour product team, and that team is now really unlocked to be able to build\nthings on top of our models because we now have a very strong model.\n\n So before this, we had been prototyping a bunch of things using other different\nmodels, whether it was our previous older models or kind of using the APIs\nfrom other companies. And now we’re unlocked to be able to go build things\nand get them to scale on top of our own models. So I think you will see that\nover some period of time.\n\n I tried in my opening remarks to give a bit of a sense of where we’re going, but I\nthink that more of the details of that will become clear over the coming\nmonths. And I think that these are just both loops that we’ll iterate on. We’ll\nkeep on iterating on the intelligence.\n\n We’ll keep on working on building new products and scaling the products. And\nthen as we get to product market fit, we’re also going to increasingly focus on", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p10", - "metadata": { - "length": 2809, - "summary": "10 And then we’ll also ramp up monetization over that period of time as well. So I think that those are the set of things that I look at. I think for the kind of specific financial questions, I think Susan can jump in if there’s anything more to add. Operator: Your next questi...", - "page_nums": [ - 10 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 10, "artifact_ref": "page_citation_assets/page-10.png", @@ -246,24 +193,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a8cef4d9-ef8a-57c1-ad84-3d35f2dfebdf", - "type": "page", - "content": "11\n\nbuilding the businesses around them and decreasing the costs. And this is kind\nof how we’ve done everything over the last 20 years of running the company,\nand that is basically the plan.\n\nSusan Li: Mark, on your second question, we aren’t providing a specific outlook for 2027\nCapEx. And we are, frankly, undergoing a very dynamic planning process\nourselves as we’re working through what our capacity needs will be over the\ncoming years.\n\n Our experience so far has been that we have continued to underestimate o ur\ncompute needs even as we have been ramping capacity significantly as the\nadvances in AI have continued and our teams continue to identify compelling\nnew projects and initiatives. And now too, there are very compelling internal\nuse cases.\n\n So our expectation is that compute will become even more central to the\nbusiness going forward. And it will be critical to determining the quality of the\nmodels we develop, the types of products we can introduce, how productive\nwe can be as an organization.\n\n So we’re going to continue building out our infrastructure with flexibility in\nmind. And if we end up not needing as much as we anticipate, we can choose to\nbring it online more slowly or reduce our spending in future years as we grow\ninto the capacity that we’re building now.\n\nOperator: Your next question comes from the line of Eric Sheridan with Goldman Sachs.\nPlease go ahead.\n\nEric Sheridan: Thanks so much for taking the question. Maybe if I can build out on one of the\ntopics that was discussed in the prepared remarks. But just the opportunity set\nthat sits in front of the company with respect to putting agentic compute in\nfront of both consumers and enterprises.\n\n You’ve long been associated with sort of the consumer landscape. And I am\ncurious about how you’re thinking about extensions of the media engagement\nparts of your business model and the commerce parts of the business model to\nbecome more agentic over time.\n\n But what do you see also as the opportunity set that sits in front of you across\nSMBs and enterprises where historically, you maybe haven’t had as much\nproduct velocity? Thanks so much.\n\nSusan Li: Thanks, Eric. So I would say in the near term, obviously the sort of biggest\nfocuses are some of the areas that you mentioned around deepening sort of\nengagement, obviously with our existing community and user base, making ad\nexperiences meaningfully more personalized, more engaging, more valuable,\nhelping SMBs find and engage with customers across our platform.\n\n Those are some of the, I think, most intuitive and adjacent opportunities to the\nbusiness that we have today. And then, of course, as we are able to build out", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p11", - "metadata": { - "length": 2678, - "summary": "11 building the businesses around them and decreasing the costs. And this is kind of how we’ve done everything over the last 20 years of running the company, and that is basically the plan. Susan Li: Mark, on your second question, we aren’t providing a specific outlook for 202...", - "page_nums": [ - 11 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 11, "artifact_ref": "page_citation_assets/page-11.png", @@ -271,24 +201,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d73df0e3-c34b-5a9b-81a4-12a568cba11a", - "type": "page", - "content": "12\n\nmore agentic capabilities, enabling agents to help people be more productive,\nbut also agents for businesses and enabling, frankly, those agents to interact\nwith each other and build what we hope will be a thriving commerce ecosystem\non our platform.\n\n So I would say some of these are a little bit further out, especially in that latter\ncategory of things. Again, the focus is on building personal superintelligence,\nbuilding a consumer agent that can work for you and help you get things done.\nThat right now is a consumer experience that we’re focused on, but we think\nthere will be clear monetization opportunities over time. You can imagine\ncommission structures or a premium offering. And on the business side, we’re\nseeing a large opportunity, of course, around agents and scaling our business\nAI initiatives.\n\n I think I mentioned earlier in my remarks that there are over 10 million weekly\nconversations between people and business AIs on our messaging platforms.\nThat’s up from 1 million at the start of the year, and we’re going to continue\nexpanding globally in Q2. And business AIs today are currently free for most\nbusinesses on our messaging apps.\n\n But as we make more progress, we expect that we will also work towards\nestablishing a longer-term monetization model. And we’ll also consider other\nservices that we can offer to businesses in the future, but we don’t have\nanything more to share today.\n\nOperator: Your next question comes from the line of Youssef Squali with Truist\nSecurities. Please go ahead.\n\nYoussef Squali: Great, thank you very much for taking the questions. Maybe one for Mark and\none for Susan. Mark, Ray-Ban, Oakley AI glasses continue to perform really well\nfor you guys, but EssilorLuxottica owns and manages a lot more brands.\n\n What are the gating factors to see the launch of additional glasses under these\nother brands this year? And what would be a successful year for you as you\nlook back at 2026, maybe in terms of units sold?\n\n And then Susan, on that 10% RIF, how much of that is due to efficiencies for\nmaybe AI implementation versus just the need to stay fit? And as you look at\nyour employee needs over time how do you see that growing maybe relative to\nyour overall top line growth? Thank you very much.\n\nSusan Li: I can go ahead and take both of those. I might answer your second question\nfirst. And I’m just trying to make sure I got all of the parts of the question.\n\n So in terms of what the sort of kind of the optimal size of the company, I think,\nover time we don’t really know what the optimal size of the company will be in\nthe future. I think there’s a lot of change right now with AI capabilities\nadvancing rapidly.", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p12", - "metadata": { - "length": 2685, - "summary": "12 more agentic capabilities, enabling agents to help people be more productive, but also agents for businesses and enabling, frankly, those agents to interact with each other and build what we hope will be a thriving commerce ecosystem on our platform. So I would say some of...", - "page_nums": [ - 12 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 12, "artifact_ref": "page_citation_assets/page-12.png", @@ -296,24 +209,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e6e2fa1f-7102-5ef4-a74c-b5039af4bfd0", - "type": "page", - "content": "13\n\n We’re very focused on leveraging AI tools to substantially increase our\nproductivity, and we’re seeing that reflected in the accelerating output from\nour engineers. And we’re generally approaching -- we’re approaching this with\na bias toward wanting to use these tools to build even more products and\nservices than we would have before.\n\n At the same time we’re making very significant investments in infrastructure,\nand we are very focused on continuing to operate efficiently.\n\n So I think we will be continuously evaluating how we’re structured just to make\nsure we’re best set up to deliver against our priorities over the coming years. So\nthat is, I think, your second question. The first question was about the AI\nglasses.\n\n We have -- we’re continuing to see strong growth in, obviously the AI glasses\nsales over the course of Q1. Demand for the expanded portfolio lineup has\ngenerally been quite strong, and we’re seeing sales shift now from the prior\ngeneration of Ray-Ban Metas to the latest generation which I think speaks to\nthe value of the improved features like extended battery life and features like\nhigher resolution video capture.\n\n So we’re pretty excited about the progress we’ve made with glasses. We see\nstrong interest now in the Meta Ray-Ban Displays with the Meta Neural Band.\n\n So that’s an encouraging sign that there is consumer appetite for display\nglasses which is kind of the next generation of how this product evolves. And\nyes, so I think this is an area that we will continue to be -- that we continue to\nbe excited about and are investing in.\n\nOperator: Your next question comes from the line of Justin Post with Bank of America.\nPlease go ahead.\n\nJustin Post: Great, thanks for taking my question. Mark, it took about 10 months to get\nMuse Spark out. I think it’s a pretty good pace. Just help us understand what\nkind of unlock that is for some of the new products you’re developing? And\nhow is the product cadence going to be over the next nine months on either\nconsumer or business enterprise products built on top of that model?\n\nMark Zuckerberg: I mean the field is moving pretty quickly. So I mean I’m very happy that we’re --\nI think the lab that has gone the fastest from standing up the lab to having a\nvery kind of widely accepted as strong model. So I think that’s good.\n\n I take that as a very significant validation of the effort that the team is working\nwell together, that the infrastructure is working, that the effort is on track. And\nI think that that’s basically the main thing that we’ve learned over the last\nquarter that I would take away is like where and we started what is this pretty\nbig bet, and it’s on track for our plan.\n\n In terms of what exactly the cadence is going to be. It’s tough for me to say\nboth because I don’t really want to share competitively sensitive information", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p13", - "metadata": { - "length": 2849, - "summary": "13 We’re very focused on leveraging AI tools to substantially increase our productivity, and we’re seeing that reflected in the accelerating output from our engineers. And we’re generally approaching -- we’re approaching this with a bias toward wanting to use these tools to bu...", - "page_nums": [ - 13 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 13, "artifact_ref": "page_citation_assets/page-13.png", @@ -321,24 +217,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_909b0032-1800-5509-9962-c48cb1e75763", - "type": "page", - "content": "14\n\nand because I think some of the stuff we are more focused on quality than\nhitting a specific date.\n\n I mean on the research side, this is research, right? We are trying novel things.\nYou don’t exactly know when they’re going to land. And on the product side, I\nthink we care a lot about just having -- let me put it this way.\n\n There’s a lot of agents out there, right, that people are building for different\nthings. And there aren’t that many that I would want to give to my mother. And\nI think getting to like that quality bar is something that I care about more than\nhitting a specific week for launching or something like that.\n\n So -- but with that said, I mean we’re in a zone here where the teams don’t\ncheck in with me like once a quarter, like we make meaningful progress day\nover day. I think that’s part of the fun of developing in this world is that people\ncan make very rapid progress. Small groups of people and teams can make very\nrapid progress.\n\n So I think we’re going to see a lot of innovation. The timing of this call is it’s\ngood in some ways because the Muse Spark release, I think, was positive. The\nMeta AI first release, I think, is positive.\n\n I think that that shows that we’re on track. I’m trying to kind of paint a picture\nof the very high-level direction that we’re going in, but I think that the picture is\ngoing to come into focus a lot more over the subsequent quarters.\n\nOperator: Your next question comes from the line of Ross Sandler with Barclays. Please\ngo ahead.\n\nRoss Sandler: Yes. Mark, just sort of related to that last answer, but there’s a lot of new\nconsumer applications kind of cropping up everything from like an OpenClaw to\nsomething a little bit more consumer friendly that you would build for your\nmom, like you said, with like Poke or Dreamer which you recently acquired.\n\n So how are these new ideas, I guess, changing your view around the direction\nthat core Meta AI or Dreamer or kind of your overall agentic strategy needs to\ngo? And then the second part of it would be, do you think the lab will stay in\nthis consumer lane? Or do you think you need -- or you want to go down the\nroute that others are going down with code writing and like the recursive self -\nimprovement loop and in that direction kind of in parallel, just thoughts on\nthat? Thank you.\n\nMark Zuckerberg: Yes. So look, on the OpenClaw and other agents, I think that they give you a\nvery exciting glimpse of what types of things should be possible.\n\n Now they’re pretty rough systems today. And to set up OpenClaw you need to\nlike install a computer locally and then get into a terminal and configure a bunch\nof things that, again, like there’s -- maybe there’s hundreds of thousands of\npeople or small numbers of millions of people who can do that. But what we’re", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p14", - "metadata": { - "length": 2793, - "summary": "14 and because I think some of the stuff we are more focused on quality than hitting a specific date. I mean on the research side, this is research, right? We are trying novel things. You don’t exactly know when they’re going to land. And on the product side, I think we care a...", - "page_nums": [ - 14 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 14, "artifact_ref": "page_citation_assets/page-14.png", @@ -346,24 +225,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a25d059f-0364-5368-85bc-92108eef7f60", - "type": "page", - "content": "15\n\ntalking about is delivering personal superintelligence for billions of people\naround the world.\n\n So how do you make a version of that experience that is a lot more polished and\ndialed and easy and that has all the infrastructure basically done for people\nalready and that just works. And that’s kind of what we’re focused on, on the\nconsumer side. And I’m really excited about that.\n\n I think if you had something like that, that worked quite a bit better than those\nsystems and was easy enough that people could just get then I think you go\nfrom having something that hundreds of thousands or millions of people are\ngoing to use to something that is going to be addressable to billions of people.\nAnd that has been our primary focus from day one of the lab is being able to\ndeliver something like that as a product, and I think it’s just going to be very\nexciting.\n\n By the way, the same thing is true for businesses, right? I mean there’s the\npersonal version of this but there’s also a lot of people’s goals are they want to\ncreate things, right? They want to create websites. They want to create\nproducts. They want to grow their products.\n\n These are all things that good agents are going to be able to help people do\nwhich I think is partially why this is so exciting. And in my opening comments, I\ntalked about how today we can handle a few goals for people, they’re big goals,\nright? We can help people stay connected with people they care about, learn\nabout the world. These are big things that people care about. But they’re not\nthe only things that people care about.\n\n And one of the things that I would love for our products to be able to do is just\nunderstand people’s goals specifically and then be able to just go work on them\nfor them, and check back in and whenever you have questions that you need\nanswered. So whether those are personal goals or you’re trying to create a\nbusiness or do work.\n\n I think that this is like -- this is stuff that I think literally every person in the\nworld is going to want some version of it. And also, I think it is something that\nscales where the more you want to get out of it, I think people are going to also\nbe willing to pay a lot of money to have premium or high compute versions of it.\nSo I think that this is like, it’s a very exciting area.\n\n But I think what you all should be waiting to see is like whether we can build the\nversion that really like just works and how effective we are at converting people\nwho are using our products into being hundreds of millions and then billions of\npeople using this stuff. And then over time how can we effectively convert that\ninto something that’s increasingly profitable by monetizing it and getting the\ncosts down.\n\n So I think that that’s the roadmap of what we need to do. You asked about\nwhether we’re primarily focused on consumers or also recursive self -\nimprovement. I think that we’ve talked about two main goals for the team.", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p15", - "metadata": { - "length": 2945, - "summary": "15 talking about is delivering personal superintelligence for billions of people around the world. So how do you make a version of that experience that is a lot more polished and dialed and easy and that has all the infrastructure basically done for people already and that jus...", - "page_nums": [ - 15 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 15, "artifact_ref": "page_citation_assets/page-15.png", @@ -371,24 +233,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_14b448dd-c100-53cf-8fb2-dd92be50375b", - "type": "page", - "content": "16\n\n\n I mean one is this kind of agents version vision of what we’re doing. The other is\nthat self-improvement is really important because you can’t build a leading AI\nproduct if you don’t have leading models. So -- and you’re not going to have\nleading models in the future if your models can’t improve themselves, right?\n\n So you’re getting to a point where today, the models are still able to learn from\npeople -- and then I think at some point, the models will have to improve\nthemselves. And that’s how the growth is going to -- and improvement in the\nmodels is going to happen. And if you don’t -- if we don’t have an ability to do\nthat, then we or anyone else, I think the companies that don’t do that are not\ngoing to be leading labs, they’re not going to produce leading products.\n\n So I think that is a table stakes thing that we are focused on. Now does that\nmake us a developer tools company? Not necessarily.\n\n I mean I’m not against having an API or coding tools or anything like that. But\nit’s not our primary focus. But I actually think people conflate coding with self -\nimprovement more than they should. Coding is one ingredient for the model\nself improving.\n\n It’s not the only thing. And we are focused on all of the parts that are going to\nbe necessary for self-improvement in service of the personal superintelligence\nvision that we have for people and businesses.\n\nOperator: Your next question comes from the line of Ron Josey with Citigroup. Please go\nahead.\n\nRonald Josey: Great, thanks for taking my question. Mark, maybe a quick follow-up to a prior\nquestion around personal agents and business agents. And with Spark Muse\nnow live and more models in development, do you look at the personal agent\nopportunity which we talked about earlier on the call more of a short-term,\nmedium-term, long-term goal, I’m sure it’s a never-ending goal, but when we\nsee a product, is the question short or medium term?\n\nAnd then Susan, I think the ranking recommendation model improvements are\nvery impressive to see, given the size and scale of both Instagram and\nFacebook. Could you help us understand just how doubling the length of these\ninteraction sequences can drive greater usage? There’s a thesis out there that\nmaybe some of the rating recommendation improvements are long in the\ntooth. So it seems if there’s a lot more room to go. So any help there would be\nhelpful. Thank you.\n\nMark Zuckerberg: I mean I think that the agents work, there’s going to be short-term versions of\nit, but then I think that there’s going to be massive upside for delivering more\nintelligence and more capabilities in the models. And you’re kind of seeing this\nacross the industry.", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p16", - "metadata": { - "length": 2681, - "summary": "16 I mean one is this kind of agents version vision of what we’re doing. The other is that self-improvement is really important because you can’t build a leading AI product if you don’t have leading models. So -- and you’re not going to have leading models in the future if you...", - "page_nums": [ - 16 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 16, "artifact_ref": "page_citation_assets/page-16.png", @@ -396,24 +241,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_07f4d0af-a465-5670-9ce6-04a3ccc6c694", - "type": "page", - "content": "17\n\n Each month, each generation of models, they just have more capabilities and\ncan do more things and people absorb it and are able to get more superpowers\nand it’s awesome. It’s like the most exciting time in the industry.\n\n So I think of the agents as the product vehicle for delivering that capability to\npeople. And we certainly -- I think this year is going to be a key period for\nestablishing that as the vehicle for how people are going to use this, but then\nthe model improvement, I think, is going to be something that’s going to go on\nfor a very long time. So there’s a lot to do here in both the short, medium, and\nlong term.\n\nSusan Li: And then on your second question which I think is about the ranking and\nrecommendations improvements that we talked about in our -- that I talked\nabout in my earlier remarks, I think first of all, there is still a lot of room to\ncontinue improving recommendations over the rest of the year, and we expect\nwe’ll be able to do that to drive additional engagement on both Facebook and\nInstagram.\n\nA couple of the things. First, we’re going to continue to improve our data\ninfrastructure that’s going to allow our models to train on more data. And we’re\nadding more detail to how we describe the content that users have engaged\nwith in the past and scaling up the complexity of our model architecture to take\nadvantage of those larger data sets like using even longer histories of content\ninteractions, and that should all be in service of improving the overall quality of\nrecommendations.\n\n We also are focused on making the recommendations even more personalized\nand more relevant to any given users interest. There’s work we’re doing to\nredesign our content retrieval system to show more content that matches the\nfull range of a user’s interests and to tailor the diversity of the topics we\nrecommend to the broadness of someone’s interests.\n\n So someone with particularly concentrated interests might see relatively more\nof that content while people with a broader set of interests might see kind of a\ngreater range in the topics that we show them. And then finally, we’re\ncontinuing to make improvements to our sort of LLM based tune-your-\nalgorithm features that allow users to provide more granular natural language\nfeedback on what they want to see more of or less of in their feed.\n\n So the sort of the kind of the sequence length which is the thing that you called\nout is one of really many improvements we made in Q1, and there is a big\nroadmap of further improvements going forward.\n\nOperator: Your next question comes from the line of Doug Anmuth with JPMorgan.\nPlease go ahead,\n\nDouglas Anmuth: Thanks so much for taking the questions. Mark, how do you think about the\nstep up as you go from leveraging smaller models in the ad business to Muse\nSpark and future large language models going forward, what are some of the\nkey unlocks across engagement and monetization? And then on Manus, can", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p17", - "metadata": { - "length": 2950, - "summary": "17 Each month, each generation of models, they just have more capabilities and can do more things and people absorb it and are able to get more superpowers and it’s awesome. It’s like the most exciting time in the industry. So I think of the agents as the product vehicle for d...", - "page_nums": [ - 17 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 17, "artifact_ref": "page_citation_assets/page-17.png", @@ -421,24 +249,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e3fcfa64-447f-5734-b6fe-0643f8548cc5", - "type": "page", - "content": "18\n\nyou just talk at all about the strategic importance and the role in developing\nagentic products for Meta and then just current status around the tech and the\ndeal.\n\nSusan Li: I’ll take that question. On Manus, we’re still working through the details. So we\ndon’t have an update right now.\n\n On your first question which is about going from leveraging smaller models in\nthe ads business to kind of the ads models growing. There’s already some work\nunderway, and I think I alluded to some of this in my earlier remarks, even kind\nof in the current landscape of the ads roadmap, where we’re basically trying to\nadvance the architecture here to allow sort of -- to allow us to leverage the\nabilities of larger models.\n\n Historically, we haven’t used larger model architectures like GEM for inference\nbecause their size and complexity would make them too cost prohibitive. And\nthe way we drive performance from those models is by using them to transfer\nknowledge to smaller, more lightweight models that are used at run time.\n\n The inference models are bound by strict latency requirements since they need\nto find the right ad within milliseconds, and that has, again, historically\nprevented us from meaningfully sizing up -- scaling up their size and\ncomplexity.\n\n But in the second half of last year, we introduced a new adaptive ranking model\nwhich enables us to leverage LLM scale model complexity of a trillion\nparameters, and we made advances in the model architecture and codesign the\nsystem with the underlying silicon, so it maintains the sub-second speed that is\nrequired to serve ads at scale.\n\n We also developed an approach that intelligently routes request more\ncompute-intensive inference models if it determines that there is a higher\nprobability of conversion and that lets us drive both better performance and\nincreased inference ROI.\n\n So there’s a lot of work being done there before we even sort of incorporate\nmore of the LLM work into our underlying ads ranking models.\n\nOperator: We have time for one more question, Ken Gawrelski with Wells Fargo. Your line\nis open.\n\nKenneth Gawrelski: Thank you very much. Two, if I may. First, if I -- you talked on the Muse\nSpark launch. You’ve talked about two categories or two verticals. You talked\nabout health and wellness and shopping. Can I dive a little bit -- ask you to dive\na little deeper into the latter on the shopping and commerce side?\n\n And maybe if you could -- were there any learnings in the 2021, ‘22 phase\nwhere you pushed deeper into commerce on Instagram and on Facebook? Any\nlearnings from that period that you might apply? Is there an opportunity for a\nnext-gen marketplace-type business in commerce?", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p18", - "metadata": { - "length": 2686, - "summary": "18 you just talk at all about the strategic importance and the role in developing agentic products for Meta and then just current status around the tech and the deal. Susan Li: I’ll take that question. On Manus, we’re still working through the details. So we don’t have an upda...", - "page_nums": [ - 18 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 18, "artifact_ref": "page_citation_assets/page-18.png", @@ -446,24 +257,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4a1302ba-e6a6-5648-9446-381c81670730", - "type": "page", - "content": "19\n\n\n And then the second, please, maybe, Susan, can you talk a little bit about --\nbased on your model improvements and the content recommendations, where\n-- how much visibility do you think you have to kind of the growth trajectory on\nthe core business?\n\n You continue to grow at basically double the pace of the industry despite being\na very large share of the industry. Could you just talk about a little bit about\nyour visibility into that continued performance? Thank you.\n\nMark Zuckerberg: Yes. So I might give you a somewhat loftier answer to the question. You’re\nasking about shopping.\n\n I think it’s sort of an interesting example of the way in which the work that\nwe’re doing is different than what I think others are doing out there. These\nproducts, they -- AI agents get better when you fully optimize the stack.\n\n That’s why we believe that we need to be a company that builds frontier\nmodels in addition to building the agents. And then in order to do that, you, of\ncourse, need to build your infrastructure in order to be able to do that well.\n\n So we’re undertaking this large investment to be able to do that top to bottom.\nAnd I think a lot of the way to think about the investment that we’re making is a\nbet that the individual things that people care about and that people are going\nto be more important in the future. And that’s sort of like -- and I think it should\nbe a pretty obvious thing to say.\n\n But I think so much of the rhetoric around AI in the industry is around like a\ncompany trying to build some kind of centralized thing that like does all the\nproductive work in society in some way or something like that. And that just is\nvery different from how we see the world.\n\n Like our vision for the future is one where society makes progress by\nindividuals pursuing their own aspirations. And some people care about big\ngrand things like curing diseases. And a lot of people care about personal things\nlike finding the right shirt for my daughter. And I just think that we want to --\nwe’re going to build things that help deliver this vision for personal agents for\npeople.\n\n And I think that part of the lane and what is interesting and differentiated about\nwhat we’re doing is that that’s just so different from how I hear everyone else\ntalking about the work that we’re doing. So even though I think some of these\nideas, they seem like they should be so obvious.\n\n I actually think that our approach of trying to empower individuals and building\nconsumer things is just in the details extremely different from what others are\ndoing. And shopping might be one kind of specific example that I think is going\nto have interest in commercial implications. And I think people -- consumers\nare going to like it.", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p19", - "metadata": { - "length": 2738, - "summary": "19 And then the second, please, maybe, Susan, can you talk a little bit about -- based on your model improvements and the content recommendations, where -- how much visibility do you think you have to kind of the growth trajectory on the core business? You continue to grow at...", - "page_nums": [ - 19 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 19, "artifact_ref": "page_citation_assets/page-19.png", @@ -471,24 +265,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f86aec4f-8488-5f27-8e81-ef7e539a81a2", - "type": "page", - "content": "20\n\n But I don’t hear any other labs out there talking about how they’re building an\nAI that’s really good at shopping. And I think that the reason for that is like not\nbecause shopping is the most important thing by itself, but because like\nempowering people to do the things that matter in their lives, whether that’s\nlocal or understanding social context, or shopping or personal health things or\nunderstanding what’s going on around them visually which is going to be really\nimportant on the glasses. These are all elements of the personal super\nintelligence vision.\n\n I think like a lot of this, and when you’re thinking about kind of the investment\nin Meta over time I think you should think about it as coming down to these set\nof values around what do we want AI to do in society. And if what you want it\nto do is empower individuals and build a world where the AI is in service to\nindividual’s goals, then that is what we are going to build, and I think it’s going\nto be incredibly valuable.\n\nSusan Li: Gosh, I almost wish we could end on that answer, but I will answer the second\nquestion which I think kind of has two versions.\n\n One is a version of like what’s the revenue outlook? And obviously we gave the\nQ2 guide which embeds, I think, both a range of kind of macro outcomes, but\nalso the work that we’ve -- the ongoing work that we have to continue\nimproving both the sort of usage and engagement on our family of apps and\nthen our ability to continue making the ads better and more performant.\n\n I think the second question is maybe more of a -- the second version of that\nquestion is more of a higher-level question about kind of the overall trajectory\nof the roadmap here. And one of the things I will say, having been working on\nthis for a very long time I’m always really impressed by the team’s ability to\ncontinue to advance the state of the art here. And our planning process now is,\nI think, really fine-tuned around this.\n\n So I’ve mentioned on a couple of calls, the budgeting process in which we run a\nvery sort of ROI-based process to make sure that we are funding all of the ads\ninitiatives that we think will drive growth in future years. And that’s something\nthat is both quite dialed in.\n\n And I think that our ability to measure the impact of that has been pretty\nrobust, and it’s been a very important driver of our ads revenue growth, and\nthat continues to be a process that again, we ran in this past budget and -- as\nfar as we can -- as we have line of sight, we feel good about the investment\nopportunities ahead of us.\n\nKenneth Dorell: Great. Thank you everyone, for joining us today. We look forward to speaking\nwith you again soon.\n\nOperator: This concludes today’s conference call. Thank you for joining. And you may now\ndisconnect.", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p20", - "metadata": { - "length": 2776, - "summary": "20 But I don’t hear any other labs out there talking about how they’re building an AI that’s really good at shopping. And I think that the reason for that is like not because shopping is the most important thing by itself, but because like empowering people to do the things th...", - "page_nums": [ - 20 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 20, "artifact_ref": "page_citation_assets/page-20.png", diff --git a/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/doc_nav.json b/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/doc_nav.json index 3d8587ebb..6ae96a8aa 100644 --- a/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/doc_nav.json +++ b/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/doc_nav.json @@ -2,173 +2,46 @@ "version": "1.0", "file_name": "Meta Q1 2026 Earnings Call Transcript.pdf", "stats": { - "total_chunks": 20, + "total_chunks": 3, "text_chunks": 0, "image_chunks": 0, "table_chunks": 0, - "page_chunks": 20, - "max_depth": 1 + "page_chunks": 3, + "max_depth": 2 }, "sections": [ { - "title": "p1", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p1", - "level": 1, - "summary": "1 Meta Platforms, Inc. (META) First Quarter 2026 Results Conference Call April 29th, 2026 Kenneth Dorell, Director, Investor Relations Thank you. Good afternoon and welcome to Meta Platforms’ first quarter 2026 earnings conference call. Joining me today to discuss our results...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p2", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p2", - "level": 1, - "summary": "2 personal and business agents to billions of people around the world. Our goal is not just to deliver Meta AI as an assistant, but to deliver agents that can understand your goals and then work day and night to help you achieve them. My view of AI is very different from many...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p3", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p3", - "level": 1, - "summary": "3 Talking about building physical goods at scale, our AI glasses continue to perform well with the number of people using them daily tripling year-over-year. This continues to be one of the fastest- growing categories of consumer electronics ever. We released Ray-Ban Meta Opti...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p4", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p4", - "level": 1, - "summary": "4 In Q1, the total number of ad impressions served across our services increased 19%. Impression growth was healthy across all regions, driven primarily by growth in engagement and users, as well as ad load optimizations. The global average price per ad increased 12% year-over...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p5", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p5", - "level": 1, - "summary": "5 Turning now to the business performance. There are two primary factors that drive our revenue performance: our ability to deliver engaging experiences for our community, and our effectiveness at monetizing that engagement over time. On the first, we’re continuing to see sign...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p6", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p6", - "level": 1, - "summary": "6 engagement gains that accelerated week-over-week with each new iteration of the model. We’re seeing similar gains within Meta AI following the broad roll out of our new model, with double -digit percent increases in Meta AI sessions per user. Muse Spark is now powering Meta...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p7", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p7", - "level": 1, - "summary": "7 that to AI so businesses and agencies can analyze and optimize campaigns with the tools they’re already using. Usage of our ad creative tools is also scaling, with more than 8 million advertisers using at least one of our gen AI ad creative tools and particularly strong adop...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p8", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p8", - "level": 1, - "summary": "8 infrastructure purchase agreements drove a $107 billion step up in our contractual commitments this quarter. Our investments will support our training needs for future models, and most importantly, provide us the inference capacity necessary to deliver personal and business...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p9", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p9", - "level": 1, - "summary": "9 mute your computer speakers. And your first question comes from Brian Nowak with Morgan Stanley. Please go ahead. Brian Nowak: Thanks for taking my question. Mark, I wanted to ask you just about the level of investment you’re making and sort of the signposts you’re watching...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p10", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p10", - "level": 1, - "summary": "10 And then we’ll also ramp up monetization over that period of time as well. So I think that those are the set of things that I look at. I think for the kind of specific financial questions, I think Susan can jump in if there’s anything more to add. Operator: Your next questi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p11", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p11", - "level": 1, - "summary": "11 building the businesses around them and decreasing the costs. And this is kind of how we’ve done everything over the last 20 years of running the company, and that is basically the plan. Susan Li: Mark, on your second question, we aren’t providing a specific outlook for 202...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p12", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p12", - "level": 1, - "summary": "12 more agentic capabilities, enabling agents to help people be more productive, but also agents for businesses and enabling, frankly, those agents to interact with each other and build what we hope will be a thriving commerce ecosystem on our platform. So I would say some of...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p13", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p13", - "level": 1, - "summary": "13 We’re very focused on leveraging AI tools to substantially increase our productivity, and we’re seeing that reflected in the accelerating output from our engineers. And we’re generally approaching -- we’re approaching this with a bias toward wanting to use these tools to bu...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p14", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p14", - "level": 1, - "summary": "14 and because I think some of the stuff we are more focused on quality than hitting a specific date. I mean on the research side, this is research, right? We are trying novel things. You don’t exactly know when they’re going to land. And on the product side, I think we care a...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p15", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p15", - "level": 1, - "summary": "15 talking about is delivering personal superintelligence for billions of people around the world. So how do you make a version of that experience that is a lot more polished and dialed and easy and that has all the infrastructure basically done for people already and that jus...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p16", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p16", - "level": 1, - "summary": "16 I mean one is this kind of agents version vision of what we’re doing. The other is that self-improvement is really important because you can’t build a leading AI product if you don’t have leading models. So -- and you’re not going to have leading models in the future if you...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p17", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p17", - "level": 1, - "summary": "17 Each month, each generation of models, they just have more capabilities and can do more things and people absorb it and are able to get more superpowers and it’s awesome. It’s like the most exciting time in the industry. So I think of the agents as the product vehicle for d...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p18", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p18", - "level": 1, - "summary": "18 you just talk at all about the strategic importance and the role in developing agentic products for Meta and then just current status around the tech and the deal. Susan Li: I’ll take that question. On Manus, we’re still working through the details. So we don’t have an upda...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p19", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p19", - "level": 1, - "summary": "19 And then the second, please, maybe, Susan, can you talk a little bit about -- based on your model improvements and the content recommendations, where -- how much visibility do you think you have to kind of the growth trajectory on the core business? You continue to grow at...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p20", - "path": "Meta Q1 2026 Earnings Call Transcript.pdf/p20", - "level": 1, - "summary": "20 But I don’t hear any other labs out there talking about how they’re building an AI that’s really good at shopping. And I think that the reason for that is like not because shopping is the most important thing by itself, but because like empowering people to do the things th...", - "chunk_count": 1, - "children": [] + "title": "Root", + "path": "Meta Q1 2026 Earnings Call Transcript.pdf/Root", + "level": 1, + "summary": "", + "chunk_count": 21, + "children": [ + { + "title": "Kenneth Dorell, Director, Investor Relations", + "path": "Meta Q1 2026 Earnings Call Transcript.pdf/Root/Kenneth Dorell, Director, Investor Relations", + "level": 2, + "summary": "Kenneth Dorell, Director of Investor Relations, welcomes participants to Meta Platforms' first quarter 2026 earnings conference call. He introduces the speakers, Mark Zuckerberg (CEO) and Susan Li (CFO), and outlines the call's scope, including forward-looking statements, GAAP and non-GAAP financial measures, and where to find supporting materials like the press release and investor presentation. The section concludes with him handing over the call to Mark Zuckerberg.", + "chunk_count": 1, + "children": [] + }, + { + "title": "Mark Zuckerberg, CEO", + "path": "Meta Q1 2026 Earnings Call Transcript.pdf/Root/Mark Zuckerberg, CEO", + "level": 2, + "summary": "Mark Zuckerberg, CEO of Meta Platforms, Inc., discusses the company's strong performance in Q1 2026, highlighting over 3.5 billion daily active users across its family of apps. He details the release of the Muse family of AI models and the upgraded Meta AI assistant from Meta Superintelligence Labs. Zuckerberg outlines his vision for personal and business agents designed to amplify human capabilities rather than replace people, and mentions plans to integrate these models into recommendation systems for Facebook and Instagram. The section concludes with an update on infrastructure investments, including increased capex due to memory costs and the rollout of custom silicon developed with Broadcom alongside AMD and Nvidia chips.", + "chunk_count": 2, + "children": [] + }, + { + "title": "Susan Li, CFO", + "path": "Meta Q1 2026 Earnings Call Transcript.pdf/Root/Susan Li, CFO", + "level": 2, + "summary": "This section covers the financial results for Meta's first quarter. It details segment performance, including a 33% year-over-year increase in Family of Apps revenue to $55.9 billion and a slight decline in Reality Labs revenue to $402 million. Consolidated results show total revenue of $56.3 billion and net income of $26.8 billion. The CFO also discusses business performance drivers like content recommendations and monetization efficiency, highlighting growth on Instagram Reels and Facebook video time, as well as advancements in AI-powered ad tools and commerce initiatives.", + "chunk_count": 18, + "children": [] + } + ] } ], "resources": { diff --git a/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/manifest.json b/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/manifest.json index 8935d74c1..878c6273f 100644 --- a/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/manifest.json +++ b/apps/api/app/data/demo_documents/financial-meta-q1-2026-earnings-call/manifest.json @@ -171,33 +171,18 @@ } }, "statistics": { - "total_chunks": 20, + "total_chunks": 3, "text_chunks": 0, "image_chunks": 0, "table_chunks": 0, - "page_chunks": 20, + "page_chunks": 3, "total_pages": null }, "HIERARCHY": { - "p1": {}, - "p2": {}, - "p3": {}, - "p4": {}, - "p5": {}, - "p6": {}, - "p7": {}, - "p8": {}, - "p9": {}, - "p10": {}, - "p11": {}, - "p12": {}, - "p13": {}, - "p14": {}, - "p15": {}, - "p16": {}, - "p17": {}, - "p18": {}, - "p19": {}, - "p20": {} + "Root": { + "Kenneth Dorell, Director, Investor Relations": {}, + "Mark Zuckerberg, CEO": {}, + "Susan Li, CFO": {} + } } } diff --git a/apps/api/app/data/demo_documents/spacex-s1/chunks.json b/apps/api/app/data/demo_documents/spacex-s1/chunks.json index 4f1e37537..c3db0952c 100644 --- a/apps/api/app/data/demo_documents/spacex-s1/chunks.json +++ b/apps/api/app/data/demo_documents/spacex-s1/chunks.json @@ -3749,18 +3749,1561 @@ } }, { - "chunk_id": "node_ba2fab7c-d081-5ccc-b3c8-80c27319b0e5", - "type": "page", - "content": "S-1 1 spaceexplorationtechnologi.htm S-1\nAs filed with the U.S. Securities and Exchange Commission on May 20, 2026\nRegistration No. 333-\nUNITED STATES\nSECURITIES AND EXCHANGE COMMISSION\nWASHINGTON, DC 20549\nFORM S-1\nREGISTRATION STATEMENT\nUNDER THE SECURITIES ACT OF 1933\nSpace Exploration Technologies Corp.\n(Exact name of registrant as specified in its charter)\nTexas 7370 01-0627671\n(State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number)\n(I.R.S. Employer Identification Number)\n1 Rocket Road\nStarbase, Texas 78521\n(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)\nElon Musk\nChief Executive Officer\n1 Rocket Road\nStarbase, Texas 78521\nTel: (310) 363-6000\n(Name, address, including zip code, and telephone number, including area code, of agent for service)\nWith copies to:\nGeorge J. Sampas\nHillary H. Holmes\nHarrison Tucker\nAtma J. Kabad\nGibson, Dunn & Crutcher LLP\n811 Main Street, Suite 3000\nHouston, Texas 77002\nTel: (346) 718-6600\nBret Johnsen\nMichael Smith\nSpace Exploration Technologies Corp.\n1 Rocket Road\nHawthorne, California 90250\nTel: (310) 363-6000\nByron B. Rooney\nAlan F. Denenberg\nStephen A. Byeff\nJoze Vranicar\nDavis Polk & Wardwell LLP\n450 Lexington Avenue\nNew York, New York 10017\nTel: (212) 450-4000\nApproximate date of commencement of proposed sale to the public:\nAs soon as practicable after this Registration Statement becomes effective.\nIf any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following\nbox.   ☐\nIf this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration\nstatement number of the earlier effective registration statement for the same offering.   ☐\nIf this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number\nof the earlier effective registration statement for the same offering.   ☐\nIf this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number\nof the earlier effective registration statement for the same offering.   ☐\nIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.\nSee the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:\nLarge accelerated filer ☐ Accelerated filer ☐\nNon-accelerated filer ☒ Smaller reporting company ☐\nEmerging growth company ☐\nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial\naccounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.   ☐\nThe Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further\namendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as\namended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may\ndetermine.", - "path": "spacex-s1.pdf/p1", - "metadata": { - "length": 3719, - "summary": "S-1 1 spaceexplorationtechnologi.htm S-1 As filed with the U.S. Securities and Exchange Commission on May 20, 2026 Registration No. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Space...", - "page_nums": [ - 1 + "chunk_id": "node_52f86f1a-37f6-5151-ada4-7df30d50ceed", + "type": "page", + "content": "S-1 1 spaceexplorationtechnologi.htm S-1\nAs filed with the U.S. Securities and Exchange Commission on May 20, 2026\nRegistration No. 333-          \nUNITED STATES\nSECURITIES AND EXCHANGE COMMISSION\nWASHINGTON, DC 20549\nFORM S-1\nREGISTRATION STATEMENT\nUNDER THE SECURITIES ACT OF 1933\nSpace Exploration Technologies Corp.\n(Exact name of registrant as specified in its charter)\nTexas\n7370\n01-0627671\n(State or other jurisdiction of incorporation or \norganization)\n(Primary Standard Industrial Classification Code \nNumber)\n(I.R.S. Employer Identification Number)\n1 Rocket Road\nStarbase, Texas 78521\n(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)\nElon Musk\nChief Executive Officer\n1 Rocket Road\nStarbase, Texas 78521\nTel: (310) 363-6000\n(Name, address, including zip code, and telephone number, including area code, of agent for service)\nWith copies to:\nGeorge J. Sampas\nHillary H. Holmes\nHarrison Tucker\nAtma J. Kabad\nGibson, Dunn & Crutcher LLP\n811 Main Street, Suite 3000\nHouston, Texas 77002\nTel: (346) 718-6600\nBret Johnsen\nMichael Smith\nSpace Exploration Technologies Corp.\n1 Rocket Road\nHawthorne, California 90250\nTel: (310) 363-6000\nByron B. Rooney\nAlan F. Denenberg\nStephen A. Byeff\nJoze Vranicar\nDavis Polk & Wardwell LLP\n450 Lexington Avenue\nNew York, New York 10017\nTel: (212) 450-4000\nApproximate date of commencement of proposed sale to the public:\nAs soon as practicable after this Registration Statement becomes effective.\nIf any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following \nbox.  ☐\nIf this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration \nstatement number of the earlier effective registration statement for the same offering.  ☐\nIf this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number \nof the earlier effective registration statement for the same offering.  ☐\nIf this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number \nof the earlier effective registration statement for the same offering.  ☐\nIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. \nSee the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:\nLarge accelerated filer\n☐\nAccelerated filer\n☐\nNon-accelerated filer\n☒\nSmaller reporting company\n☐\nEmerging growth company\n☐\nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial \naccounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐\nThe Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further \namendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as \namended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may \ndetermine.\n\nShares\nSpace Exploration Technologies Corp.\nClass A Common Stock\nThis is the initial public offering of shares of Class A common stock, par value $0.001 per share, of Space Exploration Technologies \nCorp., a Texas corporation. We are offering                shares of our Class A common stock.\nCurrently, no public market exists for our Class A common stock. We expect the initial public offering price to be between $    and \n$    per share. We have applied to list our Class A common stock on The Nasdaq Stock Market LLC (“Nasdaq”) and Nasdaq Texas, \nInc. (“Nasdaq Texas”) under the symbol “SPCX.”\nFollowing the completion of this offering, we will have two classes of common stock issued and outstanding: Class A common stock \nand Class B common stock. Each share of Class A common stock will entitle its holder to one vote per share. Each share of Class B \ncommon stock will entitle its holder to 10 votes per share. Class A shareholders and Class B shareholders will vote together as a \nsingle class on all matters to be voted on by shareholders, except Class B shareholders will be entitled to elect a majority of our board \nof directors in addition to having certain other class votes as described under “Description of Capital Stock.” \nAssuming an offering size as set forth above and an initial public offering price of $                per share (the midpoint of the estimated \nprice range set forth above), Elon Musk, our founder, Chief Executive Officer, Chief Technical Officer and Chairman of our board, \nwill hold approximately           % of the voting power of our common stock (or approximately        % if the underwriters exercise their \noption to purchase additional shares of Class A common stock in full) immediately after the completion of this offering through his \nownership of shares of our Class A and Class B common stock of which approximately           % he controls through his ownership of \nour Class B common stock. As a result, Mr. Musk will be able to control the outcome of matters requiring shareholder approval. This \nincludes the election of (i) a majority of our board, through his ownership of Class B shares (as Class B Directors), for so long as he \nholds a majority of the voting power of the Class B common stock, and (ii) the remainder of our board, for so long as he holds a \nmajority of the combined voting power of the Class A and Class B common stock. As a result, we will be a “controlled company” \nunder the corporate governance rules of Nasdaq following the completion of this offering and, as a result, we intend to rely on \nexemptions from certain corporate governance requirements. Please refer to “Management—Controlled Company Exemption.”\nInvesting in our Class A common stock involves risks. Please refer to “Risk Factors” beginning on page 26 of this \nprospectus.\nPer Share\nTotal\nInitial public offering price \n ...................................................................................................... $\n$\nUnderwriting discounts and commissions(1) \n ............................................................................ $\n$\nProceeds, before expenses, to Space Exploration Technologies Corp. \n \n ................................... $\n$\n________________\n(1)\nPlease refer to “Underwriting” for a description of all underwriting compensation payable in connection with this offering.\nThe underwriters may also exercise an option to purchase up to an additional       shares of our Class A common stock from us, at the \ninitial public offering price, less the underwriting discounts and commissions, for 30 days after the date of this prospectus.\nAt our request, the underwriters have reserved up to             percent of the shares of Class A common stock to be issued by the \nCompany and offered by this prospectus for sale, at the initial public offering price, to              . Please refer to “Underwriting—\nDirected Share Program.” Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has \napproved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the \ncontrary is a criminal offense.\nThe shares of Class A common stock will be ready for delivery on or about             , 2026.\nJoint Book-Running Managers\nGoldman Sachs & \nCo. LLC\nMorgan Stanley\nBofA Securities\nCitigroup\nJ.P. Morgan\nBarclays\nDeutsche Bank \nSecurities\nRBC Capital \nMarkets\nUBS \nInvestment Bank\nWells Fargo\n Securities\nAllen & Company \nLLC\nCantor\nNeedham & \nCompany\nRaymond James\nSociete Generale\nStifel\nWilliam Blair\nBTG Pactual\nING\nMacquarie Capital\nMirae Asset Securities\nMizuho\nSantander\nProspectus Dated              , 2026.\nThe information in this preliminary prospectus is not complete and may be changed. The securities described herein may not be sold until the registration statement filed with the Securities and Exchange \nCommission is effective. This prospectus is not an offer to sell such securities, and it is not soliciting an offer to buy these securities, in any jurisdiction where the offer or sale is not permitted.\nSUBJECT TO COMPLETION, DATED      , 2026\nPRELIMINARY PROSPECTUS\n\nTable of Contents\n TABLE OF CONTENTS\nPage\nGLOSSARY OF TERMS \n .................................................................................................................................\niv\nPROSPECTUS SUMMARY \n ............................................................................................................................\n1\nRISK FACTORS ..............................................................................................................................................\n26\nCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS\n \n ...........................\n64\nUSE OF PROCEEDS \n .......................................................................................................................................\n66\nDIVIDEND POLICY\n ........................................................................................................................................\n67\nCAPITALIZATION \n .........................................................................................................................................\n68\nDILUTION \n .......................................................................................................................................................\n70\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS \nOF OPERATIONS \n ........................................................................................................................................\n74\nBUSINESS\n \n ........................................................................................................................................................\n130\nMANAGEMENT\n \n ..............................................................................................................................................\n226\nEXECUTIVE COMPENSATION ....................................................................................................................\n233\nCERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS\n \n .............................................\n243\nSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT \n ....................\n247\nDESCRIPTION OF CAPITAL STOCK \n ..........................................................................................................\n250\nSHARES ELIGIBLE FOR FUTURE SALE \n ....................................................................................................\n258\nMATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF \nCLASS A COMMON STOCK \n .....................................................................................................................\n260\nUNDERWRITING \n ...........................................................................................................................................\n264\nLEGAL MATTERS\n \n ..........................................................................................................................................\n277\nEXPERTS \n .........................................................................................................................................................\n277\nWHERE YOU CAN FIND ADDITIONAL INFORMATION\n \n ........................................................................\n277\nINDEX TO FINANCIAL STATEMENTS \n ......................................................................................................\nF-1\nNeither we nor the underwriters have authorized anyone to provide you with information other than that contained in \nthis prospectus or in any free writing prospectus authorized by us. We and the underwriters take no responsibility \nfor, and can provide no assurance as to the reliability of, any other information that others may give you. We and the \nunderwriters are not making an offer to sell, or seeking offers to buy, our Class A common stock in any jurisdiction \nwhere an offer or sale is not permitted. The information contained in this prospectus or any free writing prospectus is \naccurate only as of its date, regardless of its time of delivery or of any sale of shares of our Class A common stock. \nOur business, financial condition, results of operations and future prospects may have changed since that date.\nFor investors outside of the United States: Neither we nor the underwriters have done anything that would permit \nthis offering, or possession or distribution of this prospectus, in any jurisdiction where action for that purpose is \nrequired, other than the United States. Persons outside of the United States who come into possession of this \nprospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our \nClass A common stock and the distribution of this prospectus outside of the United States.\nThis prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of \nwhich are beyond our control. Please refer to “Risk Factors” and “Cautionary Statement Regarding Forward-\nLooking Statements.”\n\nii\nTable of Contents\nGeneral Information\nExcept as otherwise indicated or required by the context, all references to “SpaceX,” the “Company,” “we,” “our” \nand “us” or similar terms refer to Space Exploration Technologies Corp. and its consolidated subsidiaries. For the \ndefinitions of certain terms and abbreviations used in this prospectus, please refer to “Glossary of Terms” beginning \non page iv of this prospectus.\nReferences to (i) our “bylaws” are to the form of amended and restated bylaws of the Company (as amended and \nrestated from time to time) to be effective upon the completion of this offering, (ii) our “charter” are to the form of \nrestated certificate of formation of the Company to be effective upon the completion of this offering and (iii) “our \nboard” or “the board” are to the board of directors of the Company.\nBasis of Presentation\nThe consolidated financial statements of SpaceX have been retrospectively recast for all periods presented to include \n(i) the historical results of X.AI Holdings Corp., which was acquired by SpaceX, effective February 2, 2026 (the \n“xAI Merger”), and X Holdings Corp. (“X Holdings”), which was acquired by xAI, effective March 28, 2025 (the \n“X Merger”), because these transactions were between entities under common control, and (ii) a five-for-one stock \nsplit of the Company’s Class A, Class B, and Class C Common Stock, effective May 4, 2026 (the “2026 Stock \nSplit”). Unless otherwise stated or the context otherwise requires, all share and per share information included in this \nprospectus have been retroactively adjusted to reflect the 2026 Stock Split. Refer to Note 1, Nature of Business, to \nthe audited consolidated financial statements included elsewhere in this prospectus.\nIndustry and Market Data\nCertain market and industry data and forecasts used in this prospectus have been obtained from, are based on, or use \ndata from, the following reports and sources, among others: (i) Breaking Barriers to Data Center Growth, dated \nJanuary 20, 2025, by Boston Consulting Group; (ii) Looming Spectrum Shortfall Could Cost America’s GDP $1.4T, \nJeopardize Continued Function of U.S. Networks, New Report Finds, dated March 27, 2025, by the Cellular \nTelecommunications and Internet Association; (iii) Top 50 Countries by Number of Business Aircraft Registered , \ndated January 27, 2026, by Corporate Jet Investor; (iv) Digital Economy Trends 2026, dated December 2025, by the \nDigital Cooperation Organization; (v) Global Fixed Broadband Market Outlook, Ericsson Mobility Report, dated \nNovember 1, 2025, by Ericsson; (vi) Households by Number of Households and by Country, Euromonitor \nInternational Passport 2026 Edition, dated November 5, 2025, by Euromonitor International; (vii) Satellite Solutions \nfor Universal Service, dated March 2025, by the Global Satellite Operators Association; (viii) Broadband Services \nMarket Analysis Segment Forecast to 2027, dated April 2025, by Grand View Research; (ix) Consumer Market \nModel H2 2025 – Worldwide Household Internet Penetration, dated March 2026, by International Data Corporation; \n(x) World Energy Outlook Special Report: Energy and AI , dated April 2025, by the International Energy Agency; \n(xi) The 175 GW Crisis: America’s Power Grid Cannot Keep Up with AI Data Centers , dated January 21, 2026, by \nIntrol; (xii) As Wireless Network Quality Competition Increases, Customers Benefit, dated July 17, 2025, by J.D. \nPower; (xiii) Satellite Statistics: Satellite and Debris Population, dated April 2026, by Jonathan McDowell; (xiv) \n2026 Global Data Center Outlook: Navigating AI Demand, Power Constraints and Global Opportunities, dated \nJanuary 5, 2026, by JLL; (xv) Global Ship Tracking Intelligence, at marinetraffic.com, as updated from time to time \nand last accessed April 13, 2026, by Marine Traffic Dashboard; (xvi) The Cost of Compute: A $7 Trillion Race to \nScale Data Centers, dated April 28, 2025, by McKinsey & Company; (xvii) What is Multimodal AI?, dated June 10, \n2025, by McKinsey & Company; (xviii) NASA: Enabling America on the Space Frontier, dated December 2024, by \nthe National Aeronautics and Space Administration (“NASA”); (xix) Space Act Agreement, dated April 2015, by \nNASA; (xx) The Recent Large Reduction in Space Launch Cost, dated July 8, 2018, by NASA; (xxi) 12th Edition \nSpace Economy Report, dated January 29, 2026, by Novaspace; (xxii) Global Fleet and MRO Market Forecast \n2025–2035, dated February 2025, by Oliver Wyman; (xxiii) Broadband Op Subs by Technology – Forecasts \nSummary, dated March 31, 2026, by Omdia; (xxiv) Mobile Forecasts Summary – February 2026, dated February \n18, 2026, by Omdia; (xxv) Data Center Rules and Regulations, dated September 8, 2025, by QTS; (xxvi) AI’s \nPower Requirements Under Exponential Growth, dated January 28, 2025, by RAND Corporation; (xxvii) Data \nCenter Grid-Power Demand to Rise 22% in 2025, Nearly Triple by 2030, dated October 14, 2025, by S&P Global \nMarket Intelligence; (xxviii) NVIDIA GTC 2025 – Built for Reasoning, Vera Rubin, Kyber, CPO, Dynamo\n\niii\nTable of Contents\nInference, Jensen Math, Feynman, dated March 18, 2025, by SemiAnalysis; (xxix) NVIDIA Blackwell Ultra \nDatasheet, dated February 16, 2026, by SemiAnalysis; (xxx) H100 Rental Price Over Time (2023–2025): A \nComplete Market Analysis, dated December 21, 2025, by Silicon Data; (xxxi) Data Centers – Understanding the \nPower Consumption of Data Centers, at socomec.us, as updated from time to time and last accessed April 13, 2026, \nby Socomec; (xxxii) The Space Report 2025 Q2 Highlights Record $613 Billion Global Space Economy for 2024, \ndated July 22, 2025, by the Space Foundation; (xxxiii) Median Country Speeds Updated February 2026, dated \nFebruary 2026, by the Speedtest Global Index; (xxxiv) Data Center (Russian Market) Commercial Data Centers, \ndated January 28, 2026, by TAdviser; (xxxv) Merchant Fleet by Flag of Registration and by Type of Ship, dated \nJune 10, 2025, by the United Nations Conference on Trade and Development; (xxxvi) U.S. Electricity Generation in \n2025 Hit a Record, Again, dated March 5, 2026, by the U.S. Energy Information Administration; (xxxvii) \nGAO-25-107555, In-Space Servicing, Assembly, and Manufacturing: Benefits, Challenges, and Policy Options, \ndated July 2025, by the U.S. Government Accountability Office; (xxxviii) GDP (current US$), at \ndata.worldbank.data.org, as updated from time to time and last accessed April 13, 2026, by the World Bank; (xxxix) \nRural population (% of total population), at data.worldbank.org, as updated from time to time and last accessed May \n2, 2026, by the World Bank; (xl) How Data Centres in Space Sustainably Enable the AI Revolution, dated January \n16, 2026, by Philip Johnston Co-Founder and Chief Executive Officer, Starcloud, published by the World Economic \nForum; and (xli) Most Americans Use AI but Still Don’t Trust It , dated December 9, 2025, by YouGov. We did not \ncommission the preparation of any of these reports or sources.\nSome market data and statistical information contained in this prospectus are also based on management’s estimates \nand calculations, which are derived from our review and interpretation of publicly available industry publications, \nour internal research and our knowledge of the markets in which we currently, and will in the future, operate, as well \nas the sources referred to above. This information involves a number of assumptions and limitations, and you are \ncautioned not to give undue weight to such information. The estimates and assumptions used in determining our \ntotal addressable markets are further detailed in the section titled “Business—Our Market Opportunity,” and you are \nurged to read the risk factor titled “The estimates of future market opportunity and forecasts of market growth, and \nour ability to capture such markets, included in this prospectus may prove to be inaccurate.” Forecasts and other \nforward-looking information obtained from the sources named above are subject to the same qualifications and \nuncertainties as the other forward-looking statements in this prospectus.\nStatements as to market position, market opportunity and market size are based on data currently available to us, as \nwell as management’s estimates, judgments, assessments, and assumptions. While we are not aware of any \nmisstatements regarding market position, market opportunity, and market size information included in this \nprospectus, such information, which is derived in part from management’s estimates and beliefs, is inherently \nuncertain and imprecise. Projections, assumptions and estimates of estimated market position and market \nopportunity and the future performance of the industries in which we operate are necessarily subject to a high degree \nof uncertainty and risk due to a variety of factors, including those described in “Risk Factors,” “Cautionary \nStatement Regarding Forward-Looking Statements” and elsewhere in this prospectus. These and other factors could \ncause results to differ materially from those expressed in the estimates made by third parties and by us. Investors are \ncautioned not to place undue reliance on statements of expected future market size or opportunity.\nTrademarks and Trade Names\nWe own or have rights to various trademarks, service marks and trade names that we use in connection with the \noperation of our business. This prospectus may also contain trademarks, service marks and trade names of third \nparties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service \nmarks, trade names or products in this prospectus is not intended to, and does not imply, a relationship with us or an \nendorsement or sponsorship by or of us. Solely for convenience, the trademarks, service marks and trade names \nreferred to in this prospectus may appear without the ®, ™ or SM symbols, but such references are not intended to \nindicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the \napplicable licensor to these trademarks, service marks and trade names.\n\niv\nTable of Contents\nGLOSSARY OF TERMS \nThe terms and abbreviations defined in this section are used throughout this prospectus:\n•\n“AI” or “artificial intelligence” refers to advanced computational technologies and systems enabling machines \nto learn, comprehend reality, solve complex problems, exhibit creativity, make critical decisions, and function \nwith growing autonomy. \n•\n“AI compute” or “compute” refers to the computing infrastructure required to train and operate artificial \nintelligence models, including, without limitation, specialized processors, networking, storage, and power \nsystems deployed in data centers or other computing environments.\n•\n“AI compute satellite” refers to a satellite equipped with onboard artificial intelligence processing capabilities \ndesigned to perform data analysis, inference, or other machine learning, automated decision-making and \nartificial intelligence algorithms, models and technologies workloads in orbit.\n•\n“AI ecosystem” refers to a complex, multi-layered network of technologies, products, systems, and \ninfrastructure that develop, leverage, and deploy intelligent systems.\n•\n“AI segment” refers to our AI business, which we acquired in connection with our acquisition of xAI in \nFebruary 2026, and includes our AI compute, Grok, and X.\n•\n“AI training cluster” refers to an integrated system that provides computational power required for training and \nrunning advanced AI models.\n•\n“The Algorithm” refers to our five-step iterative process that we use to rapidly innovate and optimize, \nemphasizing making the requirements less dumb, deleting unnecessary processes or parts, optimizing the \nnecessary processes or parts, accelerating cycle timesteps, and automating only proven processes after the first \nfour steps are completed.\n•\n“Application Programming Interface” or “API” refers to a defined set of rules and protocols that allows \ndifferent software systems to communicate with and interact with each other programmatically.\n•\n“ARPU” refers to service revenue generated from Starlink Subscribers during a period divided by (i) the \naverage number of Starlink Subscribers during the period and by (ii) the number of months in the period.\n•\n“Artemis program” refers to a NASA program aimed at landing humans on the Moon by the late 2020s.\n•\n“booster” refers to the first-stage rocket that provides the primary thrust during launch.\n•\n“booster catch” refers to a recovery method in which a returning first-stage rocket booster is captured mid-air by \nmechanical arms on the launch tower rather than on legs at a landing zone or at sea.\n•\n“booster launch” refers to a rocket launch in which a booster stage provides the primary thrust during liftoff and \nthe initial phase of ascent before separating from the vehicle.\n•\n“bps” refers to bits per second.\n•\n“COLOSSUS” refers to our flagship data center, located on Paul R. Lowry Road in Memphis, Tennessee. \n•\n“COLOSSUS II” refers to our data centers in Memphis, Tennessee and in Southaven, Mississippi. These data \ncenters are part of our coherent gigawatt-scale AI training cluster.\n•\n“Connectivity segment” refers to our Connectivity segment, which includes Starlink and associated offerings.\n•\n“Credit Agreements” refers to our SpaceX Credit Facility and SpaceX Bridge Loan.\n•\n“crewmember” refers to a person who has traveled on our spacecraft, measuring by each mission.\n\nv\nTable of Contents\n•\n“daily posts” on X and Grok refers to the aggregate volume of original posts, replies, reposts, quotes and media \nshared daily by users on the X platform, and the real-time interactions, analysis and generative capabilities \nprovided to a user by Grok. This may include posts generated by AI or accounts managed by AI. \n•\n“downlink capacity” refers to the maximum rate at which data can be transmitted from a satellite to users over a \nnetwork or communication link in a given period of time.\n•\n“Draco thrusters” refers to thrusters used in Dragon spacecraft for precise orbital maneuvering and adjustments.\n•\n“Dragon” refers to our Dragon spacecraft.\n•\n“Falcon 1” refers to our two-stage, liquid-fueled small-lift launch vehicle that operated from 2006 to 2009.\n•\n“Falcon 9” refers to our orbital-class rocket with reusable boosters, first launched in 2010, which has a payload \ncapacity to LEO of approximately 23 metric tons.\n•\n“Falcon Heavy” refers to our partially reusable super heavy-lift launch vehicle, first launched in 2018, which \nhas a payload capacity to LEO of approximately 64 metric tons.\n•\n“flight-proven booster launches” refers to a mission utilizing a booster that has previously completed at least \none successful launch and recovery.\n•\n“frontier model” refers to a leading-edge, sophisticated large language model, such as Grok, designed for \nrigorous reasoning and real-time information synthesis.\n•\n“Gbps” refers to gigabits per second. \n•\n“geostationary orbit” refers to a high Earth orbit that allows satellites to match Earth’s rotation, appearing \nstationary from the ground, often used for communication satellites.\n•\n“geosynchronous transfer orbit” refers to an elliptical orbit used to transfer a spacecraft from a lower orbit to a \ngeostationary orbit.\n•\n“gigawatt” refers to one billion watts.\n•\n“gigawatt-scale” refers to infrastructure, systems, or facilities that are designed to generate, transmit, or \nconsume approximately one gigawatt or more of electrical power capacity.\n•\n“GPU” refers to a graphics processing unit.\n•\n“Grok” refers to our family of frontier models, which represents a core pillar of our mission to advance \nhumanity’s understanding of the universe through the development of truth-seeking artificial intelligence. \n•\n“Grok API” refers to our application programming interface that enables developers to access and integrate \nGrok models into external software applications and workflows.\n•\n“Grok Business” refers to our subscription-based offering that provides organizations with access to Grok \nmodels and related tools for use in internal business applications and workflows, designed for deployment by \nsmall-to-medium teams.\n•\n“Grok Enterprise” refers to our subscription-based offering that provides organizations with access to Grok \nmodels and related tools for use in internal business applications and workflows, designed for deployment by \nenterprise organizations.\n•\n“Grok Voice” refers to the Grok real-time speech engine.\n•\n“high-density compute” refers to compute infrastructure designed to deliver a large amount of processing power \nwithin a limited physical footprint, typically characterized by high processor concentration and elevated power \nusage per unit of space.\n\nvi\nTable of Contents\n•\n“Imagine” refers to our image and video generation system.\n•\n“inference” refers to the process by which a trained artificial intelligence model generates outputs (such as text, \nimages, or predictions) from new input data.\n•\n“International Docking System Standard” refers to a standard for autonomous docking capabilities used by \nspacecraft like Dragon.\n•\n“IoT” refers to the network of physical objects embedded with sensors, software, and other technologies for the \npurpose of connecting and exchanging data with other devices and systems over the internet.\n•\n“Kardashev Type II” refers to a civilization that harnesses the full energy output of its local star, like our Sun, to \npower unprecedented growth and sustain the civilization’s existence.\n•\n“large language model” or “LLM” refers to a sophisticated artificial intelligence model designed for advanced \nreasoning and natural language processing.\n•\n“large-scale LEO broadband satellite constellation” refers to a satellite constellation network of over 1,000 \nsatellites.\n•\n“latency” refers to the time delay between the transmission of data from a source and its receipt at a destination, \ntypically measured in milliseconds.\n•\n“launch payload mass” refers to the theoretical payload mass that a particular spacecraft is capable of delivering \nto a specified orbit under specific conditions, which is derived from advanced computer simulations and \nperformance modeling that apply to particular mission scenarios and trajectory assumptions. Actual payload \nthat can be delivered for a given mission may be different and will vary depending on numerous mission \nparameters and operational factors, including mission-specific trajectory requirements, atmospheric conditions, \nvehicle and payload configuration, risk profile, and applicable regulatory or range-safety limitations.\n•\n“launch system” refers to a comprehensive system comprising rockets and associated ground infrastructure used \nto launch spacecraft and payloads into space.\n•\n“launch vehicle” refers to a rocket designed to transport payloads from terrestrial bodies (e.g., Earth, Moon, or \nMars) to space or to a designated orbital trajectory.\n•\n“LEO satellite constellation” refers to a network of numerous satellites operating in Low-Earth Orbit, typically \ndeployed to provide services such as broadband connectivity, including Starlink.\n•\n“Low-Earth Orbit” or “LEO” refers to an orbit relatively close to Earth’s surface, typically used by satellites for \napplications like broadband internet due to its lower latency compared to higher orbits.\n•\n“low-latency network” refers to a network with latency below 70 milliseconds.\n•\n“lunar mass driver” refers to a launch system that we intend to build on the Moon’s surface that will be \ndesigned to use electromagnetic acceleration to propel payloads into space without the use of rockets.\n•\n“Macrohard” refers to a platform we are currently developing that is designed to emulate digital workflows, \naugment human operation of computers, and create a fully AI-operated software company.\n•\n“mass to orbit” refers to the total kilograms of payload deployed to orbit in a given period, and is a key indicator \nof our capacity and scalability that supports Space revenue and drives expansion across our Connectivity and AI \nsegments.\n•\n“MAU” (or monthly active users) refers to the total number of users who have interacted with Grok or X \nthrough web browsers or mobile applications at least once during the 30-day period ending on the date of \nmeasurement (“active users”). In presenting combined MAUs across the two platforms, we seek to identify and \naccount for users who access both Grok and X based on sign-in traffic so that such users are not double-counted\n\nvii\nTable of Contents\nwhen measuring MAU. Furthermore, only users who have registered for an X or Grok account are included. \nWhile we believe our methodologies provide a reasonable approximation of MAU based on the number of \nunique users, they may not fully capture all instances of duplication, and our reported MAU should be viewed \nas an estimate of unique users across our Grok and X platforms for the applicable period. We track the subset of \nusers who used Grok’s AI features and those who have not based on the source of their server requests.\n•\n“Mbps” refers to megabits per second.\n•\n“Megapack” refers to a containerized, utility-scale lithium-ion battery energy storage system produced by Tesla \nand designed to stabilize power grids, store renewable energy, and replace fossil fuel peaker plants.\n•\n“megawatt” refers to one million watts.\n•\n“Merlin” refers to the Merlin family of engines, which include vacuum and sea level variants and are fully \ndeveloped and produced by the Company.\n•\n“microgravity” refers to very weak gravity, such as that experienced in orbiting spacecraft, which allows for \nunique manufacturing processes like creating ultra-pure materials.\n•\n“Mid-Earth Orbit” or “MEO” refers to an orbital region between approximately 2,000 km and 35,786 km above \nEarth’s surface.\n•\n“mission success rate” refers to the proportion of Falcon 9 and Falcon Heavy missions that achieve their \nprimary objectives. This term does not include Starship flight tests.\n•\n“mobile network operators” or “MNOs” refers to the local entities of the companies that provide mobile phone \nservices to customers, with whom SpaceX partners to offer satellite-to-mobile connectivity. The term may also \ninclude mobile virtual network operators, where applicable. \n•\n“Mobile Satellite Service” refers to providing wireless voice, messaging, and data connectivity to, from, or \nbetween mobile devices by using orbiting satellites rather than terrestrial cell towers.\n•\n“Moore’s Law” refers to an observation, not a physical law, that the number of transistors on a microchip \ndoubles roughly every two years, leading to exponentially faster, smaller, and cheaper electronics.\n•\n“orbital AI compute” refers to artificial intelligence computing infrastructure contemplated to be deployed in \nspace, consisting of satellite constellations that act as orbital data centers, harnessing solar energy for power and \nleveraging the space environment for cooling. We expect to begin deploying our orbital AI compute satellites as \nearly as 2028.\n•\n“payload” refers to the portion of a vehicle’s total mass that consists of the cargo, passengers, satellites, or other \nmission-specific items being transported and that reaches the target orbit or destination. Payload is distinct from \ntotal mass (also referred to as gross mass or initial mass) which is the entire weight of the vehicle, including the \npayload, fuel / propellant, structure, engines, and any other items, at the start of a journey.\n•\n“payload capacity to orbit” refers to a theoretical payload capacity that a particular launch vehicle is capable of \ndelivering to a specified orbit (e.g., LEO or GEO) or celestial body (e.g., Mars) under specific conditions, which \norbit is derived from advanced computer simulations and performance modelling that apply to particular \nmission scenarios and trajectory assumptions. Actual payload capacity for a given mission may be different and \nwill vary depending on numerous mission parameters and operational factors, including mission-specific \ntrajectory requirements, atmospheric conditions, vehicle and payload configuration, risk profile, and applicable \nregulatory or range-safety limitations.\n•\n“Power Usage Effectiveness” refers to the global standard metric for data center efficiency, calculated as the \nratio of total facility power to IT equipment power.\n\nviii\nTable of Contents\n•\n“propellant” refers to the chemical substance or combination of substances consumed by a rocket engine to \nproduce thrust by generating high-velocity exhaust gases.\n•\n“propulsive landing” refers to the process of landing a rocket or spacecraft using its engines to control descent \nand achieve a soft, vertical touchdown.\n•\n“radiative cooling” refers to a cooling method that dissipates heat by radiating it into space, often passively, and \nis expected to be used in orbital AI compute infrastructure.\n•\n“Raptor engines” refers to high-performance family of engines developed and produced by the Company, such \nas those powering the Super Heavy booster and Starship upper stage, designed for efficiency and reusability.\n•\n“reflight” refers to the reuse of a flight-proven rocket booster or upper stage that has successfully completed a \nprior space mission, and has been recovered, refurbished, and certified for subsequent launches. \n•\n“return payload mass” refers to the theoretical payload mass that a particular spacecraft is capable of bringing \nback to Earth from a specified orbit under specific conditions, which is derived from advanced computer \nsimulations and performance modelling that apply to particular mission scenarios and trajectory assumptions. \nActual payload that can be returned for a given mission may be different and will vary depending on numerous \nmission parameters and operational factors, including mission-specific trajectory requirements, atmospheric \nconditions, vehicle and payload configuration, risk profile, and applicable regulatory or range-safety limitations.\n•\n“rideshare” refers to a type of space mission where multiple satellites or payloads from different customers are \nlaunched together on a single rocket, sharing the cost.\n•\n“satellite-to-mobile” refers to a service that provides global cellular connectivity directly to everyday \nsmartphones via satellites, supplementing terrestrial networks and eliminating mobile dead zones.\n•\n“Service Line” refers to an individual instance of Starlink broadband internet service provisioned under a \nsubscription plan, generally associated with a specific Starlink User Terminal or group of terminals, and billed \naccording to Starlink’s service plans and terms of service. The number of Service Lines is distinct from the \nnumber of unique devices, account holders, end users, or physical persons.\n•\n“space economy” refers to economic activities related to the development, production, and operation of goods \nand services that utilize or support space-based infrastructure and capabilities, including launch services, \nsatellite systems, and space-enabled technologies.\n•\n“Space segment” refers to our Space segment, which includes our customer launch operations and offerings \nsuch as Falcon, Dragon, and Starship.\n•\n“SpaceX Bridge Loan” refers to the Bridge Loan Credit Agreement, dated as of March 2, 2026, by and among \nthe Company, as borrower, the guarantors from time to time party thereto, the lenders from time to time party \nthereto and Goldman Sachs Bank USA, as administrative agent and a lender.\n•\n“SpaceX Credit Facility” refers to our Credit Agreement, dated as of February 7, 2025, by and among the \nCompany, as borrower, the guarantors from time to time party thereto, the lenders from time to time party \nthereto and Bank of America, N.A., as administrative agent, as amended by the First Amendment to Credit \nAgreement and Waiver, dated as of March 2, 2026, by and among the Company, the lenders party thereto, and \nthe other L/C Issuers party thereto. In May 2026, the SpaceX Credit Facility was amended to increase the \nborrowing capacity and extends the maturity date.\n•\n“spectrum” refers to the range of electromagnetic frequencies used for wireless communication, with licensed \nspectrum granting use for specific services.\n•\n“Starlink” refers to our global Low-Earth Orbit satellite constellation and broadband network designed to \ndeliver high-speed, low-latency internet connectivity worldwide.\n\nix\nTable of Contents\n•\n“Starlink Consumer Broadband” refers to a category of Starlink active users encompassing both individual \nresidential users (households and personal use) and small-to-medium-sized businesses.\n•\n“Starlink Fixed Site” refers to a category of Starlink active users encompassing exclusively enterprise \nbusinesses.\n•\n“Starlink Kit” refers to a set of products needed to connect to the Starlink network, typically including a Starlink \nUser Terminal and accessories.\n•\n“Starlink Mobile” refers to a service that provides cellular connectivity directly to everyday smartphones via \nsatellites, supplementing terrestrial networks and substantially reducing mobile dead zones.\n•\n“Starlink Subscriber” refers to a unique Service Line that is directly assigned to a Starlink.com account \nregistered to a person or entity that does not have a direct, negotiated agreement with the Starlink sales team.\n•\n“Starlink User Terminal” refers to a device developed by the Company that connects to the Starlink satellite \nconstellation to deliver high-speed, low-latency internet.\n•\n“Starshield” refers to a secure satellite network designed specifically for government customers and national \nsecurity applications.\n•\n“Starship” refers to a fully reusable, super heavy-lift launch vehicle. Starship can be used to describe the stacked \nvehicle (booster and upper stage) or upper stage only. We expect Starship to commence payload delivery to \norbit in the second half of 2026.\n•\n“Sun-synchronous orbit” refers to a type of polar orbit around a planet in which a satellite passes over any given \npoint of the planet’s surface at the same local mean solar time, allowing for consistent solar energy capture.\n•\n“Super Heavy” refers to the reusable first-stage booster for the Starship launch vehicle, powered by 33 Raptor \nengines.\n•\n“SuperGrok” refers to our subscription-based Grok service that provides users with expanded access to Grok \nmodels and related tools.\n•\n“SuperGrok Heavy” refers to our subscription-based Grok service tier that provides users with expanded access \nto Grok models and related tools, including higher usage limits relative to SuperGrok.\n•\n“SuperGrok Lite” refers to our subscription-based Grok service tier that provides users with basic access to \nGrok models and related tools.\n•\n“supported accounts” refers to, when used in the context of our X platform and Grok, a human, bot or similar \naccount that logged into the X platform or Grok. The total number of supported accounts may include fake, \nspam or bot accounts if they are active.\n•\n“Tbps” refers to terabits per second.\n•\n“Terafab” refers to a chip manufacturing initiative with a long-term goal of producing one terawatt of compute \nhardware each year.\n•\n“terawatt” refers to one trillion watts.\n•\n“terawatt-scale” refers to infrastructure, systems, or facilities that are designed to generate, transmit, or consume \napproximately one terawatt or more of electrical power capacity.\n•\n“terrestrial AI compute” refers to artificial intelligence computing infrastructure located on Earth, such as data \ncenters and supercomputers, used for training and running AI models.\n\nx\nTable of Contents\n•\n“throughput” refers to the rate at which data or material can be processed or transferred, often referring to \nnetwork capacity or production output.\n•\n“tokens” refers to the basic units of text or images processed and generated by an AI model, used to measure AI \nworkload, throughput, and computational output.\n•\n“watt” is the International System of Units (SI) unit for measuring power, representing the rate of which energy \nis transferred, used or generated. \n•\n“X” refers to our real-time information, entertainment, and free speech platform that serves as a foundational \ndistribution and data engine for the AI ecosystem.\n•\n“xAI” refers to X.AI Holdings LLC or, prior to the xAI Merger, X.AI Holdings Corp., together with its \nsubsidiaries, as applicable.\n•\n“xAI Gov” refers to our offering that provides government customers with access to Grok models and related \ntools for use in governmental applications, workflows, and services.\n•\n“X Premium+” refers to our highest subscription tier for X.\nOur Satellite Names\nWe use a “V” naming convention for our Starlink satellites (such as V1, V2 Mini, and V3). Although we use a \nsimilar “V” naming convention for both our broadband and mobile satellite constellations, these are distinct systems. \nOur broadband satellites are designed to deliver high-speed internet services to homes, businesses, and vehicles, \nwhile our mobile satellites are designed to connect directly to cell phones from space. These constellations have \ndifferent performance requirements and technical specifications. Please see below the terms used for our satellites \nthroughout this prospectus:\n•\n“V1 Mobile satellites” refers to our mobile satellites that provide light data, text messaging (SMS), and over-\nthe-top voice services (e.g., WhatsApp and FaceTime) to mobile devices. V1 Mobile satellites are currently in \norbit and are launched on our Falcon rockets.\n•\n“V2 Mini satellites” refers to our current broadband satellites that provide high-speed internet to homes, \nbusinesses, and vehicles. V2 Mini satellites are currently in orbit and are launched on our Falcon rockets.\n•\n“V2 Mobile satellites” refers to our next-generation mobile satellites, which are designed to provide more \ncomprehensive satellite-to-mobile services, including broadband data and IoT connectivity and which we expect \nto begin deploying on Starship in 2027.\n•\n“V3 satellites” refers to our next-generation Starlink broadband satellites, which are designed to offer one Tbps \nof downlink capacity per satellite and which we expect to begin deploying on Starship in the second half of \n2026.\n\n1\nTable of Contents\nPROSPECTUS SUMMARY\nThis summary highlights information contained elsewhere in this prospectus. This summary is not complete and \ndoes not contain all of the information you should consider before investing in our Class A common stock. You \nshould read this entire prospectus carefully before making an investment decision. You should carefully consider, \namong other things, the sections titled “Risk Factors,” “Management’s Discussion and Analysis of Financial \nCondition and Results of Operations,” and our consolidated financial statements and the related notes included \nelsewhere in this prospectus. Some of the statements in this summary constitute forward-looking statements. Please \ncarefully consider “Cautionary Statement Regarding Forward-Looking Statements.”\n“You want to wake up in the morning and think the future is going to be great—and that’s what being a space-faring \ncivilization is all about. It’s about believing in the future and thinking that the future will be better than the past. And \nI can’t think of anything more exciting than going out there and being among the stars.”\n—Elon Musk\nOur Mission\nOur mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true \nnature of the universe, and to extend the light of consciousness to the stars. To do this, we have formed the most \nambitious, vertically integrated innovation engine on (and off) Earth with unmatched capabilities to rapidly \nmanufacture and launch space-based communications that connect the world, to harness the Sun to power a truth-\nseeking artificial intelligence that advances scientific discovery, and ultimately to build a base on the Moon and \ncities on other planets.\nOverview\nFounded in 2002, SpaceX is the only company building the integrated hardware and software infrastructure of the \nfuture across space, connectivity, and AI. At our core, we are builders. We design, manufacture, launch, and operate \nproducts and services built on cutting-edge technologies, including the world’s most advanced rockets and \nspacecraft. We safely and reliably transport astronauts, satellites, and other payloads on missions that benefit life on \nEarth. Since 2023, we have launched more than 80% of mass to orbit for the world each year with an over 99% \nmission success rate with Falcon rockets. We also operate a high-speed, low-latency global broadband data and \ncommunications network powered by approximately 9,600 Starlink broadband and mobile satellites in Low-Earth \nOrbit, delivering connectivity to millions of consumer, enterprise, and government customers across 164 countries, \nterritories, and other markets, as of March 31, 2026. Using our dedicated satellite-to-mobile constellation, we offer \nconnectivity services, supplementing terrestrial networks and substantially reducing mobile “dead zones” across \napproximately 30 countries.\nWith the potential to improve both space exploration and life on Earth, AI accelerates SpaceX’s mission to make life \nmultiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars. \nxAI, which was founded in 2023 and acquired by SpaceX in early 2026, is now an integral pillar of our vertically \nintegrated company. We are rapidly constructing AI compute infrastructure—starting on Earth with the goal of \nextending to space—at industry-leading pace and cost efficiency. Our infrastructure supports training and inference \nfor Grok, which has emerged as one of the world’s most advanced frontier models. Grok is designed as a truth-\nseeking AI model, built on our founder Elon Musk’s mission to enable humanity to understand the universe. We \nbelieve that accomplishing this mission requires a truth-seeking approach to AI. We define truth seeking as the \nactive, relentless pursuit of what is objectively true about reality, and grounded in evidence, logic, empirical data, \nand first principles thinking. Our goal is to understand and explain what the universe appears to be doing, as \naccurately as current knowledge allows. Within two years of its initial model release, Grok achieved frontier-level \nperformance in scientific reasoning, as measured by its GPQA Diamond score, an industry benchmark that evaluates \nAI models on a standardized set of questions written and validated by experts, on a faster timeline than reported by \nother leading model providers. Grok also benefits from integration with X, our real-time information, entertainment, \nand free speech platform, which serves as a foundational distribution and data engine for our AI ecosystem and \nfurther enhances Grok’s truth-seeking objective.\n\n2\nTable of Contents\nWe believe that space represents the largest economic frontier in human history. Connectivity infrastructure in space \nis designed to help everyone on Earth have access to education, healthcare, entertainment, and communications, and \nto enable people to overcome many traditional limits, such as physical and political borders. We believe AI \ninfrastructure in space can utilize the virtually limitless power of the Sun and thereby enable the use of AI as a \ntransformative force for understanding the universe and improving the daily lives of all humans. We believe the \nconvergence of these areas will enable an unprecedented expansion in the global economy, leading to an age of \nabundance. Our innovations and technological advancements are redefining industries on Earth, while we aim to \ncreate new ones on the Moon, Mars, and beyond. We are truly building the infrastructure of the future.\n•\nSpace. SpaceX is the only company that has cracked the code on accessing space at scale, revolutionizing an \nindustry characterized by decades of stagnation, risk aversion, and economically perverse cost structures. \nSpaceX upended this paradigm through the application of first-principles thinking, which rejects industry \nassumptions and builds solutions based on the fundamental laws of physics. Our intense, mission-driven, \nengineering-first culture and focus on extreme vertical integration have propelled us to achieve what many \ndeemed impossible. We pioneered high-cadence, reliable, and affordable access to space with our Falcon family \nof rockets. In 2015, we established at least a 10-year lead over the industry by successfully landing our first \nFalcon 9 booster back from space before anyone else. Space flight that historically cost billions per launch now \ncosts in the tens of millions, fundamentally reducing the cost of space access and providing the opportunity to \nbuild new enterprises in space.\n•\nConnectivity. Since activating service for customers in 2020, Starlink has rapidly expanded global access to \nhigh-speed internet, prioritizing underserved rural and remote communities worldwide. While building \nterrestrial networks in such communities can be prohibitively expensive, Starlink is capable of delivering \nbroadband connectivity anywhere on Earth with just a Starlink Kit. As of March 31, 2026, we had \napproximately 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, operating the world’s most \nadvanced broadband constellation providing internet connectivity to approximately 10.3 million Starlink \nSubscribers across 164 countries, territories, and other markets. In January 2024, we also began deploying our \nStarlink Mobile constellation that utilizes separate Starlink satellites with satellite-to-mobile capabilities, \nsubstantially reducing mobile “dead zones” around the world. As of March 31, 2026, our dedicated satellite-to-\nmobile constellation of approximately 650 V1 Mobile satellites provides satellite-to-mobile data, over-the-top \nvoice, and messaging services to approximately 7.4 million monthly unique devices across approximately 30 \ncountries.\n•\nAI. We were the first company to deploy a coherent gigawatt-scale AI training cluster. For complex reasoning \nand agentic workloads, compute is directly correlated with the quality of intelligence and task completion speed. \nIn under two years, we have established a dual advantage in both cost efficiency and deployment speed at scale. \nBy owning the compute infrastructure and vertically integrating across the full AI stack, we can train and iterate \nour frontier models at lower cost and higher velocity and accelerate development cycles. This eliminates \nexternal bottlenecks and drives rapid, continuous improvements in model performance. We believe this \ncombination of our state-of-the-art AI compute infrastructure, our truth-seeking frontier model, and our access \nto real-time data on X creates a significant strategic advantage. Our integrated AI platforms across Grok and X \nhave over 1.3 billion supported accounts active in the last twelve months ended March 31, 2026, including \napproximately 550 million MAUs and generating approximately 350 million daily posts. Of our MAUs, we had \napproximately 117 million MAUs that used Grok’s AI features as of March 31, 2026. Grok’s deep integration \nwith X enables freshness, relevance, and contextual awareness that we believe is a competitive differentiator. \nThis direct, real-time access to the information and human discourse on X enhances Grok’s truth-seeking \ncapabilities by grounding outputs in up-to-date knowledge and diverse viewpoints. As a result, we believe Grok \ncan deliver the most objective and relevant insights and best serve high-frequency, high-value use cases across \nconsumer and enterprise AI applications.\nWe have created distinct new markets across the space, connectivity, and AI industries by building the integrated \nhardware and software infrastructure of the future and by combining our broad range of capabilities. For example, \nSpaceX’s recent acquisition of xAI unites SpaceX’s launch capabilities and global connectivity network with xAI’s \nAI development capabilities. Specifically, we believe SpaceX’s reusable rockets, scaled satellite manufacturing, and \noperational expertise can enable the cost-effective and rapid deployment of massive AI compute satellite\n\n3\nTable of Contents\nconstellations—with potentially millions of satellites—for orbital data centers. We believe these AI compute \nsatellites in Sun-synchronous orbit will be able to handle energy-intensive AI workloads, such as inference demand, \nat far greater scale and efficiency than terrestrial alternatives, with Starlink providing low-latency, global \nconnectivity linking these orbital AI systems to people around the world and delivering real-time intelligence. We \nexpect to begin deploying our orbital AI compute satellites as early as 2028.\nOur financial results reflect the strength of our operating model and our ability to create and scale multiple new \nbusinesses:\n•\nFor the three months ended March 31, 2026, we generated revenue on a consolidated basis of $4,694 million, \nloss from operations of $(1,943) million and Adjusted EBITDA of $1,127 million. In 2025, we generated \nrevenue on a consolidated basis of $18,674 million, loss from operations of $(2,589) million and Adjusted \nEBITDA of $6,584 million. Our Space and Connectivity segments contributed the substantial majority of our \nconsolidated revenue in the three months ended March 31, 2026 and the year ended December 31, 2025, \ndemonstrating the benefits of their scale and operating leverage in our vertically integrated business model; \n•\nFor the three months ended March 31, 2026, our Space segment generated revenue of $619 million, loss from \noperations of $(662) million, and Segment Adjusted EBITDA of $(351) million. In 2025, our Space segment \ngenerated revenue of $4,086 million, loss from operations of $(657) million, and Segment Adjusted EBITDA of \n$653 million. Additionally, our Space segment funded $930 million and $3,004 million in research and \ndevelopment expense during the three months ended March 31, 2026 and the year ended December 31, 2025, \nrespectively, for our next-generation Starship launch vehicle program. Starship is designed to enable a step-\nfunction change in our launch capability across reusability, payload capacity, and launch cadence, and is the key \nenabler of our long-term growth strategy by unlocking entirely new categories of missions;\n•\nFor the three months ended March 31, 2026, our Connectivity segment generated revenue of $3,257 million, \nincome from operations of $1,188 million, and Segment Adjusted EBITDA of $2,087 million. Our Connectivity \nsegment, primarily driven by Starlink, generated revenue of $11,387 million, income from operations of $4,423 \nmillion, and Segment Adjusted EBITDA of $7,168 million in 2025, representing year-over-year growth of \n49.8%, 120.4%, and 86.2%, respectively, benefiting from subscriber growth, increasing enterprise adoption, and \ncontinued improvement in network efficiency;\n•\nIn our newly acquired AI segment, we plan to prioritize growth and investment to capture significant \nopportunities in AI applications and compute infrastructure. For the three months ended March 31, 2026, our AI \nsegment generated revenue of $818 million, loss from operations of $(2,469) million, and Segment Adjusted \nEBITDA of $(609) million. In 2025, our AI segment generated revenue of $3,201 million, loss from operations \nof $(6,355) million, and Segment Adjusted EBITDA of $(1,237) million, reflecting its earlier stage of \ndevelopment and continued investments to support long-term growth opportunities in AI; and\n•\nFor the three months ended March 31, 2026, capital expenditures for our Space segment was $1,052 million, for \nour Connectivity segment was $1,332 million and for our AI segment was $7,723 million. In 2025, capital \nexpenditures for our Space segment was $3,832 million, for our Connectivity segment was $4,178 million and \nfor our AI segment was $12,727 million.  \nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “Management’s Discussion \nand Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for additional \ninformation on our non-GAAP financial measures, including reconciliations of Segment Adjusted EBITDA to \nsegment income (loss) from operations, the most directly comparable GAAP measure. \nWhy This Matters Now\nFor the entirety of its existence, human civilization has lived on a single celestial body: Earth. The current paradigm, \nin which human civilization is confined to one planet, exposes humanity to existential threats that are unpredictable \nand uncontrollable on a planetary scale. By moving beyond the only home we have ever known, we ensure species-\nlevel redundancy and that the light of consciousness will not be tied to a single planet subject to the inevitable \nhazards of a harsh and vast universe. We do not want humans to have the same fate as dinosaurs. We want to give\n\n4\nTable of Contents\nthem a reason to look ahead with excitement, with the prospect that we are entering an age of abundance with an \nendlessly prosperous and exciting future.\nFor decades, a reality where humanity travels between the planets and the stars has felt tantalizingly close but still \nlocked in the pages and screens of science fiction. We are capable of better understanding the universe, exploring the \nuniverse, and ultimately making life multiplanetary across the universe. We are becoming a civilization with the \nability to reach beyond Earth’s cradle and begin to inhabit other worlds. While we remain dedicated to this \nfundamental mission, our progress in accessing space continues to yield opportunities that enrich life on Earth. For \nexample, by dramatically reducing the cost of access to space, we have been able to expand our mission to address \nsome of the Earth’s most pressing challenges, including bridging the digital divide by aiming to connect over three \nbillion unconnected people to the internet and humanity’s collective knowledge.\nThe rapid emergence of the AI era intensifies the urgency of our mission, as AI has the potential to accelerate not \nonly space exploration, but also transformative societal advancements on Earth. However, AI’s ability to \nrevolutionize human potential is directly dependent on meeting exponentially increasing resource demands. On \nEarth, the massive expansion of data center capacity to support growing compute demand is significantly outpacing \nelectricity generation, which was effectively flat in the United States for approximately 15 years, growing at a \ncompound annual growth rate of 0.1% from 2008 to 2023. Despite the recent increase in electricity demand from AI \ndata centers, electricity generation in the United States has grown at an annual rate of less than 3% between 2023 \nand 2025, while electricity generation in China has grown at approximately twice that rate in the same time period. \nThis supply and demand imbalance is already imposing unsustainable strains on terrestrial power grids, supply \nchains, and the environment. The Sun contains approximately 99.8% of the solar system’s energy and, as a result, \nwe believe it is the only truly scalable solution to terrestrial energy constraints in the age of AI. Harnessing this \nenergy in space is considerably more efficient than on land. Space-based solar arrays can generate more than five \ntimes the energy per unit area of terrestrial solar due to continuous illumination, lack of atmospheric interference, \nand optimal orientation. SpaceX is well-positioned to capture this space-based solar energy through our ability to \nrapidly access Sun-synchronous orbit through our satellite manufacturing scale and launch capability. As a result, \nwe are expanding our footprint and harnessing the vast resources of space that are essential to sustaining \ntechnological development. Our goal is to ensure that AI becomes a force for human flourishing and a benefit to \ncivilization, rather than a catalyst for terrestrial resource depletion and instability. \nWe believe that our current space efforts will catalyze transformative breakthroughs that could reshape terrestrial \nindustries and lead to the emergence of new trillion-dollar markets on the Moon, Mars, and beyond. In particular, we \nbelieve our goal of establishing a lunar presence will enable terawatt-scale annual AI compute growth, support \ndeeper space exploration and industrialization, and serve as a stepping stone to establishing a civilization on Mars. \nWe believe the next paradigm shift for humanity is the creation of a resilient, perpetually expanding spacefaring \ncivilization that drives continuous innovation across new frontiers, ultimately propelling us to Kardashev Type II \nstatus—we believe we are capable of unlocking an era of unprecedented economic expansion, while also \ncontributing to the safeguards of humanity’s future against existential risk. \nWho We Are\nSpaceX combines the most transformative and critical technologies in human history, including reusable rockets, a \nfully global internet service, satellite-to-mobile communications, a real-time information, entertainment and free \nspeech platform, and a truth-seeking AI system designed to accelerate scientific discovery and augment human \ncapabilities. \nOur Unparalleled Launch Capabilities\nSince our founding in 2002, SpaceX has cracked the code on accessing space at scale, transforming an industry \ncharacterized by decades of stagnation, risk aversion, and economically perverse cost structures. We design, \nmanufacture, launch, and refurbish reusable launch vehicles that provide cost-efficient, reliable, and high-cadence \naccess to space for our own purposes as well as for third-party commercial and government customers. Our \nextensive vertical integration and end-to-end control over the entire value chain, from design to launch to operations, \nallows us to achieve unprecedented speed and cost efficiency.\n\n5\nTable of Contents\nAs of March 31, 2026, SpaceX had launched a total mass to orbit of approximately 7,400 metric tons with an over \n99% mission success rate across our Falcon rockets. We have completed approximately 650 orbital space launches, \nand over 540 of those launches were completed by a flight-proven Falcon rocket. With the first successful launch of \nFalcon 1 in 2008, we became the first private company to successfully launch a liquid-fueled rocket to Earth’s orbit. \nIn December 2015, we achieved what many deemed impossible: landing a rocket launched to space back on Earth. \nBy 2017, we were routinely recovering and reusing the Falcon 9 first-stage booster post-launch, delivering another \nstep-function drop in space access costs via groundbreaking reusability. As of March 31, 2026, our Falcon 9 rockets \nhave demonstrated the ability to refly a first-stage 34 times. With the future deployment of Starship, which is \ndesigned to be the world’s first fully and rapidly reusable spacecraft, we aim to reduce the cost to reach orbit by 99% \nor more relative to the historical average launch cost, establishing the most affordable and scalable path to creating \nnew opportunities in space, such as orbital AI compute and Mars exploration.\nOur principal launch vehicles and spacecraft include:\n•\nFalcon 9. As the world’s first orbital-class rapidly reusable rocket, Falcon 9 was first launched in 2010 and has \na payload capacity to LEO of approximately 23 metric tons when fully expendable. Falcon 9 has completed \napproximately 620 orbital space launches as of March 31, 2026, and an over 99% mission success rate. \nAccording to NASA, the first version of Falcon 9 in 2010 reduced launch cost to approximately $2,700 per \nkilogram, approximately 85% less than the historical average launch cost of $18,500 per kilogram.\n•\nFalcon Heavy. Falcon Heavy first launched in 2018 when it put a Tesla all-electric sports car (“Tesla \nRoadster”) and its mannequin passenger, known as Starman, into orbit around the Sun. With a payload capacity \nto LEO of approximately 64 metric tons, Falcon Heavy is a partially reusable super heavy-lift launch vehicle \ndesigned to deliver large payloads to orbit. Falcon Heavy is one of the most powerful operational rockets in the \nworld measured by liftoff thrust, with 11 launches as of March 31, 2026 and a 100% mission success rate. \n•\nDragon. Launched by Falcon 9 in 2012, our Dragon spacecraft became the first commercial spacecraft to \ndeliver cargo to and from the International Space Station, an orbiting laboratory that serves as a research facility \nand destination for human spaceflight, and, eight years later, the first privately built vehicle to fly humans to the \norbiting laboratory. Since 2020, our Dragon spacecraft has safely flown 78 crewmembers from 20 countries.\n•\nStarship. First launched in 2023, Starship is designed to be a fully reusable, super heavy-lift launch vehicle. \nStarship V3 is designed to deliver 100 metric tons to Earth’s orbit in a fully reusable configuration while \nenabling rapid turnaround times akin to commercial aviation. Future generations of Starship are being designed \nto double this payload capacity. To date, we have executed 11 Starship flight tests. We have also scheduled a \n12th flight test, which will debut the next generation Starship vehicle and Super Heavy booster, powered by the \nnext evolution of our Raptor engine and launching from a newly designed pad at Starbase. We expect Starship \nto commence payload delivery to orbit in the second half of 2026. We have achieved innovative milestones \nsuch as catching a booster using “chopstick” arms on the same tower it launched from. We expect this \ncapability will facilitate rapid refurbishment and reuse, allowing for multiple launches per day at reduced costs.\nUpon achieving rocket reusability, we recognized the immense potential of our launch business to enable new \nrevenue streams. This led to the development of Starlink, our global satellite internet constellation, consisting of \nthousands of LEO satellites designed to provide high-speed, low-latency broadband connectivity to underserved \nareas worldwide. Although the concept of using satellites for global internet connectivity dates back decades, \ntechnical challenges and the prohibitive cost of accessing space and deploying the satellites required for capacity and \nglobal coverage historically rendered attempts to provide such connectivity economically unviable. Within three \nyears of our first satellite launch in 2019, we solved the technical and production challenges of the satellites, and \nwithin five years, we had deployed the largest LEO constellation in existence. Today, Starlink is the sole low-\nlatency network available globally. By combining increasing launch cadence, expanding cargo capacity, and \ndeclining unit costs—driven by rapid reusability—we have generated a compounding competitive advantage. This \nnot only fortifies our core business, but also provides vast new market opportunities uniquely enabled by space.\n\n6\nTable of Contents\nOur Leading Capabilities Across Space, Connectivity, and AI\nSpace. While our launch capabilities support our other businesses, such as Starlink Consumer Broadband and \nStarlink Mobile, we also sell launches to third-party customers. We offer launch services to commercial, civil, \ninternational and government customers through our reusable Falcon 9 and Falcon Heavy rockets for satellite, cargo, \nand crew missions. We are the primary launch provider for the U.S. government. In 2025, we launched 11 of 12 \nNational Security Space Launch (“NSSL”) medium and heavy lift missions and all five U.S. crew and cargo \nmissions to the International Space Station for NASA. \nConnectivity. Our Connectivity business includes Starlink Consumer Broadband, Enterprise Solutions, Government \nSolutions, and Starlink Mobile.\n•\nStarlink Consumer Broadband. We operate the world’s largest and most advanced space-based internet \nbroadband service. We provide fiber-like download speeds—at a median of 225 Mbps during peak hours for \nresidential users as of March 31, 2026—and the technological capability to provide service everywhere on \nEarth, including the poles. This service quality is enabled by our vast network of approximately 9,600 Starlink \nbroadband and mobile satellites in Low-Earth Orbit, which accounted for approximately 75% of all active \nmaneuverable satellites in orbit as of March 31, 2026. We expect to commence deploying our next-generation \nV3 satellites, designed to offer one Tbps of downlink capacity per satellite, using Starship in the second half of \n2026. We expect that a single Starship launch will be capable of deploying up to 60 V3 satellites to LEO, \nrepresenting a potential twenty-fold increase in Starlink downlink capacity deployed relative to a Falcon 9 \nlaunch. \n•\nEnterprise Solutions. SpaceX is a critical partner to a wide array of enterprises. We offer Starlink’s high-\nspeed, low-latency, reliable internet services to enterprise customers across industries including construction, \nagriculture, retail, telecom, hospitality, aviation, maritime, and land mobility. Starlink’s unique capabilities are \nwell‑suited for deployments across field offices, remote worksites, research stations, drilling rigs, rural \nhospitals, aircraft, cruise ships, trains, and hotels. We also serve a broad fixed‑site customer base across \nindustries such as retail and financial services that require high availability for critical operations as well as \nreliable connectivity in remote or hard-to-serve locations. \n•\nGovernment Solutions. For our government customers, we provide high-speed, resilient connectivity for \npublic services, social impact, humanitarian efforts, and disaster response in even the most remote and \nchallenging environments. Separately with Starshield, we have leveraged our commercial LEO satellite \nconstellation engineering learnings and operational experiences to develop a secure, dedicated satellite network \ndesigned specifically for United States Government customers and national security applications. \n•\nStarlink Mobile. We provide satellite-to-mobile connectivity, supplementing terrestrial networks and \nsubstantially reducing mobile “dead zones” across approximately 30 countries. Through our partnerships with \napproximately 30 MNOs on six continents, we enable consumers, businesses, and public-sector customers to \nuse their existing phones in more places, support critical connectivity during disasters and power outages, and \nopen new applications for low-bandwidth mobile and IoT devices.\nAI. We operate a highly vertically integrated AI platform.\n•\nAI Compute Infrastructure. xAI has established a leading position in building and scaling terrestrial AI \ncompute infrastructure, becoming the first company to deploy a coherent gigawatt-scale AI training cluster. We \nown and operate what we believe to be the largest AI training data center clusters on Earth, including \nCOLOSSUS and COLOSSUS II. The addition of Terafab, a chip manufacturing initiative with Tesla and Intel, \naims to further extend our vertical integration to chip design and manufacturing to alleviate potential future chip \nshortages at SpaceX, optimize compute performance, and potentially reduce overall compute costs. In \nconnection with such collaboration, we have agreed with Tesla on a general framework for the future \ndevelopment of Terafab. Any specific projects undertaken pursuant to this framework will be subject to separate \nnegotiations and agreements (including any development timelines, milestones and capital expenditures) and \nhave not yet been determined. We believe that the key constraints in the continued growth of AI are physical—\n\n7\nTable of Contents\nchip manufacturing, data center infrastructure, and power generation; the future of AI will be determined by the \ncontrol of the physical stack.\n•\nTruth-Seeking Frontier Model. Since launching Grok-1 in November 2023, we have released four major \nversions and notable variations thereof, achieving one of the fastest iteration cycles in the industry. Within two \nyears of its initial model release, Grok achieved frontier-level performance in scientific reasoning, as measured \nby its GPQA Diamond score, an industry benchmark that evaluates AI models on a standardized set of \nquestions written and validated by experts, on a faster timeline than reported by other leading model providers. \nBuilding on this trajectory, we expect to continue scaling Grok through subsequent generations. Ongoing \ntraining of next‑generation models is expected to scale toward multiple trillions of parameters, which could \nrepresent a step change in reasoning in depth and overall intelligence. In this context, the number of parameters \nrefers to the scale of the model, where parameters are the internal numerical values, such as “weights,” that are \nadjusted during training to enable the model to recognize patterns and relationships in data. A larger number of \nparameters generally allows the model to capture more complex relationships, store greater amounts of \nknowledge, and achieve higher levels of reasoning capability. This accelerated rate of innovation stems from \nour highly vertically integrated stack: full ownership of training infrastructure; access to the world’s most \npowerful compute clusters; and relentless focus on truth seeking and real-world utility. A key competitive \ndifferentiator is Grok’s deep integration with X, enabling proprietary access to a real-time information stream of \napproximately 350 million daily posts, which enhances freshness, relevance, and contextual awareness for \nGrok. This direct, real-time access to the information and human discourse on X enhances Grok’s truth-seeking \ncapabilities by grounding outputs in up-to-date knowledge and diverse viewpoints. \n•\nConsumer and Enterprise Applications. We leverage our leading frontier models and compute infrastructure \nto deliver consumer and enterprise applications. Together with Tesla, we are also developing Macrohard, an \nagentic AI platform designed to be capable of fully emulating digital workflows and augmenting human \noperation of computers using sophisticated autonomous agents. We believe Macrohard will have the potential to \nfundamentally transform how companies are structured and operate, thereby allowing dramatic increases in \nhuman productivity. \nOur Repeatable Business Model\nOur business model is built on a repeatable, engineering-driven framework that combines our unparalleled launch \ncapabilities, extreme vertical integration, rapid iteration, and disciplined capital investment to create durable, large-\nscale businesses. We execute this framework through the following core principles:\n1.\nLeverage our unparalleled launch capabilities to enable massive scale;\n2.\nIdentify and create new trillion-dollar market opportunities;\n3.\nDesign a solution with world-class engineering and first-principles thinking;\n4.\nApply “The Algorithm” (make less dumb, delete, optimize, accelerate, automate);\n5.\nVertically integrate all the way to the end customer;\n6.\nContinuously drive cost down and throughput up; and\n7.\nGenerate significant cash flow and reinvest in the future. \nOur Engineering-First Culture\nWe are able to achieve transformative technological breakthroughs because we accept only the laws of physics as \nthe limiting factors to our work and mission. Our core approach is deeply rooted in first-principles thinking, which \nrejects any preconceived notions or experience-based norms. We have a track record of achieving what many have \ndeemed impossible. Some of our industry-defining achievements and historic milestones include: \n•\nThe first private company to develop and launch a liquid-fuel rocket to reach orbit (2008);\n•\nThe first private company to successfully dock a private spacecraft with the International Space Station (2012);\n•\nThe first to successfully propulsively land (2015) and refly orbital-class rocket boosters (2017);\n•\nThe first to begin deploying a large-scale LEO broadband satellite constellation (2019);\n•\nThe first private company to transport astronauts to orbit, returning America’s ability to fly astronauts to and \nfrom the International Space Station (2020);\n\n8\nTable of Contents\n•\nThe first to manufacture consumer-grade phased-array user terminals at scale (2022);\n•\nThe first to deploy a large-scale LEO satellite-to-mobile constellation (2025);\n•\nThe first to build a gigawatt-scale AI training cluster and largest coherent supercomputer (2026);\n•\nThe first gigawatt-scale Megapack battery installation (2026); and\n•\nThe only company capable of building orbital AI compute at scale.\nOur AI Compute Infrastructure Advantage and Growth Strategy\nWhy Compute Matters. We believe AI leadership will be defined by the ability to rapidly scale compute capacity to \nsupport exponential usage growth and frontier intelligence. The training and inference demanded by advanced AI \nmodels require substantial computational resources. Reasoning models introduced in 2024 demonstrated that \nallocating more computational resources and giving models more time to process during inference directly leads to \nhigher-quality intelligence. In addition, compute infrastructure with end-to-end, cluster-level coherence through tight \nintegration across software and hardware systems enables more efficient, stable, and higher-fidelity training and \ninference at scale—ultimately enhancing model intelligence and performance. Within inference, we expect \ncomputationally-intensive reasoning, agentic, and multi-modal workloads will continue to grow as a portion of \noverall usage. We therefore believe operators with superior model-to-compute integration—the ability to efficiently \nsupport and allocate compute across both training and inference workloads—are best positioned to win the AI race.\nSelf-Reinforcing Network Effects Among Lower Cost Per Token, Model Quality, and User Adoption. AI systems \nare ultimately constrained or differentiated by the cost, speed, and scale at which they can generate and process \ntokens. A “token” represents the fundamental unit of data consumed and produced by modern AI models. This is \nbecause lower cost per token enables more frequent model training, larger and more sophisticated models, longer \nchains of processing for reasoning and agentic workloads, and significantly higher inference volumes at \neconomically viable prices. This dynamic directly impacts model quality, responsiveness, and accessibility, while \nalso determining the ability to serve the rising global demand across consumer, enterprise, and mission-critical AI \napplications. This creates a self-reinforcing advantage in which lower token costs drive greater model quality and \nuser adoption, reinforcing AI leadership.\nCost of Compute is the Main Driver of Cost Per Token. The total cost per token is determined by the efficiency, \navailability, and unit economics of the underlying compute and the cost of building and operating compute \ninfrastructure. Improvement in the cost of building and operating this compute infrastructure—whether through \nlower data center construction cost, lower power infrastructure cost, shorter time to grid interconnection, or higher \ncluster-level throughput—translates directly into lower cost per token. Accordingly, for a given level of intelligence, \nwe expect the long-term economics of AI companies to be driven by the ability to consistently deliver bleeding-edge \ncompute at the lowest possible cost per token. Put simply, we view cost per token as a function of three primary \ninputs—the underlying AI model, the compute hardware, and energy, and we expect to have a competitive \nadvantage in the latter two cost components. We believe we have a pathway over time that will significantly reduce \ncompute hardware costs through continued vertical integration and development of proprietary chips, building on \nour experience designing custom silicon for our Starlink satellites. We also expect that the marginal cost of energy \nfor our AI compute satellites will be minimal because our satellites are powered by solar arrays in space. By driving \nthe energy component to minimal levels and pursuing improvements in compute hardware cost, we believe we can \nachieve a meaningfully lower overall cost per token in the future.\nWe Have a Dual Speed and Cost Advantage in Terrestrial AI Compute. We own and operate what we believe to be \nthe largest AI training data center clusters on Earth. Our AI compute facilities, COLOSSUS and COLOSSUS II, \ncollectively provide approximately 1.0 gigawatt of compute power, with additional power capacity available for data \ncenter operations. Our first-principles thinking enables us to build coherent compute at scale and at rapid speed with \nlower costs than most other companies in the industry. In order to bring compute clusters online as fast as possible, \nwe employ a vertically integrated, nimble approach to construction. We brought the first cluster of COLOSSUS \nonline in 122 days, repurposing the shell of an existing factory, and the first cluster of COLOSSUS II online even \nfaster in 91 days. As an illustrative comparison,  an industry benchmark to bring online a 100 megawatt greenfield \ndata center is approximately two years. We also demonstrated a significant improvement in cost efficiency, \nachieving data center construction costs for COLOSSUS II that are considerably lower than industry benchmarks on \na per megawatt basis.\n\n9\nTable of Contents\nWe Believe Orbital AI Can Accelerate Time to Power and Reduce Token Costs. The Sun contains approximately \n99.8% of the solar system’s energy and offers what we believe is the only truly scalable solution to the challenge of \naccelerating demand for compute relative to terrestrial energy constraints. The logical path forward is to move \npower-intensive AI workloads into orbit, where solar energy is near-constant and uninterrupted. With such \naccessibility to energy, we believe that our launch business will enable us to consistently activate the highest \nperforming hardware before our competitors without such access, shrinking the timeline to useful tokens on \nbleeding-edge hardware and sustaining our token cost advantage. We believe SpaceX is uniquely positioned to \ndeploy and operate data centers in orbit that can eventually achieve a lower cost than terrestrial data centers over \ntime due to our extreme vertically integrated approach across launch, satellite manufacturing at scale, network \nconnectivity, and terrestrial data center expertise.\nWe Believe We Are Well-Positioned to Deliver Orbital AI Compute. We believe orbital AI compute is an incredibly \ndifficult technical challenge that only we can solve at scale in the near term. We are the only company that has \nalready accomplished the key technical challenges associated with evolving connectivity satellites into AI compute \nsatellites. In our view, we are well-positioned to deliver a full-scale AI compute satellite constellation. Significant \nwork remains, but we are confident in our singular leadership position.\n•\nWe have unmatched satellite launch capabilities to enable deployment at scale. Deployment of 100 \ngigawatts per year via satellites carrying over 100 kilowatts of compute power per metric ton will require \nthousands of launches per year and the transport of approximately one million metric tons to orbit annually. The \nfully reusable nature of Starship positions us to be capable of launching this level of mass. Starlink Broadband \nV1 and V2 Mini satellites have already demonstrated launch survivability and high reliability under vibration, \nshock, g-loads, acoustic stress, and vacuum exposure, achieving 99.9% average uptime. \n•\nWe have already solved many of the significant technical hurdles to evolving connectivity satellites into \nAI compute satellites. Through our leading expertise of connectivity satellites—including mass production, \ndeployment, network operations, and inter-satellite lasers and mesh connectivity—we have already solved the \nhardest part in the development of AI compute satellites. Because AI compute satellites represent an evolution \nof spacecraft engineering already demonstrated through Starlink, we believe development of AI compute \nsatellites will be easier for us than for anyone else. Our existing Starlink constellation is another crucial enabler \nof orbital AI compute, as its global network allows data from our AI compute satellites to reach ground stations \nanywhere on Earth. \n•\nWe will use our proven Starlink in-orbit technology to optimize our orbital AI compute. In order to \noperate orbital AI compute satellites, we plan to build on our vast experience of operating approximately 9,600 \nStarlink broadband and mobile satellites in Low-Earth Orbit. In 2025 alone, Starlink satellites proactively \nperformed over 1,000 automated collision avoidance maneuvers per day guided by this technology to safely and \nefficiently operate the constellation. This operating model gives us control over workload placement across \nEarth and space while maintaining resilience through redundancy and fail safe systems. A high degree of \ncontrollability will allow the satellite to be optimized for brightness mitigation, disposal, and other modes of \noperation. \n•\nWe can manufacture our AI compute constellations at scale with rapid upgrade cycles. We have built one \nof the largest satellite manufacturing operations in the world. Our vertically integrated approach with limited \nreliance on third-party suppliers will be key to our mass-scaling efforts and should allow us to deploy the latest \nAI processors. We believe SpaceX will be the first and only company to manufacture satellites at the scale of \nautomotive manufacturing.\n•\nWe are building chip manufacturing capabilities to scale our access to AI compute hardware. We \nannounced a collaboration with Tesla in March 2026 to build the Terafab initiative with a long-term goal of \nproducing one terawatt of compute hardware each year. In connection with such collaboration, we have agreed \nwith Tesla on a general framework for the future development of Terafab. Intel joined the project in April 2026 \nand is expected to contribute its expertise in designing, fabricating, and packaging ultra-high performance chips \nto help Terafab scale. Any specific projects undertaken pursuant to this framework will be subject to separate \nnegotiations and agreements (including any development timelines, milestones and capital expenditures) and\n\n10\nTable of Contents\nhave not yet been determined. With this internal manufacturing capability, we plan to alleviate potential future \nchip shortages at SpaceX, especially as we develop orbital AI at scale, and design chips that are optimized for \nthe space environment. \n•\nWe can leverage our terrestrial experience to build and operate compute clusters and AI workloads at \nscale. We believe our experience operating compute infrastructure on Earth provides the technical and \noperational foundation to extend these capabilities into orbit. For example, we plan to subject compute hardware \nto extensive pre-deployment testing on Earth to identify early life failures before launch to reduce in-orbit \ndisruption. For compute hardware that does fail, we plan to leverage existing Starlink fleet management \nsoftware to reallocate traffic to other satellites and prevent cluster-level downtime. \nWe Believe Our Infrastructure is a Distinct Advantage in Delivering Superior AI. We expect the combination of \ncompetitive cost per token, our ability to deploy and operate data centers in orbit, and our strength in connectivity to \nresult in more scalable intelligence that is accessible globally at high speeds.\nOur Strengths \n•\nGlobal Leadership in Orbital Launch Services\n•\nUnrivaled Satellite and Connectivity Platform across Design, Manufacturing, Deployment, and Operations\n•\nTruth-Seeking AI Model Enhanced by Real-Time Data\n•\nExtreme Vertical Integration Enabling High Velocity and Superior Cost Efficiency at Scale\n•\nUnique Ability to Scale New Trillion-Dollar Markets Across Space, Connectivity, and AI\n•\nBusiness Models that Are Incredibly Difficult to Replicate\n•\nMission-Driven Culture and World-Class Talent\nOur Growth Strategies \nSpace\n•\nIncrease launch payload capacity\n•\nEstablish the lunar economy, including cargo transport, manufacturing, and energy production on the Moon\nConnectivity\n•\nGrow Starlink Broadband customers\n•\nExpand our Starlink Mobile offering\n•\nIncrease the capacity of our constellations\nAI\n•\nGrow consumer AI platform monetization\n•\nGrow X monetization\n•\nDeepen enterprise and government adoption\n•\nIncrease the scale of our terrestrial power and AI compute infrastructure\n•\nDeploy orbital AI compute at scale\n•\nDesign and manufacture our own chips\n•\nLaunch digital human augmentation\nFuture Markets\n•\nPoint-to-point terrestrial travel\n•\nSpace tourism \n•\nIn-orbit manufacturing\n•\nPassenger and cargo transport to the Moon and Mars\n•\nEnergy production on the Moon and Mars\n•\nManufacturing capabilities on the Moon and Mars\n•\nAsteroid mining\n\n11\nTable of Contents\nOur Market Opportunity\nWe believe we have identified the largest actionable total addressable market (“TAM”) in human history. We \nestimate that our quantifiable TAM is $28.5 trillion, consisting of $370 billion in Space from space-enabled \nsolutions; $1.6 trillion in Connectivity across $870 billion in Starlink Broadband and $740 billion in Starlink Mobile \nas well as additional opportunities in enterprise and government; $26.5 trillion in AI across $2.4 trillion in AI \ninfrastructure, $760 billion in consumer subscriptions, $600 billion in digital advertising, and $22.7 trillion in \nenterprise applications. For illustrative purposes of sizing our addressable market opportunity, we exclude China and \nRussia from our global estimates. \nSpaceX’s Estimated TAM by Segment\nOur Challenges\nWe face a number of challenges relating to our business and growth strategy and, ultimately, the achievement of our \nmission to make life multiplanetary, understand the true nature of the universe, and extend the light of consciousness \nto the stars. The pursuit of our mission drives our decision-making and forms the foundation of our business plan, \nwhich is  predicated on building, commercializing, and operating services and products at a scale that has not \npreviously been achieved. This objective requires us to develop and integrate complex and novel technologies, \ndevelop new processes and infrastructure, and coordinate across multiple suppliers, contractors, regulators, and \nstakeholders. Because we are attempting to execute at a scale for which there is no precedent, we face heightened \nuncertainty with respect to design, engineering, procurement, construction, commissioning, and operational \nperformance. In particular, our ability to execute our growth strategy is highly dependent on the successful \ndevelopment and scaling of Starship and the ability to increase our launch cadence, both of which are subject to \nchallenges and uncertainties inherent in the development and deployment of new and complex technologies. \nAdditionally, many of our initiatives described above under “Our Growth Strategies,” including those to develop \norbital AI compute at scale, manufacture AI chips at scale, establish a lunar economy, transport humans and cargo to \nthe Moon and Mars, and develop human augmentation systems, involve significant technical complexity, unproven \ntechnologies or technologies that do not exist, and such initiatives may not achieve commercial viability. Many of \nthe innovative products and services described elsewhere in this prospectus may ultimately be unsuccessful and may \nrequire great expense, innovations not yet achieved or technologies not yet developed. As a result, the timeline for \ncertain of our initiatives involving unproven or new innovations, including our goal of deploying 100 gigawatts of\n\n12\nTable of Contents\nannual compute power to orbit, the establishment of a lunar economy and interplanetary industrialization, and the \nlaunch cadence required to achieve these goals may be difficult or impossible to determine. Our growth strategy may \ntake longer to execute than anticipated, and you may not realize a return on your investment within the timeframe \nyou anticipate, or at all. \nIn addition, a portion of our anticipated market opportunities is associated with industries described above under \n“Future Markets.” Certain of these industries, such as space tourism and cargo transport to the Moon, are still \nemerging. Others, including in-orbit manufacturing, passenger transport to the Moon, passenger and cargo transport \nto Mars, energy production on the Moon and Mars, manufacturing capabilities on the Moon and Mars, and asteroid \nmining, do not exist today. While we believe these industries will develop over time, the manner in which they \nemerge, including the timing of commercialization, the scale and pace of adoption, and the applicable competitive, \ntechnical, regulatory, geopolitical, and economic frameworks may differ materially from our current expectations. \nOur Space, Connectivity, and AI segments are also subject to the following challenges and uncertainties, among \nothers.\n•\nSpace: Our growth strategy depends on our ability to increase our launch cadence and payload capacity, which \nis dependent on the successful development of Starship at scale. Unexpected design modifications, supply chain \ndisruptions, anomalies, environmental issues, and other unforeseen technical challenges could result in delays or \nfailures to deploy Starship on our anticipated schedule, which would delay or impede our ability to achieve our \nother business objectives, such as the deployment of our next-generation satellites, the expansion of our \nsatellite-to-mobile connectivity services, and deployment of in-orbit AI compute infrastructure.\n•\nConnectivity: Our satellite connectivity, including our global satellite-to-mobile connectivity services under \nStarlink Mobile, depend on access to radio frequency spectrum and authorizations from the Federal \nCommunications Commission (the “FCC”) in the United States and telecommunications regulators in other \ncountries. Acquiring the necessary authorizations can be a complex and time-consuming process. Without these \nlicenses and approvals, we cannot generally offer connectivity services in a given market. Spectrum access itself \nis limited and highly regulated. Additionally, the growth of our connectivity services depends on our ability to \nincrease market awareness and acceptance of connectivity through Starlink across numerous international \nmarkets, each with its unique challenges. \n•\nAI: Our AI business is in a relatively early stage, it is being integrated into our organization, its business \nstrategy is still developing, and it will require significant capital expenditures to fund compute, infrastructure \nand power generation, model training, and product development. Additionally, our AI business is subject to \nchallenges inherent in a nascent, highly competitive, capital intensive and rapidly changing industry. These \ninclude the potential for disruptive technological change, evolving industry and regulatory standards, the \nemergence of new and well-funded competitors, frequent new product and service introductions, and changing \ncustomer demands.\nAny number of these challenges, and others that may be currently unknown to us, could have a negative impact on \nour business, financial condition, and results of operations. For a discussion of the challenges, risks, and limitations \nthat could harm our future prospects, please refer to “Cautionary Note Regarding Forward-Looking Statements,” \n“Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” \nincluded elsewhere in this prospectus.\nRecent Developments \nCollaboration with Cursor\nIn April 2026, we entered into a compute and option agreement with Anysphere, Inc., doing business as Cursor, a \nSan Francisco-based private software company (“Cursor”), which we view as a compelling extension of our strategy \nto vertically integrate compute infrastructure, models, and applications. Under the compute agreement, we will \nprovide Cursor with certain GPU cluster compute capacity and collaborate to improve existing models, including \nGrok, and potentially to jointly develop AI models and related model-specific deliverables or products. With the \noption agreement, we have the right, but not obligation, to acquire Cursor at a predetermined price or pay a fee. We\n\n13\nTable of Contents\nconsider software development as a strategically important use case for AI given its combination of high-quality \nstructured data, rapid feedback cycles and frequent, mission-critical usage. AI-assisted coding workflows generate \ncontext-rich, verifiable data that can enhance model training and performance, while also driving sustained inference \ndemand. The depth of Cursor’s integration with a high-frequency coding workflow generates valuable developer \ninteraction data, including coding generation prompts, iteration cycles, and software architecture decisions. We \nexpect that access to this data will enhance our model training and inference, including with respect to Grok. \nMeanwhile, by providing access to our large-scale compute infrastructure, we believe we can help Cursor deliver \nfaster and higher quality user experiences. The collaboration with Cursor may also accelerate our AI strategy by \nintegrating our AI models more directly into developer workflows and expanding the distribution of our AI \ncapabilities through high-engagement software interfaces. \nThe consideration for the acquisition of Cursor, if any, after the closing of this offering would consist of shares of \nour Class A common stock based on an implied equity value of Cursor of $60.0 billion, and the price of our Class A \ncommon stock that equals the volume-weighted average closing price thereof over the seven consecutive trading \ndays immediately preceding the closing of the acquisition. If either (i) we decide to terminate the option agreement \nor (ii) Cursor is eligible to and decides to terminate due to our material breach of the option agreement (subject to \nnotice and cure provisions), Cursor is entitled to a $1.5 billion termination fee under the option agreement and an \n$8.5 billion deferred services fee under the compute agreement. These fees are payable in cash (or Class A common \nstock, if this offering has not been consummated at the time the fees become payable). For more information about \nour arrangement with Cursor, including our option to acquire the company, please refer to “Business—Collaboration \nwith Cursor” included elsewhere in this prospectus.\nCompute Services Agreements with Third Parties\nWe believe our compute infrastructure and related strategy provides us with substantial flexibility in how we \nallocate and monetize capacity. We have the ability to use compute resources to support our proprietary AI \napplications (such as Grok 5, which is currently being trained at COLOSSUS II), while also providing access to \nselect compute capacity to third-party customers. For example, in May 2026, we entered into Cloud Services \nAgreements with Anthropic PBC (“Anthropic”), an AI research and development public benefit corporation, with \nrespect to access to compute capacity across COLOSSUS and COLOSSUS II. Pursuant to these agreements, the \ncustomer has agreed to pay us $1.25 billion per month through May 2029, with capacity ramping in May and June \n2026 at a reduced fee. The agreements may be terminated by either party upon 90 days’ notice. The customer will \nretain ownership and intellectual property rights in its content, AI models, and related data. This structure allows us \nto monetize unused compute capacity in our infrastructure, while still permitting reallocation of the capacity for our \nown internal initiatives if needed in the future. We have sufficient capacity to provide compute for our own AI \nmodels, including support of our training and inference demands, and to satisfy the obligations under these \nagreements. We expect to enter into additional similar services contracts. We believe this opportunity highlights the \nincreasing importance of large-scale, frontier-level AI infrastructure and positions us as a differentiated provider of \nhigh-performance compute capacity to both internal and third-party AI workloads. We believe our dual monetization \nstrategy provides multiple pathways to generate returns on invested capital.\nFounder, Chief Executive Officer, Chief Technical Officer and Chairman of Our Board\nMr. Musk is our founder, Chief Executive Officer, Chief Technical Officer and the Chairman of our board. \nAssuming a size as set forth on the cover page of this prospectus and an initial public offering price of $                \nper share (the midpoint of the estimated price range set forth on the cover page of this prospectus), Mr. Musk will \nhold approximately           % of the voting power of our common stock (or               % if the underwriters exercise \ntheir option to purchase additional shares of Class A common stock in full) immediately after this offering through \nhis ownership of                    shares of our Class A common stock and                    shares of our Class B common \nstock, which comprises approximately           % of our Class B common stock. Under our charter, the holders of our \nClass B common stock will have the right to elect a majority of our board (such directors, the “Class B Directors”), \nfor so long as any shares of Class B common stock remain outstanding. As the holder of a majority of our shares of \nClass B common stock, Mr. Musk will be able to elect, remove or fill any vacancy among the Class B Directors. In \naddition, for so long as he beneficially owns more than 50% of the voting power of our common stock, Mr. Musk \nwill control the voting power over the selection of our board. As a result, Mr. Musk will have the power to control\n\n14\nTable of Contents\nthe outcome of matters requiring shareholder approval, including election of all our directors, and to control our \nbusiness and affairs. \nOur Controlled Company Status\nWe will be a controlled company as of the completion of this offering under Nasdaq and Nasdaq Texas listing rules. \nA controlled company is not required to have a majority of its board composed of independent directors or to \nestablish independent compensation and nominating committees. As a controlled company, we will remain subject \nto rules that require us to have an audit committee composed entirely of independent directors.\nCorporate Information\nWe were founded and incorporated as Space Exploration Technologies Corp., a Delaware corporation, on March 14, \n2002 and reincorporated as a Texas corporation on February 14, 2024. Our principal executive offices are located at \n1 Rocket Road, Starbase, Texas 78521. Our website address is www.spacex.com. Information contained on our \nwebsite or linked therein or otherwise connected thereto does not constitute part of nor is it incorporated by \nreference into this prospectus or the registration statement of which this prospectus forms a part.\n\n15\nTable of Contents\nSummary of Risk Factors\nAn investment in our Class A common stock involves risks and uncertainties. The following is a summary of the \nprincipal factors that make an investment in our Class A common stock speculative or risky, all of which are more \nfully described below in the section titled “Risk Factors.” This summary should be read in conjunction with the \n“Risk Factors” section and should not be relied upon as an exhaustive summary.\n•\nAny failure or delay in the development of Starship at scale or in achieving the required launch cadence, \nreusability and capabilities thereafter would delay or limit our ability to execute our growth strategy, including \nthe deployment of next-generation satellites, global satellite-to-mobile connectivity, and orbital AI compute, \nwhich could materially adversely affect our business, financial condition, results of operations, and future \nprospects.\n•\nAny delays or difficulties in obtaining, maintaining or renewing required regulatory approvals and licenses \nrequired for our space-related activities, including the U.S. Federal Aviation Administration (“FAA”) launch \nand reentry licenses, would materially delay or disrupt our operations, harm our business, or limit our ability to \nexecute our business strategy.\n•\nAny delays or difficulties in obtaining, maintaining or renewing required communications licenses and \nspectrum authorizations for our satellite connectivity services, including international and FCC satellite \nspectrum licenses, could materially delay or disrupt our operations, harm our business, or limit our ability to \nexecute our business strategy.\n•\nOur AI products and X platform are subject to complex and evolving U.S. and foreign laws and regulations that \nare subject to change and uncertain interpretation, and we could be required to make changes to our products \nand business practices, and be exposed to monetary penalties, increased cost of operations, declines in user \ngrowth or engagement, or loss of customers, or other harm to our AI products and X platform. \n•\nOur business strategy depends on successfully designing, developing, and deploying our products and services, \nas well as related platforms, infrastructure, and other strategic initiatives, at an unprecedented scale, which \npresents significant execution, cost, and timing risks.\n•\nWe have experienced, and will likely continue to experience, launch delays and failures that could have a \nmaterial adverse effect on our business, financial condition, results of operations, and future prospects.\n•\nOur satellites, launch vehicles, and other space-related technologies operate, and in the case of orbital AI \ncompute, will operate, in the harsh and unpredictable environment of space, exposing them to a wide and \nunique range of space-related risks that could cause them to malfunction or fail, and any such malfunction or \nfailure could adversely affect our business, financial condition, results of operations, and future prospects.\n•\nThe continued proliferation of satellite constellations in Low-Earth Orbit, as well as the risk of collisions with \nspace debris or other spacecraft, could limit or impair our launch flexibility and satellite deployment, which \ncould adversely affect our business, financial condition, results of operations, and future prospects.\n•\nInterruptions in the operation of critical satellite network, ground station, launch, manufacturing, or spacecraft \nor data center infrastructure could result in significant downtime, operational delays or loss of service, each of \nwhich could have a material adverse effect on our business, financial condition, results of operations, and future \nprospects. \n•\nManufacturing, testing and launching rockets, satellites, and spacecraft, including our efforts to reuse rockets \nand spacecraft, involve inherent risks that could result in human injury or death, property damage and \nenvironmental damage or other adverse environmental impacts due to accidents or equipment failures. Any such \nevents could result in substantial losses, including reputational harm and legal liability, which could have a \nmaterial adverse effect on our business.\n•\nAlthough we are focused on the vertical integration of our businesses, we depend on third parties to \nmanufacture and supply certain key components necessary for the provision of our launch, connectivity, and AI\n\n16\nTable of Contents\nservices, and any supply shortages or disruptions or failures in their performance could have a material adverse \neffect on our business, financial condition, results of operations, and future prospects.\n•\nOur ability to scale our AI products relies on our terrestrial and orbital AI compute infrastructure, which \ndepends on the availability of power, AI processors, and other critical components, telecommunications \nservices, and any shortages or disruptions thereof would materially adversely affect our business, financial \ncondition, results of operations, and future prospects.\n•\nWe face intense competition in the markets in which we operate, and while we have historically outperformed \ncertain competitors in our Space and Connectivity segments, we may not continue to do so, which could \nadversely affect our business, financial condition, results of operations, and future prospects.\n•\nThe Company’s AI segment is recently formed, still being integrated, operates in a rapidly evolving industry \nand is subject to integration, execution, competitive and operational risks.\n•\nAdverse global macroeconomic and geopolitical conditions may negatively affect our business, financial \ncondition, results of operations and future prospects.\n•\nWe depend on our ability to recruit and retain employees who have advanced engineering and technical skills, \nand intense competition for such employees may increase costs and affect our ability to meet development and \nproduction timelines.\n•\nAny significant disruption in, or unauthorized access to, our computer and data systems or those of third parties \nthat we utilize in our operations could result in a loss or degradation of service, loss of trust in us and harm to \nour business.\n•\nThe development and maintenance of the technologies and infrastructure necessary to support our current and \nfuture operations will require significant capital expenditures, and if we are unable to generate sufficient cash \nflow from operations or obtain additional financing on acceptable terms, our business, financial condition, \nresults of operations, and future prospects could be materially and adversely affected.\n•\nOur substantial level of indebtedness could materially adversely affect our financial condition.\n•\nOur future revenue and operating results depend upon our ability to develop new technologies and respond to \nchanges in customer demands and industry standards in highly competitive markets, and if we are unable to do \nso, our business, financial condition, results of operations, and future prospects may be materially and adversely \naffected. \n•\nThe estimates of future market opportunity and forecasts of market growth, and our ability to capture such \nmarkets, included in this prospectus may prove to be inaccurate.\n•\nMany of our initiatives, including those to develop orbital AI compute at scale, manufacture AI chips at scale, \nestablish a lunar economy, develop human augmentation systems, and transport humans and cargo to the Moon \nand Mars, involve significant technical complexity, unproven technologies, or technologies that do not exist or \nmay require significant advancement, and such initiatives may not achieve commercial viability.\n•\nThe global nature of our business poses risks with respect to unstable, malicious or arbitrary legal regimes and \nauthorities.\n•\nOur bylaws place restrictions on the forum, venue and procedures for legal actions or proceedings initiated by \nour shareholders, including certain requirements for mandatory arbitration. These provisions could limit our \nshareholders’ ability to pursue certain claims and/or increase the cost of doing so and could also affect the \nprocedures, rights, and remedies available to our shareholders in such legal actions or proceedings.\n•\nUpon completion of this offering, Mr. Musk will serve as our Chief Executive Officer, Chief Technical Officer, \nand Chairman of our board and control the election of our directors, and our dual class structure concentrates \nvoting control with Mr. Musk and other holders of our Class B common stock. This will limit or preclude your \nability to influence corporate matters and the election of our directors.\n\n17\nTable of Contents\nThe Offering\nIssuer \n \n ...................................................................... Space Exploration Technologies Corp.\nClass A common stock offered by us \n \n .....................                 shares (or                shares if the underwriters exercise \ntheir option to purchase additional shares of Class A common \nstock in full).\nClass A common stock outstanding immediately \nafter this offering ................................................                 shares (or                shares if the underwriters exercise \ntheir option to purchase additional shares of Class A common \nstock in full).\nClass B common stock outstanding immediately \nafter this offering ................................................                 shares.\nVoting power of Class A common stock after \ngiving effect to this offering \n ...............................                 % (or                % if the underwriters exercise their \noption to purchase additional shares of Class A common stock \nin full).\nVoting power of Class B common stock after \ngiving effect to this offering \n ...............................                 % (or                % if the underwriters exercise their \noption to purchase additional shares of Class A common stock \nin full).\nVoting rights\n \n ........................................................... Each share of Class A common stock will entitle its holder to \none vote per share. Each share of Class B common stock will \nentitle its holder to 10 votes per share. Class A shareholders and \nClass B shareholders will vote together as a single class on all \nmatters to be voted on by shareholders under our charter, \nexcept the holders of our Class B common stock will have the \nright to elect a majority of our board and have certain other \nvoting rights as a class. Each share of Class B common stock \nwill be convertible at any time at the option of the holder into \none share of our Class A common stock. In addition, each share \nof Class B common stock will convert automatically into one \nshare of Class A common stock upon a Transfer (as defined in \nthe charter) of that share of Class B common stock, whether or \nnot for value, except for Permitted Transfers (as defined in the \ncharter). Please refer to “Description of Capital Stock.”\nUse of proceeds ...................................................... We expect to receive approximately $                of net proceeds \nfrom this offering (or $                if the underwriters exercise \ntheir option to purchase additional shares of Class A common \nstock in full), based upon the assumed initial public offering \nprice of $                per share (which is the midpoint of the price \nrange set forth on the cover page of this prospectus), after \ndeducting underwriting discounts and commissions and \nestimated offering expenses payable by us. Please refer to \n“Underwriting.” We intend to use the net proceeds from this \noffering to fund our growth strategy, including the expansion of \nour AI compute infrastructure, enhancements to our launch \ninfrastructure and launch vehicles, increases in the scale and \ncapacity of our satellite constellations, and any remaining \namounts for general corporate purposes. Please refer to “Use of \nProceeds” for a more complete description of the intended use \nof proceeds from this offering.\n\n18\nTable of Contents\nDividend policy \n ...................................................... We do not anticipate declaring or paying any cash dividends to \nholders of our common stock in the foreseeable future. We \ncurrently intend to retain future earnings, if any, to finance the \ngrowth of our business. Our future dividend policy is within the \ndiscretion of our board and will depend upon then-existing \nconditions, including our results of operations, financial \ncondition, capital requirements, investment opportunities, \nstatutory restrictions on our ability to pay dividends, restrictions \nin our existing and any future debt agreements and other factors \nour board may deem relevant. Covenants under our Credit \nAgreements also restrict our ability to pay dividends, and we \nmay enter into credit agreements or other borrowing \narrangements in the future that restrict our ability to declare or \npay cash dividends or make distributions in the future. \nDirected share program \n .......................................... At our request, the underwriters have reserved              percent \nof the shares of Class A common stock to be issued by the \nCompany and offered by this prospectus for sale, at the initial \npublic offering price, to employees of the Company and certain \nother designated individuals. If purchased by these persons, \nthese shares of Class A common stock will not be subject to a \nlock-up restriction. The number of shares of Class A common \nstock available for sale to the general public will be reduced to \nthe extent these individuals purchase such reserved shares of \nClass A common stock. Any reserved shares of Class A \ncommon stock that are not so purchased will be offered by the \nunderwriters to the general public on the same basis as the other \nshares of Class A common stock offered by this prospectus. \nControlled company \n ............................................... Upon completion of this offering, Mr. Musk will beneficially \nown a majority of the voting power of our common stock and \nthe Class B common stock, which elects a majority of the \nboard. As a result, we expect to be a “controlled company” \nwithin the meaning of the Nasdaq and Nasdaq Texas corporate \ngovernance standards, and intend to rely on exemptions from \ncertain of the corporate governance listing requirements. Please \nrefer to “Management—Controlled Company Exemption” and \n“Certain Relationships and Related Person Transactions.”\nRisk factors ............................................................. You should carefully read and consider the information set \nforth in the section titled “Risk Factors” beginning on page 26, \ntogether with all of the other information set forth in this \nprospectus, before deciding whether to invest in our Class A \ncommon stock.\nListing and trading symbol \n ..................................... We have applied to list our Class A common stock on Nasdaq \nand Nasdaq Texas under the symbol “SPCX.”\nThe number of shares of our Class A and Class B common stock that will be outstanding after this offering is based \non           shares of Class A common stock and                   shares of Class B common stock outstanding as of March \n31, 2026, after giving effect to (i) the sale of                    shares of Class A common stock in this offering, (ii) the \nClass C Reclassification (as defined below), and (iii) the Preferred Conversion (as defined below).\nUnless otherwise noted, common stock outstanding after the offering and other information based thereon in this \nprospectus does not reflect any of the following: \n•\n                shares of Class A common stock issuable upon exercise of the underwriters’ option to purchase \nadditional shares from us;\n•\n                shares of Class A common stock issuable upon the exercise of outstanding stock options granted \nunder the Equity Plans (as defined below) that were outstanding as of March 31, 2026 with a weighted-average \nexercise price of $                per share;\n\n19\nTable of Contents\n•\n                shares of Class A common stock issuable upon the exercise of outstanding stock options granted \nunder the Equity Plans (as defined below) granted after March 31, 2026 with a weighted-average exercise price \nof $                per share;\n•\n                shares of Class A common stock issuable upon the vesting and settlement of restricted stock units that \nwere outstanding as of March 31, 2026 under the Equity Plans (none of which will vest in connection with this \noffering); \n•\n                shares of Class A common stock issuable upon the vesting and settlement of restricted stock units \ngranted after March 31, 2026 under the Equity Plans (none of which will vest in connection with this offering); \n•\n                shares of Class A common stock reserved for issuance under our Amended and Restated 2024 Equity \nIncentive Plan (the “A&R 2024 Plan”), excluding shares subject to outstanding awards thereunder as described \nabove, which we plan to adopt in connection with this offering;\n•\n                shares of Class A common stock reserved for issuance under our Amended and Restated 2017 Equity \nStock Purchase Plan (the “A&R 2017 ESPP”), which we plan to adopt in connection with this offering; and\n•\n                shares of Class A common stock reserved for future issuance upon the conversion of           shares of \nClass B common stock on a one-for-one basis. \nThe term “Equity Plans” refers to our 2015 Plan, our A&R 2017 ESPP and our A&R 2024 Plan as well as (i) xAI’s \n2023 Equity Incentive Plan, 2023 Incentive Plan and 2025 Equity Incentive Plan, each of which we assumed in the \nxAI Merger and (ii) the 2017 Stock Plan, as amended, of Swarm Technologies, Inc. (“Swarm”), which we assumed \nin our acquisition of Swarm in 2021.\nThe information in this prospectus also does not reflect: \n•\nthe payment of                      shares of Class A common stock and cash consideration which would occur upon \nclosing of our agreement with EchoStar Corporation (“EchoStar”) to purchase certain AWS-3, AWS-4, and H-\nBlock spectrum licenses pursuant to the License Purchase Agreement, dated as of September 7, 2025 (as \namended and restated on November 5, 2025), by and among SpaceX, Spectrum Business Trust 2025-1 and \nEchoStar (the “Spectrum Transaction”), which transaction was approved by the FCC on May 12, 2026 and is \nsubject to other closing conditions prior to completion; and \n•\nthe issuance of shares of our Class A common stock if in the future our board determines to exercise our option \nto acquire Cursor as such option is described under “Business—Collaboration with Cursor,” which, as an \nexample, assuming the volume-weighted average closing price of our common stock over the seven consecutive \ntrading days immediately preceding the closing of such acquisition were equal to the initial public offering price \nof $                      per share (which is the midpoint of the price range set forth on the cover of this prospectus), \nwould equal approximately                      shares. The actual number of shares that may be issued will be \ndetermined based on a future trading price and is subject to customary adjustments for reclassifications, \nrecapitalization, stock splits or any other similar event affecting the outstanding capital stock of Cursor or the \nCompany.\nUnless otherwise indicated, all information contained in this prospectus assumes or gives effect to:\n•\nthe 2026 Stock Split;\n•\nprior to the completion of this offering, pursuant to the terms of our certificate of formation in effect as a private \ncompany prior to this offering, the reclassification of all of the outstanding shares of our Class C common stock \ninto an aggregate of                      shares of Class A common stock (the “Class C Reclassification”) and the \nconversion of the outstanding shares of all our preferred stock into an aggregate of                     shares of our \nClass A common stock and                    shares of our Class B common stock (the “Preferred Conversion”);\n•\nthe effectiveness of our charter and bylaws, which will become effective upon the completion of this offering;\n\n20\nTable of Contents\n•\nan initial public offering price of $                per share of Class A common stock (the midpoint of the price range \nset forth on the cover of this prospectus); \n•\nthat the underwriters do not exercise their option to purchase additional shares of Class A common stock from \nus; and \n•\nno purchase of shares of Class A common stock in this offering by our directors, officers or existing \nshareholders.\n\n21\nTable of Contents\nSummary Historical Consolidated Financial and Operating Data\nThe following table sets forth the summary historical consolidated financial and operating data for the periods and as \nof the dates presented. The summary historical consolidated financial data as of March 31, 2026 and for the three \nmonths ended March 31, 2026 and 2025 (except for pro forma basic and diluted net loss per share of common stock \nattributable to common shareholders and weighted average shares used in computing pro forma basic and diluted net \nloss per share of common stock attributable to common shareholders) has been derived from our unaudited \nconsolidated financial statements included elsewhere in this prospectus. The summary historical consolidated \nfinancial data as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024, and 2023 \n(except for pro forma basic and diluted net loss per share of common stock attributable to common shareholders and \nweighted average shares used in computing pro forma basic and diluted net loss per share of common stock \nattributable to common shareholders) has been derived from our audited consolidated financial statements included \nelsewhere in this prospectus.  The summary historical consolidated financial and operating data presented below is \nnot indicative of the results to be expected for any future period, and the results for any interim period are not \nnecessarily indicative of the results to be expected for the full fiscal period.\nThe summary historical consolidated financial and operating data of SpaceX has been prepared to reflect the \nretrospective combination of the companies for all periods presented to include the historical results of xAI, which \nwas acquired by SpaceX, effective February 2, 2026, and X Holdings, which was acquired by xAI, effective \nMarch 28, 2025, because these transactions were between entities under common control. \nThe following information should be read together with “Management’s Discussion and Analysis of Financial \nCondition and Results of Operations” and our consolidated financial statements and related notes thereto included \nelsewhere in this prospectus. The summary historical consolidated financial data included in this section is not \nintended to replace the consolidated financial statements and is qualified in its entirety by our consolidated financial \nstatements and related notes included elsewhere in this prospectus.\nStatements of Operations Data: \nThree Months Ended March 31,\nYear Ended December 31,\n2026\n2025\n2025\n2024\n2023\n(in millions, except per share data)\n(unaudited)\nRevenue \n ............................................. $\n4,694\n$\n4,067\n$\n18,674\n$\n14,015\n$\n10,387\nTotal costs and expenses\n \n ...........\n6,637\n4,040\n21,263\n13,549\n13,892\nIncome (loss) from operations \n ...........\n(1,943)\n27\n(2,589)\n466\n(3,505)\nNet income (loss) \n .............................. $\n(4,276) $\n(528) $\n(4,937) $\n791\n$\n(4,628)\nNet income (loss) per share of \ncommon stock attributable to \ncommon shareholders (1)\nBasic \n \n .............................................. $\n(1.27) $\n(0.18) $\n(1.69) $\n0.01\n$\n(1.68)\nDiluted ........................................... $\n(1.27) $\n(0.18) $\n(1.69) $\n0.00\n$\n(1.68)\nWeighted average shares used in \ncomputing net income (loss) per \nshare of common stock (1)\nBasic \n \n ..............................................\n3,884\n2,875\n2,926\n2,848\n2,759\nDiluted ...........................................\n3,884\n2,875\n2,926\n9,956\n2,759\n__________________\n(1)\nPlease refer to Note 14, Earnings per Share to our audited consolidated financial statements appearing elsewhere in this prospectus for an \nexplanation of our calculation of basic and diluted net income (loss) per share of common stock attributable to common shareholders.\n\n22\nTable of Contents\nThe following table sets forth the computation of unaudited pro forma basic and diluted net loss per share of \ncommon stock attributable to common shareholders for the period presented:\n(in millions, except per share data)\nThree Months \nEnded\nMarch 31, 2026\nYear Ended \nDecember 31, \n2025\nNumerator:\nNet loss attributable to common shareholders, basic and diluted \n ......................... $\n(4,947) $\n(4,937)\nPro forma adjustment to reverse the deemed dividend on SpaceX Redeemable \nConvertible Preferred Stock, basic and diluted ................................................\n565\n—\nPro Forma net loss attributable to common shareholders, basic and diluted \n ........ $\n(4,382) $\n(4,937)\nDenominator:\nWeighted average shares used in computing net loss per share of common \nstock, basic and diluted \n .....................................................................................\n3,884\n2,926\nPro forma adjustment to reflect the Preferred Conversion as if the conversion \noccurred on January 1, 2025, basic and diluted \n ................................................\n6,723\n6,723\nWeighted average shares used in computing pro forma net loss per share of \ncommon stock, basic and diluted \n ......................................................................\n10,607\n9,649\nPro forma net loss per share of common stock attributable to common \nshareholders, basic and diluted (2)\n \n .......................................................................... $\n(0.41) $\n(0.51)\n__________________\n(2)\nPro forma basic and diluted net loss per share of common stock attributable to common shareholders and weighted-average number of \nshares used in the computation of the per share amount gives effect to (i) the Preferred Conversion as if such conversion had occurred as of \nJanuary 1, 2025, (ii) the Class C Reclassification as if such reclassification had occurred as of January 1, 2025, and (iii) the effectiveness of \nour charter, which will become effective upon the completion of this offering.\nStatement of Cash Flows Data: \nThree Months Ended March 31,\nYear Ended December 31,\n2026\n2025\n2025\n2024\n2023\n(in millions)\n(unaudited)\nNet cash provided by operating \nactivities .......................................... $\n1,047\n$\n727\n$\n6,785\n$\n5,776\n$\n4,520\nNet cash used in investing activities \n .. $\n(16,724) $\n(4,170) $\n(19,575) $\n(10,796) $\n(4,867)\nNet cash provided by financing \nactivities .......................................... $\n7,125\n$\n354\n$\n26,350\n$\n11,830\n$\n422\nCapital Expenditures: \nThe following table presents our capital expenditures by segment:\nThree Months Ended March 31,\nYear Ended December 31,\n2026\n2025\n2025\n2024\n2023\n(in millions)\n(unaudited)\nSpace \n \n .................................................. $\n1,052\n$\n759\n$\n3,832\n$\n2,032\n$\n1,497\nConnectivity .......................................\n1,332\n814\n4,178\n3,498\n2,455\nAI \n ........................................................\n7,723\n2,567\n12,727\n5,633\n463\nTotal Capital Expenditures \n \n ................. $\n10,107\n$\n4,140\n$\n20,737\n$\n11,163\n$\n4,415\n\n23\nTable of Contents\nBalance Sheet Data: \nMarch 31,\nDecember 31, \n2026\n2025\n2024\n(in millions)\n(unaudited)\nCash and cash equivalents \n .............................................................. $\n15,852\n$\n24,747\n$\n11,385\nTotal current assets \n .........................................................................\n29,732\n30,952\n16,108\nProperty, plant, and equipment, net\n \n ................................................\n53,879\n42,602\n21,147\nTotal assets \n ....................................................................................\n102,094\n92,079\n57,062\nDebt and finance leases, current \n ....................................................\n1,538\n928\n372\nTotal current liabilities \n ...................................................................\n24,436\n21,400\n11,791\nTotal liabilities\n \n ................................................................................\n60,512\n50,754\n31,258\nRedeemable convertible preferred stock \n \n ........................................\n7,049\n38,752\n20,941\nTotal shareholders’ equity .............................................................\n34,533\n2,573\n4,863\nSegment Operating and Financial Data (unaudited)\nSpace:\nThree Months Ended March 31,\nYear Ended December 31,\n2026\n2025\n2025\n2024\n2023\nMass to Orbit (in metric tons) (1)\n \n ........\n556\n450\n2,213\n1,699\n1,210\nLaunches (number) (1)\n .........................\n40\n38\n170\n138\n98\nSegment income (loss) from \noperations (in millions) \n \n ................... $\n(662) $\n(70) $\n(657) $\n21\n$\n(1)\nSegment Adjusted EBITDA (in \nmillions) (2)\n \n ...................................... $\n(351) $\n224\n$\n653\n$\n1,154\n$\n997\nConnectivity: \nThree Months Ended March 31,\nYear Ended December 31,\n2026\n2025\n2025\n2024\n2023\nStarlink Subscribers (in millions) (1)\n \n ...\n10.3\n5.0\n8.9\n4.4\n2.3\nStarlink ARPU (dollars per month) (1)\n \n $\n66\n$\n86\n$\n81\n$\n91\n$\n99\nSegment income from operations (in \nmillions) .......................................... $\n1,188\n$\n1,033\n$\n4,423\n$\n2,006\n$\n469\nSegment Adjusted EBITDA (in \nmillions) (2)\n \n \n ...................................... $\n2,087\n$\n1,618\n$\n7,168\n$\n3,849\n$\n1,602\nAI: \nThree Months Ended March 31,\nYear Ended December 31,\n2026\n2025\n2025\n2024\n2023\nNameplate compute draw (in \ngigawatts) (1)\n ....................................\n1\n0.3\n0.8\n0.3\n0\nSegment loss from operations (in \nmillions) \n .......................................... $\n(2,469) $\n(936) $\n(6,355) $\n(1,561) $\n(3,973)\nSegment Adjusted EBITDA (in \nmillions) (2)\n \n ...................................... $\n(609) $\n(112) $\n(1,237) $\n347\n$\n1,222\n______________\n(1)\nPlease refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Key Business \nMetrics” for additional information on our key business metrics.\n(2)\nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “Management’s Discussion and Analysis of Financial \nCondition and Results of Operation—Non-GAAP Financial Measures” for additional information on our non-GAAP financial measures, \nincluding reconciliations of Segment Adjusted EBITDA to segment income (loss) from operations, the most directly comparable GAAP \nmeasure.\n\n26\nTable of Contents\nRISK FACTORS\nInvesting in our Class A common stock involves a high degree of risk. You should carefully consider the risks and \nuncertainties described below, together with all of the other information contained in this prospectus, including our \nconsolidated financial statements and the related notes thereto, before making a decision to invest in our Class A \ncommon stock. The disclosures in this section reflect our beliefs and opinions as to factors that could materially and \nadversely affect us in the future. We may not be able to accurately predict, control, or mitigate these risks. \nReferences to past events are provided by way of example only and are not intended to be a complete listing or a \nrepresentation as to whether or not such factors have or have not occurred in the past or their likelihood of \noccurring in the future. Additional risks and uncertainties that we are unaware of, or that we currently believe are \nnot material, may also become important factors that adversely affect us. Many of the risks and uncertainties that \ncould materially adversely affect us or our prospects are beyond our control or relate to portions of our business \nstrategy that have a lengthy time horizon or involve unprecedented ventures. This can make assessment of certain \nrisks more difficult and you should factor these uncertainties into your assessment of an investment in our Class A \ncommon stock. If any of the following risks and uncertainties occur, the price of our Class A common stock could \ndecline, and you could lose part or all of your investment.\nRisks Related to Our Business\nAny failure or delay in the development of Starship at scale or in achieving the required launch cadence, \nreusability and capabilities thereafter would delay or limit our ability to execute our growth strategy, including \nthe deployment of next-generation satellites, global satellite-to-mobile connectivity, and orbital AI compute, \nwhich could materially adversely affect our business, financial condition, results of operations, and future \nprospects.\nIf we are unable to successfully complete the development, testing, and deployment of Starship at scale in \naccordance with our anticipated schedule, or at all, or if we are unable to achieve sufficient launch cadence, \nreusability, and capability, our ability to execute our growth strategy (such as the deployment of our next-generation \nV3 satellites, V2 satellite-to-mobile connectivity, and providing orbital AI compute infrastructure) would be \nmaterially and adversely affected. The commercial deployment of Starship, particularly at scale, is subject to \nsubstantial risks and uncertainties inherent in the development of new and complex technologies and systems. \nDelays or challenges in the Starship program have in the past occurred, and may occur in the future due to a variety \nof factors, including unforeseen technical challenges, supply chain disruptions, manufacturing difficulties, delays in \nthe development, construction or commissioning of launch and fueling infrastructure (such as launch pads, air \nseparation units and other propellant production systems), unavailability of such launch and fueling infrastructure \n(including launch pads) in sufficient number and in operable condition (including as a result of mishaps), loss or \ndamage to the vehicle or other components, regulatory hurdles, or the need for additional design modifications. If we \nare required to undertake unanticipated redesigns, conduct additional testing, replace lost vehicles or components, or \naddress operational setbacks, we may experience delays and incur significant additional costs, or be forced to \nreallocate critical resources from other projects. If our launch pads are not available for an extended period of time \nfor any reason, we may not be able to achieve our development, testing and deployment goals. Such delays could \nhave cascading effects on our ability to achieve the scale we need to timely achieve future objectives. In addition, a \ncritical part of our growth strategy involves increasing our launch cadence, reusability and capability, including \nincreasing our payload per launch. This will require, among other things, the successful development and operation \nof reusable launch vehicles, substantially increased access to raw materials and components like steel, fuel and \npropellant, the construction of additional facilities and securing of additional launch sites or rights to additional \nlaunches from existing sites, and navigating complex and evolving regulatory requirements and environmental and \ntechnological issues as we seek to increase our launch cadence. Our rocket programs have historically required \nsubstantial time and resources to reach the cadence and cost thresholds necessary for commercial viability, and the \ndevelopment of Starship may face similar or greater challenges. Any significant delay in achieving key development \nmilestones, obtaining the necessary regulatory approvals or increasing and maintaining our launch cadence, \nreusability, and capability would impede the expansion of our service offerings, defer anticipated revenue streams, \nand negatively impact our growth trajectory and competitive positioning in rapidly evolving markets.\n\n27\nTable of Contents\nOur ability to execute our growth strategy is highly dependent on Starship. If we are unable to achieve the \ncommercial development, anticipated performance, launch cadence, or cost efficiencies associated with Starship \nwithin expected timeframes, our ability to deploy next-generation V3 satellites, V2 Mobile satellites, and orbital AI \ncompute infrastructure at scale, reduce capital and operating costs (including cost per token), realize projected \nrevenue growth, and retain existing customers from these initiatives could be materially and adversely affected. This \nincludes our expectations with respect to completion of flight testing of Starship and commencement of payload \ndelivery to orbit. Our current operational rockets, including Falcon 9 and Falcon Heavy, are not capable of \ndeploying V3 satellites and V2 Mobile satellites.\nIn addition, our ability to pursue new initiatives and capture emerging business opportunities—particularly those \nrequiring high launch cadence, large payload capacity, or advanced in-space capabilities, such as lunar operations \nand interplanetary missions—depends on the timely and successful deployment of Starship and achieving our \ntargeted launch cadence. Achieving our targeted launch cadence will require significant progress on several key \nmilestones and the continued investment of significant capital resources. These include: securing additional land and \ndeveloping high-rate launch sites and supporting infrastructure across multiple locations; scaling production of \nStarship vehicles and Raptor engines; constructing propellant production facilities, including air separation units and \nmethane liquefaction plants co-located with launch sites; securing sufficient power supply; and obtaining the \nnecessary regulatory approvals, particularly from the FAA, to support a high launch cadence while addressing public \nsafety and environmental considerations. We face a number of material challenges and uncertainties in achieving \nthese milestones, such as achieving reliable high-cadence return-to-launch-site operations for the full vehicle stack, \ndeveloping durable reusable heat shields capable of withstanding repeated high-velocity reentries, ensuring rapid \nrefurbishment and high-rate reusability of engines and other vehicle components, managing public and regulatory \ntolerance for anomalies during the transition to frequent operational flights, securing sufficient power for both \nmanufacturing and launch operations, and obtaining timely regulatory approvals from the FAA and other agencies. \nOrbital refueling involves technical complexities associated with cryogenic propellant transfer in microgravity, \npropellant settling, and boil-off management and is required for lunar and interplanetary objectives.\nIf Starship does not achieve full reusability or rapid turnaround, we may experience higher per-launch costs, slower \ndeployment timelines for our large-scale constellations (including our orbital AI compute program), delayed revenue \ngrowth, and increased overall capital requirements, and our brand and reputation may suffer. AI compute satellites at \nscale need full Starship reusability to be economically compelling. Without full reusability and rapid turnaround, \nStarship would still be capable of enabling progress on our next-generation Starlink, direct-to-cell, initial lunar \nobjectives, and early AI compute satellite deployments, but such progress would be at a slower pace and higher cost. \nAny inability to deliver Starship to market as planned could constrain our participation in new or expanding \naddressable markets, limit our competitive differentiation, and hinder our efforts to attract and retain customers. \nThere can be no assurance that we will be able to achieve our objectives with respect to Starship within the expected \ntimeframes, if at all, or that delays or setbacks will not materially impact our strategic plans.\nAny delays or difficulties in obtaining, maintaining or renewing required regulatory approvals and licenses \nrequired for our space-related activities, including FAA launch and reentry licenses, would materially delay or \ndisrupt our operations, harm our business, or limit our ability to execute our business strategy.\nOur launch services are subject to extensive regulation in the United States and internationally. We must secure and \nmaintain numerous governmental approvals to launch our rockets and conduct related launch and reentry activities. \nAny failure or significant delay in obtaining required licenses and permits or failure to maintain them could disrupt \nour operations, constrain our growth, and adversely affect our ability to serve our customers. Our plans to deploy \nlarge-scale orbital infrastructure, including orbital AI compute systems, will require the operation of very large \nsatellite constellations, potentially numbering up to one million satellites. These plans will depend on obtaining a \nwide range of domestic and international approvals, including spectrum authorizations, orbital debris mitigation \napprovals, and coordination and authorization requirements relating to space situational awareness and international \nregulatory regimes, and there can be no assurance that such approvals will be obtained on acceptable timelines, \nterms, or at all.\nWe depend on timely approvals from the FAA to conduct our launch operations. If we do not receive FAA launch \nlicenses or related approvals on the schedules we anticipate or if we are subject to regulatory delays, we could be\n\n28\nTable of Contents\nforced to delay or cancel planned launches, which could cause missed customer commitments, increased costs, and \nunderutilization of our launch resources. Obtaining a launch license involves rigorous safety and environmental \nreviews, and unforeseen issues in meeting these requirements or additional conditions imposed during the review \nprocess could also impact our launch timelines. For example, current FAA regulations do not permit return-to-\nlaunch-site reentries for Starship, requiring us to obtain a waiver from the FAA, which is not guaranteed and could \ndelay or restrict such operations. Following an anomaly, mishap, or failure, the FAA or other authorities may require \ninvestigations, impose corrective actions, or restrict or delay our ability to conduct launch operations. We have in the \npast been, and may in the future become, subject to such actions, impacting our ability to increase launch cadence. \nThe regulatory framework governing commercial launches may also evolve over time. The FAA or other authorities \ncould introduce new or more stringent requirements for launch licensing – for instance, heightened safety standards, \nenvironmental mitigation measures, or other operational restrictions – that could require us to invest in new \ntechnologies, adjust our procedures, or otherwise incur additional compliance burdens. Moreover, as the frequency \nof our launches and industry activity overall continues to grow, the FAA’s resources may become strained, which \ncould lead to longer application processing times and other difficulties obtaining FAA licenses. Any significant \ndelay in receiving required FAA licenses, the imposition of onerous new licensing conditions, or failure to obtain an \napproval for a key launch, could materially adversely affect our business, financial condition, results of operations, \nand future prospects. \nAny delays or difficulties in obtaining, maintaining or renewing required communications licenses and spectrum \nauthorizations for our satellite connectivity services, including international and FCC satellite spectrum licenses, \ncould materially delay or disrupt our operations, harm our business, or limit our ability to execute our business \nstrategy.\nOur satellite connectivity services are subject to extensive regulation in the United States and internationally. \nObtaining and maintaining communications licenses and approvals from U.S. and foreign regulatory authorities is \ncritical to our connectivity services. Our satellite connectivity, including our global satellite-to-mobile connectivity \nservices under Starlink Mobile, depend on access to radio frequency spectrum and authorizations from the FCC in \nthe United States and telecommunications regulators in other countries. Without these licenses and approvals, we \ngenerally cannot offer connectivity services in a given market. Acquiring the necessary authorizations can be a \ncomplex and time-consuming process, often involving technical coordination, public-interest or national security \nreviews, and cross-border considerations, including in certain jurisdictions where regulatory processes may be \ninfluenced by protectionist policies or preferences. Spectrum access itself is limited and highly regulated. In \nSeptember 2025, we announced a definitive agreement with EchoStar to purchase its AWS-4 and H-block spectrum \nlicenses. The Spectrum Transaction was approved by the FCC on May 12, 2026 and is subject to other closing \nconditions prior to completion. We expect the Spectrum Transaction to close in November 2027. There can be no \nassurance that these conditions will be satisfied or waived in a timely manner, or at all. Even if the transaction is \ncompleted, there can be no assurance that our purchase of licenses from EchoStar will be sufficient to meet our \ngrowing need for spectrum licenses and we may be unable to find other parties to provide us with additional \nspectrum licenses on terms acceptable to us, or at all. We may in the future pursue additional acquisitions, leases, or \nother arrangements relating to spectrum rights in order to support the expansion of our connectivity services, and \nthere can be no assurance that we will be able to enter into or complete any such transactions or arrangements on \nacceptable terms, or at all. Any such future transactions or arrangements could require significant capital \ncommitments, ongoing payment obligations, and regulatory approvals. In addition, we must secure the global right \nto use the spectrum acquired from EchoStar from a number of international telecommunications regulators in order \nto make our V2 satellite-to-mobile services usable worldwide, and there can be no assurance that such authorizations \nwill be granted on acceptable terms, or at all. Moreover, our rights to use certain frequencies are coordinated through \nthe International Telecommunication Union (“ITU”) and are subject to international agreements to prevent harmful \ninterference. We must comply with ITU rules and coordination procedures, and changes in international spectrum \nallocations or adverse decisions in global regulatory forums could also reduce the frequencies available to us or \nattach conditions that degrade our network’s performance. Additionally, third parties have in the past, and may in \nthe future, obtain spectrum rights for the purpose of blocking market entry. \nRegulatory regimes for communications services vary widely across different countries and are continuously \nevolving. Each country may impose its own licensing conditions and operating requirements on satellite internet\n\n29\nTable of Contents\nproviders – for example, mandates to partner with a local entity, to host certain infrastructure within its borders, or to \nadhere to specific standards relating to data privacy and cybersecurity (including data localization) and, in some \ncases, regulators may deny, delay or decline to grant authorization for us to operate or use our spectrum in their \njurisdiction at all. Regimes in certain of our target markets may also favor incumbent or legacy telecommunications \ncompanies, which may impede, delay, or prevent our ability to enter such markets. Compliance with the different \nrequirements of applicable regulatory regimes can be challenging and costly, and any failure to comply with local \nlaws and regulations could lead to penalties or the loss of our authorization to operate in that region. Furthermore, \ncommunications regulatory authorizations often require periodic renewal and ongoing compliance with conditions \nsuch as deployment milestones, fee payments, and interference mitigation obligations. If we are unable to obtain, \nretain, and renew the necessary spectrum rights and service licenses on acceptable terms in each of our target \nmarkets, or if regulatory bodies significantly delay our authorizations or impose burdensome requirements, our \nability to expand and continue our connectivity services would be jeopardized, which would have a material adverse \neffect on our business, financial condition, results of operations, and future prospects.\nOur AI products and X platform are subject to complex and evolving U.S. and foreign laws and regulations \nregarding privacy, cybersecurity, data use, data combination, data protection, content, AI, competition, youth \nprotection, safety, consumer protection and notification, advertising, e-commerce, sanctions, export controls, and \nother matters. Many of these laws and regulations are subject to change and uncertain interpretation, and we \ncould be required to make changes to our products and business practices, and be exposed to monetary penalties, \nincreased cost of operations, declines in user growth or engagement, or loss of customers, or other harm to our \nAI products and X platform. \nOur AI products and X platform are subject to a variety of laws and regulations in the United States and abroad, \nincluding privacy, cybersecurity, data use, data combination, data protection and personal information, the provision \nof our services to younger users, biometrics, encryption, rights of publicity and related concepts, content, integrity, \nintellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization \nand storage, data disclosure, AI and machine learning, electronic contracts and other communications, competition, \nprotection of minors, consumer protection, sanctions, export controls, and notification, civil rights, accessibility, \nproduct liability, e-commerce, taxation and online payment services, as well as contractual requirements imposed by \napp stores, payment processors, and other partners. The introduction of new products or services, expansion of our \nactivities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, or \nother government scrutiny and, in some cases, such laws, regulations, or government scrutiny may limit or delay our \nability to introduce new products or services or expand our activities in certain jurisdictions. Particularly, our \nleadership position in various markets, especially in orbital launch services, could subject us to heightened \nregulatory scrutiny under competition laws. In addition, these U.S. and foreign laws and regulations may impose \ndifferent obligations from each other. As a result of these laws, regulations, and requirements, we are exposed to the \nrisk of significant fines and penalties or other adverse consequences, such as changes to our products, services, or \nbusiness practices. \nOur social media and AI-related activities expose us to a variety of risks related to harmful, misleading or illegal \ncontent, accuracy, misinformation and deepfakes, bias, discrimination, toxicity, sycophancy, AI deception, \nconsumer protection and notification, products liability, intellectual property infringement or misappropriation, \ndefamation, data privacy, cybersecurity, and sanctions and export controls. Social media and AI are the subject of \nincreasing legislative and regulatory activity by various governmental and regulatory agencies in jurisdictions \naround the world, which are applying, or are considering applying, platform moderation, intellectual property, \nproduct liability, data privacy, age restrictions, data disclosure, cybersecurity, export controls, consumer protection, \nor other existing laws and regulations or new general legal frameworks to AI (such as the EU’s AI Act, California’s \nFrontier Artificial Intelligence Act and New York’s Responsible AI Safety and Education Act). In the United States, \nan increasing amount of legislative and regulatory activity regarding AI is taking place at the state level. Various \nother jurisdictions have enacted or are considering enacting regulations focused on AI. Restrictions under such laws \nor regulations, if implemented, could increase the costs and burdens to our AI segment and its customers, delay or \nhalt deployment of new systems using our AI segment’s products, require us to modify, restrict, or discontinue \ncertain features (including less constrained modes), and reduce the number of new entrants and customers, \nnegatively impacting our AI segment’s business and financial results. If we do not adequately address concerns and\n\n30\nTable of Contents\nregulations relating to the responsible use of AI, public confidence in AI could be undermined, adoption of our AI \nproducts and services could slow, and we may suffer reputational or financial harm.\nCertain of our AI products, including Grok, offer features or modes designed to generate more candid, direct, or less \nreserved or irreverent outputs, such as “Spicy” Imagine Mode and “Unhinged” Voice Mode. These features are \nintended to provide users with greater flexibility and control in how they use our tools. Because these modes may be \nmore irreverent and harsher than our standard offerings, they present heightened risks, including reputational harm, \nthe generation of potentially explicit content and misinformation or deceptive outputs, potential nonconsensual or \nexploitative imagery, intellectual property infringement, or content that could be viewed as exploitative, harmful, \nharassing, abusive, or discriminatory. The availability of such features may also increase the risk of regulatory \nscrutiny, enforcement actions, litigation, or claims of harm, as well as reputational damage, user or advertiser \nbacklash, or limitations on our ability to distribute or monetize our products in certain jurisdictions or through \ncertain partners.\nIn addition, various regulatory authorities and agencies around the world are actively investigating and making \ninquiries relating to social media or the use of AI concerning a variety of matters, including investigations and \ninquiries relating to harmful or illegal content, recommendations, advertising, and consumer protection and \nnotification, which have resulted in, and may in the future result in additional or further investigations and \nproceedings being brought against us. Certain features that enable more user-directed or less constrained outputs \nmay increase the risk of regulatory scrutiny. For example, we are subject to investigations and inquiries from \nregulators and law enforcement authorities in the United States and internationally concerning allegations that our \nAI products were used to create nonconsensual explicit images or content representing children in sexualized \ncontexts, and similar matters. We are subject to ongoing litigation, including putative class action lawsuits, relating \nto such allegations, and we may be subject to additional litigation in the future concerning these types of allegations. \nThese regulatory inquiries, including those related to misuse of our AI products, such as Grok, and those related to \nthe X platform, could expose us to additional investigations, proceedings, and litigation, regulatory sanctions \n(including loss of access to certain markets, which has occurred in the past), liability and adverse publicity, any of \nwhich would adversely affect our business. \nFor example, in February 2026, the Irish Data Protection Commission, our AI segment’s privacy regulator in \nEurope, launched a large-scale inquiry to determine whether our AI segment has complied with its obligations under \nthe European Union’s General Data Protection Regulation (“GDPR”). This inquiry involves the processing of \npersonal data of European Union data subjects, including children, using generative AI functionality associated with \nthe Grok model within the X platform. In the United States, the Federal Trade Commission has undertaken an \ninquiry into the chatbots of our AI segment and other major technology companies to understand how these \ncompanies have evaluated the safety of their chatbots when acting as companions to children and teens. Regulatory \nrequirements applicable to online platforms and content moderation, and to AI systems, could require us to \nimplement costly compliance measures, restrict certain features or jurisdictions, or expose us to significant fines, \nliability, penalties, or operational constraints. We are also subject to developer agreements and guidelines imposed \nby third-party app stores, such as the Apple App Store and Google Play Store. Failure to comply with these \nagreements and guidelines, including those relating to content, could result in the suspension or removal of our \nmobile applications from such app stores. Any such suspension or removal could materially limit our ability to \ndistribute our mobile applications, and adversely affect our business, results of operations, and financial condition.\nAuthorities around the world have adopted or are considering adopting a number of legislative and regulatory \nproposals concerning data protection and privacy. Additionally, the increasing adoption of AI technologies, which \noften rely on the collection of large amounts of data and use of such data to train, fine-tune or otherwise develop AI \nmodels, has led data protection authorities around the world to consider and adopt new and evolving interpretations \nof data protection laws, imposing specific obligations with respect to the processing of personal data, including \nrequired notices, consents and opt-outs. Adverse legal rulings, legislation or regulations related to such data privacy \nmatters may result in fines and orders requiring that we change our practices, which could have an adverse effect on \nhow we provide services, and could harm our business, financial condition, results of operations and future \nprospects. These compliance obligations could also cause us to incur substantial costs or harm the quality and \noperations of our products and services in ways that harm our business. Further, we are subject to evolving laws and \nregulations that dictate whether, how, and under what circumstances we can transfer, receive or otherwise process\n\n31\nTable of Contents\npersonal data. The validity of various data transfer mechanisms we currently rely upon remains subject to legal, \nregulatory and political developments globally, which may require us to adapt our existing arrangements. Evolving \ndata protection laws and regulations such as the GDPR and ePrivacy Directive, and regulatory actions affecting our \nAI segment may restrict or adversely affect the X platform’s advertising services, Grok’s development and training, \nor the ability to offer certain products and services in certain jurisdictions. \nWe are also subject to tax laws, regulations, and policies of the U.S. federal, state, and local governments and of \ncomparable taxing authorities in foreign jurisdictions where we conduct business. Changes in tax laws or in their \ninterpretation or enforcement could result in fluctuations in our effective tax rate, exposure to new or additional tax \nliabilities, or adversely affect our after-tax profitability or financial position. These U.S. federal and state, EU, and \nother international laws and regulations, which in some cases can be enforced by private parties in addition to \ngovernment entities, are constantly evolving and can be subject to significant change. As a result, the application, \ninterpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly \nevolving industry in which we operate, and may be interpreted and applied inconsistently from jurisdiction to \njurisdiction and inconsistently with our current policies and practices. For example, regulatory or legislative actions \nor litigation concerning the manner in which we display content to our users, moderate content, provide our services \nto younger users, or are able to use data in various ways, including for advertising, have in the past and could in the \nfuture adversely affect user growth and engagement, affect the manner in which we provide our services, or \nadversely affect our financial results, including by imposing significant fines that increasingly may be calculated \nbased on global revenue. For example, the UK’s Online Safety Act 2023 and Australia’s Online Safety Amendment \n(Social Media Minimum Age) Act 2024 impose risk mitigation and age-related requirements on certain online \nplatforms. These laws and regulations, as well as any associated claims, inquiries, or investigations or any \ngovernment actions, have led to, and may in the future lead to, unfavorable outcomes including increased \ncompliance costs, changes to our products, loss of revenue, delays or impediments in the development of new \nproducts, negative publicity and reputational harm, increased operating costs, diversion of management time and \nattention, and remedies that harm our business, including fines, damages, or orders that we modify or cease existing \nbusiness practices. In addition, our AI products and the X platform have historically been, and may continue to be, \nsubject to claims and investigations relating to misinformation and deepfakes, defamation, intellectual property \ninfringement or misappropriation, data privacy, cybersecurity, employment matters, advertising practices, and user \nharms; defending such matters could be costly and divert management attention.\nOur Starlink and other satellite services are subject to complex and evolving U.S. and foreign laws and \nregulations, particularly relating to data privacy, cybersecurity, and telecommunications.\nOur Starlink and other satellite services are subject to a variety of laws and regulations in the United States and \nabroad covering cybersecurity, privacy, data use, data combination, data protection, data security, data retention and \ndeletion, data localization and storage, and data disclosure to law enforcement agencies. As a satellite internet and \ncommunications provider, we collect and otherwise process various kinds of data in connection with our services, \nsuch as customer personal information, account registration information, device identifiers, network and \nconnectivity data, and government information. These laws and regulations govern how we handle such information, \nand they may, among others, impose requirements relating to cybersecurity and privacy governance, data security \nmeasures, data security breach notification, cross border data transfers, and customer consent obligations. \nIn particular, the California Consumer Privacy Act (as amended), the GDPR (and its equivalent in the United \nKingdom) and other data privacy laws and regulations impose stringent and burdensome requirements in connection \nwith the processing of personal information and include significant penalties for non-compliance. Additionally, as a \ngovernment contractor, we are also subject to the Department of War’s Cybersecurity Maturity Model Certification \nrequirements, which requires companies that do business with the Department of War to, depending on the level of \nscrutiny required, meet or exceed certain specified cybersecurity standards to be eligible for new contract awards. \nMany of these laws and regulations are subject to change and uncertain interpretation, and their application may \nvary significantly across jurisdictions. Compliance may require us to modify our policies, procedures, and controls, \nand increase our compliance costs and operational complexity. We may post public privacy policies and other \nstatements regarding our collection, storage, sharing and other processing of personal information, and any actual or \nperceived failure to comply with such privacy policies and other statements, as well as the foregoing data privacy\n\n32\nTable of Contents\nand cybersecurity laws and regulations, may subject us to enforcement actions, investigations, litigation, reputational \nharm or requirements to modify or cease our business practices.\nOur business strategy depends on successfully designing, developing, and deploying our products and services, as \nwell as related platforms, infrastructure, and other strategic initiatives, at an unprecedented scale, which presents \nsignificant execution, cost, and timing risks.\nOur business plan, and ultimately, the achievement of our mission, is predicated on building, commercializing, and \noperating products and services, as well as related infrastructure and strategic initiatives at a scale that has not \npreviously been achieved. This objective requires us to integrate complex technologies, develop new processes and \ninfrastructure, and coordinate across multiple suppliers, contractors, regulators, and stakeholders. Because we are \nattempting to execute at a scale for which there is limited precedent, we face heightened uncertainty with respect to \ndesign, engineering, procurement, construction, commissioning, and operational performance, which is further \nheightened by the novel nature of the technologies underlying the products and services we intend to develop.\nAs a result, timelines for developing and deploying our products and services may be longer than we currently \nanticipate, and we may encounter delays due to, among other things, technical challenges, including those resulting \nfrom the nascent state of certain of our products and services, the unavailability or immaturity of key technologies, \nsupply chain constraints, energy shocks, including related price volatility, labor availability, permitting and \nregulatory approvals, or the need to redesign or reengineer key components. In addition, the costs associated with \ndeveloping and deploying our products and services and related platforms, infrastructure and strategic initiatives at \nscale may exceed our current estimates, including due to inflationary pressures, energy prices, unforeseen \nengineering complexities, the cost of developing or licensing technologies that are not yet commercially available, \ncompetitive dynamics, changes in scope, or the need for additional capital expenditures, contingency reserves or \nworking capital.\nIf we are unable to successfully execute our growth strategy on the anticipated timeline or within our expected cost \nparameters, our business, financial condition and results of operations could be materially adversely affected. Delays \nor cost overruns could also impact our ability to achieve projected returns, meet contractual commitments, access \nadditional financing on acceptable terms, or maintain investor confidence. Moreover, even if we successfully deploy \nour growth strategy, including Starship, Terafab, orbital AI, and the creation of the lunar economy, they may not \nperform as expected at scale, which could result in operational inefficiencies, increased costs, reduced revenues, or \ndeclines in our stock price.\nWe have experienced, and will likely continue to experience, launch delays and failures that could have a \nmaterial adverse effect on our business, financial condition, results of operations, and future prospects.\nLaunch vehicle underperformance, propulsion anomalies, structural failures, software errors, or other malfunctions \ncould result in launch delays or partial or total mission failures, including the loss of satellites or payloads. The \noccurrence of mission failures or other significant operational disruptions could also expose us to litigation as well \nas increased scrutiny from regulatory authorities, lead to the imposition of additional compliance requirements, and \nadversely affect our brand and reputation, and our ability to obtain future licenses, permits, or government contracts. \nWe do not typically obtain insurance coverage for our satellites, payloads, or launch vehicles, and as a result we bear \nthe full financial cost of any such losses. Repeated anomalies or high visibility mission failures could also negatively \naffect our brand, reputation, ability to win new business, and our customers’ ability to procure launch and in-orbit \ninsurance at competitive rates (to the extent we decide to pursue it). Such repeated anomalies or mission failures \ncould also result in, regulators delaying, conditioning or denying approvals, waivers or licenses required for future \nlaunches or reentries, which could reduce our launch cadence and delay the deployment of our satellites and other \nservices. In the past, certain of our launch vehicles have experienced partial or total mission failures, including \nanomalies that resulted in the loss of payloads and damage to launch vehicles. In certain circumstances, such \nmission failures could result in, debris from our launch vehicles causing significant damage to persons or property \non the ground as well as environmental damage. There can be no assurance that similar or other failures will not \noccur with future launches. In addition, satellites may be deployed into incorrect or suboptimal orbits due to vehicle \nperformance issues, separation events, or guidance, navigation and control errors. Incorrect orbital placement can\n\n33\nTable of Contents\nmaterially reduce a satellite’s operational life, impair performance, increase fuel consumption, or render the satellite \nunusable.\nOur satellites, launch vehicles, and other space-related technologies operate, and in the case of orbital AI \ncompute, will operate, in the harsh and unpredictable environment of space, exposing them to a wide and unique \nrange of space-related risks that could cause them to malfunction or fail, and any such malfunction or failure \ncould adversely affect our business, financial condition, results of operations, and future prospects.\nOperating in space subjects our satellites, launch vehicles, spacecraft, and related systems to extreme and highly \nvariable conditions that can adversely affect performance, reduce useful life, or result in total mission failure. Space \nis inherently hostile. Hardware must withstand: significant vibration and acoustic loads during launch; wide-ranging \nthermal cycles; radiation from solar and cosmic sources; micrometeoroids and orbital debris; and other \nenvironmental hazards, each of which testing cannot fully replicate. In particular, we have not, and no one else has, \npreviously operated or attempted to operate orbital AI compute, and the conditions of space on such AI \ninfrastructure have not been tested. Once deployed, orbital AI compute infrastructure will not be readily accessible, \nand as a result, will not be easily repaired or upgraded, such that any component failures could result in permanent \ncapacity loss, accelerated depreciation, decommissioning or need for replacement of the infrastructure. \nIn addition, space weather events, such as geomagnetic storms, solar flares, and other forms of radiation activity, \nhave in the past disrupted and could in the future disrupt satellite propulsion, power systems, and communications \nequipment, potentially leading to reduced performance or permanent damage. Although we incorporate certain \nradiation-hardened components, shielding, and redundancy into our systems, these measures may not be sufficient to \nprevent material adverse impacts in all scenarios. Failures or performance degradation resulting from these risks \ncould delay deployments, reduce available capacity, increase operating costs, require significant capital expenditures \nto replace affected assets, or interrupt or degrade services provided to customers. Furthermore, the useful life of our \nsatellites is inherently shorter than that of the information technology systems and infrastructure they host. As a \nresult, we must periodically launch replacement satellites as existing satellites reach the end of their useful lives and \nare decommissioned, which may truncate the effective lifespan of those underlying information technology systems \nand infrastructure. Any such events could adversely affect our reputation, compliance with applicable laws and \nregulations, business, financial condition, results of operations, and future prospects. \nThe continued proliferation of satellite constellations in Low-Earth Orbit, as well as the risk of collisions with \nspace debris or other spacecraft, could limit or impair our launch flexibility and satellite deployment, which could \nadversely affect our business, financial condition, results of operations, and future prospects.\nThe continued proliferation of Low-Earth Orbit constellations can increase the risk of collisions with space debris or \nother spacecraft if operators fail to adhere to responsible space safety, debris mitigation, or coordination practices. \nOur growth strategy depends, in part, on continuing to launch additional satellites into Low-Earth Orbit. As the \nnumber of satellites and other objects in Low-Earth Orbit continues to grow, the probability of accidental collisions, \nfragmentation events, or other in-orbit incidents increases, which could result in the loss or degradation of our \nsatellites, increased costs for collision avoidance maneuvers, or the need to replace or reposition assets on an \naccelerated schedule. Not all satellite operators or other space actors adhere to the same rigorous space safety, debris \nmitigation, or coordination practices that we adhere to, which may increase the likelihood of congestion, \nconjunctions, or other operational risks outside of our control and, in extreme cases, could contribute to \nfragmentation events or cascading debris effects that further increase collision risks in Low-Earth Orbit.\nIn addition, some domestic and international authorities have applied heightened regulatory scrutiny as interest in \nutilizing Low-Earth Orbit for satellite operations has increased. Debris mitigation regulations may emerge if \ncongestion increases. Failure to meet debris requirements could result in monetary penalties or loss of licensing \nauthority, which would adversely affect our satellite constellation deployment and expansion plans, and future \nregulatory actions could impose more restrictive operational, deployment, or debris mitigation requirements that \ncould limit our ability to launch or operate satellites in Low-Earth Orbit. In addition, there is a burgeoning effort to \nfurther regulate Low-Earth Orbit, MEO, and GSO and establish liability regimes for operators, including regimes \nsimilar to those under the Comprehensive Environmental Response, Compensation and Liability Act, which imposes \nstrict liability for environmental contamination or remediation costs, as well as growing concern over the potential\n\n34\nTable of Contents\nenvironmental effects of emissions and other byproducts from rocket launches in Earth’s upper atmosphere. \nAdditional regulation in this area could adversely impact our business, financial condition, results of operations, and \nfuture prospects.\nFurthermore, any damage to our satellites or impairment of their functionality resulting from collisions with space \ndebris or other spacecraft could materially and adversely affect our ability to deliver reliable services to our \ncustomers, harm our reputation, and expose us to potential contractual liabilities or insurance claims. The growing \nchallenges associated with space debris management may require us to invest in additional technologies or processes \nto safeguard our assets and maintain compliance with evolving regulatory frameworks, which could have a material \nadverse effect on our business, financial condition, results of operations, and future prospects.\nInterruptions in the operation of critical satellite network, ground station, launch, manufacturing, or spacecraft \nor data center infrastructure could result in significant downtime, operational delays or loss of service, each of \nwhich could have a material adverse effect on our business, financial condition, results of operations, and future \nprospects.\nOur ability to provide reliable services across our Space, Connectivity, and AI business segments depends on the \nuninterrupted operation of our critical infrastructure, including but not limited to satellite and communications \nnetworks, ground stations, launch facilities, and data centers. An interruption or failure affecting any aspect of this \ninfrastructure, whether due to equipment malfunctions, power outages, disruptions in, or unauthorized access to, our \ncomputer systems (such as software or hardware failures, or cyberattacks), natural disasters (such as earthquakes, \nfloods, fires, or severe weather events), terrorism, war, sabotage, pandemics, epidemics, or other unforeseen \ncircumstances, could result in significant downtime, operational delays, or complete loss of service. Any such attack \ncould destroy or disable a significant number of our satellites and, depending on its scale, could trigger a cascading \ncollision event that renders our licensed orbits, and potentially other orbits, unusable for an extended period. \nSimilarly, the use of our satellites to enable communications access in conflict zones may expose us to retaliation \nfrom foreign governments and non-state actors. Such an event could have a material adverse effect on our business, \nfinancial condition, results of operations, and future prospects. These events may disrupt power, damage facilities, \ninterrupt service despite contingency plans or compromise our ability to deliver services to customers as promised, \nhinder our ability to meet regulatory or contractual requirements, and erode trust among our customers, partners, \nregulators and stakeholders. In particular, an interruption or failure affecting our critical infrastructure could result in \noutages of service to our Starlink Subscribers. Any such outage could erode the trust of existing and potential \nStarlink Subscribers in our service, which could result in the loss of existing or potential subscribers. In addition, the \ncomplexity and interdependence of our engineering, manufacturing, assembly and terrestrial, space transportation, \nand infrastructure systems mean that a disruption in one component can have cascading effects throughout our \noperations. For example, an outage at a data center or ground station could impact command and control functions, \nmission planning, or real-time telemetry, while interruptions at launch facilities could cause postponements or \ncancellations of scheduled launches. \nAdverse global macroeconomic and geopolitical conditions may negatively affect our business, financial \ncondition, results of operations and future prospects.\nAdverse global or regional economic and geopolitical conditions could reduce demand for certain of our products \nand services, which may negatively affect our business, financial condition, results of operations and future \nprospects. Economic downturns, inflation, higher interest rates, tighter credit conditions, reduced consumer \nspending, lower business or government investment, or geopolitical developments may negatively affect demand for \nour offerings. Reduced consumer or enterprise spending for each of our Starlink connectivity services or our AI-\nrelated offerings would limit our ability to grow our business, which may slow the pace at which we deploy satellites \nand expand our constellation or adversely affect the utilization of our launch capabilities.\n\n35\nTable of Contents\nManufacturing, testing and launching rockets, satellites, and spacecraft, including our efforts to reuse rockets \nand spacecraft, involve inherent risks that could result in human injury or death, property damage and \nenvironmental damage or other adverse environmental impacts due to accidents or equipment failures. Any such \nevents could result in substantial losses, including reputational harm and legal liability, which could have a \nmaterial adverse effect on our business.\nThe manufacturing, testing, launching, and recovery of our rockets, satellites, and spacecraft are complex activities \nthat are conducted under challenging conditions and involve a high degree of risk. Our reusable vehicles will reenter \nEarth’s atmosphere and fly over populated land for extended periods, which carries inherent risks to populations in \nthe event of failure, such as structural breakup, loss of control, or debris dispersal. Although we implement extensive \nsafety protocols and operational safeguards designed to protect personnel and the public, these protocols and \nsafeguards may not in all circumstances prevent exposure of our personnel and potentially members of the public to \nhazards such as explosions, structural failures or debris dispersal. A manufacturing defect, testing anomaly, launch \nfailure, recovery incident, or similar event involving injury to humans, any human fatalities, property damage, or \nenvironmental damage or other adverse environmental impacts could result in substantial losses, including \nreputational harm and legal liability, which could have a material adverse effect on our business.\nAlthough we are focused on the vertical integration of our businesses, we depend on third parties to manufacture \nand supply certain key components necessary for the provision of our launch, connectivity, and AI services, and \nany supply shortages or disruptions or failures in their performance could have a material adverse effect on our \nbusiness, financial condition, results of operations, and future prospects.\nDisruptions in the supply chain for essential raw materials or components, challenges in the supplier qualification \nprocess, or increases in the prices of inputs could materially and adversely affect our business, financial condition, \nresults of operations, and future prospects. Despite our supply chain being largely vertically integrated, our reliance \non third-party manufacturers and suppliers for key components introduces risks related to supply chain continuity, \nquality assurance, and vendor performance. We depend on both domestic and international suppliers for certain \nspecialized materials, components, and services that are essential to the production and operation of our launch \nvehicles, spacecraft, satellites, user terminals (including Starlink consumer terminals), AI segment and related \ninfrastructure. Any failure or delay by these partners to deliver components in the required quantities, within \nspecifications, or on schedule has in the past and may in the future adversely affect our production schedules, \noperational reliability, and our ability to meet contractual obligations. In addition, disruptions in the supply chain \ndue to shortages, quality issues, natural disasters, geopolitical events, labor disputes, pandemics, epidemics, tariffs or \ntrade restrictions, criminal activity (including terrorism, sabotage or cyberattacks) or other factors outside our \ncontrol could result in significant delays, increased costs, or an inability to deliver products and services to \ncustomers in a timely and cost-effective manner. The process of qualifying new suppliers or transitioning to \nalternative vendors can be time-consuming and may not be successful, further increasing our exposure to supply \nchain interruptions. Furthermore, our limited pool of qualified vendors for certain critical products or services \nexposes us to increased pricing pressures and quality risks. In particular, certain materials and products that are key \ninputs in our Space, Connectivity, and AI segments are available from a limited number of suppliers, including sole \nor limited-source suppliers, and our direct chip suppliers are dependent on a concentrated group of advanced \nsemiconductor fabrication facilities. For additional information regarding supply chain risk relating to our AI \nprocessors, please see “Our ability to scale our AI products relies on our terrestrial and orbital AI compute \ninfrastructure, which depends on the availability of power, AI processors, and other critical components, \ntelecommunications services, and any shortages or disruptions thereof would materially adversely affect our \nbusiness, financial condition, results of operations, and future prospects.” The inability of these suppliers to deliver \nnecessary components of the products in a timely manner and at prices, quality levels, and volumes acceptable to us, \nor interruptions in supply of materials or products on which these suppliers rely, could have an adverse effect on our \nability to meet customer demands and contractual obligations, execute on our growth strategy, or manage our \nexpenses or timelines as expected, which could adversely impact our business, financial condition, results of \noperations, and future prospects.\n\n36\nTable of Contents\nOur ability to scale our AI products relies on our terrestrial and orbital AI compute infrastructure, which \ndepends on the availability of power, AI processors, and other critical components, telecommunications services, \nand any shortages or disruptions thereof would materially adversely affect our business, financial condition, \nresults of operations, and future prospects.\nOur ability to scale our data center infrastructure, which supports our AI segment, is increasingly constrained by the \navailability of power at economically feasible prices, long lead times, availability of materials, and changing \nregulatory requirements. For example, energy supply is constrained globally due to the significant increase in \ndemand for, and limited availability of, energy to power AI compute. Securing this capacity can involve entering \ninto complex, long-lead-time arrangements or proceeding with alternative sources of power generation. We \ncurrently rely significantly on natural gas and gas turbine technology to power our data center operations. As such, \nour ability to scale our infrastructure depends in part on our continued access to natural gas supply at economically \nfeasible prices, the availability of gas turbines and related equipment, and the maintenance of a regulatory \nenvironment that permits and supports the use of natural gas for large-scale power generation. Our AI products also \nrely on GPUs and other processors, servers, network equipment and other critical components sourced from third-\nparty suppliers for use in our data centers. Manufacturing and supply of servers and network equipment for our \ntechnical infrastructure, particularly for GPUs and other specialized components, is limited to a small number of \nqualified suppliers. We do not have any long-term or other material contractual arrangements with our direct chip \nsuppliers, instead procuring all of our GPUs on a purchase-order basis. Our direct chip suppliers are dependent on a \nconcentrated group of advanced semiconductor fabrication facilities, or “fabs.” Any disruption to our upstream \nsupply chain, including fab capacity constraints, manufacturing issues, shortages of raw materials such as silicon \nwafers or rare earth elements, geopolitical tensions affecting fab operations, or natural disasters impacting key \nfabrication regions, could limit our chip suppliers’ ability to fulfill our orders, which could have a material adverse \neffect on our business, financial condition, and results of operations. Our ability to achieve orbital AI at scale \ndepends on our ability to access a sufficient number of AI chips, significantly more than are currently available to \nus. While we expect to construct Terafab to address such supply constraints, Terafab may not be successful, in \nwhich case we may not have other sources of sufficient AI chips to meet our orbital AI compute demands. While \nTerafab is intended to expand our internal chip manufacturing capabilities and alleviate potential future AI chip \nshortages at SpaceX, particularly as we pursue orbital AI at scale, we expect to continue sourcing a significant \nportion of our compute hardware from third-party suppliers, and there can be no assurance that we will be able to \nachieve our objectives with respect to Terafab within the expected timeframes, or at all. While we have a framework \nagreement with Tesla, neither Tesla nor Intel are obligated to remain a part of the project, and we may not enter into \nany such definitive agreements. Our AI segment also relies on services from third-party telecommunications \nproviders, including connectivity to the cloud, and internet bandwidth suppliers to provide uninterrupted and error-\nfree services through their networks. We may be unable to obtain AI processors or other necessary components or \ntelecommunications services at prices or volumes that are acceptable to us or in a timely manner. Our suppliers and \ntelecommunications and internet service providers also serve other customers, including certain of our competitors, \nand such suppliers or providers may prioritize capacity for such other customers, increase prices on short notice, \nrequire onerous prepayments, or reduce or delay deliveries to us. Any failure by our suppliers and service providers \nto meet our cost, quality, volume, or delivery requirements, or any shortage or disruption in the supply of chips, \ntelecommunications services or other components required for our AI segment, could result in service disruption or \noutages, delay critical data center or network infrastructure upgrades or expansions, impair our ability to train our AI \nmodels and meet customer demand for our AI segment products and materially adversely affect our business, \nfinancial condition, results of operations and future prospects.\nWe also rely on third-party cloud compute providers for a portion of the compute used for the X platform and may \nfrom time to time rely on third-party data center providers, which exposes us to several risks that are beyond our \ndirect control, including vulnerability to outages, performance issues, and cyberattacks. We have non-cancellable, \nmulti-year capacity commitments to cloud compute providers, requiring payment regardless of usage. A termination \nor lapse in service from third-party cloud compute and data center providers could expose us to service interruptions, \nsignificant delays, and additional expenses to re-architect products for a different provider. Additionally, in the event \nof nonperformance by us or our providers, or an industry downturn, we may incur liabilities, have excess capacity \nthat we cannot easily redeploy, and fail to receive payments from our counterparties or customers.\n\n37\nTable of Contents\nWe face intense competition in the markets in which we operate, and while we have historically outperformed \ncertain competitors in our Space and Connectivity segments, we may not continue to do so, which could adversely \naffect our business, financial condition, results of operations, and future prospects.\nThe markets in which we operate are rapidly evolving and intensely competitive, and we face competition from a \nrange of established and emerging companies, including large, well-capitalized technology companies and aerospace \nfirms, including foreign competitors. Some competitors are investing significant capital to develop and deploy \nsatellite constellations and related infrastructure that compete directly with our offerings, and companies based in \nChina and other jurisdictions may benefit from government support, favorable regulatory environments, or strategic \nnational prioritization.\nSome of our current and potential competitors, particularly in our AI segment, have greater financial, technical, \nmanufacturing, or other resources than we do, and may devote more resources to the development and \ncommercialization of competing products and services. Competitors may adopt more aggressive pricing, secure \nmore favorable supplier or distribution arrangements, bundle services, form strategic alliances or otherwise take \nactions that enhance their competitive position in ways that could adversely affect our business. In certain markets, \nregulatory or geopolitical factors may result in preferential treatment for domestic competitors or otherwise limit our \nability to compete effectively.\nCompetition continues to intensify as new technologies are developed and new entrants emerge. While we have \nhistorically outperformed certain competitors in aspects of our business, such as our Space and Connectivity \nsegments, there can be no assurance that we will maintain this position. \nWe depend on our ability to recruit and retain employees who have advanced engineering and technical skills, \nand intense competition for such employees may increase costs and affect our ability to meet development and \nproduction timelines.\nWe depend on our ability to recruit and retain employees who have advanced engineering and technical skills and, in \nsome cases, employees with the necessary national security clearances to perform under our government contracts or \nwin new business. These employees are in great demand and are likely to remain a limited resource in the \nforeseeable future. The current tight labor market has adversely impacted our ability to recruit qualified personnel, \nincluding engineers, particularly with respect to our AI segment. Increased restrictions on the import or retention of \nforeign labor may also increase demand for engineering personnel and adversely impact our ability to hire and retain \nqualified personnel. Continued turnover may impact employee morale and create other challenges as we attempt to \nscale our AI business. In addition, significant amounts of time and resources are required to train technical and other \npersonnel, and we have in the past lost and may in the future lose new employees to our competitors or other \ncompanies before we realize the benefit of our investment in recruiting and training them. Our ability to recruit and \nretain qualified employees depends on a number of things, including our ability to pay market compensation, \nprovide opportunities for advancement, and secure visa sponsorships and work permits for qualified international \ncandidates. If we are unable to recruit and retain a sufficient number of these employees, then our ability to maintain \nour competitiveness and grow our business could be negatively affected. In addition, because of the highly technical \nnature of our products and services, the loss of any significant number of our existing engineering personnel could \nhave a material adverse effect on our business, financial condition, results of operations, and future prospects. A \nsignificant portion of the talent pool for advanced engineering and technical roles is international, and changes in \nimmigration laws or policies in the jurisdictions in which we operate could limit our ability to hire and retain such \ncandidates and intensify competition for talent.\nFrom time to time, we are involved in litigation, investigations, and other regulatory proceedings which could be \ncostly, time-consuming, and divert management attention, materially adversely affecting our business.\nFrom time to time, we have been and may in the future become involved in various legal proceedings relating to a \nvariety of matters, including intellectual property, commercial, regulatory, product liability, employment, personal \ninjury, class action, employee or contractor health and safety, environmental, whistleblower, securities and other \nlitigation and claims, and governmental and other regulatory investigations and proceedings, including tax \nexaminations. Additionally, our share price may be volatile and, in the past, companies that have experienced\n\n38\nTable of Contents\nvolatility in the market price of their stock have been subject to securities litigation, including class action litigation. \nSuch matters could be costly, time-consuming, and divert management’s attention from executing our strategic \ninitiatives and operating our business. The industries in which we operate have historically experienced significant \nlitigation and regulatory scrutiny, and with our public profile, expanding operations and the novel nature of some of \nour offerings, including our AI solutions, we may face an increased risk of such actions. Litigation and regulatory \nproceedings are inherently unpredictable. Any adverse judgments, settlements, or regulatory penalties could result in \nsubstantial financial costs, reputational harm, and operational disruptions. Certain of our hardware products are new \nand relatively unproven. If a product defect were to arise, especially one leading to product liability claims, the \nresulting warranty and damage claims, together with any associated harm to our reputation, could have a material \nadverse effect on our business, financial condition, results of operations, and future prospects. Even if we prevail in \nthese matters, the defense and resolution of litigation and regulatory proceedings may require significant resources \nand management attention, which could materially and adversely affect our business, financial condition, results of \noperations, and future prospects. Additionally, the mere initiation of litigation or government inquiries, regardless of \nthe outcome, could negatively impact investor confidence and our stock price. As we continue to innovate and \npursue new commercial and government contracts, expand our product offerings, and enter new markets, the \nlikelihood of facing legal and regulatory challenges may increase, further exposing us to these risks. Please refer to \n“Business—Legal Proceedings” and Note 17, Commitments and Contingencies, in our audited consolidated \nfinancial statements and Note 16, Commitments and Contingencies in our unaudited consolidated financial \nstatements include elsewhere in this prospectus.\nAny significant disruption in, or unauthorized access to, our computer and data systems or those of third parties \nthat we utilize in our operations could result in a loss or degradation of service, loss of trust in us and harm to \nour business.\nAn operational disruption in, or unauthorized access to, our computer and data systems or those of third parties that \nwe utilize in our operations could compromise sensitive (including classified or otherwise government-controlled), \nproprietary, confidential, or personal information, impede operations, and result in financial losses, legal liabilities, \nreputational harm, and erosion of our competitive position in launch services, space-based internet, and mobile \nphone services. Our business depends on the continuous and secure operation of our information technology systems \nand infrastructure, including those that support our launch operations, manufacturing facilities, Starlink services, \ngovernment services, employee databases, and mission-critical communications. Our systems and infrastructure may \nalso be subject to cyberattacks, including sophisticated hacking attempts by nation-states, state-sponsored actors, \ncybercriminals, or other malicious third parties, which could result in unauthorized access to, disruption of, or \ndegradation of our satellite systems, ground infrastructure, or data networks. Such disruptions or unauthorized \naccess, which may result from a wide variety of incidents or activities, including inadvertent compromises arising \nfrom process, coding or human errors, cyberattacks, data breaches, exploitation of known or unknown software or \nhardware vulnerabilities, malware, ransomware, credential harvesting, computer viruses, social engineering (such as \nphishing), denial of service attacks, software or hardware failure, or other malicious or disruptive incidents or \nactivities—whether perpetrated by external actors, including nation-states, state-sponsored organizations, or \ncybercriminal groups, insiders, or other threat actors, any of whom may see their efforts enhanced by the use of AI\n—could lead to the theft, destruction, or unauthorized disclosure of sensitive (including classified or otherwise \ngovernment-controlled), proprietary, confidential or personal information, including technical data, customer or \npartner information, and intellectual property, particularly because some of our products and services involve the \ncollection, storage, and processing of such data and information. Our development and deployment of AI models, \ninternal and third-party AI tools, and other AI applications expose us to increased and novel risks and \nvulnerabilities, including prompt injection, hallucinations, errors, and other issues related to AI agents, as well as the \nrisk of compromise of valuable intellectual property including source code, model weights, and other assets. Certain \ninternal and external threat actors, such as nation-states, state-sponsored organizations, organized threat networks \nand corporate espionage actors, among others have and will continue to sustain malicious activities for extended \nperiods and deploy significant resources to attempt, and in some cases succeed, at causing significant disruptions in, \nor unauthorized access to, our computer systems or those of third parties that we utilize in our operations. Such \nincidents have in the past and may in the future also disrupt or degrade our ability to design, produce, launch, or \nmanage our products and services, resulting in operational delays, violations of applicable data privacy and\n\n39\nTable of Contents\ncybersecurity laws and regulations, disruptions in, or unauthorized access to, our customers’ computer systems, \nincreased costs, loss of revenue, loss of trust, litigation or regulatory penalties. \nAs the scale, frequency, sophistication, or intensity of cyber and data privacy threats continue to evolve, and as our \nreliance on interconnected systems and third-party vendors grows, we remain exposed to vulnerabilities despite our \nefforts to implement security measures, monitoring, and incident response protocols. There can be no assurance that \nour cybersecurity risk management processes, including our policies, procedures, and controls, will be effective in \npromptly or effectively detecting, containing, or remediating cybersecurity attacks. Any significant security and data \nbreach or system failure could materially and adversely affect our business, financial condition, results of operations, \nand future prospects, and could result in loss of trust among customers, regulators, government agencies, and \npartners. Furthermore, our efforts to investigate, mitigate, contain, and remediate the harm caused by a significant \ndisruption in, or unauthorized access to, our computer and data systems or those of third parties that we utilize in our \noperations may be costly and time-consuming and may not be successful, and we may make errors or fail to take \nnecessary actions. Remediation efforts, litigation, regulatory investigations, and compliance obligations (including \nobligations to notify appropriate regulators and affected parties) arising from such incidents could require substantial \nmanagement attention and resources, and we rely on our own funds to cover such losses or liabilities. In addition, \nrapid changes to U.S. and international cybersecurity and privacy laws and regulations have expanded regulatory \nregimes and compliance requirements, and regulators continue to undertake enforcement actions in these areas. We \nexpect the regulatory environment to grow more complicated, which may increase our operational and compliance \nexpenditures, as well as those of our suppliers. Moreover, some third parties we utilize in our operations may receive \nor store information provided by us or by our customers. If these third parties fail to adopt or adhere to adequate data \nprivacy and security practices, or their systems or networks are breached in the manner described above, our data or \nour customers’ data may be improperly accessed, used, or disclosed to unauthorized recipients, which could result in \nfinancial losses, legal liabilities, reputational harm, and additional compliance obligations. We do not control the \nprivacy and cybersecurity measures put in place by such third parties, and any contractual protections with such \nthird parties, such as obligations to indemnify us, if any, may be ineffective or otherwise inadequate.\nThe development and maintenance of the technologies and infrastructure necessary to support our current and \nfuture operations will require significant capital expenditures, and if we are unable to generate sufficient cash \nflow from operations or obtain additional financing on acceptable terms, our business, financial condition, \nresults of operations, and future prospects could be materially and adversely affected.\nOur business requires substantial capital expenditures to design, develop, expand, and maintain our technologies and \ninfrastructure to support our operations. For example, we have incurred significant capital expenditures and expect \nto increase our capital expenditures substantially in the future in connection with the design, development, and \ndeployment of our satellite constellations, launch vehicles, ground stations, manufacturing facilities, and programs, \nincluding Terafab, AI compute infrastructure, data centers, and other supporting infrastructure. These expenditures \ninclude, but are not limited to, costs associated with research and development, construction and expansion of \nproduction capabilities, acquisition of property and equipment, and ongoing maintenance and upgrades to ensure \nreliability and competitiveness. In particular, the development, testing, and deployment of Starship in accordance \nwith our anticipated schedule, as well as our pursuit of orbital AI, other space-related services, and lunar and \ninterplanetary missions, will require the investment of significant additional capital resources. In addition, we have \nmade and intend to continue to make substantial capital expenditures to support the growth of our AI products, \nincluding costs related to obtaining third-party GPUs, manufacturing our own GPUs, and constructing, leasing, \nmaintaining, enhancing, and expanding our data centers. We may choose to increase or accelerate the pace of any of \nthese investments at any time, which could result in periods of reduced profitability or increased losses as we \nprioritize long-term growth over near-term financial performance. Many of the products and services that are \nimportant for our growth prospects are novel and untested, and therefore our estimates of capital expenditures may \nprove to be inaccurate.\nIf we raise additional capital through further issuances of equity or convertible debt securities, our shareholders \ncould suffer significant dilution and any new equity securities we issue could have rights, preferences, and privileges \nsuperior to those of holders of our Class A common stock. The agreements governing our indebtedness contain \nvarious restrictive covenants and any additional debt financing secured by us in the future could involve restrictive \ncovenants relating to our capital-raising activities and other financial and operational matters, which could limit our\n\n40\nTable of Contents\noperational flexibility and make it more difficult for us to obtain additional capital and to pursue business \nopportunities. Our ability to access the capital markets or secure other sources of financing may be adversely \naffected by factors beyond our control, including fluctuations in market conditions, changes in investor sentiment, \nincreases in interest rates, or adverse events affecting the broader industry or economy. \nOur substantial level of indebtedness could materially adversely affect our financial condition.\nWe have significant indebtedness that could materially adversely affect our business by increasing our vulnerability \nto general adverse economic and industry conditions; requiring us to dedicate a substantial portion of our cash flow \nfrom operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund \noperations, our growth strategy, product development and strategic initiatives; limiting our flexibility in planning \nfor, or reacting to, changes in our business and the industry in which we operate; and exposing us to the risk of \nincreased interest rates as our borrowings are, and may in the future be, at variable interest rates. As of March 31, \n2026, we had total principal indebtedness outstanding of $29,132 million. Our substantial indebtedness may also \nadversely affect our credit ratings or outlook, which may increase our cost of capital, limit our access to financing, \nand impair our ability to obtain additional financing on acceptable terms, or at all. The occurrence of any one of \nthese events could have a material adverse effect on our business, results of operations, and financial condition, and \nability to satisfy our obligations under the agreements governing our indebtedness. If we fail to comply with the \nterms of our debt agreements, our lenders could declare a default and accelerate our repayment obligations, which \ncould materially and adversely affect our business, financial condition, results of operations, and future prospects.\nOur future revenue and operating results depend upon our ability to develop new technologies and respond to \nchanges in customer demands and industry standards in highly competitive markets, and if we are unable to do \nso, our business, financial condition, results of operations, and future prospects may be materially and adversely \naffected.\nOur future revenue growth and operating results are highly dependent on our ability to design, develop and \nsuccessfully commercialize new and innovative technologies, products, and services on a timely and cost-effective \nbasis. The markets in which we operate are characterized by rapid and disruptive technological change, evolving \nindustry standards, the emergence of new and well-funded competitors, frequent new product and service \nintroductions, changing customer demands and regulatory changes. In addition, we may expand into new markets, \nwhich may lead to similar or additional challenges that we cannot foresee and may require novel innovations to \nnavigate or overcome. As a result, we may from time to time rapidly adjust, modify or change our strategic \npriorities, capital allocation, product or service focus or operational initiatives across our business in response to \nthese other changes or new markets. In particular, the AI industry is nascent, highly competitive, capital intensive \nand rapidly changing. There are a number of companies today that develop or may develop products or services that \ncompete with our AI segment, and new competitors may emerge over time. Some of our current or potential \ncompetitors in the AI market are large technology companies that have significant financial, technical and marketing \nresources, and in some cases greater access to data, and others are smaller specialized companies that possess \nspecialized expertise and may have greater flexibility than we do. We also have a limited number of customers for \nour AI products when compared to certain of our competitors. Current and potential competitors have established, or \nmay in the future establish, cooperative relationships among themselves or with third parties to increase the ability \nof their AI technologies to address the needs of current and prospective users of our AI products. Furthermore, \ncurrent or prospective users may decide to develop competing products for particular use cases or to establish \nstrategic relationships with our competitors for such use cases. Current and potential competitors and bad actors, \nmay also attempt to reverse engineer or otherwise replicate our AI technology, including through model extraction \nor distillation techniques. Increased competition with our AI products could result in price reductions, revenue \nshortfalls, loss of customers and loss of market share, which may harm our business, financial condition results of \noperations and future prospects. \nIn our Connectivity segment, including Starlink broadband and Starlink Mobile, we face competition from terrestrial \nfixed network providers, mobile network operators, and other satellite providers, and our services may be less \ncompetitive in certain markets, including dense urban areas where terrestrial fiber and wireless networks may offer \nhigher capacity, lower cost, or more consistent performance. In addition, our Starlink Mobile offering operates in a \nhighly competitive and evolving market, and may be affected by the pace of technological development, spectrum\n\n41\nTable of Contents\navailability, and the success of our partnerships with mobile carriers. In addition, the X platform faces intense \ncompetition from social media, messaging and media companies and traditional media outlets, such as television, \nradio and print, for advertising budgets. Advertisers generally do not have long-term commitments to the X platform \nand may reduce or discontinue their advertising spending for a variety of reasons outside our control. We are \nexpending resources to improve the X platform and improve its attractiveness to users and advertisers. While we \nhave introduced new user interface enhancements, algorithm updates, and other product features, improvements to \nthe X platform, introducing new products and services on the X platform and other initiatives may be costly and \ndifficult to implement, and we cannot be sure that they will be positively received by users, content creators, or \nadvertisers, or provide positive returns on our investment. Losing users who migrate to other platforms may \nnegatively impact our potential subscription or advertising revenue. Additionally, if users do not continue to \ncontribute content and otherwise engage with the X platform, we are unable to provide users with valuable and \ntimely content, or if content that is considered to be problematic or offensive is made available on the X platform, \nthe size of the X platform’s user base and their engagement may decline, leading to a decline in monetizable usage \nand the loss of potential subscription revenue from such users, and the X platform may experience brand or \nreputational harm. A decline in users on the X platform, or the volume or quality of their content on the X platform, \ncould also impact the ongoing development of our AI product, which in part utilizes data and user-generated content \nfrom the X platform. We plan to publicly launch the Money product on the X platform (the “Money Product”); \nhowever, we are competing against large, established companies with significantly greater resources and market \npresence than us. If we are unable to anticipate technological trends, respond to technological advancements or \nchanging customer demands, or successfully develop and commercialize new or enhanced offerings, we may be \nunable to establish or maintain a meaningful market position and our business, financial condition, results of \noperations, and future prospects could be materially and adversely affected.\nThe estimates of future market opportunity and forecasts of market growth, and our ability to capture such \nmarkets, included in this prospectus may prove to be inaccurate.\nOur estimates for the total addressable market for our Space, Connectivity and AI businesses, as well as estimates \nregarding the growth of AI and its impacts, contained elsewhere in this prospectus are based on a number of internal \nand third-party estimates. For example, our estimates of market opportunity for our Space, Connectivity and AI \nbusinesses rely in part on third-party data and a number of internal assumptions. With respect to our Space segment, \nthese estimates rely in part on estimates published by Novaspace regarding the size of the global market for space-\nenabled solutions, including spacecraft manufacturing, launch services and related activities. Our connectivity \nmarket estimates are based in part on estimates of the number of households, businesses, aircraft and maritime \nvessels globally derived from third-party sources, together with assumptions regarding ARPU and monthly service \nrevenue derived from third-party industry data and our internal expectations regarding pricing, adoption rates and \nservice penetration across different geographic regions and economic environments. Our AI market estimates are \nbased in part on projections of global data center compute demand from third-party sources, including estimates \npublished by RAND Corporation, together with internal assumptions regarding the portion of global compute \ncapacity that may be utilized for AI workloads and other operational assumptions such as power usage, utilization \nrates and pricing.\nThese estimates require us to make numerous assumptions and judgments regarding factors that are inherently \nuncertain and subject to change, including the pace of technological development, future demand for launch, \nconnectivity and AI services, the rate of adoption of satellite connectivity and AI technologies, the availability and \ncost of power and computing hardware, the evolution of regulatory frameworks, and broader macroeconomic \nconditions.\nWhile we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and \nestimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, \nthereby reducing the predictive accuracy of these underlying factors. As a result, our estimates of the total \naddressable market for our services, as well as the expected growth rate for the total addressable market for our \nservices, may prove to be inaccurate.\n\n42\nTable of Contents\nMany of our initiatives, including those to develop orbital AI compute at scale, manufacture AI chips at scale, \nestablish a lunar economy, develop human augmentation systems, and transport humans and cargo to the Moon \nand Mars, involve significant technical complexity, unproven technologies, or technologies that do not exist or \nmay require significant advancement, and such initiatives may not achieve commercial viability.\nOur initiatives to develop orbital AI compute at scale, establish a lunar economy, develop human augmentation \nsystems, and transport humans and cargo to the Moon and Mars are in early stages of conception, design and \ndevelopment and have not yet been proven at commercial scale, or at all, and may ultimately be unsuccessful. In \nparticular, the timeline for these initiatives, and the launch cadence required to achieve them may be difficult or \nimpossible to determine. These efforts require substantial and ongoing investments of financial, technical, and \nhuman resources over extended time horizons, including, but not limited to, research and development, testing, \ninfrastructure, regulatory approvals, and mission execution. The technologies, systems, and operational capabilities \nrequired for each of these initiatives involve significant technical complexity and are subject to design, engineering, \nand performance risks, many of which may only become apparent as development and testing progress. Many of \nthese technologies, systems and operational capabilities are novel and untested, and we expect to incur significant \ncapital expenditures over a period of years before our AI products and services and other strategic initiatives, \nincluding AI compute infrastructure and in-orbit, lunar, and interplanetary industrialization efforts, become \nprofitable, which may never occur. In addition, in-orbit refueling of Starship is essential to our lunar, Mars, asteroid \nmining, and other deep space ambitions beyond geostationary Earth orbit. In-orbit refueling is complex, and we have \nnot yet demonstrated or attempted it. We may not be able to develop, commercialize, scale, or successfully \nimplement these or other strategic initiatives on the timelines we currently anticipate, or at all. Furthermore, the \nviability of orbital AI compute depends in part on the cost advantages of solar energy relative to existing terrestrial \nenergy sources. To the extent that breakthrough developments in terrestrial energy access, such as advances in \nnuclear energy, significantly reduce energy costs or alleviate infrastructure constraints, the viability of our orbital AI \ncompute infrastructure may be materially diminished. Even if our orbital AI compute infrastructure proves to be \ncommercially viable, a material slowdown in the growth of AI applications and related compute demand could result \nin existing terrestrial data centers sufficiently meeting such demand, thereby reducing the need for our orbital AI \ncompute infrastructure. As a result, we may be required to devote financial, technical, human or other resources in \nexcess of our current expectations, and there can be no assurance that these investments will generate adequate \nrevenue, which could adversely affect our business, financial condition, results of operations, and future prospects.\nSeveral of our anticipated market opportunities, including certain AI, orbital, lunar, and interplanetary \ntransportation and industrial activities, are still emerging and evolving or do not currently exist, and such \nmarkets may not develop as we expect, or at all. \nA portion of our anticipated market opportunities is associated with industries described in the section entitled \n“Business—Future Markets.” Certain of these industries, such as space tourism, human augmentation, and cargo \ntransport to the Moon, are still emerging. Others, including in-orbit manufacturing, passenger transport to the Moon, \nan established human presence or gateway hub on the Moon, passenger and cargo transport to Mars, energy \nproduction on the Moon or Mars, manufacturing capabilities on the Moon or Mars, and asteroid mining do not exist \ntoday. Any estimate we make regarding the size or timing of our anticipated market opportunities is inherently \nuncertain and necessarily involves significant assumptions about future customer demand, adoption, technological \ndevelopment, regulatory conditions and the emergence of a broader commercial market that does not currently exist. \nWhile we believe these industries will develop over time, the manner in which they emerge, including the timing of \ncommercialization, the scale and pace of adoption, and the applicable technical, regulatory, geopolitical and \neconomic frameworks may differ materially from our current expectations. If these industries do not develop, \ndevelop on slower timelines, at smaller scales, or under different economic or regulatory conditions than we \nanticipate, this could require us to modify, delay, or abandon certain of our business plans, or cause such plans not to \ndevelop at all, which could materially and adversely affect our business, financial condition, results of operations, \nand future prospects.\n\n43\nTable of Contents\nThe global nature of our business poses risks with respect to unstable, malicious or arbitrary legal regimes and \nauthorities.\nWe, particularly through Starlink, maintain global operations. As a result, we may face risks that our operations will \nbe subject to unstable, capricious, or malicious legal regimes and authorities. The increasing militarization of space \nand the potential development of space-based warfare capabilities may expose our assets and operations to \nheightened geopolitical and security risks, including the risk that foreign governments or other actors could target \nour satellites or related infrastructure. Certain foreign governments have publicly discussed the potential use of anti-\nsatellite weapons against the Starlink constellation. These and other actions by foreign governments, whether \nthrough military, regulatory or other means, may adversely affect our operations and assets. Even if we attempt to \ncomply with known local laws, our assets (both physical, intangible and financial) may be subject to seizure or other \nexpropriation. There is no guarantee that we will be able to maintain operations in any jurisdiction, and, if our assets \nor properties are subject to seizure or other expropriation, there can be no assurances that we will be able to recover \nour assets or properties. Any such legal or other governmental action could have an adverse effect on us. For \nexample, in August 2024, Starlink received an order from Brazil’s Supreme Court that froze Starlink’s Brazilian \nfinancial assets and prevented Starlink from conducting financial transactions in Brazil (the “Brazil Asset Seizure”). \nThe action taken by the Brazilian Supreme Court arose out of purported violations of Brazilian law by X, which at \nthe time was not owned by us and was only affiliated with Mr. Musk. It is possible that we may be subject to actions \nlike the Brazil Asset Seizure in the future (whether in Brazil or another country) and, regardless of whether any such \naction is consistent with local and international law, we may never recover assets seized in any similar action. \nAdditionally, actions that we take to minimize the impact of actions such as the Brazil Asset Seizure to our \ncustomers, for example, by continuing to provide service without charge or otherwise altering payment processes \nand methods to permit customers to maintain service, may have a material impact on our financial performance. As \nevidenced by the Brazil Asset Seizure, we may be subject to adverse actions from governmental actors on the basis \nof assumptions, facts or events that are not directly related to our operations and instead relate to the actions of our \ndirectors, officers, or shareholders or operations of businesses that are affiliated with them.\nOur services are subject to risks related to supplying services to the U.S. government.\nSupplying services to the U.S. government subjects us to unique risks, including compliance with complex \nregulations, vulnerability to changes in government priorities or funding levels, and exposure to contractual disputes \nor audits. In 2025, approximately one-fifth of our revenue was attributable to agencies within the U.S. federal \ngovernment. As a contractor to various U.S. government agencies, we are subject to extensive federal procurement \nregulations, including the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation \nSupplement (DFARS), as well as other rules governing cost accounting, cybersecurity, ethics, and national security. \nThese regulations impose stringent requirements on our operations, business practices, and reporting, and \nnoncompliance could result in civil or criminal penalties, suspension or debarment from government contracting, or \nloss of existing or future business. These requirements, although customary in U.S. government contracts, increase \nour performance and compliance costs. These costs might increase in the future. For those reasons and in order to \nachieve our orbital compute goals, we may prioritize our own launch payloads over additional U.S. government \ncontracts or third-party customers. This prioritization of launch capacity may limit revenue growth in our Space \nsegment, and impact our relationship with regulators, and could invite litigation from customers or competitors. In \naddition, government contracts are susceptible to unilateral termination, reduction in scope, or delays at the \ngovernment’s convenience, which may occur due to shifting budgetary priorities, changes in defense or space \npolicy, or the reallocation of funding to other programs. The termination or reduction of funding for a government \nprogram could result in a loss of anticipated future revenue attributable to that program. The actual receipt of \nrevenue on awards may never occur or may change because a program schedule could change or the program could \nbe canceled, or a contract could be reduced, modified, or terminated early. In addition, in certain circumstances, \ngovernments or other customers may be reluctant to rely on our satellite connectivity or defense-related services if \nthey believe the availability of such services could be restricted or suspended based on geopolitical considerations, \nconflicts, sanctions, or other policy determinations, which could adversely affect our ability to win or retain \ncontracts. In addition, our significant business relationships with U.S. defense and government agencies may cause \nus to be perceived as closely aligned with the U.S. government or military. This perception could discourage certain \nconsumers, enterprises, or foreign governments from purchasing our products and services which could adversely\n\n44\nTable of Contents\naffect our sales in the United States and internationally. We and our facilities could also be targeted by foreign \nadversaries and non-state actors due to such perception. Government customers may also subject our contracts to \nrigorous audits and investigations, which can result in disputes regarding contract performance, cost allowability, or \ncompliance with applicable laws and regulations. Adverse audit findings or contractual disputes could lead to \nrepayments, financial penalties, or restrictions on our ability to compete for future contracts. \nCertain of our government contracts also require that we maintain facility security clearances and that certain of our \nemployees obtain and maintain personnel security clearances. Obtaining and maintaining these clearances involves a \nlengthy and uncertain process and depends on factors outside of our control, and we may experience delays in \nreceiving required clearances or be unable to hire or retain a sufficient number of employees with the necessary \nclearances to perform under certain contracts. If we are unable to obtain or maintain required facility or personnel \nsecurity clearances, we may be unable to bid on, win, or perform certain classified programs, and existing contracts \ncould be terminated or not renewed, which could materially and adversely affect our business, financial condition, \nresults of operations, and future prospects. \nFurther, our business is subject to economic sanctions and trade embargo laws, various import regulations, including \ntariffs, and stringent U.S. import and export control laws. Any failure by us to comply with any of the foregoing \ncould result in our debarment from government contracts, limitations on our ability to enter into contracts with the \nU.S. government, civil or criminal penalties, fines, investigations, more onerous compliance requirements, or loss of \nexport privileges. \nWe derive significant revenue from U.S. government contracts that are subject to competitive bidding, funding \napprovals and other government budgetary processes, which factors could adversely affect our business, financial \ncondition, results of operations, and future prospects.\nWe derive significant revenue from U.S. government contracts that were awarded through a competitive bidding \nprocess. Competitive bidding presents a number of risks, including: the need to bid on programs in advance of the \ncompletion of their design, which may result in unforeseen technological difficulties and cost overruns; the \nsubstantial cost and managerial time and effort that must be spent to prepare bids and proposals for contracts that \nmay not be awarded to us; the need to estimate accurately the resources and cost structure that will be required to \nservice any contract we are awarded; and the expense and delay that may arise if interested parties or our \ncompetitors protest or challenge contract awards made to us pursuant to competitive bidding, and the risk that any \nsuch protest or challenge could result in the delay of our contract performance, the distraction of management, the \nresubmission of bids on modified specifications, or in termination, reduction or modification of the awarded \ncontract.\nOur business with governmental entities is subject to changes in policies, priorities, regulations, mandates, and \nfunding levels, any of which could materially impact our operations and financial results. U.S. government program \nfunding is subject to Congressional appropriations on a fiscal year basis even though contract performance may take \nmore than one year. As a result, at the outset of a major program, the contract is usually incrementally funded and \nadditional funds are normally committed to the contract only as Congress makes appropriations in future fiscal \nyears. U.S. government contracts may also be undefinitized at the time of the start of performance. Under \nundefinitized contract actions, the U.S. government has the ability to unilaterally definitize contracts and, absent a \nsuccessful appeal of such action, the unilateral definitization of the contract would obligate us to perform under \nterms and conditions imposed by the U.S. government. Such unilaterally imposed contract terms could include less \nfavorable pricing or terms and conditions more burdensome than those negotiated in other circumstances. U.S. \ngovernment contracts typically involve long lead times for design and development and are subject to significant \nchanges in contract scheduling.\nAdditionally, the U.S. government’s budget deficit and the national debt, as well as any inability of the U.S. \ngovernment to complete its budget process for any government fiscal year and consequently having to shut down or \noperate on funding levels equivalent to its prior fiscal year pursuant to a “continuing resolution,” could have a \nmaterial and adverse impact on our business, financial condition, results of operations, and future prospects. \nMoreover, if we fail to establish and maintain important relationships with U.S. government agencies, our ability to \nsuccessfully maintain and develop new business could be materially and adversely affected. The current political\n\n45\nTable of Contents\nenvironment in the United States is highly polarized, and shifts in the composition of the U.S. Congress or changes \nin the presidential administration can result in significant changes in government spending priorities, regulatory \nposture, and the allocation of contracts and resources across industries and programs. Our relationships with U.S. \ngovernment agencies and the favorability of the regulatory and procurement environment in which we operate may \nbe affected by which political party controls the presidency or one or both chambers of the U.S. Congress. As a \nresult, there can be no assurance that current government relationships, contracts, or levels of funding will be \nmaintained, and any significant adverse developments could have a material and adverse impact on our growth and \ncompetitive position.\nIn addition, our Space segment revenue is primarily derived from fixed-price contracts, under which we agree to \ndeliver specified products or services at a predetermined price regardless of the actual costs incurred. As a result, if \nwe experience cost overruns on these contracts, including from factors outside our control, we are required to absorb \nthe excess costs, which may reduce profitability or result in losses, strain cash flows, and impact our ability to invest \nin future growth. Any unanticipated increases in labor, material, or other direct or indirect costs—including those \narising from inflation, supply chain disruptions, design changes, regulatory requirements, or unforeseen technical \nchallenges—must be borne by us. When these overruns occur, our margins on affected contracts may be \nsignificantly reduced or eliminated, which could adversely affect our business, financial condition, results of \noperations, and future prospects. Additionally, absorbing excess costs may limit our ability to allocate resources to \nother strategic initiatives, delay investment in research and development, or constrain our capacity to pursue new \nbusiness opportunities. In addition, we sometimes receive advanced payments and billings in excess of the amount \nof revenue we recognize, which we record as deferred revenue. As a result, our cash flows may be subject to \nfluctuation across periods in a manner that may be unrelated to our underlying performance.\nOur ability to expand our Starlink consumer and enterprise connectivity services depends on our ability to \nincrease market awareness and acceptance of connectivity through Starlink, and any failure to do so could \nmaterially and adversely affect our business, financial condition, results of operations and future prospects.\nOur ability to expand our Starlink consumer and enterprise connectivity services depends on our ability to increase \nmarket awareness and acceptance of connectivity through Starlink. There can be no assurance that our efforts to \nincrease awareness will be successful. In particular, such efforts may not be successful if we are unable to offer \nStarlink services at competitive prices. Additionally, constraints in the distribution of user terminals could delay \nservice activations, increase costs, or otherwise limit our ability to scale such services as anticipated. Consumer \nacceptance may also be hindered by the presence of well-established terrestrial broadband alternatives, as well as \nlingering perceptions regarding service reliability, latency, and the complexity of satellite-based internet compared \nto traditional fixed-line solutions.\nThe expansion of our satellite-to-mobile connectivity services depends substantially on our ability to secure and \nmaintain partnerships with mobile network operators and on the adoption of necessary hardware and software \nmodifications by device manufacturers, and any failure to do so could materially and adversely affect our \nbusiness, financial condition, results of operations and future prospects.\nThe expansion of our global satellite-to-mobile connectivity offerings depends substantially on our ability to enter \ninto and maintain successful partnerships with telecommunications carriers and spectrum licensees globally, and to \nobtain country-specific authorizations to offer such connectivity using satellite spectrum bands for which we have \ninternational coordination rights. In the United States, we expect to be able to provide 5G-like connectivity to a \nmeaningful portion of existing unmodified devices through our Starlink Mobile Gen2 service utilizing our V2 \nMobile satellites, either by operating on spectrum leased to us by MNO partners or by utilizing our own domestic \nspectrum holdings. However, achieving full 5G NR-NTN compliance and optimal performance would likely require \nhandset manufacturers to implement hardware and software modifications, primarily to the radio-frequency front \nend, in future devices. The spectrum frequencies in the FCC licenses to be acquired from EchoStar are standardized \nfor terrestrial 5G mobile broadband (3GPP bands n66 and n70). But the 5G NR-NTN bands for these same \nfrequencies, such as n252 and n256, are not currently supported by RF front-end hardware for the provision of 5G-\nlike service in any commercially available mobile devices. We do not have direct contractual arrangements with \nhandset manufacturers; instead, we expect MNO partners, as major purchasers of mobile devices, to encourage or\n\n46\nTable of Contents\ndrive such adoption. There can be no assurance that these modifications will be adopted on our preferred timeline, or \nat all.\nInternationally, we face similar constraints until handset manufacturers implement hardware and software \nmodifications to support the international spectrum authorizations to be obtained from EchoStar. As a result, our \nnear-term international service strategy depends on our ability to establish MNO spectrum partnerships on a market-\nby-market basis, which does not require device hardware modifications but is subject to the successful negotiation \nand execution of commercial agreements in each jurisdiction. Until device manufacturers incorporate support for our \ninternational spectrum bands into future handsets, we will be unable to offer 5G-like direct-to-consumer service on \nour own international spectrum.\nThe provision of our satellite-to-mobile services also requires regulatory approvals from the FCC and foreign \nregulatory authorities. Our Gen1 service, utilizing our existing constellation of V1 Mobile satellites, is fully licensed \nin the United States but requires additional country-by-country approvals to operate internationally. We have signed \nMNO partnerships for our Gen1 service in over 30 countries. These partnerships represent commercial agreements \nwith carriers but do not, by themselves, provide the regulatory approvals necessary to offer service. In addition to at \nleast one MNO partnership, we have obtained required approvals to offer commercial Gen1 service in the United \nStates, Canada, the United Kingdom, Japan, and Australia, as well as in several additional countries.\nOur Gen2 service, which will utilize 2 GHz S-band spectrum and a new satellite constellation, requires a license \ntransfer, a constellation license, and spectrum usage approvals in each country in which we seek to operate. For the \nUnited States, we have received the relevant license transfer approval from the FCC, and we expect to receive the \nremaining necessary regulatory authorizations in the second or third quarter of 2026. While these authorizations \nwould be sufficient from a United States regulatory perspective, we still require our V2 Mobile satellites to be in \norbit and must complete the acquisition of the relevant spectrum from EchoStar before we can commence our \nplanned commercial Gen2 service in the United States. Internationally, we have filed applications in nearly every \ncountry in which we intend to operate our Gen2 service, and approvals have been granted in a limited number of \nthese jurisdictions to date. Each jurisdiction presents its own regulatory process and timeline, and we cannot predict \nwhen or whether approvals will be granted in any given market. Subject to regulatory approvals, we are receiving \nfrom EchoStar certain assets and authorizations that provide very senior ITU priority for international frequency \ncoordination for our V2 Mobile constellation. Until such approvals are obtained, we also signed a coordination \nagreement with EchoStar to obtain the protection of its senior ITU priority rights until the authorizations transfer. \nHowever, some countries have signaled through public consultations or other actions that they are considering \nignoring or diminishing ITU priority as a mechanism to decide which operators are licensed to operate in their \ncountry. Several countries and regions have open inquiries that invite input on whether factors other than ITU \npriority (such as whether the operator originates from the country) should govern the issuance of spectrum licenses, \nand we cannot be certain the outcome of these proceedings. Delays or failures to obtain necessary approvals could \nmaterially delay the deployment and commercialization of our Gen2 service. The failure to enter into or successfully \nmaintain such partnerships, or the failure of device manufacturers to adopt the necessary hardware modifications, or \nthe failure to obtain required regulatory approvals, could materially and adversely affect our business, financial \ncondition, results of operations, and future prospects.\nIf the recommendations, forecasts, content, analyses or other output that our AI technologies, including Grok, \nassist in producing are or are alleged to be deficient, inaccurate, harmful, illegal, or used for an improper \npurpose, we could continue to be subjected to claims and investigations, and we could be subjected to legal \nliability and brand, reputational, or competitive harm.\nAI technologies, the models, algorithms, prompts and datasets on which they rely, and the recommendations, \nforecasts, analyses or other output that such AI technologies assist in producing, may be flawed, insufficient, of poor \nquality, rely upon incorrect, inaccurate, harmful or illegal data, reflect unwanted forms of bias, hallucinate, \nmisrepresent, mislead or contain other errors or inadequacies, any of which may not be easily detectable. Although \nwe devote significant resources to develop, test, and maintain our AI technologies, we may not be able to identify or \nresolve all AI-related issues, deficiencies, and failures before they arise. AI technologies have been known to \nproduce mischaracterized or “hallucinatory” inferences or outputs, and certain of our AI products, such as Grok, \nhave been alleged to be susceptible to “data poisoning” in the past. We may not have insight into, or control over,\n\n47\nTable of Contents\nthe practices of third parties who may utilize our AI technologies. As such, third parties have in the past used, and \nmay in the future use, such AI technologies for improper purposes, including through the dissemination of illegal, \ninaccurate, defamatory or harmful content, intellectual property infringement or misappropriation, furthering bias or \ndiscrimination, cybersecurity attacks, including spear phishing and social engineering attacks, data privacy \nviolations, other societal harms, including activities that threaten people’s safety, financial security, or mental well-\nbeing on- or offline, or to develop competing technologies. Inappropriate or controversial data practices by data \nscientists, engineers, and end users of AI technologies, including our AI segment’s systems, could impair the \nacceptance of AI technologies generally, including our AI products. If the recommendations, forecasts, content, or \nanalyses that our AI technologies assist in producing are or are alleged to be deficient, inaccurate, offensive, illegal, \nor otherwise harmful, we could be subjected to claims and investigations, and we could be subjected to legal liability \nand brand, reputational or competitive harm. We have in the past been, and may in the future be, subject to \nregulatory investigations and litigation related to such claims regarding our recommendations, forecasts, content or \nanalyses. Also please refer to “—Our AI products, X platform, and Starlink services are subject to complex and \nevolving U.S. and foreign laws and regulations regarding privacy, cybersecurity, data use, data combination, data \nprotection, content, AI, competition, youth protection, safety, consumer protection and notification, advertising, e-\ncommerce, sanctions, export controls, and other matters. Many of these laws and regulations are subject to change \nand uncertain interpretation, and we could be required to make changes to our products and business practices, and \nbe exposed to monetary penalties, increased cost of operations, declines in user growth or engagement, or loss of \ncustomers, or other harm to our AI products, X platform, and Starlink services.” In addition, if we do not have \nsufficient rights to use the models, algorithms, prompts and datasets on which our AI technologies rely, or the \nrecommendations, forecasts, content, analyses or other output that our AI technologies assist in producing, we could \nalso incur liability through the violation of applicable laws and regulations, third-party intellectual property, privacy \nor other rights, or contracts to which we are a party. Furthermore, failure to properly disclose the use of consumer-\nfacing AI technologies may result in consumer protection or regulatory enforcement activity. Use of AI \ntechnologies, including our AI products, may result in disruptions in, or unauthorized access to, users’ computer \nsystems, which could also lead to the unauthorized disclosure of sensitive (including classified), proprietary, \nconfidential or personal information, new potential cyberattack methods for third parties or an increase in the \nfrequency, sophistication or intensity of cyberattacks. Moreover, if AI technologies are perceived to be significantly \ndisruptive to society, it could lead to governmental or regulatory restrictions or prohibitions on their use, societal \nconcerns or unrest, or both, any of which could materially and adversely affect our ability to develop, deploy, or \ncommercialize AI technologies and execute our business strategy. Our implementation of AI technologies, including \nthrough our AI segment’s systems, could result in legal liability, regulatory action, operational disruption, brand, \nreputational or competitive harm, or other adverse impacts.\nEnvironmental laws, regulations, litigation, liabilities and proceedings may adversely affect our operations, \nincluding our launch operations, manufacturing activities, fuel storage and handling operations, launch facilities \nand ground infrastructure, and data center operations and expansion plans.\nOur operations, including our launch operations, manufacturing activities, fuel storage and handling operations, \nlaunch facilities and ground infrastructure, and data center operations and expansion plans are subject to a variety of \nstate and federal environmental laws and regulations governing matters such as air emissions, wastewater discharges \nand the discharge, treatment, storage, disposal and remediation of hazardous substances and wastes, including the \nComprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and \nRecovery Act, the Clean Air Act, the Clean Water Act and permitting requirements of federal, state and local \nenvironmental authorities. Liability under these laws imposes strict liability for environmental contamination or \nremediation costs. Changing regulatory requirements for permits and approvals relating to operational infrastructure, \nincluding energy generation assets (e.g., renewables, generators or grid connections), manufacturing facilities, \nlaunch facilities, fuel storage and handling facilities, and data centers may cause delays, higher costs or denials, and \na failure to comply with these requirements may result in fines, shutdowns or competitive harm. In addition, \ngrowing scrutiny of data centers’ overall ecological footprint could lead to community opposition, fines or mandates \nfor changing existing practices. We are or may become subject to environmental lawsuits and proceedings, and \nvarious parties have threatened or brought lawsuits that allege we are unlawfully operating natural gas-fired turbines \nwithout required permits at facilities in Southaven, Mississippi. While we have obtained such permits, the outcome \nof these legal actions is uncertain. Injunctive relief or the rescission of issued permits would prevent our ability to\n\n48\nTable of Contents\nutilize power generation sources that are required for the operation of these data centers and would adversely affect \nour AI business. We cannot predict with certainty how future legislative or regulatory developments will affect our \nbusiness, but compliance with new or modified environmental requirements could require us to incur significant \nunanticipated expenditures that could adversely affect our financial condition, results of operations, speed of \ndeployment and cash flows. \nIn addition, our launch facilities and related operations are subject to environmental permitting, land use, wetlands, \ncoastal management and other environmental review requirements, such as the National Environmental Policy Act \nor related federal and state laws, that may give rise to litigation, regulatory enforcement actions or permitting \ndisputes. Environmental groups, regulatory authorities or other stakeholders may challenge our launch activities, \nlaunch cadence, construction or expansion of facilities, fuel storage or handling practices, or other operational \nactivities under federal, state or local environmental laws. Such actions may seek injunctive relief, civil penalties or \nadditional environmental review and mitigation measures, any of which could delay launches, restrict operations, \nincrease compliance costs or otherwise adversely affect our business, financial condition, results of operations and \nfuture prospects.\nWe may face substantial potential liability and operational disruptions if we violate the intellectual property rights \nor other rights of third parties, and if we fail to adequately protect, maintain, defend or enforce our intellectual \nproperty and other similar rights, we could lose an important competitive advantage, in each case which could \nhave a material adverse effect on our business, financial condition, results of operations, customer trust and \nfuture prospects. \nOur success and ability to compete also depends in part on our ability to operate without infringing, \nmisappropriating or otherwise violating the intellectual property rights of third parties. Companies in the AI and \ntechnology industries own large numbers of patents, copyrights, trademarks, and trade secrets, and frequently enter \ninto litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or \nother rights, including in novel areas such as those relating to AI training and AI outputs. Plaintiffs have in the past \nand may in the future file infringement or other litigation or administrative or adversarial actions relating to the \ntraining or development of our AI models. We cannot guarantee that the operation of our business does not and will \nnot infringe or violate the rights of third parties, and we may be unaware of the intellectual property rights that \nothers may claim cover some or all of our products or services. Moreover, we may not have the freedom to operate \nunimpeded by the patent or other rights of others. Third parties may have dominating, blocking or other patents or \nother rights relevant to our technology, of which we are not aware. \nIntellectual property and related laws are constantly evolving, can be highly uncertain and involve complex legal \nand factual questions for which important principles remain unresolved. For example, in the United States and in \nmany foreign jurisdictions, policies regarding the breadth of claims allowed in patents and scope of protections for \ncontent can be inconsistent. We cannot predict future changes in the interpretation of patent, intellectual property \nand other related laws or changes to patent, intellectual property and other related laws that might be enacted into \nlaw by U.S. and foreign legislative bodies. \nWe rely on statutory safe harbors, including those set forth in the Digital Millennium Copyright Act and Section 230 \nof the Communications Decency Act in the United States and the Digital Services Act in the EU, to protect against \nliability for various activities, including linking, caching, ranking, recommending and hosting. Legislation or court \nrulings affecting these safe harbors may harm us and may impose significant operational challenges. There are \nlegislative proposals and pending litigation in the United States, EU, and around the world that could diminish or \neliminate safe harbor protection for websites and online platforms.\nIf we violate, or are alleged to have violated, the intellectual property rights of third parties, including patents, \ncopyrights, trademarks, trade secrets, or other intellectual property rights and related rights, we may be subject to \ncostly and time-consuming litigation, substantial financial penalties, and reputational harm, any of which could \nmaterially disrupt our operations, product development and strategic initiatives. As we continue to develop new or \nupdate existing technologies, products, and services, there is a risk that third parties may allege that our operations \nor offerings infringe upon their intellectual property rights. For example, we are currently a defendant in litigation \nalleging copyright infringement relating to the claimed use of copyrighted works to train our AI models. Other\n\n49\nTable of Contents\nplaintiffs may file infringement or other litigation relating to the training or development of our AI models. In \naddition, we are currently subject to, and in the future may be subject to claims from various “non-practicing \nentities” or other companies that own patents and other intellectual property rights that often attempt to aggressively \nassert their rights in order to extract value from technology companies by threatening costly litigation or that have \nminimal operations or relevant product revenue and against whom our patents may provide little or no deterrence or \nprotection. We are and may in the future be subject to additional copyright litigation or other litigation, including \nlitigation relating to allegations that we have trained or developed our AI models on copyrighted works in a manner \nthat infringes on copyrights, or in a manner that otherwise violates the intellectual property or other rights of third \nparties, or that our models produce outputs in a manner that infringes on copyrights or other intellectual property or \nother rights. Moreover, the impact of AI on intellectual property ownership and licensing rights, including \ncopyrights, has not been fully addressed by U.S. or international courts or other federal, state or international laws or \nregulations (or by courts, laws or regulations in foreign jurisdictions), and our use of AI models may reduce our \nability to protect our own intellectual property. In addition, former employers of our current, former, or future \nemployees may assert claims that such employees have improperly disclosed to us confidential or proprietary \ninformation of these former employers. Any such claims or allegations, whether or not they have merit, could result \nin costly litigation, substantial damages, injunctions against the use of certain technologies, or the need to obtain \nlicenses on unfavorable terms. In addition, certain of our contracts with customers, suppliers, and partners contain \nindemnification provisions that could require us to defend against infringement or other claims and pay damages or \nsettlements, thereby increasing our financial exposure. The outcome of intellectual property litigation is inherently \nuncertain, and adverse judgments could materially and adversely affect our business, financial condition, results of \noperations, and future prospects. If we are unable to obtain necessary licenses, non-infringing substitute \ntechnologies, or otherwise mitigate these risks, we may be forced to discontinue certain products or services, delay \nor curtail research and development activities, or limit our expansion into new markets. \nAdditionally, failure to adequately protect, maintain, defend, or enforce our intellectual property—including patents, \ncopyrights, trademarks, trade secrets, and proprietary technologies—may lead to loss of competitive advantage, \nweakened market position, and financial harm from unauthorized use or infringement. We rely and expect to \ncontinue to rely upon a combination of patents, trademarks, trade secrets, copyrights, confidentiality procedures, \ncontractual commitments and other legal rights to establish and protect our intellectual property. However, the steps \nwe take to protect our intellectual property and other rights may be inadequate due to various circumstances. We \nmay be unable or choose not to pursue or maintain certain types of intellectual property protection or registration for \nour intellectual property in the United States or foreign jurisdictions, and the measures we do take may not prevent \nour competitors or other third parties from independently developing products, services, and technology similar to or \nduplicative of our products and services. We will not be able to protect our intellectual property if we are unable to \nenforce our rights or if we do not detect unauthorized use of our intellectual property. In addition, our patents or \nother intellectual property rights may be challenged, invalidated, circumvented or rendered unenforceable, and \npending and future trademark and patent applications may not be approved. While it is our policy to enter into \nconfidentiality agreements with our employees, contractors and other third parties to limit and control access to and \ndisclosure of our trade secrets, intellectual property and confidential information, we may fail to enter into such \nagreements with all relevant entities and any such agreements may be breached, or this intellectual property may \notherwise be disclosed or become known to our competitors, including through hacking, theft, or other \nmisappropriation, including by employees, which could cause us to lose any competitive advantage resulting from \nthese trade secrets, intellectual property and proprietary information. Accordingly, we cannot guarantee that the \nsteps we have taken to protect our intellectual property will be adequate to prevent infringement of our rights or \nmisappropriation of our technology, trade secrets or know-how.\nAdditionally, to protect our intellectual property rights, we may be required to spend significant resources to \nmonitor, defend, enforce and protect these rights. Monitoring unauthorized uses of our intellectual property is \ndifficult and costly. We may not be able to detect unauthorized use of, or take appropriate steps to enforce, our \nintellectual property rights. Litigation may be necessary in the future to enforce our intellectual property rights and \nto protect our trade secrets, and any such litigation may be costly and time consuming, result in the diversion of time \nand attention of our management team, and may not be successful or could result in the impairment or loss of \nportions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met \nwith defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property\n\n50\nTable of Contents\nrights. Despite our efforts, we may not be able to prevent unauthorized use, copy, reverse engineering, \nmisappropriation of our technology or intellectual property rights to create technology that compete with ours, or \nindependent development of similar technologies. Insufficient protection could force us into costly and uncertain \nlitigation or enforcement actions, allowing competitors to launch rival products and eroding our revenue and \nprofitability.\nAcquisitions, divestitures, or other strategic transactions we pursue may not achieve the anticipated benefits, \nsynergies or strategic objectives.\nWe may not achieve the anticipated benefits, synergies, or strategic objectives of any acquisition, divestiture, or \nother strategic transaction in a timely manner, or at all, including those we expect from the recent acquisition of xAI, \nthe acquisition of spectrum assets and licenses from EchoStar in connection with our Starlink Mobile initiatives, our \ncollaboration on Terafab with Tesla, Intel or any future partners, project and our recent collaboration with Cursor \nand any potential acquisition of Cursor, if consummated. Acquisitions, divestitures, or other strategic transactions \nmay present unforeseen liabilities or disruptions to our operations, which could adversely impact our business, \nfinancial condition, results of operations, and future prospects. We may assume unexpected obligations or incur \ncosts associated with acquired businesses, including litigation, regulatory compliance, environmental liabilities, or \ncontractual disputes, which could result in material losses or divert management focus from ongoing operations.\nIntegrating acquired businesses, partnerships, or joint ventures may present significant challenges, including \naligning operations, systems, and cultures, which could result in inefficiencies, increased costs, or failure to realize \nanticipated benefits. The process of integration is often complex and time-consuming, and we may encounter \nunforeseen difficulties in harmonizing business practices, integrating technologies and IT systems, retaining key \npersonnel, or reconciling differences in corporate cultures and management philosophies. In addition, the integration \nof acquired entities or new partners exposes us to disruptions in, or unauthorized access to, our computer systems \nand data or may divert management attention and resources from our core operations, potentially impacting our \nability to execute on other strategic initiatives or maintain existing customer relationships. We may also face \nchallenges in achieving expected synergies, cost savings, or strategic objectives within anticipated timeframes, or at \nall, which could adversely affect our business, financial condition, results of operations, and future prospects. If we \nare unable to successfully integrate acquisitions, partnerships, or joint ventures, or if the anticipated benefits of these \ntransactions do not materialize as expected, we could experience operational disruptions, loss of key personnel or \ncustomers, increased costs, and diminished competitive position. Any failure to effectively integrate acquired \nbusinesses, partnerships, or joint ventures could materially and adversely affect our business, financial condition, \nresults of operations, and future prospects.\nSimilarly, divestitures could result in the loss of revenue, disruption of customer or partner relationships, or \nchallenges in separating assets and personnel. There can be no assurance that we will be able to identify, \nconsummate, or integrate future acquisitions, divestitures, or other strategic transactions on favorable terms, or at all, \nand any such activities may heighten our exposure to operational, financial, and regulatory risks unique to our \nindustry.\nWe have experienced, and will likely continue to experience, development and manufacturing delays and damage \nor destruction during pre-launch operations, any of which could have a material adverse effect on our business, \nfinancial condition, results of operations, and future prospects.\nThe development, manufacturing, and operation of launch vehicles and satellites are complex and capital-intensive \nactivities that are subject to numerous risks. Our launch vehicles, satellites, and related systems have in the past \nexperienced and may in the future experience delays, damage or destruction during design and manufacturing, \nincluding delays in fabrication, assembly, inspection, testing, and component qualification. These issues may arise \nfrom engineering challenges, supplier performance problems, quality control shortcomings, unexpected design \nmodifications, or disruptions in our manufacturing facilities. Any of these factors may delay development or \nproduction schedules, increase costs, or result in hardware that must be reworked or replaced. \nOur operations also involve significant risks during pre-launch preparation. Launch vehicles and satellites can be \ndamaged or destroyed during transport, fueling, integration, or ground testing. Furthermore, the early retirement or\n\n51\nTable of Contents\ninoperability of satellites or related infrastructure may require us to accelerate depreciation or recognize impairment \ncharges, thereby adversely affecting our business, financial condition, results of operations, and future prospects. \nEven minor anomalies may require extensive troubleshooting or repairs, resulting in launch delays, increased \nmission costs, or the loss of flight hardware. Because launch operations require coordination across multiple systems\n—including propulsion, avionics, ground infrastructure, and third-party range providers—issues in any one area can \nlead to postponements or mission cancellations.\nOur ability to continue and expand launch and satellite operations depends upon our ability to obtain new and \nleverage existing U.S. export control and sanctions authorizations, and any significant changes to the geopolitical \nlandscape or U.S. government regulatory approach to licensing could materially and adversely impact our \ninternational business operations by compromising existing licenses or limiting our ability to engage in \ncommercial dealings in or involving geopolitically sensitive countries.\nThe launch and satellite operations are subject to stringent export control and economic and trade sanctions laws, \nincluding the U.S. International Traffic in Arms Regulations (“ITAR”), the Export Administration Regulations, and \nsanctions administered and enforced by the U.S. Treasury Department’s Office of Foreign Assets Control \n(“OFAC”). Under U.S. export control laws, we are required to obtain export authorizations from the Departments of \nCommerce or State to export or share any controlled goods, technology, or software with foreign persons, including \nforeign person employees, or to foreign destinations. The availability of such authorizations may be impacted by \nsignificant changes to the geopolitical landscape. The U.S. government may revise export control regulations, \nrestrict exports to new or additional locations, or otherwise change its approach to licensing in ways that, while \noutside of our control, materially impact our international supply chain, existing export licenses, and business \noperations. For example, under the ITAR, we are required to determine the proper licensing jurisdiction and \nclassification of products, software and technology; and obtain licenses or other forms of U.S. government \nauthorizations to engage in certain activities related to and that support our business operations. The authorization \nrequirements include the need to get permission to release controlled technology to foreign person employees and \nother foreign persons. \nIn addition, we are required to obtain OFAC authorization in certain situations, including to provide connectivity \nservices or engage in other business operations in certain global markets that may be subject to economic sanctions \nor trade embargoes. While we have been successful in obtaining such authorizations in the past, there can be no \nassurances that authorizations or licenses will be available in the future. In addition, significant changes to the \ngeopolitical landscape, such as the outbreak of armed conflict, could result in the imposition of new or expanded \neconomic or trade sanctions that may impact or prevent our ability to provide services or otherwise operate in certain \nmarkets. Failures by us to comply with import, export control, or sanctions laws and regulations could result in civil \nor criminal penalties, fines, investigations, more onerous compliance requirements, loss of export privileges, \ndebarment from government contracts, or limitations on our ability to enter into contracts with the U.S. government. \nOther regulators, such as the EU or UK, may also impose restrictions on our ability to operate in geopolitically \nsensitive countries or territories. \nOur use of open source technology could impose limitations on our ability to commercialize our space-based \ninternet and mobile phone services, AI products, and X platform, or otherwise negatively affect our business. \nWe use open source technology in some of our software, including in our Starlink products and services, and in our \nAI segment’s and X platform’s software and products, and we expect to continue to use open source technology in \nthe future. Open source technology is licensed by its authors or other third parties under open source licenses, which \nin some instances may subject us to certain unfavorable conditions. For example, certain open source licenses may \ngive rise to requirements to disclose or license our proprietary source code or make available any derivative works \nor modifications of the open source code on unfavorable terms or at no cost. Although we monitor and have \nimplemented policies relating to our use of open source technology to avoid subjecting our products and services to \nconditions we do not intend, we cannot guarantee such efforts will be successful and we may face allegations from \nothers alleging ownership of, or seeking to enforce the terms of, an open source license, including by demanding \nrelease of the open source software, derivative works or modifications, or our proprietary source code that was \ndeveloped using such technology, or demanding access to our software free of charge or on other unfavorable terms. \nThese allegations could also result in litigation. Additionally, our AI products are trained on data sets that may\n\n52\nTable of Contents\ninclude open source software, and it is possible that certain outputs of our AI products may be subject to open source \nlicense restrictions or obligations. The terms of many open source licenses are ambiguous and have not been \ninterpreted by United States or foreign courts. There is a risk that these licenses could be construed in a way that \ncould impose unanticipated conditions or restrictions on our ability to commercialize our AI segment’s products. In \nsuch an event, we may be required to seek licenses from third parties to continue commercially offering our AI \nsegment’s products, to make our proprietary code generally available in source code form, to re-engineer our AI \nsegment’s products or to discontinue the sale of our AI segment’s products or such other products if re-engineering \ncould not be accomplished on a timely basis, any of which could adversely affect our business, financial condition, \nresults of operations, and future prospects.\nIn addition, the use of open source technology may entail greater technical and legal risks than those associated with \nthe use of third-party commercial software as open source licensors generally do not provide support, warranties, \ncontrols on origin of the software, indemnification or other contractual protections regarding infringement claims or \nthe quality of the code, including the existence of security vulnerabilities. Many of the risks associated with usage of \nopen source technology, such as the lack of warranties or assurance of title, cannot be eliminated and could, if not \nproperly addressed, negatively affect our business. To the extent that our technologies and other business operations \ndepend upon the successful and secure operation of the open source technology we use, any undetected errors or \ndefects in this open source software could prevent the deployment or impair the functionality of our software, delay \nthe introduction of new technological capabilities, result in a failure of our technologies, and injure our brand and \nreputation. For example, undetected errors or defects in open source software could render it vulnerable to breaches \nor security attacks and make our AI segment’s products more vulnerable to data breaches or security attacks. Any of \nthe foregoing would have a material adverse effect on our business, financial condition, results of operations and \nfuture prospects.\nPayment, banking, and other financial service-related activities may subject us to additional regulatory \nrequirements, regulatory actions, and other risks that could be costly and difficult to comply with or that could \nharm our business.\nWe plan to publicly launch the Money Product, which will offer payment, banking and other financial services \nfunctionalities, including enabling our users to purchase tangible, virtual, and digital goods from merchants and send \nmoney to other users, among other activities. These activities will subject us to a variety of laws and regulations in \nthe United States, Europe, and elsewhere globally, including those governing anti-money laundering and counter-\nterrorism financing, money transmission, stored value, gift cards and other prepaid access instruments, electronic \nfunds transfer, virtual currency, consumer protection, charitable fundraising, global and local economic sanctions, \nand import and export restrictions. In addition, we could become subject to new consumer protection laws and \nregulations that may be adopted or amended, including those related to payment, banking, and other financial \nservices activities as well as sharing, collection, and use of payment, banking, and other financial services-related \ndata. Depending on how the Money Product evolves, we may also be subject to other laws and regulations including \nthose governing gambling, cryptocurrencies, brokerage, banking, credit, and lending. In some jurisdictions, the \napplication or interpretation of these laws and regulations is not clear. We have received certain payments licenses in \nthe United States and other jurisdictions for our anticipated regulated payments-related products and activities. \nThese licenses increase flexibility in how our use of payments may evolve, help mitigate regulatory uncertainty, and \nwill generally require us to demonstrate compliance with many domestic and foreign laws in relation to our licensed \npayments products and activities. Our efforts to comply with these laws and regulations may still not guarantee \ncompliance. In the event that we are found to be in violation of any such legal or regulatory requirements, we may \nbe subject to monetary fines or other penalties such as a cease and desist order, or we may be required to make \nproduct changes, any of which could have a material and adverse effect on our business, financial condition, results \nof operations and future prospects.\nIn addition, we will be subject to a variety of additional risks as a result of payment, banking, and other financial \nservices transactions, including: increased costs and other resources to address errors in transactions or customer \ndisputes; potential fraudulent or otherwise illegal activity by users, developers, employees, or third parties; \nrestrictions on the investment of consumer funds used to transact payments; and additional disclosure and reporting \nrequirements. We plan to publicly launch the Money Product and may in the future undertake additional payment,\n\n53\nTable of Contents\nbanking, and other financial services initiatives, which may subject us to many of the foregoing risks and additional \nlicensing requirements.\nOur efforts to support the creation of permanent installations on the Moon and Mars depend on the successful \ndevelopment and deployment of next-generation capabilities. \nActivities related to the industrialization and development of the Moon and Mars require the successful development \nand deployment of next-generation capabilities such as fully reusable launch vehicles, including Starship, in-space \nrefueling and propellant storage, in space communications systems, and other capabilities required for operations \nbeyond Earth’s orbit. These systems involve significant technological, engineering, and operational challenges, \nincluding the need to develop habitable transportation and surface environments, and perform complex in-orbit \noperations. Solving these challenges will require developing solutions that are novel or untested and will require \nsubstantial capital investment. If these efforts take longer than anticipated, or if technical, operational, or engineering \nchallenges arise in connection with these efforts, our goals with respect to the Moon and Mars, including \ngovernment contracts, and other and multiplanetary initiatives could be delayed, modified, or cancelled and could \nmaterially and adversely affect our business, financial condition, and results of operations. Even if such goals are \nachieved, they may not generate meaningful revenue or achieve profitability for an extended period of time.\nOur AI segment is recently formed, is still being fully integrated and optimized, operates in a rapidly evolving \nindustry and is subject to significant execution, competitive and operational risks.\nWe acquired xAI in February 2026 as the foundational platform for our AI segment and as part of our ambitious \nvertical integration strategy intended to combine artificial intelligence capabilities with our established Space and \nConnectivity businesses. Prior to its acquisition by the Company, xAI itself was an early-stage company. As a result, \nour AI segment remains in a relatively early stage of organizational and operational maturity and is subject to \nintegration, scaling and execution risks.\nThe successful integration of acquired businesses, technologies, strategic partners, and employees is inherently \ncomplex, costly and time-consuming, and may result in operational inefficiencies, delays, disruptions, increased \ncosts, loss of knowledge and diversion of management attention. As is common in large acquisitions, we have had to \ntake significant steps to integrate xAI’s operations into our broader corporate structure as part of our AI segment, \nincluding putting in place the management team and organizational structure needed to execute at the scale and pace \nour strategy demands, as well as controls and procedures appropriate for a larger organization like ours. Many of \nthese steps are not yet complete. \nWe have undertaken, and continue to undertake, changes in personnel, strategic partnerships, infrastructure-sharing \narrangements, organizational restructurings, acquisitions and other integration initiatives intended to accelerate \ndevelopment of our AI capabilities, compute infrastructure and commercial offerings. Management believes these \ninitiatives may create long-term strategic advantages through the combination of engineering talent, compute \ninfrastructure, proprietary data, software capabilities and integrated operational platforms across the Company’s \nbusinesses, among others. However, the successful integration of acquired businesses, management teams, \nemployees, strategic partners, technologies and evolving product architectures is inherently complex, costly and \ntime-consuming and may result in operational inefficiencies, delays, disruptions or the failure to realize anticipated \nsynergies or commercial benefits. \nWe have also pursued evolving commercial and technical strategies, including coding and software development \n(such as through our partnership with Cursor) and monetization of unused compute capacity (such as through our \ncloud compute services agreements with Anthropic), while simultaneously continuing to invest heavily in expanding \ndatacenter and compute capacity for our own internal AI initiatives and products. These efforts may require \nsubstantial capital expenditures and management attention and may create operational complexity relating to \ninfrastructure allocation, prioritization of internal versus external compute usage, integration of third-party \ntechnologies and partnerships, cybersecurity, data governance and commercialization strategy. We may elect to \nallocate capital and resources to long-term initiatives even if alternative uses with more short-term upside are \navailable. There can be no assurance that these initiatives will achieve their intended operational or financial \nobjectives.\n\n54\nTable of Contents\nThe artificial intelligence industry is highly dynamic and rapidly evolving. We face significant uncertainty relating \nto technological developments, changing customer preferences, evolving regulatory and legal frameworks, \nincreasing public scrutiny, and intense competition for engineering talent, compute capacity, infrastructure, \ncustomers and capital. In addition, the consumer AI market is characterized by rapid model iteration, frequent new \nentrants and intense competition for user attention; as a result, download and other usage metrics for any individual \nAI application, including Grok, can fluctuate significantly (including periods of decreased Grok app downloads and \nuser activity) in response to competitor model releases, product update cycles, and broader shifts in user behavior. \nAs a result of these market dynamics, we may need to modify our AI strategy, organizational structure, \ninfrastructure deployment and capital allocation decisions in response to technological change, competitive \npressures, regulatory developments or commercial adoption trends. Initiatives that management believes are \nstrategically beneficial over the long term may nevertheless experience near-term operational disruptions, integration \ninefficiencies, product delays, technical setbacks, leadership turnover, employee attrition, infrastructure constraints, \nincreased costs or uneven customer adoption during periods of transition or rapid scaling.\nManagement believes that our recent organizational restructuring efforts, infrastructure investments and strategic \ncollaborations position the AI segment favorably for long-term growth and are consistent with the maturation \nprocess of rapidly scaling AI platforms and optimization of acquired companies. However, there can be no assurance \nthat we will successfully integrate acquired businesses and technologies, retain key personnel, execute our AI \nstrategy within anticipated timeframes, achieve meaningful commercial adoption, generate anticipated revenues or \nreturns on investment, or compete effectively in a rapidly evolving and increasingly competitive and consolidated AI \nmarket. If we are unable to successfully execute our AI strategy, our business, financial condition, results of \noperations and prospects could be materially adversely affected.\nOur AI segment is capital intensive, has incurred significant operating losses, and operates in a nascent and \nrapidly evolving market in which the potential of AI remains uncertain.\nAI is a nascent and rapidly evolving technology, and although we believe AI holds significant promise for \nconsumers and enterprises, its long-term impact will depend on the degree to which AI products and services prove \nto be broadly useful in real-world applications. There can be no assurance that demand for AI solutions will develop \nor be sustained at the levels we anticipate, or at all. While industry interest in AI has grown substantially, the \ncommercial value proposition of frontier AI models remains largely unproven, and long-term market acceptance of \nour AI products and services is uncertain. Developing, training, and providing inference for frontier AI models \nrequires substantial and growing capital expenditures, including investments in specialized computing hardware, \ndata center infrastructure, energy procurement, and technical personnel, and we expect these costs to continue to \nincrease for the foreseeable future. In addition, we plan to allocate substantial capital to build our AI compute \ninfrastructure, and we expect a multi-year investment horizon before these deployments translate into sustained \npositive AI Segment Adjusted EBITDA. Our AI segment has incurred significant operating losses since inception, \nand we may not achieve profitability in this segment, or, if achieved, sustain it, and there can be no assurance that \nthe returns on our AI investments will be adequate to justify the capital deployed. Furthermore, the continued \nimprovement of AI model capabilities has historically depended in part on scaling laws, the empirical observation \nthat model performance improves with increased compute, data, and model size, but there is uncertainty as to how \nlong these scaling relationships will continue to hold. As a result of these factors, our AI segment may not achieve \nthe growth or returns we expect.\nWe have a history of net losses and may not achieve profitability in the future.\nWe incurred net losses of $(4,937) million and $(4,628) million for the years ended December 31, 2025 and 2023, \nrespectively, and a net loss of $(4,276) million for the three months ended March 31, 2026. We may not achieve or, \nif achieved, sustain profitability in the future. As of March 31, 2026, we had an accumulated deficit of $41,311 \nmillion. While we have experienced significant growth in revenue over the last three years, we cannot predict \nwhether we will maintain this level of growth or when we will achieve profitability again. We also expect our capital \nexpenditures and operating expenses to increase in the future, including our general and administrative expenses as a \nresult of increased costs associated with operating as a public company and as we continue to invest for our future \ngrowth, including substantial capital expenditures to design, develop, expand, and maintain our technologies and \ninfrastructure to support our operations. Our revenue could decline for a number of reasons, including if we are\n\n55\nTable of Contents\nunable to execute on our growth strategy and as a result of the other risks described in this prospectus. Furthermore, \nif we fail to maintain or increase our revenue to offset increases in our operating expenses or manage our costs as we \ninvest in our business, including if we do not maintain or improve our operating efficiencies, we may not achieve or \nsustain profitability. Any failure by us to achieve or sustain profitability on a consistent basis could have a material \nadverse effect on our business, financial condition and results of operations and cause the market price of our Class \nA common stock to decline.\nThe timing of our revenue and cost recognition may fluctuate due to factors outside of our control, which could \ncause our periodic results of operations to fluctuate and make our results difficult to predict.\nIn our financial results, we recognize revenue and costs for a majority of customer payloads at the launch or \ndeployment of the customer’s payload to its intended orbit. While we plan launches and schedule payloads in \nadvance, the timing of these launches or deployments may vary and can be delayed or otherwise affected by a \nnumber of factors outside of our control, including the customer’s delay in delivering their payload for integration \nonto the launch vehicle, adverse weather, and other operational considerations. As a result, the timing of revenue \nrecognition may shift between reporting periods. For example, if the launch of a customer’s payload was expected to \noccur near the end of a reporting period but instead occurs shortly thereafter (e.g., on April 1 instead of March 30), \nthe associated revenue would be recognized in the subsequent quarter. In addition, if a significant number of \nlaunches or deployments occur within a short period of time, the concentration of those events may result in greater \nvariability in the timing of revenue recognition between reporting periods. These factors may cause our quarterly or \nannual results of operations to fluctuate and may make our results difficult to predict. \nFailure to comply with requirements to design, implement, and maintain effective internal controls could have a \nmaterial adverse effect on our business and stock price.\nAs a privately held company, we were not required to evaluate our internal control over financial reporting in a \nmanner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act \n(“Section 404”).\nAs a public company, we will have significant requirements for enhanced financial reporting and internal controls. \nThe process of designing and implementing effective internal controls is a continuous effort that requires us to \nanticipate and react to changes in our business and the economic and regulatory environments and to expend \nsignificant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as \na public company. If we are unable to establish or maintain appropriate internal financial reporting controls and \nprocedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material \nmisstatements in our consolidated financial statements, and harm our results of operations. In addition, we will be \nrequired, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of \nour internal control over financial reporting in the second annual report following the completion of this offering. \nThis assessment will need to include disclosure of any material weaknesses identified by our management in our \ninternal control over financial reporting. The rules governing the standards that must be met for our management to \nassess our internal control over financial reporting are complex and require significant documentation, testing, and \npossible remediation. Testing and maintaining internal controls may divert our management’s attention from other \nmatters that are important to our business. Additionally, our independent registered public accounting firm will be \nrequired to attest to the effectiveness of our internal control over financial reporting on an annual basis, beginning \nwith our second annual report.\nWe are currently in the process of updating our control processes and automating certain of our procedures and \nsystems in anticipation of becoming a public company, but our internal controls over financial reporting currently do \nnot meet all of the standards contemplated by Section 404 that we will eventually be required to meet. Because we \ncurrently do not have comprehensive documentation of our internal controls and have not yet tested our internal \ncontrols in accordance with Section 404, we cannot conclude in accordance with Section 404 that we do not have a \nmaterial weakness in our internal controls or a combination of significant deficiencies that could result in the \nconclusion that we have a material weakness in our internal controls. In connection with updating our control \nprocesses and the implementation of the necessary procedures and practices related to internal control over financial \nreporting, we have identified deficiencies and may identify deficiencies in the future that we may not be able to\n\n56\nTable of Contents\nremediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of \nSection 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies \nidentified by our independent registered public accounting firm in connection with the issuance of their attestation \nreport. Our testing, or the subsequent testing (if required) by our independent registered public accounting firm, may \nreveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses. Any \nmaterial weaknesses could result in a material misstatement of our annual or quarterly consolidated financial \nstatements or disclosures that may not be prevented or detected.\nOur insurance coverage strategy may not be adequate to protect us from all business risks.\nWe may be subject, in the ordinary course of business, to losses resulting from accidents, acts of God and other \nclaims against us, for which we may have no insurance coverage. As a general matter, we do not maintain as much \ninsurance coverage as many other companies do, and in some cases, we do not maintain any at all, including with \nrespect to our in-orbit satellites, which we currently do not insure and do not expect to insure in the future. \nAdditionally, the policies that we do have may include significant deductibles or self-insured retentions, policy \nlimitations and exclusions, and we cannot be certain that our insurance coverage will be sufficient to cover all future \nlosses or claims against us. A loss that is uninsured or which exceeds policy limits may require us to pay substantial \namounts, which may harm our financial condition and operating results.\nRisks Related to Our Corporate Structure, Ownership of our Class A Common Stock and This Offering\nConflicts of interest could arise in the future between us, on the one hand, and Mr. Musk and entities owned by \nor affiliated with him, on the other hand, concerning among other things, business transactions, potential \ncompetitive activities or other business opportunities.\nConflicts of interest could arise in the future between us, on the one hand, and Mr. Musk and entities owned by or \naffiliated with him, on the other hand, concerning among other things, business transactions, potential competitive \nbusiness activities or other opportunities. In the normal course of business, we have engaged in a variety of \ntransactions with some of these companies. Please refer to “Certain Relationships and Related Person Transactions.” \nIn addition, we have previously engaged, are currently engaged, and expect to continue to engage in the future in a \nnumber of strategic collaborations with Tesla, including with respect to Macrohard and Terafab. Certain of these \nprojects, including Macrohard and Terafab, are in the very early stages, as a result of which we and Tesla have not \nfinalized a variety of details relating to our collaboration, including, but not limited to, financial terms, intellectual \nproperty rights, and the ultimate term of our collaboration. Furthermore, Mr. Musk and other businesses owned by \nor affiliated with him may now, or in the future, directly or indirectly, compete with us for investment or business \nopportunities.\nMr. Musk or his affiliates may become aware, from time to time, of certain business opportunities (such as \nacquisition opportunities or technological developments) and may direct such opportunities to other businesses in \nwhich they have invested, in which case we may not become aware of or otherwise have the ability to pursue such \nopportunity. In addition, Mr. Musk and his affiliates may dispose of their interests in other companies or other assets \nin the future, without any obligation to offer us the opportunity to purchase any of those interests or assets.\nUnder our charter, Mr. Musk and his affiliates are not restricted from owning assets or engaging in businesses that \ncompete directly or indirectly with us and will not have any duty to refrain from engaging, directly or indirectly, in \nthe same or similar business activities or lines of business as us, including those business activities or lines of \nbusiness deemed to be competing with us, or doing business with any of our customers or vendors. Moreover, we \nhave in the past entered into, and may in the future enter into, transactions with entities affiliated with Mr. Musk. We \nmay enter into such transactions in lieu of pursuing other opportunities that some other shareholders may prefer or \nthat may prove to be more accretive than the opportunities we elect to pursue. In any of these matters, the interests \nof Mr. Musk and entities owned by or affiliated with him may differ or conflict with the interests of our other \nshareholders. Any actual or perceived conflicts of interest with respect to the foregoing could have an adverse \nimpact on the trading price of our Class A common stock.\n\n57\nTable of Contents\nCertain of our directors and key employees may have conflicts of interest because they are also employees or \ndirectors of affiliates of Mr. Musk or other large shareholders. The resolution of these conflicts of interest may \nnot be in our or your best interests.\nCertain of our directors and key employees may have conflicts of interest because they are also employees or \ndirectors of affiliates of Mr. Musk or other large shareholders. Such directors may have interests in, serve on the \nboards of, or have financial or other relationships with other companies, ventures, or initiatives that are related to or \ncompetitive with our business, including but not limited to other space or AI companies, technology ventures, \nsatellite communications businesses, and government or commercial space contracts. Please refer to “Management.” \nThese relationships and interests could create actual or perceived conflicts of interest, particularly with respect to the \nallocation of time, resources, business opportunities, or strategic decisions. In addition, our charter provides that, to \nthe fullest extent permitted by applicable law, we renounce certain corporate opportunities that may be presented to \nMr. Musk and certain of our directors and their respective affiliates, and such persons may have no duty to present \nsuch opportunities to us. Please refer to “Description of Capital Stock—Corporate Opportunities.” Any actual or \nperceived conflicts of interest could harm our reputation, lead to disputes, divert management attention, or result in \ndecisions that are not in the best interests of us or our shareholders, which could materially and adversely affect our \nbusiness, financial condition, results of operations, and future prospects.\nWe are highly dependent on the continued services of Mr. Musk, our Chief Executive Officer and Chief \nTechnical Officer, and other key personnel, and the loss or reduced involvement of one or more of these \nindividuals could adversely affect our ability to execute our business strategy.\nWe are highly dependent on the continued service and performance of Mr. Musk, whose leadership, vision, and \nexpertise are critical to the development of our technologies and the execution of our business strategy. Mr. Musk \nhas been, and continues to be, a driving force behind our growth, innovation, and operational success. The loss of \nMr. Musk, whether due to death, disability, or otherwise, or his inability or unwillingness to continue in his current \nroles, could significantly disrupt our management structure, adversely affect our ability to execute our strategic \nplans, and negatively impact our reputation and relationships with customers, partners, and other stakeholders. Our \nintense, mission-driven, engineering-first culture has been a key driver of our growth and execution, and any erosion \nof this culture, including as a result of the loss or reduced involvement of Mr. Musk, could have a material adverse \neffect on our business, financial condition, results of operations, and future prospects. We do not maintain key-\nperson life insurance on Mr. Musk. Further, although Mr. Musk devotes significant time to our businesses and is \nhighly active in our management, he does not devote his full time and attention to our businesses and devotes time \nand attention to other significant roles (and may in the future serve in additional roles). For instance, Mr. Musk \ncurrently serves as Technoking and Chief Executive Officer of Tesla and is involved in other emerging technology \nventures, including Neuralink and The Boring Company. Mr. Musk has also previously served as Senior Advisor to \nthe President of the United States. Any such loss or reduced involvement in our business could result in a material \nadverse effect on our business, financial condition, results of operations, and future prospects. The process of \nidentifying and recruiting a successor with the combination of skills and experience possessed by Mr. Musk, as well \nas the ability to maintain the confidence of the market, could be lengthy and uncertain, and there can be no assurance \nthat we would be able to attract or retain a suitable replacement in a timely manner or at all.\nWe, Mr. Musk, and other companies Mr. Musk is affiliated with frequently receive an immense amount of media \nattention. The actions and statements of Mr. Musk and his affiliated ventures, whether or not directly relating to us, \nmay draw significant public attention and scrutiny to us and could potentially have a positive or negative impact on \nour business, relationships with customers and regulators, or stock price. \nIn addition to Mr. Musk, we have key personnel who are invaluable to our businesses. We rely upon their \nknowledge, expertise, and leadership to develop, manufacture, launch, sell, and support our products and services. \nNone of our key employees are bound by an employment agreement for any specific term and we may not be able to \nsuccessfully attract and retain the senior leadership necessary to continue to grow our business. Our compensation \narrangements, such as our equity award programs, may not always be successful in attracting new employees and \nretaining and motivating existing key personnel. Our success depends upon our ability to attract and retain key \npersonnel and any failure to do so could have a material adverse effect on our business, financial condition, results \nof operations, and future prospects.\n\n58\nTable of Contents\nA significant reduction by Mr. Musk or other existing shareholders of their ownership interest in us could \nadversely affect us.\nWe believe that Mr. Musk’s substantial ownership interest in us provides him with an economic incentive to assist \nus to be successful. Upon the expiration or earlier waiver of the lock-up restrictions on transfers or sales of our \nsecurities following the completion of this offering, Mr. Musk will not be subject to any obligation to maintain his \nownership interest in us and may elect at any time thereafter to sell all or a substantial portion of or otherwise reduce \nhis ownership interest in us. If Mr. Musk sells all or a substantial portion of his ownership interest in us, he may \nhave less incentive to assist in our success, which could adversely affect our future prospects. Additionally, future \nresales of our Class A common stock by Mr. Musk or other existing shareholders, or the perception that such sales \nmay occur, could cause the market price of our Class A common stock to decline significantly, regardless of our \nactual business performance. In particular, subject to the expiration or waiver of any applicable lock-up period, \nparties to the Investors’ Rights Agreement described in “Certain Relationships and Related Person Transactions—\nInvestors’ Rights Agreement” will have the right, subject to certain exceptions and conditions, to require us to \nregister approximately                    shares of Class A common stock under the Securities Act, and they will have the \nright to participate in certain future registrations of securities by us. Registration of any of such shares would result \nin such shares becoming freely tradable without compliance with Rule 144 limitations upon effectiveness of the \nregistration statement. In addition, approximately                    shares of Class A common stock will generally be \navailable for resale under Rule 144 starting 90 days after this offering, subject to lock-up restrictions described \nelsewhere in this prospectus. See “Certain Relationships and Related Person Transactions—Investors’ Rights \nAgreement” and “Shares Eligible for Future Sale—Registration Rights.”\nFollowing the consummation of this offering, we will be a “controlled company” within the meaning of the \nNasdaq and Nasdaq Texas listing rules and, as a result, will qualify for and rely on exemptions from certain \ncorporate governance requirements.\nBecause Mr. Musk will beneficially own                    shares of Class A common stock and                    shares of \nClass B common stock, which represents greater than 50% of the voting power of our common stock with respect to \ndirector elections and moreover, holders of our Class B common stock, voting separately as a class, will be entitled \nto elect 51% of the total number of authorized directors constituting our board (rounded up to the nearest whole \nnumber), following the completion of this offering, we will be a controlled company under the listing rules of \nNasdaq and Nasdaq Texas. \nUnder the listing rules of Nasdaq and Nasdaq Texas, a company of which more than 50% of the voting power with \nrespect to director elections is held by another person or group of persons acting together is a “controlled company” \nand may elect not to comply with certain Nasdaq and Nasdaq Texas corporate governance requirements, including \nthe requirements that:\n•\na majority of such company’s board of directors consist of independent directors as defined under the listing \nrules of Nasdaq and Nasdaq Texas;\n•\ndirector nominees be selected or recommended for board of directors’ selection by a nominating committee \ncomposed entirely of independent directors, with a written charter addressing the nominations process as \nrequired under the listing rules of Nasdaq and Nasdaq Texas;\n•\nthe compensation committee be composed entirely of independent directors with a written charter addressing \nthe committee’s purpose and responsibilities; and\n•\nannual performance evaluations of the compensation and nominating committees be conducted. \nFollowing the completion of this offering, we intend to utilize certain of these exemptions. As a result, we do not \nexpect to have a compensation and nominating committee that is composed entirely of independent directors or that \nhas a committee charter that addresses all Nasdaq and Nasdaq Texas requirements applicable to companies that are \nnot controlled companies. Additionally, we may elect to take advantage of certain other exemptions in the future for \nas long as we remain a “controlled company.” Accordingly, our Class A shareholders will not have the same \nprotections afforded to shareholders of companies that are subject to all of the corporate governance requirements of\n\n59\nTable of Contents\nNasdaq and Nasdaq Texas. In the event that we cease to be a “controlled company” and our shares continue to be \nlisted on Nasdaq and Nasdaq Texas, we will be required to comply with all of the applicable governance \nrequirements within the applicable transition periods. Please refer to “Management.”\nOur ability to provide returns to shareholders will depend on appreciation in our share price, as we do not plan to \npay dividends for the foreseeable future.\nThe ability of investors to realize a return on their investment will depend largely on the appreciation of the price of \nour Class A common stock, as we do not anticipate paying dividends in the foreseeable future. We have never \ndeclared or paid any cash dividends on our common stock, and we currently intend to retain all available funds and \nany future earnings to support the growth and operation of our business, including investment in new technologies \nand commercial opportunities. As a result, investors seeking cash returns from their investment will not receive any \ndividend income, and the only way to realize a return may be through an increase in the market price of our Class A \ncommon stock, which may not occur. The trading price of our Class A common stock may be volatile and subject to \nwide fluctuations in response to various factors, including our financial condition and operating results, changes in \nour business or future prospects, technological innovations, announcements by us or our competitors, changes in the \nregulatory environment, harm to our brand and reputation, broader market or economic conditions, and the fact that \na number of shares of our Class A common stock are expected to be allocated to retail investors in this offering. \nAdditionally, high retail investor interest in our Class A common stock may occur following this offering, which \nmay lead to increased volatility of the trading price. Some of these factors are outside of our control, and the trading \nprice of our Class A common stock may not reflect our actual operating performance. Accordingly, investors may \nnot be able to realize a gain on their investment and could lose all or part of their investment in our Class A common \nstock. \nUpon completion of this offering, Mr. Musk will serve as our Chief Executive Officer, Chief Technical Officer, \nand Chairman of our board and control the election of our directors, and our dual class structure concentrates \nvoting control with Mr. Musk and other holders of our Class B common stock. This will limit or preclude your \nability to influence corporate matters and the election of our directors.\nOur Class B common stock will have ten votes per share; our Class A common stock will have one vote per share; \nand, except as summarized here, our Class A common stock will vote together with our Class B common stock on \nany matter submitted to the shareholders for a vote. Under our charter, holders of our Class B common stock, voting \nseparately as a class, will be entitled to elect 51% of the total number of authorized directors constituting our board \n(rounded up to the nearest whole number) and will have the ability to remove those directors for as long as there is at \nleast one share of Class B common stock outstanding. As a result, holders of our Class B common stock will have \ncontrol over the composition of our board and significant influence over the outcome of matters requiring \nshareholder approval. Please refer to “Description of Capital Stock” for certain other actions that will require \napproval of a majority of the voting power of the outstanding shares of Class B common stock voting separately as a \nclass. This concentration of voting power will limit or preclude the ability of holders of our Class A common stock, \nincluding purchasers of Class A common stock in this offering, to influence corporate matters and the election of our \ndirectors.\nUpon completion of this offering, Mr. Musk will beneficially own a majority of the outstanding shares of our \nClass B common stock and a majority of the voting power of the common stock (the Class A common stock and the \nClass B common stock voting together) and therefore will be able to elect all the members of our board. Mr. Musk, \nwho will serve as our Chief Executive Officer and Chairman of our board under our charter and can only be \nremoved from our board or these positions by the vote of Class B holders, as set forth in our charter, will exert \nsignificant influence over our business and affairs.\nClass B common stock will continue to have ten votes per share, except that, subject to exceptions for certain inter-\nfamily transfers and transfers to certain entities that qualify as “permitted transferees” (as described elsewhere in this \nprospectus), transfers by holders of our Class B common stock will generally result in those shares converting to \nClass A common stock. The conversion of Class B common stock to Class A common stock will have the effect, \nover time, of increasing the relative voting power of those holders of Class B common stock who retain their shares.\n\n60\nTable of Contents\nIf Mr. Musk retains a significant portion of his holdings of Class B common stock for an extended period of time, he \ncould continue to control the election and removal of a majority of our board.\nHowever, other persons will also hold shares of Class B common stock. If Mr. Musk were to sell, transfer or \notherwise dispose of a sufficient number of his shares of Class B common stock such that he no longer holds a \nmajority of the outstanding shares of Class B common stock, another holder or group of holders of Class B common \nstock could obtain the ability to elect and remove a majority of our board and thereby effectively control the \nCompany. Any such change in control could result in changes to our strategic direction, management, business plans \nor policies that may not be aligned with the interests of holders of our Class A common stock. \nIn addition, our charter will provide that other than for specified class votes by the Class B common stock or any \nrights granted to other classes in the future, classes of stock will not be entitled to any separate class votes provided \nfor under the Texas Business Organizations Code (the “TBOC”), including among others (i) the increase or decrease \nof the aggregate number of authorized shares of a class outstanding, (ii) the exchange, reclassification, or \ncancellation of all or part of the shares of a class, (iii) a change of shares of a class, with or without par value, into \nthe same or a different number of shares of the same or another class, with or without par value, (iv) the creation of a \nnew class of shares with rights and preferences equal, prior, or superior to the shares of the class and (v) cancellation \nor other effectuation of the dividends on the shares of the class or series that have accrued but have not been \ndeclared. \nThe TBOC and our charter include provisions that may limit shareholders’ ability to bring a cause of action \nagainst our directors or officers for certain acts or omissions in their capacity as directors or officers of the \nCompany, including minimum share ownership for derivative proceedings and the presumption of the business \njudgment rule.\nThe TBOC and our governing documents include certain provisions that may limit our shareholders’ ability to bring \ncertain derivative claims against our officers and directors. For example, the TBOC provides that, if a corporation \nhas a class of stock listed on a national securities exchange, the governing documents may provide that the minimum \nownership threshold for a shareholder or group of shareholders to institute or maintain such derivative proceeding is \n3% of shares outstanding. A similar ownership threshold provision based on this 2025 TBOC provision has already \nbeen challenged in court proceedings involving another Texas corporation and, although the federal district court \nfound the provision enforceable in that case, its enforceability or governing documents containing its provisions \ncould be subject to further challenges or interpretation. The TBOC also permits corporations to request a court, at \nthe start of a transaction (including a related party transaction) or inquiry into a derivative claim, to determine the \nindependence and disinterestedness of directors serving on a special committee reviewing the transaction or \ndirectors or other individuals on panels reviewing derivative claims. Subsequent challenges to independence or \ndisinterestedness would require new facts. Our bylaws will provide that these TBOC provisions will apply to us.\nIn addition, Section 21.419 of the TBOC sets forth certain presumptions concerning compliance by directors and \nofficers with respect to their duties to a corporation, including the duty of care and duty of loyalty. Specifically, in \ntaking or declining to take any action on any matters of a corporation’s business, Section 21.419, which applies to \nus, provides that a director or officer is presumed to have acted (i) in good faith, (ii) on an informed basis, (iii) in \nfurtherance of the interests of the corporation and (iv) in obedience to the law and the corporation’s governing \ndocuments. These provisions are described as codifying the “business judgment rule.” In order to succeed in a cause \nof action against a director or officer, the Company or a shareholder pursuing such an action must rebut one or more \nof the foregoing presumptions and prove with particularity the director or officer’s act or omission constituted a \nbreach of duty as a director or officer and that such breach involved fraud, intentional misconduct, an ultra vires act \nor a knowing violation of law.\nOur bylaws will impose minimum stock ownership and solicitation requirements on shareholders seeking to \nsubmit proposals for shareholder approval, which could limit the ability of our shareholders to bring matters \nbefore a meeting of shareholders.\nUpon the completion of this offering, we will qualify as a “nationally listed corporation” under Section 21.373 of the \nTBOC, and our bylaws will provide that the shareholder proposal requirements permitted by that section will apply\n\n61\nTable of Contents\nimmediately upon qualifying as a “nationally listed corporation.” As a result, except with respect to director \nnominations and procedural resolutions ancillary to the conduct of a shareholders’ meeting, a shareholder or group \nof shareholders seeking to submit a proposal for approval at a meeting of shareholders will be required to satisfy \nspecified ownership, holding-period and solicitation requirements. Under these provisions, the proposing \nshareholder or shareholder group must hold an amount of voting shares (determined as of the date of submission of \nthe proposal) equal to at least 3% of our voting shares, must have held that amount continuously for at least six \nmonths before the date of the meeting and throughout the entire duration of the meeting, and must solicit holders of \nshares representing at least 67% of the voting power of shares entitled to vote on the proposal at the shareholder \nmeeting. For the purpose of this paragraph, “voting shares” means shares that entitle the holder of the shares to vote \non the proposal. These requirements are more restrictive than the requirements that would otherwise apply absent \nsuch a bylaw provision and may make it more difficult, or in some cases impracticable, for shareholders to submit \nproposals for consideration at a shareholders’ meeting. As a result, our shareholders may have fewer opportunities to \npresent proposals for shareholder approval, even on matters they believe are important, which could limit \nshareholder influence over corporate governance and other matters. Section 21.373 of the TBOC was enacted in \n2025 and, while its enforceability has not yet been challenged in court and we do not have any material concerns \nrelated to enforceability of Section 21.373 or the related bylaws provision, like many new laws, we expect the \nenforceability of TBOC Section 21.373 will eventually be challenged.\nOur bylaws place restrictions on the forum, venue and procedures for legal actions or proceedings initiated by \nour shareholders, including certain requirements for mandatory arbitration. These provisions could limit our \nshareholders’ ability to pursue certain claims and/or increase the cost of doing so and could also affect the \nprocedures, rights, and remedies available to our shareholders in such legal actions or proceedings.\nOur bylaws will contain a section (the “Forum Section Bylaw”) that will provide that, unless the Company consents \nin writing to the selection of an alternative forum, the sole and exclusive forum for the filing, adjudication, and trial \nof all disputes between (i) one or more shareholders and (ii) the Company or its directors, officers, or controlling \npersons, or any underwriter of securities issued by the Company (or controlling person thereof) relating to any of the \nfollowing: (1) any derivative proceeding, meaning a civil dispute brought in the right of the Company; (2) any action \nbased on the governance, governing documents, or internal affairs of the Company; (3) any action based on state or \nfederal securities or trade regulation laws; (4) any action based on the alleged act(s) or omission(s) by a person in its \ncapacity as a shareholder, controlling person, director, officer or other managerial official of the Company; (5) any \naction based on the alleged breach(es) by one or more shareholders, controlling persons, directors, officers, or other \nmanagerial officials of a duty owed, in his or her capacity as such, to the Company or to any shareholder thereof; (6) \nan action seeking to hold a shareholder, controlling person, director, officer, or other managerial official of the \nCompany liable for an obligation of the Company, other than on account of a written contract signed by the person \nto be held liable in a capacity other than as a shareholder or managerial official; and (7) any action arising out of the \nTBOC, will be the Texas Business Court, Eleventh Division (the “Business Court”) (for purposes of this summary, \neach, an “Internal Dispute”).\nThe selection of the Business Court as the exclusive forum for Internal Disputes may limit a shareholder’s ability to \nbring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, other \nmanagerial officials, or other employees, which may discourage lawsuits against us and our directors, officers, other \nmanagerial officials, and other employees. Except to the extent that the Company consents in writing, or a court of \ncompetent jurisdiction determines in a final and unappealable judgment, that an Internal Dispute is not subject to the \nsole and exclusive venue and forum or jurisdiction of the Business Court or arbitration (as described further below), \na shareholder will not be permitted to litigate an Internal Dispute in federal court or in any state court other than the \nBusiness Court, and will not be able to avail itself of any potential advantages or procedural protections of such \nother forums. Any person or entity purchasing or otherwise acquiring any interest in our shares of capital stock will \nbe deemed to have notice of and have consented to these provisions. For more information, please refer to \n“Description of Capital Stock—Anti-Takeover Effects of Provisions of Our Charter, our Bylaws and Texas Law.”\nSpaceX maintains that the Forum Selection Bylaw, including without limitation the selection of the Business Court \nas the sole and exclusive forum for all actions brought under federal securities laws, accords with the law and is \nenforceable. However, the law governing the selection of a forum other than a federal court for certain actions \nbrought under the federal securities laws is unsettled, and there is some risk that, if an Internal Dispute were filed\n\n62\nTable of Contents\nunder the Exchange Act (or the rules and regulations thereunder) in a court other than the Business Court, that court \ncould deny a motion to transfer the action to the Business Court pursuant to the Forum Selection Bylaw. \nAccordingly, the bylaws provide that to the extent that a court of competent jurisdiction were to determine in a final \nand unappealable judgment that an Internal Dispute is not subject to the sole and exclusive venue and forum or \njurisdiction of the Business Court (such Internal Dispute, an “Other Dispute”), such Other Dispute would be \nexclusively and finally settled by arbitration, pursuant to the Texas Arbitration Act, under the Expedited Procedure \nProvisions of the Rules of the International Chamber of Commerce, pursuant to Article 30 thereof. To be clear, \nabsent Company consent, a shareholder would not be able to file an arbitration demand pursuant to the Dispute \nResolution Clause without first obtaining a final and unappealable judgment that the shareholder’s Internal Dispute \nis not subject to the sole and exclusive venue and forum or jurisdiction of the Business Court. The governing law of \nsuch Other Dispute would be the federal law of the United States or the law of the State of Texas, as applicable to \nthe issues raised in the Other Dispute, including without limitation the pleading and discovery limitations of the \nPrivate Securities Litigation Reform Act.\nGiven the unsettled nature of the law in this area, there is also some risk that a court that has denied a motion to \ntransfer an Internal Dispute to the Business Court pursuant to the Forum Selection Bylaw would also deny a motion \nto compel arbitration of such Other Dispute pursuant to the Forum Selection Bylaw. Accordingly, the Forum \nSelection Bylaw further provides that to the extent that a court of competent jurisdiction determines in a final and \nunappealable judgment that such Other Dispute cannot be compelled to arbitration pursuant to the Forum Selection \nBylaw, the sole and exclusive forum for the adjudication and trial of such Other Dispute will be the United States \nDistrict Court for the Southern District of Texas, Houston Division (the “Federal Court”). \nFinally, the Forum Selection Bylaw provides that to the extent that a court of competent jurisdiction determines in a \nfinal and unappealable judgment that the Federal Court lacks jurisdiction over any such Other Dispute, the sole and \nexclusive forum and venue for such Other Dispute will be the state district courts of Harris County, Texas.\nRegardless of the forum, venue, or procedures selected for an Internal Dispute or Other Dispute, our bylaws shall \nrequire that any Internal Dispute or Other Disputes be brought only as an individual action or derivative proceeding, \nand, to the fullest extent permitted by law, shall prohibit shareholders from bringing such an Internal Dispute or \nOther Dispute as a class action, mass action, or other form of collective action or from being consolidated or joined, \nin whole or in part, consistent with the Arbitration Rules. However, the Company, at its sole option, may elect to \nseek consolidation or joinder of matters as consistent with the Arbitration Rules. \nIn addition, our bylaws will provide that any person or entity purchasing or otherwise acquiring or holding any \ninterest in shares of stock of the Company shall be deemed to have irrevocably and unconditionally waived any right \nit may have to a trial by jury in any Internal Dispute. This will prevent a shareholder from requesting that a jury \ndecide disputed issues of fact and may discourage lawsuits against us and our directors, officers, other managerial \nofficials, and other employees.\nThese dispute resolution rules that our bylaws will establish for Internal Disputes, as well as the Arbitration Rules to \nthe extent they will apply, are different from the procedural rules that would normally apply to the litigation of \nInternal Disputes in state or federal court. They may prevent a shareholder from availing itself of procedural \nprotections that would be available under litigation in state or federal court and may render available or affect \nadversely the rights and remedies available to shareholders in such proceedings. Particularly in the case of \narbitration, including its prohibition on class or collective actions, these dispute resolution rules may also result in \ngreater costs being imposed on shareholders to litigate Internal Disputes, and in some cases involving lower amounts \nin controversy, the additional costs that may be imposed on shareholders to litigate Internal Disputes could exceed \nthe potential recovery from such litigation.\nIt is possible that one or more provisions of our bylaws, including those regarding the exclusive forum for Internal \nDisputes, mandatory arbitration for Other Disputes, or waiver of the right to proceed on a class, mass, or collective \nbasis, may be found by a court to be inapplicable or unenforceable. In addition, the mandatory arbitration provision \nin our bylaws could be subject to litigation or regulatory scrutiny, which could result in the provision being enjoined \nor in additional costs or uncertainty. In such case, we may incur additional costs or delays associated with resolving\n\n63\nTable of Contents\nsuch actions, including in other jurisdictions, which could adversely affect our business, financial condition, or \nresults of operations.\n\n64\nTable of Contents\nCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS\nThis prospectus contains forward-looking statements. Forward-looking statements include those that express a \nbelief, expectation, or intention, as well as those that are not statements of historical fact. Forward-looking \nstatements contained in this prospectus include information regarding our future operating results and financial \nposition, our business strategy and plans and our objectives for future operations. Forward-looking statements \ncontained in this prospectus also include, but are not limited to, statements about:\n•\nthe development and deployment of Starship in accordance with our anticipated schedule (including \ncommencement of payload delivery to orbit in 2026) and launch cadence and our ability to achieve expected \nperformance, reusability, and cost efficiencies;\n•\nthe size and growth of our various existing and future markets, including the markets for commercial launch \nservices, satellite connectivity services, our AI platforms, AI compute infrastructure (terrestrial and orbital), \nlunar-related activities and interplanetary activities, including the extent to which such markets develop, \nparticularly emerging or unproven markets that may not materialize as expected or on anticipated timelines; \n•\ndemand for our products and services, including our launch, connectivity, and AI offerings, and our ability to \ngrow our customer base and generate revenue;\n•\nthe deployment of our next-generation Starlink satellites, satellite-to-mobile connectivity, and orbital AI \ncompute infrastructure (including potential deployment of our orbital AI compute satellites as early as 2028), \nincluding our ability to successfully develop, scale, and commercialize such technologies, which are subject to \nsignificant technical complexity, capital requirements, new innovations and regulatory approvals;\n•\nour target launch cadence and expansion of our manufacturing and operational capacity necessary to support our \nstrategies, including our ability to scale production, supply chain, infrastructure, and workforce efficiently;\n•\nour ability to execute our growth strategy and scale our operations efficiently, including managing costs, \ntimelines, and operational complexity;\n•\nour ability to solve novel issues and navigate and monetize technologies and environments that have never been \naccessed or economized before;\n•\nour ability to design, develop and successfully commercialize new and innovative technologies, products, and \nservices, including our AI platforms and Terafab, and our ability to achieve and maintain a low cost per token, \nin each case in rapidly evolving and competitive markets;\n•\nour ability to scale and monetize our AI products and services, including the development, performance, and \nadoption of our frontier models and related applications, and to realize benefits from related acquisitions and \ninitiatives, such as our arrangement with Cursor;\n•\nthe amount, nature and timing of our capital expenditures and the impact of such capital expenditures on our \ngrowth and performance, including our ability to fund such expenditures, manage costs, strategically reduce \ncosts and achieve expected returns on investment;\n•\nour ability to obtain sufficient power, GPUs, and other critical components and manage our supply chain to \nsupport our operations and growth;\n•\nour ability to obtain and maintain required regulatory approvals, licenses and spectrum authorizations in the \nUnited States and internationally, and the timing, scope, and conditions of such approvals;\n•\nthe competitive landscape in the industries in which we operate and our ability to compete effectively;\n•\nthe implementation, interpretation, and impact of current or future regulations including laws and regulations \nrelating to space operations, communications, AI, data privacy, and other areas; \n•\nour ability to realize benefits and manage risks of being a public company; and\n\n65\nTable of Contents\n•\ngeneral economic conditions. \nThese forward-looking statements may be accompanied by words such as “anticipate,” “believe,” “estimate,” \n“expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “will,” “should,” “could,” “would,” \n“likely,” “future,” “budget,” “goal,” “commit,” “pursue,” “target,” “seek,” “objective” or the negative of these \nwords, or similar expressions that are predictions of or indicate future events or trends that do not relate to historical \nmatters. We caution you that the foregoing list may not contain all of the forward-looking statements made in this \nprospectus.\nThe forward-looking statements in this prospectus speak only as of the date of this prospectus, or such other date as \nspecified herein. We undertake no obligation to update these statements unless required by law, and we caution you \nnot to place undue reliance on them. Forward-looking statements are not assurances of future performance and \ninvolve risks and uncertainties. We have based these forward-looking statements on our current expectations and \nassumptions about future events. Forecasts, goals, milestones, and expectations that cover multi-year time horizons, \nor unknown timelines, inherently involve increased risks with respect to predictability and actual results may differ \nmaterially from current expectations. While our management considers these expectations and assumptions to be \nreasonable, they are inherently subject to significant business, economic, competitive, regulatory, technological, \nenvironmental, political, and other risks, contingencies and uncertainties, which are difficult to predict and many of \nwhich are beyond our control. These risks, contingencies, and uncertainties and other important factors are described \nin the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of \nOperations” sections of this prospectus. Should one or more of such risks or uncertainties occur, or should \nunderlying assumptions prove incorrect, our actual results, performance, achievements or plans could differ \nmaterially from those expressed or implied in any forward-looking statements. In addition, because we operate in \nrapidly evolving and certain highly competitive markets, we may from time to time rapidly adjust, modify or change \nour strategic priorities, capital allocation, product or service focus or operational initiatives in response to \ntechnological developments, competitive dynamics, regulatory changes or other factors, which could cause actual \nresults to differ materially from those expressed or implied by the forward-looking statements contained herein. New \nrisks emerge from time to time, some risks are inherently unknown to us, and it is not possible for our management \nto predict all such risks. Many of the risks and uncertainties that could materially adversely affect us or our prospects \nare beyond our control or relate to portions of our business strategy that have a lengthy time horizon or involve \nunprecedented ventures. This can make assessment of certain risks more difficult and you should factor these \nuncertainties into your assessment of an investment in our Class A common stock. All forward-looking statements in \nthis prospectus are expressly qualified in their entirety by the cautionary statements in this section.\n\n66\nTable of Contents\nUSE OF PROCEEDS\nWe expect to receive approximately $           of net proceeds from this offering (or $           if the underwriters \nexercise their option to purchase additional shares of Class A common stock in full), based upon the assumed initial \npublic offering price of $           per share (which is the midpoint of the price range set forth on the cover page of this \nprospectus) after deducting underwriting discounts and commissions and estimated offering expenses payable by us. \nWe intend to use the net proceeds from this offering to fund our growth strategy, including the expansion of our AI \ncompute infrastructure, enhancements to our launch infrastructure and launch vehicles, increases in the scale and \ncapacity of our satellite constellations, and any remaining amounts for general corporate purposes.\nAssuming no exercise of the underwriters’ option to purchase additional shares, each $1.00 change in the assumed \ninitial public offering price of $           per share (which is the midpoint of the price range set forth on the cover page \nof this prospectus) would cause the net proceeds from this offering, after deducting the underwriting discounts and \ncommissions and estimated offering expenses payable by us, to change by approximately $          million, assuming \nno change to the number of shares of our Class A common stock offered by us, as set forth on the cover page of this \nprospectus. Similarly, an increase (decrease) of one million shares of Class A common stock sold in this offering by \nus would increase (decrease) our net proceeds by $          million, assuming the initial public offering price of \n$           per share (which is the midpoint of the price range set forth on the cover page of this prospectus) remains \nthe same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable \nby us. If the net proceeds increase for any reason, we would use the additional net proceeds for the purposes set forth \nabove. If the net proceeds decrease for any reason, then we expect that we would use the lower amount of net \nproceeds for the purposes set forth above.\nThe expected use of net proceeds from this offering represents our intentions based upon our present plans and \nbusiness conditions. We cannot predict with certainty all of the particular uses for the net proceeds from this offering \nor the amounts that we will actually spend on each of the uses set forth above. Accordingly, our management will \nhave significant flexibility in applying the net proceeds from this offering. The timing and amount of our actual \nexpenditures will be based on many factors, including cash flows and the anticipated growth of our business.\n\n67\nTable of Contents\nDIVIDEND POLICY\nWe do not anticipate declaring or paying any cash dividends to holders of our common stock in the foreseeable \nfuture. We currently intend to retain future earnings, if any, to finance the growth of our business. Our future \ndividend policy is within the discretion of our board and will depend upon then-existing conditions, including our \nresults of operations, financial condition, capital requirements, investment opportunities, statutory restrictions on our \nability to pay dividends, restrictions in our existing and any future debt agreements and other factors our board may \ndeem relevant. Covenants under our Credit Agreements also restrict our ability to pay dividends, and we may enter \ninto credit agreements or other borrowing arrangements in the future that restrict our ability to declare or pay cash \ndividends or make distributions in the future. Please refer to “Management’s Discussion and Analysis of Financial \nCondition and Results of Operations—Liquidity and Capital Resources” for a description of the restrictions on our \nability to pay dividends.\nPlease refer to “Risk Factors—Risks Related to Our Corporate Structure, Ownership of our Class A Common Stock \nand This Offering—Our ability to provide returns to shareholders will depend on appreciation in our share price, as \nwe do not plan to pay dividends for the foreseeable future.”\n\n68\nTable of Contents\nCAPITALIZATION\nThe following table sets forth our cash and cash equivalents and capitalization as of March 31, 2026: \n•\non an actual basis;\n•\non a pro forma basis, giving effect to (i) the Preferred Conversion as if such conversion had occurred on March \n31, 2026, (ii) the Class C Reclassification as if such reclassification had occurred on March 31, 2026, and (iii) \nthe effectiveness of our charter, which will become effective upon the completion of this offering; and\n•\non a pro forma as adjusted basis, giving effect to (i) the pro forma adjustments set forth above, (ii) the sale of \nshares of our Class A common stock in this offering at an assumed initial offering price of $           per share, \nwhich is the midpoint of the range set forth on the cover page of this prospectus, and (iii) the application of the \nnet proceeds from this offering as described under “Use of Proceeds.”\nThe table below should be read in conjunction with, and is qualified in its entirety by reference to “Management’s \nDiscussion and Analysis of Financial Condition and Results of Operations,” “Description of Capital Stock” and our \nconsolidated financial statements and related notes included elsewhere in this prospectus.\nAs of March 31, 2026\n(Dollars in millions, except par values)\nActual\nPro Forma\nPro Forma as \nAdjusted\nCash and cash equivalents \n ............................................................. $\n15,852\n$\n15,852\n$\nLong-term debt:\nSpaceX Credit Facility (1)\n \n ......................................................... $\n—\n$\n—\nSpaceX Bridge Loan (2)\n \n ............................................................\n20,000\n20,000\nX 2027 and X 2030 Notes \n ........................................................\n27\n27\nOther Financings (3)\n \n ..................................................................\n9,105\n9,105\nUnamortized deferred financing costs \n ......................................\n(21)\n(21)\nTotal long-term debt \n ............................................................ $\n29,111\n$\n29,111\nRedeemable convertible preferred stock:\nRedeemable convertible preferred stock, par value $0.001; \n189,155,861 shares issued and 134,451,267 shares \noutstanding, actual; no shares authorized, issued or \noutstanding, pro forma and pro forma as adjusted \n ............... $\n7,049\n$\n—\nShareholders’ equity:\nClass A common stock, par value $0.001; 2,964,501,353 \nshares issued and 2,882,444,444 shares outstanding, \nactual; 36,132,150,000 shares authorized, 6,824,581,339 \nshares issued and outstanding, pro forma; 36,132,150,000 \nshares authorized,                shares issued and outstanding, \npro forma as adjusted \n ............................................................\n3\n6\nClass B common stock, par value $0.001; 2,421,276,530 \nshares issued and outstanding, actual; \n6,125,000,000 shares authorized, 5,695,729,430 shares \nissued and outstanding, pro forma and pro forma as \nadjusted \n .................................................................................\n3\n6\nClass C common stock, par value $0.001; 494,026,445 \nshares issued and outstanding, actual; 10,000,000,000 \nshares authorized, no shares issued or outstanding, pro \nforma and pro forma as adjusted ..........................................\n0\n—\nClass D common stock, par value $0.0001; no shares issued \nand outstanding, actual; no shares authorized, issued or \noutstanding, pro forma and pro forma as adjusted \n ...............\n—\n—\n\n69\nTable of Contents\nPreferred stock, par value $0.001; no shares issued and \noutstanding, actual; 2,400,000,000 shares authorized, no \nshares issued or outstanding, pro forma and pro forma as \nadjusted \n .................................................................................\n—\n—\nAdditional paid-in capital \n .........................................................\n74,083\n81,126\nAccumulated deficit .................................................................\n(41,311)\n(41,311)\nAccumulated other comprehensive income \n .............................\n1,755\n1,755\nTotal shareholders’ equity \n ................................................... $\n34,533\n$\n41,582\nTotal capitalization \n ........................................................................ $\n70,693\n$\n70,693\n________________\n(1)\nAs of April 30, 2026, we had no borrowings outstanding under the SpaceX Credit Facility. In May 2026, the SpaceX Credit Facility was \namended to increase the borrowing capacity up to $5,000 million (“Amended SpaceX Credit Facility”). The Amended SpaceX Credit \nFacility terminates, and all outstanding loans become due and payable, on May 19, 2031, unless the parties agree to an extension in \naccordance with the terms of the Amended SpaceX Credit Facility. For more information on the SpaceX Credit Facility and Amended \nSpaceX Credit Facility, please see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity \nand Capital Resources—Debt Agreements.”\n(2)\nAs of April 30, 2026, we had $20,000 million of borrowings outstanding under the SpaceX Bridge Loan. The SpaceX Bridge Loan matures \non September 2, 2027, subject to extension in accordance with the terms of the agreement. For more information on the SpaceX Bridge \nLoan, please see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital \nResources—Debt Agreements.” \n(3)\nIncludes obligations related to certain AI infrastructure assets recorded as failed sale-leaseback transactions.\n\n70\nTable of Contents\nDILUTION\nPurchasers of the Class A common stock in this offering will experience immediate and substantial dilution in the \nnet tangible book value per share of the Class A common stock for accounting purposes. Our net tangible book value \nas of March 31, 2026 was approximately $              , or $                per share of Class A common stock. Net tangible \nbook value per share is determined by dividing our tangible net worth (tangible assets less total liabilities) by the \ntotal number of outstanding shares of all classes of common stock outstanding immediately prior to the completion \nof this offering. After giving effect to the sale of shares of Class A common stock in this offering, the payment of \nunderwriting discounts and commissions and estimated offering expenses by us, the Class C Reclassification and the \nPreferred Conversion as if such reclassification and conversion occurred on March 31, 2026, our adjusted pro forma \nnet tangible book value as of March 31, 2026 would have been approximately $                , or $                per share of \nClass A common stock. This represents an immediate decrease in the net tangible book value of $                per share \nof Class A common stock to Mr. Musk and other existing investors and an immediate dilution (i.e., the difference \nbetween the offering price and the adjusted pro forma net tangible book value immediately after this offering) to \nnew investors purchasing shares of Class A common stock in this offering of $                per share. The following \ntable illustrates the per share dilution to new investors purchasing shares of Class A common stock in this offering:\nInitial public offering price per share \n ........................................................................\n$\nPro forma net tangible book value per share as of March 31, 2026 \n .......................... $\nDecrease per share attributable to new investors in this offering \n ..............................\nAs adjusted pro forma net tangible book value per share after giving further effect \nto this offering \n ........................................................................................................\nDilution in pro forma net tangible book value per share to new investors in this \noffering (1)\n ...............................................................................................................\n$\n_______________\n(1)\nIf the initial public offering price were to increase or decrease by $1.00 per share, then dilution in pro forma net tangible book value per \nshare of Class A common stock to new investors in this offering would equal $                or $                , respectively. Similarly, if the \nnumber of shares of Class A common stock offered by us were to increase or decrease by                      shares, then dilution in pro forma net \ntangible book value per share of Class A common stock to new investors in this offering would be $                or $                , respectively.\nThe following table summarizes, on an adjusted pro forma basis as of March 31, 2026, the total number of shares of \nClass A and Class B common stock owned by Mr. Musk and other existing investors and to be owned by new \ninvestors in this offering, the total consideration paid, and the average price per share paid by Mr. Musk and other \nexisting investors and to be paid by new investors in this offering at $                , calculated before deduction of \nunderwriting discounts and commissions and estimated offering expenses.\nShares Acquired(1)\nTotal Consideration(2)\nAverage Price \nPer Share\nNumber\nPercent\nAmount\nPercent\nElon Musk and other existing \ninvestors\n ............................................\n%\n$\n%\n$\nNew investors in this offering \n \n ............\n%\n$\n%\n$\nTotal \n \n ...................................................\n100.0%\n$\n100.0%\n$\n______________\n(1)\nIf the underwriters exercise their option to purchase additional shares in full, Mr. Musk and other existing investors would own \napproximately                % and our new investors in this offering would own approximately                % of the total number of shares of our \ncommon stock outstanding after this offering.\n(2)\nIf the underwriters exercise their option to purchase additional shares in full, the total consideration paid by our new investors would be \napproximately $                (or                %).\nEach $1.00 increase or decrease in the assumed initial public offering price would increase or decrease, as \napplicable, the total consideration paid by new investors and the total consideration paid by all shareholders by \n$           million, assuming that the number of shares of Class A common stock offered by us remains the same and \nafter deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. \nSimilarly, an increase or decrease of                      shares in the number of shares of Class A common stock offered \nby us would increase or decrease, as applicable, the total consideration paid by new investors and the total\n\n71\nTable of Contents\nconsideration paid by all shareholders by $              million, assuming that the assumed initial public offering price \nremains the same and after deducting estimated underwriting discounts and commissions and estimated offering \nexpenses payable by us.\n\n74\nTable of Contents\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF \nOPERATIONS\nThe following discussion and analysis of our financial condition and results of operations should be read in \nconjunction with our audited consolidated financial statements and the related notes and other financial information \nincluded elsewhere in this prospectus. In addition to historical consolidated financial information, the following \ndiscussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results \ncould differ materially from those discussed in the forward-looking statements. You should review the sections titled \n“Cautionary Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and \n“Risk Factors” for a discussion of factors that could cause actual results to differ materially from the results \ndescribed in or implied by the forward-looking statements contained in the following discussion and analysis and \nelsewhere in this prospectus. Our audited consolidated financial statements and related notes have been prepared to \nreflect the retrospective combination of the companies for all periods presented as the acquisitions of xAI and X \nHoldings were accounted for as transactions between entities under common control.\nOur Mission\nOur mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true \nnature of the universe, and to extend the light of consciousness to the stars. To do this, we have formed the most \nambitious, vertically integrated innovation engine on (and off) Earth with unmatched capabilities to rapidly \nmanufacture and launch space-based communications that connect the world, to harness the Sun to power a truth-\nseeking artificial intelligence that advances scientific discovery, and ultimately to build a base on the Moon and \ncities on other planets. \nStarship Flight Test\nOverview\nFounded in 2002, SpaceX is the only company building the integrated hardware and software infrastructure of the \nfuture across space, connectivity, and AI. At our core, we are builders. We design, manufacture, launch, and operate \nproducts and services built on cutting-edge technologies, including the world’s most advanced rockets and \nspacecraft. We safely and reliably transport astronauts, satellites, and other payloads on missions that benefit life on\n\n75\nTable of Contents\nEarth. Since 2023, we have launched more than 80% of mass to orbit for the world each year with an over 99% \nmission success rate with Falcon rockets. We also operate a high-speed, low-latency global broadband data and \ncommunications network powered by approximately 9,600 Starlink broadband and mobile satellites in Low-Earth \nOrbit, delivering connectivity to millions of consumer, enterprise, and government customers across 164 countries, \nterritories, and other markets, as of March 31, 2026. Using our dedicated satellite-to-mobile constellation, we offer \nconnectivity services, supplementing terrestrial networks and substantially reducing mobile “dead zones” across \napproximately 30 countries. \nWith the potential to improve both space exploration and life on Earth, AI accelerates SpaceX’s mission to make life \nmultiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars. \nxAI, which was founded in 2023 and acquired by SpaceX in early 2026, is now an integral pillar of our vertically \nintegrated company. We are rapidly constructing AI compute infrastructure—starting on Earth with the goal of \nextending to space—at industry-leading pace and cost efficiency. Our infrastructure supports training and inference \nfor Grok, which has emerged as one of the world’s most advanced frontier models. Grok is designed as a truth-\nseeking AI model, built on our founder Elon Musk’s mission to enable humanity to understand the universe. We \nbelieve that accomplishing this mission requires a truth-seeking approach to AI. We define truth seeking as the \nactive, relentless pursuit of what is objectively true about reality, and grounded in evidence, logic, empirical data, \nand first principles thinking. Our goal is to understand and explain what the universe appears to be doing, as \naccurately as current knowledge allows. Within two years of its initial model release, Grok achieved frontier-level \nperformance in scientific reasoning, as measured by its GPQA Diamond score, an industry benchmark that evaluates \nAI models on a standardized set of questions written and validated by experts, on a faster timeline than reported by \nother leading model providers. Grok also benefits from integration with X, our real-time information, entertainment, \nand free speech platform, which serves as a foundational distribution and data engine for our AI ecosystem and \nfurther enhances Grok’s truth-seeking objective.\nWe believe that space represents the largest economic frontier in human history, unlocking unprecedented \nopportunities in orbit and on Earth. Earth has limits, so we must build infrastructure and industries in space, \nexpanding human capabilities to improve life on Earth and to establish life beyond. Connectivity infrastructure in \nspace is designed to help everyone on Earth have access to education, healthcare, entertainment, and \ncommunications, and to enable people to overcome many traditional limits, such as physical and political borders. \nWe believe AI infrastructure in space can utilize the virtually limitless power of the Sun and thereby enable the use \nof AI as a transformative force for understanding the universe and improving the daily lives of all humans. We \nbelieve the convergence of these areas will enable an unprecedented expansion in the global economy, leading to an \nage of abundance. Our innovations and technological advancements are redefining industries on Earth, while we aim \nto create new ones on the Moon, Mars, and beyond. We are truly building the infrastructure of the future.\nSpaceX is the only company that has cracked the code on accessing space at scale, revolutionizing an industry \ncharacterized by decades of stagnation, risk aversion, and economically perverse cost structures. SpaceX upended \nthis paradigm through the application of first-principles thinking, which rejects industry assumptions and builds \nsolutions based on the fundamental laws of physics. Our intense, mission-driven, engineering-first culture and focus \non extreme vertical integration have propelled us to achieve what many deemed impossible. We have demonstrated \nthe ability to achieve groundbreaking technological innovations with speed, quality control, and precision. We \npioneered high-cadence, reliable, and affordable access to space with our Falcon family of rockets, with a goal to \ntransform the rocket launch industry into airline-like operations. In 2015, we established at least a 10-year lead over \nthe industry by successfully landing our first Falcon 9 booster back from space before anyone else. We have \ncontinued to invest significantly in further increasing our lead by pursuing full and rapid reusability at scale, \nincluding investing over $15 billion in our next-generation rocket, Starship.\nWe believe rocket launches and landings should be as routine and commonplace as airplanes taking off and landing. \nTo achieve this sort of cadence, our iterative approach emphasizes rapid designing, testing, and process \noptimization, putting flight hardware in the flight environment as often as possible. This allows us to accelerate our \nlearning by repeatedly using and improving our systems. This has resulted in a significantly higher flight rate at \ncosts that are much lower than launch programs that existed before SpaceX. For example, according to NASA, the \nfirst version of Falcon 9 in 2010 had a launch cost of approximately $2,700 per kilogram, which represented a \nreduction of approximately 85% compared to the historical average launch cost per kilogram of $18,500. The first\n\n76\nTable of Contents\nversion of Falcon Heavy in 2018 further reduced this cost to approximately $1,400 per kilogram, a reduction of \napproximately 92% compared to the historical average cost. With the future deployment of Starship, which is \ndesigned to be the world’s first fully and rapidly reusable spacecraft, we aim to further reduce the cost to reach orbit \nby 99% or more relative to the historical average launch cost. Central to our cost advantage is the reusability of key \nhardware—most notably boosters—which we recover, refurbish, and refly many times instead of discarding after \nsingle use. This dramatically lowers per-launch costs by minimizing hardware replacement expenses and spreading \nfixed production costs across repeated uses. Space flight that historically cost billions per launch now costs in the \ntens of millions, fundamentally reducing the cost of space access, providing the opportunity to build new enterprises \nin space.\nSimilarly, xAI has cracked the code in the complexities of building and scaling AI compute infrastructure, becoming \nthe first company to deploy a coherent gigawatt-scale AI training cluster. We believe the combination of our \nproprietary AI infrastructure capability, our truth-seeking frontier model, Grok, and our access to real-time data on \nX creates a formidable competitive advantage, allowing us to maintain a leading position in the development of \nadvanced artificial intelligence. This advantage stems from our complete vertical integration and the common vision \ninfused by our founder, Elon Musk. In just a few years, we have demonstrated an ability to build coherent compute \nat scale and rapid speed with lower cost. COLOSSUS and COLOSSUS II collectively provide approximately 1.0 \ngigawatt of compute power, with additional power capacity available for data center operations. We believe speed is \na competitive advantage. In order to bring compute clusters online as fast as possible, we employ a vertically \nintegrated, nimble approach to construction. At COLOSSUS, we brought online the first cluster of approximately \n100,000 H100 processors, approximately 130 megawatts of compute power, in just 122 days, repurposing the shell \nof an existing factory. At COLOSSUS II, we brought online the first cluster of approximately 110,000 GB200 \nprocessors, approximately 210 megawatts of compute power, even faster in 91 days. As an illustrative comparison, \nan industry benchmark to bring online a 100 megawatt greenfield data center is approximately two years. \nFurthermore, in the case of COLOSSUS II, following the initial cluster, we brought online the second cluster of \n110,000 GB300 processors and 220 megawatts of compute power in 64 days, demonstrating our ability to rapidly \nscale our facilities once built. We expect that once fully operational, the next phase of expansion at COLOSSUS II \nwill bring online at least 220,000 additional GB300 processors and over 400 additional megawatts of compute \npower. We also demonstrated a significant improvement in cost efficiency, achieving data center construction costs \nfor COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis. \nWe are able to deploy power and compute significantly faster than other AI companies through first-principles \nthinking, behind-the-meter power generation, coupled with what we believe is the world’s largest network of \nsustainable battery storage systems, and innovations in advanced liquid cooling, high-density rack layouts, and \nefficient networking. Our facilities also incorporate innovative design features that limit the effects on regional \nelectricity pricing for neighbors and include advanced water cleaning, reclamation, and recycling processes to \nsupport sustainable operations. We partner with utilities and communities to connect to and enhance the grid over \ntime, and do so while pledging to cover costs of all new power delivery infrastructure upgrades to service our data \ncenters, including adequate network upgrade costs, to ensure that these expenses are not passed on to the ordinary \nhousehold. Our ability to rapidly and cost-effectively scale with the latest processors keeps us ahead of competitors \nwho deploy traditional and more expensive methods. As a result, we believe COLOSSUS II became one of the \nworld’s first data centers to deploy GB200s and GB300s, the most advanced AI processors available at the time, at \nsignificant scale, and is currently powering training for our next frontier models, including Grok-5. Furthermore, \nthrough our Terafab initiative together with Tesla to build a manufacturing facility capable of producing 1 terawatt \nper year of compute hardware, we intend to further extend our vertical integration to chip design and manufacturing \nto alleviate potential future chip shortages at SpaceX, optimize compute performance, and potentially reduce overall \ncompute costs. Intel, which has the ability to design, fabricate, and package ultra-high-performance chips at scale, \nalso joined the Terafab project in early April 2026. Our shovels-to-tokens approach allows us to train and iterate our \nfrontier models at high velocity, accelerating development cycles, eliminating external bottlenecks, and driving \nrapid, continuous improvements in model performance.\nWe were the first private company to develop and launch a liquid-fuel rocket to reach orbit with the successful \nlaunch of Falcon 1 in 2008. In 2019, we were the first to begin deploying a large-scale LEO broadband satellite\n\n77\nTable of Contents\nconstellation. In February 2026, we acquired xAI, the first company to build a gigawatt-scale AI training cluster and \nlargest coherent supercomputer. The graphic below illustrates key milestones for our business.\n\n78\nTable of Contents\nOur Repeatable Business Model \nOur business model is built on a repeatable, engineering-driven framework that combines our unparalleled launch \ncapabilities, extreme vertical integration, rapid iteration, and disciplined capital investment to create durable, large-\nscale businesses. We execute this framework through the following core principles:\n1.\nLeverage our unparalleled launch capabilities to enable massive scale. Our rockets—with unmatched \nlaunch cadence, best-in-class reliability, and dramatically reduced cost-to-orbit—are the foundation that we \nexpect will enable us to create economic opportunities in space and deliver a diversified portfolio of services. \nOur launch capabilities enable large-scale deployment of assets that would not otherwise be economically \nviable. \n2.\nIdentify and create new trillion-dollar market opportunities. We focus on market opportunities that are \nuseful for humanity and that present trillion-dollar opportunities, including global broadband and mobile \nconnectivity for consumers, enterprises, and governments; and AI applications and computational infrastructure. \nWe prioritize opportunities where structural inefficiencies or legacy technological limitations have constrained \nsupply. \n3.\nDesign a solution with world-class engineering and first-principles thinking. We apply physics-based \nengineering and first-principles thinking to design products and systems from the ground up—boiling things \ndown to the most fundamental truths and reasoning up from there. This helps us drive massive, step-function \nimprovements in performance, scalability, and cost. \n4.\nApply “The Algorithm” (make less dumb, delete, optimize, accelerate, automate). We operate under a set \nof core execution principles that we refer to as “The Algorithm,” a five-step iterative process that we use as our \nguiding principles day-to-day. We make the requirements less dumb, delete unnecessary processes or parts \n(embracing the principle that the best part is no part), only then optimize the necessary processes or parts, and \nthen accelerate cycle time (many entities have launched once; no one other than us has ever launched over 100 \ntimes per year), and automate only proven processes after the first four steps are completed. We apply the \nAlgorithm across every aspect of our organization, creating a cultural and operational standard of excellence \nthat has defined SpaceX since inception.\n5.\nVertically integrate all the way to the end customer. We design and manufacture a significant portion of our \ncomponents in-house, including engines, avionics, structures, and software, even producing the “tools that make \nthe tools,” enabling us to test, fail, and iterate rapidly. We can then release newer, more advanced hardware with \nspeed and cost efficiency. \n6.\nContinuously drive cost down and throughput up. Through rocket reusability, manufacturing at scale, \nadvanced automation, and rigorous operational discipline, we continuously reduce unit costs while increasing \nlaunch cadence, satellite network, and AI hosting capacity. \n7.\nGenerate significant cash flow and reinvest in the future. As our businesses scale, they generate significant \ncash flow, which we reinvest into nascent market opportunities—driving a self-reinforcing cycle of constant \ninnovation and potentially creating significant additional value.\nSegments in Our Vertically-Integrated Innovation Engine\nWe have three reportable segments in our vertically integrated innovation engine: Space, Connectivity, and AI. In \nour Space segment, we design, manufacture, and launch reusable rockets to provide high cadence, reliable, and \naffordable access to space at unprecedented scale. In our Connectivity segment, we operate a worldwide high-speed, \nlow-latency broadband data and communications network powered by over 9,600 Starlink broadband and mobile \nsatellites in Low-Earth Orbit, delivering connectivity to millions of consumer, enterprise, and government customers \nacross 164 countries, territories, and other markets. In our AI segment, we operate a highly vertically integrated AI \nplatform spanning our truth-seeking frontier model Grok, AI solutions for consumer and enterprise customers, X—\nour real-time information, entertainment, and free speech platform—and AI computational infrastructure.\n\n79\nTable of Contents\nOur financial results reflect the strength of our operating model and our ability to create and scale multiple new \nbusinesses:\n•\nFor the three months ended March 31, 2026, we generated revenue on a consolidated basis of $4,694 million, \nloss from operations of $(1,943) million and Adjusted EBITDA of $1,127 million. In 2025, we generated \nrevenue on a consolidated basis of $18,674 million, loss from operations of $(2,589) million and Adjusted \nEBITDA of $6,584 million. Our Space and Connectivity segments contributed the substantial majority of our \nconsolidated revenue in the three months ended March 31, 2026 and the year ended December 31, 2025, \ndemonstrating the benefits of their scale and operating leverage in our vertically integrated business model; \n•\nFor the three months ended March 31, 2026, our Space segment generated revenue of $619 million, loss from \noperations of $(662) million, and Segment Adjusted EBITDA of $(351) million. In 2025, our Space segment \ngenerated revenue of $4,086 million, loss from operations of $(657) million, and Segment Adjusted EBITDA of \n$653 million. Additionally, our Space segment funded $930 million and $3,004 million in research and \ndevelopment expense during the three months ended March 31, 2026 and the year ended December 31, 2025, \nrespectively, for our next-generation Starship launch vehicle program. Starship is designed to enable a step-\nfunction change in our launch capability across reusability, payload capacity, and launch cadence, and is the key \nenabler of our long-term growth strategy by unlocking entirely new categories of missions;\n•\nFor the three months ended March 31, 2026, our Connectivity segment generated revenue of $3,257 million, \nincome from operations of $1,188 million, and Segment Adjusted EBITDA of $2,087 million. Our Connectivity \nsegment, primarily driven by Starlink, generated revenue of $11,387 million, income from operations of $4,423 \nmillion, and Segment Adjusted EBITDA of $7,168 million in 2025, representing year-over-year growth of \n49.8%, 120.4%, and 86.2%, respectively, benefiting from subscriber growth, increasing enterprise adoption, and \ncontinued improvement in network efficiency;\n•\nIn our newly acquired AI segment, we plan to prioritize growth and investment to capture significant \nopportunities in AI applications and compute infrastructure. For the three months ended March 31, 2026, our AI \nsegment generated revenue of $818 million, loss from operations of $(2,469) million, and Segment Adjusted \nEBITDA of $(609) million. In 2025, our AI segment generated revenue of $3,201 million, loss from operations \nof $(6,355) million, and Segment Adjusted EBITDA of $(1,237) million, reflecting its earlier stage of \ndevelopment and continued investments to support long-term growth opportunities in AI; and\n•\nFor the three months ended March 31, 2026, capital expenditures for our Space segment was $1,052 million, for \nour Connectivity segment was $1,332 million and for our AI segment was $7,723 million. In 2025, capital \nexpenditures for our Space segment was $3,832 million, for our Connectivity segment was $4,178 million and \nfor our AI segment was $12,727 million.  \nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “—Non-GAAP Financial \nMeasures” for additional information on our non-GAAP financial measures, including reconciliations of Segment \nAdjusted EBITDA to segment income (loss) from operations, the most directly comparable GAAP measure. \nSpace\nSince our founding in 2002, SpaceX has cracked the code on accessing space at scale, transforming an industry \ncharacterized by decades of stagnation, risk aversion, and economically perverse cost structures. We design, \nmanufacture, launch, and refurbish reusable launch vehicles that provide cost-efficient, reliable, and high-cadence \naccess to space for our own purposes as well as for third-party commercial and government customers. In 2025, we \nlaunched from four primary launch pads in the United States and successfully recovered boosters across seven \nlanding facilities including autonomous drone ships and catch towers based on the vehicle type and mission profile. \nOur extensive vertical integration and end-to-end control over the entire value chain, from design to launch to \noperations, allows us to achieve unprecedented speed and cost efficiency.\n\n80\nTable of Contents\nFalcon 9 First Stage Booster Landing\nAs of March 31, 2026, SpaceX had launched a total mass to orbit of approximately 7,400 metric tons with an over \n99% mission success rate across our Falcon rockets. We have completed approximately 650 orbital space launches, \nand over 540 of those launches were completed by a flight-proven Falcon rocket. In 2025 alone, SpaceX completed \n170 missions across Falcon and Starship vehicles and 159 flight-proven booster launches with an over 99% success \nrate on attempted booster recoveries. We launched over 2,200 metric tons, representing over 80% of mass to orbit \nfor the world in 2025. With the first successful launch of Falcon 1 in 2008, we became the first private company to \nsuccessfully launch a liquid-fueled rocket to Earth’s orbit. Just two years later, in 2010, the commercial debut of the \nFalcon 9 rocket revolutionized space access by delivering unprecedented cost efficiency. For example, according to \nNASA, the first version of Falcon 9 in 2010 reduced launch cost to approximately $2,700 per kilogram, which \nrepresented a reduction of approximately 85% compared to the historical average launch cost per kilogram of \n$18,500. The first version of Falcon Heavy in 2018 further reduced this cost to $1,400 per kilogram, a reduction of \napproximately 92% compared to the historical average. We have also reduced our internal cost of launch through a \ncombination of engineering improvements, manufacturing efficiencies, and economies of scale—most notably, \nthrough our ability to drive more frequent reuse of rockets.\nWe generate Space revenue primarily through launch and mission services of Falcon 9, Falcon Heavy, and Dragon \nprovided to commercial and government customers. We fly to LEO, MEO, GEO, lunar, and interplanetary \ntrajectories, as well as the International Space Station. Our Space segment revenue is derived from fixed-price \ncontracts related to the development and provision of launch services for both commercial customers and \ngovernmental agency space programs, either at a “point in time” or “over time.”\nWe manage our Space segment to support our businesses and those of our customers. We plan launches and allocate \npayloads in advance, although it can be difficult to manage the timing of customer payload arrivals. When an \nexpected customer payload for a planned launch is not available, we instead use launch capacity for our satellites. As \na result, we adjust expected launch payloads frequently, impacting period-to-period financial comparison. For a \nmajority of customer payloads, revenue and costs are primarily recognized at the launch or deployment of the \ncustomer’s spacecraft to its intended orbit, with some revenues and costs being recognized over time. For launches \ndedicated to deploying our Starlink satellites, we capitalize the associated costs within our Connectivity segment and \ndepreciate them over time, and we do not recognize revenue for those launches in our Space segment. We allocate a\n\n81\nTable of Contents\nsignificant amount of launch capacity to our Connectivity segment, and expect to allocate a significant amount to \nour AI segment in the future. Our Space segment revenue only reflects customer launches and other customer \nactivities. As a result, notwithstanding an increasing launch cadence, our Space segment has relatively lower \nrevenue scale and revenue growth compared to our other segments, though its financial results do not reflect the \nfoundational strategic value that it provides to us in bolstering the growth of our Connectivity and AI segments.\nConnectivity. Starlink provides global access to high-speed internet, including underserved rural and remote \ncommunities worldwide. As of March 31, 2026, we had approximately 9,600 Starlink broadband and mobile \nsatellites in Low-Earth Orbit, providing broadband connectivity to approximately 10.3 million Starlink Subscribers \nacross 164 countries, territories, and other markets. We also provide satellite-to-mobile texting and over-the-top \nvoice services to approximately 7.4 million monthly unique devices across approximately 30 countries. \nStarlink Mini\n•\nStarlink Consumer Broadband. We operate the world’s largest and most advanced space-based internet \nbroadband service with median latency at approximately 25 milliseconds as of March 31, 2026. We provide \nfiber-like download speeds—at a median of 225 Mbps during peak hours for residential users as of March 31, \n2026—and the technological capability to provide service everywhere on Earth, including the poles. This \nservice quality is enabled by our vast network of approximately 9,600 Starlink broadband and mobile satellites \nin Low-Earth Orbit, which accounted for approximately 75% of all active maneuverable satellites in orbit as of \nMarch 31, 2026. We expect to commence deploying our next-generation V3 satellites, designed to offer one \nTbps of downlink capacity per satellite, using Starship in the second half of 2026. We expect that a single \nStarship launch will be capable of deploying up to 60 V3 satellites to LEO, representing a potential twenty-fold \nincrease in Starlink downlink capacity deployed relative to a Falcon 9 launch. As of March 31, 2026, we had \napproximately 10.3 million Starlink Subscribers, up approximately 105% from 5.0 million subscribers a year \nprior. We charge our Starlink Subscribers a monthly subscription fee, which varies based on geographic market \nand download speed, plus typically a one-time upfront terminal cost. \n•\nEnterprise Solutions. SpaceX is a critical partner to a wide array of enterprises. We offer Starlink’s high-\nspeed, low-latency, reliable internet services to enterprise customers across industries including construction, \nagriculture, retail, telecom, hospitality, aviation, maritime, and land mobility. Starlink’s unique capabilities are \nwell‑suited for deployments across field offices, remote worksites, research stations, drilling rigs, rural\n\n82\nTable of Contents\nhospitals, aircraft, cruise ships, trains, and hotels. Our enterprise customers include companies such as United \nAirlines, Carnival, Maersk, and John Deere, among others. We also serve a broad fixed‑site customer base \nacross industries such as retail and financial services that require high availability for critical operations as well \nas reliable connectivity in remote or hard-to-serve locations. As companies continue to invest in secure and \nresilient networks and backup systems to keep critical infrastructure online—such as point‑of‑sale and payment \nprocessing systems—we often start as a backup solution and then transition to being the primary solution. Our \nenterprise contracts are based on a combination of subscriptions, data consumption, capacity, or other pricing \nmodels depending on each customer’s particular needs. Since 2023, no Starlink Enterprise customer having \ncontributed more than $750,000 of annual revenue has voluntarily discontinued their service, demonstrating the \nstrong performance and value of our offering. This is despite the ability of our customers to cancel the service at \nany time.\n•\nGovernment Solutions. For our government customers, we provide high-speed, resilient connectivity for \npublic services, social impact, humanitarian efforts, and disaster response in even the most remote and \nchallenging environments. Examples include support for the FEMA in coordinating disaster recovery after \nhurricanes and wildfires, the NOAA for at-sea testing and environmental monitoring, the Government of the \nPhilippines for linking remote islands, schools, and public institutions, the Government of Jamaica for \nimproving digital access in remote and maritime areas, and the Government of Ecuador for supporting \neducation and healthcare connectivity in isolated communities. Separately with Starshield, we have leveraged \nour commercial LEO satellite constellation engineering learnings and operational experiences to develop a \nsecure, dedicated satellite network designed specifically for United States Government customers and national \nsecurity applications.\n•\nStarlink Mobile. We provide satellite-to-mobile connectivity, supplementing terrestrial networks and \nsubstantially reducing mobile “dead zones” across approximately 30 countries. We partner with MNOs \nincluding major wireless carriers like T-Mobile in the United States, and other international operators including \nOne NZ, Optus, Telstra, Rogers, KDDI, Salt, Entel, Kyivstar, and VMO2. Through these partnerships, we \nenable consumers, businesses, and public-sector customers to use their existing phones in more places, support \ncritical connectivity during disasters and power outages, and open new applications for low-bandwidth mobile \nand IoT devices. Our current capabilities under our “V1” constellation (consisting of approximately 650 V1 \nMobile satellites in orbit) include light data, text messaging (SMS), and over-the-top voice services (e.g., \nWhatsApp and FaceTime). We are developing more comprehensive satellite-to-mobile services, including \nbroadband data and IoT connectivity, which are expected to deliver resilient, infrastructure-independent \nconnectivity worldwide and enable 5G connectivity. We have partnerships with approximately 30 MNOs on six \ncontinents, covering an area that is home to approximately 1.9 billion people. We charge MNOs either a fixed \nfee or a per-mobile user fee-based amount, which is typically passed through to the customer via the carrier as \nan “add-on” feature.\nWe generate revenue in our Connectivity segment primarily through subscription fees from consumer subscribers. \nWe drive consumer revenue through monthly subscription fees based on geographic market and download speed, \nrecognizing revenue ratably over the service period, plus typically a one-time sale of a kit. In addition, we generate \nrevenue from enterprises through contracts structured as a combination of subscriptions, data consumption, and \ncapacity, or on a percentage-of-completion basis, depending on each customer’s particular needs. We generate \ngovernment revenue via long term contracts for Starshield, a secure satellite network designed specifically for \ngovernment customers and national security applications. We also earn Starlink Mobile revenue through revenue-\nsharing arrangements with MNO partners, based on connectivity services included in their plans. \nIn 2025, revenue from consumer subscribers represented over 60% of Connectivity segment revenue. We expect  \nrevenue from consumer subscribers, as well as enterprise and government customers, to be  the primary driver of \nConnectivity segment growth, and that Starlink Mobile will become a significant new contributor of Connectivity \nsegment revenue.\nAI. We operate a highly vertically integrated AI platform spanning gigawatt-scale AI compute infrastructure, our \ntruth-seeking frontier AI model, Grok, AI solutions for consumer and enterprise customers, and X, our real-time \ninformation, entertainment, and free speech platform. We believe AI is rapidly converging toward AGI, where\n\n83\nTable of Contents\nhuman cognitive capabilities can be replicated and scaled at machine speeds, profoundly augmenting human \nproductivity. Once an AGI system exists, its true value derives from the ability to create limitless duplicates of \nhuman-like intelligence, necessitating vast computational resources and cost-efficient deployment to achieve \nmeaningful scale. Without large-scale, power-efficient infrastructure, AGI cannot be deployed broadly or \neconomically—making such infrastructure a critical strategic differentiator. \nCOLOSSUS II Facility in Memphis, Tennessee\n•\nAI Compute Infrastructure. xAI has established a leading position in building and scaling terrestrial AI \ncompute infrastructure, becoming the first company to deploy a coherent gigawatt-scale AI training cluster. Our \nAI compute facilities, COLOSSUS and COLOSSUS II, collectively provide approximately 1.0 gigawatt of \ncompute power, with additional power capacity available for data center operations. Our first-principles \nthinking enables us to build coherent compute at scale and at rapid speed with lower costs than most other \ncompanies in the industry. We brought the first cluster of COLOSSUS online in 122 days, repurposing the shell \nof an existing factory, and the first cluster of COLOSSUS II online even faster in 91 days. As an illustrative \ncomparison, an industry benchmark to bring online a 100 megawatt greenfield data center is approximately two \nyears. We also demonstrated a significant improvement in cost efficiency, achieving data center construction \ncosts for COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis. This \ndual speed and cost advantage stems from our complete vertical integration and the shared culture infused by \nour founder, Mr. Musk, across our Space, Connectivity, and AI segments. The addition of Terafab, an initiative \ntogether with Tesla to build a manufacturing facility capable of producing 1 terawatt per year of compute \nhardware, aims to further extend our vertical integration to chip design and manufacturing to alleviate potential \nfuture chip shortages at SpaceX, optimize compute performance, and potentially reduce overall compute costs. \nIntel, which has the ability to design, fabricate, and package ultra-high-performance chips at scale, has also \njoined the Terafab project. We believe that the key constraints in the continued growth of AI are physical—chip \nmanufacturing, data center infrastructure, and power generation; the future of AI will be determined by the \ncontrol of the physical stack.\n•\nTruth-Seeking Frontier Model. xAI has developed one of the world’s most advanced, truth-seeking frontier \nmodels with Grok. Since launching Grok-1 in November 2023, we have released four major versions and \nnotable variations thereof, achieving one of the fastest iteration cycles in the industry, culminating in Grok-4.3\n\n84\nTable of Contents\n(April 2026). Building on this trajectory, we expect to continue scaling Grok through subsequent generations. \nOngoing training of next‑generation models is expected to scale toward multiple trillions of parameters, which \ncould represent a step change in reasoning in depth and overall intelligence. In this context, the number of \nparameters refers to the scale of the model, where parameters are the internal numerical values, such as \n“weights,” that are adjusted during training to enable the model to recognize patterns and relationships in data. \nA larger number of parameters generally allows the model to capture more complex relationships, store greater \namounts of knowledge, and achieve higher levels of reasoning capability. Within two years of its initial model \nrelease, Grok achieved frontier-level performance in scientific reasoning, as measured by its GPQA Diamond \nscore, an industry benchmark that evaluates AI models on a standardized set of questions written and validated \nby experts, on a faster timeline than reported by other leading model providers. This accelerated rate of \ninnovation stems from our highly vertically integrated stack: full ownership of training infrastructure, access to \nthe world’s most powerful compute clusters, and relentless focus on truth seeking and real-world utility. A key \ncompetitive differentiator is Grok’s deep integration with X, enabling proprietary access to a real-time \ninformation stream of approximately 350 million daily posts, which enhances freshness, relevance, and \ncontextual awareness for Grok. This direct, real-time access to the information and human discourse on X \nenhances Grok’s truth-seeking capabilities by grounding outputs in up-to-date knowledge and diverse \nviewpoints. We believe that this combination of compute infrastructure scale and the massive dataset available \nto us through X, subject to some limitations for certain content, has allowed us to achieve industry-leading \nperformance and provide model outputs that analyze real-time information on global events. We expect that our \ncompute infrastructure and direct access to real-time data via X constitute substantial performance advantages \nfor Grok that will result in increasingly rapid and dramatic iteration cycles.\n•\nConsumer and Enterprise Applications. We leverage our leading frontier models and compute infrastructure \nto deliver consumer and enterprise applications. In under six months, we developed Grok Voice, a real-time \nspeech engine, including in multilingual performance. Our image and video generation system, Imagine, \nproduced approximately 10 billion images and over 2 billion videos per month, on average, for the quarter \nending March 31, 2026. Together with Tesla, we are also developing Macrohard, an agentic AI platform \ndesigned to be capable of fully emulating digital workflows and augmenting human operation of computers—\nfrom coding and product development to management and entire business processes—using sophisticated \nautonomous agents. We believe Macrohard will have the potential to fundamentally transform how companies \nare structured and operate, thereby allowing dramatic increases in human productivity. In addition, we believe \nour existing government relationships and track record as large government contractors are a structural \nadvantage as governments become significant consumers of AI applications.\nOur integrated AI platforms across Grok and X have over 1.3 billion supported accounts active in the last \ntwelve months ended March 31, 2026, including approximately 550 million MAUs, up from over 1.1 billion \nsupported accounts and approximately 520 million MAUs as of December 31, 2025. Of our MAUs, we had \napproximately 117 million MAUs that used Grok’s AI features as of March 31, 2026. While MAUs provide an \nestimated measure of the size and engagement of our user base, we are focused on revenue and operating \nmargin, and manage our business with the objective of driving sustainable revenue growth and profitability \nrather than with the primary objective of growing or maintaining MAU levels. \nWe also monetize user activity through high-impact advertising inventory on X. We believe X’s scale, real-time \nengagement, and integration with Grok provide a differentiated foundation for building a unified user \nexperience across communication, content discovery, commerce, and financial services, among others. For \nenterprises that advertise on X, we offer large-scale user engagement, real-time content, and advanced AI-\ndriven performance marketing tools. For enterprises, we offer tailored deployments of Grok customized to \nspecific workflows and security needs through Grok Business and Grok Enterprise, sold on license-, \nconsumption-, or outcome-based pricing models. \nOur Capital Allocation and Funding Strategy\nSince our beginning, we have managed through multiple investment cycles. We initially raised capital to fund what \nis now our Space segment, which generates revenue from commercial and government customers while serving as \nthe backbone for our Connectivity segment. We invested in our Connectivity segment as we generated Segment\n\n85\nTable of Contents\nAdjusted EBITDA from our Space segment, along with additional equity capital that we raised externally, creating a \nsegment that generates predictable and recurring revenue from consumer, enterprise, and government customers. We \ncontinue to invest meaningfully in both our Space and Connectivity segments to build out the infrastructure of the \nfuture through our next-generation Starship launch platform and our expanded Starlink broadband and mobility \nnetworks. \nWe have a stellar track record of capital allocation and value creation in Space and Connectivity. Since SpaceX’s \nfounding in 2002, we have raised over $9 billion of equity capital to fund the development and growth of these two \nbusiness segments. The Space segment became Segment Adjusted EBITDA positive on a sustained basis beginning \nin 2018 and the Connectivity segment became in aggregate Segment Adjusted EBITDA positive on a sustained basis \nbeginning in 2023. In 2025, our Space segment generated a loss from operations of $(657) million and Segment \nAdjusted EBITDA of $653 million, including the impact of funding $3,004 million in research and development \nexpense for our next-generation Starship launch vehicle program. In 2025, our Connectivity segment generated \nincome from operations of $4,423 million and Segment Adjusted EBITDA of $7,168 million. \nWe acquired xAI in February 2026, which forms the basis of our AI segment. We expect to allocate substantial \ncapital to expand our compute infrastructure, and we expect a multi-year investment horizon before these \ndeployments translate into sustained positive AI Segment Adjusted EBITDA. During this investment period, our \ncapital expenditures will scale as quickly as we are able to deploy power and compute to address the $26.5 trillion \npotential market opportunity for AI. We plan to access a range of debt and equity financing solutions available to us \nas a public company to fund future investments in growth and to maintain strong liquidity. We aim to maintain an \ninvestment grade credit rating.\nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “—Non-GAAP Financial \nMeasures” for additional information on our non-GAAP financial measures, including reconciliations of Segment \nAdjusted EBITDA to segment income (loss) from operations, the most directly comparable GAAP measure.\nKey Business Metrics\nWe use the following key business metrics to evaluate our business, measure our performance, identify trends, \nformulate business plans, and make strategic decisions.\nSpace\nIn our Space segment, we use mass to orbit and launches as key business metrics to measure our scale and \nthroughput. Mass to orbit and launches grow more rapidly than Space segment revenue because these metrics \ninclude our internal constellation deployments from which we do not recognize inter-segment revenue.\nMass to Orbit: Mass to orbit is the total kilograms of payload that we deploy to orbit in a given period, and is a key \nindicator of SpaceX’s capacity and scalability that supports Space revenue and drives expansion across our \nConnectivity and AI segments. We calculate this metric by summing verified mass, including Starlink satellites, \ncustomer payloads, and development cargo, from all successful orbital and flight tests. This measure excludes failed \nor scrubbed attempts. We increased mass to orbit from 1,210 metric tons in 2023 to 1,699 metric tons in 2024 to \n2,213 metric tons in 2025, and from 450 metric tons in the three months ended March 31, 2025 to 556 metric tons in \nthe three months ended March 31, 2026. In 2023, 2024, and 2025, mass to orbit included 205, 282, and 312 metric \ntons attributable to customer payloads, respectively, and 1,005, 1,418, and 1,901 metric tons attributable to internal \npayloads, respectively (the amounts presented may not add up to the corresponding totals due to rounding). Falcon 9 \nlaunches contribute steadily at an average capacity of 13 metric tons per mission since 2023 to various orbits while \nwe transition to Starship. As the most powerful launch system ever developed, we expect that Starship V3 will be \nable to carry a payload of 100 metric tons, with future generations of Starship being designed to double this payload.\n\n86\nTable of Contents\nLaunches: Launches are a key measure of our operational scale, which in turn supports our revenue growth and \nmission to expand humanity’s presence in space. Launches in a period represent the sum of all successful orbital and \nflight tests across our rockets, including internal Starlink deployments, development tests, and launches for our \nthird-party customers, and excluding any cancellations or scrubs that occurred in that period. Falcon 9 is the most \nactive orbital launch vehicle today, with approximately 620 orbital space launches as of March 31, 2026, and an \nover 99% mission success rate. During the three months ended March 31, 2026, we launched 40 Falcon rockets, of \nwhich 39 were flight-proven booster launches, and in 2025, we launched 165 Falcon 9 rockets, of which 157 were \nflight-proven booster launches. While we have steadily increased our Falcon 9 launch cadence over recent years, we \nexpect Falcon 9 launches to decrease over time. While Falcon 9 currently drives the majority of our launch activity, \nwe expect Starship, which is designed to be the world’s first fully, rapidly, reusable launch vehicle, to become a \nlarger contributor to our launch volume as it enters operational service. To date, we have executed 11 Starship flight \ntests to advance our goal of rapidly and fully reusable orbital capability, a breakthrough we believe will transform \nour launch economics and benefit both our business and customers who rely on our launch services. We have also \nscheduled a 12th flight test, which will debut the next generation Starship vehicle and Super Heavy booster, \npowered by the next evolution of our Raptor engine and launching from a newly designed pad at Starbase. We \nallocate a significant amount of launch capacity to our Connectivity segment, and expect to allocate a significant\n\n87\nTable of Contents\namount to our AI segment in the future. Our Space segment revenue only reflects our customer launches and \ncustomer activities. \n__________________\n(1)\nWith respect to Falcon launches, the number of launches for the years ended December 31, 2023, 2024, and 2025 totaled 96, 134, and 165, \nrespectively, of which customer launches totaled 33, 45, and 43, respectively, and internal launches totaled 63, 89, and 122, respectively. \nThe number of Falcon launches for the three months ended March 31, 2025 and 2026 totaled 36 and 40, respectively, of which customer \nlaunches totaled 12 and 7, respectively, and internal launches totaled 24 and 33, respectively. We designate a launch as a “customer launch” \nif an external customer payload constitutes the primary payload (i.e., where the principal objective is to deliver the customer payload) and \nthe mission parameters (e.g., launch window, orbital parameters, mission profile) are designed around the primary payload’s requirements. \nTo date, all Starship launches have been classified as internal. \nConnectivity \nIn our Connectivity segment, we view Starlink Subscribers and Starlink Subscriber ARPU as key business metrics to \nevaluate our growth and monetization.\nStarlink Subscribers: We define a Starlink Subscriber as a unique Service Line that is directly assigned to a \nStarlink.com account registered to a person or entity that does not have a direct, negotiated agreement with the \nStarlink sales team. A Service Line is an individual instance of Starlink broadband internet service provisioned \nunder a subscription plan, generally associated with a specific Starlink terminal or group of terminals, and billed \naccording to Starlink’s service plans and terms of service. The number of Service Lines is distinct from the number \nof unique devices, account holders, end users or physical persons. An individual, household, or business may share a \nsingle Service Line among multiple end-users. Likewise, an individual, household, or business may maintain \nmultiple service lines (e.g., both a Residential Service Line and a separate Roam Service Line, which would be \ndefined as two separate Service Lines and therefore two Starlink Subscribers). \nWe use this measure to assess the adoption of Starlink as we expand within and across geographies and business \nsegments. Starlink Subscribers includes both Personal (e.g., Residential and Roam) and Business (e.g., Local \nPriority and Global Priority) subscription plans, but does not include managed enterprise and government customers \nwith contracts in domains including aviation, maritime, land mobility, fixed sites and government entities. We \ncalculate Starlink Subscribers for a period as the number of unique Service Lines at the end of the period. Starlink\n\n88\nTable of Contents\nSubscribers totaled approximately 10.3 million and 5.0 million, up 105% and 91% on a year-over-year basis, in the \nquarters ended March 31, 2026 and March 31, 2025, respectively.\nStarlink Subscriber ARPU: We calculate ARPU as service revenue generated from Starlink Subscribers during the \nperiod divided by (i) the average number of Starlink Subscribers during the period and by (ii) the number of months \nin the period. Our strategy is focused on driving sustainable revenue growth and expanding our margins through \noperational efficiencies and technological advancements, rather than prioritizing increases in ARPU. This approach \naligns with our long-term vision of expanding global connectivity and market access. We generally expect Starlink \nSubscriber ARPU to continue to decline over the next few years as the portion of our subscriber base outside North \nAmerica continues to grow, as we add lower priced service plans, and as we adjust the monthly service plan fees we \ncharge for broadband offerings. However, we expect these dynamics to be offset by increased scale and \ntechnological advancement in our launch, satellite, and user terminal operations, ultimately supporting overall \nrevenue growth and cost reduction. Our Starlink Subscriber monthly ARPU decreased from $86 per month for the \nthree months ended March 31, 2025 to $66 per month for the three months ended March 31, 2026 and from $91 per\n\n89\nTable of Contents\nmonth in 2024 to $81 per month in 2025. These decreases were driven primarily by international expansion and the \naddition of lower priced service plans.\nAI\nNameplate Compute Draw: We calculate Nameplate Compute Draw for a period as the number of GPUs installed in \nour data centers at the end of the period multiplied by their respective all-in power draw. Nameplate Compute Draw \nreflects installed capacity and does not represent actual power consumption or utilization. It does not include power \nwe install and use for our supporting infrastructure such as cooling systems, power distribution losses, lighting, \nsecurity systems, or facility-level overhead. Our Nameplate Compute Draw increased to 1.0 gigawatt as of March\n\n90\nTable of Contents\n31, 2026 as we brought COLOSSUS and COLOSSUS II online. We use this metric to assess our ability to deploy \nand scale compute capacity. \nSegment Income (Loss) from Operations\nSpace Income (Loss) from Operations\nSpace loss from operations for the three months ended March 31, 2026 increased by $592 million to $(662) million \ncompared to $(70) million for the three months ended March 31, 2025, primarily driven by an accelerated \ninvestment in development of the Starship vehicle as well as launch facilities to support future Starship launches, \nand a decrease in revenue from customer launches, partially offset by a decrease in cost of revenue, selling, general, \nand administrative expenses and impairment. \nSpace income (loss) from operations for the year ended December 31, 2025 decreased by $678 million to $(657) \nmillion compared to $21 million for the year ended December 31, 2024, while Space income (loss) from operations \nfor the year ended December 31, 2024 increased by $22 million to $21 million for the year ended December 31, \n2024 compared to $(1) million for the year ended December 31, 2023. The year-over-year decrease in 2025 was \nprimarily driven by an accelerated investment in development of the Starship vehicle as well as launch facilities to \nsupport future Starship launches, partially offset by an increase in revenue and decrease in cost of revenue. \nConnectivity Income (Loss) from Operations\nConnectivity income from operations for the three months ended March 31, 2026 increased by $155 million to \n$1,188 million compared to $1,033 million for the three months ended March 31, 2025, primarily driven by \nincreased revenue from our consumer subscribers (composed of 104.7% growth in Starlink Subscribers, offset by a \n22.9% decline in Starlink Subscriber ARPU, primarily due to international expansion and the addition of lower \npriced service plans) and enterprise business, partially offset by higher depreciation of capitalized launch and \nsatellite costs due to the increase in Starlink flights, as well as higher operating expenses including ground operating \ncosts and international expansion costs to support and drive subscriber growth. \nConnectivity income from operations for 2025 increased by $2,417 million to $4,423 million compared to $2,006 \nmillion for the year ended December 31, 2024 while Connectivity income from operations for the year ended\n\n91\nTable of Contents\nDecember 31, 2024 increased by $1,537 million to $2,006 million compared to $469 million for the year ended \nDecember 31, 2023. The year-over-year increase in 2025 was primarily driven by increased revenue from growth of \nour consumer and enterprise customers by $2,378 million and $1,410 million, respectively, partially offset by higher \ndepreciation of capitalized launch and satellite costs due to the increase in Starlink flights, as well as higher \nmarketing and international expansion costs to drive subscriber growth.\nAI Income (Loss) from Operations\nAI loss from operations for the three months ended March 31, 2026 increased by $1,533 million to $(2,469) million \ncompared to $(936) million for the three months ended March 31, 2025, primarily driven by higher cloud computing \nand GPU depreciation costs, data center infrastructure and employee expenses, partially offset by higher revenue. \nAI loss from operations for 2025 increased by $4,794 million to $(6,355) million compared to $(1,561) million for \nthe year ended December 31, 2024, while AI loss from operations for the year ended December 31, 2024 decreased \nby $2,412 million to $(1,561) million compared to $(3,973) million for the year ended December 31, 2023. The \nincrease in 2025 was primarily driven by higher cloud computing costs, facilities-related costs and employee \nexpenses, partially offset by higher revenue.\nSegment Adjusted EBITDA\nSegment Adjusted EBITDA is defined as segment income (loss) from operations excluding (i) depreciation and \namortization, (ii) share-based compensation, (iii) restructuring charges and (iv) impairment.\nSpace Segment Adjusted EBITDA\nSpace Segment Adjusted EBITDA for the three months ended March 31, 2026 decreased by $575 million to $(351) \nmillion compared to $224 million for the three months ended March 31, 2025, primarily driven by an accelerated \ninvestment in development of the Starship vehicle as well as launch facilities to support future Starship launches, \nand a decrease in revenue from customer launches, partially offset by a decrease in cost of revenue, selling, general, \nand administrative expenses. \nSpace Segment Adjusted EBITDA for 2025 decreased by $501 million to $653 million compared to $1,154 million \nin 2024, while Space Segment Adjusted EBITDA for 2024 increased by $157 million to $1,154 million compared to \n$997 million in 2023. The year-over-year decrease in 2025 was primarily driven by an accelerated investment in \ndevelopment of the Starship vehicle, as well as launch facilities to support future Starship launches, partially offset \nby an increase in NASA Cargo Resupply Services (CRS) for additional missions to the International Space Station, \nalong with increased revenue from a U.S. Department of War contract. Our Space Segment Adjusted EBITDA is \nalso driven by the reusability and efficiency of our rockets, which boosts cadence and reliability and supports a \ndiversified base of commercial and government customers. These efforts have created a strong foundation for our \nSpace Segment Adjusted EBITDA, and we believe position us to unlock further high-value opportunities in the \nexpanding space economy.\nConnectivity Segment Adjusted EBITDA\nConnectivity Segment Adjusted EBITDA for the three months ended March 31, 2026 increased by $469 million to \n$2,087 million compared to $1,618 million for the three months ended March 31, 2025, primarily driven by higher \nrevenue from growth in consumer and enterprise revenue. Consumer revenue was composed of 104.7% growth in \nStarlink Subscribers, offset by a 22.9% decline in Starlink Subscriber ARPU, primarily due to international \nexpansion and the addition of lower priced service plans. Enterprise and government revenue had an increase \nprimarily driven by the growth in our aviation, maritime, mobility, and other enterprise business, partially offset by a \ndecrease in our government business. These increases in revenue were offset by higher operating expenses for \ninternational expansion, and higher research and development costs.\nConnectivity Segment Adjusted EBITDA for 2025 increased by $3,319 million to $7,168 million compared to \n$3,849 million in 2024 while Connectivity Segment Adjusted EBITDA for 2024 increased by $2,247 million to \n$3,849 million compared to $1,602 million in 2023. The year-over-year increase in 2025 was primarily driven by\n\n92\nTable of Contents\nhigher revenue from growth in our consumer and enterprise customers, partially offset by higher marketing and \ninternational expansion costs to grow our subscribers, as well as higher research and development costs for our next-\ngeneration product development. We have driven our strong sequential Connectivity Segment Adjusted EBITDA \ngrowth by expanding the scale and efficiency of our LEO satellite constellations and our highly verticalized supply \nchain, which has delivered major cost reductions in user terminal production.\nAI Segment Adjusted EBITDA\nAI Segment Adjusted EBITDA for the three months ended March 31, 2026 decreased by $497 million to $(609) \nmillion compared to $(112) million for the three months ended March 31, 2025, primarily driven by higher cloud \ncompute and data center infrastructure and operating costs, and employee compensation expenses, partially offset by \nhigher revenue. \nAI Segment Adjusted EBITDA for 2025 decreased by $1,584 million to $(1,237) million compared to $347 million \nin 2024 while AI Segment Adjusted EBITDA for 2024 decreased by $875 million to $347 million, compared to \n$1,222 million in 2023. The decrease in 2025 was primarily driven by higher cloud computing costs, facilities-\nrelated costs and employee expenses, partially offset by higher revenue. AI Segment Adjusted EBITDA is primarily \ndriven by our strategy to rapidly and cost-effectively scale compute infrastructure. We expect to continue to expand \nour terrestrial data centers, and to launch orbital data centers, and we expect a multi-year investment horizon before \nthese deployments translate into sustained positive Segment Adjusted EBITDA for our AI segment. \nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “—Non-GAAP Financial \nMeasures” for additional information on our non-GAAP financial measures, including reconciliations of Segment \nAdjusted EBITDA to segment income (loss) from operations, the most directly comparable GAAP measure. \nCapital Expenditures \nThe following table presents our capital expenditures by segment:\nThree Months Ended March 31,\nYear Ended December 31,\n(in millions)\n2026\n2025\n2025\n2024\n2023\nSpace \n .................................................. $\n1,052\n$\n759\n$\n3,832\n$\n2,032\n$\n1,497\nConnectivity \n .......................................\n1,332\n814\n4,178\n3,498\n2,455\nAI\n \n ........................................................\n7,723\n2,567\n12,727\n5,633\n463\nTotal Capital Expenditures \n ................. $\n10,107\n$\n4,140\n$\n20,737\n$\n11,163\n$\n4,415\nSpace Capital Expenditures\nSpace capital expenditures for the three months ended March 31, 2026 increased $293 million to $1,052 million \ncompared to $759 million for the three months ended March 31, 2025. The increase was primarily driven by \nincreased investment in our launch site infrastructure for Starship. \nSpace capital expenditures for 2025 increased $1,800 million to $3,832 million compared to $2,032 million in 2024, \nwhile Space capital expenditures for 2024 increased $535 million to $2,032 million compared to $1,497 million in \n2023. The increase in each year-over-year period was primarily driven by increased investment in our launch site \ninfrastructure for Starship. \nConnectivity Capital Expenditures\nConnectivity capital expenditures for the three months ended March 31, 2026 increased $518 million to $1,332 \nmillion compared to $814 million for the three months ended March 31, 2025. The increase was primarily driven by \nhigher satellite and ground equipment costs as we continue to increase our number of satellites and grow our satellite \nnetwork. \nConnectivity capital expenditures for 2025 increased $680 million to $4,178 million compared to $3,498 million in \n2024, while Connectivity capital expenditures for 2024 increased $1,043 million to $3,498 million compared to\n\n93\nTable of Contents\n$2,455 million in 2023. The increase in each year-over-year period was primarily driven by higher satellite and \nground equipment costs as we continue to increase our number of satellites and grow our satellite network.  \nAI Capital Expenditures\nAI capital expenditures for the three months ended March 31, 2026 increased $5,156 million to $7,723 million \ncompared to $2,567 million for the three months ended March 31, 2025. The increase was primarily driven by \ninvestments in the rapid expansion of our terrestrial data centers, including the development, construction, and \nequipping of new facilities and supporting infrastructure. \nAI capital expenditures for 2025 increased $7,094 million to $12,727 million compared to $5,633 million in 2024, \nwhile AI capital expenditures for 2024 increased $5,170 million to $5,633 million compared to $463 million in \n2023. This increase was primarily driven by significant investments in the rapid expansion of our terrestrial data \ncenters, including the development, construction, and equipping of new facilities and supporting infrastructure. \nDrivers of Our Performance\nDeveloping Starship. Starship is our next-generation vehicle that we expect will dramatically expand our launch \ncapability through full and rapid reusability combined with unprecedented mass to orbit capability. As the most \npowerful launch system ever developed, we expect that Starship V3 will be able to carry a payload of 100 metric \ntons, and that future generations could reach 200 metric tons, potentially as soon as Starship V4. Starship is central \nto our goal of unlocking growth through our unique vertically integrated business model. Starship is expected to be \nthe only vehicle with fully reusable first and second stages, which is critical to reducing launch costs and increasing \nlaunch cadence. We believe that Starship can eventually reduce the cost to reach orbit by 99% or more relative to the \nhistorical average launch cost per kilogram according to NASA of $18,500, establishing a scalable path to creating \nthe infrastructure of the future, such as orbital AI compute.\nWe have already demonstrated catching and reusing the first stage booster for Starship through our innovative \n“chopsticks” method to catch the booster. To date, we have executed 11 Starship flight tests. We have also \nscheduled a 12th flight test, which will debut the next generation Starship vehicle and Super Heavy booster. This \nnext-generation Starship introduces major changes for better orbital performance and reusability. We plan to \ndemonstrate key development milestones of catching the upper stage and demonstrating in-orbit propellant transfer \ncapabilities. These milestones will be the key unlocks for a rapidly reusable rocket that we expect will take hundreds \nof thousands of tons of mass to orbit to drive growth in our Connectivity and AI segments, and allow us to develop \nthe lunar economy and eventually to reach Mars. We expect Starship to commence payload delivery to orbit in the \nsecond half of 2026 following additional flight tests. For additional information about this risk, please refer to “Risk \nFactors—Risks Related to Our Business—Any failure or delay in the development of Starship at scale or in \nachieving the required launch cadence, reusability and capabilities thereafter would delay or limit our ability to \nexecute our growth strategy, including the deployment of next-generation satellites, global satellite-to-mobile \nconnectivity, and orbital AI compute, which could materially adversely affect our business, financial condition, \nresults of operations, and future prospects” in this prospectus. \nLaunch Costs and Cadence. Our launch costs and cadence underpin the foundational competitive advantage that \nenables the performance of each of our segments. The reusability of our launch vehicles meaningfully reduces the \ncost per kilogram to orbit by eliminating or limiting the need to manufacture new vehicles for every mission. \nReusability also enables higher launch cadence by shortening the time between flights, as vehicles can be rapidly \nreflown after their return. These factors enable performance in our Connectivity segment by supporting faster and \nmore cost‑effective deployment of our satellite constellations. We expect they will support our AI segment as we \naim to deploy a large fleet of orbital AI compute. We expect continued enhancements to our launch infrastructure \nand launch vehicles, including Starship, to drive cost down and throughput up, extending these benefits to our \nbusinesses, as well as to our third‑party customers who rely on our launch capabilities. As we continue to reduce \nlaunch costs and increase launch cadence, we expect to transform the rocket launch industry into airline-like \noperations, enabling continuous and affordable access to space. Period-to-period comparisons of launch costs and \ncadence are impacted by factors out of our control, including timing of delivery of customer payloads which impacts\n\n94\nTable of Contents\nthe mix of customer and internal payloads and related financial reporting, or weather which can delay a launch from \none period to another.\nIncreasing Satellite Capacity. The scale, reliability, and capacity of our LEO broadband and mobile satellite \nconstellations drive our Connectivity segment’s growth and operating performance. In 2025, launching and \noperating higher-throughput satellites supported Starlink’s service quality and customer reach by increasing \navailable network capacity and improving service consistency during peak usage periods. As of March 31, 2026, we \noperated over 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, with the majority composed of our \nsecond-generation, V2 Mini satellites. We expect to commence deploying our next-generation V3 satellites, \ndesigned to offer one Tbps of downlink capacity per satellite, using Starship in the second half of 2026 and expect \nthat a single Starship launch will be capable of deploying up to 60 V3 satellites to LEO, representing a twenty-fold \nincrease in Starlink downlink capacity deployed relative to a Falcon 9 launch.\nWe also provide satellite-to-mobile connectivity, supplementing terrestrial networks and substantially reducing \nmobile “dead zones” in approximately 30 countries. Since January 2025, we have grown our constellation from \napproximately 360 mobile V1 Mobile satellites to approximately 650 mobile V1 Mobile satellites. Through this \nconstellation and in partnership with more than 30 mobile network operators, we provided data, over-the-top voice, \nand messaging services to approximately 7.4 million monthly unique devices across approximately 30 countries. \nDuring 2025, we also entered into agreements to acquire 65 MHz of spectrum in the United States as well as certain \nglobal Mobile Satellite Service spectrum licenses from EchoStar for $19.6 billion of equity and cash consideration, \nas described below under “—Liquidity and Capital Resources—Material Cash Commitments.” We expect the \nspectrum acquisition to close in November 2027, subject to required regulatory approvals and other closing \nconditions. We expect the wider bandwidth operations enabled by this spectrum purchase, together with our \nauthorization to deploy 7,500 satellites including with the 2GHz spectrum band, will provide stronger support for \ncurrent performance and potential future services, including broadband data and IoT connectivity, and is expected to \nenable 5G connectivity.\nThese investments in satellite scale, per-satellite capacity, and expanded capabilities are instrumental to the growth \nand operating performance of our Connectivity segment, enabling us to onboard new users while improving service \nquality.\nIncreasing Starlink Brand Awareness and Acquiring New Subscribers. Our growth is driven in part by increased \nglobal awareness of Starlink’s capabilities and our ability to convert that awareness into customer adoption. Trust, \nvisibility, and demonstrated reliability are central to customer acquisition, particularly for those in remote and \ninfrastructure-limited regions. Proven performance in rural, remote, and disaster-affected areas, along with strong \nbrand awareness, reinforces Starlink’s reputation as essential infrastructure, leading to higher adoption in new \nmarkets.\nAs of March 31, 2026, we had over 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, operating the \nworld’s most advanced broadband constellation providing internet connectivity to approximately 10.3 million \nStarlink Subscribers across 164 countries, territories, and other markets, collectively home to more than 3.3 billion \npeople. We are focused on growing the number of Starlink Subscribers by expanding our consumer distribution \nnetwork across thousands of authorized retail stores globally, and executing region-specific marketing campaigns to \nincrease brand awareness. By clearly demonstrating Starlink’s superior speed, low-latency, and ease of installation, \nwe expect to drive meaningful subscriber growth.\nIncreasing Enterprise Customer Adoption. As we continue to grow our Starlink constellation and bandwidth, we \nsee a large opportunity to grow the enterprise connectivity market by providing solutions that had not previously \nbeen available. Our network is global and can provide primary connectivity for on-the-move applications as well as \na resilient backup option for enterprises serviced by land-based connectivity. We plan to deepen our penetration with \nenterprise and government customers through direct, vertical-specific acquisition strategies. In recent years, we have \nassembled dedicated sales and engineering teams to market and support fleet-wide conversions in aviation and \nmaritime, customized deployments for land mobility, which we expect to continue to grow as consumers who \nexperience Starlink begin to expect high-performance connectivity when traveling. We expect to enable more \ncustomized deployments for land mobility across existing use cases such as commercial trucking fleets, and new\n\n95\nTable of Contents\napplications enabled by more connected devices. We also continue to develop specialized networks for secure \ngovernment applications via Starshield. By leveraging proven performance in mission-critical environments and \nexpanding through channel partners in select geographies, we expect to drive increased adoption among high-value \nenterprise and government accounts.\nAccelerating Investment in Growth and Innovation. We are simultaneously developing and scaling a wide range of \ncomplex, capital‑intensive projects, including Starship and terrestrial and orbital AI compute. We believe speed is a \ncompetitive advantage, and periodically we decide to increase and accelerate our investments. For example, in 2025 \nwe accelerated our timeline for Starship development, increasing R&D in our Space segment to $3,004 million, \ncompared to $1,835 million in 2024. In our AI segment, in 2025 we successfully accelerated deployment of compute \nfor the development of Grok, increasing R&D in our AI segment to $5,064 million, compared to $1,176 million in \n2024. We believe pursuing multiple ambitious programs in parallel enables us to compound advantages across our \nvertically integrated innovation engine and unlock new large addressable markets over time. The timing of our \ninvestments is not fixed and may accelerate based on technical progress, market opportunity, or resource \navailability. As a result, our operating results, margins and profitability may fluctuate from period to period as we \ncontinue to prioritize execution speed, capacity expansion, and technological leadership over near‑term margin \noptimization. We believe that this approach maximizes long‑term value creation by allowing us to move faster than \ncompetitors, scale earlier in emerging markets, and reinforce durable competitive advantages that we expect to \nbenefit our business over time.\nSupply Chain and Manufacturing Efficiency for User Terminals. The operating performance of our Connectivity \nsegment depends in part on the cost and availability of user terminals at scale. We are vertically integrated across \nterminal design, production, and support, including silicon, hardware, software, manufacturing, fulfillment, and \noperations, which enables us to control our means of production as well as rapidly iterate to continuously improve \nthe performance of our user terminals and optimize product cost. Since our initial launch of our user terminal, we \nhave optimized the design of our phased-array antennas, our self-aligning antenna responsible for connecting user \nequipment to our LEO satellite network, for manufacturability and high-volume scale. Over the past five years, we \nhave significantly lowered production costs and have scaled terminal output to approximately 200,000 terminals per \nweek. We plan to continue to further scale production significantly and make gains that improve margins, lower \ncustomer barriers, and broaden addressable markets.\nScaling our AI Compute Rapidly and Efficiently. Our ability to rapidly and cost-effectively scale AI compute is a \nsignificant driver of our competitiveness. We view scaling of compute capacity through a simple lens: power \navailability and the powered shell together determine how quickly we can deploy compute, and our model and \nserving stack in that powered shell determines how efficiently we convert that compute into useful tokens. In order \nto scale our AI segment rapidly and efficiently, our strategy is extreme vertical integration, “from shovels to tokens.”\nPower Availability and Powered Shells. We have demonstrated an industry-leading ability to rapidly deploy \nlarge-scale data center infrastructure at unprecedented speed and cost efficiency. Our COLOSSUS and \nCOLOSSUS II data centers collectively provide approximately 1.0 gigawatt of compute power, with additional \npower capacity available for data center operations. We brought the first cluster of COLOSSUS online in 122 \ndays, repurposing the shell of an existing factory, and the first cluster of COLOSSUS II online even faster in 91 \ndays. As an illustrative comparison, an industry benchmark to bring online a 100 megawatt greenfield data \ncenter is approximately two years. We also demonstrated a significant improvement in cost efficiency, \nachieving data center construction costs for COLOSSUS II that are considerably lower than industry \nbenchmarks on a per megawatt basis.\nCOLOSSUS and COLOSSUS II were brought online almost entirely through on-site power generation \ncapabilities that we designed, built, and deployed ourselves. We view our proven ability to construct power \ninfrastructure at this scale and speed as a significant competitive advantage. We partner closely with local \nutilities to fund grid infrastructure expansions and access excess capacity, while proactively curtailing our grid \nusage whenever required to prioritize community needs. Megapacks—utility-scale battery storage systems—\ndeliver critical redundancy and help stabilize operations during peak demand. Going forward, COLOSSUS II is \nexpected to be primarily powered by a dedicated natural gas power plant, supplemented over time by additional \ngrid capacity that we are directly funding through our local utility partners. Our comprehensive expertise across \nthe full infrastructure stack—from power procurement and on-site generation to distribution and advanced\n\n96\nTable of Contents\ncooling systems—enables us to translate available power into usable compute capacity with exceptional \nefficiency. As we continue to scale and optimize, we expect to drive further improvements in Power Usage \nEffectiveness. We expect these gains to accelerate the path from buildout to monetization.\nAI Token Generation Efficiency. We are highly vertically integrated. We design, own or lease, and install all of \nour powered shells and dedicated processor capacity. This full-stack ownership enables us to efficiently convert \npower capacity into usable compute, precisely control cluster configuration, and operate a true end-to-end \nsystem spanning infrastructure through to model deployment. Our operating performance depends on how \neffectively we utilize deployed compute once capacity comes online—specifically, our ability to convert raw \ninfrastructure into reliable, high-throughput token generation at scale. Achieving this requires tight coordination \nacross model training and inference workflows, hardware configuration, and data center operations so that \nutilization and throughput ramp efficiently as we expand. We believe we hold a meaningful efficiency \nadvantage by tightly integrating the model layer directly with the compute layer. Unlike third-party \nenvironments that impose multiple abstraction layers, we run our serving stack close to the processors and \noptimize serving, networking, and cluster configuration as a single unified system. This “model-to-compute” \nintegration reduces overhead, improves hardware utilization, and increases the proportion of available compute \nthat is converted into delivered output tokens. Output tokens represent the final generated response delivered to \nthe user, while total processing can be substantially higher when a request triggers additional inference-time \nreasoning steps. Because we control workload scheduling and serving logic, we can prioritize high token \nefficiency—intelligently balancing compute allocated to reasoning with strong final output to maintain or \nimprove response quality. This end-to-end control, combined with our sourcing relationships with leading \ncompute providers, gives us a performance-per-watt advantage and enables us to adopt new processor \ngenerations at scale more rapidly through a repeatable playbook for reconfiguration and recommissioning.\nOrbital AI Compute Has the Potential to Massively Increase Our Ability to Scale Our AI Compute, \nAccelerate Our Pace, and to Be More Cost Effective Relative to Terrestrial Options. We believe we are the \nonly company with a commercially viable path to building orbital AI compute at scale. This is underpinned by \nour unique ability to launch substantial mass into orbit cost efficiently through reusable rockets and manufacture \nsecure, reliable, and high performance satellites at low cost and high volume. We plan to develop orbital data \ncenters to enable scaling of compute capacity for us and our customers that is independent of terrestrial power \ninfrastructure constraints. Space offers the potential to access virtually limitless power and an operating \nenvironment that supports sustained high‑density compute, including structural advantages for power \ngeneration, cooling, and uninterrupted operations as capacity grows. We plan to employ a modular shell \napproach built around our scalable satellite constellation, which enables compute capacity to be deployed and \nexpanded efficiently as capacity requirements grow. The architecture also supports shorter refresh cycles at the \ntoken layer, as we can upgrade compute as successive chip generations arrive, increasing token output per unit \nof installed capacity. Our goal over time is to launch 100 gigawatts of compute to space each year. If operated \ncontinuously, the generation resources used to support 100 gigawatts of compute could generate approximately \none-fifth of the annual power production in the United States, which was 4.4 thousand terawatt hours in 2025, \naccording to the U.S. Energy Information Administration (EIA). We expect space‑based compute to massively \nincrease AI compute scale, while also improving token economics. \nAbility to Increase Revenue from our Consumer User Base. Our performance depends in part on our ability to \neffectively increase revenue from our over 1.3 billion accounts active in the last twelve months ended March 2026, \nincluding approximately 550 million monthly active AI users across Grok and X through multiple complementary \nmonetization channels:\nGrowing our Advertising Platform. Advertising remains a core monetization channel for our AI segment, with \nrevenue driven by our ability to deliver highly relevant ads. We aim to grow advertising revenue per user by \nstrengthening performance advertising, expanding AI‑driven targeting and measurement, and introducing richer \nad formats and creative tools. A central focus of ours is making ads feel like content—contextually relevant, \naligned with user interests, and integrated into real‑time conversations. Grok increasingly supports this strategy \nby helping advertisers with campaign creation, creative optimization, and alignment with trending topics and \nuser intent. While these factors help us drive advertising revenue, the pricing of our advertising products is also \naffected by other factors, including the global economy and the highly competitive nature of our industry. We\n\n97\nTable of Contents\nbelieve continued investment in AI‑powered advertising will further improve advertiser ROI while further \nenhancing user experience.\nConversion of Users to Paid Subscribers. In parallel, we are focused on converting a greater portion of our user \nbase into paying subscribers through our X subscription (Premium and Premium+) and Grok subscription \nofferings. Subscribers benefit from enhanced functionality, exclusive features, and access to our latest AI \nmodels. As of March 31, 2026, we reached approximately 6.3 million active paid subscribers, which was \ncomprised of approximately 4.4 million X Premium and Premium+ paid subscribers and approximately 1.9 \nmillion SuperGrok, SuperGrok Heavy and SuperGrok Lite paid subscribers. We plan to continue adding new \nfeatures and functionality while releasing increasingly capable Grok models to increase the penetration rate of \nour subscriber base. Our AI segment has demonstrated exceptional model velocity: since launching Grok, we \nhave developed leading frontier models at a far faster rate of innovation than others. We believe this pace of \ninnovation strengthens the value proposition of our subscription offerings and supports long‑term subscriber \ngrowth.\nProgress Toward the Everything App and New Monetization Channels. We aim to evolve X into an \n“Everything App,” integrating real-time information, communications, media, payments, banking, commerce \nand more within one consumer experience. This can increase the usefulness of X, and therefore increase the \nusage and monetization potential of X. We have rapid product launch velocity, with a frequent cadence of new \nfeatures and products launched since 2023, including features such as long‑form video, improved group \ninteractions, and creator tools. We plan to further broaden the value proposition of X through offerings like \nMoney, a product we launched in beta in November 2025, which aims to expand platform utility by enabling \npayments and other financial services. We released X Chat in November 2025, which features end-to-end \nencryption and has no connection to advertising, unlike other services. We intend to further embed Grok \nthroughout the platform to enhance discovery, analysis of posts, user support, and personalization, making core \nworkflows more useful and reducing friction for users to adopt paid features.\nGrowing Enterprise and Government Adoption of Our AI Offerings. Our future growth and financial performance \ndepend in part on our ability to increase adoption and usage of our AI offerings among enterprise and government \ncustomers. We have launched Grok Business, Grok Enterprise, Grok API, and xAI Gov, products that we believe \nwill be attractive to enterprises and governments, and we expect substantial opportunities to acquire new customers. \nWe are also partnering with Cursor to advance Grok and potentially to create jointly-owned coding and knowledge \nwork AI models, trained on our compute infrastructure. Over time, we also believe enterprises and governments will \npresent significant opportunities for revenue expansion as they deploy our models more broadly across their \norganizations, adopt new capabilities, and build and operate solutions using our API. We also intend to continue to \noffer our compute infrastructure to third-party customers. Our ability to realize these expansion opportunities \ndepends on continued innovation, reliable performance, and meeting evolving technical, security, and compliance \nrequirements. \nComponents of Results of Operations\nDescription of Our Segments\nSpace\nRevenue - Space\nSpace segment generates revenue primarily through (i) Launch Services for the deployment of payloads to their \nintended orbits for both commercial and government customers utilizing Falcon 9 and Falcon Heavy, and (ii) \nLaunch and Development for the development of spacecraft and provision of launch and mission services for \ngovernment agency space programs utilizing Falcon 9, Falcon Heavy, Starship, and Dragon. Launch Services \nrevenue is derived from fixed-price contracts that range from one to five years. Launch and Development revenue is \nderived from fixed-price contracts that can range from one to fourteen years.\n\n98\nTable of Contents\nThe Company recognizes Launch Services revenue at a point in time, due to the interchangeability of flight \nhardware and minimal unique engineering costs. Revenue and costs are deferred and not recognized until upon the \nlaunch or deployment of the customer’s payload to their intended orbit. \nThe Company recognizes Launch and Development revenue over time as the Company’s performance on the \ncontract creates an asset with no alternative use and the Company has an enforceable right to payment for \nperformance to date. The Company measures progress on these contracts using the cost-to-cost input method, which \nthe Company believes represents the most appropriate measure towards satisfaction of its performance obligation. \nFor launches of our Starlink satellites, the Company does not recognize any inter-segment revenue, rather those \nlaunch costs are capitalized in satellites in Property, plant, and equipment, net.  We allocate a significant amount of \nlaunch capacity to our Connectivity segment, and expect to allocate a significant amount to our AI segment in the \nfuture. Our Space segment revenue only reflects our customer launches and customer activities.\nRevenue from Launch Services recognized at point in time and revenue from Launch and Development recognized \nover time as a percentage of total Space segment revenue are as follows: \nThree Months Ended March 31,\nYear Ended December 31,\n2026\n2025\n2025\n2024\n2023\nLaunch Services \n ...............................\n53.3 %\n65.4 %\n63.0 %\n68.2 %\n55.2 %\nLaunch & Development \n ...................\n46.7 %\n34.6 %\n37.0 %\n31.8 %\n44.8 %\nSpace \n \n ................................................\n100.0 %\n100.0 %\n100.0 %\n100.0 %\n100.0 %\nWe expect Space revenue growth to continue to be lower than total company revenue growth as our internal \nbusiness continues to absorb most of the growth in our launch capacity. In addition, we expect Launch and \nDevelopment to represent a larger portion of our Space revenue as we continue to serve our long-term contracts for \nour government customers. From period to period, Space revenue will vary based on the mix of launches used for \ncustomers and our own businesses.\nExpenses - Space\nCost of Revenue\nThe Company’s Falcon 9 and Falcon Heavy are composed of boosters (also known as first stages), second stages, \nMerlin engines, and fairings. Boosters, fairings, and Merlin engines are reusable and are classified as property, plant, \nand equipment and are depreciated to cost of revenue. The second stages are not reusable and are recorded to cost of \nrevenue when they are launched for Launch Services revenue transactions or assigned for Launch and Development \nrevenue transactions. Dragon is comprised of a fully reusable capsule that is classified as Property, plant, and \nequipment, net and is depreciated to cost of revenue. Starship is comprised of a booster, ship, and Raptor engines \nand is currently in the development stage. A majority of Starship costs are currently expensed to Research and \ndevelopment as incurred. Raptor engines are expensed when used in test flights.    \nSpace segment’s cost of revenue includes second stages flown related to the Company’s Falcon 9 and Falcon Heavy \nlaunches, launch operations and overhead, depreciation (inclusive of booster, Merlin engine, and fairing \ndepreciation), employee compensation costs (including salaries, benefits, and share-based compensation) for our \noperations teams, launch testing and overhead, engineering costs, inventory excess and obsolescence, shared costs \nincurred in the production of launch hardware, and ongoing product support.  \nWe expect Space cost of revenue to increase both in absolute dollars and as a percentage of revenue based on our \nexpected mix of Launch Services and Launch and Development. From period to period, Space segment cost of \nrevenue will vary based on the mix of customer and internal launches.\nResearch and Development\nSpace segment’s research and development (“R&D”) expenses mainly relate to the development, build, and testing \nof Starship. Starship costs consist of test flight hardware, Raptor engines, employee compensation costs (including\n\n99\nTable of Contents\nsalaries, benefits, and share-based compensation), tooling and equipment expenses, depreciation for R&D \nequipment, and allocated overhead. R&D also includes certain expenses related to the development of features and \nmodules created through engineering services for the Company’s Falcon vehicles, where the Company retains the \nassociated intellectual property.\nWe expect Space research and development to increase both in absolute dollars and as a percentage of revenue in \n2026, as we invest in the development and commercialization of Starship, and to moderate both in absolute dollars \nand as a percentage of revenue once Starship is commercialized by delivering payload to orbit. At \ncommercialization, Starship costs generally will be capitalized and then depreciated in cost of revenue of the \nsegment associated with the payload delivered.\nSelling, General, and Administrative\nSpace segment’s selling, general, and administrative (“SG&A”) expenses include allocated employee compensation \ncosts (including salaries, benefits, and share-based compensation) for our sales, facilities, legal, finance, information \ntechnology, human resources, and other administrative employees, depreciation, and corporate aircraft costs. \nWe expect Space segment's SG&A to increase in absolute dollars to support growth of our business, and to decrease \nas a percentage of revenue as we continue to work to reduce operating costs as a percentage of revenue.\nImpairment\nSpace impairment includes impairment losses on fixed assets due to anomalies on the Company’s flight vehicles and \nlaunch sites, which occur outside our normal business operations. \nConnectivity\nRevenue - Connectivity\nConnectivity segment generates revenue from (i) the broadband and mobile connectivity services provided through \nStarlink and (ii) the sale of the Starlink Kit (inclusive of the terminal). The Company provides connectivity services \nand Starlink Kits to consumers or enterprise and government customers.  \nThe Company recognizes revenue from broadband and mobile connectivity services over time as the customer \nsimultaneously receives and consumes the benefits provided. The Company generates service revenue from (i) \nfixed-price services that require advance or recurring monthly payments by the customer or (ii) variable-priced \nservices based on actual data consumption. The amounts received from customers for advanced payments for \nbroadband and mobile connectivity services are recognized either ratably over the subscription term or based on \nactual data consumption. The Company’s broadband contracts are generally month-to-month and the revenue \nrecognized for these recurring consumer customers is equal to the amount billed in that month.  The Company’s \nmobile connectivity agreements are generally multi-year contractual obligations that range from one to five years, \nalthough the customer can generally terminate at any time. \nThe Company recognizes revenue over time for certain contracts related to our Starshield business that are multi-\nyear in nature. For revenue that is recognized over time, we use the cost-to-cost input method. The Company records \nrevenue based upon costs (such as materials and labor hours) incurred to date relative to the total estimated cost at \ncompletion. \nThe Company records revenue for the Starlink Kit upon delivery to the customer, or in the instance of certain \nenterprise customers, when it is installed. Starlink Kit revenue is reported net of sales returns, credits, and \nchargebacks.\n\n100\nTable of Contents\nExpenses - Connectivity\nCost of Revenue\nConnectivity segment’s cost of revenue includes depreciation (inclusive of launch, satellite, and ground \ninfrastructure costs), Starlink Kit costs, shipping and handling costs, ground operating expenses, employee \ncompensation costs (including salaries, benefits, and share-based compensation) for our engineering and operations \nteams, payment processor fees, warranty expense, inventory excess and obsolescence, and customs and duties. \nWe expect Connectivity cost of revenue to increase in absolute dollars as we grow our revenue, and to decrease as a \npercentage of revenue as we continue to drive efficiencies in our next-generation satellites, Starlink Kits, and ground \ninfrastructure.\nResearch and Development\nConnectivity segment’s R&D expenses mainly relate to the development, build, and testing of our next-generation \nsatellites, Starlink Kits, and ground infrastructure. These costs include employee compensation costs (including \nsalaries, benefits, and share-based compensation), contractor compensation expenses, equipment lease expenses, \ndepreciation for R&D equipment, and allocated overhead.\nWe expect Connectivity research and development to increase in absolute dollars as we grow our revenue, and to \ndecrease as a percentage of revenue as we scale our business.\nSelling, General, and Administrative\nConnectivity segment’s SG&A expenses include allocated employee compensation costs (including salaries, \nbenefits, and share-based compensation) for our sales, facilities, legal, finance, information technology, human \nresources, and other administrative employees, licensing and regulatory fees, marketing expenses, depreciation, and \nbad debt expense. \nWe expect Connectivity SG&A to increase in absolute dollars and as a percentage of revenue in 2026 as we \nintroduce marketing spend to support growth of our business, and to decrease as a percentage of revenue over time \nas we continue to work to reduce operating costs as a percentage of revenue.\nImpairment\nConnectivity impairment includes costs related to discontinuation of a product line for Starlink Kits that is non-\nrecurring.\nAI\nRevenue - AI\nAI segment generates revenue from the sale of digital platform services, including advertising, subscription, and \nlicensing services offered to consumers and enterprise customers.  \nThe Company generates revenue from (i) the sale of ad products displayed on its X platform, and (ii) providing AI \nsolutions and infrastructure, which includes subscription-related offerings, data licensing arrangements, and API \naccess to Grok models.\nRevenue for advertising services is recognized in the period when advertising is delivered as evidenced by a person \nengaging with an ad on the Company’s platforms in a manner satisfying the types of engagement selected by the \nadvertisers.  The Company’s contract terms for advertising services are typically cancellable short-term \narrangements. We experience seasonality in our advertising revenues. Overall advertising spend tends to be highest \nin the fourth quarter of each year due in large part to end-of-year advertiser spending and lowest in the first quarter \nof each year.\n\n101\nTable of Contents\nRevenue for AI solutions and infrastructure includes: (i) premium subscriptions on X and Grok which is recognized \nratably over the period of the subscription term (ranging from month-to-month to one year), (ii) data licensing \nrevenue which is generally recognized ratably over the period (from month-to-month to two years) in which the \nCompany provides data as the customer consumes and benefits from the use of the licensed data, (iii) revenue from \nproviding API access to Grok models recognized ratably over the contract term (typically month-to-month or up to \none year) for stand-ready access or as services are consumed for usage based arrangements.\nExpenses - AI\nCost of Revenue\nAI segment’s cost of revenue includes infrastructure costs, revenue share expenses, payment processor fees, \npayments to creators, amortization of acquired intangible assets, and allocated labor and overhead costs. \nInfrastructure costs consist primarily of costs related to data center facilities, including lease and hosting costs, \nrelated support, maintenance, energy, and bandwidth costs, depreciation of servers and networking equipment, \npublic cloud hosting costs, and employee compensation costs (including salaries, benefits, and share-based \ncompensation) for our operations teams. \nWe expect AI cost of revenue to increase in absolute dollars as we grow our revenue, and to decrease as a \npercentage of revenue as we monetize our products and as we expand our service offerings for AI solutions.  \nResearch and Development\nAI segment’s R&D expenses mainly relate to the training of Grok, our leading frontier model, development, build, \nand testing of our next-generation AI-enabled products and data center costs to train AI-enabled products. These \ncosts include cloud computing expenses, employee compensation expenses (including salaries, benefits, and share-\nbased compensation), power generation costs, and depreciation of data center assets, including processors, \nequipment lease expenses, and networking equipment.\nWe expect AI R&D expenses to increase, both in absolute dollars and as a percentage of revenue, as we invest in \ncompute infrastructure for Grok. Additionally, AI R&D expenses may increase as a result of the compute agreement \nwith Cursor. \nSelling, General, and Administrative\nAI segment’s SG&A expenses consist primarily of employee compensation expenses (including salaries, benefits, \nand share-based compensation) for our sales, sales support, marketing, finance, legal, information technology, \nhuman resources and other administrative employees. In addition, SG&A expenses include fees and costs for \nprofessional services, including consulting, content moderation, third-party legal and accounting services and \nfacilities costs and other supporting overhead costs that are not allocated to other departments.\nWe expect AI SG&A to increase in absolute dollars to support growth of our business, and to decrease as a \npercentage of revenue as we continue to work to reduce operating costs as a percentage of revenue. Additionally, AI \nSG&A may increase as a result of the compute agreement with Cursor. \nRestructuring Charges\nAI restructuring charges are the result of the acquisition of Twitter in October 2022 by X Holdings. The charges \ninclude workforce restructuring for former Twitter employees, as well as impairment and early termination penalties \nas a result of consolidation of Twitter’s various office leases.\nImpairment\nAI impairment includes a one-time impairment of the Twitter brand when Twitter was rebranded to X in July 2023.\n\n102\nTable of Contents\nOther Corporate Expenses\nInterest Expense\nInterest expense includes interest expense related to our borrowings, amortization of associated debt issuance costs, \nundrawn fees, and finance leases. Interest expense is reflected net of capitalized interest. \nInterest Income\nInterest income includes interest income earned on cash and cash equivalents and marketable securities, and \ndividend income from our investments in mutual funds.\nOther Income (Expense), Net\nOther income (expense), net consists of gain or loss on digital assets, gain or loss on foreign currency transactions, \nand loss on extinguishment of debt.\nProvision for (Benefit from) Income Taxes\nThe provision for (benefit from) income taxes consists primarily of income taxes in certain federal, state, local and \nforeign jurisdictions in which we conduct business. Foreign jurisdictions typically have different statutory tax rates \nfrom those in the United States. Accordingly, our effective tax rates may vary depending on the impact of the \nvaluation allowance as well as the relative proportion of foreign income to domestic income, generation of tax \ncredits, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.\nComparison of the three months ended March 31, 2026 and 2025\nConsolidated Results of Operations\nThe following table sets forth our consolidated financial statements data for the periods indicated:\nThree Months Ended March 31,\n2026 vs. 2025 Change\n(in millions)\n2026\n2025\n$ Change\n% Change\nRevenue\n \n ............................................................... $\n4,694\n$\n4,067\n$\n627\n15.4 %\nCosts and expenses\nCost of revenue \n ..............................................\n2,388\n1,962\n426\n21.7 %\nResearch and development \n .............................\n3,514\n1,557\n1,957\n125.7 %\nSelling, general, and administrative \n \n ...............\n746\n493\n253\n51.3 %\nRestructuring charges (credits)\n .......................\n(11)\n4\n(15)\nNM\nImpairment \n .....................................................\n—\n24\n(24)\nNM\nTotal costs and expenses \n ...........................\n6,637\n4,040\n2,597\n64.3 %\nIncome (loss) from operations \n ............................\n(1,943)\n27\n(1,970)\nNM\nInterest expense \n ...................................................\n(664)\n(447)\n(217)\n48.5 %\nInterest income \n ....................................................\n213\n117\n96\n82.1 %\nOther expense, net \n ...............................................\n(1,876)\n(211)\n(1,665)\n789.1 %\nLoss before income taxes \n ....................................\n(4,270)\n(514)\n(3,756)\n730.7 %\nProvision for income taxes \n ..................................\n6\n14\n(8)\n(57.1)%\nNet loss\n \n ................................................................ $\n(4,276) $\n(528) $\n(3,748)\n709.8 %\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\n\n103\nTable of Contents\nRevenue \nRevenue for the three months ended March 31, 2026 increased by $627 million, or 15.4%, compared to the three \nmonths ended March 31, 2025. This increase was primarily due to an increase in revenue from our Connectivity \nsegment of $782 million as our Starlink Subscriber base continued to grow as well as an increase in revenue from \nour AI segment of $91 million from higher X and Grok subscriptions, partially offset by a decrease in revenue from \nour Space segment of $246 million due to lower Launch Services missions and timing of work for government \ncontracts.\nCost of Revenue\nCost of revenue for the three months ended March 31, 2026 increased by $426 million, or 21.7%, compared to the \nprior three months ended March 31, 2025. This increase was primarily due to an increase in costs in our \nConnectivity segment of $437 million driven by an increase in depreciation related to the number of satellites placed \ninto orbit and higher operating costs of $5 million in our AI segment, partially offset by a decrease in cost of revenue \nfrom our Space segment of $16 million due to less customer launches.\nResearch and Development\nResearch and development expense for the three months ended March 31, 2026 increased by $1,957 million, or \n125.7%, compared to the prior three months ended March 31, 2025. This increase was primarily due to higher costs \nin our AI segment of $1,471 million driven by depreciation of GPU hardware, and the cost of cloud computing and \ndata center infrastructure expenses as a result of our AI data center expansions and higher costs from our Space \nsegment of $404 million driven by accelerated investment in our Starship vehicle and related facilities.\nSelling, General, and Administrative\nSelling, general, and administrative expense for the three months ended March 31, 2026 increased by $253 million, \nor 51.3%, compared to the prior three months ended March 31, 2025. This increase was primarily due to higher \nemployee-related costs and professional fees for our AI segment of $163 million as our AI business grew rapidly, \nhigher marketing and international expansion costs of $79 million and $23 million, respectively, for our \nConnectivity segment. These increases were partially offset by lower expenses of $18 million in our Space segment.\nRestructuring Charges (Credits)\nRestructuring charges (credits) for the three months ended March 31, 2026 decreased by $15 million compared to \nthe prior three months ended March 31, 2025.  This decrease was primarily due to change in estimated settlement \namounts for former Twitter employees as part of the workforce reduction program implemented in 2022.\nImpairment \nImpairment for the three months ended March 31, 2026 decreased by $24 million compared to the prior three \nmonths ended March 31, 2025. The impairment in the three months ended March 31, 2025 was related to a post-\nlanding anomaly in our Space segment.  There was no impairment for the three months ended March 31, 2026.\nIncome (Loss) from Operations \nIncome (loss) from operations for the three months ended March 31, 2026 decreased by $1,970 million compared to \nthe prior three months ended March 31, 2025 driven by the factors described above.\nInterest Expense\nInterest expense for the three months ended March 31, 2026 increased by $217 million, or 48.5%, compared to the \nprior three months ended March 31, 2025. This increase was primarily due to additional debt raised by the Company \nand other financing arrangements entered into during the period by our AI segment.\n\n104\nTable of Contents\nInterest Income\nInterest income for the three months ended March 31, 2026 increased by $96 million, or 82.1%, compared to the \nprior three months ended March 31, 2025. This increase was primarily due to an increase in interest income earned \nfrom cash equivalents and marketable securities.\nOther Income (Expense), Net\nOther expense, net for the three months ended March 31, 2026 increased by $1,665 million, compared to the prior \nthree months ended March 31, 2025. This increase was primarily due to the loss on extinguishment of debt and \nunrealized loss on digital assets.\nProvision for (Benefit from) Income Taxes\nProvision for income taxes for the three months ended March 31, 2026 decreased by $8 million compared to the \nprior three months ended March 31, 2025. This decrease was primarily due to the change in the mix of our \njurisdictional earnings subject to different tax rates.\nNet Income (Loss)\nNet loss for the three months ended March 31, 2026 increased by $3,748 million compared to the prior three months \nended March 31, 2025 driven by the factors described above.\nSegment Results\nSpace\nThree Months Ended March 31,\n2026 vs. 2025 Change\n(in millions)\n2026\n2025\n$ Change\n% Change\nRevenue \n ............................................................. $\n619\n$\n865\n$\n(246)\n(28.4)%\nCosts and expenses\nCost of revenue \n ...................................................\n281\n297\n(16)\n(5.4)%\nResearch and development \n .............................\n930\n526\n404\n76.8 %\nSelling, general, and administrative \n \n ...............\n70\n88\n(18)\n(20.5)%\nImpairment \n .....................................................\n—\n24\n(24)\nNM\nTotal costs and expenses \n ................................ $\n1,281\n$\n935\n$\n346\n37.0 %\nLoss from operations \n ................................. $\n(662) $\n(70) $\n(592)\n845.7 %\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue \nRevenue for the three months ended March 31, 2026 decreased $246 million, or 28.4%, compared to the prior three \nmonths ended March 31, 2025. This decrease was primarily driven by a decrease in Launch Services revenue of \n$236 million and a decrease of $10 million in Launch and Development revenue. The decrease in Launch Services \nrevenue is due to a decrease in customer launches period over period. While total Falcon launches increased by 4 \nfrom 36 for the three months ended March 31, 2025 to 40 for the three months ended March 31, 2026, Launch \nServices missions decreased by 4 over the same period. Launch and Development revenue decreased due to timing \nof work performed on government contracts.  \nCost of Revenue\nCost of revenue for the three months ended March 31, 2026 decreased by $16 million, or 5.4%, compared to the \nprior three months ended March 31, 2025. This decrease was primarily due to the decrease in customer launches and \ntiming of work on government contracts of $34 million, offset by an increase of $10 million in inventory excess and \nobsolescence reserves and $10 million in launch hardware disposals for damaged Falcon fairings.\n\n105\nTable of Contents\nResearch and Development\nResearch and development for the three months ended March 31, 2026 increased by $404 million, or 76.8%, \ncompared to the prior three months ended March 31, 2025. This increase was primarily driven by higher production \ncosts of $194 million, higher engineering costs of $95 million, and higher test and launch costs of $62 million, due \nto the accelerated investment in development of the Starship vehicle and continued development of production and \nlaunch facilities to support future Starship launches.\nSelling, General, and Administrative\nSelling, general, and administrative for the three months ended March 31, 2026 decreased by $18 million, or 20.5%, \ncompared to the prior three months ended March 31, 2025. This decrease was primarily due to lower allocated \ngeneral and administrative overhead of $13 million. \nImpairment\nImpairment for the three months ended March 31, 2026 decreased by $24 million compared to the prior three \nmonths ended March 31, 2025. This decrease was primarily due to a non-recurring impairment loss on a Falcon 9 \nbooster due to a post-landing anomaly during the three months ended March 31, 2025. There was no impairment for \nthe three months ended March 31, 2026.\nLoss from Operations \nSpace loss from operations for the three months ended March 31, 2026 increased by $592 million compared to the \nprior three months ended March 31, 2025 driven by the factors described above.\nConnectivity\nThree Months Ended March 31,\n2026 vs. 2025 Change\n(in millions)\n2026\n2025\n$ Change\n% Change\nRevenue \n ............................................................. $\n3,257\n$\n2,475\n$\n782\n31.6 %\nCosts and expenses\nCost of revenue \n .............................................. $\n1,651\n$\n1,214\n$\n437\n36.0 %\nResearch and development \n .............................\n205\n123\n82\n66.7 %\nSelling, general, and administrative \n \n ...............\n213\n105\n108\n102.9 %\nTotal costs and expenses \n ................................ $\n2,069\n$\n1,442\n$\n627\n43.5 %\nIncome from operations\n \n ............................. $\n1,188\n$\n1,033\n$\n155\n15.0 %\nRevenue \nRevenue for the three months ended March 31, 2026 increased by $782 million, or 31.6%, compared to the prior \nthree months ended March 31, 2025. This increase was primarily driven by an increase of $656 million in revenue \nfrom our consumer subscribers, composed of 104.7% growth in Starlink Subscribers, offset by an 22.9% decline in \nStarlink Subscriber ARPU, primarily due to international expansion and the addition of lower priced service plans. \nIn addition, enterprise and government revenue had an increase of $126 million primarily driven by the growth in \nour aviation, maritime, and other enterprise business of $209 million, our mobile connectivity business of $85 \nmillion, partially offset by a decrease of $175 million in our government connectivity business.\nCost of Revenue\nCost of revenue for the three months ended March 31, 2026 increased by $437 million, or 36.0%, compared to the \nprior three months ended March 31, 2025. This increase was primarily due to higher depreciation of $276 million \nfrom capitalized launch and satellite costs, higher operating expenses of $140 million mainly driven by ground \noperating costs of $50 million, customer support and installation costs of $42 million, payment processor fees of $19 \nmillion, freight costs of $15 million, and warranty costs of $12 million.\n\n106\nTable of Contents\nResearch and Development\nResearch and development for the three months ended March 31, 2026 increased by $82 million, or 66.7%, \ncompared to the prior three months ended March 31, 2025. This increase was primarily due to higher costs for the \nnext-generation production development of satellites of $62 million, Starlink Kits of $8 million, and ground \nequipment of $14 million. \nSelling, General, and Administrative\nSelling, general, and administrative for the three months ended March 31, 2026 increased by $108 million, or \n102.9%, compared to the prior three months ended March 31, 2025. This increase was primarily driven by higher \nmarketing costs of $79 million and higher international expansion costs of $23 million, partially offset by lower bad \ndebt expense of $9 million.\nIncome from Operations\nConnectivity income from operations for the three months ended March 31, 2026 increased by $155 million, or \n15.0%, compared to the prior three months ended March 31, 2025 driven by the factors described above.\nAI\nThree Months Ended March 31,\n2026 vs. 2025 Change\n(in millions)\n2026\n2025\n$ Change\n% Change\nRevenue \n ............................................................. $\n818\n$\n727\n$\n91\n12.5 %\nCosts and expenses\nCost of revenue \n ..............................................\n456\n451\n5\n1.1 %\nResearch and development \n .............................\n2,379\n908\n1,471\n162.0 %\nSelling, general, and administrative \n \n ...............\n463\n300\n163\n54.3 %\nRestructuring charges \n .....................................\n(11)\n4\n(15)\nNM\nTotal costs and expenses \n ........................... $\n3,287\n$\n1,663\n$\n1,624\n97.7 %\nLoss from operations \n ................................. $\n(2,469) $\n(936) $\n(1,533)\n163.8 %\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue \nRevenue for the three months ended March 31, 2026 increased by $91 million, or 12.5%, compared to the prior three \nmonths ended March 31, 2025 due to the increase in AI solutions and infrastructure revenue of $191 million, offset \nby decrease in advertising revenue of $100 million. The increase in AI solutions and infrastructure was primarily \ndue to an increase in Grok and X subscription revenue of $177 million and an increase in data licensing \narrangements of $12 million. The decrease in advertising revenue is due to an overhaul of the Company’s \nadvertising platform which impacted ad sales for a short period of time during the rebuild. \nCost of Revenue\nCost of revenue for the three months ended March 31, 2026 increased by $5 million, or 1.1%, compared to the prior \nthree months ended March 31, 2025. This increase was primarily due to an increase in revenue share and content \ncreator expenses of $71 million, and higher payment processing fees of $18 million, partially offset by a decrease in \namortization expenses of technology intangibles of $89 million that were fully amortized during 2025.\nResearch and Development\nResearch and development for the three months ended March 31, 2026 increased by $1,471 million, or 162.0%, \ncompared to the prior three months ended March 31, 2025. This increase was primarily due to higher GPU \ndepreciation expense of $908 million, and higher cloud computing and data center infrastructure expenses of $301\n\n107\nTable of Contents\nmillion associated with the continued build out of our compute infrastructure, as well as higher employee \ncompensation expenses (including salaries, benefits, and share-based compensation) of $262 million.\nSelling, General, and Administrative\nSelling, general, and administrative for the three months ended March 31, 2026 increased by $163 million, or \n54.3%, compared to the prior three months ended March 31, 2025. This increase was primarily due to higher \nemployee compensation expenses (including salaries, benefits, and share-based compensation) of $148 million as \nwe continue to expand our AI business and higher legal expenses of $33 million, partially offset by a decrease in \nfacilities and general and administrative costs of $18 million.\nRestructuring Charges (Credits)\nRestructuring charges (credits) for the three months ended March 31, 2026 decreased by $15 million compared to \nthe prior three months ended March 31, 2025. This decrease was primarily due to a change in estimated settlement \namounts for former Twitter employees as part of the workforce reduction program implemented in 2022.\nLoss from Operations \nAI loss from operations for the three months ended March 31, 2026 increased by $1,533 million, or 163.8%, \ncompared to the prior three months ended March 31, 2025 driven by the factors described above.\nComparison of the Years Ended December 31, 2025 and 2024\nConsolidated Results of Operations\nThe following table sets forth our consolidated statements of operations data for the periods indicated:\nYear Ended December 31,\n2025 vs. 2024 Change\n(in millions)\n2025\n2024\n$ Change\n% Change\nRevenue\n \n ............................................................... $\n18,674\n$\n14,015\n$\n4,659\n33.2 %\nCosts and expenses\nCost of revenue \n ..............................................\n9,451\n7,996\n1,455\n18.2 %\nResearch and development \n .............................\n8,643\n3,464\n5,179\n149.5 %\nSelling, general, and administrative \n \n ...............\n2,644\n1,813\n831\n45.8 %\nRestructuring charges \n .....................................\n487\n213\n274\n128.6 %\nImpairment \n .....................................................\n38\n63\n(25)\n(39.7)%\nTotal costs and expenses \n ...........................\n21,263\n13,549\n7,714\n56.9 %\nIncome (loss) from operations \n ............................\n(2,589)\n466\n(3,055)\nNM\nInterest expense \n ...................................................\n(1,945)\n(1,580)\n(365)\n23.1 %\nInterest income \n ....................................................\n492\n371\n121\n32.6 %\nOther income, net \n ................................................\n(177)\n985\n(1,162)\nNM\nIncome (loss) before income taxes\n ......................\n(4,219)\n242\n(4,461)\nNM\nProvision for (benefit from) income taxes \n \n ..........\n718\n(549)\n1,267\nNM\nNet income (loss) \n ................................................ $\n(4,937) $\n791\n$\n(5,728)\nNM\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue \nRevenue for the year ended December 31, 2025 increased by $4,659 million, or 33.2%, compared to the prior year \nended December 31, 2024. This increase was primarily due to an increase in revenue from our Connectivity segment \nof $3,788 million as our Starlink Subscriber base continued to grow as well as our Connectivity enterprise and \ngovernment sales, and increases in revenue from our Space segment of $290 million due to increases in Launch and\n\n108\nTable of Contents\nDevelopment revenue for work performed on government contracts, and an increase in revenue from our AI \nsegment of $581 million as advertising, Grok and X subscriptions, and data licensing arrangements grew.\nCost of Revenue\nCost of revenue for the year ended December 31, 2025 increased by $1,455 million, or 18.2%, compared to the prior \nyear ended December 31, 2024. This increase was primarily due to an increase in costs in our Connectivity segment \nof $1,153 million driven by higher depreciation as the number of satellites placed into orbit grew and higher \noperating expenses, and higher infrastructure and cloud computing costs of $491 million in our AI segment, partially \noffset by a decrease in cost of revenue from our Space segment of $189 million due to the increased reusability of \nour Falcon launch vehicles resulting in lower depreciation.  \nResearch and Development\nResearch and development expense for the year ended December 31, 2025 increased by $5,179 million, or 149.5%, \ncompared to the prior year ended December 31, 2024. This increase was primarily due to higher R&D costs in our \nAI segment of $3,888 million driven by the depreciation of GPU hardware and the cost of cloud computing as a \nresult of our AI data center expansions and higher R&D costs from our Space segment of $1,169 million driven by \naccelerated investment in our Starship vehicle.\nSelling, General, and Administrative\nSelling, general, and administrative expense for the year ended December 31, 2025 increased by $831 million, or \n45.8%, compared to the prior year ended December 31, 2024. This increase was primarily due to higher employee \nand facilities-related costs and higher legal expenses for our AI segment of $722 million as our AI business grew \nrapidly, and higher marketing and international expansion costs of $53 million and $37 million, respectively, for our \nConnectivity segment. These increases were partially offset by lower allocated general and administrative overhead \nin our Space segment.\nRestructuring Charges\nRestructuring charges for the year ended December 31, 2025 increased by $274 million, or 128.6%, compared to the \nprior year ended December 31, 2024.  This increase was primarily due to additional expense related to the settlement \nto former Twitter employees as part of the workforce reduction program implemented in 2022.\nImpairment \nImpairment for the year ended December 31, 2025 decreased by $25 million, or 39.7%, compared to the prior year \nended December 31, 2024. The decrease was primarily related to a discontinuation of a Starlink Kit production line \nin our Connectivity segment that occurred during the year ended December 31, 2024 with no impairment in 2025, \npartially offset by an increase in impairment in our Space Segment during the year ended December 31, 2025 \nprimarily related to a post-landing anomaly.\nIncome (Loss) from Operations \nIncome (loss) from operations for the year ended December 31, 2025 decreased by $3,055 million compared to the \nprior year ended December 31, 2024 driven by the factors described above.\nInterest Expense\nInterest expense for the year ended December 31, 2025 increased by $365 million, or 23.1%, compared to the prior \nyear ended December 31, 2024. This increase was primarily due to new term loans and senior notes entered into by \nthe Company and other financing arrangements for GPUs entered into during the year by our AI segment.\n\n109\nTable of Contents\nInterest Income\nInterest income for the year ended December 31, 2025 increased by $121 million, or 32.6%, compared to the prior \nyear ended December 31, 2024. This increase was primarily due to an increase in dividend income earned from \nmarketable securities and cash equivalents.\nOther Income (Expense), Net\nOther income (expense), net for the year ended December 31, 2025 decreased by $1,162 million, compared to the \nprior year ended December 31, 2024. This decrease was primarily due to an unrealized loss on digital assets.\nProvision for (Benefit from) Income Taxes\nProvision for income taxes for the year ended December 31, 2025 increased by $1,267 million compared to the prior \nyear ended December 31, 2024. The increase was primarily due to a partial valuation allowance release in 2024 and \nthe establishment of a valuation allowance in 2025. For the year ended December 31, 2024, the Company released a \npartial valuation allowance on the Company’s U.S. deferred tax assets. As of December 31, 2024, the Company \nforecasted $659 million of deferred tax assets related to U.S. R&D credits would be utilized in the future. For the \nyear ended December 31, 2025, as a result of the enactment of the One Big Beautiful Bill Act (Public Law No. \n119-21), we assessed the realizability of our deferred tax assets and reversed the benefit that was recognized for the \nyear ended December 31, 2024. \nNet Income (Loss)\nNet income (loss) for the year ended December 31, 2025 decreased by $5,728 million compared to the prior year \nended December 31, 2024 driven by the factors described above.\nSegment Results\nSpace\nYear Ended December 31,\n2025 vs. 2024 Change\n(in millions)\n2025\n2024\n$ Change\n% Change\nRevenue\n \n ............................................................... $\n4,086\n$\n3,796\n$\n290\n7.6 %\nCosts and expenses\nCost of revenue \n ..............................................\n1,352\n1,541\n(189)\n(12.2)%\nResearch and development \n .............................\n3,004\n1,835\n1,169\n63.7 %\nSelling, general, and administrative \n \n ...............\n349\n375\n(26)\n(6.9)%\nImpairment \n .....................................................\n38\n24\n14\n61.5 %\nTotal costs and expenses \n ........................... $\n4,743\n$\n3,775\n$\n968\n25.7 %\nIncome (loss) from operations \n ............................ $\n(657) $\n21\n$\n(678)\nNM\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue \nRevenue for the year ended December 31, 2025 increased by $290 million, or 7.6%, compared to the prior year \nended December 31, 2024.  Launch Services revenue remained relatively flat year over year, while Launch and \nDevelopment revenue increased by $298 million.  The Launch and Development revenue increase was primarily \ndriven by increased revenue for an extended contract with NASA for additional Cargo Resupply Services (CRS) \nmissions to the International Space Station and increased revenue from a U.S. Department of War contract. While \ntotal Falcon launches increased by 31 from 134 in 2024 to 165 in 2025, Space customer launches and average price \nper launch remained relatively flat year over year.\n\n110\nTable of Contents\nCost of Revenue\nCost of revenue for the year ended December 31, 2025 decreased by $189 million, or 12.2%, compared to the prior \nyear ended December 31, 2024. This decrease was primarily due increased reusability of our Falcon launch vehicles \nresulting in lower deprecation of $240 million, lowering the cost of each launch, and lower overhead costs of $11 \nmillion. The decrease is also due to the relative increase in Starlink satellite launches from 89 launches in 2024 to \n122 launches in 2025, resulting in relatively more of our launch operations and overhead costs capitalized in our \nConnectivity segment of $14 million.  This decrease was partially offset by an increase in inventory excess and \nobsolescence reserves of $51 million mainly due to less demand on rocket vehicle and spacecraft parts as reusability \nhas increased.  \nResearch and Development\nResearch and development for the year ended December 31, 2025 increased by $1,169 million, or 63.7%, compared \nto the prior year ended December 31, 2024. This increase was primarily driven by higher production costs of $779 \nmillion, higher launch costs of $218 million, and higher engineering costs of $185 million, due to the accelerated \ninvestment in development of the Starship vehicle and continued development of production and launch facilities to \nsupport future Starship launches.  \nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2025 decreased by $26 million, or 6.9%, \ncompared to the prior year ended December 31, 2024. This decrease was primarily due to lower allocated general \nand administrative overhead of $52 million, partially offset by higher employee compensation expenses (including \nsalaries, benefits, and share-based compensation) of $16 million.\nImpairment\nImpairment for the year ended December 31, 2025 increased by $14 million, or 61.5%, compared to the prior year \nended December 31, 2024. This increase was primarily due to a non-recurring impairment loss on a Falcon 9 booster \ndue to a post-landing anomaly during the year.\nIncome (Loss) from Operations \nSpace income from operations for the year ended December 31, 2025 decreased by $678 million compared to the \nprior year ended December 31, 2024 driven by the factors described above.\nConnectivity\nYear Ended December 31,\n2025 vs. 2024 Change\n(in millions)\n2025\n2024\n$ Change\n% Change\nRevenue\n \n ............................................................... $\n11,387\n$\n7,599\n$\n3,788\n49.8 %\nCosts and expenses\nCost of revenue \n ..............................................\n5,921\n4,768\n1,153\n24.2 %\nResearch and development \n .............................\n575\n453\n122\n27.1 %\nSelling, general, and administrative \n \n ...............\n468\n333\n135\n40.4 %\nImpairment \n .....................................................\n—\n39\n(39)\nNM\nTotal costs and expenses \n ................................ $\n6,964\n$\n5,593\n$\n1,371\n24.5 %\nIncome from operations \n ...................................... $\n4,423\n$\n2,006\n$\n2,417\n120.4 %\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\n\n111\nTable of Contents\nRevenue \nRevenue for the year ended December 31, 2025 increased by $3,788 million, or 49.8%, compared to the prior year \nended December 31, 2024. This increase was primarily driven by an increase of $2,377 million in revenue from our \nconsumer subscribers, composed of 99.9% growth in Starlink Subscribers, offset by an 11.2% decline in Starlink \nSubscriber ARPU, primarily due to international expansion and the addition of lower priced service plans. In \naddition, Connectivity revenue had an increase of $1,411 million from our enterprise and government customers, \nprimarily driven by the growth in our enterprise connectivity business of $1,218 million inclusive of growth in our \nmobile connectivity business of $632 million, and growth in our government connectivity business of $193 million.\nCost of Revenue\nCost of revenue for the year ended December 31, 2025 increased by $1,153 million, or 24.2%, compared to the prior \nyear ended December 31, 2024. This increase was primarily due to higher depreciation of $827 million from \ncapitalized launch and satellite costs, higher operating expenses of $283 million mainly driven by ground operating \ncosts of $134 million, payment processor fees of $45 million, international expansion of $44 million, warranty costs \nof $38 million, and employee compensation expenses (including salaries, benefits, and share-based compensation) \nof $12 million, and higher freight costs of $72 million.\nResearch and Development\nResearch and development for the year ended December 31, 2025 increased by $122 million, or 27.1%, compared to \nthe prior year ended December 31, 2024. This increase was primarily due to higher costs for the next-generation \nproduction development of satellites of $84 million, Starlink Kits of $22 million, and ground equipment of $15 \nmillion.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2025 increased by $135 million, or 40.4%, \ncompared to the prior year ended December 31, 2024. This increase was primarily driven by higher marketing costs \nof $53 million, higher international expansion costs of $37 million, and higher allocated general and administrative \noverhead of $67 million.\nImpairment\nImpairment for the year ended December 31, 2025 decreased by $39 million compared to the prior year ended \nDecember 31, 2024. The decrease was primarily related to the discontinuation of a Starlink Kit production line in \n2024 with no impairment in 2025.\nIncome from Operations\nConnectivity income from operations for the year ended December 31, 2025 increased by $2,417 million, or \n120.4%, compared to the prior year ended December 31, 2024 driven by the factors described above.\n\n112\nTable of Contents\nAI\nYear Ended December 31,\n2025 vs. 2024 Change\n(in millions)\n2025\n2024\n$ Change\n% Change\nRevenue\n \n ............................................................... $\n3,201\n$\n2,620\n$\n581\n22.2 %\nCosts and expenses\nCost of revenue \n ..............................................\n2,178\n1,687\n491\n29.1 %\nResearch and development \n .............................\n5,064\n1,176\n3,888\n330.8 %\nSelling, general, and administrative \n \n ...............\n1,827\n1,105\n722\n65.4 %\nRestructuring charges \n .....................................\n487\n213\n274\n129.1 %\nTotal costs and expenses \n ........................... $\n9,556\n$\n4,181\n$\n5,375\n128.6 %\nLoss from operations\n \n ........................................... $\n(6,355) $\n(1,561) $\n(4,794)\n307.1 %\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue \nRevenue for the year ended December 31, 2025 increased by $581 million, or 22.2%, compared to the prior year \nended December 31, 2024. This increase was primarily due to an increase in advertising revenue of $116 million as  \nadvertising spend increased from advertising partners on X and an increase in AI solutions and infrastructure \nrevenue of $465 million.  The increase in AI solutions and infrastructure revenue is mainly due to an increase in X \nand Grok subscription revenue of $365 million and an increase in revenue from data licensing arrangements of $88 \nmillion.      \nCost of Revenue\nCost of revenue for the year ended December 31, 2025 increased by $491 million, or 29.1%, compared to the prior \nyear ended December 31, 2024. This increase was primarily due to higher infrastructure and cloud computing costs \nof $412 million attributable to increased subscriber revenue, higher employee compensation expenses (including \nsalaries, benefits, and share-based compensation) of $90 million, higher revenue share and content creator fees of \n$45 million, and higher payment processor fees of $28 million, partially offset by a decrease in depreciation and \namortization expense of $97 million driven by a decrease in amortization expense for intangible assets that were \nfully amortized during 2025.\nResearch and Development\nResearch and development for the year ended December 31, 2025 increased by $3,888 million, or 330.8%, \ncompared to the prior year ended December 31, 2024. This increase was primarily due to higher GPU depreciation \nexpense of $1,673 million, higher infrastructure and cloud computing expenses of $1,440 million associated with the \nbuild out of our compute infrastructure, and higher employee compensation expenses (including salaries, benefits, \nand share-based compensation) and allocated overhead costs of $775 million.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2025 increased by $722 million, or 65.4%, \ncompared to the prior year ended December 31, 2024. This increase was primarily due to higher employee \ncompensation expenses (including salaries, benefits, and share-based compensation) of $519 million as we continue \nto expand our AI business, higher legal expenses of $189 million, and higher facilities and general and \nadministrative costs of $14 million.\nRestructuring Charges\nRestructuring charges for the year ended December 31, 2025 increased by $274 million or 129.1%, compared to the \nprior year ended December 31, 2024. This increase was primarily due to additional expense recorded to settle with \nformer Twitter employees as part of the workforce reduction program implemented in 2022.\n\n113\nTable of Contents\nLoss from Operations \nAI loss from operations for the year ended December 31, 2025 increased by $4,794 million, or 307.1%, compared to \nthe prior year ended December 31, 2024 driven by the factors described above.\nComparison of the Years Ended December 31, 2024 and 2023\nConsolidated Results of Operations\nYear Ended December 31,\n2024 vs. 2023 Change\n(in millions)\n2024\n2023\n$ Change\n% Change\nRevenue\n \n ............................................................... $\n14,015\n$\n10,387\n$\n3,628\n34.9 %\nCosts and expenses\nCost of revenue \n ..............................................\n7,996\n6,110\n1,886\n30.9 %\nResearch and development \n .............................\n3,464\n2,105\n1,359\n64.6 %\nSelling, general, and administrative \n \n ...............\n1,813\n1,665\n148\n8.9 %\nRestructuring charges \n .....................................\n213\n237\n(24)\n(10.1)%\nImpairment \n .....................................................\n63\n3,775\n(3,712)\n(98.3)%\nTotal costs and expenses \n ...........................\n13,549\n13,892\n(343)\n(2.5)%\nIncome (loss) from operations \n ............................\n466\n(3,505)\n3,971\nNM\nInterest expense \n ...................................................\n(1,580)\n(1,693)\n113\n(6.7)%\nInterest income \n ....................................................\n371\n249\n122\n49.0 %\nOther income, net \n ................................................\n985\n(42)\n1,027\nNM\nIncome (loss) before income taxes\n ......................\n242\n(4,991)\n5,233\nNM\nBenefit from income taxes \n \n ..................................\n(549)\n(363)\n(186)\n51.2 %\nNet income (loss) \n ................................................ $\n791\n$\n(4,628) $\n5,419\nNM\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue \nRevenue for the year ended December 31, 2024 increased by $3,628 million, or 34.9%, compared to the prior year \nended December 31, 2023. This increase was primarily due to an increase in revenue from our Connectivity segment \nof $3,730 million as both our Starlink consumer subscriber base continued to grow as well as our Connectivity \nenterprise and government sales, and an increase in revenue from our Space segment of $239 million due to the \nincrease in Falcon 9 launches partially offset by a decrease in Launch and Development revenue due to timing of \ngovernment contracts. This increase was partially offset by a decrease in revenue from our AI segment of $341 \nmillion driven by a decrease in advertising sales, partially offset by an increase in X subscriptions and data licensing \narrangements.\nCost of Revenue\nCost of revenue for the year ended December 31, 2024 increased by $1,886 million, or 30.9%, compared to the prior \nyear ended December 31, 2023. This increase was primarily due to a higher cost of revenue from the Connectivity \nsegment of $1,982 million as a result of the higher volume spend on Starlink Kits as deliveries increased and higher \ndepreciation of launch costs driven by an increase in the number of satellites placed into orbit, partially offset by \ncost efficiency from increased reusability of our Falcon launch vehicles in our Space segment of $128 million.\nResearch and Development\nResearch and development for the year ended December 31, 2024 increased by $1,359 million, or 64.6%, compared \nto the prior year ended December 31, 2023. This increase was primarily due to higher cost in our AI segment of\n\n114\nTable of Contents\n$990 million related to advancing our AI technologies and higher costs of $297 million in our Space segment for \ninvestment in Starship production, launch and engineering costs, and related facilities.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2024 increased by $148 million, or 8.9%, \ncompared to the prior year ended December 31, 2023.  This increase was primarily due to: (i) higher international \nexpansion costs of $18 million, higher employee compensation expenses (including salaries, benefits, and share-\nbased compensation) of $11 million, and higher allocated general and administrative overhead of $54 million in our \nConnectivity segment, and  (ii) higher employee compensation expenses (including salaries, benefits, and share-\nbased compensation) and professional fees of $25 million in our Space segment.\nRestructuring Charges\nRestructuring charges for the year ended December 31, 2024 decreased by $24 million, or 10.1%, compared to the \nprior year ended December 31, 2023.  This decrease was due to the impairment on office leases assumed as part of \nthe Twitter acquisition that occurred during the year ended December 31, 2023, partially offset by an increase in \nworkforce-related restructuring charges.\nImpairment\nImpairment for the year ended December 31, 2024 decreased by $3,712 million, or 98.3%, compared to the prior \nyear ended December 31, 2023. The impairment during the year ended December 31, 2023 was primarily related to \nthe impairment of the Twitter brand following its rebranding to X.\nIncome (Loss) from Operations \nIncome from operations for the year ended December 31, 2024 increased by $3,971 million compared to the prior \nyear ended December 31, 2023 driven by the factors described above.\nInterest Expense\nInterest expense for the year ended December 31, 2024 decreased by $113 million, or 6.7%, compared to the prior \nyear ended December 31, 2023. This decrease was primarily due to the debt issuance costs related to the X Bridge \nCredit Facilities being amortized only through July 2024, the original maturity date, as compared to a full year of \namortization in 2023.\nInterest Income\nInterest income for the year ended December 31, 2024 increased by $122 million, or 49.0%, compared to the prior \nyear ended December 31, 2023. This increase was primarily due to an increase in dividend income earned from \nmarketable securities.\nOther Income (Expense), net\nOther income (expense), net for the year ended December 31, 2024 increased by $1,027 million compared to the \nprior year ended December 31, 2023. This increase was primarily due to an unrealized gain on digital assets.\nBenefit from Income Taxes\nBenefit from income taxes for the year ended December 31, 2024 increased by $186 million, or 51.2%, compared to \nthe prior year ended December 31, 2023. This increase was primarily due to the change in the realizability of our net \ndeferred tax assets. As of December 31, 2024, we forecasted additional deferred tax assets related to U.S. R&D \ncredits would be utilized.\n\n115\nTable of Contents\nNet Income (Loss)\nNet income for the year ended December 31, 2024 increased by $5,419 million compared to the prior year ended \nDecember 31, 2023 driven by the factors described above.\nSpace\nYear Ended December 31,\n2024 vs. 2023 Change\n(in millions)\n2024\n2023\n$ Change\n% Change\nRevenue\n \n ............................................................... $\n3,796\n$\n3,557\n$\n239\n6.7 %\nCosts and expenses\nCost of revenue \n ..............................................\n1,541\n1,669\n(128)\n(7.6)%\nResearch and development \n .............................\n1,835\n1,538\n297\n19.3 %\nSelling, general, and administrative \n \n ...............\n375\n351\n24\n7.0 %\nImpairment \n .....................................................\n24\n—\n24\nNM\nTotal costs and expenses \n ........................... $\n3,775\n$\n3,558\n$\n217\n6.1 %\nIncome (loss) from operations \n ............................ $\n21\n$\n(1) $\n22\nNM\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue \nRevenue for the year ended December 31, 2024 increased by $239 million, or 6.7%, compared to the prior year \nended December 31, 2023. Launch Services revenue increased by $620 million as total Falcon launches increased by \n38 from 96 in 2023 to 134 in 2024, with Launch Services missions increasing by 8.  This increase was partially \noffset by a decrease of $381 million for Launch and Development revenue due to decreased activity in our \nInternational Space Station contracts and lower revenue from a U.S. Department of War contract. \nCost of Revenue\nCost of revenue for the year ended December 31, 2024 decreased by $128 million, or 7.6%, compared to the prior \nyear ended December 31, 2023. This decrease was primarily due to increased reusability of our Falcon launch \nvehicles resulting in lower depreciation of $80 million, lowering the cost of each launch. The decrease was also due \nto the relative increase in Starlink satellite launches from 63 launches in 2023 to 89 launches in 2024, resulting in \nrelatively more of our launch operations and overhead costs capitalized in our Connectivity segment of $99 million.  \nThis decrease was offset by an increase in launch overhead costs of $77 million due to the increase in Falcon \nlaunches.  \nResearch and Development\nResearch and development for the year ended December 31, 2024 increased by $297 million, or 19.3%, compared to \nthe prior year ended December 31, 2023. This increase was primarily due to higher production costs of $159 million, \nhigher launch costs of $67 million, and higher engineering costs of $56 million due to the increased investment in \nthe development of the Starship vehicle and related launch facilities.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2024 increased by $24 million, or 7.0%, \ncompared to the prior year ended December 31, 2023. This increase was primarily due to higher employee \ncompensation expenses (including salaries, benefits, and share-based compensation) and professional fees of $25 \nmillion.\n\n116\nTable of Contents\nImpairment \nImpairment for the year ended December 31, 2024 increased by $24 million compared to the prior year ended \nDecember 31, 2023. This increase was primarily due to non-recurring impairment losses resulting from one-time \nlaunch anomalies experienced during the year.\nIncome (Loss) from Operations \nIncome (loss) from operations for the year ended December 31, 2024 increased by $22 million compared to the prior \nyear ended December 31, 2023 driven by the factors described above.\nConnectivity\nYear Ended December 31,\n2024 vs. 2023 Change\n(in millions)\n2024\n2023\n$ Change\n% Change\nRevenue\n \n ............................................................... $\n7,599\n$\n3,869\n$\n3,730\n96.4 %\nCosts and expenses\nCost of revenue \n ..............................................\n4,768\n2,786\n1,982\n71.1 %\nResearch and development \n .............................\n453\n381\n72\n18.8 %\nSelling, general, and administrative \n \n ...............\n333\n233\n100\n43.0 %\nImpairment \n .....................................................\n39\n—\n39\nNM\nTotal costs and expenses \n ........................... $\n5,593\n$\n3,400\n$\n2,193\n64.5 %\nIncome from operations \n ...................................... $\n2,006\n$\n469\n$\n1,537\n327.4 %\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue \nRevenue for the year ended December 31, 2024 increased by $3,730 million, or 96.4%, compared to the prior year \nended December 31, 2023. This increase was primarily driven by an increase of $2,013 million in revenue from our \nconsumer subscribers, composed of 96.5% growth in Starlink Subscribers offset by a 8.1% decline in Starlink \nSubscriber ARPU primarily due to international expansion.  In addition, Connectivity revenue had an increase of \n$1,717 million from our enterprise and government customers, primarily driven by the growth in our enterprise \nconnectivity business of $466 million and growth in our government connectivity business of $1,250 million.\nCost of Revenue\nCost of revenue for the year ended December 31, 2024 increased by $1,982 million, or 71.1%, compared to the prior \nyear ended December 31, 2023. This increase was primarily due to higher volume spend on Starlink Kits of $907 \nmillion driven by higher kit deliveries and higher depreciation of $555 million from capitalized launch and satellite \ncosts driven by an increase in the number of launches and satellites placed into orbit.\nResearch and Development\nResearch and development for the year ended December 31, 2024 increased by $72 million, or 18.8%, compared to \nthe prior year ended December 31, 2023. This increase was primarily due to higher costs for the next-generation \nproduction development of satellites of $73 million, ground equipment of $4 million, offset by lower costs of $4 \nmillion for Starlink Kits.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2024 increased by $100 million, or 43.0%, \ncompared to the prior year ended December 31, 2023. This increase was primarily due to higher international \nexpansion costs of $18 million, higher employee compensation expenses (including salaries, benefits, and share-\nbased compensation) of $11 million, and higher allocated general and administrative overhead of $54 million.\n\n117\nTable of Contents\nImpairment \nImpairment for the year ended December 31, 2024 increased by $39 million compared to the prior year ended \nDecember 31, 2023. This increase was due to a discontinuation of a certain Starlink Kit production line.\nIncome from Operations\nIncome from operations for the year ended December 31, 2024 increased by $1,537 million, or 327.4%, compared to \nthe prior year ended December 31, 2023 driven by the factors described above.\nAI\nYear Ended December 31,\n2024 vs. 2023 Change\n(in millions)\n2024\n2023\n$ Change\n% Change\nRevenue\n \n ............................................................... $\n2,620\n$\n2,961\n$\n(341)\n(11.5)%\nCosts and expenses\nCost of revenue \n ..............................................\n1,687\n1,655\n32\n1.9 %\nResearch and development \n .............................\n1,176\n186\n990\n531.5 %\nSelling, general, and administrative \n \n ...............\n1,105\n1,081\n24\n2.3 %\nRestructuring charges \n .....................................\n213\n237\n(24)\n(10.2)%\nImpairment \n .....................................................\n—\n3,775\n(3,775)\nNM\nTotal costs and expenses \n ........................... $\n4,181\n$\n6,934\n$\n(2,753)\n(39.7)%\nLoss from operations\n \n ........................................... $\n(1,561) $\n(3,973) $\n2,412\n(60.7)%\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue \nRevenue for the year ended December 31, 2024 decreased by $341 million, or 11.5%, compared to the prior year \nended December 31, 2023. This decrease was due to a decrease in advertising revenue of $595 million, partially \noffset by an increase in AI solutions and infrastructure revenue of $254 million. The decrease in advertising revenue \nwas due to the loss of advertising partners for X. The increase in AI solutions and infrastructure was due to an \nincrease in X subscription revenue of $157 million and an increase in data licensing arrangements of $90 million.  In \n2023 and 2024, substantially all of our AI segment revenue consisted of advertising, subscriptions, and data \nlicensing revenue generated from X, formerly known as Twitter.  \nCost of Revenue\nCost of revenue for the year ended December 31, 2024 increased by $32 million, or 1.9%, compared to the prior \nyear ended December 31, 2023. This increase was primarily due to higher server depreciation of $97 million, \npartially offset by lower infrastructure and revenue share expenses of $46 million, and lower employee and \nfacilities-related expenses of $18 million resulting from the Company’s restructuring and cost reduction efforts.\nResearch and Development\nResearch and development for the year ended December 31, 2024 increased by $990 million, or 531.5%, compared \nto the prior year ended December 31, 2023. This increase was primarily due to increased investments made in \nadvancing our AI technologies, including employee compensation expenses (including salaries, benefits, and share-\nbased compensation) and infrastructure services of $703 million and higher depreciation of $321 million for our \nequipment hardware.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2024 increased by $24 million, or 2.3%, \ncompared to the prior year ended December 31, 2023. This increase was primarily due to an increase in our\n\n118\nTable of Contents\namortization expense of $107 million related to the Twitter brand becoming a finite-lived intangible asset and higher \nlegal costs of $65 million, partially offset by lower employee and facilities related costs of $125 million and lower \nprofessional fees of $23 million resulting from the Company’s restructuring and cost reduction efforts.\nRestructuring charges\nRestructuring charges for the year ended December 31, 2024 decreased by $24 million, or 10.2%, compared to the \nprior year ended December 31, 2023. This decrease was due to the impairment on the office leases assumed as part \nof the Twitter acquisition that primarily occurred during the year ended December 31, 2023, partially offset by an \nincrease in workforce-related restructuring charges.\nImpairment\nImpairment for the year ended December 31, 2024 decreased by $3,775 million compared to the prior year ended \nDecember 31, 2023. The impairment during the year ended December 31, 2023 was related to the impairment of the \nTwitter brand intangible asset following its rebranding to X.\nLoss from Operations \nLoss from operations for the year ended December 31, 2024 decreased by $2,412 million, or 60.7%, compared to the \nprior year ended December 31, 2023 driven by the factors described above.\nNon-GAAP Financial Measures\nManagement believes that certain financial measures that are not presented in accordance with GAAP provide \nmanagement and investors with useful supplemental information that provides a meaningful view of our financial \ncondition and results of operations across periods by removing the impact of items that management believes do not \ndirectly reflect our ongoing operating performance. Adjusted EBITDA and Segment Adjusted EBITDA are \nsupplemental measures that are not required by or presented in accordance with GAAP. In evaluating our \nperformance as measured by Adjusted EBITDA and Segment Adjusted EBITDA, management recognizes and \nconsiders the limitations of these measures. Other companies in our industry may calculate Adjusted EBITDA and \nSegment Adjusted EBITDA differently than we do or may not calculate them at all, limiting their usefulness as \ncomparative measures. Because of these limitations,  Adjusted EBITDA and Segment Adjusted EBITDA should not \nbe considered in isolation or as a substitute for net income (loss), income (loss) from operations, or any other \nmeasure calculated in accordance with GAAP, and should be considered together with our GAAP financial \nmeasures and the reconciliations to the corresponding most directly comparable GAAP financial measures set forth \nin this prospectus.\nAdjusted EBITDA is defined as net income (loss) excluding (i) depreciation and amortization, (ii) share-based \ncompensation, (iii) impairment, (iv) restructuring charges, (v) interest expense, (vi) interest income, (vii) other \nincome (expense), net and (viii) provision for income taxes. Segment Adjusted EBITDA is defined as segment \nincome (loss) from operations excluding (i) depreciation and amortization, (ii) share-based compensation, (iii) \nrestructuring charges, and (iv) impairment. Adjusted EBITDA and Segment Adjusted EBITDA are key performance \nmeasures that our management uses to assess our financial performance as well as for internal planning and \nforecasting purposes. We consider Adjusted EBITDA and Segment Adjusted EBITDA to be meaningful \nperformance measures for investors to evaluate our operating performance and to compare the financial results \nbetween periods.\n\n119\nTable of Contents\nThe following table sets forth a reconciliation of Net income (loss), the most directly comparable GAAP measure, to \nAdjusted EBITDA:\nThree Months Ended March 31,\nYear Ended December 31,\n(in millions)\n2026\n2025\n2025\n2024\n2023\nNet income (loss) \n \n ........................................ $\n(4,276) $\n(528) $\n(4,937) $\n791\n$\n(4,628)\nAdd (deduct):\nDepreciation and amortization \n ....................\n2,442\n1,443\n6,701\n3,824\n2,635\nShare-based compensation \n ..........................\n639\n232\n1,947\n784\n679\nRestructuring charges\n ..................................\n(11)\n4\n487\n213\n237\nImpairments \n ................................................\n—\n24\n38\n63\n3,775\nInterest expense \n ...........................................\n664\n447\n1,945\n1,580\n1,693\nInterest income ............................................\n(213)\n(117)\n(492)\n(371)\n(249)\nOther (income) expense, net \n .......................\n1,876\n211\n177\n(985)\n42\nProvision for (benefit from) income taxes \n ..\n6\n14\n718\n(549)\n(363)\nAdjusted EBITDA \n ..................................... $\n1,127\n$\n1,730\n$\n6,584\n$\n5,350\n$\n3,821\n\n120\nTable of Contents\nThe following table sets forth a reconciliation of Income (loss) from operations for each segment, the most directly \ncomparable GAAP measure, to Segment Adjusted EBITDA:\nThree Months Ended March 31,\n2026\n(in millions)\nSpace\nConnectivity\nAI\nTotal Reportable \nSegments\nIncome (loss) from operations \n ............................ $\n(662) $\n1,188\n$\n(2,469) $\n(1,943)\nAdd:\nDepreciation and amortization \n ............................\n166\n783\n1,493\n2,442\nShare-based compensation \n ..................................\n145\n116\n378\n639\nRestructuring charges \n ..........................................\n—\n—\n(11)\n(11)\nSegment Adjusted EBITDA\n ................................ $\n(351) $\n2,087\n$\n(609) $\n1,127\nThree Months Ended March 31,\n2025\n(in millions)\nSpace\nConnectivity\nAI\nTotal Reportable \nSegments\nIncome (loss) from operations ............................ $\n(70) $\n1,033\n$\n(936) $\n27\nAdd:\nDepreciation and amortization \n ............................\n162\n510\n771\n1,443\nShare-based compensation \n \n ..................................\n108\n75\n49\n232\nRestructuring charges \n ..........................................\n—\n—\n4\n4\nImpairment \n ..........................................................\n24\n—\n—\n24\nSegment Adjusted EBITDA\n ................................ $\n224\n$\n1,618\n$\n(112) $\n1,730\nYear Ended December 31,\n2025\n(in millions)\nSpace\nConnectivity\nAI\nTotal Reportable \nSegments\nIncome (loss) from operations ............................ $\n(657)\n$\n4,423\n$\n(6,355)\n$\n(2,589)\nAdd:\nDepreciation and amortization \n \n ............................\n757\n2,376\n3,568\n6,701\nShare-based compensation \n \n ..................................\n515\n369\n1,063\n1,947\nRestructuring charges ..........................................\n—\n—\n487\n487\nImpairment \n \n ..........................................................\n38\n—\n—\n38\nSegment Adjusted EBITDA\n ................................ $\n653\n$\n7,168\n$\n(1,237)\n$\n6,584\n\n121\nTable of Contents\nYear Ended December 31,\n2024\n(in millions)\nSpace\nConnectivity\nAI\nTotal Reportable \nSegments\nIncome (loss) from operations \n ............................ $\n21\n$\n2,006\n$\n(1,561)\n$\n466\nAdd:\nDepreciation and amortization \n ............................\n637\n1,508\n1,679\n3,824\nShare-based compensation \n ..................................\n472\n296\n16\n784\nRestructuring charges \n ..........................................\n—\n—\n213\n213\nImpairment \n ..........................................................\n24\n39\n—\n63\nSegment Adjusted EBITDA\n ................................ $\n1,154\n$\n3,849\n$\n347\n$\n5,350\nYear Ended December 31,\n2023\n(in millions)\nSpace\nConnectivity\nAI\nTotal Reportable \nSegments\nIncome (loss) from operations ............................ $\n(1)\n$\n469\n$\n(3,973)\n$\n(3,505)\nAdd:\nDepreciation and amortization \n ............................\n571\n884\n1,180\n2,635\nShare-based compensation \n \n ..................................\n427\n249\n3\n679\nRestructuring charges \n ..........................................\n—\n—\n237\n237\nImpairment \n ..........................................................\n—\n—\n3,775\n3,775\nSegment Adjusted EBITDA\n ................................ $\n997\n$\n1,602\n$\n1,222\n$\n3,821\nLiquidity and Capital Resources\nOur primary sources of liquidity are cash flows generated from operations, our total cash and cash equivalents of \n$15,852 million as of March 31, 2026, short-term marketable securities of $7,823 million as of March 31, 2026, and \nborrowings under our credit facilities. As of March 31, 2026, we have $1,500 million available to borrow under the \nSpaceX Credit Facility.  The cash we generate from our core operations also enables us to fund our research and \ndevelopment projects including our Starship rocket and next-generation satellites, the construction of future data \ncenters, and the continued expansion of our AI-enabled products.\nIn addition, because we expect a significant portion of our future expenditures to fund growth initiatives, we retain \nflexibility to adjust spending across segments. For example, if our near-term data center needs decrease in scale or \nramp more slowly than expected, including due to global economic, tax, trade or business conditions, we may \nreduce future capital expenditures in this segment and reallocate those expenditures to other segments based on \nbusiness priorities and growth opportunities. In addition, we continually evaluate our cash needs and may decide it is \nbest to raise additional capital or seek alternative financing sources to fund the rapid growth of our business, \nincluding through drawdowns on existing or new debt facilities. We may seek to refinance the SpaceX Bridge Loan, \nincluding with the proceeds from notes offerings, bank borrowings, or other financial arrangements. We may also \nfrom time to time determine that it is in our best interests to voluntarily repay certain indebtedness early.\nAccordingly, we believe we have sufficient sources of funding to meet our business requirements for at least the \nnext twelve months from the issuance of the consolidated financial statements.\nDebt Agreements\nSpaceX Credit Facility\nIn February 2025, SpaceX entered into a five-year senior unsecured revolving credit agreement with a syndicate of \nbanks, under which the Company may borrow up to $1,500 million (“SpaceX Credit Facility”). The SpaceX Credit \nFacility is subject to certain customary representations, warranties, covenants, and events of default, including a\n\n122\nTable of Contents\nmaximum financial covenant requiring the Company to maintain a Consolidated Leverage Ratio (as defined in the \nSpaceX Credit Facility) of no greater than 3.75 to 1.0 as of the end of each fiscal quarter (subject to temporary \nincreases to 4.25 to 1.0 following certain qualified acquisitions) and other customary reporting requirements. The \nSpaceX Credit Facility also includes sublimits of up to $150 million for financial letters of credit and up to $1,000 \nmillion for performance letters of credit. The SpaceX Credit Facility terminates, and all outstanding loans become \ndue and payable, on February 7, 2030, unless the parties agree to an extension in accordance with the terms of the \nSpaceX Credit Facility. As of March 31, 2026 and December 31, 2025, no amounts were outstanding under the \nSpaceX Credit Facility. \nBorrowings under the SpaceX Credit Facility bear interest, at the Company’s option, at a rate per annum equal to (i) \na forward-looking term rate based on SOFR (“Term SOFR”) plus an applicable margin ranging from 0.75% and \n1.25% (depending on the Company’s debt rating), or (ii) a base rate equal to the highest of (a) Federal Funds Rate \nplus 0.5%, (b) the Prime Rate, (c) Term SOFR plus 1.00%, and (d) 1.00% plus an applicable margin ranging from \n0.0% and 0.25% (depending on the Company’s debt rating). The Company may also borrow in various alternative \ncurrencies, with interest calculated at rates based on SONIA for Pound Sterling-denominated loans and EURIBOR \nfor Euro-denominated loans, plus an applicable margin. In addition, the Company pays a commitment fee on the \nunused portion of the SpaceX Credit Facility, which ranges from 0.07% (amended to 0.06% under the Amended \nSpaceX Credit Facility described below) to 0.11% per annum based on the Company’s debt rating. As of March 31, \n2026, the Company was in compliance with all covenants under the SpaceX Credit Facility.\nIn March 2026, the Company entered into a First Amendment to Credit Agreement and Waiver (the “First \nAmendment”) with its lenders, in connection with the Company’s entry into the SpaceX Bridge Loan (as defined \nbelow). The First Amendment, among other things, (i) waived certain specified defaults and (ii) amended certain \ndefinitions and covenants under the SpaceX Credit Facility to conform to the terms of the SpaceX Bridge Loan.\nIn May 2026, SpaceX amended the SpaceX Credit Facility to increase the borrowing capacity up to $5,000 million \n(“Amended SpaceX Credit Facility”). As part of the Amended SpaceX Credit Facility, the sublimit for performance \nletters of credit was increased to $2,000 million. The Amended SpaceX Credit Facility terminates, and all \noutstanding loans become due and payable, on May 19, 2031, unless the parties agree to an extension in accordance \nwith the terms of the Amended SpaceX Credit Facility. All other terms were consistent with the terms of the SpaceX \nCredit Facility.\nSpaceX Bridge Loan\nIn March 2026, SpaceX entered into a new bridge loan credit agreement (the “SpaceX Bridge Loan”) with a \nsyndicate of lenders, providing for an unsecured bridge term loan facility in an aggregate principal amount of \n$20,000 million. The SpaceX Bridge Loan matures on September 2, 2027, with two three-month extensions at the \nCompany’s option, subject to the absence of a continuing default and the payment of an extension fee of 0.25% of \nthe aggregate outstanding principal per extension, resulting in a final extended maturity date of March 2028. \nThe proceeds of the SpaceX Bridge Loan were used to repay the X B-1 Term Loan, the X B-3 Term Loan, the xAI \nFixed Rate Loan, the xAI Floating Rate Loan and the xAI 12.5% Senior Secured Notes (as defined and described in \nNote 10, Debt, to the consolidated financial statements included elsewhere in this prospectus). The Company may \nalso use the remaining proceeds for general corporate purposes.\nThe SpaceX Bridge Loan bears interest, at the Company’s election, at a rate per annum equal to (i) Term SOFR plus \nan applicable margin ranging from 0.75%-1.75% (depending on the Company’s debt rating), or (ii) a base rate equal \nto the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus 1.0% and (d) 1.00%, \nplus an applicable margin ranging from 0.00% to 0.75% (depending on the Company’s debt rating). In addition, the \nCompany is obligated to pay duration fees equal to 0.125% of outstanding principal on the first anniversary of \nclosing and 0.25% of outstanding principal on the fifteen-month anniversary of closing. As of March 31, 2026, the \nCompany was in compliance with all covenants under the SpaceX Bridge Loan.\nThe obligations of the Company under the SpaceX Bridge Loan are guaranteed on a joint and several basis by X \nCorp., X.AI LLC, and CTC Property LLC (each a subsidiary of the Company). The SpaceX Bridge Loan may be \nprepaid at any time, in whole or in part, without premium or penalty. The Company is required to use an amount\n\n123\nTable of Contents\nequal to the net cash proceeds of certain debt financings to repay amounts outstanding under the SpaceX Bridge \nLoan and to apply an amount equal to the net proceeds of a qualified initial public offering, including this offering, \nto repay such amounts within six months following receipt of such proceeds.\nThe SpaceX Bridge Loan contains customary events of default and affirmative and negative covenants, including \nrestrictions on liens, subsidiary indebtedness, fundamental changes (including a prohibition on the disposition of \nStarlink assets and other material businesses outside the consolidated group), and changes in the nature of the \nCompany’s business. The sole financial maintenance covenant requires the Company to maintain a Consolidated \nLeverage Ratio — defined as consolidated funded indebtedness (net of 85% of unrestricted cash) to Consolidated \nEBITDA (as defined in the SpaceX Bridge Loan) — of no greater than 3.75 to 1.0 as of the end of each fiscal \nquarter, with a temporary step-up to 4.25 to 1.0 for four fiscal quarters following a qualifying acquisition of at least \n$1.0 billion.\nMaterial Cash Commitments\nFrom time to time in the ordinary course of business, we enter into agreements with suppliers for the purchase of \nparts and raw materials to manufacture our products. However, due to contractual terms, variability in the precise \ngrowth curves of our development and production ramps, and opportunities to renegotiate pricing, these contracts \ngenerally do not have long-term binding and enforceable purchase orders, and the timing and magnitude of purchase \norders beyond the short term is difficult to accurately project. Because we do not have long-term purchase orders for \nthese parts and raw materials, future purchases may result in material cash commitments. For additional information \nabout this risk, please refer to “Risk Factors” in this prospectus.\nOn September 7, 2025, the Company entered into a License Purchase Agreement (the “Spectrum License Purchase \nAgreement”) with Spectrum Business Trust 2025-1, a Nevada Business Trust (“Trust”) and EchoStar Corporation \n(“EchoStar” and the transactions contemplated thereby, “Spectrum Transaction”). On November 5, 2025 the parties \namended and restated the Spectrum License Purchase Agreement to include EchoStar’s licenses for up to 15 MHz of \nadditional unpaired AWS-3 spectrum. The total consideration for the acquisition of EchoStar’s spectrum is \napproximately $19.6 billion, consisting of (i) approximately $11.1 billion in equity, payable through the issuance of \napproximately 261.8 million shares of the Company’s Class A common stock at a fixed value of $42.40 per share, \nand (ii) up to $8.5 billion related to the payoff of designated EchoStar debt, with any shortfall below $8.5 billion to \nbe paid in cash. The allocation of cash and equity consideration is subject to certain adjustments based on the \namount of EchoStar debt satisfied at or prior to closing. The Spectrum Transaction was approved by the FCC on \nMay 12, 2026 and is expected to close on or about November 30, 2027 subject to other closing conditions. Upon \nclosing, the Company intends to either use cash and cash equivalents on hand or seek alternative financing sources \nto fund the cash payment to EchoStar.  \nAs of March 31, 2026, we and our subsidiaries had outstanding $29,132 million in aggregate principal amount of \nindebtedness and no debt principal payments are due until August 28, 2027 if we choose not to extend.  As of March \n31, 2026, our total minimum lease payments was $5,823 million, of which $1,026 million is due within this fiscal \nyear. For details regarding our indebtedness and lease obligations, refer to Note 10, Debt, and Note 11, Leases of our  \naudited consolidated financial statements and Note 9, Debt of our unaudited consolidated financial statements \nincluded elsewhere in this prospectus.\nSummary of Cash flows\nThe following table summarizes our cash flows for the periods indicated:\nThree Months Ended March 31,\nYear Ended December 31,\n(in millions)\n2026\n2025\n2025\n2024\n2023\nNet cash provided by (used in)\nOperating activities\n \n ........................ $\n1,047\n$\n727\n$\n6,785\n$\n5,776\n$\n4,520\nInvesting activities \n ......................... $\n(16,724) $\n(4,170) $\n(19,575) $\n(10,796) $\n(4,867)\nFinancing activities\n \n ........................ $\n7,125\n$\n354\n$\n26,350\n$\n11,830\n$\n422\n\n124\nTable of Contents\nOperating Activities\nNet cash provided by operating activities increased by $320 million from $727 million during the three months \nended March 31, 2025 to $1,047 million during the three months ended March 31, 2026. This increase was primarily \ndriven by an increase in working capital for deferred revenue of $1,153 million from upfront payments from our \nSpace and Connectivity customers, partially offset by lower net income exclusive of non-cash items.\nNet cash provided by operating activities increased by $1,009 million from $5,776 million during the year ended \nDecember 31, 2024 to $6,785 million during the year ended December 31, 2025. This increase was primarily driven \nby higher net income exclusive of non-cash items and an increase of $1,080 million for accounts payable and other \nliabilities as we continue to expand our infrastructure and timing of payments, and higher deferred revenue from \ncash received from upfront payments from our aviation customers. This increase was partially offset by an increase \nof $449 million for accounts receivable, prepaid expenses, and inventory.\nNet cash provided by operating activities increased by $1,256 million from $4,520 million during the year ended \nDecember 31, 2023 to $5,776 million during the year ended December 31, 2024. This increase was primarily driven \nby higher net income exclusive of non-cash items, partially offset by a decrease of $628 million for inventory, \naccounts receivable, prepaid expenses and other assets due to increase in our revenue and production of Starlink \nKits.\nInvesting Activities\nNet cash used in investing activities increased by $12,554 million from $4,170 million during the three months \nended March 31, 2025 to $16,724 million during the three months ended March 31, 2026.  This increase was \nprimarily driven by an increase in capital expenditures of $5,967 million related to the build out of data centers and \nrelated infrastructure, and space launch facilities and related infrastructure, as well as an increase in purchases of \nmarketable securities of $7,489 million in the period. This increase was partially offset by an increase in cash \nreceived from product rebates of $1,195 million.\nNet cash used in investing activities increased by $8,779 million from $10,796 million during the year ended \nDecember 31, 2024 to $19,575 million during the year ended December 31, 2025.  This increase was primarily \ndriven by an increase in capital expenditures of $9,574 million related to the build out of data centers and related \ninfrastructure, and space launch facilities and related infrastructure, partially offset by a net increase in cash received \nfrom marketable securities of $1,264 million.\nNet cash used in investing activities increased by $5,929 million from $4,867 million during the year ended \nDecember 31, 2023 to $10,796 million during the year ended December 31, 2024.  This increase was primarily \ndriven by an increase in capital expenditures of $6,748 million related to the build out of data centers and related \ninfrastructure, and space launch facilities and related infrastructure, partially offset by an increase in cash received \nfor the maturities of marketable securities of $981 million.\nFinancing Activities\nNet cash provided by financing activities increased by $6,771 million from $354 million during the three months \nended March 31, 2025 to $7,125 million during the three months ended March 31, 2026.  This increase was \nprimarily driven by an increase in proceeds from the SpaceX Bridge Loan and other financing arrangements of \n$17,950 million and proceeds from sale of our capital stock of $7,420 million, partially offset by an increase in \npayment on existing debt obligations and debt extinguishment costs of $14,703 million from the proceeds from the \nSpaceX Bridge Loan as well as an increase in repurchases of our capital stock of $3,838 million following the xAI \nMerger.\nNet cash provided by financing activities increased by $14,520 million from $11,830 million during the year ended \nDecember 31, 2024 to $26,350 million during the year ended December 31, 2025.  This increase was primarily \ndriven by an increase in proceeds from debt and other financing arrangements for our AI segment of $16,055 million \nand proceeds from sale of our capital stock of $5,706 million, partially offset by an increase in repayments on debt \nand other financing arrangements for our AI segment of $6,781 million.\n\n125\nTable of Contents\nNet cash provided by financing activities increased by $11,408 million from $422 million during the year ended \nDecember 31, 2023 to $11,830 million during the year ended December 31, 2024.  This increase was primarily \ndriven by an increase in proceeds from the sale of our capital stock of $12,327 million, partially offset by an increase \nin the buyback of common and preferred shares by the Company of $104 million.\nCritical Accounting Estimates\nThe preparation of financial statements and related disclosures in conformity with GAAP and the Company’s \ndiscussion and analysis of its financial condition and operating results require the Company’s management to make \njudgments, assumptions and estimates that affect the amounts reported. Note 2, “Summary of Significant \nAccounting Policies” of the Notes to audited consolidated financial statements included elsewhere in this prospectus \ndescribes the significant accounting policies and methods used in the preparation of the Company’s consolidated \nfinancial statements. Management bases its estimates on historical experience and on various other assumptions it \nbelieves to be reasonable under the circumstances, the results of which form the basis for making judgments about \nthe carrying values of assets and liabilities.\nRevenue Recognition\nSpace contract revenue is derived from fixed-price contracts related to the development and provision of launch \nservices for the deployment of spacecraft and other payloads to their intended orbit for both commercial customers \nand governmental agency space programs. Connectivity contract revenue for Starshield customers is mostly derived \nfrom fixed-price contracts related to the development of a secure satellite network designed specifically for \ngovernment and national security applications. \nThe Company recognizes revenue over time when the Company’s performance on the contract creates an asset with \nno alternative use and when the Company has an enforceable right to payment for performance to date. The \nCompany measures progress on these contracts using the cost-to-cost input method, as the Company believes this \nrepresents the most appropriate measure towards satisfaction of its performance obligation. Under the cost-to-cost \ninput method, the Company records revenue based upon costs (such as materials and labor hours) incurred to date \nrelative to the total estimated cost at completion. \nThe Company’s contracts recognized over time using the cost-to-cost input method are complex and require the \nCompany to estimate the total costs to perform over the term of the contracts, as well as the measurement of \nprogress towards completion for each performance obligation. For Space contracts, developing the estimated total \ncost at completion for each performance obligation requires the use of significant management judgment, including \nassumptions regarding launch timing, labor hours, allocation of shared costs for launch vehicles that have been \nidentified as reusable for multiple launches, as well as expected technological changes to launch vehicles and \nspacecraft. For Connectivity contracts, developing the estimated total cost at completion for each performance \nobligation requires the use of significant management judgment, including assumptions regarding labor hours, \nallocation of shared costs used in the production of satellites, satellite material costs, as well as expected \ntechnological changes to satellites. Material changes in estimated contract revenue or costs at completion and the \nresulting changes in contract profit could have a material impact on the Company’s financial condition and operating \nresults. \nThe impact of net adjustments from contracts recognized over time using the cost-to-cost input method to our \nrevenue and operating income was not material for the years ended December 31, 2025, 2024, and 2023 and for the \nthree months ended March 31, 2026. If the combined gross margins for our contracts recognized over time using the \ncost-to-cost input method had been estimated to be higher or lower by 1% during 2025, it would have increased or \ndecreased operating income for the year by approximately $110 million.\nProperty, Plant, and Equipment, Net\nProperty, plant, and equipment, net is stated at cost less accumulated depreciation. The Company depreciates these \nassets primarily using the straight-line method over the estimated useful lives of the assets except flight vehicles and \nspacecraft, which are depreciated over the expected number of average flights for each flight vehicle and spacecraft. \nLeasehold improvements are depreciated over the shorter of their estimated useful lives or the related lease term.\n\n126\nTable of Contents\nDetermining the useful lives and the number of average flights a flight vehicle and spacecraft can fly require the \nCompany to estimate the period over which we expect to recover the economic value of our property, plant, and \nequipment. For each of our flight vehicle hardware and spacecraft, we consider recovery and refurbishment success \nrates, refurbishment economics, customer acceptance limits that may prohibit the use of vehicles that have been \nflown more than a certain number of launches, expected future launches included in the mission manifest, as well as \nany anticipated retirement timing of certain flight vehicle and spacecraft models such as Falcon as a result of \nanticipated transition to Starship to determine the expected number of average flights for each vehicle. \nFor our satellites assets, we consider factors such as on-orbit performance, orbit-raise timing, expected service \ncapability, and the evolution of constellation density and technology.\nWhen we determine that the useful lives or expected remaining flights of assets are shorter or longer than we had \noriginally estimated, we adjust the rate of depreciation to reflect the assets' revised useful lives or number of \nremaining flights. \nThe Company periodically evaluates impairment of its property, plant, and equipment assets whenever events or \ncircumstances indicate that the carrying value of an asset or asset group may not be recoverable. Factors we consider \nto identify indicators of potential impairment include significant changes or planned changes in our use of certain \nproperty, plant and equipment, technological developments that reduce the utility of the existing assets, declines in \nforecasted cash flows, and significant negative industry or economic trends. \nImpairment is assessed at the lowest level for which identifiable cash flows are largely independent of the cash flows \nof other assets and liabilities. If estimated future cash flows are less than the carrying value of the asset or asset \ngroup, an impairment charge is recognized to the extent its carrying value exceeds its estimated fair value to cost of \nrevenue or selling, general, and administrative expenses depending on the nature of the assets, or to impairment \ncharges if the impairment is considered to be outside the normal course of business. For the years ended December \n31, 2025, 2024, and 2023, and for the three months ended March 31, 2026, impairments on fixed assets were not \nmaterial. \nIf the average remaining flights for our flight vehicle and spacecraft had been estimated to be five more or fewer \nflights, the impact to our operating income for the year ended December 31, 2025 and three months ended March 31, \n2026 would not be material. If the average useful life of our satellite assets had been changed by one year, it would \nhave an approximately $480 million and $170 million impact on our operating income for the year ended December \n31, 2025 and three months ended March 31, 2026, respectively.\nLegal and Other Contingencies\nThe Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the \noutcomes of which are inherently uncertain. The Company records a liability when it is probable a loss has been \nincurred and the amount is reasonably estimable, the determination of which requires significant judgment. \nResolution of legal matters in a manner inconsistent with management’s expectations could have a material impact \non the Company’s financial condition and operating results.\nRecent Accounting Pronouncements\nRefer to Note 2, Summary of Significant Accounting Policies, to the audited consolidated financial statements \nincluded elsewhere in this prospectus.\nQuantitative and Qualitative Disclosures About Market Risk\nForeign Currency Risk\nOur Connectivity and AI businesses operate in many countries and transact in multiple currencies. In general, we are \na net receiver of currencies other than the U.S. dollar for our foreign subsidiaries. Accordingly, we are exposed to \nforeign currency risk both from fluctuations in exchange rates affecting foreign-currency denominated transactions \nand from the impact of translating the assets, liabilities, revenues, costs of revenue, and other operating expenses of \nour foreign subsidiaries into U.S. dollars. We have experienced, and will continue to experience, fluctuations in our\n\n127\nTable of Contents\nnet income as a result of gains (losses) on the settlement and the re-measurement of monetary assets and liabilities \nnot denominated in our functional currencies. We do not hedge foreign currency risk and changes in exchange rates \ncould have an adverse impact on our operating results and cash flows. \nWe considered the historical trends in foreign currency exchange rates and determined that it is reasonably possible \nthat adverse changes in foreign currency exchange rates of 10% for all currencies could be experienced in the near-\nterm. These changes were applied to our total monetary assets and liabilities denominated in our non-functional \ncurrencies at the balance sheet date to compute the impact these changes would have had on our income (loss) \nbefore income taxes. These changes would have resulted in an immaterial gain or loss as of March 31, 2026 and \nDecember 31, 2025, respectively.\nInterest Rate Risk\nOur exposure to changes in interest rates relates primarily to our investment portfolio, interest income on cash and \ncash equivalents and our credit facilities.  \nOur cash and cash equivalents consist of cash, time deposits, money market funds, U.S. government and agency \nsecurities. Our investment policy and strategy are focused on preservation of capital and supporting our liquidity \nrequirements. Changes in U.S. interest rates affect the interest earned on our cash and cash equivalents.  A \nhypothetical 100 basis point increase or decrease in market interest rates would have resulted in an immaterial \nincrease or decrease in interest income for the year ended December 31, 2025 and three months ended March 31, \n2026.  \nThe effective interest rate on outstanding borrowings under the SpaceX Bridge Loan was 4.58% as of March 31, \n2026. A hypothetical 100 basis point increase in U.S. interest rates would increase annual interest expense by \napproximately $200 million.\n\n130\nTable of Contents\nBUSINESS\n“You want to wake up in the morning and think the future is going to be great—and that’s what being a space-faring \ncivilization is all about. It’s about believing in the future and thinking that the future will be better than the past. And \nI can’t think of anything more exciting than going out there and being among the stars.”\n—Elon Musk\nOur Mission \nOur mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true \nnature of the universe, and to extend the light of consciousness to the stars. To do this, we have formed the most \nambitious, vertically integrated innovation engine on (and off) Earth with unmatched capabilities to rapidly \nmanufacture and launch space-based communications that connect the world, to harness the Sun to power a truth-\nseeking artificial intelligence that advances scientific discovery, and ultimately to build a base on the Moon and \ncities on other planets. \nOverview\nFounded in 2002, SpaceX is the only company building the integrated hardware and software infrastructure of the \nfuture across space, connectivity, and AI. At our core, we are builders. We design, manufacture, launch, and operate \nproducts and services built on cutting-edge technologies, including the world’s most advanced rockets and \nspacecraft. We safely and reliably transport astronauts, satellites, and other payloads on missions that benefit life on \nEarth. Since 2023, we have launched more than 80% of mass to orbit for the world each year with an over 99% \nmission success rate with Falcon rockets. We also operate a high-speed, low-latency global broadband data and \ncommunications network powered by approximately 9,600 Starlink broadband and mobile satellites in Low-Earth \nOrbit, delivering connectivity to millions of consumer, enterprise, and government customers across 164 countries, \nterritories, and other markets, as of March 31, 2026. Using our dedicated satellite-to-mobile constellation, we offer \nconnectivity services, supplementing terrestrial networks and substantially reducing mobile “dead zones” across \napproximately 30 countries. \nWith the potential to improve both space exploration and life on Earth, AI accelerates SpaceX’s mission to make life \nmultiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars. \nxAI, which was founded in 2023 and acquired by SpaceX in early 2026, is now an integral pillar of our vertically \nintegrated company. We are rapidly constructing AI compute infrastructure—starting on Earth with the goal of \nextending to space—at industry-leading pace and cost efficiency. Our infrastructure supports training and inference \nfor Grok, which has emerged as one of the world’s most advanced frontier models. Grok is designed as a truth-\nseeking AI model, built on our founder Elon Musk’s mission to enable humanity to understand the universe. We \nbelieve that accomplishing this mission requires a truth-seeking approach to AI. We define truth seeking as the \nactive, relentless pursuit of what is objectively true about reality, and grounded in evidence, logic, empirical data, \nand first principles thinking. Our goal is to understand and explain what the universe appears to be doing, as \naccurately as current knowledge allows. Within two years of its initial model release, Grok achieved frontier-level \nperformance in scientific reasoning, as measured by its GPQA Diamond score, an industry benchmark that evaluates \nAI models on a standardized set of questions written and validated by experts, on a faster timeline than reported by \nother leading model providers. Grok also benefits from integration with X, our real-time information, entertainment, \nand free speech platform, which serves as a foundational distribution and data engine for our AI ecosystem and \nfurther enhances Grok’s truth-seeking objective.\nWe believe that space represents the largest economic frontier in human history, unlocking unprecedented \nopportunities in orbit and on Earth. Earth has limits, so we must build infrastructure and industries in space, \nexpanding human capabilities to improve life on Earth and to establish life beyond. Connectivity infrastructure in \nspace is designed to help everyone on Earth have access to education, healthcare, entertainment, and \ncommunications, and to enable people to overcome many traditional limits, such as physical and political borders. \nWe believe AI infrastructure in space can utilize the virtually limitless power of the Sun and thereby enable the use \nof AI as a transformative force for understanding the universe and improving the daily lives of all humans. We \nbelieve the convergence of these areas will enable an unprecedented expansion in the global economy, leading to an\n\n131\nTable of Contents\nage of abundance. Our innovations and technological advancements are redefining industries on Earth, while we aim \nto create new ones on the Moon, Mars, and beyond. We are truly building the infrastructure of the future.\nSpaceX is the only company that has cracked the code on accessing space at scale, revolutionizing an industry \ncharacterized by decades of stagnation, risk aversion, and economically perverse cost structures. SpaceX upended \nthis paradigm through the application of first-principles thinking, which rejects industry assumptions and builds \nsolutions based on the fundamental laws of physics. Our intense, mission-driven, engineering-first culture and focus \non extreme vertical integration have propelled us to achieve what many deemed impossible. We have demonstrated \nthe ability to achieve groundbreaking technological innovations with speed, quality control, and precision. We \npioneered high-cadence, reliable, and affordable access to space with our Falcon family of rockets, with a goal to \ntransform the rocket launch industry into airline-like operations. In 2015, we established at least a 10-year lead over \nthe industry by successfully landing our first Falcon 9 booster back from space before anyone else. We have \ncontinued to invest significantly in further increasing our lead by pursuing full and rapid reusability at scale, \nincluding investing over $15 billion in our next-generation rocket, Starship.\nWe believe rocket launches and landings should be as routine and commonplace as airplanes taking off and landing. \nTo achieve this sort of cadence, our iterative approach emphasizes rapid designing, testing, and process \noptimization, putting flight hardware in the flight environment as often as possible. This allows us to accelerate our \nlearning by repeatedly using and improving our systems. This has resulted in a significantly higher flight rate at \ncosts that are much lower than launch programs that existed before SpaceX. For example, according to NASA, the \nfirst version of Falcon 9 in 2010 had a launch cost of approximately $2,700 per kilogram, which represented a \nreduction of approximately 85% compared to the historical average launch cost per kilogram of $18,500. The first \nversion of Falcon Heavy in 2018 further reduced this cost to approximately $1,400 per kilogram, a reduction of \napproximately 92% compared to the historical average cost. With the future deployment of Starship, which is \ndesigned to be the world’s first fully and rapidly reusable spacecraft, we aim to further reduce the cost to reach orbit \nby 99% or more relative to the historical average launch cost. Central to our cost advantage is the reusability of key \nhardware—most notably boosters—which we recover, refurbish, and refly many times instead of discarding after \nsingle use. This dramatically lowers per-launch costs by minimizing hardware replacement expenses and spreading \nfixed production costs across repeated uses. Space flight that historically cost billions per launch now costs in the \ntens of millions, fundamentally reducing the cost of space access, providing the opportunity to build new enterprises \nin space.\nSimilarly, xAI has cracked the code in the complexities of building and scaling AI compute infrastructure, becoming \nthe first company to deploy a coherent gigawatt-scale AI training cluster. We believe the combination of our \nproprietary AI infrastructure capability, our truth-seeking frontier model, Grok, and our access to real-time data on \nX creates a formidable competitive advantage, allowing us to maintain a leading position in the development of \nadvanced artificial intelligence. This advantage stems from our complete vertical integration and the common vision \ninfused by our founder, Elon Musk. In just a few years, we have demonstrated an ability to build coherent compute \nat scale and rapid speed with lower cost. COLOSSUS and COLOSSUS II collectively provide approximately 1.0 \ngigawatt of compute power, with additional power capacity available for data center operations. We believe speed is \na competitive advantage. In order to bring compute clusters online as fast as possible, we employ a vertically \nintegrated, nimble approach to construction. At COLOSSUS, we brought online the first cluster of approximately \n100,000 H100 processors, approximately 130 megawatts of compute power, in just 122 days, repurposing the shell \nof an existing factory. At COLOSSUS II, we brought online the first cluster of approximately 110,000 GB200 \nprocessors, approximately 210 megawatts of compute power, even faster in 91 days. As an illustrative comparison, \nan industry benchmark to bring online a 100 megawatt greenfield data center is approximately two years. \nFurthermore, in the case of COLOSSUS II, following the initial cluster, we brought online the second cluster of \n110,000 GB300 processors and 220 megawatts of compute power in 64 days, demonstrating our ability to rapidly \nscale our facilities once built. We expect that once fully operational, the next phase of expansion at COLOSSUS II \nwill bring online at least 220,000 additional GB300 processors and over 400 additional megawatts of compute \npower. We also demonstrated a significant improvement in cost efficiency, achieving data center construction costs \nfor COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis. \nWe are able to deploy power and compute significantly faster than other AI companies through first-principles \nthinking, behind-the-meter power generation, coupled with what we believe is the world’s largest network of\n\n132\nTable of Contents\nsustainable battery storage systems, and innovations in advanced liquid cooling, high-density rack layouts, and \nefficient networking. Our facilities also incorporate innovative design features that limit the effects on regional \nelectricity pricing for neighbors and include advanced water cleaning, reclamation, and recycling processes to \nsupport sustainable operations. We partner with utilities and communities to connect to and enhance the grid over \ntime, and do so while pledging to cover costs of all new power delivery infrastructure upgrades to service our data \ncenters, including adequate network upgrade costs, to ensure that these expenses are not passed on to the ordinary \nhousehold. Our ability to rapidly and cost-effectively scale with the latest processors keeps us ahead of competitors \nwho deploy traditional and more expensive methods. As a result, we believe COLOSSUS II became one of the \nworld’s first data centers to deploy GB200s and GB300s, the most advanced AI processors available at the time, at \nsignificant scale, and is currently powering training for our next frontier models, including Grok-5. Furthermore, \nthrough our Terafab initiative together with Tesla to build a manufacturing facility capable of producing 1 terawatt \nper year of compute hardware, we intend to further extend our vertical integration to chip design and manufacturing \nto alleviate potential future chip shortages at SpaceX, optimize compute performance, and potentially reduce overall \ncompute costs. Intel, which has the ability to design, fabricate, and package ultra-high-performance chips at scale, \nalso joined the Terafab project in early April 2026. Our shovels-to-tokens approach allows us to train and iterate our \nfrontier models at high velocity, accelerating development cycles, eliminating external bottlenecks, and driving \nrapid, continuous improvements in model performance.\nIn pursuing our mission, SpaceX has created new opportunities across our three foundational competitive \nadvantages, Space, Connectivity, and AI: \n•\nSpace. Launch is one of our foundational competitive advantages. We were the first private company to \ndevelop and launch a liquid-fuel rocket to reach orbit (2008), the first private company to successfully dock a \nprivate spacecraft with the International Space Station (2012), the first company to propulsively land (2015) and \nrefly an orbital-class rocket booster (2017), the first to begin deploying a large-scale LEO broadband satellite \nconstellation (2019), and the first private company to launch astronauts to orbit, allowing American astronauts \nto again fly to and from the International Space Station on an American launch vehicle (2020). As of March 31, \n2026, SpaceX had completed approximately 650 orbital space launches, and over 540 of those launches were \ncompleted by a flight-proven Falcon rocket, drastically reducing the cost of access to space. We are the only \nprivate company that is certified by NASA to send human missions to orbit. We are currently developing \nStarship, designed to be the world’s most powerful launch vehicle. Starship is designed to be a fully and rapidly \nreusable transportation system capable of carrying larger payloads farther and at lower marginal cost per launch \nthan our current Falcon rockets. Our unparalleled launch capabilities power every aspect of our business. \n•\nConnectivity. Since activating service for customers in 2020, Starlink has rapidly expanded global access to \nhigh-speed internet, prioritizing underserved rural and remote communities worldwide. While building \nterrestrial networks in such communities can be prohibitively expensive, Starlink is capable of delivering \nbroadband connectivity anywhere on Earth with just a Starlink Kit. As of March 31, 2026, we had \napproximately 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, operating the world’s most \nadvanced broadband constellation providing internet connectivity to approximately 10.3 million Starlink \nSubscribers across 164 countries, territories, and other markets. In January 2024, we also began deploying our \nStarlink Mobile constellation that utilizes separate Starlink satellites with satellite-to-mobile capabilities, \nsubstantially reducing mobile “dead zones” around the world. As of March 31, 2026, our dedicated satellite-to-\nmobile constellation of approximately 650 V1 Mobile satellites provides satellite-to-mobile data, over-the-top \nvoice, and messaging services to approximately 7.4 million monthly unique devices across approximately 30 \ncountries.\n•\nAI. We were the first company to deploy a coherent gigawatt-scale AI training cluster. We own and operate \nwhat we believe to be the largest AI training data center clusters on Earth, consisting of hundreds of thousands \nGPUs—all in the same spirit that enabled us to launch Grok faster than any other leading foundational AI model\n—while maintaining full vertical integration from on-site power generation and water reclamation to GPU \ndeployment. In under two years, we have established a dual advantage in both cost efficiency and deployment \nspeed at scale. By owning the compute infrastructure and vertically integrating across the full AI stack, we can \ntrain and iterate our frontier models at lower cost and higher velocity and accelerate development cycles. This \neliminates external bottlenecks and drives rapid, continuous improvements in model performance. The addition\n\n133\nTable of Contents\nof the Terafab initiative aims to further extend our control to the foundational processor layer. We believe that \nthe key constraints in the continued growth of AI are physical—chip manufacturing, data center infrastructure, \nand power generation; the future of AI will be determined by the control of the physical stack. We believe no \nother AI company has better control over the full physical stack than SpaceX. We believe this combination of \nour state-of-the-art AI compute infrastructure, our truth-seeking frontier model, and our access to real-time data \non X creates a significant strategic advantage. Our integrated AI platforms across Grok and X have over 1.3 \nbillion supported accounts active in the last twelve months ended March 31, 2026, including approximately 550 \nmillion MAUs, up from over 1.1 billion supported accounts and approximately 520 million MAUs as of \nDecember 31, 2025, and generating approximately 350 million daily posts. Of our MAUs, we had \napproximately 117 million MAUs that used Grok’s AI features as of March 31, 2026. Grok’s deep integration \nwith X enables freshness, relevance, and contextual awareness that we believe is a competitive differentiator. \nThis direct, real-time access to the information and human discourse on X enhances Grok’s truth-seeking \ncapabilities by grounding outputs in up-to-date knowledge and diverse viewpoints. As a result, we believe Grok \ncan deliver the most objective and relevant insights and best serve high-frequency, high-value use cases across \nconsumer and enterprise AI applications. \nFor complex reasoning and agentic workloads, compute is directly correlated with the quality of intelligence \nand task completion speed. Over the long-term, however, we expect Earth’s finite resources will not be able to \nsustain the immense computational demands of advanced AI models. Sustainably satisfying this compute \ndemand will require space-based infrastructure that utilizes the ultimate fusion energy source: the Sun. We \nbelieve we are the only company with a commercially viable path to building orbital AI compute at scale, due to \nour unique ability to launch substantial mass into orbit through reusable, cost-efficient rockets, to manufacture \nsecure, reliable, and high-performance satellites at low cost and high volume, and to manage large-scale \nconstellations. We expect that owning scalable, power-efficient infrastructure to train and operate frontier \nmodels will be the most important driver for AI differentiation as AI systems converge toward artificial general \nintelligence (“AGI”)—which has the potential to unlock large-scale productivity gains, scientific discovery, and \nsocietal abundance. \nWe have created distinct new markets across the space, connectivity, and AI industries by building the integrated \nhardware and software infrastructure of the future and by combining our broad range of capabilities. For example, \nSpaceX’s recent acquisition of xAI unites SpaceX’s launch capabilities and global connectivity network with xAI’s \nAI development capabilities. Specifically, we believe SpaceX’s reusable rockets, scaled satellite manufacturing, and \noperational expertise can enable the cost-effective and rapid deployment of massive AI compute satellite \nconstellations—with potentially millions of satellites—for orbital data centers. We believe these AI compute \nsatellites in Sun-synchronous orbit will be able to handle energy-intensive AI workloads, such as inference demand, \nat far greater scale and efficiency than terrestrial alternatives, with Starlink providing low-latency, global \nconnectivity linking these orbital AI systems to people around the world and delivering real-time intelligence. Our \ngoal is to leverage our launch leadership, global connectivity network, and AI expertise to allow us to continue \nbuilding the integrated infrastructure of the future on Earth, the Moon, Mars, and beyond to benefit humanity.\n\n135\nTable of Contents\nWe have an intense, mission-driven, engineering-first culture that seeks to achieve what many have deemed \nimpossible. “The Algorithm,” as it is known internally, is a five-step iterative process that emphasizes making the \nrequirements less dumb, deleting unnecessary processes or parts (embracing the principle that the best part is no \npart), only then optimizing the necessary processes or parts, accelerating cycle time, and automating only proven \nprocesses. We strive to make the incredible and extraordinary accessible and repeatable, and we have grown rapidly \nby continuously leveraging our core strengths, including: \n•\nGlobal leadership in orbital launch services;\n•\nUnrivaled satellite and connectivity platform across design, manufacturing, deployment, and operations; \n•\nTruth-seeking AI model enhanced by real-time data;\n•\nExtreme vertical integration enabling high velocity and superior cost efficiency at scale;\n•\nUnique ability to scale new trillion-dollar markets across Space, Connectivity, and AI;\n•\nBusiness models that are incredibly difficult to replicate; and \n•\nOur mission-driven culture and world-class talent.\nWe have a stellar track record of capital allocation and value creation in Space and Connectivity. Since SpaceX’s \nfounding in 2002, we have raised over $9 billion of equity capital to fund the development and growth of these two \nbusiness segments. The Space segment became Segment Adjusted EBITDA positive on a sustained basis beginning \nin 2018 and the Connectivity segment became in aggregate Segment Adjusted EBITDA positive on a sustained basis \nbeginning in 2023. In 2025, our Space segment generated a loss from operations of $(657) million and Segment \nAdjusted EBITDA of $653 million, including the impact of funding $3,004 million in research and development \nexpense for our next-generation Starship launch vehicle program. In 2025, our Connectivity segment generated \nincome from operations of $4,423 million and Segment Adjusted EBITDA of $7,168 million. \nOur financial results reflect the strength of our operating model and our ability to create and scale multiple new \nbusinesses:\n•\nFor the three months ended March 31, 2026, we generated revenue on a consolidated basis of $4,694 million, \nloss from operations of $(1,943) million and Adjusted EBITDA of $1,127 million. In 2025, we generated \nrevenue on a consolidated basis of $18,674 million, loss from operations of $(2,589) million and Adjusted \nEBITDA of $6,584 million. Our Space and Connectivity segments contributed the substantial majority of our \nconsolidated revenue in the three months ended March 31, 2026 and the year ended December 31, 2025, \ndemonstrating the benefits of their scale and operating leverage in our vertically integrated business model; \n•\nFor the three months ended March 31, 2026, our Space segment generated revenue of $619 million, loss from \noperations of $(662) million, and Segment Adjusted EBITDA of $(351) million. In 2025, our Space segment \ngenerated revenue of $4,086 million, loss from operations of $(657) million, and Segment Adjusted EBITDA of \n$653 million Additionally, our Space segment funded $930 million and $3,004 million in research and \ndevelopment expense during the three months ended March 31, 2026 and the year ended December 31, 2025, \nrespectively, for our next-generation Starship launch vehicle program. Starship is designed to enable a step-\nfunction change in our launch capability across reusability, payload capacity, and launch cadence, and is the key \nenabler of our long-term growth strategy by unlocking entirely new categories of missions;\n•\nFor the three months ended March 31, 2026, our Connectivity segment generated revenue of $3,257 million, \nincome from operations of $1,188 million, and Segment Adjusted EBITDA of $2,087 million. Our Connectivity \nsegment, primarily driven by Starlink, generated revenue of $11,387 million, income from operations of $4,423 \nmillion, and Segment Adjusted EBITDA of $7,168 million in 2025, representing year-over-year growth of \n49.8%, 120.4%, and 86.2%, respectively, benefiting from subscriber growth, increasing enterprise adoption, and \ncontinued improvement in network efficiency;\n\n136\nTable of Contents\n•\nIn our newly acquired AI segment, we plan to prioritize growth and investment to capture significant \nopportunities in AI applications and compute infrastructure. For the three months ended March 31, 2026, our AI \nsegment generated revenue of $818 million, loss from operations of $(2,469) million, and Segment Adjusted \nEBITDA of $(609) million. In 2025, our AI segment generated revenue of $3,201 million, loss from operations \nof $(6,355) million, and Segment Adjusted EBITDA of $(1,237) million, reflecting its earlier stage of \ndevelopment and continued investments to support long-term growth opportunities in AI; and\n•\nFor the three months ended March 31, 2026, capital expenditures for our Space segment was $1,052 million, for \nour Connectivity segment was $1,332 million and for our AI segment was $7,723 million. In 2025, capital \nexpenditures for our Space segment was $3,832 million, for our Connectivity segment was $4,178 million and \nfor our AI segment was $12,727 million.  \nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “Management’s Discussion \nand Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for additional \ninformation on our non-GAAP financial measures, including reconciliations of Segment Adjusted EBITDA to \nsegment income (loss) from operations, the most directly comparable GAAP measure.\nWhy This Matters Now\nFor the entirety of its existence, human civilization has lived on a single celestial body: Earth. The current paradigm, \nin which human civilization is confined to one planet, exposes humanity to existential threats that are unpredictable \nand uncontrollable on a planetary scale. These threats include naturally occurring catastrophic events—such as \nasteroid impacts, volcanic activity, or solar fluctuations—as well as man-made global conflicts. Geological and \nastronomical records indicate a non-zero probability of extinction-level events occurring over periods measurable in \nmillions of years. Reliance on a single planetary home constitutes a single point of failure and carries existential risk \nwith a probability of one that must be solved. By moving beyond the only home we have ever known, we ensure \nspecies-level redundancy and that the light of consciousness will not be tied to a single planet subject to the \ninevitable hazards of a harsh and vast universe. We do not want humans to have the same fate as dinosaurs. We want \nto give them a reason to look ahead with excitement, with the prospect that we are entering an age of abundance \nwith an endlessly prosperous and exciting future.\nArtist Visualization of Life on Mars\n\n137\nTable of Contents\nFor decades, a reality where humanity travels between the planets and the stars has felt tantalizingly close but still \nlocked in the pages and screens of science fiction. We are capable of better understanding the universe, exploring the \nuniverse, and ultimately making life multiplanetary across the universe. We are becoming a civilization with the \nability to reach beyond Earth’s cradle and begin to inhabit other worlds. While we remain dedicated to this \nfundamental mission, our progress in accessing space continues to yield opportunities that enrich life on Earth. \nWe believe our steps into the expanse will be accelerated by the rapid emergence of AI. As humanity moves into the \nunknown, we believe AI will be our greatest tool for innovation and navigation, helping us better understand day-to-\nday life and the universe, and master the complexity of establishing new civilizations in the far-flung reaches of \nspace. For AI to help us understand the universe, we believe it must be able to discard the often popular, but wrong, \nin favor of the unpopular, but true. By combining the innate human desire to seek truth and explore with our \nbreakthrough technologies, we believe humanity will eventually reach new frontiers across the universe, while \nenhancing the quality and resilience of life on Earth. \nThe rapid emergence of the AI era intensifies the urgency of our mission, as AI has the potential to accelerate not \nonly space exploration, but also transformative societal advancements on Earth. However, AI’s ability to \nrevolutionize human potential is directly dependent on meeting exponentially increasing resource demands. On \nEarth, the massive expansion of data center capacity to support growing compute demand is significantly outpacing \nelectricity generation, which was effectively flat in the United States for approximately 15 years, growing at a \ncompound annual growth rate of 0.1% from 2008 to 2023. Despite the recent increase in electricity demand from AI \ndata centers, electricity generation in the United States has grown at an annual rate of less than 3% between 2023 \nand 2025, while electricity generation in China has grown at approximately twice that rate in the same time period. \nU.S. compute demand has already outpaced available power supply with estimated demand of 62 gigawatts in 2025 \nexceeding the power generation of 49 gigawatts, according to industry sources. We expect the gap between demand \nfor compute and power supply to continue to widen meaningfully as AI compute needs proliferate. Such structural \npower shortages are expected to intensify over the coming years. This supply and demand imbalance is already \nimposing unsustainable strains on terrestrial power grids, supply chains, and the environment. The Sun contains \napproximately 99.8% of the solar system’s energy and, as a result, we believe it is the only truly scalable solution to \nterrestrial energy constraints in the age of AI. Harnessing this energy in space is considerably more efficient than on \nland. Space-based solar arrays can generate more than five times the energy per unit area of terrestrial solar due to \ncontinuous illumination, lack of atmospheric interference, and optimal orientation. SpaceX is well-positioned to \ncapture this space-based solar energy through our ability to rapidly access Sun-synchronous orbit through our \nsatellite manufacturing scale and launch capability. As a result, we are expanding our footprint and harnessing the \nvast resources of space that are essential to sustaining technological development. Our goal is to ensure that AI \nbecomes a force for human flourishing and a benefit to civilization, rather than a catalyst for terrestrial resource \ndepletion and instability. We believe owning scalable, power-efficient infrastructure to train and operate frontier \nmodels will be the most important competitive differentiator as AI systems converge toward AGI—which has the \npotential to unlock large-scale productivity gains, scientific discovery, and societal abundance.\nWe believe space represents the largest economic frontier in human history. Our unmatched launch cadence has \nmassively increased access to space, enabling rapid and reliable missions for humans, cargo, and satellites—creating \nunprecedented opportunities for innovation, scientific discovery, and global connectivity. SpaceX has always been a \nmission-driven company, founded with the goal of making humanity multiplanetary. By dramatically reducing the \ncost of access to space, we have been able to expand our mission to address some of the Earth’s most pressing \nchallenges, including bridging the digital divide by aiming to connect over three billion unconnected people to the \ninternet and humanity’s collective knowledge. Starlink is our groundbreaking solution for global internet \nconnectivity, delivering high-speed, low-latency access to the most remote and underserved corners of the world—\nfrom Antarctica’s frozen wilderness to vast oceans and towering mountaintops—overcoming barriers posed by \ntraditional terrestrial infrastructure. Starlink’s unparalleled global reach has the potential to enable society to educate \nbillions of people, to help lift entire communities out of poverty, and to provide essential connectivity to schools, \nhospitals, and critical services, fostering a more equitable and informed future for humanity. We support essential \napplications such as education in rural and underserved regions, telemedicine for hard-to-reach patients, seamless \nconnectivity for aviation and maritime users, and resilient communications during natural disasters. For example, \nduring the 2023 Maui wildfires, which devastated Lahaina and left thousands without power or cellular service,\n\n138\nTable of Contents\nStarlink rapidly deployed over 650 terminals to restore high-speed internet connectivity, enabling first responders, \nhumanitarian organizations, and survivors to coordinate relief efforts, access aid resources, communicate with \nfamily, and support recovery in areas where traditional infrastructure had completely failed. During Hurricanes \nHelene and Milton in 2024 in the southeastern United States, our Starlink terminals provided a rapid lifeline for \ncommunication and recovery when traditional cell towers, broadband lines, and power infrastructure were knocked \nout for days or weeks by widespread damage caused by flooding and high winds. \nOur AI technology also has the ability to elevate the quality of life for people and communities around the world. \nWe believe AI has the potential to revolutionize human potential—from advanced manufacturing and infrastructure \ndevelopment to scientific research and medicine—delivering tangible real-world benefits for individuals, \norganizations, and governments. For example, AI systems can expedite scientific discovery for researchers, aid \nhealthcare professionals in precise medical analysis and diagnosis, and empower educators to craft tailored learning \nexperiences for students. Moreover, these technologies can optimize Earth’s resource allocation, enhance disaster \nresponse strategies, and drive efficiencies in transportation and energy systems. \nWe believe that our current space efforts will catalyze transformative breakthroughs that could reshape terrestrial \nindustries and lead to the emergence of new trillion-dollar markets on the Moon, Mars, and beyond. In particular, we \nbelieve our goal of establishing a lunar presence will enable terawatt-scale annual AI compute growth, support \ndeeper space exploration and industrialization, and serve as a stepping stone to establishing a civilization on Mars. \nDue to technological advancements that we are working towards, such as in-space propellant transfer, we believe \nour Starship vehicle will be capable of landing massive amounts of cargo on the Moon. Once there, we believe it \nwill be possible to establish a permanent presence for scientific and manufacturing pursuits. For example, we believe \nthat factories on the Moon will be able to take advantage of lunar resources to manufacture millions of AI compute \nsatellites and deploy them farther into space. Our goal is to establish a sustainable lunar presence for scientific \nexploration, industrialization, and as a stepping stone to Mars, serving as a proving ground for habitats, resource \nutilization, and Starship systems essential for long-term human survival beyond Earth. \nWe believe the next paradigm shift for humanity is the creation of a resilient, perpetually expanding spacefaring \ncivilization that drives continuous innovation across new frontiers, ultimately propelling us to Kardashev Type II \nstatus—a civilization that harnesses the full energy output of our Sun. In the near term, we expect space-enabled \ntechnologies to enhance life on Earth through greater global connectivity and breakthroughs forged in the harsh \nenvironments of our solar system, leading to accelerating progress in energy and AI. As we build infrastructure in \nthe Earth’s orbit, and potentially on the Moon, Mars and beyond, we believe we are capable of unlocking an era of \nunprecedented economic expansion, while also contributing to the safeguards of humanity’s future against \nexistential risk. \nWho We Are\nOur mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true \nnature of the universe, and to extend the light of consciousness to the stars. To do this, we’ve formed the most \nambitious, vertically integrated innovation engine on (and off) Earth. We are combining the most transformative and \ncritical technologies in human history, including reusable rockets, a fully global internet service, satellite-to-mobile \ncommunications that enable connectivity everywhere, our real-time information, entertainment, and free speech \nplatform, and a truth-seeking AI system designed to accelerate scientific discovery and augment human capabilities. \nThese capabilities form a self-reinforcing ecosystem: launch systems deploy and maintain the satellite network, \nwhich delivers ubiquitous connectivity and vast data flows; the platform surfaces real-time information and supports \nopen discourse; and AI processes data at scale to drive breakthroughs in physics, materials science, and space \nexploration. Together, they create a foundation for the development of the infrastructure of the future and the \nultimate goal of establishing a self-sustaining human presence on other planets.\nSpaceX designs, manufactures, launches, and operates the world’s most advanced rockets and spacecraft. We safely \nand reliably transport astronauts, satellites, and other payloads on missions that benefit life on Earth. Since 2023, we \nhave launched more than 80% of mass to orbit for the world each year with an over 99% mission success rate. We \nbelieve our unparalleled launch capabilities represent the foundational competitive advantage that enables all other \nparts of our business. We operate a high-speed, low-latency broadband data and communications network powered\n\n139\nTable of Contents\nby approximately 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, delivering connectivity to \nmillions of consumer, enterprise, and government customers across 164 countries, territories, and other markets, as \nof March 31, 2026. We also built one of the world’s most advanced models in under two years and are rapidly \nscaling the associated AI compute infrastructure—starting on Earth with the goal of extending to space—at industry-\nleading pace and cost efficiency. We believe that space represents the largest economic frontier in human history \nand that AI is a transformative force for understanding the universe. Together, we believe that space and AI will \nenable an age of abundance that will lead to an unprecedented expansion in the global economy. We are the only \ncompany that has the foundational infrastructure across hardware and software necessary to drive transformative \ninnovation across space, connectivity, and AI. Our technological advancements are redefining industries on Earth, \nwhile aiming to create new ones on the Moon, Mars, and beyond. \nOur Unparalleled Launch Capabilities\nSince our founding in 2002, SpaceX has cracked the code on accessing space at scale, transforming an industry \ncharacterized by decades of stagnation, risk aversion, and economically perverse cost structures. We design, \nmanufacture, launch, and refurbish reusable launch vehicles that provide cost-efficient, reliable, and high-cadence \naccess to space for our own purposes as well as for third-party commercial and government customers. In 2025, we \nlaunched from four primary launch pads in the United States and successfully recovered boosters across seven \nlanding facilities including autonomous drone ships and catch towers based on the vehicle type and mission profile. \nOur extensive vertical integration and end-to-end control over the entire value chain, from design to launch to \noperations, allows us to achieve unprecedented speed and cost efficiency. \nAs of March 31, 2026, SpaceX had launched a total mass to orbit of approximately 7,400 metric tons with an over \n99% mission success rate across our Falcon rockets. We have completed approximately 650 orbital space launches, \nand over 540 of those launches were completed by a flight-proven Falcon rocket. In 2025 alone, SpaceX completed \n170 missions across Falcon and Starship vehicles and 159 flight-proven booster launches with an over 99% success \nrate on attempted booster recoveries. We launched over 2,200 metric tons, representing over 80% of mass to orbit \nfor the world in 2025. With the first successful launch of Falcon 1 in 2008, we became the first private company to \nsuccessfully launch a liquid-fueled rocket to Earth’s orbit. Just two years later, in 2010, the commercial debut of the \nFalcon 9 rocket revolutionized space access by delivering unprecedented cost efficiency. For example, according to \nNASA, the first version of Falcon 9 in 2010 reduced launch cost to approximately $2,700 per kilogram, which \nrepresented a reduction of approximately 85% compared to the historical average launch cost per kilogram of \n$18,500. The first version of Falcon Heavy in 2018 further reduced this cost to $1,400 per kilogram, a reduction of \napproximately 92% compared to the historical average. We have also reduced our internal cost of launch through a \ncombination of engineering improvements, manufacturing efficiencies, and economies of scale—most notably, \nthrough our ability to drive more frequent reuse of rockets.\nIn December 2015, we achieved what many deemed impossible: landing a rocket launched to space back on Earth. \nBy 2017, we were routinely recovering and reusing the Falcon 9 first-stage booster post-launch, delivering another \nstep-function drop in space access costs via groundbreaking reusability. As of March 31, 2026, our Falcon 9 rockets \nhave demonstrated the ability to refly a first-stage 34 times. Since 2020, our Dragon spacecraft has safely flown 78 \ncrewmembers from 20 countries. With the future deployment of Starship, which is designed to be the world’s first \nfully and rapidly reusable spacecraft, we aim to reduce the cost to reach orbit by 99% or more relative to the \nhistorical average launch cost, establishing the most affordable and scalable path to creating new opportunities in \nspace, such as orbital AI compute and Mars exploration.\n\n140\nTable of Contents\nBooster Reusability Enables Increasing Launch Rates\nOur principal launch vehicles and spacecraft include:\n•\nFalcon 9. As the world’s first orbital-class rapidly reusable rocket, Falcon 9 was first launched in 2010 and has \na payload capacity to LEO of approximately 23 metric tons when fully expendable. Falcon 9 has completed \napproximately 620 orbital space launches as of March 31, 2026, and an over 99% mission success rate, making \nit the most active orbital launch vehicle today. In 2025 alone, we launched 165 Falcon 9 rockets, of which 157 \nwere flight-proven booster launches, and during the three months ended March 31, 2026, we launched 40 \nFalcon rockets, of which 39 were flight-proven booster launches. \n•\nFalcon Heavy. Falcon Heavy first launched in 2018 when it put a Tesla Roadster and its mannequin passenger, \nknown as Starman, into orbit around the Sun. With a payload capacity to LEO of approximately 64 metric tons, \nFalcon Heavy is a partially reusable super heavy-lift launch vehicle designed to deliver large payloads to orbit. \nFalcon Heavy is one of the most powerful operational rockets in the world measured by liftoff thrust, with 11 \nlaunches as of March 31, 2026 and a 100% mission success rate. \n•\nDragon. Launched by Falcon 9 in 2012, our Dragon spacecraft became the first commercial spacecraft to \ndeliver cargo to and from the International Space Station and, eight years later, the first privately built vehicle to \nfly humans to the orbiting laboratory. Since its first flight, Dragon has visited the International Space Station \nover 50 times, and restored America’s ability to launch astronauts. Dragon has also supported all of NASA’s \nprivate astronaut missions to the International Space Station, flown the first all-commercial astronaut crew, \ncompleted the first human spaceflight over the Earth’s polar regions, and supported the first-ever commercial \nspacewalk. \n•\nStarship. First launched in 2023, Starship is designed to be a fully reusable, super heavy-lift launch vehicle. \nStarship V3 is designed to deliver 100 metric tons to Earth’s orbit in a fully reusable configuration while \nenabling rapid turnaround times akin to commercial aviation. Future generations of Starship are being designed \nto double this payload capacity. To date, we have executed 11 Starship flight tests. We have also scheduled a \n12th flight test, which will debut the next generation Starship vehicle and Super Heavy booster, powered by the \nnext evolution of our Raptor engine and launching from a newly designed pad at Starbase. We expect Starship \nto commence payload delivery to orbit in the second half of 2026. We have achieved innovative milestones\n\n141\nTable of Contents\nsuch as catching a booster using “chopstick” arms on the same tower it launched from. We expect this \ncapability will facilitate rapid refurbishment and reuse, allowing for multiple launches per day at reduced costs. \nUpon achieving rocket reusability, we recognized the immense potential of our launch business to enable new \nrevenue streams, as our launch capacity would eventually outstrip demand from traditional space customers alone. \nThis realization, along with our efforts to make life multiplanetary, drove us to reimagine what was possible when \naccess to space became more affordable. Rather than asking what was being done in space, we asked what large-\nscale global need could be better served from space. This led to the development of Starlink, our global satellite \ninternet constellation, consisting of thousands of LEO satellites designed to provide high-speed, low-latency \nbroadband connectivity to underserved areas worldwide. Although the concept of using satellites for global internet \nconnectivity dates back decades, technical challenges and the prohibitive cost of accessing space historically \nrendered attempts to provide such connectivity economically unviable. Within three years of our first satellite launch \nin 2019, we solved the technical and production challenges of the satellites, and within five years, we had deployed \nthe largest LEO constellation in existence. Today, Starlink is the sole low-latency network available globally.\nAs the leader in space access, our launch operations are an important and expanding competitive advantage. By \ncombining increasing launch cadence, expanding cargo capacity, and declining unit costs—driven by rapid \nreusability—we have generated a compounding competitive advantage. This not only fortifies our core business, but \nalso provides vast new market opportunities uniquely enabled by space. \nOur Leading Capabilities Across Space, Connectivity, and AI\nSpace. While our launch capabilities support our other businesses, such as Starlink Consumer Broadband and \nStarlink Mobile, we also sell launches to third-party customers. We offer launch services to commercial, civil, and \ngovernment customers through our reusable Falcon 9 and Falcon Heavy rockets for satellite, cargo, and crew \nmissions. We fly to LEO, MEO, GEO, lunar, and interplanetary trajectories, as well as the International Space \nStation. We are the primary launch provider for the U.S. government. In 2025, we launched 11 of 12 National \nSecurity Space Launch (“NSSL”) medium and heavy lift missions and all five U.S. crew and cargo missions to the \nInternational Space Station for NASA. We serve commercial and government customers—including NASA, the \nNational Reconnaissance Office (“NRO”), Axiom Space, SES, Eutelsat, and Oneweb. We charge our customers \nbased on the type of rocket, mass to orbit, size of payload, and type of service, such as whether the launch is \ndedicated to a single customer or part of a “rideshare” with other customers. \nStarship is our next-generation reusable rocket vehicle that we expect will expand our launch capability dramatically \nthrough full and rapid reusability combined with currently unprecedented mass to orbit capability. As the most \npowerful launch system ever developed, we expect that Starship V3 will be able to carry a payload of 100 metric \ntons, and that future generations could reach 200 metric tons, potentially as soon as Starship V4. Starship is designed \nto deliver our next-generation satellites to orbit, long-haul point-to-point transportation on Earth, the cargo and crew \nnecessary to develop a base on the Moon and a city on Mars for research and human spaceflight development.\nConnectivity. Starlink provides global access to high-speed internet, including underserved rural and remote \ncommunities worldwide. As of March 31, 2026, we had approximately 9,600 Starlink broadband and mobile \nsatellites in Low-Earth Orbit, providing broadband connectivity to approximately 10.3 million Starlink Subscribers \nacross 164 countries, territories, and other markets. We also provide satellite-to-mobile texting and over-the-top \nvoice services to approximately 7.4 million monthly unique devices across approximately 30 countries. \n•\nStarlink Consumer Broadband. We operate the world’s largest and most advanced space-based internet \nbroadband service with median latency at approximately 25 milliseconds as of March 31, 2026. We provide \nfiber-like download speeds—at a median of 225 Mbps during peak hours for residential users as of March 31, \n2026—and the technological capability to provide service everywhere on Earth, including the poles. This \nservice quality is enabled by our vast network of approximately 9,600 Starlink broadband and mobile satellites \nin Low-Earth Orbit, which accounted for approximately 75% of all active maneuverable satellites in orbit as of \nMarch 31, 2026. We expect to commence deploying our next-generation V3 satellites, designed to offer one \nTbps of downlink capacity per satellite, using Starship in the second half of 2026. We expect that a single \nStarship launch will be capable of deploying up to 60 V3 satellites to LEO, representing a potential twenty-fold\n\n142\nTable of Contents\nincrease in Starlink downlink capacity deployed relative to a Falcon 9 launch. As of March 31, 2026, we had \napproximately 10.3 million Starlink Subscribers, up approximately 105% from 5.0 million subscribers a year \nprior. We charge our Starlink Subscribers a monthly subscription fee, which varies based on geographic market \nand download speed, plus typically a one-time upfront terminal cost. \n•\nEnterprise Solutions. SpaceX is a critical partner to a wide array of enterprises. We offer Starlink’s high-\nspeed, low-latency, reliable internet services to enterprise customers across industries including construction, \nagriculture, retail, telecom, hospitality, aviation, maritime, and land mobility. Starlink’s unique capabilities are \nwell‑suited for deployments across field offices, remote worksites, research stations, drilling rigs, rural \nhospitals, aircraft, cruise ships, trains, and hotels. Our enterprise customers include companies such as United \nAirlines, Carnival, Maersk, and John Deere, among others. We also serve a broad fixed‑site customer base \nacross industries such as retail and financial services that require high availability for critical operations as well \nas reliable connectivity in remote or hard-to-serve locations. As companies continue to invest in secure and \nresilient networks and backup systems to keep critical infrastructure online—such as point‑of‑sale and payment \nprocessing systems—we often start as a backup solution and then transition to being the primary solution. Our \nenterprise contracts are based on a combination of subscriptions, data consumption, capacity, or other pricing \nmodels depending on each customer’s particular needs. Since 2023, no Starlink Enterprise customer having \ncontributed more than $750,000 of annual revenue has voluntarily discontinued their service, demonstrating the \nstrong performance and value of our offering. This is despite the ability of our customers to cancel the service at \nany time.\n•\nGovernment Solutions. For our government customers, we provide high-speed, resilient connectivity for \npublic services, social impact, humanitarian efforts, and disaster response in even the most remote and \nchallenging environments. Examples include support for the FEMA in coordinating disaster recovery after \nhurricanes and wildfires, the NOAA for at-sea testing and environmental monitoring, the Government of the \nPhilippines for linking remote islands, schools, and public institutions, the Government of Jamaica for \nimproving digital access in remote and maritime areas, and the Government of Ecuador for supporting \neducation and healthcare connectivity in isolated communities. Separately with Starshield, we have leveraged \nour commercial LEO satellite constellation engineering learnings and operational experiences to develop a \nsecure, dedicated satellite network designed specifically for United States Government customers and national \nsecurity applications.\n•\nStarlink Mobile. We provide satellite-to-mobile connectivity, supplementing terrestrial networks and \nsubstantially reducing mobile “dead zones” across approximately 30 countries. We partner with MNOs \nincluding major wireless carriers like T-Mobile in the United States, and other international operators including \nOne NZ, Optus, Telstra, Rogers, KDDI, Salt, Entel, Kyivstar, and VMO2. Through these partnerships, we \nenable consumers, businesses, and public-sector customers to use their existing phones in more places, support \ncritical connectivity during disasters and power outages, and open new applications for low-bandwidth mobile \nand IoT devices. Our current capabilities under our “V1” constellation (consisting of approximately 650 V1 \nMobile satellites in orbit) include light data, text messaging (SMS), and over-the-top voice services (e.g., \nWhatsApp and FaceTime). We are developing more comprehensive satellite-to-mobile services, including \nbroadband data and IoT connectivity, which are expected to deliver resilient, infrastructure-independent \nconnectivity worldwide and enable 5G connectivity. We have partnerships with approximately 30 MNOs on six \ncontinents, covering an area that is home to approximately 1.9 billion people. We charge MNOs either a fixed \nfee or a per-mobile user fee-based amount, which is typically passed through to the customer via the carrier as \nan “add-on” feature.\n\n143\nTable of Contents\nOur Global Starlink Subscriber Base\nAI. We operate a highly vertically integrated AI platform spanning gigawatt-scale AI compute infrastructure, our \ntruth-seeking frontier AI model, Grok, AI solutions for consumer and enterprise customers, and X, our real-time \ninformation, entertainment, and free speech platform. We believe AI is rapidly converging toward AGI, where \nhuman cognitive capabilities can be replicated and scaled at machine speeds, profoundly augmenting human \nproductivity. Once an AGI system exists, its true value derives from the ability to create limitless duplicates of \nhuman-like intelligence, necessitating vast computational resources and cost-efficient deployment to achieve \nmeaningful scale. Without large-scale, power-efficient infrastructure, AGI cannot be deployed broadly or \neconomically—making such infrastructure a critical strategic differentiator. \n•\nAI Compute Infrastructure. xAI has established a leading position in building and scaling terrestrial AI \ncompute infrastructure, becoming the first company to deploy a coherent gigawatt-scale AI training cluster. Our \nAI compute facilities, COLOSSUS and COLOSSUS II, collectively provide approximately 1.0 gigawatt of \ncompute power, with additional power capacity available for data center operations. Our first-principles \nthinking enables us to build coherent compute at scale and at rapid speed with lower costs than most other \ncompanies in the industry. We brought the first cluster of COLOSSUS online in 122 days, repurposing the shell \nof an existing factory, and the first cluster of COLOSSUS II online even faster in 91 days. As an illustrative \ncomparison, an industry benchmark to bring online a 100 megawatt greenfield data center is approximately two \nyears. We also demonstrated a significant improvement in cost efficiency, achieving data center construction \ncosts for COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis. This \ndual speed and cost advantage stems from our complete vertical integration and the shared culture infused by \nour founder, Mr. Musk, across our Space, Connectivity, and AI segments. The addition of Terafab, an initiative \ntogether with Tesla to build a manufacturing facility capable of producing 1 terawatt per year of compute \nhardware, aims to further extend our vertical integration to chip design and manufacturing to alleviate potential \nfuture chip shortages at SpaceX, optimize compute performance, and potentially reduce overall compute costs. \nIntel, which has the ability to design, fabricate, and package ultra-high-performance chips at scale, has also \njoined the Terafab project. We believe that the key constraints in the continued growth of AI are physical—chip \nmanufacturing, data center infrastructure, and power generation; the future of AI will be determined by the \ncontrol of the physical stack.\n\n144\nTable of Contents\n•\nTruth-Seeking Frontier Model. xAI has developed one of the world’s most advanced, truth-seeking frontier \nmodels with Grok. Since launching Grok-1 in November 2023, we have released four major versions and \nnotable variations thereof, achieving one of the fastest iteration cycles in the industry, culminating in Grok-4.3 \n(April 2026). Building on this trajectory, we expect to continue scaling Grok through subsequent generations. \nOngoing training of next‑generation models is expected to scale toward multiple trillions of parameters, which \ncould represent a step change in reasoning in depth and overall intelligence. In this context, the number of \nparameters refers to the scale of the model, where parameters are the internal numerical values, such as \n“weights,” that are adjusted during training to enable the model to recognize patterns and relationships in data. \nA larger number of parameters generally allows the model to capture more complex relationships, store greater \namounts of knowledge, and achieve higher levels of reasoning capability. Within two years of its initial model \nrelease, Grok achieved frontier-level performance in scientific reasoning, as measured by its GPQA Diamond \nscore, an industry benchmark that evaluates AI models on a standardized set of questions written and validated \nby experts, on a faster timeline than reported by other leading model providers. This accelerated rate of \ninnovation stems from our highly vertically integrated stack: full ownership of training infrastructure, access to \nthe world’s most powerful compute clusters, and relentless focus on truth seeking and real-world utility. A key \ncompetitive differentiator is Grok’s deep integration with X, enabling proprietary access to a real-time \ninformation stream of approximately 350 million daily posts, which enhances freshness, relevance, and \ncontextual awareness for Grok. This direct, real-time access to the information and human discourse on X \nenhances Grok’s truth-seeking capabilities by grounding outputs in up-to-date knowledge and diverse \nviewpoints. We believe that this combination of compute infrastructure scale and the massive dataset available \nto us through X, subject to some limitations for certain content, has allowed us to achieve industry-leading \nperformance and provide model outputs that analyze real-time information on global events. We expect that our \ncompute infrastructure and direct access to real-time data via X constitute substantial performance advantages \nfor Grok that will result in increasingly rapid and dramatic iteration cycles.\n•\nConsumer and Enterprise Applications. We leverage our leading frontier models and compute infrastructure \nto deliver consumer and enterprise applications. In under six months, we developed Grok Voice, a real-time \nspeech engine, including in multilingual performance. Our image and video generation system, Imagine, \nproduced approximately 10 billion images and over 2 billion videos per month, on average, for the quarter \nending March 31, 2026. Together with Tesla, we are also developing Macrohard, an agentic AI platform \ndesigned to be capable of fully emulating digital workflows and augmenting human operation of computers—\nfrom coding and product development to management and entire business processes—using sophisticated \nautonomous agents. We believe Macrohard will have the potential to fundamentally transform how companies \nare structured and operate, thereby allowing dramatic increases in human productivity. In addition, we believe \nour existing government relationships and track record as large government contractors are a structural \nadvantage as governments become significant consumers of AI applications. \nOur integrated AI platforms across Grok and X have over 1.3 billion supported accounts active in the last \ntwelve months ended March 31, 2026, including approximately 550 million MAUs, up from over 1.1 billion \nsupported accounts and approximately 520 million MAUs as of December 31, 2025. Of our MAUs, we had \napproximately 117 million MAUs that used Grok’s AI features as of March 31, 2026.  \nWe also monetize user activity through high-impact advertising inventory on X. We believe X’s scale, real-time \nengagement, and integration with Grok provide a differentiated foundation for building a unified user \nexperience across communication, content discovery, commerce, and financial services, among others. For \nenterprises that advertise on X, we offer large-scale user engagement, real-time content, and advanced AI-\ndriven performance marketing tools. For enterprises, we offer tailored deployments of Grok customized to \nspecific workflows and security needs through Grok Business and Grok Enterprise, sold on license-, \nconsumption-, or outcome-based pricing models. \nCollaboration with Tesla\nSpaceX and Tesla developed the early foundation of a strong and constructive partnership through a series of limited \nbut successful commercial engagements. Our relationship with Tesla evolved meaningfully following Tesla’s \nJanuary 2026 commitment to invest in xAI—an investment that, upon SpaceX’s acquisition of xAI, was converted\n\n145\nTable of Contents\ninto an equity interest in SpaceX. Tesla and xAI continue to build upon their longstanding collaborative relationship \nby evaluating future strategic opportunities between the companies.\nOne expected area of collaboration is an AI project called Macrohard. We expect Macrohard to benefit from running \non both state-of-the-art processors and cost efficient, next-generation Tesla processors, a critical advantage of our \nvertical integration.\nAnother expected area of collaboration is Terafab, an announced AI chip manufacturing initiative designed to \nvertically integrate the design, fabrication, and deployment of advanced logic and memory chips. We believe this \ninitiative will alleviate potential future chip shortages at SpaceX and optimize compute performance.  We expect \nTerafab to be the world’s largest chip manufacturing facility. Our strategy for Terafab is to vertically integrate \nacross the design of lithography masks, fabrication of logic and memory chips, and design of advanced packaging in \na single closed-loop plant. Conducting all these activities end-to-end in a single facility enables rapid testing and \niterations, allowing us to improve chip design and scale manufacturing faster. We expect that our speed and cost \nadvantage from vertical integration will allow us to scale efficiently in AI chip manufacturing towards our long-term \ngoal of producing one terawatt of compute each year. We are partnering to build Terafab in order to support growth \nin two kinds of chips— one type optimized for terrestrial edge and inference to be used primarily in Tesla’s Optimus \nrobots and vehicles, and another type optimized for the space environment to be used in our orbital compute \ninfrastructure. While Terafab is intended to expand our internal chip manufacturing capabilities, we expect to \ncontinue sourcing a significant portion of our compute hardware from third-party suppliers. We view Terafab as \ncomplementary to these relationships, enabling us to augment our access to compute hardware at massive scale and \nfurther complete our highly vertically integrated compute platform by extending our control to the foundational chip \nlayer. We believe that the key constraints in the continued growth of AI are physical—chip manufacturing, data \ncenter infrastructure, and power generation; the future of AI will be determined by the control of the physical stack. \nWe believe that we are better positioned than other AI companies given our unique control over the full physical \nstack. We plan to explore other areas of strategic collaboration with Tesla in the future.\nCollaboration with Cursor\nOn April 19, 2026, we entered into a compute agreement with Cursor. Cursor develops and operates an AI-native \nintegrated development environment that enables professional software developers and engineering teams to write, \nedit, review, and refactor code using LLM-powered agents and workflows integrated via its proprietary model \nharness. In 2025, Cursor launched Composer, its own LLM trained for software development. It recently released \nComposer 2, which offers improvements in coding performance at lower cost. We believe the compute agreement \nand any acquisition of Cursor (described below), if completed, will extend our strategy to vertically integrate \ncompute infrastructure, models, and applications, can help accelerate our development of AI-native software tools, \nand combined with our significant compute capacity, will help strengthen our position in AI-assisted developer \nproductivity. We expect to accelerate the development of our existing AI models, including Grok, through our \ncollaboration with Cursor.\nUnder the compute agreement, we will provide Cursor with certain GPU cluster compute capacity for use in \nconnection with specified development, training, improvement and other activities related to AI models and other \ntechnology and intellectual property. In exchange, Cursor will contribute certain personnel, data and datasets, \ndocumentation, technical know-how, workflows, prompts, specifications and software code. We will collaborate \nwith Cursor to improve our existing models, including Grok, and potentially to jointly develop AI models and \nrelated model-specific deliverables. Each party retains ownership of its pre-existing and independently developed \nintellectual property (including, in the case of SpaceX, Grok) and related improvements and derivatives, including \nwhere they are utilized in connection with joint development activities. Any jointly developed models will be jointly \nowned, and each party will have a broad right to use, reproduce, modify, distribute, license, commercialize and \notherwise exploit them without an obligation to account to the other party.\nWe also entered into an option agreement pursuant to which we have the right, but not the obligation, to acquire \nCursor. The option agreement generally provides that we may exercise the call option at any time during the 30-day \nperiod following the earlier of (i) seven trading days following the completion of this offering and (ii) September 30,\n\n146\nTable of Contents\n2026. Exercise of the call option is in our sole discretion and subject to further approval by our board of directors. \nCursor is also subject to certain exclusivity obligations under the option agreement.\nIf we exercise the call option, we would simultaneously execute a merger agreement with Cursor, pursuant to which, \nfollowing satisfaction of the closing conditions set forth in the merger agreement, including receipt of requisite \nregulatory approvals, Cursor would become our subsidiary, and, as a result, we would acquire all of Cursor’s cash, \nintellectual property, personnel, customer contracts and other assets. As of January 31, 2026 (Cursor’s fiscal year-\nend), Cursor had $3.1 billion of total assets, primarily comprising $2.7 billion of cash and cash equivalents, and \n$0.55 billion of total liabilities. The purchase price would primarily be allocated to goodwill on our balance sheet. \nCursor has historically earned some revenue by providing services to customers and, if we acquired Cursor, we may \nprovide these or similar services to customers after the acquisition although at revenue levels that may vary \nsignificantly from historical performance. If we exercise the call option to acquire Cursor, we would expect to retain \ncertain Cursor talent by committing to provide continuing employees with competitive compensation and retention-\nfocused incentives designed to support the long-term value of SpaceX. \nThe consideration for the acquisition of Cursor, if any, after the closing of this offering would consist of shares of \nour Class A common stock based on an implied equity value of Cursor of $60.0 billion, and the price of our Class A \ncommon stock that equals the volume-weighted average closing price thereof over the seven consecutive trading \ndays immediately preceding the closing of the acquisition. If either (i) we decide to terminate the option agreement \nor (ii) Cursor is eligible to and decides to terminate due to our material breach of the option agreement (subject to \nnotice and cure provisions), Cursor is entitled to a $1.5 billion termination fee under the option agreement and an \n$8.5 billion deferred services fee under the compute agreement. These fees are payable in cash (or Class A common \nstock, if this offering has not been consummated at the time the fees become payable). \nAny shares of our Class A common stock issuable pursuant to the merger agreement would be issued in reliance \nupon the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof. As \na result, any such shares of Class A common stock would be deemed “restricted securities” as such term is defined \nunder Rule 144 under the Securities Act. Such shares of Class A common stock would be eligible for resale only if \nregistered under the Securities Act or if such resales qualify for an exemption from registration. \nWe have conducted preliminary due diligence on Cursor’s business, technology and operations, and expect to \ncontinue such diligence in connection with any decision to exercise the call option. We cannot predict whether we \nwill elect to exercise the call option or, if exercised, whether the acquisition will close on the anticipated terms, or at \nall.\nCompute Services Agreements with Third Parties\nWe believe our compute infrastructure and related strategy provides us with substantial flexibility in how we \nallocate and monetize capacity. We have the ability to use compute resources to support our proprietary AI \napplications (such as Grok 5, which is currently being trained at COLOSSUS II), while also providing access to \nselect compute capacity to third-party customers. For example, in May 2026, we entered into Cloud Services \nAgreements with Anthropic, an AI research and development public benefit corporation, with respect to access to \ncompute capacity across COLOSSUS and COLOSSUS II. Pursuant to these agreements, the customer has agreed to \npay us $1.25 billion per month through May 2029, with capacity ramping in May and June 2026 at a reduced fee. \nThe agreements may be terminated by either party upon 90 days’ notice. The customer will retain ownership and \nintellectual property rights in its content, AI models, and related data. This structure allows us to monetize unused \ncompute capacity in our infrastructure, while still permitting reallocation of the capacity for our own internal \ninitiatives if needed in the future. We have sufficient capacity to provide compute for our own AI models, including \nsupport of our training and inference demands, and to satisfy the obligations under these agreements. We expect to \nenter into additional similar services contracts for compute capacity with third parties. To the extent we become \ncompute constrained due internal and external utilization, we would need to expand our compute infrastructure. We \nbelieve this opportunity highlights the increasing importance of large-scale, frontier-level AI infrastructure and \npositions us as a differentiated provider of high-performance compute capacity to both internal and third-party AI \nworkloads. We believe our dual monetization strategy provides multiple pathways to generate returns on invested \ncapital.\n\n147\nTable of Contents\nOur Repeatable Business Model\nOur business model is built on a repeatable, engineering-driven framework that combines our unparalleled launch \ncapabilities, extreme vertical integration, rapid iteration, and disciplined capital investment to create durable, large-\nscale businesses. We execute this framework through the following core principles:\n1.\nLeverage our unparalleled launch capabilities to enable massive scale. Our rockets—with unmatched \nlaunch cadence, best-in-class reliability, and dramatically reduced cost-to-orbit—are the foundation that we \nexpect will enable us to create economic opportunities in space and deliver a diversified portfolio of services. \nOur launch capabilities enable large-scale deployment of assets that would not otherwise be economically \nviable. \n2.\nIdentify and create new trillion-dollar market opportunities. We focus on market opportunities that are \nuseful for humanity and that present trillion-dollar opportunities, including global broadband and mobile \nconnectivity for consumers, enterprises, and governments; and AI applications and computational infrastructure. \nWe prioritize opportunities where structural inefficiencies or legacy technological limitations have constrained \nsupply. \n3.\nDesign a solution with world-class engineering and first-principles thinking. We apply physics-based \nengineering and first-principles thinking to design products and systems from the ground up—boiling things \ndown to the most fundamental truths and reasoning up from there. This helps us drive massive, step-function \nimprovements in performance, scalability, and cost. \n4.\nApply “The Algorithm” (make less dumb, delete, optimize, accelerate, automate). We operate under a set \nof core execution principles that we refer to as “The Algorithm,” a five-step iterative process that we use as our \nguiding principles day-to-day. We make the requirements less dumb, delete unnecessary processes or parts \n(embracing the principle that the best part is no part), only then optimize the necessary processes or parts, and \nthen accelerate cycle time (many entities have launched once; no one other than us has ever launched over 100 \ntimes per year), and automate only proven processes after the first four steps are completed. We apply the \nAlgorithm across every aspect of our organization, creating a cultural and operational standard of excellence \nthat has defined SpaceX since inception.\n5.\nVertically integrate all the way to the end customer. We design and manufacture a significant portion of our \ncomponents in-house, including engines, avionics, structures, and software, even producing the “tools that make \nthe tools,” enabling us to test, fail, and iterate rapidly. We can then release newer, more advanced hardware with \nspeed and cost efficiency. \n6.\nContinuously drive cost down and throughput up. Through rocket reusability, manufacturing at scale, \nadvanced automation, and rigorous operational discipline, we continuously reduce unit costs while increasing \nlaunch cadence, satellite network, and AI hosting capacity. \n7.\nGenerate significant cash flow and reinvest in the future. As our businesses scale, they generate significant \ncash flow, which we reinvest into nascent market opportunities—driving a self-reinforcing cycle of constant \ninnovation and potentially creating significant additional value. \nStarship is a powerful example of this business model in action. Upon achieving a fully and rapidly reusable design, \nwe believe Starship will support a step-function increase in launch capacity and be capable of landing massive \namounts of cargo on the Moon. Once there, we believe it will be possible to establish a permanent presence for \nscientific and manufacturing pursuits. For example, we believe that factories on the Moon could take advantage of \nlunar resources to manufacture millions of AI compute satellites and deploy them farther into space. Additionally, \nwe are collaborating with NASA under the Artemis program to land humans on the Moon, with the goal of using \nStarship for transportation, which will be the first such mission since 1972.\nWe will continue leveraging our expanding launch capabilities, combined with our engineering and manufacturing \nexpertise, to create and scale new markets in space for the benefit of humanity—on Earth, the Moon, Mars, and \nbeyond.\n\n148\nTable of Contents\nOur Engineering-First Culture\nWe are able to achieve transformative technological breakthroughs because we accept only the laws of physics as \nthe limiting factors to our work and mission. Our core approach is deeply rooted in first-principles thinking, which \nrejects any preconceived notions or experience-based norms. Our unparalleled track record demonstrates our \ncapacity to execute space missions and achieve technological breakthroughs with speed and precision that others \nhave not achieved. We have a track record of achieving what many have deemed impossible. Some of our industry-\ndefining achievements and historic milestones include: \n•\nThe first private company to develop and launch a liquid-fuel rocket to reach orbit (2008);\n•\nThe first private company to successfully dock a private spacecraft with the International Space Station (2012);\n•\nThe first to successfully propulsively land (2015) and refly orbital-class rocket boosters (2017);\n•\nThe first to begin deploying a large-scale LEO broadband satellite constellation (2019);\n•\nThe first private company to transport astronauts to orbit, returning America’s ability to fly astronauts to and \nfrom the International Space Station (2020);\n•\nThe first to manufacture consumer-grade phased-array user terminals at scale (2022); \n•\nThe first to deploy a large-scale LEO satellite-to-mobile constellation (2025);\n•\nThe first to build a gigawatt-scale AI training cluster and largest coherent supercomputer (2026);\n•\nThe first gigawatt-scale Megapack battery installation (2026); and\n•\nThe only company capable of building orbital AI compute at scale.\nOur organizational philosophy fosters an engineering- and data-led culture that embraces failure as an essential \nlearning opportunity and is maniacally focused on efficiency and speed. This culture allows us to deliberately move \nquickly to test new hardware, knowing that early failures provide more valuable data than protracted analysis. We \nview our factories as the machines that build the machines and maintain a relentless focus on our ability to move, \nfail, and fix fast.\nOur AI Compute Infrastructure Advantage and Growth Strategy\nWe believe AI leadership will be defined by the ability to rapidly scale compute capacity to support exponential \nusage growth and frontier intelligence. There is a meaningful compounding benefit of greater usage, creating more \ndata for training, driving improvements in model performance, and in turn leading to greater usage. We believe that \nour highly vertically integrated, shovels-to-tokens approach allows us to train and iterate our frontier models at \nlower cost and higher velocity, accelerating development cycles, eliminating external bottlenecks, and driving rapid, \ncontinuous improvements in model performance. This dynamic reinforces the criticality of scale and cost efficiency \nin compute infrastructure as the primary differentiator in the AI landscape. In addition, our leadership in compute \ninfrastructure positions us to monetize not only AI software applications built on our models, but also the underlying \ncompute that powers them. As we continue to scale our terrestrial and orbital compute infrastructure to support \ninternal model development, training, and inference workloads, we intend to sell our high-performance compute \ncapacity to a limited number of third party customers.\nWhy Compute Matters. The training and inference demanded by advanced AI models require substantial \ncomputational resources. Greater compute capacity enables more intelligence by training new generations of models \nwith increasing frequency and creating more capable models, ability to support inference, or usage, across a large \nand growing user base, and extraction of the highest performance from those models. As the AI user base expands, \nwe also expect compute demand per user to increase significantly. Reasoning models introduced in 2024 \ndemonstrated that allocating more computational resources during inference directly leads to higher-quality \nintelligence. AI agents popularized in 2026 demonstrated that allocating more computational resources enabled\n\n149\nTable of Contents\nmulti-step task execution, meaningfully increasing compute demand per human user interaction. In addition, \ncompute infrastructure with end-to-end, cluster-level coherence through tight integration across software and \nhardware systems enables more efficient, stable, and higher-fidelity training and inference at scale—ultimately \nenhancing model intelligence and performance. Within inference, we expect computationally-intensive reasoning, \nagentic, and multi-modal workloads will continue to grow as a portion of overall usage. We therefore expect \ndemand for compute will continue to increase across consumer, enterprise, and government applications as AI \nadoption accelerates. For example, U.S. compute demand has already outpaced available power supply with \nestimated demand of 62 gigawatts in 2025 exceeding the power generation of 49 gigawatts, according to industry \nsources. We expect the gap between demand for compute and power supply to continue to widen meaningfully as AI \ncompute needs proliferate.  Furthermore, we believe that third-party estimates on data center demand are constrained \nby the practical supply limitations that exist in a terrestrial context and the power shortage may be far greater than \nwhat research estimates suggest. We believe operators with superior model-to-compute integration—the ability to \nefficiently support and allocate compute across both training and inference workloads—are best positioned to win \nthe AI race. \nSelf-Reinforcing Network Effects Among Lower Cost Per Token, Model Quality, and User Adoption. AI systems \nare ultimately constrained or differentiated by the cost, speed, and scale at which they can generate and process \ntokens. A “token” represents the fundamental unit of data consumed and produced by modern AI models, for \nexample corresponding to words, images, audio, or other modalities. It serves as the atomic unit through which \nmodels read, reason, and generate output. As such, tokens are the primary basis for measuring both the cost of \ntraining and cost of inference, making them a foundational economic metric in the AI space. Companies that can \nstructurally reduce energy, compute, networking, and deployment costs per token will be positioned to train faster, \niterate more rapidly, and ultimately manufacture greater intelligence, scale models more rapidly, and deliver \nincreasingly powerful and accessible AI solutions. This creates a self-reinforcing advantage in which lower token \ncosts drive greater model quality and user adoption, reinforcing AI leadership. This is because lower cost per token \nenables more frequent model training, larger and more sophisticated models, longer chains of processing for \nreasoning and agentic workloads, and significantly higher inference volumes at economically viable prices. This \ndynamic directly impacts model quality, responsiveness, and accessibility, while also determining the ability to \nserve the rising global demand across consumer, enterprise, and mission-critical AI applications. As AI systems \nscale toward increasingly complex reasoning tasks and higher usage intensity, improvement in cost per token \nenables meaningful advantages in performance quality, scaled distribution, and monetization. This is particularly \ntrue as the industry converges towards recursive self-improving learning that minimizes human intervention, which \nis highly token consumptive.\nCost of Compute is the Main Driver of Cost Per Token. The cost of compute is the primary driver of cost per token \nacross both training and inference workloads. Each token processed by an AI model requires a quantifiable amount \nof computational effort. The total cost per token is determined by the efficiency, availability, and unit economics of \nthe underlying compute resources. According to SemiAnalysis, for most AI companies without a build cost \nadvantage, their total capital cost of building compute infrastructure derives approximately 30% from data center \nconstruction costs (including, but not limited to, the shell; mechanical, electrical, and plumbing (“MEP”); and grid \ninterconnection) and approximately 70% from the cost of procuring processors and critical IT equipment. Ongoing \noperational costs of utilizing this compute infrastructure include the cost of power to run the processors, cost of \nmaintaining those processors, and cost of delivering inference workloads to the end user. Improvement in the cost of \nbuilding and operating this compute infrastructure—whether through lower data center construction cost, lower \npower infrastructure cost, shorter time to grid interconnection, or higher cluster-level throughput—translates directly \ninto lower cost per token. Accordingly, for a given level of intelligence, we expect the long-term economics of AI \ncompanies to be driven by the ability to consistently deliver bleeding-edge compute at the lowest possible cost per \ntoken. Put simply, we view cost per token as a function of three primary inputs—the underlying AI model, the \ncompute hardware, and energy, and we expect to have a competitive advantage in the latter two cost components. \nWe believe we have a pathway over time that will significantly reduce compute hardware costs through continued \nvertical integration and development of proprietary chips, building on our experience designing custom silicon for \nour Starlink satellites. We also expect that the marginal cost of energy for our AI compute satellites will be minimal \nbecause our satellites are powered by solar arrays in space. By driving the energy component to minimal levels and\n\n150\nTable of Contents\npursuing improvements in compute hardware cost, we believe we can achieve a meaningfully lower overall cost per \ntoken in the future.\nWe Have a Dual Speed and Cost Advantage in Terrestrial AI Compute. We have established a leading position in \nbuilding and scaling terrestrial AI compute infrastructure, becoming the first company to deploy a coherent \ngigawatt-scale AI training cluster. We own and operate what we believe to be the largest AI training data center \nclusters on Earth. Our AI compute facilities, COLOSSUS and COLOSSUS II, collectively provide approximately \n1.0 gigawatt of compute power, with additional power capacity available for data center operations. Our first-\nprinciples thinking enables us to build coherent compute at scale and at rapid speed with lower costs than most other \ncompanies in the industry. We brought the first cluster of COLOSSUS online in 122 days, repurposing the shell of \nan existing factory, and the first cluster of COLOSSUS II online even faster in 91 days. As an illustrative \ncomparison, an industry benchmark to bring online a 100 megawatt greenfield data center is approximately two \nyears. We also demonstrated a significant improvement in cost efficiency, achieving data center construction costs \nfor COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis. We are able to \ndeploy power and compute significantly faster than other AI companies through first-principles thinking, behind-\nthe-meter power generation, coupled with what we believe is the world’s largest network of sustainable battery \nstorage systems, and innovations in advanced liquid cooling, high-density rack layouts, and efficient networking. \nOur first-principles thinking and innovations in advanced liquid cooling, high-density rack layouts, and efficient \nnetworking enable rapid, cost-effective scaling with the latest processors—keeping us ahead of competitors \ndeploying traditional methods. Faster deployments reinforce our cost advantage: we are able to access and bring \nonline the highest performing hardware before our competitors, allowing us to sustain a token cost advantage. For \nexample, we believe COLOSSUS II became one of the world’s first data centers to deploy GB200s and GB300s at \nsignificant scale and is currently powering training for our next frontier models, including Grok-5. We have already \nproven in multiple large-scale terrestrial data centers that we have built not only faster than competitors in the \nindustry, but also at a lower cost. \nWe have a Unique Right to Win in Orbital AI . The Sun contains approximately 99.8% of the solar system’s energy \nand offers what we believe is the only truly scalable solution to terrestrial energy constraints, as we expect the cost \nand availability of terrestrial energy sources over time will necessitate a transition to orbital AI solutions. The logical \npath forward is to move power-intensive AI workloads into orbit, where solar energy is near-constant and \nuninterrupted. With such accessibility to energy, we believe that our launch business will enable us to consistently \nactivate the highest performing hardware before our competitors without such access, shrinking the timeline to \nuseful tokens on bleeding-edge hardware and sustaining our token cost advantage. Manufacturing next-generation \nsatellites and launching them into space in very large numbers is a core component of our plans. We believe we are \nthe only company with a commercially viable path to building orbital AI compute at scale. This is underpinned by \nour unique ability to launch substantial mass into orbit cost-efficiently through reusable rockets and to manufacture \nsecure, reliable, and high-performance satellites at low cost and high volume. \n•\nTerrestrial compute leadership. We believe the same cost and build advantages that have underpinned our \nleadership in gigawatt-scale terrestrial data centers will enable us to innovate across other terrestrial data center \nformats such as modular data centers for inference. We believe our modular terrestrial data center architectures \nwill provide a foundation for the deployment of compute infrastructure in orbit given similarities in form factor \nin contrast to a gigawatt-scale campus.\n•\nSatellites. Just as we expect our expertise in terrestrial data centers will enable us to package AI compute into \nmodular, satellite form factors, we expect our leadership in satellite communications to allow us to interconnect \nour fleet of AI compute satellites into a massive, coherent constellation of compute. For example, as of March \n31, 2026, our constellation already incorporated over 23,000 inter-satellite lasers that create a dynamic mesh \nnetwork in space, enabling traffic to route through orbit rather than relying solely on terrestrial backhaul \ninfrastructure. We are designing next-generation, high-performance AI compute satellites built for high volume, \nlow cost, and with the reliability required for long-duration operation in space. \n•\nStarship. We expect each of our Starship V3 vehicles to carry 100 metric tons to Earth’s orbit in a reusable \nconfiguration, and future generations could reach 200 metric tons in capacity, potentially as soon as Starship\n\n151\nTable of Contents\nV4. Future generations of Starship are being designed to eventually deliver millions of tons to orbit and beyond \nper year. Delivering large amounts of mass to orbit at low cost will be critical to deploying AI compute satellites \nat scale.\nWe Believe Orbital AI Can Accelerate Time to Power and Reduce Token Costs . The Sun contains approximately \n99.8% of the solar system’s energy and offers what we believe is the only truly scalable solution to the challenge of \naccelerating demand for compute relative to terrestrial energy constraints. The logical path forward is to move \npower-intensive AI workloads into orbit, where solar energy is near-constant and uninterrupted. With such \naccessibility to energy, we believe that our launch business will enable us to consistently activate the highest \nperforming hardware before our competitors without such access. We believe SpaceX is uniquely positioned to \ndeploy and operate data centers in orbit that can eventually achieve a lower cost than terrestrial data centers over \ntime due to our extreme vertically integrated approach across launch, satellite manufacturing at scale, network \nconnectivity and terrestrial data center expertise.\n•\nTime to useful tokens on new generations of infrastructure. Although we have already demonstrated an \nability to rapidly scale new generations of compute in terrestrial deployments, we believe orbital AI will \naccelerate our time to useful tokens on bleeding-edge AI infrastructure. Physical deployment of new hardware \nis expected to be enabled by our launch business, where we believe reusability and launch cost efficiency will \ndrive rapid cycles of payload delivery. Rapid time to useful tokens on that hardware will be enabled by the \nSun’s near-constant, uninterrupted supply of power, which would circumvent terrestrial power infrastructure \nconstraints such as power procurement, grid interconnections, and permitting. As new generations of AI \ninfrastructure continue to deliver step-function improvements in token efficiency, we believe that maintaining \nan AI fleet consistently at the bleeding edge of the frontier curve has the potential to deliver a sustainable cost \nper token advantage relative to our competitors.\n•\nConstruction, power, and cooling infrastructure. In orbit, construction costs are replaced by launch costs and \nsatellite production costs. We expect reusable launch systems and high flight cadence will significantly reduce \nthe cost per kilogram to orbit, enabling more efficient deployment of compute payloads to orbit, and eventually \napproach the cost of fuel. We believe our advanced satellite manufacturing capabilities enable us to build AI \ncompute satellites at scale and lower cost than competitors. Other terrestrial data center construction costs such \nas building the shell, MEP, and grid interconnection are not applicable in space. As a result, once Starship and \nour AI compute satellites are fully deployed at scale, we believe that the initial deployment costs of in-orbit \ncompute in the aggregate will be less than construction costs of others’ terrestrial data centers.\n•\nCost to procure and service processors. The cost of processors is a significant cost for both terrestrial and \norbital data centers. We do not believe that moving compute to space in and of itself will have a meaningful \nimpact on the cost of procuring processors. However, we believe that diversifying our long-term access to the \nsupply of processors, including through our Terafab initiative with Tesla and Intel, will be a key driver in \nreducing the overall cost of compute hardware over time. By combining internally manufactured, lower cost \nchips with those we source from third-party suppliers, we expect the overall cost of our processors to decline. In \naddition to reducing costs, we also expect that this hybrid sourcing strategy will help alleviate potential future \nchip shortages at SpaceX. In addition, we intend to conduct intensive pre-deployment testing to reduce the rate \nof chip failure in space, as we do not anticipate servicing or repairing processors in space.\n•\nOngoing operations. The total cost of operating data centers is heavily influenced by energy, cooling, and \ndistribution requirements. In orbit, chips are expected to be powered by solar energy which is low cost and \nunlimited, and we expect to leverage radiative cooling architectures, which incur no operating costs compared \nto liquid or air cooling. Our integrated, space-based Starlink network architecture also enables more cost \nefficient routing of data between compute clusters and to end users on a global basis.\nWe Believe We Are Well-Positioned to Deliver Orbital AI Compute . We believe orbital AI compute is an incredibly \ndifficult technical challenge that only we can solve at scale in the near term. We are the only company that has \nalready accomplished the key technical challenges associated with evolving connectivity satellites into AI compute \nsatellites. In our view, due to our proven experience, we are well-positioned to deliver a full-scale AI compute \nsatellite constellation. Significant work remains, but we are confident in our singular leadership position.\n\n152\nTable of Contents\n•\nWe have unmatched satellite launch capabilities to enable deployment at scale. Our ability to launch mass \nat scale and low cost is our foundational competitive advantage. Deployment of 100 gigawatts per year via \nsatellites carrying over 100 kilowatts of compute power per metric ton will require thousands of launches per \nyear and the transport of approximately one million metric tons to orbit annually. The fully reusable nature of \nStarship positions us to be capable of launching this level of mass. We plan to leverage our PEZ dispenser \nsystem, an integrated payload deployment system for Starship, along with our experience in developing fully \ndeployable single-unit systems that are designed to substantially reduce the risks associated with in-orbit \nassembly. Starlink Broadband V1 and V2 Mini satellites have already demonstrated launch survivability and \nhigh reliability under vibration, shock, g-loads, acoustic stress, and vacuum exposure, achieving 99.9% average \nuptime. Although introducing AI processors would traditionally increase component-level failure rates, we plan \nto subject compute hardware to extensive pre-deployment testing on Earth to identify early life failures before \nlaunch. \n•\nWe have already solved many of the significant technical hurdles to evolving connectivity satellites into \nAI compute satellites. Through our leading expertise in connectivity satellites and Starlink’s existing technical \nand operational capabilities—including constellation-scale satellite management, autonomous operations, over-\nthe-air software updates, inter-satellite laser communications, mesh network deployment, radiation-hardened \nsystem design, proprietary chip development, and the ability to operate computers reliably in the space \nenvironment—we have already solved the hardest part in the development of AI compute satellites. AI compute \nsatellites represent an evolution of spacecraft engineering already demonstrated at scale through Starlink’s \nconnectivity satellites, and we believe development of AI compute satellites will be easier for us than for \nanyone else. AI compute satellites must integrate high-density compute payloads developed with radiation-\ntolerant designs and components with high electrical power generation, advanced thermal management, and \ninter satellite networking. To source the electricity needed to power our AI processors, we aim to continuously \nscale our existing space-grade solar technologies through insourced process development and build a \nconstellation in dawn-dusk Sun-synchronous orbit that delivers near-constant solar exposure. We expect solar \ncells optimized for the space environment will be produced at a rapid rate, with early satellites generating 100 \nkilowatts of compute power and scaling from there. In orbit, thermal control must be accomplished through \nradiation rather than convection and conduction. We plan to advance thermal control systems—many of which \nhave been proven on Starlink—by using radiators, vapor chambers, active cooling loops, and coatings to \ndissipate the heat generated by AI hardware in space’s vacuum. We will also utilize inter-satellite lasers \npioneered by Starlink for mesh networking at scale, creating coherent computing clusters across free space \ninstead of wired connections used in terrestrial data centers. Our existing Starlink constellation, with over \n23,000 inter-satellite lasers, will be a crucial enabler of orbital AI compute, as its global network allows data \nfrom our AI compute satellites in Sun-synchronous orbit to reach ground stations anywhere on Earth. The \nSpaceX AI compute satellites will be designed for high rate, automated production to enable the scale of \nsatellites needed for the large amounts of compute planned in space. \nThere are material differences between connectivity satellites and AI compute satellites. Connectivity satellites \nare primarily designed for communications, with substantial onboard equipment dedicated to phased-array \nantennas, radio systems, and data transmission. In contrast, AI compute satellites are optimized for high-\nperformance computing. Key differences include significantly larger solar arrays to support higher power \nrequirements, substantially larger radiators for thermal management, different electronics centered on AI \naccelerators rather than communications processors, and the removal of much of the communications hardware. \nOur V3 satellite platform already incorporates proprietary chips, providing a strong foundation for the ability to \noperate AI-focused electronics in space, and we expect to begin deploying our orbital AI compute satellites as \nearly as 2028.\nThe primary remaining challenge is one of scale. For example, a deployment rate of approximately 10 gigawatts \nper year would require a materially lower manufacturing and launch cadence, which we believe would still \nenable a commercially attractive AI compute business with strong economic returns. While our long-term vision \nincludes the ambition of deploying up to 100 gigawatts of power to orbit annually, which would require the \ndeployment of thousands of launches per year, assuming 100 kilowatts of compute power per metric ton and \nStarship capacity to orbit of 100 metric tons, we believe we can be economically successful at significantly \nmore modest volumes.\n\n153\nTable of Contents\nOur 100 gigawatt annual power deployment goal is based on reasoned engineering analyses and design \nparameters developed through our ongoing design and development work on next-generation AI compute \nsatellites. These analyses are based on currently available space-grade solar technology and do not require \nfundamental technological advances beyond existing capabilities. Specifically, we expect these satellites to \nleverage our already-designed V3 satellite platform. The core V3 satellite design is complete, and the AI \ncompute satellites are expected to generate substantially more power than V3 satellites. This performance is \nexpected to be achieved primarily through the use of significantly larger solar arrays. These satellites are \ntargeted to generate approximately 100 kW of compute power per ton, which initially will require \napproximately five times the solar array output compared to V3 satellite designs.\nWe currently do not anticipate material supply constraints for space-based solar panels, as global production \ncapacity, including through our vertical integration efforts, is believed to be sufficient to meet its requirements. \nWe are actively developing the manufacturing, launch cadence, and operational capabilities that we believe \nwould be needed to support such launch rates.\nThe precise solar collection area, total system mass per satellite, and on-orbit assembly requirements associated \nwith this goal continue to be refined as part of our ongoing engineering efforts. In general, the approach \ncontemplates larger deployable solar arrays on each satellite, with no significant on-orbit assembly currently \nanticipated.\n•\nWe will use our proven Starlink in-orbit technology to optimize our orbital AI compute. In order to \noperate orbital AI compute satellites, we plan to build on our vast experience of operating approximately 9,600 \nStarlink broadband and mobile satellites in Low-Earth Orbit. In 2025 alone, Starlink satellites proactively \nperformed over 1,000 automated collision avoidance maneuvers per day guided by this technology to safely and \nefficiently operate the constellation. This operating model gives us control over workload placement across \nEarth and space while maintaining resilience through redundancy and fail safe systems. To ensure optimized \nthermal management and power generation, we will design each satellite’s solar arrays to face the sun for \nconstant power while its housing radiator panels face cold deep space for radiative cooling. A high degree of \ncontrollability will allow the satellite to be optimized for brightness mitigation, disposal, and other modes of \noperation. As more advanced AI hardware becomes available, we plan to manage the lifecycle of deployed \nsystems by shifting older hardware to lower intensity workloads as performance characteristics evolve, and \nretiring systems that are no longer needed through controlled end of life disposition, including transition to \ngraveyard orbits where appropriate. These retirements may occur sooner than our estimates for the useful lives \nof our satellites, which estimates are based on engineering studies, historical on-orbit performance, propellant \nlife, utilization patterns, design enhancements across generations, and planned transitions to newer satellite \ntechnology. Space based compute also introduces orbital debris risk, which we already manage at constellation \nscale through our autonomous collision avoidance system across Starlink. To date, we have not experienced any \nfailures of our autonomous collision avoidance system that have resulted in satellite loss. \n•\nWe can manufacture our AI compute constellations at scale with rapid upgrade cycles. We have built one \nof the largest satellite manufacturing operations in the world with standardized bus architectures, rapid iteration \ncycles, and automotive-style production lines, enabling us to evolve bus architecture and subsystem design with \nlimited reliance on third-party suppliers. Our highly vertically integrated approach will be key to our mass-\nscaling efforts and should allow us to deploy the latest AI processors. Our ability to quickly develop and deploy \nnew generations of AI compute to orbit will be a key advantage in maintaining frontier performance of the \nconstellation. We believe SpaceX will be the first and only company to manufacture satellites at the scale of \nautomotive manufacturing.\n•\nWe are building chip manufacturing capabilities to scale our access to AI compute hardware. We \nannounced a collaboration with Tesla in March 2026 to build the Terafab initiative with a long-term goal of \nproducing one terawatt of compute hardware each year. Intel joined the project in April 2026 and is expected to \ncontribute its expertise in designing, fabricating, and packaging ultra-high-performance chips to help Terafab \nscale. In connection with such collaboration, we have agreed with Tesla on a general framework for the future \ndevelopment of Terafab. Any specific projects undertaken pursuant to this framework will be subject to separate \nnegotiations and agreements (including any development timelines, milestones and capital expenditures) and\n\n154\nTable of Contents\nhave not yet been determined. Our strategy for Terafab is to vertically integrate across design of lithography \nmasks, fabrication of logic and memory chips, design of advanced packaging and rapidly test and iterate in \norder to improve chip design and performance. With this internal manufacturing capability, we plan to alleviate \npotential future chip shortages at SpaceX, especially as we develop orbital AI at scale, and design chips that are \noptimized for the space environment. We expect that our speed and cost advantage from vertical integration will \nallow us to scale efficiently in AI chip manufacturing. \n•\nWe can leverage our terrestrial experience to build and operate compute clusters and AI workloads at \nscale. We believe our experience operating compute infrastructure on Earth provides the technical and \noperational foundation to extend these capabilities into orbit. For example, manufacturing and silicon defects in \nAI processors can cause failures early in life. We plan to subject compute hardware to extensive pre-deployment \ntesting on Earth to identify early life failures before launch to reduce in-orbit disruption. Over time, we plan to \ndesign AI compute processors optimized for the space environment. Our operating experience will be critical in \ninforming our orbital data center designs for highly reliable operations even with potential chip failures. This \ncapability is further supported by our flexible allocation of AI workloads across compute clusters, enabling us to \nutilize orbital data centers for workloads without hardware reconfigurations or maintenance. For compute \nhardware that does fail, we plan to leverage existing Starlink fleet management software to reallocate traffic to \nother satellites and prevent cluster-level downtime. We further believe that our strong relationships with chip \nmakers enhance our ability to build a well-functioning, integrated AI compute system in space.\nWe Believe Our Infrastructure is a Distinct Advantage in Delivering Superior AI. We believe that the key \nconstraints in the continued growth of AI are physical – chip manufacturing, data center infrastructure, and power \ngeneration; the future of AI will be determined by the control of the physical stack. We believe no other AI company \nhas better control over the full physical stack than SpaceX. We expect the combination of competitive cost per \ntoken, our ability to deploy and operate data centers in orbit, and our strength in connectivity to result in more \nscalable intelligence that is accessible globally at high speeds by way of the following structural advantages:\n•\nTime to power. If we are able to deploy our AI compute satellite constellation, we believe it will enable \ncompute capacity to be deployed and expanded efficiently as capacity requirements grow. This approach will \nalso allow us to deploy new generations of compute hardware in quicker succession relative to terrestrial \napproaches where data centers cannot be easily retrofitted for new compute hardware. Due to terrestrial \nretrofitting limitations, adding terrestrial capacity typically demands building large, new data centers designed \nfor specific generations of compute hardware. This approach is usually burdened with long lead times for \nactivities such as power procurement, utility grid interconnections, and permitting before new computing \nhardware can generate useful tokens. We believe our orbital, modular approach will allow us to circumvent \nterrestrial power infrastructure constraints.\n•\nHighly scalable compute capacity. Unlike terrestrial facilities constrained by physical footprint and \navailability of power in a given location, orbital data centers leverage a decentralized mesh architecture. This \npermits the aggregation of massive compute clusters interconnected over long distances by inter-satellite lasers \npioneered by Starlink. Space offers effectively unlimited power and vast expanse to sustain uninterrupted \noperations as capacity grows. We believe this abundance of power and physical area will allow us to scale our \nconnected compute capacity faster and far beyond levels that are terrestrially viable.\n•\nLow latency. Our satellite constellation provides a direct, orbital data path that circumvents the bottlenecks of \nterrestrial communications networks. This architecture is particularly suitable to support high-speed \nconnectivity for latency-sensitive workloads, which we believe are increasingly valued in certain consumer- and \nenterprise-facing applications. \n•\nGlobal distribution. Because of the global coverage of our satellite constellation, not only can we deliver high-\nspeed, ultra-low latency AI solutions, we can do so anywhere in the world. We believe our increasingly global \nnetwork of Starlink satellites will enable us to deliver frontier intelligence, at high speed and reliability, to \ncommunities and economies around the world.\n\n155\nTable of Contents\nDesign and manufacture our own chips. Terafab aims to be the world’s largest chip manufacturing facility, with \nthe goal of achieving one terawatt of annual compute production capacity. While Terafab is intended to expand our \ninternal chip manufacturing capabilities, we expect to continue sourcing a significant portion of our compute \nhardware from third-party suppliers. We view Terafab as complementary to these relationships, enabling us to \naugment our access to compute hardware at massive scale and further complete our highly vertically integrated \ncompute platform by extending our control to the foundational chip layer. By developing end-to-end capabilities \nspanning the design of lithography masks, fabrication of logic and memory chips, and advanced packaging, all in a \nvertically integrated closed-loop single plant, we will be able to more rapidly iterate to improve chip design and \nperformance. We plan to design chips that are optimized for the space environment. This collaboration directly \nenables our planned orders-of-magnitude increases in AI compute deployment in orbit which would be constrained \nby pure reliance on external foundries. Leveraging shared engineering resources, intellectual property, and \ninfrastructure across Tesla and SpaceX, as well as Intel’s proposed contribution of its expertise in designing, \nfabricating and packaging ultra-high-performance chips at scale, Terafab creates powerful ecosystem synergies that \naccelerate innovation cycles and reduce costs. Just as we manufacture approximately 80% of Starship in-house, \nenabling it to be the world’s most powerful and, eventually, the most cost-effective launch vehicle through full and \nrapid reusability, we expect significant speed and cost advantages from Terafab’s vertical integration. We believe \nthis will provide us with a critical competitive advantage in the race to scale AI infrastructure, especially as we begin \nour orbital AI compute satellite deployments.\nIndustry Overview\nWe are focused on three rapidly evolving industries: space, connectivity, and AI. Technological advancements and \nbreakthrough innovation are enabling what we believe is the next great economic frontier, as progress across space \nlaunch, global communications, frontier models, AI compute, robotics, and automation reshape what is possible on \nand off Earth. There are several key trends driving the growth and evolution of these industries in which we operate:\n•\nReusable launch and industrialized space operations are materially reducing the cost of access to orbit, \nincreasing mass carried per launch, and enabling high-cadence deployment of space-based infrastructure;\n•\nHigh‑volume satellite manufacturing, combined with rapid constellation refresh cycles, is expanding the ability \nfor ubiquitous connectivity across unconnected, underconnected, and mobile “dead zone” areas; and\n•\nAI, automation, and robotics are accelerating engineering iteration cycles, streamlining operations, and \nrevolutionizing complex construction, reducing reliance on scarce specialized labor while delivering faster, \nmore precise, and cost-optimized infrastructure.\nThe Space Industry\nFor most of the space age—dating back to the first launches in the 1950s—spaceflight was shaped by onerous \nregulatory requirements and government budgets that determined launch cadence. The prevailing cost-plus \nprocurement model offered limited incentives to reduce costs or increase launch cadence, creating an operating \nenvironment that constrained technological innovation. Government agencies served as the primary launch services \nproviders and the industry remained stagnant for decades. According to NASA, until the 2000s and the introduction \nof the Falcon 9 rocket by SpaceX, global commercial launch activity averaged 25 to 35 launches per year. As a \nresult, the space industry remained a niche domain with limited ability to support large commercial markets or \nscaled space-based infrastructure. \nDuring this period, satellites—which comprised the majority of launch payload—were typically bespoke, expensive \nsystems requiring significant non-recurring engineering that consisted of development cycles that were measured in \ndecades. Launch vehicles were designed to be largely expendable and optimized for single-mission use, reinforcing \na low-throughput ecosystem that lacked flexibility, scalability, and responsiveness to evolving customer \nrequirements. \nThe need for more advanced launch capabilities became clear as space-based use cases expanded to include \ncommunications, navigation, Earth observation, environmental monitoring, scientific research, Intelligence, \nSurveillance and Reconnaissance, and access to the International Space Station. In 2006, NASA awarded SpaceX,\n\n156\nTable of Contents\nalong with Rocketplane Kistler, the landmark Commercial Orbital Transportation Services contract that heralded the \nage of commercial space launch, marking a shift toward a more scalable approach to accessing space. This inflection \npoint catalyzed a transition toward systems designed for more frequent operations, lower cost, and greater \noperational flexibility. \nFundamental breakthroughs in high cadence, reliable, and affordable access to space—driven largely by SpaceX—\nhave expanded space from a purely mission-driven activity to a fully industrialized and commercial sector capable \nof supporting and enabling industries far beyond traditional launch and satellites. SpaceX’s advancements reduced \nthe cost of access to orbit from tens of thousands of dollars per kilogram to just a few thousand dollars per kilogram.\nCost of Space Launches to Low-Earth Orbit\n(constant 2021 $ per kilogram; plotted on a logarithmic axis) \nAs launch economics have changed rapidly over the last decade, demand for orbital infrastructure has expanded \ndramatically. Commercial operators have launched thousands of satellites since 2015 as constellation architectures \nscale and diversify. The number of active maneuverable satellites in orbit has grown from less than 1,000 in 2015 to \napproximately 12,700 as of March 31, 2026. With approximately 9,600 Starlink broadband and mobile satellites in \nLow-Earth Orbit as of March 31, 2026, SpaceX owns and operates approximately 75% of all active maneuverable \nsatellites. Additionally, launch activity has continued to grow, with approximately 220 metric tons of payload \nlaunched to orbit in 2012 increasing to approximately 2,600 metric tons in 2025, of which over 80% was launched \nby SpaceX. \nGovernment demand is rising in parallel: according to the Space Foundation, excluding classified spending, U.S. \nGovernment space spending in 2024 totaled approximately $77 billion. Notably, U.S. national security customers \nhave also awarded approximately $13.7 billion across the National Security Space Launch (“NSSL”) Program’s \nPhase 3 Lane 2 contracts through 2032, supporting approximately 54 missions from 2025 to 2032, with the overall \nPhase 3 manifest nearly doubling Phase 2’s manifest to 84 missions. Amid escalating geopolitical tensions that \nfurther underscore the critical role of resilient launch infrastructure, we believe government space budgets around \nthe world are positioned for sustained, long‑term growth.\n\n157\nTable of Contents\nFalcon Heavy Boosters Landing\nOn the back of dramatically reduced launch cost pioneered by SpaceX over the past two decades, the global \neconomy is reorganizing around a new domain: space. We believe the development of a lunar economy will be \ncentral to unlocking the full potential of this new domain and advancing the long-term transition to a multiplanetary \ncivilization.\nThe Connectivity Industry\nModern life relies on connectivity. Over the past several decades, the technologies that underpin global connectivity \nhave evolved rapidly, reshaping the way individuals, families, and organizations communicate, collaborate, and \naccess information. \nDespite remarkable technological advancements, terrestrial networks remain constrained by the same inherent \nstructural limitations that have hindered them since their inception. According to the Global Satellite Operators \nAssociation, terrestrial network infrastructure only covers approximately 20% of global land mass, resulting in \nsignificant unserved and underserved regions across both developed and developing economies. This terrestrial \nconnectivity gap spans areas that are remote, difficult to build in, or economically impractical to serve—and also \nincludes mobile “dead zones” within otherwise well-connected areas and in urban markets. According to the J.D. \nPower U.S. Wireless Network Quality Performance Study, U.S. wireless customers experienced service problems in \napproximately one out of every 11 mobile interactions, even in well-connected areas. As demand for ubiquitous, \nhigh-reliability connectivity continues to rise, terrestrial networks alone are increasingly unable to bridge the \nwidening gap between user demand and available coverage.\nThe development of large-scale LEO constellations represented a paradigm shift, breaking from the long-standing \ndependence on terrestrial networks for global connectivity. Deployed at unprecedented scale—such as through \nSpaceX’s Starlink and Mobile constellations—these satellites can provide high-speed, low-latency service that \nintegrates seamlessly with terrestrial infrastructure. This evolution has transformed satellite connectivity from a \nsolution of last resort into a core pillar of resilient, ubiquitous global communications.\n\n158\nTable of Contents\nConsumer Broadband\nResidential internet access began with the dial-up connection in the late 1990s with maximum speeds of .056 Mbps, \nwhen early users relied on narrowband copper phone lines to connect. As demand for speed and reliability grew, \ndial-up gave way to DSL, cable, and eventually fiber, each increasing bandwidth and enabling more connected \ndevices. According to the Speedtest Global Index, the global average broadband download speed has increased to \napproximately 120 Mbps. Satellite internet also emerged in the 1990s through geostationary orbit (GEO) systems \nthat extended coverage to remote and unconnected regions—beginning with early offerings such as Hughesnet’s \nfirst satellite service DirecPC, which provided downstream speeds of roughly 400 kbps compared to dial-up \naverages of 28.8 kbps—but these systems were constrained by limited throughput and high latency, making it \ndifficult to keep pace as consumer requirements evolved. Starlink satellites operate in Low-Earth Orbit, substantially \ncloser to the Earth’s surface than traditional geostationary communications satellites. This architecture reduces \nsignal latency and is designed to support broadband connectivity in remote and underserved areas. Each launch of \nadditional Starlink satellites increases the overall capacity of the network, which provides service globally.\nIn today’s digital landscape, consumers increasingly rely on seamless, high-performance connectivity to power all \naspects of connected life—from every day digital services to demanding applications that require high throughput, \nconsistent performance, and low latency. These needs are particularly challenging to satisfy in regions where \nterrestrial networks are limited, degraded, or unavailable due to prohibitive deployment costs, rugged terrain, low \npopulation density, or outdated infrastructure. Consequently, consumer broadband has evolved into a multifaceted \necosystem, where diverse access technologies converge and providers compete based on superior reliability, \nconsistent performance, and an exceptional overall user experience.\nConsumer demand for data is surging at a pace that terrestrial infrastructure has struggled to match. According to \nInternational Data Corporation’s Global DataSphere, in 2025, global data generation was estimated to have reached \nmore than 585 exabytes of per day—up from approximately 10.8 exabytes per day in 2010—reflecting an immense \nescalation in consumption. With fixed broadband connections projected to reach two billion by 2030 according to \nEricsson, and terrestrial expansion often economically unfeasible in remote and challenging regions, only space-\nbased systems can deliver truly global, ubiquitous, high-throughput coverage capable of supporting this explosive \ngrowth in data demand.\nEnterprise and Government Broadband\nEnterprise broadband internet has evolved alongside residential internet, beginning with fixed private lines that \nconnected offices and infrastructure. As businesses adopted real-time, distributed workflows, they needed secure, \nlow-latency connectivity across multiple sites and mobile assets. Mobility became essential in sectors like \nmanufacturing, transportation, and logistics, extending connectivity demands beyond fixed locations into dynamic \nenvironments that terrestrial networks often cannot support reliably or economically. Enterprises now expect \nseamless, uninterrupted performance with instant failover where terrestrial systems are unavailable or unstable—\ndriving adoption of hybrid architectures that combine ground networks with space-based solutions. \nEnterprise connectivity demand continues to rise as organizations digitize operations and rely on real‑time, \ncloud‑based workflows that require secure, low‑latency connectivity across distributed sites and mobile \nenvironments. This is particularly true in the case of aviation, maritime, and land mobility applications, where \naircraft, vessels, and ground fleets are inherently mobile and therefore unable to depend on continuous terrestrial \nnetwork coverage for connectivity. These platforms increasingly require resilient communications to support flight \nand voyage operations, crew applications, passenger internet access, telematics, and port or shipboard logistics. In \naviation, legacy GEO-based systems that are still prevalent across most major commercial fleets typically provide \nlow Mbps speeds and significantly higher latency, often exceeding 500 milliseconds, falling well short of the \napproximately 100 Mbps throughput and sub-50 milliseconds latency that today’s applications—such as streaming, \ncloud services, and real-time collaboration—increasingly demand. Therefore, there is a need for modern LEO-\npowered in-flight connectivity systems—such as Starlink Broadband—that can deliver passenger download speeds \nexceeding 400 Mbps with latency as low as 21 milliseconds. Terrestrial networks cannot meet these evolving \ndemands where deployment is costly, complex, and slowed by regulatory constraints, and legacy satellite solutions\n\n159\nTable of Contents\nhave not delivered the latency or consistency needed for enterprise‑grade applications, with average terrestrial ISP \ndownload speeds at 120 Mbps and average latency from 7-34 milliseconds.\nDefense and civil agencies similarly require secure, resilient, and global connectivity, often operating in contested or \ninfrastructure-poor regions where terrestrial networks are unavailable or vulnerable. As the battlefield becomes \nincreasingly connected, the need for robust, persistent connectivity across all domains is more urgent than ever. \nModern missions depend on high-throughput, low-latency connectivity for command and control, autonomous \nsystems, emergency response, and humanitarian operations, driving demand for architectures that maintain \nperformance where terrestrial systems fail. Substantial government investment into mission-critical, space-based \ncommunication services illustrates the institutional reliance on LEO architecture for defense applications. High-\nthroughput, low-latency LEO constellations add a new architectural layer that enhances redundancy, operational \ncontinuity, and flexibility across mission sets. There is an increasing need for purpose-built secure platforms—such \nas Starshield, that can provide encrypted, high-assurance communications and modular payload integration—further \nexpand the utility of space-based connectivity for defense, civil, and national resilience needs. Together, these \nadvances position space as the foundational component of future mission‑critical communications architectures.\nSatellite-to-Mobile Service\nSince the early rise of mobile phones, terrestrial networks have expanded at immense cost and increasing density to \nsupport successive generations of cellular technology—from the primarily voice-centric networks of the 1980s to \ntoday’s high-speed 5G data networks. These investments have enabled much of the global population to become \nwell‑connected, yet the capital‑intensive nature of terrestrial build‑outs has resulted in vast geographic mobile “dead \nzones” where coverage remains too expensive or is nonexistent. In many regions particularly those that are remote \nor sparsely populated, extending towers is economically impractical for mobile network operators, resulting in large \nsegments of the population with limited or no access to reliable connectivity. Early satellite-based cellular options, \nbeginning in the 1980s with dedicated satellite phones, helped fill these gaps but required bulky hardware and \ncarried high usage cost, limiting them to narrow and mission-driven use cases. As consumer expectations for \nubiquitous coverage have grown, mobile network operators face structural limits in closing these “dead zones” with \nterrestrial infrastructure alone, making LEO-based augmentation the most viable path to continuous, reliable mobile \nconnectivity at global scale. \nEarly satellite-to-mobile services (i.e., those connecting directly to standard smartphones) emerged in the 2020s with \nsupport for basic messaging and, in some cases, voice in areas without terrestrial coverage. These offerings provided \nmore contiguous communication for safety, continuity, and remote operations. However, they were introduced at the \nsame time mobile data consumption was accelerating dramatically, and consumer expectations for “always-\nconnected” devices were rising. As a result, satellite-to-mobile technology is now evolving beyond emergency-only \ncommunication. It is shifting toward enabling everyday smartphones to remain seamlessly connected when outside \ntraditional cellular or Wi-Fi range, integrating satellite connectivity into routine mobile usage, rather than treating it \nas a contingency layer. At the same time, telecom operators have been reducing capital expenditures amid slower \nrevenue growth, weaker monetization, and declining returns on invested capital—pressures that have limited their \nwillingness to maintain historically high levels of network deployment. These shifts are also increasing demand for \nharmonized, scalable spectrum allocations capable of supporting higher-capacity satellite-to-mobile services without \ninterfering with terrestrial networks, with the potential to add an incremental $1.4 trillion of economic growth over \nthe next 10 years, as forecasted by Cellular Telecommunications and Internet Association. \nThese industry shifts have opened the door for deeper collaboration among satellite operators, MNOs, carriers, \nspectrum owners, device manufacturers, and regulators. As satellite network performance continues to improve and \nthese partnerships expand, satellite-to-mobile offerings—such as Starlink Mobile—are poised to evolve from a \n“backup” layer into a meaningful complement to terrestrial networks, extending coverage and enhancing overall \nnetwork resilience and performance. \nThe AI Industry\nHumanity is defined by our relentless pursuit of knowledge, with each transformative breakthrough dramatically \nexpanding our capacity to create, preserve, and share ideas across time and space. AI marks the next—and arguably\n\n160\nTable of Contents\nmost consequential—chapter in this progression. For the first time, we are creating systems that do more than simply \namplify or transmit human-generated knowledge. These systems can reason, learn, and generate new knowledge \nautonomously—synthesizing information, forming hypotheses, and in some domains even making original \ndiscoveries. In doing so, they augment, accelerate, and will likely surpass unaided human cognition. This represents \na profound shift: we are moving from tools that simply extend the mind to autonomous agents and companions that \nactively participate in the act of knowing.\nOver the past decade, the convergence of big data, advances in AI hardware, and the breakthrough development of \nLLMs have transformed AI from a speculative academic field into a foundational driver of the modern economy.\nAI Compute\nMassive demand for frontier AI models is accelerating the build-out of AI infrastructure at a pace and scale with few \nhistorical precedents. Meeting projected AI needs will require $7 trillion in global data center investment through \n2030, with generative AI workloads expected to account for roughly 70% of total data-center power demand by the \nend of the decade. Each new generation of frontier models requires exponentially greater compute, following well-\nestablished scaling laws that link model performance to the volume and quality of training data, parameter count, \nand total compute expected. The rise of agentic AI and the potential emergence of artificial general intelligence are \nexpected to further amplify inference workloads, driving a step-function increase in compute requirements and the \ncorresponding data center capacity needed to support them. Frontier AI has become fundamentally infrastructure-\nconstrained. Only operators with access to massive amounts of power, very large GPU clusters and tightly integrated \ntraining infrastructure can train cutting-edge models, and these systems exhibit non-linear performance advantages \nthat compound over time. Compute infrastructure scale helps determine model iteration speed, model quality, and \ncapital efficiency—making infrastructure itself a critical capability. \nAI Frontier Models\nA new class of frontier models has emerged, which includes LLMs and multimodal models. LLMs are neural \nnetwork-based models trained on massive datasets to interpret user questions and generate responses to highly \ncomplex questions. LLMs can synthesize existing research, propose new ideas, and communicate in a natural \nlanguage that requires no programming expertise by the user. Demand for these tools has been explosive—according \nto a YouGov survey, approximately 60% of Americans have used AI tools since December 2024, and 34% use AI \ntools at least weekly. Multimodal models are AI systems that can process, understand, and generate outputs across \nmultiple types of data simultaneously—such as text, images, audio, video, and sometimes other modalities—rather \nthan being limited to just one (like text-only language models). Multimodal models offer several key benefits over \ntraditional unimodal (e.g., text-only) systems by processing and integrating multiple data types like text, images, \naudio, video, and sometimes sensor data simultaneously. They provide richer contextual understanding, capturing \nrelationships and nuances across modalities that are invisible in isolation, leading to more accurate predictions and \nreasoning. \nAI frontier models are shaped by the values, objectives, and design choices of their creators. Model intelligence and \nperformance reflect decisions around data curation, training methodologies, alignment frameworks, and system \nconstraints, resulting in different reasoning styles, interpretations, and responses across models. Therefore, values \ncan be embedded in the technology, influencing accuracy, logic, and utility of the model outputs and how well \nmodels can serve end users.\nFollowing rapid frontier model innovation and broad adoption of chat-based tools, organizations are now beginning \nto deploy agentic systems—AI that can use tools and operate with limited supervision. This marks the beginning of \nwhat we believe will be a broader transition from co-pilots to agentic systems that enable high-complexity \nworkflows and create materially higher inference demand.\nConsumer and Enterprise Applications\nAdvances in digital communication have reshaped how information is created, shared, and consumed, laying the \nfoundation for today’s social media platforms. These platforms have become essential channels for digital \nadvertising by combining large‑scale user engagement with targeted content and ad distribution. Recent advances in\n\n161\nTable of Contents\nAI are further strengthening advertising, allowing enterprises to optimize campaigns and measure outcomes. At the \nsame time, consumer expectations for AI‑powered tools are rising, with users seeking timely, accurate and \ntrustworthy information across an expanding universe of digital content. \nWe believe the ongoing convergence of consumer platforms, consumer AI, and integrated digital services will \naccelerate the emergence of super‑app ecosystems that combine communication, content creation, information, \ncommerce, and banking within a single platform. These trends are expected to expand the role of internet platforms \nas distribution channels and support next‑generation AI‑enabled applications and advertising solutions.\nFor enterprises and governments, frontier models and agentic AI—autonomous systems capable of multi-step \nreasoning and independent task execution—are beginning to manage increasingly complex processes and \nworkflows. As of February 2026, more than 80% of Fortune 500 companies were using AI active agents. Entire \nindustries are being reshaped by AI-driven applications, including agentic commerce (personalized AI-directed \nshopping), vibe coding (software development with minimal or no human-written code), and autonomous driving for \nvehicles.\nThe ultimate frontier in AI is human augmentation: creating systems that amplify and multiply human reasoning, \ncreativity, decision-making, and productivity, enabling people to perform highly complex tasks with unprecedented \nspeed, scale, and insight. By enhancing how humans think, learn, and interact, such systems act as cognitive \nmultipliers, supercharging individual and collective capabilities far beyond biological limits. As AI evolves, we \nexpect both consumer platforms and enterprises to adopt increasingly agentic systems that serve as powerful \nextensions of human intelligence. These tools will orchestrate multi-step workflows, interact seamlessly with \nbusiness applications, and accelerate operational processes, with humans at the center of judgment, creativity, and \nstrategy. Emerging efforts in enterprise AI illustrate how future systems could coordinate entire business functions \nas force multipliers—dramatically expanding what a human team can achieve with minimal scaling friction and \nmaximal leverage. Human augmentation also offers a transformative solution to the escalating effort required for \nbreakthroughs in technology and beyond. For example, the human effort needed to sustain Moore’s Law (chip \ndensity doubling approximately every two years) has increased eighteenfold since the early 1970s; AI augmentation \ncould reverse this trend by empowering engineers, researchers, and innovators to iterate faster, explore more \npossibilities, and achieve exponential progress with smaller, core teams of experts. \nAs humanity expands beyond Earth, augmented human intelligence will be essential to managing the immense \noperational, scientific, and logistical complexity of a spacefaring civilization. The core promise of augmentation lies \nin multiplication: AI not as a substitute for human minds, but as an amplifier for human ingenuity, curiosity and \npurpose that unlocks new frontiers of what humans can accomplish together. \nOur Strengths \nWe have an intense, mission-driven, and engineering-first culture that seeks to achieve what many have deemed \nimpossible. We make the incredible and extraordinary possible and repeatable by continuously leveraging our core \nstrengths:\nGlobal Leadership in Orbital Launch Services\nOur unique ability to reliably, quickly, and cost efficiently launch rockets at scale into space is our core competitive \nadvantage that enables other parts of our business. Our launch capabilities form the foundation of our orbital \ninfrastructure and have created new multi-trillion-dollar opportunities in space, global connectivity, and AI. We \nbelieve no other launch provider is competitive at this scale today, nor is likely to become so in the near term. Our \nfleet of 24 flight-proven, reusable rockets and our growing share of total mass delivered to orbit has increased every \nyear since 2021. Reusability completely changes the economics of space access. Qualified for 40 launches, our \nreusable rockets can fly multiple times with only minimal refurbishment between missions, sharply lowering the \ncost per launch, while boosting our launch rate, asset use, and overall efficiency compared to traditional expendable \nrockets. As a result, we can offer competitive launch prices, rapidly deploy our own satellites and infrastructure, and \nmake it easier and cheaper for us to pursue new opportunities requiring orbital access. Our higher launch rates and \nreusability also create a virtuous cycle: more flights lead to faster improvements in design, manufacturing, and \noperations through accumulated experience. Additionally, not only did we demonstrate at least a 10-year advantage\n\n162\nTable of Contents\nover the rest of the industry when we first landed our Falcon 9 booster back from space in 2015, but we have \ncontinued to invest significantly in further increasing our lead by pursuing full and rapid reusability at scale, \nincluding investing over $15 billion in our next-generation rocket, Starship.\nUnrivaled Satellite and Connectivity Platform across Design, Manufacturing, Deployment, and Operations \nWe are able to design, engineer, and manufacture the world’s most advanced satellites at scale, enabling the creation \nand scaling of new businesses leveraging this core satellite technology platform, including: Starlink Broadband, our \nspace-based internet broadband service; Starlink Mobile, our global satellite-to-mobile service; and emerging AI \ninitiatives. Unlike traditional satellite manufacturers that rely on fragmented supply chains and low-volume \nproduction, we have built an integrated satellite platform that spans architecture, chip design, software, power \nsystems, and final assembly. As we rapidly iterate on our next-generation satellites in-house, some others are \ncontracting outsourced manufacturers to build satellite architectures with capacity comparable to satellites that we \nretired years ago. As of March 31, 2026, our constellation also incorporates over 23,000 inter-satellite lasers that \ncreate a dynamic mesh network in space, enabling data traffic to route through orbit rather than relying solely on \nterrestrial backhaul infrastructure. By controlling satellite design, production, launch and operations, we can tailor \npayloads, networking capabilities, and power requirements to support new use cases. For example, our AI compute \nconstellations will leverage our core satellite technologies already developed for our existing Starlink constellations. \nWe will build new satellites that can host processors for high-density compute payloads, offer enhanced power \ngeneration with larger solar panels and storage systems, and enable higher-capacity networking capabilities to \nsupport low-latency workloads in orbit. Our high-throughput manufacturing capabilities—combined with our launch \ncapabilities—enable us to produce and deploy thousands of satellites per year, an uneconomic proposition for those \nlacking an ability to deliver substantial mass into space. This capability accelerates our deployment timelines and \nallows us to commercialize entire constellations with capital efficiency that we believe is difficult to replicate. \nOur global connectivity platform, Starlink, is powered by the world’s largest LEO constellation and supported by \nour vertically integrated launch and satellite manufacturing capabilities to enable the delivery of high-speed, low-\nlatency broadband and mobile connectivity to homes and businesses everywhere in the world. Our vertically \nintegrated model allows us to provide reliable service with unmatched speed and cost across geographies where \ntraditional terrestrial infrastructure has been limited, uneconomical, or unavailable. \nTruth-Seeking AI Model Enhanced by Real-Time Data\nAI frontier models are shaped by the values, objectives, and design choices of their creators that influence accuracy, \nlogic, and utility of the model outputs. We believe Grok represents a differentiated approach to AI, grounded in a \ncore objective of truth seeking and powered by continuous, proprietary access to real-time data inflows through its \nintegration with X. With approximately 350 million daily posts, X enables freshness, relevance, and contextual \nawareness for Grok that we believe is a competitive differentiator. This direct, real-time access to the information \nand human discourse on X enhances Grok’s truth-seeking capabilities by grounding outputs in up-to-date knowledge \nand diverse viewpoints.\nThis architecture reflects our core philosophy that maximizing truth seeking—through the active, relentless pursuit \nof what is objectively true about reality, grounded in evidence, logic, empirical data, and first principles thinking—\ndrives superior model outputs and higher utility intelligence. By combining our unique truth-seeking model with \nproprietary access to one of the world’s largest real-time information platforms, we believe Grok can deliver the \nmost objective and relevant insights and best serve high-frequency, high-value use cases across consumer and \nenterprise AI applications.\nExtreme Vertical Integration Enabling High Velocity and Superior Cost Efficiency at Scale \nWhile conventional aerospace manufacturing relies heavily on fragmented and outsourced supply chains, we operate \nwith extreme vertical integration. By designing and manufacturing a significant portion of our components in-house, \nwe bypass many of the slow, bloated sourcing channels that structurally constrain the rest of the industry. For \nexample, approximately 80% of Starship, SpaceX’s next-generation launch vehicle, is manufactured in-house. Our \nvertical integration allows us to achieve iterative cycles in weeks, compared to years for some legacy companies, \nenabling us to build newer, more technologically advanced products faster than many of our competitors. We\n\n163\nTable of Contents\nbelieve this technological and logistical gap is widening meaningfully as our speed and cost advantage compound. \nOur vertical integration extends beyond design and manufacturing—it permeates our entire business model, \nencompassing engineering, deployment, and operations. We are the only company building integrated hardware and \nsoftware infrastructure of the future across space, connectivity and AI. This end-to-end control allows us to deliver \nvalue through structural advantages in speed, cost and quality. \nOur strong belief in the benefits of extreme vertical integration is further exemplified by our acquisition of xAI. We \nnot only develop best-in-class models to support the application layer of AI, where we leverage real-time data \ningestion from X (subject to some limitations for certain content), but we also own and operate the physical compute \ninfrastructure required to train and run inference on those models, providing a substantial cost and speed advantage. \nThrough our Terafab initiative together with Tesla and Intel, we intend to further extend our vertical integration to \nchip design and manufacturing to alleviate potential future chip shortages at SpaceX, optimize compute \nperformance, and reduce overall compute costs. Intel will contribute its expertise in designing, fabricating, and \npackaging ultra-high-performance chips to help Terafab scale. This highly vertically integrated approach allows us \nto train and iterate our frontier models at high velocity, accelerating development cycles, eliminating external \nbottlenecks, and driving rapid, continuous improvements in model performance. Compute availability is also critical \nfor running more complex workloads and delivering higher performance inference at scale. As AI adoption \naccelerates and demand for low-latency, high-throughput inference increases, we believe operators with the ability \nto support and efficiently allocate compute across both training and inference workloads are best positioned to win \nthe AI race. Our human augmentation solutions are being designed to capitalize on this shift, enabling us to deliver \nsuperior performance for our customers. This advantage of vertical integration exists in both a terrestrial context, \nwhere we own our own data centers and the associated power infrastructure, and eventually in a space-based \ncontext, where we are planning to build our own orbital AI compute infrastructure. The key constraints in the \ncontinued growth of AI are physical—chip manufacturing, data center infrastructure, and power generation. \nDifferentiation is rapidly shifting from model architecture alone to AI compute scale, cost efficiency, power \navailability, and speed of deployment. We believe that physical infrastructure, not models, will be the primary \ncompetitive differentiator for AI companies, and no other AI company has better control over the full physical \ninfrastructure than SpaceX.\nUnique Ability to Scale New Trillion-Dollar Markets Across Space, Connectivity, and AI\nWe believe space represents the largest economic frontier in human history. We believe we have a distinct ability to \nidentify, activate, and commercialize new multi-trillion-dollar markets that did not previously exist. Historically, \nspace access was impaired by high launch costs, low flight cadence, and limited demand. While such constraints \nmay limit others’ ability to access space at a scale, our ability to build large-scale and complex hardware \ninfrastructure is a meaningful competitive advantage. By pioneering the world’s first and only fleet of reusable \nrockets at scale, we revolutionized space access through dramatically lower cost and unmatched reliability. \nLowering costs by orders of magnitude does not just expand the launch market, it enables the creation of entirely \nnew industries on Earth and in space that have historically been technologically and economically infeasible for \nothers to access historically. \nWhen we have identified a new trillion-dollar market opportunity to pursue, we design a solution rooted in the same \nworld-class engineering and first-principles thinking that has driven our technological breakthroughs and success to \ndate. Our first trillion-dollar market was connectivity: we founded Starlink, a satellite service supported by our low-\nlatency, high-speed LEO constellation. Starlink required the rapid, low-cost deployment of millions of kilograms of \nhardware into orbit, a feat economically impossible to solve for anyone lacking our foundational launch capabilities. \nOur Starlink constellation powers a global connectivity platform capable of supporting the world’s largest and most \nadvanced space-based internet broadband service and satellite-to-mobile service, enabling high-speed internet access \nto homes, enterprises, governments, and mobile users around the world. We believe our next trillion-dollar market is \nAI compute, and we expect to leverage our rockets and satellites for massive orbital deployments of AI \ninfrastructure. We believe this AI compute infrastructure will help us develop and monetize the Grok model faster \nthan other AI companies that are dependent on finite sources of power on Earth. No other company has built the \ncapabilities to create value across all these end markets at scale.\n\n164\nTable of Contents\nIn addition, we believe we are poised to catalyze transformative breakthroughs in other industries on Earth and in \nspace such as long haul point-to-point terrestrial travel, in-orbit manufacturing, passenger and cargo transportation to \nthe Moon and Mars, manufacturing and energy production on the Moon and Mars, and asteroid mining. In \nparticular, we believe that if we achieve our goal of establishing a lunar presence, it will potentially enable terawatt-\nscale annual AI compute growth, support deeper space exploration and industrialization, and serve as a stepping \nstone to establishing a civilization on Mars. As we continue to scale and expand into new trillion-dollar markets, we \nexpect our more mature businesses will continue to generate substantial cash flows, enabling us to reinvest in \nemerging opportunities.\nBusiness Models that Are Incredibly Difficult to Replicate\nOur business model is simple to describe: leverage our unparalleled launch capabilities to reduce the cost of access \nto space, apply first-principles thinking and world-class engineering to solve large structural constraints, vertically \nintegrate across the value chain, continuously improve cost efficiency and throughput, and reinvest cash flow to \nexpand our capabilities and create new markets. While simple to describe, we believe this model is extraordinarily \ndifficult to replicate. We believe no other organization can execute this combination of reusable orbital launch \nsystems at industrial scale, breakthrough engineering designs with reliable high-volume manufacturing, full stack \nproprietary software, and end-to-end operational control. These capabilities reinforce each other, and our vertical \nintegration enables faster innovation cycles and structural cost advantages that widen our competitive advantage. \nOur business model has allowed us to build a diversified portfolio of complementary businesses and revenue streams \nfrom a common technological foundation. Our Space segment generates revenue from commercial and government \ncustomers, while also serving as the backbone for our Connectivity segment which generates highly predictable and \nrecurring subscription revenue from Starlink broadband consumer, enterprise, and government customers, as well as \nStarlink Mobile subscribers. The result is a powerful, self-reinforcing value creation cycle: success in one business \nfuels faster growth in the others, enabling reinvestment into the next frontier. We believe this model has the potential \nto create compounding value across our ecosystem, allowing our lead to grow and become more durable over time.\nMission-Driven Culture and World-Class Talent\nWe have the benefit of being founded and led by Elon Musk, one of the great visionaries of our generation. We \nbelieve that our ability to attract and retain world-class technical and engineering talent is a significant competitive \nadvantage. Our founding goal of making life multiplanetary serves as the ultimate mission-driven filter and retention \ntool, which has only been enhanced by xAI’s truth-seeking mission of understanding the universe. Top engineers are \ndrawn to SpaceX to work on some of the hardest, most consequential problems facing humanity—doing things that \nhave never been done before, like landing and re-using rockets, working towards making humanity multiplanetary, \nand gaining a better understanding of the mysteries of the universe through AI. They are also drawn to our intense, \nengineering-led, first-principles culture, which treats the laws of physics as the only true constraints. We reinforce \nthis culture through “The Algorithm,” a five-step iterative process that emphasizes making the requirements less \ndumb, deleting unnecessary processes or parts (embracing the principle that the best part is no part), only then \noptimizing what remains, accelerating cycle time, and automating only proven processes. Our organizational \nphilosophy embraces failure as an essential learning opportunity and maintains a relentless focus on efficiency and \nspeed, enabling rapid iteration and repeatable execution on the hardest technical problems. To this end, our \nengineering-oriented organization maintains access to some of the world’s most selective talent pool. In 2025, we \naccepted under 2% of our engineering applicants, reflecting our ability to be highly selective and hire among the \nbest talent in the industry. We also foster commitment by aligning employee interests with organizational success: \nour broad-based employee ownership program ensures that those who help us build the future are also direct \nbeneficiaries of our success. This commitment to quality and mission results in exceptional employee loyalty, \nreflected by an average tenure across our broader SpaceX leadership team of 12 years. \nOur Growth Strategies \nWe have created what we believe to be the world’s most ambitious vertically integrated innovation engine that \ncaptures significant growth across three domains: Space, Connectivity, and AI. While our Space segment provides \nus with a foundational competitive advantage that enables all other parts of our business, our Connectivity and AI\n\n165\nTable of Contents\nsegments are expected to be the primary driver of revenue growth in the near term. In the next few years, we are \nfocused on increasing the monetization of our existing Connectivity infrastructure and our existing AI user base. We \nalso intend to continue to build out our AI infrastructure, which we expect to enable growth as we address the \nsignificant AI market opportunity. Our growth strategy aligns with our value creation cycle where we identify \nemerging opportunities, invest in innovation, rigorously test and iterate, launch new offerings, and generate strong \ncash flows to fuel the next wave of breakthroughs.\nSpace \nIncrease launch payload capacity. We plan to drive meaningful growth in payload delivered to orbit (mass to orbit) \nthrough higher launch cadence and increased payload per launch, while enhancing launch efficiency and reducing \ncosts. Our next-generation fully and rapidly reusable Starship V3 vehicle is designed to carry 100 metric tons to \nEarth’s orbit in a reusable configuration, driving substantial improvements in payload capacity per launch, while \nenabling significantly more frequent flights, at unparalleled cost efficiency. To date, we have executed 11 Starship \nflight tests. We have also scheduled a 12th flight test, which will debut the next generation Starship vehicle and \nSuper Heavy booster, powered by the next evolution of our Raptor engine and launching from a newly designed pad \nat Starbase. We expect Starship to commence payload delivery to orbit in the second half of 2026. We have \nachieved innovative milestones, such as the creation of booster catches using “chopstick” arms that facilitate rapid \nrefurbishment and reuse, including launching multiple times per day. To enable a more frequent launch cadence and \noverall greater payload delivery, we are also expanding our ground launch infrastructure, including investing in \nadditional pads, on-site propellant production, and other support facilities, and investing in future generations of \nStarship, which could carry 200 metric tons in capacity, potentially as soon as Starship V4. We expect these efforts \nto continue to drive launch payload growth that is expected to provide the foundational capacity needed to scale our \nStarlink Broadband and Starlink Mobile constellations that underpin our Connectivity platform. Our growing \npayload capacity is also intended to underpin the deployment of orbital AI compute that will accelerate our AI \nbusiness, as well as benefit third-party customers who use our launch offerings.\nEstablish the lunar economy. Advancing access to the lunar surface represents an important next step in the \nevolution of our Space segment and is a prerequisite for long-term commercialization beyond Earth. We are focused \non developing the capability to transport significant amounts of cargo and crew to the lunar surface in a repeatable \nand economically viable manner. We believe this capability will also enable creating a petawatt-scale AI \nconstellation through the use of lunar satellite production and a lunar mass driver for launch activities. By leveraging \nStarship’s expected fully and rapidly reusable capabilities and in‑space refueling, we expect to materially reduce the \ncost of lunar missions relative to historical norms. Our initial efforts will prioritize lunar cargo landings and \nreturning Americans to the Moon, followed by expanded crewed missions that we believe can establish a continuous \nflow of cargo and humans between Earth and the lunar surface. \nWe believe that the foundation of a commercial lunar economy begins with achieving infrastructure development, \nlunar resource utilization, and high bandwidth communications at scale. This requires the ability to mine, extract and \nprocess raw material for the production of solar power on the lunar surface. Combined with the ability to locally \nproduce water and fuel, we believe these capabilities would enable sustained lunar operations, support lunar \nexploration, and provide the foundation for humanity’s permanent presence on the Moon. The lunar base would then \nallow sustained, high volume testing of new technologies in a space environment much closer to Earth than deep \nspace.\nWe intend to establish lunar‑based manufacturing capabilities, including factories to produce large‑scale AI compute \nsatellites. We believe we can efficiently launch our satellites at scale, namely due to the potential use of a lunar mass \ndriver that is capable of high-frequency, low-cost launches of satellites from the lunar surface. By shifting energy \nand material and mass-intensive satellite and solar manufacturing activities off Earth that leverage sustainable power \ngeneration and the Moon’s low gravity, we aim to significantly reduce costs and terrestrial resource constraints. We \nexpect to use raw materials from the Moon to construct most of the mass of the satellites and ship chips and other \nlower mass elements from Earth. This roadmap positions the Moon not only as a potential gateway to Mars and \nspace exploration, but as the first space-based industrial economy at scale.\n\n166\nTable of Contents\nOnce resource utilization capabilities are proven feasible, we believe there is an opportunity to commercialize the \nharvesting and exportation of rare materials, which is estimated to be present on the Moon in quantities exceeding \none million tons and has potential applications in future nuclear energy and quantum computing systems. Large-\nscale access to these resources, coupled with the Moon’s low gravity, could unlock the potential for scalable growth \nby establishing a vertically-integrated resource extraction, processing and exportation hub. Using Starship’s high \npayload capacity, we believe these materials could be economically transported directly to Earth. In parallel, the \nMoon could function as a proving ground for closed-loop ecosystems, long-duration habitats, and autonomous \nconstruction techniques, all of which are essential for industrialization. Over time, this infrastructure has the \npotential to position the Moon as a strategic industrial and transportation node.\nEstablishing lunar operations for mining, refueling, manufacturing, and habitation is subject to a variety of \ninterconnected engineering and other hurdles as well as known and currently unknown risks and uncertainties. These \ninclude hurdles, risks and uncertainties that relate to, among other things, transporting and deploying heavy \nequipment to the lunar surface, developing reliable power generation and storage systems, extracting and processing \nlunar resources at commercial scale, operating equipment in extreme temperature, radiation and dust conditions, \nmaintaining communications and navigation infrastructure, and supporting long-duration human presence in a \nremote and hazardous environment.\nConnectivity\nGrow Starlink Broadband customers. In the near term, we are focused on increasing global awareness of our \nStarlink brand and capabilities to grow our base of Starlink Broadband subscribers and to increase Starlink \nBroadband adoption in new and existing markets. \n•\nStarlink Consumer Broadband. We have grown the number of Starlink Subscribers rapidly over the last \nseveral years. As of March 31, 2026, we had approximately 10.3 million Starlink Subscribers across 164 \ncountries, territories, and other markets. These subscribers represent a small fraction of the estimated 3.3 billion \npotential end users in the markets we currently serve, many of whom still lack reliable high-speed broadband. \nBecause we report Starlink Subscribers on a per‑Service Line basis, the number of individual end users who \naccess Starlink is already likely meaningfully higher than 10.3 million, as multiple people may share a single \nService Line, including within a household. We intend to grow the number of Starlink Subscribers by \nexpanding our consumer distribution network across thousands of authorized retail stores globally and execute \nregion-specific marketing campaigns to increase Starlink brand awareness. By clearly demonstrating Starlink’s \nsuperior speed, low-latency, affordability, and ease of installation—not only in rural, remote, and infrastructure-\nlimited areas, but also in suburban and urban areas with wireline broadband options—we expect to drive \nmeaningful subscriber and revenue growth.\n•\nEnterprise and Government Starlink Customers. We plan to drive growth in enterprise and government \nStarlink customers through our direct, vertical-specific sales model. In recent years, we have assembled \ndedicated sales and engineering teams to market and support fleet-wide conversions in the aviation and \nmaritime sectors. This has enabled partnerships with many of the world’s leading airlines, including United \nAirlines, Southwest Airlines, Qatar Airways, Lufthansa Group, British Airways, Alaska Airlines, and Hawaiian \nAirlines, many of which have implemented or committed to fleet-wide Starlink installations for seamless in-\nflight connectivity. We have also partnered with premier cruise operators, such as Carnival Corporation, Royal \nCaribbean Group, MSC Cruises, and Norwegian Cruise Line Holdings, for full-fleet deployments that deliver \nreliable high-speed internet across thousands of vessels worldwide. In addition, we have partnered with land \nmobility operators, including John Deere and the California Fire Department, as well as passenger rail operators \nsuch as Brightline (Florida), and Italo Treno, to provide remote monitoring and management of their fleets. We \nare actively driving growth in these sectors by onboarding new major airlines, cruise lines, and land mobility \noperators around the world, expanding existing relationships through deeper fleet penetration, and introducing \nadvanced service tiers to make Starlink the standard connectivity solution for aviation, maritime, and land \nmobility customers globally. We also intend to expand our government customer base, securing major contracts \nwith the United States and allied governments while delivering secure, resilient, and mission-critical \nconnectivity for defense operations, humanitarian efforts, disaster response, and national security applications in \neven the most remote and challenging environments. We also serve a broad fixed‑site customer base across\n\n167\nTable of Contents\nindustries such as retail and financial services that require high availability for critical operations as well as \nreliable connectivity in remote or hard-to-serve locations. As companies continue to invest in secure and \nresilient networks to keep critical infrastructure—such as point‑of‑sale and payment processing systems—we \nsee an opportunity to grow our broad fixed‑site customer base, often starting as back-up and then transitioning \nto primary.\nExpand our Starlink Mobile offering. As of March 31, 2026, we provide Starlink Mobile services to approximately \n7.4 million monthly unique devices across approximately 30 countries. We partner with leading device \nmanufacturers, application developers, and mobile network operators to enhance the services we provide over one \nsatellite network, including over-the-top voice, video, and messaging. In 2025, we entered into agreements to \nacquire 65 MHz of spectrum in the United States and certain global Mobile Satellite Service spectrum licenses from \nEchoStar, which will enable a step-change in the possibilities for our Starlink Mobile service. Furthermore, we \nanticipate that Starship will be able to deploy approximately 50 mobile satellites per launch, significantly increasing \ncapacity per launch and accelerating the deployment of our next-generation constellation. With the deployment of \nour next-generation constellation, which is designed to fully utilize the acquired spectrum, and the expansion of our \nMNO partnerships, we aim to further deliver on our goal of providing connectivity for everyone and substantially \nreducing mobile “dead zones” worldwide—eventually with 5G connectivity to unmodified cell phones and IoT \ndevices globally.\nIncrease the capacity of our constellations. Our current constellations of approximately 9,600 Starlink broadband \nand mobile satellites, including over 3,000 satellites deployed in 2025, support over 700 Tbps of cumulative \ndownlink capacity. To support larger numbers of customers through our Connectivity segment, we plan to materially \nincrease the capacity of our broadband and mobile constellations. For our Starlink broadband constellation, we will \ncontinue deployment of more of our V2 Mini satellites, and in the second half of 2026, we expect to begin \ndeployment of our next-generation V3 satellites, each of which is designed to offer one Tbps of downlink capacity \nper satellite. We expect Starship will be able to deploy up to 60 V3 satellites per launch, representing a twenty-fold \nincrease in downlink capacity deployed per launch compared to Falcon 9, enabling a more rapid expansion of our \nStarlink broadband constellation at a significantly lower cost. For our Starlink Mobile constellation, we currently \nhave approximately 650 existing dedicated mobile satellites. We are developing more comprehensive satellite-to \nmobile services, which we refer to as our Starlink Mobile Gen2 services, including broadband data and IoT \nconnectivity, which are expected to deliver resilient, infrastructure-independent connectivity worldwide and enable \n5G connectivity. \nWe plan to expand our mobile constellation by deploying our next-generation mobile V2 Mobile satellites in 2027 \nwhich, combined with the EchoStar spectrum acquisition and optimized 5G protocols, are expected to increase \ncapacity by orders of magnitude compared to our first-generation constellation. In the U.S., the FCC approved the \nEchoStar license transfer in May 2026, and we separately expect to receive the remaining necessary U.S. regulatory \nauthorizations in the second or third quarter of 2026. While these authorizations would be sufficient from a U.S. \nregulatory perspective, we still require our V2 Mobile satellites to be in orbit and must complete the acquisition of \nthe relevant spectrum from EchoStar before we can commence our planned commercial Gen2 service in the United \nStates. Internationally, we have filed applications in nearly every country in which we intend to operate our Gen2 \nservice, and approvals have been granted in a limited number of these jurisdictions to date. Each international \njurisdiction presents its own regulatory process and timeline, and we cannot predict when or whether approvals will \nbe granted in any given market. In addition, our Gen2 service is subject to ITU coordination requirements. We have \nan operational coordination agreement with EchoStar, which we expect to continue through 2026 and 2027, under \nwhich EchoStar has agreed to protect our lower-priority S-band V2 Mobile constellation. By prioritizing these step-\nchange capacity increases in our satellite-to-mobile capabilities, we expect to both enhance high-speed, low-latency \nservice quality in existing markets and provide services to previously capacity-limited and unserved regions, \nincluding dense urban areas and emerging markets.\nAI \nGrow consumer AI platform monetization. We plan to continue to grow revenue from our AI platform, the Grok \napplication, by increasing monetization of our existing user base. We will leverage our unique combination of \nreal‑time data, large‑scale distribution, leading foundational model, and hardware expertise to increase the number\n\n168\nTable of Contents\nof Grok subscribers. Subscribers benefit from enhanced functionality, exclusive features, and access to our latest AI \nmodels. Since the introduction of our Grok subscription offering in 2025, we have increased the number of available \nfeatures to add value to our subscribers, including providing access to our latest and enhanced AI tools. We plan to \ncontinue adding new features and functionality while releasing increasingly capable Grok models to increase the \npenetration rate of our subscriber base. Our AI segment has demonstrated exceptional model velocity: since \nlaunching Grok, we have developed leading frontier models at a far faster rate of innovation than others. We \ncontinue to invest in scaling Grok through subsequent generations, including Grok 5. Our roadmap for future models \ncontains multi-trillion parameter models, which could represent a step change in reasoning depth and overall \nintelligence. We believe this pace of innovation strengthens the value proposition of our subscription offerings and \nsupports long term subscriber growth. While our subscriber growth has been strong, we believe we are still early in \nincreasing paid penetration across our Grok user base. We further believe there might be an incremental \nmonetization opportunity by introducing advertising into our stand-alone Grok offering. \nGrow X monetization. We intend to drive X revenue growth by increasing engagement across our users, increasing \nX Premium subscriber conversion, growing advertising revenue per user, and diversifying our advertising base. We \ncontinue to evolve X into an “Everything App,” integrating real-time information, communications, media, \npayments, banking, and more within one consumer app experience. This can improve the usefulness of X, and \ntherefore increase the usage and monetization potential of X. We have demonstrated rapid product launch velocity, \nwith frequent features and products launched since 2023, including Grok integration, long‑form video, audio and \nvideo calling, secure messaging, tool calling, long-form articles, and creator tools. We plan to further broaden the \nvalue proposition of X through offerings like Money, a product we launched in beta in November 2025, which aims \nto expand platform utility by enabling payments and other financial services. We updated X chat in 2025, featuring \nend-to-end encryption and no connection to our ad personalization, unlike other messaging services. We intend to \nfurther embed Grok throughout X to enhance discovery, analysis of posts, user support, and personalization, \nincreasing the usefulness of X and further improving the value of a paid subscription.\nWe also expect to grow advertising revenue per user and to diversify our advertiser base over time because of X’s \ncompelling advertiser value proposition—large-scale user engagement, real-time content, and advanced AI-driven \nperformance marketing tools. We intend to drive further advertising revenue growth by improving our performance \nadvertising capabilities, embedding AI to optimize ad campaigns, and launching richer ad formats, including those \nthat increase advertiser return on ad spending and their spend with us. In determining our advertising rates, we use \nan auction process in which advertisers bid to have their ads shown to the audience they are targeting, except for \ncertain reserved inventory, which is sold on a fixed price basis. We provide advertisers with several engagement \nmetrics, including: the number of impressions, price per ad, clicks, and conversions. Currently, Grok API access is \nnot included in our advertising rates to advertisers. We do not currently sell or offer advertisers the ability to place \nads on the Grok API. \nWe also expect X’s real-time content stream and engagement feedback, subject to some limitations for certain \ncontent, to strengthen our advertising product performance and relevance, improving outcomes for both consumers \nand advertisers, and increasing retention. We also began a phased roll-out of our new advertising platform, including \nthe new X Ads Manager, in April 2026. X Ads Manager is designed to help advertisers launch better campaigns \nfaster, with AI-powered systems enabling more precise, relevant, and dynamic ad delivery and a centralized \nworkflow for campaign creation, optimization, and real-time monitoring. Grok supports this strategy by helping \nadvertisers with campaign creation, creative optimization, and alignment with trending topics and user intent. \nDeepen enterprise and government adoption. We believe adoption of AI by both enterprise and government reflects \na structural industry shift, with room for substantial long-term growth. Our Grok Business, Grok Enterprise, and xAI \nGov offerings position us to scale in tandem with broader enterprise and governmental AI adoption. Our Grok API \nfurther extends our reach by enabling developers to integrate our models directly into their applications and \nworkflows. We intend to further support our enterprise offerings with a specialized salesforce and forward deployed \nengineers, engineers who embed directly with a client to implement our solution, to support customer acquisition \nand expansion.\nIncrease the scale of our terrestrial power and AI compute infrastructure. We plan to rapidly scale our terrestrial \nAI compute infrastructure through the continued deployment of large-scale clusters to support the training and\n\n169\nTable of Contents\ninference of our AI models. To rapidly bring gigawatt-scale data centers online, we leverage world-class \nengineering, first-principles thinking and deep “shovels-to-tokens” vertical integration. Our AI compute facilities, \nCOLOSSUS and COLOSSUS II, collectively provide approximately 1.0 gigawatt of compute power, with additional \npower capacity available for data center operations. COLOSSUS II will also provide the compute to train our next-\ngeneration Grok 5 AI model. We expect that once fully operational, the next phase of expansion at COLOSSUS II \nwill represent an additional 400MW of compute capacity. Our first-principles thinking enables us to build coherent \ncompute at scale and at rapid speed with lower costs than most other companies in the industry. We brought the first \ncluster of COLOSSUS online in 122 days, repurposing the shell of an existing factory, and the first cluster of \nCOLOSSUS II online even faster in 91 days. As an illustrative comparison, an industry benchmark to bring online a \n100 megawatt greenfield data center is approximately two years. We also demonstrated a significant improvement in \ncost efficiency, achieving data center construction costs for COLOSSUS II that are considerably lower than industry \nbenchmarks on a per megawatt basis. As AI workloads increase in complexity and scale, data center operators face \nconstraints related to power density, cooling, network bandwidth, supply chain management, construction expertise \nand capital deployment. Our experience in designing mission-critical hardware systems, optimizing power \nefficiency, and operating distributed infrastructure networks provides a differentiated foundation for continuing to \ngrow and advance the next-generation compute platform. We believe that continued investment in our compute \ninfrastructure is critical to supporting long-term consumer and enterprise growth as AI adoption accelerates, while \nalso providing a powerful foundation for our transition to orbital AI compute at scale.\nIn addition, our leadership in compute infrastructure positions us to monetize not only AI software applications built \non our models, but also the underlying compute that powers them. As we continue to scale our terrestrial compute \ninfrastructure to support internal model development, training, and inference workloads, we intend to sell our high-\nperformance compute capacity to a limited number of third party customers.\nDeploy orbital AI compute at scale. We believe growth of the projected $26.5 trillion-dollar AI market will be \nconstrained by Earth’s inability to rapidly scale power generation, underscoring the challenge of achieving terawatt-\nscale compute without harming people and the environment. While we expect terrestrial power generation to \ncontinue to grow, we believe the physical, environmental, and regulatory constraints will prevent it from delivering \nthe orders-of-magnitude increases needed to match future energy demands of the AI era. Power from the Sun, an \nenormous, free fusion reactor in the sky, represents approximately 99.8% of the solar system’s energy and offers the \nonly truly scalable solution to terrestrial energy constraints. By combining virtually unlimited solar power in space \nwith our industry-leading launch costs and satellite manufacturing capabilities, we believe we can deliver compute \nover time at a fundamentally lower cost structure than is possible on Earth. By the end of the decade, we intend to \ndeploy the first modular orbital AI compute shells and begin monetizing capacity through the sale of AI software \nand AI compute. We aim to launch 100 gigawatts of AI compute capacity on solar-powered satellites each year, \nequivalent to roughly one fifth of total annual U.S. power production in 2025. The amount of compute capacity we \ncan launch depends on three components—payload, satellite capacity, and launch frequency. With respect to \npayload, Starship V3 is designed to deliver 100 metric tons to space in a fully reusable configuration while enabling \nrapid turnaround times, and future generations could reach 200 metric tons, potentially as soon as Starship V4. With \nrespect to satellite capacity, we expect solar cells optimized for the space environment will be produced at a rapid \nrate, with early satellites generating 100 kilowatts of compute power and scaling from there. Finally, with respect to \nlaunch frequency, we expect to be able to scale to thousands of launches per year. Together, we expect these \nachievements will allow us to transport approximately one million metric tons to orbit annually, powering 100 \ngigawatts of AI compute. Such compute capacity will also play a critical role in advancing our human augmentation \nvision by expanding the reach, speed, and capability of AI beyond what is possible with terrestrial compute \ninfrastructure alone.\nWe believe we are well-positioned to execute and deliver orbital AI compute to build the infrastructure of the future. \nWe believe orbital AI compute is an incredibly difficult challenge that only we can solve at scale in the near term. \nDesign and manufacture our own chips. We plan to deepen our strategic collaboration with Tesla and Intel through \nTerafab. In connection with such collaboration, we have agreed with Tesla on a general framework for the future \ndevelopment of Terafab. Any specific projects undertaken pursuant to this framework will be subject to separate \nnegotiations and agreements (including any development timelines, milestones and capital expenditures) and have \nnot yet been determined. We expect Terafab to be the world’s largest chip manufacturing facility, with the goal of\n\n170\nTable of Contents\neventually achieving one terawatt of annual compute production capacity. While Terafab is intended to expand our \ninternal chip manufacturing capabilities, we expect to continue sourcing a significant portion of our compute \nhardware from third-party suppliers. We view Terafab as complementary to these relationships, enabling us to \naugment our access to compute hardware at massive scale and further complete our highly vertically integrated \ncompute platform by extending our control to the foundational chip layer. By developing end-to-end capabilities \nspanning the design of lithography masks, fabrication of logic and memory chips, and advanced packaging, all in a \nvertically integrated closed-loop single plant, we will be able to more rapidly iterate to improve chip design and \nperformance. We plan to design chips that are optimized for the space environment. This collaboration directly \nenables our planned orders-of-magnitude increases in AI compute deployment in orbit which would be constrained \nby pure reliance on external foundries. Leveraging shared engineering resources, intellectual property, and \ninfrastructure across Tesla and SpaceX, as well as Intel’s expertise in designing, fabricating and packaging ultra-\nhigh-performance chips at scale, Terafab is designed to create powerful ecosystem synergies that accelerate \ninnovation cycles and reduce costs. Just as we manufacture approximately 80% of Starship in-house, we expect \nsignificant speed and cost advantages from Terafab’s vertical integration. We believe this integration, if achieved, \nwill provide us with a critical competitive advantage in the race to scale AI infrastructure, especially as we begin our \norbital AI compute satellite deployments.\nLaunch digital human augmentation. In partnership with Tesla, we are developing Macrohard, an agentic platform \ndesigned to fully emulate digital workflows and augment human operation of computers—from coding and product \ndevelopment to management and entire business processes. Similar to how autonomous systems emulate human \ninputs to execute complex tasks, Macrohard is designed to augment how humans operate computers and tools to \nanalyze, create, and manage workflows. Unlike other enterprise software and AI applications that primarily digitize \nworkflows and systematize historical processes, our solutions are designed to operate as real-time, intelligence-\ndriven extensions of the user. Macrohard aims to combine our frontier AI model with Tesla’s physical AI prowess to \nachieve the goal of augmenting the operational functions of entire companies. We expect Macrohard to benefit from \nrunning on both state-of-the-art processors and cost efficient Tesla processors, a critical advantage of our vertical \nintegration. We believe Macrohard has the potential to fundamentally transform how companies across all industries \nare structured and operate, thereby allowing dramatic increases in human productivity and prosperity.\nFuture Markets\nWe aim to build the infrastructure of the future in Space, leveraging our foundational competitive advantage, the \nability to launch mass at scale. By opening access to space to industries on Earth, we can grow our business by \ncreating new markets. Our technological capabilities enable us to repeatedly create new markets by pushing the \nboundaries of what space can support. As we continue to advance and scale, we expect to unlock new market \nopportunities. Over the long-term, we expect our Starship-enabled opportunities to include: \n•\nPoint-to-point terrestrial travel. We plan to develop ultra-fast long-haul point-to-point Earth transport using \nStarship, enabling passengers and cargo to travel between major cities in a fraction of current transit times, \nrevolutionizing global logistics and passenger travel with unprecedented speed and efficiency.\n•\nSpace tourism. With meaningful advances in space technology and the continued build-out of orbital flight \ninfrastructure, we expect increasing interest in human space travel as it becomes easier and more common to \naccess space. \n•\nIn-orbit manufacturing. We aim to establish in-space manufacturing facilities that leverage the unique \nmicrogravity conditions of space to produce materials, pharmaceuticals, and advanced components that are \ndifficult or impossible to manufacture on Earth, opening new high-value industrial markets.\n•\nPassenger and cargo transport to the Moon and Mars. We intend to support large-scale passenger and cargo \nmissions to the Moon and Mars, delivering the people, equipment, and supplies needed to establish permanent \nhuman settlements and accelerate the path to becoming a self-sustaining multiplanetary civilization.\n•\nEnergy production on the Moon and Mars. We aim to develop large-scale solar energy production on the \nMoon and Mars, taking advantage of the thin atmosphere and constant solar exposure to generate power for \nmanufacturing, habitats, and future infrastructure at scale.\n\n171\nTable of Contents\n•\nManufacturing capabilities on the Moon and Mars. We plan to build manufacturing infrastructure on the \nMoon and Mars that utilizes local resources to produce fuel, construction materials, and other essential \nresources, reducing dependence on Earth resupply and enabling sustainable long-term presence.\n•\nAsteroid mining. We plan to pursue asteroid mining operations to extract metals and other critical resources \nfrom near-Earth and main-belt asteroids, providing abundant raw materials for space-based industries and \nreducing the need to launch mass from Earth.\nOur Market Opportunity\nWe believe space represents the largest economic frontier in human history. Our innovations and technological \nadvancements are redefining existing industries and creating new market opportunities across Space, Connectivity \nand AI. We believe we have a distinct ability to identify, develop, and commercialize new multi-trillion-dollar \nmarkets that did not previously exist. We currently stand alone in our ability to deliver revolutionary breakthroughs \nacross spaceflight and exploration, global connectivity, and artificial intelligence, enabling an age of abundance that \nwe believe has the potential to propel an unprecedented expansion in the global economy. \nBy pioneering the world’s first and only fleet of reusable rockets at scale, we revolutionized space access through \ndramatically lower cost and unmatched reliability. Lowering costs by orders of magnitude creates entirely new \nindustries on Earth and in space that were technologically and economically infeasible for others to access \nhistorically. Our first trillion-dollar market was Starlink, a satellite service supported by our low-latency, high-speed \nLEO constellation that required the rapid, low-cost deployment of millions of kilograms of hardware into orbit. Our \nStarlink constellation powers a global connectivity platform capable of supporting broadband and mobile services, \nenabling high-speed internet access to homes, enterprises, governments, and mobile users across virtually any \nlocation on Earth. We believe our next trillion-dollar market is AI compute, which we contemplate will leverage our \nrockets and satellites for massive orbital deployment. \nWe believe we have identified the largest TAM in human history. We estimate that our quantifiable TAM is $28.5 \ntrillion, consisting of $370 billion in Space from space-enabled solutions; $1.6 trillion in Connectivity across $870 \nbillion in Starlink Broadband and $740 billion in Starlink Mobile as well as additional opportunities in enterprise \nand government; $26.5 trillion in AI across $2.4 trillion in AI infrastructure, $760 billion in consumer subscriptions, \n$600 billion in digital advertising, and $22.7 trillion in enterprise applications. For illustrative purposes of sizing our \naddressable market opportunity, we exclude China and Russia from our global estimates. \nIn addition to the markets we serve today, we believe we are poised to catalyze transformative breakthroughs and \ncreate entirely new markets. Given these are longer-term opportunities at earlier stages of development, we do not \nquantify them in our TAM estimates; however, we believe that over time each of these markets could eventually \nrepresent multi-trillion-dollar economic opportunities. These new markets include long haul point-to-point terrestrial \ntravel, space tourism, in-orbit manufacturing, asteroid mining, energy production and manufacturing on the Moon \nand Mars, and passenger and cargo transportation to the Moon and Mars.\n\n172\nTable of Contents\nSpaceX’s Estimated TAM by Segment\nSpace\nWhile the size of the space market is massive for any company to address, our capabilities in space represent a \nfoundational competitive advantage that allow us to address markets that represent significant portions of global \ngross domestic product (“GDP”)—connectivity and AI. We estimate a total market opportunity of $370 billion \nacross space-enabled solutions, with the lunar economy presenting a significant upside not included in the estimate.\nSpace-Enabled Solutions. According to Novaspace, space-enabled solutions represented a $370 billion market in \n2025, including spacecraft manufacturing, launch services, satellite operations, positioning, navigation and timing \n(“PNT”) devices and value-added services, as well as uncontracted costs of government space agencies. Both \ncommercial and government customers participate in this market, with growing space-based defense budgets \nreflecting prioritization of security, resilience, and strategic autonomy by governments globally. For the purpose of \nsizing our TAM, we exclude the value of satellite communications services, as we include those within our \nConnectivity segment.\nLunar Economy. We believe the development of a sustained human and commercial presence on the Moon has the \npotential to give rise to a new lunar economy encompassing transportation, infrastructure, communications, energy, \nmanufacturing (including the production of satellites and advanced chips), resource extraction, and scientific and \ncommercial activity. Early demand is already emerging from government space agencies and research institutions, \nand we expect this to expand over time to include commercial enterprises seeking to leverage the Moon as a \nplatform for logistics, industrial activity, and deep-space exploration. Establishing a lunar economy requires first \nproving reliable extraction of water ice to sustain life and producing hydrogen-oxygen propellant, alongside building \npower, transport, and storage infrastructure in an extreme, high-cost environment. If achieved, we believe these \nsame resources and the Moon’s low gravity unlock the potential for scalable growth through an efficient fuel \nproduction and refueling hub, creating a strategic access point that can potentially support deeper space \nindustrialization and serve as a stepping stone to establishing a civilization on Mars. Although we believe the \npotential size and scope of the lunar economy is extraordinarily large, we are not providing an estimate of the TAM \nfor this opportunity at this time because expectations regarding the timing, pace of adoption, regulatory frameworks, \nand ultimate scope of commercial activity beyond Earth are rapidly evolving alongside the development and \ndeployment of the technology necessary to establish a lunar presence (such as Starship). As the Moon transitions\n\n173\nTable of Contents\nfrom a scientific outpost into an industrial frontier, SpaceX is positioned to spearhead this revolutionary expansion, \nand we believe that continued advancements in our launch capabilities, space infrastructure capabilities, and cost \nefficiency will allow us to meaningfully accelerate the development of a sustainable lunar economy.\nConnectivity\nWe believe the global connectivity market represents a substantial and durable opportunity, driven by the increasing \nreliance of consumers, enterprises, and governments on high-speed, low-latency, reliable connectivity across both \nterrestrial and remote environments. Across Starlink Broadband and Starlink Mobile, we estimate a total market \nopportunity of $1.6 trillion reflecting primarily consumer use cases. We believe these traditional use cases, however, \ndo not account for the long-term market opportunity, as connectivity is evolving into a critical infrastructure layer \nunderpinning the global economy, enabling entirely new categories of demand. As high-performance, ubiquitous \nconnectivity becomes embedded across transportation networks, autonomous systems, and smart devices, we expect \nthe scope of the market to extend well beyond the traditional definitions. \nStarlink Broadband. The global demand for ubiquitous, high-speed broadband internet creates an approximately \n$870 billion dollar opportunity. Our satellite broadband service, Starlink, is positioned to capture value across \nmultiple massive and rapidly expanding markets: \n•\nConsumer Broadband. As the digital economy continues to expand, ubiquitous, high-speed, reliable internet \nhas become a structural necessity for households worldwide—powering opportunity and the next wave of \nglobal prosperity. According to Euromonitor, there were approximately 1.8 billion global households in 2025. \nAs Starlink develops, we believe that our broadband network can connect, and improve the existing connection, \nof every household globally. Given varying economic conditions and consumer purchasing power across \ndifferent countries, we use a different monthly ARPU for different parts of the world based on country-specific \nconsumer broadband ARPU from Omdia as we seek to make our service affordable and accessible across \ndifferent economic development contexts. Region-specific ARPU assumptions result in a weighted average of \n$31 monthly ARPU for residential broadband internet services globally, according to Omdia. This global \naverage consists of a weighted average monthly ARPU of $43 in high-income markets, $16 in upper-middle \nincome markets, and $9 in lower-middle income and low income markets per World Bank classification. \nTogether this represents a total addressable market of $660 billion based on 1.8 billion households.\nApproximately 40% of the global population lives in rural areas, remaining structurally underserved by \nterrestrial broadband infrastructure due to unfavorable deployment economics, limited network density and high \nlast-mile costs. \nThis structural imbalance creates a large, durable and relatively uncontested baseline market for satellite-based \nconnectivity solutions. For many of these households, Starlink represents the first viable option for high-speed, \nlow-latency internet access, with limited competition from terrestrial providers. Unlike terrestrial networks, \nwhich require significant incremental capital to extend coverage to low-density areas, our space-based \narchitecture enables economically scalable service delivery across these regions with minimal marginal cost per \nadditional user.\nImportantly, while rural and underserved geographies provide a compelling initial adoption vector, we believe \nStarlink’s value proposition extends well beyond these markets. As network capacity increases and product \nperformance continues to improve, we expect to compete increasingly in suburban and urban environments. \nAccordingly, while rural households represent a large and durable entry point for our connectivity offering, we \nview this segment as a foundational layer upon which significantly broader consumer, enterprise and \ngovernment demand can be built.\n•\nEnterprise Solutions. We offer fixed site broadband solutions tailored for the needs of our enterprise customers \nacross many different industries, including construction, agriculture, retail, telecom, hospitality and others. For \nthe purpose of sizing market opportunity, we include small and medium sized businesses within our Enterprise \nSolutions market opportunity. Our Starlink enterprise offerings can provide important primary or back-up \nconnectivity for every business in the geographies where we are licensed to operate. According to Grand View\n\n174\nTable of Contents\nResearch, the global business broadband market in 2025 across small to medium sized business and enterprise \nusage is estimated to be $200 billion. \n•\nGovernment Solutions. Driven by increasing demand for resilient, low-latency, and highly secure \ncommunications in contested and remote environments, defense organizations and governments around the \nworld are increasingly turning to commercial satellite providers with connectivity solutions to supplement and \nenhance traditional military networks. According to Novaspace, the global satellite communications market \ndriven by defense and government demand in 2025 was $5 billion. The estimate of the government \ncommunications market includes only publicly disclosed programs and budgets and does not include classified \nmissions or other restricted uses, which we believe represent additional sources of demand.\nStarlink Mobile. According to Omdia, as of December 31, 2025, there were eight billion mobile connected devices \nglobally. We believe our Starlink Mobile offering will be able to provide continuous global coverage and \nsubstantially reduce mobile “dead zones,” which remain areas that are structurally underserved by the limitations of \nthe networks of current mobile network operators. For example, according to the J.D. Power U.S. Wireless Network \nQuality Performance Study, U.S. wireless customers experienced service problems in approximately one out of \nevery 11 mobile interactions, even in well-connected areas. In addition, an estimated 40% of the global population \nresided in rural areas in 2024 according to the World Bank, where terrestrial mobile coverage can be limited or \nunreliable. While we expect Starlink Mobile service today to be most impactful for customers in remote areas \nuncovered by terrestrial mobile networks, as our constellation grows and our product performance continues to \nimprove, we will compete to be the preferred connectivity experience to our customers no matter where they are \nlocated, whether in rural, suburban, or urban areas. The next-generation of Starlink Mobile satellites, in combination \nwith our recent purchase of wireless spectrum from EchoStar, is designed to provide high bandwidth and low \nlatency connectivity directly to end user devices, enabling a connectivity solution on par with terrestrial mobile \nnetworks. Given varying economic conditions and consumer purchasing power across different countries, we \nassume a different monthly ARPU for different parts of the world as we seek to make our service affordable and \naccessible across different economic development contexts. Our region-specific ARPU assumptions result in a \nweighted average monthly mobile ARPU of $8 per user. This global average consists of a weighted average monthly \nARPU of $18 in high-income markets, $5 in upper-middle income markets, $2 in lower-middle, and $2 in low \nincome markets. Based on the total number of connected devices globally and the mobile ARPU, we estimate the \nStarlink Mobile market opportunity to be $740 billion. We expect to continue to partner with mobile network \noperators globally as we expand coverage and participate in the broader mobile connectivity market.\nAdditional and Future Starlink Applications. We believe the long-term market opportunity for Starlink extends \nmaterially beyond traditional fixed broadband and satellite-to-mobile connectivity. Many of these use cases \nrepresent new categories of demand that were not previously addressable with legacy terrestrial or satellite solutions \ndue to limitations in coverage, latency, capacity, or cost. While these additional and future use cases are early stage \nand not yet captured in conventional industry market definitions, we believe they have the potential to significantly \nexpand the total addressable market for connectivity over time.\n•\nEnterprise Mobility. Because our Starlink solutions are uniquely well-suited for in-motion environments, \nremote, or hard-to-serve locations, we are able to provide high-performance connectivity across land, air, and \nsea. We believe we have a differentiated right to win these verticals as existing connectivity solutions are not \nable to provide sufficient speed, latency and reliability, with frequent service outages driven by weather, orbital \nmechanics and coverage gaps. Our Starlink constellation directly addresses these deficiencies, creating a \ncompelling path for us to capture a substantial share of opportunities and to unlock previously unattainable \nlevels of service quality and customer willingness to pay.\nIn land mobility, Starlink supports connectivity for vehicle fleets, including trucking, rail, public safety vehicles, \nand autonomous systems, enabling real-time telematics, route optimization, safety monitoring, and onboard \npassenger connectivity, as fleets become increasingly connected and data-driven. \nIn aviation, Starlink delivers high-speed, low-latency in-flight connectivity for commercial airlines, business \naviation, and government aircraft, supporting passenger broadband, operational communications, and real-time \naircraft data transmission, as airlines increasingly prioritize differentiated onboard experiences and operational\n\n175\nTable of Contents\nefficiency. There are approximately 23,900 commercial aircraft, according to Oliver Wyman, and \napproximately 24,500 privately owned aircraft, according to Corporate Jet Investor, in the world, which can be \nserved by our aviation offering.\nIn maritime, Starlink provides connectivity for commercial shipping, offshore energy platforms, cruise lines, \nand government vessels, enabling crew welfare, operational optimization, safety systems, and real-time data \ntransfer, as connectivity becomes a standard requirement across global fleets. Our potential customer base as of \n2025 consists of approximately 99,000 commercial merchant ships, defined as being 100 gross tons or more, \napproximately 21,000 fishing vessels, and approximately 4,000 cruise ships and private yachts, according to \nMarine Traffic Dashboard. \n•\nExpanded Enterprise and Government Applications\nEnterprise Back-Up and Failover Connectivity. As connectivity becomes a mission critical component of \nenterprise operations, we believe back-up and failover connectivity is evolving into a foundational layer of \nenterprise infrastructure. The increasing cost of downtime, combined with the proliferation of cloud-based and \nlatency-sensitive applications, is driving enterprises to prioritize uptime, business continuity, and network \nresilience and adopt multi-layered connectivity architectures. We believe this shift will result in a meaningful \nexpansion of the connectivity market. \nExpanded Government Applications. We believe traditional connectivity market estimates do not fully \ncapture the scope of government-related demand, particularly in mission-critical and classified applications. The \ngrowing importance of secure communications, real-time intelligence, and resilient network architectures is \ndriving sustained investment in connectivity capabilities across defense and civilian agencies. These use cases \ntend to command higher value and longer-duration contracts, contributing to a meaningful and durable \nexpansion of the connectivity market. \nSmart Device Connectivity. The proliferation of connected devices across various physical environments—\nincluding sensors, wearables, vehicles, appliances, and infrastructure systems—is driving increasing demand for \nubiquitous, reliable, and low-latency connectivity. As of 2025, there were approximately 22 billion IoT \nconnected devices globally, forecasted to reach 47 billion by 2031. As billions of connected devices generate, \ntransmit, and act on data, connectivity becomes an essential enabler of new categories of economic activity. As \nthese devices grow in scale into the tens of billions globally and become more intelligent and data-intensive, we \nbelieve the scope of the connectivity market will expand significantly beyond traditional human-centric usage.\nIn-Orbit Data Transport. We operate a large constellation of over 23,000 inter-satellite lasers that create a \ndynamic mesh network in space and enable traffic rerouting through orbit. We believe this laser mesh network \nwill help us unlock a new connectivity market by enabling third-party satellites to utilize our in-orbit data \ntransport layer. While most of our laser mesh network capacity is used to power our Starlink services, we \nselectively monetize excess capacity through our Plaser program. We allow third parties to purchase our space \nlaser hardware and connect their satellites to our Starlink network, allowing them to offload data to a ground \nstation anywhere on Earth while bypassing the need to build their own relay architecture or ground stations. As \nsatellite constellations grow, we expect market demand for high-throughput, low-latency data relay to increase \nacross commercial and government operators. While this market remains nascent, we believe the opportunity \nrepresents a meaningful expansion beyond traditional satellite connectivity TAM.\nArtificial Intelligence\nThe market for artificial intelligence is currently undergoing explosive structural growth, emerging as a foundational \nutility for the modern global economy and unlocking a multi-trillion-dollar opportunity. Our frontier models, \nconsumer and enterprise applications, and AI infrastructure solutions are strategically positioned to capture value \nacross four key components of this vast ecosystem, resulting in an estimated total market opportunity of $26.5 \ntrillion.\nAI Infrastructure. According to RAND Corporation, global data center compute demand is estimated to be 235 \ngigawatts in 2030, of which 70% is estimated to be utilized for AI workloads. Assuming a target Power Usage\n\n176\nTable of Contents\nEffectiveness of 1.2 and an all-in chip power consumption per GPU of 1.3 kilowatts per GPU—that of an H100 \nSXM—this AI workload demand corresponds to 104 million GPUs required. We apply an 80% utilization rate per \nthe National Electrical Installation Standards and a GPU rental rate of $3.33 per hour, according to Silicon Data, \nwhich is based on the median of neocloud GPU rental rates in 2025; we note that the rental rate has historically \nvaried subject to market conditions. As a result, we estimate the AI compute infrastructure market opportunity to be \napproximately $2.4 trillion.\nConsumer Subscriptions. As demand for AI solutions surges, fueled by widespread adoption of AI tools that \nenhance productivity, creativity, personalization, and real-time assistance in everyday life, consumers are \nincreasingly turning to subscription-based access to high-performance AI platforms. These platforms, equipped with \nadvanced reasoning, seamless real-time data integration, and multimodal capabilities, are essential in today’s ever-\nmore receptive and interconnected world. We believe SpaceX is well positioned to address this opportunity through \nour X and Grok platforms by delivering a differentiated product centered on truth-seeking and real-time relevance. \nOur roadmap for future models contains multi-trillion parameter models, which could represent a step change in \nreasoning depth and overall intelligence. Through Grok’s integration with X and proprietary access to real-time data \ninflows, we believe we can better address a broader set of high-frequency, high-value consumer use cases and \nincrease user engagement and willingness to pay, positioning Grok to capture a larger share of the consumer AI \nsubscription market relative to standalone, non-integrated offerings. We estimate our market opportunity based on \nthe global population of individuals aged 10 and over in 2025—approximately five and a half billion according to \nEuromonitor—multiplied by the weighted average monthly subscription revenue of $12, resulting in an annualized \nmarket opportunity of approximately $760 billion. Our weighted average monthly revenue assumes different \nmonthly subscription fees across different geographies around the world. We assume $30 monthly cost of a \nSuperGrok subscription in high-income countries, $8 monthly cost in upper-middle and lower-middle income \ncountries, and significantly lower monthly cost in low income countries, as defined by the World Bank.\nDigital Advertising. Digital advertising represents a large and growing global market opportunity as businesses \nincrease marketing budgets towards digital platforms that enable targeted advertising, measurable performance, and \ndirect engagement with consumers. In 2025, global digital advertising spending totaled $600 billion according to \nS&P Global Market Intelligence. We believe that X’s ability to combine large-scale user engagement, real-time \ncontent, and advanced AI-driven performance marketing tools positions us well to participate in this significant \nmarket opportunity. \nEnterprise Applications. AI is revolutionizing enterprise applications as organizations across industries increasingly \nadopt AI solutions to automate complex workflows, augment knowledge workers, enhance decision-making, \nredefine productivity, and improve operational efficiency. Specifically, we believe that our enterprise applications, \nincluding Macrohard, agentic AI, will increasingly support knowledge workers across industries by automating \nroutine cognitive tasks, assisting with research and analysis, generating content and code, and refining decision-\nmaking processes. Ultimately, we believe this transformation could evolve knowledge workers into empowered \nmanagers of autonomous agents, unlocking unprecedented levels of creativity and productivity.\nWe believe we are still in the early days of AI transforming enterprises, with AI-powered enterprise applications \npoised to reshape the digital economy. The Digital Cooperation Organization (“DCO”) defines the digital economy \nas economic activity reliant on, significantly enhanced, or enabled by digital technologies and their applications, \nincluding the following products and services: AI and advanced analytics, blockchain and decentralized \ntechnologies, cloud services, digital connectivity, digital devices and the IoT, encryption and cybersecurity, \nimmersive technologies, and robotics and autonomous systems. DCO estimates that the digital economy will grow \nthree times faster in 2026 on a year-over-year basis compared to the estimated growth of the global GDP, reaching \napproximately $22.7 trillion in 2026. In a survey of CTOs, senior technologists, policymakers, and digital economy \nexperts, also conducted by DCO, AI and advanced analytics were identified by 69% of respondents as their top \ndigital technology priority—higher than any other surveyed priority. We believe that our enterprise strategy, which \nis focused on serving the digital needs of the world’s largest industries with AI solutions, positions us competitively \nto pursue this rapidly growing opportunity.\n\n177\nTable of Contents\nFuture Markets\nBeyond the established markets reflected in our TAM, we envision that ongoing advancements in our technology \nand infrastructure will unlock entirely new markets over time. As launch costs decline, satellite capabilities advance, \nand large-scale compute infrastructure expands, innovative applications and new markets may emerge that harness \nour integrated infrastructure across space, connectivity, and AI. Although these prospects remain nascent, with \nuncertain timing and scale—and thus are excluded from our quantified total addressable market estimates—we \nbelieve they hold trillions of dollars of eventual potential for groundbreaking innovation and value creation, \neventually representing multi-trillion-dollar economic opportunities.\nLong-Haul Point-to-Point Terrestrial Travel. Our Starship vehicle has the potential to revolutionize terrestrial \ncommercial transportation by achieving an unparalleled combination of speed, reliability and cost efficiency. This \ncapability could reduce most international long-haul flights to under 30 minutes, enabling point-to-point travel to the \nfurthest location in an hour or less. While we must surmount technological, economic and regulatory obstacles to \nfully capitalize on this opportunity—such as restrictions on supersonic flights over land in certain regions due to \nsonic booms, and the economic feasibility of shorter routes—we believe we are strategically positioned to take share \nof the terrestrial logistics and transportation market. \nSpace Tourism. Historically, human spaceflight has been limited to government astronauts, augmented by a limited \nnumber of privately funded missions. Yet, with meaningful advances in space technology and the ongoing \nexpansion of orbital flight infrastructure, we anticipate a gradual increase in accessibility of spaceflight over time, \npotentially enabling a new category of commercial human spaceflight and tourism. Under 30 people out of the \nglobal population visited Earth’s orbit in 2025, which we believe could be a far greater number in the future. \nPassenger and Cargo Transport to the Moon and Mars. Looking further ahead, advances in reusable launch \nsystems and deep-space transportation infrastructure may enable new forms of interplanetary logistics, including \npassenger and cargo transportation to the Moon and Mars. Supporting a sustained human presence on another planet \nwould require the regular transport of people, equipment, and materials at a scale not previously possible. \nEnergy Production and Manufacturing on the Moon and Mars. Establishing a sustained human and industrial \npresence on the Moon and Mars would require reliable, large-scale energy generation to support habitats, \nmanufacturing, and scientific operations. Potential solutions could include solar power systems, taking advantage of \nthe thin atmosphere, constant solar exposure, and other advanced energy technologies designed to operate in the \nunique environmental conditions of the Moon and Mars. Over time, we believe that advances in planetary \ninfrastructure may enable manufacturing on the Moon and Mars using locally available resources.\nIn-Orbit Manufacturing. Terrestrial manufacturing is inherently constrained by gravity, which imposes \nfundamental limitations on processes at the atomic and molecular level. Establishing in-orbit infrastructure unlocks \nlarge-scale, high-value production free from those traditional barriers, enabling breakthroughs in precision and \nefficiency. The microgravity environment of space fosters innovative advancements in key industries, such as \npharmaceuticals—where it enhances drug solubility, purity, crystallization, and stability—as well as, advanced \nmaterials and semiconductors, allowing for superior crystal formation and material properties unattainable on Earth. \nBeyond these particle-level innovations, in-orbit facilities overcome Earth’s energy constraints by harnessing \nabundant, uninterrupted solar power, facilitating energy-intensive operations with unparalleled sustainability.\nAsteroid Mining. Asteroid resources, including platinum-group metals, rare earth elements, nickel, cobalt, iron and \nwater, represent a vast untapped reservoir beyond Earth’s gravity well, with some near-Earth objects containing \nconcentrations of elements far exceeding typical terrestrial ore grades. With meaningful advances in reusable launch \ncapabilities, autonomous robotics, and in-situ processing technologies, we believe the accessibility of asteroid \nresources will expand over time, unlocking a new category of commercial space resource extraction. We believe our \nexperience in launch systems, spacecraft development, and space infrastructure uniquely positions us to pursue \nasteroid mining operations to extract metals and other critical resources from near-Earth and main-belt asteroids, \nproviding abundant raw materials for space-based infrastructure, reducing the need to launch all mass from Earth.\n\n178\nTable of Contents\nOur Solutions & Services \nUnparalleled Launch Capability \nOur unmatched launch capability is the foundational competitive advantage that enables our unique solutions and \nservices. We are the market leader in orbital launch, providing low-cost, reliable, and frequent access to space for \ncommercial and government customers. Our launch services are built around a fleet of reusable rockets and \nspacecraft. SpaceX’s family of rocket systems and spacecraft address missions ranging from routine cargo delivery \nto the International Space Station to deep-space exploration. The Falcon class of rockets delivered over 80% of mass \nto orbit in the year ending December 31, 2025. Starship, a two-stage super heavy-lift launch vehicle that we have \nbeen flight testing since 2023, further enhances our industry-defining launch offerings. \nSeparate from our fleet of reusable rockets, SpaceX’s launch advantage is equally underpinned by our fleet of \nadvanced spacecraft. Our International Space Station cargo and human spaceflight missions are launched on Falcon \n9 and flown on the Dragon crew and cargo spacecraft. The vehicles autonomously dock to the station, delivering \npressurized and unpressurized cargo, and passengers. Both Dragon variants are partially reusable and perform fully \nautonomous rendezvous, docking, and return operations.\nOur Fleet of Launch Vehicles and Spacecraft \nOur Fleet of Launch Vehicles\nFalcon 9. The Falcon 9 rocket is a reusable, two-stage rocket designed and manufactured by SpaceX for the safe, \nreliable, and cost-effective transport of satellites, scientific payloads, cargo, and crew to Earth orbit and beyond. \nPowered by liquid oxygen and rocket-grade kerosene, the first-stage is equipped with nine Merlin 1D engines \nproducing over 1.7 million pounds of thrust at sea level, while the second stage utilizes a single vacuum-optimized \nMerlin engine for precise orbital insertion. First launched in 2010, Falcon 9 is the world’s first orbital-class rapidly \nreusable rocket, and has become the most active orbital launch vehicle today, with approximately 620 orbital space \nlaunches as of March 31, 2026 and an over 99% mission success rate. Falcon 9 is capable of delivering \napproximately 23 metric tons to LEO and eight metric tons to geosynchronous transfer orbit. Reusability allows \nSpaceX to refly the most expensive parts of the rocket, which in turn drives down the cost of space access. Falcon \n9’s reusable components primarily include its booster, which lands on one of our autonomous drone ships out on the\n\n179\nTable of Contents\nocean or on one of our landing zones near our launch pads ahead of being refurbished for a future launch, and its \npayload fairing halves, which are recovered via parachute-assisted splashdowns and are refurbished and reused after \nretrieval. The second stage is not designed for recovery or reuse and instead safely deorbits after successful payload \ndeployment. \nFalcon 9 Overview\nFalcon 9 introduced a combination of technical innovation, cost reduction, and operational scale that materially \naltered the economics of orbital launch and established our position as the leading commercial launch provider.\n•\nFirst Orbital-Class Rapidly Reusable Rocket: In December 2015, Falcon 9 achieved the first vertical landing \nof an orbital-class booster, followed in April 2016 by the first autonomous drone ship landing in the Atlantic \nOcean. Reuse of boosters and fairings, a practice pioneered by SpaceX in the launch industry, fundamentally \nenables our launch rate and capacity and forms the basis for the launch system’s inherent reliability. Through \nrecovering, inspecting, and evaluating flown hardware, SpaceX gains insight into system performance that \nwould not be otherwise achievable. Partial reusability for orbital spaceflight has reduced cost per ton to orbit by \napproximately 85% as compared to the historical average launch cost per kilogram of $18,500. \n•\nReusability Enabled Cost Structure Advantage: Reuse of the first-stage—representing the majority of \nvehicle manufacturing cost—has materially reduced marginal launch costs relative to fully expendable systems.\n•\nHighest Operational Tempo in History: With approximately 620 orbital space launches over 15 years of \noperation, Falcon 9 is the most frequently flown active orbital launch vehicle to date. In 2025, Falcon 9 \nconducted 165 launches, accounting for over half of all global orbital launches in the year while delivering over \n80% of mass to orbit.\n•\nTrack Record of Success: As of March 31, 2026, Falcon 9 has achieved an over 99% mission success rate. \nFalcon 9 has achieved over 530 successful booster landings and more than 540 launches completed by a flight-\nproven Falcon rocket, underscoring the reliability of its reusability architecture. \n•\nHuman Spaceflight Certified: Falcon 9, paired with SpaceX’s Dragon crew spacecraft, is the only U.S.-based \nlaunch vehicle certified by NASA under the Commercial Crew Program to transport astronauts to and from the\n\n180\nTable of Contents\nInternational Space Station. As of December 31, 2025, Falcon 9 has successfully launched 19 human \nspaceflight missions with a 100% mission success rate.\n•\nIn-House Engine Development and Manufacturing: Falcon 9 is powered by Merlin engines that are \ndesigned, developed, and manufactured in‑house, providing vertical integration across propulsion design, \nproduction, and testing. The Merlin engine achieves one of the highest thrust‑to‑weight ratios of any rocket \nengine in operational service, contributing to Falcon 9’s performance and payload capacity.\nFalcon 9\nAs we transition primary production and development resources toward the fully and rapidly reusable Starship \nsystem, Falcon 9 continues to serve as the backbone of our launch revenue base; generating high-margin recurring \ncash flows while providing critical operational experience in high-cadence reuse. The proven capabilities of Falcon \n9 established us as the leading provider of launch services globally and laid the technological and economic \nfoundation for the next era of space transportation.\nFalcon Heavy. Falcon Heavy is a partially reusable super heavy-lift launch vehicle, designed to deliver large \npayloads to orbit. Building on the proven architecture of the Falcon 9 rocket, Falcon Heavy is composed of three \nreusable Falcon 9 nine-engine boosters whose combined 27 Merlin engines generate more than five million pounds \nof thrust at liftoff—one of the most powerful operational rockets in the world today. It is capable of carrying \napproximately 64 metric tons of payload to LEO and 27 metric tons to geosynchronous transfer orbit. Falcon \nHeavy’s reusable components primarily include its three boosters, which are designed to land vertically on drone \nships in the ocean and landing zones near our launch sites, and its payload-faring halves, which are recovered via \nparachute-assisted splashdown and are refurbished and reused after retrieval. The second stage is not designed for \nrecovery or reuse and is designed to safely deorbit after successful payload deployment, similar to Falcon 9.\n\n181\nTable of Contents\nFalcon Heavy Overview\n•\nReusability: Falcon Heavy incorporates a design focused on reusability, which has contributed to lowering the \ncost of access to space and altering the launch industry’s economic model for large or high-value payloads. The \nvehicle’s two side boosters, equipped with hypersonic grid fins and advanced propulsion systems, enable \ncontrolled recovery and soft landings. This capability enables reusability, with missions launching on flight-\nproven boosters generally priced below those of traditional expendable flights. Our Falcon 9 boosters, which are \nqualified for up to 40 flights, are also used on Falcon Heavy, with an average of 6 flights per booster on Falcon \nHeavy. Although our Falcon 9 boosters have been engineered and demonstrated to support up to 40 flights, we \nhave established a maximum accounting useful life of 25 flights as an estimate based on forecasted utilization. \nThis estimate reflects: (i) our strategic transition to Starship, which is expected to materially reduce future \nFalcon 9 flight demand; and (ii) restrictions under certain government contracts that prohibit the use of boosters \nflown more than five times on their missions. These useful life estimates are periodically reassessed based on \nengineering qualification data, post-flight inspections, recovery success rates, actual fleet performance, cost \nsensitivity analyses, and the long-range launch manifest.\n\n182\nTable of Contents\nFalcon Heavy\n•\nExploratory Missions Beyond Earth’s Orbit: Falcon Heavy first launched in February 2018, when it put a \nTesla Roadster and its mannequin passenger, Starman, into orbit around the Sun. This was the first instance of a \ncar sent into deep space and demonstrated the rocket’s capability for trans-Mars injection. Since its inaugural \nflight, Falcon Heavy has completed missions that expanded the scope of space exploration and commercial \nspaceflight. Falcon Heavy has been selected by NASA to launch critical weather satellites, interplanetary probes \nincluding Europa Clipper (Jupiter) and Dragonfly (Saturn), and the upcoming Nancy Grace Roman telescope, \ndesigned to study exoplanets and dark energy and matter.\n\n183\nTable of Contents\nStarman in Orbit\n•\nPerfect Performance Record: As of March 31, 2026, Falcon Heavy had successfully completed 11 launches, \nall resulting in successful payload delivery. Falcon Heavy flown boosters have also safely completed 18 total \nrecoveries and 16 reflights. It was certified for National Security Space Launch in 2019, authorizing its use for \nU.S. government operations alongside Falcon 9.\nStarship. A fully reusable two-stage super heavy-lift launch vehicle, Starship stands to fundamentally transform \nspaceflight by making it more accessible, cost-effective, and scalable than ever before. Comprising the Super Heavy \nbooster (powered by 33 Raptor engines) and the Starship upper stage (with three sea-level and three vacuum Raptor \nengines), Starship V3 is designed to deliver 100 metric tons to space in a fully reusable configuration while enabling \nrapid turnaround times akin to commercial aviation, and future generations could reach 200 metric tons, potentially \nas soon as Starship V4. To date, we have executed 11 Starship flight tests. We have also scheduled a 12th flight test, \nwhich will debut the next generation Starship vehicle and Super Heavy booster, powered by the next evolution of \nour Raptor engine and launching from a newly designed pad at Starbase. We expect Starship to commence payload \ndelivery to orbit in the second half of 2026. We have achieved innovative milestones, including multiple successful \nascents of the world’s most powerful rocket; the launch, return, catch, and reuse of the Super Heavy booster; the \nreturn of its upper stage within three meters of its intended landing point; the transfer of approximately five metric \ntons of cryogenic propellant between tanks while in space, a first of its kind operation that provides key data for \nfuture full-scale propellant transfer operations; successful in-space relights of the Raptor engines; and multiple \ncontrolled reentries through Earth’s atmosphere. The purpose of flight tests is to collect data so no result, even loss \nof a vehicle, is considered a failure because we learn something. \nStarship is a key enabler of our growth objectives, including the deployment of next-generation V3 satellites, direct-\nto-cell constellations, and orbital AI compute at scale. Achieving our targeted launch cadence with Starship will \nrequire significant progress on several key milestones and the investment of significant capital resources. These \ninclude: securing additional land and developing high-rate launch sites and supporting infrastructure across multiple \nlocations; scaling production of Starship vehicles and Raptor engines; constructing propellant production facilities, \nincluding air separation units and methane liquefaction plants co-located with launch sites; securing sufficient power \nsupply; and obtaining the necessary regulatory approvals, particularly from the FAA, to support a high launch \ncadence while addressing public safety and environmental considerations. Our development of Starship and its\n\n184\nTable of Contents\nassociated infrastructure assumes continued successful iteration through flight testing, regulatory progress, supply \nchain scaling, and cost reduction driven by increasing reusability. We have made substantial investments in \nmanufacturing scale-up, including Starfactory for high-volume vehicle production, multiple large-scale vertical \nintegration and refurbishment facilities, additional launch towers, test infrastructure, propellant production assets, \nand power generation capabilities.\nFull reusability of Starship’s upper stage is not required to deploy our V3 satellites and V2 Mobile satellites in low-\nEarth orbit. In-orbit refueling is also not required for any of these LEO programs and is instead intended for \nmissions beyond LEO, such as lunar and interplanetary transport. Starship’s substantial payload capacity to LEO, \neven in partially reusable or expendable configurations, enables meaningful progress toward these objectives. We \nhave already demonstrated Super Heavy booster reusability in multiple integrated flight tests. As a result, \nmeaningful advancement across the deployment of next-generation V3 satellites, direct-to-cell constellations, and \nthe orbital AI compute program is not dependent on achieving full reusability.\nStarship Overview\n•\nFull and Rapid Reusability and Drastically Reduced Launch Costs: Starship’s core design innovation is its \nfull and rapid approach to reusability: both stages return to Earth for catch and rapid refurbishment. The Super \nHeavy booster returns to the launch site following stage separation and is caught mid-air by the launch tower’s \nmechanical arms, also known as “chopsticks,” to facilitate immediate inspection, refurbishment, and relaunch.\n\n185\nTable of Contents\n“Chopstick” Super Heavy Booster Catch \nThe Starship upper stage, after orbital delivery or missions beyond, is designed to reenter protected by advanced \nheat shield tiles, execute a propulsive landing burn, and be similarly caught mid-air by the launch tower’s \nmechanical arms. We believe that Starship’s full and rapid reusability will enable sub-one hour reflights, \ncausing a paradigm shift in launch cadence.\nStarship Landing Burn\n\n186\nTable of Contents\n•\nImprovements in Engine Development Underpin Starship’s Massive Payload Capacity: With a payload \nbay volume rivaling the pressurized sections of the International Space Station, Starship is designed to deploy \nstructures like space station modules, large telescopes, our next-generation V3 satellites, and future AI compute \nsatellites. Starship is powered by 39 Raptor engines, which are full-flow staged combustion cycle rocket engines \nburning cryogenic liquid methane and liquid oxygen. Raptor engines offer nearly triple the thrust per engine, \nhigher efficiency, and better performance for heavy-lift and deep space missions compared to the Merlin engine \nused on Falcon 9. Each Raptor 3 engine in Starship saves nearly a ton of vehicle mass compared to previous \ngenerations by removing heat shields and simplifying plumbing. Starship’s capacity enables the next leg of our \ngrowth, including scaling our Starlink Mobile constellation and orbital AI compute.\n•\nOrbital Refueling: Starship’s expected orbital refueling capability will allow tanker variants to refill the upper \nstage in LEO and extend its range for deep-space missions beyond Earth’s orbit. These capabilities are expected \nto revolutionize mission architecture, with each Starship designed to be capable of transporting large numbers \nof people or hundreds of metric tons of cargo to destinations like the surface of the Moon and Mars. \n•\nSustainable Human Exploration Beyond Earth: Starship was designed from the beginning to fly to other \nworlds and enable self-growing bases on the Moon, an entire civilization on Mars, and ultimately expansion \nbeyond our solar system. As NASA’s Human Landing System for Artemis, Starship is built to deliver \nastronauts and cargo to the lunar surface and serve as the key enabler for supporting permanent presence on the \nMoon. \n•\nVersatility Across Mission Profiles: Beyond deep space, Starship is designed to adapt to diverse roles \nincluding the U.S. Space Force’s Rocket Cargo program for rapid point-to-point global logistics, Starlink and \nother commercial satellite constellations, in-orbit manufacturing components and hardware, space tourism, and \nothers. \nStarship is designed to enable a step-function advancement in our capabilities, featuring rapid, full reusability of \nboth the Super Heavy booster and the Starship spacecraft to achieve unprecedented throughput at significantly \nreduced costs compared to existing systems. As Starship progresses toward full operational utilization, the Falcon 9 \nand Falcon Heavy platforms will remain key assets for specialized missions, including NASA crew rotations and \nnational security payloads.\nDragon Cargo Spacecraft. The Dragon cargo spacecraft is an uncrewed vehicle designed primarily for transporting \ncargo to and from the International Space Station under NASA’s Commercial Resupply Services program. As an \nevolution of the original Dragon spacecraft, this vehicle represents a critical component of our portfolio, enabling \nreliable, cost-effective logistics for space missions. The spacecraft consists of a pressurized section for \nenvironmentally controlled cargo and an unpressurized trunk section for additional payloads. It has a launch payload \nmass of up to 6,000 kilograms and a return payload mass of 3,000 kilograms, making it uniquely suited for both \ndelivery and retrieval of scientific experiments, supplies, and hardware, and establishing SpaceX as the only \ncompany capable of returning significant amounts of cargo from the International Space Station back to Earth.\n\n187\nTable of Contents\nDragon Cargo Overview \n•\nKey features: Key highlights of the Dragon cargo spacecraft include its propulsion system with 16 Draco \nthrusters for precise orbital maneuvering, autonomous docking capabilities via NASA’s International Docking \nSystem Standard (IDSS), and a trunk equipped with solar panels for power generation during flight.\n•\nLaunch vehicle, return mechanism and mission profiles: The spacecraft is launched atop the Falcon 9 rocket \nand returns to Earth via parachute-assisted splashdown in the ocean, where it is recovered for refurbishment and \nreuse. Dragon supports extended in-orbit durations, typically spending several weeks docked to the International \nSpace Station before undocking with returned cargo. \n•\nHistoric accomplishments: Launched by Falcon 9 in 2012, our Dragon spacecraft became the first commercial \nspacecraft to deliver cargo to and from the International Space Station and, eight years later, the first privately \nbuilt vehicle to fly humans to the orbiting laboratory. This achievement ended U.S. reliance on foreign vehicles \nfor International Space Station resupply following the Space Shuttle’s retirement in 2011. The original Dragon \nvariant (later known as Dragon 1) established a critical role in advancing research on the space station as the \nonly spacecraft capable of returning significant amounts of cargo to Earth. The upgraded cargo spacecraft \npioneered autonomous docking without robotic arm assistance, delivered major hardware upgrades for the \nstation including new solar arrays, and recently debuted the ability to reboost the station’s altitude. It remains \nthe only reusable cargo spacecraft in operation. As of March 31, 2026, our Dragon spacecraft has completed \nover 30 cargo missions to the International Space Station.\nDragon Crew Spacecraft. Dragon is engineered to fly humans to and from Earth orbit, including the International \nSpace Station. The spacecraft is designed to accommodate up to seven passengers, with a pressurized cabin for crew \nhabitation, life support systems, and cargo.\n\n188\nTable of Contents\nDragon Orbiting Earth's Poles\n•\nKey features: Dragon Crew spacecraft is equipped with advanced avionics, touchscreen interfaces for manual \ncontrol, and an integrated trunk with solar power generation. Dragon Crew’s propulsion includes 16 Draco \nthrusters for orbital adjustments and 8 Super Draco engines for its launch escape system, enabling rapid \nseparation from the rocket in the unlikely event of an emergency. \n•\nLaunch vehicle, return mechanism and mission profiles: The spacecraft is launched atop the Falcon 9 rocket \nand returns to Earth via parachute-assisted splashdown in the ocean, where it is recovered for refurbishment and \nreuse. The design emphasizes reusability, with vehicles certified for multiple flights after refurbishment, and \nsupports missions lasting up to nine months on the International Space Station.\n•\nHistoric accomplishments: Revolutionary accomplishments of Dragon include being the first privately \ndeveloped spacecraft to transport humans to and from the International Space Station, achieved during the \nDemo-2 mission in May 2020 which carried NASA astronauts Doug Hurley and Bob Behnken. This milestone \nreturned human spaceflight capabilities to the United States for the first time since the Space Shuttle’s \nretirement in 2011, reducing dependence on foreign spacecraft. Dragon has enabled regular astronaut rotations \nunder NASA’s Commercial Crew Program, flying nearly 15 successful Crew and Private Astronaut missions to \nthe International Space Station to date, while pioneering space tourism by carrying commercial astronauts on \nprivate flights. Its autonomous docking technology, life support for extended durations, and abort system have \nset new safety standards achieving a flawless record in crewed operations.\nConnectivity\nStarlink Consumer Broadband \nStarlink Consumer Broadband is a broadband network powered by our global LEO satellite constellation, designed \nto deliver high-speed, low-latency internet connectivity anywhere on Earth. The service provides fiber-like \ndownload speeds with latency low enough to support intensive real-time applications, such as content streaming, \nvideo calls, and online gaming, while requiring only visible sight to the sky and electricity for installation. Since \nlaunch, Starlink has scaled rapidly, serving approximately 10.3 million subscribers across 164 countries, territories, \nand other markets as of March 31, 2026.\n\n189\nTable of Contents\nStarlink Consumer Broadband is enabled by the largest satellite constellation in human history with approximately \n9,000 broadband satellites as of March 31, 2026, operating in LEO to deliver latency comparable to many terrestrial \nbroadband connections. We launched approximately 3,100 Starlink broadband and mobile satellites in 2025, which \nis approximately five times more than the total number of active satellites in the entire second largest LEO satellite \nconstellation. We provide download speeds exceeding 400 Mbps with round-trip latencies as low as 21 milliseconds\n—performance that rivals or surpasses traditional terrestrial broadband while also reaching locations no traditional \nfiber or cellular network can economically serve. Satellite-based communications are uniquely suited to reach \nunderserved and remote areas by delivering coverage directly from LEO without requiring local infrastructure. In \ncontrast, terrestrial networks depend on costly, ground-based buildouts that are often uneconomical in low-density or \nhard-to-access regions. As of March 31, 2026, the constellation incorporated over 23,000 inter-satellite lasers that \ncreate a dynamic mesh network in space, enabling traffic to route through orbit rather than relying solely on \nterrestrial backhaul infrastructure. Satellites autonomously maneuver to avoid collisions and are designed for \ncontrolled end-of-life deorbit, supporting long-term orbital sustainability. Successive generations of our broadband \nsatellites, including V3 satellites, are expected to increase throughput, power capacity, and network efficiency, with \nproduction vertically integrated and performed largely in-house. Our focus on vertical integration has allowed us to \nreduce the Starlink satellite manufacturing cost per one Gbps of downlink capacity by approximately three times \nfrom Starlink V1 Broadband satellites to V2 Mini satellites. We expect to achieve a total cost reduction of nine times \nfrom Starlink V1 Broadband satellites to V3 satellites.\nStarlink Broadband V2 and V3 Satellites\nOn Earth, users access the network through proprietary Starlink terminals that we design and manufacture. As of \nMarch 31, 2026, we have reduced the cost of Starlink terminals—achieving an approximately 59% reduction in the \naverage manufacturing cost of a Starlink Kit since 2022—while improving performance and reliability, which we \nbelieve collectively provides us a meaningful and durable competitive advantage over other terrestrial and satellite \nbroadband providers. Our portfolio of terminals, which we are able to manufacture and sell for a fraction of the cost \nof terminals used by other satellite internet providers, includes three primary consumer configurations including: a \nStandard terminal designed for fixed residential and small business use, featuring a wide field of view; a Mini \nterminal roughly the size of a laptop, designed for mobility and travel use cases with a built-in Wi-Fi router and the \nability to operate on portable battery systems or 12V vehicle power; and the Performance terminal, designed for \ndemanding environments, with a maximum download speed over 450 Mbps and a higher power consumption of\n\n190\nTable of Contents\n110W or more under load. Each type of terminal is designed to be quick and seamless for a consumer to self-set up, \nsupport in-motion connectivity up to speeds of 100 mph, and deliver global, oceanwide coverage for consumer \nmaritime use. We believe that this combination of low cost, portability (particularly in the case of our Starlink Mini \nterminal), and ease of installation of our terminals will help scale our consumer broadband offering.\nStarlink Standard and Mini User Terminals\nWe monetize Starlink primarily through subscription plans paired with hardware sales. Service tiers vary by speed, \npriority access, geographic coverage, and mobility requirements, including Local and Global Priority options for \nsmall to medium sized business, enterprise, and government Starlink customers. As the constellation scales and \ncapacity expands with next-generation satellites, we expect Starlink to continue growing as a global, recurring-\nrevenue connectivity platform and foundational layer of a space-enabled digital economy.\nEnterprise Solutions\nEnterprise Solutions offers the same fundamental advantages of Starlink Consumer Broadband—high throughput, \nlow-latency, and global coverage—into mission-critical, in-motion, and distributed connectivity environments for \nenterprises. Starlink’s architecture is designed to deliver consistent performance across routes, oceans, and remote \nindustrial sites. Enterprise services are supported by dedicated hardware configurations and commercial structures \ntailored to usage intensity, service-level requirements, and fleet-scale deployments.\n\n191\nTable of Contents\nEnterprise Solutions\nAviation Connectivity\nStarlink Aviation provides broadband connectivity for commercial and private aircraft, enabling high-quality \ninternet service for passengers and crew from gate to gate, including during taxi and prior to take-off. The service is \ndifferentiated by materially lower latency and higher throughput than legacy in-flight connectivity systems, enabling \nstreaming, video conferencing, and real-time applications at scale while in flight—even bandwidth-intensive \napplications such as gaming, previously impractical from an airplane. Starlink’s global network is designed to \neliminate “dead zones” and supports performance on polar and high-latitude routes that can be challenging for \ntraditional providers. In recent years, we have assembled dedicated sales and engineering teams to market and \nsupport fleet-wide conversions in the aviation sector. This has enabled partnerships with many of the world’s \nleading airlines, including United Airlines, Southwest Airlines, Qatar Airways, Lufthansa Group, British Airways, \nAlaska Airlines, and Hawaiian Airlines, many of which have implemented or committed to fleet-wide Starlink \ninstallations for seamless in-flight connectivity. \nMaritime Connectivity\nStarlink Maritime provides broadband connectivity for vessels operating in coastal and deep-ocean environments, \nsupporting both operational requirements (navigation, telemetry, maintenance, logistics) and end-user connectivity \n(crew welfare and passenger internet). The service is designed for consistent coverage regardless of proximity to \nland, including routes that may experience service degradation under legacy satellite architectures. Starlink terminals \nare engineered for marine operating conditions and are designed to be installed or swapped efficiently alongside \nexisting onboard communications systems, reducing downtime during retrofit. For many maritime operators, \nStarlink functions as a wholesale or “syndicated” connectivity layer: vessel owners or cruise operators purchase and \nallocate capacity across passengers, crew, and critical ship systems, including when reselling Wi-Fi access as an \nonboard service. Pricing structures vary by vessel class, expected consumption, coverage requirements (coastal vs. \nocean), and priority level, and are generally implemented through recurring subscription arrangements with fleet-\nbased commercial terms. To support fleet-wide conversions in the maritime sector, we have partnered with premier \ncruise operators, such as Carnival Corporation, Royal Caribbean Group, MSC Cruises, and Norwegian Cruise Line \nHoldings, for full-fleet deployments that deliver reliable high-speed internet across thousands of vessels worldwide.\n\n192\nTable of Contents\nLand Mobility and IoT\nStarlink supports in-motion connectivity for land mobility and industrial IoT applications where terrestrial networks \nare intermittent or unavailable. These deployments include fleet vehicles, remote field operations, and ruggedized \nuse cases that require continuous broadband while moving, often across large geographies. The service is \nparticularly relevant for emergency responders, disaster recovery, and critical infrastructure continuity, where \nresilient communications materially impact safety and response effectiveness. In industrial settings, Starlink can \nserve as a connectivity backbone for connected equipment and telemetry-driven workflows, enabling real-time \nmonitoring and remote operations in agriculture, energy, and logistics environments. Commercial deployments are \ntypically structured around fleets or enterprise accounts, with hardware and service tiers aligned to mobility \nrequirements, usage intensity, and priority performance. We have partnered with land mobility operators, including \nJohn Deere and the California Fire Department, as well as passenger rail operators such as Brightline (Florida), and \nItalo Treno, to provide remote monitoring and management of their fleets.\nStarlink Fixed Site\nStarlink Fixed Site is designed to provide primary or backup connectivity for distributed business locations globally, \nincluding sites that are difficult to serve economically with fiber or that require redundancy for uptime. Starlink’s \nlack of dependence on wireline infrastructure—which is subject to damage or disruption from natural disasters, \nconflict, and other events—makes it well-suited for businesses that rely on continuous broadband connectivity and \ncannot afford a terrestrial offering going temporarily “offline.” Customers deploy Starlink to support point-of-sale \nsystems, corporate networking, video and security systems, and business continuity, including during disasters and \nlocalized outages where terrestrial infrastructure may be impaired. The service is differentiated by rapid \ninstallability, geographic flexibility, and reliable performance in remote and hard-to-reach locations, making it \nsuitable for retailers, industrial operators, and remote facilities (including offshore and field sites). Pricing models \ninclude multiple tiers and configurations depending on speed, priority access, coverage footprint, and the number of \nsites deployed, with typical enterprise arrangements structured as recurring subscriptions paired with hardware.\nGovernment Solutions\nWe provide U.S. civil, state, and local government agencies as well as international civil government agencies high-\nspeed, resilient connectivity for public services, social impact, humanitarian efforts, and disaster response in even \nthe most remote and challenging environments. Examples include support for the FEMA in coordinating disaster \nrecovery after hurricanes and wildfires, the NOAA for at-sea testing and environmental monitoring, the Government \nof the Philippines for linking remote islands, schools, and public institutions, the Government of Jamaica for \nimproving digital access in remote and maritime areas, and the Government of Ecuador for supporting education and \nhealthcare connectivity in isolated communities.\nSeparately, we operate Starshield, a secure satellite network designed specifically for national security applications. \nBuilt on the technology, manufacturing, and launch infrastructure that underpin Starlink, Starshield is focused on \nthree core mission areas: Earth observation, global secure communications, and hosted payloads. Starshield satellites \nare designed to integrate a wide range of sensors and instruments, allowing government customers to deploy \nmission-specific capabilities in LEO without having to design, build, and launch standalone spacecraft for every \nprogram.\nStarshield builds on the end-to-end data encryption used in our commercial network by adding high-assurance \ncryptographic capabilities tailored to military and other government requirements. By combining this security \nposture with our high-cadence launch capability and evolving Starlink-derived infrastructure, we aim to offer a \nscalable national security platform that can be updated, replenished, and expanded as mission needs change over \ntime.\nStarlink Mobile\nWe are extending the reach of Starlink beyond fixed and mobility terminals through our mobile service, connecting \nsmartphones (with no modifications or incremental hardware) and other terrestrial devices directly to our satellites. \nWe aim to entirely eliminate mobile “dead zones.” By using satellites that effectively function as cell towers in\n\n193\nTable of Contents\nspace, we enable data, over-the-top voice, video and messaging in remote and hard-to-reach locations where \nterrestrial networks have historically been unavailable or unreliable. Starlink Mobile is already commercially \navailable for messaging in select markets and has been used to support emergency communications following \nnatural disasters, demonstrating its strength as resilient, infrastructure-independent connectivity. \nV1 Mobile Satellites and V2 Mobile Satellites\nOur mobile constellation builds on the same LEO architecture as our broadband network, with satellites specifically \ndesigned to communicate directly with everyday LTE handsets and IoT devices without requiring specialized or \nadditional hardware. These satellites use exclusive licensed spectrum, allowing us to integrate into MNOs’ existing \nnetworks while delivering coverage far beyond the reach of ground-based towers. Since launching the first mobile \nsatellites in early 2024, we have rapidly scaled the network to hundreds of in-orbit spacecraft and demonstrated key \ntechnical milestones, including the first SMS tests within days of launch, live video calls, and public posts sent \ndirectly from standard smartphones through a Starlink Mobile satellite. Our ability to design, manufacture and \nlaunch these satellites on our own vehicles enables us to iterate quickly on payloads and software, expanding \ncapacity and performance over time. \nToday, our Starlink Mobile service is delivered in partnership with leading mobile network operators around the \nworld. We are initially focused on messaging for consumer subscribers in areas with limited or no terrestrial \ncoverage, with a roadmap to support broader data, voice and IoT services. We partner with approximately 30 MNOs \nacross six continents, including T-Mobile in the United States, and other international operators including One NZ, \nOptus, Telstra, Rogers, KDDI, Salt, Entel, Kyivstar, and VMO2. Through these partnerships, we enable consumers, \nbusinesses and public-sector customers to use their existing phones in more places, support critical connectivity \nduring disasters and power outages, and open new applications for low-bandwidth mobile and IoT devices.\n\n194\nTable of Contents\nMap of Starlink Mobile Coverage\nSatellite Life\nWe estimate that our satellites have useful lives of three to five years based on engineering studies, historical on-\norbit performance, propellant life, utilization patterns, design enhancements across generations, and planned \ntransitions to newer satellite technology. We, however, often deorbit satellites before the end of their useful lives, \nprimarily to reduce degradation risks that could impair our autonomous collision avoidance system and compromise \nconstellation safety. To date, our autonomous collision avoidance system has not experienced any failures resulting \nin satellite loss, and satellite losses from other causes remain de minimis.\nAI\nGrok\nGrok represents a core pillar of our mission to advance humanity’s understanding of the universe through the \ndevelopment of truth-seeking artificial intelligence. Grok is designed and optimized for rigorous reasoning, real-time \ninformation synthesis, and transparent outputs, with a product philosophy centered on intellectual honesty, first-\nprinciples thinking, and engagement with complex topics.\nGrok is designed as a truth-seeking AI model, built on our founder Elon Musk’s mission to enable humanity to \nunderstand the universe. We believe that accomplishing this mission requires a truth-seeking approach to AI. We \ndefine truth seeking as the active, relentless pursuit of what is objectively true about reality, and grounded in \nevidence, logic, empirical data, and first principles thinking. Our goal is to understand and explain what the universe \nappears to be doing, as accurately as current knowledge allows. In pursuit of this truth-seeking objective, Grok also \nbenefits from its integration with X, our real-time information, entertainment, and free speech platform. This direct, \nreal-time access to the information and human discourse on X enhances Grok’s truth-seeking capabilities by \ngrounding outputs in up-to-date knowledge and diverse viewpoints.\nSince the initial release of Grok 1, we have iterated rapidly, releasing Grok 2, Grok 3, and, the current version, Grok \n4, each delivering material improvements in pre-training, reasoning depth, multimodal capabilities, latency, and \nscale. Building on this trajectory, we expect to continue scaling Grok through subsequent generations. Ongoing\n\n195\nTable of Contents\ntraining of next‑generation models is expected to scale toward multiple trillions of parameters, which could \nrepresent a step change in reasoning in depth and overall intelligence. In this context, the number of parameters \nrefers to the scale of the model, where parameters are the internal numerical values, such as “weights,” that are \nadjusted during training to enable the model to recognize patterns and relationships in data. A larger number of \nparameters generally allows the model to capture more complex relationships, store greater amounts of knowledge, \nand achieve higher levels of reasoning capability. Our accelerated development cadence positions Grok among the \nfastest-advancing frontier models relative to peers, including OpenAI, Anthropic, and Google. Grok is differentiated \nby its emphasis on real-time data integration, particularly through insights derived from the X platform (subject to \nsome limitations for certain content), enabling dynamic awareness of current events and user discourse, as well as by \nexplicit investment in reasoning transparency and explainability. Grok enhances the X ecosystem by improving \ncontent understanding, personalization, and recommendation systems, thereby increasing user engagement and \nplatform intelligence. We are currently developing next-generation iterations, including Grok 5, which are expected \nto further expand reasoning fidelity, multimodal integration, and domain-specific performance. \nTerrestrial AI Compute\nOur terrestrial AI compute forms the backbone of the Grok model family and is anchored by the COLOSSUS and \nCOLOSSUS II data centers that boast some of the world’s largest and most advanced AI training clusters. \nCOLOSSUS and COLOSSUS II collectively provide approximately 1.0 gigawatt of compute power, with the \nadditional power capacity available for data center operations. We brought the first cluster of COLOSSUS online in \n122 days, repurposing the shell of an existing factory, and the first cluster of COLOSSUS II online even faster in 91 \ndays. As an illustrative comparison, an industry benchmark to bring online a 100 megawatt greenfield data center is \napproximately two years. We also demonstrated a significant improvement in cost efficiency, achieving data center \nconstruction costs for COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis. \nCOLOSSUS II is capable of operating entirely by our self-built behind-the-meter gigawatt-scale natural gas power \nplant. Our data centers are integrated with the world’s largest Megapack deployment, providing additional layers of \nreliability and operating performance. At all our existing data centers we have employed a brownfield retrofit \nstrategy leveraging existing industrial sites, advanced direct-to-chip cooling to support higher rack densities, and \nhigh-speed networking. The clusters deploy leading-edge GPUs to maximize training throughput and model \nperformance. The next phase of expansion at COLOSSUS II is designed to train our next-generation Grok 5 AI \nmodel. As we continue to expand our AI compute infrastructure, we will also continue to enhance our power \ncapabilities utilizing a combination of grid-power and behind-the-meter natural gas power plant buildouts. At \nCOLOSSUS, our grid power capabilities are designed to purchase power from the grid as available, and to rely on \nour behind-the-meter, self-generated power and Megapack installations when grid power is curtailed.\n\n196\nTable of Contents\nCOLOSSUS II Facility\nX Platform\nX is a real-time information, entertainment, and free speech platform that serves as a foundational distribution and \ndata engine for our AI ecosystem. With a global user base generating substantial volumes of content at all times \nacross a wide variety of topics, X provides a uniquely dynamic data for model training and real-time context \nintegration, subject to some limitations for certain content, which significantly differentiates Grok from the other \nfrontier lab offerings.\n\n197\nTable of Contents\nX is Our Real-time Information, Entertainment, and Free Speech Platform\nX is our real-time information, entertainment, and free speech platform that serves as a global town square with \nintegrated AI capabilities powered by Grok. Designed to evolve toward an “everything app,” X enables users to post \ncontent, share media, engage in conversations, host, view, and participate in live group discussions, follow real-time \nevents, use encrypted messaging, and leverage advanced features such as Grok-assisted post creation, content \ndiscovery, and conversational AI directly within the interface via the prominent Grok icon.\n\n198\nTable of Contents\nGrok Holds Front and Center Real Estate on the X Platform\nWith native integration of Grok’s frontier models, including real-time access to X data for up-to-date insights, \ntrending analysis, and enhanced search, X delivers personalized feeds, smarter recommendations, and low-latency \nAI assistance for our users worldwide. Our X Premium subscription options, including Basic, Premium and \nPremium+ tiers, offer expanded features, ad-reduced experiences, and priority Grok interactions. In 2023, Grok’s \nchat functionality was integrated into the X app allowing for the user to open the chat interface to type prompts and \nget real time answers.\nPublic X data enhances Grok’s training and reasoning capabilities, while the platform continues to deliver \nmeasurable performance outcomes for advertisers, with an increasing strategic focus on performance-based \nmarketing solutions.\nIn addition to X consumer products, X offers advertisers and developers a powerful suite of tools to reach highly \nengaged audiences. Advertisers can target audiences through diverse ad formats—such as Promoted Ads, Vertical \nVideo Ads, Collection Ads, and premium options such as X Amplify and Takeovers—blending seamlessly with \norganic content for authentic engagement. With advanced targeting based on public conversations, events, \nkeywords, interests, locations, and look-alike audiences, brands can connect with audiences while benefiting from \nflexible, performance-based pricing (pay only for actions such as clicks or engagements) and often lower costs \ncompared to other platforms. We expect that our ongoing innovations—including Grok-powered integrations, new \ncontextual ad tests, and expanded aspect ratio support for easy reuse of ad creative—make X a competitive choice \nfor driving traffic, conversions, and brand awareness and visibility among X’s hundreds of millions of MAUs. \nDevelopers have access to a continuous, high-volume, real-time stream of data around current events, trends, or \nsentiment, which they can access through an official X Developer Platform and APIs.\nIn April 2026, we began a phased roll-out of our new advertising platform, that we rebuilt from the ground up. The \nnew Ads Manager is built to help advertisers launch better campaigns, faster, with stronger ROI. Powered by AI, the \nnew systems enable more precise, relevant and dynamic ad delivery. Ads are seamlessly integrated into a User’s X \nfeed.\n\n199\nTable of Contents\nBy combining high-volume user interactions with frontier AI, AI compute infrastructure, and vertical integration, X \naccelerates progress toward ubiquitous connectivity, real-time global awareness, and the foundational social layer \nfor multiplanetary human endeavors.\nX Ads Manager. X provides a comprehensive suite of advertising products, including promoted posts, video ads, \ncarousels, and sponsored content, which enable businesses to reach targeted audiences in real time across the \nplatform. Powered by real-time conversation data, interest-based targeting, and behavioral signals, these solutions \nsupport objective-based campaigns focused on website traffic, video views, app installs, lead generation, and brand \nawareness. X’s Ad Manager provides a centralized platform that allows advertisers to manage creation, \noptimization, and real-time monitoring of ad campaigns with detailed audience insights, bidding controls, \nperformance analytics, and A/B testing capabilities. Integration with Grok AI further streamlines creative \ndevelopment, making X’s scalable ad solutions effective for businesses of all sizes seeking efficient engagement in a \ndynamic public conversation environment. \nGrok Consumer Products\nOur consumer products are powered by Grok, including Grok language and coding models, Grok image and video \ngeneration models (more commonly known as Grok Imagine), and Grokipedia. These applications leverage the \nunderlying Grok model family to deliver advanced multimodal interaction, real-time information awareness, and \ntransparent reasoning outputs. We currently offer three different tiers of subscription for Grok—basic, SuperGrok, \nSuperGrok Heavy, and SuperGrok Lite, each priced on a monthly or annual basis. Higher pricing tiers unlock \nexpanded access to advanced models, increased usage limits, priority compute, and a suite of premium features \ntailored to power users and enterprise-grade applications. \nGrok Chat. Grok Chat represents the primary conversational interface of Grok, enabling users to submit text or \nvoice queries for explanations, problem-solving, research, coding, brainstorming, and in-depth discussions with real-\ntime integration of web search, X data, code execution, and multimodal analysis of images or documents. Available \nvia grok.com, dedicated mobile apps, X platform integration, and the xAI API, it provides truth-seeking, helpful, \nand minimally censored responses optimized for factual precision and complex reasoning.\nGrok Chat\n\n200\nTable of Contents\nGrok Imagine. Grok Imagine is Grok’s generative visual and multimedia creation suite, powered by proprietary \nmodels for producing high-quality images, short videos (up to 15 seconds at 720p in current iterations), and \nsynchronized audio from text prompts, reference images, or existing visuals. It supports text-to-image/video editing, \nimage-to-video editing, and video-to-video editing, style transfer, and cinematic motion with strong prompt \nadherence and photorealistic output, accessible through the Grok platform, Imagine tab, and dedicated API.\nGrok Imagine\nGrok Voice. Grok Voice delivers natural, real-time conversational AI through voice interactions, allowing users to \nseamlessly speak and listen to Grok for faster access to information and task execution.\nGrok Enterprise Products\nGrok Teams. Grok Teams empowers small-to-medium-sized organizations to integrate Grok’s advanced AI \ncapabilities directly into collaborative workflows. Teams gain access to dedicated workspaces with secure sharing, \nenhanced privacy protections, and administrative controls for inviting users and managing access. Grok Teams \naccelerates analysis, innovation, and creation while ensuring data remains private and is never used for training.\nGrok API. The Grok API provides programmatic access to Grok’s frontier models, including advanced reasoning, \nvision, tool-use, image generation, voice AI, and real-time search capabilities, tailored for enterprise-scale \nintegration. It offers features like agentic workflows, and enterprise-grade options such as custom allocations, secure \nauthentication, and dedicated support. Designed for developers and organizations building production applications, \nthe API enables seamless embedding of Grok’s powerful AI into custom solutions, driving innovation across \nindustries with speed, precision, and reliability. For example, the enterprise version of the Grok Voice Agent API \nallows developers and businesses to build multilingual voice agents capable of speech recognition, tool calling, real-\ntime data querying, and low-latency responses. It supports production-grade voice applications that enhance \ncustomer service, internal operations, and interactive experiences with high performance in audio reasoning \nbenchmarks.\n\n201\nTable of Contents\nInfrastructure and Facilities\nSpaceX maintains a highly vertically integrated, geographically diverse manufacturing ecosystem that designs, \nproduces, and qualifies a significant share of components in-house, from raw materials and rocket engines to \ncomplete launch vehicles, crewed spacecraft, satellites, and user terminals, enabling unprecedented iteration speed, \nquality control, and cost efficiency essential for successful production of reusable systems and high-cadence \noperations. Our manufacturing facilities are complemented by our physical infrastructure, which supports launch \nand orbital operations for human spaceflight, satellite deployment, and cargo missions, as well as large-scale \nartificial intelligence training and inference. We continue to invest in expansions and improvements across our sites \nto accommodate anticipated growth in launch cadence, Starlink Subscribers, and AI compute requirements.\nSpaceX Facilities\nWhile none of our properties are individually material to our operations because of the long-term timetables for \nrenewal and the opportunities for alternative sites, we maintain an effective network of vertically integrated facilities \nacross the United States, including: \n•\nStarbase, Texas: Development, manufacturing, testing, and launch of Starship currently takes place at \nStarbase, home to SpaceX headquarters and one of the world’s first commercial spaceports designed for orbital \nmissions. The site is located at the newly created city of Starbase in Cameron County, Texas, along the Gulf of \nAmerica. Its infrastructure includes Starfactory, a manufacturing facility designed to mass produce Starship and \nSuper Heavy at scale; a large office structure co-locating engineering and production personnel; and large, \nvertical integration buildings including the upcoming Gigabay, which will be able to support Starship and Super \nHeavy vehicles up to 85 meters (279 feet) tall and will provide 24 work cells for integration and refurbishment \nwork, along with cranes capable of lifting up to 400 tons. Starbase also has an orbital launch pad for flight of the \nworld’s most powerful rocket, complete with one of the tallest launch towers in the world, specially designed to \nintegrate, test, launch, and catch Starship and Super Heavy vehicles, with an additional pad underway to support \nStarship V3. The Starbase team also operates a site for full and subscale vehicle structural testing, static fires, \nand component level testing.\nStarbase is also home to several hundred SpaceX employees and their families, many of whom have relocated \nfrom across the country to the community to support the development and operation of Starship. SpaceX, in\n\n202\nTable of Contents\npartnership with the newly formed city, is developing local infrastructure and municipal services, including \nutilities, governance, schools, and environmental conservation initiatives, to support a world-class, concentrated \nengineering and manufacturing community focused on the rapid advancement of Starship and SpaceX’s long-\nterm mission. This close integration of residential life, engineering, and manufacturing around a single program \nenables a mission-focused environment designed to accelerate development, testing, and launch operations.\nSpaceX Headquarters at Starbase, Texas\n\n203\nTable of Contents\n•\nHawthorne, California: Our original flagship facility in Hawthorne, California manufactures Falcon 9 and \nFalcon Heavy first and second stages, Dragon Crew and Dragon Cargo spacecraft, Merlin engines, Starship’s \nRaptor engines, Starlink User Terminals, as well as other various Starship components. The site supports high-\nreliability production for hundreds of successful missions, including NASA-certified crew rotations. We also \nmaintain a corporate presence in Hawthorne.\nHawthorne, California\n\n204\nTable of Contents\n•\nMcGregor, Texas: The McGregor rocket engine complex is the most active rocket development and testing \nfacility in the world. It serves as the primary site for qualification, acceptance, and post-flight testing of Merlin \nand Raptor engines. It features 15 specialized test stands, including dedicated vertical stands for Raptor engines \nand multiple stands for Falcon 9’s Merlin engines, as well as component-level testing facilities for Starship \nhardware, including composite overwrapped pressure vessels, tanks, and experimental systems.\nMcGregor, Texas\n\n205\nTable of Contents\n•\nRedmond, Washington: The Redmond Starlink satellite manufacturing facility has produced an average of \napproximately 70 satellites per week (approximately 3,640 per year at full rate) from December 2025 to April \n2026, covering bus structures, phased-array antennas, propulsion, solar arrays, and inter-satellite lasers, \nenabling rapid Starlink constellation expansion.\nRedmond, Washington\n\n206\nTable of Contents\n•\nBastrop, Texas: We build the majority of Starlink products at our manufacturing facility in Bastrop, Texas, \nwhich opened in 2023, producing tens of thousands of Starlink Kits per day and all of the current generation \nStarlink Standard and Performance Kits.\nIn 2026, we expect to more than double the size of the Bastrop facility, expanding our design and \nmanufacturing capabilities to support new Starlink products, plus deepening our vertical integration by adding \nthe production of Starlink gateway antennas, solar cells and AI compute satellites.\nBastrop, Texas\n•\nKennedy Space Center and Cape Canaveral, Florida: SpaceX operations in Florida span across NASA’s \nKennedy Space Center and Cape Canaveral Space Force Station, which includes two active launch sites—\nLaunch Complex 39A (LC-39A) and Space Launch Complex 40 (SLC-40)—Falcon booster and Dragon \nspacecraft refurbishing facilities, launch operations, and payload processing buildings. Both launch sites support \ncritical missions to geostationary orbit and the International Space Station while also providing launch \nopportunities to a wide range of low, mid, and polar orbit inclinations for science and national security \nmissions. SpaceX also utilizes Landing Zones 40 and 2 at the Cape, which support Return to Launch Site \nlandings for Falcon boosters ahead of recovery and refurbishment for future missions.\nOnce recovered, flight hardware is refurbished at one of two state-of-the-art SpaceX facilities, HangarX and X2, \non Kennedy Space Center. These facilities also house our Falcon Launch and Landing Control Center, where \nour Dragon spacecraft are refurbished and prepared for their next missions after they are recovered off the coast \nof southern California, where we produce Starship heatshield tiles in the Bakery, and where we process \ncustomer payloads before launch in our Payload Processing Facility.\nFor future launches, SpaceX is expanding its operations in Florida to bring Starship to the Cape. In addition to \nthe under-construction Starship launch pad at LC-39A expected to be completed by the end of 2026, SpaceX is \nconstructing Space Launch Complex 37 (SLC-37) on Cape Canaveral Space Force Station as another Starship \nlaunch site. SLC-37 will host two orbital launch pads, including up to two towers for Starship launch, catch, and \ntesting operations, culminating in a total of four operational launch pads for Starship by the end of 2027. \nSpaceX is also building a new integration facility called Gigabay, next to its HangarX location at Kennedy \nSpace Center by late 2026.\n\n207\nTable of Contents\nIn connection with preparing leased real property for our launch operations, we make significant capital \nimprovements and install extensive real and personal property at these government-owned sites. The launch \nfacilities we build are a unique capital improvement compared to standard commercial use sites because the \nfederal government specifically designates these launch sites for aerospace activities, such as rocket launches. \nGiven the specific use requirements of these government-owned sites, we have historically entered into \nhandover agreements with the relevant government entities upon expiration or termination of the leases, \npursuant to which the improvements are transferred to the government rather than removed. This fact pattern \nhas historically been the case with previous leases such as at Cape Canaveral Space Force Station.\nNASA’s Kennedy Space Center, Florida\n\n208\nTable of Contents\nCape Canaveral Space Force Station, Florida\n•\nVandenberg Space Force Base, Space Launch Complex 4: Space Launch Complex 4 East at Vandenberg \nSpace Force Base is our West Coast launch site and serves as our primary facility for polar and high-inclination \norbit missions critical to Starlink constellation deployment, national security payloads, Earth observation \nsatellites, and select lunar trajectories. The facility includes a modernized orbital launch pad optimized for \nFalcon 9 launches, featuring a fixed launch mount, integration tower, propellant loading infrastructure, flame \ntrench, and support systems enabling frequent operations. Adjacent Space Launch Complex 4 West functions as \na dedicated Falcon 9 booster landing zone, supporting downrange recoveries to maximize reusability. Please \nrefer to “—Kennedy Space Center and Cape Canaveral, Florida” for additional information regarding our lease \narrangements with government entities.\n\n209\nTable of Contents\nVandenberg Space Force Base, California\n\n210\nTable of Contents\n•\nMemphis, Tennessee and Southaven, Mississippi: We operate a cluster of high-density data centers in the \nGreater Memphis Area extending into northern Mississippi along the state border, to power training and \ninference for frontier AI models, including the Grok family. The flagship COLOSSUS supercomputer campus \nis located on Paul R. Lowry Road in Memphis, Tennessee; the COLOSSUS II facilities are located on Tulane \nRoad in Memphis, Tennessee and on Stateline Road in Southaven, Mississippi.\nMemphis, Tennessee\n\n211\nTable of Contents\n•\nPalo Alto, California: The corporate headquarters for our AI operations following the acquisition of xAI in \nFebruary 2026 is located in Palo Alto, California. This location, under long-term lease, houses our advanced AI \nresearch, development, and engineering teams and is strategically situated in Silicon Valley to attract and retain \ntop AI research talent. The engineers responsible for the design, training, and continued evolution of Grok, our \nproprietary frontier AI model, are based at this facility.\nPalo Alto, California\nIn addition to our infrastructure and facilities across the United States, we also operate a fleet of recovery vessels, \nautonomous spaceport drone ships (“ASDS”), and a network of Starlink ground stations. \n•\nOur recovery fleet: Our fleet of ASDS forms the maritime backbone of SpaceX’s reusable rocket architecture, \nenabling high-probability downrange booster landings for Falcon 9 and Falcon Heavy missions while \nmaximizing vehicle recovery and rapid refurbishment. The core ASDS fleet consists of three operational \nvessels: “Of Course I Still Love You,” the pioneering East Coast-to-Pacific vessel homeported at the Port of \nLong Beach, California, and dedicated to supporting primarily polar and high-inclination launches from \nVandenberg Space Force Base with its large landing deck and thruster-based dynamic positioning; “Just Read \nthe Instructions,” stationed at Port Canaveral, Florida, serving East Coast operations from Cape Canaveral and \nKennedy Space Center; and “A Shortfall of Gravitas,” the newest and most advanced addition since 2021, also \nbased at Port Canaveral with enhanced autonomy, station-keeping precision, and upgraded deck infrastructure \nto handle frequent, high-cadence missions. These autonomous ships have collectively facilitated hundreds of \nsuccessful booster touchdowns, dramatically reducing expendable flight profiles and enabling the reuse of \nboosters 34 times as of March 31, 2026. Complementing the drone ships are dedicated support vessels for \nfairing half recovery, such as “Bob” and “Doug,” named after astronauts Bob Behnken and Doug Hurley, and \nDragon retrieval vessel “Shannon,” named in honor of astronaut Shannon Walker. These support vessels ensure \ncomprehensive ocean-based recovery operations across Atlantic and Pacific theaters and underpin our \nconstellation deployments, national security launches, and crewed missions while advancing toward full \nreusability for Starship in future offshore scenarios.\n\n212\nTable of Contents\nAutonomous Drone Ship “A Shortfall of Gravitas”\n•\nStarlink ground stations: A Starlink ground station, also referred to as a gateway, is a terrestrial relay station \nthat communicates with our satellite constellation. These stations transmit data between satellites and terrestrial \ninternet networks. We operate ground stations around the world, with over 400 sites globally.\nCustomer Case Studies  \nThe following examples illustrate ways in which customers across a range of industries have used and benefited \nfrom our solutions within our Space, Connectivity, and AI segments. These examples are intended to highlight \nrepresentative applications of our offerings and the types of operational, performance and efficiency benefits that \ncustomers may realize.\nIn addition, we include examples of our deployment of Starlink services in response to natural disasters, which \ndemonstrate our ability to rapidly establish communications infrastructure to support emergency response and \nrecovery efforts in challenging environments.\n\n219\nTable of Contents\nCompetition\nOur principal sources of competition vary based on the segment and market in which our business operates.\nIn Space, we compete with launch service providers that transport small, medium, and heavy payloads and \nastronauts to Earth’s orbit and beyond. Participants in this market include established aerospace and defense \ncompanies, emerging commercial launch providers, and national space agencies. Key established aerospace and \ndefense competitors providing launch services include, among others, United Launch Alliance, a joint venture \nbetween Boeing and Lockheed Martin, Arianespace, a French-based aerospace company operating a family of \nEuropean-developed rockets, and Northrop Grumman, manufacturer of the Cygnus cargo spacecraft. Emerging \ncommercial launch providers include Blue Origin, which has developed launch vehicles intended to compete with \nour Falcon 9 rocket, and Rocket Lab, which operates in the small-lift launch market but is expanding into medium-\nlift payloads, as well as other domestic competitors such as Firefly Aerospace and Relativity Space. While we \ntypically do not compete directly for the same missions, national space agencies also provide launch services in their \nrespective markets.\nHowever, the launch services market is characterized by significant barriers to entry, including substantial capital \nrequirements, advanced technological expertise, regulatory licenses and approvals, and established relationships \nwith government and commercial customers. Competition in this market is based on factors that include launch \nreliability and cadence, payload capacity, mission flexibility, manufacturing capabilities and price. For this reason, \nwhile the established aerospace and defense competitors and emerging commercial launch providers may provide \nlaunch services at varying degrees of scale, we believe that SpaceX holds a meaningful advantage in terms of the \nbreadth of our launch solutions and services and the cadence at which we are able to launch, and thus a significant \ncompetitive advantage relative to these players. \nIn Connectivity, we compete with operators of terrestrial and satellite communications infrastructure and providers \nof satellite-to-mobile connectivity solutions, including terrestrial fixed network providers, terrestrial mobile network \ncompanies, and other satellite service providers, as described below:\n•\nConsumer and Enterprise Broadband. Our Starlink Consumer and Enterprise broadband offerings compete with \nterrestrial fixed network providers, terrestrial mobile network companies, and other satellite service providers. \nTerrestrial fixed network providers include operators of cable and fiber networks such as Verizon, Comcast, \nAT&T, T-Mobile, Lumen, Charter Communications, Google Fiber, Astound, BT, Deutsche Telekom, and \nLiberty Global. Terrestrial mobile network companies also operate land-based infrastructure, including wireless \nantennas affixed to mobile towers used to provide fixed wireless services, and include AT&T, Telefónica, T-\nMobile, Verizon, and Vodafone Group. These network providers typically serve customers in one or more \ncountries (for example, Verizon in the United States, or Telefónica in Spain and Brazil, among others), but are \nnot global players insofar as they do not sell to a global customer base, nor does their network infrastructure \nexist globally. Satellite service providers include, among others, GEO satellite network operators such as \nEchoStar, SES, Telesat Corporation (“Telesat”) GEO, and Viasat, as well as current and planned LEO and \nMEO constellations including Amazon LEO, Blue Origin’s TeraWave, Eutelsat OneWeb, Iridium NEXT and \nTelesat Lightspeed. Some of these service providers are also launch customers of SpaceX as they contract with \nus to launch their satellite constellations into orbit.\n•\nGovernment Solutions. Our Starlink broadband offering for government use cases competes primarily with the \nsame terrestrial network providers and satellite service providers with which our Starlink Consumer and \nEnterprise broadband offerings compete, as well as defense prime contractors. In certain cases, these providers \nalso have dedicated subsidiaries or business units focused on serving government customers, such as Telesat \nGovernment Solutions.\n•\nStarlink Mobile. Our Starlink Mobile offering competes with other satellite-to-mobile satellite operators \nincluding, among others, AST SpaceMobile, Lynk, Globalstar and Skylo.\nThe satellite connectivity market involves significant barriers to entry, including substantial capital requirements, \nadvanced technological capabilities, access to spectrum and orbital resources, regulatory licenses and approvals, and \nthe development of relationships with government, enterprise and commercial customers. Competition in this market\n\n220\nTable of Contents\nis based on factors that include network coverage, capacity, latency and reliability, spectrum access, density of urban \nenvironments, satellite deployment capability and efficiency, price and user acquisition, retention, and experience.\nIn AI, we compete with developers of foundational AI models and providers of AI products and services, as well as \ngeneral purpose and vertical search engines, information services, online advertising platforms and social networks. \nParticipants in this market include large technology companies, emerging AI model developers and providers of AI-\nenabled products and services. Key competitors in these markets include, among others, AI model developers and \nplatform providers such as OpenAI, Anthropic, Google, Meta, Microsoft, and various open source model providers, \nas well as social networks such as Threads (owned by Meta), Reddit, and TikTok. As we continue to build out our \nAI compute infrastructure, we intend to sell our excess capacity by offering it to a limited number of third parties \nand intend to continue to explore monetizing excess capacity, potentially positioning us to emerge as a competitor to \nAI cloud providers such as Coreweave and Nebius as well as hyperscalers. \nOur AI businesses likewise compete in markets characterized by significant barriers to entry, including substantial \ncomputational and infrastructure requirements, access to large datasets and the ability to attract and retain highly \nskilled technical talent. Competition in these markets is based on factors including pricing and cost efficiency, the \nperformance and technical features of AI platforms, customer experience across our products and services, the \nability to attract new and retain existing subscribers, users and advertisers and the ability to deploy compute and \ninnovative technologies at scale.\nIntellectual Property \nThe intellectual property that is material to our business includes our proprietary knowledge and software, as well as \nour brands and our selectively patented inventions and technologies. Our proprietary knowledge includes expertise \nin design, testing, manufacturing, software, in-orbit operations, real-time platforms, and artificial intelligence \ndevelopment. The protection of our technology and intellectual property is an important aspect of our business. We \nrely upon a combination of patents, trademarks, trade secrets, copyrights, confidentiality procedures, contractual \ncommitments and other legal rights to establish and protect our intellectual property. We have registered, and \napplied for the registration of, U.S. and international trademarks, service marks, domain names, and copyrights. We \nhave also filed patent applications and acquired patents in the United States and foreign countries covering certain \naspects of our technology, and in some cases, we have acquired patent assets of others to supplement our portfolio. \nWe have licensed in the past, and expect that we may license in the future, certain of our rights to other parties or \nfrom other parties. We generally enter into confidentiality agreements and invention or work product assignment \nagreements with our employees, contractors, and consultants to control access to, and clarify ownership of, our \nproprietary information and other intellectual property. For additional information, please refer to “Risk Factors—\nRisks Related to Our Business—We may face substantial potential liability and operational disruptions if we violate \nthe intellectual property rights or other rights of third parties, and if we fail to adequately protect, maintain, defend \nor enforce our intellectual property and other similar rights, we could lose an important competitive advantage, in \neach case which could have a material adverse effect on our business, financial condition, results of operations, \ncustomer trust and future prospects.” \nHuman Capital\nAs of March 31, 2026, we employed over 22,000 full-time employees worldwide, none of whom are subject to any \ncollective bargaining agreement. We believe our strong culture of collaboration and innovation distinguishes us and \nserves as an important driver of our business performance.\nRegulatory Environment\nWe are required to comply with a variety of governmental regulations, which could have a significant impact on our \nbusiness, including our capital expenditures, earnings and competitive position. In particular, our ability to (i) \nconduct launches and reentries, (ii) operate and expand our satellite systems and related ground infrastructure and \n(iii) perform certain U.S. government programs depends on maintaining key governmental authorizations and \ncomplying with evolving safety, spectrum, national security, environmental, contractual, and trade-control \nrequirements. Our ability to provide our AI products and X platform depends on complying with evolving AI, data \nprivacy, online services, cybersecurity and environmental requirements. We incur and will continue to incur\n\n221\nTable of Contents\nsubstantial costs to monitor and take actions to comply with governmental and other regulations that are or will be \napplicable to our businesses, including, among others, restrictions and regulations of the U.S. Department of \nTransportation, the FAA, the FCC and other government agencies in the United States and the other countries in \nwhich we operate, economic sanctions and trade embargo laws, export controls, import controls and customs. For \nadditional information, please refer to “Risk Factors—Risks Related to Our Business—Our ability to continue and \nexpand launch and satellite operations depends upon our ability to obtain new and leverage existing U.S. export \ncontrol and sanctions authorizations, and any significant changes to the geopolitical landscape or U.S. government \nregulatory approach to licensing could materially and adversely impact our international business operations by \ncompromising existing licenses or limiting our ability to engage in commercial dealings in or involving \ngeopolitically sensitive countries.” We will also be subject to additional laws and regulations as a result of being a \npublic company, which will require us to devote significant management resources and incur additional legal, \naccounting and other expenses. \nSpace\nOur Space segment is subject to extensive regulation in the United States and internationally, including (i) \nregulations administered by the FAA relating to commercial space launches and reentries, (ii) regulations \nadministered by the FCC relating to radio communications used in launch activities and spacecraft operations, and \nrelated domestic and international coordination processes, including through the International Telecommunication \nUnion, (iii) U.S. export and import regulatory regimes, and (iv) additional regulations that relate to being a U.S. \ngovernment contractor.\nCommercial space launch and reentry activities require licenses and permits from the FAA. FAA licenses are \ngenerally granted on a launch-by-launch basis and may incorporate safety, environmental and operational \nconditions. Where applicable, reentry operations require separate authorization. We are generally required to obtain \nlicenses or license modifications from the FAA in connection with changes to vehicles, launch sites, flight profiles, \noperational procedures, payloads, or other mission parameters, and our launch and range operations may also be \nsubject to environmental reviews, consultations, and permits. We depend on timely approvals of licenses or license \nmodifications from the FAA and the timing and outcome of the FAA approval process may affect our ability to \nconduct launches and reentries or require operational restrictions or mitigation measures. For additional information, \nplease refer to “Risk Factors—Risks Related to Our Business—Any delays or difficulties in obtaining, maintaining \nor renewing required regulatory approvals and licenses required for our space-related activities, including FAA \nlaunch and reentry licenses, would materially delay or disrupt our operations, harm our business, or limit our ability \nto execute our business strategy.”\nRadio communications for launch activities and spacecraft operations require licenses from the FCC and are subject \nto technical and operational conditions, coordination requirements, and interference-mitigation frameworks. We rely \non obtaining licenses from the FCC to conduct our launch and spacecraft operations, and many of our FCC licenses \ninclude conditions regarding milestone schedules, reporting and surety‑bond requirements, among other conditions. \nIn addition, our spacecraft and satellite operations are subject to evolving regulatory expectations relating to space \nsituational awareness and orbital debris mitigation, including requirements regarding collision avoidance and post-\nmission disposal. International spacecraft frequency use is coordinated via International Telecommunication Union \nfilings made through the FCC and similar international regulatory bodies, and through country‑by‑country market \naccess approvals for non‑U.S. service. For additional information, please refer to “Risk Factors—Risks Related to \nOur Business—Any delays or difficulties in obtaining, maintaining or renewing required regulatory approvals and \nlicenses required for our space-related activities, including FAA launch and reentry licenses, would materially delay \nor disrupt our operations, harm our business, or limit our ability to execute our business strategy.”  \nAdditionally, as a contractor and subcontractor to certain agencies of the U.S. government, we are subject to the \nFederal Acquisition Regulation, and other applicable laws, security requirements, and regulations, including \nsupplemental agency regulations, which comprehensively regulate the formation, administration, and performance \nunder government contracts. Certain contracts with the U.S. government may require us to be issued facility security \nclearances under the National Industrial Security Program Operating Manual Rule, as a result of which we are \nrequired to maintain with the Department of War mitigation measures with respect to foreign ownership, control and \ninfluence. Additionally, certain transactions in which we may be involved from time to time may be subject to the\n\n222\nTable of Contents\njurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”), which has authority to conduct \nnational security reviews of certain foreign investments. CFIUS may impose mitigation conditions to grant clearance \nof a particular transaction, may unilaterally initiate national security review of certain transactions, and may \nrecommend that the President of the United States order parties to divest their shareholdings in certain situations, \namong other actions. \nConnectivity \nOur Connectivity services, including our global satellite-to-mobile connectivity services under Starlink Mobile, \ndepend on authorizations from the FCC in the United States and telecommunications regulators in other countries. \nWithout these licenses and approvals, we generally cannot offer connectivity services in a given market. In the \nUnited States, these authorizations include FCC approvals for our satellite system and related earth stations and use \nof radio frequency spectrum, and they may be subject to technical, operational, and reporting conditions and \nongoing compliance obligations (including interference mitigation, coordination requirements and orbital debris \nmitigation requirements). All communications services that rely on radio frequency communications require use of \nradio frequency spectrum, the assignment and distribution of which is subject to FCC oversight. Our access to \nspectrum and orbital resources is also subject to international coordination processes, including through International \nTelecommunication Union filing and coordination processes, and disputes or delays in these processes could \nadversely affect our operations. If demand continues to increase or if new spectrum is required for a future \ngeneration of technology, we may need to obtain additional spectrum usage rights or related authorizations through \nFCC proceedings (including modification applications), coordination processes, auctions or secondary market \ntransactions, or partnerships with third parties, each of which may be subject to review, approval, and conditions. \nWe hold FCC authorizations and licenses that allow us to provide a wide range of satellite-based connectivity \nservices, including through the operation of our satellite system and related earth stations. FCC spectrum licenses \nand authorizations typically have terms of 10-15 years, at which time they are subject to renewal. Similarly, our \nsubsidiaries operating outside the United States are subject to the jurisdiction of regulatory authorities in the \nterritories in which the subsidiaries operate, including any requirements to obtain spectrum licenses or other market \naccess authorization. Our licensing, compliance and advocacy initiatives in foreign countries support our ability to \noffer enterprise and consumer connectivity services in various international markets. Although we generally seek to \nrenew and maintain these authorizations, challenges could be raised in the future, and there can be no assurance that \nour applications to renew, modify, or expand our authorizations will be granted on a timely basis, or at all, or \nwithout additional conditions. If a spectrum license was revoked or not renewed, we would not be permitted to \nprovide services on the spectrum covered by that license or could be required to modify or curtail operations. \nWithin the United States, the Communications Act generally preempts regulation by state and local governments of \nthe entry of, or the rates charged by, wireless carriers. It does not prohibit states from regulating the other “terms and \nconditions” of wireless service. For example, some states impose reporting and consumer protection requirements. \nSeveral states also have laws or regulations that address safety issues (for example, use of wireless handsets while \ndriving), universal service funding, and taxation matters. Some states are also considering new network reliability or \nservice quality requirements that may affect how and where we provide services if not preempted by federal law. \nAI\nCertain enacted and proposed laws and regulations related to AI may impose requirements with respect to our \ndevelopment, deployment, and use of AI systems and models, including obligations relating to security, integrity, \ntransparency, labeling, detection, and provenance of AI data, models and AI-generated content, as well as \nrestrictions on the export or import of AI-related systems and components. AI regulation is evolving rapidly across \njurisdictions, with regulators applying, or considering applying, existing laws or adopting new, non-harmonized \nframeworks with respect thereto, including emerging AI laws. Development, deployment, and use of AI can also be \nsubject to existing, technology-agnostic regulatory frameworks, including, for example, those addressing consumer \nprotection, data privacy, cybersecurity, intellectual property, content moderation, non-discrimination, and \nemployment. Data centers necessary for AI-related systems may also be subject to changing regulatory frameworks \nunder federal, state, local, and foreign environmental, health, and safety laws. The scope and enforcement of these \nregimes remain uncertain, and their potential impact on our multiple and overlapping business lines is difficult to\n\n223\nTable of Contents\npredict. Divergent or conflicting regulatory approaches across jurisdictions, as well as evolving enforcement \npriorities, may also create compliance uncertainty and require market-specific limitations or modifications to AI-\nrelated functionality, increasing operational complexity. \nIn addition, third parties may allege intellectual property violations, or misappropriation relating to the training data \nused in, or the outputs generated by, AI systems and models. The uncertain and evolving legal status of AI-\ngenerated content may create legal and operational risk, including with respect to the ownership of, and ability to \nobtain intellectual property protection for, such outputs, as well as our ability to offer services in certain markets. \nOpen-source and other license terms applicable to AI systems and models may limit the distribution of AI-related \nfunctionality or constrain product design.\nSeparately, AI systems and models may present legal operational and reputational risks. Legal and reputational risk \nmay arise in the context of datasets used in the development or operation of AI systems and models as well as the \nuse of AI-enabled products or services to generate output that is perceived as objectionable or inappropriate. \nEmerging legislation, such as the European Union’s Artificial Intelligence Act, California’s Transparency in \nFrontier Artificial Intelligence Act (SB 53) and New York’s Responsible AI Safety and Education Act (RAISE Act), \nmay impose requirements relating to, among other things, safety, governance, transparency, and incident reporting \non developers of large or frontier AI models. Misuse of our AI systems, models, products, or services by customers \nor partners may similarly create safety, compliance, or brand risks. These risks have in the past and may in the future \nresult in regulatory scrutiny, legal liability, or reputational harm and adversely affect our business, results of \noperations, and financial condition. Addressing these risks may require substantial investment in testing, \nmoderation, guardrails, enforcement, and other mitigation measures. For additional information, please refer to \n“Risk Factors—Risks Related to Our Business—If the recommendations, forecasts, content, analyses or other output \nthat our AI technologies, including Grok, assist in producing are or are alleged to be deficient, inaccurate, harmful, \nillegal, or used for an improper purpose, we could continue to be subjected to claims and investigations, and we \ncould be subjected to legal liability and brand, reputational, or competitive harm.”\nPrivacy, Cybersecurity, Data Protection, Online Safety, and Digital Platform Regulation\nWe are subject to complex and evolving global legal and regulatory frameworks relating to privacy, cybersecurity, \nAI, data protection, lawful access, content moderation, and digital platform regulation, as well as contractual and \nother commitments we make in the course of doing business and our internal and external policies, procedures and \ncontrols. These laws and regulations vary across jurisdictions and sectors, are not harmonized, and may conflict or \nimpose overlapping or inconsistent obligations, and continue to evolve and emerge. In particular, the California \nConsumer Privacy Act (as amended), the European Union’s General Data Protection Regulation (and its equivalent \nin the United Kingdom) and other data privacy laws and regulations impose stringent and burdensome requirements \nin connection with the processing of personal information and include significant penalties for non-compliance. \nAdditionally, as a government contractor, we are also subject to the Department of War’s Cybersecurity Maturity \nModel Certification requirements, which requires companies that do business with the Department of War to, \ndepending on the level of security required, meet or exceed certain specified cybersecurity standards to be eligible \nfor new contract awards. The interpretation and application of these and other existing laws not originally enacted to \naddress privacy, cybersecurity, AI, data protection, lawful access, content moderation, or digital platforms are \nuncertain and continue to develop as they are applied to new technologies and data-driven products and services. \nThese frameworks impose obligations regarding, among other things, the collection, use, storage, protection, \ndisclosure, transfer, and other processing of data, including personal information, and may restrict or condition \ncross-border data transfers, require data localization, or impose content moderation or other platform-related \nrequirements, and may be interpreted or enforced in ways that are inconsistent, unclear, or subject to significant \nregulatory discretion. The risks are particularly acute for us because we operate globally across multiple industries \nand develop cutting-edge technologies that present novel regulatory and security issues. The data we collect and \notherwise process is integral to our business, technology, and services, and regulatory restrictions or limitations on \nour ability to secure and process such data could materially affect our operations and business model. \nIn addition, our products and services, including those enabled by AI, may also be subject to online safety and \nyouth-protection laws and regulations. Such laws and regulations may impose obligations relating to content risk \nmitigation, age assurance, platform governance, and, in certain jurisdictions, content reporting and removal\n\n224\nTable of Contents\nrequirements. For example, the UK’s Online Safety Act 2023 and Australia’s Online Safety Amendment (Social \nMedia Minimum Age) Act 2024 impose risk mitigation and age-related requirements on certain online platforms. As \na result of these requirements or to otherwise seek to maintain the safety of our platforms, we maintain content \npolicies and enforcement mechanisms across our platforms and related products and services. These include a \ncombination of automated detection tools, classifiers and filters, algorithmic signals, and human review processes. \nWe also employ measures to help detect and challenge suspicious accounts during sign-up and ongoing use, provide \nuser reporting channels, and apply enforcement actions. Additional safeguards to help mitigate safety concerns \ninclude age-related controls, content restrictions, and specialized modes; and labeling or watermarks on certain \noutputs and other market-specific restrictions on certain content categories where required by local laws.\nThis evolving landscape will continue to affect our ability to maintain, develop, or launch products and services, \nincluding those that rely on the processing of personal information or other sensitive data, including targeted \nadvertising and other data-driven offerings, and may require market-specific changes to our products, services, or \nbusiness practices, increasing operational complexity and cost. In addition, emerging laws and regulations seeking to \nrestrict cross-border transfer of or access to certain data in light of perceived national security considerations may \nincrease compliance costs and restrict our operational flexibility, investment activities, or ability to achieve our \nstrategic objectives. As our business evolves, and if we expand into additional industries or jurisdictions, our \ncompliance requirements and associated costs may increase and we may be subject to heightened regulatory \nscrutiny.\nWe also face cybersecurity risks, including the potential unlawful, accidental, or unauthorized access to, or use, \ndisclosure, alteration, loss, or disruption of, our technology, products, systems, and data, or those of our service \nproviders and partners, which could result in a loss of confidentiality, integrity, or availability. We operate in \nindustries that have been, and will continue to be, targeted by sophisticated and persistent internal and external threat \nactors, including those controlled by or affiliated with nation states. For additional information, please refer to “Risk \nFactors—Risks Related to Our Business—Any significant disruption in, or unauthorized access to, our computer and \ndata systems or those of third parties that we utilize in our operations could result in a loss or degradation of service, \nloss of trust in us and harm to our business.” Many jurisdictions impose mandatory breach notification and reporting \nobligations, and compliance with such requirements can be costly, time-sensitive, and operationally burdensome, \nand we may bear such costs in the event of a material incident. As we continue to use and integrate advanced \ntechnologies, including AI systems and models, into our operations, products, and services, our exposure to \ncybersecurity incidents may increase, particularly as threat actors also try to adopt and deploy AI-enabled tools to \nevade detection and compromise systems or data. Compliance with applicable privacy, cybersecurity, AI, data \nprotection, lawful access, content moderation and digital platform obligations can be costly and operationally \ndemanding and may require changes to our products, services, business practices, or technical infrastructure.\nEnvironmental, Health, and Safety\nOur operations and facilities, as well as existing and planned infrastructure, are subject to an extensive regulatory \nframework of federal, state, local, and foreign environmental, health, and safety laws, and regulations and permits \nthat govern, among other things, employee health and safety, discharges of pollutants into the air and water, the \ngeneration, handling, storage, and disposal of hazardous materials and wastes and the investigation and remediation \nof certain materials, substances, and wastes. These include various regulations promulgated by federal, state, and \nlocal regulatory agencies and legislative bodies. Certain of our operations, including launch, reentry, testing, and \nmanufacturing activities and the development or expansion of facilities, as well as the siting, construction and \noperation of data centers, may require environmental reviews, consultations, and permits and may be subject to \nconditions or mitigation measures that could increase costs or limit operations.\nWe are required to obtain a number of permits and entitlements from various government agencies to construct and \noperate our facilities, including zoning, land use and building code permits, air quality permits for permanent \ncombustion equipment (including both diesel generators and natural gas turbines), stormwater and wastewater \ndischarge permits, and fire and life safety approvals. We have issued or pending permit applications for certain of \nour facilities. For additional information, please refer to “Risk Factors—Risks Related to Our Business—\nEnvironmental laws, regulations, litigation, liabilities and proceedings may adversely affect our operations,\n\n225\nTable of Contents\nincluding our launch operations, manufacturing activities, fuel storage and handling operations, launch facilities and \nground infrastructure, and data center operations and expansion plans.”\nGovernment Contracts\nA portion of our revenue is derived from contracts, directly or indirectly, with the U.S. government. We have \nnumerous direct contracts with the U.S. government, primarily NASA, the Department of War, the General Services \nAdministration, and certain Intelligence Community agencies. These contracts focus mainly on launch services, \nspacecraft development, and satellite deployment, and artificial intelligence products. We are almost always the \nprime contractor on our government contracts, and we rarely use subcontractors. All of our launch contracts with \nU.S. government agencies are firm fixed-price contracts with milestone-based payments. \nThese contracts are subject to U.S. government contracting rules and regulations (Federal Acquisition Regulation \n(FAR) and Defense Federal Acquisition Regulation Supplement (DFARS)), and therefore, we are subject to the \nbusiness risks specific to the defense industry. These regulations impose stringent requirements on our operations, \nbusiness practices and reporting, and noncompliance could result in civil or criminal penalties, suspension or \ndebarment from government contracting, or loss of existing or future business. These requirements, although \ncustomary in U.S. government contracts, increase our performance and compliance costs. These costs might increase \nin the future. The U.S. government has the ability to unilaterally: (i) declare us ineligible to receive new contracts; \n(ii) terminate existing contracts at its convenience and without advance notice; (iii) reduce the scope and value of \nexisting contracts; (iv) audit our contract-related costs and fees, including allocated indirect costs; and (v) revoke \nrequired security clearances. Violations of government procurement laws could result in civil or criminal penalties. \nWe are also required to maintain special security clearances and comply with executive orders, federal laws and \nregulations, and customer security requirements for classified programs, and our government contracts impose \ncybersecurity and information assurance requirements, including implementation of information security protections \nin accordance with NIST Special Publication 800-171 and obligations to review and report certain cyber incidents. \nFailure to comply could result in suspension of payments, termination of contracts, civil or criminal penalties, or \nexclusion from future government contracting opportunities. For additional information, please refer to “Risk \nFactors—Risks Related to Our Business—Our services are subject to risks related to supplying services to the U.S. \ngovernment.” \nIn addition, in connection with preparing leased real property for our launch operations at Kennedy Space Center \nand Cape Canaveral, Florida, and Space Launch Complex 4 at Vandenberg Space Force Base, California, we make \nsignificant capital improvements and install extensive real and personal property at these government-owned sites. \nThe launch facilities we build are a unique capital improvement compared to standard commercial use sites because \nthe federal government specifically designates these launch sites for aerospace activities, such as rocket launches. \nGiven the specific use requirements of these government-owned sites, we have historically entered into handover \nagreements with the relevant government entities upon expiration or termination of the leases, pursuant to which the \nimprovements are transferred to the government rather than removed. This fact pattern has historically been the case \nwith previous leases such as at Cape Canaveral Space Force Station.\nLegal Proceedings\nWe are involved in the legal proceedings described in Note 17, Commitments and Contingencies, in our audited \nconsolidated financial statements and Note 16, Commitments and Contingencies in our unaudited consolidated \nfinancial statements included elsewhere in this prospectus, and we are subject to other claims and litigation arising in \nthe ordinary course of business. The outcome of any litigation is inherently uncertain, and if decided adversely to us, \nor if we determine that settlement of particular litigation is appropriate, we may be subject to liability that could \nhave a material adverse effect on our business.\n\n226\nTable of Contents\nMANAGEMENT\nBelow is certain information as of May 1, 2026 regarding individuals who are expected to serve as our executive \nofficers and directors upon the completion of this offering.\nName\nAge\nPosition\nElon Musk \n ......................\n54\nChief Executive Officer, Chief Technical Officer and Chairman of the Board\nGwynne Shotwell \n ...........\n62\nPresident, Chief Operating Officer and Director\nBret Johnsen \n ...................\n57\nChief Financial Officer\nIra Ehrenpreis \n .................\n57\nDirector \nRandy Glein \n ....................\n60\nDirector \nAntonio J. Gracias \n \n ..........\n55\nDirector\nDonald Harrison \n .............\n54\nDirector\nSteve Jurvetson \n ...............\n59\nDirector\nLuke Nosek\n \n .....................\n50\nDirector\nExecutive Officers and Management Directors\nElon Musk has served as our Chief Executive Officer, Chief Technical Officer and Chairman of our board since \nMay 2002. Mr. Musk is also the Technoking of Tesla and has served as Chief Executive Officer of Tesla since \nOctober 2008. Mr. Musk was Chief Technology Officer and on the board of directors of X, beginning October 2022 \nand served as the Chief Executive Officer and on the board of directors of xAI, beginning March 2023, in each case \nthrough the March 2025 merger of X and xAI. Following the merger, Mr. Musk served as the President, Treasurer, \nand Chief Executive Officer and on the board of directors of xAI, until it was acquired by the Company in February \n2026. Mr. Musk is also a founder and Chief Executive Officer of Neuralink Corp., a company focused on \ndeveloping brain-machine interfaces, and The Boring Company, an infrastructure company. Prior to the Company, \nMr. Musk co-founded PayPal, an electronic payment system, which was acquired by eBay in October 2002, and \nZip2 Corporation, a provider of Internet enterprise software and services, which was acquired by Compaq in March \n1999. Mr. Musk serves on the board of directors of Tesla and previously served on the board of directors of \nEndeavor Group Holdings, Inc. from April 2021 to June 2022. Mr. Musk holds a B.A. in Physics from the \nUniversity of Pennsylvania and a B.S. in Business from the Wharton School of the University of Pennsylvania. Mr. \nMusk brings to our board historical knowledge, operational and technical expertise, and continuity.\nGwynne Shotwell has served as our President and Chief Operating Officer since 2008 and has been a member of our \nboard since March 2009. Previously, Ms. Shotwell served as our Vice President, Business Development, from 2002 \nto 2008. Prior to joining the Company, Ms. Shotwell held positions with Microcosm, Inc., an aerospace company, as \na director, and The Aerospace Corporation, an independent, non-profit organization performing objective technical \nanalyses and assessments for a variety of government, civil, and commercial customers, as a senior project engineer. \nMs. Shotwell also serves on the board of directors of Polaris, Inc., a manufacturer of powersports vehicles, and on \nNorthwestern University’s Board of Trustees. Ms. Shotwell was inducted into the National Academy of Engineering \nand was previously named the Satellite Executive of the Year, included on Time’s 100 Most Influential People, and \nFortune Magazine’s World’s 50 Greatest Leaders. Ms. Shotwell holds a B.S. in Mechanical Engineering and an \nM.S. in Applied Mathematics from Northwestern University. As one of the key members of our leadership team, \nMs. Shotwell brings to our board extensive operational experience and in-house knowledge of the Company’s \noperations, technology, research and development and business management.\nBret Johnsen has served as our Chief Financial Officer since 2011. In this role, Mr. Johnsen leads our global \nfinance organization and is responsible for our long-term financial strategy, internal financial operations, \ninteractions with the financial community, and the financial aspects of our growth initiatives. With more than two \ndecades of experience in financial leadership, primarily in high-profile technology and semiconductor companies, \nhis leadership continues to play a key role in driving our financial performance, long-term value creation and \noperational discipline. Prior to joining the Company, Mr. Johnsen served as Chief Financial Officer at Mindspeed \nTechnologies, Inc., a publicly traded semiconductor company, from 2008 to 2011. Prior to that role, he spent nearly\n\n227\nTable of Contents\na decade at Broadcom Inc., a global semiconductor company, from 1999 to 2008, holding roles of increasing \nresponsibility within the organization, including serving as Vice President and Corporate Controller. Mr. Johnsen \nserves as a Trustee of the University of Southern California and holds a B.S. in Accounting from the University of \nSouthern California and an M.S. in Finance from San Diego State University, and he is a Certified Public \nAccountant (CPA).\nNon-Management Directors\nIra Ehrenpreis has served on our board since February 2026. Mr. Ehrenpreis is a founder and managing member of \nDBL Partners, a leading impact investing venture capital firm, formed in 2015. Previously, he was a partner at \nTechnology Partners, a venture capital firm. Mr. Ehrenpreis serves on the board of directors of Tesla. He serves as \nthe Chairman of the VCNetwork, the largest and most active California venture capital organization. Mr. Ehrenpreis \nalso serves as the Chair of the National Association of Corporate Directors (NACD) Northern California and the Co-\nChair of the Stanford Precourt Institute for Energy Advisory Council. Among several other awards and honors, Mr. \nEhrenpreis has been named a member of the NACD Directorship 100 for being “one of the most influential leaders \nin the boardroom and corporate governance community.” Mr. Ehrenpreis holds a B.A. from the University of \nCalifornia, Los Angeles and a J.D. and M.B.A. from Stanford University. Mr. Ehrenpreis brings to our board \nexperience in the technology, impact and venture capital industries, as well as valuable insights in corporate \ngovernance, strategic growth and shareholder values. \nRandy Glein has served on our board since February 2026 and previously served as a board observer since 2009. \nMr. Glein is co-founder and managing partner of DFJ Growth, a venture capital firm that has invested in more than \n100 growth-stage technology companies over the past 20 years. He currently serves on the board of directors of \nseveral private technology companies and has previously served on the board of directors of Anaplan, Inc. and \nTremor Video, Inc. Prior to DFJ Growth, Mr. Glein served as Chief Financial Officer of FeedBurner (acquired by \nGoogle in 2007) and Vice President of Tribune Company and its corporate investment group, Tribune Ventures. Mr. \nGlein began his career in the aerospace industry as a systems engineer with Hughes Space & Communications and \nin business development roles with its DIRECTV and New Ventures units. Mr. Glein holds a B.S.E.E. in Electrical \nEngineering from the University of Florida, an M.S.E.E. in Electrical Engineering from the University of Southern \nCalifornia, and an M.B.A. from the UCLA Anderson School of Management. Mr. Glein brings to our board \nexperience in the venture capital industry and more than 35 years of business and leadership experience in the \ntechnology, media, and satellite communications industries. \nAntonio J. Gracias has served on our board since October 2010. Since 2001, Mr. Gracias has been Chief Executive \nOfficer and Chief Investment Officer of Valor Management LLC, a private equity firm. As Founder, CEO, and CIO \nof Valor, he oversees one of the leading growth-focused investment firms in the United States with over $55 billion \nin assets under management. He has served on the board of Neuralink Corp., a company focused on developing \nbrain-machine interfaces, since May 2026, served on the board of The Boring Company, an infrastructure company, \nsince May 2026 and served as a director of Harmony Biosciences Holdings, Inc., a pharmaceutical company, from \nSeptember 2017 to May 2026. He also served as a director of Marathon Pharmaceuticals, LLC from November 2013 \nuntil its acquisition by PTC Therapeutics in May 2017, and SolarCity Corporation from 2012 to 2016. Mr. Gracias \npreviously served as a director of Tesla from 2007 to 2021 helping take the company public and acting as Lead \nIndependent Director for eight years. Prior to founding Valor Management LLC in 2001, Mr. Gracias served as \nFounder and Managing Member of MG Capital, a private equity firm headquartered in Chicago, where he was the \nlead transaction principal from 1995 through 2000. Prior to MG Capital, Mr. Gracias was an associate with \nGoldman, Sachs & Co. in New York, where he served the firm’s institutional clients in the International Equity \nDivision. Mr. Gracias is also actively involved in philanthropic activities. He is a trustee of The Aspen Institute, \nwhere he was a 2009 Henry Crown Fellow, an Aspen Institute program designed to engage the next generation of \nleaders in the challenge of community-spirited leadership. Additionally, he serves as a member of several \nprestigious non-profit and endowment boards, including the Board of Visitors for the Georgetown University School \nof Foreign Service and the Pritzker School of Molecular Engineering at the University of Chicago. He is also a \nmember of the University of Chicago Board of Trustees. Mr. Gracias holds a joint B.S. and M.S.F.S. (Honors \nDegree) in International Finance and Economics from the Georgetown University School of Foreign Service and a \nJ.D. from the University of Chicago Law School. Mr. Gracias brings to our board skills and experience in\n\n228\nTable of Contents\ninvestment strategy, portfolio company management and improvement, operations of business, and finance across \nseveral industries, including aerospace, technology, and manufacturing.\nDonald Harrison has served on our board since February 2015. Mr. Harrison has served as President, Global \nPartnerships and Corporate Development at Google LLC, a technology company, since 2017. Mr. Harrison \npreviously served as Vice-President, Corporate Development at Google from 2012 to 2017 and as Vice-President \nand Deputy General Counsel from 2005 to 2012. Mr. Harrison also sits on the board of directors of Reliance Jio, the \nlargest mobile telecommunications services provider in India. Mr. Harrison holds a B.A. in Philosophy and Political \nScience from the University of King’s College and a J.D. and LLB from the University of Toronto. Mr. Harrison \nbrings to our board years of business and leadership experience and provides valuable experience in the areas of \nstrategic transactions and partnerships.\nSteve Jurvetson has served on our board since March 2009. Mr. Jurvetson is a co-founder of Future Ventures, a \nventure capital firm, which he founded in 2019, and previously he co-founded and served as Managing Director of \nDraper Fisher Jurvetson, a venture capital firm, from 1995 to 2017. Mr. Jurvetson serves as a director of The Metals \nCompany, a deep sea mining exploration company, and also previously served as a director of Tesla from 2009 to \n2020, and NeoPhotonics Corp. from 2004 to 2011. Mr. Jurvetson also served as a director of Planet Labs from 2011 \nto 2017 and a director of D-Wave from 2003 to 2020. Before co-founding Future Ventures and Draper Fisher \nJurvetson, Mr. Jurvetson was an R&D Engineer at Hewlett-Packard, where seven of his chip designs were \nfabricated. He also worked in product marketing at Apple Inc. and NeXT and management consulting with Bain & \nCompany. Mr. Jurvetson holds B.S. and M.S. degrees in Electrical Engineering from Stanford University and an \nM.B.A. from the Stanford Business School. Mr. Jurvetson brings to our board experience in the venture capital \nindustry and years of business and leadership experience.\nLuke Nosek has served on our board since July 2008. Mr. Nosek co-founded Gigafund, a venture capital firm, in \nJuly 2017, and has been Managing Partner since inception. Mr. Nosek previously co-founded Founders Fund, a \nventure capital fund, in April 2006, and served as General Partner through July 2017. Prior to that, Mr. Nosek co-\nfounded and served as Vice President of Business Development, Vice President of Marketing, and Vice President of \nStrategy of PayPal, an electronic payment system, from November 1998 to February 2002. Mr. Nosek also serves as \na member of the board of directors of various private companies, including Last Energy, a nuclear energy company \nthat designs and manufactures small modular reactors, Emerald Cloud Lab, which operates remotely accessible and \nlargely autonomous life science laboratories, and ResearchGate, an online platform connecting scientists and \nresearchers with each other and their work. Mr. Nosek also served as a board member of DeepMind prior to its \nacquisition by Google. Mr. Nosek holds a B.S. in Computer Engineering from the University of Illinois Urbana-\nChampaign. Mr. Nosek brings to the board experience in the venture capital industry and years of business and \nleadership experience.\nAdditional Information\nOn October 16, 2018, the U.S. District Court for the Southern District of New York entered a final judgment \napproving the terms of a settlement, filed with the court on September 29, 2018, in connection with the actions taken \nby the SEC relating to Mr. Musk’s August 7, 2018 Twitter (now known as X) posts stating that he was considering \ntaking Tesla private at a specified price and with secured financing. The SEC alleged that these posts were \nmaterially false and misleading, in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 \nthereunder. In settling the action, Mr. Musk did not admit or deny the SEC’s allegations and consented to the entry \nof a judgment that enjoined him from violating these laws, ordered him to pay a $20 million civil penalty and \nrequired him to comply with procedures implemented by Tesla with respect to preclearing his public statements \nabout Tesla. While he was required to step down as chairman of the board of Tesla for three years, there is no \nrestriction on Mr. Musk’s ability to serve as an officer or director on the board of directors of any public or private \ncompany. On April 26, 2019, this settlement was amended to further clarify the pre-clearance procedures applicable \nto his making certain public statements about Tesla. The amendment was subsequently approved by the District \nCourt. \nOn April 3, 2026, in Pampena v. Musk, the U.S. District Court for the Northern District of California entered a \npartial judgment against Mr. Musk in his personal capacity only in favor of lead plaintiffs on behalf of themselves\n\n229\nTable of Contents\nand a class of investors who sold certain Twitter, Inc. equity securities between May 13 and October 4, 2022. The \njudgment is based on a jury verdict rendered on March 20, 2026 that found (i) in favor of plaintiffs on claims \nalleging that Mr. Musk violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder in \nconnection with two statements made by Mr. Musk in May 2022 and (ii) in favor of Mr. Musk on claims challenging \na third statement and alleging a “scheme to defraud” under Rules 10b-5(a) and (c). The claims in this case all \nconcern Mr. Musk’s then-pending potential purchase of Twitter, Inc. On May 1, 2026, Mr. Musk challenged the \npartial judgment by filing a post-trial motion for judgment as a matter of law and motion to decertify the class. The \nmotion practice is ongoing, and the Court is expected to hear these motions in June 2026. \nFamily Relationships \nThere are no family relationships among any of our directors or executive officers. \nControlled Company Exemption\nUpon completion of this offering, Mr. Musk will beneficially own approximately          % of our outstanding Class B \ncommon stock, which under our charter, as described under “Description of Capital Stock,” will be entitled to elect \n51% of the total number of authorized directors (rounded up to the nearest whole number), and          % of the total \nvoting power of our outstanding common stock (or               % if the underwriters exercise their option to purchase \nadditional shares of Class A common stock in full). As a result, we will be a “controlled company” within the \nmeaning of Nasdaq and Nasdaq Texas corporate governance standards. Under the listing rules of Nasdaq and \nNasdaq Texas, a company of which more than 50% of the voting power with respect to director elections is held by \nanother person or group of persons acting together is a “controlled company” and may elect not to comply with \ncertain Nasdaq and Nasdaq Texas corporate governance requirements, including the requirements that: \n•\na majority of such company’s board of directors consist of independent directors as defined under the listing \nrules of Nasdaq and Nasdaq Texas;\n•\ndirector nominees be selected or recommended for board of directors’ selection by a nominating committee \ncomposed entirely of independent directors, with a written charter addressing the nominations process as \nrequired under the listing rules of Nasdaq and Nasdaq Texas;\n•\nthe compensation committee be composed entirely of independent directors with a written charter addressing \nthe committee’s purpose and responsibilities; and \n•\nannual performance evaluations of the compensation and nominating committees be conducted. \nFollowing the completion of this offering, we intend to utilize certain of these exemptions. As a result, we do not \nexpect to have a compensation and nominating committee that is composed entirely of independent directors or that \nhas a committee charter that addresses all Nasdaq and Nasdaq Texas requirements applicable to companies that are \nnot controlled companies. Additionally, we may elect to take advantage of certain other exemptions in the future for \nas long as we remain a “controlled company.” Accordingly, our Class A shareholders will not have the same \nprotections afforded to shareholders of companies that are subject to all of the corporate governance requirements of \nNasdaq and Nasdaq Texas. In the event that we cease to be a “controlled company” and our shares continue to be \nlisted on Nasdaq and Nasdaq Texas, we will be required to comply with all of the applicable governance \nrequirements within the applicable transition periods. \nComposition of Our Board\nUpon the consummation of the offering, our board will consist of eight directors. Subject to the terms of our charter \nand bylaws, the number of directors on our board will be determined from time to time by our board. Under the \nterms of our charter, the holders of our outstanding Class B common stock, voting separately as a class, will have \nthe right to elect 51% of the total number of authorized directors, rounded up to the nearest whole number (the \n“Class B Directors”). Holders of Class A and Class B common stock, voting together as a single class, will elect the \nremaining members of our board (the “Common Stock Directors”). We expect that upon the completion of the \noffering Mr. Musk, Gwynne Shotwell, Antonio J. Gracias, Donald Harrison, and Luke Nosek will serve as the initial\n\n230\nTable of Contents\nClass B Directors and Ira Ehrenpreis, Randy Glein, and Steve Jurvetson will serve as the initial Common Stock \nDirectors.\nOur board will be subject to annual elections. Each director will hold office until the next annual meeting of our \nshareholders and until his or her successor is duly elected and qualified or until his or her earlier death, resignation \nor removal (as provided in our charter). For additional information, please refer to “Description of Capital Stock.” \nRole of our Board in Risk Oversight\nWe face a number of risks, including those described under the section titled “Risk Factors” included elsewhere in \nthis prospectus. Our board believes that risk management is an important part of establishing, updating and \nexecuting on our business strategy. Our board, as a whole and at the committee level, has oversight responsibility \nrelating to risks that could affect our corporate strategy, business objectives, compliance, operations and financial \ncondition and performance. Our board focuses its oversight on the most significant risks facing us and on the \nprocesses to identify, prioritize, assess, manage and mitigate those risks. While our board has an oversight role, \nmanagement is principally tasked with direct responsibility for management and assessment of risks and the \nimplementation of processes and controls to mitigate their effects on us. \nDirector Independence\nBased upon information requested from and provided by each director concerning his or her background, \nemployment and affiliations, our board has determined that each of Ira Ehrenpreis, Randy Glein, Donald Harrison, \nSteve Jurvetson, and Luke Nosek is independent within the meaning of the listing standards of Nasdaq and Nasdaq \nTexas currently in effect. In making this determination, our board considered the relationships that each of these \ndirectors has with our company and all other facts and circumstances our board deemed relevant in determining their \nindependence, including (i) the beneficial ownership of our capital stock by each such director and/or investment \nfunds or other entities affiliated with them and (ii) the relationships set forth below under “Certain Relationships and \nRelated Person Transactions.” The board also considered that Donald Harrison was employed by an organization \nthat does business with Company. The amount received by the Company or such other organization in each of the \nlast three fiscal years did not exceed the greater of $200,000 or 5% of either the Company’s or such organization’s \nconsolidated gross revenues.\nBoard Leadership Structure\nUpon the completion of this offering, as provided in our charter, our board will continue to be led by Mr. Musk. \nPursuant to the terms of our charter, he can only be removed from the board and these leadership positions by the \naffirmative vote of the holders of a majority of the outstanding shares of our Class B common stock, voting \nseparately as a class. \nOur board has concluded that our current leadership structure is appropriate at this time. \nBoard Committees\nIn connection with the completion of this offering, our board will establish an audit committee and a compensation \nand nominating committee. Audit and compensation and nominating committees will be governed by their charters \nthat will be available on our website at www.spacex.com. Pursuant to our bylaws, our board may, from time to time, \nestablish other committees to facilitate the management of our business and operations. Information contained on \nour website or linked therein or otherwise connected thereto does not constitute part of nor is it incorporated by \nreference into this prospectus or the registration statement of which this prospectus forms a part. \nAudit Committee\nThe primary responsibilities of our audit committee will include, among other things: \n•\nassisting our board in its oversight responsibilities regarding the integrity of our financial statements, our \ncompliance with legal and regulatory requirements, the independent accountant’s qualifications and \nindependence and our accounting and financial reporting processes of and the audits of our financial statements;\n\n231\nTable of Contents\n•\npreparing the report required by the SEC for inclusion in our annual proxy or information statement; \n•\napproving audit and non-audit services to be performed by the independent accountants; and\n•\nperforming such other functions as our board may from time to time assign to the audit committee.\nThe audit committee will be empowered to retain any advisors as it deems necessary or appropriate to assist it in \nfulfilling its responsibilities, and to approve the fees and other retention terms of such advisors. \nUpon the completion of this offering, Randy Glein and Steve Jurvetson are expected to be the members of our audit \ncommittee. Randy Glein is expected to qualify as an “audit committee financial expert” as such term is defined \nunder the rules of the SEC implementing Section 407 of the Sarbanes-Oxley Act and each of Randy Glein and Steve \nJurvetson qualifies as an independent director for purposes of Rule 10A-3 of the Exchange Act and the listing \nstandards of Nasdaq and Nasdaq Texas. We will identify the third member to serve on the audit committee within \nthe applicable one year period under the Nasdaq and Nasdaq Texas listing rules. Randy Glein is expected to serve as \nthe chair of the audit committee. \nCompensation and Nominating Committee\nThe primary responsibilities of our compensation and nominating committee will include, among other things: \n•\noverseeing the Company’s overall compensation philosophy; \n•\nreviewing and approving, or recommending to the full board for approval, the compensation and other benefits \nfor executive officers; \n•\nreviewing and recommending to our board for approval the form and amount of compensation for our \nindependent directors;\n•\nmaking recommendations to our board regarding director candidates and assisting our board in determining the \ncomposition of our board and its committees, subject to the terms of our charter; and\n•\nperforming such other functions as our board may from time to time assign to the committee. \nUpon the completion of this offering, Ira Ehrenpreis, Antonio J. Gracias, and Luke Nosek are expected to be the \nmembers of our compensation and nominating committee. As a “controlled company,” we will rely upon the \nexemption from Nasdaq’s and Nasdaq Texas’ requirement that we have a compensation and nominating committee \nthat is composed entirely of independent directors with a committee charter that addresses all Nasdaq and Nasdaq \nTexas’ requirements applicable to companies that are not controlled companies. Each of Ira Ehrenpreis and Luke \nNosek qualifies as an independent director under the listing standards of Nasdaq and Nasdaq Texas, including the \nheightened independence standards for members of a compensation committee, and as a “non-employee director” as \ndefined in Rule 16b-3 of the Exchange Act. Ira Ehrenpreis is expected to serve as the chair of the compensation and \nnominating committee.  \nCompensation Committee Interlocks and Insider Participation\nDuring the last completed fiscal year, we were not a publicly traded company and did not have a compensation \ncommittee or any other committee serving a similar function. Historically, the board has been responsible for \ndetermining, and has made all decisions regarding, the compensation for Mr. Musk. With respect to those expected \nto serve as our other executive officers, Mr. Musk has had primary responsibility for compensation-related \ndecisions; however, all equity awards were approved by the board. \nCode of Business Conduct and Ethics\nIn connection with this offering, our board will adopt a code of business conduct and ethics applicable to our \nemployees, directors and officers, in accordance with applicable SEC rules and the corporate governance rules of \nNasdaq and Nasdaq Texas. We expect that any amendments to the code or any waivers of its requirements \napplicable to our directors and executive officers will be disclosed on our website at www.spacex.com, as and to the\n\n232\nTable of Contents\nextent required by applicable SEC rules and the corporate governance rules of Nasdaq and Nasdaq Texas. \nInformation contained on our website or linked therein or otherwise connected thereto does not constitute part of, \nnor is it incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a \npart. \nCorporate Governance Guidelines\nIn connection with the completion of this offering, we intend to adopt corporate governance guidelines, which will \nset forth expectations for directors, director qualification standards, committee structure and functions and other \npolicies for the governance of our company. A copy of our corporate governance guidelines will be posted on our \nwebsite at www.spacex.com. Information contained on our website or linked therein or otherwise connected thereto \ndoes not constitute part of, nor is it incorporated by reference into, this prospectus or the registration statement of \nwhich this prospectus forms a part.\n\n233\nTable of Contents\nEXECUTIVE COMPENSATION\nCompensation Discussion and Analysis\nThis Compensation Discussion and Analysis, or CD&A, provides an overview of our executive compensation \nphilosophy, objectives, and design and each element of our executive compensation program with regard to the \ncompensation awarded, to, earned by, or paid to the following named executive officers (collectively, our “NEOs”) \nfor the fiscal year ended December 31, 2025 (the “2025 Fiscal Year”), which includes all of our executive officers \nfor the 2025 Fiscal Year. For the 2025 Fiscal Year, our NEOs were:\nName\nPosition\nElon Musk \n ...................................... Chief Executive Officer, Chief Technical Officer and Chairman of the Board\nGwynne Shotwell ........................... President, Chief Operating Officer and Director\nBret Johnsen \n \n ................................... Chief Financial Officer\nOur Compensation Philosophy and Objectives\nOur compensation program is designed to attract, retain and reward executives and employees, with a heavy \nemphasis on equity compensation to provide employees with a financial stake in our business and an ownership \nmindset. We offer a number of programs that allow employees to voluntarily elect to receive elements of their \ncompensation in equity or to otherwise increase their ownership interests in the Company.\nProcess for Setting Compensation\nHistorically, our board has been responsible for determining, and has made all decisions regarding, the \ncompensation for Mr. Musk. With respect to the other NEOs, Mr. Musk has had primary responsibility for \ncompensation-related decisions (in consultation with Ms. Shotwell with respect to Mr. Johnsen’s compensation). All \nequity awards are approved by our board. \nIn connection with this offering, we plan to establish a compensation and nominating committee of our board who \nwill oversee our executive compensation program going forward. The compensation and nominating committee, in \nconsultation with Mr. Musk (other than with respect to his own compensation), will have primary responsibility for \nevaluating and approving the compensation of our NEOs or making recommendations regarding such compensation \nto our board when appropriate, including with respect to Mr. Musk’s compensation.\nElements of Compensation\nBase Salary\nEach NEO’s base salary is a fixed component of compensation for performing specific job duties and functions. \nBase salaries are generally reviewed on an annual basis, taking into account the NEO’s experience and \nresponsibilities. Mr. Musk’s base salary of $54,080 has remained unchanged since 2019, and prior to our relocation \nto Texas in 2024 was tied to California’s minimum salary for exempt employees. Mr. Musk has historically \ndetermined the base salary for Ms. Shotwell, which was increased from $1,040,000 to $1,080,000 effective April 20, \n2025. Mr. Musk and Ms. Shotwell have historically determined the base salary for Mr. Johnsen, which was \nincreased from $780,000 to $825,000 on April 6, 2025, with retroactive effect for the full 2025 Fiscal Year.\nAs participants in a broader employee equity election program, our NEOs, other than Mr. Musk, were eligible to \nelect to receive all or a portion of their base salary in the form of restricted stock units (“RSUs”). For the 2025 Fiscal \nYear, Ms. Shotwell received $353,077 of her base salary in cash and the remainder as a grant of 19,650 RSUs that \nvested 50% on May 15, 2025 and 50% on November 15, 2025, and Mr. Johnsen elected to receive his base salary \nfully in cash. The base salaries paid to our NEOs reflect the only cash compensation that they are eligible to receive, \nas no NEO participates in an annual bonus program.\n\n234\nTable of Contents\nLong-Term Incentive Compensation\nIn 2025, we granted long-term incentive compensation under our 2024 Equity Incentive Plan (the “2024 Plan”), \nwhich replaced our 2015 Equity Incentive Plan (the “2015 Plan”) with respect to new grants; however, outstanding \ngrants under the 2015 Plan remained outstanding and subject to the terms of the 2015 Plan, which are substantially \nsimilar to the terms of the 2024 Plan. The 2024 Plan provides for the issuance of up to 365,950,000 shares of Class \nC common stock thereunder pursuant to stock options (which may be either incentive stock options or nonstatutory \nstock options), RSUs, and other equity awards, in each case, on the terms determined by our board. It is expected \nthat, in connection with and following the completion of this offering, all outstanding awards under the 2015 Plan \nand the 2024 Plan will remain outstanding and continue to be subject to their existing terms; however, awards in \nrespect of Class C common stock will be converted into awards in respect of Class A common stock on a one-for-\none basis as part of the Class C Reclassification. It is expected that the 2024 Plan will be amended and restated in \nconnection with this offering, as described below.\nGiven his significant ownership interest in our Company, Mr. Musk was not granted any annual long-term incentive \ncompensation in 2025, and generally does not participate in our annual long-term incentive compensation program. \nHowever, as part of our efforts to further incentivize Mr. Musk to achieve our long-term business objectives, the \nboard granted him a performance-based award of restricted shares of Class B common stock in January 2026, as \ndescribed further under “—2026 Compensation Developments” below. \nMs. Shotwell was eligible to participate in our long-term incentive election program with a target award of $5 \nmillion, pursuant to which she could elect to receive 20% of her target award in cash or RSUs that vest after six \nmonths and 80% of her target award in cash vesting over five years, RSUs vesting over five years or stock options \nvesting over six years. In accordance with her elections, on May 10, 2025, our board granted Ms. Shotwell 27,030 \nRSUs, representing $1 million of her target award, that vested on November 15, 2025 and stock options to purchase \n324,325 shares of Class C common stock, representing $4 million of her target award, which vest as to 12.5% on \nMay 15, 2027 and monthly thereafter in equal installments through November 15, 2030, in each case, subject to Ms. \nShotwell’s continued employment with us through the applicable vesting date.\nBecause Mr. Johnsen held outstanding stock options tied to aggressive performance milestones, a portion of which \nwere adjusted in 2026 as described further under “—2026 Compensation Developments” below, he was not eligible \nto participate in the long-term incentive election program described above. Instead, Mr. Johnsen’s long-term \nincentive award for the 2025 Fiscal Year consisted exclusively of stock options to purchase 324,325 shares of Class \nC common stock, which was granted by our board on May 10, 2025. These stock options vest as to 40% in equal \nmonthly installments from January 1, 2027 through December 1, 2027 and as to 60% in equal monthly installments \nfrom January 1, 2028 through December 1, 2030, in each case, subject to Mr. Johnsen’s continued employment with \nus through the applicable vesting date.\nOn October 20, 2025, as a special equity grant intended to further promote their retention, reward their individual \nperformance, and encourage efforts to continue growing the Company, our board granted Ms. Shotwell stock \noptions to purchase 3,537,740 shares of Class C common stock and granted Mr. Johnsen stock options to purchase \n141,510 shares of Class C common stock. These special stock options vest as to 20% on September 30, 2027 and \nmonthly thereafter in equal installments through September 30, 2031, in each case, subject to the NEO’s continued \nemployment with us through the applicable vesting date. \nOther Elements of Compensation\nRetirement Benefits\nAll of our U.S. employees, including our NEOs, are eligible to participate in our 401(k) plan, which is a broad-\nbased, tax-qualified defined contribution retirement plan. Under the 401(k) plan, we may make discretionary \nmatching and non-elective contributions, subject to certain limits under the Internal Revenue Code of 1986, as \namended (the “Code”), and such contributions would vest ratably and would be 100% vested after five years of \ncredited service; however, no such company contributions were made for 2025.\n\n235\nTable of Contents\nEmployee Stock Purchase Plans\nHistorically, we have provided two employee stock purchase plans in which all of our U.S. employees, including the \nNEOs, are eligible to participate. Our Amended and Restated 2017 Employee Stock Purchase Plan (the “2017 \nESPP”) is intended to qualify under Section 423 of the Code and allows eligible employees to purchase shares of \nClass C common stock using accumulated payroll contributions at a discount. It is expected that the 2017 ESPP will \nbe amended and restated in connection with this offering, as described below. Our 2023 Non-Qualified ESPP (the \n“NQ ESPP”) is not intended to qualify under Section 423 of the Code and allows eligible employees to purchase \nshares of Class C common stock using accumulated payroll contributions at fair market value. Our NQ ESPP will be \ndiscontinued in connection with this offering.\nPerquisites\nThe Company provides security equipment to enhance security at Ms. Shotwell’s personal residence. The aggregate \nincremental cost of these security benefits are reported in the “—Executive Compensation Tables—2025 Summary \nCompensation Table” below. No other material perquisites are provided to our NEOs.\nOther Matters\n2026 Compensation Developments\nOn January 13, 2026, our board approved the grant of 1 billion performance-based restricted shares of Class B \ncommon stock to Mr. Musk. The restricted shares vest upon (i) our achievement of specified market capitalization \nmilestones across 15 equal tranches and (ii) the Company’s establishment of a permanent human colony on Mars \nwith at least one million inhabitants, in each case, subject to Mr. Musk’s continued employment with us through the \ndate on which achievement is certified by our board. For any tranche of the award to vest, both the applicable market \ncapitalization milestone for such tranche and the human colony milestone must be met. In connection with the xAI \nMerger that closed on February 2, 2026, the market capitalization milestones were equitably adjusted in accordance \nwith the terms of the award agreement to the following:\nRestricted Shares Subject to Tranche \nMarket Capitalization \nMilestone\n66,666,665 \n ............................................................................................................................... $\n500,000,000,000\n66,666,665 \n ............................................................................................................................... $\n1,000,000,000,000\n66,666,665 \n ............................................................................................................................... $\n1,500,000,000,000\n66,666,665 \n ............................................................................................................................... $\n2,000,000,000,000\n66,666,665 \n ............................................................................................................................... $\n2,500,000,000,000\n66,666,665 \n ............................................................................................................................... $\n3,000,000,000,000\n66,666,665 \n ............................................................................................................................... $\n3,500,000,000,000\n66,666,665 \n ............................................................................................................................... $\n4,000,000,000,000\n66,666,665 \n ............................................................................................................................... $\n4,500,000,000,000\n66,666,665 \n ............................................................................................................................... $\n5,000,000,000,000\n66,666,670 \n ............................................................................................................................... $\n5,500,000,000,000\n66,666,670 \n ............................................................................................................................... $\n6,000,000,000,000\n66,666,670 \n ............................................................................................................................... $\n6,500,000,000,000\n66,666,670 \n ............................................................................................................................... $\n7,000,000,000,000\n66,666,670 \n ............................................................................................................................... $\n7,500,000,000,000\nIn connection with the xAI Merger, we also assumed a performance stock award originally granted to Mr. Musk by \nxAI on November 26, 2025. In accordance with the terms of that award agreement, the award was adjusted to \naccount for the xAI Merger and, following such adjustment, reflected Mr. Musk’s right to receive shares of our \nClass A common stock equal to 0.20% of the fully diluted capitalization of the Company upon achievement of each \nof 12 valuation milestones ranging from $1.065 trillion to $6.565 trillion, with each milestone reflecting $500 billion\n\n236\nTable of Contents\nin additional valuation, in each case, subject to Mr. Musk’s continued employment with us. The first valuation \nmilestone was achieved prior to the xAI Merger, and Mr. Musk was issued 25,172,695 shares of our Class A \ncommon stock in settlement of that portion of the award. On March 23, 2026, this award and the 25,172,695 shares \nearned upon achievement of the first valuation milestone were cancelled and replaced with a grant of 302,072,285 \nperformance-based restricted shares of Class B common stock, which vest upon both (i) achievement of specified \nmarket capitalization milestones across 12 equal tranches ranging from $1.065 trillion to $6.565 trillion, with each \nmilestone reflecting $500 billion in additional valuation, and (ii) the Company’s completion of non-Earth-based data \ncenters capable of delivering 100 terawatts of compute per year, in each case, subject to Mr. Musk’s continued \nemployment with us through the date on which achievement is certified by our board. \nOn January 4, 2026, our board approved an amendment to Mr. Johnsen’s 4 million performance-based stock options \noriginally granted in 2024. In lieu of vesting based on free cash flow achievement in excess of a baseline, 371,125 of \nthe stock options will vest for each $10 billion in adjusted EBITDA achieved during the 2025 through 2029 fiscal \nyears, assessed on an annual basis. For purposes of this award, adjusted EBITDA is calculated as income from \noperations excluding (i) depreciation and amortization, (ii) share-based compensation, (iii) impairment, and (iv) \nrestructuring impacts. Once a tranche of the stock options have become earned as a result of our adjusted EBITDA \nperformance as of the end of a particular fiscal year, such stock options remain subject to an additional one-year and \none day service-based vesting requirement following December 31 of the fiscal year in which such tranche was \nearned. None of the stock options became earned on account of our 2025 Fiscal Year adjusted EBITDA \nperformance.\nClawback Policy\nIn connection with this offering, we will adopt a compensation recoupment (clawback) policy that complies with the \nNasdaq and Nasdaq Texas listing standards implementing Rule 10D-1 of the Exchange Act.\nExecutive Compensation Tables\n2025 Summary Compensation Table\nThe following table presents information regarding the total compensation awarded to, earned by, and paid to the \nNEOs for the 2025 Fiscal Year.\nName and Principal Position\nYear\nSalary \n($)\nOption \nAwards \n($)(1)\nStock \nAwards \n($)(2)\nAll Other \nCompensation\n($)(3)\nTotal \nCompensation \n($)\nElon Musk \nChief Executive Officer, Chief \nTechnical Officer and \nChairman of the Board\n \n ............\n2025\n54,080\n—\n—\n—\n54,080\nGwynne Shotwell \nPresident, Chief Operating \nOfficer and Director ................\n2025\n1,080,127\n(4)\n82,969,515\n1,727,160\n30,095\n85,806,897\nBret Johnsen \nChief Financial Officer \n ...............\n2025\n825,000\n9,013,002\n—\n—\n9,838,002\n__________________\n(1)\nAmounts in this column represent the grant date fair value of stock options granted to the NEOs during the 2025 Fiscal Year calculated in \naccordance with FASB ASC Topic 718, disregarding the effect of estimated forfeitures. For additional information regarding the \nassumptions underlying this calculation, please refer to Note 15, Share-based Compensation—Fair Value Determination, to the consolidated \nfinancial statements included elsewhere in this prospectus.\n(2)\nAmounts in this column represent the grant date fair value of RSUs granted to the NEOs calculated in accordance with FASB ASC Topic \n718, disregarding the effect of estimated forfeitures, based on the fair market value of a share of our Class C common stock on the \napplicable date.\n(3)\nAmounts in the column include, for Ms. Shotwell, the incremental cost to the Company of security equipment to enhance security at Ms. \nShotwell’s personal residence. From time to time, each NEO may also be accompanied by personal guests on travel on Company-owned \naircraft that otherwise has a business purpose; however, there is no incremental cost to the Company of such travel.\n(4)\nThis amount includes the grant date fair value of 19,650 RSUs granted to Ms. Shotwell in lieu of base salary, calculated in accordance with \nFASB ASC Topic 718, disregarding the effect of estimated forfeitures, based on the fair market value of a share of our Class C common \nstock on the applicable date ($37 on May 10, 2025). For additional information, please refer to “—Compensation Discussion and Analysis\n—Elements of Compensation—Base Salary” above and “Grants of Plan-Based Awards” below.\n\n237\nTable of Contents\nGrants of Plan-Based Awards\nThe following table provides information on the stock options to purchase shares of our Class C common stock and \nRSUs representing a right to receive shares of our Class C common stock, in each case, granted to each NEO during \nthe 2025 Fiscal Year under the 2024 Plan. Mr. Musk did not receive any equity grants from the Company during the \n2025 Fiscal Year. \nName\nGrant \nDate\nAll Other Stock \nAwards: Number \nof Shares of \nStock \nor Units (#)(1)\nAll Other Option \nAwards: Number \nof \nSecurities \nUnderlying \nOptions (#)(2)\nExercise or \nBase Price of \nOption Awards \n($/Sh)(3)\nGrant Date Fair \nValue of Stock \nand \nOption Awards \n($)(4)\nGwynne Shotwell \nRSUs \n ......................................\n5/10/25\n19,650\n(5)\n$\n727,050\nRSUs \n ......................................\n5/10/25\n27,030\n$\n1,000,110\nOptions \n ...................................\n5/10/25\n324,325\n$\n37.00\n$\n6,136,878\nOptions \n ...................................\n10/20/25\n3,537,740\n$\n42.40\n$\n76,832,637\nBret Johnsen \nOptions \n ...................................\n5/10/25\n324,325\n$\n37.00\n$\n5,939,688\nOptions \n ...................................\n10/20/25\n141,510\n$\n42.40\n$\n3,073,314\n__________________\n(1)\nAmounts in this column represent RSUs granted during the 2025 Fiscal Year. For more information, please refer to “—Compensation \nDiscussion and Analysis—Elements of Compensation—Long-Term Incentive Compensation” and “Compensation Discussion and Analysis\n—Elements of Compensation—Base Salaries” above.\n(2)\nAmounts in this column represent stock options granted during the 2025 Fiscal Year. For more information, please refer to “—\nCompensation Discussion and Analysis—Elements of Compensation—Long-Term Incentive Compensation” above.\n(3)\nThe exercise price of each stock option granted during the 2025 Fiscal Year reflects the fair market value of a share of our Class C common \nstock on the date of grant and was determined based on a third-party valuation obtained in accordance with Section 409A of the Code. \n(4)\nAmounts in this column represent the grant date fair value of stock options and RSUs, calculated in accordance with FASB ASC Topic 718, \ndisregarding the effect of estimated forfeitures. For additional information regarding the assumptions underlying this calculation, refer to \nNote 15, Share-based Compensation—Fair Value Determination, to the audited financial statements included elsewhere in this prospectus.\n(5)\nRepresents the RSUs granted to Ms. Shotwell in lieu of $726,923 of her 2025 base salary. For additional information, please refer to “—\nCompensation Discussion and Analysis—Elements of Compensation—Base Salary” above.\nOutstanding Equity Awards at Fiscal Year-End\nThe following table presents information regarding the outstanding stock option awards held by our NEOs as of \nDecember 31, 2025. No NEOs held outstanding RSUs or other unvested stock awards in the Company as of \nDecember 31, 2025. Awards in respect of Class C common stock reflected in this following table will be converted \ninto awards in respect of Class A common stock on a one-for-one basis as part of the Class C Reclassification.\n\n238\nTable of Contents\nName\nOption Awards\nNumber of \nSecurities \nUnderlying \nUnexercised \nOptions (#) \nExercisable\nNumber of \nSecurities \nUnderlying \nUnexercised \nOptions (#) \nUnexercisable\nEquity Incentive \nPlan Awards: \nNumber of \nSecurities \nUnderlying \nUnexercised \nUnearned Options \n(#)\nOption \nExercise Price \n($)\nOption \nExpiration \nDate\nElon Musk \nClass B Options \n .....................\n344,166,650\n8,333,350\n(1)\n—\n$\n8.3998\n2/11/31\nGwynne Shotwell \nClass C Options \n .....................\n27,800\n305,550\n(2)\n—\n$\n8.3998\n4/20/31\nClass C Options \n .....................\n14,885\n163,690\n(2)\n—\n$\n11.20\n4/27/32\nClass C Options \n .....................\n—\n618,560\n(3)\n—\n$\n19.40\n5/16/34\nClass C Options \n .....................\n—\n324,325\n(4)\n—\n$\n37.00\n5/10/35\nClass C Options \n .....................\n—\n3,537,740\n(5)\n—\n$\n42.40\n10/20/35\nBret Johnsen \nClass C Options \n .....................\n711,850\n—\n—\n$\n4.40\n4/24/30\nClass C Options \n .....................\n1,019,400\n480,600\n(2)\n—\n$\n8.3998\n4/20/31\nClass C Options \n .....................\n535,715\n—\n2,142,860\n(6)\n$\n11.20\n4/27/32\nClass C Options \n .....................\n139,285\n375,005\n(7)\n—\n$\n15.40\n5/1/33\nClass C Options \n .....................\n—\n371,135\n(3)\n—\n$\n19.40\n5/16/34\nClass C Options \n .....................\n—\n—\n4,000,000\n(8)\n$\n19.40\n5/16/34\nClass C Options \n .....................\n—\n324,325\n(9)\n—\n$\n37.00\n5/10/35\nClass C Options \n .....................\n—\n141,510\n(5)\n—\n$\n42.40\n10/20/35\n__________________\n(1)\nThese stock options to purchase shares of our Class B common stock vested on January 1, 2026.\n(2)\nThese stock options to purchase shares of our Class C common stock vest in approximately equal monthly installments through November \n15, 2026, subject to the NEO’s continued employment.\n(3)\nThese stock options to purchase shares of our Class C common stock vest as to 12.5% on May 15, 2026 and thereafter in approximately \nequal monthly installments through November 15, 2029, subject to the NEO’s continued employment.\n(4)\nThese stock options to purchase shares of our Class C common stock vest as to 12.5% on May 15, 2027 and thereafter in approximately \nequal monthly installments through November 15, 2030, subject to the NEO’s continued employment.\n(5)\nThese stock options to purchase shares of our Class C common stock vest as to 20% on September 30, 2027 and thereafter in approximately \nequal monthly installments through September 30, 2031, subject to the NEO’s continued employment.\n(6)\nThese stock options to purchase shares of our Class C common stock vest as follows: (i) 75% vests in three equal tranches upon \nachievement of a 50%, 80% and 90% reduction in cost per ton to orbit from such cost in April 2022, and (ii) 25% vests in two equal \ntranches upon achievement of 80% and 90% reduction in Starlink service delivery costs from such costs in April 2022, in each case, subject \nto the NEO’s continued employment.\n(7)\nThese stock options to purchase shares of our Class C common stock vest in approximately equal monthly installments through November \n15, 2028, subject to the NEO’s continued employment.\n(8)\nThese stock options to purchase shares of our Class C common stock were eligible to vest based on our free cash flow performance \nexceeding $2 billion beginning in 2025, subject to the NEO’s continued employment. In 2026, these stock options were amended as \ndescribed in more detail under —”Compensation Discussion and Analysis—Other Matters—2026 Compensation Developments” above.\n(9)\nThese stock options to purchase shares of our Class C common stock vest as follows: (i) 129,730 vest in approximately equal monthly \ninstallments from January 1, 2027 through December 1, 2027 and (ii) 194,595 vest in approximately equal monthly installments from \nJanuary 1, 2028 through December 1, 2030, in each case, subject to the NEO’s continued employment.\n\n239\nTable of Contents\nOption Exercises and Stock Vested\nThe following table reflects stock options to purchase Class C common stock exercised by our NEOs during the \n2025 Fiscal Years and RSUs held by our NEOs which vested during 2025.\nName\nOption Awards\nStock Awards\nNumber of \nShares \nAcquired on \nExercise (#)\nValue Realized \non \nExercise ($)(1)\nNumber of \nShares \nAcquired on \nVesting (#)\nValue Realized \non \nVesting ($)(2)\nElon Musk \n ..........................................................\n—\n—\n—\n—\nGwynne Shotwell \n ...............................................\n1,684,515\n44,800,662\n46,680\n1,926,177\nBret Johnsen \n .......................................................\n1,182,150\n41,906,655\n—\n—\n__________________\n(1)\nThe value realized on the exercise of stock options is determined based on the fair market value of a share of our Class C common stock on \nthe exercise date, less the applicable exercise price.\n(2)\nThe value realized on the vesting of RSUs is determined based on the fair market value of a share of our Class C common stock on the \nvesting date.\nPotential Payments Upon Termination or Change in Control\nNone of our NEOs are party to an employment agreement or severance arrangement that provides for payments or \nbenefits upon termination of employment or a change in control of the Company. Under the terms of the RSU award \nagreements, in the event of an NEO’s death, the RSUs scheduled to vest within the following 12-month period \nwould become vested. No NEOs held outstanding RSUs as of December 31, 2025. No other equity award \nagreements provide for benefits upon termination of employment or a change in control of the Company.\nAmended and Restated 2024 Equity Incentive Plan\nIn connection with this offering, we intend to amend and restate our 2024 Plan (the “A&R 2024 Plan”). The purpose \nof the A&R 2024 Plan is to secure and retain the services of eligible employees, directors and consultants to provide \nincentives for such persons to exert maximum efforts for the success of the Company and to provide a means by \nwhich such eligible recipients may be given an opportunity to benefit from increases in value of our Class A \ncommon stock. The A&R 2024 Plan allows for the grant of stock options, both incentive stock options and \n“nonstatutory” stock options; stock appreciation rights (“SARs”); restricted stock; RSUs; and other equity awards. \nWe refer to these collectively herein as “Awards.”\nThe following description of the A&R 2024 Plan is not intended to be complete and is qualified in its entirety by \nreference to the complete text of the A&R 2024 Plan, a copy of which will be filed as an exhibit to the registration \nstatement of which this prospectus forms a part. Please read the A&R 2024 Plan in its entirety. \nAdministration\nThe A&R 2024 Plan will be administered by our board or a committee thereof designated by our board to administer \nthe A&R 2024 Plan, which we refer to herein as the “Plan Administrator.” The Plan Administrator will have broad \nauthority, subject to the provisions of the A&R 2024 Plan, to administer and interpret the A&R 2024 Plan and \nAwards granted thereunder. All decisions and actions of the Plan Administrator will be final, binding and conclusive \non all persons.\nStock Subject to A&R 2024 Plan\nThe maximum number of shares of Class A common stock that may be issued under the A&R 2024 Plan will not \nexceed 365,950,000 shares (the “Share Reserve”), inclusive of shares issued under the 2024 Plan prior to the \nadoption of the A&R 2024 Plan. The Share Reserve is subject to certain adjustments in the event of a change in our \ncapitalization. Shares of Class A common stock issued under the A&R 2024 Plan may be authorized but unissued or \nreacquired shares, including shares repurchased by the Company on the open market or otherwise.\n\n240\nTable of Contents\nShares of Class A common stock subject to any award under our 2012 Equity Incentive Plan or the 2015 Plan that \nexpires, terminates or is forfeited or that are reacquired, withheld or not issued to satisfy a tax withholding obligation \nwill be added to the Share Reserve. Shares of Class A common stock subject to any award under the A&R 2024 Plan \nthat expires, terminates or is forfeited or that are reacquired, withheld or not issued to satisfy a tax withholding \nobligation or payment of an exercise price will be again be available for issuance under the A&R 2024 Plan.\nEligibility\nCurrent or prospective employees, non-employee directors and consultants of the Company and its affiliates will be \neligible to participate in the A&R 2024 Plan.\nTypes of Awards\nStock Options. Stock options granted under the A&R 2024 Plan may be granted as incentive stock options or \nnonstatutory stock options, in either case with a term not to exceed 10 years (or five years for incentive stock options \ngranted to 10% shareholders). Subject to the express provisions of the A&R 2024 Plan, stock options generally may \nbe exercised over such period, in installments or otherwise, as the Plan Administrator may determine. The exercise \nprice for any stock option granted may not generally be less than the fair market value of the Class A common stock \nsubject to that option on the grant date (or 110% of the fair market value for incentive stock options granted to 10% \nshareholders). The exercise price may be paid in cash or such other method as determined by the Plan Administrator, \nincluding an irrevocable commitment by a broker to pay over such amount from a sale of the shares issuable under \nan option, the delivery of previously owned shares, or withholding of shares deliverable upon exercise.\nStock Appreciation Rights. SARs represent, upon exercise, the right to receive the amount by which the fair market \nvalue of the Class A common stock at the time of exercise exceeds the exercise price of the SAR. This amount is \npayable in Class A common stock, cash, or a combination thereof, or in any other form of consideration at the Plan \nAdministrator’s discretion. The exercise price for any SARs may not generally be less than the fair market value of \nthe Class A common stock subject to the SAR on the grant date and may not have a term in excess of 10 years.\nRestricted Stock and RSUs. Awards of restricted stock consist of shares of stock that are transferred to the \nparticipant subject to restrictions that may result in forfeiture if specified conditions are not satisfied. RSUs result in \nthe transfer of shares of Class A common stock, cash or other form of consideration to the participant only after \nspecified conditions are satisfied. The Plan Administrator will determine the restrictions and conditions applicable to \neach award of restricted stock or RSUs, which may include performance vesting conditions.\nOther Equity Awards. Other equity awards are Awards valued in whole or in part by reference to, or otherwise \nbased, on Class A common stock, including the appreciation in value thereof. Other equity awards may be granted \neither alone or in tandem with other Awards under the A&R 2024 Plan.\nPerformance Criteria\nThe Plan Administrator may specify certain performance criteria which must be satisfied before Awards will be \ngranted or will vest. The performance goals may vary from participant to participant, group to group, and period to \nperiod.\nTransferability\nExcept as otherwise permitted by the Plan Administrator, Awards generally are not transferable except by will or by \nthe laws of descent and distribution, and each stock option or SAR will be exercisable during the lifetime of the \nparticipant only by the participant. \nClawback\nAwards will be subject to recoupment in accordance with any clawback policy that we adopt, including any \nclawback policy required under Rule 10D-1 of the Exchange Act.\n\n241\nTable of Contents\nAmendment and Termination\nThe Plan Administrator may amend, suspend or terminate the A&R 2024 Plan at any time; however certain \nenumerated material amendments may not be made without shareholder approval. Suspension or termination of the \nA&R 2024 Plan may not impair the rights and obligations of any outstanding Award. The Plan Administrator may \nalso amend any outstanding Award, subject to the participant’s consent in the event such amendment impairs such \nparticipant’s rights under such Award. The A&R 2024 Plan is expected to be adopted by our board in connection \nwith this offering and will terminate on December 10, 2034, unless earlier terminated by our board.\nSecond Amended and Restated 2017 Employee Stock Purchase Plan\nIn connection with this offering, we intend to further amend and restated our 2017 ESPP. The purpose of the A&R \n2017 ESPP is to encourage and enable our eligible employees to acquire a proprietary interest in us through the \nownership of our Class A common stock. The A&R 2017 ESPP, and the rights of participants to make purchases \nthereunder, is intended to qualify under the provisions of Section 423 of the Code. \nThe following description of the A&R 2017 ESPP is not intended to be complete and is qualified in its entirety by \nreference to the complete text of the A&R 2017 ESPP, a copy of which will be filed as an exhibit to the registration \nstatement of which this prospectus forms a part. Please read the A&R 2017 ESPP in its entirety.  \nAdministration \nThe A&R 2017 ESPP will be administered by our board or a committee thereof designated by our board to \nadminister the A&R 2017 ESPP, which we refer to herein as the “ESPP Administrator.” The ESPP Administrator \nhas the final power to determine all questions of policy and expediency that may arise in the administration of the \nA&R 2017 ESPP. The ESPP Administrator may delegate its responsibilities under the A&R 2017 ESPP to one or \nmore other persons.\nStock Subject to A&R 2017 ESPP\nThe maximum number of shares of Class A common stock that may be issued under the A&R 2017 ESPP will not \nexceed 75,000,000 shares (the “ESPP Share Pool”), inclusive of shares issued under the 2017 ESPP prior to the \nadoption of the A&R 2017 Plan. The ESPP Share Pool is subject to certain adjustments in the event of a change in \nour capitalization. Shares of Class A common stock issued under the A&R 2017 ESPP may be either authorized and \nunissued shares or previously issued shares acquired by us. A participant does not have the rights of a shareholder \nuntil the shares are actually issued to the participant.\nEligibility; Limitations\nAn employee is eligible to participate in the A&R 2017 ESPP if the employee has been continuously employed by \nus our one of our related corporations incorporated in the United States since at least the last day of the calendar \nmonth preceding the month in which the offering date occurs and does not own 5% or more of the combined voting \npower of the Company or any related corporations (as determined under Section 423 and 424 of the Code). Eligible \nemployees must enroll in a particular offering at least 10 business days prior to the offering date of such offering, \nand once enrolled for an offering, employees will be automatically enrolled in subsequent offerings unless the \nemployee withdraws.\nA participant is not permitted to purchase shares of our Class A common stock with a fair market value in excess of \n$25,000 in any one calendar year (calculated based on the fair market value on the offering date).\nOfferings\nThe offerings and purchase periods will be determined by the ESPP Administrator, subject to limitations under the \nSection 423 of the Code. It is expected that we will continue six-month successive purchase periods with purchase \ndates occurring on April 15th and October 15th of each year.\n\n242\nTable of Contents\nDuring the purchase period, a participant may contribute between 1% and 100% of their eligible earnings (in whole \npercentage increments) through payroll deductions. A participant may change their payroll deduction prior to the \nbeginning of an offering; however, during an offering, a participant may not increase the contribution percentage \nand may only decrease it up to two times (with the second decrease required to be to 0%), subject to the withdrawal \nprovisions. At the end of each offering period, unless the participant has withdrawn from the A&R 2017 ESPP, \npayroll deductions are applied automatically to purchase shares of Class A common stock at the purchase price \ndescribed below. The number of shares purchased is determined by dividing the payroll deductions by the applicable \npurchase price, with any remaining funds held in the participant’s account for the subsequent purchase period \n(subject to the withdrawal provisions).\nIn the event of a participant’s termination of employment or a participant’s withdrawal from an offering (which may \noccur at any time prior to the ten-business day period preceding the purchase date), such participant’s accumulated \ndeductions will be returned to the participant as soon as administratively practicable.\nPurchase Price\nThe price per share at which shares are purchased under the A&R 2017 ESPP in a particular offering period is \ndetermined by the ESPP Administrator, but in no event will be less than 85% of the lower of the fair market value of \nthe Class A common stock on the offering date or the fair market value of the Class A common stock on the \npurchase date. \nAdjustments\nIn the event of any reorganizations, recapitalizations, stock splits, reverse stock splits, stock dividends, extraordinary \ndividends or distributions, or similar events, the ESPP Administrator will appropriately adjust the number and class \nof shares available under the A&R 2017 ESPP and subject to the purchase limits under each ongoing offering and \nthe applicable purchase price of such shares in each ongoing offering.\nTransferability\nRights to purchase Class A common stock under the A&R 2017 ESPP may not be transferred by a participant and \nmay be exercised during a participant’s lifetime only by the participant.\nAmendment and Termination\nThe A&R 2017 ESPP will become effective when it is approved by our board. Our board may amend, alter, or \ndiscontinue the A&R 2017 ESPP in any respect at any time, subject to shareholder approval as required by \napplicable laws and regulations. \nDirector Compensation\nDuring 2025, our non-employee directors did not receive cash or equity compensation for their service on our board. \nMr. Musk and Ms. Shotwell do not receive any additional compensation for their respective services as directors.\n\n243\nTable of Contents\nCERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS\nThe following is a description of certain relationships and transactions that exist, are proposed to exist or have \nexisted or that we have entered into or propose to enter into with our directors, executive officers, holders of more \nthan 5% of our capital stock or their affiliates and immediate family members since January 1, 2023 and where:\n•\nwe have been or are to be a participant;\n•\nthe amount involved exceeded or will exceed $120,000; and\n•\nany of our directors, executive officers, or holders of more than 5% of our capital stock, or any immediate \nfamily member of, or persons sharing their household with, any of these individuals, had or will have a direct or \nindirect material interest.\nNote Regarding the xAI Merger\nOn February 2, 2026, we effected the xAI Merger, pursuant to which we acquired xAI (which includes X). For the \npurposes of the disclosures set forth in this section pursuant to Item 404 of Regulation S-K, the transactions \ndescribed below also include certain agreements and transactions originally entered into by xAI or X Holdings prior \nto the xAI Merger to the extent that such agreements and transactions are ongoing following the consummation of \nthe xAI Merger.\nTransactions with Elon Musk and Affiliated Entities\nElon Musk, our founder, Chief Executive Officer, Chief Technical Officer, Chairman of our board, and principal \nshareholder, also serves as the Technoking, Chief Executive Officer and director of Tesla, and is an approximately \n20% shareholder of Tesla as of November 10, 2025. Mr. Musk is also the founder of several other ventures, \nincluding The Boring Company (an infrastructure company). In addition, Mr. Musk was a stockholder, director, and \nofficer of each of xAI and X prior to the X Merger and the xAI Merger. We have certain relationships and/or \ntransactions with Mr. Musk and affiliated entities, as described below.\nTransactions with Tesla\nTesla is the beneficial owner of 18,990,195 shares of our Class A common stock as of May 1, 2026, representing an \nownership interest of less than 1.0% of the total outstanding number of shares of our Class A common stock, after \ngiving effect to the sale of shares of Class A common stock in this offering.\nTesla designs, develops, manufactures, sells, and leases fully electric vehicles and energy generation and storage \nsystems that deliver AI-related and enhanced software and services to its customers. We have historically \ncollaborated with Tesla through commercial, licensing, and support agreements. Certain amounts presented below \nthat may have been incurred in one year could be paid in another year.\n•\nSpaceX commercial, licensing and support agreements. We are party with Tesla to certain agreements which \ngenerally relate to commercial, licensing, and support agreements and standardized commercial transactions \nwith Tesla done on terms no less favorable to SpaceX than those generally available to unaffiliated third parties \nunder similar circumstances. Pursuant to those agreements, we obtained goods and services of $11 million in \n2023, $4 million in 2024, $144 million in 2025, and $0.2 million from January 1, 2026 through February 28, \n2026.\n•\nxAI commercial, licensing and support agreements. xAI is party to certain commercial, licensing, and \nsupport agreements with Tesla. Under these agreements, xAI obtained goods and services of $191 million in \n2024, $506 million in 2025, and $34 million from January 1, 2026 through February 28, 2026, and xAI \nrecognized revenue of $2 million in 2025 and $0.4 million from January 1, 2026 through February 28, 2026 \nfrom Tesla.\n\n244\nTable of Contents\n•\nX Holdings advertising agreements. Tesla has directly and indirectly purchased advertising on our X \nplatform. These amounts totaled $0.5 million in 2024, $4 million in 2025, and $0 from January 1, 2026 through \nFebruary 28, 2026.  \n•\nAircraft usage. Since April 2016, we have owned and operated aircraft used by Mr. Musk, in his capacity as \nthe Chief Executive Officer of Tesla, and other Tesla personnel for business travel, and we have invoiced Tesla \nfor the use of such aircraft owned and operated by us at rates determined by Tesla and SpaceX, subject to rules \nof the Federal Aviation Administration governing such arrangements. For such aircraft use, we charged Tesla \n$1 million in 2023, $1 million in 2024, $2 million in 2025, and $0 from January 1, 2026 through February 28, \n2026.\nTransactions with The Boring Company\nIn 2024, X entered into a lease for office space with a subsidiary owned by The Boring Company (an entity \naffiliated with Mr. Musk). Under this agreement, X made lease payments of $0.1 million in 2024, $1 million in \n2025, and $0.1 million from January 1, 2026 through February 28, 2026. In addition, SpaceX incurred expenses of \n$1 million in 2025 in connection with the construction of tunnels by The Boring Company in Bastrop, Texas.\nRelationships with Musk Industries LLC\nxAI leases a real property owned by the Musk Industries LLC, which is owned by Mr. Musk. Under this agreement, \nxAI made lease payments of $0.5 million in 2024, $2 million in 2025, and $0.2 million from January 1, 2026 \nthrough February 28, 2026.\nSecurity Services provided to Mr. Musk\nWe are party to a services agreement with a security company owned by Mr. Musk and organized to provide \nsecurity services concerning him, including in connection with his duties to and work for SpaceX. SpaceX incurred \nexpenses of $2 million for such SpaceX-related security services in 2023, $3 million for such security services in \n2024, $4 million for such security services in 2025, and $1 million for such security services from January 1, 2026 \nthrough February 28, 2026.\nRelationship with Antonio J. Gracias and Affiliated Entities\nTransactions with Valor Equity Partners and Affiliated Entities\nMr. Antonio J. Gracias, a member of our board, also serves as the founder, CEO and Chief Investment Officer of \nValor Equity Partners (together with its affiliates, “Valor”).\nCertain subsidiaries of xAI, have entered into certain equipment lease, sublease, and access agreements with Valor. \nThese arrangements include (i) an equipment lease agreement under which a subsidiary of xAI leases computing and \nrelated equipment from Valor, which provides for aggregate cash payments of $6,986 million to be made by such \nsubsidiary over the life of the lease, (ii) a second equipment lease agreement under which such subsidiary leases \ncertain computing and related equipment from Valor, which provides for aggregate cash payments of $6,633 million \nto be made by such subsidiary over the life of the lease, and (iii) a third equipment lease under which such \nsubsidiary leases certain computing and related equipment from Valor, which provides for aggregate cash payments \nof $6,587 million to be made by such subsidiary over the life of the lease. The lessees’ payments and performance \nobligations under these agreements are guaranteed by Space Exploration Technologies Corp. or one of its \nsubsidiaries. Pursuant to the lease agreements described above, our subsidiaries have made payments of $885 \nmillion in 2025, and $857 million from January 1, 2026 through February 28, 2026.\nIn connection with certain X API services, X received payments from Valor of $1 million in 2024, $1 million in \n2025, and $0.1 million from January 1, 2026 through February 28, 2026.\n\n245\nTable of Contents\nOther Transactions with our Directors and Executive Officers\nWe own and operate, through our subsidiary, Falcon Landing, LLC, three aircraft for use by our directors, executive \nofficers and employees in connection with the performance of their duties for business purposes. One of the aircraft \nis maintained and serviced by Craft Aviation Services, LLC, an affiliate of Mr. Musk. The amount of the expenses \nincurred by us for the maintenance and service of this aircraft was $1 million in 2023, $1 million in 2024, $3 million \nin 2025, and $1 million from January 1, 2026 through February 28, 2026. As disclosed above, we have also invoiced \nTesla for their use of one of the aircraft owned and operated by us at rates determined by Tesla and SpaceX, subject \nto rules of the Federal Aviation Administration governing such arrangements.\nIn certain circumstances, when our aircraft are unavailable, Mr. Musk uses his personal aircraft for SpaceX business \npurposes and is reimbursed by us, subject to rules of the Federal Aviation Administration governing such \narrangements. In connection with the use of such aircraft, SpaceX has incurred expenses of $0.1 million in 2023, $3 \nmillion in 2024, $2 million in 2025, and $0.2 million from January 1, 2026 through February 28, 2026.\nMs. Shotwell, our President, Chief Operating Officer and Director, and Mr. Johnsen, our Chief Financial Officer, \nseparately co-own an aircraft for their personal use. In certain circumstances, when none of our aircraft are available \nfor business use, our directors and employees, including Ms. Shotwell and Mr. Johnsen, have used this aircraft for \nSpaceX business purposes. Any leasing fees for the use of such aircraft for our business purposes have been waived \nby the owners, and we have agreed to assume the cost of maintenance, crew and operation of such aircraft for such \nuse, subject to rules of the Federal Aviation Administration governing such arrangements. In connection with the use \nof this aircraft, SpaceX has incurred expenses of $3 million in 2023, $3 million in 2024, $3 million in 2025, and $1 \nmillion from January 1, 2026 through February 28, 2026.\nInvestors’ Rights Agreement\nCertain existing investors in our equity securities, including entities affiliated with Elon Musk, Google, Valor, and \nDFJ Growth, are party to an Amended and Restated Investors’ Rights Agreement, dated as of August 4, 2020 (the \n“Investors’ Rights Agreement”). Under the Investors’ Rights Agreement, such existing investors are entitled to \nregistration rights with respect to shares of our Class A common stock beneficially owned by them (collectively, the \n“Registrable Securities”). These registration rights, if exercised, would require us to register such existing investors’ \nRegistrable Securities under the Securities Act, and would facilitate the resale of such securities by such existing \ninvestors into the public markets.  \nWe will pay all registration expenses, other than underwriting discounts and commissions, associated with \nregistrations effected pursuant to the Investors’ Rights Agreement, subject to limited exceptions.\nDemand Registration Rights\nAt any time commencing six months after the effective date of the first registration statement for a public offering of \nour securities (other than a registration on certain registration forms or for transactions not providing for the sale of \nRegistrable Securities), such holders of a majority of the then‑outstanding Registrable Securities, excluding for this \npurpose shares issuable or issued upon conversion of certain series of our preferred stock, may request that we file a \nregistration statement within 60 days after receipt of the request covering the offer and sale of Registrable Securities, \nprovided that, among other things, the anticipated aggregate offering price, net of underwriting discounts and selling \nexpenses, exceeds $250.0 million. Further, the initiating holders may require that such registration be an \nunderwritten offering, in which case the underwriter will be selected by a majority in interest of the initiating \nholders, subject to our reasonable approval.  \nPiggyback Registration Rights\nIf we propose to register any of our securities under the Securities Act for sale to the public for cash (other than on \ncertain registration forms or for transactions that do not permit piggyback participation), we must promptly give \neach holder of Registrable Securities notice of such proposed registration and, upon timely request, cause to be \nregistered all Registrable Securities that such holder requests to be included, subject to any cutbacks, as permitted by \nthe agreement.\n\n246\nTable of Contents\nPolicies and Procedures for Review of Related Person Transactions\nIn connection with the completion of this offering, we will adopt a written policy pursuant to which the audit \ncommittee will review and approve or disapprove certain “related person transactions” (as defined in the policy and \nsummarized below) with our directors, executive officers and holders of more than 5% of any class of our voting \nsecurities and certain of their family members and affiliates. In approving or disapproving any such transaction, we \nexpect that our audit committee will consider the relevant facts and circumstances available and deemed relevant to \nthe audit committee. Any member of the audit committee who is a related person with respect to a transaction under \nreview will not be permitted to participate in the deliberations or vote on approval or disapproval of the transaction. \nIn addition, certain transactions (including compensation arrangements with our executives and directors) will \nconstitute pre-approved related person transactions under the terms of our policy.\nFor purposes of the policy, (i) “related person transaction” is a transaction, arrangement or relationship in which we \nor any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in \nwhich any related person had, has or will have a direct or indirect material interest; and (ii) “related person” means: \n(1) any person who is, or at any time during the applicable period was, one of our executive officers or one of our \ndirectors; (2) any person who is known by us to be the beneficial owner of more than 5.0% of any class of our \ncommon stock; and (3) any immediate family member of any of the foregoing persons, which means any child, \nstepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-\nlaw or sister-in-law of a director, executive officer or a beneficial owner of more than 5.0% of any class of our \ncommon stock, and any person (other than a tenant or employee) sharing the household of such director, executive \nofficer or beneficial owner of more than 5.0% of any class of our common stock.\n\n247\nTable of Contents\nSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT\nThe following table sets forth certain information with respect to the beneficial ownership of our common stock as \nof May 1, 2026 and as adjusted to give effect to the completion of this offering and transactions related thereto, for:\n•\neach person (or group of affiliated persons) known to us to beneficially own more than 5% of any class of our \nvoting securities;\n•\neach of our named executive officers and directors; and\n•\nall of our executive officers and directors as a group.\nUnless otherwise indicated, the address of each beneficial owner listed below is c/o Space Exploration Technologies \nCorp., 1 Rocket Road, Starbase, Texas 78521. \nThe percentage ownership information before this offering shown in the table is based on 6,932,508,000 shares of \nour Class A common stock and 5,602,790,410 shares of our Class B common stock outstanding as of May 1, 2026, \nafter giving effect to the Class C Reclassification, the Preferred Conversion, and the 2026 Stock Split. The \npercentage ownership information after this offering shown in the table is based on               shares of our Class A \ncommon stock and                shares of our Class B common stock outstanding as of May 1, 2026, after giving effect \nto the sale of               shares of Class A common stock in this offering and to the Class C Reclassification, the \nPreferred Conversion, and the 2026 Stock Split.\nTo the extent that the underwriters sell more than               shares of Class A common stock, the underwriters have \nthe option to purchase up to an additional               shares of Class A common stock from us. These amounts are \nshown assuming no exercise of the underwriters’ option to purchase additional shares of Class A common stock. \nThe following table does not reflect any of the shares of Class A common stock that may be purchased in this \noffering through the directed share program described in “Underwriting—Directed Share Program.”\nWe have determined beneficial ownership in accordance with the rules of the SEC. Shares of common stock subject \nto options, warrants and rights that are exercisable within 60 days of May 1, 2026 are considered outstanding and \nbeneficially owned by the person holding such options or warrants for the purpose of computing the percentage \nownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership \nof any other person, except with respect to the percentage ownership of all directors and executive officers as a \ngroup.\n\n248\nTable of Contents\nShares Beneficially Owned Before This Offering\nShares Beneficially Owned After This Offering (No Exercise)\nClass A common stock(8)\nClass B common stock\nCombined\nvoting \npower\nClass A common stock\nClass B common stock\nCombined\nvoting \npower\nNumber\n%\nNumber\n%\n%\nNumber\n%\nNumber\n%\n%\n5% Shareholders:\nElon Musk (1) ...................................\n849,494,440\n12.3 %\n5,569,053,075\n93.6 %\n85.1 %\n%\n%\n%\nNamed Executive Officers and \nDirectors:\nElon Musk (1) ...................................\n849,494,440\n12.3 %\n5,569,053,075\n93.6 %\n85.1 %\n%\n%\n%\nGwynne Shotwell (2) \n ........................\n5,460,400\n*\n7,113,550\n*\n*\n%\n%\n%\nBret Johnsen (3) \n ................................\n9,583,690\n*\n—\n*\n*\n%\n%\n%\nIra Ehrenpreis (4) \n ..............................\n809,050\n*\n564,650\n*\n*\n%\n%\n%\nRandy Glein (5)\n .................................\n277,800\n*\n—\n*\n*\n%\n%\n%\nAntonio J. Gracias (6) \n \n .......................\n503,414,530\n7.3 %\n—\n*\n*\n%\n%\n%\nDonald Harrison \n ..............................\n—\n*\n—\n*\n*\n%\n%\n%\nSteve Jurvetson \n ...............................\n—\n*\n—\n*\n*\n%\n%\n%\nLuke Nosek (7) \n .................................\n32,987,360\n*\n—\n*\n*\n%\n%\n%\nAll executive officers and directors \nas a group (              persons) ......\n1,402,027,270\n20.2 %\n5,576,731,275\n93.7 %\n86.0 %\n%\n%\n%\n__________________\n*\nRepresents beneficial ownership or voting power of less than 1%.\n(1)\nIncludes (i) 1,302,072,285 shares of restricted Class B common stock issued to and held of record by Mr. Musk, which may be voted by Mr. Musk and the vesting \nof which is subject to the satisfaction of certain performance and other conditions, (ii) 842,091,670 shares of Class A common stock and 3,788,654,145 shares of \nClass B common stock held of record by the Elon Musk Revocable Trust dated July 22, 2003, of which Mr. Musk serves as trustee, (iii) 900,495 shares of Class B \ncommon stock held of record by the Musk 2017 Sprinkling Trust dated 12/12/2017, of which Mr. Musk serves as trustee, (iv) 7,402,770 shares of Class A \ncommon stock held of record by the EM 2024 GRAT-A under agreement dated November 26, 2024, of which Mr. Musk serves as trustee, (v) 127,426,150 shares \nof Class B common stock held of record by the Mission Trust dated December 12, 2019, of which Mr. Musk serves as trustee, and (vi) 350,000,000 shares of \nClass B common stock issuable to Mr. Musk upon exercise of options exercisable within 60 days of May 1, 2026. The reported amounts include 237,530 shares of \nClass A common stock pledged as security for personal indebtedness.\n(2)\nIncludes (i) 2,258,135 shares of Class A common stock and 7,113,550 shares of Class B common stock held of record by Ms. Shotwell, (ii) 1,556,055 shares of \nClass A common stock held of record by QM GS 2021 Exempt Trust, of which Ms. Shotwell and her spouse serve as trustees, (iii) 1,556,005 shares of Class A \ncommon stock held of record by QM RS 2021 Exempt Trust, of which Ms. Shotwell and her spouse serve as trustees, and (iv) 90,205 shares of Class A common \nstock issuable to Ms. Shotwell upon exercise of options exercisable within 60 days of May 1, 2026.\n(3)\nIncludes (i) 2,518,540 shares of Class A common stock held of record by B & C Johnsen Holdings LLC, of which Mr. Johnsen and his spouse serve as managers, \n(ii) 3,866,970 shares of Class A common stock held of record by the Bret and Catherine Johnsen Family Trust dated July 2, 2015, of which Mr. Johnsen and his \nspouse serve as trustees, and (iii) 3,198,180 shares of Class A common stock issuable to Mr. Johnsen upon exercise of options exercisable within 60 days of May \n1, 2026.\n(4)\nConsists of 809,050 shares of Class A common stock and 564,650 shares of Class B common stock held of record by a revocable trust, of which Mr. Ehrenpreis \nand his spouse serve as trustees.\n(5)\nRepresents 277,800 shares of Class A common stock held of record by Galaxy2021 Partners, LLC for which Mr. Glein serves as a manager. Mr. Glein disclaims \nbeneficial ownership of the shares held of record by Galaxy2021 Partners, LLC, except to the extent of his pecuniary interest therein.\n(6)\nConsists of shares of Class A common stock held of record by the following: (i) 16,250,015 shares held by CV Consortio A LLC, (ii) 5,154,650 shares held by CV \nConsortio F LLC, (iii) 4,464,250 shares held by CV Consortio G LLC, (iv) 2,375,295 shares held by CV Consortio M LLC, (v) 4,652,600 shares held by CV \nConsortio N LLC, (vi) 3,648,645 shares held by KVSX I L.P., (vii) 1,118,920 shares held by TM33 Partner Holdings LLC, (viii) 911,430 shares held by Valor \nEquity Partners Opportunity Fund I L.P., (ix) 190,610 shares held by Valor Equity Partners Opportunity Fund I-A L.P., (x) 1,576,525 shares held by Valor Equity \nPartners Opportunity Fund I-B L.P., (xi) 20,529,605 shares held by Valor Equity Partners VI L.P., (xii) 495,880 shares held by Valor Equity Partners VI-A L.P., \n(xiii) 13,152,840 shares held by Valor Equity Partners VI-B L.P., (xiv) 52,569,550 shares held by Valor IV Space Holdings, LLC, (xv) 39,793,000 shares held by \nValor M33 II L.P., (xvi) 22,066,800 shares held by Valor M33 IV L.P., (xvii) 77,810,800 shares held by Valor M33 V L.P., (xviii) 8,939,445 shares held by Valor \nM33 VI L.P., (xix) 31,083,705 shares held by Valor M33 L.P., (xx) 7,552,000 shares held by Valor R&D Series LLC, (xxi) 97,883,000 shares held by Valor \nSpace Holdings, LLC, (xxii) 34,051,100 shares held by Valor V Space Holdings, L.P., (xxiii) 1,179,245 shares held by Valor VII Space Holdings, L.P., (xxiv) \n20,497,155 shares held by VG 1.0 L.P., (xxv) 4,272,795 shares held by VG 2.0 L.P., (xxvi) 783,920 shares held by VG AI Holdings L.P., (xxvii) 27,462,910 \nshares held by VGX 1.0 L.P., (xxviii) 669,600 shares held by VOF Space Holdings L.P., (xxix) 1,197,160 shares held by VSV II XAI Holdings L.P., and (xxx) \n1,081,080 shares held by VX Holdings L.P. (collectively, “Valor Entities”). By virtue of his position with the Valor Entities or the general partners of the Valor \nEntities, Antonio J. Gracias may be deemed to have beneficial ownership of the shares held of record by the Valor Entities. Mr. Gracias disclaims beneficial \nownership of the shares held of record by each of the Valor Entities, except to the extent of his pecuniary interest therein. The address for each of the Valor \nEntities identified in this footnote and Antonio Gracias is c/o Valor Equity Partners, 320 North Sangamon Street, Suite 1200, Chicago, IL 60607.\n(7)\nIncludes (i) 24,987,340 shares of Class A common stock held of record by Mr. Nosek and (ii) 8,000,020 shares of Class A common stock held of record by Nosek \nCapital, LLC, for which Mr. Nosek is the managing member. The reported amounts include 2,381,000 shares of Class A common stock pledged as security for \npersonal indebtedness.\n\n249\nTable of Contents\n(8)\nThe amounts in the table with respect to Class A Common Stock do not include the shares of Class B Common Stock beneficially owned by the persons listed \ntherein. Each share of Class B common stock is convertible at any time at the option of the holder into one share of our Class A common stock. In addition, \nsubject to certain exceptions, each share of Class B common stock will convert automatically into one share of Class A common stock upon any sale of such share \nof Class B common stock or any legal or beneficial interest in such share, as described in “Description of Capital Stock—Common Stock—Conversion.” \nBeneficial ownership is determined in accordance with the rules of the SEC, which generally attribute ownership to persons who have or share voting or \ninvestment power with respect to the relevant securities. Shares of Class A Common Stock that may be acquired within 60 days upon conversion of outstanding \nClass B Common Stock are deemed to be beneficially owned. Securities not outstanding, but included in the beneficial ownership of each such person, are deemed \nto be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person, but are not deemed to be outstanding \nfor the purpose of computing the percentage of the class(es) of securities owned by any other person. Except as indicated in these footnotes, and subject to \ncommunity property laws where applicable, the persons named in the table have sole voting and investment power with respect to all securities shown as \nbeneficially owned by them. Moreover, as described in “Description of Capital Stock—Voting Rights,” subject to the terms of our charter, each holder of our \nClass A common stock is entitled to one vote per share, and each holder of our Class B common stock is entitled to ten votes per share. Holders of our Class B \ncommon stock, voting separately as a class, are entitled to elect 51% of the total number of authorized directors (rounded up to the nearest whole number).\n\n250\nTable of Contents\nDESCRIPTION OF CAPITAL STOCK \nThe following summary of the Company’s capital stock and charter and bylaws (each as in effect upon completion of \nthis offering) does not purport to be complete and is qualified in its entirety by reference to the provisions of \napplicable law and to our charter and bylaws, which are filed as exhibits to the registration statement of which this \nprospectus is a part. To understand the material terms of our common stock and preferred stock, you should read \nour charter and our bylaws in their entirety. For purposes of this section, the term “common stock” refers to our \nClass A, Class B, and Class C common stock.\nGeneral \nUpon completion of this offering, the authorized capital stock of the Company will consist of  36,132,150,000 shares \nof Class A common stock, par value $0.001 per share, of which          shares will be issued and outstanding, \n6,125,000,000 shares of Class B common stock, par value $0.001 per share, of which          shares will be issued and \noutstanding, 10,000,000,000 shares of Class C common stock, par value $0.001 per share, of which no shares will be \nissued and outstanding, and 2,400,000,000 shares of preferred stock, par value $0.001 per share, of which no shares \nwill be issued and outstanding.\nCommon Stock \nVoting Rights\nGeneral\nSubject to the terms of our charter, each holder of our Class A common stock is entitled to one vote per share; each \nholder of our Class B common stock is entitled to ten votes per share; and the holders of our Class C common stock \nwill have no voting rights. Generally speaking, with respect to matters to be voted on by shareholders of the \nCompany, the holders of all classes of our voting common stock will vote together as a single class. Notwithstanding \nthe foregoing, our charter will provide that (i) as further described below, (1) holders of our Class B common stock, \nvoting separately as a class, are entitled to elect 51% of the total number of authorized directors (rounded up to the \nnearest whole number); and (2) removal of Mr. Musk from his board and leadership roles (Chief Executive Officer \nand Chairman of our board) requires the approval of the holders of at least a majority of the voting power of the \noutstanding shares of Class B common stock, voting separately as a class; and (ii) in addition to any other required \nvote, under our charter, the approval of the Class B common stock, voting separately as a class, is required to \napprove (1) any amendment to our charter that would make any change in the rights, powers, preferences and \nprivileges of the Class B common stock (including with respect to Class B Directors); and (2) certain combinations, \nmergers or sales, as described in our charter. Otherwise, classes of common stock will not be entitled to any separate \nclass votes, as our charter will provide for an opt-out from class votes that would otherwise be required under the \nTBOC.\nElection and Removal of Directors\nWith respect to the election of directors, our charter will provide that (i) holders of our Class B common stock, \nvoting separately as a class, are entitled to elect 51% of the total number of authorized directors (rounded up to the \nnearest whole number) for so long as any shares of Class B common stock remain outstanding; and that (ii) holders \nof all classes of our voting common stock, voting together as a single class, are entitled to elect the remaining \ndirectors (the “Common Stock Directors”). Class B Directors may be removed with or without cause by the \naffirmative vote of the holders of at least a majority of the voting power of the outstanding shares of Class B \ncommon stock, voting separately as a class. Vacancies occurring with respect to the Class B Directors, including as \na result of newly created directorships on the board, may be filled at any time by the affirmative vote of the holders \nof at least a majority of the voting power of the outstanding shares of Class B common stock, voting separately as a \nclass, or by the remaining Class B Directors, and not any other persons, subject to the terms of our charter. Common \nStock Directors may be removed with or without cause by the affirmative vote of the holders of at least a majority of \nthe voting power of the outstanding shares of voting common stock, voting together as a single class. Vacancies \noccurring with respect to the Common Stock Directors, including as a result of newly created directorships on the \nboard, may be filled at any time by the affirmative vote of the holders of at least a majority of the voting power of\n\n251\nTable of Contents\nthe outstanding shares of voting common stock, voting together as a single class, or by the remaining directors, \nsubject to the terms of our charter. \nUpon completion of this offering, Mr. Musk will continue to serve as our Chief Executive Officer, Chief Technical \nOfficer and Chairman of the board. Notwithstanding the preceding paragraph, pursuant to the terms of our charter, \nMr. Musk will only be subject to removal from the board and from his Chief Executive Officer and Chairman of the \nboard leadership positions with the approval of the holders of at least a majority of the voting power of the \noutstanding shares of our Class B common stock, voting separately as a class.\nNotwithstanding the above, each of the voting rights described above will be subject to the rights that may be \ngranted in the future to the holders of any one or more series of preferred stock, as applicable.\nDividends\nSubject to the prior rights of holders of all classes and series of the Company’s capital stock at the time outstanding \nhaving prior rights as to dividends, the holders of shares of Class A common stock, Class B common stock and Class \nC common stock will be entitled to receive such dividends as may be declared from time to time by the board. Any \ndividends paid to the holders of shares of Class A common stock, Class B common stock and Class C common stock \nwill be paid pro rata, on an equal priority, pari passu basis.\nDissolution and Liquidation \nUpon the Company’s liquidation, dissolution or winding up, holders of shares of Class A common stock, Class B \ncommon stock and Class C common stock are entitled to share ratably in all assets remaining after payment of \nliabilities and the liquidation preference of any then outstanding shares of capital stock of the Company. \nConversion\nHolders of our Class A common stock and Class C common stock do not have conversion rights. Each share of \nClass B common stock is convertible at any time at the option of the holder into one share of our Class A common \nstock. In addition, subject to certain exceptions specified in the charter that do not constitute a “Transfer” (as defined \nbelow) and other than in the case of certain “permitted transfers” (as summarized below), each share of Class B \ncommon stock will convert automatically into one share of Class A common stock upon any sale, assignment, \nencumbrance, transfer, conveyance, hypothecation, pledge, gift, or other transfer or disposition of any kind of such \nshare of Class B common stock or any legal or beneficial interest in such share, whether or not for value and \nwhether voluntary or involuntary or by operation of law, including, without limitation, the transfer of, or entering \ninto a binding agreement with respect to, voting control over such share by proxy or otherwise (each, a “Transfer”). \nFor purposes of our charter, “permitted transfers” will include transfers to and from (i) the registered holders of \nClass B common stock; (ii) each natural person who transferred shares of Class B common stock or equity awards \n(including any option or warrant exercisable or convertible into shares of Class B common stock) to certain \n“permitted entities” (as defined in the charter); (iii) one or more family members of shareholders specified in clauses \n(i) and (ii); (iv) certain other trusts, general partnerships, limited partnerships, limited liability companies, \ncorporations, or other entities owned by certain qualified shareholders (as defined in the charter), including certain \npermitted non-for-profits; as well as (v) certain transfers to bona fide trusts for the benefit of a charitable \norganization, contributions to which are deductible for federal income, estate, gift and generation skipping transfer \ntax purposes, to certain retirement accounts, and for certain estate or succession planning purposes. “Permitted \nTransferees” will include a transferee of shares of Class B common stock received in a Transfer that constitutes a \n“permitted transfer.”\nNo Preemptive or Other Rights \nHolders of the Company’s Class A common stock, Class B common stock, and Class C common stock do not have \npreemptive, subscription, redemption rights, or sinking fund.\n\n252\nTable of Contents\nIssuance of Additional Shares \nWe may issue additional authorized shares of Class A common stock, Class B common stock and Class C common \nstock at any time or from time to time, subject to applicable provisions of our charter, our bylaws and Texas law. \nOur charter will provide that additional shares of Class B common stock may only be issued in the future to Mr. \nMusk, his family members and certain entities permitted under our charter. \nPreferred Stock \nOur charter authorizes our board, subject to any limitations prescribed by applicable law and any stock exchange, \nwithout further shareholder approval, to establish and to issue from time to time one or more series of preferred \nstock. Each series of preferred stock will have the powers, designations, preferences and relative, participation, \noptional or other rights, if any, including voting rights, and the qualifications, limitations or restrictions thereof, if \nany, and the number of shares constituting the series, as determined by the board. Any issuance of preferred stock \ncould have the effect of decreasing the market price of our Class A common stock. \nAnti-takeover Effects of Provisions of Our Charter, our Bylaws and Texas Law \nSome provisions of Texas law, and our charter and our bylaws contain provisions that could make the following \ntransactions more difficult: acquisitions of us by means of a tender offer, a proxy contest or otherwise; or removal of \nour incumbent officers and directors. These provisions may also have the effect of preventing changes in our \nmanagement. It is possible that these provisions could make it more difficult to accomplish or could deter \ntransactions that shareholders may otherwise consider to be in their best interest or in our best interests, including \ntransactions that might result in a premium over the market price for our shares of Class A common stock. \nThese provisions, as summarized below, are expected to discourage coercive takeover practices and inadequate \ntakeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first \nnegotiate with us. We believe that the benefits of increased protection and our potential ability to negotiate with the \nproponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of \ndiscouraging these proposals because, among other things, negotiation of these proposals could result in an \nimprovement of their terms. \nAnti-takeover statute under Texas law \nWe will be subject to Section 21.606 of the TBOC, which in general, prohibits a publicly held Texas corporation, \nlike the Company after the completion of this offering, from engaging, under certain circumstances, in a business \ncombination with an affiliated shareholder (as defined in the TBOC) for a period of three years following the date \nthe person became an affiliated shareholder unless:\n•\nthe board approved either the business combination or the transaction that resulted in the shareholder becoming \nan affiliated shareholder before the affiliated shareholder’s share acquisition date; or\n•\nat or subsequent to the date of the transaction, the business combination is approved by the board and authorized \nat an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of at least \ntwo-thirds of the outstanding voting shares not beneficially owned by the affiliated shareholder or any of its \naffiliates or associates at a meeting of shareholders called for that purpose not less than six months after the \naffiliated shareholder’s share acquisition date.\nProvisions of our charter and our bylaws that may have an anti-takeover effect \nElection of Class B Directors\nAs discussed above, our charter will provide that holders of our Class B common stock, voting separately as a class, \nare entitled to elect 51% of the total number of authorized directors (rounded up to the nearest whole number). Upon \ncompletion of this offering, Mr. Musk will beneficially own                    shares of our Class A common stock \nand                    shares of our Class B common stock, representing approximately           % of the combined voting \npower of our outstanding shares of voting common stock. As the holder of a majority of our outstanding shares of\n\n253\nTable of Contents\nClass B common stock, Mr. Musk will be able to elect, remove or fill any vacancy among the Class B Directors. As \na result, Mr. Musk will have the power to control the outcome of matters requiring shareholder approval, including \nelection of the board, and our business and affairs. This may have the effect of deferring, delaying or discouraging \nhostile takeovers, or changes in control or management, of the Company. \nNo cumulative voting \nOur charter will not permit cumulative voting in the election of directors. \nSpecial meetings of shareholders \nOur charter will provide that special meetings of shareholders may be called by the chairman of the board, the chief \nexecutive officer, the president (to the extent required by the TBOC), our board, our founder or by shareholders \nholding not less than 50% (or the highest percentage of ownership that may be set under the TBOC) of the \nCompany’s then outstanding shares of capital stock entitled to vote on the proposed action at the meeting. \nShareholder action by written consent \nOur charter will provide that any action required to be taken at any annual or special meeting of the shareholders \nmay be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting \nforth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of \nvotes that would be necessary to authorize or take such action at a meeting at which all shares of stock entitled to \nvote thereon were present and voted. Our charter will also provide that any action required or permitted to be taken \nby the holders of Class B common stock, voting separately as a class, may be taken without a meeting, without prior \nnotice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the \nholders of outstanding Class B common stock having not less than the minimum number of votes that would be \nnecessary to authorize or take such action at a meeting at which all shares of Class B common stock entitled to vote \nthereon were present and voted.\nRequirements for advance notification of shareholder meetings, nominations and proposals \nOur bylaws will establish advance notice procedures with respect to shareholder proposals and the nomination of \ncandidates for election as a director. In order for any matter to be “properly brought” before a meeting, a shareholder \n(other than Mr. Musk and his permitted transferees) must comply with such advance notice procedures and provide \nus with certain information. \nSection 21.373 of the TBOC permits a “nationally listed corporation” to amend its governing documents to elect to \nimpose stock ownership requirements on shareholders seeking to submit a proposal on a matter (other than director \nnominations and procedural resolutions ancillary to the conduct of a shareholder meeting) to the shareholders of \nsuch corporation for approval at a shareholder meeting. If a “nationally listed corporation” elects to be governed by \nSection 21.373 of the TBOC, a shareholder or group of shareholders may submit a proposal on a matter to the \nshareholders of such corporation for approval at a meeting of shareholders only if such shareholder or group of \nshareholders (i) holds an amount of voting shares (determined as of the date of submission of the proposal) equal to \nat least $1,000,000 in market value or 3% of the corporation’s voting shares, and (ii) holds such amount for a \ncontinuous period of at least six months before the date of the meeting and throughout the entire duration of the \nmeeting and (iii) solicits the holders of shares representing at least 67% of the voting power of shares entitled to vote \non the proposal at the shareholder meeting. For the purpose of this paragraph, “voting shares” means shares that \nentitle the holder of the shares to vote on the proposal. Our bylaws will adopt these requirements for submitting a \nshareholder proposal to go into effect immediately upon the completion of this offering, when we will qualify as a \n“nationally listed corporation.” \nAuthorized but unissued shares \nAs mentioned above, our authorized but unissued shares of common stock and preferred stock will generally be \navailable for future issuance without the approval of our shareholders. The TBOC does not require shareholder \napproval for any issuance of authorized shares. However, the Nasdaq and Nasdaq Texas listing requirements require\n\n254\nTable of Contents\nshareholder approval of certain issuances equal to or exceeding 20% of the then-outstanding voting power or the \nthen-outstanding number of shares of common stock. We may issue additional shares for a variety of corporate \npurposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit \nplans. \nCorporate Opportunities\nUnder our charter, to the fullest extent permitted by applicable law, we will renounce any interest or expectancy of \nthe Company or its subsidiaries in, or in being offered an opportunity to participate in, certain business opportunities \n(as specified in our charter) that are from time to time presented to any member of the board or board observer or \nattendee, regardless of whether any such person is an employee of the Company and their respective affiliates (other \nthan the Company and its subsidiaries) (together, the “Business Opportunities Exempt Party”), even if the business \nopportunity is one that we or our subsidiaries might reasonably be deemed to have pursued or had the ability or \ndesire to pursue if granted the opportunity to do so, and no Business Opportunities Exempt Party shall have any duty \nto present any such business opportunity to us or be liable to us or any of our subsidiaries or any shareholder, \nincluding for breach of any fiduciary or other duty, as a director or officer or controlling shareholder or otherwise, \nand we shall indemnify each Business Opportunities Exempt Party against any claim that such person is liable to us \nor our shareholders for breach of any fiduciary duty, by reason of the fact that such person (i) fails to present any \nsuch business opportunity, (ii) pursues, acquires or exploits any such business opportunity, or (iii) directs, sells, \nassigns or transfers any such business opportunity to another person or entity, unless, in the case of a person who is \nour director or officer, such business opportunity is presented to, or acquired, created or developed by, or otherwise \ncomes into the possession of, such Business Opportunities Exempt Party expressly and solely in his or her capacity \nas an employee, director, board observer or attendee, or shareholder of the Company.\nExclusive Forum and Venue and Arbitration, Jury Trial Waiver\nOur bylaws will provide that, unless the Company consents in writing to the selection of an alternative forum, the \nsole and exclusive forum for any of the filing, adjudication and trial of all disputes (“Internal Disputes”) between (i) \none or more shareholders and (ii) the Company or its directors, officers, or controlling persons, or any underwriter of \nsecurities issued by the Company (or controlling person thereof) relating to any of the following: (1) any derivative \nproceeding, meaning a civil dispute brought in the right of the Company; (2) any action based on the governance, \ngoverning documents, or internal affairs of the Company; (3) any action based on state or federal securities or trade \nregulation laws; (4) any action based on the alleged act(s) or omission(s) by a person in its capacity as a shareholder, \ncontrolling person, director, officer, or other managerial official of the Company; (5) any action based on the alleged \nbreach(es) by one or more shareholders, controlling persons, directors, officers, or other managerial officials of a \nduty owed, in his or her capacity as such, to the Company or to any shareholder thereof; (6) an action seeking to \nhold a shareholder, controlling person, director, officer, or other managerial official of the Company liable for an \nobligation of the Company, other than on account of a written contract signed by the person to be held liable in a \ncapacity other than as a shareholder or managerial official; and (7) any action arising out of the TBOC, will be the \nBusiness Court.\nOur bylaws will further provide that to the extent, and solely to the extent, that a court of competent jurisdiction \ndetermines in a final and unappealable judgment that an Internal Dispute is not subject to the sole and exclusive \nvenue and forum provision or to the jurisdiction of the Business Court (such Internal Dispute, an “Other Dispute”), \nsuch Other Dispute, irrespective of the amount in dispute, shall be exclusively and finally settled by arbitration \nbefore the International Chamber of Commerce (“ICC”) in Houston, Texas, conducted under the Expedited \nProcedure Provisions of the Rules (the “Arbitration Rules”) of the ICC as those rules may be periodically updated. \nOur bylaws will provide the following for arbitration:\n•\nThe tribunal will include one arbitrator for claims of $5 million or less or a panel of three arbitrators for claims \nexceeding $5 million, and our bylaws will specify procedures governing the selection of the panel. The ICC fees \nand arbitrator(s) fees will be governed by the ICC fee and arbitrator fee schedule as may apply depending on the \nnature and amount of the claim.\n\n255\nTable of Contents\n•\nIf more than three claims arising from the same or similar conduct, transaction, or occurrence are submitted to \narbitration within any three-year period, all but the first-filed claim shall be stayed pending final resolution of \nthat first-filed claim. In such circumstance, the Company and each shareholder asserting such a claim shall bear \nequal shares of the ICC fees and arbitrator(s) fees. However, if any shareholder party or parties are ultimately \nsuccessful on all of their claims, the Company shall reimburse the successful shareholder party or parties for the \nICC fees and arbitrator(s) fees paid by such shareholder party or parties.\n•\nIf more than three claims are submitted by the same shareholder(s) within any three-year period, then the \nCompany shall pay the ICC fees and arbitrator(s) fees associated with the first three claims only. However, if \nany shareholder party or parties are ultimately successful on all of their claims, the Company shall reimburse the \nsuccessful shareholder party or parties for the ICC fees and arbitrator(s) fees paid by such shareholder party or \nparties.\n•\nIf any claim submitted to arbitration is determined by the tribunal to be frivolous, without reasonable cause, or \nfor an improper purpose such as bad faith or vexatious litigation, the Company shall be entitled to recover its \nreasonable attorney’s fees and costs incurred in defending against such claim, including any ICC fees and \narbitrator(s) fees. \n•\nThe tribunal’s authority is subject to the same limits as the authority of a judge in a Texas court of law. The \ntribunal does not have authority to issue an award that (i) exceeds the tribunal’s authority under the Texas \nArbitration Act; (ii) contains a reversible error of state or federal law, including as to the admissibility of \nevidence, or a clearly erroneous finding of fact; or (iii) applies a cause of action or provides a remedy not \nexpressly provided for under applicable Texas or federal law. The tribunal’s application of the pleading and \ndiscovery limitations imposed by the Private Securities Litigation Reform Act is mandatory for applicable \nclaims and shall not constitute a refusal to hear evidence pertinent and/or material to the controversy under \nTexas or federal law.\n•\nPursuant to the Texas Arbitration Act, the scope of judicial review of the tribunal’s award includes the ordinary \ngrounds for vacatur, modification, and correction imposed by the Texas Civil Practice & Remedies Code §§ \n171.088 and 171.091, and is expanded beyond what is otherwise available under the Texas Civil Practice & \nRemedies Code to include review of whether the award: (i) contains a reversible error of state or federal law, \nincluding as to the admissibility of evidence, or a clearly erroneous finding of fact; or (ii) applies a cause of \naction or provides a remedy not expressly provided for under applicable Texas or federal law. The arbitral \ntribunal’s award and the findings of fact and conclusions of law shall be reviewable upon the same standards of \nreview as if said award and supporting findings of fact and conclusions of law were entered by a Texas court. \n•\nAny action seeking to confirm, vacate, modify, correct, or otherwise challenge the tribunal’s award shall be \nbrought in the Business Court. In any such action, the parties shall file all court filings under seal, to the fullest \nextent allowed by applicable law.\nOur bylaws will further provide that the extent, and solely to the extent, that a court of competent jurisdiction \ndetermines in a final and unappealable judgment that the requirement that Other Disputes be exclusively and finally \nsettled by arbitration is unenforceable in whole or part, the sole and exclusive forum and venue for such Other \nDisputes which are determined not to be subject to mandatory arbitration shall be the United States District Court for \nthe Southern District of Texas, Houston Division (the “Federal Court”), or if a court of competent jurisdiction \ndetermines in a final and unappealable judgment that the Federal Court lacks jurisdiction over any such Other \nDispute, the sole and exclusive forum and venue for such Other Dispute shall be the state district courts of Harris \nCounty, Texas.\nOur bylaws will further provide that Other Disputes will be governed either by Texas state law or federal law, \ndepending on the claim asserted. \nOur bylaws will also provide that: \n•\nThe Company and each shareholder, director, and officer of the Company irrevocably and unconditionally \nwaives, and any person or entity purchasing or otherwise acquiring or holding any interest in shares of stock of\n\n256\nTable of Contents\nthe Company shall be deemed to have irrevocably and unconditionally waived, any right it may have to a trial \nby jury in any legal action or proceeding relating to Internal Disputes described above. \n•\nInternal Disputes may not be brought as a class, or consolidated or joined, except at the Company’s option.\nAlthough we believe these provisions will benefit us by providing increased consistency in the application of Texas \nlaw for the specified types of actions and proceedings, the provisions may have the effect of discouraging or \nincreasing the costs of lawsuits against our directors, officers, other managerial officials employees and agents. \nHowever, it is possible that, in connection with a future legal proceeding, a court could rule that all or a portion of \nthese provisions in our bylaws purporting to require an exclusive forum for certain disputes, to waive the right to a \njury trial or to require arbitration for shareholder claims are inapplicable, unconstitutional or otherwise \nunenforceable. \nStock Ownership Requirement for Derivative Suits\nOur bylaws will specify that the required ownership threshold for a shareholder or group of shareholders to institute \nor maintain a derivative proceeding in the right of the Company for purposes of Section 21.552(a)(3) of the TBOC \nwill be 3% of the outstanding shares of common stock of the Company. This provision will continue to apply so \nlong as any shares of the Company’s common stock are listed for trading on a national securities exchange or the \nCompany affirmatively elects to be governed by TBOC 21.419 and has 500 or more shareholders. \nLimitations on Liability and Indemnification of Officers and Directors \nOur charter will include a provision eliminating the liability of our directors and officers for monetary damages for \nan act or omission by the person in the person’s capacity as a director or officer, respectively, except for: (i) a breach \nof the duty of loyalty to the Company or its shareholders; (ii) an act or omission not in good faith that constitutes a \nbreach of duty of the person to the Company or involves intentional misconduct or a knowing violation of applicable \nlaw; (iii) a transaction from which the director or officer obtains an improper benefit, regardless of whether the \nbenefit resulted from an action taken within the scope of the person’s duties; or (iv) an act or omission for which the \nliability of a director or officer is expressly provided by an applicable statute (such as wrongful distributions). Our \ncharter also will provide that if the TBOC is amended in the future to authorize corporate action further eliminating \nor limiting of the personal liability of directors and officers, the liability of directors and officers will be eliminated \nor limited to the fullest extent permitted by the TBOC as so amended. \nAny amendment, repeal or modification of these provisions will be prospective only and would not affect any \nlimitation on liability of a director or officer for acts or omissions that occurred prior to any such amendment, repeal \nor modification. \nOur bylaws also provide that we will indemnify and advance expenses to our directors and officers to the fullest \nextent permitted by the TBOC, subject to reimbursement in the event it is ultimately determined that the individual \nwas not entitled to indemnification under the TBOC or the indemnification agreement. Our bylaws also will permit \nus to purchase insurance on behalf of any officer, director, employee, or other agent for any liability arising out of \nthat person’s actions as our officer, director, employee or agent, regardless of whether the TBOC would permit \nindemnification. We intend to enter into indemnification agreements with each of our current and future directors \nand officers. These agreements will require us to indemnify these individuals against liability that may arise by \nreason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which \nthey could be indemnified. As permitted by the TBOC, because these agreements are expected to be approved by \nour shareholders, the agreements may require indemnification or payment of expenses in favor of the indemnitee in \ncertain circumstances in which we would not otherwise have the power to do so under the provisions of the TBOC \nor our charter or bylaws. We believe that the limitation of liability provision that will be in our charter and the \nindemnification agreements will facilitate our ability to continue to attract and retain qualified individuals to serve as \ndirectors and officers. \nOur bylaws will provide that the Company affirmatively elects to be governed by Section 21.419 of the TBOC and \nany successor provision thereto. Because the Company will have a class of voting common stock (our Class A \ncommon stock) listed on a national securities exchange, Section 21.419 will also be deemed to apply to the\n\n257\nTable of Contents\nCompany. Under Section 21.419 of the TBOC, in taking or declining to take any action on any matters of a \ncorporation’s business, a director or officer of the Company is presumed to act (i) in good faith, (ii) on an informed \nbasis, (iii) in furtherance of the interests of the Company, and (iv) in obedience to the law and the Company’s \ngoverning documents. In addition, neither the Company nor any of its shareholders has a cause of action against the \ndirector or officer as a result of any act or omission in the person’s capacity as such unless the claimant rebuts one or \nmore of the foregoing presumptions and it is proven by the claimant that (A) the director’s or officer’s act or \nomission constitutes a breach of one or more of the person’s duties as a director or officer and (B) the breach \ninvolved fraud, intentional misconduct, an ultra vires act or a knowing violation of law.\nProtection for Conflicts of Interest\nSection 21.418 of the TBOC provides that, at any time a corporation’s voting common stock is listed for trading on a \nnational securities exchange, the corporation’s directors and officers will not be liable to the corporation or its \nshareholders for claims alleging a breach of duty arising from the making, authorization, or performance of a \ncontract or transaction solely because the director or officer had an interest in the transaction unless the claim would \nbe permitted under Section 21.419 of the TBOC as described above. Because the Company will have a class of \nvoting common stock (our Class A common stock) listed on a national securities exchange, Section 21.418 of the \nTBOC will be deemed to apply to the Company.\nRegistration Rights\nFor a description of registration rights with respect to our Class A common stock, see “Certain Relationships and \nRelated Person Transactions—Investors' Rights Agreement.”\nTransfer Agent and Registrar \nThe Transfer Agent and Registrar for our Class A common stock is                    .\nListing \nWe have applied to list our Class A common stock on Nasdaq and Nasdaq Texas under the symbol “SPCX.”\n\n258\nTable of Contents\nSHARES ELIGIBLE FOR FUTURE SALE\nPrior to this offering, there has been no public market for our Class A common stock. Future sales of our Class A \ncommon stock in the public market, or the availability of such shares for sale in the public market, could adversely \naffect the market price of our Class A common stock prevailing from time to time. As described below, only a \nlimited number of shares will be available for sale shortly after this offering due to contractual and legal restrictions \non resale. Nevertheless, sales of a substantial number of shares of our Class A common stock in the public market \nafter such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing \nmarket price of our Class A common stock at such time and our ability to raise equity-related capital at a time and \nprice we deem appropriate.\nSales of Restricted Shares\nUpon the completion of this offering, we will have outstanding an aggregate of                  shares of Class A \ncommon stock. Of these shares, all shares of Class A common stock sold in this offering will be freely tradable \nwithout restriction or further registration under the Securities Act, unless the shares are held by any of our \n“affiliates” as such term is defined in Rule 144 under the Securities Act. All shares of Class A and Class B common \nstock issued prior to the closing of this offering, including shares held by Mr. Musk and other existing investors, will \nbe deemed “restricted securities” as such term is defined under Rule 144. The restricted securities were issued in \nprivate transactions and are eligible for public sale only if registered under the Securities Act or if they qualify for an \nexemption from registration under Rule 144 or Rule 701 under the Securities Act, which rules are summarized \nbelow.\nAs a result of the lock-up agreements described below,                  shares of Class A common stock, and potentially \nan additional                  shares of Class A common stock, assuming that 100% of our Class B common stock has \nbeen converted into Class A common stock on a one-for-one basis, will be eligible for sale upon the expiration of \nthe lock-up agreements, beginning                     days after the date of this prospectus when permitted under Rule 144 \nor Rule 701.\nLock-Up Agreements\nWe and all of our directors and executive officers have agreed not to sell any shares of Class A common stock for a \nperiod of                    days after the date of this prospectus, subject to certain exceptions. Please refer to \n“Underwriting” for a description of these lock-up provisions.\nRegistration Rights\nAfter the completion of this offering, holders of an aggregate of approximately                      shares of our Class A \ncommon stock will be entitled to certain rights with respect to the registration of such shares under the Securities \nAct. The registration of these shares of our Class A common stock under the Securities Act would result in these \nshares becoming eligible for sale in the public market without restriction under the Securities Act immediately upon \nthe effectiveness of such registration, subject to certain limitations applicable to affiliates. See “Certain \nRelationships and Related Person Transactions—Investors' Rights Agreement” for a description of these registration \nrights.\nRule 144\nIn general, under Rule 144 under the Securities Act as currently in effect, a person (or persons whose shares are \naggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, \nand who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months \n(including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those \nshares, subject only to the availability of current public information about us. A non-affiliated person (who has been \nunaffiliated for at least the past three months) who has beneficially owned restricted securities within the meaning of \nRule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.\n\n259\nTable of Contents\nBeginning 90 days after the effective date of the registration statement of which this prospectus forms a part, a \nperson (or persons whose shares are aggregated) who is deemed to be an affiliate of ours and who has beneficially \nowned restricted securities within the meaning of Rule 144 for at least nine months would be entitled to sell within \nany three-month period a number of shares that does not exceed the greater of one percent of the then outstanding \nshares of our Class A common stock or the average weekly trading volume of our Class A common stock reported \nthrough Nasdaq and Nasdaq Texas during the four calendar weeks preceding the filing of a notice on Form 144 with \nrespect to the sale. Such sales are also subject to certain manner of sale provisions, notice requirements and the \navailability of current public information about us.\nRegulation S\nRegulation S under the Securities Act (“Regulation S”) provides that ordinary shares owned by any person may be \nsold without registration in the United States, provided that the sale is effected in an offshore transaction and no \ndirected selling efforts are made in the United States (as these terms are defined in Regulation S), subject to certain \nother conditions. In general, this means that our Class A common stock may be sold outside the United States under \ncertain circumstances without registration in the United States being required.\nRule 701\nIn general, under Rule 701 under the Securities Act, any of our employees, directors, officers, consultants or \nadvisors who purchases shares from us in connection with a compensatory stock or option plan or other written \nagreement before the effective date of this offering is entitled to sell such shares 90 days after the effective date of \nthis offering in reliance on Rule 144, without having to comply with the holding period requirement of Rule 144 \nand, in the case of non-affiliates, without having to comply with the public information, volume limitation or notice \nfiling provisions of Rule 144. The SEC has indicated that Rule 701 will apply to typical stock options granted by an \nissuer before it becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired \nupon exercise of such options, including exercises after the date of this prospectus.\nStock Issued Under Employee Plans\nWe intend to file a registration statement on Form S-8 under the Securities Act to register stock issuable under our \nA&R 2024 Plan and A&R 2017 ESPP and to register stock issuable pursuant to outstanding awards under our other \nEquity Plans. This registration statement on Form S-8 is expected to be filed following the effective date of the \nregistration statement of which this prospectus is a part and will be effective immediately upon filing. Accordingly, \nshares of Class A common stock registered under such registration statement will be available for sale in the open \nmarket following the effective date, unless such shares are subject to vesting restrictions with us or the lock-up \nrestrictions described above.\n\n260\nTable of Contents\nMATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF CLASS \nA COMMON STOCK \nThe following discussion is a summary of the material U.S. federal income tax consequences of the purchase, \nownership, and disposition of shares of our Class A common stock by a Non-U.S. Holder (as defined below). This \ndiscussion does not address all aspects of U.S. federal income taxation that may be relevant to particular taxpayers in \nlight of their special circumstances (including the impact of the Medicare contribution tax on net investment income \nand the alternative minimum tax) or to taxpayers subject to special tax rules (including a “controlled foreign \ncorporation,” a “passive foreign investment company,” a company that accumulates earnings to avoid U.S. federal \nincome tax, a tax-exempt organization or a governmental organization, a financial institution, a person that elects to \nmark their securities to market, a person required to conform the timing of income accruals to financial statements \npursuant to Section 451 of the Internal Revenue Code of 1986, as amended (the “Code”), a person holding our Class \nA common stock as part of a hedge, straddle, or other risk reduction strategy or as part of a conversion transaction or \nother integrated investment, a person who holds or receives our Class A common stock pursuant to the exercise of \nany employee stock option or otherwise as compensation, a tax-qualified retirement plan, a “qualified foreign \npension fund” as defined in Section 897(l)(2) of “Code” or an entity all of the interests of which are held by \nqualified foreign pension funds, a broker or dealer in securities or currencies, a U.S. expatriate, a former U.S. citizen \nor resident, or a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax \npurposes).\nExcept as specifically provided herein, this discussion does not address any aspect of U.S. federal taxation other than \nU.S. federal income taxation or any aspect of state, local or foreign taxation. In addition, this discussion deals only \nwith U.S. federal income tax consequences to a Non-U.S. Holder that acquires our Class A common stock in this \noffering and holds our Class A common stock as a capital asset.\nThis discussion is based on the Code, Treasury Regulations promulgated thereunder, judicial decisions, and \npublished rulings and administrative pronouncements of the Internal Revenue Service (the “IRS”), in each case, in \neffect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change \nor differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder of \nour Class A common stock. We have not sought and will not seek any rulings from the IRS regarding the matters \ndiscussed below. We cannot assure that the IRS or a court will not take a contrary position to that discussed below \nregarding the tax consequences of the purchase, ownership, and disposition of our Class A common stock, or that a \nchange in law will not alter significantly the tax considerations that we describe in this summary. \nA “Non-U.S. Holder” is a beneficial owner of our Class A common stock that is an individual, corporation (or other \nentity treated as a corporation for U.S. federal income tax purposes), trust or estate that is not, for U.S. federal \nincome tax purposes:\n•\nan individual who is a citizen or resident of the United States;\n•\na corporation created or organized in or under the laws of the United States or any State thereof (including the \nDistrict of Columbia);\n•\nan estate, the income of which is subject to U.S. federal income taxation regardless of its source; or\n•\na trust, the administration of which is subject to the primary supervision of a court within the United States and \nfor which one or more U.S. persons have the authority to control all substantial decisions, or that has a valid \nelection in effect under applicable Treasury Regulations to be treated as a U.S. person.\nIf a partnership or an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds our \nClass A common stock, the U.S. federal income tax treatment of a partner generally will depend upon the status of \nthe partner and the activities of the partnership. Partnerships holding our Class A common stock and partners in such \npartnerships should consult their tax advisors concerning the U.S. federal income and other tax consequences of \ninvesting in our Class A common stock.\n\n261\nTable of Contents\nTHIS DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL \nINFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE HOLDERS SHOULD \nCONSULT THEIR TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES \nTO THEM OF PURCHASING, OWNING, AND DISPOSING OF OUR CLASS A COMMON STOCK, AS WELL \nAS THE APPLICATION OF ANY U.S. FEDERAL NON-INCOME, STATE, LOCAL AND NON-U.S. INCOME, \nGIFT, ESTATE AND OTHER TAX LAWS.\nDistributions\nAs described in the section titled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of \nour Class A common stock in the foreseeable future. However, if we do make distributions of cash or property on \nour Class A common stock (other than certain pro rata distributions of our stock), such distributions will be treated \nas dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. \nfederal income tax principles). Amounts not treated as dividends for U.S. federal income tax purposes will be treated \nas a tax-free return of capital and first be applied against and reduce a Non-U.S. Holder’s tax basis in its shares of \nour Class A common stock, but not below zero. Any excess will be treated as capital gain from the sale or exchange \nof the Non-U.S. Holder’s shares of Class A common stock taxable as described below under “—Sale or Disposition \nof Class A Common Stock.” \nSubject to the discussion below on backup withholding and FATCA, dividends  paid to a Non-U.S. Holder of our \nClass A common stock that are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business \nwithin the United States will generally be subject to withholding of U.S. federal income tax at a 30% rate or such \nlower rate as may be specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a valid \nIRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty \nrate. These certifications must be provided to the applicable withholding agent prior to the payment of dividends and \nmust be updated periodically. A Non-U.S. Holder that does not timely furnish the required documentation, but is \neligible for a reduced rate of withholding tax under an income tax treaty, may obtain a refund or credit of any excess \namounts withheld by filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax \nadvisors regarding their entitlement to benefits under an applicable income tax treaty and the manner of claiming the \nbenefits of such treaty.\nDividends that are effectively connected with a Non-U.S. Holder’s conduct of a trade or business within the United \nStates (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed \nbase that such holder maintains or maintained in the United States) are not subject to the withholding tax described \nabove but instead are subject to U.S. federal income tax on a net income basis at applicable graduated U.S. federal \nincome tax rates. In order for its effectively connected dividends to be exempt from the withholding tax described \nabove, a Non-U.S. Holder will be required to provide a duly completed and properly executed IRS Form W-8ECI, \ncertifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business \nwithin the United States. Dividends received by a Non-U.S. Holder that is a corporation that are effectively \nconnected with its conduct of a trade or business within the United States may be subject to an additional “branch \nprofits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. Non-U.S. \nHolders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.\nSale or Disposition of Class A Common Stock\nSubject to the discussion below on backup withholding and FATCA, a Non-U.S. Holder generally will not be \nsubject to U.S. federal income or withholding tax on any gain recognized upon the sale, exchange or other taxable \ndisposition of shares of our Class A common stock, unless: \n•\nsuch gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business within the \nUnited States and, if the Non-U.S. Holder is entitled to claim treaty benefits (and the Non-U.S. Holder complies \nwith applicable certification and other requirements), is attributable to a permanent establishment or fixed base \nmaintained by the Non-U.S. Holder within the United States; \n•\nsuch Non-U.S. Holder is a nonresident alien individual who is present in the United States for 183 days or more \nin the taxable year of disposition and certain other conditions are met; or\n\n262\nTable of Contents\n•\nwe are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at \nany time within the shorter of the five-year period ending on the date of disposition or the period that such Non-\nU.S. Holder held shares of our Class A common stock.\nA Non-U.S. Holder described in the first bullet point immediately above will be subject to tax on the gain derived \nfrom the sale or other disposition in the same manner as if the Non-U.S. Holder were a U.S. person as defined under \nthe Code. In addition, if any Non-U.S. Holder described in the first bullet point immediately above is a corporation, \nthe gain realized by such Non-U.S. Holder may be subject to an additional “branch profits tax” at a 30% rate or such \nlower rate as may be specified by an applicable income tax treaty. An individual Non-U.S. Holder described in the \nsecond bullet point immediately above will be subject to a 30% (or such lower rate as may be specified by an \napplicable income tax treaty) tax on the gain derived from the sale or other taxable disposition, which gain may be \noffset by U.S. source capital losses even though the individual is not considered a resident of the United States, \nprovided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses. \nGenerally, a corporation is a “United States real property holding corporation” (“USRPHC”) if the fair market value \nof its United States real property interests equals or exceeds 50% of the sum of the fair market value of its \nworldwide real property interests and its other assets used or held for use in a trade or business (all as determined for \nU.S. federal income tax purposes). We believe we are not and do not anticipate becoming a USRPHC for U.S. \nfederal income tax purposes. However, because the determination of whether we are a USRPHC depends on the fair \nmarket value of our U.S. real property interests relative to the fair market value of our business assets, there can be \nno assurances that we are not a USRPHC or will not become one in the future. Even if we became a USRPHC, a \nNon-U.S. Holder would not be subject to U.S. federal income tax on a sale, exchange, or other taxable disposition of \nour Class A common stock by reason of our status as USRPHC so long as our Class A common stock is regularly \ntraded on an established securities market (within the meaning of the applicable regulations) and such Non-U.S. \nHolder does not own and is not deemed to own (directly, indirectly or constructively) more than 5% of our \noutstanding Class A common stock at any time during the shorter of the five year period ending on the date of \ndisposition and such holder’s holding period. Each Non-U.S. Holder should consult its tax advisor regarding the \npossible consequences to them if we are, or were to become, a USRPHC.\nInformation Reporting Requirements and Backup Withholding\nThe amount of dividends or proceeds paid to a Non-U.S. Holder, the name and address of the Non-U.S. Holder and \nthe amount of tax, if any, withheld generally will be reported to the IRS. Copies of these information returns may \nalso be made available under the provisions of a specific treaty or agreement to the tax authorities of the country in \nwhich the Non-U.S. Holder resides. A Non-U.S. Holder generally will be required to provide proper certification \n(usually on an IRS Form W-8BEN,  W-8BEN-E or W-8ECI, as applicable) to establish that the Non-U.S. Holder is \nnot a U.S. person or otherwise qualifies for an exemption in order to avoid backup withholding tax with respect to \nour payment of dividends on, or the proceeds from the disposition of, our Class A common stock. Backup \nwithholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a \nrefund or a credit against that Non-U.S. Holder’s U.S. federal income tax liability provided the required information \nis timely furnished to the IRS. Each Non-U.S. Holder should consult its tax advisor regarding the application of the \ninformation reporting rules and backup withholding to it.\nAdditional Withholding Tax on Payments Made to Foreign Accounts\nWithholding taxes may be imposed under Sections 1471 to 1474 of the Code, the Treasury Regulations promulgated \nthereunder and other official guidance (commonly referred to as “FATCA”) on certain types of payments made to \nnon-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be \nimposed on dividends on, or (subject to the proposed Treasury Regulations discussed below) gross proceeds from \nthe sale or other disposition of, our Class A common stock paid to a “foreign financial institution” or a “non-\nfinancial foreign entity” (each as defined in the Code), unless applicable exceptions apply. Foreign financial \ninstitutions located in jurisdictions that have an intergovernmental agreement with the United States governing \nFATCA may be subject to different rules.\n\n263\nTable of Contents\nUnder the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally \napplies to payments of dividends on our Class A common stock. However, under proposed Treasury Regulations (on \nwhich taxpayers may rely until final Treasury Regulations are issued), this withholding tax will not apply to the \ngross proceeds from the sale, exchange, redemption or other taxable disposition of our Class A common stock. \nThere can be no assurance that the proposed Treasury Regulations will be finalized in their present form. \nEach Non-U.S. Holder should consult its tax advisor regarding the effects of FATCA on its investment in our Class \nA common stock.\nTHE PRECEDING DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS NOT TAX \nADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR REGARDING THE \nPARTICULAR U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, \nOWNING, AND DISPOSING OF OUR CLASS A COMMON STOCK, INCLUDING THE CONSEQUENCES \nOF ANY PROPOSED CHANGE IN APPLICABLE LAWS, INTERGOVERNMENTAL AGREEMENTS, OR \nTAX TREATIES.\n\n264\nTable of Contents\nUNDERWRITING \nUnder the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus, the \nunderwriters named below, for whom  Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, BofA Securities, \nInc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are acting as representatives, have severally \nagreed to purchase, and we have agreed to sell to them, severally, the number of shares of Class A common stock \nindicated below:\nName\nNumber of \nShares\nGoldman Sachs & Co. LLC \n .................................................................................................................\nMorgan Stanley & Co. LLC \n ................................................................................................................\nBofA Securities, Inc.\n ............................................................................................................................\nCitigroup Global Markets Inc. \n .............................................................................................................\nJ.P. Morgan Securities LLC\n .................................................................................................................\nBarclays Capital Inc. \n ............................................................................................................................\nDeutsche Bank Securities Inc. \n \n .............................................................................................................\nRBC Capital Markets, LLC \n \n .................................................................................................................\nUBS Securities LLC \n ............................................................................................................................\nWells Fargo Securities, LLC \n ...............................................................................................................\nBanco BTG Pactual S.A. – Cayman Branch \n .......................................................................................\nING Bank N.V. \n ....................................................................................................................................\nMacquarie Capital (USA) Inc. \n .............................................................................................................\nMirae Asset Securities Co., Ltd. \n .........................................................................................................\nMizuho Securities USA LLC\n ...............................................................................................................\nSantander US Capital Markets LLC \n ...................................................................................................\nAllen & Company LLC \n .......................................................................................................................\nCantor Fitzgerald & Co. \n .....................................................................................................................\nNeedham & Company, LLC \n ................................................................................................................\nRaymond James & Associates, Inc. \n ....................................................................................................\nSG Americas Securities, LLC\n \n ..............................................................................................................\nStifel, Nicolaus & Company, Incorporated \n .........................................................................................\nWilliam Blair & Company, L.L.C. \n ......................................................................................................\nTotal \n ..............................................................................................................................................\nThe underwriters and the representatives are collectively referred to as the “underwriters” and the “representatives,” \nrespectively. The underwriters are offering the shares of Class A common stock subject to their acceptance of such \nshares from us and subject to prior sale. The underwriting agreement provides that the obligations of the several \nunderwriters to pay for and accept delivery of the shares of Class A common stock offered by this prospectus are \nsubject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are \nobligated to take and pay for all of the shares of Class A common stock offered by this prospectus if any such shares \nare taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters’ \noption to purchase additional shares described below. The offering of the shares of Class A common stock by the \nunderwriters is subject to their receipt and acceptance of the shares being offered and subject to the underwriters’ \nright to reject any order in whole or in part.\nThe underwriters initially propose to offer part of the shares of Class A common stock directly to the public at the \noffering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a \nconcession not in excess of $                per share of Class A common stock under the public offering price. After the \ninitial offering of the shares of Class A common stock, the offering price and other selling terms may from time to\n\n265\nTable of Contents\ntime be varied by the representatives. Sales of Class A common stock made outside of the United States may be \nmade by affiliates of the underwriters.\nWe have granted to the underwriters an option, exercisable for 30 days after the date of this prospectus, to purchase \nup to                 additional shares of Class A common stock at the public offering price listed on the cover page of \nthis prospectus, less underwriting discounts and commissions. To the extent the option is exercised, each underwriter \nwill become obligated, subject to certain conditions, to purchase about the same percentage of the additional shares \nof Class A common stock as the number listed next to the underwriter’s name in the preceding table bears to the \ntotal number of shares of Class A common stock listed next to the names of all underwriters in the preceding table.\nING Bank N.V., Banco BTG Pactual S.A. – Cayman Branch and Mirae Asset Securities Co., Ltd. are not broker-\ndealers registered with the SEC and therefore may not make sales of any shares of Class A common stock in the \nUnited States or to U.S. persons except in compliance with applicable U.S. laws and regulations.\nThe following table shows the per share and total public offering price, underwriting discounts and commissions, \nand proceeds before expenses to us. These amounts are shown assuming both no exercise and full exercise of the \nunderwriters’ option to purchase up to an additional                 shares of Class A common stock.\nTotal\nPer Share\nNo Exercise\nFull Exercise\nPublic offering price \n ....................................................................... $                     \n$                     \n$                     \nUnderwriting discounts and commissions to be paid by us \n ........... $                     \n$                     \n$                     \nProceeds, before expenses, to us \n .................................................... $                     \n$                     \n$                     \nThe estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are \napproximately $               . We have agreed to reimburse the underwriters for their reasonable expenses relating to \nclearance of this offering with the Financial Industry Regulatory Authority up to $               .\nThe underwriters have informed us that they do not intend sales to discretionary accounts to exceed 5% of the total \nnumber of shares of Class A common stock offered by them.\nWe have applied to list our Class A common stock on Nasdaq and Nasdaq Texas under the trading symbol “SPCX.”\nIn addition to allocations made to retail investors by the underwriters, we currently anticipate that certain of the \nshares of Class A common stock offered hereby will, at our request, be offered to retail investors through Charles \nSchwab & Co., Inc., Fidelity Brokerage Services LLC and Fidelity Capital Markets, a division of National Financial \nServices LLC, Robinhood Financial, LLC, and SoFi Securities LLC, as selling group members, via their respective \nonline brokerage platforms. We also anticipate that certain of the shares of Class A common stock will be offered to \nretail investors through E*TRADE by Morgan Stanley, an affiliate of Morgan Stanley & Co. LLC, one of the \nunderwriters of this offering. These platforms are not affiliated with us. Purchases through these platforms will be \nsubject to the terms, conditions and requirements set by each selling group member. Any purchase of our Class A \ncommon stock in this offering through these platforms will be at the same initial public offering price, and at the \nsame time, as any other purchases in this offering, including purchases by institutions and other large investors. The \nselling group members’ platforms and information on the selling group members’ applications do not form a part of \nnor are they incorporated by reference into this prospectus.\nWe have agreed with the underwriters that during the period of 180 days after the date of this prospectus (the “lock-\nup period”), without the prior written consent of Goldman Sachs & Co. LLC, on behalf of the underwriters, subject \nto certain exceptions, we will not (a) offer, sell, contract to sell, pledge, grant any option to purchase, make any short \nsale or otherwise transfer or dispose of, directly or indirectly, or file with the SEC a registration statement under the \nSecurities Act relating to, any of our common stock or other securities substantially similar to our common stock, \nincluding but not limited to any options or warrants to purchase shares of our common stock or any securities that \nare convertible into or exchangeable for, or that represent the right to receive, common stock or any such \nsubstantially similar securities, or publicly disclose the intention to do any of the foregoing, or (b) enter into any \nswap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of any\n\n266\nTable of Contents\nof our common stock or such other securities, whether any such transaction described in clause (a) or (b) above is to \nbe settled by delivery of our common stock or such other securities, in cash or otherwise. These restrictions will not \napply to securities to be issued by the Company in connection with any mergers, acquisitions or similar transactions \nduring the lock-up period. Certain additional exceptions to these restrictions will be detailed in a subsequent \namendment to the registration statement of which this prospectus forms a part.\nOur Founder and certain significant investors have agreed with the underwriters, that during a period of 366 days \nafter the date of this prospectus, an aggregate of        shares owned by them (including 100% of the shares owned by \nour Founder), representing      % of our shares outstanding, are subject to the restrictions described in the paragraph \nbelow. This total amount of shares will not be subject to any early release provisions. \nThese shareholders and our Founder may not (and may not cause any of their direct or indirect affiliates to), without \nthe prior written consent of Goldman Sachs & Co. LLC, on behalf of the underwriters, subject to certain exceptions: \n(a) offer, sell, contract to sell, pledge, grant any option, right or warrant to purchase, purchase any option or contract \nto sell, lend or otherwise transfer or dispose of (directly or indirectly) any shares of our common stock, or any \noptions, rights, or warrants to purchase any shares of our common stock or any securities convertible into, \nexchangeable for or that represent the right to receive shares of our common stock (such shares of common stock, \noptions, rights, warrants or other securities, collectively, the \"lock-up securities\"), including without limitation any \nsuch lock-up securities now owned or hereafter acquired, (b) engage in any hedging or other transaction or \narrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call \noption, or combination thereof, forward, swap or any other derivative transaction or instrument, however described \nor defined) which is designed to or which reasonably could be expected to lead to or result in a sale, loan, pledge, or \nother disposition (whether by the applicable lock-up party or someone other than such lock-up party), or transfer of \nany of the economic consequences of ownership, in whole or in part, directly or indirectly, of any lock-up securities, \nwhether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of \nour common stock or such other securities, in cash or otherwise, (c) make any demand for or exercise any right with \nrespect to the registration of any lock-up securities, or (d) otherwise publicly announce any intention to engage in or \ncause any action, activity, transaction or arrangement described in clause (a), (b) or (c) above. Certain exceptions to \nthese restrictions will be detailed in a subsequent amendment to the registration statement of which this prospectus \nforms a part.\nIn addition, all of the remaining shares of our common stock, and securities convertible into, exchangeable for or \nthat represent the right to receive our common stock, are subject to a variety of other terms governing restrictions on \nthe sale, short sale, transfer, hedging, pledging, or other disposition of their interests in our equity, pursuant to a \nnumber of different agreements, for 180 days from the date of this prospectus. \nFurthermore, there are automatic releases from these restrictions on a portion of securities earlier than 180 days as \nfollows, for (i) the total number of shares of common stock comprising or underlying (as applicable) the outstanding \nlock-up securities, as of the date of this offering, subject to the 180-day lock-up period described above, and (ii)    % \nof the total number of shares of common stock comprising or underlying (as applicable) the outstanding lock-up \nsecurities, as of the date of this offering, subject to the 366-day lock-up period described above (together, the “Early \nRelease Eligible Shares”):\na.\non or after the second full trading day on Nasdaq immediately following the public release of our quarterly \nfinancial results (which for this purpose does not include “flash” numbers or preliminary, partial earnings) for \nthe quarter ended June 30, 2026 (such date, the “First Earnings Release Date”), up to 20% of the Early Release \nEligible Shares may be transferred; \nb.\nif the reported closing price of our Class A common stock on Nasdaq is at least 30% greater than the public \noffering price set forth on the cover page of this prospectus for at least five of the ten consecutive trading days \nending on, and  including, the First Earnings Release Date,, on or after the second full trading day immediately \nafter the First Earnings Release Date, up to additional 10% of the Early Release Eligible Shares may be \ntransferred;\n\n267\nTable of Contents\nc.\nup to additional 7% of the Early Release Eligible Shares may be transferred on or after each of the dates that are \n70 days, 90 days, 105 days, 120 days, and 135 days, respectively, after this offering;\nd.\non the second full trading day immediately following the public release of our quarterly financial results (which \nfor this purpose does not include “flash” numbers or preliminary, partial earnings) for the quarter ended \nSeptember 30, 2026, up to additional 28% of the Early Release Eligible Shares may be transferred; and\ne.\non or after the date that is 180 days after this offering, all remaining Early Release Eligible Shares may be \ntransferred.\nOur Founder is not party to any of the early release provisions during the extended lock-up period.\nIn order to facilitate the offering of our Class A common stock, the underwriters, with Morgan Stanley & Co. LLC \nacting as stabilization agent, may engage in transactions that stabilize, maintain or otherwise affect the price of our \nClass A common stock. Specifically, the underwriters may sell more shares of Class A common stock than they are \nobligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short \nposition is no greater than the number of shares available for purchase by the underwriters under the option to \npurchase additional shares. The underwriters can close out a covered short sale by exercising the option to purchase \nadditional shares or purchasing shares in the open market. In determining the source of shares to close out a covered \nshort sale, the underwriters will consider, among other things, the open market price of our Class A common stock \ncompared to the price available under the option to purchase additional shares. The underwriters may also sell shares \nof Class A common stock in excess of the option to purchase additional shares, creating a naked short position. The \nunderwriters must close out any naked short position by purchasing shares of Class A common stock in the open \nmarket. A naked short position is more likely to be created if the underwriters are concerned that there may be \ndownward pressure on the price of our Class A common stock in the open market after pricing that could adversely \naffect investors who purchase shares of Class A common stock in this offering. As an additional means of \nfacilitating this offering, the underwriters may bid for, and purchase, shares of Class A common stock in the open \nmarket to stabilize the price of our Class A common stock. These activities may raise or maintain the market price of \nour Class A common stock above independent market levels or prevent or retard a decline in the market price of our \nClass A common stock. The underwriters are not required to engage in these activities and may end any of these \nactivities at any time.\nWe and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under \nthe Securities Act.\nA prospectus in electronic format may be made available on websites maintained by one or more underwriters, or \nselling group members, if any, participating in this offering. The representatives may agree to allocate a number of \nshares of Class A common stock to underwriters for sale to their online brokerage account holders. Internet \ndistributions will be allocated by the representatives to the underwriters that may make internet distributions on the \nsame basis as other allocations.\nThe underwriters and their respective affiliates are full service financial institutions engaged in various activities, \nwhich may include securities trading, commercial and investment banking, financial advisory, investment \nmanagement, investment research, principal investment, hedging, financing and brokerage activities. Certain of the \nunderwriters and their respective affiliates have, from time to time, performed, and may in the future perform, \nvarious financial advisory and investment banking services for us, for which they received or will receive customary \nfees and expenses. Certain of the underwriters and their respective affiliates have in the past been, are currently, and \nmay in the future be, our customers in arm’s length transactions. In addition, Morgan Stanley & Co. LLC advised us \nin connection with the acquisition of xAI. Affiliates of Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, \nBofA Securities, Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC serve as lenders or \nadministrative agents under the SpaceX Bridge Loan. Affiliates of Barclays Capital Inc., Deutsche Bank Securities \nInc., RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC are lenders under the \nSpaceX Bridge Loan. Affiliates of BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. \nLLC, Morgan Stanley & Co. LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., Wells Fargo Securities, \nLLC, RBC Capital Markets, LLC and UBS Securities LLC are lenders under the SpaceX Credit Facility. Affiliates\n\n268\nTable of Contents\nof Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC serve as co-\nsyndication agents; affiliates of Barclays Capital Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities, \nLLC serve as co-documentation agents; affiliates of BofA Securities, Inc., Citigroup Global Markets Inc., Goldman \nSachs & Co. LLC and Morgan Stanley & Co. LLC serve as joint lead arrangers; affiliates of BofA Securities, Inc., \nCitigroup Global Markets Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Barclays Capital Inc., \nDeutsche Bank Securities Inc. and Wells Fargo Securities, LLC serve as joint bookrunners; and an affiliate of BofA \nSecurities, Inc. serves as administrative agent under the SpaceX Credit Facility.\nIn addition, in the ordinary course of their various business activities, the underwriters and their respective affiliates \nmay make or hold a broad array of investments and actively trade debt and equity securities (or related derivative \nsecurities) and financial instruments (including bank loans) for their own account and for the accounts of their \ncustomers and may at any time hold long and short positions, or provide loans or other financing on or secured by, \nin such securities and instruments. Such investment and securities activities may involve our securities and \ninstruments. The underwriters and their respective affiliates may also make investment recommendations or publish \nor express independent research views in respect of such securities or instruments and may at any time hold, or \nrecommend to clients that they acquire, long or short positions in such securities and instruments.\nPricing of the Offering\nPrior to this offering, there has been no public market for our Class A common stock. The initial public offering \nprice has been determined by negotiations between us and the representatives. Among the factors considered in \ndetermining the initial public offering price were prevailing market conditions, our future prospects and those of our \nindustry in general, our historical financial and operating performance in recent periods, an assessment by our \nmanagement and the consideration of the above factors in relation to market valuation of companies engaged in \nactivities similar to ours.\nDirected Share Program\nAt our request, the underwriters have reserved up to                 percent of the shares of Class A common stock \noffered by this prospectus for sale at the initial public offering price through a directed share program to certain \nemployees and persons identified by our management, which may include parties with whom we have a business \nrelationship and friends and family of management. If purchased by these persons, these shares will not be subject to \na lock-up restriction. The number of shares of Class A common stock available for sale to the general public will be \nreduced by the number of reserved shares sold to these persons. Any reserved shares not purchased by these persons \nwill be offered by the underwriters to the general public on the same basis as the other shares of Class A common \nstock offered by this prospectus. We will agree to indemnify the underwriters and their affiliates against certain \nliabilities and expenses, including liabilities under the Securities Act, in connection with sales of the shares reserved \nfor the directed share program. Morgan Stanley & Co. LLC, an underwriter in this offering, and its affiliates will \nadminister the global directed share program.\nOfferings Outside the United States\nThis offering includes public offerings in Australia, certain provinces and territories of Canada, certain member \nstates of the European Economic Area, Japan, Switzerland, and the United Kingdom. We do not currently intend to \nlist our Class A common stock on any exchange in such jurisdictions. \nSubject to applicable law, the underwriters may offer shares of our Class A common stock outside of the United \nStates, Australia, Canada, the European Economic Area, Japan, Switzerland and the United Kingdom. The \nunderwriters may use one or more affiliates in order to offer and sell shares outside of the United States. No shares \nof our Class A common stock will be offered or sold in any jurisdiction except by or through brokers or dealers duly \nregistered under the applicable securities laws of that jurisdiction, or in circumstances where any exemption from \nsuch registration requirements is available.\n\n269\nTable of Contents\nSelling Restrictions\nArgentina\nThe shares of Class A common stock are not authorized for public offering in Argentina by the Comisión Nacional \nde Valores pursuant to Argentine Public Offering Law No. 17,811, as amended, and they shall not be sold publicly. \nTherefore, any transaction carried out in Argentina must be made privately.\nAustralia\nThis prospectus does not constitute a prospectus, product disclosure statement, or other disclosure document under \nChapter 6D.2 of the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the \ninformation required for a prospectus, product disclosure statement or other disclosure document under the \nCorporations Act. \nAny offer in Australia of the shares of Class A common stock made pursuant to this prospectus may only be made to \npersons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the \nCorporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or \notherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to \noffer the shares of Class A common stock without disclosure to investors under Chapter 6D of the Corporations Act. \nThe shares of Class A common stock applied for by Exempt Investors in Australia pursuant to this prospectus must \nnot be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in \ncircumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required \npursuant to an exemption under section 708 of the Corporations Act or otherwise, or where the offer is pursuant to a \ndisclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring the shares of \nClass A common stock pursuant to this prospectus must observe such Australian on-sale restrictions. \nThe public offering in Australia will be made pursuant to a separate prospectus (“Australian Prospectus”) which \ncomplies with the requirements of the Corporations Act and will be lodged with the Australian Securities and \nInvestments Commission. Any non-Exempt Investor who wishes to participate in the offering must apply pursuant \nto the Australian Prospectus, through an application form which accompanies the Australian Prospectus.\nThis prospectus contains general information only and does not take account of the investment objectives, financial \nsituation or particular needs of any particular person. It does not contain any securities recommendations or financial \nproduct advice. Before making an investment decision, investors need to consider whether the information in this \nprospectus is appropriate to their needs, objectives and circumstances and, if necessary, seek expert advice on those \nmatters.\nBrazil\nThe offer and sale of the shares of Class A common stock have not been and will not be registered with the Brazilian \nSecurities Commission (Comissão de Valores Mobiliários, or “CVM”) and, therefore, will not be carried out by any \nmeans that would constitute a public offering in Brazil under CVM Resolution No. 160, dated 13 July 2022, as \namended, or unauthorized distribution under Brazilian laws and regulations. The shares of Class A common stock \nwill be authorized for trading on organized non-Brazilian securities markets and may only be offered to Brazilian \nProfessional Investors (as defined by applicable CVM regulation), who may only acquire the shares of Class A \ncommon stock through a non-Brazilian account, with settlement outside Brazil in non-Brazilian currency. The \ntrading of the shares of Class A common stock on regulated securities markets in Brazil is prohibited.\nChile\nThe shares of Class A common stock offered by this prospectus are not registered in the Securities Registry \n(Registro de Valores) or subject to the control of the Chilean Securities and Exchange Commission \n(Superintendencia de Valores y Seguros de Chile). This prospectus and other offering materials relating to the offer \nof the shares of Class A common stock do not constitute a public offer of, or an invitation to subscribe for or \npurchase, the shares of Class A common stock in the Republic of Chile, other than to individually identified\n\n270\nTable of Contents\npurchasers pursuant to a private offering within the meaning of Article 4 of the Chilean Securities Market Act (Ley \nde Mercado de Valores) (an offer that is not “addressed to the public at large or to a certain sector or specific group \nof the public”).\nChina\nThis prospectus will not be circulated or distributed in the People’s Republic of China (the “PRC”) and the shares of \nClass A common stock will not be offered or sold, and will not be offered or sold to any person for re-offering or \nresale directly or indirectly, to any residents of the PRC (for such purposes, not including the Hong Kong and Macau \nSpecial Administrative Regions or Taiwan), except pursuant to any applicable laws and regulations of the PRC. \nNeither this prospectus nor any advertisement or other offering material may be distributed or published in the PRC, \nexcept under circumstances that will result in compliance with applicable laws and regulations.\nColombia\nThe shares of Class A common stock have not been and will not be registered with the Colombian National Registry \nof Securities and Issuers (Registro Nacional de Valores y Emisores - RNVE) maintained by the Financial \nSuperintendence of Colombia (Superintendencia Financiera de Colombia; the “SFC”) and, therefore, the shares of \nClass A common stock may not be publicly offered or delivered in Colombia. However, the shares of Class A \ncommon stock may be offered in Colombia under Colombian law pursuant to the private placement exemption set \nforth in the Colombian regulation (Decree 2555 of 2010), in accordance of which an offering shall be deemed a \nprivate placement if it is addressed to fewer than one hundred (100) specific persons (article 6.1.1.1.1, Decree 2555 \nof 2010). These materials are solely our responsibility and have not been reviewed or authorized by the SFC and \nmay not be publicly distributed in Colombia. In making an investment decision, all investors, including any \nColombian investor who may acquire shares of the Class A common stock from time to time, must rely on their own \nexamination of the terms of the offering and shares of the Class A common stock, including the merits and risks \ninvolved.\nDubai\nThis prospectus relates to an “Exempt Offer” in accordance with the Offered Securities Rules of the Dubai Financial \nServices Authority (the “DFSA”). This prospectus is intended for distribution only to persons of a type specified in \nthe Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA \nhas no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has \nnot approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for \nthe prospectus. The shares of Class A common stock to which this prospectus relates may be illiquid or subject to \nrestrictions on their resale. Prospective purchasers of the shares of Class A common stock should conduct their own \ndue diligence on the shares of Class A common stock. If you do not understand the contents of this prospectus, you \nshould consult an authorized financial advisor.\nHong Kong\nThe shares of Class A common stock have not been offered or sold and will not be offered or sold in Hong Kong, by \nmeans of any document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance \n(Cap. 571 of the laws of Hong Kong) (the “SFO”) and any rules made thereunder; or (b) in other circumstances \nwhich do not result in this prospectus being a “prospectus” as defined in the Companies (Winding Up and \nMiscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) (the “CO”) or which do not constitute an \noffer to the public within the meaning of the CO. No advertisement, invitation or document relating to the shares of \nClass A common stock has been or may be issued or has been or may be in the possession of any person for the \npurposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be \naccessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) \nother than with respect to the shares of Class A common stock which are or are intended to be disposed of only to \npersons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made \nthereunder.\n\n271\nTable of Contents\nIndia\nThis prospectus has not been and will not be registered as a prospectus with any registrar of companies in India. This \nprospectus has not been and will not be reviewed or approved by any regulatory authority in India, including the \nSecurities and Exchange Board of India, any registrar of companies in India or any stock exchange in India. This \nprospectus and this offering of the shares of Class A common stock are not and should not be construed as an \ninvitation, offer or sale of any securities to the public in India. Other than in compliance with the private placement \nexemptions under applicable laws and regulations in India, including the Companies Act, 2013, as amended, the \nshares of Class A common stock have not been, and will not be, offered or sold to the public or any member of the \npublic in India. This prospectus is strictly personal to the recipient and neither this prospectus nor the offering of the \nshares of Class A common stock is calculated to result, directly or indirectly, in the shares of Class A common stock \nbecoming available for subscription or purchase by persons other than those receiving the invitation or offer. Each \ninvestor is deemed to have acknowledged, represented and agreed that it is eligible to invest in the shares of Class A \ncommon stock under applicable laws, rules and regulations in India, without the requirement to obtain any prior \napproval, and that it is not prohibited or prevented under any law, rule or regulation in India from acquiring, owning \nor selling the shares of Class A common stock.\nIndonesia\nThis prospectus does not, and is not intended to, constitute a public offering in Indonesia under Law Number 8 of \n1995 regarding Capital Market. This prospectus may not be distributed in the Republic of Indonesia and the shares \nof Class A common stock may not be offered or sold in the Republic of Indonesia or to Indonesian citizens wherever \nthey are domiciled, or to Indonesia residents, in a manner which constitutes a public offering under the laws of the \nRepublic of Indonesia.\nIsrael\nIn the State of Israel this prospectus shall not be regarded as an offer to the public to purchase shares of Class A \ncommon stock under the Israeli Securities Law, 5728—1968, which requires a prospectus to be published and \nauthorized by the Israel Securities Authority, if it complies with certain provisions of Section 15 of the Israeli \nSecurities Law, 5728–1968, including, inter alia, if: (i) the offer is made, distributed or directed to not more than 35 \ninvestors, subject to certain conditions (the “Addressed Investors”), or (ii) the offer is made, distributed or directed \nto certain qualified investors defined in the First Addendum of the Israeli Securities Law, 5728—1968, subject to \ncertain conditions (the “Qualified Investors”). The Qualified Investors shall not be taken into account in the count of \nthe Addressed Investors and may be offered to purchase securities in addition to the 35 Addressed Investors. We \nhave not and will not take any action that would require it to publish a prospectus in accordance with and subject to \nthe Israeli Securities Law, 5728—1968. We have not and will not distribute this prospectus or make, distribute or \ndirect an offer to subscribe for our Class A common stock to any person within the State of Israel, other than to \nQualified Investors and up to 35 Addressed Investors.\nQualified Investors may have to submit written evidence that they meet the definitions set out in of the First \nAddendum to the Israeli Securities Law, 5728—1968. In particular, we may request, as a condition to be offered \nshares of Class A common stock, that Qualified Investors will each represent, warrant and certify to us and/or to \nanyone acting on our behalf: (i) that it is an investor falling within one of the categories listed in the First Addendum \nto the Israeli Securities Law, 5728—1968; (ii) which of the categories listed in the First Addendum to the Israeli \nSecurities Law, 5728—1968 regarding Qualified Investors is applicable to it; (iii) that it will abide by all provisions \nset forth in the Israeli Securities Law, 5728—1968 and the regulations promulgated thereunder in connection with \nthe offer to be issued shares of Class A common stock; (iv) that the shares of Class A common stock that it will be \nissued are, subject to exemptions available under the Israeli Securities Law, 5728—1968: (a) for its own account; (b) \nfor investment purposes only; and (c) not issued with a view to resale within the State of Israel, other than in \naccordance with the provisions of the Israeli Securities Law, 5728—1968; and (v) that it is willing to provide further \nevidence of its Qualified Investor status. Addressed Investors may have to submit written evidence in respect of their \nidentity and may have to sign and submit a declaration containing, inter alia, the Addressed Investor’s name, address \nand passport number or Israeli identification number.\n\n272\nTable of Contents\nMalaysia\nNo prospectus or other offering material or document in connection with the offer and sale of shares of Class A \ncommon stock offered by this prospectus has been or will be registered with the Securities Commission of Malaysia \n(the “Malaysian Commission”) for the Malaysian Commission’s approval pursuant to the Capital Markets and \nServices Act 2007. Accordingly, this prospectus and any other document or material in connection with the offer or \nsale, or invitation for subscription or purchase, of the shares of Class A common stock may not be circulated or \ndistributed, nor may the shares of Class A common stock be offered or sold, or be made the subject of an invitation \nfor subscription or purchase, whether directly or indirectly, to persons in Malaysia other than (i) a closed-end fund \napproved by the Malaysian Commission; (ii) a holder of a Capital Markets Services License; (iii) a person who \nacquires shares of Class A common stock, as principal, if the offer is on terms that the shares if Class A common \nstock may only be acquired at a consideration of not less than RM250,000 (or its equivalent in foreign currencies) \nfor each transaction; (iv) an individual whose total net personal assets or total net joint assets with his or her spouse \nexceeds RM3 million (or its equivalent in foreign currencies), excluding the value of the primary residence of the \nindividual; (v) an individual who has a gross annual income exceeding RM300,000 (or its equivalent in foreign \ncurrencies) per annum in the preceding twelve months; (vi) an individual who, jointly with his or her spouse, has a \ngross annual income of RM400,000 (or its equivalent in foreign currencies), per annum in the preceding twelve \nmonths; (vii) a corporation with total net assets exceeding RM10 million (or its equivalent in foreign currencies) \nbased on the last audited accounts; (viii) a partnership with total net assets exceeding RM10 million (or its \nequivalent in foreign currencies); (ix) a bank licensee or insurance licensee as defined in the Labuan Financial \nServices and Securities Act 2010; (x) an Islamic bank licensee or takaful licensee as defined in the Labuan Financial \nServices and Securities Act 2010; and (xi) any other person as may be specified by the Commission; provided that, \nin each of the preceding categories (i) to (xi), the distribution of the shares of Class A common stock is made by a \nholder of a Capital Markets Services License who carries on the business of dealing in securities. The distribution in \nMalaysia of this prospectus is subject to Malaysian laws. This prospectus does not constitute and may not be used \nfor the purpose of a public offering or an issue, offer for subscription or purchase, or invitation to subscribe for or \npurchase any securities requiring the registration of a prospectus with the Malaysian Commission under the Capital \nMarkets and Services Act 2007.\nMexico\nThe shares of Class A common stock have not been and will not be registered with the Mexican National Securities \nRegistry (Registro Nacional de Valores or the “RNV”) maintained by the Mexican National Banking and Securities \nCommission (Comisión Nacional Bancaria y de Valores, or the “CNBV”), and therefore, may not be offered or sold \npublicly in Mexico or otherwise be subject to intermediation activities in Mexico. However, the shares of Class A \ncommon stock may only be offered and sold in Mexico on a private placement basis to investors that qualify as \ninstitutional or qualified investors pursuant to the private placement exemption set forth in Article 8 of the Mexican \nSecurities Market Law (Ley del Mercado de Valores) and regulations thereunder. The information contained in this \nprospectus is solely our responsibility and has not been reviewed or authorized by the CNBV and may not be \npublicly distributed in Mexico. In making an investment decision, all investors, including any Mexican investor, \nwho may acquire the shares of Class A common stock from time to time, must rely on their own examination of us \nand the terms of this offering and the shares of Class A common stock, including the merits and risks involved.\nNew Zealand\nThis document has not been registered, filed with or approved by any New Zealand regulatory authority under the \nFinancial Markets Conduct Act 2013 (the “FMC Act”). The shares of Class A common stock may only be offered or \nsold in New Zealand (or allotted with a view to being offered for sale in New Zealand) to a person who:\n•\nis an investment business within the meaning of clause 37 of Schedule I of the FMC Act;\n•\nmeets the investment activity criteria in clause 38 of Schedule I of the FMC Act;\n•\nis large within the meaning of clause 39 of Schedule I of the FMC Act;\n•\nis a government agency within the meaning of clause 40 of Schedule I of the FMC Act; or\n\n273\nTable of Contents\n•\nis an eligible investor within the meaning of clause 41 of Schedule I of the FMC Act.\nPeru\nThe shares of Class A common stock and the information contained herein are not being publicly marketed or \noffered in Peru and will not be distributed or caused to be distributed to the general public in Peru. Peruvian \nsecurities laws and regulations on public offerings will not be applicable to this offering and therefore, the disclosure \nobligations set forth therein will not be applicable to the Company or the sellers of the shares of Class A common \nstock before or after their acquisition by prospective investors. The shares of Class A common stock and the \ninformation contained herein have not been and will not be reviewed, confirmed, approved or in any way submitted \nto the Superintendencia del Mercado de Valores (Peruvian capital market regulator) (the “SMV”), nor have they \nbeen registered with the SMV’s Securities Market Public Registry (Registro Público del Mercado de Valores). \nAccordingly, the shares of Class A common stock cannot be offered or sold within Peruvian territory except to the \nextent any such offering or sale qualifies as a private offering under Peruvian law and regulations and complies with \nthe provisions on private offerings set forth therein.\nPhilippines\nThe shares of Class A common stock being offered or sold have not been and will not be registered with the \nPhilippine Securities and Exchange Commission under the Securities Regulation Code of the Philippines (the \n“SCR”). Any future offer or sale of the shares of Class A common stock within the Philippines is subject to the \nregistration requirements under the SRC unless such offer or sale qualifies as a transaction exempt from the \nregistration under the SRC.\nAccordingly, this prospectus, and any other document or material in connection with the offer or sale, or invitation \nfor subscription or purchase of the shares of Class A common stock, may not be circulated or distributed in the \nPhilippines, and the shares of Class A common stock may not be offered or sold, or be made the subject of an \ninvitation for subscription or purchase, to persons in the Philippines, other than (i) to qualified investors in \ntransactions that are exempt from the registration requirements of the SRC; and (ii) by persons licensed to make \nsuch offers or sales in the Philippines. \nQatar\nIn the State of Qatar, the offer contained in this prospectus is made on an exclusive basis to the specifically intended \nrecipient thereof, upon that person’s request and initiative, for personal use only and shall in no way be construed as \na general offer for the sale of the shares of Class A common stock to the public or an attempt to do business as a \nbank, an investment company or otherwise in the State of Qatar. This prospectus and the underlying securities have \nnot been approved or licensed by the Qatar Central Bank or the Qatar Financial Center Regulatory Authority or any \nother regulator in the State of Qatar. The information contained in this prospectus shall only be shared with any third \nparties in the State of Qatar on a need to know basis for the purpose of evaluating the offering. Any distribution of \nthis prospectus by the recipient to third parties in the State of Qatar beyond the terms hereof is not permitted and \nshall be at the liability of such recipient.\nSaudi Arabia \nThis prospectus may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted \nunder the Rules on the Offer of Securities and Continuing Obligations Regulations as issued by the board of the \nSaudi Arabian Capital Market Authority (the “CMA”) pursuant to resolution number 3-123-2017 dated 27 \nDecember 2017, as amended. The CMA does not make any representation as to the accuracy or completeness of this \nprospectus and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, \nany part of this prospectus. Prospective purchasers of the shares of Class A common stock offered hereby should \nconduct their own due diligence on the accuracy of the information relating to the shares of Class A common stock. \nIf you do not understand the contents of this prospectus, you should consult an authorized financial adviser.\n\n274\nTable of Contents\nSingapore\nThis prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the \nshares of Class A common stock may not be offered or sold, or made the subject of an invitation for subscription or \npurchase, nor may this prospectus or any other document or material in connection with the offer or sale, or \ninvitation for subscription or purchase of the shares of Class A common stock be circulated, whether directly or \nindirectly, to any person in Singapore other than (i) to an institutional investor (as defined in Section 4A of the \nSecurities and Futures Act 2001 of Singapore, as modified or amended from time to time (the “SFA”)) pursuant to \nSection 274 of the SFA or (ii) to an accredited investor (as defined in Section 4A of the SFA) pursuant to and in \naccordance with the conditions specified in Section 275 of the SFA.\nSouth Africa\nDue to restrictions under the securities laws of South Africa, no “offer to the public” (as such term is defined in the \nSouth African Companies Act, No. 71 of 2008 (as amended or re-enacted) (the South African Companies Act)) is \nbeing made in connection with the issue of the shares of Class A common stock in South Africa. Accordingly, this \ndocument does not, nor is it intended to, constitute a “registered prospectus” (as that term is defined in the South \nAfrican Companies Act) prepared and registered under the South African Companies Act and has not been approved \nby, and/or filed with, the South African Companies and Intellectual Property Commission or any other regulatory \nauthority in South Africa. The shares of Class A common stock are not offered, and the offer should not be \ntransferred, sold, renounced, or delivered in South Africa or to a person with an address in South Africa, unless one \nor other of the following exemptions stipulated in section 96(1) applies: \nSection 96(1)(a) the offer, transfer, sale, renunciation or delivery is to:\ni.\npersons whose ordinary business, or part of whose ordinary business, is to deal in securities, as principal or \nagent;\nii.\nthe South African Public Investment Corporation;\niii. persons or entities regulated by the Reserve Bank of South Africa;\niv.\nauthorized financial service providers under South African law;\nv.\nfinancial institutions recognized as such under South African law;\nvi. a wholly-owned subsidiary of any person or entity contemplated in (iii), (iv) or (v), acting as agent in the \ncapacity of an authorized portfolio manager for a pension fund, or as manager for a collective investment \nscheme (in each case duly registered as such under South African law); or\nvii. any combination of the person in (i) to (vi);\nSection 96(1)(b) the total contemplated acquisition cost of the shares of Class A common stock, for any single \naddressee acting as a principal is equal to or greater than ZAR 1,000,000 or such higher amount as may be \npromulgated by notice in the Government Gazette of South Africa pursuant to section 96(2)(a) of the South African \nCompanies Act.\nInformation made available in this prospectus should not be considered as “advice” as defined in the South African \nFinancial Advisory and Intermediary Services Act 2002. \nSouth Korea \nThe shares of Class A common stock offered by this prospectus have not been and will not be registered under the \nFinancial Investments Services and Capital Markets Act of Korea and the decrees and regulations thereunder (the \n“FSCMA”), and the shares of Class A common stock have been and will be offered in Korea as a private placement \nunder the FSCMA. None of the shares of Class A common stock may be offered, sold or delivered directly or \nindirectly, or offered or sold to any person for re-offering or resale, directly or indirectly, in Korea or to any resident\n\n275\nTable of Contents\nof Korea except pursuant to the applicable laws and regulations of Korea, including the FSCMA and the Foreign \nExchange Transaction Law of Korea and the decrees and regulations thereunder (the “FETL”). The shares of Class \nA common stock have not been listed on any of securities exchanges in the world including, without limitation, the \nKorea Exchange in Korea. Furthermore, the purchaser of the shares of Class A common stock will comply with all \napplicable regulatory requirements (including but not limited to requirements under the FETL) in connection with \nthe purchase of shares of Class A common stock. By the purchase of shares of Class A common stock, the relevant \nholder thereof will be deemed to represent and warrant that if it is in Korea or is a resident of Korea, it purchased the \nshares of Class A common stock pursuant to the applicable laws and regulations of Korea.\nSwitzerland \nExcept pursuant to the Swiss public offering described above, the shares of Class A common stock may not be \npublicly offered in Switzerland. In addition, the Class A common stock will not be listed on any trading venue in \nSwitzerland. \nOther than in the context of the Swiss public offering described above, the shares of Class A common stock may \nonly be offered, sold or advertised, directly or indirectly, in or into Switzerland (i) to any investor that qualifies as a \nprofessional client within the meaning of the Swiss Financial Services Act (\"FinSA\") or (ii) in any other \ncircumstances falling within Article 36 FinSA.\nThis document does not constitute a prospectus within the meaning of the FinSA and has not been and will not be \nfiled with, or reviewed or approved by, a Swiss review body pursuant to Article 51 FinSA. This document does not \ncomply with the disclosure requirements applicable to a prospectus within the meaning of the FinSA. This document \nmay not be publicly distributed or otherwise made publicly available in Switzerland.\nTaiwan\nThe shares of Class A common stock have not been and will not be registered with the Financial Supervisory \nCommission of Taiwan pursuant to relevant securities laws and regulations and may not be sold, issued or offered \nwithin Taiwan through a public offering or in circumstances which constitutes an offer within the meaning of the \nSecurities and Exchange Act of Taiwan that requires a registration or approval of the Financial Supervisory \nCommission of Taiwan. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or \notherwise intermediate the offering and sale of the shares of Class A common stock in Taiwan.\nThailand\nThis prospectus does not, and is not intended to, constitute a public offering in Thailand. The shares of Class A \ncommon stock may not be offered or sold to persons in Thailand, unless such offering is made under the exemptions \nfrom approval and filing requirements under applicable laws, or under circumstances which do not constitute an \noffer for sale of the shares Class A common stock to the public for the purposes of the Securities and Exchange Act \nof 1992 of Thailand, nor require approval from the Office of the Securities and Exchange Commission of Thailand.\nUnited Arab Emirates\nThe shares of Class A common stock have not been, and are not being, publicly offered, sold, promoted or \nadvertised in the United Arab Emirates (including the Dubai International Financial Centre) other than in \ncompliance with the laws of the United Arab Emirates (and the Dubai International Financial Centre) governing the \nissue, offering and sale of the shares of Class A common stock. Further, this prospectus does not constitute a public \noffer of securities in the United Arab Emirates (including the Dubai International Financial Centre) and is not \nintended to be a public offer. This prospectus has not been approved by or filed with the Central Bank of the United \nArab Emirates, the Securities and Commodities Authority, Financial Services Regulatory Authority or the Dubai \nFinancial Services Authority.\nUnited Kingdom \nThis prospectus has been prepared on the basis that the offering of the shares of Class A common stock falls within \none of the exceptions specified in Part 1 of Schedule 1 of the Public Offers and Admissions to Trading Regulations\n\n276\nTable of Contents\n2024 (the “POATRs”) and, accordingly, there will not be a prospectus prepared or published for the purposes of the \nPOATRs. This prospectus does not constitute a prospectus for the purposes of the POATRs.\nEach underwriter has represented and agreed that it has not made and will not make an offer of the shares of Class A \ncommon stock which are the subject of this prospectus to the public in the United Kingdom, except that it may make \nan offer: \n•\nat any time to any legal entity which is a qualified investor as defined in paragraph 15 of Schedule 1 to the \nPOATRs;\n•\nat any time to fewer than 150 persons (other than qualified investors as defined in paragraph 15 of Schedule 1 to \nthe POATRs) in the United Kingdom subject to obtaining the prior consent of the relevant underwriters \nnominated by us for any such offer; or\n•\nat any time in any other circumstances falling within Part 1 of Schedule 1 to the POATRs.\nFor the purposes of this provision, the expression an “offer to the public” in relation to the shares of Class A \ncommon stock in the United Kingdom means the communication in any form and by any means of sufficient \ninformation on the terms of the offer and the shares of Class A common stock to be offered so as to enable an \ninvestor to decide to purchase or subscribe for the shares of Class A common stock.\n\n277\nTable of Contents\nLEGAL MATTERS\nThe validity of the shares of Class A common stock offered by this prospectus will be passed upon for us by Gibson, \nDunn & Crutcher LLP, Houston, Texas. Certain legal matters in connection with this offering will be passed upon \nfor the underwriters by Davis Polk & Wardwell LLP, New York, New York.\nEXPERTS\nThe financial statements as of December 31, 2025 and 2024 and for each of the three years in the period ended \nDecember 31, 2025 included in this prospectus have been so included in reliance on the report of \nPricewaterhouseCoopers LLP (which contains an explanatory paragraph relating to the Company’s significant \ntransactions with related parties, as described in Note 18 to the consolidated financial statements), an independent \nregistered public accounting firm, given on the authority of said firm as experts in auditing and accounting.\nWHERE YOU CAN FIND ADDITIONAL INFORMATION\nWe have filed with the SEC a registration statement on Form S-1 under the Securities Act relating to the shares of \nour Class A common stock offered by this prospectus. This prospectus, which constitutes a part of the registration \nstatement, does not contain all of the information set forth in the registration statement or the exhibits and schedules \nthereto. For more information regarding us and the shares of our Class A common stock offered by this prospectus, \nwe refer you to the full registration statement, including the exhibits and schedules filed therewith. This prospectus \nsummarizes certain provisions of certain contracts and other documents filed as exhibits to which we refer you. \nBecause the summaries may not contain all of the information that you may find important, you should review the \nfull text of those documents.\nThe SEC maintains a website at www.sec.gov that contains reports, information statements and other information \nregarding issuers that file electronically with the SEC. Our registration statement, of which this prospectus \nconstitutes a part, can be downloaded from the SEC’s website. As a result of the offering, we will become subject to \nthe reporting requirements of the Exchange Act and will file with or furnish to the SEC periodic reports and other \ninformation. We intend to furnish or make available to our shareholders annual reports containing our audited \nconsolidated financial statements prepared in accordance with GAAP. We also intend to furnish or make available to \nour shareholders quarterly reports containing our unaudited interim financial information, for the first three fiscal \nquarters of each fiscal year. Our website is located at www.spacex.com. Following the completion of this offering, \nwe intend to make our periodic reports and other information filed with or furnished to the SEC available, free of \ncharge, through our website, as soon as reasonably practicable after those reports and other information are \nelectronically filed with or furnished to the SEC. Information contained on our website or linked therein or \notherwise connected thereto does not constitute part of nor is it incorporated by reference into this prospectus or the \nregistration statement of which this prospectus forms a part. We may use our website www.spacex.com/               or \nour X account to make information publicly available for purposes of Regulation FD from time to time.\n\nF-1\nTable of Contents\nINDEX TO FINANCIAL STATEMENTS\nPage\nSpace Exploration Technologies Corp. \nAudited Consolidated Financial Statements\nReport of Independent Registered Public Accounting Firm \n ...................................................................\nF-2\nConsolidated Balance Sheets as of December 31, 2025 and 2024 \n ..........................................................\nF-4\nConsolidated Statements of Operations for the Years Ended December 31, 2025, 2024, and 2023 \n ......\nF-5\nConsolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2025, \n2024, and 2023\n .....................................................................................................................................\nF-6\nConsolidated Statements of Redeemable Convertible Preferred Stock and Shareholders' Equity for \nthe Years Ended December 31, 2025, 2024, and 2023\n \n ........................................................................\nF-7\nConsolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023 \n .....\nF-8\nNotes to Consolidated Financial Statements \n ...........................................................................................\nF-10\nUnaudited Consolidated Financial Statements\nConsolidated Balance Sheets as of March 31, 2026 and December 31, 2025 \n ........................................\nF-63\nConsolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025 \n ..........\nF-64\nConsolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2026 and \n2025 .....................................................................................................................................................\nF-65\nConsolidated Statements of Redeemable Convertible Preferred Stock and Shareholders' Equity for \nthe Three Months Ended  March 31, 2026 and 2025 \n ..........................................................................\nF-66\nConsolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 \n .........\nF-67\nNotes to Consolidated Financial Statements \n ...........................................................................................\nF-69\n\nF-2\nTable of Contents\nReport of Independent Registered Public Accounting Firm \nTo the Board of Directors and Shareholders of Space Exploration Technologies Corp.\nOpinion on the Financial Statements\nWe have audited the accompanying consolidated balance sheets of Space Exploration Technologies Corp. and its \nsubsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of \noperations, of comprehensive income (loss), of redeemable convertible preferred stock and shareholders' equity and \nof cash flows for each of the three years in the period ended December 31, 2025, including the related notes \n(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial \nstatements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 \nand 2024, and the results of its operations and its cash flows for each of the three years in the period ended \nDecember 31, 2025 in conformity with accounting principles generally accepted in the United States of America.\nChange in Accounting Principle\nAs discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it \naccounts for digital assets in 2024.  \nBasis for Opinion\nThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is \nto express an opinion on the Company’s consolidated financial statements based on our audits. We are a public \naccounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are \nrequired to be independent with respect to the Company in accordance with the U.S. federal securities laws and the \napplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. \nThose standards require that we plan and perform the audits to obtain reasonable assurance about whether the \nconsolidated financial statements are free of material misstatement, whether due to error or fraud.\nOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial \nstatements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures \nincluded examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial \nstatements. Our audits also included evaluating the accounting principles used and significant estimates made by \nmanagement, as well as evaluating the overall presentation of the consolidated financial statements. We believe that \nour audits provide a reasonable basis for our opinion.\nSignificant Transactions with Related Parties\nAs discussed in Note 18 to the consolidated financial statements, the Company has entered into significant \ntransactions with related parties.\nCritical Audit Matters\nThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated \nfinancial statements that was communicated or required to be communicated to the audit committee and that (i) \nrelates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our \nespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter \nin any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by \ncommunicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the \naccounts or disclosures to which it relates.\n\nF-3\nTable of Contents\nRevenue Recognition – Estimate of Total Cost at Completion for Certain Contracts Recognized Over Time\nAs described in Notes 2 and 3 to the consolidated financial statements, the Company recognized revenue of $4.1 \nbillion and $11.4 billion for the year ended December 31, 2025 within the Space and Connectivity segments, \nrespectively, a portion of which related to contracts recognized over time using the cost-to-cost input method. Under \nthe cost-to-cost input method, the Company records revenue based upon costs (such as materials and labor hours) \nincurred to date relative to the total estimated cost at completion. Developing the estimated total cost at completion \nfor each performance obligation requires the use of significant management judgment, including assumptions \nregarding (i) launch timing, labor hours, allocation of shared costs for launch vehicles that have been identified as \nreusable for multiple launches, as well as expected technological changes to launch vehicles and spacecraft for \nSpace contracts, and (ii) labor hours, allocation of shared costs used in the production of satellites, satellite material \ncosts, as well as expected technological changes to satellites for Connectivity contracts. The Company recognizes \nchanges in estimated contract revenue or costs at completion and the resulting changes in contract profit on a \ncumulative basis.\nThe principal considerations for our determination that performing procedures relating to revenue recognition – \nestimate of total cost at completion for certain contracts recognized over time is a critical audit matter are (i) the \nsignificant judgment by management in developing the estimate of total cost at completion, including significant \njudgments and assumptions on a contract by contract basis, and (ii) a high degree of auditor judgment, subjectivity, \nand effort in performing procedures and evaluating audit evidence related to management’s estimate of total cost at \ncompletion, including estimated labor hours.\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming \nour overall opinion on the consolidated financial statements. These procedures included, among others, (i) testing \nthe completeness and accuracy of underlying data used by management related to actual costs to date, (ii) testing \nmanagement’s process for developing the estimate of total cost at completion, including evaluating on a test basis, \nthe reasonableness of certain significant judgments and assumptions considered by management specific to each \ncontract, including estimated labor hours. Evaluating the significant judgments and assumptions related to the \nestimates of total cost at completion involved evaluating whether the significant judgments and assumptions used by \nmanagement were reasonable considering (i) management’s historical forecasting accuracy; (ii) evidence to support \nthe relevant aforementioned assumptions; (iii) the consistent application of accounting policies; and (iv) the timely \nidentification of circumstances which may require a modification to a previous estimate.\n/s/PricewaterhouseCoopers LLP\nLos Angeles, California\nMarch 30, 2026, except for the effects of the reorganization of entities under common control and the effects of the \nstock split discussed in Note 1 to the consolidated financial statements and the change in reportable segments \ndiscussed in Note 19 to the consolidated financial statements, as to which the date is May 7, 2026 \nWe have served as the Company’s auditor since 2012.\n\nF-4\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Balance Sheets\n(in millions, except per share data)\nDecember 31, \n2025\n2024\nAssets\nCurrent assets\nCash and cash equivalents \n .............................................................................................................................\n$\n24,747\n$\n11,385\nMarketable securities .....................................................................................................................................\n—\n800\nAccounts receivable, net of allowance for credit losses of $39 and $119 at December 31, 2025 and 2024, \nrespectively \n ...............................................................................................................................................\n1,579\n1,052\nInventory \n \n ........................................................................................................................................................\n2,416\n2,003\nPrepaid expenses and other current assets \n .....................................................................................................\n2,210\n868\nTotal current assets \n \n .....................................................................................................................................\n30,952\n16,108\nProperty, plant, and equipment, net(a)\n ...................................................................................................................\n42,602\n21,147\nFinance lease right-of-use assets \n ..........................................................................................................................\n1,260\n1,686\nIntangible assets, net \n ............................................................................................................................................\n1,548\n2,211\nDigital assets\n .........................................................................................................................................................\n1,637\n1,749\nGoodwill ...............................................................................................................................................................\n11,809\n11,129\nDeferred tax assets\n ................................................................................................................................................\n141\n696\nOther assets\n ...........................................................................................................................................................\n2,130\n2,336\nTotal assets \n ...............................................................................................................................................\n$\n92,079\n$\n57,062\nLiabilities, Redeemable Convertible Preferred Stock, and Shareholders’ Equity\nCurrent liabilities\nAccounts payable \n \n ...........................................................................................................................................\n11,792\n4,413\nDeferred revenue, current \n .............................................................................................................................\n6,111\n5,498\nDebt and finance leases, current (related party of $455 and $- at December 31, 2025 and 2024, \nrespectively) ..............................................................................................................................................\n928\n372\nAccrued expenses and other current liabilities \n \n ..............................................................................................\n2,569\n1,508\nTotal current liabilities\n \n ................................................................................................................................\n21,400\n11,791\nLong-term liabilities \n .............................................................................................................................................\nDeferred revenue, net of current ..........................................................................................................................\n6,005\n4,681\nDebt and finance leases, net of current (related party of $4,052 and $- at December 31, 2025 and 2024, \nrespectively) \n ....................................................................................................................................................\n21,968\n13,421\nOther liabilities \n \n .....................................................................................................................................................\n1,381\n1,365\nTotal liabilities \n \n ..........................................................................................................................................\n50,754\n31,258\nCommitments and contingencies (Note 17)\nRedeemable convertible preferred stock\nRedeemable convertible preferred stock, par value $0.001; 2,351 and 1,997 shares issued; 2,046 and \n1,748 shares outstanding as of December 31, 2025 and 2024, respectively \n .............................................\n38,752\n20,941\nShareholders’ equity\nClass A common stock, par value $0.001; 2,036 and 1,832 shares issued; 1,954 and 1,832 shares \noutstanding as of December 31, 2025 and 2024, respectively \n ..................................................................\n3\n2\nClass B common stock, par value $0.001; 644 and 768 shares issued and outstanding as of December \n31, 2025 and 2024, respectively\n \n ................................................................................................................\n1\n1\nClass C common stock, par value $0.001; 482 and 421 shares issued and outstanding as of December \n31, 2025 and 2024, respectively\n \n ................................................................................................................\n0\n0\nClass D common stock, par value $0.0001; no shares issued and outstanding as of December 31, 2025 \nand 2024, respectively\n \n ...............................................................................................................................\n—\n—\nAdditional paid-in capital \n .....................................................................................................................................\n37,706\n35,865\nAccumulated deficit \n .............................................................................................................................................\n(37,035)\n(32,098)\nAccumulated other comprehensive income \n \n .........................................................................................................\n1,898\n1,093\nTotal shareholders’ equity \n ......................................................................................................................\n2,573\n4,863\nTotal liabilities, redeemable convertible preferred stock, and shareholders’ equity \n .......................\n$\n92,079\n$\n57,062\n__________________\n(a)\nRefer to Note 18, Related Party Transactions for additional details on related party arrangements.\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-5\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Operations\n(in millions, except per share data)\nYear Ended December 31,\n2025\n2024\n2023\nRevenue \n ........................................................................................ $\n18,674\n$\n14,015\n$\n10,387\nCosts and expenses \n ......................................................................\nCost of revenue \n ............................................................................\n9,451\n7,996\n6,110\nResearch and development \n ..........................................................\n8,643\n3,464\n2,105\nSelling, general, and administrative \n .............................................\n2,644\n1,813\n1,665\nRestructuring charges\n ...................................................................\n487\n213\n237\nImpairment \n ...................................................................................\n38\n63\n3,775\nTotal costs and expenses \n ...........................................................\n21,263\n13,549\n13,892\nIncome (loss) from operations \n ....................................................\n(2,589)\n466\n(3,505)\nInterest expense (related party of $66, $-, and $- for December \n31, 2025, 2024, and 2023, respectively) \n .....................................\n(1,945)\n(1,580)\n(1,693)\nInterest income \n ...............................................................................\n492\n371\n249\nOther income (expense), net\n \n ...........................................................\n(177)\n985\n(42)\nIncome (loss) before income taxes \n \n ..............................................\n(4,219)\n242\n(4,991)\nProvision for (benefit from) income taxes \n .....................................\n718\n(549)\n(363)\nNet income (loss) \n .......................................................................... $\n(4,937) $\n791\n$\n(4,628)\nNet income (loss) attributable to shareholders - basic \n ................. $\n(4,937) $\n18\n$\n(4,628)\nNet income (loss) attributable to shareholders - diluted \n .............. $\n(4,937) $\n21\n$\n(4,628)\nNet income (loss) per share of common stock attributable to \ncommon shareholders\nBasic \n ............................................................................................... $\n(1.69) $\n0.01\n$\n(1.68)\nDiluted \n ............................................................................................ $\n(1.69) $\n0.00\n$\n(1.68)\nWeighted average shares used in computing net income (loss) \nper share of common stock\nBasic \n ...............................................................................................\n2,926\n2,848\n2,759\nDiluted \n ............................................................................................\n2,926\n9,956\n2,759\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-6\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Comprehensive Income (Loss)\n(in millions)\nYear Ended December 31,\n2025\n2024\n2023\nNet income (loss) \n \n ......................................................................... $\n(4,937) $\n791\n$\n(4,628)\nOther comprehensive income (loss)\nChange in foreign currency translation adjustments, net of tax \n ....\n805\n(391)\n222\nUnrealized gains (losses) on marketable securities, net of tax\n \n ......\n0\n(1)\n1\nOther comprehensive income (loss) \n ..............................................\n805\n(392)\n223\nComprehensive income (loss) \n .................................................... $\n(4,132) $\n399\n$\n(4,405)\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-7\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Redeemable Convertible Preferred Stock and Shareholders’ Equity\n(in millions) \nRedeemable Convertible Preferred \nStock\nCommon Stock\nShares\nAmount\nShares\nAmount\nAdditional \nPaid-in Capital\nAccumulated \nDeficit\nAccu\nO\nComp\nIn\nBalances at December 31, 2022 \n ....................................\n136\n$\n7,239\n2,742\n$\n3\n$\n35,275\n$\n(28,757)\n$\nShare-based compensation \n ...............................................\n—\n3\n—\n—\n784\n—\nIssuance of redeemable convertible preferred stock \n ........\n750\n750\n—\n—\n—\n—\nCommon stock issued, net of tax withholding \n .................\n—\n—\n249\n0\n(41)\n—\nRepurchase of common stock \n ..........................................\n—\n—\n(11)\n0\n(170)\n—\nNet loss .............................................................................\n—\n—\n—\n—\n—\n(4,628)\nOther comprehensive income (loss) \n \n .................................\n—\n—\n—\n—\n—\n—\nBalances at December 31, 2023 \n ....................................\n886\n$\n7,992\n2,980\n$\n3\n$\n35,848\n$\n(33,385)\n$\nAdjustment for prior periods from adoption of ASU \n2023-08 \n .......................................................................\n—\n—\n—\n—\n—\n496\nShare-based compensation \n ..............................................\n—\n—\n—\n—\n914\n—\nIssuance of redeemable convertible preferred stock \n ........\n862\n13,001\n—\n—\n—\n—\nCommon stock issued, net of tax withholding \n .................\n—\n—\n75\n0\n72\n—\nRepurchase of common and redeemable convertible \npreferred stock \n .............................................................\n0\n(21)\n(46)\n0\n(1,000)\n—\nConversion of redeemable convertible preferred stock \nto common stock ..........................................................\n0\n(31)\n14\n0\n31\n—\nNet income \n ......................................................................\n—\n—\n—\n—\n—\n791\nOther comprehensive income (loss) \n \n .................................\n—\n—\n—\n—\n—\n—\nBalances at December 31, 2024 \n ....................................\n1,748\n$\n20,941\n3,023\n$\n3\n$\n35,865\n$\n(32,098)\n$\nShare-based compensation \n ..............................................\n—\n—\n—\n—\n2,087\n—\nIssuance of redeemable convertible preferred stock \n ........\n299\n17,898\n—\n—\n—\n—\nCommon stock issued, net of tax withholding \n .................\n—\n—\n97\n1\n740\n—\nRepurchase of common stock \n ..........................................\n—\n—\n(69)\n0\n(1,125)\n—\nConversion of redeemable convertible preferred stock \nto common stock ..........................................................\n(1)\n(87)\n28\n0\n87\n—\nTransfer of equity in business combination \n .....................\n—\n—\n0\n0\n52\n—\nNet loss .............................................................................\n—\n—\n—\n—\n—\n(4,937)\nOther comprehensive income (loss) \n \n .................................\n—\n—\n—\n—\n—\n—\nBalances at December 31, 2025 \n ....................................\n2,046\n$\n38,752\n3,079\n$\n4\n$\n37,706\n$\n(37,035)\n$\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-8\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Cash Flows\n(in millions)\nYear Ended December 31,\n2025\n2024\n2023\nCash flows from operating activities\nNet income (loss) \n ........................................................................... $\n(4,937) $\n791\n$\n(4,628)\nAdjustments to reconcile net income (loss) to net cash provided \nby operating activities:\nDepreciation and amortization\n ...................................................\n6,701\n3,824\n2,635\nShare-based compensation \n ........................................................\n1,947\n784\n679\nIntangible asset impairment \n .......................................................\n—\n—\n3,775\nDeferred income taxes \n ...............................................................\n626\n(675)\n(409)\nUnrealized (gain) loss on digital assets \n .....................................\n112\n(955)\n—\nImpairment and loss on disposal of fixed assets, net\n \n .................\n88\n135\n36\nAmortization of debt discount and issuance costs \n .....................\n93\n84\n212\nOther \n ..........................................................................................\n66\n115\n214\nChanges in operating assets and liabilities\nAccounts receivable \n ..............................................................\n(543)\n(347)\n345\nInventory \n ...............................................................................\n(413)\n(309)\n(72)\nPrepaid expenses and other assets \n ........................................\n(673)\n(328)\n41\nAccounts payable \n ..................................................................\n709\n472\n220\nDeferred revenue \n ..................................................................\n1,929\n1,876\n1,695\nOperating lease liabilities, net\n \n ...............................................\n(56)\n(37)\n(15)\nOther liabilities \n .....................................................................\n1,136\n346\n(208)\nNet cash provided by operating activities \n ........................ $\n6,785\n$\n5,776\n$\n4,520\nCash flows from investing activities\nPurchases of property, plant, and equipment (related party of \n$666, $171, and $11 for December 31, 2025, 2024, and 2023, \nrespectively) \n ................................................................................\n(20,737)\n(11,163)\n(4,415)\nCapitalized interest \n .........................................................................\n(169)\n—\n—\nProceeds from product rebates \n .......................................................\n118\n—\n—\nPurchases of marketable securities \n .................................................\n(611)\n(3,542)\n(3,535)\nMaturities of marketable securities \n ................................................\n548\n3,712\n2,731\nProceeds from sales of marketable securities \n .................................\n1,457\n193\n333\nInvestments in unconsolidated affiliates \n ........................................\n(86)\n—\n—\nOther investing activities, net \n .........................................................\n(95)\n4\n19\nNet cash used in investing activities \n .......................................... $\n(19,575) $\n(10,796) $\n(4,867)\nCash flows from financing activities\nPrincipal repayments on finance leases \n ..........................................\n(295)\n(154)\n—\nProceeds from debt and other financing obligations \n ......................\n16,055\n—\n—\nPayment of debt issuance costs \n ......................................................\n(66)\n—\n—\nRepayments on debt and other financing obligations \n ....................\n(6,858)\n(77)\n(112)\nProceeds from issuance of capital stock, net of issuance costs ......\n18,807\n13,101\n774\nProceeds from employee equity award plans \n .................................\n328\n224\n141\n\nF-9\nTable of Contents\nYear Ended December 31,\n2025\n2024\n2023\nPayments for repurchase of common and redeemable convertible \npreferred stock \n ............................................................................\n(1,125)\n(1,021)\n(170)\nTaxes paid related to net share settlement of equity award \n ............\n(496)\n(243)\n(211)\nNet cash provided by financing activities\n .................................. $\n26,350\n$\n11,830\n$\n422\nEffect of exchange rate changes on cash and cash equivalents \n ......\n63\n1\n(2)\nNet change in cash and cash equivalents and restricted cash \n .........\n13,623\n6,811\n73\nCash and cash equivalents and restricted cash, beginning of year \n .\n11,501\n4,690\n4,617\nCash and cash equivalents and restricted cash, end of year \n \n ........... $\n25,124\n$\n11,501\n$\n4,690\nSupplemental disclosures of cash flow information\nCash paid for the following:\nInterest, net of interest capitalized \n ............................................. $\n1,476\n$\n1,500\n$\n1,365\nIncome taxes, net \n ....................................................................... $\n154\n$\n134\n$\n45\nSupplemental schedule of noncash investing and financing \nactivities\nShare-based compensation capitalized in property, plant, and \nequipment, net\n ............................................................................. $\n154\n$\n132\n$\n108\nAcquisition of property, plant, and equipment included in \naccounts payable \n ......................................................................... $\n7,088\n$\n2,481\n$\n505\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-10\nTable of Contents\nSPACE EXPLORATION TECHNOLOGIES CORP.\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n(tables in millions, except per share data) \nNote 1 - Nature of Business\nDescription of Business \nSpace Exploration Technologies Corp. and its wholly owned subsidiaries, collectively referred to as the “Company” \nor “SpaceX,” operate three segments – (i) the Space segment designs, manufactures, and launches reusable rockets \nto provide high cadence, reliable, and affordable access to space at unprecedented scale, (ii) the Connectivity \nsegment operates a worldwide high-speed, low-latency broadband network powered by thousands of Starlink \nsatellites in Low-Earth Orbit, delivering connectivity to millions of consumer, enterprise, and government customers \nthrough our Starlink offering, and (iii) the AI segment operates a vertically integrated AI platform spanning a \nfrontier LLM Grok, AI solutions for consumer and enterprise customers, X — a real-time information, \nentertainment, and free speech platform — and AI computational infrastructure.\nSpaceX is advancing the boundaries of space technology and human spaceflight through its Falcon launch vehicles \nand Dragon spacecraft and is currently developing Starship, a fully reusable transportation system that is designed to \ncarry crew, cargo, satellites, and data centers to Earth orbit, the Moon, Mars, and beyond. \nSpaceX operates Starlink which delivers high-speed, low-latency broadband internet to customers around the globe, \nincluding to those who live in some of the most remote places on Earth. The Company also provides access to \nsatellite-to-mobile texting and voice services to mobile users (referred to as “Starlink Mobile”).\nSpaceX operates a global platform for public conversation known as X (formerly known as Twitter) as well as the \nGrok suite of text and multi-modal AI models, accessible to individual users via online platforms such as x.com and \nto enterprise clients for applications in research, productivity, and decision-making.\nThe Company’s corporate headquarters is located in Starbase, Texas. SpaceX was incorporated in the state of \nDelaware on March 14, 2002 and converted into a corporation organized under the laws of the State of Texas on \nFebruary 14, 2024. \nOn May 4, 2026, the Company effected a five-for-one forward stock split of its authorized, issued, and outstanding \nshares of Class A, Class B, and Class C Common Stock (“2026 Stock Split”). The conversion rate of SpaceX \nRedeemable Convertible Preferred Stock was proportionately adjusted to factor in the 2026 Stock Split. All share \nand per share information has been retroactively adjusted to reflect the 2026 Stock Split for all periods presented. \nOn February 2, 2026, the Company completed its acquisition of X.AI Holdings Corp. (“xAI”), pursuant to which \nxAI became a wholly-owned subsidiary of the Company (“xAI Merger”). Prior to the xAI Merger, on March 28, \n2025, xAI completed its acquisition of X Holdings Corp. (“X”) and X.AI Corp., in which X and X.AI Corp. became \nwholly-owned subsidiaries of xAI (“X Merger”, and collectively with xAI Merger, “Mergers”). X.AI Corp began \noperations in March 2023 and Twitter, Inc. (“Twitter”) was acquired by Mr. Elon Musk in October 2022. The \nMergers were each effected through a share exchange.    \nThe Mergers have been accounted for as reorganizations of entities under common control as Mr. Elon Musk had a \ncontrolling financial interest in the Company, xAI and X through his majority voting interest in each such entity \nduring the years presented in these consolidated financial statements. The Company’s consolidated financial \nstatements have been prepared to reflect the retrospective combination of the net assets of the entities at their \nhistorical carrying amounts for all periods presented. No new goodwill or other intangible assets have been recorded \nand all historical related party transactions between the entities have been eliminated in consolidation. The capital \nstock and shareholders’ equity for all periods presented reflects a continuation of the historical SpaceX capital stock \nand shareholders’ equity, combined with the historical capital stock and shareholders’ equity of X and xAI merged \nunder common control, as adjusted by the respective exchange ratios used to effect the Mergers, except for xAI’s \nhistorical redeemable convertible preferred stock. This presentation constitutes a change in reporting entity. Refer to\n\nF-11\nTable of Contents\nNote 13, Redeemable Convertible Preferred Stock and Shareholders’ Equity for additional details. \nAs the consolidated financial statements already reflect the reorganization of entities under common control for all \nperiods presented, separate financial statements of xAI and X are not provided.\nNote 2 - Summary of Significant Accounting Policies\nBasis of Presentation\nThe consolidated financial statements are presented in accordance with generally accepted accounting principles \n(“GAAP”) in the United States of America (“U.S.”).\nPrinciples of Consolidation\nThe consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All \nintercompany balances and transactions have been eliminated in consolidation.\nUse of Estimates\nThe preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make \nestimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent \nassets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and \nexpenses during the reporting period. Actual results could differ from those estimates. Amounts which are subject to \nsignificant judgment and use of estimates include revenues recognized over time using the cost-to-cost input \nmethod, the determination of valuation allowances associated with deferred tax assets and estimates of tax liabilities, \nreserves for excess and obsolete inventory, fair value of indefinite-lived intangible assets and goodwill, useful lives \nof property, plant, and equipment, the determination of incremental borrowing rate for lease liabilities, litigation and \nsettlement costs, and the valuation and assumptions underlying share-based compensation. On an ongoing basis, the \nCompany evaluates its estimates compared to historical experience and current trends, which forms the basis for \nmaking judgments about the carrying value of assets and liabilities. In addition, the Company engages valuation \nspecialists to assist in the valuation of equity instruments.\nConcentration of Supplier Risk\nCertain materials and products that are key inputs in the Company’s Space, Connectivity, and AI segments are \navailable from a limited number of suppliers, including sole or limited-source suppliers; and the Company’s direct \nchip suppliers are dependent on a concentrated group of advanced semiconductor fabrication facilities. The \nCompany believes that alternative suppliers are available for many, but not all, of these products and services. The \ninability of these suppliers to deliver necessary components of the products in a timely manner and at prices, quality \nlevels, and volumes acceptable to the Company, or interruptions in supply of materials or products on which these \nsuppliers rely, could have an adverse effect on the Company’s ability to meet customer demands and contractual \nobligations, to execute on its growth strategy, or to manage its expenses or timelines as expected, which could \nadversely impact the Company’s financial condition and operating results.\nCash and Cash Equivalents and Restricted Cash\nCash and cash equivalents consist of cash in checking accounts, money market accounts, and certificates of deposit \nat high quality financial institutions primarily in the U.S. All highly liquid investments with an original maturity of \nthree months or less at the date of purchase are considered to be cash equivalents. The Company maintains certain \ncash and cash equivalents for which the withdrawal or use is restricted. The restricted cash and cash equivalents are \ngenerally held in separate, dedicated accounts required to secure letters of credit related to various customer, \ninsurance, and facility lease agreements.\n\nF-12\nTable of Contents\nThe Company’s total cash and cash equivalents and restricted cash, as presented in the consolidated statements of \ncash flows, are as follows:\nYear Ended December 31,\n2025\n2024\n2023\nCash and cash equivalents \n .............................................................. $\n24,747\n$\n11,385\n$\n4,620\nRestricted cash included in prepaid expenses and other current \nassets \n ...........................................................................................\n182\n23\n28\nRestricted cash included in other assets .........................................\n195\n93\n42\nTotal as presented in the consolidated statements of cash \nflows \n .......................................................................................... $\n25,124\n$\n11,501\n$\n4,690\nMarketable Securities\nThe Company’s marketable securities consist primarily of debt securities of the U.S. Government, time deposits and \ncertificates of deposits, and are classified and accounted for as either available-for-sale or held-to-maturity. \nManagement determines the classification of its investments at the time of purchase and reevaluates the \nclassification at each balance sheet date. Marketable securities are classified as held-to-maturity when the Company \nhas the positive intent and ability to hold the securities to maturity and are carried at cost. The Company’s available-\nfor-sale investments in marketable securities are recorded at fair value, with any unrealized gains and losses, net of \ntaxes, reported as a component of accumulated other comprehensive income (loss) in shareholders’ equity until \nrealized. Realized gains and losses on the sale of available-for-sale marketable securities are recorded in Other \nincome (expense), net. Interest on marketable securities is included in Interest income. \nThe Company classifies its marketable securities as either short-term or long-term based on each instrument’s \nunderlying contractual maturity date. Marketable securities with maturities of 12 months or less from the balance \nsheet date are classified as short-term, and maturities greater than 12 months from the balance sheet date are \nclassified as long-term and included in Other assets.\nAccounts Receivable, Unbilled Receivables, and Allowance for Credit Losses\nThe Company extends credit in the normal course of business to its customers and performs credit evaluations on a \ncase-by-case basis. The Company generally does not obtain collateral or other security to secure accounts receivable. \nBilled receivables are recorded at their carrying amount, net of allowance for credit losses, and do not bear interest. \nUnbilled receivables is comprised principally of revenue recognized on contracts that are not contractually billable at \nthe balance sheet date.\nThe allowance for credit losses is established through a provision for bad debt expense which is recorded in Selling, \ngeneral, and administrative expense in the consolidated statements of operations. The Company determines the \nadequacy of its allowance for credit losses by considering a number of factors including: age of invoices, each \ncustomer’s expected ability to pay and collection history, customer-specific information, and current economic \nconditions that may impact a customer’s ability to pay. Accounts receivable are written off when they are deemed \nuncollectible.\nFair Value Measurement\nFinancial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair \nValue Measurement, states that fair value is an exit price, representing the amount that would be received to sell an \nasset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a \nmarket-based measurement that should be determined based on assumptions that market participants would use in \npricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes which inputs should be used in \nmeasuring fair value, is comprised of:\nLevel I\nObservable inputs such as quoted prices in active markets\n\nF-13\nTable of Contents\nLevel II\nInputs other than quoted prices in active markets that are observable either directly or indirectly\nLevel III\nUnobservable inputs for which there is little or no market data\nThe fair value hierarchy requires the use of observable market data when available in determining fair value. The \nCompany’s financial assets only include cash equivalents, certain restricted cash accounts, digital assets and \nmarketable securities that are measured and recorded at fair value on a recurring basis. The carrying amounts of the \nCompany’s other financial instruments, including cash, accounts receivable, and accounts payable approximate fair \nvalue because of their short maturities. The carrying value of financing obligations approximate fair value based on \nthe interest rate remaining relatively consistent from the dates these arrangements were initially entered into and/or \nthe overall materiality of the related liability balances.\nLaunch Vehicles and Spacecraft\nThe Company has four types of launch vehicles - Falcon 9, Falcon Heavy, Dragon, and Starship.  Falcon 9 and \nFalcon Heavy are comprised of the following significant components: boosters (also known as first stages), second \nstages, Merlin engines, and fairings.  Boosters, fairings, and Merlin engines are reusable and are classified as \nProperty, plant, and equipment, net.  The second stages are not reusable and are recorded as inventory until they are \nlaunched for point-in-time revenue transactions or assigned for over-time revenue transactions.  Dragon is composed \nof a fully reusable capsule that is classified as Property, plant, and equipment, net. Starship is a fully reusable rocket \ncomposed of boosters, ships, and Raptor engines and is currently in the development stage. A majority of Starship \ncosts are expensed to Research and development as incurred.\nInventory\nInventory consists primarily of raw materials and work-in-progress used in the production of launch vehicles and \nStarlink Kits, and finished goods for Starlink Kits, Falcon 9 and Falcon Heavy second stages awaiting launch. \nInventory is computed using standard cost or weighted average, which approximates actual cost on a first-in, first-\nout basis and is stated at the lower of cost or net realizable value. The Company records inventory write-downs in \nCost of revenue in the consolidated statements of operations for estimated obsolescence or unmarketable inventories \nbased upon assumptions about future demand and design, and technological or other changes.\nProperty, Plant, and Equipment, net\nProperty, plant, and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the \nstraight-line method over the estimated useful lives of the assets except flight vehicles, which is computed based on \nthe expected number of average flights for each flight vehicle. Leasehold improvements are depreciated over the \nshorter of their estimated useful lives or the related lease term. Management periodically reviews these useful life \nestimates with engineering and operations teams and revises them as additional data becomes available.\nThe Company estimates the useful lives of its satellite assets based on engineering studies, historical on-orbit \nperformance, propellant life, utilization patterns, design enhancements across generations, and planned transitions to \nnewer satellite technology. The Company estimates broadband satellites to have a five-year useful life and the first \ngeneration mobile satellites to have a three-year useful life. \nThe Company estimates the expected flights for its flight vehicle hardware based on three key criteria: (1) the \ncontinued ability to successfully recover and refurbish the hardware for additional flights, (2) the continued \neconomic feasibility of using the hardware on incremental flights, supported by declining refurbishment costs and \nsensitivity analyses, and (3) customer acceptance for reflown hardware as evidenced by the Company’s launch \nmanifest. \nExpenditures for maintenance and repairs that do not extend the lives of the respective assets are expensed as \nincurred while significant refurbishment, renewals, and enhancements that increase the functionality, output or \nexpected life of an asset are capitalized and depreciated ratably over the identified useful life.\n\nF-14\nTable of Contents\nSatellites include costs to build the satellites (parts, labor, and allocated overhead) as well as capitalized launch costs \nincurred by the Space segment to launch the satellites to orbit, which include an allocation of the flight vehicle \nhardware costs.  \nThe Company capitalizes certain interest costs associated with significant acquisition or construction of certain \nProperty, plant, and equipment, net. The Company begins to capitalize qualified interest cost once activities \nnecessary to get the asset ready for its intended use have commenced. The Company calculates qualified interest \ncapitalization using the average amount of accumulated expenditures during the period the asset is being prepared \nfor its intended use and a capitalization rate which is derived from the Company’s weighted average borrowing rate \nduring such time, in the absence of specific borrowings related to the significant long term construction projects. \nThe Company ceases capitalization on any portions substantially completed and ready for their intended use. \nCapitalized interest is considered a part of the assets’ historical cost, and depreciates over the estimated useful lives \nof the underlying assets. \nThe Company evaluates impairment of its Property, plant, and equipment assets at the lowest level for which \nidentifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company \nreviews Property, plant, and equipment for impairment whenever events or circumstances indicate that the carrying \nvalue of an asset or asset group may not be recoverable. If estimated future cash flows are less than the carrying \nvalue of the asset or asset group, an impairment charge is recognized to the extent its carrying value exceeds its \nestimated fair value. Routine asset disposals, scrapping, gateway decommissions, and other recurring operational \nlosses are charged to Cost of revenue or Selling, general, and administrative expenses depending on the nature of the \nassets, or to impairment if the impairment is considered to be outside the normal course of business. \nThe estimated useful lives of the Company’s Property, plant, and equipment, net are as follows:\nClassification\nEstimated Useful Life\nServers and networking equipment \n ................................... 5 - 6 years\nSatellites \n ............................................................................ 3 - 5 years\nMachinery and equipment \n ................................................. 3 - 10 years\nFlight vehicle hardware \n ..................................................... 5 - 25 flights\nData center infrastructure \n .................................................. 20 - 25 years\nLaunch sites \n ....................................................................... 7 - 20 years\nBuildings and improvements \n ............................................. 30 years\nLeasehold improvements \n ................................................... Shorter of 7 - 20 years or the life of the lease\nLeases\nThe Company leases facilities, corporate offices, data centers, and manufacturing equipment primarily in the U.S. \nunder various operating and finance leases. In addition, the Company enters into various lease agreements for its \nsatellite gateway sites throughout the world. \nThe Company determines whether an arrangement is or contains a lease at inception. If a lease exists, any lease \narrangements with contractual terms longer than twelve months are classified as either an operating or finance lease. \nFinance leases are generally those leases that allow the Company to substantially utilize or pay for the entire asset \nover its estimated life. All other leases that do not meet any of the criteria for finance lease classification are \nclassified as operating leases. \nLeases with a lease term of twelve months or less are not recorded on the consolidated balance sheets and are \nexpensed on a straight-line basis over the lease term in the consolidated statements of operations.\nCertain lease agreements include options that grant the Company the ability to renew or extend the lease term, or \nearly terminate the lease. When determining the lease term, the Company does not include renewal or early \ntermination options unless they are deemed to be reasonably certain of being exercised at the lease commencement \ndate.\n\nF-15\nTable of Contents\nUpon lease commencement, the Company recognizes a lease liability measured at the present value of the fixed \nfuture minimum lease payments and a right-of-use asset for an amount equal to the lease liability, adjusted by \nprepaid and accrued rent, lease incentives, and initial direct costs. The Company has elected the practical expedient \nto not separate lease and non-lease components. Operating lease expense is recognized on a straight-line basis over \nthe lease term, with the cost presented as a component of Cost of revenue, Research and development, or Selling, \ngeneral, and administrative expenses in the consolidated statements of operations depending on the nature of the \noperating lease. Finance lease cost is composed of a separate interest component and amortization component. The \ninterest component of a finance lease is included in Interest expense in the consolidated statements of operations and \nthe amortization component of a finance lease is included in Cost of revenue, Research and development, or Selling, \ngeneral, and administrative expenses in the consolidated statements of operations depending on the nature of the \nfinance lease. \nThe Company’s leases generally do not provide information about the rate implicit in the lease. Therefore, the \nCompany utilizes an incremental borrowing rate to calculate the present value of future lease obligations. The \nCompany’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with \nsimilar terms and payments, and in economic environments where the leased asset is located.\nGoodwill and Indefinite-Lived Intangible Assets\nGoodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and the \nliabilities assumed in connection with a business combination. Goodwill and indefinite-lived intangible assets are \nnot amortized but rather, are tested for impairment annually on October 1 and more frequently if events and \ncircumstances indicate that the asset might be impaired. Events that could indicate impairment of goodwill and other \nindefinite-lived intangible assets that trigger an impairment assessment include, but are not limited to, adverse \neconomic market conditions, long-term declining industry outlook conditions, entity-specific financial \nunderperformance, changes in the use of the asset, and other adverse legal and regulatory events. Goodwill is tested \nfor impairment at the reporting unit level. \nThe Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair \nvalue of a reporting unit or indefinite-lived intangible asset is less than its carrying value and if so, the Company \nperforms a quantitative test. Impairment is recognized when the quantitative assessment results in the carrying value \nexceeding the fair value. The reporting unit’s estimated fair value is determined on the basis of discounted future \ncash flows and market approach using the guideline public company method. \nThe Company conducted its annual goodwill impairment test and no goodwill impairments were identified for the \nyears ended December 31, 2025, 2024, and 2023. Refer to Note 6, Intangible Assets and Goodwill for additional \ndiscussion on indefinite-lived intangible assets.\nDigital Assets\nThe Company has ownership of and control over its digital assets, which consist of bitcoin, and utilizes, and expects \nto continue to utilize, third-party custodians to hold its bitcoin. \nThe Company determines and records the fair value of its bitcoin based on quoted prices on the active exchange that \nthe Company has determined is the principal market for bitcoin (Level I inputs). The cost of bitcoin is based upon \nthe specific identification method. Realized and unrealized gains and losses are recorded to Other income (expense), \nnet in the Company’s consolidated statements of operations.  \nThe Company adopted Accounting Standards Update No. 2023-08, Intangibles—Goodwill and Other—Crypto \nAssets (Subtopic 350-60) (“ASU 2023-08”), using a modified retrospective approach effective January 1, 2024. The\n\nF-16\nTable of Contents\ncumulative effect of the changes made on the Company’s January 1, 2024 consolidated balance sheet for the \nadoption of ASU 2023-08 were as follows:\nBalance at \nDecember 31, \n2023\nAdjustment from \nadoption of ASU \n2023-08\nBalance at \nJanuary 1, 2024\nAssets\nDigital assets \n .................................................................................. $\n299\n$\n496\n$\n794\nShareholders’ Equity\nAccumulated deficit ....................................................................... $\n(4,664) $\n496\n$\n(4,168)\nLoss Contingencies\nThe Company is currently involved in, and may in the future be involved in, legal proceedings, claims, \ninvestigations, and government inquiries and investigations arising in the ordinary course of business. The Company \nrecords a liability when it believes that it is both probable that a loss has been incurred and the amount or range can \nbe reasonably estimated. If the Company determines there is a reasonable possibility that it may incur a loss and the \nloss or range of loss can be estimated, it discloses the possible loss to the extent material. Significant judgment is \nrequired to determine both probability and the estimated amount. The Company reviews these provisions on a \nregular basis and adjusts these provisions accordingly to reflect the impact of negotiations, settlements, rulings, \nadvice of legal counsel, and updated information. Legal fees are expensed as incurred.\nJoint Ventures and Investments\nThe Company has made strategic investments in joint ventures. The Company evaluates each investment to \ndetermine if the investee is a variable interest entity, and, if so, whether the Company is the primary beneficiary of \nthe variable interest entity. The Company has determined, as of December 31, 2025, there were no variable interest \nentities required to be consolidated in the Company’s consolidated financial statements. The Company’s investments \nin unconsolidated affiliates are primarily non-marketable equity securities without readily determinable fair values. \nThe Company accounts for each of its investments in unconsolidated affiliates either under equity method \naccounting, fair value, or by adjusting the carrying value of its non-marketable equity securities to fair value upon \nobservable transactions for identical or similar investments of the same issuer or upon impairment (referred to as the \nmeasurement alternative). The investments in unconsolidated affiliates are included within Other assets on the \nconsolidated balance sheets. Gains and losses on the Company’s non-marketable equity securities are recognized in \nOther income (expense), net in the consolidated statements of operations. Refer to Note 9, Investments in \nunconsolidated affiliates for additional details. \nRevenue Recognition\nBelow describes the Company’s significant revenue recognition policies by segment. \nSpace Segment\nThe Company’s Space segment generates revenue primarily through (i) Launch Services for the deployment of \npayloads to their intended orbits for both commercial and government customers utilizing Falcon 9 and Falcon \nHeavy, and (ii) Launch and Development for the development of spacecraft and provision of launch and mission \nservices for government agency space programs utilizing Falcon 9, Falcon Heavy, Starship, and Dragon. \nSpace revenue is derived from fixed-price contracts related to the development and provision of launch services for \nthe deployment of spacecraft and other payloads to its intended orbit for both commercial customers and \ngovernmental agency space programs. The Company recognizes revenue as control is transferred to the customer, \neither “over time” or at a “point in time”. The Company recognizes revenue over time for Launch and Development  \ncontracts when the Company’s performance on the contract creates an asset with no alternative use and when the \nCompany has an enforceable right to payment for performance to date. The Company measures progress on these\n\nF-17\nTable of Contents\ncontracts using the cost-to-cost input method, as the Company believes this represents the most appropriate measure \ntowards satisfaction of its performance obligation. Under the cost-to-cost input method, the Company records \nrevenue based upon costs (such as materials and labor hours) incurred to date relative to the total estimated cost at \ncompletion. For Launch Services contracts where revenue is recognized at a point in time, due to the \ninterchangeability of flight hardware and minimal unique engineering costs, revenue and costs are deferred and not \nrecognized until the launch or deployment of the customer’s spacecraft to its intended orbit.\nThe Company’s contracts are complex and require the Company to estimate total costs to perform over the term of \nthe contracts, as well as the measurement of progress towards completion for each performance obligation. \nDeveloping the estimated total cost at completion for each performance obligation requires the use of significant \nmanagement judgment, including assumptions regarding launch timing, labor hours, allocation of shared costs for \nlaunch vehicles that have been identified as reusable for multiple launches, as well as expected technological \nchanges to launch vehicles and spacecraft. The Company recognizes changes in estimated contract revenue or costs \nat completion and the resulting changes in contract profit on a cumulative basis.  \nConnectivity Segment\nThe Company’s Connectivity segment generates revenue primarily through broadband and Starlink Mobile services \nto consumers, and enterprise and government customers throughout 156 markets.\nSubstantially all of the Company’s contracts with Starlink customers contain multiple performance obligations. \nThese performance obligations typically include (i) the broadband services provided through Starlink and (ii) the \nsale of the Starlink Kit (inclusive of the terminal). For customer contracts that include multiple performance \nobligations, the Company accounts for individual performance obligations if they are distinct. The transaction price \nis allocated to each performance obligation based on its standalone selling price. The Company determines the \nstandalone selling price based on the price at which the good or service is sold separately on a standalone basis to \nsimilar customers in similar locations. Starlink Mobile services have one performance obligation.  \nThe Company’s performance obligation to provide broadband and Starlink Mobile services is satisfied over time as \nthe customer simultaneously receives and consumes the benefits provided.  The Company generates service revenue \nby (i) fixed price services that require advanced or recurring monthly payments by the customer or (ii) variable \npriced services based on actual data usage of the Starlink broadband.  The amounts received from customers for \nadvanced payment for broadband and Starlink Mobile service are included in deferred revenue on the Company’s \nconsolidated balance sheets and revenue is recognized either ratably over the subscription term or based on actual \ndata usage. The Company’s contracts are generally month to month and the revenue recognized for these recurring \ncustomers is equal to the amount billed in that month.\nThe Company’s performance obligation to provide the Starlink Kit and other related hardware is satisfied at the \npoint in time when control is transferred to the customer. In almost all circumstances, control passes to the customer \nupon delivery of the Starlink Kit and other related hardware to the customer, or in the instance of certain enterprise \ncustomers, when it is installed. Starlink Kit revenue is reported net of sales returns and chargebacks. Shipping and \nhandling charges are included in the transaction price. The Company recognizes shipping and handling activities as \nfulfillment activities and not as a separate performance obligation. \nThe Company recognizes revenue over time for certain contracts related to the Starshield business that are long-term \nin nature using the cost-to-cost input method.  The Company records revenue based upon costs (such as materials \nand labor hours) incurred to date relative to the total estimated cost at completion. \nThe Company’s Starshield contracts are complex and require the Company to estimate the total costs to perform \nover the term of the contracts, as well as the measurement of progress towards completion for each performance \nobligation. Developing the estimated total cost at completion for each performance obligation requires the use of \nsignificant management judgment, including assumptions regarding labor hours, allocation of shared costs used in \nthe production of satellites, satellite material costs, as well as expected technological changes to satellites. The \nCompany recognizes changes in estimated contract revenue or costs at completion and the resulting changes in \ncontract profit on a cumulative basis.\n\nF-18\nTable of Contents\nAI Segment\nThe AI segment generates revenue from the sale of advertising and from AI solutions and infrastructure services, \nwhich include (i) subscription offerings, (ii) data licensing arrangements, and (iii) API access to Grok models. \nRevenue from advertising is recognized in the period in which the advertising is delivered, as evidenced by a user \nengaging with the ad in a manner that satisfies the advertiser’s selected engagement criteria. The Company evaluates \nwhether it acts as principal or agent when third parties are involved. For advertising products sold directly through \nits X platform, the Company controls the specified ad services prior to transfer to the advertiser, is responsible for \nserving the advertisements, and fulfills the advertiser’s engagement criteria. Accordingly, it acts as principal and \nrecognizes revenue on a gross basis. For advertising sold through supply side platform (“SSP”) partners, the \nCompany receives a percentage share of gross advertising spend. The SSP partner controls the advertising inventory \nprior to its transfer to the advertisers, is primarily responsible for fulfilling the performance obligation to the \nadvertiser, and has discretion in pricing. As a result, the Company acts as agent and recognizes revenue on a net \nbasis.\nSubscription revenue is recognized ratably over the period of the subscription term. \nData licensing arrangements grant customers a right to access, search, and analyze the Company’s historical and \nreal-time intellectual property (“IP”) on the X platform through the developer channel for a defined period. These \narrangements may contain a single performance obligation (satisfied at a point in time for historical IP or over time \nfor future IP) or multiple performance obligations satisfied separately. For arrangements with a fixed monthly fee \nand a single future IP performance obligation, revenue is recognized on a straight-line basis over the period in which \nthe Company provides the data. When such arrangements contain multiple performance obligations, the Company \nallocates revenue on a relative basis between the performance obligations based on standalone selling price based on \ndirectly observable standalone transactions and recognizes revenue as the performance obligations are satisfied. For \ncertain data licensing arrangements, the Company charges customers based on the amount of sales they generate \nfrom downstream customers using its data. For arrangements with a minimum guarantee and a single future IP \nperformance obligation, the minimum guarantee is recognized on a straight-line basis over the period. For \narrangements with a minimum guarantee and two or more performance obligations, the Company allocates revenue \non a relative basis between the performance obligations based on standalone selling price based on directly \nobservable standalone transactions and recognizes revenue as each performance obligation is satisfied. Any royalties \nin excess of minimum guarantees, if any, are recognized over the contract term, on a straight-line, on a cumulative \ncatch-up basis. \nFor the Company’s API services, the primary performance obligation is to stand ready to provide customers with \naccess to the platform to process data through token-based inputs and utilize compute hours for outputs. Revenue is \nrecognized ratably on a straight-line basis over the contract term for subscription arrangements that provide stand-\nready access. For usage-based arrangements, revenue is recognized as the services are consumed (i.e., as tokens are \nprocessed or compute hours are utilized).\nFor all segments, the Company records payment processing fees for its credit card sales within Cost of revenue. \nTaxes collected from customers and remitted to government authorities are not included in the transaction price. The \nCompany expenses sales commissions as incurred when the amortization period is one year or less within Selling, \ngeneral, and administrative expenses in the consolidated statements of operations.\nCost of Revenue\nCost of revenue includes the cost of materials, depreciation and amortization, shipping and handling, payment \nprocessor fees, customs and duties, revenue share costs, infrastructure costs, allocated overhead, and employee \ncompensation costs (including salaries, benefits, and share-based compensation). Infrastructure costs consist \nprimarily of rocket, kit, and satellite manufacturing facilities and data center costs related to the Company’s \ncolocated facilities, which include lease and hosting costs, related support and maintenance costs, energy and \nbandwidth costs, and public cloud hosting costs.\n\nF-19\nTable of Contents\nWarranty on Starlink Kits\nThe Company offers a standard product warranty for a period of one to two years on Starlink Kits. The Company \nhas an obligation to either repair or replace the defective Starlink Kit. At the time revenue is recognized, an estimate \nof future warranty costs is recorded as a component of Cost of revenue. Factors that affect the warranty obligation \ninclude historical as well as current product failure rates and costs incurred in correcting product failures. Warranty \nexpenses and related liabilities are not material to the consolidated financial statements. \nResearch and Development Expenses\nThe Company sponsors various research and development projects, whose costs are expensed as incurred. Research \nand development (“R&D”) expenses consist of cost of materials, employee compensation costs (including salaries, \nbenefits, and share-based compensation), contractor compensation expenses, cloud computing expenses, data \nservices, equipment lease expenses, depreciation for R&D equipment and allocated overhead. R&D costs also \ninclude certain expenses related to the development of features and modules created through engineering services \nfor the Company’s products, where the Company retains the associated intellectual property.\nSoftware Development Costs\nThe Company expenses software development costs marketed under on-premise perpetual license agreements. Costs \nincurred prior to the establishment of technological feasibility are expensed as research and development costs. Due \nto the nature of the Company’s development cycle, technological feasibility typically occurs shortly before the \nproduct is available for general release. All software development costs for the years ended December 31, 2025, \n2024, and 2023 were expensed as incurred.\nShare-Based Compensation\nThe fair value of stock options, restricted share units (“RSUs”) and restricted share awards (“RSAs”) with service \nand/or performance conditions and the employee share purchase plan (“ESPP”) are estimated on the grant or \noffering date. The fair value of RSUs, RSAs, and ESPP is determined based on the fair value of the Company’s \ncommon stock on the date of grant and the fair value of stock options is determined using the Black-Scholes option-\npricing model. The Black-Scholes option-pricing model requires inputs such as the fair value of the Company’s \ncommon stock, risk-free interest rate, expected award term and expected share price volatility.\nShare-based compensation expense for equity awards with performance conditions is recognized over the requisite \nservice period when the vesting of the award becomes probable. Share-based compensation expense is recognized \non a straight-line basis for equity awards with only a service condition and on a graded vesting basis for equity \nawards with a performance condition. The Company accounts for forfeitures as they occur rather than on an \nestimated basis. \nThe fair value and derived service period of awards granted to the Company’s CEO with market, service, and \nperformance conditions are estimated on the grant date using a Monte Carlo simulation model. A Monte Carlo \nsimulation model requires inputs such as fair value of the Company’s common stock, the risk-free interest rate, \nexpected award term, expected share dilution and expected share price volatility. These inputs, which are subjective \nand generally require judgment, are unique to each award based on the best available information at the valuation \ndate. For these awards, share-based compensation expense is not recognized until the performance condition is \nprobable. Once the performance condition is met, share-based compensation is recorded based on the requisite \nservice period associated with the probable performance condition.\nAdvertising Expense\nThe Company expenses the cost of advertising and other promotional expenditures to primarily market Starlink \nservices as incurred. For the years ended December 31, 2025, 2024, and 2023, advertising expenses included in \nSelling, general, and administrative expenses on the consolidated statements of operations are $69 million, $31 \nmillion, and $29 million, respectively.\n\nF-20\nTable of Contents\nNet Income (Loss) per Share of Common Stock Attributable to Common Shareholders\nNet income (loss) per share attributable to common shareholders is computed using the two-class method required \nfor participating securities. Under this method, net income is allocated to common shareholders and participating \nsecurities based on their respective rights to receive dividends as if all earnings for the period had been distributed. \nCertain series of the Company’s redeemable convertible preferred stock are considered participating securities \nbecause they are entitled to receive dividends on an as-converted basis if and when dividends are declared on \ncommon stock. These securities do not participate in net losses. The Company’s classes of common stock have \nidentical economic rights, resulting in the same net income (loss) per share for each class. Accordingly, the \nCompany presents a single net income (loss) per share for all classes of common stock. \nDiluted net (loss) income per share is computed based on the more dilutive of (i) the two-class method or (ii) the if-\nconverted method. Potentially dilutive shares from outstanding share-based compensation awards, including stock \noptions and restricted stock units, are included when calculating diluted net income (loss) per share of attributable to \ncommon shareholders using the treasury stock method when their effect is dilutive.\nRefer to Note 13, Redeemable Convertible Preferred Stock and Shareholders’ Equity for additional details of the \nCompany’s preferred and common stock. \nIncome Taxes\nThe Company utilizes the asset and liability method of accounting for income taxes as set forth in ASC Topic 740, \nIncome Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized using enacted tax \nrates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. \nASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that \nsome portion or all of the net deferred tax assets will not be realized. The Company’s ability to realize deferred tax \nassets is assessed at each year-end and a valuation allowance is established if necessary. The factors used to assess \nthe likelihood of realization may include forecasts of future taxable income, future reversal of existing taxable \ntemporary differences, and available tax planning strategies that could be implemented to realize net deferred tax \nassets.\nThe Company applies the provisions of ASC 740-10, which requires the Company to recognize in the consolidated \nfinancial statements the impact of a tax position only if it is more likely than not to be sustained upon examination \nbased on the technical merits of the position. The Company recognizes interest and penalties related to uncertain tax \npositions in income tax expense.\nIn December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740) \n(“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate \nreconciliation as well as additional information on income taxes paid. The Company adopted this ASU on a \nprospective basis effective January 1, 2025. Refer to Note 16, Income Taxes for the inclusion of new disclosures \nrequired.\nInvestment Tax Credits\nThe Company recognizes investment tax credits when there is reasonable assurance that the credit will be received \nand the Company will comply with the conditions specified in the agreement or statutory requirements. The \nCompany records capital-related credits as a reduction to Property, plant, and equipment, net within the consolidated \nbalance sheets and recognizes a reduction to depreciation expense over the useful life of the corresponding acquired \nasset. \nForeign Currency\nThe reporting currency of the Company is the United States (“U.S.”) dollar. The Company determines the functional \nand reporting currency of each of its international subsidiaries based on the primary currency in which they operate. \nIf the functional currency is not the U.S. dollar, the Company recognizes a cumulative translation adjustment created \nby the different rates the Company applies to current period income or loss and the balance sheet. For each\n\nF-21\nTable of Contents\nsubsidiary, the Company applies the monthly average functional exchange rate to its monthly income or loss and the \nmonth-end functional currency rate to translate the balance sheet.\nForeign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions \ndenominated in currencies other than the functional currency. Transaction gains and losses are recognized in Other \nincome (expense), net in the consolidated statements of operations. Net foreign currency transaction gains (losses) \nwere not material to the consolidated financial statements.\nRecent Accounting Pronouncements\nIn November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic \n220-40). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of \ninventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This \nASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. \nThe ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years \nbeginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated \nfinancial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all \nprior periods presented in the consolidated financial statements. This ASU will likely result in the required \nadditional disclosures being included in the consolidated financial statements, once adopted. The Company is  \ncurrently evaluating the provisions of this ASU.\nIn July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement \nof Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical \nexpedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of \nthe asset when estimating expected credit losses for current classified accounts receivable and contract assets. This \nupdate is effective for annual periods beginning after December 15, 2025, including interim periods within those \nfiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date. Early \nadoption is permitted. The Company is currently evaluating the provisions of this ASU and does not expect this \nASU to have a material impact on the consolidated financial statements.\nIn September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software \n(Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software . The ASU simplifies the \ncapitalization guidance by removing all references to prescriptive and sequential software development stages \n(referred to as “project stages”) throughout ASC 350-40. The ASU is effective for annual periods beginning after \nDecember 15, 2027, and interim periods within those fiscal years. Adoption of this ASU can be applied \nprospectively for reporting periods after its effective date; or follow a modified transition approach that is based on \nthe status of the respective projects and whether software costs were capitalized before the date of adoption; or \nretrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is \npermitted. The Company is currently evaluating the provisions of this ASU and does not expect this ASU to have a \nmaterial impact on the consolidated financial statements.\nIn December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for \nGovernment Grants Received by Business Entities. The ASU establishes authoritative guidance in GAAP about \naccounting for government grants received by business entities, clarifies the appropriate accounting, in an effort to \nreduce diversity in practice, and increase consistency of application across business entities. The ASU is effective \nfor annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual \nreporting periods. Adoption of this ASU can be applied a modified prospective approach, a modified retrospective \napproach, or a retrospective approach. Early adoption is permitted. The Company is currently evaluating the \nprovisions of this ASU and does not expect this ASU to have a material impact on the consolidated financial \nstatements.\n\nF-22\nTable of Contents\nNote 3 - Revenue\nRevenue disaggregated by products and services is as follows:\nYear Ended December 31,\n2025\n2024\n2023\nProducts \n .......................................................................................... $\n1,510\n$\n1,470\n$\n1,093\nServices \n ..........................................................................................\n17,164\n12,545\n9,294\nTotal revenues \n .............................................................................. $\n18,674\n$\n14,015\n$\n10,387\nAll of products revenue is attributable to the Connectivity segment.\nRevenue disaggregated by type and segment is as follows:\nYear Ended December 31,\n2025\n2024\n2023\nLaunch Services \n ........................................................................... $\n2,576\n$\n2,584\n$\n1,964\nLaunch & Development \n \n ...............................................................\n1,510\n1,212\n1,593\nSpace \n .............................................................................................\n4,086\n3,796\n3,557\nConsumer \n \n .....................................................................................\n7,208\n4,830\n2,817\nEnterprise & Government (1)\n \n ........................................................\n4,179\n2,769\n1,052\nConnectivity \n .................................................................................\n11,387\n7,599\n3,869\nAdvertising\n \n ...................................................................................\n1,844\n1,728\n2,323\nAI Solutions & Infrastructure ......................................................\n1,357\n892\n638\nAI \n ..................................................................................................\n3,201\n2,620\n2,961\nTotal revenues ......................................................................... $\n18,674\n$\n14,015\n$\n10,387\n___________________\n(1)\n Enterprise & Government revenue includes revenue from Starlink Mobile service offerings.\nDeferred revenue\nDeferred revenue is recorded when cash payments are received or due, in advance of the Company’s performance. \nDeferred revenue primarily relates to Space agreements and Connectivity enterprise and government contracts. Total \ndeferred revenue as of December 31, 2024 was $10,179 million, of which $4,080 million was recognized as revenue \nfor the year ended December 31, 2025. Total deferred revenue as of December 31, 2025 was $12,116 million. \nRevenue recognized during the years ended December 31, 2024 and 2023 that were included in the deferred revenue \nbalance at the beginning of each period was $3,414 million and $2,691 million, respectively.\nBacklog \nThe Company’s backlog represents the transaction price of performance obligations to customers for which work \nremains to be performed. The amount of backlog increases with new contracts or additions to existing contracts and \ndecreases as revenue is recognized on existing contracts. Contracts are included in backlog when an enforceable \nagreement has been reached. Backlog does not include amounts related to performance obligations that are billed \nand recognized as they are delivered, optional purchases that do not represent material rights and any estimated \namounts of variable consideration that are subject to constraint. Backlog totaled $28,377 million as of December 31, \n2025, of which $12,116 million was recognized as deferred revenue at December 31, 2025. Approximately 32% is \nexpected to be recognized within one year, and approximately 53%  to be recognized in 2027 and 2028, with the \nremaining 15% to be recognized thereafter.\n\nF-23\nTable of Contents\nConcentration of risk\nConsolidated revenue from a significant customer is as follows:\nYear Ended December 31,\n2025\n2024\n2023\nCustomer A \n ....................................................................................\n20.9 %\n24.2 %\n25.2 %\nRevenue from this customer relates to all three segments. No other customers represented more than 10% of \nconsolidated revenue during the years ended December 31, 2025, 2024 and 2023. \nNote 4 - Inventory\nInventory consists of the following:\nDecember 31,\n2025\n2024\nRaw materials \n ............................................................................................................ $\n1,030\n$\n923\nWork-in-progress .......................................................................................................\n803\n730\nFinished goods \n \n \n ...........................................................................................................\n583\n350\nInventory ................................................................................................................. $\n2,416\n$\n2,003\nNote 5 - Property, Plant, and Equipment, Net\nProperty, plant, and equipment, net consist of the following:\nDecember 31,\n2025\n2024\nServers and networking equipment \n \n ........................................................................... $\n22,694\n$\n6,892\nSatellites\n .....................................................................................................................\n11,949\n7,591\nMachinery and equipment \n \n .........................................................................................\n6,343\n5,343\nData center infrastructure \n \n ..........................................................................................\n2,960\n224\nLaunch sites \n ...............................................................................................................\n2,404\n2,121\nLand, buildings and improvements (1)\n .......................................................................\n1,876\n913\nFlight vehicle hardware \n \n .............................................................................................\n1,689\n1,577\nLeasehold improvements ...........................................................................................\n784\n1,019\nConstruction-in-progress \n \n ...........................................................................................\n4,604\n3,007\nProperty, plant, and equipment ..................................................................................\n55,303\n28,687\nLess: Accumulated depreciation \n \n ................................................................................\n(12,701)\n(7,540)\nProperty, plant, and equipment, net \n \n ..................................................................... $\n42,602\n$\n21,147\n__________________\n(1)\nLand is not a depreciable asset.\nConstruction in progress is primarily comprised of ongoing construction and expansion of the facilities and \nequipment as well as AI infrastructure that has not yet been placed in service.\nDepreciation expense for the years ended December 31, 2025, 2024 and 2023 was $5,915 million, $2,977 million \nand $1,897 million respectively.\nInterest is capitalized during the construction period for significant long term construction projects, such as the AI \ninfrastructure data centers. For the year ended December 31, 2025, the Company capitalized $169 million of interest,\n\nF-24\nTable of Contents\nwhich is included in Construction-in-progress amounts above. No interest was capitalized during the years ended \nDecember 31, 2024 and 2023.\nFor the years ended December 31, 2025 and 2024, the Company recorded impairment charges of $38 million and \n$63 million, respectively, related to the write off of (i) damaged flight vehicle in the Space segment, and (ii) \nabandoned production line and damaged satellite hardware in the Connectivity segment. These charges are reflected \nin Impairment in the consolidated statements of operations. There was no impairment related to Property, plant, and \nequipment recorded in Impairment during the year ended December 31, 2023.\nDuring the years ended December 31, 2024 and 2023, the Company also recorded impairment charges of $36 \nmillion and $54 million, respectively, related to its leasehold improvements and office equipment as part of its \nfacilities consolidation efforts in the AI segment in Restructuring charges in the consolidated statements of \noperations. There was no impairment related to Property, plant, and equipment recorded in Restructuring charges \nduring the year ended December 31, 2025. Refer to Note 20, Restructuring for additional details.\nIn 2024, the Company closed two taxable revenue bond transactions with a local municipality, in order to receive a \npersonal property tax abatement on newly acquired server and networking equipment in the state. Pursuant to this \ntransaction, the municipality issued taxable revenue bonds of $442 million and $258 million principal amount each \nto the Company and used the constructive proceeds to purchase the server and networking equipment from the \nCompany, and then leased the equipment back to the Company. As this effectively created a bond receivable and a \ncorresponding financing obligation with the municipality, and the Company has the legal right to set-off and intends \nto set-off the corresponding lease expense and bond service payments received, there was no impact to the \nconsolidated statements of operations and consolidated balance sheets.\nNote 6 - Intangible Assets and Goodwill\nIntangible Assets\nFinite-lived intangible assets consist of the following:\nDecember 31, 2025\nWeighted-\nAverage Useful \nLife (years)\nGross Carrying \nValue\nAccumulated \nAmortization\nNet Carrying \nValue\nBrand \n ......................................................................\n5.0\n$\n743\n$\n(335) $\n408\nUser base\n .................................................................\n9.0\n1,291\n(456)\n835\nExisting technology \n \n ................................................\n3.2\n27\n(16)\n11\nAdvertising customer relationships \n ........................\n5.0\n752\n(478)\n274\nAcquired workforce \n ................................................\n2.0\n9\n—\n9\nTotal .................................................................\n$\n2,822\n$\n(1,285) $\n1,537\nDecember 31, 2024\nWeighted-\nAverage Useful \nLife (in years)\nGross Carrying \nValue\nAccumulated \nAmortization\nNet Carrying \nValue\nBrand \n ......................................................................\n5.0\n$\n707\n$\n(177) $\n530\nUser base\n .................................................................\n9.0\n1,225\n(297)\n928\nExisting technology \n ................................................\n3.0\n1,140\n(823)\n317\nAdvertising customer relationships \n \n ........................\n5.0\n714\n(311)\n403\nData licensing customer relationships \n ....................\n3.0\n102\n(74)\n28\nDeveloped technology \n ............................................\n2.0\n3\n(2)\n1\nTotal .................................................................\n$\n3,891\n$\n(1,684) $\n2,207\n\nF-25\nTable of Contents\nAmortization expense associated with finite-lived intangible assets was $786 million, $847 million, and $738 \nmillion in the years ended December 31, 2025, 2024, and 2023, respectively.\nThe Company also has indefinite-lived intangible assets of $11 million and $4 million as of December 31, 2025 and \n2024, respectively. Indefinite-lived intangible assets primarily consist of domain names, which are expected to \nprovide long-term branding and marketing benefits. No impairment charges were recognized on indefinite-lived \nintangible assets for the years ended December 31, 2025, 2024, and 2023 other than the Twitter impairment \ndescribed below.\nEstimated future amortization expense of finite-lived intangible assets as of December 31, 2025 is as follows:\n2026 \n ...................................................................................................................................................... $\n452\n2027 \n ......................................................................................................................................................\n421\n2028 \n ......................................................................................................................................................\n256\n2029 \n ......................................................................................................................................................\n143\n2030 \n ......................................................................................................................................................\n142\nThereafter \n ..............................................................................................................................................\n123\n$\n1,537\nTwitter Impairment\nIn 2023, the Company rebranded its Twitter platform to X. As a result of the rebranding, the Company performed an \nimpairment assessment and recorded an impairment charge of $3,775 million on its previously indefinite-lived brand \nintangible for the AI segment. The Company’s brand intangible asset was determined to no longer be indefinite-\nlived and is presented as a finite-lived intangible asset with a five-year useful life. The fair value of the brand \nintangible asset was determined using the relief-from-royalty method.\nSpectrum Transactions\nOn September 7, 2025, the Company entered into a License Purchase Agreement (the “Spectrum License Purchase \nAgreement”) with Spectrum Business Trust 2025-1, a Nevada Business Trust (“Trust”) and EchoStar Corporation \n(“EchoStar”, and the transactions contemplated thereby, “Spectrum Transactions”) for total consideration of $17,000 \nmillion as discussed below.  \nPursuant to the terms and subject to the conditions set forth in the Spectrum License Purchase Agreement, the \nCompany agreed to purchase EchoStar’s rights and licenses related to an aggregate of 50 MHz of spectrum in \nfrequency ranges 2000–2020, 2180–2200, 1915–1920 and 1995–2000 (the “AWS-4 and H-Block Licenses” and \nsuch spectrum, “the Spectrum”) granted by the Federal Communication Commissions (“FCC”), together with \ncertain international authorizations, filings, concessions, licenses, rights and priorities related to that spectrum and \ncertain assets associated therewith (collectively, the “Foreign Assets”). The transfer of the AWS-4 and H-Block \nLicenses will occur in two steps: first, the AWS-4 and H-Block Licenses will be transferred by EchoStar to the Trust \n(the “Spectrum Transfer Closing”), and second, the AWS-4 and H-Block Licenses will be transferred by the Trust to \nthe Company (the “Spectrum Acquisition Closing”). The Foreign Assets will be transferred directly to the Company \nat the Spectrum Acquisition Closing, to the extent the required regulatory approvals have been obtained by such \ndate; provided, however, that the failure to obtain such approvals will not delay or prevent the Spectrum Acquisition \nClosing.\nIn connection with the Spectrum License Purchase Agreement and the Spectrum Transactions, on September 7, \n2025, the Company and the Trust entered into a Credit Agreement, pursuant to which the Company has agreed upon \nthe Spectrum Transfer Closing, to loan to the Trust (via loans which are able to be canceled at six-month intervals) \nto be used by the Trust to  make debt service payments on EchoStar’s debt through at least November 30, 2027, but \nin no event later than November 30, 2028. These loans will be secured on a junior lien basis by the AWS-4 and H-\nBlock Licenses. The aggregate amount of debt service payments through November 30, 2028 will equal \napproximately $3,000 million.\n\nF-26\nTable of Contents\nOn November 5, 2025, the parties amended and restated the Spectrum License Purchase Agreement to include \nEchoStar’s licenses for up to 15MHz of additional unpaired AWS-3 spectrum, and increased the consideration by \n$2,600 million, to a total amount of consideration of $19,600 million. The cash payoff consideration (as noted \nbelow), two-step transfer process, debt service payments, trust structure, and maintenance obligations remain \nunchanged. \nThe total consideration, approximating $19.6 billion, consisting of (i) approximately $11.1 billion in equity, payable \nthrough the issuance of approximately 261.8 million shares of the Company’s Class A common stock at a fixed \nvalue of $42.40 per share, and (ii) up to $8.5 billion related to the payoff of designated EchoStar debt, with any \nshortfall below $8.5 billion to be paid in cash. The allocation of cash and equity consideration is subject to certain \nadjustments based on the amount of EchoStar debt satisfied at or prior to closing.\nThe Spectrum Acquisition Closing is expected to occur on or about November 30, 2027. The completion of the \nSpectrum Transactions is subject to the satisfaction or waiver of customary closing conditions, including, among \nothers, receipt of certain consents and approvals from the FCC and the Department of Justice (“DOJ”). The \nSpectrum License Purchase Agreement also provides for specified termination rights. As of December 31, 2025, the \nSpectrum Transfer Closing has not yet occurred, and as a result, the Company is not yet obligated to make any \npayments under the Credit Agreement with the Trust. Once the Spectrum Transfer Closing occurs, the Spectrum \nTransactions will be recognized as acquired intangible assets.\nGoodwill\nThe activity for goodwill is as follows:\nBalance at December 31, 2023 \n ............................................................................................................. $\n11,418\nCumulative translation adjustments \n \n .................................................................................................\n(289)\nBalance at December 31, 2024 \n .............................................................................................................\n11,129\nBusiness combination\n .......................................................................................................................\n52\nCumulative translation adjustments \n \n ................................................................................................\n628\nBalance at December 31, 2025 \n .......................................................................................................... $\n11,809\nAs of December 31, 2025 and 2024, goodwill attributable to the Connectivity segment was $513 million and $505 \nmillion, respectively, and goodwill attributable to the AI segment was $11,296 million and $10,624 million, \nrespectively.\nNote 7 - Digital Assets\nDigital assets consist of the following:\nDecember 31,\n2025\n2024\n(in millions except units of digital assets)\nUnits\nCost Basis\nFair Value\nUnits\nCost Basis\nFair Value\nDigital assets held:\nBitcoin \n .........................................\n18,712\n$\n661\n$\n1,637\n18,712\n$\n661\n$\n1,749\nTotal \n ................................................\n18,712\n$\n661\n$\n1,637\n18,712\n$\n661\n$\n1,749\n\nF-27\nTable of Contents\nThe fair value of digital assets is determined using a Level I in the fair value hierarchy.  The following table \nprovides activities related to digital assets:\nYear Ended December 31,\n2025\n2024\nBeginning balance, at fair value \n ................................................................................ $\n1,749\n$\n794\nUnrealized gain (loss), net \n .........................................................................................\n(112)\n955\nEnding balance, at fair value \n ................................................................................. $\n1,637\n$\n1,749\nNote 8 - Financial Instruments\nThe Company’s assets that are measured at fair value on a recurring basis are as follows:\nAs of December 31, 2025\nLevel\nCost\nUnrealized \nGain\nUnrealized \nLoss\nFair Value\nCash and cash equivalents\nCash \n .................................................\nI\n$\n3,408\n$\n—\n$\n—\n$\n3,408\nMoney market funds \n ........................\nI\n21,339\n—\n—\n21,339\nPrepaid expenses and other \ncurrent assets\nRestricted cash \n .................................\nI\n30\n—\n—\n30\nRestricted cash in money market \nfunds ...............................................\nI\n152\n—\n—\n152\nOther assets\nRestricted cash \n .................................\nI\n182\n—\n—\n182\nRestricted cash in money market \nfunds ...............................................\nI\n13\n—\n—\n13\nTotal ..................................................\n$\n25,124\n$\n—\n$\n—\n$\n25,124\n As of December 31, 2024\nLevel\nCost\nUnrealized \nGain\nUnrealized \nLoss\nFair Value\nCash and cash equivalents\nCash .................................................\nI\n$\n3,865\n$\n—\n$\n—\n$\n3,865\nMoney market funds \n ........................\nI\n7,520\n—\n—\n7,520\nMarketable securities\nGovernment securities \n .....................\nII\n800\n1\n(1)\n800\nPrepaid expenses and other \ncurrent assets\nRestricted cash \n .................................\nI\n23\n—\n—\n23\nOther assets\nRestricted cash \n .................................\nI\n88\n—\n—\n88\nRestricted cash in money market \nfunds \n \n ...............................................\nI\n5\n—\n—\n5\nGovernment securities \n .....................\nII\n581\n1\n—\n582\nTotal \n ..................................................\n$\n12,882\n$\n2\n$\n(1) $\n12,883\n\nF-28\nTable of Contents\nNote 9 - Investments in Unconsolidated Affiliates\nEquity method investment\nIn April 2025, the Company, through its wholly-owned subsidiary CTC Property LLC (“CTC”), entered into a joint \nventure Stateline Power, LLC (“Stateline”), with Solaris Power Solutions Stateline, LLC (“Stateline Power \nSolutions”), a wholly owned subsidiary of Solaris Energy Infrastructure, Inc. (“Solaris”). \nStateline was formed to provide off-grid power to CTC’s data center campus pursuant to a long-term equipment \nrental arrangement. In connection with the formation of Stateline, Solaris contributed non-cash assets valued at $86 \nmillion, consisting primarily of progress payments on power generation equipment now owned by Stateline and pre-\nfunded expenses, in exchange for a 50.1% equity interest in Stateline. CTC contributed $86 million in cash in \nexchange for the remaining 49.9% equity interest. Interests in Stateline held by CTC were subsequently assigned to \nMZX Tech LLC (“MZX”), another wholly-owned subsidiary of the Company. \nConcurrent with its formation, CTC (subsequently assigned to MZX) entered into a master equipment rental \nagreement (“Rental Agreement”) with Stateline under which Stateline will lease power generation equipment to \nMZX for use at the Company’s data center facility. The Rental Agreement lease commences upon completion of \nequipment deployment and commissioning activities by Stateline. No rental payments were made by the Company \nfor the year ended December 31, 2025. \nThe Company evaluated its interest in Stateline under ASC 810 and determined that Stateline is a variable interest \nentity but the Company is not the primary beneficiary because it does not have the power to direct the activities that \nmost significantly impact Stateline’s economic performance, which are the operations of the assets managed by a \nsubsidiary of Solaris and the Company’s lack of control over how the assets are managed and redeployed after the \ninitial term of the Rental Agreement. As a result, the Company accounts for its interest in Stateline using the equity \nmethod of accounting. As of December 31, 2025, the carrying value of the equity method investment was $86 \nmillion, which represents the Company’s initial investment in Stateline. Activity in Stateline during the year ended \nDecember 31, 2025 was not material.\nEquity investments without readily determinable fair value\nAs of December 31, 2025 and 2024, the Company held investments in unconsolidated affiliates which are accounted \nfor as equity investments without readily determinable fair values of $157 million and $154 million, respectively. \nFor the years ended December 31, 2025, 2024, and 2023, the Company recorded a total of $0 million, $1 million, \nand $45 million of impairment charges related to the equity method investments in Other income (expense), net in \nthe consolidated statements of operations. The Company recorded cumulative downward adjustments of $59 million \non these investments as of December 31, 2025. No upward adjustments were recorded in the years ended December \n31, 2025, 2024 and 2023.\n\nF-29\nTable of Contents\nNote 10 - Debt\nAs of December 31, 2025\nPrincipal\nUnamortized \nDeferred \nFinancing Costs\nNet\nX 2027 and X 2030 Notes \n .............................................................. $\n27\n$\n—\n$\n27\nX B-1 Term Loan \n ...........................................................................\n6,504\n280\n6,224\nX B-3 Term Loan \n ...........................................................................\n5,966\n54\n5,912\nxAI Fixed Rate Term Loan \n ............................................................\n995\n4\n991\nxAI Floating Rate Term Loan \n ........................................................\n995\n40\n955\nxAI 12.5% Secured Senior Notes \n ...................................................\n3,000\n12\n2,988\nOther financings (1)\n \n \n .........................................................................\n4,562\n—\n4,562\nTotal debt\n \n ........................................................................................\n22,049\n390\n21,659\nFinance lease liability \n .....................................................................\n1,237\n—\n1,237\nTotal debt and finance leases\n .......................................................... $\n23,286\n$\n390\n$\n22,896\nLess: Short-term portion\n \n .................................................................\n928\n—\n928\nTotal debt and finance leases, net of current \n ............................\n22,358\n390\n21,968\nAs of December 31, 2024\nPrincipal\nUnamortized \nDeferred \nFinancing Costs\nNet\nX 2027 and X 2030 Notes \n .............................................................. $\n27\n$\n—\n$\n27\nX B-1 Term Loan \n ...........................................................................\n6,571\n359\n6,212\nX Bridge Credit Facilities\n ...............................................................\n5,966\n—\n5,966\nOther financings \n .............................................................................\n57\n—\n57\nTotal debt\n \n ........................................................................................\n12,621\n359\n12,262\nFinance lease liability \n \n .....................................................................\n1,531\n—\n1,531\nTotal debt and finance leases\n ..........................................................\n14,152\n359\n13,793\nLess: Short-term portion\n \n .................................................................\n372\n—\n372\nTotal debt and finance leases, net of current \n ............................\n13,780\n359\n13,421\n__________________\n(1)\nIncludes obligations related to certain AI infrastructure assets recorded as failed sale-leaseback transactions. Refer to Other Financings \nbelow for additional details.\nSpaceX ABL Credit Agreement\nGeneral. In 2018 and subsequently amended through 2023, SpaceX entered into a senior secured asset-based \nrevolving credit agreement (“SpaceX ABL Credit Agreement”) with a syndicate of banks. The SpaceX ABL Credit \nAgreement provided for a senior secured asset-based revolving credit facility, from which the Company may draw \nupon as needed for up to $1,500 million. The SpaceX ABL Credit Agreement was collateralized primarily by a \npledge of certain of SpaceX’s inventory and equipment, and availability under the SpaceX ABL Credit Agreement \nwas based on the estimated fair value of such assets, as reduced by certain reserves. The Company was required to \nmeet various covenants, including meeting certain reporting requirements, and certain financial covenants applied \nonce more than 85.0% of the SpaceX ABL Credit Agreement was drawn upon. In February 2025, SpaceX \nterminated the SpaceX ABL Credit Agreement. No amounts were outstanding at the time of termination.\nSpaceX Credit Facility\nGeneral. In February 2025, the Company entered into a five-year senior unsecured revolving credit agreement \n(“SpaceX Credit Facility”) with a syndicate of banks, under which the Company may draw up to $1,500 million,\n\nF-30\nTable of Contents\nsubject to a customary financial covenant and other reporting requirements. The SpaceX Credit Facility terminates, \nand all outstanding loans become due and payable, on February 7, 2030, unless the parties agree to an extension. No \namounts were borrowed under the SpaceX Credit Facility during 2025.\nInterest Rates. Under the SpaceX Credit Facility, borrowings bear interest at the Company’s option, at a rate per \nannum of (i) between 0.75%-1.25%, depending on the Company’s current debt rating, plus the relevant Term SOFR \nor (ii) between 0.0%-0.25% depending on the Company’s current debt rating plus the greater of (a) the Federal \nFunds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus 1.0% and (d) 1.0%. The Company may also borrow \nin various alternative currencies at various alternative rates, including rates based on SONIA for Pound Sterling \nloans and EURIBOR for Euro loans plus an applicable margin. The fee for undrawn amounts is between \n0.07%-0.11% per annum, depending on the Company’s current debt rating. Interest is payable either monthly or \nquarterly, depending on the interest loan option.\nCovenants. The Company was in compliance with the covenants of the SpaceX Credit Facility as of December 31, \n2025; however, the Company had a technical default when the Company acquired xAI on February 2, 2026 due to \nthe amount of debt assumed as part of the acquisition at the subsidiary level. On March 2, 2026, the Company \nobtained a waiver from the syndicate of banks and amended the SpaceX Credit Facility allowing for the debt \nrefinance completed on March 2, 2026 (refer to Note 21, Subsequent Events for additional details), resulting in the \nCompany being in compliance with all covenants.\nX 2027 and 2030 Notes\nGeneral. In 2019, a subsidiary of X, an indirect subsidiary of the Company, issued $700 million aggregate principal \namount of 3.875% senior notes due 2027 (the “X 2027 Notes”) in a private placement. The X 2027 Notes mature on \nDecember 15, 2027.  In 2022, a subsidiary of X issued $1,000 million aggregate principal amount of 5.000% senior \nnotes due 2030 (the “X 2030 Notes”) in a private placement.  The X 2030 Notes mature on March 1, 2030. The X \n2027 and X 2030 Notes represent senior unsecured obligations of the Company.\nInterest Rates. For the X 2027 Notes, the interest rate is fixed at 3.875% per annum and interest is payable semi-\nannually in arrears on June 15 and December 15 of each year.  For the X 2030 Notes, the interest rate is fixed at \n5.000% per annum and interest is payable semi-annually in arrears on March 1 and September 1 of each year.\nPrincipal Repayments. In November 2022, the Company purchased approximately $675 million aggregate principal \namount of X 2027 Notes and $998 million aggregate principal amount of the X 2030 Notes in settlement of the \nchange in control of Twitter. The X 2027 Notes and X 2030 Notes that remain outstanding may be redeemed at the \noption of the Company, in whole or in part, at any time prior to September 15, 2027 and December 1, 2029, \nrespectively, at a price equal to 100.0% of the principal amounts plus a “make-whole” premium and accrued and \nunpaid interest, if any, up to, but excluding, the redemption date.\nCovenants. The Company was in compliance with the covenants of the X 2027 Notes and X 2030 Notes as of \nDecember 31, 2025.\nX First Lien Senior Credit Facilities\nGeneral. In 2022, X Corp., an indirect subsidiary of the Company, entered into the First Lien Credit Agreement \nwhich provided for a new term loan commitment of $6,705 million (“X B-1 Term Loan”) and a $500 million \nSecured First Lien Revolving Credit Facility (including a letter of credit subfacility with an aggregate face value of \nup to $100 million) (together referred to as “X First Lien Senior Credit Facilities”).  The Secured First Lien \nRevolving Credit Facility matures on October 27, 2027 and the X B-1 Term Loan matures on October 27, 2029.\nAmendments. In February 2025, X Corp., an indirect subsidiary of the Company, amended the X First Lien Senior \nCredit Facilities and entered into a new term loan commitment for $4,741 million with a maturity date of October \n27, 2029  (“X B-3 Term Loan”) and reduced the Secured First Lien Revolving Credit Facility commitment to $0.  \nAs part of the issuance of the X B-3 Term Loan, the Company is required to pay an arrangement fee of $51 million, \nwhich is due and payable on February 19, 2027. In April 2025, the Company entered into an amendment to the X\n\nF-31\nTable of Contents\nB-3 Term Loan for an additional commitment of $1,225 million with the same terms and conditions, increasing the \ntotal X B-3 Term Loan borrowings to $5,966 million.\nProceeds. The proceeds from the X B-3 Term Loan were used to pay down and extinguish the First Lien Bridge \nCredit Facility and the Second Lien Bridge Credit Facility. The Company accounted for the pay down as a partial \nmodification and extinguishment of debt, expensing immaterial debt issuance costs.\nInterest Rates. The X B-1 Term Loan bears interest at a rate per annum of, initially, adjusted Term SOFR plus \n6.50%.  The Secured First Lien Revolving Credit Facility bore interest at a rate per annum of, initially, an adjusted \nTerm SOFR plus 4.50%, with leverage-based step-downs. Undrawn commitments under the Secured First Lien \nRevolving Credit Facility were subject to an unused commitment fee of 0.50% per annum, subject to quarterly \nleverage based step-downs.  The X B-3 Term Loan has a fixed interest rate of 9.50% per annum.  Interest on the X \nB-1 Term Loan and X B-3 Term Loan is payable monthly, quarterly, or bi-annually at the option of the Company.  \nThe effective interest rate on outstanding borrowings under the X B-1 Term Loan and X B-3 Term Loan was \n12.40% and 9.80%, respectively, as of December 31, 2025.\nPrincipal Repayments. The X B-1 Term Loan is repayable at any time, in whole or in part, without premium or \npenalty, subject to mandatory quarterly prepayments of principal beginning on the last day of the fiscal quarter \nended March 31, 2023, in amounts equal to 0.25% of the original principal amount of borrowings thereunder, with \nthe unpaid balance being payable on the final maturity date thereof.  The X B-1 Term Loan is also subject to \nadditional customary mandatory prepayment provisions from the proceeds of certain debt issuances and asset sales, \nas well as sweeps of a portion of excess cash flow, subject to certain leverage-based step-downs and exceptions.  \nNone of these additional customary mandatory prepayment provisions have been triggered as of December 31, 2025.  \nThe X B-3 Term Loan has prepayment penalties of 107.13% of the outstanding principal before October 27, 2026, \n104.75% of the outstanding principal before October 27, 2027, and 102.38% of the outstanding principal before \nOctober 27, 2028.\nGuarantors and Collateral. Obligations under the First Lien Senior Credit Facilities were guaranteed by X, and were \ncollateralized by a first priority lien on substantially all of the assets of X and its subsidiaries (subject to customary \nexceptions) which had a carrying amount of $42,132 million as of December 31, 2025.\nCovenants. The Company was in compliance with the covenants of the First Lien Senior Credit Facilities as of \nDecember 31, 2025.\nX Bridge Credit Facilities\nGeneral. On October 27, 2022, X Corp., an indirect subsidiary of the Company, entered into the First Lien Bridge \nLoan Credit Agreement and the Second Lien Bridge Loan Credit Agreement as borrower, which provided for a \n$3,000 million First Lien Bridge Credit Facility and a $3,000 million Second Lien Bridge Credit Facility (together, \nthe “X Bridge Credit Facilities”), respectively. The initial term loans under each Bridge Credit Facility automatically \nconvert to permanent term loans (“Permanent Bridge Loans”) on July 31, 2025 (“Bridge Conversion Date”), as \namended. The Permanent Bridge Loans mature on October 27, 2029 and October 27, 2030 for the First Lien Bridge \nCredit Facility and the Second Lien Bridge Credit Facility, respectively.  In February 2025, the Company repaid the \nfull outstanding amount of $2,966 million resulting in the full payoff of the First Lien Bridge Credit Facility prior to \nthe Bridge Conversation Date.  In February and April 2025, the Company made principal payments of $1,775 \nmillion and $1,225 million respectively, resulting in the full payoff of the Second Lien Bridge Credit Facility prior \nto the Bridge Conversation Date.\nInterest Rates. Borrowings under the First Lien Bridge Credit Facility bore interest at a rate per annum of, initially, \nan adjusted term SOFR plus 6.75%, with 0.50% step-ups occurring on each successive three-month period until the \nBridge Conversion Date, but subject to a maximum all-in rate of, prior to January 20, 2023, 9.25% and, on and after \nJanuary 20, 2023, 9.50% (“First Lien Bridge Total Cap”).  After the Bridge Conversion Date, any outstanding \nborrowings under the First Lien Bridge Credit Facility bore interest at the First Lien Bridge Total Cap.  Borrowings \nunder the Second Lien Bridge Credit Facility bore interest at a rate per annum of, initially, an adjusted term SOFR \nplus 10.00%, with 0.50% step-ups occurring on each successive three-month period thereafter until the Bridge \nConversion Date, but subject to a maximum all-in rate of, prior to January 20, 2023, 12.75% and, on and after\n\nF-32\nTable of Contents\nJanuary 20, 2023, 13.00% (“Second Lien Bridge Total Cap”). After the Bridge Conversion Date, any outstanding \nborrowings under the Second Lien Bridge Credit Facility bore interest at the Second Lien Bridge Total Cap. \nxAI First Lien Credit Agreement\nGeneral. In June 2025, X.AI Corp. and X.AI LLC, indirect subsidiaries of the Company, entered into the First Lien \nCredit Agreement to provide borrowings up to $2,000 million.  The Company executed a $1,000 million Fixed Rate \nTerm Loan maturing on June 30, 2030 (“xAI Fixed Rate Term Loan”); and a $1,000 million Floating Rate Term \nLoan  maturing on June 30, 2030 (“xAI Floating Rate Term Loan”).\nInterest Rates. The xAI Fixed Rate Term Loan has a fixed interest rate of 12.50% per annum and the xAI Floating \nRate Term Loan has a floating interest rate per annum of Term SOFR plus 7.25% or ABR plus 6.25%.  Interest on \nthe xAI Fixed Rate Term Loan is payable bi-annually on January 31 and July 31, commencing on January 31, 2026. \nInterest on the xAI Floating Rate Term loan is payable monthly, quarterly, or bi-annually at the option of the \nCompany.  The effective interest rate on outstanding borrowings under the xAI Fixed Rate Term Loan and xAI \nFloating Rate Term Loan was 11.91% and 12.48%, respectively, as of December 31, 2025.\nPrincipal Repayments. The xAI Fixed Rate Term Loan and the xAI Floating Rate Term Loan have prepayment \npenalties of 103% on the principal outstanding balance prior to June 30, 2027 and 101% on the principal outstanding \nbalance prior to June 30, 2028.\nGuarantors. Obligations under the xAI Fixed Rate Term Loan and xAI Floating Rate Term Loan were guaranteed \neach jointly and severally by X.AI Corp. and the following subsidiaries of X.AI Corp.: AIQ Phase LLC, CTC \nHolding LLC, CTC, LLZ Build LLC, and MZX.\nCovenants. The Company was in compliance with the covenants of the xAI Fixed Rate Term Loan and xAI Floating \nRate Term Loan as of December 31, 2025.\nxAI 12.5% Secured Senior Notes\nGeneral. In June 2025, X.AI LLC and, X.AI Co Issuer Corp, indirect subsidiaries of the Company, issued $3,000 \nmillion aggregate principal amount of 12.5% interest Senior Secured Notes due in 2030 (“xAI 12.5% Senior Secured \nNotes”).  The Senior Secured Notes were issued at 100% of the principal amount and the entire principal amount \nwill be due on June 30, 2030.\nInterest Rates. The xAI 12.5% Senior Secured Notes have a fixed interest rate of 12.50% per annum.  Interest is \npayable bi-annually on January 15 and July 15, commencing on January 15, 2026.\nPrincipal Repayments. The xAI 12.5% Senior Secured Notes have prepayment penalties of 106.25% on the principal \noutstanding balance prior to July 15, 2027 and 103.13% on the principal outstanding balance prior to July 15, 2028.\nGuarantors. Obligations under the xAI 12.5% Senior Secured Notes were guaranteed each jointly and severally by \nxAI and the following subsidiaries of xAI: AIQ Phase LLC, CTC Holding LLC, CTC, LLZ Build LLC, and MZX.\nCovenants. The Company was in compliance with the covenants of the 12.5% Senior Secured Notes as of \nDecember 31, 2025.\nxAI Revolving Line of Credit\nGeneral. In April 2024 and amended in May 2024, a subsidiary of xAI, an indirect subsidiary of the Company, \nentered into a revolving line of credit for an aggregate face amount up to $150 million.  The Company had no\n\nF-33\nTable of Contents\nborrowings under the line of credit during 2025.  Letters of credit issued under the revolving line of credit were $145 \nmillion as of December 31, 2025.\nInterest Rates. Interest on any borrowings is calculated based on the 30-day average SOFR plus the International \nSwaps and Derivatives Association spread adjustment plus a spread of 40 basis points.\nGuarantors and Collateral. The agreement permits borrowings up to the value of the pledged collateral held in \ncustody, less any outstanding loan balances, accrued interest, and fees. The pledged collateral consisted of securities \nheld in xAI’s custodial account.\nOther Financings\nThe Company has entered into various other financing arrangements, generally collateralized by specific machinery \nand equipment. These arrangements have an average fixed interest rate of 5.5% and 5.3% per annum as of \nDecember 31, 2025 and 2024, respectively, with principal and interest payments due monthly, and in certain \ninstances, a lump sum payment at the end of term.\nIn addition, in November 2025, CTC completed a sale-leaseback transaction for its AI infrastructure assets which \nwould have been deemed finance leases resulting in failed sale-leaseback transactions. X.AI Corp. guarantees certain \nof CTC’s obligations under the lease agreement. As a result, the Company recorded the related debt of $455 million \nand $4,052 million within Debt and finance leases, current and Debt and finance leases, net of current, respectively, \nin the Company’s consolidated balance sheets. Refer to Note 18, Related Party Transactions for additional details.\nThe future scheduled principal maturities of debt as of December 31, 2025 are as follows:\n2026 \n ...................................................................................................................................................... $\n560\n2027 \n ......................................................................................................................................................\n858\n2028 \n ......................................................................................................................................................\n1,063\n2029 \n ......................................................................................................................................................\n13,539\n2030 \n ......................................................................................................................................................\n6,029\nThereafter \n ..............................................................................................................................................\n—\n$\n22,049\nThe Company recognized interest expense for debt prior to capitalization of interest of $1,797 million, $1,580 \nmillion and $1,693 million, in the years ended December 31, 2025, 2024, and 2023, respectively.\nThe Company measures the fair value of its long-term fixed-rate debt for disclosure purposes. The fair value \nestimates for these debts were determined based on a discounted cash flow approach using yields calibrated from \nrecent issuances of the securities, resulting in Level II measurement.\nThe carrying amounts and fair values of the long-term fixed-rate debt included in the consolidated balance sheets are \nas follows:\nAs of December 31, 2025\nCarrying \nAmount\nFair Value\nX B-3 Term Loan \n \n ...................................................................................................... $\n5,912\n$\n6,190\nxAI Fixed Rate Term Loan ........................................................................................ $\n991\n$\n1,057\nxAI 12.5% Secured Senior Notes .............................................................................. $\n2,988\n$\n3,173\n\nF-34\nTable of Contents\nNote 11 - Leases\nThe balances of the Company’s operating and finance leases, included in Other assets, Accrued expenses and other \ncurrent liabilities, and Other liabilities for operating leases, and Finance lease right-of-use assets, Debt and finance \nleases, current, and Debt and finance leases, net of current for finance leases, in the consolidated balance sheets, are \nas follows:\nDecember 31,\n2025\n2024\nOperating leases:\nOperating lease right-of-use assets \n ....................................................................... $\n1,338\n$\n1,367\nOperating lease liabilities, current \n ........................................................................\n422\n382\nOperating lease liabilities, net of current \n ..............................................................\n1,136\n1,259\nTotal operating lease liabilities \n \n ................................................................... $\n1,558\n$\n1,641\nFinance leases:\nFinance lease right-of-use assets\n \n ........................................................................... $\n1,260\n$\n1,686\nFinance lease liabilities, current\n \n ............................................................................\n369\n295\nFinance lease liabilities, net of current \n .................................................................\n868\n1,236\nTotal finance lease liabilities \n \n ........................................................................ $\n1,237\n$\n1,531\nThe components of lease expense are as follows within the consolidated statements of operations: \nYear Ended December 31,\n2025\n2024\n2023\nOperating lease expense:\nOperating lease expense \n ............................................................ $\n475\n$\n311\n$\n295\nShort-term lease cost \n \n .................................................................\n267\n101\n25\nVariable lease cost \n .....................................................................\n106\n83\n75\nTotal operating lease expense \n ...............................................\n848\n495\n395\nFinance lease expense:\nAmortization of leased assets \n ....................................................\n330\n—\n—\nInterest on lease liabilities .........................................................\n317\n—\n—\nTotal finance lease expense \n ..................................................\n647\n—\n—\nTotal lease expense \n ...................................................................... $\n1,495\n$\n495\n$\n395\n\nF-35\nTable of Contents\nOther information related to leases is as follows:\nDecember 31,\n2025\n2024\nWeighted-average remaining lease term (in years):\nOperating leases \n .........................................................................................................\n5.9\n5.2\nFinance leases ............................................................................................................\n3.0\n4.0\nWeighted-average discount rate:\nOperating leases \n .........................................................................................................\n10.3 %\n10.9 %\nFinance leases ............................................................................................................\n22.6 %\n22.6 %\nDuring the years ended December 31, 2024 and 2023, the Company recorded restructuring charges of $30 million \nand $106 million, respectively, for operating lease right-of-use assets as part of its facilities consolidation \nrestructuring efforts in Restructuring charges in the consolidated statements of operations. There was no impairment \nrelated to leases during the year ended December 31, 2025.\nSupplemental cash flow and other information related to the Company’s leases are as follows:\nYear Ended December 31,\n2025\n2024\n2023\nCash paid for amounts included in the measurement of lease \nliabilities:\nOperating cash outflows from operating leases\n \n ......................... $\n533\n$\n372\n$\n303\nOperating cash outflows from finance leases \n ............................ $\n317\n$\n—\n$\n—\nFinancing cash outflows from finance leases \n ............................ $\n295\n$\n154\n$\n—\nLeased assets obtained in exchange for operating lease liabilities \n . $\n288\n$\n564\n$\n168\nLeased assets obtained in exchange for finance lease liabilities \n .... $\n—\n$\n1,686\n$\n—\nThe above tables exclude operating lease agreements that have been signed as of December 31, 2025, but not yet \ncommenced for the aggregate lease payments of $1,627 million and an average lease term of 7.2 years, including the \noperating lease arrangement with Stateline. Refer to Note 9, Investments in unconsolidated affiliates for additional \ndetails.\nThe maturities of the Company’s lease liabilities as of  December 31, 2025 are as follows:\nOperating Leases\nFinance Leases\n2026 ........................................................................................................................... $\n682\n$\n611\n2027 ...........................................................................................................................\n593\n611\n2028 ...........................................................................................................................\n531\n459\n2029 ...........................................................................................................................\n492\n—\n2030 ...........................................................................................................................\n446\n—\nThereafter ...................................................................................................................\n995\n—\nTotal undiscounted liabilities\n \n .....................................................................................\n3,739\n1,681\nLess: Leases not yet commenced \n ...............................................................................\n(1,627)\n—\nLess: Imputed interest ................................................................................................\n(554)\n(444)\nTotal lease liabilities \n \n ............................................................................................... $\n1,558\n$\n1,237\n\nF-36\nTable of Contents\nNote 12 - Balance Sheet Components\nCertain financial statement details are as follows:\nDecember 31,\n2025\n2024\nPrepaid expenses and other current assets\nTax related assets \n ....................................................................................................... $\n618\n$\n160\nRebates and credits \n \n ....................................................................................................\n597\n—\nUnbilled receivables \n ..................................................................................................\n223\n314\nRestricted cash and deposits \n ......................................................................................\n182\n23\nOther \n \n ..........................................................................................................................\n590\n371\nPrepaid expenses and other current assets \n ...................................................... $\n2,210\n$\n868\nAccrued expenses and other current liabilities\nTax related liabilities \n ................................................................................................. $\n563\n$\n112\nOperating lease liabilities, current \n .............................................................................\n422\n382\nAccrued interest \n .........................................................................................................\n416\n118\nRestructuring liabilities\n \n ..............................................................................................\n339\n149\nPayroll & employee benefit accruals \n .........................................................................\n322\n366\nOther current liabilities \n ..............................................................................................\n507\n381\nAccrued expenses and other current liabilities \n ............................................... $\n2,569\n$\n1,508\nNote 13 - Redeemable Convertible Preferred Stock and Shareholders’ Equity\nSpaceX Preferred and Common Stock\nOn February 14, 2024, the holders of outstanding stock of the Company approved and adopted a Plan of Conversion, \npursuant to which the Company converted from a Delaware corporation into a corporation organized under the laws \nof the State of Texas.\nIn connection with the Plan of Conversion, the Company updated its authorized capitalization to issue five classes of \nstock - four classes to be designated Class A common stock (“Class A”), Class B common stock (“Class B”), \nClass C common stock (“Class C”), Class D common stock (“Class D”) (collectively the “SpaceX Common Stock”), \nand one class of stock to be designated preferred stock and subdivided into several series of redeemable convertible \npreferred stock (collectively the “SpaceX Redeemable Convertible Preferred Stock”). All references to “Class” refer \nto that particular class of SpaceX Common Stock and all references to “Series” refer to that particular series of \nSpaceX Redeemable Convertible Preferred Stock. \nAs of December 31, 2025, the total number of shares of SpaceX Common Stock the Company is authorized to issue \nis 53,855 million shares, each with a par value of $0.001 per share, except for Class D, which has a par value of \n$0.0001 per share. 36,130 million shares are Class A, 5,325 million shares are Class B, 10,000 million shares are \nClass C, and 2,400 million shares are Class D. The total number of SpaceX Redeemable Convertible Preferred Stock \nthat the Company is authorized to issue is 2,607 million shares, of which 2,400 million shares are undesignated. \nWith the exception of the expanded conversion rights described below, there were no changes to the dividend \nprovisions, liquidation preferences, conversion rights, redemption rights or the voting rights of the SpaceX \nConvertible Redeemable Preferred Stock and SpaceX Common Stock during the years ended December 31, 2025, \n2024, and 2023.\nIn 2022, the Board approved a stock split (the “2022 Stock Split”), pursuant to which each share of the SpaceX \nCommon Stock issued and outstanding was split into ten shares of SpaceX Common Stock. In May 2026, the Board\n\nF-37\nTable of Contents\napproved the 2026 Stock Split, pursuant to which each share of the Class A, Class B, and Class C SpaceX Common \nStock issued and outstanding was split into five shares of SpaceX Common Stock. \nxAI Redeemable Convertible Preferred Stock and Common Stock\nOn March 28, 2025, xAI adopted an Amended and Restated Articles of Incorporation, which established its capital \nstructure and designated multiple classes of common stock and several series of redeemable convertible preferred \nstock. The Articles were subsequently amended and restated through January 30, 2026 (collectively, the “xAI \nArticles of Incorporation”) to add and authorize additional series of redeemable convertible preferred stock with no \neconomic changes to any previously existing series.\nPursuant to the xAI Articles of Incorporation, xAI’s authorized capitalization prior to the xAI Merger consisted of \nthree classes of common, stock, which are designated Class A common stock (“xAI Class A”), Class B common \nstock (“xAI Class B”), Limited Voting common stock (“xAI Limited Voting”), (collectively the “xAI Common \nStock”) and several series of redeemable convertible preferred stock (collectively the “xAI Redeemable Convertible \nPreferred Stock”). All references to “xAI Class” refer to that particular class of xAI Common Stock and all \nreferences to “xAI Series” refer to that particular series of xAI Redeemable Convertible Preferred Stock. \nAs of December 31, 2025, the total number of xAI Common Stock that xAI authorized to issue is 7,884 million \nshares, each with a par value of $0.001 per share, 5,874 million shares are xAI Class A, 2,000 million shares are xAI \nClass B, and 10 million shares are xAI Limited Voting. The total number of xAI Redeemable Convertible Preferred \nStock that the Company is authorized to issue is 3,302 million shares.\nEffect of the xAI Merger\nxAI Redeemable Convertible Preferred Stock\nUpon the effective date of the xAI Merger, all outstanding shares of xAI Redeemable Convertible Preferred Stock \nconverted into shares of SpaceX Common Stock, based on the share-for-share exchange mechanics specified in the \nMerger Agreement. Each share of xAI Series A‑1, B, C, D, and E redeemable convertible preferred stock (classified \nas “xAI Low Vote Stock”) was converted into 0.1433 shares of SpaceX Class A Common Stock per preferred share \n(on a pre-2026 Stock Split basis), rounded up to the nearest whole number for fractional shares. Each share of xAI \nSeries A redeemable convertible preferred stock (classified as “xAI High Vote Stock”) was converted into 0.1433 \nshares of SpaceX Class B Common Stock per preferred share (on a pre-2026 Stock Split basis), rounded up to the \nnearest whole number for fractional shares. For xAI Series A Redeemable Convertible Preferred Stock, all holders \nthat are an eligible service provider may instead elect to receive cash of $75.46 per share (on a pre-2026 Stock Split \nbasis) of xAI Series A Redeemable Convertible Preferred Stock. Upon conversion, all shares of xAI Redeemable \nConvertible Preferred Stock were canceled and retired, and former xAI Redeemable Convertible Preferred Stock \nshareholders received the applicable shares of SpaceX Common Stock. Any shares of xAI Redeemable Convertible \nPreferred Stock previously held by the Company were canceled and retired and did not receive any consideration.\nAlthough xAI Redeemable Convertible Preferred Stock converted into SpaceX Common Stock upon the xAI Merger \nclosing, the xAI Redeemable Convertible Preferred Stock balances are presented as Redeemable Convertible \nPreferred Stock in the consolidated financial statements for all periods presented. Because the xAI Redeemable \nConvertible Preferred Stock was legally outstanding during all historical periods prior to the xAI Merger and \nrepresented a separate equity class of a legally distinct predecessor entity, the conversion of xAI Redeemable \nConvertible Preferred Stock into SpaceX Common Stock is recognized only in the period in which the exchange \nactually occurs, and not retrospectively. Accordingly, the historical consolidated balance sheets and consolidated \nstatements of redeemable convertible preferred stock and shareholders’ equity reflect the xAI Redeemable \nConvertible Preferred Stock as outstanding xAI Redeemable Convertible Preferred Stock consistent with its legal \nform and rights during those periods and are not recast on an as-converted basis. The impact of the conversion will \nbe presented prospectively in the period of the merger (Q1 2026).\n\nF-38\nTable of Contents\nxAI Warrants\nxAI also issued warrants to customer that were outstanding as of the effective date of the xAI Merger, which had a \nten-year term originally set to expire in 2035, with an exercise price equal to the par value of the stock, and vesting \nterms that resulted in the warrants vesting proportionally to the payments received under the related agreement. The \nclosing of the xAI Merger triggered an acceleration clause in which all outstanding xAI warrants, both vested and \nunvested components, were automatically exercised on a cashless basis exercised and converted into fully vested \nSpaceX Class A Common Stock at the exchange ratio of 0.1433 (on a pre-2026 Stock Split basis).\nxAI and X Common Stock\nUpon the effective date of the xAI Merger, every outstanding share of xAI Common Stock, whether Class A, Class \nB, or Limited Voting, converted into the right to receive SpaceX Common Stock at a fixed exchange ratio of 0.1433 \nSpaceX shares per share of xAI Common Stock (on a pre-2026 Stock Split basis), unless the holder was an eligible \nservice provider and elected to receive cash of $75.46 per share of xAI Class A or Class B. No fractional SpaceX \nshares were issued and all share amounts were rounded up to the nearest whole number. Any shares of xAI Common \nStock previously held by the Company were canceled and retired and did not receive any consideration.  \nEffect of the X Merger\nUpon the effective date of the X Merger, each class of common stock of X Holdings Corp. (“X Common Stock”) \nwas converted to 2.776 shares of xAI Common Stock of the same class (rounded down to the nearest whole share), \neach class of common stock of X.AI Corp. (“xAI Corp. Common Stock”) was converted to 1.000 share of xAI \nCommon Stock of the same class, and each series of X.AI Corp. preferred stock (“xAI Corp. Preferred Stock”) \n(other than shares held by X or any of its subsidiaries) was converted to 1.000 share of xAI Redeemable Convertible \nPreferred Stock of the same series. \nAs a result of the Mergers, all of X, X.AI Corp. and xAI Common Stock are being presented in the historical \nfinancial statements as if they had been converted into SpaceX Common Stock at the applicable exchange rate for all \nperiods presented. As such, all shares of historical X, X.AI Corp. and xAI Common Stock are included in the share \ncounts for SpaceX Common Stock below. X.AI Corp. and xAI Redeemable Convertible Preferred Stock are being \npresented in the consolidated financial statements at historical values with an adjustment to the conversion rate at the \napplicable exchange ratio per the xAI Merger.\nRedeemable Convertible Preferred Stock\nInformation for each series of SpaceX and xAI Redeemable Convertible Preferred Stock (collectively, the \n“Combined Redeemable Convertible Preferred Stock”) at December 31 is as follows: \nDividend Per \nShare\nInitial Price \nPer Share\nAuthorized \nShares\nOutstanding (1)\nLiquidation \nPreference\nNet Carrying \nValue\n2025\n2025\n2025\n2025\n2024\n2025\n2025\nSpaceX Redeemable \nConvertible Preferred \nStock\nSeries A \n ................................ $\n0.05\n$\n1.00\n61.0\n60.4\n60.5\n$\n60\n$\n59\nSeries A-1 \n ............................. $\n0.05\n$\n1.00\n61.0\n0.2\n0.2\n—\n—\nSeries B\n ................................. $\n0.10\n$\n2.00\n5.5\n5.1\n5.1\n10\n10\nSeries B-1 \n ............................. $\n0.10\n$\n2.00\n5.5\n0.1\n0.1\n—\n—\nSeries C\n ................................. $\n0.15\n$\n3.00\n10.5\n9.7\n9.7\n29\n23\nSeries D \n ................................ $\n0.19\n$\n3.88\n7.5\n5.2\n5.2\n40\n20\nSeries E \n ................................. $\n0.23\n$\n4.50\n10.5\n10.2\n10.2\n46\n647\nSeries F \n ................................. $\n0.38\n$\n7.50\n6.8\n6.7\n6.7\n50\n48\nSeries G \n ................................ $\n3.87\n$\n77.46\n13.0\n12.6\n12.8\n978\n978\nSeries H \n ................................ $\n6.75\n$\n135.00\n3.4\n3.2\n3.3\n429\n429\nSeries I \n .................................. $\n8.45\n$\n169.00\n3.0\n3.0\n3.0\n499\n499\nSeries J \n .................................. $\n9.30\n$\n186.00\n2.7\n2.5\n2.6\n457\n457\n\nF-39\nTable of Contents\nDividend Per \nShare\nInitial Price \nPer Share\nAuthorized \nShares\nOutstanding (1)\nLiquidation \nPreference\nNet Carrying \nValue\n2025\n2025\n2025\n2025\n2024\n2025\n2025\nSeries K \n ................................ $\n10.20\n$\n204.00\n2.7\n2.5\n2.5\n518\n518\nSeries L \n ................................. $\n10.70\n$\n214.00\n1.5\n1.4\n1.4\n295\n295\nSeries M \n ................................ $\n11.00\n$\n220.00\n2.7\n2.7\n2.7\n596\n596\nSeries N \n ................................ $\n13.50\n$\n270.00\n9.5\n9.3\n9.4\n2,520\n2,520\nTotal SpaceX Redeemable \nConvertible Preferred \nStock \n \n ...............................\n206.8\n134.8\n135.4\n$\n6,527\n$\n7,099\nxAI Redeemable \nConvertible Preferred \nStock\nSeries A \n ................................ $\n0.05\n$\n1.00\n1,000.0\n750.0\n750.0\n$\n750\n$\n753\nSeries A-1 \n ............................. $\n0.05\n$\n1.00\n1,000.0\n—\n—\n—\n—\nSeries B\n ................................. $\n0.60\n$\n11.97\n584.9\n584.9\n584.9\n7,001\n7,001\nSeries C\n ................................. $\n1.08\n$\n21.65\n277.1\n277.1\n277.1\n6,000\n6,000\nSeries D \n ................................ $\n1.83\n$\n36.56\n174.8\n120.1\n—\n4,390\n4,388\nSeries E \n ................................. $\n3.77\n$\n75.46\n265.0\n179.2\n—\n13,523\n13,510\nTotal xAI Redeemable \nConvertible Preferred \nStock \n \n ...............................\n3,301.8\n1,911.3\n1,612.0\n$\n31,664\n$\n31,652\nTotal Combined \nRedeemable \nConvertible Preferred \nStock \n \n ...............................\n3,508.6\n2,046.1\n1,747.4\n$\n38,191\n$\n38,751\n______________\n(1)\nThe number of issued redeemable convertible preferred stock is equal to the number of outstanding redeemable convertible preferred stock, \nwith the exception of xAI Series A and xAI Series D, of which the number of issued shares is 1,000.0 million and 175.0 million, \nrespectively, due to redeemable convertible preferred stock held by X and SpaceX, respectively.\nThe following describes the various rights and preferences of the SpaceX Redeemable Convertible Preferred Stock:\nDividend Provisions\nOn a per annum basis, holders of shares of SpaceX Redeemable Convertible Preferred Stock are entitled to receive \ndividends prior and in preference to any declaration or payment of any dividend to common shareholders at a rate \ndescribed in the table above for each outstanding share of SpaceX Redeemable Convertible Preferred Stock. Any \nsuch dividends are declared at the discretion of the Board of Directors and are not cumulative. For the period from \ninception through December 31, 2025, no dividends on SpaceX Redeemable Convertible Preferred Stock have been \ndeclared. The SpaceX Redeemable Convertible Preferred Stock do not participate in distributions beyond their \npreferred dividend as described above.\nLiquidation Preference\nThe series of SpaceX Redeemable Convertible Preferred Stock listed in the table above were issued by the Company \nchronologically and in alphabetical order, with Series A issued first and Series N issued most recently. Each series \nof SpaceX Redeemable Convertible Preferred Stock is senior in rank to all earlier issued series and junior in rank to \nall later issued series, except that: (i) Series A, A-1, B, B-1, and C SpaceX Redeemable Convertible Preferred Stock \nare all on parity with each other and junior in rank to all subsequently issued series of SpaceX Redeemable \nConvertible Preferred Stock; and (ii) series E, F, and G SpaceX redeemable convertible preferred stock are all on \nparity with each other, are senior in rank to all earlier issued series of SpaceX Redeemable Convertible Preferred \nStock, and junior in rank to all subsequently issued series of SpaceX Redeemable Convertible Preferred Stock.\nIn the event of a liquidation, dissolution, or winding up of the Company, holders of a given series of SpaceX \nRedeemable Convertible Preferred Stock are entitled to receive, in preference to the holders of SpaceX Common \nStock and any junior-ranking SpaceX Redeemable Convertible Preferred Stock, the liquidation preference indicated \nin the table above for such series of SpaceX Redeemable Convertible Preferred Stock, plus any declared but unpaid \ndividends. Holders of all series of SpaceX Redeemable Convertible Preferred Stock are entitled to receive the\n\nF-40\nTable of Contents\ngreater of the liquidation preference per share indicated above, or the amount each series would be entitled to receive \nif all such outstanding SpaceX Redeemable Convertible Preferred Stock were converted to Class A or Class B \nSpaceX Common Stock, as applicable, immediately prior to such liquidation, dissolution, or winding up of the \nCompany. Upon completion of the distributions described above, if any assets remain in the Company, the then \nremaining assets will be distributed on an equal priority, pro rata basis to the holders of SpaceX Common Stock.\nConversion Rights\nEach share of Series A and Series B SpaceX Redeemable Convertible Preferred Stock is convertible at the option of \nthe holder at any time after the date of issuance of such share into shares of Class A, Class B, or Class C SpaceX \nCommon Stock and each share of all other series of preferred stock are convertible at the option of the holder at any \ntime after the date of issuance of such share into shares of Class A or Class C SpaceX Common Stock. The number \nof shares of SpaceX Common Stock to which a holder of SpaceX Redeemable Convertible Preferred Stock is \nentitled shall be at a conversion rate determined by dividing the initial price by the conversion price. Each share of \nSpaceX Redeemable Convertible Preferred Stock is convertible into fifty shares of SpaceX Common Stock \nfollowing the 2026 Stock Split. The conversion price is subject to adjustment set forth in the charter for certain \ndilutive issuances, splits and combinations. Prior to Company’s conversion to a Texas entity, holders of Series A and \nSeries B SpaceX Redeemable Convertible Preferred Stock were only permitted to convert to Class B SpaceX \nCommon Stock, and holders of other series of SpaceX Redeemable Convertible Preferred Stock were only permitted \nto convert to Class A SpaceX Common Stock.\nThe SpaceX Redeemable Convertible Preferred Stock automatically converts upon the earlier of (i) the Company’s \nsale of its common stock in a public offering pursuant to a registration statement under the Securities Act of 1933, in \nwhich the pre-public offering market capitalization of the Company is at least $6.0 billion and which results in \naggregate cash proceeds to the Company of not less than $250 million (“Qualified IPO”) or (ii) the date specified by \nwritten consent or agreement of the applicable holders of shares of SpaceX Redeemable Convertible Preferred Stock \n(with respect to each applicable series of SpaceX Redeemable Convertible Preferred Stock), voting in accordance \nwith the charter. \nIn the event of a transfer of a share of Series A or Series B (other than a Permitted Transfer as defined in the \ncharter), such share shall automatically be cancelled and converted into a corresponding share of Series A-1 or \nSeries B-1. \nVoting Rights\nHolders of each share of Series A and Series B have the right to ten votes for each share of Class B into which such \nshare is convertible. Holders of each share of all other series of SpaceX Redeemable Convertible Preferred Stock \nhave the right to one vote for each share of Class A into which such share is convertible. Such holders will have full \nvoting rights and powers equal to the voting rights and powers of the holders of SpaceX Common Stock, except as \nrequired by law.\nClassification\nThe liquidation preference provisions of the SpaceX Redeemable Convertible Preferred Stock are considered \ncontingent redemption provisions as deemed liquidation events such as a change of control are not solely within the \ncontrol of the Company. Accordingly, SpaceX Redeemable Convertible Preferred Stock are presented outside of \npermanent equity on the Company’s consolidated balance sheets as Redeemable convertible preferred stock. SpaceX \nRedeemable Convertible Preferred Stock has not been remeasured to their redemption amount as they are not \ncurrently redeemable or probable of becoming redeemable.\nThe following describes the various rights and preferences of the xAI Redeemable Convertible Preferred Stock:\nDividend Provisions\nOn a per annum basis, holders of shares of xAI Redeemable Convertible Preferred Stock are entitled to receive \ndividends prior and in preference to any declaration or payment of any dividend to common shareholders at a rate\n\nF-41\nTable of Contents\ndescribed in the table above for each outstanding share of xAI Redeemable Convertible Preferred Stock. Any such \ndividends declared at the discretion of the Board of Directors and are not cumulative. After payment of any such \npreferred dividends, holders of xAI Redeemable Convertible Preferred Stock are entitled to participate in any \nadditional dividends or distributions on an as‑converted basis with holders of xAI Common Stock. For the period \nfrom inception through December 31, 2025, no dividends were declared on xAI Redeemable Convertible Preferred \nStock.\nLiquidation Preference\nThe series of xAI Redeemable Convertible Preferred Stock listed in the table above were issued by xAI \nchronologically and in alphabetical order, with Series A issued first and Series E issued most recently. Each of \nSeries A, Series A‑1, Series B, Series C, Series D, and Series E xAI Redeemable Convertible Preferred Stock has a \nliquidation preference equal to the greater of (i) the applicable original issue price plus any declared but unpaid \ndividends or (ii) the amount the holder would receive if the xAI Redeemable Convertible Preferred Stock were \nconverted to xAI Common Stock immediately prior to such event. In the event of a liquidation, dissolution, winding \nup, or deemed liquidation event, holders of xAI Redeemable Convertible Preferred Stock would receive their \nliquidation preference prior to holders of xAI Common Stock. After payment of all liquidation amounts owed to xAI \nRedeemable Convertible Preferred Stock, remaining assets or consideration not payable to holders of xAI \nRedeemable Convertible Preferred Stock (as applicable), if any, would be distributed to holders of xAI Common \nStock on a pro rata basis.\nConversion Rights\nEach share of xAI Redeemable Convertible Preferred Stock is convertible at the option of the holder into xAI \nCommon Stock at any time after the date of issuance. The number of shares of xAI Common Stock issuable upon \nconversion is determined by dividing the initial price of the applicable series by its conversion price, with the \nconversion price subject to adjustment for customary anti‑dilution events, including stock splits, combinations, and \ncertain dilutive issuances as presented in the table above. Each share of xAI Series A Redeemable Convertible \nPreferred Stock is convertible into xAI Class B Common Stock or Series A-1 Redeemable Convertible Preferred \nStock, while each remaining series of xAI Redeemable Convertible Preferred Stock is convertible into xAI Class A \nCommon Stock. \nThe xAI Redeemable Convertible Preferred Stock would automatically convert into xAI Common Stock upon the \nearlier of (i) the consummation of a qualified public offering that meets the criteria set forth in the Articles, or (ii) \nthe written consent of the requisite percentage of voting power of the outstanding shares of xAI Redeemable \nConvertible Preferred Stock. \nVoting Rights\nHolders of each share of xAI Series A have the right to ten votes for each share of Series A held by such holder. \nHolders of each share of all other series of xAI Redeemable Convertible Preferred Stock have the right to one vote \nfor each share of xAI Class A into which such share is convertible. Such holders have full voting rights and powers \nequal to the voting rights and powers of the holders of xAI Common Stock (other than xAI Limited Voting).\nClassification\nThe liquidation preference provisions of the xAI Redeemable Convertible Preferred Stock are considered contingent \nredemption provisions as deemed liquidation events such as a change of control are not solely within the control of \nxAI. Accordingly, xAI Redeemable Convertible Preferred Stock are presented outside of permanent equity on the \nCompany’s consolidated balance sheets as Redeemable convertible preferred stock. xAI Redeemable Convertible \nPreferred Stock has not been remeasured to their redemption amount as they are not currently redeemable or \nprobable of becoming redeemable.\n\nF-42\nTable of Contents\nCommon Stock\nThe following describes all of the activity that occurred within each class of SpaceX Common Stock during the \nyears ended December 31, 2025 and 2024, incorporating all activity that occurred within the class of xAI Common \nStock on an as-converted basis to the class of SpaceX Common Stock it was converted into per the xAI Merger and \nX Merger.\nClass A\nClass B\nClass C\nClass D\nCommon Stock\nCommon Stock\nCommon Stock\nCommon Stock\nShares\nAmount\nShares\nAmount\nShares\nAmount\nShares\nAmount\nBalance at December 31, 2022 \n .........\n1,778\n$\n2\n647\n$\n1\n317\n$\n0\n—\n$\n—\nCommon stock issued, net of tax \nwithholding \n ...............................\n6\n0\n188\n0\n55\n0\n—\n—\nConversion between classes of \ncommon stock ...........................\n32\n0\n(32)\n0\n—\n—\n—\n—\nRepurchase of common stock \n .....\n(6)\n0\n0\n0\n(5)\n0\n—\n—\nBalance at December 31, 2023 \n .........\n1,810\n2\n803\n1\n367\n0\n—\n—\nCommon stock issued, net of tax \nwithholding \n ...............................\n8\n0\n9\n0\n58\n0\n—\n—\nRepurchase of common stock \n .....\n(35)\n0\n(8)\n0\n(3)\n0\n—\n—\nConversion of redeemable \nconvertible preferred stock to \ncommon stock ...........................\n13\n0\n—\n—\n1\n—\n—\n—\nConversion between classes of \ncommon stock ...........................\n36\n0\n(36)\n0\n—\n—\n—\n—\nBalance at December 31, 2024 \n .........\n1,832\n2\n768\n1\n423\n0\n—\n—\nCommon stock issued, net of tax \nwithholding \n ...............................\n33\n1\n4\n0\n60\n0\n—\n—\nRepurchase of common stock \n .....\n(31)\n0\n(38)\n0\n—\n—\n—\n—\nConversion of redeemable \nconvertible preferred stock to \ncommon stock ...........................\n27\n0\n—\n—\n1\n0\n—\n—\nConversion between classes of \ncommon stock ...........................\n91\n0\n(91)\n0\n—\n—\n—\n—\nBalance at December 31, 2025 \n .........\n1,952\n$\n3\n643\n$\n1\n484\n$\n0\n—\n$\n—\nThe following describes the various rights and preferences of the SpaceX Common Stock:\nDividend Provisions\nSubject to the prior rights of holders of all classes and series of stock at the time outstanding having prior rights as to \ndividends, holders of SpaceX Common Stock shall be entitled to receive, when, as and if declared by the Board of \nDirectors, out of any funds legally available, such dividends as may be declared from time to time by the Board of \nDirectors. For the period from inception through December 31, 2025, no dividends were declared on SpaceX \nCommon Stock. \nLiquidation Rights\nIn the event of a liquidation, dissolution, or winding up of the Company, upon the completion of the distributions \nrequired with respect to the SpaceX Redeemable Convertible Preferred Stock, if assets remain in the Company, the \nthen remaining assets will be distributed on an equal priority, pro rata basis to the holders of SpaceX Common \nStock.\n\nF-43\nTable of Contents\nConversion Rights\nEach share of Class B is convertible at the option of the holder, at any time, into one share of Class A. Each share of \nClass B will automatically convert into one share of Class A upon a transfer, other than a Permitted Transfer (as \ndefined in the charter), of such share of Class B.\nVoting Rights\nEach holder of Class A is entitled to one vote for each share held. Each holder of Class B is entitled to ten votes for \neach share held. The holders of Class C have no voting rights, except as required by law. Voting rights with respect \nto Class D will be established when and if any shares of Class D are issued by the Board of Directors.\nReserve for Unissued Shares of Common Stock\nThe Company is required to reserve and keep available out of its authorized but unissued shares of SpaceX Common \nStock such number of shares sufficient to effect the conversion of all outstanding shares of SpaceX Redeemable \nConvertible Preferred Stock and Class B, as applicable, plus shares granted and available for grant under the \nCompany’s share plans. \nThe amount of such shares of the SpaceX Common Stock reserved for these purposes at December 31, 2025 is as \nfollows:\nNumber of Shares\nClass A\nClass B\nClass C\nClass D\nRedeemable Convertible Preferred Stock issued \n(low-vote) \n \n ........................................................\n4,291\n—\n3,459\n—\nRedeemable Convertible Preferred Stock issued \n(high-vote) .......................................................\n3,275\n3,812\n3,275\n—\nOutstanding Class B \n ............................................\n644\n—\n—\n—\nOutstanding stock options \n ...................................\n10\n468\n474\n—\nOutstanding RSUs \n ...............................................\n47\n43\n62\n—\nFuture grants under share-based compensation \n ..\n161\n—\n383\n—\n8,428\n4,323\n7,653\n—\nShare Repurchases\nSpaceX Share Repurchases\nDuring the year ended December 31, 2025, SpaceX repurchased $522 million or 14.0 million shares of SpaceX \nCommon Stock from eligible current and former employees. Similarly, the Company repurchased $920 million or \n38.7 million shares of SpaceX Common Stock from eligible current and former employees and existing shareholders \nduring the year ended December 31, 2024, as well as $101 million or 0.1 million shares of SpaceX Redeemable \nConvertible Preferred Stock in a number of unrelated transactions with existing shareholders at their then-current \nfair market value. The Company only repurchased shares held by eligible participants for more than six months at a \npurchase price per share equal to the then current fair market value.  \nAll SpaceX shares repurchased to date have been retired.\nxAI Share Repurchase\nDuring the year ended December 31, 2025, the Company also purchased 11.8 million shares of xAI Common Stock \nfor $600 million from an existing shareholder of xAI. Following the xAI Merger, this transaction is considered as a \nrepurchase of xAI Common Stock in the consolidated statements of redeemable convertible preferred stock and \nshareholders’ equity.\nAll xAI shares repurchased to date have been retired.\n\nF-44\nTable of Contents\nNote 14 - Earnings per Share\nThe following table presents the reconciliation of net income (loss) attributable to common shareholders to net \nincome (loss) used in computing basic and diluted net income (loss) per share of common stock:\nYear Ended December 31,\n2025\n2024\n2023\nNumerator:\nNet income (loss) \n .......................................................................... $\n(4,937) $\n791\n$\n(4,628)\nLess: Deemed dividend(1)\n \n ..........................................................\n—\n80\n—\nLess: Dividends and undistributed earnings allocated to \nparticipating securities \n ...........................................................\n—\n693\n—\nNet income (loss) attributable to common shareholders - basic ....\n(4,937)\n18\n(4,628)\nAdd: Effect of assumed conversion of SpaceX Redeemable \nConvertible Preferred Stock \n ...................................................\n—\n3\n—\nAdd: Effect of assumed conversion of stock options \n ................\n—\n0\n—\nAdd: Effect of assumed conversion of restricted stock units \n ....\n—\n0\n—\nAdd: Effect of assumed issuance of shares under the ESPP \n .....\n—\n0\n—\nNet income (loss) attributable to common shareholders - diluted\n \n .. $\n(4,937) $\n21\n$\n(4,628)\nDenominator:\nWeighted average shares of common stock outstanding - basic \n ....\n2,926\n2,848\n2,759\nWeighted average shares of common stock equivalents:\nConversion of SpaceX Redeemable Convertible Preferred \nStock \n ......................................................................................\n—\n6,771\n—\nExercise of stock options \n ...........................................................\n—\n292\n—\nConversion of restricted stock units \n ..........................................\n—\n45\n—\nConversion of ESPPs \n .................................................................\n—\n0\n—\nWeighted average common stock and common stock equivalent \noutstanding - diluted \n ...................................................................\n2,926\n9,956\n2,759\nEarnings (loss) per share attributable to common shareholders\nBasic \n .......................................................................................... $\n(1.69) $\n0.01\n$\n(1.68)\nDiluted \n \n ....................................................................................... $\n(1.69) $\n0.00\n$\n(1.68)\n__________________\n(1)\nThe excess of fair market value over the consideration transferred for the repurchase of SpaceX Redeemable Convertible Preferred Stock \nwas treated as a deemed dividend and resulted in a decrease to net income (loss) attributable to common shareholders in the calculation of \nearnings (loss) per share.\n\nF-45\nTable of Contents\nThe following potentially dilutive securities on an as-converted basis are excluded from the calculation of diluted net \nincome (loss) per share attributable to common shareholders for the periods presented because the impact of \nincluding them would be anti-dilutive (refer to Note 15, Share-based Compensation for additional details):\nYear Ended December 31,\n2025\n2024\n2023\nxAI Redeemable Convertible Preferred Stock \n \n ...............................\n1,369\n—\n537\nSpaceX Redeemable Convertible Preferred Stock \n .........................\n6,733\n—\n6,780\nShare-based compensation \n .............................................................\n623\n18\n767\nThe table above excludes 14.5 million, 38.3 million, and 21.2 million share-based compensation awards outstanding \nas of December 31, 2025, 2024, and 2023, respectively, as these awards are subject to performance and market \nconditions that were not met as of those dates.\nNote 15 - Share-based Compensation\nX and xAI Mergers\nAs part of the xAI Merger, each xAI option for a share of xAI common stock outstanding and unexercised at the \ntime of the xAI Merger (vested and unvested) was converted into a SpaceX option to receive 0.1433 shares of \nSpaceX Class A or Class B Common Stock (on a pre-2026 Stock Split basis), as applicable, under the same terms \nand conditions (including the vesting and exercisability conditions) as the original xAI stock options at an exercise \nprice equal to the original xAI option exercise price divided by 0.1433 (on a pre-2026 Stock Split basis). Each xAI \nRSU that was vested and outstanding was converted to the right to receive 0.1433 of a share of SpaceX Class A or \nClass B Common Stock (on a pre-2026 Stock Split basis), as applicable. Each xAI RSU that was unvested was \nconverted to 0.1433 of a SpaceX RSU (on a pre-2026 Stock Split basis). Each xAI RSA was converted to 0.1433 \nshares of SpaceX RSA for SpaceX Class A or Class B Common Stock (on a pre-2026 Stock Split basis), as \napplicable, with the same terms and conditions (including the vesting terms). Holders of vested xAI options and \nvested xAI RSUs also had the option to receive cash payment for $75.46 per share in lieu of conversion. Refer to \nNote 13, Redeemable Convertible Preferred Stock and Shareholders’ Equity for additional details.\nAs part of the X Merger, each X RSU that was outstanding was converted to a xAI RSU to receive 2.776 shares of \nxAI Common Stock.  \nGeneral\nThe Company grants RSUs, RSAs, and non-statutory options to eligible employees, key executives, and certain non-\nemployee service providers (collectively, the “Plans”).  The Company also has a number of performance-based \nawards. RSUs entitle the grantee to receive shares of Class A or Class B Common Stock upon vesting, with vesting \ngenerally occurring either (i) 25% after the first service year with quarterly vesting for the remaining four-year \nservice period,  (ii) 12.5% after the first six months of service with quarterly vesting for the remaining four-year \nservice period, or (iii) 20% after the first service year with semi-annual vesting for the remaining five-year service \nperiod, subject to continued service through the applicable vesting date. RSAs entitle the grantee to receive shares of \nClass A or Class B Common Stock with 25% after the first service year with monthly vesting for the remaining four-\nyear service period.  Options generally vest over (i) four years with 25% vesting after one year then one thirty-sixth \nof the remainder vesting thereafter on a monthly basis or (ii) six years with 20% vesting after two years, and then \none forty-eighth of the remainder vesting thereafter on a monthly basis.  Options are exercisable up to ten years from \nthe date of grant. At December 31, 2025, 543.8 million shares remained available for future grant under the Plans. \nThe Company offers an ESPP, under which eligible employees can purchase the Company’s Common Stock at a \ndiscounted price. The Company also offers a Non-Qualified Employee Stock Purchase Plan (“NQ ESPP”), under \nwhich employees can purchase the Company’s Common Stock at the fair market value. At December 31, 2025, 27.0 \nmillion and 4.8 million shares remained available for future grant under the ESPP and NQ ESPP plans, respectively.\n\nF-46\nTable of Contents\nSummary Activity under the Plans\nBelow table summarizes activities related to the Company’s Plans, presented on an as-converted basis per the xAI \nMerger. For the purposes of the table below, each xAI option, RSU and RSA is presented as 0.1433 SpaceX option, \nRSU and RSA, respectively.  \nStock Options\nNumber of \nOptions\nWeighted \nAverage Exercise \nPrice\nWeighted \nAverage \nRemaining \nContractual Life \n(years)\nAggregate \nIntrinsic Value\nBalance at December 31, 2024 \n ........................\n530\n$\n8.86\n6.5\n$\n14,342\nGranted \n ................................................................\n20\n$\n37.27\nExercised \n .............................................................\n(34) $\n5.80\nCancelled .............................................................\n(20) $\n9.81\nOutstanding at December 31, 2025 .................\n496\n$\n10.18\n5.7\n$\n37,171\nVested and expected to vest at December 31, \n2025 \n ..................................................................\n496\n$\n10.18\n5.7\n$\n37,171\nVested and exercisable at December 31, 2025 \n ..\n398\n$\n8.31\n5.2\n$\n30,346\nRSUs\nRSAs\nNumber of \nRestricted Stock \nUnits\nWeighted \nAverage Grant \nDate Fair Value \nPer Share\nNumber of \nRestricted Stock \nAwards\nWeighted \nAverage Grant \nDate Fair Value \nPer Share\nBalance at December 31, 2024 \n ........................\n110\n$\n12.57\n109\n$\n0.00\nGranted \n ................................................................\n74\n$\n54.84\n0\n$\n93.87\nExercised \n \n .............................................................\n(51) $\n25.53\n(34) $\n0.42\nCancelled .............................................................\n(24) $\n33.44\n(42) $\n0.00\nBalance at December 31, 2025 \n ........................\n109\n$\n40.49\n34\n$\n0.11\nThe weighted-average grant-date fair value per share of options granted during the years ended December 31, 2025, \n2024, and 2023 was $21.29, $5.02, and $7.60 respectively. The total intrinsic value of options exercised during the \nyears ended December 31, 2025, 2024, and 2023 was $1,249 million, $392 million and $261 million, respectively. \nThe weighted-average grant date fair value per share of RSUs granted during the years ended December 31, 2025, \n2024, and 2023 was $54.84, $17.68, and $15.60, respectively. The total fair market value of RSUs released for the \nyears ended December 31, 2025, 2024, and 2023 was $2,151 million, $871 million and $729 million, respectively.  \nThe weighted-average grant date fair value per share of RSAs granted during the years ended December 31, 2025, \n2024, and 2023 was $93.87, $—, and $0.00, respectively. There were no RSAs released during the years ended \nDecember 31, 2025 and 2024, and the total fair value of the RSAs released during the year ended December 31, \n2023 was $38 million.  \nAt December 31, 2025, total remaining share-based compensation expense for unvested stock options, RSUs, and \nRSAs was $4,842 million, which is expected to be recognized over a weighted-average period of 3.2 years. \nESPP\nDuring the years ended December 31, 2025, 2024, and 2023, under the ESPP, the Company issued 6.3 million, 8.0 \nmillion and 6.5 million shares, respectively. For the year ended December 31, 2025, the Company issued 0.2 million \nshares under the NQ ESPP. No shares were issued under NQ ESPP during the years ended December 31, 2024 and \n2023.\n\nF-47\nTable of Contents\nCEO Award \nIn November 2025, the Company granted a performance-based award (“xAI Award”) to Elon Musk consisting of \ntwelve tranches. Each tranche represents the right to receive a number of shares at fair market value equal to 1.0% of \nxAI’s valuation at the valuation milestone. The xAI Award is subject to market conditions based on valuation \nmilestones, ranging from $213 billion to $1,313 billion, performance condition requiring the Company to receive not \nless than $2,000 million in proceeds from investors through capital raises on the milestone date, and a service \ncondition requiring Mr. Musk’s continued service over the ten-year performance period. \nThe grant date fair value of the award was determined to be $2,205 million and the Company recorded $28 million \nof share-based compensation expense for the year ended December 31, 2025.  In March 2026, the Company \nterminated the xAI Award, refer to Note 21, Subsequent Events for further discussion.\nPerformance-based awards\nIn March 2023, X issued performance-based RSU awards to all X employees that also included service conditions.  \nThe performance conditions would only be satisfied upon a change in control or completion of an initial public \noffering (deemed a liquidity event). For the years ended December 31, 2024 and 2023, no share-based compensation \nexpense was recorded as it was not probable the performance-based vesting condition would be met.  In 2025, these \nawards were modified to remove the performance-based condition, resulting in additional share-based compensation \nexpense of $588 million.  \nFair Value Determination\nThe weighted-average assumptions that were used to calculate the grant date fair value of the Company’s employee \nstock option grants are as follows:\nYear Ended December 31,\n2025\n2024\n2023\nExpected term (years)\n \n .....................................................................\n6.94\n6.80\n6.70\nVolatility\n \n .........................................................................................\n43.14 %\n39.80 %\n43.20 %\nRisk-free interest rate \n .....................................................................\n4.02 %\n4.30 %\n3.60 %\nDividend yield \n ................................................................................\n— %\n— %\n— %\nThe expected term of employee stock options represents the weighted-average period that the stock options are \nexpected to remain outstanding. The Company determined the expected term of options granted using the simplified \nmethod. Under the simplified method, the expected term of an award is presumed to be the mid-point between the \nvesting period and the contractual life of the award. \nThe Company determined the expected volatility assumption using the frequency of daily historical prices of \ncomparable public companies’ common stock for a period equal to the expected term of the options.  \nThe risk-free interest rate assumption is based upon observed interest rates on U.S. Government securities for a \nperiod consistent with the expected term of the Company’s employee stock options. \nThe dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The \nCompany has never declared or paid any cash dividends on its Common Stock and does not anticipate paying any \ncash dividends in the foreseeable future.\n\nF-48\nTable of Contents\nThe weighted-average assumptions that were used to calculate the grant date fair value of the CEO’s xAI Award are \nas follows:\nExpected term (years) \n ...........................................................................................................................\n10.0\nVolatility \n ...............................................................................................................................................\n45% – 55%\nRisk-free interest rate \n ............................................................................................................................\n4.06\nDividend yield \n .......................................................................................................................................\n0.00\nThe expected term is the period from the grant date to the end of the performance period. The Company determined \nthe expected volatility assumption using the frequency of daily historical prices of comparable public companies’ \ncommon stock for a period equal to the expected term. The risk-free interest rate assumption is based upon observed \ninterest rates on U.S. Government securities for a period consistent with the expected term. The dividend yield \nassumption is based on the Company’s history and expectation of dividend payouts. The Company has never \ndeclared or paid any cash dividends on its Common Stock and does not anticipate paying any cash dividends in the \nforeseeable future.\nSummary of Share-Based Compensation Information\nThe following table summarizes our share-based compensation expense by line item in the consolidated statements \nof operations:\nYear Ended December 31,\n2025\n2024\n2023\nCost of revenue\n \n ............................................................................... $\n253\n$\n193\n$\n167\nResearch and development \n \n .............................................................\n859\n230\n179\nSelling, general, and administrative \n ...............................................\n835\n360\n333\nTotal \n ......................................................................................... $\n1,947\n$\n784\n$\n679\nDuring the years ended December 31, 2025, 2024, and 2023, share-based compensation expense capitalized to the \nconsolidated balance sheets was $154 million, $132 million, and $108 million, respectively. No income tax benefit \nwas recognized from share-based compensation expense during the years ended December 31, 2025, 2024, and 2023 \ndue to the valuation allowance on U.S. deferred tax assets. Refer to Note 16, Income Taxes for additional details.\nNote 16 - Income Taxes\nThe U.S. and foreign components of consolidated income (loss) before income taxes for the years ended December \n31, 2025, 2024, and 2023 are as follows:\nYear Ended December 31,\n2025\n2024\n2023\nDomestic \n ......................................................................................... $\n(3,959) $\n73\n$\n(3,598)\nForeign \n ...........................................................................................\n(260)\n169\n(1,393)\nIncome (loss) before income taxes \n .............................................. $\n(4,219) $\n242\n$\n(4,991)\n\nF-49\nTable of Contents\nThe current and deferred provisions (benefits) for federal, state, and foreign income taxes consist of the following:\nYear Ended December 31,\n2025\n2024\n2023\nCurrent:\nFederal \n \n ....................................................................................... $\n(11) $\n57\n$\n11\nState \n \n ...........................................................................................\n18\n18\n24\nForeign \n .......................................................................................\n82\n51\n15\nTotal current provision \n ...............................................................\n89\n126\n50\nDeferred:\nFederal \n \n .......................................................................................\n659\n(667)\n(305)\nState \n \n ...........................................................................................\n4\n2\n(70)\nForeign \n .......................................................................................\n(34)\n(10)\n(38)\nTotal deferred provision \n .............................................................\n629\n(675)\n(413)\nTotal provision for (benefit from) income taxes \n ....................... $\n718\n$\n(549) $\n(363)\nUpon adoption of ASU 2023-09, as described in Note 2, Summary of Significant Accounting Policies, the \nreconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:\nYear Ended December 31,\n2025\nU.S. federal statutory income tax rate \n \n ....................................................................... $\n(886)\n21.0 %\nState and local income taxes, net of federal income tax effect(1)\n \n ...............................\n(105)\n2.5 %\nForeign tax effects \n .....................................................................................................\nIreland \n ...................................................................................................................\n81\n(1.9)%\nOther .....................................................................................................................\n22\n(0.5)%\nEffect of cross-border tax laws \n ..................................................................................\n(1)\n— %\nTax credits\nResearch and development tax credits ..................................................................\n(602)\n14.3 %\nForeign tax credits \n ................................................................................................\n(27)\n0.6 %\nOther .....................................................................................................................\n(11)\n0.3 %\nChange in valuation allowance \n ..................................................................................\n2,194\n(51.6)%\nNontaxable or nondeductible items\nShare-based compensation \n ....................................................................................\n(274)\n6.5 %\nOther .....................................................................................................................\n45\n(1.1)%\nChange in unrecognized tax benefits \n \n .........................................................................\n297\n(7.0)%\nOther adjustments \n ......................................................................................................\n(15)\n(0.1)%\nEffective tax rate \n ..................................................................................................... $\n718\n(17.0)%\n__________________\n(1)\nState taxes in California made up the majority (greater than 50%) of the tax effect in this category.\n\nF-50\nTable of Contents\nThe following table is a reconciliation of taxes at the U.S. federal statutory income tax rate to the Company’s benefit \nfrom income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the \nCompany’s adoption of ASU 2023-09:\nYear Ended December 31,\n2024\n2023\nFederal statutory income tax rate\n \n ............................................................................... $\n51\n$\n(1,048)\nState and local income taxes, net of federal income tax effect \n ..................................\n(213)\n(276)\nShare-based compensation \n ........................................................................................\n(90)\n(73)\nForeign tax effects \n .....................................................................................................\n(3)\n84\nResearch and development tax credits\n \n .......................................................................\n(689)\n(489)\nChange in valuation allowance ..................................................................................\n137\n1,209\nChange in unrecognized tax benefits \n .........................................................................\n299\n206\nOther adjustments \n ......................................................................................................\n(41)\n24\nProvision for (benefit from) income taxes \n ............................................................ $\n(549) $\n(363)\nUpon adoption of ASU 2023-09, cash paid for income taxes, net of refunds, during the year ended December 31, \n2025 is as follows:\nYear Ended \nDecember 31,\n2025\nFederal................................................................................................................................................... $\n70\nState and Local \n ......................................................................................................................................\n17\nForeign\nIreland \n \n ..............................................................................................................................................\n20\nMexico \n .............................................................................................................................................\n9\nOther\n \n .................................................................................................................................................\n38\nTotal cash paid for income taxes, net of refunds \n ............................................................................. $\n154\n\nF-51\nTable of Contents\nThe significant components of the deferred tax assets and liabilities are as follows:\nDecember 31,\n2025\n2024\nDeferred tax assets:\n \n  Net operating loss carryforwards \n ............................................................................. $\n2,275\n$\n572\n  Research and development and other credits\n ...........................................................\n3,627\n2,988\n  Intangible assets \n .......................................................................................................\n812\n568\n  Operating lease liability \n ...........................................................................................\n1,613\n313\n  Capitalized research and development costs \n ...........................................................\n4,077\n3,215\n  Share-based compensation \n ......................................................................................\n366\n254\n  Deferred revenue \n .....................................................................................................\n757\n664\n  Disallowed interest expense \n ....................................................................................\n762\n785\n  Other \n \n ........................................................................................................................\n233\n206\n  Total deferred tax assets \n ..........................................................................................\n14,522\n9,565\n  Valuation allowance \n ................................................................................................\n(8,286)\n(5,621)\n  Deferred tax assets, net of valuation allowance\n .......................................................\n6,236\n3,944\nDeferred tax liabilities:\n  Fixed assets \n ..............................................................................................................\n(5,209)\n(2,372)\n  Operating lease right-of-use asset\n \n ............................................................................\n(627)\n(632)\n  Unrealized gains/losses\n \n ............................................................................................\n(248)\n(244)\n  Other \n \n ........................................................................................................................\n(39)\n(32)\n  Total deferred tax liabilities \n .....................................................................................\n(6,123)\n(3,280)\nDeferred tax assets, net of valuation allowance \n ................................................. $\n113\n$\n664\nIn assessing the realizability of deferred tax assets, management considered whether it is more likely than not that \nsome or all of the deferred tax assets will not be realizable based on the relevant weight of all positive and negative \nevidence, including the retrospective combination of the financial results of the entities due to the Mergers described \nin Note 1, Nature of Business. As a result of the Mergers, management assessed the realizability of the deferred tax \nassets of the combined group and concluded that the majority of the U.S. federal and state deferred tax assets are not \nmore likely than not to be realized based on cumulative pretax losses adjusted for permanent differences and other \nnegative evidence. Accordingly, the Company has recorded a full valuation allowance against its net U.S. deferred \ntax assets as of December 31, 2025 with the exception of certain state deferred tax assets and transferrable \ninvestment tax credits that are expected to be realizable. The Company will continue to assess the realizability of its \ndeferred tax assets in future periods and will adjust the valuation allowance as necessary based on changes in facts \nand circumstances.\nIn addition, the Company continues to record a valuation allowance in certain foreign jurisdictions where the \nCompany has concluded it is more likely than not that the deferred tax assets will not be realized. \nA reconciliation of the valuation allowance is as follows:\nYear Ended December 31,\n2025\n2024\n2023\nBeginning balance \n .......................................................................... $\n5,621\n$\n5,582\n$\n4,347\nCharged to income tax expense \n ......................................................\n2,551\n204\n1,210\nCharged to other comprehensive income \n .......................................\n114\n(55)\n25\nCumulative effect adjustment \n .........................................................\n—\n(110)\n—\nEnding balance \n \n ............................................................................ $\n8,286\n$\n5,621\n$\n5,582\n\nF-52\nTable of Contents\nThe valuation allowance on the Company’s net deferred tax assets increased by $2,665 million, $39 million and \n$1,235 million during the years ended December 31, 2025, 2024, and 2023, respectively. The changes in valuation \nallowance are primarily driven by the generation of net operating loss carry-forwards (“NOLs”) and tax credits, \nwhich are not more likely than not to be realizable. For the year ended December 31, 2024, the Company released a \npartial valuation allowance on SpaceX’s U.S. deferred tax assets for the retrospectively combined comparative \nresults. Based on available projections as of December 31, 2024, management forecasted $659 million of deferred \ntax assets related to U.S. R&D credits would be utilized in the following year on a separate company basis in 2025 \nbefore the Mergers occurred, and as such, no valuation allowance was recorded on those credits.  \nAt December 31, 2025, the Company had NOLs for federal and state income tax purposes of $9,728 million and \n$5,234 million, which are available to offset taxable income in future periods. The federal NOLs generated through \nDecember 31, 2017 expire at various dates beginning in 2034 and will continue to expire through 2037, while U.S. \nfederal net operating loss carryforwards generated in 2018 or later do not expire. The state NOLs  will expire at \nvarious dates beginning in 2027. \nAt December 31, 2025, the Company had tax credits for federal and state income tax purposes of $3,586 million and \n$2,104 million, respectively, which are available to offset future periods and begin to expire in 2036 for federal \nincome tax purposes. Of the $2,104 million in state tax credits, $161 million will begin to expire in 2026 and the \nremaining credits do not expire.\nAdditionally, the Company’s net operating loss carryforwards and other tax attributes are subject to various \nlimitations and restrictions, including those arising from ownership changes under applicable tax laws, which may \nlimit the Company’s ability to utilize such attributes in the future.\nAt December 31, 2025, the Company had foreign NOLs of $126 million, which will expire at various dates based on \nthe tax laws of the different jurisdictions we operate in.\nIn assessing whether uncertain tax positions should be recognized in the financial statements, the Company first \ndetermines whether it is more likely than-not that a tax position will be sustained upon examination, including \nresolution of any related appeals or litigation process, based on the technical merits of the position. In evaluating \nwhether a tax position has met the more likely than-not recognition threshold, the Company presumes that the \nposition will be examined by the appropriate taxing authority that would have full knowledge of all relevant \ninformation. For tax positions that meet the more likely than not recognition threshold, the Company measures the \namount of benefit recognized in its financial statements at the largest amount of benefit that is greater than 50.0% \nlikely of being realized upon ultimate settlement.\nThe following table reflects changes in gross unrecognized tax benefits:\nYear Ended December 31,\n2025\n2024\n2023\nBeginning balance \n .......................................................................... $\n1,619\n$\n1,320\n$\n1,114\nGross increases - current year tax positions \n \n ...................................\n282\n302\n233\nGross increases - prior year tax positions .......................................\n16\n—\n—\nGross decreases - current year tax positions \n ..................................\n—\n—\n—\nGross decreases - prior year tax positions \n ......................................\n(1)\n(3)\n(27)\nGross decreases - settlements with tax authorities \n \n .........................\n—\n—\n—\nGross decreases - lapse of statute of limitations\n .............................\n—\n—\n—\nEnding balance \n ............................................................................ $\n1,916\n$\n1,619\n$\n1,320\nFor the years ended December 31, 2025, 2024, and 2023, the Company had unrecognized tax benefits of $1,916 \nmillion, $1,619 million, and $1,320 million respectively. The Company’s policy is to recognize interest and \npenalties associated with uncertain tax benefits as part of the income tax provision. The amount of interest and \npenalties recognized in the periods presented were insignificant. As of December 31, 2025 and 2024, the Company \nhas accrued $6 million and $5 million, respectively, related to interest and penalties on our unrecognized tax\n\nF-53\nTable of Contents\nbenefits. As of December 31, 2025, unrecognized tax benefits of $11 million, if recognized, would affect our \neffective tax rate.\nThe Company files income tax returns in the U.S. and all state and various foreign jurisdictions. To the extent the \nCompany has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted \nupon examination by the federal, state or foreign tax authorities to the extent utilized in a future period. As of \nDecember 31, 2025, the major jurisdictions in which the Company remains subject to examinations are U.S. federal \nand California for tax years 2003 and forward. Based on all available information, the Company is not aware of any \nnew information that would require the remeasurement of its uncertain tax positions. \nOn July 4, 2025, the One Big Beautiful Bill Act, Public Law No. 119-21 and formally titled “An Act to Provide for \nReconciliation Pursuant to Title II of H. Con. Res. 14” (“OBBBA”) was enacted in the United States. The OBBBA \nincludes a broad range of tax provisions, such as the permanent extension of certain provisions of the 2017 Act and \nthe restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, \nwith certain provisions effective in 2025 and others implemented through 2027. The Company has evaluated the \nprovisions of the OBBBA and determined that the most significant impacts relate to the expensing of research and \nexperimental expenditures under IRC Section 174A and interest expense limitation under IRC Section 163(j). The \neffects of applicable provisions of OBBBA have been reflected in the Company’s income tax provision.\nNote 17 - Commitments and Contingencies\nUnconditional Obligations\nThe Company’s unconditional obligations are non-cancelable contractual commitments primarily relate to the \nCompany’s investments in AI infrastructure and third-party cloud capacity arrangements and other service \narrangements. It also includes the Company’s commitments under the Spectrum Transaction, which are payable in \ncash and in the Company’s Class A Common Stock. Refer to Note 6, Intangible Assets and Goodwill for additional \ndetails. The following table summarizes the Company’s non-cancelable contractual commitments as of \nDecember 31, 2025:\n2026 \n ...................................................................................................................................................... $\n2,720\n2027 \n ......................................................................................................................................................\n21,476\n2028 \n ......................................................................................................................................................\n1,250\n2029 \n ......................................................................................................................................................\n4\n2030 \n ......................................................................................................................................................\n1\nThereafter \n ..............................................................................................................................................\n—\nTotal \n .................................................................................................................................................... $\n25,451\nLetters of Credit and Surety Bonds\nThe Company had outstanding letters of credit of $348 million at December 31, 2025 related to various customer \ncontracts, insurance agreements, and facility lease agreements. All of the outstanding letters of credit were \ncollateralized by restricted cash. The Company also had surety bonds of $51 million for self-insured workers’ \ncompensation programs and other governmental licenses at December 31, 2025.\nLegal Proceedings \nIn the normal course of its business, the Company is involved from time to time in various arbitrations, class actions, \ncommercial litigation, investigations and other legal, regulatory or governmental actions, including the significant \nmatters described below that could have a material impact on our results of operations. The Company assesses, in \nconjunction with its legal counsel, the need to record a liability for litigation and contingencies. With respect to the \ncases, actions, and inquiries described below, the Company evaluates the associated developments on a regular basis \nand will accrue a liability when it believes a loss is probable and the amount can be reasonably estimated. In\n\nF-54\nTable of Contents\naddition, the Company believes there is a reasonable possibility that it may incur a loss in some of these matters and \nthe loss may be material or exceed its estimated ranges of possible loss.\nThe outcomes of the matters described in this section, such as whether the likelihood of loss is remote, reasonably \npossible, or probable, or if and when the reasonably possible range of loss is estimable, are inherently uncertain, and \nunless specified otherwise, possible losses are not reasonably estimable at this time. If one or more of these matters \nwere resolved against the Company for amounts above management’s estimates, the Company’s financial condition \nand results of operations, including in a particular reporting period in which any such outcome becomes probable \nand estimable, could be materially adversely affected.\nIn November 2022, the European Union’s Digital Services Act (“DSA”) came into force as a result of which X has \nto comply with extensive content moderation and other duties. The Company published its first Transparency Report \nunder the DSA in November 2023. In December 2023, the European Commission (“EC”) opened a formal \ninvestigation into X and its Irish subsidiary, Twitter International Unlimited Company (“TIUC”), which was later \nrenamed to X Internet Unlimited Company (XIUC). On July 12, 2024, in relation to alleged breaches of Articles \n25(1), 39 and 40(12) of the DSA, the EC issued preliminary findings that X’s blue checkmark is deceptive, its \nadvertisement repository does not meet DSA requirements, and it grants inadequate access to data to third-party \nresearchers. On September 26, 2024, XIUC and X submitted their observations challenging the EC’s preliminary \nfindings.  On December 5, 2025, the EC delivered a final decision in which it upheld its preliminary findings and \nimposed a fine of EUR 120 million on XIUC, X., x.AI, and Elon Musk (together, the “parties”).  On February 16, \n2026, the parties challenged the EC’s decision in the General Court of the European Union. This challenge remains \npending.\nIn March 2016, non-practicing entity Youtoo Technologies filed suit against Twitter, Inc. in the United States \nDistrict Court for the Northern District of Texas alleging its Vine and Periscope products infringe Youtoo’s video-\nsharing patents (the ‘304, ‘506, and ‘997 patents). On Twitter’s motion, the district court dismissed the ‘304 and \n’506 patents as invalid. Twitter filed petitions for Inter Partes Review before the Patent Trial and Appeals Board \n(PTAB) challenging all three patents-in-suit. The PTAB upheld the ‘304 and ‘506 Patents and invalidated the ‘997 \nPatent; the Federal Circuit affirmed. On March 16, 2020, Plaintiff (now Vidstream LLC, which allegedly acquired \nthe patents from Youtoo Technologies in a bankruptcy proceeding), moved the Court to reconsider its earlier ruling \ninvalidating the ‘304 and ‘506 patents. On April 1, 2022, the Court reversed its original ruling on the ‘304 and ‘506 \npatents. On September 27, 2024, Vidstream filed a motion for partial summary judgment, which the Court granted in \npart. The case went to a jury trial, and on April 16, 2025, the jury rendered a verdict finding (i) that Twitter did not \ninfringe any claim of the ‘506 patent and two out of three claims of the ‘304 patent and that each of those patent \nclaims was invalid, but (ii) that Twitter willfully infringed one claim of the ‘304 patent. The jury awarded Plaintiff \n$105 million in damages. In November 2025, the district court affirmed the jury’s award and awarded an additional \n$67 million in prejudgment interest. Twitter has appealed and Vidstream has cross-appealed. Both appeals remain \npending before the Federal Circuit.\nIn June 2023, music publishing companies that are members of the National Music Publishers’ Association (the \n“NMPA”) filed a complaint against X in the U.S. District Court for the Middle District of Tennessee, claiming \ndirect, contributory, and vicarious copyright infringement based on Twitter’s alleged failure to expeditiously take \ndown infringing music posted by users after the music publishers allegedly gave Twitter notice of those \ninfringements. The music publishers also allege that Twitter did not suspend the accounts of “repeat infringers,” so \nthat Twitter is not entitled to a “safe harbor” from liability under the DMCA. X filed a motion to dismiss the \ncomplaint on August 14, 2023. On March 5, 2024, the Court dismissed plaintiffs’ direct infringement and vicarious \ninfringement claims, and part of plaintiffs’ claim for contributory infringement. X answered the complaint on April \n9, 2024. Litigation was stayed from June 11, 2025 to September 9, 2025 for settlement discussions that were not \nsuccessful. Accordingly, discovery is ongoing. \nIn September 2023, Dutch foundation Stichting Data Bescherming Nederland (“SDBN”) filed a putative class action \nlawsuit in the District Court of Amsterdam in the Netherlands against TIUC, Twitter, Inc., X Corp., and Twitter \nNetherlands b.v. related to Twitter’s operation of the MoPub platform. SDBN primarily claims that MoPub’s real-\ntime bidding ad exchange violated the GDPR. SDBN claims to represent 11 million Dutch internet users who \ndownloaded and used third-party mobile apps containing the MoPub software development kit during the period\n\nF-55\nTable of Contents\n2013-2022 and it seeks a monetary award in the range of € 250 to € 2,500 per person.  On February 4, 2026, the \nCourt declined to allow the case to proceed as a class action and indicated that it is considering staying the \nproceedings until the Court of Justice of the European Union has ruled in a separate case concerning the \napplicability of Dutch class action requirements to GDPR claims. The Twitter parties filed a brief in support of the \nproposed stay, which the plaintiffs opposed, on March 4, 2026.\nIn August 2024, Dutch foundation Stichting Onderzoek Marktinformatie (SOMI) initiated a collective action in the \nDistrict Court of Amsterdam in the Netherlands on behalf of approximately 7.8 million Dutch X users. Among other \nthings, SOMI seeks damages against TIUC, X Corp. and Twitter Netherlands B.V. (collectively, the “X entities”) \nfor: (1) alleged data breaches and insufficient security measures; (2) alleged unauthorized microtargeting and lack of \ntransparency; and (3) the alleged failure to moderate hate speech and the obstruction of research, all in violation of \nthe GDPR and/or DSA. The alleged data breaches relate to a Twitter API bug that came to light in 2022 and that had \nallowed persons who knew the email address or phone number of a user to determine the user’s Twitter ID. SOMI \nhas requested compensation (to be assessed at a later stage) for each member of the class, including symbolic \ndamages of EUR 1 for each member of the class that is allegedly affected by hate speech on the X platform. The X \nentities filed a procedural defense on March 12, 2025.  A hearing has been scheduled for April 2, 2026.\nIn September 2025, non-practicing entity Search and Share Technologies, LLC (“SaS”) filed a patent complaint \nagainst X Corp. in the Federal District Court for the Western District of Texas. SaS alleges that X Corp. infringed on \nU.S. Patent Nos. 10,180,952 and 11,106,744, through features in its mobile app and website enabling users to \ninteract with content through dedicated interfaces that directly share what other users see in ranked feeds and search \nresults. SaS filed an Amended Complaint on January 5, 2026. On January 20, 2026, X Corp. moved to dismiss SaS’s \nwillful infringement and induced infringement claims.  On February 3, 2026, SAS responded to, but did not oppose, \nX Corp.’s partial motion to dismiss. On February 10, 2026, X Corp. filed its reply.  On February 4, 2026, X Corp. \nfiled an IPR petition challenging the ‘744 Patent and on February 18, 2026, filed an IPR petition challenging the \n'952 Patent.\nBeginning in January 2026, the Company and certain subsidiaries have been named as defendants in multiple \nlawsuits arising from Grok’s image-generation and editing features. The complaints generally allege that Grok’s \nimage-generation and editing features enabled the creation and dissemination of nonconsensual explicit images and/\nor content representing women and/or children in sexualized contexts. The actions include Jane Doe v. X.AI Corp. \nand X.AI LLC, instituted in the U.S. District Court for the Northern District of California on January 23, 2026, and \nJane Doe 1 et al. v. X.AI Corp. and X.AI LLC (the “Jane Doe 1 Case”) instituted in the U.S. District Court for the \nNorthern District of California on March 16, 2026.  These cases are putative class actions, asserting claims \nincluding, among other things, claims of strict liability, negligence, nuisance, rights of privacy or publicity, and, in \nthe Jane Doe 1 Case, certain federal statutory claims.  Plaintiffs in these two cases seek, among other things, \ncompensatory, statutory and punitive damages, restitution, disgorgement and injunctive relief. In addition, a case, \nMayor and City Council of Baltimore ex rel. Ebony M. Thompson v. X Corp., X.AI Corp., X.AI LLC, and Space \nExploration Technologies Corp, was instituted in the Baltimore City Circuit Court on March 24, 2026 (the \n“Baltimore Case”). The plaintiff in the Baltimore Case, the Mayor and City Council of Baltimore, asserts similar \nclaims to those in the two cases discussed above under Baltimore’s Consumer Protection Ordinances. The plaintiff \nin the Baltimore Case seeks statutory penalties and/or injunctive relief. The defendants intend to defend themselves \nvigorously in these actions.\nThe Company has recorded an accrual of $530 million for litigation losses that are probable and reasonably \nestimable in Accrued expenses and other current liabilities and Other liabilities on the consolidated balance sheet as \nof December 31, 2025. For other matters, the Company is not currently able to estimate the reasonably possible loss \nor range of loss.\nNon-Income Taxes\nThe Company is under various non-income tax audits by domestic and foreign tax authorities. These audits \nprimarily revolve around routine inquiries, refund requests, and employee benefits. The Company accrues non-\nincome taxes that may result from these audits when they are probable and can be reasonably estimated. Due to the\n\nF-56\nTable of Contents\ncomplexity and uncertainty of some of these matters, however, as well as the judicial process in certain jurisdictions, \nthe final outcome of these audits may be materially different from the Company’s expectations.\nIndemnifications\nIn the ordinary course of business, the Company may provide indemnifications of varying scope and terms to \ncustomers, vendors, lessors, investors, directors, officers, employees, and other parties with respect to certain \nmatters, including, but not limited to, losses arising out of the Company’s breach of certain agreements, services to \nbe provided by the Company, or from intellectual property infringement claims made by third parties. These \nindemnifications may survive the termination of the underlying agreement and the maximum potential amount of \nfuture payments the Company could be required to make under these indemnification provisions may not be subject \nto maximum loss clauses.  It is not possible to determine the maximum potential amount under these indemnification \nagreements due to the unique facts and circumstances involved in each particular agreement. Historically, payments \nmade by us under these agreements have not had a material impact on our consolidated financial statements. At \nDecember 31, 2025 and 2024, the Company has not accrued a liability for any indemnification claims, because the \nlikelihood of incurring a payment obligation, if any, in connection with any such indemnification claims is not \nprobable or reasonably estimable.\nNote 18 - Related Party Transactions\nThe Company periodically does business with certain entities with which its CEO and directors are affiliated. \nDuring the years ended December 31, 2025 and 2024, the Company purchased $506 million and $191 million of \nMegapack products, respectively, from Tesla, Inc. (“Tesla ”) recorded in Property, plant, and equipment, net in the \nconsolidated balance sheets. The Company also obtained $131 million of Cybertrucks at manufacturer’s suggested \nretail price from Tesla recorded in Property, plant, and equipment, net in the consolidated balance sheets during the \nyear ended December 31, 2025. \nOn October 12, 2025, and as subsequently amended on November 10, 2025, CTC, a subsidiary of xAI and an \nindirect subsidiary of the Company, entered into an equipment lease agreement with Valor Equity Partners (“Valor ”) \nfor certain AI infrastructure hardware (the “Valor transaction ”). The founder, CEO and Chief Investment Officer of \nValor, Antonio J. Gracias, serves as one of the directors of the Company. The Valor transaction was deemed to be a \nfailed sale-leaseback transaction and the Company recorded the related debt of $455 million and $4,052 million \nwithin Debt and finance leases, current and Debt and finance leases, net of current, respectively, as of December 31, \n2025 in the Company’s consolidated balance sheets, and $66 million in Interest expense for the year ended \nDecember 31, 2025 in the Company’s consolidated statements of operations. Refer to Note 10, Debt for additional \ndetails. The related asset is recorded within Property, plant, and equipment, net in the Company’s consolidated \nbalance sheets.  \nIn 2025, Elon Musk, through his trust, purchased $1,421 million of common stock from current and former \nemployees.\nOther transactions with Tesla and other related parties during the years ended December 31, 2025, 2024, and 2023 \nwere immaterial.\n\nF-57\nTable of Contents\nNote 19 - Segments\nFollowing the Mergers, the Company evaluated how to view and measure performance of the combined company \nand potential realignment of individual entity’s historical segment structure. Following this evaluation, the Company \ndetermined that as a combined company, effective in Q1 2026, the Company’s Chief Executive Officer, as the Chief \nOperating Decision Maker (“CODM”), organizes the Company, manages resource allocations, and measures \nperformance among three operating and reportable segments: (i) Space, (ii) Connectivity, and (iii) AI. Prior period \npresentations for segments conform to the current segment reporting structure.  \nThe Company’s CODM assesses performance and allocates resources to operating segments based on segment \nincome (loss) from operations by comparing actual income (loss) from operations to historical results and previously \nforecasted financial information. The Company’s CODM does not evaluate operating and reportable segments using \nasset or liability information. \nThe following tables present information as to revenues, significant segment expenses, and income (loss) from \noperations by the Company’s reportable segments:\nYear Ended December 31,\n2025\nSpace\nConnectivity\nAI\nTotal Reportable \nSegments\nRevenue \n ............................................................. $\n4,086\n$\n11,387\n$\n3,201\n$\n18,674\nCosts and expenses\nCost of revenue \n .................................................\n1,352\n5,921\n2,178\n9,451\nResearch and development \n ...............................\n3,004\n575\n5,064\n8,643\nSelling, general, and administrative \n .................\n349\n468\n1,827\n2,644\nRestructuring charges \n .......................................\n—\n—\n487\n487\nImpairment\n ........................................................\n38\n—\n—\n38\nTotal costs and expenses \n ................................\n4,743\n6,964\n9,556\n21,263\nIncome (loss) from operations \n .........................\n(657)\n4,423\n(6,355)\n(2,589)\nInterest expense \n ...................................................\n(1,945)\nInterest income \n ....................................................\n492\nOther income (expense), net \n ...............................\n(177)\nIncome (loss) before income taxes \n ..................\n$\n(4,219)\nSupplemental segment information\nDepreciation and amortization \n ............................ $\n757\n$\n2,376\n$\n3,568\n$\n6,701\nShare-based compensation \n .................................. $\n515\n$\n369\n$\n1,063\n$\n1,947\nImpairment \n .......................................................... $\n38\n$\n—\n$\n—\n$\n38\nCapital expenditures \n ............................................ $\n3,832\n$\n4,178\n$\n12,727\n$\n20,737\n\nF-58\nTable of Contents\nYear Ended December 31,\n2024\nSpace\nConnectivity\nAI\nTotal Reportable \nSegments\nRevenue \n ............................................................. $\n3,796\n$\n7,599\n$\n2,620\n$\n14,015\nCosts and expenses\nCost of revenue \n .................................................\n1,541\n4,768\n1,687\n7,996\nResearch and development \n ...............................\n1,835\n453\n1,176\n3,464\nSelling, general, and administrative \n .................\n375\n333\n1,105\n1,813\nRestructuring charges \n .......................................\n—\n—\n213\n213\nImpairment\n ........................................................\n24\n39\n—\n63\nTotal costs and expenses \n ................................\n3,775\n5,593\n4,181\n13,549\nIncome (loss) from operations \n .........................\n21\n2,006\n(1,561)\n466\nInterest expense \n ...................................................\n(1,580)\nInterest income \n ....................................................\n371\nOther income (expense), net \n ...............................\n985\nIncome (loss) before income taxes \n ..................\n$\n242\nSupplemental segment information\nDepreciation and amortization \n ............................ $\n637\n$\n1,508\n$\n1,679\n$\n3,824\nShare-based compensation \n .................................. $\n472\n$\n296\n$\n16\n$\n784\nImpairment \n .......................................................... $\n24\n$\n39\n$\n—\n$\n63\nCapital expenditures \n ............................................ $\n2,032\n$\n3,498\n$\n5,633\n$\n11,163\nYear Ended December 31,\n2023\nSpace\nConnectivity\nAI\nTotal Reportable \nSegments\nRevenue \n ............................................................. $\n3,557\n$\n3,869\n$\n2,961\n$\n10,387\nCosts and expenses\nCost of revenue \n .................................................\n1,669\n2,786\n1,655\n6,110\nResearch and development \n ...............................\n1,538\n381\n186\n2,105\nSelling, general, and administrative \n .................\n351\n233\n1,081\n1,665\nRestructuring charges \n .......................................\n—\n—\n237\n237\nImpairment\n ........................................................\n—\n—\n3,775\n3,775\nTotal costs and expenses \n ................................\n3,558\n3,400\n6,934\n13,892\nIncome (loss) from operations \n .........................\n(1)\n469\n(3,973)\n(3,505)\nInterest expense \n \n ...................................................\n(1,693)\nInterest income \n \n ....................................................\n249\nOther income (expense), net \n ...............................\n(42)\nIncome (loss) before income taxes ..................\n$\n(4,991)\nSupplemental segment information\nDepreciation and amortization \n ............................ $\n571\n$\n884\n$\n1,180\n$\n2,635\nShare-based compensation \n \n .................................. $\n427\n$\n249\n$\n3\n$\n679\nImpairment \n .......................................................... $\n—\n$\n—\n$\n3,775\n$\n3,775\nCapital expenditures ............................................ $\n1,497\n$\n2,455\n$\n463\n$\n4,415\n\nF-59\nTable of Contents\nThe following tables provide revenue by geography based on the country of domicile in which the transaction \noriginated: \nYear Ended December 31,\n2025\n2024\n2023\nUSA \n ................................................................................................ $\n12,966\n$\n10,008\n$\n7,473\nIreland\n \n .............................................................................................\n1,827\n1,371\n1,047\nCanada \n ............................................................................................\n764\n582\n447\nAll Other .........................................................................................\n3,117\n2,054\n1,420\nTotal Revenues \n .......................................................................... $\n18,674\n$\n14,015\n$\n10,387\nAs of December 31, 2025 and 2024, substantially all of the Company’s long-lived assets were located within the \nUnited States. \nNote 20 - Restructuring\nIn 2022. X, an indirect subsidiary of the Company (through the X Merger and subsequently, xAI Merger), initiated \nglobal employee workforce reductions, the effects of which continued through 2025. The charges associated with \nthe workforce reduction include cash severance expense and other termination benefits. Restructuring charges also \ninclude impairment of operating lease right-of-use assets for excess office space and related leasehold improvements \nand office equipment, as well as lease termination penalties for office space terminated before the end of the lease \nterm as a result of the workforce reduction.  \nTotal charges of $487 million, $147 million, and $77 million associated with the workforce reduction were recorded \nin Restructuring charges in the consolidated statements of operations for the years ended December 31, 2025, 2024, \nand 2023, respectively. Additionally, the Company recorded restructuring charges of $36 million, and $54 million \nrelated to its leasehold improvements and office equipment, and restructuring charges of $30 million, and $106 \nmillion for operating lease right-of-use assets as part of its facilities consolidation efforts for the years ended \nDecember 31, 2024 and 2023, respectively.\nThe following table is a summary of the changes in the restructuring liabilities for each period presented, included \nwithin Accrued expenses and other current liabilities and Other liabilities on the consolidated balance sheets:\nRestructuring liabilities as of December 31, 2023 ................................................................................ $\n8\nSeverance and other personnel costs .................................................................................................\n147\nCash payments\n \n ...................................................................................................................................\n(11)\nOther adjustments ..............................................................................................................................\n8\nRestructuring liabilities as of December 31, 2024 ................................................................................\n152\nSeverance and other personnel costs .................................................................................................\n487\nCash payments\n \n ...................................................................................................................................\n(212)\nOther adjustments ..............................................................................................................................\n16\nRestructuring liabilities as of December 31, 2025 ................................................................................ $\n443\nNote 21 - Subsequent Events \nThe Company has evaluated subsequent events that occurred from January 1, 2026 through March 30, 2026, which \nis the date the consolidated financial statements were available to be issued, and determined that there were no \nsubsequent events or transactions that required recognition or disclosure in the consolidated financial statements, \nexcept as discussed below.\n\nF-60\nTable of Contents\nOfficer Equity Awards \nIn January 2026, the Company granted 1,000 million performance-based restricted shares of Class B common stock \nto Elon Musk. The restricted shares vest upon (i) the Company’s achievement of specified market capitalization \nmilestones across 15 equal tranches ranging from $500 billion to $7.5 trillion, with each milestone reflecting $500 \nbillion in additional valuation, and (ii) the Company’s establishment of a permanent human colony on Mars with at \nleast one million inhabitants, in each case, subject to Mr. Musk’s continued employment. \nIn March 2026, the Company cancelled Mr. Musk’s xAI Award and replaced it with a grant of 302.1 million \nperformance-based restricted shares of Class B common stock, which vest upon (i) the achievement of specified \nmarket capitalization milestones across 12 equal tranches ranging from $1.065 trillion to $6.565 trillion, with each \nmilestone reflecting $500 billion in additional valuation, and (ii) the Company’s completion of non-Earth-based data \ncenters capable of delivering 100 terawatts of compute per year, in each case, subject to Mr. Musk’s continued \nemployment. \nIn January 2026, the Company approved an amendment to 4 million performance-based stock options granted to \nBret Johnsen, Chief Financial Officer, that were originally issued in 2024. In lieu of vesting based on free cash flow \nachievement in excess of a baseline, 371 thousand of the stock options will vest for each $10 billion in adjusted \nEBITDA achieved during the 2025 through 2029 fiscal years, assessed on an annual basis. For purposes of this \naward, adjusted EBITDA is calculated as income from operations excluding (i) depreciation and amortization, (ii) \nshare-based compensation, (iii) impairment, and (iv) restructuring impacts. Once a tranche of the stock options have \nbecome earned as a result of the Company’s adjusted EBITDA performance as of the end of a particular fiscal year, \nsuch stock options remain subject to an additional one-year and one day service-based vesting requirement \nfollowing December 31 of the fiscal year in which such tranche was earned. The number of options granted was not \nchanged in the amendment. None of the stock options became earned on account of the Company’s adjusted \nEBITDA performance for the year ended December 31, 2025.\nShare Repurchases\nBetween January and March 2026, the Company repurchased Redeemable Convertible Preferred Stock and \nCommon Stock from eligible current and former employees as well as third-party investors totaling $1,396 million. \nSale-Leaseback Transaction\nIn January 2026, and as further amended on February 18, 2026, CTC entered into an equipment lease agreement \nwith Valor for certain AI infrastructure hardware (“Valor transaction II ”). Similar to the Valor transaction, the Valor \ntransaction II was considered to be a transaction with a related party. The Valor transaction II is deemed to be a \nfailed sale-leaseback transaction and the Company recorded the related debt of $5,365 million in the Company’s \nconsolidated balance sheets.\nxAI Merger Closing\nPursuant to the terms of the xAI Merger on February 2, 2026, the Company issued, prior to the 2026 Stock Split, \n321.7 million shares of Class A Common Stock, 121.7 million shares of Class B Common Stock and paid $2,947 \nmillion in cash to holders of xAI Common Stock and Redeemable Convertible Preferred Stock. Refer to Note 13, \nRedeemable Convertible Preferred Stock and Shareholders’ Equity for additional details.\nTesla’s xAI Investment and SpaceX Class A Common Stock Issuance\nIn January 2026, Tesla entered into an agreement with xAI to invest $2,000 million via a purchase of xAI Series E \nRedeemable Convertible Preferred Stock. Pursuant to the terms of that agreement and a letter agreement entered into \nbetween xAI and Tesla on January 16, 2026, xAI’s issuance of the shares of Series E Redeemable Convertible \nPreferred Stock, and Tesla’s payment therefore, was conditioned upon the receipt of required regulatory approvals. \nFollowing the xAI Merger, Tesla’s right to acquire Series E Redeemable Convertible Preferred Stock of xAI was \nconverted into the right to acquire SpaceX Class A common stock. On March 12, 2026, following expiration of the\n\nF-61\nTable of Contents\napplicable regulatory waiting period, SpaceX issued 3.8 million shares of Class A Common Stock (on a pre-2026 \nStock Split basis) to Tesla in accordance with the terms of the foregoing agreements. \nTesla Collaboration\nIn March 2026, the Company announced a collaboration with Tesla to build a chip manufacturing facility (referred \nto as Terafab).\nSpaceX Bridge Loan Credit Agreement\nIn March 2026, SpaceX entered into a new bridge loan credit agreement (“SpaceX Bridge Loan”) for \n$20,000 million with a syndicate of banks. The SpaceX Bridge Loan matures on September 2, 2027 with two three-\nmonth extensions, at the option of the Company, reaching a final maturity date of March 2, 2028. The SpaceX \nBridge Loan proceeds were used to extinguish and pay off the X B-1 Term Loan, X B-3 Term Loan, xAI Fixed Rate \nLoan, xAI Floating Rate Loan, and the xAI 12.5% Senior Secured Notes. The SpaceX Bridge Loan bears interest at \na rate per annum of (i) between 0.75%-1.75%, dependent upon the debt rating of the Company, plus the relevant \nTerm SOFR or (ii) the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus \n1.0% and (d) 1.0%, plus an applicable margin ranging from 0.00% to 0.75% (depending on the Company’s debt \nrating). Obligations under the SpaceX Bridge Loan were guaranteed jointly and severally by certain subsidiaries of \nthe Company. The SpaceX Bridge Loan is repayable at any time, in whole or in part, without premium or penalty.  \nThe Company is required to meet various covenants, including meeting certain reporting requirements, and certain \nfinancial covenants.\nConcurrently with the SpaceX Bridge Loan, the Company repaid the outstanding principal and accrued interests of \nthe X B-1 Term Loan, X B-3 Term Loan, xAI Fixed Rate Term Loan, xAI Floating Rate Term Loan and xAI 12.5% \nSecured Senior Notes for an aggregate amount of $18,905 million, including $1,163 million of prepayment penalty. \nPurchase Commitments\nIn March 2026, the Company executed a purchase agreement with an unaffiliated third party to acquire additional \nturbines for the AI infrastructure totaling $805 million through 2029. \nNote 22 - Subsequent Events to the Original Issuance of the Consolidated Financial Statements (Unaudited)\nThe Company has evaluated subsequent events that occurred from the date the consolidated financial statements \nwere originally issued on March 30, 2026 through May 7, 2026, the date the consolidated financial statements were \navailable to be reissued, and determined that the following subsequent events require disclosure in the consolidated \nfinancial statements.\nCollaboration Agreement \nOn April 19, 2026, the Company entered into a compute agreement with Anysphere, Inc., doing business as Cursor, \na San Francisco-based private software company (“Cursor”). Pursuant to the compute agreement, the Company will \ncollaborate with Cursor to improve the Company’s existing models, including Grok, and potentially to jointly \ndevelop AI models and related model-specific deliverables. \nConcurrent with the compute agreement, the Company also entered into an option agreement for the right, but not \nthe obligation, to acquire Cursor. The option agreement generally provides that the Company may exercise the call \noption at any time during the 30-day period following the earlier of (i) seven trading days following the completion \nof the Company’s IPO and (ii) September 30, 2026. Exercise of the call option is in the Company’s sole discretion \nand subject to further approval by the board of directors. Cursor is also subject to certain exclusivity obligations \nunder the option agreement. The consideration for the acquisition of Cursor would consist of shares of  Class A \ncommon stock based on an implied equity value of Cursor of $60.0 billion, and the price of Class A common stock \nthat equals, if the acquisition closed prior to the completion of this offering, the most recent quarterly valuation, or, \nif the acquisition closed after the completion of the Company’s IPO, the volume-weighted average closing price \nthereof over the seven consecutive trading days immediately preceding the closing of the acquisition. If either (i) the \nCompany decides to terminate the option agreement or (ii) Cursor is eligible to and decides to terminate due to the\n\nF-62\nTable of Contents\nCompany’s material breach of the option agreement, Cursor is entitled to a $1.5 billion termination fee under the \noption agreement and an $8.5 billion deferred services fee under the compute agreement. These fees are payable in \ncash (or Class A common stock, if the Company’s IPO has not been consummated at the time the fees become \npayable). \nThe Company has conducted preliminary due diligence on Cursor’s business, technology and operations, and expect \nto continue such diligence in connection with any decision to exercise the call option. The Company cannot predict \nwhether the Company will elect to exercise the call option or, if exercised, whether the acquisition will close on the \nanticipated terms or at all.\nSale-Leaseback Transaction\nOn April 24, 2026, CTC entered into a five-year equipment lease agreement with Valor, a related party, for certain \nAI infrastructure hardware (“Valor transaction III”) for total undiscounted lease payments of $6,587 million. \nAsset Acquisition\nOn April 30, 2026, the Company entered into an asset purchase agreement with an unaffiliated third party to \npurchase certain mobile gas turbines and related packages for approximately $2,000 million (the “Turbine \nAcquisition”). The closing of the Turbine Acquisition is expected to occur in May 2026 and is subject to customary \nclosing conditions. The seller has also agreed to enter into a post-closing services agreement to support the \nCompany's turbine operations. The Turbine Acquisition will help provide power to the Company's data centers.\nCloud Services Agreement\nOn May 3, 2026, the Company entered into a cloud services agreement with Anthropic PBC, an AI research and \ndevelopment public benefit corporation, with respect to access to compute capacity. Pursuant to this agreement, the \ncustomer has agreed to pay a monthly fee through May 2029, with capacity ramping in May 2026 at a reduced fee. \nThe agreement may be terminated by either party upon 90 days’ notice. The customer will retain ownership and \nintellectual property rights in its content, AI models, and related data.\n\nF-63\nTable of Contents\n \nSpace Exploration Technologies Corp.\nConsolidated Balance Sheets\n(in millions, except per share data)\n(unaudited)\nMarch 31, 2026\nDecember 31, 2025\nAssets\nCurrent assets\nCash and cash equivalents\n ................................................................................................................\n$\n15,852\n$\n24,747\nMarketable securities .......................................................................................................................\n7,823\n—\nAccounts receivable, net of allowance for credit losses of $47 and $39 at March 31, 2026 and \nDecember 31, 2025, respectively \n \n ...............................................................................................\n1,833\n1,579\nInventory \n \n ..........................................................................................................................................\n2,588\n2,416\nPrepaid expenses and other current assets .......................................................................................\n1,636\n2,210\nTotal current assets\n .....................................................................................................................\n29,732\n30,952\nProperty, plant, and equipment, net(a) \n \n ....................................................................................................\n53,879\n42,602\nFinance lease right-of-use assets \n \n ............................................................................................................\n1,182\n1,260\nIntangible assets, net \n ..............................................................................................................................\n1,432\n1,548\nDigital assets \n ..........................................................................................................................................\n1,293\n1,637\nGoodwill\n .................................................................................................................................................\n11,681\n11,809\nDeferred tax assets \n .................................................................................................................................\n213\n141\nOther assets \n ............................................................................................................................................\n2,682\n2,130\nTotal assets \n \n ...............................................................................................................................\n$\n102,094\n$\n92,079\nLiabilities, Redeemable Convertible Preferred Stock, and Shareholders’ Equity\nCurrent liabilities\nAccounts payable \n \n ...................................................................................................................................\n10,002\n11,792\nDeferred revenue, current \n \n .....................................................................................................................\n7,207\n6,111\nDebt and finance leases, current (related party of $1,121 and $455 at March 31, 2026 and \nDecember 31, 2025, respectively) \n \n .....................................................................................................\n1,538\n928\nAccrued expenses and other current liabilities ......................................................................................\n5,689\n2,569\nTotal current liabilities ...........................................................................................................................\n24,436\n21,400\nLong-term liabilities\nDeferred revenue, net of current \n ...........................................................................................................\n6,029\n6,005\nDebt and finance leases, net of current (related party of $7,920 and $4,052 at March 31, 2026 and \nDecember 31, 2025, respectively) .....................................................................................................\n28,727\n21,968\nOther liabilities \n .......................................................................................................................................\n1,320\n1,381\nTotal liabilities ......................................................................................................................................\n60,512\n50,754\nCommitments and contingencies (Note 16)\nRedeemable convertible preferred stock\nRedeemable convertible preferred stock, par value $0.001; 189 and 2,351 shares issued; 135 and \n2,046 shares outstanding as of March 31, 2026 and December 31, 2025, respectively \n ....................\n7,049\n38,752\nShareholders’ equity\nClass A common stock, par value $0.001; 2,965 and 2,036 shares issued; 2,883 and 1,952 shares \noutstanding as of March 31, 2026 and December 31, 2025, respectively .........................................\n3\n3\nClass B common stock, par value $0.001; 2,421 and 643 shares issued and outstanding as of March \n31, 2026 and December 31, 2025, respectively\n .................................................................................\n3\n1\nClass C common stock, par value $0.001; 494 and 484 shares issued and outstanding as of March \n31, 2026 and December 31, 2025, respectively\n .................................................................................\n0\n0\nClass D common stock, par value $0.0001; no shares issued and outstanding as of March 31, 2026 \nand December 31, 2025, respectively\n ................................................................................................\n—\n—\nAdditional paid-in capital\n .......................................................................................................................\n74,083\n37,706\nAccumulated deficit \n \n ...............................................................................................................................\n(41,311)\n(37,035)\nAccumulated other comprehensive income \n \n ...........................................................................................\n1,755\n1,898\nTotal shareholders’ equity \n .................................................................................................................\n34,533\n2,573\nTotal liabilities, redeemable convertible preferred stock, and shareholders’ equity \n ...................\n$\n102,094\n$\n92,079\n__________________\n(a)\nRefer to Note 17, Related Party Transactions for additional details on related party arrangements.\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-64\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Operations\n(in millions, except per share data)\n(unaudited)\nThree Months Ended March 31,\n2026\n2025\nRevenue \n ........................................................................................................................ $\n4,694\n$\n4,067\nCosts and expenses \nCost of revenue \n .........................................................................................................\n2,388\n1,962\nResearch and development\n ........................................................................................\n3,514\n1,557\nSelling, general, and administrative \n ..........................................................................\n746\n493\nRestructuring charges (credits) \n .................................................................................\n(11)\n4\nImpairment \n ................................................................................................................\n—\n24\nTotal costs and expenses \n ......................................................................................\n6,637\n4,040\nIncome (loss) from operations \n \n ....................................................................................\n(1,943)\n27\nInterest expense (related party of $186 and $- for March 31, 2026 and 2025, \nrespectively) \n ...............................................................................................................\n(664)\n(447)\nInterest income \n ...............................................................................................................\n213\n117\nOther expense, net\n ..........................................................................................................\n(1,876)\n(211)\nLoss before income taxes \n \n .............................................................................................\n(4,270)\n(514)\nProvision for income taxes \n ............................................................................................\n6\n14\nNet loss \n \n .......................................................................................................................... $\n(4,276) $\n(528)\nNet loss attributable to shareholders - basic and diluted \n ........................................... $\n(4,947) $\n(528)\nNet loss per share of common stock attributable to common shareholders\nBasic and Diluted \n ........................................................................................................... $\n(1.27) $\n(0.18)\nWeighted average shares used in computing net loss per share of common stock\nBasic and Diluted \n ...........................................................................................................\n3,884\n2,875\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-65\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Comprehensive Loss\n(in millions)\n(unaudited)\nThree Months Ended March 31,\n2026\n2025\nNet loss \n ..................................................................................................................... $\n(4,276) $\n(528)\nOther comprehensive income (loss)\nChange in foreign currency translation adjustments, net of tax \n \n ...............................\n(140)\n257\nUnrealized gains (losses) on marketable securities, net of tax \n .................................\n(3)\n2\nOther comprehensive income (loss) \n .........................................................................\n(143)\n259\nComprehensive loss \n \n \n ................................................................................................ $\n(4,419) $\n(269)\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-66\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Redeemable Convertible Preferred Stock and Shareholders’ Equity\n(in millions)\n(unaudited)\nRedeemable Convertible \nPreferred Stock\nCommon Stock\nShares\nAmount\nShares\nAmount\nAdditional \nPaid-in  \nCapital\nAccumulated \nDeficit\nAccu\nO\nComp\nIn\nBalances at December 31, 2024 \n ........................................\n1,748\n$\n20,941\n3,023\n$\n3\n$\n35,865\n$\n(32,098)\n$\nShare-based compensation \n ..................................................\n—\n—\n—\n—\n262\n—\nCommon stock issued, net of tax withholding \n ....................\n—\n—\n26\n0\n931\n—\nRepurchase of common stock \n .............................................\n—\n—\n(28)\n0\n(508)\n—\nConversion of redeemable convertible preferred stock to \ncommon stock \n \n .................................................................\n0\n(1)\n2\n0\n1\n—\nTransfer of equity in business combination \n ........................\n—\n—\n1\n0\n39\n—\nNet loss ................................................................................\n—\n—\n—\n—\n—\n(528)\nOther comprehensive income \n ..............................................\n—\n—\n—\n—\n—\n—\nBalances at March 31, 2025 ..............................................\n1,748\n$\n20,940\n3,024\n$\n3\n$\n36,590\n$\n(32,626)\n$\nRedeemable Convertible \nPreferred Stock\nCommon Stock\nShares\nAmount\nShares\nAmount\nAdditional \nPaid-in  \nCapital\nAccumulated \nDeficit\nAccu\nO\nComp\nIn\nBalances at December 31, 2025 \n \n ..........................................\n2,046\n$\n38,752\n3,079\n$\n4\n$\n37,706\n$\n(37,035)\n$\nShare-based compensation \n \n ..................................................\n—\n—\n—\n—\n693\n—\nIssuance of redeemable convertible preferred stock \n ...........\n78\n5,869\n—\n—\n—\n—\nCommon stock issued, net of tax withholding \n \n ....................\n—\n—\n1,346\n1\n2,460\n—\nRepurchase of common and redeemable convertible \npreferred stock \n ................................................................\n(2)\n(69)\n(31)\n—\n(1,864)\n—\nConversion of redeemable convertible preferred stock \npursuant to the xAI Merger \n .............................................\n(1,987)\n(37,476)\n1,424\n1\n37,474\n—\nRepurchase of common stock pursuant to xAI Merger \n .......\n—\n—\n(25)\n—\n(2,413)\n—\nConversion of redeemable convertible preferred stock to \ncommon stock \n \n .................................................................\n—\n(27)\n5\n—\n27\n—\nNet loss ................................................................................\n—\n—\n—\n—\n—\n(4,276)\nOther comprehensive loss ...................................................\n—\n—\n—\n—\n—\n—\nBalances at March 31, 2026 ..............................................\n135\n$\n7,049\n5,798\n$\n6\n$\n74,083\n$\n(41,311)\n$\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-67\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Cash Flows\n(in millions)\n(unaudited)\nThree Months Ended March 31,\n2026\n2025\nCash flows from operating activities\nNet loss ..................................................................................................................................... $\n(4,276) $\n(528)\nAdjustments to reconcile net loss to net cash provided by operating activities:\nDepreciation and amortization ............................................................................................\n2,442\n1,443\nShare-based compensation ..................................................................................................\n639\n232\nUnrealized loss on digital assets \n .........................................................................................\n344\n188\nImpairment and loss on disposal of fixed assets, net ..........................................................\n5\n32\nAmortization of debt discount and issuance costs \n ..............................................................\n19\n18\nLoss on debt extinguishment ..............................................................................................\n1,526\n—\nOther ...................................................................................................................................\n(26)\n31\nChanges in operating assets and liabilities\nAccounts receivable .......................................................................................................\n(218)\n(197)\nInventory\n ........................................................................................................................\n(384)\n(322)\nPrepaid expenses and other assets .................................................................................\n(74)\n(88)\nAccounts payable\n ...........................................................................................................\n(528)\n93\nDeferred revenue ...........................................................................................................\n1,119\n(34)\nOperating lease liabilities, net .......................................................................................\n(5)\n(1)\nOther liabilities \n ..............................................................................................................\n464\n(140)\nNet cash provided by operating activities ................................................................ $\n1,047\n$\n727\nCash flows from investing activities\nPurchases of property, plant, and equipment (related party of $34 and $84 for March 31, \n2026 and 2025, respectively) ...............................................................................................\n(10,107)\n(4,140)\nCapitalized interest ...................................................................................................................\n(7)\n—\nProceeds from product rebates \n .................................................................................................\n1,195\n—\nPurchases of marketable securities ...........................................................................................\n(7,801)\n(312)\nMaturities of marketable securities ..........................................................................................\n—\n289\nOther investing activities, net ...................................................................................................\n(4)\n(7)\nNet cash used in investing activities \n ................................................................................... $\n(16,724) $\n(4,170)\nCash flows from financing activities\nPrincipal repayments on finance leases ....................................................................................\n(82)\n(66)\nProceeds from debt and other financing obligations ................................................................\n22,694\n4,744\nPayment of debt issuance costs\n(23)\n(3)\nRepayments on debt and other financing obligations ..............................................................\n(18,295)\n(4,745)\nPayment of debt extinguishment premium\n(1,153)\n—\nProceeds from issuance of capital stock, net of issuance costs ................................................\n8,319\n899\nProceeds from employee equity award plans ...........................................................................\n111\n33\nPayments for repurchase of common and redeemable convertible preferred stock .................\n(4,346)\n(508)\nTaxes paid related to net share settlement of equity awards ....................................................\n(100)\n—\nNet cash provided by financing activities ........................................................................... $\n7,125\n$\n354\nEffect of exchange rate changes on cash and cash equivalents\n ................................................\n36\n70\nNet change in cash and cash equivalents and restricted cash ...................................................\n(8,516)\n(3,019)\nCash and cash equivalents and restricted cash, beginning of the period\n ..................................\n25,124\n11,501\nCash and cash equivalents and restricted cash, end of the period ............................................ $\n16,608\n$\n8,482\n\nF-68\nTable of Contents\nThree Months Ended March 31,\n2026\n2025\nSupplemental disclosures of cash flow information\nCash paid for the following:\nInterest, net of interest capitalized ...................................................................................... $\n990\n$\n382\nIncome taxes, net ................................................................................................................ $\n8\n$\n7\nSupplemental schedule of noncash investing and financing activities\nShare-based compensation capitalized in property, plant, and equipment, net\n ........................ $\n60\n$\n30\nPurchases of property, plant, and equipment included in accrued expenses and accounts \npayable ................................................................................................................................. $\n10,649\n$\n565\nPurchases of  property, plant, and equipment financed by other financings ............................ $\n2,684\n$\n—\nThe accompanying notes are an integral part of these consolidated financial statements.\n\nF-69\nTable of Contents\nSPACE EXPLORATION TECHNOLOGIES CORP.\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n(tables in millions, except per share data) \n(unaudited)\nNote 1 - Nature of Business\nDescription of Business \nSpace Exploration Technologies Corp. and its wholly owned subsidiaries, collectively referred to as the “Company” \nor “SpaceX,” operate three segments – (i) the Space segment designs, manufactures, and launches reusable rockets \nto provide high cadence, reliable, and affordable access to space at unprecedented scale, (ii) the Connectivity \nsegment operates a worldwide high-speed, low-latency broadband network powered by thousands of Starlink \nsatellites in Low-Earth Orbit, delivering connectivity to millions of consumer, enterprise, and government customers \nthrough our Starlink offering, and (iii) the AI segment operates a vertically integrated AI platform spanning a \nfrontier LLM Grok, AI solutions for consumer and enterprise customers, X — a real-time information, \nentertainment, and free speech platform — and AI computational infrastructure.\nOn February 2, 2026 (“xAI Merger Date”), the Company completed its acquisition of X.AI Holdings Corp. (“xAI”), \npursuant to which xAI became a wholly-owned subsidiary of the Company (“xAI Merger”). Prior to the xAI \nMerger, on March 28, 2025, xAI completed its acquisition of X Holdings Corp. (“X”) and X.AI Corp., in which X \nand X.AI Corp. became wholly-owned subsidiaries of xAI (“X Merger”, and collectively with xAI Merger, \n“Mergers”). X.AI Corp began operations in March 2023 and Twitter, Inc. (“Twitter”) was acquired by Mr. Elon \nMusk in October 2022. The Mergers were each effected through a share exchange.    \nThe Mergers have been accounted for as reorganizations of entities under common control as Mr. Elon Musk had a \ncontrolling financial interest in the Company, xAI and X through his majority voting interest in each such entity \nduring the periods presented in these consolidated financial statements. The Company’s consolidated financial \nstatements have been prepared to reflect the retrospective combination of the net assets of the entities at their \nhistorical carrying amounts for all periods presented. No new goodwill or other intangible assets have been recorded \nand all historical related party transactions between the entities have been eliminated in consolidation. The capital \nstock and shareholders’ equity for all periods presented reflects a continuation of the historical SpaceX capital stock \nand shareholders’ equity, combined with the historical capital stock and shareholders’ equity of X and xAI merged \nunder common control, as adjusted by the respective exchange ratios used to effect the Mergers, except for xAI’s \nhistorical redeemable convertible preferred stock through the date of the xAI Merger. All of xAI’s redeemable \nconvertible preferred stock were converted to SpaceX common stock as part of the xAI Merger and are presented as \nsuch from the date of the xAI Merger. This presentation constitutes a change in reporting entity. Refer to Note 12 - \nRedeemable Convertible Preferred Stock and Shareholders’ Equity for additional details. \nOn May 4, 2026, the Company effected a five-for-one forward stock split of its authorized, issued, and outstanding \nshares of Class A, Class B, and Class C Common Stock (“2026 Stock Split”). The conversion rate of SpaceX \nRedeemable Convertible Preferred Stock was proportionately adjusted to factor in the 2026 Stock Split. All share \nand per share information has been retroactively adjusted to reflect the 2026 Stock Split for all periods presented. \nNote 2 - Summary of Significant Accounting Policies\nUnaudited Interim Financial Statements\nThe consolidated financial statements, including the consolidated balance sheet as of March 31, 2026, the \nconsolidated statements of operations, the consolidated statements of comprehensive loss, the consolidated \nstatements of redeemable convertible preferred stock and shareholders’ equity and the consolidated statements of \ncash flows for the three months ended March 31, 2026 and 2025, as well as other information disclosed in the \naccompanying notes, are unaudited. The consolidated balance sheet as of December 31, 2025 was derived from the \naudited consolidated financial statements as of that date. The interim consolidated financial statements and the\n\nF-70\nTable of Contents\naccompanying notes should be read in conjunction with the annual consolidated financial statements and the \naccompanying notes.\nThe interim consolidated financial statements and the accompanying notes have been prepared on the same basis as \nthe annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which \ninclude only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods \npresented. The consolidated results of operations for any interim period are not necessarily indicative of the results \nto be expected for the full year or for any other future years or interim periods.\nUse of Estimates\nThe preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make \nestimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent \nassets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and \nexpenses during the reporting period. Actual results could differ from those estimates. Amounts which are subject to \nsignificant judgment and use of estimates include revenues recognized over time using the cost-to-cost input \nmethod, the determination of valuation allowances associated with deferred tax assets and estimates of tax liabilities, \nreserves for excess and obsolete inventory, fair value of indefinite-lived intangible assets and goodwill, useful lives \nof property, plant, and equipment, the determination of incremental borrowing rate for lease liabilities, litigation and \nsettlement costs, and the valuation and assumptions underlying share-based compensation. On an ongoing basis, the \nCompany evaluates its estimates compared to historical experience and current trends, which forms the basis for \nmaking judgments about the carrying value of assets and liabilities. In addition, the Company engages valuation \nspecialists to assist in the valuation of equity instruments.\nCash and Cash Equivalents and Restricted Cash\nThe Company’s total cash and cash equivalents and restricted cash, as presented in the consolidated statements of \ncash flows, are as follows:\nMarch 31, 2026\nDecember 31, \n2025\nCash and cash equivalents \n \n ......................................................................................... $\n15,852\n$\n24,747\nRestricted cash included in prepaid expenses and other current assets \n .....................\n67\n182\nRestricted cash included in other assets\n .....................................................................\n689\n195\nTotal as presented in the consolidated statements of cash flows \n ........................ $\n16,608\n$\n25,124\nSignificant Accounting Policies\nThere have been no material changes to the Company’s significant accounting policies from the annual consolidated \nfinancial statements for the year ended December 31, 2025.\nRecent Accounting Pronouncements\nIn December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope \nImprovements. The ASU improves the guidance in Topic 270 by improving the navigability of the required interim \ndisclosures and clarifying when that guidance is applicable. The amendments also provide additional guidance on \nwhat disclosures should be provided in interim reporting periods. The amendments add to Topic 270 a principle that \nrequires entities to disclose events since the end of the last annual reporting period that have a material impact on the \nentity. The ASU is effective for interim reporting periods within annual reporting periods beginning after December \n15, 2027. Adoption of this ASU can either be applied prospectively or retrospectively to any or all prior periods \npresented in the financial statements, and early adoption is permitted. The Company is currently evaluating the \nprovisions of this ASU and does not expect this ASU to have a material impact on the consolidated financial \nstatements.\n\nF-71\nTable of Contents\nRecently adopted accounting pronouncements\nIn July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement \nof Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical \nexpedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of \nthe asset when estimating expected credit losses for current classified accounts receivable and contract assets. The \nCompany adopted this ASU on a prospective basis effective January 1, 2026. While this ASU was adopted, the \nCompany did not elect the practical expedient permitted under this ASU. Therefore, the adoption has no impact on \nthe consolidated financial statements.\nNote 3 - Revenue\nRevenue disaggregated by products and services is as follows:\nThree Months Ended March 31,\n2026\n2025\nProducts ..................................................................................................................... $\n380\n$\n352\nServices \n ......................................................................................................................\n4,314\n3,715\nTotal revenues \n ......................................................................................................... $\n4,694\n$\n4,067\nAll of products revenue is attributable to the Connectivity segment. \nRevenue disaggregated by type and segment is as follows:\nThree Months Ended March 31,\n2026\n2025\nLaunch Services \n \n ................................................................................................... $\n330\n$\n566\nLaunch & Development \n ........................................................................................\n289\n299\nSpace ........................................................................................................................\n619\n865\nConsumer ..............................................................................................................\n2,148\n1,492\nEnterprise & Government (1)\n \n \n .................................................................................\n1,109\n983\nConnectivity \n ............................................................................................................\n3,257\n2,475\nAdvertising\n ............................................................................................................\n343\n443\nAI Solutions & Infrastructure \n ...............................................................................\n475\n284\nAI \n ..............................................................................................................................\n818\n727\nTotal revenues \n \n ......................................................................................................... $\n4,694\n$\n4,067\n___________________\n(1)\n Enterprise & Government revenue includes revenue from Starlink Mobile service offerings.\nDeferred revenue\nDeferred revenue is recorded when cash payments are received or due, in advance of the Company’s performance. \nDeferred revenue primarily relates to Space agreements and Connectivity enterprise and government contracts. Total \ndeferred revenue as of December 31, 2025 was $12,116 million, of which $1,165 million was recognized as revenue \nfor the three months ended March 31, 2026. Total deferred revenue as of March 31, 2026 was $13,236 million. \nBacklog\nThe Company’s backlog represents the transaction price of performance obligations to customers for which work \nremains to be performed. The amount of backlog increases with new contracts or additions to existing contracts and \ndecreases as revenue is recognized on existing contracts. Contracts are included in backlog when an enforceable \nagreement has been reached. Backlog does not include amounts related to performance obligations that are billed \nand recognized as they are delivered, optional purchases that do not represent material rights and any estimated \namounts of variable consideration that are subject to constraint. Backlog totaled $27,621 million as of March 31,\n\nF-72\nTable of Contents\n2026, of which $13,236 million was recognized as deferred revenue at March 31, 2026. Approximately 36% is \nexpected to be recognized within one year, and approximately 46% is expected to be recognized between one and \nthree years, with the remaining 18% to be recognized thereafter.\nNote 4 - Inventory\nInventory consists of the following:\nMarch 31, 2026\nDecember 31, \n2025\nRaw materials \n ............................................................................................................ $\n1,054\n$\n1,030\nWork-in-progress \n .......................................................................................................\n835\n803\nFinished goods \n ...........................................................................................................\n699\n583\nInventory \n \n ................................................................................................................. $\n2,588\n$\n2,416\nNote 5 - Property, Plant, and Equipment, Net\nProperty, plant, and equipment, net consist of the following:\nMarch 31, 2026\nDecember 31, \n2025\nServers and networking equipment \n \n ........................................................................... $\n23,850\n$\n22,694\nSatellites\n .....................................................................................................................\n12,893\n11,949\nMachinery and equipment \n .........................................................................................\n8,020\n6,343\nData center infrastructure \n \n ..........................................................................................\n2,965\n2,960\nLaunch sites \n ...............................................................................................................\n2,479\n2,404\nLand, buildings and improvements (1)\n \n .......................................................................\n2,018\n1,876\nFlight vehicle hardware \n .............................................................................................\n1,459\n1,689\nLeasehold improvements \n ...........................................................................................\n842\n784\nConstruction-in-progress \n ...........................................................................................\n14,045\n4,604\nProperty, plant, and equipment ..................................................................................\n68,571\n55,303\nLess: Accumulated depreciation \n ................................................................................\n(14,692)\n(12,701)\nProperty, plant, and equipment, net \n ..................................................................... $\n53,879\n$\n42,602\n__________________\n(1)\nLand is not a depreciable asset.\nConstruction in progress is primarily comprised of ongoing construction and expansion of the facilities and \nequipment as well as AI infrastructure that has not yet been placed in service.\nDepreciation expense for the three months ended March 31, 2026 and 2025 was $2,329 million and $1,237 million, \nrespectively.\nInterest is capitalized during the construction period for significant long term construction projects, such as the AI \ninfrastructure data centers and launch facilities. For the three months ended March 31, 2026, the Company \ncapitalized $7 million of interest, which is included in Construction-in-progress amounts above. No interest was \ncapitalized during the three months ended March 31, 2025.\nFor the three months ended March 31, 2025, the Company recorded impairment charges of $24 million related to the \nwrite off of damaged flight vehicles in the Space segment. These charges are reflected in Impairment in the \nconsolidated statements of operations. There were no impairment charges related to Property, plant, and equipment \nduring the three months ended March 31, 2026.\n\nF-73\nTable of Contents\nNote 6 - Intangible Assets and Goodwill\nIntangible Assets\nFinite-lived intangible assets consist of the following:\nMarch 31, 2026\nWeighted-\nAverage Useful \nLife (years)\nGross Carrying \nValue\nAccumulated \nAmortization\nNet Carrying \nValue\nBrand \n ......................................................................\n5.0\n$\n735\n$\n(367) $\n368\nUser base\n .................................................................\n9.0\n1,277\n(486)\n791\nExisting technology \n \n ................................................\n3.0\n27\n(17)\n10\nAdvertising customer relationships \n ........................\n5.0\n745\n(510)\n235\nAcquired workforce \n ................................................\n2.0\n11\n(2)\n9\nTotal .................................................................\n$\n2,795\n$\n(1,382) $\n1,413\nDecember 31, 2025\nWeighted-\nAverage Useful \nLife (in years)\nGross Carrying \nValue\nAccumulated \nAmortization\nNet Carrying \nValue\nBrand \n ......................................................................\n5.0\n$\n743\n$\n(335) $\n408\nUser base\n .................................................................\n9.0\n1,291\n(456)\n835\nExisting technology \n ................................................\n3.2\n27\n(16)\n11\nAdvertising customer relationships \n \n ........................\n5.0\n752\n(478)\n274\nAcquired workforce \n ................................................\n2.0\n9\n—\n9\nTotal .................................................................\n$\n2,822\n$\n(1,285) $\n1,537\nAmortization expense associated with finite-lived intangible assets was $113 million and $206 million in the three \nmonths ended March 31, 2026 and 2025, respectively.\nThe Company also has indefinite-lived intangible assets of $19 million and $11 million as of March 31, 2026 and \nDecember 31, 2025, respectively. Indefinite-lived intangible assets primarily consist of trade names and domain \nnames, which are expected to provide long-term branding and marketing benefits.\nGoodwill\nThe activity for goodwill is as follows:\nBalance at December 31, 2025 \n \n .............................................................................................................\n11,809\nBusiness combination\n .......................................................................................................................\n3\nCumulative translation adjustments \n ................................................................................................\n(131)\nBalance at March 31, 2026 \n ................................................................................................................. $\n11,681\nAs of March 31, 2026 and December 31, 2025, goodwill attributable to the Connectivity segment was $515 million \nand $513 million, respectively, and goodwill attributable to the AI segment was $11,166 million and $11,296 \nmillion, respectively.\n\nF-74\nTable of Contents\nNote 7 - Financial Instruments\nThe Company’s assets that are measured at fair value on a recurring basis are as follows:\nMarch 31, 2026\nLevel\nCost\nUnrealized Gain\nUnrealized Loss\nFair Value\nCash and cash equivalents\nCash .............................................\nI\n7,181\n—\n—\n7,181\nMoney market funds \n ....................\nI\n6,950\n—\n—\n6,950\nGovernment securities \n \n .................\nII\n1,721\n—\n—\n1,721\nMarketable securities \n \n .....................\nGovernment securities \n \n .................\nII\n7,823\n—\n0\n7,823\nPrepaid expenses and other \ncurrent assets\nRestricted cash \n .............................\nI\n15\n—\n—\n15\nRestricted cash in money market \nfunds \n .........................................\nI\n52\n—\n—\n52\nOther assets \n .....................................\nRestricted cash \n .............................\nI\n512\n—\n—\n512\nRestricted cash in money market \nfunds \n .........................................\nI\n146\n—\n—\n146\nRestricted cash in government \nsecurities\n ...................................\nII\n31\n—\n—\n31\nTotal .................................................\n$\n24,431\n$\n—\n$\n—\n$\n24,431\nDecember 31, 2025\nLevel\nCost\nUnrealized Gain\nUnrealized Loss\nFair Value\nCash and cash equivalents\nCash\n ..............................................\nI\n$\n3,408\n$\n—\n$\n—\n$\n3,408\nMoney market funds \n ....................\nI\n21,339\n—\n—\n21,339\nPrepaid expenses and other \ncurrent assets \nRestricted cash .............................\nI\n30\n—\n—\n30\nMoney market funds \n ....................\nI\n152\n—\n—\n152\nOther assets ....................................\nRestricted cash .............................\nI\n182\n—\n—\n182\nRestricted cash in money market \nfunds \n .........................................\nI\n13\n—\n—\n13\nTotal \n .................................................\n$\n25,124\n$\n—\n$\n—\n$\n25,124\nAs of March 31, 2026 and December 31, 2025, the Company also held 18,712 units of Bitcoin with a cost basis of \n$661 million and fair value of $1,293 million and $1,637 million, respectively. The fair value of these digital assets \nis determined using Level I in the fair value hierarchy.\n\nF-75\nTable of Contents\nNote 8 - Investments in Unconsolidated Affiliates\nEquity method investment\nAs of March 31, 2026 and December 31, 2025, the Company held an investment in Stateline Power, LLC, which is \naccounted for as an equity method investment, of $80 million and $86 million, respectively. \nEquity investments without readily determinable fair value\nAs of March 31, 2026 and December 31, 2025, the Company held investments in unconsolidated affiliates which are \naccounted for as equity investments without readily determinable fair values of $168 million and $157 million, \nrespectively. The Company recorded cumulative downward adjustments of $59 million on these investments as of \nMarch 31, 2026. Upward adjustments or impairment on these investments during the three months ended March 31, \n2026 and 2025 were not material.\nNote 9 - Debt\nMarch 31, 2026\nPrincipal\nUnamortized \nDeferred \nFinancing Costs\nNet\nSpaceX Bridge Loan \n ......................................................................\n20,000\n21\n19,979\nX 2027 and X 2030 Notes \n ..............................................................\n27\n—\n27\nOther financings (1)\n \n \n .........................................................................\n9,105\n—\n9,105\nTotal debt\n \n ........................................................................................\n29,132\n21\n29,111\nFinance lease liability \n .....................................................................\n1,154\n—\n1,154\nTotal debt and finance leases\n ..........................................................\n30,286\n21\n30,265\nLess: Short-term portion\n \n .................................................................\n1,538\n—\n1,538\nTotal debt and finance leases, net of current \n \n ............................. $\n28,748\n$\n21\n$\n28,727\nDecember 31, 2025\nPrincipal\nUnamortized \nDeferred \nFinancing Costs\nNet\nX 2027 and X 2030 Notes \n ..............................................................\n27\n—\n27\nX B-1 Term Loan \n ...........................................................................\n6,504\n280\n6,224\nX B-3 Term Loan \n ...........................................................................\n5,966\n54\n5,912\nxAI Fixed Rate Term Loan \n \n ............................................................\n995\n4\n991\nxAI Floating Rate Term Loan \n ........................................................\n995\n40\n955\nxAI 12.5% Secured Senior Notes \n ...................................................\n3,000\n12\n2,988\nOther financings (1)\n \n .........................................................................\n4,562\n—\n4,562\nTotal debt\n \n ........................................................................................\n22,049\n390\n21,659\nFinance lease liability \n \n .....................................................................\n1,237\n—\n1,237\nTotal debt and finance leases\n ..........................................................\n23,286\n390\n22,896\nLess: Short-term portion\n \n .................................................................\n928\n—\n928\nTotal debt and finance leases, net of current \n ............................. $\n22,358\n$\n390\n$\n21,968\n__________________\n(1)\nIncludes obligations related to certain AI infrastructure assets recorded as failed sale-leaseback transactions. Refer to Other Financings \nbelow for additional details.\n\nF-76\nTable of Contents\nSpaceX Bridge Loan\nGeneral.  In March 2026, SpaceX entered into a new bridge loan credit agreement (the “SpaceX Bridge Loan”) with \na syndicate of lenders, providing for an unsecured bridge term loan facility in an aggregate principal amount of \n$20,000 million. The SpaceX Bridge Loan matures on September 2, 2027, with two three-month extensions at the \nCompany’s option, subject to the absence of a continuing default and the payment of an extension fee of 0.25% of \nthe aggregate outstanding principal per extension, resulting in a final extended maturity date in March 2028. \nProceeds. The proceeds of the SpaceX Bridge Loan were used to repay the X B-1 Term Loan, the X B-3 Term \nLoan, the xAI Fixed Rate Loan, the xAI Floating Rate Loan, and the xAI 12.5% Senior Secured Notes (as defined \nand described below). The remaining proceeds were used for general corporate purposes.\nInterest Rates.  The SpaceX Bridge Loan bears interest, at the Company’s election, at a rate per annum equal to (i) \nTerm SOFR plus an applicable margin ranging from 0.75%-1.75% (depending on the Company’s debt rating), or (ii) \na base rate equal to the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus \n1.00% and (d) 1.00%, plus an applicable margin ranging from 0.00% to 0.75% (depending on the Company’s debt \nrating). In addition, the Company is obligated to pay duration fees equal to 0.125% of outstanding principal on the \nfirst anniversary of closing and 0.25% of outstanding principal on the fifteen-month anniversary of closing. The \neffective interest rate on outstanding borrowings under the SpaceX Bridge Loan was 4.58% as of March 31, 2026.\nPrincipal Repayments.  The SpaceX Bridge Loan may be prepaid at any time, in whole or in part, without premium \nor penalty. The Company is required to use the net proceeds of certain debt financings to repay amounts outstanding \nunder the SpaceX Bridge Loan and to apply the net proceeds of a qualified initial public offering (“IPO”) to repay \nsuch amounts within six months following receipt.\nGuarantors and Collateral.  The obligations of the Company under the SpaceX Bridge Loan are guaranteed on a \njoint and several basis by X Corp., X.AI LLC, and CTC Property LLC (each a subsidiary of the Company).\nCovenants.  The SpaceX Bridge Loan contains customary events of default and affirmative and negative covenants, \nincluding restrictions on liens, subsidiary indebtedness, fundamental changes (including a prohibition on the \ndisposition of Starlink assets and other material businesses outside the consolidated group), and changes in the \nnature of the Company’s business. The sole financial maintenance covenant requires the Company to maintain a \nConsolidated Leverage Ratio — defined as consolidated funded indebtedness (net of 85% of unrestricted cash) to \nConsolidated EBITDA (as defined in the SpaceX Bridge Loan) — of no greater than 3.75 to 1.0 as of the end of \neach fiscal quarter, with a temporary step-up to 4.25 to 1.0 for four fiscal quarters following a qualifying acquisition \nof at least $1.0 billion.  The Company was in compliance with the covenants as of March 31, 2026.  \nAccounting Treatment.  The Company accounted for the repayment of the X B-1 Term Loan, the X B-3 Term Loan, \nthe xAI Fixed Rate Loan, the xAI Floating Rate Loan and the xAI 12.5% Senior Secured Notes as an \nextinguishment of debt, resulting in a loss on extinguishment of $1,526 million, recorded in Other expense, net.\nSpaceX Credit Facility\nGeneral. In February 2025, the Company entered into a five-year senior unsecured revolving credit agreement \n(“SpaceX Credit Facility”) with a syndicate of banks, under which the Company may draw up to $1,500 million, \nsubject to a customary financial covenant and other reporting requirements. The SpaceX Credit Facility terminates, \nand all outstanding loans become due and payable, on February 7, 2030, unless the parties agree to an extension. No \namounts were borrowed under the SpaceX Credit Facility during the three months ended March 31, 2026 and 2025.\nAmendment. In March 2026, the Company entered into a First Amendment to Credit Agreement and Waiver (the \n“First Amendment”) with its lenders, in connection with the Company’s entry into the SpaceX Bridge Loan (as \ndefined above). The First Amendment, among other things, (i) waived certain specified defaults and (ii) amended\n\nF-77\nTable of Contents\ncertain definitions and covenants under the SpaceX Credit Facility to conform to the terms of the SpaceX Bridge \nLoan.\nInterest Rates. Under the SpaceX Credit Facility, borrowings bear interest at the Company’s option, at a rate per \nannum of (i) between 0.75%-1.25%, depending on the Company’s current debt rating, plus the relevant Term SOFR \nor (ii) between 0.0%-0.25% depending on the Company’s current debt rating plus the greater of (a) the Federal \nFunds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus 1.0% and (d) 1.0%. The Company may also borrow \nin various alternative currencies at various alternative rates, including rates based on SONIA for Pound Sterling \nloans and EURIBOR for Euro loans plus an applicable margin. The fee for undrawn amounts is between \n0.07%-0.11% per annum, depending on the Company’s current debt rating. Interest is payable either monthly or \nquarterly, depending on the interest loan option.\nCovenants. The Company was in compliance with the covenants as of March 31, 2026; however, the Company had \na technical default when the Company acquired xAI on February 2, 2026 due to the amount of debt assumed as part \nof the acquisition at the subsidiary level. On March 2, 2026, the Company obtained a waiver from the syndicate of \nbanks and amended the SpaceX Credit Facility allowing for the debt refinance completed on March 2, 2026, \nresulting in the Company being in compliance with all covenants.\nX 2027 and 2030 Notes\nGeneral. In 2019, a subsidiary of X, an indirect subsidiary of the Company, issued $700 million aggregate principal \namount of 3.875% senior notes due 2027 (the “X 2027 Notes”) in a private placement. The X 2027 Notes mature on \nDecember 15, 2027.  In 2022, a subsidiary of X issued $1,000 million aggregate principal amount of 5.000% senior \nnotes due 2030 (the “X 2030 Notes”) in a private placement.  The X 2030 Notes mature on March 1, 2030. The X \n2027 and X 2030 Notes represent senior unsecured obligations of the Company.\nInterest Rates. For the X 2027 Notes, the interest rate is fixed at 3.875% per annum and interest is payable semi-\nannually in arrears on June 15 and December 15 of each year.  For the X 2030 Notes, the interest rate is fixed at \n5.000% per annum and interest is payable semi-annually in arrears on March 1 and September 1 of each year.\nPrincipal Repayments. In November 2022, the Company purchased approximately $675 million aggregate principal \namount of X 2027 Notes and $998 million aggregate principal amount of the X 2030 Notes in settlement of the \nchange in control of Twitter. The X 2027 Notes and X 2030 Notes that remain outstanding may be redeemed at the \noption of the Company, in whole or in part, at any time prior to September 15, 2027 and December 1, 2029, \nrespectively, at a price equal to 100.0% of the principal amounts plus a “make-whole” premium and accrued and \nunpaid interest, if any, up to, but excluding, the redemption date.\nCovenants. The Company was in compliance with the covenants as of March 31, 2026.\nX First Lien Senior Credit Facilities\nGeneral. In 2022, X Corp., an indirect subsidiary of the Company, entered into the First Lien Credit Agreement \nwhich provided for a new term loan commitment of $6,705 million (“X B-1 Term Loan”) and a $500 million \nSecured First Lien Revolving Credit Facility (including a letter of credit subfacility with an aggregate face value of \nup to $100 million) (together referred to as “X First Lien Senior Credit Facilities”).  The Secured First Lien \nRevolving Credit Facility matures on October 27, 2027 and the X B-1 Term Loan matures on October 27, 2029.\nAmendments. In February 2025, X Corp., an indirect subsidiary of the Company, amended the X First Lien Senior \nCredit Facilities and entered into a new term loan commitment for $4,741 million with a maturity date of October \n27, 2029  (“X B-3 Term Loan”) and reduced the Secured First Lien Revolving Credit Facility commitment to $0.  \nAs part of the issuance of the X B-3 Term Loan, the Company is required to pay an arrangement fee of $51 million, \nwhich is due and payable on February 19, 2027. In April 2025, the Company entered into an amendment to the X\n\nF-78\nTable of Contents\nB-3 Term Loan for an additional commitment of $1,225 million with the same terms and conditions, increasing the \ntotal X B-3 Term Loan borrowings to $5,966 million.  \nInterest Rates. The X B-1 Term Loan bore interest at a rate per annum of, initially, adjusted Term SOFR plus \n6.50%.  The Secured First Lien Revolving Credit Facility bore interest at a rate per annum of, initially, an adjusted \nTerm SOFR plus 4.50%, with leverage-based step-downs. Undrawn commitments under the Secured First Lien \nRevolving Credit Facility were subject to an unused commitment fee of 0.50% per annum, subject to quarterly \nleverage based step-downs.  The X B-3 Term Loan had a fixed interest rate of 9.50% per annum.  Interest on the X \nB-1 Term Loan and X B-3 Term Loan was payable monthly, quarterly, or bi-annually at the option of the Company.  \nPrincipal Repayments. On March 2, 2026, the Company repaid the full outstanding principal balance and accrued \ninterest, including a prepayment penalty of $425 million, resulting in the extinguishment of the X B-1 Term Loan \nand X B-3 Term Loan. The X B-1 Term Loan was repayable at any time, in whole or in part, without premium or \npenalty, subject to mandatory quarterly prepayments of principal beginning on the last day of the fiscal quarter \nended March 31, 2023, in amounts equal to 0.25% of the original principal amount of borrowings thereunder, with \nthe unpaid balance being payable on the final maturity date thereof.  The X B-1 Term Loan was also subject to \nadditional customary mandatory prepayment provisions from the proceeds of certain debt issuances and asset sales, \nas well as sweeps of a portion of excess cash flow, subject to certain leverage-based step-downs and exceptions.  \nThe X B-3 Term Loan had prepayment penalties of 107.13% of the outstanding principal before October 27, 2026, \n104.75% of the outstanding principal before October 27, 2027, and 102.38% of the outstanding principal before \nOctober 27, 2028. \nGuarantors and Collateral. Obligations under the First Lien Senior Credit Facilities were guaranteed by X, and were \ncollateralized by a first priority lien on substantially all of the assets of X and its subsidiaries (subject to customary \nexceptions).\nxAI First Lien Credit Agreement\nGeneral. In June 2025, X.AI Corp. and X.AI LLC, indirect subsidiaries of the Company, entered into the First Lien \nCredit Agreement to provide borrowings up to $2,000 million.  The Company executed a $1,000 million Fixed Rate \nTerm Loan maturing on June 30, 2030 (“xAI Fixed Rate Term Loan”); and a $1,000 million Floating Rate Term \nLoan  maturing on June 30, 2030 (“xAI Floating Rate Term Loan”).\nInterest Rates. The xAI Fixed Rate Term Loan had a fixed interest rate of 12.50% per annum and the xAI Floating \nRate Term Loan had a floating interest rate per annum of Term SOFR plus 7.25% or ABR plus 6.25%.  Interest on \nthe xAI Fixed Rate Term Loan was payable bi-annually on January 31 and July 31, commencing on January 31, \n2026. Interest on the xAI Floating Rate Term loan was payable monthly, quarterly, or bi-annually at the option of \nthe Company. \nPrincipal Repayments. On March 2, 2026, the Company repaid the full outstanding principal balance and accrued \ninterest, including a prepayment penalty of $221 million, resulting in the extinguishment of the xAI Fixed Rate \nTerm Loan and xAI Floating Rate Term Loan.  The xAI Fixed Rate Term Loan and the xAI Floating Rate Term \nLoan had prepayment penalties of 103% on the principal outstanding balance prior to June 30, 2027 and 101% on \nthe principal outstanding balance prior to June 30, 2028.\nGuarantors. Obligations under the xAI Fixed Rate Term Loan and xAI Floating Rate Term Loan were guaranteed \neach jointly and severally by X.AI Corp. and the following subsidiaries of X.AI Corp.: AIQ Phase LLC, CTC \nHolding LLC, CTC, LLZ Build LLC, and MZX.\nxAI 12.5% Secured Senior Notes\nGeneral. In June 2025, X.AI LLC and, X.AI Co Issuer Corp, indirect subsidiaries of the Company, issued $3,000 \nmillion aggregate principal amount of 12.5% interest Senior Secured Notes due in 2030 (“xAI 12.5% Senior Secured \nNotes”).  The Senior Secured Notes were issued at 100% of the principal amount and the entire principal amount \nwill be due on June 30, 2030.\n\nF-79\nTable of Contents\nInterest Rates. The xAI 12.5% Senior Secured Notes had a fixed interest rate of 12.50% per annum.  Interest was \npayable bi-annually on January 15 and July 15, commencing on January 15, 2026.\nPrincipal Repayments. On March 5, 2026, the Company repaid the full outstanding principal balance and accrued \ninterest, including a prepayment penalty of $518 million, resulting in the extinguishment of the xAI 12.5% Senior \nSecured Notes. The xAI 12.5% Senior Secured Notes had prepayment penalties of 106.25% on the principal \noutstanding balance prior to July 15, 2027 and 103.13% on the principal outstanding balance prior to July 15, 2028.\nGuarantors. Obligations under the xAI 12.5% Senior Secured Notes were guaranteed each jointly and severally by \nxAI and the following subsidiaries of xAI: AIQ Phase LLC, CTC Holding LLC, CTC, LLZ Build LLC, and MZX.\nxAI Revolving Line of Credit\nGeneral. In April 2024 and amended through March 2026, a subsidiary of xAI, an indirect subsidiary of the \nCompany, entered into a revolving line of credit up to borrowing capacity of $250 million.  The Company had no \nborrowings under the line of credit during the three months ended March 31, 2026 and 2025.  \nInterest Rates. Interest on any borrowings is calculated based on the 30-day average SOFR plus the International \nSwaps and Derivatives Association spread adjustment plus a spread of 40 basis points.\nGuarantors and Collateral. The agreement permits borrowings up to the value of the pledged collateral held in \ncustody, less any outstanding loan balances, accrued interest, and fees. The pledged collateral consisted of securities \nheld in xAI’s custodial account.\nOther Financings\nThe Company has entered into various other financing arrangements, generally collateralized by specific machinery \nand equipment. These arrangements have an average fixed interest rate of 4.4% and 5.5% per annum as of March \n31, 2026 and December 31, 2025, respectively, with principal and interest payments due monthly, and in certain \ninstances, a lump sum payment at the end of term.\nIn addition, in November 2025 and January 2026, CTC completed sale-leaseback transactions for its AI \ninfrastructure assets which would have been deemed finance leases resulting in failed sale-leaseback transactions. As \na result, the Company recorded the related debt of $1,121 million and $7,920 million within Debt and finance leases, \ncurrent and Debt and finance leases, net of current, respectively, in the Company’s consolidated balance sheets as of \nMarch 31, 2026 for these two failed sale-leaseback transactions. Refer to Note 17, Related Party Transactions for \nadditional details.\nThe future scheduled principal maturities of debt as of March 31, 2026 are as follows:\n2026 (remaining nine months) \n .............................................................................................................. $\n801\n2027 \n ......................................................................................................................................................\n21,540\n2028 \n ......................................................................................................................................................\n1,938\n2029 \n ......................................................................................................................................................\n2,393\n2030 \n ......................................................................................................................................................\n2,460\nThereafter \n ..............................................................................................................................................\n—\nTotal \n \n ..................................................................................................................................................... $\n29,132\n\nF-80\nTable of Contents\nNote 10 - Leases\nThe components of lease expense are as follows within the consolidated statements of operations: \nThree Months Ended March 31,\n2026\n2025\nOperating lease expense:\nOperating lease expense\n ........................................................................................ $\n107\n$\n120\nShort-term lease cost \n .............................................................................................\n113\n29\nVariable lease cost \n ................................................................................................\n31\n23\nTotal operating lease expense \n ..........................................................................\n251\n172\nFinance lease expense:\nAmortization of leased assets ............................................................................... $\n79\n$\n84\nInterest on lease liabilities\n \n .....................................................................................\n68\n85\nTotal finance lease expense\n ..............................................................................\n147\n169\nTotal lease expense \n .................................................................................................. $\n398\n$\n341\nDuring the three months ended March 31, 2026, there has been no material changes in the Company’s lease portfolio \nsince December 31, 2025.\nNote 11 - Balance Sheet Components\nCertain financial statement details are as follows:\nMarch 31, 2026\nDecember 31, \n2025\nPrepaid expenses and other current assets\nTax related assets \n ....................................................................................................... $\n690\n$\n618\nUnbilled receivables \n ..................................................................................................\n275\n223\nRebates and credits \n \n ....................................................................................................\n109\n597\nRestricted cash and deposits \n ......................................................................................\n67\n182\nOther \n \n ..........................................................................................................................\n495\n590\nPrepaid expenses and other current assets \n \n ...................................................... $\n1,636\n$\n2,210\nAccrued expenses and other current liabilities\nAccrued infrastructure purchases \n .............................................................................. $\n2,669\n$\n—\nTax related liabilities \n .................................................................................................\n601\n563\nPayroll & employee benefit accruals \n .........................................................................\n436\n322\nOperating lease liabilities, current \n .............................................................................\n338\n422\nRestructuring liabilities\n \n ..............................................................................................\n220\n339\nAccrued interest \n .........................................................................................................\n68\n416\nOther current liabilities \n ..............................................................................................\n1,357\n507\nAccrued expenses and other current liabilities ............................................... $\n5,689\n$\n2,569\n\nF-81\nTable of Contents\nNote 12 - Redeemable Convertible Preferred Stock and Shareholders’ Equity\nSpaceX Preferred and Common Stock\nThe Company has five classes of stock - four classes to be designated Class A common stock (“Class A”), Class B \ncommon stock (“Class B”), Class C common stock (“Class C”), Class D common stock (“Class D”) (collectively the \n“SpaceX Common Stock”), and one class of stock to be designated preferred stock and subdivided into several \nseries of redeemable convertible preferred stock (collectively the “SpaceX Redeemable Convertible Preferred \nStock”). All references to “Class” refer to that particular class of SpaceX Common Stock and all references to \n“Series” refer to that particular series of SpaceX Redeemable Convertible Preferred Stock. \nAs of March 31, 2026, the total number of shares of SpaceX Common Stock the Company is authorized to issue is \n54,657 million shares, each with a par value of $0.001 per share, except for Class D, which has a par value of \n$0.0001 per share. 36,132 million shares are Class A, 6,125 million shares are Class B, 10,000 million shares are \nClass C, and 2,400 million shares are Class D. The total number of SpaceX Redeemable Convertible Preferred Stock \nthat the Company is authorized to issue is 2,607 million shares, of which 2,400 million shares are undesignated. \nWith the exception of the expanded conversion rights described below, there were no changes to the dividend \nprovisions, liquidation preferences, conversion rights, redemption rights or the voting rights of the SpaceX \nConvertible Redeemable Preferred Stock and SpaceX Common Stock during the three months ended March 31, \n2026.\nIn May 2026, the Board approved the 2026 Stock Split, pursuant to which each share of the Class A, Class B, and \nClass C SpaceX Common Stock issued and outstanding was split into five shares of the same class of SpaceX \nCommon Stock. \nxAI Redeemable Convertible Preferred Stock and Common Stock\nOn March 28, 2025, xAI adopted an Amended and Restated Articles of Incorporation, which established its capital \nstructure and designated multiple classes of common stock and several series of redeemable convertible preferred \nstock. The Articles were subsequently amended and restated through January 30, 2026 (collectively, the “xAI \nArticles of Incorporation”) to add and authorize additional series of redeemable convertible preferred stock with no \neconomic changes to any previously existing series.\nPursuant to the xAI Articles of Incorporation, xAI’s authorized capitalization prior to the xAI Merger consisted of \nthree classes of common, stock, which are designated Class A common stock (“xAI Class A”), Class B common \nstock (“xAI Class B”), Limited Voting common stock (“xAI Limited Voting”), (collectively the “xAI Common \nStock”) and several series of redeemable convertible preferred stock (collectively the “xAI Redeemable Convertible \nPreferred Stock”). All references to “xAI Class” refer to that particular class of xAI Common Stock and all \nreferences to “xAI Series” refer to that particular series of xAI Redeemable Convertible Preferred Stock. \nEffect of the xAI Merger\nxAI Redeemable Convertible Preferred Stock\nOn xAI Merger Date, all outstanding shares of xAI Redeemable Convertible Preferred Stock converted into shares \nof SpaceX Common Stock, based on the share-for-share exchange mechanics specified in the Merger Agreement. \nEach share of xAI Series A‑1, B, C, D, and E redeemable convertible preferred stock (classified as “xAI Low Vote \nStock”) was converted into 0.1433 shares of SpaceX Class A Common Stock per preferred share  (on a pre-2026 \nStock Split basis), rounded up to the nearest whole number for fractional shares. Each share of xAI Series A \nredeemable convertible preferred stock (classified as “xAI High Vote Stock”) was converted into 0.1433 shares of \nSpaceX Class B Common Stock per preferred share  (on a pre-2026 Stock Split basis), rounded up to the nearest \nwhole number for fractional shares. For xAI Series A Redeemable Convertible Preferred Stock, all holders that were \nan eligible service provider could elect to receive cash of $75.46 per share of xAI Series A Redeemable Convertible \nPreferred Stock  (on a pre-2026 Stock Split basis). Upon conversion, all shares of xAI Redeemable Convertible \nPreferred Stock were canceled and retired, and former xAI Redeemable Convertible Preferred Stock shareholders\n\nF-82\nTable of Contents\nreceived the applicable shares of SpaceX Common Stock. Any shares of xAI Redeemable Convertible Preferred \nStock previously held by the Company were canceled and retired and did not receive any consideration.\nBecause the xAI Redeemable Convertible Preferred Stock was legally outstanding during all historical periods prior \nto the xAI Merger and represented a separate equity class of a legally distinct predecessor entity, the conversion of \nxAI Redeemable Convertible Preferred Stock into SpaceX Common Stock is recognized only as of the closing of the \nxAI Merger, and not retrospectively. Accordingly, the historical consolidated balance sheets and consolidated \nstatements of redeemable convertible preferred stock and shareholders’ equity reflect the xAI Redeemable \nConvertible Preferred Stock as outstanding xAI Redeemable Convertible Preferred Stock consistent with its legal \nform and rights during those periods and are not recast on an as-converted basis for all periods presented prior to the \nxAI Merger Date. The impact of the conversion is presented separately in the consolidated statements of redeemable \nconvertible preferred stock and shareholders’ equity for the three months ended March 31, 2026.\nxAI Warrants\nxAI also issued warrants to customers that were outstanding as of the effective date of the xAI Merger, which had a \nten-year term originally set to expire in 2035, with an exercise price equal to the par value of the stock, and vesting \nterms that resulted in the warrants vesting proportionally to the payments received under the related agreement. The \nclosing of the xAI Merger triggered an acceleration clause in which all outstanding xAI warrants, both vested and \nunvested components, were automatically exercised on a cashless basis exercised and converted into fully vested \nSpaceX Class A Common Stock at the exchange ratio of 0.1433 (on a pre-2026 Stock Split basis).\nxAI and X Common Stock\nUpon the effective date of the xAI Merger, every outstanding share of xAI Common Stock, whether Class A, Class \nB, or Limited Voting, converted into the right to receive SpaceX Common Stock at a fixed exchange ratio of 0.1433 \nSpaceX shares per share of xAI Common Stock, unless the holder was an eligible service provider and elected to \nreceive cash of $75.46 per share of xAI Class A or Class B (on a pre-2026 Stock Split basis). No fractional SpaceX \nshares were issued and all share amounts were rounded up to the nearest whole number. Any shares of xAI Common \nStock previously held by the Company were canceled and retired and did not receive any consideration.  \nEffect of the X Merger\nUpon the effective date of the X Merger, each class of common stock of X Holdings Corp. (“X Common Stock”) \nwas converted to 2.776 shares of xAI Common Stock of the same class (rounded down to the nearest whole share), \neach class of common stock of X.AI Corp. (“xAI Corp. Common Stock”) was converted to 1.000 share of xAI \nCommon Stock of the same class, and each series of X.AI Corp. preferred stock (“xAI Corp. Preferred Stock”) \n(other than shares held by X or any of its subsidiaries) was converted to 1.000 share of xAI Redeemable Convertible \nPreferred Stock of the same series. \nAs a result of the Mergers, all of X, X.AI Corp. and xAI Common Stock are being presented in the historical \nfinancial statements as if they had been converted into SpaceX Common Stock at the applicable exchange rate for all \nperiods presented through the date of the xAI Merger. As such, all shares of historical X, X.AI Corp. and xAI \nCommon Stock are included in the share counts for SpaceX Common Stock below. X.AI Corp. and xAI Redeemable \nConvertible Preferred Stock are being presented in the consolidated financial statements at historical values with an \nadjustment to the conversion rate at the applicable exchange ratio per the xAI Merger.\n\nF-83\nTable of Contents\nRedeemable Convertible Preferred Stock\nInformation for each series of SpaceX and xAI Redeemable Convertible Preferred Stock (collectively, the \n“Combined Redeemable Convertible Preferred Stock”) is as follows: \nDividend Per \nShare\nInitial Price \nPer Share\nAuthorized \nShares\nOutstanding (1)\nLiquidation \nPreference\nNet Carrying \nValue\nMarch 31, \n2026\nMarch 31, \n2026\nMarch 31, \n2026\nMarch 31, \n2026\nDecember 31, \n2025\nMarch 31, \n2026\nMarch 31, \n2026\nSpaceX Redeemable \nConvertible Preferred \nStock\nSeries A \n ................................ $\n0.05\n$\n1.00\n61.0\n60.4\n60.4\n$\n60\n$\n59\nSeries A-1 \n ............................. $\n0.05\n$\n1.00\n61.0\n0.2\n0.2\n—\n—\nSeries B\n ................................. $\n0.10\n$\n2.00\n5.5\n5.1\n5.1\n10\n10\nSeries B-1 \n ............................. $\n0.10\n$\n2.00\n5.5\n0.1\n0.1\n—\n—\nSeries C\n ................................. $\n0.15\n$\n3.00\n10.5\n9.7\n9.7\n29\n23\nSeries D \n ................................ $\n0.19\n$\n3.88\n7.5\n5.2\n5.2\n40\n20\nSeries E \n ................................. $\n0.23\n$\n4.50\n10.5\n10.2\n10.2\n46\n647\nSeries F \n ................................. $\n0.38\n$\n7.50\n6.8\n6.7\n6.7\n50\n48\nSeries G \n ................................ $\n3.87\n$\n77.46\n13.0\n12.6\n12.6\n978\n978\nSeries H \n ................................ $\n6.75\n$\n135.00\n3.4\n3.2\n3.2\n429\n429\nSeries I \n .................................. $\n8.45\n$\n169.00\n3.0\n3.0\n3.0\n499\n499\nSeries J \n .................................. $\n9.30\n$\n186.00\n2.7\n2.5\n2.5\n457\n457\nSeries K \n ................................ $\n10.20\n$\n204.00\n2.7\n2.5\n2.5\n515\n515\nSeries L \n ................................. $\n10.70\n$\n214.00\n1.5\n1.4\n1.4\n295\n295\nSeries M \n ................................ $\n11.00\n$\n220.00\n2.7\n2.6\n2.7\n575\n575\nSeries N \n ................................ $\n13.50\n$\n270.00\n9.5\n9.2\n9.3\n2,492\n2,494\nTotal SpaceX Redeemable \nConvertible Preferred \nStock \n \n ................................\n206.6\n134.6\n134.7\n$\n6,475\n$\n7,049\nxAI Redeemable \nConvertible Preferred \nStock\nSeries A \n ................................ $\n—\n$\n—\n—\n—\n750.0\n$\n—\n$\n—\nSeries A-1 \n ............................. $\n—\n$\n—\n—\n—\n—\n—\n—\nSeries B\n ................................. $\n—\n$\n—\n—\n—\n584.9\n—\n—\nSeries C\n ................................. $\n—\n$\n—\n—\n—\n277.1\n—\n—\nSeries D \n ................................ $\n—\n$\n—\n—\n—\n120.1\n—\n—\nSeries E \n ................................. $\n—\n$\n—\n—\n—\n179.2\n—\n—\nTotal xAI Redeemable \nConvertible Preferred \nStock \n \n ................................\n—\n—\n1,911.3\n$\n—\n$\n—\nTotal Combined \nRedeemable \nConvertible Preferred \nStock \n \n ................................\n206.6\n134.6\n2,046.0\n$\n6,475\n$\n7,049\n__________________\n(1)\nThe number of issued redeemable convertible preferred stock is equal to the number of outstanding redeemable convertible preferred stock, \nwith the exception of xAI Series A and xAI Series D, of which the number of issued shares is 1,000.0 million and 175.0 million as of \nDecember 31, 2025, respectively, due to redeemable convertible preferred stock held by X and SpaceX, respectively.\n\nF-84\nTable of Contents\nThe following describes the various rights and preferences of the SpaceX Redeemable Convertible Preferred Stock:\nDividend Provisions\nOn a per annum basis, holders of shares of SpaceX Redeemable Convertible Preferred Stock are entitled to receive \ndividends prior and in preference to any declaration or payment of any dividend to common shareholders at a rate \ndescribed in the table above for each outstanding share of SpaceX Redeemable Convertible Preferred Stock. Any \nsuch dividends are declared at the discretion of the Board of Directors and are not cumulative. For the period from \ninception through March 31, 2026, no dividends on SpaceX Redeemable Convertible Preferred Stock have been \ndeclared. The SpaceX Redeemable Convertible Preferred Stock do not participate in distributions beyond their \npreferred dividend as described above.\nLiquidation Preference\nThe series of SpaceX Redeemable Convertible Preferred Stock listed in the table above were issued by the Company \nchronologically and in alphabetical order, with Series A issued first and Series N issued most recently. Each series \nof SpaceX Redeemable Convertible Preferred Stock is senior in rank to all earlier issued series and junior in rank to \nall later issued series, except that: (i) Series A, A-1, B, B-1, and C SpaceX Redeemable Convertible Preferred Stock \nare all on parity with each other and junior in rank to all subsequently issued series of SpaceX Redeemable \nConvertible Preferred Stock; and (ii) series E, F, and G SpaceX redeemable convertible preferred stock are all on \nparity with each other, are senior in rank to all earlier issued series of SpaceX Redeemable Convertible Preferred \nStock, and junior in rank to all subsequently issued series of SpaceX Redeemable Convertible Preferred Stock.\nIn the event of a liquidation, dissolution, or winding up of the Company, holders of a given series of SpaceX \nRedeemable Convertible Preferred Stock are entitled to receive, in preference to the holders of SpaceX Common \nStock and any junior-ranking SpaceX Redeemable Convertible Preferred Stock, the liquidation preference indicated \nin the table above for such series of SpaceX Redeemable Convertible Preferred Stock, plus any declared but unpaid \ndividends. Holders of all series of SpaceX Redeemable Convertible Preferred Stock are entitled to receive the \ngreater of the liquidation preference per share indicated above, or the amount each series would be entitled to receive \nif all such outstanding SpaceX Redeemable Convertible Preferred Stock were converted to Class A or Class B \nSpaceX Common Stock, as applicable, immediately prior to such liquidation, dissolution, or winding up of the \nCompany. Upon completion of the distributions described above, if any assets remain in the Company, the then \nremaining assets will be distributed on an equal priority, pro rata basis to the holders of SpaceX Common Stock.\nConversion Rights\nEach share of Series A and Series B SpaceX Redeemable Convertible Preferred Stock is convertible at the option of \nthe holder at any time after the date of issuance of such share into shares of Class A, Class B, or Class C SpaceX \nCommon Stock and each share of all other series of preferred stock are convertible at the option of the holder at any \ntime after the date of issuance of such share into shares of Class A or Class C SpaceX Common Stock. The number \nof shares of SpaceX Common Stock to which a holder of SpaceX Redeemable Convertible Preferred Stock is \nentitled shall be at a conversion rate determined by dividing the initial price by the conversion price. Each share of \nSpaceX Redeemable Convertible Preferred Stock is convertible into fifty shares of SpaceX Common Stock \nfollowing the 2026 Stock Split. The conversion price is subject to adjustment set forth in the charter for certain \ndilutive issuances, splits and combinations. \nThe SpaceX Redeemable Convertible Preferred Stock automatically converts upon the earlier of (i) the Company’s \nsale of its common stock in a public offering pursuant to a registration statement under the Securities Act of 1933, in \nwhich the pre-public offering market capitalization of the Company is at least $6.0 billion and which results in \naggregate cash proceeds to the Company of not less than $250 million (“Qualified IPO”) or (ii) the date specified by \nwritten consent or agreement of the applicable holders of shares of SpaceX Redeemable Convertible Preferred Stock \n(with respect to each applicable series of SpaceX Redeemable Convertible Preferred Stock), voting in accordance \nwith the charter.\n\nF-85\nTable of Contents\nIn the event of a transfer of a share of Series A or Series B (other than a Permitted Transfer as defined in the \ncharter), such share shall automatically be cancelled and converted into a corresponding share of Series A-1 or \nSeries B-1. \nVoting Rights\nHolders of each share of Series A and Series B have the right to ten votes for each share of Class B into which such \nshare is convertible. Holders of each share of all other series of SpaceX Redeemable Convertible Preferred Stock \nhave the right to one vote for each share of Class A into which such share is convertible. Such holders will have full \nvoting rights and powers equal to the voting rights and powers of the holders of SpaceX Common Stock, except as \nrequired by law.\nClassification\nThe liquidation preference provisions of the SpaceX Redeemable Convertible Preferred Stock are considered \ncontingent redemption provisions as deemed liquidation events such as a change of control are not solely within the \ncontrol of the Company. Accordingly, SpaceX Redeemable Convertible Preferred Stock are presented outside of \npermanent equity on the Company’s consolidated balance sheets as Redeemable convertible preferred stock. SpaceX \nRedeemable Convertible Preferred Stock has not been remeasured to their redemption amount as they are not \ncurrently redeemable or probable of becoming redeemable.\nCommon Stock\nThe following describes all of the activity that occurred within each class of SpaceX Common Stock during the three \nmonths ended March 31, 2026 and 2025, incorporating all activity that occurred within the class of xAI Common \nStock on an as-converted basis to the class of SpaceX Common Stock it was converted into per the xAI Merger and \nX Merger.\nClass A Common \nStock\nClass B Common \nStock\nClass C Common \nStock\nClass D Common \nStock\nShares\nAmount\nShares\nAmount\nShares\nAmount\nShares\nAmount\nBalances at December 31, \n2024 \n \n ...................................\n1,832\n$\n2\n768\n$\n1\n423\n$\n0\n—\n$\n—\nCommon stock issued, net of \ntax withholding \n ..................\n18\n0\n1\n0\n7\n0\n—\n—\nRepurchase of common \nstock\n ...................................\n(14)\n0\n(14)\n0\n—\n—\n—\n—\nConversion of redeemable \nconvertible preferred stock \nto common stock \n ...............\n1\n0\n—\n—\n1\n0\n—\n—\nConversion between classes \nof common stock \n ...............\n24\n0\n(24)\n0\n—\n—\n—\n—\nTransfer of equity in \nbusiness combination \n ........\n1\n0\n—\n—\n—\n—\n—\n—\nBalances at March 31, 2025 \n1,862\n$\n2\n731\n$\n1\n431\n$\n0\n—\n$\n—\n\nF-86\nTable of Contents\nClass A Common \nStock\nClass B Common \nStock\nClass C Common \nStock\nClass D Common \nStock\nShares\nAmount\nShares\nAmount\nShares\nAmount\nShares\nAmount\nBalances at December 31, \n2025 \n \n ...................................\n1,952\n$\n3\n643\n$\n1\n484\n$\n0\n—\n$\n—\nCommon stock issued, net of \ntax withholding \n ..................\n28\n—\n1,305\n1\n13\n—\n—\n—\nRepurchase of common \nstock\n ...................................\n(9)\n—\n(22)\n—\n—\n—\n—\n—\nConversion of redeemable \nconvertible preferred stock \npursuant to the xAI \nMerger \n ...............................\n886\n—\n537\n1\n—\n—\n—\n—\nRepurchase of common \nstock pursuant to xAI \nMerger \n ...............................\n(3)\n—\n(20)\n—\n—\n—\n—\n—\nConversion of redeemable \nconvertible preferred stock \nto common stock \n ...............\n5\n—\n—\n—\n—\n—\n—\n—\nConversion between classes \nof common stock \n ...............\n25\n—\n(25)\n—\n—\n—\n—\n—\nBalances at March 31, 2026 \n2,884\n$\n3\n2,418\n$\n3\n497\n$\n0\n—\n$\n—\nThe following describes the various rights and preferences of the SpaceX Common Stock:\nDividend Provisions\nSubject to the prior rights of holders of all classes and series of stock at the time outstanding having prior rights as to \ndividends, holders of SpaceX Common Stock shall be entitled to receive, when, as and if declared by the Board of \nDirectors, out of any funds legally available, such dividends as may be declared from time to time by the Board of \nDirectors. For the period from inception through March 31, 2026, no dividends were declared on SpaceX Common \nStock. \nLiquidation Rights\nIn the event of a liquidation, dissolution, or winding up of the Company, upon the completion of the distributions \nrequired with respect to the SpaceX Redeemable Convertible Preferred Stock, if assets remain in the Company, the \nthen remaining assets will be distributed on an equal priority, pro rata basis to the holders of SpaceX Common \nStock.  \nConversion Rights\nEach share of Class B is convertible at the option of the holder, at any time, into one share of Class A. Each share of \nClass B will automatically convert into one share of Class A upon a transfer, other than a Permitted Transfer (as \ndefined in the charter), of such share of Class B.\nVoting Rights\nEach holder of Class A is entitled to one vote for each share held. Each holder of Class B is entitled to ten votes for \neach share held. The holders of Class C have no voting rights, except as required by law. Voting rights with respect \nto Class D will be established when and if any shares of Class D are issued by the Board of Directors.\nReserve for Unissued Shares of Common Stock\nThe Company is required to reserve and keep available out of its authorized but unissued shares of SpaceX Common \nStock such number of shares sufficient to effect the conversion of all outstanding shares of SpaceX Redeemable\n\nF-87\nTable of Contents\nConvertible Preferred Stock and Class B, as applicable, plus shares granted and available for grant under the \nCompany’s share plans. \nThe amount of such shares of the SpaceX Common Stock reserved for these purposes at March 31, 2026 is as \nfollows:\nNumber of Shares\nClass A\nClass B\nClass C\nClass D\nRedeemable Convertible Preferred Stock issued \n(low-vote)\n .................................................................\n3,448\n—\n3,448\n—\nRedeemable Convertible Preferred Stock issued \n(high-vote) \n ...............................................................\n3,274\n3,274\n3,274\n—\nOutstanding Class B \n \n ....................................................\n2,421\n—\n—\n—\nOutstanding stock options \n ...........................................\n8\n450\n476\n—\nOutstanding RSUs \n \n .......................................................\n49\n1\n79\n—\nFuture grants under share-based compensation ...........\n150\n—\n350\n—\n9,350\n3,725\n7,627\n—\nShare Repurchases\nDuring the three months ended March 31, 2026, the Company repurchased $2,413 million or 25.4 million shares of \nSpaceX Common Stock from eligible current and former xAI employees as part of the xAI Merger. During the three \nmonths ended March 31, 2026, the Company also repurchased of 30.5 million shares of SpaceX Common Stock and \n2.1 million shares of SpaceX Redeemable Convertible Preferred Stock for $1,933 million in a number of unrelated \ntransactions with existing shareholders at their then-current fair market value.\nSimilarly, the Company repurchased $508 million or 28.0 million shares of SpaceX Common Stock from eligible \ncurrent and former employees and existing shareholders during the three ended March 31, 2025. The Company only \nrepurchased shares held by eligible participants for more than six months at a purchase price per share equal to the \nthen current fair market value.  \nAll SpaceX shares repurchased to date have been retired.\n\nF-88\nTable of Contents\nNote 13 - Earnings per Share\nThe following table presents the reconciliation of net loss attributable to common shareholders to net loss used in \ncomputing basic and diluted net income loss per share of common stock:\nThree Months Ended March 31,\n2026\n2025\nNumerator:\nNet loss \n ...................................................................................................................... $\n(4,276) $\n(528)\nLess: Deemed dividend(1)\n \n ......................................................................................\n671\n—\nNet loss attributable to common shareholders - basic and diluted \n ............................\n(4,947)\n(528)\nDenominator:\nWeighted average shares of common stock outstanding - basic and diluted \n ............\n3,884\n2,875\nLoss per share attributable to common shareholders\nBasic and Diluted \n .................................................................................................. $\n(1.27) $\n(0.18)\n__________________\n(1)\nThe excess of fair market value over the consideration transferred for the repurchase of SpaceX Redeemable Convertible Preferred Stock \nwas treated as a deemed dividend and resulted in an increase to net loss attributable to common shareholders in the calculation of loss per \nshare.\nThe following potentially dilutive securities on an as-converted basis are excluded from the calculation of diluted net \nloss per share attributable to common shareholders for the periods presented because the impact of including them \nwould be anti-dilutive (refer to Note 14, Share-based Compensation for additional details):\nThree Months Ended March 31,\n2026\n2025\nxAI Redeemable Convertible Preferred Stock \n ..........................................................\n—\n1,155\nSpaceX Redeemable Convertible Preferred Stock \n ....................................................\n6,723\n6,760\nShare-based compensation \n ........................................................................................\n598\n674\nThe table above excludes 1,319.1 million and 14.3 million share-based compensation awards outstanding as of \nMarch 31, 2026 and 2025, respectively, as these awards are subject to performance and market conditions that were \nnot met as of those dates.\nNote 14 - Share-based Compensation\nX and xAI Mergers\nAs part of the xAI Merger, each xAI option for a share of xAI common stock outstanding and unexercised at the \ntime of the xAI Merger (vested and unvested) was converted into a SpaceX option to receive 0.1433 shares of \nSpaceX Class A or Class B Common Stock (on a pre-2026 Stock Split basis), as applicable, under the same terms \nand conditions (including the vesting and exercisability conditions) as the original xAI stock options at an exercise \nprice equal to the original xAI option exercise price divided by 0.1433. Each xAI RSU that was vested and \noutstanding was converted to the right to receive 0.1433 of a share of SpaceX Class A or Class B Common Stock  \n(on a pre-2026 Stock Split basis), as applicable. Each xAI RSU that was unvested was converted to 0.1433 of a \nSpaceX RSU. Each xAI RSA was converted to 0.1433 shares of SpaceX RSA for SpaceX Class A or Class B \nCommon Stock  (on a pre-2026 Stock Split basis), as applicable, with the same terms and conditions (including the \nvesting terms). Refer to Note 12, Redeemable Convertible Preferred Stock and Shareholders’ Equity for additional \ndetails.\n\nF-89\nTable of Contents\nAs part of the X Merger, each X RSU that was outstanding was converted to a xAI RSU to receive 2.776 shares of \nxAI Common Stock.  \nGeneral\nThe Company grants RSUs, RSAs, and non-statutory options to eligible employees, key executives, and certain non-\nemployee service providers (collectively, the “Plans”).  The Company also has a number of performance-based \nawards. The Company offers an ESPP, under which eligible employees can purchase the Company’s Common \nStock at a discounted price. The Company also offers a Non-Qualified Employee Stock Purchase Plan (“NQ \nESPP”), under which employees can purchase the Company’s Common Stock at the fair market value. In April \n2026, the Company cancelled the NQ ESPP.\nOfficer Equity Awards \nIn January 2026, the Company granted 1,000 million performance-based restricted shares of Class B common stock \nto Elon Musk. The restricted shares vest upon (i) the Company’s achievement of specified market capitalization \nmilestones across 15 equal tranches ranging from $500 billion to $7.5 trillion, with each milestone reflecting $500 \nbillion in additional valuation, and (ii) the Company’s establishment of a permanent human colony on Mars with at \nleast one million inhabitants, in each case, subject to Mr. Musk’s continued employment (“SpaceX CEO Award”). \nThe grant date fair value of the SpaceX CEO Award was determined to be $90.40 to $95.92 per share for each \ntranche.\nIn November 2025, the Company granted a performance-based award (“xAI Award”) to Elon Musk consisting of \ntwelve tranches with certain market, performance and service conditions. In March 2026, the Company cancelled the \nxAI Award and replaced it with a grant of 302.1 million performance-based restricted shares of Class B common \nstock, which vest upon (i) the achievement of specified market capitalization milestones across 12 equal tranches \nranging from $1.065 trillion to $6.565 trillion, with each milestone reflecting $500 billion in additional valuation, \nand (ii) the Company’s completion of non-Earth-based data centers capable of delivering 100 terawatts of compute \nper year, in each case, subject to Mr. Musk’s continued employment (“AI CEO Award”). The grant date fair value \nof the AI CEO Award was determined to be $91.47 to $95.92 per share for each tranche. The cancellation of the xAI \nAward and the grant of the AI CEO Award was considered an accounting modification. Share-based compensation \nwill continue to be recognized over the original remaining service period equal to the fair value of the portion of the \noriginal xAI Award that was deemed probable of vesting as of the modification date. No incremental expense will \nbe recognized based on the modified terms of the new AI CEO Award until the new performance conditions are \ndeemed probable of vesting.\nShare-based compensation expense recognition for the SpaceX CEO Award and AI CEO Award commences when \nthe performance condition milestone is considered probable of achievement for each award regardless of the \nprogress made towards achieving the next market capitalization milestone. As of March 31, 2026, both performance \nmilestones were considered improbable and no share-based compensation expense has been recognized related to \nthe SpaceX CEO Award and AI CEO Award. Once the performance milestone is considered probable of \nachievement, share-based compensation expense associated with the tranche will be recognized over the expected \nachievement date of the performance milestone. \nIn January 2026, the Company approved an amendment to 4 million performance-based stock options granted to \nBret Johnsen, Chief Financial Officer, that were originally issued in 2024 (“CFO Award”). In lieu of vesting based \non free cash flow achievement in excess of a baseline, 371 thousand of the stock options will vest for each $10 \nbillion in adjusted EBITDA achieved during the 2025 through 2029 fiscal years, assessed on an annual basis. For \npurposes of this award, adjusted EBITDA is calculated as income from operations excluding (i) depreciation and \namortization, (ii) share-based compensation, (iii) impairment, and (iv) restructuring impacts. Once a tranche of the \nstock options have become earned as a result of the Company’s adjusted EBITDA performance as of the end of a \nparticular fiscal year, such stock options remain subject to an additional one-year and one day service-based vesting \nrequirement following December 31 of the fiscal year in which such tranche was earned. The number of options \ngranted was not changed in the amendment. The impact of the modification of the CFO Award was not material.\n\nF-90\nTable of Contents\nFair Value Determination\nThe fair value and derived service period of the SpaceX CEO Award and AI CEO Award are estimated on the grant \ndate using a Monte Carlo simulation model. The weighted-average assumptions that were used to calculate the grant \ndate fair value of the SpaceX CEO Award and modification date fair value of the AI CEO Award are as follows:\nExpected term (years) \n ...........................................................................................................................\n30.0\nVolatility \n ...............................................................................................................................................\n45.0 %\nRisk-free interest rate \n ............................................................................................................................\n4.91 %\nDividend yield \n .......................................................................................................................................\n— %\nThe SpaceX CEO Award and AI CEO Award do not have a defined performance period other than Mr. Musk’s \ncontinued employment through the date each milestone is achieved. Therefore, an analysis was performed for an \nexpected term of ten to fifty years and a midpoint of thirty years was used. The Company determined the expected \nvolatility assumption using the frequency of daily historical prices of comparable public companies’ common stock \nfor a period equal to the expected term. The risk-free interest rate assumption is based upon observed interest rates \non U.S. Government securities for a period consistent with the expected term. The dividend yield assumption is \nbased on the Company’s history and expectation of dividend payouts. The Company has never declared or paid any \ncash dividends on its Common Stock and does not anticipate paying any cash dividends in the foreseeable future.\nSummary of Share-Based Compensation Information\nThe following table summarizes our share-based compensation expense by line item in the consolidated statements \nof operations:\nThree Months Ended March 31,\n2026\n2025\nCost of revenue \n .......................................................................................................... $\n76\n$\n39\nResearch and development \n ........................................................................................\n362\n75\nSelling, general, and administrative \n ..........................................................................\n201\n118\nTotal .................................................................................................................... $\n639\n$\n232\nDuring the three months ended March 31, 2026 and 2025, share-based compensation expense capitalized to the \nconsolidated balance sheets was $60 million and $30 million, respectively. \nNote 15 - Income Taxes\nThe Company’s effective tax rate was (0.1)% for the three months ended March 31, 2026, compared to (2.7)% for \nthe three months ended March 31, 2025. The change in the Company’s effective tax rate was primarily due to the \nchanges in the mix of its jurisdictional earnings.\nThe Company’s effective tax rates for the three months ended March 31, 2026 and 2025 as compared to the U.S. \nfederal statutory rate of 21.0% were primarily impacted by the mix of its jurisdictional earnings subject to different \ntax rates and the valuation allowances on its deferred tax assets.\nIn assessing the realizability of deferred tax assets, the Company considered whether it is more likely than not that \nsome or all of its net deferred tax assets will not be realizable based on the relevant weight of all positive and \nnegative evidence. As of March 31, 2026, the Company continues to maintain a full valuation allowance against its \ndeferred tax assets in the United States, with the exception of certain state deferred tax assets and transferrable \ninvestment tax credits that are expected to be realizable. The Company has also recorded valuation allowances in \ncertain foreign jurisdictions where it concluded that it is more likely than not that the deferred tax assets will not be \nrealized. The Company will continue to assess the realizability of its deferred tax assets in future periods and will \nadjust the valuation allowance as necessary based on changes in facts and circumstances.\n\nF-91\nTable of Contents\nNote 16 - Commitments and Contingencies\nUnconditional Obligations\nDuring the three months ended March 31, 2026, there have been no material changes to the Company’s \nunconditional obligation since December 31, 2025 other than the execution of certain purchase agreements with an \nunaffiliated third party to acquire additional turbines for the AI infrastructure totaling $925 million through 2029.\nLetters of Credit and Surety Bonds\nThe Company had outstanding letters of credit of $517 million at March 31, 2026 related to various customer \ncontracts, insurance agreements, and facility lease agreements. All of the outstanding letters of credit were \ncollateralized by restricted cash. The Company also had surety bonds of $447 million for self-insured workers’ \ncompensation programs and other governmental licenses at March 31, 2026.\nLegal Proceedings \nIn the normal course of its business, the Company is involved from time to time in various arbitrations, class actions, \ncommercial litigation, investigations and other legal, regulatory or governmental actions, including the significant \nmatters described below that could have a material impact on our results of operations. The Company assesses, in \nconjunction with its legal counsel, the need to record a liability for litigation and contingencies. With respect to the \ncases, actions, and inquiries described below, the Company evaluates the associated developments on a regular basis \nand will accrue a liability when it believes a loss is probable and the amount can be reasonably estimated. In \naddition, the Company believes there is a reasonable possibility that it may incur a loss in some of these matters and \nthe loss may be material or exceed its estimated ranges of possible loss.\nThe outcomes of the matters described in this section, such as whether the likelihood of loss is remote, reasonably \npossible, or probable, or if and when the reasonably possible range of loss is estimable, are inherently uncertain, and \nunless specified otherwise, possible losses are not reasonably estimable at this time. If one or more of these matters \nwere resolved against the Company for amounts above management’s estimates, the Company’s financial condition \nand results of operations, including in a particular reporting period in which any such outcome becomes probable \nand estimable, could be materially adversely affected.\nIn November 2022, the European Union’s Digital Services Act (“DSA”) came into force as a result of which X has \nto comply with extensive content moderation and other duties. The Company published its first Transparency Report \nunder the DSA in November 2023. In December 2023, the European Commission (“EC”) opened a formal \ninvestigation into X and its Irish subsidiary, Twitter International Unlimited Company (“TIUC”), which was later \nrenamed to X Internet Unlimited Company (XIUC). On July 12, 2024, in relation to alleged breaches of Articles \n25(1), 39 and 40(12) of the DSA, the EC issued preliminary findings that X’s blue checkmark is deceptive, its \nadvertisement repository does not meet DSA requirements, and it grants inadequate access to data to third-party \nresearchers. On September 26, 2024, XIUC and X submitted their observations challenging the EC’s preliminary \nfindings.  On December 5, 2025, the EC delivered a final decision in which it upheld its preliminary findings and \nimposed a fine of EUR 120 million on XIUC, X., x.AI, and Elon Musk (together, the “parties”). On February 16, \n2026, the parties challenged the EC’s decision in the General Court of the European Union. This challenge remains \npending.\nIn March 2016, non-practicing entity Youtoo Technologies filed suit against Twitter, Inc. in the United States \nDistrict Court for the Northern District of Texas alleging its Vine and Periscope products infringe Youtoo’s video-\nsharing patents (the ‘304, ‘506, and ‘997 patents). On Twitter’s motion, the district court dismissed the ‘304 and \n’506 patents as invalid. Twitter filed petitions for Inter Partes Review before the Patent Trial and Appeals Board \n(PTAB) challenging all three patents-in-suit. The PTAB upheld the ‘304 and ‘506 Patents and invalidated the ‘997 \nPatent; the Federal Circuit affirmed. On March 16, 2020, Plaintiff (now Vidstream LLC, which allegedly acquired \nthe patents from Youtoo Technologies in a bankruptcy proceeding), moved the Court to reconsider its earlier ruling \ninvalidating the ‘304 and ‘506 patents. On April 1, 2022, the Court reversed its original ruling on the ‘304 and ‘506 \npatents. On September 27, 2024, Vidstream filed a motion for partial summary judgment, which the Court granted in \npart. The case went to a jury trial, and on April 16, 2025, the jury rendered a verdict finding (i) that Twitter did not\n\nF-92\nTable of Contents\ninfringe any claim of the ‘506 patent and two out of three claims of the ‘304 patent and that each of those patent \nclaims was invalid, but (ii) that Twitter willfully infringed one claim of the ‘304 patent. The jury awarded Plaintiff \n$105 million in damages. In November 2025, the district court affirmed the jury’s award and awarded an additional \n$67 million in prejudgment interest. Twitter has appealed and Vidstream has cross-appealed. Both appeals remain \npending before the Federal Circuit.\nIn June 2023, music publishing companies that are members of the National Music Publishers’ Association (the \n“NMPA”) filed a complaint against X in the U.S. District Court for the Middle District of Tennessee, claiming \ndirect, contributory, and vicarious copyright infringement based on Twitter’s alleged failure to expeditiously take \ndown infringing music posted by users after the music publishers allegedly gave Twitter notice of those \ninfringements. The music publishers also allege that Twitter did not suspend the accounts of “repeat infringers,” so \nthat Twitter is not entitled to a “safe harbor” from liability under the DMCA. X filed a motion to dismiss the \ncomplaint on August 14, 2023. On March 5, 2024, the Court dismissed plaintiffs’ direct infringement and vicarious \ninfringement claims, and part of plaintiffs’ claim for contributory infringement. X answered the complaint on April \n9, 2024. Litigation was stayed from June 11, 2025 to September 9, 2025 for settlement discussions that were not \nsuccessful. Accordingly, discovery is ongoing. On April 1, 2026, the Court granted the parties’ joint motion for a \nstay to allow X to file a renewed motion to dismiss the suit based on the Supreme Court’s decision in Cox Comm’s, \nInc. v. Sony Music Entm’t. Fact discovery is now closed. In light of this Supreme Court ruling, the parties have \nstipulated to a May 11, 2026 deadline for the music publishers to amend their complaint with respect to their \nremaining claims for contributory infringement, and a June 11, 2026 deadline for X to file a renewed motion to \ndismiss.\nIn September 2023, Dutch foundation Stichting Data Bescherming Nederland (“SDBN”) filed a putative class action \nlawsuit in the District Court of Amsterdam in the Netherlands against TIUC, Twitter, Inc., X Corp., and Twitter \nNetherlands b.v. related to Twitter’s operation of the MoPub platform. SDBN primarily claims that MoPub’s real-\ntime bidding ad exchange violated the GDPR. SDBN claims to represent 11 million Dutch internet users who \ndownloaded and used third-party mobile apps containing the MoPub software development kit during the period \n2013-2022 and it seeks a monetary award in the range of € 250 to € 2,500 per person.  On February 4, 2026, the \nCourt declined to allow the case to proceed as a class action and indicated that it is considering staying the \nproceedings until the Court of Justice of the European Union has ruled in a separate case concerning the \napplicability of Dutch class action requirements to GDPR claims. The Twitter parties filed a brief in support of the \nproposed stay, which the plaintiffs opposed, on March 4, 2026.\nIn August 2024, Dutch foundation Stichting Onderzoek Marktinformatie (SOMI) initiated a collective action in the \nDistrict Court of Amsterdam in the Netherlands on behalf of approximately 7.8 million Dutch X users. Among other \nthings, SOMI seeks damages against TIUC, X Corp. and Twitter Netherlands B.V. (collectively, the “X entities”) \nfor: (1) alleged data breaches and insufficient security measures; (2) alleged unauthorized microtargeting and lack of \ntransparency; and (3) the alleged failure to moderate hate speech and the obstruction of research, all in violation of \nthe GDPR and/or DSA. The alleged data breaches relate to a Twitter API bug that came to light in 2022 and that had \nallowed persons who knew the email address or phone number of a user to determine the user’s Twitter ID. SOMI \nhas requested compensation (to be assessed at a later stage) for each member of the class, including symbolic \ndamages of EUR 1 for each member of the class that is allegedly affected by hate speech on the X platform. The X \nentities filed a procedural defense on March 12, 2025.  The court held a hearing on April 2, 2026, and indicated that \nit would hand down its decision on May 27, 2026.\nIn September 2025, non-practicing entity Search and Share Technologies, LLC (“SaS”) filed a patent complaint \nagainst X Corp. in the Federal District Court for the Western District of Texas. SaS alleges that X Corp. infringed on \nU.S. Patent Nos. 10,180,952 and 11,106,744, through features in its mobile app and website enabling users to \ninteract with content through dedicated interfaces that directly share what other users see in ranked feeds and search \nresults. SaS filed an Amended Complaint on January 5, 2026. On January 20, 2026, X Corp. moved to dismiss SaS’s \nwillful infringement and induced infringement claims.  On February 3, 2026, SAS responded to, but did not oppose, \nX Corp.’s partial motion to dismiss. On February 10, 2026, X Corp. filed its reply.  On February 4, 2026, X Corp. \nfiled an IPR petition challenging the ‘744 Patent and on February 18, 2026, filed an IPR petition challenging the \n'952 Patent.\n\nF-93\nTable of Contents\nBeginning in January 2026, the Company and certain subsidiaries have been named as defendants in multiple \nlawsuits arising from Grok’s image-generation and editing features. The complaints generally allege that Grok’s \nimage-generation and editing features enabled the creation and dissemination of nonconsensual explicit images and/\nor content representing women and/or children in sexualized contexts. The actions include Jane Doe v. X.AI Corp. \nand X.AI LLC, instituted in the U.S. District Court for the Northern District of California on January 23, 2026, and \nJane Doe 1 et al. v. X.AI Corp. and X.AI LLC (the “Jane Doe 1 Case”) instituted in the U.S. District Court for the \nNorthern District of California on March 16, 2026.  These cases are putative class actions, asserting claims \nincluding, among other things, claims of strict liability, negligence, nuisance, rights of privacy or publicity, and, in \nthe Jane Doe 1 Case, certain federal statutory claims.  Plaintiffs in these two cases seek, among other things, \ncompensatory, statutory and punitive damages, restitution, disgorgement and injunctive relief. In addition, a case, \nMayor and City Council of Baltimore ex rel. Ebony M. Thompson v. X Corp., X.AI Corp., X.AI LLC, and Space \nExploration Technologies Corp, was instituted in the Baltimore City Circuit Court on March 24, 2026 (the \n“Baltimore Case”). The plaintiff in the Baltimore Case, the Mayor and City Council of Baltimore, asserts similar \nclaims to those in the two cases discussed above under Baltimore’s Consumer Protection Ordinances. The plaintiff \nin the Baltimore Case seeks statutory penalties and/or injunctive relief. The Company intends to defend itself \nvigorously in these actions. \nOn April 14, 2026, the National Association for the Advancement of Colored People and the NAACP Mississippi \nState Conference (together, the “NAACP”) filed suit against X.AI Corp. and MZX Tech, LLC alleging that the \nmobile gas turbines powering the COLOSSUS II data center with the permission of the Mississippi Department of \nEnvironmental Quality are in violation of the Clean Air Act because they allegedly constitute stationary sources \nwithout the proper permits.  On May 6, 2026, the NAACP filed a preliminary injunction motion seeking to enjoin \nthe operation of the turbines.  The Company intends to defend itself vigorously in these actions.  \nThe Company has recorded an accrual of $399 million for litigation losses that are probable and reasonably \nestimable in Accrued expenses and other current liabilities and Other liabilities on the consolidated balance sheet as \nof March 31, 2026. For other matters, the Company is not currently able to estimate the reasonably possible loss or \nrange of loss.\nNote 17 - Related Party Transactions\nThe Company periodically does business with certain entities with which its CEO and directors are affiliated. \nDuring the three months ended March 31, 2026, the Company purchased $34 million of Megapack products from \nTesla, Inc. (“Tesla”) recorded in Property, plant, and equipment, net in the consolidated balance sheets. As of \nDecember 31, 2025, the Company purchased $506 million of Megapack products and $131 million of Cybertrucks \nat manufacturer’s suggested retail price from Tesla, recorded in Property, plant, and equipment, net in the \nconsolidated balance sheets.\nIn January 2026, and as further amended on February 18, 2026, CTC entered into an equipment lease agreement \nwith Valor Equity Partners (“Valor ”) for certain AI infrastructure hardware (“Valor transaction II ”). The founder, \nCEO and Chief Investment Officer of Valor, Antonio Gracias, serves as one of the directors of the Company. The \nValor transaction II was deemed to be a failed sale-leaseback transaction. The Company has previously entered into \na similar agreement with Valor for other AI infrastructure hardware. As of March 31, 2026, the Company recorded \ndebt of $1,121 million and $7,920 million within Debt and finance leases, current and Debt and finance leases, net \nof current, respectively, in the Company’s consolidated balance sheet, and $186 million in Interest expense for the \nthree months ended March 31, 2026 in the Company’s consolidated statement of operations related to equipment \nlease agreements with Valor. As of December 31, 2025, the Company recorded debt of $455 million and $4,052 \nmillion within Debt and finance leases, current and Debt and finance leases, net of current, respectively, in the \nCompany’s consolidated balance sheet related to equipment lease agreements with Valor. Refer to Note 9, Debt for \nadditional details. The related asset is recorded within Property, plant, and equipment, net in the Company’s \nconsolidated balance sheets. \nOther transactions with Tesla and other related parties during the three months ended March 31, 2026 and 2025 were \nimmaterial.\n\nF-94\nTable of Contents\nNote 18 - Segments\nFollowing the Mergers, the Company evaluated how to view and measure performance of the combined company \nand potential realignment of individual entity’s historical segment structure. Following this evaluation, the Company \ndetermined that as a combined company, effective in Q1 2026, the Company’s Chief Executive Officer, as the Chief \nOperating Decision Maker (“CODM”), organizes the Company, manages resource allocations, and measures \nperformance among three operating and reportable segments: (i) Space, (ii) Connectivity, and (iii) AI. Prior period \npresentations for segments conform to the current segment reporting structure.  \nThe Company’s CODM assesses performance and allocates resources to operating segments based on segment \nincome (loss) from operations by comparing actual income (loss) from operations to historical results and previously \nforecasted financial information. The Company’s CODM does not evaluate operating and reportable segments using \nasset or liability information. \nThe following tables present information as to revenues, significant segment expenses, and income (loss) from \noperations by the Company’s reportable segments:\nThree Months Ended March 31,\n2026\nSpace\nConnectivity\nAI\nTotal Reportable \nSegments\nRevenue \n \n ............................................................. $\n619\n$\n3,257\n$\n818\n$\n4,694\nCosts and expenses\nCost of revenue \n ..............................................\n281\n1,651\n456\n2,388\nResearch and development \n .............................\n930\n205\n2,379\n3,514\nSelling, general and administrative \n \n ................\n70\n213\n463\n746\nRestructuring charges \n .....................................\n—\n—\n(11)\n(11)\nTotal costs and expenses \n ...........................\n1,281\n2,069\n3,287\n6,637\nIncome (loss) from operations ..........................\n(662)\n1,188\n(2,469)\n(1,943)\nInterest expense \n ...................................................\n(664)\nInterest income \n ....................................................\n213\nOther expense, net \n ...............................................\n(1,876)\nLoss before income taxes \n ..................................\n$\n(4,270)\nSupplemental segment information\nDepreciation and amortization \n ............................ $\n166\n$\n783\n$\n1,493\n$\n2,442\nShare-based compensation \n .................................. $\n145\n$\n116\n$\n378\n$\n639\nCapital expenditures \n ............................................ $\n1,052\n$\n1,332\n$\n7,723\n$\n10,107\n\nF-95\nTable of Contents\nThree Months Ended March 31,\n2025\nSpace\nConnectivity\nAI\nTotal Reportable \nSegments\nRevenue \n \n .............................................................. $\n865\n$\n2,475\n$\n727\n$\n4,067\nCosts and expenses\nCost of revenue \n ..............................................\n297\n1,214\n451\n1,962\nResearch and development \n .............................\n526\n123\n908\n1,557\nSelling, general and administrative \n \n ................\n88\n105\n300\n493\nRestructuring charges \n .....................................\n—\n—\n4\n4\nImpairment \n .....................................................\n24\n—\n—\n24\nTotal costs and expenses \n ...........................\n935\n1,442\n1,663\n4,040\nIncome (loss) from operations ..........................\n(70)\n1,033\n(936)\n27\nInterest expense \n ...................................................\n(447)\nInterest income \n ....................................................\n117\nOther expense, net \n ...............................................\n(211)\nLoss before income taxes \n ..................................\n$\n(514)\nSupplemental segment information\nDepreciation and amortization \n ............................ $\n162\n$\n510\n$\n771\n$\n1,443\nShare-based compensation \n .................................. $\n108\n$\n75\n$\n49\n$\n232\nImpairment \n .......................................................... $\n24\n$\n—\n$\n—\n$\n24\nCapital expenditures \n ............................................ $\n759\n$\n814\n$\n2,567\n$\n4,140\nNote 19 - Restructuring\nIn 2022, X, an indirect subsidiary of the Company (through the X Merger and subsequently, xAI Merger), initiated \nglobal employee workforce reductions, the effects of which continued into 2026. The charges and credits associated \nwith the workforce reduction include cash severance expense and other termination benefits. Total charges (credits) \nof $(11) million and $4 million associated with the workforce reduction were recorded in Restructuring charges \n(credits) in the consolidated statements of operations for the three months ended March 31, 2026, and 2025, \nrespectively.\nThe following table is a summary of the changes in the restructuring liabilities for each period presented, included \nwithin Accrued expenses and other current liabilities and Other liabilities on the consolidated balance sheets:\nRestructuring liabilities as of December 31, 2025 ................................................................................ $\n443\nSeverance and other personnel costs .................................................................................................\n(11)\nCash payments\n \n ...................................................................................................................................\n(123)\nOther adjustments ..............................................................................................................................\n3\nRestructuring liabilities as of March 31, 2026 ...................................................................................... $\n312\n\nF-96\nTable of Contents\nNote 20 - Subsequent Events \nThe Company has evaluated subsequent events that occurred from April 1, 2026 through May 7, 2026, which is the \ndate the consolidated financial statements were available to be issued, and determined that there were no subsequent \nevents or transactions that required recognition or disclosure in the consolidated financial statements, except as \ndiscussed below.\nCollaboration Agreement \nOn April 19, 2026, the Company entered into a compute agreement with Anysphere, Inc., doing business as Cursor, \na San Francisco-based private software company (“Cursor”). Pursuant to the compute agreement, the Company will \ncollaborate with Cursor to improve the Company’s existing models, including Grok, and potentially to jointly \ndevelop AI models and related model-specific deliverables. \nConcurrent with the compute agreement, the Company also entered into an option agreement for the right, but not \nthe obligation, to acquire Cursor. The option agreement generally provides that the Company may exercise the call \noption at any time during the 30-day period following the earlier of (i) seven trading days following the completion \nof the Company’s IPO and (ii) September 30, 2026. Exercise of the call option is in the Company’s sole discretion \nand subject to further approval by the board of directors. Cursor is also subject to certain exclusivity obligations \nunder the option agreement. The consideration for the acquisition of Cursor would consist of shares of  Class A \ncommon stock based on an implied equity value of Cursor of $60.0 billion, and the price of Class A common stock \nthat equals, if the acquisition closed prior to the completion of this offering, the most recent quarterly valuation, or, \nif the acquisition closed after the completion of the Company’s IPO, the volume-weighted average closing price \nthereof over the seven consecutive trading days immediately preceding the closing of the acquisition. If either (i) the \nCompany decides to terminate the option agreement or (ii) Cursor is eligible to and decides to terminate due to the \nCompany’s material breach of the option agreement, Cursor is entitled to a $1.5 billion termination fee under the \noption agreement and an $8.5 billion deferred services fee under the compute agreement. These fees are payable in \ncash (or Class A common stock, if the Company’s IPO has not been consummated at the time the fees become \npayable). \nThe Company has conducted preliminary due diligence on Cursor’s business, technology and operations, and expect \nto continue such diligence in connection with any decision to exercise the call option. The Company cannot predict \nwhether the Company will elect to exercise the call option or, if exercised, whether the acquisition will close on the \nanticipated terms or at all.\nSale-Leaseback Transaction\nOn April 24, 2026, CTC entered into a five-year equipment lease agreement with Valor, a related party, for certain \nAI infrastructure hardware (“Valor transaction III”) for total undiscounted lease payments of $6,587 million. \nAsset Acquisition\nOn April 30, 2026, the Company entered into an asset purchase agreement with an unaffiliated third party to \npurchase certain mobile gas turbines and related packages for approximately $2,000 million (the “Turbine \nAcquisition”). The closing of the Turbine Acquisition is expected to occur in May 2026 and is subject to customary \nclosing conditions. The seller has also agreed to enter into a post-closing services agreement to support the \nCompany's turbine operations. The Turbine Acquisition will help provide power to the Company's data centers.\nCloud Services Agreement\nOn May 3, 2026, the Company entered into a cloud services agreement with Anthropic PBC, an AI research and \ndevelopment public benefit corporation, with respect to access to compute capacity. Pursuant to this agreement, the \ncustomer has agreed to pay a monthly fee through May 2029, with capacity ramping in May 2026 at a reduced fee. \nThe agreement may be terminated by either party upon 90 days’ notice. The customer will retain ownership and \nintellectual property rights in its content, AI models, and related data.\n\nTable of Contents\n                    Shares\nSpace Exploration Technologies Corp.\nClass A Common Stock\nPRELIMINARY PROSPECTUS\n                    , 2026\nThrough and including                     , 2026 (the 25th day after the date of this prospectus), all dealers effecting \ntransactions in our Class A common stock, whether or not participating in this offering, may be required to deliver a \nprospectus. This delivery requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an \nunderwriter and with respect to an unsold allotment or subscription.\n\nII-1\nTable of Contents\nPART II\nINFORMATION NOT REQUIRED IN PROSPECTUS\nItem 13.Other Expenses of Issuance and Distribution.\nThe following table shows the costs and expenses, other than underwriting discounts and commissions, payable in \nconnection with the sale and distribution of the securities being registered. All amounts except the SEC registration \nfee, the FINRA fee and the stock exchange listing fee are estimated.\nSEC Registration Fee \n ............................................................................................................................ $\n138,100\nFINRA Filing Fee \n .................................................................................................................................\n150,500\nNasdaq Listing Fee\n335,000\nPrinting Costs \n ........................................................................................................................................\n*\nLegal Fees and Expenses\n .......................................................................................................................\n*\nAccounting Fees and Expenses \n .............................................................................................................\n*\nTransfer Agent Fees and Expenses \n .......................................................................................................\n*\nMiscellaneous Expenses\n \n ........................................................................................................................\n*\nTotal \n ...................................................................................................................................................... $\n*\n__________________\n*\nTo be provided by amendment.\nItem 14.Indemnification of Directors and Officers.\nUnder the Texas Business Organizations Code (the “TBOC”), the charter of a corporation may provide that a \ndirector or officer of the corporation is not liable, or is liable only to the extent provided by the charter, to the \ncorporation or its shareholders for monetary damages for an act or omission by the person in the person’s capacity as \na director or officer. The TBOC does not authorize elimination or limitation of liability to the extent the director or \nofficer is found liable under applicable law for:\n•\nany breach of the director’s or officer’s duty of loyalty to the corporation or its shareholders;\n•\nany act or omission not in good faith that constitutes a breach of duty of the director or officer to the corporation \nor that involves intentional misconduct or a knowing violation of law;\n•\nany transaction from which the director or officer receives an improper benefit, whether or not the benefit \nresulted from an action taken within the scope of the director’s duties; or\n•\nan act or omission for which the liability of the director or officer is expressly provided by an applicable statute.\nOur charter will provide that our directors and officers are not liable to the Company or its shareholders for \nmonetary damages for an act or omission by the director or officer in his or her capacity as a director or officer or \nfor a breach of any duty as a director or officer to the fullest extent permitted by the TBOC, as it exists or as \namended from time to time.\nThe TBOC provides that a corporation must indemnify a director or former director against reasonable expenses \nactually incurred by the person in connection with a proceeding in which the person is a respondent because the \nperson is or was a director, or is or was serving as a representative of another enterprise or organization or an \nemployee benefit plan while serving as a director, if the director or former director is wholly successful, on the \nmerits or otherwise, in the defense of the proceeding. If a court determines that a director, former director or \nrepresentative is entitled to indemnification, the court will order indemnification by the corporation and award the \nperson expenses incurred in securing the indemnification. The TBOC also permits corporations to indemnify present \nor former directors where indemnification is not mandated by the TBOC; however, such permissive indemnification \nis subject to certain limitations and the director satisfying specified standards of conduct. The TBOC also provides \nthat officers must be indemnified to the same extent as directors are required to be indemnified under the TBOC and\n\nII-2\nTable of Contents\nthat a court may also order indemnification under various circumstances. In addition, the TBOC permits \nindemnification in certain circumstances in which we would not otherwise have the power to do so under the \nprovisions of the TBOC or our charter or bylaws if that indemnification is approved by the shareholders of the \nCompany.\nOur bylaws will also provide that, to the fullest extent permitted by the TBOC, the Company must indemnify any \nperson who was or is, or is threatened to be made, a party to any threatened, pending or completed action, suit or \nproceeding, whether civil, criminal, administrative, arbitrative, legislative or investigative, including an appeal \nthereof, by reason of the fact that the person is or was a director or an officer (who is appointed by our board or \nspecifically designated as such by our chief executive officer, president or chief financial officer) of the Company, \nor while a director or officer of the Company is or was serving at the request of the Company as a director, officer, \npartner, venturer, trustee, employee, administrator or agent of another entity, trust or enterprise, against expenses \n(including attorneys’ fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably \nincurred by the person in connection with the action, suit or proceeding if the person satisfied a specified standard of \nconduct. Our bylaws will also provide that expenses (including attorneys’ fees) actually and reasonably incurred by \nsuch director or officer in defending any proceeding will be paid by the Company in advance of the final disposition \nof the proceeding upon written request from that person subject to the person satisfying certain conditions. To the \nextent that indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers \nand controlling persons, we have been advised that, in the opinion of the SEC, this indemnification is against public \npolicy as expressed in the Securities Act and is, therefore, unenforceable.\nThe TBOC and our bylaws permit the Company to purchase insurance on behalf of existing or former officers, \nemployees, directors or agents against any liability asserted against and incurred by that person in such capacity, or \narising out of that person’s status in such capacity, whether or not the Company would have the power to indemnify \nthat person under the TBOC. Pursuant to this authority, we expect to obtain such insurance for the officers, \nemployees, directors and agents of the Company and its subsidiaries. We will also enter into written indemnification \nagreements with each of our officers and directors that provide, in general, that we will indemnify them against loss \nand liability arising from, and will pay or reimburse their actual and reasonable expenses incurred in advance of the \nfinal disposition of any legal proceeding involving their service to us or on our behalf. As permitted by the TBOC, \nbecause these agreements are expected to be approved by our shareholders, the agreements may require \nindemnification or payment of expenses in favor of the indemnitee in certain circumstances in which we would not \notherwise have the power to do so under the provisions of the TBOC or our charter or bylaws. Pursuant to a written \nundertaking provided by any director or officer who requests the Company to reimburse or pay that person’s \nexpenses in advance of the final disposition of the proceeding, the director or officer will be required to repay the \nadvanced expenses to the Company if it is found that such director or officer is not entitled to indemnification under \napplicable law and our bylaws.\nThe proposed form of Underwriting Agreement filed as Exhibit 1.1 to this Registration Statement will provide for \nindemnification of our directors and officers by the underwriters against certain liabilities in connection with this \noffering.\n\nII-3\nTable of Contents\nItem 15.Recent Sales of Unregistered Securities. \nThe following sets forth information regarding all unregistered securities we have issued in the last three years. \nUnless stated otherwise, the sale of the securities listed below were deemed to be exempt from registration pursuant \nto Section 4(a)(2) of the Securities Act, including Regulation D and Rule 506 promulgated thereunder, as \ntransactions by an issuer not involving a public offering. Share amounts in this Item 15. do not give effect to the \n2026 Stock Split. \nOn February 2, 2026, we consummated the xAI Merger and, in connection therewith, issued 321,681,643 shares of \nClass A common stock and 121,683,400 shares of Class B common stock as partial consideration, including \n3,798,039 shares of Class A common stock to Tesla following the completion of a regulatory review period on \nMarch 12, 2026.  \nOn January 13, 2026, we granted 200 million performance-based restricted shares of Class B common stock to Mr. \nMusk to vest upon (i) our achievement of specified market capitalization milestones across 15 equal tranches and (ii) \nthe Company’s establishment of a permanent human colony on Mars with at least one million inhabitants, in each \ncase, subject to Mr. Musk’s continued employment with us through the date on which achievement is certified by \nour board. \nOn September 7, 2025, we entered into a License Purchase Agreement with Spectrum Business Trust 2025-1, a \nNevada Business Trust, and EchoStar. The total consideration for the acquisition of EchoStar’s spectrum is \napproximately $19.6 billion, consisting of (i) approximately $11.1 billion in equity, payable through the issuance of \napproximately 52.4 million shares of Class A common stock at a fixed value of $212 per share, and (ii) up to $8.5 \nbillion related to the payoff of designated EchoStar debt, with any shortfall below $8.5 billion to be paid in cash. \nSuch amounts do not give effect to the 2026 Stock Split. The allocation of cash and equity consideration is subject to \ncertain adjustments based on the amount of EchoStar debt satisfied at or prior to closing. The Spectrum Transaction \nis expected to close in November 2027.  \nItem 16.Exhibits and Financial Statement Schedules.\n(a) Exhibits\nExhibit No.\nDescription of Exhibit\n1.1*\nForm of Underwriting Agreement. \n2.1^\nAgreement and Plan of Merger and Reorganization, by and among Space Exploration Technologies \nCorp., X.AI Holdings Corp., K2 Merger Sub Inc. and K2 Merger Sub 2 LLC, dated January 31, 2026.\n3.1\nForm of Restated Certificate of Formation of Space Exploration Technologies Corp.\n3.2\nForm of Amended and Restated Bylaws of Space Exploration Technologies Corp. \n4.1\nForm of Class A Common Stock Certificate of Space Exploration Technologies Corp. \n4.2\nAmended and Restated Investors’ Rights Agreement, dated as of August 4, 2020, by and among \nSpace Exploration Technologies Corp. and the investors listed on the exhibits thereto.\n5.1\nForm of Opinion of Gibson, Dunn & Crutcher LLP. \n10.1\nForm of Indemnification Agreement.\n10.2†\nForm of Space Exploration Technologies Corp. Second Amended and Restated 2017 Employee Stock \nPurchase Plan.  \n10.3†\nSpace Exploration Technologies Corp. Amended & Restated 2015 Equity Incentive Plan and Form of \nStock Option Grant Notice and Option Agreement.\n10.4†\nForm of Space Exploration Technologies Corp. Amended and Restated 2024 Equity Incentive Plan.\n10.5†\nSpace Exploration Technologies Corp. 2024 Equity Incentive Plan and Forms of Grant Notices and \nAward Agreements.\n10.6†\nClass B Restricted Stock Award Agreement between Space Exploration Technologies Corp. and Elon \nR. Musk, dated as of January 13, 2026.\n10.7†\nClass B Restricted Stock Award Agreement between Space Exploration Technologies Corp. and Elon \nR. Musk, dated as of March 23, 2026.\n\nII-4\nTable of Contents\nExhibit No.\nDescription of Exhibit\n10.8^\nAmended and Restated License Purchase Agreement, dated as of November 5, 2025, by and among \nEchoStar Corporation, Space Exploration Technologies Corp. and Spectrum Business Trust 2025-1.\n10.9^\nBridge Loan Credit Agreement, dated as of March 2, 2026, by and among Space Exploration \nTechnologies Corp., as borrower, the guarantors from time to time party thereto, the lenders from \ntime to time party thereto and Goldman Sachs Bank USA, as administrative agent and a lender.\n10.10*\nAmended and Restated Credit Agreement, dated as of May 19, 2026, by and among Space \nExploration Technologies Corp., the Guarantors party thereto, the Lenders party thereto, Bank of \nAmerica, NA., as the administrative agent, an L/C Issuer and the Swing Line Lender, and the other L/\nC Issuers from time to time party thereto. \n21.1\nList of subsidiaries of Space Exploration Technologies Corp.\n23.1\nConsent of PricewaterhouseCoopers LLP, independent registered public accounting firm to Space \nExploration Technologies Corp.\n23.2\nConsent of Gibson, Dunn & Crutcher LLP (form included in Exhibit 5.1). \n24.1\nPower of Attorney (included on the signature page hereto). \n107\nFiling Fee Table.\n__________________\n*\nTo be filed by amendment. \n^\nCertain of the schedules and attachments to this exhibit have been omitted pursuant to Regulation S-K, Item 601(a)(5). The registrant \nhereby undertakes to provide further information regarding such omitted materials to the SEC upon request.\n†\nManagement contract or compensatory plan or arrangement.\n(b) Financial Statement Schedules\nFinancial statement schedules have been omitted because the information is not applicable or included in our \nconsolidated financial statements in the prospectus that forms a part of this Registration Statement.\nItem 17.Undertakings.\nThe undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the \nunderwriting agreement certificates in such denominations and registered in such names as required by the \nunderwriters to permit prompt delivery to each purchaser.\nInsofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and \ncontrolling persons of the registrant pursuant to the provisions referenced in Item 14 of this Registration Statement, \nor otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such \nindemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the \nevent that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses \nincurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, \nsuit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being \nregistered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling \nprecedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against \npublic policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.\nThe undersigned registrant hereby undertakes that:\n(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of \nprospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of \nprospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be \ndeemed to be part of this Registration Statement as of the time it was declared effective.\n(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that \ncontains a form of prospectus shall be deemed to be a new registration statement relating to the securities \noffered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide \noffering thereof.\n\nII-5\nTable of Contents\nSIGNATURES\nPursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement \nto be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Starbase, Texas, on May 20, \n2026.\nSpace Exploration Technologies Corp.\nBy: /s/ Elon Musk\nName: Elon Musk\nTitle:\nChief Executive Officer and Chief \nTechnical Officer\n\nII-6\nTable of Contents\nPOWER OF ATTORNEY\nKNOW ALL PEOPLE BY THESE PRESENTS, that each person whose signature appears below constitutes and \nappoints Gwynne Shotwell and Bret Johnsen, and each of them, as his or her true and lawful attorneys-in-fact and \nagents, each with full power of substitution and resubstitution, for him or her and in his or her name, place or stead, \nin any and all capacities (including, without limitation, the capacities listed below), to sign any and all amendments \n(including post-effective amendments) to this Registration Statement, and to sign any registration statement for the \nsame offering covered by this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) \npromulgated under the Securities Act of 1933, as amended, and all post-effective amendments thereto, and to file the \nsame, with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange \nCommission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to \ndo and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to \nall intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said \nattorneys-in-fact and agents, or any of them, or his or her substitute or substitutes, may lawfully do or cause to be \ndone by virtue hereof.\nPursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed \nby the following persons in the capacities indicated on the 20th day of May, 2026.\nSignature\nTitle\n/s/ Elon Musk\nElon Musk\nChief Executive Officer, Chief Technical Officer and \nChairman of the Board\n(principal executive officer)\n/s/ Gwynne Shotwell\nGwynne Shotwell\nPresident, Chief Operating Officer and Director\n/s/ Bret Johnsen\nBret Johnsen\nChief Financial Officer\n(principal financial and accounting officer)\n/s/ Ira Ehrenpreis\nIra Ehrenpreis\nDirector\n/s/ Randy Glein\nRandy Glein\nDirector\n/s/ Antonio J. Gracias\nAntonio J. Gracias\nDirector\n/s/ Donald Harrison\nDonald Harrison\nDirector\n/s/ Steve Jurvetson\nSteve Jurvetson\nDirector\n/s/ Luke Nosek\nLuke Nosek\nDirector", + "path": "spacex-s1.pdf/Root", + "metadata": { + "length": 1467990, + "summary": "This section, titled 'Root', serves as the introductory part of a registration statement and prospectus for Space Exploration Technologies Corp. (SpaceX). It details the company's initial public offering (IPO) of Class A common stock, including its ticker symbol ('SPCX'), the two classes of stock structure (Class A and Class B), and the significant voting control held by founder Elon Musk. The section also provides key business metrics and historical milestones for SpaceX's space launch operations and Starlink connectivity services.", + "page_nums": [ + 1, + 2, + 3, + 4, + 5, + 6, + 7, + 8, + 9, + 10, + 11, + 12, + 13, + 14, + 15, + 16, + 17, + 18, + 19, + 20, + 21, + 22, + 23, + 24, + 25, + 26, + 27, + 28, + 29, + 30, + 31, + 32, + 33, + 34, + 35, + 36, + 37, + 38, + 39, + 40, + 41, + 42, + 43, + 44, + 45, + 46, + 47, + 48, + 49, + 50, + 51, + 52, + 53, + 54, + 55, + 56, + 57, + 58, + 59, + 60, + 61, + 62, + 63, + 64, + 65, + 66, + 67, + 68, + 69, + 70, + 71, + 72, + 73, + 74, + 75, + 76, + 77, + 78, + 79, + 80, + 81, + 82, + 83, + 84, + 85, + 86, + 87, + 88, + 89, + 90, + 91, + 92, + 93, + 94, + 95, + 96, + 97, + 98, + 99, + 100, + 101, + 102, + 103, + 104, + 105, + 106, + 107, + 108, + 109, + 110, + 111, + 112, + 113, + 114, + 115, + 116, + 117, + 118, + 119, + 120, + 121, + 122, + 123, + 124, + 125, + 126, + 127, + 128, + 129, + 130, + 131, + 132, + 133, + 134, + 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"page_num": 1, @@ -3769,24 +5312,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e9a990d9-966d-55b4-8926-ace4d2cab103", - "type": "page", - "content": "Shares\nSpace Exploration Technologies Corp.\nClass A Common Stock\nThis is the initial public offering of shares of Class A common stock, par value $0.001 per share, of Space Exploration Technologies Corp., a Texas corporation. We are offering shares of our Class A common stock.\nCurrently, no public market exists for our Class A common stock. We expect the initial public offering price to be between $ and $ per share. We have applied to list our Class A common stock on The Nasdaq Stock Market LLC (“Nasdaq”) and Nasdaq Texas, Inc. (“Nasdaq Texas”) under the symbol “SPCX.”\nFollowing the completion of this offering, we will have two classes of common stock issued and outstanding: Class A common stock and Class B common stock. Each share of Class A common stock will entitle its holder to one vote per share. Each share of Class B common stock will entitle its holder to 10 votes per share. Class A shareholders and Class B shareholders will vote together as a single class on all matters to be voted on by shareholders, except Class B shareholders will be entitled to elect a majority of our board of directors in addition to having certain other class votes as described under “Description of Capital Stock.”\nAssuming an offering size as set forth above and an initial public offering price of $ per share (the midpoint of the estimated price range set forth above), Elon Musk, our founder, Chief Executive Officer, Chief Technical Officer and Chairman of our board, will hold approximately % of the voting power of our common stock (or approximately % if the underwriters exercise their option to purchase additional shares of Class A common stock in full) immediately after the completion of this offering through his ownership of shares of our Class A and Class B common stock of which approximately % he controls through his ownership of\nour Class B common stock. As a result, Mr. Musk will be able to control the outcome of matters requiring shareholder approval. This includes the election of (i) a majority of our board, through his ownership of Class B shares (as Class B Directors), for so long as he holds a majority of the voting power of the Class B common stock, and (ii) the remainder of our board, for so long as he holds a majority of the combined voting power of the Class A and Class B common stock. As a result, we will be a “controlled company” under the corporate governance rules of Nasdaq following the completion of this offering and, as a result, we intend to rely on exemptions from certain corporate governance requirements. Please refer to “Management—Controlled Company Exemption.”\nInvesting in our Class A common stock involves risks. Please refer to “Risk Factors” beginning on page 26 of this prospectus.\nPer Share Total\nInitial public offering price\n ...................................................................................................... $ $\nUnderwriting discounts and commissions(1)\n ............................................................................ $ $\nProceeds, before expenses, to Space Exploration Technologies Corp.\n\n ................................... $ $\n________________\n(1) Please refer to “Underwriting” for a description of all underwriting compensation payable in connection with this offering.\nThe underwriters may also exercise an option to purchase up to an additional shares of our Class A common stock from us, at the initial public offering price, less the underwriting discounts and commissions, for 30 days after the date of this prospectus.\nAt our request, the underwriters have reserved up to percent of the shares of Class A common stock to be issued by the Company and offered by this prospectus for sale, at the initial public offering price, to . Please refer to “Underwriting—Directed Share Program.” Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.\nThe shares of Class A common stock will be ready for delivery on or about , 2026.\nJoint Book-Running Managers\nGoldman Sachs &\nCo. LLC Morgan Stanley BofA Securities Citigroup J.P. Morgan\nBarclays Deutsche Bank Securities RBC Capital Markets UBS Investment Bank Wells Fargo Securities\nAllen & Company LLC Cantor Needham & Company Raymond James Societe Generale Stifel William Blair\nBTG Pactual ING Macquarie CapitalMirae Asset Securities Mizuho Santander\nProspectus Dated , 2026.\nThe information in this preliminary prospectus is not complete and may be changed. The securities described herein may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell such securities, and it is not soliciting an offer to buy these securities, in any jurisdiction where the offer or sale is not permitted.\nSUBJECT TO COMPLETION, DATED , 2026PRELIMINARY PROSPECTUS", - "path": "spacex-s1.pdf/p2", - "metadata": { - "length": 5123, - "summary": "Shares Space Exploration Technologies Corp. Class A Common Stock This is the initial public offering of shares of Class A common stock, par value $0.001 per share, of Space Exploration Technologies Corp., a Texas corporation. 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"content": "", - "path": "spacex-s1.pdf/p16", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 16 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 16, "artifact_ref": "page_citation_assets/page-16.png", @@ -4144,24 +5432,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5134dd30-73f4-51cf-8d76-6b6c89062ca0", - "type": "page", - "content": "Table of Contents\n TABLE OF CONTENTS\nPage\nGLOSSARY OF TERMS\n\n................................................................................................................................. iv\nPROSPECTUS SUMMARY\n\n............................................................................................................................ 1\nRISK FACTORS .............................................................................................................................................. 26\nCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS\n\n........................... 64\nUSE OF PROCEEDS\n\n....................................................................................................................................... 66\nDIVIDEND POLICY\n\n........................................................................................................................................ 67\nCAPITALIZATION\n\n......................................................................................................................................... 68\nDILUTION\n\n....................................................................................................................................................... 70\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\n\n........................................................................................................................................ 74\nBUSINESS\n\n\n........................................................................................................................................................ 130\nMANAGEMENT\n\n\n.............................................................................................................................................. 226\nEXECUTIVE COMPENSATION .................................................................................................................... 233\nCERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS\n\n............................................. 243\nSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT\n\n.................... 247\nDESCRIPTION OF CAPITAL STOCK\n\n.......................................................................................................... 250\nSHARES ELIGIBLE FOR FUTURE SALE\n\n.................................................................................................... 258\nMATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF CLASS A COMMON STOCK\n\n..................................................................................................................... 260\nUNDERWRITING\n\n........................................................................................................................................... 264\nLEGAL MATTERS\n\n.......................................................................................................................................... 277\nEXPERTS\n\n......................................................................................................................................................... 277\nWHERE YOU CAN FIND ADDITIONAL INFORMATION\n\n........................................................................ 277\nINDEX TO FINANCIAL STATEMENTS\n\n...................................................................................................... F-1\nNeither we nor the underwriters have authorized anyone to provide you with information other than that contained in\nthis prospectus or in any free writing prospectus authorized by us. We and the underwriters take no responsibility\nfor, and can provide no assurance as to the reliability of, any other information that others may give you. We and the\nunderwriters are not making an offer to sell, or seeking offers to buy, our Class A common stock in any jurisdiction\nwhere an offer or sale is not permitted. The information contained in this prospectus or any free writing prospectus is\naccurate only as of its date, regardless of its time of delivery or of any sale of shares of our Class A common stock.\nOur business, financial condition, results of operations and future prospects may have changed since that date.\nFor investors outside of the United States: Neither we nor the underwriters have done anything that would permit\nthis offering, or possession or distribution of this prospectus, in any jurisdiction where action for that purpose is\nrequired, other than the United States. Persons outside of the United States who come into possession of this\nprospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our\nClass A common stock and the distribution of this prospectus outside of the United States.\nThis prospectus contains forward-looking statements that are subject to a number of risks and uncertainties, many of\nwhich are beyond our control. Please refer to “Risk Factors” and “Cautionary Statement Regarding Forward-\nLooking Statements.”", - "path": "spacex-s1.pdf/p17", - "metadata": { - "length": 4966, - "summary": "Table of Contents TABLE OF CONTENTS Page GLOSSARY OF TERMS ................................................................................................................................. iv PROSPECTUS SUMMARY .....................................................................", - "page_nums": [ - 17 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 17, "artifact_ref": "page_citation_assets/page-17.png", @@ -4169,24 +5440,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1f1d9b0e-86df-51b9-a732-f56335d17eac", - "type": "page", - "content": "ii\nTable of Contents\nGeneral Information\nExcept as otherwise indicated or required by the context, all references to “SpaceX,” the “Company,” “we,” “our”\nand “us” or similar terms refer to Space Exploration Technologies Corp. and its consolidated subsidiaries. For the\ndefinitions of certain terms and abbreviations used in this prospectus, please refer to “Glossary of Terms” beginning\non page iv of this prospectus.\nReferences to (i) our “bylaws” are to the form of amended and restated bylaws of the Company (as amended and\nrestated from time to time) to be effective upon the completion of this offering, (ii) our “charter” are to the form of\nrestated certificate of formation of the Company to be effective upon the completion of this offering and (iii) “our\nboard” or “the board” are to the board of directors of the Company.\nBasis of Presentation\nThe consolidated financial statements of SpaceX have been retrospectively recast for all periods presented to include\n(i) the historical results of X.AI Holdings Corp., which was acquired by SpaceX, effective February 2, 2026 (the\n“xAI Merger”), and X Holdings Corp. (“X Holdings”), which was acquired by xAI, effective March 28, 2025 (the\n“X Merger”), because these transactions were between entities under common control, and (ii) a five-for-one stock\nsplit of the Company’s Class A, Class B, and Class C Common Stock, effective May 4, 2026 (the “2026 Stock\nSplit”). Unless otherwise stated or the context otherwise requires, all share and per share information included in this\nprospectus have been retroactively adjusted to reflect the 2026 Stock Split. Refer to Note 1, Nature of Business, to\nthe audited consolidated financial statements included elsewhere in this prospectus.\nIndustry and Market Data\nCertain market and industry data and forecasts used in this prospectus have been obtained from, are based on, or use\ndata from, the following reports and sources, among others: (i) Breaking Barriers to Data Center Growth, dated\nJanuary 20, 2025, by Boston Consulting Group; (ii) Looming Spectrum Shortfall Could Cost America’s GDP $1.4T,\nJeopardize Continued Function of U.S. Networks, New Report Finds, dated March 27, 2025, by the Cellular\nTelecommunications and Internet Association; (iii) Top 50 Countries by Number of Business Aircraft Registered,\ndated January 27, 2026, by Corporate Jet Investor; (iv) Digital Economy Trends 2026, dated December 2025, by the\nDigital Cooperation Organization; (v) Global Fixed Broadband Market Outlook, Ericsson Mobility Report, dated\nNovember 1, 2025, by Ericsson; (vi) Households by Number of Households and by Country, Euromonitor\nInternational Passport 2026 Edition, dated November 5, 2025, by Euromonitor International; (vii) Satellite Solutions\nfor Universal Service, dated March 2025, by the Global Satellite Operators Association; (viii) Broadband Services\nMarket Analysis Segment Forecast to 2027, dated April 2025, by Grand View Research; (ix) Consumer Market\nModel H2 2025 – Worldwide Household Internet Penetration, dated March 2026, by International Data Corporation;\n(x) World Energy Outlook Special Report: Energy and AI, dated April 2025, by the International Energy Agency;\n(xi) The 175 GW Crisis: America’s Power Grid Cannot Keep Up with AI Data Centers, dated January 21, 2026, by\nIntrol; (xii) As Wireless Network Quality Competition Increases, Customers Benefit, dated July 17, 2025, by J.D.\nPower; (xiii) Satellite Statistics: Satellite and Debris Population, dated April 2026, by Jonathan McDowell; (xiv)\n2026 Global Data Center Outlook: Navigating AI Demand, Power Constraints and Global Opportunities, dated\nJanuary 5, 2026, by JLL; (xv) Global Ship Tracking Intelligence, at marinetraffic.com, as updated from time to time\nand last accessed April 13, 2026, by Marine Traffic Dashboard; (xvi) The Cost of Compute: A $7 Trillion Race to\nScale Data Centers, dated April 28, 2025, by McKinsey & Company; (xvii) What is Multimodal AI?, dated June 10,\n2025, by McKinsey & Company; (xviii) NASA: Enabling America on the Space Frontier, dated December 2024, by\nthe National Aeronautics and Space Administration (“NASA”); (xix) Space Act Agreement, dated April 2015, by\nNASA; (xx) The Recent Large Reduction in Space Launch Cost, dated July 8, 2018, by NASA; (xxi) 12th Edition\nSpace Economy Report, dated January 29, 2026, by Novaspace; (xxii) Global Fleet and MRO Market Forecast\n2025–2035, dated February 2025, by Oliver Wyman; (xxiii) Broadband Op Subs by Technology – Forecasts\nSummary, dated March 31, 2026, by Omdia; (xxiv) Mobile Forecasts Summary – February 2026, dated February\n18, 2026, by Omdia; (xxv) Data Center Rules and Regulations, dated September 8, 2025, by QTS; (xxvi) AI’s\nPower Requirements Under Exponential Growth, dated January 28, 2025, by RAND Corporation; (xxvii) Data\nCenter Grid-Power Demand to Rise 22% in 2025, Nearly Triple by 2030, dated October 14, 2025, by S&P Global\nMarket Intelligence; (xxviii) NVIDIA GTC 2025 – Built for Reasoning, Vera Rubin, Kyber, CPO, Dynamo", - "path": "spacex-s1.pdf/p18", - "metadata": { - "length": 5022, - "summary": "ii Table of Contents General Information Except as otherwise indicated or required by the context, all references to “SpaceX,” the “Company,” “we,” “our” and “us” or similar terms refer to Space Exploration Technologies Corp. and its consolidated subsidiaries. For the definiti...", - "page_nums": [ - 18 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 18, "artifact_ref": "page_citation_assets/page-18.png", @@ -4194,24 +5448,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_308998bc-dc99-5095-a999-fe6568e86853", - "type": "page", - "content": "iii\nTable of Contents\nInference, Jensen Math, Feynman, dated March 18, 2025, by SemiAnalysis; (xxix) NVIDIA Blackwell Ultra\nDatasheet, dated February 16, 2026, by SemiAnalysis; (xxx) H100 Rental Price Over Time (2023–2025): A\nComplete Market Analysis, dated December 21, 2025, by Silicon Data; (xxxi) Data Centers – Understanding the\nPower Consumption of Data Centers, at socomec.us, as updated from time to time and last accessed April 13, 2026,\nby Socomec; (xxxii) The Space Report 2025 Q2 Highlights Record $613 Billion Global Space Economy for 2024,\ndated July 22, 2025, by the Space Foundation; (xxxiii) Median Country Speeds Updated February 2026, dated\nFebruary 2026, by the Speedtest Global Index; (xxxiv) Data Center (Russian Market) Commercial Data Centers,\ndated January 28, 2026, by TAdviser; (xxxv) Merchant Fleet by Flag of Registration and by Type of Ship, dated\nJune 10, 2025, by the United Nations Conference on Trade and Development; (xxxvi) U.S. Electricity Generation in\n2025 Hit a Record, Again, dated March 5, 2026, by the U.S. Energy Information Administration; (xxxvii)\nGAO-25-107555, In-Space Servicing, Assembly, and Manufacturing: Benefits, Challenges, and Policy Options,\ndated July 2025, by the U.S. Government Accountability Office; (xxxviii) GDP (current US$), at\ndata.worldbank.data.org, as updated from time to time and last accessed April 13, 2026, by the World Bank; (xxxix)\nRural population (% of total population), at data.worldbank.org, as updated from time to time and last accessed May\n2, 2026, by the World Bank; (xl) How Data Centres in Space Sustainably Enable the AI Revolution, dated January\n16, 2026, by Philip Johnston Co-Founder and Chief Executive Officer, Starcloud, published by the World Economic\nForum; and (xli) Most Americans Use AI but Still Don’t Trust It, dated December 9, 2025, by YouGov. We did not\ncommission the preparation of any of these reports or sources.\nSome market data and statistical information contained in this prospectus are also based on management’s estimates\nand calculations, which are derived from our review and interpretation of publicly available industry publications,\nour internal research and our knowledge of the markets in which we currently, and will in the future, operate, as well\nas the sources referred to above. This information involves a number of assumptions and limitations, and you are\ncautioned not to give undue weight to such information. The estimates and assumptions used in determining our\ntotal addressable markets are further detailed in the section titled “Business—Our Market Opportunity,” and you are\nurged to read the risk factor titled “The estimates of future market opportunity and forecasts of market growth, and\nour ability to capture such markets, included in this prospectus may prove to be inaccurate.” Forecasts and other\nforward-looking information obtained from the sources named above are subject to the same qualifications and\nuncertainties as the other forward-looking statements in this prospectus.\nStatements as to market position, market opportunity and market size are based on data currently available to us, as\nwell as management’s estimates, judgments, assessments, and assumptions. While we are not aware of any\nmisstatements regarding market position, market opportunity, and market size information included in this\nprospectus, such information, which is derived in part from management’s estimates and beliefs, is inherently\nuncertain and imprecise. Projections, assumptions and estimates of estimated market position and market\nopportunity and the future performance of the industries in which we operate are necessarily subject to a high degree\nof uncertainty and risk due to a variety of factors, including those described in “Risk Factors,” “Cautionary\nStatement Regarding Forward-Looking Statements” and elsewhere in this prospectus. These and other factors could\ncause results to differ materially from those expressed in the estimates made by third parties and by us. Investors are\ncautioned not to place undue reliance on statements of expected future market size or opportunity.\nTrademarks and Trade Names\nWe own or have rights to various trademarks, service marks and trade names that we use in connection with the\noperation of our business. This prospectus may also contain trademarks, service marks and trade names of third\nparties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service\nmarks, trade names or products in this prospectus is not intended to, and does not imply, a relationship with us or an\nendorsement or sponsorship by or of us. Solely for convenience, the trademarks, service marks and trade names\nreferred to in this prospectus may appear without the ®, ™ or SM symbols, but such references are not intended to\nindicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the\napplicable licensor to these trademarks, service marks and trade names.", - "path": "spacex-s1.pdf/p19", - "metadata": { - "length": 5026, - "summary": "iii Table of Contents Inference, Jensen Math, Feynman, dated March 18, 2025, by SemiAnalysis; (xxix) NVIDIA Blackwell Ultra Datasheet, dated February 16, 2026, by SemiAnalysis; (xxx) H100 Rental Price Over Time (2023–2025): A Complete Market Analysis, dated December 21, 2025,...", - "page_nums": [ - 19 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 19, "artifact_ref": "page_citation_assets/page-19.png", @@ -4219,24 +5456,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_aede2557-d6e2-52f7-8b3a-6533dde5fd52", - "type": "page", - "content": "iv\nTable of Contents\nGLOSSARY OF TERMS\nThe terms and abbreviations defined in this section are used throughout this prospectus:\n• “AI” or “artificial intelligence” refers to advanced computational technologies and systems enabling machines\nto learn, comprehend reality, solve complex problems, exhibit creativity, make critical decisions, and function\nwith growing autonomy.\n• “AI compute” or “compute” refers to the computing infrastructure required to train and operate artificial\nintelligence models, including, without limitation, specialized processors, networking, storage, and power\nsystems deployed in data centers or other computing environments.\n• “AI compute satellite” refers to a satellite equipped with onboard artificial intelligence processing capabilities\ndesigned to perform data analysis, inference, or other machine learning, automated decision-making and\nartificial intelligence algorithms, models and technologies workloads in orbit.\n• “AI ecosystem” refers to a complex, multi-layered network of technologies, products, systems, and\ninfrastructure that develop, leverage, and deploy intelligent systems.\n• “AI segment” refers to our AI business, which we acquired in connection with our acquisition of xAI in\nFebruary 2026, and includes our AI compute, Grok, and X.\n• “AI training cluster” refers to an integrated system that provides computational power required for training and\nrunning advanced AI models.\n• “The Algorithm” refers to our five-step iterative process that we use to rapidly innovate and optimize,\nemphasizing making the requirements less dumb, deleting unnecessary processes or parts, optimizing the\nnecessary processes or parts, accelerating cycle timesteps, and automating only proven processes after the first\nfour steps are completed.\n• “Application Programming Interface” or “API” refers to a defined set of rules and protocols that allows\ndifferent software systems to communicate with and interact with each other programmatically.\n• “ARPU” refers to service revenue generated from Starlink Subscribers during a period divided by (i) the\naverage number of Starlink Subscribers during the period and by (ii) the number of months in the period.\n• “Artemis program” refers to a NASA program aimed at landing humans on the Moon by the late 2020s.\n• “booster” refers to the first-stage rocket that provides the primary thrust during launch.\n• “booster catch” refers to a recovery method in which a returning first-stage rocket booster is captured mid-air by\nmechanical arms on the launch tower rather than on legs at a landing zone or at sea.\n• “booster launch” refers to a rocket launch in which a booster stage provides the primary thrust during liftoff and\nthe initial phase of ascent before separating from the vehicle.\n• “bps” refers to bits per second.\n• “COLOSSUS” refers to our flagship data center, located on Paul R. Lowry Road in Memphis, Tennessee.\n• “COLOSSUS II” refers to our data centers in Memphis, Tennessee and in Southaven, Mississippi. These data\ncenters are part of our coherent gigawatt-scale AI training cluster.\n• “Connectivity segment” refers to our Connectivity segment, which includes Starlink and associated offerings.\n• “Credit Agreements” refers to our SpaceX Credit Facility and SpaceX Bridge Loan.\n• “crewmember” refers to a person who has traveled on our spacecraft, measuring by each mission.", - "path": "spacex-s1.pdf/p20", - "metadata": { - "length": 3370, - "summary": "iv Table of Contents GLOSSARY OF TERMS The terms and abbreviations defined in this section are used throughout this prospectus: • “AI” or “artificial intelligence” refers to advanced computational technologies and systems enabling machines to learn, comprehend reality, solve c...", - "page_nums": [ - 20 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 20, "artifact_ref": "page_citation_assets/page-20.png", @@ -4244,24 +5464,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fcf844da-9484-51eb-829d-1988d63e957c", - "type": "page", - "content": "v\nTable of Contents\n• “daily posts” on X and Grok refers to the aggregate volume of original posts, replies, reposts, quotes and media\nshared daily by users on the X platform, and the real-time interactions, analysis and generative capabilities\nprovided to a user by Grok. This may include posts generated by AI or accounts managed by AI.\n• “downlink capacity” refers to the maximum rate at which data can be transmitted from a satellite to users over a\nnetwork or communication link in a given period of time.\n• “Draco thrusters” refers to thrusters used in Dragon spacecraft for precise orbital maneuvering and adjustments.\n• “Dragon” refers to our Dragon spacecraft.\n• “Falcon 1” refers to our two-stage, liquid-fueled small-lift launch vehicle that operated from 2006 to 2009.\n• “Falcon 9” refers to our orbital-class rocket with reusable boosters, first launched in 2010, which has a payload\ncapacity to LEO of approximately 23 metric tons.\n• “Falcon Heavy” refers to our partially reusable super heavy-lift launch vehicle, first launched in 2018, which\nhas a payload capacity to LEO of approximately 64 metric tons.\n• “flight-proven booster launches” refers to a mission utilizing a booster that has previously completed at least\none successful launch and recovery.\n• “frontier model” refers to a leading-edge, sophisticated large language model, such as Grok, designed for\nrigorous reasoning and real-time information synthesis.\n• “Gbps” refers to gigabits per second.\n• “geostationary orbit” refers to a high Earth orbit that allows satellites to match Earth’s rotation, appearing\nstationary from the ground, often used for communication satellites.\n• “geosynchronous transfer orbit” refers to an elliptical orbit used to transfer a spacecraft from a lower orbit to a\ngeostationary orbit.\n• “gigawatt” refers to one billion watts.\n• “gigawatt-scale” refers to infrastructure, systems, or facilities that are designed to generate, transmit, or\nconsume approximately one gigawatt or more of electrical power capacity.\n• “GPU” refers to a graphics processing unit.\n• “Grok” refers to our family of frontier models, which represents a core pillar of our mission to advance\nhumanity’s understanding of the universe through the development of truth-seeking artificial intelligence.\n• “Grok API” refers to our application programming interface that enables developers to access and integrate\nGrok models into external software applications and workflows.\n• “Grok Business” refers to our subscription-based offering that provides organizations with access to Grok\nmodels and related tools for use in internal business applications and workflows, designed for deployment by\nsmall-to-medium teams.\n• “Grok Enterprise” refers to our subscription-based offering that provides organizations with access to Grok\nmodels and related tools for use in internal business applications and workflows, designed for deployment by\nenterprise organizations.\n• “Grok Voice” refers to the Grok real-time speech engine.\n• “high-density compute” refers to compute infrastructure designed to deliver a large amount of processing power\nwithin a limited physical footprint, typically characterized by high processor concentration and elevated power\nusage per unit of space.", - "path": "spacex-s1.pdf/p21", - "metadata": { - "length": 3249, - "summary": "v Table of Contents • “daily posts” on X and Grok refers to the aggregate volume of original posts, replies, reposts, quotes and media shared daily by users on the X platform, and the real-time interactions, analysis and generative capabilities provided to a user by Grok. This...", - "page_nums": [ - 21 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 21, "artifact_ref": "page_citation_assets/page-21.png", @@ -4269,24 +5472,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_530ffece-5f67-5301-ab35-643982930318", - "type": "page", - "content": "vi\nTable of Contents\n• “Imagine” refers to our image and video generation system.\n• “inference” refers to the process by which a trained artificial intelligence model generates outputs (such as text,\nimages, or predictions) from new input data.\n• “International Docking System Standard” refers to a standard for autonomous docking capabilities used by\nspacecraft like Dragon.\n• “IoT” refers to the network of physical objects embedded with sensors, software, and other technologies for the\npurpose of connecting and exchanging data with other devices and systems over the internet.\n• “Kardashev Type II” refers to a civilization that harnesses the full energy output of its local star, like our Sun, to\npower unprecedented growth and sustain the civilization’s existence.\n• “large language model” or “LLM” refers to a sophisticated artificial intelligence model designed for advanced\nreasoning and natural language processing.\n• “large-scale LEO broadband satellite constellation” refers to a satellite constellation network of over 1,000\nsatellites.\n• “latency” refers to the time delay between the transmission of data from a source and its receipt at a destination,\ntypically measured in milliseconds.\n• “launch payload mass” refers to the theoretical payload mass that a particular spacecraft is capable of delivering\nto a specified orbit under specific conditions, which is derived from advanced computer simulations and\nperformance modeling that apply to particular mission scenarios and trajectory assumptions. Actual payload\nthat can be delivered for a given mission may be different and will vary depending on numerous mission\nparameters and operational factors, including mission-specific trajectory requirements, atmospheric conditions,\nvehicle and payload configuration, risk profile, and applicable regulatory or range-safety limitations.\n• “launch system” refers to a comprehensive system comprising rockets and associated ground infrastructure used\nto launch spacecraft and payloads into space.\n• “launch vehicle” refers to a rocket designed to transport payloads from terrestrial bodies (e.g., Earth, Moon, or\nMars) to space or to a designated orbital trajectory.\n• “LEO satellite constellation” refers to a network of numerous satellites operating in Low-Earth Orbit, typically\ndeployed to provide services such as broadband connectivity, including Starlink.\n• “Low-Earth Orbit” or “LEO” refers to an orbit relatively close to Earth’s surface, typically used by satellites for\napplications like broadband internet due to its lower latency compared to higher orbits.\n• “low-latency network” refers to a network with latency below 70 milliseconds.\n• “lunar mass driver” refers to a launch system that we intend to build on the Moon’s surface that will be\ndesigned to use electromagnetic acceleration to propel payloads into space without the use of rockets.\n• “Macrohard” refers to a platform we are currently developing that is designed to emulate digital workflows,\naugment human operation of computers, and create a fully AI-operated software company.\n• “mass to orbit” refers to the total kilograms of payload deployed to orbit in a given period, and is a key indicator\nof our capacity and scalability that supports Space revenue and drives expansion across our Connectivity and AI\nsegments.\n• “MAU” (or monthly active users) refers to the total number of users who have interacted with Grok or X\nthrough web browsers or mobile applications at least once during the 30-day period ending on the date of\nmeasurement (“active users”). In presenting combined MAUs across the two platforms, we seek to identify and\naccount for users who access both Grok and X based on sign-in traffic so that such users are not double-counted", - "path": "spacex-s1.pdf/p22", - "metadata": { - "length": 3740, - "summary": "vi Table of Contents • “Imagine” refers to our image and video generation system. • “inference” refers to the process by which a trained artificial intelligence model generates outputs (such as text, images, or predictions) from new input data. • “International Docking System...", - "page_nums": [ - 22 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 22, "artifact_ref": "page_citation_assets/page-22.png", @@ -4294,24 +5480,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7c069002-cb71-5cbe-865f-8db440a71af6", - "type": "page", - "content": "vii\nTable of Contents\nwhen measuring MAU. Furthermore, only users who have registered for an X or Grok account are included.\nWhile we believe our methodologies provide a reasonable approximation of MAU based on the number of\nunique users, they may not fully capture all instances of duplication, and our reported MAU should be viewed\nas an estimate of unique users across our Grok and X platforms for the applicable period. We track the subset of\nusers who used Grok’s AI features and those who have not based on the source of their server requests.\n• “Mbps” refers to megabits per second.\n• “Megapack” refers to a containerized, utility-scale lithium-ion battery energy storage system produced by Tesla\nand designed to stabilize power grids, store renewable energy, and replace fossil fuel peaker plants.\n• “megawatt” refers to one million watts.\n• “Merlin” refers to the Merlin family of engines, which include vacuum and sea level variants and are fully\ndeveloped and produced by the Company.\n• “microgravity” refers to very weak gravity, such as that experienced in orbiting spacecraft, which allows for\nunique manufacturing processes like creating ultra-pure materials.\n• “Mid-Earth Orbit” or “MEO” refers to an orbital region between approximately 2,000 km and 35,786 km above\nEarth’s surface.\n• “mission success rate” refers to the proportion of Falcon 9 and Falcon Heavy missions that achieve their\nprimary objectives. This term does not include Starship flight tests.\n• “mobile network operators” or “MNOs” refers to the local entities of the companies that provide mobile phone\nservices to customers, with whom SpaceX partners to offer satellite-to-mobile connectivity. The term may also\ninclude mobile virtual network operators, where applicable.\n• “Mobile Satellite Service” refers to providing wireless voice, messaging, and data connectivity to, from, or\nbetween mobile devices by using orbiting satellites rather than terrestrial cell towers.\n• “Moore’s Law” refers to an observation, not a physical law, that the number of transistors on a microchip\ndoubles roughly every two years, leading to exponentially faster, smaller, and cheaper electronics.\n• “orbital AI compute” refers to artificial intelligence computing infrastructure contemplated to be deployed in\nspace, consisting of satellite constellations that act as orbital data centers, harnessing solar energy for power and\nleveraging the space environment for cooling. We expect to begin deploying our orbital AI compute satellites as\nearly as 2028.\n• “payload” refers to the portion of a vehicle’s total mass that consists of the cargo, passengers, satellites, or other\nmission-specific items being transported and that reaches the target orbit or destination. Payload is distinct from\ntotal mass (also referred to as gross mass or initial mass) which is the entire weight of the vehicle, including the\npayload, fuel / propellant, structure, engines, and any other items, at the start of a journey.\n• “payload capacity to orbit” refers to a theoretical payload capacity that a particular launch vehicle is capable of\ndelivering to a specified orbit (e.g., LEO or GEO) or celestial body (e.g., Mars) under specific conditions, which\norbit is derived from advanced computer simulations and performance modelling that apply to particular\nmission scenarios and trajectory assumptions. Actual payload capacity for a given mission may be different and\nwill vary depending on numerous mission parameters and operational factors, including mission-specific\ntrajectory requirements, atmospheric conditions, vehicle and payload configuration, risk profile, and applicable\nregulatory or range-safety limitations.\n• “Power Usage Effectiveness” refers to the global standard metric for data center efficiency, calculated as the\nratio of total facility power to IT equipment power.", - "path": "spacex-s1.pdf/p23", - "metadata": { - "length": 3842, - "summary": "vii Table of Contents when measuring MAU. Furthermore, only users who have registered for an X or Grok account are included. While we believe our methodologies provide a reasonable approximation of MAU based on the number of unique users, they may not fully capture all instanc...", - "page_nums": [ - 23 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 23, "artifact_ref": "page_citation_assets/page-23.png", @@ -4319,24 +5488,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_11b5ee96-0ac9-5414-93a2-18c172e20eff", - "type": "page", - "content": "viii\nTable of Contents\n• “propellant” refers to the chemical substance or combination of substances consumed by a rocket engine to\nproduce thrust by generating high-velocity exhaust gases.\n• “propulsive landing” refers to the process of landing a rocket or spacecraft using its engines to control descent\nand achieve a soft, vertical touchdown.\n• “radiative cooling” refers to a cooling method that dissipates heat by radiating it into space, often passively, and\nis expected to be used in orbital AI compute infrastructure.\n• “Raptor engines” refers to high-performance family of engines developed and produced by the Company, such\nas those powering the Super Heavy booster and Starship upper stage, designed for efficiency and reusability.\n• “reflight” refers to the reuse of a flight-proven rocket booster or upper stage that has successfully completed a\nprior space mission, and has been recovered, refurbished, and certified for subsequent launches.\n• “return payload mass” refers to the theoretical payload mass that a particular spacecraft is capable of bringing\nback to Earth from a specified orbit under specific conditions, which is derived from advanced computer\nsimulations and performance modelling that apply to particular mission scenarios and trajectory assumptions.\nActual payload that can be returned for a given mission may be different and will vary depending on numerous\nmission parameters and operational factors, including mission-specific trajectory requirements, atmospheric\nconditions, vehicle and payload configuration, risk profile, and applicable regulatory or range-safety limitations.\n• “rideshare” refers to a type of space mission where multiple satellites or payloads from different customers are\nlaunched together on a single rocket, sharing the cost.\n• “satellite-to-mobile” refers to a service that provides global cellular connectivity directly to everyday\nsmartphones via satellites, supplementing terrestrial networks and eliminating mobile dead zones.\n• “Service Line” refers to an individual instance of Starlink broadband internet service provisioned under a\nsubscription plan, generally associated with a specific Starlink User Terminal or group of terminals, and billed\naccording to Starlink’s service plans and terms of service. The number of Service Lines is distinct from the\nnumber of unique devices, account holders, end users, or physical persons.\n• “space economy” refers to economic activities related to the development, production, and operation of goods\nand services that utilize or support space-based infrastructure and capabilities, including launch services,\nsatellite systems, and space-enabled technologies.\n• “Space segment” refers to our Space segment, which includes our customer launch operations and offerings\nsuch as Falcon, Dragon, and Starship.\n• “SpaceX Bridge Loan” refers to the Bridge Loan Credit Agreement, dated as of March 2, 2026, by and among\nthe Company, as borrower, the guarantors from time to time party thereto, the lenders from time to time party\nthereto and Goldman Sachs Bank USA, as administrative agent and a lender.\n• “SpaceX Credit Facility” refers to our Credit Agreement, dated as of February 7, 2025, by and among the\nCompany, as borrower, the guarantors from time to time party thereto, the lenders from time to time party\nthereto and Bank of America, N.A., as administrative agent, as amended by the First Amendment to Credit\nAgreement and Waiver, dated as of March 2, 2026, by and among the Company, the lenders party thereto, and\nthe other L/C Issuers party thereto. In May 2026, the SpaceX Credit Facility was amended to increase the\nborrowing capacity and extends the maturity date.\n• “spectrum” refers to the range of electromagnetic frequencies used for wireless communication, with licensed\nspectrum granting use for specific services.\n• “Starlink” refers to our global Low-Earth Orbit satellite constellation and broadband network designed to\ndeliver high-speed, low-latency internet connectivity worldwide.", - "path": "spacex-s1.pdf/p24", - "metadata": { - "length": 4011, - "summary": "viii Table of Contents • “propellant” refers to the chemical substance or combination of substances consumed by a rocket engine to produce thrust by generating high-velocity exhaust gases. • “propulsive landing” refers to the process of landing a rocket or spacecraft using its...", - "page_nums": [ - 24 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 24, "artifact_ref": "page_citation_assets/page-24.png", @@ -4344,24 +5496,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_19314a2e-2ee7-5dad-b886-6759862524aa", - "type": "page", - "content": "ix\nTable of Contents\n• “Starlink Consumer Broadband” refers to a category of Starlink active users encompassing both individual\nresidential users (households and personal use) and small-to-medium-sized businesses.\n• “Starlink Fixed Site” refers to a category of Starlink active users encompassing exclusively enterprise\nbusinesses.\n• “Starlink Kit” refers to a set of products needed to connect to the Starlink network, typically including a Starlink\nUser Terminal and accessories.\n• “Starlink Mobile” refers to a service that provides cellular connectivity directly to everyday smartphones via\nsatellites, supplementing terrestrial networks and substantially reducing mobile dead zones.\n• “Starlink Subscriber” refers to a unique Service Line that is directly assigned to a Starlink.com account\nregistered to a person or entity that does not have a direct, negotiated agreement with the Starlink sales team.\n• “Starlink User Terminal” refers to a device developed by the Company that connects to the Starlink satellite\nconstellation to deliver high-speed, low-latency internet.\n• “Starshield” refers to a secure satellite network designed specifically for government customers and national\nsecurity applications.\n• “Starship” refers to a fully reusable, super heavy-lift launch vehicle. Starship can be used to describe the stacked\nvehicle (booster and upper stage) or upper stage only. We expect Starship to commence payload delivery to\norbit in the second half of 2026.\n• “Sun-synchronous orbit” refers to a type of polar orbit around a planet in which a satellite passes over any given\npoint of the planet’s surface at the same local mean solar time, allowing for consistent solar energy capture.\n• “Super Heavy” refers to the reusable first-stage booster for the Starship launch vehicle, powered by 33 Raptor\nengines.\n• “SuperGrok” refers to our subscription-based Grok service that provides users with expanded access to Grok\nmodels and related tools.\n• “SuperGrok Heavy” refers to our subscription-based Grok service tier that provides users with expanded access\nto Grok models and related tools, including higher usage limits relative to SuperGrok.\n• “SuperGrok Lite” refers to our subscription-based Grok service tier that provides users with basic access to\nGrok models and related tools.\n• “supported accounts” refers to, when used in the context of our X platform and Grok, a human, bot or similar\naccount that logged into the X platform or Grok. The total number of supported accounts may include fake,\nspam or bot accounts if they are active.\n• “Tbps” refers to terabits per second.\n• “Terafab” refers to a chip manufacturing initiative with a long-term goal of producing one terawatt of compute\nhardware each year.\n• “terawatt” refers to one trillion watts.\n• “terawatt-scale” refers to infrastructure, systems, or facilities that are designed to generate, transmit, or consume\napproximately one terawatt or more of electrical power capacity.\n• “terrestrial AI compute” refers to artificial intelligence computing infrastructure located on Earth, such as data\ncenters and supercomputers, used for training and running AI models.", - "path": "spacex-s1.pdf/p25", - "metadata": { - "length": 3143, - "summary": "ix Table of Contents • “Starlink Consumer Broadband” refers to a category of Starlink active users encompassing both individual residential users (households and personal use) and small-to-medium-sized businesses. • “Starlink Fixed Site” refers to a category of Starlink active...", - "page_nums": [ - 25 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 25, "artifact_ref": "page_citation_assets/page-25.png", @@ -4369,24 +5504,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e7c7af80-c7bf-5449-92f9-6347c112acd9", - "type": "page", - "content": "x\nTable of Contents\n• “throughput” refers to the rate at which data or material can be processed or transferred, often referring to\nnetwork capacity or production output.\n• “tokens” refers to the basic units of text or images processed and generated by an AI model, used to measure AI\nworkload, throughput, and computational output.\n• “watt” is the International System of Units (SI) unit for measuring power, representing the rate of which energy\nis transferred, used or generated.\n• “X” refers to our real-time information, entertainment, and free speech platform that serves as a foundational\ndistribution and data engine for the AI ecosystem.\n• “xAI” refers to X.AI Holdings LLC or, prior to the xAI Merger, X.AI Holdings Corp., together with its\nsubsidiaries, as applicable.\n• “xAI Gov” refers to our offering that provides government customers with access to Grok models and related\ntools for use in governmental applications, workflows, and services.\n• “X Premium+” refers to our highest subscription tier for X.\nOur Satellite Names\nWe use a “V” naming convention for our Starlink satellites (such as V1, V2 Mini, and V3). Although we use a\nsimilar “V” naming convention for both our broadband and mobile satellite constellations, these are distinct systems.\nOur broadband satellites are designed to deliver high-speed internet services to homes, businesses, and vehicles,\nwhile our mobile satellites are designed to connect directly to cell phones from space. These constellations have\ndifferent performance requirements and technical specifications. Please see below the terms used for our satellites\nthroughout this prospectus:\n• “V1 Mobile satellites” refers to our mobile satellites that provide light data, text messaging (SMS), and over-\nthe-top voice services (e.g., WhatsApp and FaceTime) to mobile devices. V1 Mobile satellites are currently in\norbit and are launched on our Falcon rockets.\n• “V2 Mini satellites” refers to our current broadband satellites that provide high-speed internet to homes,\nbusinesses, and vehicles. V2 Mini satellites are currently in orbit and are launched on our Falcon rockets.\n• “V2 Mobile satellites” refers to our next-generation mobile satellites, which are designed to provide more\ncomprehensive satellite-to-mobile services, including broadband data and IoT connectivity and which we expect\nto begin deploying on Starship in 2027.\n• “V3 satellites” refers to our next-generation Starlink broadband satellites, which are designed to offer one Tbps\nof downlink capacity per satellite and which we expect to begin deploying on Starship in the second half of\n2026.", - "path": "spacex-s1.pdf/p26", - "metadata": { - "length": 2613, - "summary": "x Table of Contents • “throughput” refers to the rate at which data or material can be processed or transferred, often referring to network capacity or production output. • “tokens” refers to the basic units of text or images processed and generated by an AI model, used to mea...", - "page_nums": [ - 26 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 26, "artifact_ref": "page_citation_assets/page-26.png", @@ -4394,24 +5512,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b531e4d1-15b0-567b-a0d7-09494984cefa", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p27", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 27 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 27, "artifact_ref": "page_citation_assets/page-27.png", @@ -4419,24 +5520,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2e0dee9a-f0ac-5f40-9b66-0b22e084165e", - "type": "page", - "content": "1\nTable of Contents\nPROSPECTUS SUMMARY\nThis summary highlights information contained elsewhere in this prospectus. This summary is not complete and\ndoes not contain all of the information you should consider before investing in our Class A common stock. You\nshould read this entire prospectus carefully before making an investment decision. You should carefully consider,\namong other things, the sections titled “Risk Factors,” “Management’s Discussion and Analysis of Financial\nCondition and Results of Operations,” and our consolidated financial statements and the related notes included\nelsewhere in this prospectus. Some of the statements in this summary constitute forward-looking statements. Please\ncarefully consider “Cautionary Statement Regarding Forward-Looking Statements.”\n“You want to wake up in the morning and think the future is going to be great—and that’s what being a space-faring\ncivilization is all about. It’s about believing in the future and thinking that the future will be better than the past. And\nI can’t think of anything more exciting than going out there and being among the stars.”\n—Elon Musk\nOur Mission\nOur mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true\nnature of the universe, and to extend the light of consciousness to the stars. To do this, we have formed the most\nambitious, vertically integrated innovation engine on (and off) Earth with unmatched capabilities to rapidly\nmanufacture and launch space-based communications that connect the world, to harness the Sun to power a truth-\nseeking artificial intelligence that advances scientific discovery, and ultimately to build a base on the Moon and\ncities on other planets.\nOverview\nFounded in 2002, SpaceX is the only company building the integrated hardware and software infrastructure of the\nfuture across space, connectivity, and AI. At our core, we are builders. We design, manufacture, launch, and operate\nproducts and services built on cutting-edge technologies, including the world’s most advanced rockets and\nspacecraft. We safely and reliably transport astronauts, satellites, and other payloads on missions that benefit life on\nEarth. Since 2023, we have launched more than 80% of mass to orbit for the world each year with an over 99%\nmission success rate with Falcon rockets. We also operate a high-speed, low-latency global broadband data and\ncommunications network powered by approximately 9,600 Starlink broadband and mobile satellites in Low-Earth\nOrbit, delivering connectivity to millions of consumer, enterprise, and government customers across 164 countries,\nterritories, and other markets, as of March 31, 2026. Using our dedicated satellite-to-mobile constellation, we offer\nconnectivity services, supplementing terrestrial networks and substantially reducing mobile “dead zones” across\napproximately 30 countries.\nWith the potential to improve both space exploration and life on Earth, AI accelerates SpaceX’s mission to make life\nmultiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars.\nxAI, which was founded in 2023 and acquired by SpaceX in early 2026, is now an integral pillar of our vertically\nintegrated company. We are rapidly constructing AI compute infrastructure—starting on Earth with the goal of\nextending to space—at industry-leading pace and cost efficiency. Our infrastructure supports training and inference\nfor Grok, which has emerged as one of the world’s most advanced frontier models. Grok is designed as a truth-\nseeking AI model, built on our founder Elon Musk’s mission to enable humanity to understand the universe. We\nbelieve that accomplishing this mission requires a truth-seeking approach to AI. We define truth seeking as the\nactive, relentless pursuit of what is objectively true about reality, and grounded in evidence, logic, empirical data,\nand first principles thinking. Our goal is to understand and explain what the universe appears to be doing, as\naccurately as current knowledge allows. Within two years of its initial model release, Grok achieved frontier-level\nperformance in scientific reasoning, as measured by its GPQA Diamond score, an industry benchmark that evaluates\nAI models on a standardized set of questions written and validated by experts, on a faster timeline than reported by\nother leading model providers. Grok also benefits from integration with X, our real-time information, entertainment,\nand free speech platform, which serves as a foundational distribution and data engine for our AI ecosystem and\nfurther enhances Grok’s truth-seeking objective.", - "path": "spacex-s1.pdf/p28", - "metadata": { - "length": 4647, - "summary": "1 Table of Contents PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider before investing in our Class A common stock. You should read this en...", - "page_nums": [ - 28 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 28, "artifact_ref": "page_citation_assets/page-28.png", @@ -4444,24 +5528,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f7aa5c4c-f79f-5340-938f-cd3f1f6d4863", - "type": "page", - "content": "2\nTable of Contents\nWe believe that space represents the largest economic frontier in human history. Connectivity infrastructure in space\nis designed to help everyone on Earth have access to education, healthcare, entertainment, and communications, and\nto enable people to overcome many traditional limits, such as physical and political borders. We believe AI\ninfrastructure in space can utilize the virtually limitless power of the Sun and thereby enable the use of AI as a\ntransformative force for understanding the universe and improving the daily lives of all humans. We believe the\nconvergence of these areas will enable an unprecedented expansion in the global economy, leading to an age of\nabundance. Our innovations and technological advancements are redefining industries on Earth, while we aim to\ncreate new ones on the Moon, Mars, and beyond. We are truly building the infrastructure of the future.\n• Space. SpaceX is the only company that has cracked the code on accessing space at scale, revolutionizing an\nindustry characterized by decades of stagnation, risk aversion, and economically perverse cost structures.\nSpaceX upended this paradigm through the application of first-principles thinking, which rejects industry\nassumptions and builds solutions based on the fundamental laws of physics. Our intense, mission-driven,\nengineering-first culture and focus on extreme vertical integration have propelled us to achieve what many\ndeemed impossible. We pioneered high-cadence, reliable, and affordable access to space with our Falcon family\nof rockets. In 2015, we established at least a 10-year lead over the industry by successfully landing our first\nFalcon 9 booster back from space before anyone else. Space flight that historically cost billions per launch now\ncosts in the tens of millions, fundamentally reducing the cost of space access and providing the opportunity to\nbuild new enterprises in space.\n• Connectivity. Since activating service for customers in 2020, Starlink has rapidly expanded global access to\nhigh-speed internet, prioritizing underserved rural and remote communities worldwide. While building\nterrestrial networks in such communities can be prohibitively expensive, Starlink is capable of delivering\nbroadband connectivity anywhere on Earth with just a Starlink Kit. As of March 31, 2026, we had\napproximately 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, operating the world’s most\nadvanced broadband constellation providing internet connectivity to approximately 10.3 million Starlink\nSubscribers across 164 countries, territories, and other markets. In January 2024, we also began deploying our\nStarlink Mobile constellation that utilizes separate Starlink satellites with satellite-to-mobile capabilities,\nsubstantially reducing mobile “dead zones” around the world. As of March 31, 2026, our dedicated satellite-to-\nmobile constellation of approximately 650 V1 Mobile satellites provides satellite-to-mobile data, over-the-top\nvoice, and messaging services to approximately 7.4 million monthly unique devices across approximately 30\ncountries.\n• AI. We were the first company to deploy a coherent gigawatt-scale AI training cluster. For complex reasoning\nand agentic workloads, compute is directly correlated with the quality of intelligence and task completion speed.\nIn under two years, we have established a dual advantage in both cost efficiency and deployment speed at scale.\nBy owning the compute infrastructure and vertically integrating across the full AI stack, we can train and iterate\nour frontier models at lower cost and higher velocity and accelerate development cycles. This eliminates\nexternal bottlenecks and drives rapid, continuous improvements in model performance. We believe this\ncombination of our state-of-the-art AI compute infrastructure, our truth-seeking frontier model, and our access\nto real-time data on X creates a significant strategic advantage. Our integrated AI platforms across Grok and X\nhave over 1.3 billion supported accounts active in the last twelve months ended March 31, 2026, including\napproximately 550 million MAUs and generating approximately 350 million daily posts. Of our MAUs, we had\napproximately 117 million MAUs that used Grok’s AI features as of March 31, 2026. Grok’s deep integration\nwith X enables freshness, relevance, and contextual awareness that we believe is a competitive differentiator.\nThis direct, real-time access to the information and human discourse on X enhances Grok’s truth-seeking\ncapabilities by grounding outputs in up-to-date knowledge and diverse viewpoints. As a result, we believe Grok\ncan deliver the most objective and relevant insights and best serve high-frequency, high-value use cases across\nconsumer and enterprise AI applications.\nWe have created distinct new markets across the space, connectivity, and AI industries by building the integrated\nhardware and software infrastructure of the future and by combining our broad range of capabilities. For example,\nSpaceX’s recent acquisition of xAI unites SpaceX’s launch capabilities and global connectivity network with xAI’s\nAI development capabilities. Specifically, we believe SpaceX’s reusable rockets, scaled satellite manufacturing, and\noperational expertise can enable the cost-effective and rapid deployment of massive AI compute satellite", - "path": "spacex-s1.pdf/p29", - "metadata": { - "length": 5354, - "summary": "2 Table of Contents We believe that space represents the largest economic frontier in human history. Connectivity infrastructure in space is designed to help everyone on Earth have access to education, healthcare, entertainment, and communications, and to enable people to over...", - "page_nums": [ - 29 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 29, "artifact_ref": "page_citation_assets/page-29.png", @@ -4469,24 +5536,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4c4d65cb-e862-5c48-8b3f-1965fc8925e9", - "type": "page", - "content": "3\nTable of Contents\nconstellations—with potentially millions of satellites—for orbital data centers. We believe these AI compute\nsatellites in Sun-synchronous orbit will be able to handle energy-intensive AI workloads, such as inference demand,\nat far greater scale and efficiency than terrestrial alternatives, with Starlink providing low-latency, global\nconnectivity linking these orbital AI systems to people around the world and delivering real-time intelligence. We\nexpect to begin deploying our orbital AI compute satellites as early as 2028.\nOur financial results reflect the strength of our operating model and our ability to create and scale multiple new\nbusinesses:\n• For the three months ended March 31, 2026, we generated revenue on a consolidated basis of $4,694 million,\nloss from operations of $(1,943) million and Adjusted EBITDA of $1,127 million. In 2025, we generated\nrevenue on a consolidated basis of $18,674 million, loss from operations of $(2,589) million and Adjusted\nEBITDA of $6,584 million. Our Space and Connectivity segments contributed the substantial majority of our\nconsolidated revenue in the three months ended March 31, 2026 and the year ended December 31, 2025,\ndemonstrating the benefits of their scale and operating leverage in our vertically integrated business model;\n• For the three months ended March 31, 2026, our Space segment generated revenue of $619 million, loss from\noperations of $(662) million, and Segment Adjusted EBITDA of $(351) million. In 2025, our Space segment\ngenerated revenue of $4,086 million, loss from operations of $(657) million, and Segment Adjusted EBITDA of\n$653 million. Additionally, our Space segment funded $930 million and $3,004 million in research and\ndevelopment expense during the three months ended March 31, 2026 and the year ended December 31, 2025,\nrespectively, for our next-generation Starship launch vehicle program. Starship is designed to enable a step-\nfunction change in our launch capability across reusability, payload capacity, and launch cadence, and is the key\nenabler of our long-term growth strategy by unlocking entirely new categories of missions;\n• For the three months ended March 31, 2026, our Connectivity segment generated revenue of $3,257 million,\nincome from operations of $1,188 million, and Segment Adjusted EBITDA of $2,087 million. Our Connectivity\nsegment, primarily driven by Starlink, generated revenue of $11,387 million, income from operations of $4,423\nmillion, and Segment Adjusted EBITDA of $7,168 million in 2025, representing year-over-year growth of\n49.8%, 120.4%, and 86.2%, respectively, benefiting from subscriber growth, increasing enterprise adoption, and\ncontinued improvement in network efficiency;\n• In our newly acquired AI segment, we plan to prioritize growth and investment to capture significant\nopportunities in AI applications and compute infrastructure. For the three months ended March 31, 2026, our AI\nsegment generated revenue of $818 million, loss from operations of $(2,469) million, and Segment Adjusted\nEBITDA of $(609) million. In 2025, our AI segment generated revenue of $3,201 million, loss from operations\nof $(6,355) million, and Segment Adjusted EBITDA of $(1,237) million, reflecting its earlier stage of\ndevelopment and continued investments to support long-term growth opportunities in AI; and\n• For the three months ended March 31, 2026, capital expenditures for our Space segment was $1,052 million, for\nour Connectivity segment was $1,332 million and for our AI segment was $7,723 million. In 2025, capital\nexpenditures for our Space segment was $3,832 million, for our Connectivity segment was $4,178 million and\nfor our AI segment was $12,727 million.\nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “Management’s Discussion\nand Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for additional\ninformation on our non-GAAP financial measures, including reconciliations of Segment Adjusted EBITDA to\nsegment income (loss) from operations, the most directly comparable GAAP measure.\nWhy This Matters Now\nFor the entirety of its existence, human civilization has lived on a single celestial body: Earth. The current paradigm,\nin which human civilization is confined to one planet, exposes humanity to existential threats that are unpredictable\nand uncontrollable on a planetary scale. By moving beyond the only home we have ever known, we ensure species-\nlevel redundancy and that the light of consciousness will not be tied to a single planet subject to the inevitable\nhazards of a harsh and vast universe. We do not want humans to have the same fate as dinosaurs. We want to give", - "path": "spacex-s1.pdf/p30", - "metadata": { - "length": 4709, - "summary": "3 Table of Contents constellations—with potentially millions of satellites—for orbital data centers. We believe these AI compute satellites in Sun-synchronous orbit will be able to handle energy-intensive AI workloads, such as inference demand, at far greater scale and efficie...", - "page_nums": [ - 30 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 30, "artifact_ref": "page_citation_assets/page-30.png", @@ -4494,24 +5544,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d8599e3a-f538-5e8d-931a-d959478a9b92", - "type": "page", - "content": "4\nTable of Contents\nthem a reason to look ahead with excitement, with the prospect that we are entering an age of abundance with an\nendlessly prosperous and exciting future.\nFor decades, a reality where humanity travels between the planets and the stars has felt tantalizingly close but still\nlocked in the pages and screens of science fiction. We are capable of better understanding the universe, exploring the\nuniverse, and ultimately making life multiplanetary across the universe. We are becoming a civilization with the\nability to reach beyond Earth’s cradle and begin to inhabit other worlds. While we remain dedicated to this\nfundamental mission, our progress in accessing space continues to yield opportunities that enrich life on Earth. For\nexample, by dramatically reducing the cost of access to space, we have been able to expand our mission to address\nsome of the Earth’s most pressing challenges, including bridging the digital divide by aiming to connect over three\nbillion unconnected people to the internet and humanity’s collective knowledge.\nThe rapid emergence of the AI era intensifies the urgency of our mission, as AI has the potential to accelerate not\nonly space exploration, but also transformative societal advancements on Earth. However, AI’s ability to\nrevolutionize human potential is directly dependent on meeting exponentially increasing resource demands. On\nEarth, the massive expansion of data center capacity to support growing compute demand is significantly outpacing\nelectricity generation, which was effectively flat in the United States for approximately 15 years, growing at a\ncompound annual growth rate of 0.1% from 2008 to 2023. Despite the recent increase in electricity demand from AI\ndata centers, electricity generation in the United States has grown at an annual rate of less than 3% between 2023\nand 2025, while electricity generation in China has grown at approximately twice that rate in the same time period.\nThis supply and demand imbalance is already imposing unsustainable strains on terrestrial power grids, supply\nchains, and the environment. The Sun contains approximately 99.8% of the solar system’s energy and, as a result,\nwe believe it is the only truly scalable solution to terrestrial energy constraints in the age of AI. Harnessing this\nenergy in space is considerably more efficient than on land. Space-based solar arrays can generate more than five\ntimes the energy per unit area of terrestrial solar due to continuous illumination, lack of atmospheric interference,\nand optimal orientation. SpaceX is well-positioned to capture this space-based solar energy through our ability to\nrapidly access Sun-synchronous orbit through our satellite manufacturing scale and launch capability. As a result,\nwe are expanding our footprint and harnessing the vast resources of space that are essential to sustaining\ntechnological development. Our goal is to ensure that AI becomes a force for human flourishing and a benefit to\ncivilization, rather than a catalyst for terrestrial resource depletion and instability.\nWe believe that our current space efforts will catalyze transformative breakthroughs that could reshape terrestrial\nindustries and lead to the emergence of new trillion-dollar markets on the Moon, Mars, and beyond. In particular, we\nbelieve our goal of establishing a lunar presence will enable terawatt-scale annual AI compute growth, support\ndeeper space exploration and industrialization, and serve as a stepping stone to establishing a civilization on Mars.\nWe believe the next paradigm shift for humanity is the creation of a resilient, perpetually expanding spacefaring\ncivilization that drives continuous innovation across new frontiers, ultimately propelling us to Kardashev Type II\nstatus—we believe we are capable of unlocking an era of unprecedented economic expansion, while also\ncontributing to the safeguards of humanity’s future against existential risk.\nWho We Are\nSpaceX combines the most transformative and critical technologies in human history, including reusable rockets, a\nfully global internet service, satellite-to-mobile communications, a real-time information, entertainment and free\nspeech platform, and a truth-seeking AI system designed to accelerate scientific discovery and augment human\ncapabilities.\nOur Unparalleled Launch Capabilities\nSince our founding in 2002, SpaceX has cracked the code on accessing space at scale, transforming an industry\ncharacterized by decades of stagnation, risk aversion, and economically perverse cost structures. We design,\nmanufacture, launch, and refurbish reusable launch vehicles that provide cost-efficient, reliable, and high-cadence\naccess to space for our own purposes as well as for third-party commercial and government customers. Our\nextensive vertical integration and end-to-end control over the entire value chain, from design to launch to operations,\nallows us to achieve unprecedented speed and cost efficiency.", - "path": "spacex-s1.pdf/p31", - "metadata": { - "length": 4963, - "summary": "4 Table of Contents them a reason to look ahead with excitement, with the prospect that we are entering an age of abundance with an endlessly prosperous and exciting future. For decades, a reality where humanity travels between the planets and the stars has felt tantalizingly...", - "page_nums": [ - 31 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 31, "artifact_ref": "page_citation_assets/page-31.png", @@ -4519,24 +5552,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_58486901-6261-5ebc-82b3-3f4d7408134e", - "type": "page", - "content": "5\nTable of Contents\nAs of March 31, 2026, SpaceX had launched a total mass to orbit of approximately 7,400 metric tons with an over\n99% mission success rate across our Falcon rockets. We have completed approximately 650 orbital space launches,\nand over 540 of those launches were completed by a flight-proven Falcon rocket. With the first successful launch of\nFalcon 1 in 2008, we became the first private company to successfully launch a liquid-fueled rocket to Earth’s orbit.\nIn December 2015, we achieved what many deemed impossible: landing a rocket launched to space back on Earth.\nBy 2017, we were routinely recovering and reusing the Falcon 9 first-stage booster post-launch, delivering another\nstep-function drop in space access costs via groundbreaking reusability. As of March 31, 2026, our Falcon 9 rockets\nhave demonstrated the ability to refly a first-stage 34 times. With the future deployment of Starship, which is\ndesigned to be the world’s first fully and rapidly reusable spacecraft, we aim to reduce the cost to reach orbit by 99%\nor more relative to the historical average launch cost, establishing the most affordable and scalable path to creating\nnew opportunities in space, such as orbital AI compute and Mars exploration.\nOur principal launch vehicles and spacecraft include:\n• Falcon 9. As the world’s first orbital-class rapidly reusable rocket, Falcon 9 was first launched in 2010 and has\na payload capacity to LEO of approximately 23 metric tons when fully expendable. Falcon 9 has completed\napproximately 620 orbital space launches as of March 31, 2026, and an over 99% mission success rate.\nAccording to NASA, the first version of Falcon 9 in 2010 reduced launch cost to approximately $2,700 per\nkilogram, approximately 85% less than the historical average launch cost of $18,500 per kilogram.\n• Falcon Heavy. Falcon Heavy first launched in 2018 when it put a Tesla all-electric sports car (“Tesla\nRoadster”) and its mannequin passenger, known as Starman, into orbit around the Sun. With a payload capacity\nto LEO of approximately 64 metric tons, Falcon Heavy is a partially reusable super heavy-lift launch vehicle\ndesigned to deliver large payloads to orbit. Falcon Heavy is one of the most powerful operational rockets in the\nworld measured by liftoff thrust, with 11 launches as of March 31, 2026 and a 100% mission success rate.\n• Dragon. Launched by Falcon 9 in 2012, our Dragon spacecraft became the first commercial spacecraft to\ndeliver cargo to and from the International Space Station, an orbiting laboratory that serves as a research facility\nand destination for human spaceflight, and, eight years later, the first privately built vehicle to fly humans to the\norbiting laboratory. Since 2020, our Dragon spacecraft has safely flown 78 crewmembers from 20 countries.\n• Starship. First launched in 2023, Starship is designed to be a fully reusable, super heavy-lift launch vehicle.\nStarship V3 is designed to deliver 100 metric tons to Earth’s orbit in a fully reusable configuration while\nenabling rapid turnaround times akin to commercial aviation. Future generations of Starship are being designed\nto double this payload capacity. To date, we have executed 11 Starship flight tests. We have also scheduled a\n12th flight test, which will debut the next generation Starship vehicle and Super Heavy booster, powered by the\nnext evolution of our Raptor engine and launching from a newly designed pad at Starbase. We expect Starship\nto commence payload delivery to orbit in the second half of 2026. We have achieved innovative milestones\nsuch as catching a booster using “chopstick” arms on the same tower it launched from. We expect this\ncapability will facilitate rapid refurbishment and reuse, allowing for multiple launches per day at reduced costs.\nUpon achieving rocket reusability, we recognized the immense potential of our launch business to enable new\nrevenue streams. This led to the development of Starlink, our global satellite internet constellation, consisting of\nthousands of LEO satellites designed to provide high-speed, low-latency broadband connectivity to underserved\nareas worldwide. Although the concept of using satellites for global internet connectivity dates back decades,\ntechnical challenges and the prohibitive cost of accessing space and deploying the satellites required for capacity and\nglobal coverage historically rendered attempts to provide such connectivity economically unviable. Within three\nyears of our first satellite launch in 2019, we solved the technical and production challenges of the satellites, and\nwithin five years, we had deployed the largest LEO constellation in existence. Today, Starlink is the sole low-\nlatency network available globally. By combining increasing launch cadence, expanding cargo capacity, and\ndeclining unit costs—driven by rapid reusability—we have generated a compounding competitive advantage. This\nnot only fortifies our core business, but also provides vast new market opportunities uniquely enabled by space.", - "path": "spacex-s1.pdf/p32", - "metadata": { - "length": 5028, - "summary": "5 Table of Contents As of March 31, 2026, SpaceX had launched a total mass to orbit of approximately 7,400 metric tons with an over 99% mission success rate across our Falcon rockets. We have completed approximately 650 orbital space launches, and over 540 of those launches we...", - "page_nums": [ - 32 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 32, "artifact_ref": "page_citation_assets/page-32.png", @@ -4544,24 +5560,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_96101701-ddb1-56cc-a7bf-84fc5a2d2b90", - "type": "page", - "content": "6\nTable of Contents\nOur Leading Capabilities Across Space, Connectivity, and AI\nSpace. While our launch capabilities support our other businesses, such as Starlink Consumer Broadband and\nStarlink Mobile, we also sell launches to third-party customers. We offer launch services to commercial, civil,\ninternational and government customers through our reusable Falcon 9 and Falcon Heavy rockets for satellite, cargo,\nand crew missions. We are the primary launch provider for the U.S. government. In 2025, we launched 11 of 12\nNational Security Space Launch (“NSSL”) medium and heavy lift missions and all five U.S. crew and cargo\nmissions to the International Space Station for NASA.\nConnectivity. Our Connectivity business includes Starlink Consumer Broadband, Enterprise Solutions, Government\nSolutions, and Starlink Mobile.\n• Starlink Consumer Broadband. We operate the world’s largest and most advanced space-based internet\nbroadband service. We provide fiber-like download speeds—at a median of 225 Mbps during peak hours for\nresidential users as of March 31, 2026—and the technological capability to provide service everywhere on\nEarth, including the poles. This service quality is enabled by our vast network of approximately 9,600 Starlink\nbroadband and mobile satellites in Low-Earth Orbit, which accounted for approximately 75% of all active\nmaneuverable satellites in orbit as of March 31, 2026. We expect to commence deploying our next-generation\nV3 satellites, designed to offer one Tbps of downlink capacity per satellite, using Starship in the second half of\n2026. We expect that a single Starship launch will be capable of deploying up to 60 V3 satellites to LEO,\nrepresenting a potential twenty-fold increase in Starlink downlink capacity deployed relative to a Falcon 9\nlaunch.\n• Enterprise Solutions. SpaceX is a critical partner to a wide array of enterprises. We offer Starlink’s high-\nspeed, low-latency, reliable internet services to enterprise customers across industries including construction,\nagriculture, retail, telecom, hospitality, aviation, maritime, and land mobility. Starlink’s unique capabilities are\nwell‐suited for deployments across field offices, remote worksites, research stations, drilling rigs, rural\nhospitals, aircraft, cruise ships, trains, and hotels. We also serve a broad fixed‐site customer base across\nindustries such as retail and financial services that require high availability for critical operations as well as\nreliable connectivity in remote or hard-to-serve locations.\n• Government Solutions. For our government customers, we provide high-speed, resilient connectivity for\npublic services, social impact, humanitarian efforts, and disaster response in even the most remote and\nchallenging environments. Separately with Starshield, we have leveraged our commercial LEO satellite\nconstellation engineering learnings and operational experiences to develop a secure, dedicated satellite network\ndesigned specifically for United States Government customers and national security applications.\n• Starlink Mobile. We provide satellite-to-mobile connectivity, supplementing terrestrial networks and\nsubstantially reducing mobile “dead zones” across approximately 30 countries. Through our partnerships with\napproximately 30 MNOs on six continents, we enable consumers, businesses, and public-sector customers to\nuse their existing phones in more places, support critical connectivity during disasters and power outages, and\nopen new applications for low-bandwidth mobile and IoT devices.\nAI. We operate a highly vertically integrated AI platform.\n• AI Compute Infrastructure. xAI has established a leading position in building and scaling terrestrial AI\ncompute infrastructure, becoming the first company to deploy a coherent gigawatt-scale AI training cluster. We\nown and operate what we believe to be the largest AI training data center clusters on Earth, including\nCOLOSSUS and COLOSSUS II. The addition of Terafab, a chip manufacturing initiative with Tesla and Intel,\naims to further extend our vertical integration to chip design and manufacturing to alleviate potential future chip\nshortages at SpaceX, optimize compute performance, and potentially reduce overall compute costs. In\nconnection with such collaboration, we have agreed with Tesla on a general framework for the future\ndevelopment of Terafab. Any specific projects undertaken pursuant to this framework will be subject to separate\nnegotiations and agreements (including any development timelines, milestones and capital expenditures) and\nhave not yet been determined. We believe that the key constraints in the continued growth of AI are physical—", - "path": "spacex-s1.pdf/p33", - "metadata": { - "length": 4668, - "summary": "6 Table of Contents Our Leading Capabilities Across Space, Connectivity, and AI Space. While our launch capabilities support our other businesses, such as Starlink Consumer Broadband and Starlink Mobile, we also sell launches to third-party customers. We offer launch services...", - "page_nums": [ - 33 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 33, "artifact_ref": "page_citation_assets/page-33.png", @@ -4569,24 +5568,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_46ca6fc8-b654-5013-b337-4d4e90a91db8", - "type": "page", - "content": "7\nTable of Contents\nchip manufacturing, data center infrastructure, and power generation; the future of AI will be determined by the\ncontrol of the physical stack.\n• Truth-Seeking Frontier Model. Since launching Grok-1 in November 2023, we have released four major\nversions and notable variations thereof, achieving one of the fastest iteration cycles in the industry. Within two\nyears of its initial model release, Grok achieved frontier-level performance in scientific reasoning, as measured\nby its GPQA Diamond score, an industry benchmark that evaluates AI models on a standardized set of\nquestions written and validated by experts, on a faster timeline than reported by other leading model providers.\nBuilding on this trajectory, we expect to continue scaling Grok through subsequent generations. Ongoing\ntraining of next‐generation models is expected to scale toward multiple trillions of parameters, which could\nrepresent a step change in reasoning in depth and overall intelligence. In this context, the number of parameters\nrefers to the scale of the model, where parameters are the internal numerical values, such as “weights,” that are\nadjusted during training to enable the model to recognize patterns and relationships in data. A larger number of\nparameters generally allows the model to capture more complex relationships, store greater amounts of\nknowledge, and achieve higher levels of reasoning capability. This accelerated rate of innovation stems from\nour highly vertically integrated stack: full ownership of training infrastructure; access to the world’s most\npowerful compute clusters; and relentless focus on truth seeking and real-world utility. A key competitive\ndifferentiator is Grok’s deep integration with X, enabling proprietary access to a real-time information stream of\napproximately 350 million daily posts, which enhances freshness, relevance, and contextual awareness for\nGrok. This direct, real-time access to the information and human discourse on X enhances Grok’s truth-seeking\ncapabilities by grounding outputs in up-to-date knowledge and diverse viewpoints.\n• Consumer and Enterprise Applications. We leverage our leading frontier models and compute infrastructure\nto deliver consumer and enterprise applications. Together with Tesla, we are also developing Macrohard, an\nagentic AI platform designed to be capable of fully emulating digital workflows and augmenting human\noperation of computers using sophisticated autonomous agents. We believe Macrohard will have the potential to\nfundamentally transform how companies are structured and operate, thereby allowing dramatic increases in\nhuman productivity.\nOur Repeatable Business Model\nOur business model is built on a repeatable, engineering-driven framework that combines our unparalleled launch\ncapabilities, extreme vertical integration, rapid iteration, and disciplined capital investment to create durable, large-\nscale businesses. We execute this framework through the following core principles:\n1. Leverage our unparalleled launch capabilities to enable massive scale;\n2. Identify and create new trillion-dollar market opportunities;\n3. Design a solution with world-class engineering and first-principles thinking;\n4. Apply “The Algorithm” (make less dumb, delete, optimize, accelerate, automate);\n5. Vertically integrate all the way to the end customer;\n6. Continuously drive cost down and throughput up; and\n7. Generate significant cash flow and reinvest in the future.\nOur Engineering-First Culture\nWe are able to achieve transformative technological breakthroughs because we accept only the laws of physics as\nthe limiting factors to our work and mission. Our core approach is deeply rooted in first-principles thinking, which\nrejects any preconceived notions or experience-based norms. We have a track record of achieving what many have\ndeemed impossible. Some of our industry-defining achievements and historic milestones include:\n• The first private company to develop and launch a liquid-fuel rocket to reach orbit (2008);\n• The first private company to successfully dock a private spacecraft with the International Space Station (2012);\n• The first to successfully propulsively land (2015) and refly orbital-class rocket boosters (2017);\n• The first to begin deploying a large-scale LEO broadband satellite constellation (2019);\n• The first private company to transport astronauts to orbit, returning America’s ability to fly astronauts to and\nfrom the International Space Station (2020);", - "path": "spacex-s1.pdf/p34", - "metadata": { - "length": 4499, - "summary": "7 Table of Contents chip manufacturing, data center infrastructure, and power generation; the future of AI will be determined by the control of the physical stack. • Truth-Seeking Frontier Model. Since launching Grok-1 in November 2023, we have released four major versions and...", - "page_nums": [ - 34 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 34, "artifact_ref": "page_citation_assets/page-34.png", @@ -4594,24 +5576,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6bf76140-e587-5052-9bee-16b03a76a03f", - "type": "page", - "content": "8\nTable of Contents\n• The first to manufacture consumer-grade phased-array user terminals at scale (2022);\n• The first to deploy a large-scale LEO satellite-to-mobile constellation (2025);\n• The first to build a gigawatt-scale AI training cluster and largest coherent supercomputer (2026);\n• The first gigawatt-scale Megapack battery installation (2026); and\n• The only company capable of building orbital AI compute at scale.\nOur AI Compute Infrastructure Advantage and Growth Strategy\nWhy Compute Matters. We believe AI leadership will be defined by the ability to rapidly scale compute capacity to\nsupport exponential usage growth and frontier intelligence. The training and inference demanded by advanced AI\nmodels require substantial computational resources. Reasoning models introduced in 2024 demonstrated that\nallocating more computational resources and giving models more time to process during inference directly leads to\nhigher-quality intelligence. In addition, compute infrastructure with end-to-end, cluster-level coherence through tight\nintegration across software and hardware systems enables more efficient, stable, and higher-fidelity training and\ninference at scale—ultimately enhancing model intelligence and performance. Within inference, we expect\ncomputationally-intensive reasoning, agentic, and multi-modal workloads will continue to grow as a portion of\noverall usage. We therefore believe operators with superior model-to-compute integration—the ability to efficiently\nsupport and allocate compute across both training and inference workloads—are best positioned to win the AI race.\nSelf-Reinforcing Network Effects Among Lower Cost Per Token, Model Quality, and User Adoption. AI systems\nare ultimately constrained or differentiated by the cost, speed, and scale at which they can generate and process\ntokens. A “token” represents the fundamental unit of data consumed and produced by modern AI models. This is\nbecause lower cost per token enables more frequent model training, larger and more sophisticated models, longer\nchains of processing for reasoning and agentic workloads, and significantly higher inference volumes at\neconomically viable prices. This dynamic directly impacts model quality, responsiveness, and accessibility, while\nalso determining the ability to serve the rising global demand across consumer, enterprise, and mission-critical AI\napplications. This creates a self-reinforcing advantage in which lower token costs drive greater model quality and\nuser adoption, reinforcing AI leadership.\nCost of Compute is the Main Driver of Cost Per Token. The total cost per token is determined by the efficiency,\navailability, and unit economics of the underlying compute and the cost of building and operating compute\ninfrastructure. Improvement in the cost of building and operating this compute infrastructure—whether through\nlower data center construction cost, lower power infrastructure cost, shorter time to grid interconnection, or higher\ncluster-level throughput—translates directly into lower cost per token. Accordingly, for a given level of intelligence,\nwe expect the long-term economics of AI companies to be driven by the ability to consistently deliver bleeding-edge\ncompute at the lowest possible cost per token. Put simply, we view cost per token as a function of three primary\ninputs—the underlying AI model, the compute hardware, and energy, and we expect to have a competitive\nadvantage in the latter two cost components. We believe we have a pathway over time that will significantly reduce\ncompute hardware costs through continued vertical integration and development of proprietary chips, building on\nour experience designing custom silicon for our Starlink satellites. We also expect that the marginal cost of energy\nfor our AI compute satellites will be minimal because our satellites are powered by solar arrays in space. By driving\nthe energy component to minimal levels and pursuing improvements in compute hardware cost, we believe we can\nachieve a meaningfully lower overall cost per token in the future.\nWe Have a Dual Speed and Cost Advantage in Terrestrial AI Compute. We own and operate what we believe to be\nthe largest AI training data center clusters on Earth. Our AI compute facilities, COLOSSUS and COLOSSUS II,\ncollectively provide approximately 1.0 gigawatt of compute power, with additional power capacity available for data\ncenter operations. Our first-principles thinking enables us to build coherent compute at scale and at rapid speed with\nlower costs than most other companies in the industry. In order to bring compute clusters online as fast as possible,\nwe employ a vertically integrated, nimble approach to construction. We brought the first cluster of COLOSSUS\nonline in 122 days, repurposing the shell of an existing factory, and the first cluster of COLOSSUS II online even\nfaster in 91 days. As an illustrative comparison, an industry benchmark to bring online a 100 megawatt greenfield\ndata center is approximately two years. We also demonstrated a significant improvement in cost efficiency,\nachieving data center construction costs for COLOSSUS II that are considerably lower than industry benchmarks on\na per megawatt basis.", - "path": "spacex-s1.pdf/p35", - "metadata": { - "length": 5226, - "summary": "8 Table of Contents • The first to manufacture consumer-grade phased-array user terminals at scale (2022); • The first to deploy a large-scale LEO satellite-to-mobile constellation (2025); • The first to build a gigawatt-scale AI training cluster and largest coherent supercomp...", - "page_nums": [ - 35 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 35, "artifact_ref": "page_citation_assets/page-35.png", @@ -4619,24 +5584,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_360ab5ee-7b5a-5b99-99cf-f43e40e05cd0", - "type": "page", - "content": "9\nTable of Contents\nWe Believe Orbital AI Can Accelerate Time to Power and Reduce Token Costs. The Sun contains approximately\n99.8% of the solar system’s energy and offers what we believe is the only truly scalable solution to the challenge of\naccelerating demand for compute relative to terrestrial energy constraints. The logical path forward is to move\npower-intensive AI workloads into orbit, where solar energy is near-constant and uninterrupted. With such\naccessibility to energy, we believe that our launch business will enable us to consistently activate the highest\nperforming hardware before our competitors without such access, shrinking the timeline to useful tokens on\nbleeding-edge hardware and sustaining our token cost advantage. We believe SpaceX is uniquely positioned to\ndeploy and operate data centers in orbit that can eventually achieve a lower cost than terrestrial data centers over\ntime due to our extreme vertically integrated approach across launch, satellite manufacturing at scale, network\nconnectivity, and terrestrial data center expertise.\nWe Believe We Are Well-Positioned to Deliver Orbital AI Compute. We believe orbital AI compute is an incredibly\ndifficult technical challenge that only we can solve at scale in the near term. We are the only company that has\nalready accomplished the key technical challenges associated with evolving connectivity satellites into AI compute\nsatellites. In our view, we are well-positioned to deliver a full-scale AI compute satellite constellation. Significant\nwork remains, but we are confident in our singular leadership position.\n• We have unmatched satellite launch capabilities to enable deployment at scale. Deployment of 100\ngigawatts per year via satellites carrying over 100 kilowatts of compute power per metric ton will require\nthousands of launches per year and the transport of approximately one million metric tons to orbit annually. The\nfully reusable nature of Starship positions us to be capable of launching this level of mass. Starlink Broadband\nV1 and V2 Mini satellites have already demonstrated launch survivability and high reliability under vibration,\nshock, g-loads, acoustic stress, and vacuum exposure, achieving 99.9% average uptime.\n• We have already solved many of the significant technical hurdles to evolving connectivity satellites into\nAI compute satellites. Through our leading expertise of connectivity satellites—including mass production,\ndeployment, network operations, and inter-satellite lasers and mesh connectivity—we have already solved the\nhardest part in the development of AI compute satellites. Because AI compute satellites represent an evolution\nof spacecraft engineering already demonstrated through Starlink, we believe development of AI compute\nsatellites will be easier for us than for anyone else. Our existing Starlink constellation is another crucial enabler\nof orbital AI compute, as its global network allows data from our AI compute satellites to reach ground stations\nanywhere on Earth.\n• We will use our proven Starlink in-orbit technology to optimize our orbital AI compute. In order to\noperate orbital AI compute satellites, we plan to build on our vast experience of operating approximately 9,600\nStarlink broadband and mobile satellites in Low-Earth Orbit. In 2025 alone, Starlink satellites proactively\nperformed over 1,000 automated collision avoidance maneuvers per day guided by this technology to safely and\nefficiently operate the constellation. This operating model gives us control over workload placement across\nEarth and space while maintaining resilience through redundancy and fail safe systems. A high degree of\ncontrollability will allow the satellite to be optimized for brightness mitigation, disposal, and other modes of\noperation.\n• We can manufacture our AI compute constellations at scale with rapid upgrade cycles. We have built one\nof the largest satellite manufacturing operations in the world. Our vertically integrated approach with limited\nreliance on third-party suppliers will be key to our mass-scaling efforts and should allow us to deploy the latest\nAI processors. We believe SpaceX will be the first and only company to manufacture satellites at the scale of\nautomotive manufacturing.\n• We are building chip manufacturing capabilities to scale our access to AI compute hardware. We\nannounced a collaboration with Tesla in March 2026 to build the Terafab initiative with a long-term goal of\nproducing one terawatt of compute hardware each year. In connection with such collaboration, we have agreed\nwith Tesla on a general framework for the future development of Terafab. Intel joined the project in April 2026\nand is expected to contribute its expertise in designing, fabricating, and packaging ultra-high performance chips\nto help Terafab scale. Any specific projects undertaken pursuant to this framework will be subject to separate\nnegotiations and agreements (including any development timelines, milestones and capital expenditures) and", - "path": "spacex-s1.pdf/p36", - "metadata": { - "length": 5011, - "summary": "9 Table of Contents We Believe Orbital AI Can Accelerate Time to Power and Reduce Token Costs. The Sun contains approximately 99.8% of the solar system’s energy and offers what we believe is the only truly scalable solution to the challenge of accelerating demand for compute r...", - "page_nums": [ - 36 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 36, "artifact_ref": "page_citation_assets/page-36.png", @@ -4644,24 +5592,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ee4af8b3-adc1-5499-875e-e8702b0bc4ce", - "type": "page", - "content": "10\nTable of Contents\nhave not yet been determined. With this internal manufacturing capability, we plan to alleviate potential future\nchip shortages at SpaceX, especially as we develop orbital AI at scale, and design chips that are optimized for\nthe space environment.\n• We can leverage our terrestrial experience to build and operate compute clusters and AI workloads at\nscale. We believe our experience operating compute infrastructure on Earth provides the technical and\noperational foundation to extend these capabilities into orbit. For example, we plan to subject compute hardware\nto extensive pre-deployment testing on Earth to identify early life failures before launch to reduce in-orbit\ndisruption. For compute hardware that does fail, we plan to leverage existing Starlink fleet management\nsoftware to reallocate traffic to other satellites and prevent cluster-level downtime.\nWe Believe Our Infrastructure is a Distinct Advantage in Delivering Superior AI. We expect the combination of\ncompetitive cost per token, our ability to deploy and operate data centers in orbit, and our strength in connectivity to\nresult in more scalable intelligence that is accessible globally at high speeds.\nOur Strengths\n• Global Leadership in Orbital Launch Services\n• Unrivaled Satellite and Connectivity Platform across Design, Manufacturing, Deployment, and Operations\n• Truth-Seeking AI Model Enhanced by Real-Time Data\n• Extreme Vertical Integration Enabling High Velocity and Superior Cost Efficiency at Scale\n• Unique Ability to Scale New Trillion-Dollar Markets Across Space, Connectivity, and AI\n• Business Models that Are Incredibly Difficult to Replicate\n• Mission-Driven Culture and World-Class Talent\nOur Growth Strategies\nSpace\n• Increase launch payload capacity\n• Establish the lunar economy, including cargo transport, manufacturing, and energy production on the Moon\nConnectivity\n• Grow Starlink Broadband customers\n• Expand our Starlink Mobile offering\n• Increase the capacity of our constellations\nAI\n• Grow consumer AI platform monetization\n• Grow X monetization\n• Deepen enterprise and government adoption\n• Increase the scale of our terrestrial power and AI compute infrastructure\n• Deploy orbital AI compute at scale\n• Design and manufacture our own chips\n• Launch digital human augmentation\nFuture Markets\n• Point-to-point terrestrial travel\n• Space tourism\n• In-orbit manufacturing\n• Passenger and cargo transport to the Moon and Mars\n• Energy production on the Moon and Mars\n• Manufacturing capabilities on the Moon and Mars\n• Asteroid mining", - "path": "spacex-s1.pdf/p37", - "metadata": { - "length": 2562, - "summary": "10 Table of Contents have not yet been determined. With this internal manufacturing capability, we plan to alleviate potential future chip shortages at SpaceX, especially as we develop orbital AI at scale, and design chips that are optimized for the space environment. • We can...", - "page_nums": [ - 37 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 37, "artifact_ref": "page_citation_assets/page-37.png", @@ -4669,24 +5600,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_660964b4-22e8-55e3-b631-085058e8bf01", - "type": "page", - "content": "11\nTable of Contents\nOur Market Opportunity\nWe believe we have identified the largest actionable total addressable market (“TAM”) in human history. We\nestimate that our quantifiable TAM is $28.5 trillion, consisting of $370 billion in Space from space-enabled\nsolutions; $1.6 trillion in Connectivity across $870 billion in Starlink Broadband and $740 billion in Starlink Mobile\nas well as additional opportunities in enterprise and government; $26.5 trillion in AI across $2.4 trillion in AI\ninfrastructure, $760 billion in consumer subscriptions, $600 billion in digital advertising, and $22.7 trillion in\nenterprise applications. For illustrative purposes of sizing our addressable market opportunity, we exclude China and\nRussia from our global estimates.\nSpaceX’s Estimated TAM by Segment\nOur Challenges\nWe face a number of challenges relating to our business and growth strategy and, ultimately, the achievement of our\nmission to make life multiplanetary, understand the true nature of the universe, and extend the light of consciousness\nto the stars. The pursuit of our mission drives our decision-making and forms the foundation of our business plan,\nwhich is predicated on building, commercializing, and operating services and products at a scale that has not\npreviously been achieved. This objective requires us to develop and integrate complex and novel technologies,\ndevelop new processes and infrastructure, and coordinate across multiple suppliers, contractors, regulators, and\nstakeholders. Because we are attempting to execute at a scale for which there is no precedent, we face heightened\nuncertainty with respect to design, engineering, procurement, construction, commissioning, and operational\nperformance. In particular, our ability to execute our growth strategy is highly dependent on the successful\ndevelopment and scaling of Starship and the ability to increase our launch cadence, both of which are subject to\nchallenges and uncertainties inherent in the development and deployment of new and complex technologies.\nAdditionally, many of our initiatives described above under “Our Growth Strategies,” including those to develop\norbital AI compute at scale, manufacture AI chips at scale, establish a lunar economy, transport humans and cargo to\nthe Moon and Mars, and develop human augmentation systems, involve significant technical complexity, unproven\ntechnologies or technologies that do not exist, and such initiatives may not achieve commercial viability. Many of\nthe innovative products and services described elsewhere in this prospectus may ultimately be unsuccessful and may\nrequire great expense, innovations not yet achieved or technologies not yet developed. As a result, the timeline for\ncertain of our initiatives involving unproven or new innovations, including our goal of deploying 100 gigawatts of", - "path": "spacex-s1.pdf/p38", - "metadata": { - "length": 2841, - "summary": "11 Table of Contents Our Market Opportunity We believe we have identified the largest actionable total addressable market (“TAM”) in human history. We estimate that our quantifiable TAM is $28.5 trillion, consisting of $370 billion in Space from space-enabled solutions; $1.6 t...", - "page_nums": [ - 38 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 38, "artifact_ref": "page_citation_assets/page-38.png", @@ -4694,24 +5608,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fb511909-cd4d-53c8-bf4e-4d467eeb862e", - "type": "page", - "content": "12\nTable of Contents\nannual compute power to orbit, the establishment of a lunar economy and interplanetary industrialization, and the\nlaunch cadence required to achieve these goals may be difficult or impossible to determine. Our growth strategy may\ntake longer to execute than anticipated, and you may not realize a return on your investment within the timeframe\nyou anticipate, or at all.\nIn addition, a portion of our anticipated market opportunities is associated with industries described above under\n“Future Markets.” Certain of these industries, such as space tourism and cargo transport to the Moon, are still\nemerging. Others, including in-orbit manufacturing, passenger transport to the Moon, passenger and cargo transport\nto Mars, energy production on the Moon and Mars, manufacturing capabilities on the Moon and Mars, and asteroid\nmining, do not exist today. While we believe these industries will develop over time, the manner in which they\nemerge, including the timing of commercialization, the scale and pace of adoption, and the applicable competitive,\ntechnical, regulatory, geopolitical, and economic frameworks may differ materially from our current expectations.\nOur Space, Connectivity, and AI segments are also subject to the following challenges and uncertainties, among\nothers.\n• Space: Our growth strategy depends on our ability to increase our launch cadence and payload capacity, which\nis dependent on the successful development of Starship at scale. Unexpected design modifications, supply chain\ndisruptions, anomalies, environmental issues, and other unforeseen technical challenges could result in delays or\nfailures to deploy Starship on our anticipated schedule, which would delay or impede our ability to achieve our\nother business objectives, such as the deployment of our next-generation satellites, the expansion of our\nsatellite-to-mobile connectivity services, and deployment of in-orbit AI compute infrastructure.\n• Connectivity: Our satellite connectivity, including our global satellite-to-mobile connectivity services under\nStarlink Mobile, depend on access to radio frequency spectrum and authorizations from the Federal\nCommunications Commission (the “FCC”) in the United States and telecommunications regulators in other\ncountries. Acquiring the necessary authorizations can be a complex and time-consuming process. Without these\nlicenses and approvals, we cannot generally offer connectivity services in a given market. Spectrum access itself\nis limited and highly regulated. Additionally, the growth of our connectivity services depends on our ability to\nincrease market awareness and acceptance of connectivity through Starlink across numerous international\nmarkets, each with its unique challenges.\n• AI: Our AI business is in a relatively early stage, it is being integrated into our organization, its business\nstrategy is still developing, and it will require significant capital expenditures to fund compute, infrastructure\nand power generation, model training, and product development. Additionally, our AI business is subject to\nchallenges inherent in a nascent, highly competitive, capital intensive and rapidly changing industry. These\ninclude the potential for disruptive technological change, evolving industry and regulatory standards, the\nemergence of new and well-funded competitors, frequent new product and service introductions, and changing\ncustomer demands.\nAny number of these challenges, and others that may be currently unknown to us, could have a negative impact on\nour business, financial condition, and results of operations. For a discussion of the challenges, risks, and limitations\nthat could harm our future prospects, please refer to “Cautionary Note Regarding Forward-Looking Statements,”\n“Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”\nincluded elsewhere in this prospectus.\nRecent Developments\nCollaboration with Cursor\nIn April 2026, we entered into a compute and option agreement with Anysphere, Inc., doing business as Cursor, a\nSan Francisco-based private software company (“Cursor”), which we view as a compelling extension of our strategy\nto vertically integrate compute infrastructure, models, and applications. Under the compute agreement, we will\nprovide Cursor with certain GPU cluster compute capacity and collaborate to improve existing models, including\nGrok, and potentially to jointly develop AI models and related model-specific deliverables or products. With the\noption agreement, we have the right, but not obligation, to acquire Cursor at a predetermined price or pay a fee. We", - "path": "spacex-s1.pdf/p39", - "metadata": { - "length": 4638, - "summary": "12 Table of Contents annual compute power to orbit, the establishment of a lunar economy and interplanetary industrialization, and the launch cadence required to achieve these goals may be difficult or impossible to determine. Our growth strategy may take longer to execute tha...", - "page_nums": [ - 39 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 39, "artifact_ref": "page_citation_assets/page-39.png", @@ -4719,24 +5616,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e612f923-a463-5a83-9eb3-72069a307e78", - "type": "page", - "content": "13\nTable of Contents\nconsider software development as a strategically important use case for AI given its combination of high-quality\nstructured data, rapid feedback cycles and frequent, mission-critical usage. AI-assisted coding workflows generate\ncontext-rich, verifiable data that can enhance model training and performance, while also driving sustained inference\ndemand. The depth of Cursor’s integration with a high-frequency coding workflow generates valuable developer\ninteraction data, including coding generation prompts, iteration cycles, and software architecture decisions. We\nexpect that access to this data will enhance our model training and inference, including with respect to Grok.\nMeanwhile, by providing access to our large-scale compute infrastructure, we believe we can help Cursor deliver\nfaster and higher quality user experiences. The collaboration with Cursor may also accelerate our AI strategy by\nintegrating our AI models more directly into developer workflows and expanding the distribution of our AI\ncapabilities through high-engagement software interfaces.\nThe consideration for the acquisition of Cursor, if any, after the closing of this offering would consist of shares of\nour Class A common stock based on an implied equity value of Cursor of $60.0 billion, and the price of our Class A\ncommon stock that equals the volume-weighted average closing price thereof over the seven consecutive trading\ndays immediately preceding the closing of the acquisition. If either (i) we decide to terminate the option agreement\nor (ii) Cursor is eligible to and decides to terminate due to our material breach of the option agreement (subject to\nnotice and cure provisions), Cursor is entitled to a $1.5 billion termination fee under the option agreement and an\n$8.5 billion deferred services fee under the compute agreement. These fees are payable in cash (or Class A common\nstock, if this offering has not been consummated at the time the fees become payable). For more information about\nour arrangement with Cursor, including our option to acquire the company, please refer to “Business—Collaboration\nwith Cursor” included elsewhere in this prospectus.\nCompute Services Agreements with Third Parties\nWe believe our compute infrastructure and related strategy provides us with substantial flexibility in how we\nallocate and monetize capacity. We have the ability to use compute resources to support our proprietary AI\napplications (such as Grok 5, which is currently being trained at COLOSSUS II), while also providing access to\nselect compute capacity to third-party customers. For example, in May 2026, we entered into Cloud Services\nAgreements with Anthropic PBC (“Anthropic”), an AI research and development public benefit corporation, with\nrespect to access to compute capacity across COLOSSUS and COLOSSUS II. Pursuant to these agreements, the\ncustomer has agreed to pay us $1.25 billion per month through May 2029, with capacity ramping in May and June\n2026 at a reduced fee. The agreements may be terminated by either party upon 90 days’ notice. The customer will\nretain ownership and intellectual property rights in its content, AI models, and related data. This structure allows us\nto monetize unused compute capacity in our infrastructure, while still permitting reallocation of the capacity for our\nown internal initiatives if needed in the future. We have sufficient capacity to provide compute for our own AI\nmodels, including support of our training and inference demands, and to satisfy the obligations under these\nagreements. We expect to enter into additional similar services contracts. We believe this opportunity highlights the\nincreasing importance of large-scale, frontier-level AI infrastructure and positions us as a differentiated provider of\nhigh-performance compute capacity to both internal and third-party AI workloads. We believe our dual monetization\nstrategy provides multiple pathways to generate returns on invested capital.\nFounder, Chief Executive Officer, Chief Technical Officer and Chairman of Our Board\nMr. Musk is our founder, Chief Executive Officer, Chief Technical Officer and the Chairman of our board.\nAssuming a size as set forth on the cover page of this prospectus and an initial public offering price of $\nper share (the midpoint of the estimated price range set forth on the cover page of this prospectus), Mr. Musk will\nhold approximately % of the voting power of our common stock (or % if the underwriters exercise\ntheir option to purchase additional shares of Class A common stock in full) immediately after this offering through\nhis ownership of shares of our Class A common stock and shares of our Class B common\nstock, which comprises approximately % of our Class B common stock. Under our charter, the holders of our\nClass B common stock will have the right to elect a majority of our board (such directors, the “Class B Directors”),\nfor so long as any shares of Class B common stock remain outstanding. As the holder of a majority of our shares of\nClass B common stock, Mr. Musk will be able to elect, remove or fill any vacancy among the Class B Directors. In\naddition, for so long as he beneficially owns more than 50% of the voting power of our common stock, Mr. Musk\nwill control the voting power over the selection of our board. As a result, Mr. Musk will have the power to control", - "path": "spacex-s1.pdf/p40", - "metadata": { - "length": 5442, - "summary": "13 Table of Contents consider software development as a strategically important use case for AI given its combination of high-quality structured data, rapid feedback cycles and frequent, mission-critical usage. AI-assisted coding workflows generate context-rich, verifiable dat...", - "page_nums": [ - 40 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 40, "artifact_ref": "page_citation_assets/page-40.png", @@ -4744,24 +5624,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4074b93e-8ef3-5d92-8508-f4ddd8cf04ab", - "type": "page", - "content": "14\nTable of Contents\nthe outcome of matters requiring shareholder approval, including election of all our directors, and to control our\nbusiness and affairs.\nOur Controlled Company Status\nWe will be a controlled company as of the completion of this offering under Nasdaq and Nasdaq Texas listing rules.\nA controlled company is not required to have a majority of its board composed of independent directors or to\nestablish independent compensation and nominating committees. As a controlled company, we will remain subject\nto rules that require us to have an audit committee composed entirely of independent directors.\nCorporate Information\nWe were founded and incorporated as Space Exploration Technologies Corp., a Delaware corporation, on March 14,\n2002 and reincorporated as a Texas corporation on February 14, 2024. Our principal executive offices are located at\n1 Rocket Road, Starbase, Texas 78521. Our website address is www.spacex.com. Information contained on our\nwebsite or linked therein or otherwise connected thereto does not constitute part of nor is it incorporated by\nreference into this prospectus or the registration statement of which this prospectus forms a part.", - "path": "spacex-s1.pdf/p41", - "metadata": { - "length": 1183, - "summary": "14 Table of Contents the outcome of matters requiring shareholder approval, including election of all our directors, and to control our business and affairs. Our Controlled Company Status We will be a controlled company as of the completion of this offering under Nasdaq and Na...", - "page_nums": [ - 41 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 41, "artifact_ref": "page_citation_assets/page-41.png", @@ -4769,24 +5632,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f5b73c6e-9137-502c-ab2c-0d97585e828f", - "type": "page", - "content": "15\nTable of Contents\nSummary of Risk Factors\nAn investment in our Class A common stock involves risks and uncertainties. The following is a summary of the\nprincipal factors that make an investment in our Class A common stock speculative or risky, all of which are more\nfully described below in the section titled “Risk Factors.” This summary should be read in conjunction with the\n“Risk Factors” section and should not be relied upon as an exhaustive summary.\n• Any failure or delay in the development of Starship at scale or in achieving the required launch cadence,\nreusability and capabilities thereafter would delay or limit our ability to execute our growth strategy, including\nthe deployment of next-generation satellites, global satellite-to-mobile connectivity, and orbital AI compute,\nwhich could materially adversely affect our business, financial condition, results of operations, and future\nprospects.\n• Any delays or difficulties in obtaining, maintaining or renewing required regulatory approvals and licenses\nrequired for our space-related activities, including the U.S. Federal Aviation Administration (“FAA”) launch\nand reentry licenses, would materially delay or disrupt our operations, harm our business, or limit our ability to\nexecute our business strategy.\n• Any delays or difficulties in obtaining, maintaining or renewing required communications licenses and\nspectrum authorizations for our satellite connectivity services, including international and FCC satellite\nspectrum licenses, could materially delay or disrupt our operations, harm our business, or limit our ability to\nexecute our business strategy.\n• Our AI products and X platform are subject to complex and evolving U.S. and foreign laws and regulations that\nare subject to change and uncertain interpretation, and we could be required to make changes to our products\nand business practices, and be exposed to monetary penalties, increased cost of operations, declines in user\ngrowth or engagement, or loss of customers, or other harm to our AI products and X platform.\n• Our business strategy depends on successfully designing, developing, and deploying our products and services,\nas well as related platforms, infrastructure, and other strategic initiatives, at an unprecedented scale, which\npresents significant execution, cost, and timing risks.\n• We have experienced, and will likely continue to experience, launch delays and failures that could have a\nmaterial adverse effect on our business, financial condition, results of operations, and future prospects.\n• Our satellites, launch vehicles, and other space-related technologies operate, and in the case of orbital AI\ncompute, will operate, in the harsh and unpredictable environment of space, exposing them to a wide and\nunique range of space-related risks that could cause them to malfunction or fail, and any such malfunction or\nfailure could adversely affect our business, financial condition, results of operations, and future prospects.\n• The continued proliferation of satellite constellations in Low-Earth Orbit, as well as the risk of collisions with\nspace debris or other spacecraft, could limit or impair our launch flexibility and satellite deployment, which\ncould adversely affect our business, financial condition, results of operations, and future prospects.\n• Interruptions in the operation of critical satellite network, ground station, launch, manufacturing, or spacecraft\nor data center infrastructure could result in significant downtime, operational delays or loss of service, each of\nwhich could have a material adverse effect on our business, financial condition, results of operations, and future\nprospects.\n• Manufacturing, testing and launching rockets, satellites, and spacecraft, including our efforts to reuse rockets\nand spacecraft, involve inherent risks that could result in human injury or death, property damage and\nenvironmental damage or other adverse environmental impacts due to accidents or equipment failures. Any such\nevents could result in substantial losses, including reputational harm and legal liability, which could have a\nmaterial adverse effect on our business.\n• Although we are focused on the vertical integration of our businesses, we depend on third parties to\nmanufacture and supply certain key components necessary for the provision of our launch, connectivity, and AI", - "path": "spacex-s1.pdf/p42", - "metadata": { - "length": 4367, - "summary": "15 Table of Contents Summary of Risk Factors An investment in our Class A common stock involves risks and uncertainties. The following is a summary of the principal factors that make an investment in our Class A common stock speculative or risky, all of which are more fully de...", - "page_nums": [ - 42 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 42, "artifact_ref": "page_citation_assets/page-42.png", @@ -4794,24 +5640,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_0eae5c3d-cdc8-5b68-83b6-eb47b85a2d47", - "type": "page", - "content": "16\nTable of Contents\nservices, and any supply shortages or disruptions or failures in their performance could have a material adverse\neffect on our business, financial condition, results of operations, and future prospects.\n• Our ability to scale our AI products relies on our terrestrial and orbital AI compute infrastructure, which\ndepends on the availability of power, AI processors, and other critical components, telecommunications\nservices, and any shortages or disruptions thereof would materially adversely affect our business, financial\ncondition, results of operations, and future prospects.\n• We face intense competition in the markets in which we operate, and while we have historically outperformed\ncertain competitors in our Space and Connectivity segments, we may not continue to do so, which could\nadversely affect our business, financial condition, results of operations, and future prospects.\n• The Company’s AI segment is recently formed, still being integrated, operates in a rapidly evolving industry\nand is subject to integration, execution, competitive and operational risks.\n• Adverse global macroeconomic and geopolitical conditions may negatively affect our business, financial\ncondition, results of operations and future prospects.\n• We depend on our ability to recruit and retain employees who have advanced engineering and technical skills,\nand intense competition for such employees may increase costs and affect our ability to meet development and\nproduction timelines.\n• Any significant disruption in, or unauthorized access to, our computer and data systems or those of third parties\nthat we utilize in our operations could result in a loss or degradation of service, loss of trust in us and harm to\nour business.\n• The development and maintenance of the technologies and infrastructure necessary to support our current and\nfuture operations will require significant capital expenditures, and if we are unable to generate sufficient cash\nflow from operations or obtain additional financing on acceptable terms, our business, financial condition,\nresults of operations, and future prospects could be materially and adversely affected.\n• Our substantial level of indebtedness could materially adversely affect our financial condition.\n• Our future revenue and operating results depend upon our ability to develop new technologies and respond to\nchanges in customer demands and industry standards in highly competitive markets, and if we are unable to do\nso, our business, financial condition, results of operations, and future prospects may be materially and adversely\naffected.\n• The estimates of future market opportunity and forecasts of market growth, and our ability to capture such\nmarkets, included in this prospectus may prove to be inaccurate.\n• Many of our initiatives, including those to develop orbital AI compute at scale, manufacture AI chips at scale,\nestablish a lunar economy, develop human augmentation systems, and transport humans and cargo to the Moon\nand Mars, involve significant technical complexity, unproven technologies, or technologies that do not exist or\nmay require significant advancement, and such initiatives may not achieve commercial viability.\n• The global nature of our business poses risks with respect to unstable, malicious or arbitrary legal regimes and\nauthorities.\n• Our bylaws place restrictions on the forum, venue and procedures for legal actions or proceedings initiated by\nour shareholders, including certain requirements for mandatory arbitration. These provisions could limit our\nshareholders’ ability to pursue certain claims and/or increase the cost of doing so and could also affect the\nprocedures, rights, and remedies available to our shareholders in such legal actions or proceedings.\n• Upon completion of this offering, Mr. Musk will serve as our Chief Executive Officer, Chief Technical Officer,\nand Chairman of our board and control the election of our directors, and our dual class structure concentrates\nvoting control with Mr. Musk and other holders of our Class B common stock. This will limit or preclude your\nability to influence corporate matters and the election of our directors.", - "path": "spacex-s1.pdf/p43", - "metadata": { - "length": 4179, - "summary": "16 Table of Contents services, and any supply shortages or disruptions or failures in their performance could have a material adverse effect on our business, financial condition, results of operations, and future prospects. • Our ability to scale our AI products relies on our...", - "page_nums": [ - 43 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 43, "artifact_ref": "page_citation_assets/page-43.png", @@ -4819,24 +5648,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1a5a4f75-195b-5498-93ee-c2a7b04e56c6", - "type": "page", - "content": "17\nTable of Contents\nThe Offering\nIssuer\n\n\n...................................................................... Space Exploration Technologies Corp.\nClass A common stock offered by us\n\n\n..................... shares (or shares if the underwriters exercise their option to purchase additional shares of Class A common stock in full).\nClass A common stock outstanding immediately after this offering\n................................................ shares (or shares if the underwriters exercise their option to purchase additional shares of Class A common stock in full).\nClass B common stock outstanding immediately after this offering\n................................................ shares.\nVoting power of Class A common stock after giving effect to this offering\n\n............................... % (or % if the underwriters exercise their option to purchase additional shares of Class A common stock in full).\nVoting power of Class B common stock after giving effect to this offering\n\n............................... % (or % if the underwriters exercise their option to purchase additional shares of Class A common stock in full).\nVoting rights\n\n........................................................... Each share of Class A common stock will entitle its holder to one vote per share. Each share of Class B common stock will entitle its holder to 10 votes per share. Class A shareholders and Class B shareholders will vote together as a single class on all matters to be voted on by shareholders under our charter, except the holders of our Class B common stock will have the right to elect a majority of our board and have certain other voting rights as a class. Each share of Class B common stock will be convertible at any time at the option of the holder into one share of our Class A common stock. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon a Transfer (as defined in the charter) of that share of Class B common stock, whether or not for value, except for Permitted Transfers (as defined in the charter). Please refer to “Description of Capital Stock.”\nUse of proceeds ...................................................... We expect to receive approximately $ of net proceeds from this offering (or $ if the underwriters exercise their option to purchase additional shares of Class A common stock in full), based upon the assumed initial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus), after deducting underwriting discounts and commissions and estimated offering expenses payable by us. Please refer to “Underwriting.” We intend to use the net proceeds from this offering to fund our growth strategy, including the expansion of our AI compute infrastructure, enhancements to our launch infrastructure and launch vehicles, increases in the scale and capacity of our satellite constellations, and any remaining amounts for general corporate purposes. Please refer to “Use of Proceeds” for a more complete description of the intended use of proceeds from this offering.", - "path": "spacex-s1.pdf/p44", - "metadata": { - "length": 3323, - "summary": "17 Table of Contents The Offering Issuer ...................................................................... Space Exploration Technologies Corp. Class A common stock offered by us ..................... shares (or shares if the underwriters exercise their option to purchase...", - "page_nums": [ - 44 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 44, "artifact_ref": "page_citation_assets/page-44.png", @@ -4844,24 +5656,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_699e0ef4-a89e-58bd-b9c4-b513ebe1e8a8", - "type": "page", - "content": "18\nTable of Contents\nDividend policy\n\n...................................................... We do not anticipate declaring or paying any cash dividends to holders of our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the growth of our business. Our future dividend policy is within the discretion of our board and will depend upon then-existing conditions, including our results of operations, financial condition, capital requirements, investment opportunities, statutory restrictions on our ability to pay dividends, restrictions in our existing and any future debt agreements and other factors our board may deem relevant. Covenants under our Credit Agreements also restrict our ability to pay dividends, and we may enter into credit agreements or other borrowing arrangements in the future that restrict our ability to declare or pay cash dividends or make distributions in the future.\nDirected share program\n\n.......................................... At our request, the underwriters have reserved percent of the shares of Class A common stock to be issued by the Company and offered by this prospectus for sale, at the initial public offering price, to employees of the Company and certain other designated individuals. If purchased by these persons, these shares of Class A common stock will not be subject to a lock-up restriction. The number of shares of Class A common stock available for sale to the general public will be reduced to the extent these individuals purchase such reserved shares of Class A common stock. Any reserved shares of Class A common stock that are not so purchased will be offered by the underwriters to the general public on the same basis as the other shares of Class A common stock offered by this prospectus.\nControlled company\n\n............................................... Upon completion of this offering, Mr. Musk will beneficially own a majority of the voting power of our common stock and the Class B common stock, which elects a majority of the board. As a result, we expect to be a “controlled company” within the meaning of the Nasdaq and Nasdaq Texas corporate governance standards, and intend to rely on exemptions from certain of the corporate governance listing requirements. Please refer to “Management—Controlled Company Exemption” and “Certain Relationships and Related Person Transactions.”\nRisk factors\n............................................................. You should carefully read and consider the information set forth in the section titled “Risk Factors” beginning on page 26, together with all of the other information set forth in this prospectus, before deciding whether to invest in our Class A common stock.\nListing and trading symbol\n\n..................................... We have applied to list our Class A common stock on Nasdaq and Nasdaq Texas under the symbol “SPCX.”\nThe number of shares of our Class A and Class B common stock that will be outstanding after this offering is based\non shares of Class A common stock and shares of Class B common stock outstanding as of March\n31, 2026, after giving effect to (i) the sale of shares of Class A common stock in this offering, (ii) the\nClass C Reclassification (as defined below), and (iii) the Preferred Conversion (as defined below).\nUnless otherwise noted, common stock outstanding after the offering and other information based thereon in this\nprospectus does not reflect any of the following:\n• shares of Class A common stock issuable upon exercise of the underwriters’ option to purchase\nadditional shares from us;\n• shares of Class A common stock issuable upon the exercise of outstanding stock options granted\nunder the Equity Plans (as defined below) that were outstanding as of March 31, 2026 with a weighted-average\nexercise price of $ per share;", - "path": "spacex-s1.pdf/p45", - "metadata": { - "length": 3954, - "summary": "18 Table of Contents Dividend policy ...................................................... We do not anticipate declaring or paying any cash dividends to holders of our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance t...", - "page_nums": [ - 45 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 45, "artifact_ref": "page_citation_assets/page-45.png", @@ -4869,24 +5664,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a6eebf93-32f1-5cae-aeec-a9215fc92745", - "type": "page", - "content": "19\nTable of Contents\n• shares of Class A common stock issuable upon the exercise of outstanding stock options granted\nunder the Equity Plans (as defined below) granted after March 31, 2026 with a weighted-average exercise price\nof $ per share;\n• shares of Class A common stock issuable upon the vesting and settlement of restricted stock units that\nwere outstanding as of March 31, 2026 under the Equity Plans (none of which will vest in connection with this\noffering);\n• shares of Class A common stock issuable upon the vesting and settlement of restricted stock units\ngranted after March 31, 2026 under the Equity Plans (none of which will vest in connection with this offering);\n• shares of Class A common stock reserved for issuance under our Amended and Restated 2024 Equity\nIncentive Plan (the “A&R 2024 Plan”), excluding shares subject to outstanding awards thereunder as described\nabove, which we plan to adopt in connection with this offering;\n• shares of Class A common stock reserved for issuance under our Amended and Restated 2017 Equity\nStock Purchase Plan (the “A&R 2017 ESPP”), which we plan to adopt in connection with this offering; and\n• shares of Class A common stock reserved for future issuance upon the conversion of shares of\nClass B common stock on a one-for-one basis.\nThe term “Equity Plans” refers to our 2015 Plan, our A&R 2017 ESPP and our A&R 2024 Plan as well as (i) xAI’s\n2023 Equity Incentive Plan, 2023 Incentive Plan and 2025 Equity Incentive Plan, each of which we assumed in the\nxAI Merger and (ii) the 2017 Stock Plan, as amended, of Swarm Technologies, Inc. (“Swarm”), which we assumed\nin our acquisition of Swarm in 2021.\nThe information in this prospectus also does not reflect:\n• the payment of shares of Class A common stock and cash consideration which would occur upon\nclosing of our agreement with EchoStar Corporation (“EchoStar”) to purchase certain AWS-3, AWS-4, and H-\nBlock spectrum licenses pursuant to the License Purchase Agreement, dated as of September 7, 2025 (as\namended and restated on November 5, 2025), by and among SpaceX, Spectrum Business Trust 2025-1 and\nEchoStar (the “Spectrum Transaction”), which transaction was approved by the FCC on May 12, 2026 and is\nsubject to other closing conditions prior to completion; and\n• the issuance of shares of our Class A common stock if in the future our board determines to exercise our option\nto acquire Cursor as such option is described under “Business—Collaboration with Cursor,” which, as an\nexample, assuming the volume-weighted average closing price of our common stock over the seven consecutive\ntrading days immediately preceding the closing of such acquisition were equal to the initial public offering price\nof $ per share (which is the midpoint of the price range set forth on the cover of this prospectus),\nwould equal approximately shares. The actual number of shares that may be issued will be\ndetermined based on a future trading price and is subject to customary adjustments for reclassifications,\nrecapitalization, stock splits or any other similar event affecting the outstanding capital stock of Cursor or the\nCompany.\nUnless otherwise indicated, all information contained in this prospectus assumes or gives effect to:\n• the 2026 Stock Split;\n• prior to the completion of this offering, pursuant to the terms of our certificate of formation in effect as a private\ncompany prior to this offering, the reclassification of all of the outstanding shares of our Class C common stock\ninto an aggregate of shares of Class A common stock (the “Class C Reclassification”) and the\nconversion of the outstanding shares of all our preferred stock into an aggregate of shares of our\nClass A common stock and shares of our Class B common stock (the “Preferred Conversion”);\n• the effectiveness of our charter and bylaws, which will become effective upon the completion of this offering;", - "path": "spacex-s1.pdf/p46", - "metadata": { - "length": 4143, - "summary": "19 Table of Contents • shares of Class A common stock issuable upon the exercise of outstanding stock options granted under the Equity Plans (as defined below) granted after March 31, 2026 with a weighted-average exercise price of $ per share; • shares of Class A common stock...", - "page_nums": [ - 46 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 46, "artifact_ref": "page_citation_assets/page-46.png", @@ -4894,24 +5672,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8f04656e-64db-54e2-b80f-4effbaf5fb00", - "type": "page", - "content": "20\nTable of Contents\n• an initial public offering price of $ per share of Class A common stock (the midpoint of the price range\nset forth on the cover of this prospectus);\n• that the underwriters do not exercise their option to purchase additional shares of Class A common stock from\nus; and\n• no purchase of shares of Class A common stock in this offering by our directors, officers or existing\nshareholders.", - "path": "spacex-s1.pdf/p47", - "metadata": { - "length": 424, - "summary": "20 Table of Contents • an initial public offering price of $ per share of Class A common stock (the midpoint of the price range set forth on the cover of this prospectus); • that the underwriters do not exercise their option to purchase additional shares of Class A common stoc...", - "page_nums": [ - 47 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 47, "artifact_ref": "page_citation_assets/page-47.png", @@ -4919,24 +5680,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_123324c9-d684-587f-a7af-35e1c7820e62", - "type": "page", - "content": "21\nTable of Contents\nSummary Historical Consolidated Financial and Operating Data\nThe following table sets forth the summary historical consolidated financial and operating data for the periods and as\nof the dates presented. The summary historical consolidated financial data as of March 31, 2026 and for the three\nmonths ended March 31, 2026 and 2025 (except for pro forma basic and diluted net loss per share of common stock\nattributable to common shareholders and weighted average shares used in computing pro forma basic and diluted net\nloss per share of common stock attributable to common shareholders) has been derived from our unaudited\nconsolidated financial statements included elsewhere in this prospectus. The summary historical consolidated\nfinancial data as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024, and 2023\n(except for pro forma basic and diluted net loss per share of common stock attributable to common shareholders and\nweighted average shares used in computing pro forma basic and diluted net loss per share of common stock\nattributable to common shareholders) has been derived from our audited consolidated financial statements included\nelsewhere in this prospectus. The summary historical consolidated financial and operating data presented below is\nnot indicative of the results to be expected for any future period, and the results for any interim period are not\nnecessarily indicative of the results to be expected for the full fiscal period.\nThe summary historical consolidated financial and operating data of SpaceX has been prepared to reflect the\nretrospective combination of the companies for all periods presented to include the historical results of xAI, which\nwas acquired by SpaceX, effective February 2, 2026, and X Holdings, which was acquired by xAI, effective\nMarch 28, 2025, because these transactions were between entities under common control.\nThe following information should be read together with “Management’s Discussion and Analysis of Financial\nCondition and Results of Operations” and our consolidated financial statements and related notes thereto included\nelsewhere in this prospectus. The summary historical consolidated financial data included in this section is not\nintended to replace the consolidated financial statements and is qualified in its entirety by our consolidated financial\nstatements and related notes included elsewhere in this prospectus.\nStatements of Operations Data:\nThree Months Ended March 31, Year Ended December 31,\n2026 2025 2025 2024 2023\n(in millions, except per share data) (unaudited)\nRevenue\n\n............................................. $ 4,694 $ 4,067 $ 18,674 $ 14,015 $ 10,387\nTotal costs and expenses\n\n\n........... 6,637 4,040 21,263 13,549 13,892\nIncome (loss) from operations\n\n........... (1,943) 27 (2,589) 466 (3,505)\nNet income (loss)\n\n.............................. $ (4,276) $ (528) $ (4,937) $ 791 $ (4,628)\nNet income (loss) per share of common stock attributable to common shareholders (1)\nBasic\n\n\n.............................................. $ (1.27) $ (0.18) $ (1.69) $ 0.01 $ (1.68)\nDiluted ........................................... $ (1.27) $ (0.18) $ (1.69) $ 0.00 $ (1.68)\nWeighted average shares used in computing net income (loss) per share of common stock (1)\nBasic\n\n\n.............................................. 3,884 2,875 2,926 2,848 2,759\nDiluted ........................................... 3,884 2,875 2,926 9,956 2,759\n__________________\n(1) Please refer to Note 14, Earnings per Share to our audited consolidated financial statements appearing elsewhere in this prospectus for an\nexplanation of our calculation of basic and diluted net income (loss) per share of common stock attributable to common shareholders.", - "path": "spacex-s1.pdf/p48", - "metadata": { - "length": 3768, - "summary": "21 Table of Contents Summary Historical Consolidated Financial and Operating Data The following table sets forth the summary historical consolidated financial and operating data for the periods and as of the dates presented. The summary historical consolidated financial data a...", - "page_nums": [ - 48 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 48, "artifact_ref": "page_citation_assets/page-48.png", @@ -4944,24 +5688,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_65720d49-d658-58c3-8d73-30f2e55ff307", - "type": "page", - "content": "22\nTable of Contents\nThe following table sets forth the computation of unaudited pro forma basic and diluted net loss per share of\ncommon stock attributable to common shareholders for the period presented:\n(in millions, except per share data)\nThree Months EndedMarch 31, 2026\nYear Ended December 31, 2025\nNumerator:\nNet loss attributable to common shareholders, basic and diluted\n\n......................... $ (4,947) $ (4,937)\nPro forma adjustment to reverse the deemed dividend on SpaceX Redeemable Convertible Preferred Stock, basic and diluted ................................................ 565 —\nPro Forma net loss attributable to common shareholders, basic and diluted\n\n........ $ (4,382) $ (4,937)\nDenominator:\nWeighted average shares used in computing net loss per share of common stock, basic and diluted\n\n..................................................................................... 3,884 2,926\nPro forma adjustment to reflect the Preferred Conversion as if the conversion occurred on January 1, 2025, basic and diluted\n\n................................................ 6,723 6,723\nWeighted average shares used in computing pro forma net loss per share of common stock, basic and diluted\n\n...................................................................... 10,607 9,649\nPro forma net loss per share of common stock attributable to common shareholders, basic and diluted (2)\n\n.......................................................................... $ (0.41) $ (0.51)\n__________________\n(2) Pro forma basic and diluted net loss per share of common stock attributable to common shareholders and weighted-average number of\nshares used in the computation of the per share amount gives effect to (i) the Preferred Conversion as if such conversion had occurred as of\nJanuary 1, 2025, (ii) the Class C Reclassification as if such reclassification had occurred as of January 1, 2025, and (iii) the effectiveness of\nour charter, which will become effective upon the completion of this offering.\nStatement of Cash Flows Data:\nThree Months Ended March 31, Year Ended December 31,\n2026 2025 2025 2024 2023\n(in millions) (unaudited)\nNet cash provided by operating activities\n.......................................... $ 1,047 $ 727 $ 6,785 $ 5,776 $ 4,520\nNet cash used in investing activities\n\n.. $ (16,724) $ (4,170) $ (19,575) $ (10,796) $ (4,867)\nNet cash provided by financing activities\n.......................................... $ 7,125 $ 354 $ 26,350 $ 11,830 $ 422\nCapital Expenditures:\nThe following table presents our capital expenditures by segment:\nThree Months Ended March 31, Year Ended December 31,\n2026 2025 2025 2024 2023\n(in millions) (unaudited)\nSpace\n\n\n.................................................. $ 1,052 $ 759 $ 3,832 $ 2,032 $ 1,497\nConnectivity\n....................................... 1,332 814 4,178 3,498 2,455\nAI\n\n........................................................ 7,723 2,567 12,727 5,633 463\nTotal Capital Expenditures\n\n\n................. $ 10,107 $ 4,140 $ 20,737 $ 11,163 $ 4,415", - "path": "spacex-s1.pdf/p49", - "metadata": { - "length": 3035, - "summary": "22 Table of Contents The following table sets forth the computation of unaudited pro forma basic and diluted net loss per share of common stock attributable to common shareholders for the period presented: (in millions, except per share data) Three Months EndedMarch 31, 2026 Y...", - "page_nums": [ - 49 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 49, "artifact_ref": "page_citation_assets/page-49.png", @@ -4969,24 +5696,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_581eb61b-beb2-5afc-9d30-6f929f7d9b57", - "type": "page", - "content": "23\nTable of Contents\nBalance Sheet Data:\nMarch 31, December 31,\n2026 2025 2024\n(in millions) (unaudited)\nCash and cash equivalents\n\n.............................................................. $ 15,852 $ 24,747 $ 11,385\nTotal current assets\n\n......................................................................... 29,732 30,952 16,108\nProperty, plant, and equipment, net\n\n\n................................................ 53,879 42,602 21,147\nTotal assets\n\n.................................................................................... 102,094 92,079 57,062\nDebt and finance leases, current\n\n.................................................... 1,538 928 372\nTotal current liabilities\n\n................................................................... 24,436 21,400 11,791\nTotal liabilities\n\n\n................................................................................ 60,512 50,754 31,258\nRedeemable convertible preferred stock\n\n\n........................................ 7,049 38,752 20,941\nTotal shareholders’ equity\n............................................................. 34,533 2,573 4,863\nSegment Operating and Financial Data (unaudited)\nSpace:\nThree Months Ended March 31, Year Ended December 31,\n2026 2025 2025 2024 2023\nMass to Orbit (in metric tons) (1)\n\n........ 556 450 2,213 1,699 1,210\nLaunches (number) (1)\n\n......................... 40 38 170 138 98\nSegment income (loss) from operations (in millions)\n\n................... $ (662) $ (70) $ (657) $ 21 $ (1)\nSegment Adjusted EBITDA (in millions) (2)\n\n\n...................................... $ (351) $ 224 $ 653 $ 1,154 $ 997\nConnectivity:\nThree Months Ended March 31, Year Ended December 31,\n2026 2025 2025 2024 2023\nStarlink Subscribers (in millions) (1)\n\n\n... 10.3 5.0 8.9 4.4 2.3\nStarlink ARPU (dollars per month) (1)\n\n\n$ 66 $ 86 $ 81 $ 91 $ 99\nSegment income from operations (in millions)\n.......................................... $ 1,188 $ 1,033 $ 4,423 $ 2,006 $ 469\nSegment Adjusted EBITDA (in millions) (2)\n\n\n\n...................................... $ 2,087 $ 1,618 $ 7,168 $ 3,849 $ 1,602\nAI:\nThree Months Ended March 31, Year Ended December 31,\n2026 2025 2025 2024 2023\nNameplate compute draw (in gigawatts) (1)\n\n.................................... 1 0.3 0.8 0.3 0\nSegment loss from operations (in millions)\n\n.......................................... $ (2,469) $ (936) $ (6,355) $ (1,561) $ (3,973)\nSegment Adjusted EBITDA (in millions) (2)\n\n\n...................................... $ (609) $ (112) $ (1,237) $ 347 $ 1,222\n______________\n(1) Please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Key Business\nMetrics” for additional information on our key business metrics.\n(2) Segment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “Management’s Discussion and Analysis of Financial\nCondition and Results of Operation—Non-GAAP Financial Measures” for additional information on our non-GAAP financial measures, including reconciliations of Segment Adjusted EBITDA to segment income (loss) from operations, the most directly comparable GAAP\nmeasure.", - "path": "spacex-s1.pdf/p50", - "metadata": { - "length": 3140, - "summary": "23 Table of Contents Balance Sheet Data: March 31, December 31, 2026 2025 2024 (in millions) (unaudited) Cash and cash equivalents .............................................................. $ 15,852 $ 24,747 $ 11,385 Total current assets ......................................", - "page_nums": [ - 50 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 50, "artifact_ref": "page_citation_assets/page-50.png", @@ -4994,24 +5704,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3d64fc4e-3a17-5fff-bb8e-c6025a25e0af", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p51", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 51 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 51, "artifact_ref": "page_citation_assets/page-51.png", @@ -5019,24 +5712,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c58e5ba9-22a7-5abe-8f93-4e93646c794e", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p52", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 52 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 52, "artifact_ref": "page_citation_assets/page-52.png", @@ -5044,24 +5720,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_61cdf5a0-b7b0-51e3-9a12-26c357b3a3e2", - "type": "page", - "content": "26\nTable of Contents\nRISK FACTORS\nInvesting in our Class A common stock involves a high degree of risk. You should carefully consider the risks and\nuncertainties described below, together with all of the other information contained in this prospectus, including our\nconsolidated financial statements and the related notes thereto, before making a decision to invest in our Class A\ncommon stock. The disclosures in this section reflect our beliefs and opinions as to factors that could materially and\nadversely affect us in the future. We may not be able to accurately predict, control, or mitigate these risks.\nReferences to past events are provided by way of example only and are not intended to be a complete listing or a\nrepresentation as to whether or not such factors have or have not occurred in the past or their likelihood of\noccurring in the future. Additional risks and uncertainties that we are unaware of, or that we currently believe are\nnot material, may also become important factors that adversely affect us. Many of the risks and uncertainties that\ncould materially adversely affect us or our prospects are beyond our control or relate to portions of our business\nstrategy that have a lengthy time horizon or involve unprecedented ventures. This can make assessment of certain\nrisks more difficult and you should factor these uncertainties into your assessment of an investment in our Class A\ncommon stock. If any of the following risks and uncertainties occur, the price of our Class A common stock could\ndecline, and you could lose part or all of your investment.\nRisks Related to Our Business\nAny failure or delay in the development of Starship at scale or in achieving the required launch cadence,\nreusability and capabilities thereafter would delay or limit our ability to execute our growth strategy, including\nthe deployment of next-generation satellites, global satellite-to-mobile connectivity, and orbital AI compute,\nwhich could materially adversely affect our business, financial condition, results of operations, and future\nprospects.\nIf we are unable to successfully complete the development, testing, and deployment of Starship at scale in\naccordance with our anticipated schedule, or at all, or if we are unable to achieve sufficient launch cadence,\nreusability, and capability, our ability to execute our growth strategy (such as the deployment of our next-generation\nV3 satellites, V2 satellite-to-mobile connectivity, and providing orbital AI compute infrastructure) would be\nmaterially and adversely affected. The commercial deployment of Starship, particularly at scale, is subject to\nsubstantial risks and uncertainties inherent in the development of new and complex technologies and systems.\nDelays or challenges in the Starship program have in the past occurred, and may occur in the future due to a variety\nof factors, including unforeseen technical challenges, supply chain disruptions, manufacturing difficulties, delays in\nthe development, construction or commissioning of launch and fueling infrastructure (such as launch pads, air\nseparation units and other propellant production systems), unavailability of such launch and fueling infrastructure\n(including launch pads) in sufficient number and in operable condition (including as a result of mishaps), loss or\ndamage to the vehicle or other components, regulatory hurdles, or the need for additional design modifications. If we\nare required to undertake unanticipated redesigns, conduct additional testing, replace lost vehicles or components, or\naddress operational setbacks, we may experience delays and incur significant additional costs, or be forced to\nreallocate critical resources from other projects. If our launch pads are not available for an extended period of time\nfor any reason, we may not be able to achieve our development, testing and deployment goals. Such delays could\nhave cascading effects on our ability to achieve the scale we need to timely achieve future objectives. In addition, a\ncritical part of our growth strategy involves increasing our launch cadence, reusability and capability, including\nincreasing our payload per launch. This will require, among other things, the successful development and operation\nof reusable launch vehicles, substantially increased access to raw materials and components like steel, fuel and\npropellant, the construction of additional facilities and securing of additional launch sites or rights to additional\nlaunches from existing sites, and navigating complex and evolving regulatory requirements and environmental and\ntechnological issues as we seek to increase our launch cadence. Our rocket programs have historically required\nsubstantial time and resources to reach the cadence and cost thresholds necessary for commercial viability, and the\ndevelopment of Starship may face similar or greater challenges. Any significant delay in achieving key development\nmilestones, obtaining the necessary regulatory approvals or increasing and maintaining our launch cadence,\nreusability, and capability would impede the expansion of our service offerings, defer anticipated revenue streams,\nand negatively impact our growth trajectory and competitive positioning in rapidly evolving markets.", - "path": "spacex-s1.pdf/p53", - "metadata": { - "length": 5244, - "summary": "26 Table of Contents RISK FACTORS Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this prospectus, including our consolidate...", - "page_nums": [ - 53 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 53, "artifact_ref": "page_citation_assets/page-53.png", @@ -5069,24 +5728,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_32d71d1f-c2a5-51c4-af9b-6386cccdcadc", - "type": "page", - "content": "27\nTable of Contents\nOur ability to execute our growth strategy is highly dependent on Starship. If we are unable to achieve the\ncommercial development, anticipated performance, launch cadence, or cost efficiencies associated with Starship\nwithin expected timeframes, our ability to deploy next-generation V3 satellites, V2 Mobile satellites, and orbital AI\ncompute infrastructure at scale, reduce capital and operating costs (including cost per token), realize projected\nrevenue growth, and retain existing customers from these initiatives could be materially and adversely affected. This\nincludes our expectations with respect to completion of flight testing of Starship and commencement of payload\ndelivery to orbit. Our current operational rockets, including Falcon 9 and Falcon Heavy, are not capable of\ndeploying V3 satellites and V2 Mobile satellites.\nIn addition, our ability to pursue new initiatives and capture emerging business opportunities—particularly those\nrequiring high launch cadence, large payload capacity, or advanced in-space capabilities, such as lunar operations\nand interplanetary missions—depends on the timely and successful deployment of Starship and achieving our\ntargeted launch cadence. Achieving our targeted launch cadence will require significant progress on several key\nmilestones and the continued investment of significant capital resources. These include: securing additional land and\ndeveloping high-rate launch sites and supporting infrastructure across multiple locations; scaling production of\nStarship vehicles and Raptor engines; constructing propellant production facilities, including air separation units and\nmethane liquefaction plants co-located with launch sites; securing sufficient power supply; and obtaining the\nnecessary regulatory approvals, particularly from the FAA, to support a high launch cadence while addressing public\nsafety and environmental considerations. We face a number of material challenges and uncertainties in achieving\nthese milestones, such as achieving reliable high-cadence return-to-launch-site operations for the full vehicle stack,\ndeveloping durable reusable heat shields capable of withstanding repeated high-velocity reentries, ensuring rapid\nrefurbishment and high-rate reusability of engines and other vehicle components, managing public and regulatory\ntolerance for anomalies during the transition to frequent operational flights, securing sufficient power for both\nmanufacturing and launch operations, and obtaining timely regulatory approvals from the FAA and other agencies.\nOrbital refueling involves technical complexities associated with cryogenic propellant transfer in microgravity,\npropellant settling, and boil-off management and is required for lunar and interplanetary objectives.\nIf Starship does not achieve full reusability or rapid turnaround, we may experience higher per-launch costs, slower\ndeployment timelines for our large-scale constellations (including our orbital AI compute program), delayed revenue\ngrowth, and increased overall capital requirements, and our brand and reputation may suffer. AI compute satellites at\nscale need full Starship reusability to be economically compelling. Without full reusability and rapid turnaround,\nStarship would still be capable of enabling progress on our next-generation Starlink, direct-to-cell, initial lunar\nobjectives, and early AI compute satellite deployments, but such progress would be at a slower pace and higher cost.\nAny inability to deliver Starship to market as planned could constrain our participation in new or expanding\naddressable markets, limit our competitive differentiation, and hinder our efforts to attract and retain customers.\nThere can be no assurance that we will be able to achieve our objectives with respect to Starship within the expected\ntimeframes, if at all, or that delays or setbacks will not materially impact our strategic plans.\nAny delays or difficulties in obtaining, maintaining or renewing required regulatory approvals and licenses\nrequired for our space-related activities, including FAA launch and reentry licenses, would materially delay or\ndisrupt our operations, harm our business, or limit our ability to execute our business strategy.\nOur launch services are subject to extensive regulation in the United States and internationally. We must secure and\nmaintain numerous governmental approvals to launch our rockets and conduct related launch and reentry activities.\nAny failure or significant delay in obtaining required licenses and permits or failure to maintain them could disrupt\nour operations, constrain our growth, and adversely affect our ability to serve our customers. Our plans to deploy\nlarge-scale orbital infrastructure, including orbital AI compute systems, will require the operation of very large\nsatellite constellations, potentially numbering up to one million satellites. These plans will depend on obtaining a\nwide range of domestic and international approvals, including spectrum authorizations, orbital debris mitigation\napprovals, and coordination and authorization requirements relating to space situational awareness and international\nregulatory regimes, and there can be no assurance that such approvals will be obtained on acceptable timelines,\nterms, or at all.\nWe depend on timely approvals from the FAA to conduct our launch operations. If we do not receive FAA launch\nlicenses or related approvals on the schedules we anticipate or if we are subject to regulatory delays, we could be", - "path": "spacex-s1.pdf/p54", - "metadata": { - "length": 5519, - "summary": "27 Table of Contents Our ability to execute our growth strategy is highly dependent on Starship. If we are unable to achieve the commercial development, anticipated performance, launch cadence, or cost efficiencies associated with Starship within expected timeframes, our abili...", - "page_nums": [ - 54 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 54, "artifact_ref": "page_citation_assets/page-54.png", @@ -5094,24 +5736,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b88378b7-3190-52e8-883d-6faad0f51f50", - "type": "page", - "content": "28\nTable of Contents\nforced to delay or cancel planned launches, which could cause missed customer commitments, increased costs, and\nunderutilization of our launch resources. Obtaining a launch license involves rigorous safety and environmental\nreviews, and unforeseen issues in meeting these requirements or additional conditions imposed during the review\nprocess could also impact our launch timelines. For example, current FAA regulations do not permit return-to-\nlaunch-site reentries for Starship, requiring us to obtain a waiver from the FAA, which is not guaranteed and could\ndelay or restrict such operations. Following an anomaly, mishap, or failure, the FAA or other authorities may require\ninvestigations, impose corrective actions, or restrict or delay our ability to conduct launch operations. We have in the\npast been, and may in the future become, subject to such actions, impacting our ability to increase launch cadence.\nThe regulatory framework governing commercial launches may also evolve over time. The FAA or other authorities\ncould introduce new or more stringent requirements for launch licensing – for instance, heightened safety standards,\nenvironmental mitigation measures, or other operational restrictions – that could require us to invest in new\ntechnologies, adjust our procedures, or otherwise incur additional compliance burdens. Moreover, as the frequency\nof our launches and industry activity overall continues to grow, the FAA’s resources may become strained, which\ncould lead to longer application processing times and other difficulties obtaining FAA licenses. Any significant\ndelay in receiving required FAA licenses, the imposition of onerous new licensing conditions, or failure to obtain an\napproval for a key launch, could materially adversely affect our business, financial condition, results of operations,\nand future prospects.\nAny delays or difficulties in obtaining, maintaining or renewing required communications licenses and spectrum\nauthorizations for our satellite connectivity services, including international and FCC satellite spectrum licenses,\ncould materially delay or disrupt our operations, harm our business, or limit our ability to execute our business\nstrategy.\nOur satellite connectivity services are subject to extensive regulation in the United States and internationally.\nObtaining and maintaining communications licenses and approvals from U.S. and foreign regulatory authorities is\ncritical to our connectivity services. Our satellite connectivity, including our global satellite-to-mobile connectivity\nservices under Starlink Mobile, depend on access to radio frequency spectrum and authorizations from the FCC in\nthe United States and telecommunications regulators in other countries. Without these licenses and approvals, we\ngenerally cannot offer connectivity services in a given market. Acquiring the necessary authorizations can be a\ncomplex and time-consuming process, often involving technical coordination, public-interest or national security\nreviews, and cross-border considerations, including in certain jurisdictions where regulatory processes may be\ninfluenced by protectionist policies or preferences. Spectrum access itself is limited and highly regulated. In\nSeptember 2025, we announced a definitive agreement with EchoStar to purchase its AWS-4 and H-block spectrum\nlicenses. The Spectrum Transaction was approved by the FCC on May 12, 2026 and is subject to other closing\nconditions prior to completion. We expect the Spectrum Transaction to close in November 2027. There can be no\nassurance that these conditions will be satisfied or waived in a timely manner, or at all. Even if the transaction is\ncompleted, there can be no assurance that our purchase of licenses from EchoStar will be sufficient to meet our\ngrowing need for spectrum licenses and we may be unable to find other parties to provide us with additional\nspectrum licenses on terms acceptable to us, or at all. We may in the future pursue additional acquisitions, leases, or\nother arrangements relating to spectrum rights in order to support the expansion of our connectivity services, and\nthere can be no assurance that we will be able to enter into or complete any such transactions or arrangements on\nacceptable terms, or at all. Any such future transactions or arrangements could require significant capital\ncommitments, ongoing payment obligations, and regulatory approvals. In addition, we must secure the global right\nto use the spectrum acquired from EchoStar from a number of international telecommunications regulators in order\nto make our V2 satellite-to-mobile services usable worldwide, and there can be no assurance that such authorizations\nwill be granted on acceptable terms, or at all. Moreover, our rights to use certain frequencies are coordinated through\nthe International Telecommunication Union (“ITU”) and are subject to international agreements to prevent harmful\ninterference. We must comply with ITU rules and coordination procedures, and changes in international spectrum\nallocations or adverse decisions in global regulatory forums could also reduce the frequencies available to us or\nattach conditions that degrade our network’s performance. Additionally, third parties have in the past, and may in\nthe future, obtain spectrum rights for the purpose of blocking market entry.\nRegulatory regimes for communications services vary widely across different countries and are continuously\nevolving. Each country may impose its own licensing conditions and operating requirements on satellite internet", - "path": "spacex-s1.pdf/p55", - "metadata": { - "length": 5578, - "summary": "28 Table of Contents forced to delay or cancel planned launches, which could cause missed customer commitments, increased costs, and underutilization of our launch resources. Obtaining a launch license involves rigorous safety and environmental reviews, and unforeseen issues i...", - "page_nums": [ - 55 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 55, "artifact_ref": "page_citation_assets/page-55.png", @@ -5119,24 +5744,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d5096ff1-7bde-5d55-b2c1-bc81f8450eca", - "type": "page", - "content": "29\nTable of Contents\nproviders – for example, mandates to partner with a local entity, to host certain infrastructure within its borders, or to\nadhere to specific standards relating to data privacy and cybersecurity (including data localization) and, in some\ncases, regulators may deny, delay or decline to grant authorization for us to operate or use our spectrum in their\njurisdiction at all. Regimes in certain of our target markets may also favor incumbent or legacy telecommunications\ncompanies, which may impede, delay, or prevent our ability to enter such markets. Compliance with the different\nrequirements of applicable regulatory regimes can be challenging and costly, and any failure to comply with local\nlaws and regulations could lead to penalties or the loss of our authorization to operate in that region. Furthermore,\ncommunications regulatory authorizations often require periodic renewal and ongoing compliance with conditions\nsuch as deployment milestones, fee payments, and interference mitigation obligations. If we are unable to obtain,\nretain, and renew the necessary spectrum rights and service licenses on acceptable terms in each of our target\nmarkets, or if regulatory bodies significantly delay our authorizations or impose burdensome requirements, our\nability to expand and continue our connectivity services would be jeopardized, which would have a material adverse\neffect on our business, financial condition, results of operations, and future prospects.\nOur AI products and X platform are subject to complex and evolving U.S. and foreign laws and regulations\nregarding privacy, cybersecurity, data use, data combination, data protection, content, AI, competition, youth\nprotection, safety, consumer protection and notification, advertising, e-commerce, sanctions, export controls, and\nother matters. Many of these laws and regulations are subject to change and uncertain interpretation, and we\ncould be required to make changes to our products and business practices, and be exposed to monetary penalties,\nincreased cost of operations, declines in user growth or engagement, or loss of customers, or other harm to our\nAI products and X platform.\nOur AI products and X platform are subject to a variety of laws and regulations in the United States and abroad,\nincluding privacy, cybersecurity, data use, data combination, data protection and personal information, the provision\nof our services to younger users, biometrics, encryption, rights of publicity and related concepts, content, integrity,\nintellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization\nand storage, data disclosure, AI and machine learning, electronic contracts and other communications, competition,\nprotection of minors, consumer protection, sanctions, export controls, and notification, civil rights, accessibility,\nproduct liability, e-commerce, taxation and online payment services, as well as contractual requirements imposed by\napp stores, payment processors, and other partners. The introduction of new products or services, expansion of our\nactivities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, or\nother government scrutiny and, in some cases, such laws, regulations, or government scrutiny may limit or delay our\nability to introduce new products or services or expand our activities in certain jurisdictions. Particularly, our\nleadership position in various markets, especially in orbital launch services, could subject us to heightened\nregulatory scrutiny under competition laws. In addition, these U.S. and foreign laws and regulations may impose\ndifferent obligations from each other. As a result of these laws, regulations, and requirements, we are exposed to the\nrisk of significant fines and penalties or other adverse consequences, such as changes to our products, services, or\nbusiness practices.\nOur social media and AI-related activities expose us to a variety of risks related to harmful, misleading or illegal\ncontent, accuracy, misinformation and deepfakes, bias, discrimination, toxicity, sycophancy, AI deception,\nconsumer protection and notification, products liability, intellectual property infringement or misappropriation,\ndefamation, data privacy, cybersecurity, and sanctions and export controls. Social media and AI are the subject of\nincreasing legislative and regulatory activity by various governmental and regulatory agencies in jurisdictions\naround the world, which are applying, or are considering applying, platform moderation, intellectual property,\nproduct liability, data privacy, age restrictions, data disclosure, cybersecurity, export controls, consumer protection,\nor other existing laws and regulations or new general legal frameworks to AI (such as the EU’s AI Act, California’s\nFrontier Artificial Intelligence Act and New York’s Responsible AI Safety and Education Act). In the United States,\nan increasing amount of legislative and regulatory activity regarding AI is taking place at the state level. Various\nother jurisdictions have enacted or are considering enacting regulations focused on AI. Restrictions under such laws\nor regulations, if implemented, could increase the costs and burdens to our AI segment and its customers, delay or\nhalt deployment of new systems using our AI segment’s products, require us to modify, restrict, or discontinue\ncertain features (including less constrained modes), and reduce the number of new entrants and customers,\nnegatively impacting our AI segment’s business and financial results. If we do not adequately address concerns and", - "path": "spacex-s1.pdf/p56", - "metadata": { - "length": 5656, - "summary": "29 Table of Contents providers – for example, mandates to partner with a local entity, to host certain infrastructure within its borders, or to adhere to specific standards relating to data privacy and cybersecurity (including data localization) and, in some cases, regulators...", - "page_nums": [ - 56 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 56, "artifact_ref": "page_citation_assets/page-56.png", @@ -5144,24 +5752,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f1b4b868-37ee-5727-a9fe-a47a6419b62b", - "type": "page", - "content": "30\nTable of Contents\nregulations relating to the responsible use of AI, public confidence in AI could be undermined, adoption of our AI\nproducts and services could slow, and we may suffer reputational or financial harm.\nCertain of our AI products, including Grok, offer features or modes designed to generate more candid, direct, or less\nreserved or irreverent outputs, such as “Spicy” Imagine Mode and “Unhinged” Voice Mode. These features are\nintended to provide users with greater flexibility and control in how they use our tools. Because these modes may be\nmore irreverent and harsher than our standard offerings, they present heightened risks, including reputational harm,\nthe generation of potentially explicit content and misinformation or deceptive outputs, potential nonconsensual or\nexploitative imagery, intellectual property infringement, or content that could be viewed as exploitative, harmful,\nharassing, abusive, or discriminatory. The availability of such features may also increase the risk of regulatory\nscrutiny, enforcement actions, litigation, or claims of harm, as well as reputational damage, user or advertiser\nbacklash, or limitations on our ability to distribute or monetize our products in certain jurisdictions or through\ncertain partners.\nIn addition, various regulatory authorities and agencies around the world are actively investigating and making\ninquiries relating to social media or the use of AI concerning a variety of matters, including investigations and\ninquiries relating to harmful or illegal content, recommendations, advertising, and consumer protection and\nnotification, which have resulted in, and may in the future result in additional or further investigations and\nproceedings being brought against us. Certain features that enable more user-directed or less constrained outputs\nmay increase the risk of regulatory scrutiny. For example, we are subject to investigations and inquiries from\nregulators and law enforcement authorities in the United States and internationally concerning allegations that our\nAI products were used to create nonconsensual explicit images or content representing children in sexualized\ncontexts, and similar matters. We are subject to ongoing litigation, including putative class action lawsuits, relating\nto such allegations, and we may be subject to additional litigation in the future concerning these types of allegations.\nThese regulatory inquiries, including those related to misuse of our AI products, such as Grok, and those related to\nthe X platform, could expose us to additional investigations, proceedings, and litigation, regulatory sanctions\n(including loss of access to certain markets, which has occurred in the past), liability and adverse publicity, any of\nwhich would adversely affect our business.\nFor example, in February 2026, the Irish Data Protection Commission, our AI segment’s privacy regulator in\nEurope, launched a large-scale inquiry to determine whether our AI segment has complied with its obligations under\nthe European Union’s General Data Protection Regulation (“GDPR”). This inquiry involves the processing of\npersonal data of European Union data subjects, including children, using generative AI functionality associated with\nthe Grok model within the X platform. In the United States, the Federal Trade Commission has undertaken an\ninquiry into the chatbots of our AI segment and other major technology companies to understand how these\ncompanies have evaluated the safety of their chatbots when acting as companions to children and teens. Regulatory\nrequirements applicable to online platforms and content moderation, and to AI systems, could require us to\nimplement costly compliance measures, restrict certain features or jurisdictions, or expose us to significant fines,\nliability, penalties, or operational constraints. We are also subject to developer agreements and guidelines imposed\nby third-party app stores, such as the Apple App Store and Google Play Store. Failure to comply with these\nagreements and guidelines, including those relating to content, could result in the suspension or removal of our\nmobile applications from such app stores. Any such suspension or removal could materially limit our ability to\ndistribute our mobile applications, and adversely affect our business, results of operations, and financial condition.\nAuthorities around the world have adopted or are considering adopting a number of legislative and regulatory\nproposals concerning data protection and privacy. Additionally, the increasing adoption of AI technologies, which\noften rely on the collection of large amounts of data and use of such data to train, fine-tune or otherwise develop AI\nmodels, has led data protection authorities around the world to consider and adopt new and evolving interpretations\nof data protection laws, imposing specific obligations with respect to the processing of personal data, including\nrequired notices, consents and opt-outs. Adverse legal rulings, legislation or regulations related to such data privacy\nmatters may result in fines and orders requiring that we change our practices, which could have an adverse effect on\nhow we provide services, and could harm our business, financial condition, results of operations and future\nprospects. These compliance obligations could also cause us to incur substantial costs or harm the quality and\noperations of our products and services in ways that harm our business. Further, we are subject to evolving laws and\nregulations that dictate whether, how, and under what circumstances we can transfer, receive or otherwise process", - "path": "spacex-s1.pdf/p57", - "metadata": { - "length": 5617, - "summary": "30 Table of Contents regulations relating to the responsible use of AI, public confidence in AI could be undermined, adoption of our AI products and services could slow, and we may suffer reputational or financial harm. Certain of our AI products, including Grok, offer feature...", - "page_nums": [ - 57 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 57, "artifact_ref": "page_citation_assets/page-57.png", @@ -5169,24 +5760,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_64813373-8070-5cce-935c-4383d5da369c", - "type": "page", - "content": "31\nTable of Contents\npersonal data. The validity of various data transfer mechanisms we currently rely upon remains subject to legal,\nregulatory and political developments globally, which may require us to adapt our existing arrangements. Evolving\ndata protection laws and regulations such as the GDPR and ePrivacy Directive, and regulatory actions affecting our\nAI segment may restrict or adversely affect the X platform’s advertising services, Grok’s development and training,\nor the ability to offer certain products and services in certain jurisdictions.\nWe are also subject to tax laws, regulations, and policies of the U.S. federal, state, and local governments and of\ncomparable taxing authorities in foreign jurisdictions where we conduct business. Changes in tax laws or in their\ninterpretation or enforcement could result in fluctuations in our effective tax rate, exposure to new or additional tax\nliabilities, or adversely affect our after-tax profitability or financial position. These U.S. federal and state, EU, and\nother international laws and regulations, which in some cases can be enforced by private parties in addition to\ngovernment entities, are constantly evolving and can be subject to significant change. As a result, the application,\ninterpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly\nevolving industry in which we operate, and may be interpreted and applied inconsistently from jurisdiction to\njurisdiction and inconsistently with our current policies and practices. For example, regulatory or legislative actions\nor litigation concerning the manner in which we display content to our users, moderate content, provide our services\nto younger users, or are able to use data in various ways, including for advertising, have in the past and could in the\nfuture adversely affect user growth and engagement, affect the manner in which we provide our services, or\nadversely affect our financial results, including by imposing significant fines that increasingly may be calculated\nbased on global revenue. For example, the UK’s Online Safety Act 2023 and Australia’s Online Safety Amendment\n(Social Media Minimum Age) Act 2024 impose risk mitigation and age-related requirements on certain online\nplatforms. These laws and regulations, as well as any associated claims, inquiries, or investigations or any\ngovernment actions, have led to, and may in the future lead to, unfavorable outcomes including increased\ncompliance costs, changes to our products, loss of revenue, delays or impediments in the development of new\nproducts, negative publicity and reputational harm, increased operating costs, diversion of management time and\nattention, and remedies that harm our business, including fines, damages, or orders that we modify or cease existing\nbusiness practices. In addition, our AI products and the X platform have historically been, and may continue to be,\nsubject to claims and investigations relating to misinformation and deepfakes, defamation, intellectual property\ninfringement or misappropriation, data privacy, cybersecurity, employment matters, advertising practices, and user\nharms; defending such matters could be costly and divert management attention.\nOur Starlink and other satellite services are subject to complex and evolving U.S. and foreign laws and\nregulations, particularly relating to data privacy, cybersecurity, and telecommunications.\nOur Starlink and other satellite services are subject to a variety of laws and regulations in the United States and\nabroad covering cybersecurity, privacy, data use, data combination, data protection, data security, data retention and\ndeletion, data localization and storage, and data disclosure to law enforcement agencies. As a satellite internet and\ncommunications provider, we collect and otherwise process various kinds of data in connection with our services,\nsuch as customer personal information, account registration information, device identifiers, network and\nconnectivity data, and government information. These laws and regulations govern how we handle such information,\nand they may, among others, impose requirements relating to cybersecurity and privacy governance, data security\nmeasures, data security breach notification, cross border data transfers, and customer consent obligations.\nIn particular, the California Consumer Privacy Act (as amended), the GDPR (and its equivalent in the United\nKingdom) and other data privacy laws and regulations impose stringent and burdensome requirements in connection\nwith the processing of personal information and include significant penalties for non-compliance. Additionally, as a\ngovernment contractor, we are also subject to the Department of War’s Cybersecurity Maturity Model Certification\nrequirements, which requires companies that do business with the Department of War to, depending on the level of\nscrutiny required, meet or exceed certain specified cybersecurity standards to be eligible for new contract awards.\nMany of these laws and regulations are subject to change and uncertain interpretation, and their application may\nvary significantly across jurisdictions. Compliance may require us to modify our policies, procedures, and controls,\nand increase our compliance costs and operational complexity. We may post public privacy policies and other\nstatements regarding our collection, storage, sharing and other processing of personal information, and any actual or\nperceived failure to comply with such privacy policies and other statements, as well as the foregoing data privacy", - "path": "spacex-s1.pdf/p58", - "metadata": { - "length": 5607, - "summary": "31 Table of Contents personal data. The validity of various data transfer mechanisms we currently rely upon remains subject to legal, regulatory and political developments globally, which may require us to adapt our existing arrangements. Evolving data protection laws and regu...", - "page_nums": [ - 58 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 58, "artifact_ref": "page_citation_assets/page-58.png", @@ -5194,24 +5768,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4db94e4d-f0ae-5ed3-ba1e-0dcd78b98fcb", - "type": "page", - "content": "32\nTable of Contents\nand cybersecurity laws and regulations, may subject us to enforcement actions, investigations, litigation, reputational\nharm or requirements to modify or cease our business practices.\nOur business strategy depends on successfully designing, developing, and deploying our products and services, as\nwell as related platforms, infrastructure, and other strategic initiatives, at an unprecedented scale, which presents\nsignificant execution, cost, and timing risks.\nOur business plan, and ultimately, the achievement of our mission, is predicated on building, commercializing, and\noperating products and services, as well as related infrastructure and strategic initiatives at a scale that has not\npreviously been achieved. This objective requires us to integrate complex technologies, develop new processes and\ninfrastructure, and coordinate across multiple suppliers, contractors, regulators, and stakeholders. Because we are\nattempting to execute at a scale for which there is limited precedent, we face heightened uncertainty with respect to\ndesign, engineering, procurement, construction, commissioning, and operational performance, which is further\nheightened by the novel nature of the technologies underlying the products and services we intend to develop.\nAs a result, timelines for developing and deploying our products and services may be longer than we currently\nanticipate, and we may encounter delays due to, among other things, technical challenges, including those resulting\nfrom the nascent state of certain of our products and services, the unavailability or immaturity of key technologies,\nsupply chain constraints, energy shocks, including related price volatility, labor availability, permitting and\nregulatory approvals, or the need to redesign or reengineer key components. In addition, the costs associated with\ndeveloping and deploying our products and services and related platforms, infrastructure and strategic initiatives at\nscale may exceed our current estimates, including due to inflationary pressures, energy prices, unforeseen\nengineering complexities, the cost of developing or licensing technologies that are not yet commercially available,\ncompetitive dynamics, changes in scope, or the need for additional capital expenditures, contingency reserves or\nworking capital.\nIf we are unable to successfully execute our growth strategy on the anticipated timeline or within our expected cost\nparameters, our business, financial condition and results of operations could be materially adversely affected. Delays\nor cost overruns could also impact our ability to achieve projected returns, meet contractual commitments, access\nadditional financing on acceptable terms, or maintain investor confidence. Moreover, even if we successfully deploy\nour growth strategy, including Starship, Terafab, orbital AI, and the creation of the lunar economy, they may not\nperform as expected at scale, which could result in operational inefficiencies, increased costs, reduced revenues, or\ndeclines in our stock price.\nWe have experienced, and will likely continue to experience, launch delays and failures that could have a\nmaterial adverse effect on our business, financial condition, results of operations, and future prospects.\nLaunch vehicle underperformance, propulsion anomalies, structural failures, software errors, or other malfunctions\ncould result in launch delays or partial or total mission failures, including the loss of satellites or payloads. The\noccurrence of mission failures or other significant operational disruptions could also expose us to litigation as well\nas increased scrutiny from regulatory authorities, lead to the imposition of additional compliance requirements, and\nadversely affect our brand and reputation, and our ability to obtain future licenses, permits, or government contracts.\nWe do not typically obtain insurance coverage for our satellites, payloads, or launch vehicles, and as a result we bear\nthe full financial cost of any such losses. Repeated anomalies or high visibility mission failures could also negatively\naffect our brand, reputation, ability to win new business, and our customers’ ability to procure launch and in-orbit\ninsurance at competitive rates (to the extent we decide to pursue it). Such repeated anomalies or mission failures\ncould also result in, regulators delaying, conditioning or denying approvals, waivers or licenses required for future\nlaunches or reentries, which could reduce our launch cadence and delay the deployment of our satellites and other\nservices. In the past, certain of our launch vehicles have experienced partial or total mission failures, including\nanomalies that resulted in the loss of payloads and damage to launch vehicles. In certain circumstances, such\nmission failures could result in, debris from our launch vehicles causing significant damage to persons or property\non the ground as well as environmental damage. There can be no assurance that similar or other failures will not\noccur with future launches. In addition, satellites may be deployed into incorrect or suboptimal orbits due to vehicle\nperformance issues, separation events, or guidance, navigation and control errors. Incorrect orbital placement can", - "path": "spacex-s1.pdf/p59", - "metadata": { - "length": 5246, - "summary": "32 Table of Contents and cybersecurity laws and regulations, may subject us to enforcement actions, investigations, litigation, reputational harm or requirements to modify or cease our business practices. Our business strategy depends on successfully designing, developing, and...", - "page_nums": [ - 59 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 59, "artifact_ref": "page_citation_assets/page-59.png", @@ -5219,24 +5776,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_523a1b15-32a1-54ab-afee-74ce24fe00af", - "type": "page", - "content": "33\nTable of Contents\nmaterially reduce a satellite’s operational life, impair performance, increase fuel consumption, or render the satellite\nunusable.\nOur satellites, launch vehicles, and other space-related technologies operate, and in the case of orbital AI\ncompute, will operate, in the harsh and unpredictable environment of space, exposing them to a wide and unique\nrange of space-related risks that could cause them to malfunction or fail, and any such malfunction or failure\ncould adversely affect our business, financial condition, results of operations, and future prospects.\nOperating in space subjects our satellites, launch vehicles, spacecraft, and related systems to extreme and highly\nvariable conditions that can adversely affect performance, reduce useful life, or result in total mission failure. Space\nis inherently hostile. Hardware must withstand: significant vibration and acoustic loads during launch; wide-ranging\nthermal cycles; radiation from solar and cosmic sources; micrometeoroids and orbital debris; and other\nenvironmental hazards, each of which testing cannot fully replicate. In particular, we have not, and no one else has,\npreviously operated or attempted to operate orbital AI compute, and the conditions of space on such AI\ninfrastructure have not been tested. Once deployed, orbital AI compute infrastructure will not be readily accessible,\nand as a result, will not be easily repaired or upgraded, such that any component failures could result in permanent\ncapacity loss, accelerated depreciation, decommissioning or need for replacement of the infrastructure.\nIn addition, space weather events, such as geomagnetic storms, solar flares, and other forms of radiation activity,\nhave in the past disrupted and could in the future disrupt satellite propulsion, power systems, and communications\nequipment, potentially leading to reduced performance or permanent damage. Although we incorporate certain\nradiation-hardened components, shielding, and redundancy into our systems, these measures may not be sufficient to\nprevent material adverse impacts in all scenarios. Failures or performance degradation resulting from these risks\ncould delay deployments, reduce available capacity, increase operating costs, require significant capital expenditures\nto replace affected assets, or interrupt or degrade services provided to customers. Furthermore, the useful life of our\nsatellites is inherently shorter than that of the information technology systems and infrastructure they host. As a\nresult, we must periodically launch replacement satellites as existing satellites reach the end of their useful lives and\nare decommissioned, which may truncate the effective lifespan of those underlying information technology systems\nand infrastructure. Any such events could adversely affect our reputation, compliance with applicable laws and\nregulations, business, financial condition, results of operations, and future prospects.\nThe continued proliferation of satellite constellations in Low-Earth Orbit, as well as the risk of collisions with\nspace debris or other spacecraft, could limit or impair our launch flexibility and satellite deployment, which could\nadversely affect our business, financial condition, results of operations, and future prospects.\nThe continued proliferation of Low-Earth Orbit constellations can increase the risk of collisions with space debris or\nother spacecraft if operators fail to adhere to responsible space safety, debris mitigation, or coordination practices.\nOur growth strategy depends, in part, on continuing to launch additional satellites into Low-Earth Orbit. As the\nnumber of satellites and other objects in Low-Earth Orbit continues to grow, the probability of accidental collisions,\nfragmentation events, or other in-orbit incidents increases, which could result in the loss or degradation of our\nsatellites, increased costs for collision avoidance maneuvers, or the need to replace or reposition assets on an\naccelerated schedule. Not all satellite operators or other space actors adhere to the same rigorous space safety, debris\nmitigation, or coordination practices that we adhere to, which may increase the likelihood of congestion,\nconjunctions, or other operational risks outside of our control and, in extreme cases, could contribute to\nfragmentation events or cascading debris effects that further increase collision risks in Low-Earth Orbit.\nIn addition, some domestic and international authorities have applied heightened regulatory scrutiny as interest in\nutilizing Low-Earth Orbit for satellite operations has increased. Debris mitigation regulations may emerge if\ncongestion increases. Failure to meet debris requirements could result in monetary penalties or loss of licensing\nauthority, which would adversely affect our satellite constellation deployment and expansion plans, and future\nregulatory actions could impose more restrictive operational, deployment, or debris mitigation requirements that\ncould limit our ability to launch or operate satellites in Low-Earth Orbit. In addition, there is a burgeoning effort to\nfurther regulate Low-Earth Orbit, MEO, and GSO and establish liability regimes for operators, including regimes\nsimilar to those under the Comprehensive Environmental Response, Compensation and Liability Act, which imposes\nstrict liability for environmental contamination or remediation costs, as well as growing concern over the potential", - "path": "spacex-s1.pdf/p60", - "metadata": { - "length": 5451, - "summary": "33 Table of Contents materially reduce a satellite’s operational life, impair performance, increase fuel consumption, or render the satellite unusable. Our satellites, launch vehicles, and other space-related technologies operate, and in the case of orbital AI compute, will op...", - "page_nums": [ - 60 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 60, "artifact_ref": "page_citation_assets/page-60.png", @@ -5244,24 +5784,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_cfab226f-307b-50f9-943d-a3a9b2a7f72c", - "type": "page", - "content": "34\nTable of Contents\nenvironmental effects of emissions and other byproducts from rocket launches in Earth’s upper atmosphere.\nAdditional regulation in this area could adversely impact our business, financial condition, results of operations, and\nfuture prospects.\nFurthermore, any damage to our satellites or impairment of their functionality resulting from collisions with space\ndebris or other spacecraft could materially and adversely affect our ability to deliver reliable services to our\ncustomers, harm our reputation, and expose us to potential contractual liabilities or insurance claims. The growing\nchallenges associated with space debris management may require us to invest in additional technologies or processes\nto safeguard our assets and maintain compliance with evolving regulatory frameworks, which could have a material\nadverse effect on our business, financial condition, results of operations, and future prospects.\nInterruptions in the operation of critical satellite network, ground station, launch, manufacturing, or spacecraft\nor data center infrastructure could result in significant downtime, operational delays or loss of service, each of\nwhich could have a material adverse effect on our business, financial condition, results of operations, and future\nprospects.\nOur ability to provide reliable services across our Space, Connectivity, and AI business segments depends on the\nuninterrupted operation of our critical infrastructure, including but not limited to satellite and communications\nnetworks, ground stations, launch facilities, and data centers. An interruption or failure affecting any aspect of this\ninfrastructure, whether due to equipment malfunctions, power outages, disruptions in, or unauthorized access to, our\ncomputer systems (such as software or hardware failures, or cyberattacks), natural disasters (such as earthquakes,\nfloods, fires, or severe weather events), terrorism, war, sabotage, pandemics, epidemics, or other unforeseen\ncircumstances, could result in significant downtime, operational delays, or complete loss of service. Any such attack\ncould destroy or disable a significant number of our satellites and, depending on its scale, could trigger a cascading\ncollision event that renders our licensed orbits, and potentially other orbits, unusable for an extended period.\nSimilarly, the use of our satellites to enable communications access in conflict zones may expose us to retaliation\nfrom foreign governments and non-state actors. Such an event could have a material adverse effect on our business,\nfinancial condition, results of operations, and future prospects. These events may disrupt power, damage facilities,\ninterrupt service despite contingency plans or compromise our ability to deliver services to customers as promised,\nhinder our ability to meet regulatory or contractual requirements, and erode trust among our customers, partners,\nregulators and stakeholders. In particular, an interruption or failure affecting our critical infrastructure could result in\noutages of service to our Starlink Subscribers. Any such outage could erode the trust of existing and potential\nStarlink Subscribers in our service, which could result in the loss of existing or potential subscribers. In addition, the\ncomplexity and interdependence of our engineering, manufacturing, assembly and terrestrial, space transportation,\nand infrastructure systems mean that a disruption in one component can have cascading effects throughout our\noperations. For example, an outage at a data center or ground station could impact command and control functions,\nmission planning, or real-time telemetry, while interruptions at launch facilities could cause postponements or\ncancellations of scheduled launches.\nAdverse global macroeconomic and geopolitical conditions may negatively affect our business, financial\ncondition, results of operations and future prospects.\nAdverse global or regional economic and geopolitical conditions could reduce demand for certain of our products\nand services, which may negatively affect our business, financial condition, results of operations and future\nprospects. Economic downturns, inflation, higher interest rates, tighter credit conditions, reduced consumer\nspending, lower business or government investment, or geopolitical developments may negatively affect demand for\nour offerings. Reduced consumer or enterprise spending for each of our Starlink connectivity services or our AI-\nrelated offerings would limit our ability to grow our business, which may slow the pace at which we deploy satellites\nand expand our constellation or adversely affect the utilization of our launch capabilities.", - "path": "spacex-s1.pdf/p61", - "metadata": { - "length": 4681, - "summary": "34 Table of Contents environmental effects of emissions and other byproducts from rocket launches in Earth’s upper atmosphere. Additional regulation in this area could adversely impact our business, financial condition, results of operations, and future prospects. Furthermore,...", - "page_nums": [ - 61 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 61, "artifact_ref": "page_citation_assets/page-61.png", @@ -5269,24 +5792,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6aa4a2b3-96d7-5997-bf4a-aedfc9147e57", - "type": "page", - "content": "35\nTable of Contents\nManufacturing, testing and launching rockets, satellites, and spacecraft, including our efforts to reuse rockets\nand spacecraft, involve inherent risks that could result in human injury or death, property damage and\nenvironmental damage or other adverse environmental impacts due to accidents or equipment failures. Any such\nevents could result in substantial losses, including reputational harm and legal liability, which could have a\nmaterial adverse effect on our business.\nThe manufacturing, testing, launching, and recovery of our rockets, satellites, and spacecraft are complex activities\nthat are conducted under challenging conditions and involve a high degree of risk. Our reusable vehicles will reenter\nEarth’s atmosphere and fly over populated land for extended periods, which carries inherent risks to populations in\nthe event of failure, such as structural breakup, loss of control, or debris dispersal. Although we implement extensive\nsafety protocols and operational safeguards designed to protect personnel and the public, these protocols and\nsafeguards may not in all circumstances prevent exposure of our personnel and potentially members of the public to\nhazards such as explosions, structural failures or debris dispersal. A manufacturing defect, testing anomaly, launch\nfailure, recovery incident, or similar event involving injury to humans, any human fatalities, property damage, or\nenvironmental damage or other adverse environmental impacts could result in substantial losses, including\nreputational harm and legal liability, which could have a material adverse effect on our business.\nAlthough we are focused on the vertical integration of our businesses, we depend on third parties to manufacture\nand supply certain key components necessary for the provision of our launch, connectivity, and AI services, and\nany supply shortages or disruptions or failures in their performance could have a material adverse effect on our\nbusiness, financial condition, results of operations, and future prospects.\nDisruptions in the supply chain for essential raw materials or components, challenges in the supplier qualification\nprocess, or increases in the prices of inputs could materially and adversely affect our business, financial condition,\nresults of operations, and future prospects. Despite our supply chain being largely vertically integrated, our reliance\non third-party manufacturers and suppliers for key components introduces risks related to supply chain continuity,\nquality assurance, and vendor performance. We depend on both domestic and international suppliers for certain\nspecialized materials, components, and services that are essential to the production and operation of our launch\nvehicles, spacecraft, satellites, user terminals (including Starlink consumer terminals), AI segment and related\ninfrastructure. Any failure or delay by these partners to deliver components in the required quantities, within\nspecifications, or on schedule has in the past and may in the future adversely affect our production schedules,\noperational reliability, and our ability to meet contractual obligations. In addition, disruptions in the supply chain\ndue to shortages, quality issues, natural disasters, geopolitical events, labor disputes, pandemics, epidemics, tariffs or\ntrade restrictions, criminal activity (including terrorism, sabotage or cyberattacks) or other factors outside our\ncontrol could result in significant delays, increased costs, or an inability to deliver products and services to\ncustomers in a timely and cost-effective manner. The process of qualifying new suppliers or transitioning to\nalternative vendors can be time-consuming and may not be successful, further increasing our exposure to supply\nchain interruptions. Furthermore, our limited pool of qualified vendors for certain critical products or services\nexposes us to increased pricing pressures and quality risks. In particular, certain materials and products that are key\ninputs in our Space, Connectivity, and AI segments are available from a limited number of suppliers, including sole\nor limited-source suppliers, and our direct chip suppliers are dependent on a concentrated group of advanced\nsemiconductor fabrication facilities. For additional information regarding supply chain risk relating to our AI\nprocessors, please see “Our ability to scale our AI products relies on our terrestrial and orbital AI compute\ninfrastructure, which depends on the availability of power, AI processors, and other critical components,\ntelecommunications services, and any shortages or disruptions thereof would materially adversely affect our\nbusiness, financial condition, results of operations, and future prospects.” The inability of these suppliers to deliver\nnecessary components of the products in a timely manner and at prices, quality levels, and volumes acceptable to us,\nor interruptions in supply of materials or products on which these suppliers rely, could have an adverse effect on our\nability to meet customer demands and contractual obligations, execute on our growth strategy, or manage our\nexpenses or timelines as expected, which could adversely impact our business, financial condition, results of\noperations, and future prospects.", - "path": "spacex-s1.pdf/p62", - "metadata": { - "length": 5269, - "summary": "35 Table of Contents Manufacturing, testing and launching rockets, satellites, and spacecraft, including our efforts to reuse rockets and spacecraft, involve inherent risks that could result in human injury or death, property damage and environmental damage or other adverse en...", - "page_nums": [ - 62 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 62, "artifact_ref": "page_citation_assets/page-62.png", @@ -5294,24 +5800,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a9e95541-a5bd-5c55-8e8e-dd5b6699aa3e", - "type": "page", - "content": "36\nTable of Contents\nOur ability to scale our AI products relies on our terrestrial and orbital AI compute infrastructure, which\ndepends on the availability of power, AI processors, and other critical components, telecommunications services,\nand any shortages or disruptions thereof would materially adversely affect our business, financial condition,\nresults of operations, and future prospects.\nOur ability to scale our data center infrastructure, which supports our AI segment, is increasingly constrained by the\navailability of power at economically feasible prices, long lead times, availability of materials, and changing\nregulatory requirements. For example, energy supply is constrained globally due to the significant increase in\ndemand for, and limited availability of, energy to power AI compute. Securing this capacity can involve entering\ninto complex, long-lead-time arrangements or proceeding with alternative sources of power generation. We\ncurrently rely significantly on natural gas and gas turbine technology to power our data center operations. As such,\nour ability to scale our infrastructure depends in part on our continued access to natural gas supply at economically\nfeasible prices, the availability of gas turbines and related equipment, and the maintenance of a regulatory\nenvironment that permits and supports the use of natural gas for large-scale power generation. Our AI products also\nrely on GPUs and other processors, servers, network equipment and other critical components sourced from third-\nparty suppliers for use in our data centers. Manufacturing and supply of servers and network equipment for our\ntechnical infrastructure, particularly for GPUs and other specialized components, is limited to a small number of\nqualified suppliers. We do not have any long-term or other material contractual arrangements with our direct chip\nsuppliers, instead procuring all of our GPUs on a purchase-order basis. Our direct chip suppliers are dependent on a\nconcentrated group of advanced semiconductor fabrication facilities, or “fabs.” Any disruption to our upstream\nsupply chain, including fab capacity constraints, manufacturing issues, shortages of raw materials such as silicon\nwafers or rare earth elements, geopolitical tensions affecting fab operations, or natural disasters impacting key\nfabrication regions, could limit our chip suppliers’ ability to fulfill our orders, which could have a material adverse\neffect on our business, financial condition, and results of operations. Our ability to achieve orbital AI at scale\ndepends on our ability to access a sufficient number of AI chips, significantly more than are currently available to\nus. While we expect to construct Terafab to address such supply constraints, Terafab may not be successful, in\nwhich case we may not have other sources of sufficient AI chips to meet our orbital AI compute demands. While\nTerafab is intended to expand our internal chip manufacturing capabilities and alleviate potential future AI chip\nshortages at SpaceX, particularly as we pursue orbital AI at scale, we expect to continue sourcing a significant\nportion of our compute hardware from third-party suppliers, and there can be no assurance that we will be able to\nachieve our objectives with respect to Terafab within the expected timeframes, or at all. While we have a framework\nagreement with Tesla, neither Tesla nor Intel are obligated to remain a part of the project, and we may not enter into\nany such definitive agreements. Our AI segment also relies on services from third-party telecommunications\nproviders, including connectivity to the cloud, and internet bandwidth suppliers to provide uninterrupted and error-\nfree services through their networks. We may be unable to obtain AI processors or other necessary components or\ntelecommunications services at prices or volumes that are acceptable to us or in a timely manner. Our suppliers and\ntelecommunications and internet service providers also serve other customers, including certain of our competitors,\nand such suppliers or providers may prioritize capacity for such other customers, increase prices on short notice,\nrequire onerous prepayments, or reduce or delay deliveries to us. Any failure by our suppliers and service providers\nto meet our cost, quality, volume, or delivery requirements, or any shortage or disruption in the supply of chips,\ntelecommunications services or other components required for our AI segment, could result in service disruption or\noutages, delay critical data center or network infrastructure upgrades or expansions, impair our ability to train our AI\nmodels and meet customer demand for our AI segment products and materially adversely affect our business,\nfinancial condition, results of operations and future prospects.\nWe also rely on third-party cloud compute providers for a portion of the compute used for the X platform and may\nfrom time to time rely on third-party data center providers, which exposes us to several risks that are beyond our\ndirect control, including vulnerability to outages, performance issues, and cyberattacks. We have non-cancellable,\nmulti-year capacity commitments to cloud compute providers, requiring payment regardless of usage. A termination\nor lapse in service from third-party cloud compute and data center providers could expose us to service interruptions,\nsignificant delays, and additional expenses to re-architect products for a different provider. Additionally, in the event\nof nonperformance by us or our providers, or an industry downturn, we may incur liabilities, have excess capacity\nthat we cannot easily redeploy, and fail to receive payments from our counterparties or customers.", - "path": "spacex-s1.pdf/p63", - "metadata": { - "length": 5705, - "summary": "36 Table of Contents Our ability to scale our AI products relies on our terrestrial and orbital AI compute infrastructure, which depends on the availability of power, AI processors, and other critical components, telecommunications services, and any shortages or disruptions th...", - "page_nums": [ - 63 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 63, "artifact_ref": "page_citation_assets/page-63.png", @@ -5319,24 +5808,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_28510e6f-90f4-5c17-b8e8-7b5f0e5a1971", - "type": "page", - "content": "37\nTable of Contents\nWe face intense competition in the markets in which we operate, and while we have historically outperformed\ncertain competitors in our Space and Connectivity segments, we may not continue to do so, which could adversely\naffect our business, financial condition, results of operations, and future prospects.\nThe markets in which we operate are rapidly evolving and intensely competitive, and we face competition from a\nrange of established and emerging companies, including large, well-capitalized technology companies and aerospace\nfirms, including foreign competitors. Some competitors are investing significant capital to develop and deploy\nsatellite constellations and related infrastructure that compete directly with our offerings, and companies based in\nChina and other jurisdictions may benefit from government support, favorable regulatory environments, or strategic\nnational prioritization.\nSome of our current and potential competitors, particularly in our AI segment, have greater financial, technical,\nmanufacturing, or other resources than we do, and may devote more resources to the development and\ncommercialization of competing products and services. Competitors may adopt more aggressive pricing, secure\nmore favorable supplier or distribution arrangements, bundle services, form strategic alliances or otherwise take\nactions that enhance their competitive position in ways that could adversely affect our business. In certain markets,\nregulatory or geopolitical factors may result in preferential treatment for domestic competitors or otherwise limit our\nability to compete effectively.\nCompetition continues to intensify as new technologies are developed and new entrants emerge. While we have\nhistorically outperformed certain competitors in aspects of our business, such as our Space and Connectivity\nsegments, there can be no assurance that we will maintain this position.\nWe depend on our ability to recruit and retain employees who have advanced engineering and technical skills,\nand intense competition for such employees may increase costs and affect our ability to meet development and\nproduction timelines.\nWe depend on our ability to recruit and retain employees who have advanced engineering and technical skills and, in\nsome cases, employees with the necessary national security clearances to perform under our government contracts or\nwin new business. These employees are in great demand and are likely to remain a limited resource in the\nforeseeable future. The current tight labor market has adversely impacted our ability to recruit qualified personnel,\nincluding engineers, particularly with respect to our AI segment. Increased restrictions on the import or retention of\nforeign labor may also increase demand for engineering personnel and adversely impact our ability to hire and retain\nqualified personnel. Continued turnover may impact employee morale and create other challenges as we attempt to\nscale our AI business. In addition, significant amounts of time and resources are required to train technical and other\npersonnel, and we have in the past lost and may in the future lose new employees to our competitors or other\ncompanies before we realize the benefit of our investment in recruiting and training them. Our ability to recruit and\nretain qualified employees depends on a number of things, including our ability to pay market compensation,\nprovide opportunities for advancement, and secure visa sponsorships and work permits for qualified international\ncandidates. If we are unable to recruit and retain a sufficient number of these employees, then our ability to maintain\nour competitiveness and grow our business could be negatively affected. In addition, because of the highly technical\nnature of our products and services, the loss of any significant number of our existing engineering personnel could\nhave a material adverse effect on our business, financial condition, results of operations, and future prospects. A\nsignificant portion of the talent pool for advanced engineering and technical roles is international, and changes in\nimmigration laws or policies in the jurisdictions in which we operate could limit our ability to hire and retain such\ncandidates and intensify competition for talent.\nFrom time to time, we are involved in litigation, investigations, and other regulatory proceedings which could be\ncostly, time-consuming, and divert management attention, materially adversely affecting our business.\nFrom time to time, we have been and may in the future become involved in various legal proceedings relating to a\nvariety of matters, including intellectual property, commercial, regulatory, product liability, employment, personal\ninjury, class action, employee or contractor health and safety, environmental, whistleblower, securities and other\nlitigation and claims, and governmental and other regulatory investigations and proceedings, including tax\nexaminations. Additionally, our share price may be volatile and, in the past, companies that have experienced", - "path": "spacex-s1.pdf/p64", - "metadata": { - "length": 5056, - "summary": "37 Table of Contents We face intense competition in the markets in which we operate, and while we have historically outperformed certain competitors in our Space and Connectivity segments, we may not continue to do so, which could adversely affect our business, financial condi...", - "page_nums": [ - 64 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 64, "artifact_ref": "page_citation_assets/page-64.png", @@ -5344,24 +5816,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f10abb66-41eb-5407-ad5c-082e95e9cb19", - "type": "page", - "content": "38\nTable of Contents\nvolatility in the market price of their stock have been subject to securities litigation, including class action litigation.\nSuch matters could be costly, time-consuming, and divert management’s attention from executing our strategic\ninitiatives and operating our business. The industries in which we operate have historically experienced significant\nlitigation and regulatory scrutiny, and with our public profile, expanding operations and the novel nature of some of\nour offerings, including our AI solutions, we may face an increased risk of such actions. Litigation and regulatory\nproceedings are inherently unpredictable. Any adverse judgments, settlements, or regulatory penalties could result in\nsubstantial financial costs, reputational harm, and operational disruptions. Certain of our hardware products are new\nand relatively unproven. If a product defect were to arise, especially one leading to product liability claims, the\nresulting warranty and damage claims, together with any associated harm to our reputation, could have a material\nadverse effect on our business, financial condition, results of operations, and future prospects. Even if we prevail in\nthese matters, the defense and resolution of litigation and regulatory proceedings may require significant resources\nand management attention, which could materially and adversely affect our business, financial condition, results of\noperations, and future prospects. Additionally, the mere initiation of litigation or government inquiries, regardless of\nthe outcome, could negatively impact investor confidence and our stock price. As we continue to innovate and\npursue new commercial and government contracts, expand our product offerings, and enter new markets, the\nlikelihood of facing legal and regulatory challenges may increase, further exposing us to these risks. Please refer to\n“Business—Legal Proceedings” and Note 17, Commitments and Contingencies, in our audited consolidated\nfinancial statements and Note 16, Commitments and Contingencies in our unaudited consolidated financial\nstatements include elsewhere in this prospectus.\nAny significant disruption in, or unauthorized access to, our computer and data systems or those of third parties\nthat we utilize in our operations could result in a loss or degradation of service, loss of trust in us and harm to\nour business.\nAn operational disruption in, or unauthorized access to, our computer and data systems or those of third parties that\nwe utilize in our operations could compromise sensitive (including classified or otherwise government-controlled),\nproprietary, confidential, or personal information, impede operations, and result in financial losses, legal liabilities,\nreputational harm, and erosion of our competitive position in launch services, space-based internet, and mobile\nphone services. Our business depends on the continuous and secure operation of our information technology systems\nand infrastructure, including those that support our launch operations, manufacturing facilities, Starlink services,\ngovernment services, employee databases, and mission-critical communications. Our systems and infrastructure may\nalso be subject to cyberattacks, including sophisticated hacking attempts by nation-states, state-sponsored actors,\ncybercriminals, or other malicious third parties, which could result in unauthorized access to, disruption of, or\ndegradation of our satellite systems, ground infrastructure, or data networks. Such disruptions or unauthorized\naccess, which may result from a wide variety of incidents or activities, including inadvertent compromises arising\nfrom process, coding or human errors, cyberattacks, data breaches, exploitation of known or unknown software or\nhardware vulnerabilities, malware, ransomware, credential harvesting, computer viruses, social engineering (such as\nphishing), denial of service attacks, software or hardware failure, or other malicious or disruptive incidents or\nactivities—whether perpetrated by external actors, including nation-states, state-sponsored organizations, or\ncybercriminal groups, insiders, or other threat actors, any of whom may see their efforts enhanced by the use of AI\n—could lead to the theft, destruction, or unauthorized disclosure of sensitive (including classified or otherwise\ngovernment-controlled), proprietary, confidential or personal information, including technical data, customer or\npartner information, and intellectual property, particularly because some of our products and services involve the\ncollection, storage, and processing of such data and information. Our development and deployment of AI models,\ninternal and third-party AI tools, and other AI applications expose us to increased and novel risks and\nvulnerabilities, including prompt injection, hallucinations, errors, and other issues related to AI agents, as well as the\nrisk of compromise of valuable intellectual property including source code, model weights, and other assets. Certain\ninternal and external threat actors, such as nation-states, state-sponsored organizations, organized threat networks\nand corporate espionage actors, among others have and will continue to sustain malicious activities for extended\nperiods and deploy significant resources to attempt, and in some cases succeed, at causing significant disruptions in,\nor unauthorized access to, our computer systems or those of third parties that we utilize in our operations. Such\nincidents have in the past and may in the future also disrupt or degrade our ability to design, produce, launch, or\nmanage our products and services, resulting in operational delays, violations of applicable data privacy and", - "path": "spacex-s1.pdf/p65", - "metadata": { - "length": 5696, - "summary": "38 Table of Contents volatility in the market price of their stock have been subject to securities litigation, including class action litigation. Such matters could be costly, time-consuming, and divert management’s attention from executing our strategic initiatives and operat...", - "page_nums": [ - 65 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 65, "artifact_ref": "page_citation_assets/page-65.png", @@ -5369,24 +5824,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9172de9c-bca8-5eaa-bfa0-fefc38eb6250", - "type": "page", - "content": "39\nTable of Contents\ncybersecurity laws and regulations, disruptions in, or unauthorized access to, our customers’ computer systems,\nincreased costs, loss of revenue, loss of trust, litigation or regulatory penalties.\nAs the scale, frequency, sophistication, or intensity of cyber and data privacy threats continue to evolve, and as our\nreliance on interconnected systems and third-party vendors grows, we remain exposed to vulnerabilities despite our\nefforts to implement security measures, monitoring, and incident response protocols. There can be no assurance that\nour cybersecurity risk management processes, including our policies, procedures, and controls, will be effective in\npromptly or effectively detecting, containing, or remediating cybersecurity attacks. Any significant security and data\nbreach or system failure could materially and adversely affect our business, financial condition, results of operations,\nand future prospects, and could result in loss of trust among customers, regulators, government agencies, and\npartners. Furthermore, our efforts to investigate, mitigate, contain, and remediate the harm caused by a significant\ndisruption in, or unauthorized access to, our computer and data systems or those of third parties that we utilize in our\noperations may be costly and time-consuming and may not be successful, and we may make errors or fail to take\nnecessary actions. Remediation efforts, litigation, regulatory investigations, and compliance obligations (including\nobligations to notify appropriate regulators and affected parties) arising from such incidents could require substantial\nmanagement attention and resources, and we rely on our own funds to cover such losses or liabilities. In addition,\nrapid changes to U.S. and international cybersecurity and privacy laws and regulations have expanded regulatory\nregimes and compliance requirements, and regulators continue to undertake enforcement actions in these areas. We\nexpect the regulatory environment to grow more complicated, which may increase our operational and compliance\nexpenditures, as well as those of our suppliers. Moreover, some third parties we utilize in our operations may receive\nor store information provided by us or by our customers. If these third parties fail to adopt or adhere to adequate data\nprivacy and security practices, or their systems or networks are breached in the manner described above, our data or\nour customers’ data may be improperly accessed, used, or disclosed to unauthorized recipients, which could result in\nfinancial losses, legal liabilities, reputational harm, and additional compliance obligations. We do not control the\nprivacy and cybersecurity measures put in place by such third parties, and any contractual protections with such\nthird parties, such as obligations to indemnify us, if any, may be ineffective or otherwise inadequate.\nThe development and maintenance of the technologies and infrastructure necessary to support our current and\nfuture operations will require significant capital expenditures, and if we are unable to generate sufficient cash\nflow from operations or obtain additional financing on acceptable terms, our business, financial condition,\nresults of operations, and future prospects could be materially and adversely affected.\nOur business requires substantial capital expenditures to design, develop, expand, and maintain our technologies and\ninfrastructure to support our operations. For example, we have incurred significant capital expenditures and expect\nto increase our capital expenditures substantially in the future in connection with the design, development, and\ndeployment of our satellite constellations, launch vehicles, ground stations, manufacturing facilities, and programs,\nincluding Terafab, AI compute infrastructure, data centers, and other supporting infrastructure. These expenditures\ninclude, but are not limited to, costs associated with research and development, construction and expansion of\nproduction capabilities, acquisition of property and equipment, and ongoing maintenance and upgrades to ensure\nreliability and competitiveness. In particular, the development, testing, and deployment of Starship in accordance\nwith our anticipated schedule, as well as our pursuit of orbital AI, other space-related services, and lunar and\ninterplanetary missions, will require the investment of significant additional capital resources. In addition, we have\nmade and intend to continue to make substantial capital expenditures to support the growth of our AI products,\nincluding costs related to obtaining third-party GPUs, manufacturing our own GPUs, and constructing, leasing,\nmaintaining, enhancing, and expanding our data centers. We may choose to increase or accelerate the pace of any of\nthese investments at any time, which could result in periods of reduced profitability or increased losses as we\nprioritize long-term growth over near-term financial performance. Many of the products and services that are\nimportant for our growth prospects are novel and untested, and therefore our estimates of capital expenditures may\nprove to be inaccurate.\nIf we raise additional capital through further issuances of equity or convertible debt securities, our shareholders\ncould suffer significant dilution and any new equity securities we issue could have rights, preferences, and privileges\nsuperior to those of holders of our Class A common stock. The agreements governing our indebtedness contain\nvarious restrictive covenants and any additional debt financing secured by us in the future could involve restrictive\ncovenants relating to our capital-raising activities and other financial and operational matters, which could limit our", - "path": "spacex-s1.pdf/p66", - "metadata": { - "length": 5722, - "summary": "39 Table of Contents cybersecurity laws and regulations, disruptions in, or unauthorized access to, our customers’ computer systems, increased costs, loss of revenue, loss of trust, litigation or regulatory penalties. As the scale, frequency, sophistication, or intensity of cy...", - "page_nums": [ - 66 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 66, "artifact_ref": "page_citation_assets/page-66.png", @@ -5394,24 +5832,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8b98ebc0-5f36-5f19-a525-f1916540e41b", - "type": "page", - "content": "40\nTable of Contents\noperational flexibility and make it more difficult for us to obtain additional capital and to pursue business\nopportunities. Our ability to access the capital markets or secure other sources of financing may be adversely\naffected by factors beyond our control, including fluctuations in market conditions, changes in investor sentiment,\nincreases in interest rates, or adverse events affecting the broader industry or economy.\nOur substantial level of indebtedness could materially adversely affect our financial condition.\nWe have significant indebtedness that could materially adversely affect our business by increasing our vulnerability\nto general adverse economic and industry conditions; requiring us to dedicate a substantial portion of our cash flow\nfrom operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund\noperations, our growth strategy, product development and strategic initiatives; limiting our flexibility in planning\nfor, or reacting to, changes in our business and the industry in which we operate; and exposing us to the risk of\nincreased interest rates as our borrowings are, and may in the future be, at variable interest rates. As of March 31,\n2026, we had total principal indebtedness outstanding of $29,132 million. Our substantial indebtedness may also\nadversely affect our credit ratings or outlook, which may increase our cost of capital, limit our access to financing,\nand impair our ability to obtain additional financing on acceptable terms, or at all. The occurrence of any one of\nthese events could have a material adverse effect on our business, results of operations, and financial condition, and\nability to satisfy our obligations under the agreements governing our indebtedness. If we fail to comply with the\nterms of our debt agreements, our lenders could declare a default and accelerate our repayment obligations, which\ncould materially and adversely affect our business, financial condition, results of operations, and future prospects.\nOur future revenue and operating results depend upon our ability to develop new technologies and respond to\nchanges in customer demands and industry standards in highly competitive markets, and if we are unable to do\nso, our business, financial condition, results of operations, and future prospects may be materially and adversely\naffected.\nOur future revenue growth and operating results are highly dependent on our ability to design, develop and\nsuccessfully commercialize new and innovative technologies, products, and services on a timely and cost-effective\nbasis. The markets in which we operate are characterized by rapid and disruptive technological change, evolving\nindustry standards, the emergence of new and well-funded competitors, frequent new product and service\nintroductions, changing customer demands and regulatory changes. In addition, we may expand into new markets,\nwhich may lead to similar or additional challenges that we cannot foresee and may require novel innovations to\nnavigate or overcome. As a result, we may from time to time rapidly adjust, modify or change our strategic\npriorities, capital allocation, product or service focus or operational initiatives across our business in response to\nthese other changes or new markets. In particular, the AI industry is nascent, highly competitive, capital intensive\nand rapidly changing. There are a number of companies today that develop or may develop products or services that\ncompete with our AI segment, and new competitors may emerge over time. Some of our current or potential\ncompetitors in the AI market are large technology companies that have significant financial, technical and marketing\nresources, and in some cases greater access to data, and others are smaller specialized companies that possess\nspecialized expertise and may have greater flexibility than we do. We also have a limited number of customers for\nour AI products when compared to certain of our competitors. Current and potential competitors have established, or\nmay in the future establish, cooperative relationships among themselves or with third parties to increase the ability\nof their AI technologies to address the needs of current and prospective users of our AI products. Furthermore,\ncurrent or prospective users may decide to develop competing products for particular use cases or to establish\nstrategic relationships with our competitors for such use cases. Current and potential competitors and bad actors,\nmay also attempt to reverse engineer or otherwise replicate our AI technology, including through model extraction\nor distillation techniques. Increased competition with our AI products could result in price reductions, revenue\nshortfalls, loss of customers and loss of market share, which may harm our business, financial condition results of\noperations and future prospects.\nIn our Connectivity segment, including Starlink broadband and Starlink Mobile, we face competition from terrestrial\nfixed network providers, mobile network operators, and other satellite providers, and our services may be less\ncompetitive in certain markets, including dense urban areas where terrestrial fiber and wireless networks may offer\nhigher capacity, lower cost, or more consistent performance. In addition, our Starlink Mobile offering operates in a\nhighly competitive and evolving market, and may be affected by the pace of technological development, spectrum", - "path": "spacex-s1.pdf/p67", - "metadata": { - "length": 5467, - "summary": "40 Table of Contents operational flexibility and make it more difficult for us to obtain additional capital and to pursue business opportunities. Our ability to access the capital markets or secure other sources of financing may be adversely affected by factors beyond our cont...", - "page_nums": [ - 67 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 67, "artifact_ref": "page_citation_assets/page-67.png", @@ -5419,24 +5840,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f8a185c6-331f-5783-825a-f0262303c0e6", - "type": "page", - "content": "41\nTable of Contents\navailability, and the success of our partnerships with mobile carriers. In addition, the X platform faces intense\ncompetition from social media, messaging and media companies and traditional media outlets, such as television,\nradio and print, for advertising budgets. Advertisers generally do not have long-term commitments to the X platform\nand may reduce or discontinue their advertising spending for a variety of reasons outside our control. We are\nexpending resources to improve the X platform and improve its attractiveness to users and advertisers. While we\nhave introduced new user interface enhancements, algorithm updates, and other product features, improvements to\nthe X platform, introducing new products and services on the X platform and other initiatives may be costly and\ndifficult to implement, and we cannot be sure that they will be positively received by users, content creators, or\nadvertisers, or provide positive returns on our investment. Losing users who migrate to other platforms may\nnegatively impact our potential subscription or advertising revenue. Additionally, if users do not continue to\ncontribute content and otherwise engage with the X platform, we are unable to provide users with valuable and\ntimely content, or if content that is considered to be problematic or offensive is made available on the X platform,\nthe size of the X platform’s user base and their engagement may decline, leading to a decline in monetizable usage\nand the loss of potential subscription revenue from such users, and the X platform may experience brand or\nreputational harm. A decline in users on the X platform, or the volume or quality of their content on the X platform,\ncould also impact the ongoing development of our AI product, which in part utilizes data and user-generated content\nfrom the X platform. We plan to publicly launch the Money product on the X platform (the “Money Product”);\nhowever, we are competing against large, established companies with significantly greater resources and market\npresence than us. If we are unable to anticipate technological trends, respond to technological advancements or\nchanging customer demands, or successfully develop and commercialize new or enhanced offerings, we may be\nunable to establish or maintain a meaningful market position and our business, financial condition, results of\noperations, and future prospects could be materially and adversely affected.\nThe estimates of future market opportunity and forecasts of market growth, and our ability to capture such\nmarkets, included in this prospectus may prove to be inaccurate.\nOur estimates for the total addressable market for our Space, Connectivity and AI businesses, as well as estimates\nregarding the growth of AI and its impacts, contained elsewhere in this prospectus are based on a number of internal\nand third-party estimates. For example, our estimates of market opportunity for our Space, Connectivity and AI\nbusinesses rely in part on third-party data and a number of internal assumptions. With respect to our Space segment,\nthese estimates rely in part on estimates published by Novaspace regarding the size of the global market for space-\nenabled solutions, including spacecraft manufacturing, launch services and related activities. Our connectivity\nmarket estimates are based in part on estimates of the number of households, businesses, aircraft and maritime\nvessels globally derived from third-party sources, together with assumptions regarding ARPU and monthly service\nrevenue derived from third-party industry data and our internal expectations regarding pricing, adoption rates and\nservice penetration across different geographic regions and economic environments. Our AI market estimates are\nbased in part on projections of global data center compute demand from third-party sources, including estimates\npublished by RAND Corporation, together with internal assumptions regarding the portion of global compute\ncapacity that may be utilized for AI workloads and other operational assumptions such as power usage, utilization\nrates and pricing.\nThese estimates require us to make numerous assumptions and judgments regarding factors that are inherently\nuncertain and subject to change, including the pace of technological development, future demand for launch,\nconnectivity and AI services, the rate of adoption of satellite connectivity and AI technologies, the availability and\ncost of power and computing hardware, the evolution of regulatory frameworks, and broader macroeconomic\nconditions.\nWhile we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and\nestimates may not be correct and the conditions supporting our assumptions or estimates may change at any time,\nthereby reducing the predictive accuracy of these underlying factors. As a result, our estimates of the total\naddressable market for our services, as well as the expected growth rate for the total addressable market for our\nservices, may prove to be inaccurate.", - "path": "spacex-s1.pdf/p68", - "metadata": { - "length": 5043, - "summary": "41 Table of Contents availability, and the success of our partnerships with mobile carriers. In addition, the X platform faces intense competition from social media, messaging and media companies and traditional media outlets, such as television, radio and print, for advertisi...", - "page_nums": [ - 68 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 68, "artifact_ref": "page_citation_assets/page-68.png", @@ -5444,24 +5848,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_74c7e90a-91be-50ba-af2a-f502fdd664da", - "type": "page", - "content": "42\nTable of Contents\nMany of our initiatives, including those to develop orbital AI compute at scale, manufacture AI chips at scale,\nestablish a lunar economy, develop human augmentation systems, and transport humans and cargo to the Moon\nand Mars, involve significant technical complexity, unproven technologies, or technologies that do not exist or\nmay require significant advancement, and such initiatives may not achieve commercial viability.\nOur initiatives to develop orbital AI compute at scale, establish a lunar economy, develop human augmentation\nsystems, and transport humans and cargo to the Moon and Mars are in early stages of conception, design and\ndevelopment and have not yet been proven at commercial scale, or at all, and may ultimately be unsuccessful. In\nparticular, the timeline for these initiatives, and the launch cadence required to achieve them may be difficult or\nimpossible to determine. These efforts require substantial and ongoing investments of financial, technical, and\nhuman resources over extended time horizons, including, but not limited to, research and development, testing,\ninfrastructure, regulatory approvals, and mission execution. The technologies, systems, and operational capabilities\nrequired for each of these initiatives involve significant technical complexity and are subject to design, engineering,\nand performance risks, many of which may only become apparent as development and testing progress. Many of\nthese technologies, systems and operational capabilities are novel and untested, and we expect to incur significant\ncapital expenditures over a period of years before our AI products and services and other strategic initiatives,\nincluding AI compute infrastructure and in-orbit, lunar, and interplanetary industrialization efforts, become\nprofitable, which may never occur. In addition, in-orbit refueling of Starship is essential to our lunar, Mars, asteroid\nmining, and other deep space ambitions beyond geostationary Earth orbit. In-orbit refueling is complex, and we have\nnot yet demonstrated or attempted it. We may not be able to develop, commercialize, scale, or successfully\nimplement these or other strategic initiatives on the timelines we currently anticipate, or at all. Furthermore, the\nviability of orbital AI compute depends in part on the cost advantages of solar energy relative to existing terrestrial\nenergy sources. To the extent that breakthrough developments in terrestrial energy access, such as advances in\nnuclear energy, significantly reduce energy costs or alleviate infrastructure constraints, the viability of our orbital AI\ncompute infrastructure may be materially diminished. Even if our orbital AI compute infrastructure proves to be\ncommercially viable, a material slowdown in the growth of AI applications and related compute demand could result\nin existing terrestrial data centers sufficiently meeting such demand, thereby reducing the need for our orbital AI\ncompute infrastructure. As a result, we may be required to devote financial, technical, human or other resources in\nexcess of our current expectations, and there can be no assurance that these investments will generate adequate\nrevenue, which could adversely affect our business, financial condition, results of operations, and future prospects.\nSeveral of our anticipated market opportunities, including certain AI, orbital, lunar, and interplanetary\ntransportation and industrial activities, are still emerging and evolving or do not currently exist, and such\nmarkets may not develop as we expect, or at all.\nA portion of our anticipated market opportunities is associated with industries described in the section entitled\n“Business—Future Markets.” Certain of these industries, such as space tourism, human augmentation, and cargo\ntransport to the Moon, are still emerging. Others, including in-orbit manufacturing, passenger transport to the Moon,\nan established human presence or gateway hub on the Moon, passenger and cargo transport to Mars, energy\nproduction on the Moon or Mars, manufacturing capabilities on the Moon or Mars, and asteroid mining do not exist\ntoday. Any estimate we make regarding the size or timing of our anticipated market opportunities is inherently\nuncertain and necessarily involves significant assumptions about future customer demand, adoption, technological\ndevelopment, regulatory conditions and the emergence of a broader commercial market that does not currently exist.\nWhile we believe these industries will develop over time, the manner in which they emerge, including the timing of\ncommercialization, the scale and pace of adoption, and the applicable technical, regulatory, geopolitical and\neconomic frameworks may differ materially from our current expectations. If these industries do not develop,\ndevelop on slower timelines, at smaller scales, or under different economic or regulatory conditions than we\nanticipate, this could require us to modify, delay, or abandon certain of our business plans, or cause such plans not to\ndevelop at all, which could materially and adversely affect our business, financial condition, results of operations,\nand future prospects.", - "path": "spacex-s1.pdf/p69", - "metadata": { - "length": 5166, - "summary": "42 Table of Contents Many of our initiatives, including those to develop orbital AI compute at scale, manufacture AI chips at scale, establish a lunar economy, develop human augmentation systems, and transport humans and cargo to the Moon and Mars, involve significant technica...", - "page_nums": [ - 69 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 69, "artifact_ref": "page_citation_assets/page-69.png", @@ -5469,24 +5856,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_31ba14e4-3013-594c-b93a-170d030f4dac", - "type": "page", - "content": "43\nTable of Contents\nThe global nature of our business poses risks with respect to unstable, malicious or arbitrary legal regimes and\nauthorities.\nWe, particularly through Starlink, maintain global operations. As a result, we may face risks that our operations will\nbe subject to unstable, capricious, or malicious legal regimes and authorities. The increasing militarization of space\nand the potential development of space-based warfare capabilities may expose our assets and operations to\nheightened geopolitical and security risks, including the risk that foreign governments or other actors could target\nour satellites or related infrastructure. Certain foreign governments have publicly discussed the potential use of anti-\nsatellite weapons against the Starlink constellation. These and other actions by foreign governments, whether\nthrough military, regulatory or other means, may adversely affect our operations and assets. Even if we attempt to\ncomply with known local laws, our assets (both physical, intangible and financial) may be subject to seizure or other\nexpropriation. There is no guarantee that we will be able to maintain operations in any jurisdiction, and, if our assets\nor properties are subject to seizure or other expropriation, there can be no assurances that we will be able to recover\nour assets or properties. Any such legal or other governmental action could have an adverse effect on us. For\nexample, in August 2024, Starlink received an order from Brazil’s Supreme Court that froze Starlink’s Brazilian\nfinancial assets and prevented Starlink from conducting financial transactions in Brazil (the “Brazil Asset Seizure”).\nThe action taken by the Brazilian Supreme Court arose out of purported violations of Brazilian law by X, which at\nthe time was not owned by us and was only affiliated with Mr. Musk. It is possible that we may be subject to actions\nlike the Brazil Asset Seizure in the future (whether in Brazil or another country) and, regardless of whether any such\naction is consistent with local and international law, we may never recover assets seized in any similar action.\nAdditionally, actions that we take to minimize the impact of actions such as the Brazil Asset Seizure to our\ncustomers, for example, by continuing to provide service without charge or otherwise altering payment processes\nand methods to permit customers to maintain service, may have a material impact on our financial performance. As\nevidenced by the Brazil Asset Seizure, we may be subject to adverse actions from governmental actors on the basis\nof assumptions, facts or events that are not directly related to our operations and instead relate to the actions of our\ndirectors, officers, or shareholders or operations of businesses that are affiliated with them.\nOur services are subject to risks related to supplying services to the U.S. government.\nSupplying services to the U.S. government subjects us to unique risks, including compliance with complex\nregulations, vulnerability to changes in government priorities or funding levels, and exposure to contractual disputes\nor audits. In 2025, approximately one-fifth of our revenue was attributable to agencies within the U.S. federal\ngovernment. As a contractor to various U.S. government agencies, we are subject to extensive federal procurement\nregulations, including the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation\nSupplement (DFARS), as well as other rules governing cost accounting, cybersecurity, ethics, and national security.\nThese regulations impose stringent requirements on our operations, business practices, and reporting, and\nnoncompliance could result in civil or criminal penalties, suspension or debarment from government contracting, or\nloss of existing or future business. These requirements, although customary in U.S. government contracts, increase\nour performance and compliance costs. These costs might increase in the future. For those reasons and in order to\nachieve our orbital compute goals, we may prioritize our own launch payloads over additional U.S. government\ncontracts or third-party customers. This prioritization of launch capacity may limit revenue growth in our Space\nsegment, and impact our relationship with regulators, and could invite litigation from customers or competitors. In\naddition, government contracts are susceptible to unilateral termination, reduction in scope, or delays at the\ngovernment’s convenience, which may occur due to shifting budgetary priorities, changes in defense or space\npolicy, or the reallocation of funding to other programs. The termination or reduction of funding for a government\nprogram could result in a loss of anticipated future revenue attributable to that program. The actual receipt of\nrevenue on awards may never occur or may change because a program schedule could change or the program could\nbe canceled, or a contract could be reduced, modified, or terminated early. In addition, in certain circumstances,\ngovernments or other customers may be reluctant to rely on our satellite connectivity or defense-related services if\nthey believe the availability of such services could be restricted or suspended based on geopolitical considerations,\nconflicts, sanctions, or other policy determinations, which could adversely affect our ability to win or retain\ncontracts. In addition, our significant business relationships with U.S. defense and government agencies may cause\nus to be perceived as closely aligned with the U.S. government or military. This perception could discourage certain\nconsumers, enterprises, or foreign governments from purchasing our products and services which could adversely", - "path": "spacex-s1.pdf/p70", - "metadata": { - "length": 5690, - "summary": "43 Table of Contents The global nature of our business poses risks with respect to unstable, malicious or arbitrary legal regimes and authorities. We, particularly through Starlink, maintain global operations. As a result, we may face risks that our operations will be subject...", - "page_nums": [ - 70 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 70, "artifact_ref": "page_citation_assets/page-70.png", @@ -5494,24 +5864,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e94d70a7-747f-5499-8e1d-17aa9c814b5d", - "type": "page", - "content": "44\nTable of Contents\naffect our sales in the United States and internationally. We and our facilities could also be targeted by foreign\nadversaries and non-state actors due to such perception. Government customers may also subject our contracts to\nrigorous audits and investigations, which can result in disputes regarding contract performance, cost allowability, or\ncompliance with applicable laws and regulations. Adverse audit findings or contractual disputes could lead to\nrepayments, financial penalties, or restrictions on our ability to compete for future contracts.\nCertain of our government contracts also require that we maintain facility security clearances and that certain of our\nemployees obtain and maintain personnel security clearances. Obtaining and maintaining these clearances involves a\nlengthy and uncertain process and depends on factors outside of our control, and we may experience delays in\nreceiving required clearances or be unable to hire or retain a sufficient number of employees with the necessary\nclearances to perform under certain contracts. If we are unable to obtain or maintain required facility or personnel\nsecurity clearances, we may be unable to bid on, win, or perform certain classified programs, and existing contracts\ncould be terminated or not renewed, which could materially and adversely affect our business, financial condition,\nresults of operations, and future prospects.\nFurther, our business is subject to economic sanctions and trade embargo laws, various import regulations, including\ntariffs, and stringent U.S. import and export control laws. Any failure by us to comply with any of the foregoing\ncould result in our debarment from government contracts, limitations on our ability to enter into contracts with the\nU.S. government, civil or criminal penalties, fines, investigations, more onerous compliance requirements, or loss of\nexport privileges.\nWe derive significant revenue from U.S. government contracts that are subject to competitive bidding, funding\napprovals and other government budgetary processes, which factors could adversely affect our business, financial\ncondition, results of operations, and future prospects.\nWe derive significant revenue from U.S. government contracts that were awarded through a competitive bidding\nprocess. Competitive bidding presents a number of risks, including: the need to bid on programs in advance of the\ncompletion of their design, which may result in unforeseen technological difficulties and cost overruns; the\nsubstantial cost and managerial time and effort that must be spent to prepare bids and proposals for contracts that\nmay not be awarded to us; the need to estimate accurately the resources and cost structure that will be required to\nservice any contract we are awarded; and the expense and delay that may arise if interested parties or our\ncompetitors protest or challenge contract awards made to us pursuant to competitive bidding, and the risk that any\nsuch protest or challenge could result in the delay of our contract performance, the distraction of management, the\nresubmission of bids on modified specifications, or in termination, reduction or modification of the awarded\ncontract.\nOur business with governmental entities is subject to changes in policies, priorities, regulations, mandates, and\nfunding levels, any of which could materially impact our operations and financial results. U.S. government program\nfunding is subject to Congressional appropriations on a fiscal year basis even though contract performance may take\nmore than one year. As a result, at the outset of a major program, the contract is usually incrementally funded and\nadditional funds are normally committed to the contract only as Congress makes appropriations in future fiscal\nyears. U.S. government contracts may also be undefinitized at the time of the start of performance. Under\nundefinitized contract actions, the U.S. government has the ability to unilaterally definitize contracts and, absent a\nsuccessful appeal of such action, the unilateral definitization of the contract would obligate us to perform under\nterms and conditions imposed by the U.S. government. Such unilaterally imposed contract terms could include less\nfavorable pricing or terms and conditions more burdensome than those negotiated in other circumstances. U.S.\ngovernment contracts typically involve long lead times for design and development and are subject to significant\nchanges in contract scheduling.\nAdditionally, the U.S. government’s budget deficit and the national debt, as well as any inability of the U.S.\ngovernment to complete its budget process for any government fiscal year and consequently having to shut down or\noperate on funding levels equivalent to its prior fiscal year pursuant to a “continuing resolution,” could have a\nmaterial and adverse impact on our business, financial condition, results of operations, and future prospects.\nMoreover, if we fail to establish and maintain important relationships with U.S. government agencies, our ability to\nsuccessfully maintain and develop new business could be materially and adversely affected. The current political", - "path": "spacex-s1.pdf/p71", - "metadata": { - "length": 5166, - "summary": "44 Table of Contents affect our sales in the United States and internationally. We and our facilities could also be targeted by foreign adversaries and non-state actors due to such perception. Government customers may also subject our contracts to rigorous audits and investiga...", - "page_nums": [ - 71 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 71, "artifact_ref": "page_citation_assets/page-71.png", @@ -5519,24 +5872,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_defcbb90-fb9b-52a3-962c-1dcc2a060aa4", - "type": "page", - "content": "45\nTable of Contents\nenvironment in the United States is highly polarized, and shifts in the composition of the U.S. Congress or changes\nin the presidential administration can result in significant changes in government spending priorities, regulatory\nposture, and the allocation of contracts and resources across industries and programs. Our relationships with U.S.\ngovernment agencies and the favorability of the regulatory and procurement environment in which we operate may\nbe affected by which political party controls the presidency or one or both chambers of the U.S. Congress. As a\nresult, there can be no assurance that current government relationships, contracts, or levels of funding will be\nmaintained, and any significant adverse developments could have a material and adverse impact on our growth and\ncompetitive position.\nIn addition, our Space segment revenue is primarily derived from fixed-price contracts, under which we agree to\ndeliver specified products or services at a predetermined price regardless of the actual costs incurred. As a result, if\nwe experience cost overruns on these contracts, including from factors outside our control, we are required to absorb\nthe excess costs, which may reduce profitability or result in losses, strain cash flows, and impact our ability to invest\nin future growth. Any unanticipated increases in labor, material, or other direct or indirect costs—including those\narising from inflation, supply chain disruptions, design changes, regulatory requirements, or unforeseen technical\nchallenges—must be borne by us. When these overruns occur, our margins on affected contracts may be\nsignificantly reduced or eliminated, which could adversely affect our business, financial condition, results of\noperations, and future prospects. Additionally, absorbing excess costs may limit our ability to allocate resources to\nother strategic initiatives, delay investment in research and development, or constrain our capacity to pursue new\nbusiness opportunities. In addition, we sometimes receive advanced payments and billings in excess of the amount\nof revenue we recognize, which we record as deferred revenue. As a result, our cash flows may be subject to\nfluctuation across periods in a manner that may be unrelated to our underlying performance.\nOur ability to expand our Starlink consumer and enterprise connectivity services depends on our ability to\nincrease market awareness and acceptance of connectivity through Starlink, and any failure to do so could\nmaterially and adversely affect our business, financial condition, results of operations and future prospects.\nOur ability to expand our Starlink consumer and enterprise connectivity services depends on our ability to increase\nmarket awareness and acceptance of connectivity through Starlink. There can be no assurance that our efforts to\nincrease awareness will be successful. In particular, such efforts may not be successful if we are unable to offer\nStarlink services at competitive prices. Additionally, constraints in the distribution of user terminals could delay\nservice activations, increase costs, or otherwise limit our ability to scale such services as anticipated. Consumer\nacceptance may also be hindered by the presence of well-established terrestrial broadband alternatives, as well as\nlingering perceptions regarding service reliability, latency, and the complexity of satellite-based internet compared\nto traditional fixed-line solutions.\nThe expansion of our satellite-to-mobile connectivity services depends substantially on our ability to secure and\nmaintain partnerships with mobile network operators and on the adoption of necessary hardware and software\nmodifications by device manufacturers, and any failure to do so could materially and adversely affect our\nbusiness, financial condition, results of operations and future prospects.\nThe expansion of our global satellite-to-mobile connectivity offerings depends substantially on our ability to enter\ninto and maintain successful partnerships with telecommunications carriers and spectrum licensees globally, and to\nobtain country-specific authorizations to offer such connectivity using satellite spectrum bands for which we have\ninternational coordination rights. In the United States, we expect to be able to provide 5G-like connectivity to a\nmeaningful portion of existing unmodified devices through our Starlink Mobile Gen2 service utilizing our V2\nMobile satellites, either by operating on spectrum leased to us by MNO partners or by utilizing our own domestic\nspectrum holdings. However, achieving full 5G NR-NTN compliance and optimal performance would likely require\nhandset manufacturers to implement hardware and software modifications, primarily to the radio-frequency front\nend, in future devices. The spectrum frequencies in the FCC licenses to be acquired from EchoStar are standardized\nfor terrestrial 5G mobile broadband (3GPP bands n66 and n70). But the 5G NR-NTN bands for these same\nfrequencies, such as n252 and n256, are not currently supported by RF front-end hardware for the provision of 5G-\nlike service in any commercially available mobile devices. We do not have direct contractual arrangements with\nhandset manufacturers; instead, we expect MNO partners, as major purchasers of mobile devices, to encourage or", - "path": "spacex-s1.pdf/p72", - "metadata": { - "length": 5325, - "summary": "45 Table of Contents environment in the United States is highly polarized, and shifts in the composition of the U.S. Congress or changes in the presidential administration can result in significant changes in government spending priorities, regulatory posture, and the allocati...", - "page_nums": [ - 72 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 72, "artifact_ref": "page_citation_assets/page-72.png", @@ -5544,24 +5880,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_caf14a8c-0daf-5868-9fcc-a4b37cedf21b", - "type": "page", - "content": "46\nTable of Contents\ndrive such adoption. There can be no assurance that these modifications will be adopted on our preferred timeline, or\nat all.\nInternationally, we face similar constraints until handset manufacturers implement hardware and software\nmodifications to support the international spectrum authorizations to be obtained from EchoStar. As a result, our\nnear-term international service strategy depends on our ability to establish MNO spectrum partnerships on a market-\nby-market basis, which does not require device hardware modifications but is subject to the successful negotiation\nand execution of commercial agreements in each jurisdiction. Until device manufacturers incorporate support for our\ninternational spectrum bands into future handsets, we will be unable to offer 5G-like direct-to-consumer service on\nour own international spectrum.\nThe provision of our satellite-to-mobile services also requires regulatory approvals from the FCC and foreign\nregulatory authorities. Our Gen1 service, utilizing our existing constellation of V1 Mobile satellites, is fully licensed\nin the United States but requires additional country-by-country approvals to operate internationally. We have signed\nMNO partnerships for our Gen1 service in over 30 countries. These partnerships represent commercial agreements\nwith carriers but do not, by themselves, provide the regulatory approvals necessary to offer service. In addition to at\nleast one MNO partnership, we have obtained required approvals to offer commercial Gen1 service in the United\nStates, Canada, the United Kingdom, Japan, and Australia, as well as in several additional countries.\nOur Gen2 service, which will utilize 2 GHz S-band spectrum and a new satellite constellation, requires a license\ntransfer, a constellation license, and spectrum usage approvals in each country in which we seek to operate. For the\nUnited States, we have received the relevant license transfer approval from the FCC, and we expect to receive the\nremaining necessary regulatory authorizations in the second or third quarter of 2026. While these authorizations\nwould be sufficient from a United States regulatory perspective, we still require our V2 Mobile satellites to be in\norbit and must complete the acquisition of the relevant spectrum from EchoStar before we can commence our\nplanned commercial Gen2 service in the United States. Internationally, we have filed applications in nearly every\ncountry in which we intend to operate our Gen2 service, and approvals have been granted in a limited number of\nthese jurisdictions to date. Each jurisdiction presents its own regulatory process and timeline, and we cannot predict\nwhen or whether approvals will be granted in any given market. Subject to regulatory approvals, we are receiving\nfrom EchoStar certain assets and authorizations that provide very senior ITU priority for international frequency\ncoordination for our V2 Mobile constellation. Until such approvals are obtained, we also signed a coordination\nagreement with EchoStar to obtain the protection of its senior ITU priority rights until the authorizations transfer.\nHowever, some countries have signaled through public consultations or other actions that they are considering\nignoring or diminishing ITU priority as a mechanism to decide which operators are licensed to operate in their\ncountry. Several countries and regions have open inquiries that invite input on whether factors other than ITU\npriority (such as whether the operator originates from the country) should govern the issuance of spectrum licenses,\nand we cannot be certain the outcome of these proceedings. Delays or failures to obtain necessary approvals could\nmaterially delay the deployment and commercialization of our Gen2 service. The failure to enter into or successfully\nmaintain such partnerships, or the failure of device manufacturers to adopt the necessary hardware modifications, or\nthe failure to obtain required regulatory approvals, could materially and adversely affect our business, financial\ncondition, results of operations, and future prospects.\nIf the recommendations, forecasts, content, analyses or other output that our AI technologies, including Grok,\nassist in producing are or are alleged to be deficient, inaccurate, harmful, illegal, or used for an improper\npurpose, we could continue to be subjected to claims and investigations, and we could be subjected to legal\nliability and brand, reputational, or competitive harm.\nAI technologies, the models, algorithms, prompts and datasets on which they rely, and the recommendations,\nforecasts, analyses or other output that such AI technologies assist in producing, may be flawed, insufficient, of poor\nquality, rely upon incorrect, inaccurate, harmful or illegal data, reflect unwanted forms of bias, hallucinate,\nmisrepresent, mislead or contain other errors or inadequacies, any of which may not be easily detectable. Although\nwe devote significant resources to develop, test, and maintain our AI technologies, we may not be able to identify or\nresolve all AI-related issues, deficiencies, and failures before they arise. AI technologies have been known to\nproduce mischaracterized or “hallucinatory” inferences or outputs, and certain of our AI products, such as Grok,\nhave been alleged to be susceptible to “data poisoning” in the past. We may not have insight into, or control over,", - "path": "spacex-s1.pdf/p73", - "metadata": { - "length": 5397, - "summary": "46 Table of Contents drive such adoption. There can be no assurance that these modifications will be adopted on our preferred timeline, or at all. Internationally, we face similar constraints until handset manufacturers implement hardware and software modifications to support...", - "page_nums": [ - 73 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 73, "artifact_ref": "page_citation_assets/page-73.png", @@ -5569,24 +5888,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9435a5dd-cb83-51d0-a692-3b7053a4e2ba", - "type": "page", - "content": "47\nTable of Contents\nthe practices of third parties who may utilize our AI technologies. As such, third parties have in the past used, and\nmay in the future use, such AI technologies for improper purposes, including through the dissemination of illegal,\ninaccurate, defamatory or harmful content, intellectual property infringement or misappropriation, furthering bias or\ndiscrimination, cybersecurity attacks, including spear phishing and social engineering attacks, data privacy\nviolations, other societal harms, including activities that threaten people’s safety, financial security, or mental well-\nbeing on- or offline, or to develop competing technologies. Inappropriate or controversial data practices by data\nscientists, engineers, and end users of AI technologies, including our AI segment’s systems, could impair the\nacceptance of AI technologies generally, including our AI products. If the recommendations, forecasts, content, or\nanalyses that our AI technologies assist in producing are or are alleged to be deficient, inaccurate, offensive, illegal,\nor otherwise harmful, we could be subjected to claims and investigations, and we could be subjected to legal liability\nand brand, reputational or competitive harm. We have in the past been, and may in the future be, subject to\nregulatory investigations and litigation related to such claims regarding our recommendations, forecasts, content or\nanalyses. Also please refer to “—Our AI products, X platform, and Starlink services are subject to complex and\nevolving U.S. and foreign laws and regulations regarding privacy, cybersecurity, data use, data combination, data\nprotection, content, AI, competition, youth protection, safety, consumer protection and notification, advertising, e-\ncommerce, sanctions, export controls, and other matters. Many of these laws and regulations are subject to change\nand uncertain interpretation, and we could be required to make changes to our products and business practices, and\nbe exposed to monetary penalties, increased cost of operations, declines in user growth or engagement, or loss of\ncustomers, or other harm to our AI products, X platform, and Starlink services.” In addition, if we do not have\nsufficient rights to use the models, algorithms, prompts and datasets on which our AI technologies rely, or the\nrecommendations, forecasts, content, analyses or other output that our AI technologies assist in producing, we could\nalso incur liability through the violation of applicable laws and regulations, third-party intellectual property, privacy\nor other rights, or contracts to which we are a party. Furthermore, failure to properly disclose the use of consumer-\nfacing AI technologies may result in consumer protection or regulatory enforcement activity. Use of AI\ntechnologies, including our AI products, may result in disruptions in, or unauthorized access to, users’ computer\nsystems, which could also lead to the unauthorized disclosure of sensitive (including classified), proprietary,\nconfidential or personal information, new potential cyberattack methods for third parties or an increase in the\nfrequency, sophistication or intensity of cyberattacks. Moreover, if AI technologies are perceived to be significantly\ndisruptive to society, it could lead to governmental or regulatory restrictions or prohibitions on their use, societal\nconcerns or unrest, or both, any of which could materially and adversely affect our ability to develop, deploy, or\ncommercialize AI technologies and execute our business strategy. Our implementation of AI technologies, including\nthrough our AI segment’s systems, could result in legal liability, regulatory action, operational disruption, brand,\nreputational or competitive harm, or other adverse impacts.\nEnvironmental laws, regulations, litigation, liabilities and proceedings may adversely affect our operations,\nincluding our launch operations, manufacturing activities, fuel storage and handling operations, launch facilities\nand ground infrastructure, and data center operations and expansion plans.\nOur operations, including our launch operations, manufacturing activities, fuel storage and handling operations,\nlaunch facilities and ground infrastructure, and data center operations and expansion plans are subject to a variety of\nstate and federal environmental laws and regulations governing matters such as air emissions, wastewater discharges\nand the discharge, treatment, storage, disposal and remediation of hazardous substances and wastes, including the\nComprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and\nRecovery Act, the Clean Air Act, the Clean Water Act and permitting requirements of federal, state and local\nenvironmental authorities. Liability under these laws imposes strict liability for environmental contamination or\nremediation costs. Changing regulatory requirements for permits and approvals relating to operational infrastructure,\nincluding energy generation assets (e.g., renewables, generators or grid connections), manufacturing facilities,\nlaunch facilities, fuel storage and handling facilities, and data centers may cause delays, higher costs or denials, and\na failure to comply with these requirements may result in fines, shutdowns or competitive harm. In addition,\ngrowing scrutiny of data centers’ overall ecological footprint could lead to community opposition, fines or mandates\nfor changing existing practices. We are or may become subject to environmental lawsuits and proceedings, and\nvarious parties have threatened or brought lawsuits that allege we are unlawfully operating natural gas-fired turbines\nwithout required permits at facilities in Southaven, Mississippi. While we have obtained such permits, the outcome\nof these legal actions is uncertain. Injunctive relief or the rescission of issued permits would prevent our ability to", - "path": "spacex-s1.pdf/p74", - "metadata": { - "length": 5886, - "summary": "47 Table of Contents the practices of third parties who may utilize our AI technologies. As such, third parties have in the past used, and may in the future use, such AI technologies for improper purposes, including through the dissemination of illegal, inaccurate, defamatory...", - "page_nums": [ - 74 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 74, "artifact_ref": "page_citation_assets/page-74.png", @@ -5594,24 +5896,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_39ca52e3-cc8b-50a0-83bc-771bc2949511", - "type": "page", - "content": "48\nTable of Contents\nutilize power generation sources that are required for the operation of these data centers and would adversely affect\nour AI business. We cannot predict with certainty how future legislative or regulatory developments will affect our\nbusiness, but compliance with new or modified environmental requirements could require us to incur significant\nunanticipated expenditures that could adversely affect our financial condition, results of operations, speed of\ndeployment and cash flows.\nIn addition, our launch facilities and related operations are subject to environmental permitting, land use, wetlands,\ncoastal management and other environmental review requirements, such as the National Environmental Policy Act\nor related federal and state laws, that may give rise to litigation, regulatory enforcement actions or permitting\ndisputes. Environmental groups, regulatory authorities or other stakeholders may challenge our launch activities,\nlaunch cadence, construction or expansion of facilities, fuel storage or handling practices, or other operational\nactivities under federal, state or local environmental laws. Such actions may seek injunctive relief, civil penalties or\nadditional environmental review and mitigation measures, any of which could delay launches, restrict operations,\nincrease compliance costs or otherwise adversely affect our business, financial condition, results of operations and\nfuture prospects.\nWe may face substantial potential liability and operational disruptions if we violate the intellectual property rights\nor other rights of third parties, and if we fail to adequately protect, maintain, defend or enforce our intellectual\nproperty and other similar rights, we could lose an important competitive advantage, in each case which could\nhave a material adverse effect on our business, financial condition, results of operations, customer trust and\nfuture prospects.\nOur success and ability to compete also depends in part on our ability to operate without infringing,\nmisappropriating or otherwise violating the intellectual property rights of third parties. Companies in the AI and\ntechnology industries own large numbers of patents, copyrights, trademarks, and trade secrets, and frequently enter\ninto litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or\nother rights, including in novel areas such as those relating to AI training and AI outputs. Plaintiffs have in the past\nand may in the future file infringement or other litigation or administrative or adversarial actions relating to the\ntraining or development of our AI models. We cannot guarantee that the operation of our business does not and will\nnot infringe or violate the rights of third parties, and we may be unaware of the intellectual property rights that\nothers may claim cover some or all of our products or services. Moreover, we may not have the freedom to operate\nunimpeded by the patent or other rights of others. Third parties may have dominating, blocking or other patents or\nother rights relevant to our technology, of which we are not aware.\nIntellectual property and related laws are constantly evolving, can be highly uncertain and involve complex legal\nand factual questions for which important principles remain unresolved. For example, in the United States and in\nmany foreign jurisdictions, policies regarding the breadth of claims allowed in patents and scope of protections for\ncontent can be inconsistent. We cannot predict future changes in the interpretation of patent, intellectual property\nand other related laws or changes to patent, intellectual property and other related laws that might be enacted into\nlaw by U.S. and foreign legislative bodies.\nWe rely on statutory safe harbors, including those set forth in the Digital Millennium Copyright Act and Section 230\nof the Communications Decency Act in the United States and the Digital Services Act in the EU, to protect against\nliability for various activities, including linking, caching, ranking, recommending and hosting. Legislation or court\nrulings affecting these safe harbors may harm us and may impose significant operational challenges. There are\nlegislative proposals and pending litigation in the United States, EU, and around the world that could diminish or\neliminate safe harbor protection for websites and online platforms.\nIf we violate, or are alleged to have violated, the intellectual property rights of third parties, including patents,\ncopyrights, trademarks, trade secrets, or other intellectual property rights and related rights, we may be subject to\ncostly and time-consuming litigation, substantial financial penalties, and reputational harm, any of which could\nmaterially disrupt our operations, product development and strategic initiatives. As we continue to develop new or\nupdate existing technologies, products, and services, there is a risk that third parties may allege that our operations\nor offerings infringe upon their intellectual property rights. For example, we are currently a defendant in litigation\nalleging copyright infringement relating to the claimed use of copyrighted works to train our AI models. Other", - "path": "spacex-s1.pdf/p75", - "metadata": { - "length": 5215, - "summary": "48 Table of Contents utilize power generation sources that are required for the operation of these data centers and would adversely affect our AI business. We cannot predict with certainty how future legislative or regulatory developments will affect our business, but complian...", - "page_nums": [ - 75 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 75, "artifact_ref": "page_citation_assets/page-75.png", @@ -5619,24 +5904,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_44befa87-7175-5cec-ad8c-f2141830ea13", - "type": "page", - "content": "49\nTable of Contents\nplaintiffs may file infringement or other litigation relating to the training or development of our AI models. In\naddition, we are currently subject to, and in the future may be subject to claims from various “non-practicing\nentities” or other companies that own patents and other intellectual property rights that often attempt to aggressively\nassert their rights in order to extract value from technology companies by threatening costly litigation or that have\nminimal operations or relevant product revenue and against whom our patents may provide little or no deterrence or\nprotection. We are and may in the future be subject to additional copyright litigation or other litigation, including\nlitigation relating to allegations that we have trained or developed our AI models on copyrighted works in a manner\nthat infringes on copyrights, or in a manner that otherwise violates the intellectual property or other rights of third\nparties, or that our models produce outputs in a manner that infringes on copyrights or other intellectual property or\nother rights. Moreover, the impact of AI on intellectual property ownership and licensing rights, including\ncopyrights, has not been fully addressed by U.S. or international courts or other federal, state or international laws or\nregulations (or by courts, laws or regulations in foreign jurisdictions), and our use of AI models may reduce our\nability to protect our own intellectual property. In addition, former employers of our current, former, or future\nemployees may assert claims that such employees have improperly disclosed to us confidential or proprietary\ninformation of these former employers. Any such claims or allegations, whether or not they have merit, could result\nin costly litigation, substantial damages, injunctions against the use of certain technologies, or the need to obtain\nlicenses on unfavorable terms. In addition, certain of our contracts with customers, suppliers, and partners contain\nindemnification provisions that could require us to defend against infringement or other claims and pay damages or\nsettlements, thereby increasing our financial exposure. The outcome of intellectual property litigation is inherently\nuncertain, and adverse judgments could materially and adversely affect our business, financial condition, results of\noperations, and future prospects. If we are unable to obtain necessary licenses, non-infringing substitute\ntechnologies, or otherwise mitigate these risks, we may be forced to discontinue certain products or services, delay\nor curtail research and development activities, or limit our expansion into new markets.\nAdditionally, failure to adequately protect, maintain, defend, or enforce our intellectual property—including patents,\ncopyrights, trademarks, trade secrets, and proprietary technologies—may lead to loss of competitive advantage,\nweakened market position, and financial harm from unauthorized use or infringement. We rely and expect to\ncontinue to rely upon a combination of patents, trademarks, trade secrets, copyrights, confidentiality procedures,\ncontractual commitments and other legal rights to establish and protect our intellectual property. However, the steps\nwe take to protect our intellectual property and other rights may be inadequate due to various circumstances. We\nmay be unable or choose not to pursue or maintain certain types of intellectual property protection or registration for\nour intellectual property in the United States or foreign jurisdictions, and the measures we do take may not prevent\nour competitors or other third parties from independently developing products, services, and technology similar to or\nduplicative of our products and services. We will not be able to protect our intellectual property if we are unable to\nenforce our rights or if we do not detect unauthorized use of our intellectual property. In addition, our patents or\nother intellectual property rights may be challenged, invalidated, circumvented or rendered unenforceable, and\npending and future trademark and patent applications may not be approved. While it is our policy to enter into\nconfidentiality agreements with our employees, contractors and other third parties to limit and control access to and\ndisclosure of our trade secrets, intellectual property and confidential information, we may fail to enter into such\nagreements with all relevant entities and any such agreements may be breached, or this intellectual property may\notherwise be disclosed or become known to our competitors, including through hacking, theft, or other\nmisappropriation, including by employees, which could cause us to lose any competitive advantage resulting from\nthese trade secrets, intellectual property and proprietary information. Accordingly, we cannot guarantee that the\nsteps we have taken to protect our intellectual property will be adequate to prevent infringement of our rights or\nmisappropriation of our technology, trade secrets or know-how.\nAdditionally, to protect our intellectual property rights, we may be required to spend significant resources to\nmonitor, defend, enforce and protect these rights. Monitoring unauthorized uses of our intellectual property is\ndifficult and costly. We may not be able to detect unauthorized use of, or take appropriate steps to enforce, our\nintellectual property rights. Litigation may be necessary in the future to enforce our intellectual property rights and\nto protect our trade secrets, and any such litigation may be costly and time consuming, result in the diversion of time\nand attention of our management team, and may not be successful or could result in the impairment or loss of\nportions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met\nwith defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property", - "path": "spacex-s1.pdf/p76", - "metadata": { - "length": 5922, - "summary": "49 Table of Contents plaintiffs may file infringement or other litigation relating to the training or development of our AI models. In addition, we are currently subject to, and in the future may be subject to claims from various “non-practicing entities” or other companies th...", - "page_nums": [ - 76 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 76, "artifact_ref": "page_citation_assets/page-76.png", @@ -5644,24 +5912,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_adeeff69-3672-5afd-ab0f-c02a5fc1e005", - "type": "page", - "content": "50\nTable of Contents\nrights. Despite our efforts, we may not be able to prevent unauthorized use, copy, reverse engineering,\nmisappropriation of our technology or intellectual property rights to create technology that compete with ours, or\nindependent development of similar technologies. Insufficient protection could force us into costly and uncertain\nlitigation or enforcement actions, allowing competitors to launch rival products and eroding our revenue and\nprofitability.\nAcquisitions, divestitures, or other strategic transactions we pursue may not achieve the anticipated benefits,\nsynergies or strategic objectives.\nWe may not achieve the anticipated benefits, synergies, or strategic objectives of any acquisition, divestiture, or\nother strategic transaction in a timely manner, or at all, including those we expect from the recent acquisition of xAI,\nthe acquisition of spectrum assets and licenses from EchoStar in connection with our Starlink Mobile initiatives, our\ncollaboration on Terafab with Tesla, Intel or any future partners, project and our recent collaboration with Cursor\nand any potential acquisition of Cursor, if consummated. Acquisitions, divestitures, or other strategic transactions\nmay present unforeseen liabilities or disruptions to our operations, which could adversely impact our business,\nfinancial condition, results of operations, and future prospects. We may assume unexpected obligations or incur\ncosts associated with acquired businesses, including litigation, regulatory compliance, environmental liabilities, or\ncontractual disputes, which could result in material losses or divert management focus from ongoing operations.\nIntegrating acquired businesses, partnerships, or joint ventures may present significant challenges, including\naligning operations, systems, and cultures, which could result in inefficiencies, increased costs, or failure to realize\nanticipated benefits. The process of integration is often complex and time-consuming, and we may encounter\nunforeseen difficulties in harmonizing business practices, integrating technologies and IT systems, retaining key\npersonnel, or reconciling differences in corporate cultures and management philosophies. In addition, the integration\nof acquired entities or new partners exposes us to disruptions in, or unauthorized access to, our computer systems\nand data or may divert management attention and resources from our core operations, potentially impacting our\nability to execute on other strategic initiatives or maintain existing customer relationships. We may also face\nchallenges in achieving expected synergies, cost savings, or strategic objectives within anticipated timeframes, or at\nall, which could adversely affect our business, financial condition, results of operations, and future prospects. If we\nare unable to successfully integrate acquisitions, partnerships, or joint ventures, or if the anticipated benefits of these\ntransactions do not materialize as expected, we could experience operational disruptions, loss of key personnel or\ncustomers, increased costs, and diminished competitive position. Any failure to effectively integrate acquired\nbusinesses, partnerships, or joint ventures could materially and adversely affect our business, financial condition,\nresults of operations, and future prospects.\nSimilarly, divestitures could result in the loss of revenue, disruption of customer or partner relationships, or\nchallenges in separating assets and personnel. There can be no assurance that we will be able to identify,\nconsummate, or integrate future acquisitions, divestitures, or other strategic transactions on favorable terms, or at all,\nand any such activities may heighten our exposure to operational, financial, and regulatory risks unique to our\nindustry.\nWe have experienced, and will likely continue to experience, development and manufacturing delays and damage\nor destruction during pre-launch operations, any of which could have a material adverse effect on our business,\nfinancial condition, results of operations, and future prospects.\nThe development, manufacturing, and operation of launch vehicles and satellites are complex and capital-intensive\nactivities that are subject to numerous risks. Our launch vehicles, satellites, and related systems have in the past\nexperienced and may in the future experience delays, damage or destruction during design and manufacturing,\nincluding delays in fabrication, assembly, inspection, testing, and component qualification. These issues may arise\nfrom engineering challenges, supplier performance problems, quality control shortcomings, unexpected design\nmodifications, or disruptions in our manufacturing facilities. Any of these factors may delay development or\nproduction schedules, increase costs, or result in hardware that must be reworked or replaced.\nOur operations also involve significant risks during pre-launch preparation. Launch vehicles and satellites can be\ndamaged or destroyed during transport, fueling, integration, or ground testing. Furthermore, the early retirement or", - "path": "spacex-s1.pdf/p77", - "metadata": { - "length": 5076, - "summary": "50 Table of Contents rights. Despite our efforts, we may not be able to prevent unauthorized use, copy, reverse engineering, misappropriation of our technology or intellectual property rights to create technology that compete with ours, or independent development of similar te...", - "page_nums": [ - 77 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 77, "artifact_ref": "page_citation_assets/page-77.png", @@ -5669,24 +5920,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e3a06b1e-8a80-5d66-afa5-0813ed2f1e91", - "type": "page", - "content": "51\nTable of Contents\ninoperability of satellites or related infrastructure may require us to accelerate depreciation or recognize impairment\ncharges, thereby adversely affecting our business, financial condition, results of operations, and future prospects.\nEven minor anomalies may require extensive troubleshooting or repairs, resulting in launch delays, increased\nmission costs, or the loss of flight hardware. Because launch operations require coordination across multiple systems\n—including propulsion, avionics, ground infrastructure, and third-party range providers—issues in any one area can\nlead to postponements or mission cancellations.\nOur ability to continue and expand launch and satellite operations depends upon our ability to obtain new and\nleverage existing U.S. export control and sanctions authorizations, and any significant changes to the geopolitical\nlandscape or U.S. government regulatory approach to licensing could materially and adversely impact our\ninternational business operations by compromising existing licenses or limiting our ability to engage in\ncommercial dealings in or involving geopolitically sensitive countries.\nThe launch and satellite operations are subject to stringent export control and economic and trade sanctions laws,\nincluding the U.S. International Traffic in Arms Regulations (“ITAR”), the Export Administration Regulations, and\nsanctions administered and enforced by the U.S. Treasury Department’s Office of Foreign Assets Control\n(“OFAC”). Under U.S. export control laws, we are required to obtain export authorizations from the Departments of\nCommerce or State to export or share any controlled goods, technology, or software with foreign persons, including\nforeign person employees, or to foreign destinations. The availability of such authorizations may be impacted by\nsignificant changes to the geopolitical landscape. The U.S. government may revise export control regulations,\nrestrict exports to new or additional locations, or otherwise change its approach to licensing in ways that, while\noutside of our control, materially impact our international supply chain, existing export licenses, and business\noperations. For example, under the ITAR, we are required to determine the proper licensing jurisdiction and\nclassification of products, software and technology; and obtain licenses or other forms of U.S. government\nauthorizations to engage in certain activities related to and that support our business operations. The authorization\nrequirements include the need to get permission to release controlled technology to foreign person employees and\nother foreign persons.\nIn addition, we are required to obtain OFAC authorization in certain situations, including to provide connectivity\nservices or engage in other business operations in certain global markets that may be subject to economic sanctions\nor trade embargoes. While we have been successful in obtaining such authorizations in the past, there can be no\nassurances that authorizations or licenses will be available in the future. In addition, significant changes to the\ngeopolitical landscape, such as the outbreak of armed conflict, could result in the imposition of new or expanded\neconomic or trade sanctions that may impact or prevent our ability to provide services or otherwise operate in certain\nmarkets. Failures by us to comply with import, export control, or sanctions laws and regulations could result in civil\nor criminal penalties, fines, investigations, more onerous compliance requirements, loss of export privileges,\ndebarment from government contracts, or limitations on our ability to enter into contracts with the U.S. government.\nOther regulators, such as the EU or UK, may also impose restrictions on our ability to operate in geopolitically\nsensitive countries or territories.\nOur use of open source technology could impose limitations on our ability to commercialize our space-based\ninternet and mobile phone services, AI products, and X platform, or otherwise negatively affect our business.\nWe use open source technology in some of our software, including in our Starlink products and services, and in our\nAI segment’s and X platform’s software and products, and we expect to continue to use open source technology in\nthe future. Open source technology is licensed by its authors or other third parties under open source licenses, which\nin some instances may subject us to certain unfavorable conditions. For example, certain open source licenses may\ngive rise to requirements to disclose or license our proprietary source code or make available any derivative works\nor modifications of the open source code on unfavorable terms or at no cost. Although we monitor and have\nimplemented policies relating to our use of open source technology to avoid subjecting our products and services to\nconditions we do not intend, we cannot guarantee such efforts will be successful and we may face allegations from\nothers alleging ownership of, or seeking to enforce the terms of, an open source license, including by demanding\nrelease of the open source software, derivative works or modifications, or our proprietary source code that was\ndeveloped using such technology, or demanding access to our software free of charge or on other unfavorable terms.\nThese allegations could also result in litigation. Additionally, our AI products are trained on data sets that may", - "path": "spacex-s1.pdf/p78", - "metadata": { - "length": 5407, - "summary": "51 Table of Contents inoperability of satellites or related infrastructure may require us to accelerate depreciation or recognize impairment charges, thereby adversely affecting our business, financial condition, results of operations, and future prospects. Even minor anomalie...", - "page_nums": [ - 78 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 78, "artifact_ref": "page_citation_assets/page-78.png", @@ -5694,24 +5928,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_aa9a869a-e037-52cb-9546-af35aaf6f526", - "type": "page", - "content": "52\nTable of Contents\ninclude open source software, and it is possible that certain outputs of our AI products may be subject to open source\nlicense restrictions or obligations. The terms of many open source licenses are ambiguous and have not been\ninterpreted by United States or foreign courts. There is a risk that these licenses could be construed in a way that\ncould impose unanticipated conditions or restrictions on our ability to commercialize our AI segment’s products. In\nsuch an event, we may be required to seek licenses from third parties to continue commercially offering our AI\nsegment’s products, to make our proprietary code generally available in source code form, to re-engineer our AI\nsegment’s products or to discontinue the sale of our AI segment’s products or such other products if re-engineering\ncould not be accomplished on a timely basis, any of which could adversely affect our business, financial condition,\nresults of operations, and future prospects.\nIn addition, the use of open source technology may entail greater technical and legal risks than those associated with\nthe use of third-party commercial software as open source licensors generally do not provide support, warranties,\ncontrols on origin of the software, indemnification or other contractual protections regarding infringement claims or\nthe quality of the code, including the existence of security vulnerabilities. Many of the risks associated with usage of\nopen source technology, such as the lack of warranties or assurance of title, cannot be eliminated and could, if not\nproperly addressed, negatively affect our business. To the extent that our technologies and other business operations\ndepend upon the successful and secure operation of the open source technology we use, any undetected errors or\ndefects in this open source software could prevent the deployment or impair the functionality of our software, delay\nthe introduction of new technological capabilities, result in a failure of our technologies, and injure our brand and\nreputation. For example, undetected errors or defects in open source software could render it vulnerable to breaches\nor security attacks and make our AI segment’s products more vulnerable to data breaches or security attacks. Any of\nthe foregoing would have a material adverse effect on our business, financial condition, results of operations and\nfuture prospects.\nPayment, banking, and other financial service-related activities may subject us to additional regulatory\nrequirements, regulatory actions, and other risks that could be costly and difficult to comply with or that could\nharm our business.\nWe plan to publicly launch the Money Product, which will offer payment, banking and other financial services\nfunctionalities, including enabling our users to purchase tangible, virtual, and digital goods from merchants and send\nmoney to other users, among other activities. These activities will subject us to a variety of laws and regulations in\nthe United States, Europe, and elsewhere globally, including those governing anti-money laundering and counter-\nterrorism financing, money transmission, stored value, gift cards and other prepaid access instruments, electronic\nfunds transfer, virtual currency, consumer protection, charitable fundraising, global and local economic sanctions,\nand import and export restrictions. In addition, we could become subject to new consumer protection laws and\nregulations that may be adopted or amended, including those related to payment, banking, and other financial\nservices activities as well as sharing, collection, and use of payment, banking, and other financial services-related\ndata. Depending on how the Money Product evolves, we may also be subject to other laws and regulations including\nthose governing gambling, cryptocurrencies, brokerage, banking, credit, and lending. In some jurisdictions, the\napplication or interpretation of these laws and regulations is not clear. We have received certain payments licenses in\nthe United States and other jurisdictions for our anticipated regulated payments-related products and activities.\nThese licenses increase flexibility in how our use of payments may evolve, help mitigate regulatory uncertainty, and\nwill generally require us to demonstrate compliance with many domestic and foreign laws in relation to our licensed\npayments products and activities. Our efforts to comply with these laws and regulations may still not guarantee\ncompliance. In the event that we are found to be in violation of any such legal or regulatory requirements, we may\nbe subject to monetary fines or other penalties such as a cease and desist order, or we may be required to make\nproduct changes, any of which could have a material and adverse effect on our business, financial condition, results\nof operations and future prospects.\nIn addition, we will be subject to a variety of additional risks as a result of payment, banking, and other financial\nservices transactions, including: increased costs and other resources to address errors in transactions or customer\ndisputes; potential fraudulent or otherwise illegal activity by users, developers, employees, or third parties;\nrestrictions on the investment of consumer funds used to transact payments; and additional disclosure and reporting\nrequirements. We plan to publicly launch the Money Product and may in the future undertake additional payment,", - "path": "spacex-s1.pdf/p79", - "metadata": { - "length": 5420, - "summary": "52 Table of Contents include open source software, and it is possible that certain outputs of our AI products may be subject to open source license restrictions or obligations. The terms of many open source licenses are ambiguous and have not been interpreted by United States...", - "page_nums": [ - 79 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 79, "artifact_ref": "page_citation_assets/page-79.png", @@ -5719,24 +5936,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f0d357a9-2235-53f5-99a9-1221f8394302", - "type": "page", - "content": "53\nTable of Contents\nbanking, and other financial services initiatives, which may subject us to many of the foregoing risks and additional\nlicensing requirements.\nOur efforts to support the creation of permanent installations on the Moon and Mars depend on the successful\ndevelopment and deployment of next-generation capabilities.\nActivities related to the industrialization and development of the Moon and Mars require the successful development\nand deployment of next-generation capabilities such as fully reusable launch vehicles, including Starship, in-space\nrefueling and propellant storage, in space communications systems, and other capabilities required for operations\nbeyond Earth’s orbit. These systems involve significant technological, engineering, and operational challenges,\nincluding the need to develop habitable transportation and surface environments, and perform complex in-orbit\noperations. Solving these challenges will require developing solutions that are novel or untested and will require\nsubstantial capital investment. If these efforts take longer than anticipated, or if technical, operational, or engineering\nchallenges arise in connection with these efforts, our goals with respect to the Moon and Mars, including\ngovernment contracts, and other and multiplanetary initiatives could be delayed, modified, or cancelled and could\nmaterially and adversely affect our business, financial condition, and results of operations. Even if such goals are\nachieved, they may not generate meaningful revenue or achieve profitability for an extended period of time.\nOur AI segment is recently formed, is still being fully integrated and optimized, operates in a rapidly evolving\nindustry and is subject to significant execution, competitive and operational risks.\nWe acquired xAI in February 2026 as the foundational platform for our AI segment and as part of our ambitious\nvertical integration strategy intended to combine artificial intelligence capabilities with our established Space and\nConnectivity businesses. Prior to its acquisition by the Company, xAI itself was an early-stage company. As a result,\nour AI segment remains in a relatively early stage of organizational and operational maturity and is subject to\nintegration, scaling and execution risks.\nThe successful integration of acquired businesses, technologies, strategic partners, and employees is inherently\ncomplex, costly and time-consuming, and may result in operational inefficiencies, delays, disruptions, increased\ncosts, loss of knowledge and diversion of management attention. As is common in large acquisitions, we have had to\ntake significant steps to integrate xAI’s operations into our broader corporate structure as part of our AI segment,\nincluding putting in place the management team and organizational structure needed to execute at the scale and pace\nour strategy demands, as well as controls and procedures appropriate for a larger organization like ours. Many of\nthese steps are not yet complete.\nWe have undertaken, and continue to undertake, changes in personnel, strategic partnerships, infrastructure-sharing\narrangements, organizational restructurings, acquisitions and other integration initiatives intended to accelerate\ndevelopment of our AI capabilities, compute infrastructure and commercial offerings. Management believes these\ninitiatives may create long-term strategic advantages through the combination of engineering talent, compute\ninfrastructure, proprietary data, software capabilities and integrated operational platforms across the Company’s\nbusinesses, among others. However, the successful integration of acquired businesses, management teams,\nemployees, strategic partners, technologies and evolving product architectures is inherently complex, costly and\ntime-consuming and may result in operational inefficiencies, delays, disruptions or the failure to realize anticipated\nsynergies or commercial benefits.\nWe have also pursued evolving commercial and technical strategies, including coding and software development\n(such as through our partnership with Cursor) and monetization of unused compute capacity (such as through our\ncloud compute services agreements with Anthropic), while simultaneously continuing to invest heavily in expanding\ndatacenter and compute capacity for our own internal AI initiatives and products. These efforts may require\nsubstantial capital expenditures and management attention and may create operational complexity relating to\ninfrastructure allocation, prioritization of internal versus external compute usage, integration of third-party\ntechnologies and partnerships, cybersecurity, data governance and commercialization strategy. We may elect to\nallocate capital and resources to long-term initiatives even if alternative uses with more short-term upside are\navailable. There can be no assurance that these initiatives will achieve their intended operational or financial\nobjectives.", - "path": "spacex-s1.pdf/p80", - "metadata": { - "length": 4948, - "summary": "53 Table of Contents banking, and other financial services initiatives, which may subject us to many of the foregoing risks and additional licensing requirements. Our efforts to support the creation of permanent installations on the Moon and Mars depend on the successful devel...", - "page_nums": [ - 80 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 80, "artifact_ref": "page_citation_assets/page-80.png", @@ -5744,24 +5944,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_300821a9-7f49-546d-9a3a-61c4afcb43bf", - "type": "page", - "content": "54\nTable of Contents\nThe artificial intelligence industry is highly dynamic and rapidly evolving. We face significant uncertainty relating\nto technological developments, changing customer preferences, evolving regulatory and legal frameworks,\nincreasing public scrutiny, and intense competition for engineering talent, compute capacity, infrastructure,\ncustomers and capital. In addition, the consumer AI market is characterized by rapid model iteration, frequent new\nentrants and intense competition for user attention; as a result, download and other usage metrics for any individual\nAI application, including Grok, can fluctuate significantly (including periods of decreased Grok app downloads and\nuser activity) in response to competitor model releases, product update cycles, and broader shifts in user behavior.\nAs a result of these market dynamics, we may need to modify our AI strategy, organizational structure,\ninfrastructure deployment and capital allocation decisions in response to technological change, competitive\npressures, regulatory developments or commercial adoption trends. Initiatives that management believes are\nstrategically beneficial over the long term may nevertheless experience near-term operational disruptions, integration\ninefficiencies, product delays, technical setbacks, leadership turnover, employee attrition, infrastructure constraints,\nincreased costs or uneven customer adoption during periods of transition or rapid scaling.\nManagement believes that our recent organizational restructuring efforts, infrastructure investments and strategic\ncollaborations position the AI segment favorably for long-term growth and are consistent with the maturation\nprocess of rapidly scaling AI platforms and optimization of acquired companies. However, there can be no assurance\nthat we will successfully integrate acquired businesses and technologies, retain key personnel, execute our AI\nstrategy within anticipated timeframes, achieve meaningful commercial adoption, generate anticipated revenues or\nreturns on investment, or compete effectively in a rapidly evolving and increasingly competitive and consolidated AI\nmarket. If we are unable to successfully execute our AI strategy, our business, financial condition, results of\noperations and prospects could be materially adversely affected.\nOur AI segment is capital intensive, has incurred significant operating losses, and operates in a nascent and\nrapidly evolving market in which the potential of AI remains uncertain.\nAI is a nascent and rapidly evolving technology, and although we believe AI holds significant promise for\nconsumers and enterprises, its long-term impact will depend on the degree to which AI products and services prove\nto be broadly useful in real-world applications. There can be no assurance that demand for AI solutions will develop\nor be sustained at the levels we anticipate, or at all. While industry interest in AI has grown substantially, the\ncommercial value proposition of frontier AI models remains largely unproven, and long-term market acceptance of\nour AI products and services is uncertain. Developing, training, and providing inference for frontier AI models\nrequires substantial and growing capital expenditures, including investments in specialized computing hardware,\ndata center infrastructure, energy procurement, and technical personnel, and we expect these costs to continue to\nincrease for the foreseeable future. In addition, we plan to allocate substantial capital to build our AI compute\ninfrastructure, and we expect a multi-year investment horizon before these deployments translate into sustained\npositive AI Segment Adjusted EBITDA. Our AI segment has incurred significant operating losses since inception,\nand we may not achieve profitability in this segment, or, if achieved, sustain it, and there can be no assurance that\nthe returns on our AI investments will be adequate to justify the capital deployed. Furthermore, the continued\nimprovement of AI model capabilities has historically depended in part on scaling laws, the empirical observation\nthat model performance improves with increased compute, data, and model size, but there is uncertainty as to how\nlong these scaling relationships will continue to hold. As a result of these factors, our AI segment may not achieve\nthe growth or returns we expect.\nWe have a history of net losses and may not achieve profitability in the future.\nWe incurred net losses of $(4,937) million and $(4,628) million for the years ended December 31, 2025 and 2023,\nrespectively, and a net loss of $(4,276) million for the three months ended March 31, 2026. We may not achieve or,\nif achieved, sustain profitability in the future. As of March 31, 2026, we had an accumulated deficit of $41,311\nmillion. While we have experienced significant growth in revenue over the last three years, we cannot predict\nwhether we will maintain this level of growth or when we will achieve profitability again. We also expect our capital\nexpenditures and operating expenses to increase in the future, including our general and administrative expenses as a\nresult of increased costs associated with operating as a public company and as we continue to invest for our future\ngrowth, including substantial capital expenditures to design, develop, expand, and maintain our technologies and\ninfrastructure to support our operations. Our revenue could decline for a number of reasons, including if we are", - "path": "spacex-s1.pdf/p81", - "metadata": { - "length": 5459, - "summary": "54 Table of Contents The artificial intelligence industry is highly dynamic and rapidly evolving. We face significant uncertainty relating to technological developments, changing customer preferences, evolving regulatory and legal frameworks, increasing public scrutiny, and in...", - "page_nums": [ - 81 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 81, "artifact_ref": "page_citation_assets/page-81.png", @@ -5769,24 +5952,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_aff5eb89-9881-5ff0-8c59-d3ad1aaabb71", - "type": "page", - "content": "55\nTable of Contents\nunable to execute on our growth strategy and as a result of the other risks described in this prospectus. Furthermore,\nif we fail to maintain or increase our revenue to offset increases in our operating expenses or manage our costs as we\ninvest in our business, including if we do not maintain or improve our operating efficiencies, we may not achieve or\nsustain profitability. Any failure by us to achieve or sustain profitability on a consistent basis could have a material\nadverse effect on our business, financial condition and results of operations and cause the market price of our Class\nA common stock to decline.\nThe timing of our revenue and cost recognition may fluctuate due to factors outside of our control, which could\ncause our periodic results of operations to fluctuate and make our results difficult to predict.\nIn our financial results, we recognize revenue and costs for a majority of customer payloads at the launch or\ndeployment of the customer’s payload to its intended orbit. While we plan launches and schedule payloads in\nadvance, the timing of these launches or deployments may vary and can be delayed or otherwise affected by a\nnumber of factors outside of our control, including the customer’s delay in delivering their payload for integration\nonto the launch vehicle, adverse weather, and other operational considerations. As a result, the timing of revenue\nrecognition may shift between reporting periods. For example, if the launch of a customer’s payload was expected to\noccur near the end of a reporting period but instead occurs shortly thereafter (e.g., on April 1 instead of March 30),\nthe associated revenue would be recognized in the subsequent quarter. In addition, if a significant number of\nlaunches or deployments occur within a short period of time, the concentration of those events may result in greater\nvariability in the timing of revenue recognition between reporting periods. These factors may cause our quarterly or\nannual results of operations to fluctuate and may make our results difficult to predict.\nFailure to comply with requirements to design, implement, and maintain effective internal controls could have a\nmaterial adverse effect on our business and stock price.\nAs a privately held company, we were not required to evaluate our internal control over financial reporting in a\nmanner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act\n(“Section 404”).\nAs a public company, we will have significant requirements for enhanced financial reporting and internal controls.\nThe process of designing and implementing effective internal controls is a continuous effort that requires us to\nanticipate and react to changes in our business and the economic and regulatory environments and to expend\nsignificant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as\na public company. If we are unable to establish or maintain appropriate internal financial reporting controls and\nprocedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material\nmisstatements in our consolidated financial statements, and harm our results of operations. In addition, we will be\nrequired, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of\nour internal control over financial reporting in the second annual report following the completion of this offering.\nThis assessment will need to include disclosure of any material weaknesses identified by our management in our\ninternal control over financial reporting. The rules governing the standards that must be met for our management to\nassess our internal control over financial reporting are complex and require significant documentation, testing, and\npossible remediation. Testing and maintaining internal controls may divert our management’s attention from other\nmatters that are important to our business. Additionally, our independent registered public accounting firm will be\nrequired to attest to the effectiveness of our internal control over financial reporting on an annual basis, beginning\nwith our second annual report.\nWe are currently in the process of updating our control processes and automating certain of our procedures and\nsystems in anticipation of becoming a public company, but our internal controls over financial reporting currently do\nnot meet all of the standards contemplated by Section 404 that we will eventually be required to meet. Because we\ncurrently do not have comprehensive documentation of our internal controls and have not yet tested our internal\ncontrols in accordance with Section 404, we cannot conclude in accordance with Section 404 that we do not have a\nmaterial weakness in our internal controls or a combination of significant deficiencies that could result in the\nconclusion that we have a material weakness in our internal controls. In connection with updating our control\nprocesses and the implementation of the necessary procedures and practices related to internal control over financial\nreporting, we have identified deficiencies and may identify deficiencies in the future that we may not be able to", - "path": "spacex-s1.pdf/p82", - "metadata": { - "length": 5262, - "summary": "55 Table of Contents unable to execute on our growth strategy and as a result of the other risks described in this prospectus. Furthermore, if we fail to maintain or increase our revenue to offset increases in our operating expenses or manage our costs as we invest in our busi...", - "page_nums": [ - 82 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 82, "artifact_ref": "page_citation_assets/page-82.png", @@ -5794,24 +5960,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d0029513-f354-55de-a166-fe866a482e2d", - "type": "page", - "content": "56\nTable of Contents\nremediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of\nSection 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies\nidentified by our independent registered public accounting firm in connection with the issuance of their attestation\nreport. Our testing, or the subsequent testing (if required) by our independent registered public accounting firm, may\nreveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses. Any\nmaterial weaknesses could result in a material misstatement of our annual or quarterly consolidated financial\nstatements or disclosures that may not be prevented or detected.\nOur insurance coverage strategy may not be adequate to protect us from all business risks.\nWe may be subject, in the ordinary course of business, to losses resulting from accidents, acts of God and other\nclaims against us, for which we may have no insurance coverage. As a general matter, we do not maintain as much\ninsurance coverage as many other companies do, and in some cases, we do not maintain any at all, including with\nrespect to our in-orbit satellites, which we currently do not insure and do not expect to insure in the future.\nAdditionally, the policies that we do have may include significant deductibles or self-insured retentions, policy\nlimitations and exclusions, and we cannot be certain that our insurance coverage will be sufficient to cover all future\nlosses or claims against us. A loss that is uninsured or which exceeds policy limits may require us to pay substantial\namounts, which may harm our financial condition and operating results.\nRisks Related to Our Corporate Structure, Ownership of our Class A Common Stock and This Offering\nConflicts of interest could arise in the future between us, on the one hand, and Mr. Musk and entities owned by\nor affiliated with him, on the other hand, concerning among other things, business transactions, potential\ncompetitive activities or other business opportunities.\nConflicts of interest could arise in the future between us, on the one hand, and Mr. Musk and entities owned by or\naffiliated with him, on the other hand, concerning among other things, business transactions, potential competitive\nbusiness activities or other opportunities. In the normal course of business, we have engaged in a variety of\ntransactions with some of these companies. Please refer to “Certain Relationships and Related Person Transactions.”\nIn addition, we have previously engaged, are currently engaged, and expect to continue to engage in the future in a\nnumber of strategic collaborations with Tesla, including with respect to Macrohard and Terafab. Certain of these\nprojects, including Macrohard and Terafab, are in the very early stages, as a result of which we and Tesla have not\nfinalized a variety of details relating to our collaboration, including, but not limited to, financial terms, intellectual\nproperty rights, and the ultimate term of our collaboration. Furthermore, Mr. Musk and other businesses owned by\nor affiliated with him may now, or in the future, directly or indirectly, compete with us for investment or business\nopportunities.\nMr. Musk or his affiliates may become aware, from time to time, of certain business opportunities (such as\nacquisition opportunities or technological developments) and may direct such opportunities to other businesses in\nwhich they have invested, in which case we may not become aware of or otherwise have the ability to pursue such\nopportunity. In addition, Mr. Musk and his affiliates may dispose of their interests in other companies or other assets\nin the future, without any obligation to offer us the opportunity to purchase any of those interests or assets.\nUnder our charter, Mr. Musk and his affiliates are not restricted from owning assets or engaging in businesses that\ncompete directly or indirectly with us and will not have any duty to refrain from engaging, directly or indirectly, in\nthe same or similar business activities or lines of business as us, including those business activities or lines of\nbusiness deemed to be competing with us, or doing business with any of our customers or vendors. Moreover, we\nhave in the past entered into, and may in the future enter into, transactions with entities affiliated with Mr. Musk. We\nmay enter into such transactions in lieu of pursuing other opportunities that some other shareholders may prefer or\nthat may prove to be more accretive than the opportunities we elect to pursue. In any of these matters, the interests\nof Mr. Musk and entities owned by or affiliated with him may differ or conflict with the interests of our other\nshareholders. Any actual or perceived conflicts of interest with respect to the foregoing could have an adverse\nimpact on the trading price of our Class A common stock.", - "path": "spacex-s1.pdf/p83", - "metadata": { - "length": 4942, - "summary": "56 Table of Contents remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by our independent r...", - "page_nums": [ - 83 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 83, "artifact_ref": "page_citation_assets/page-83.png", @@ -5819,24 +5968,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f165adf4-a658-590d-b005-e15e856d8b3a", - "type": "page", - "content": "57\nTable of Contents\nCertain of our directors and key employees may have conflicts of interest because they are also employees or\ndirectors of affiliates of Mr. Musk or other large shareholders. The resolution of these conflicts of interest may\nnot be in our or your best interests.\nCertain of our directors and key employees may have conflicts of interest because they are also employees or\ndirectors of affiliates of Mr. Musk or other large shareholders. Such directors may have interests in, serve on the\nboards of, or have financial or other relationships with other companies, ventures, or initiatives that are related to or\ncompetitive with our business, including but not limited to other space or AI companies, technology ventures,\nsatellite communications businesses, and government or commercial space contracts. Please refer to “Management.”\nThese relationships and interests could create actual or perceived conflicts of interest, particularly with respect to the\nallocation of time, resources, business opportunities, or strategic decisions. In addition, our charter provides that, to\nthe fullest extent permitted by applicable law, we renounce certain corporate opportunities that may be presented to\nMr. Musk and certain of our directors and their respective affiliates, and such persons may have no duty to present\nsuch opportunities to us. Please refer to “Description of Capital Stock—Corporate Opportunities.” Any actual or\nperceived conflicts of interest could harm our reputation, lead to disputes, divert management attention, or result in\ndecisions that are not in the best interests of us or our shareholders, which could materially and adversely affect our\nbusiness, financial condition, results of operations, and future prospects.\nWe are highly dependent on the continued services of Mr. Musk, our Chief Executive Officer and Chief\nTechnical Officer, and other key personnel, and the loss or reduced involvement of one or more of these\nindividuals could adversely affect our ability to execute our business strategy.\nWe are highly dependent on the continued service and performance of Mr. Musk, whose leadership, vision, and\nexpertise are critical to the development of our technologies and the execution of our business strategy. Mr. Musk\nhas been, and continues to be, a driving force behind our growth, innovation, and operational success. The loss of\nMr. Musk, whether due to death, disability, or otherwise, or his inability or unwillingness to continue in his current\nroles, could significantly disrupt our management structure, adversely affect our ability to execute our strategic\nplans, and negatively impact our reputation and relationships with customers, partners, and other stakeholders. Our\nintense, mission-driven, engineering-first culture has been a key driver of our growth and execution, and any erosion\nof this culture, including as a result of the loss or reduced involvement of Mr. Musk, could have a material adverse\neffect on our business, financial condition, results of operations, and future prospects. We do not maintain key-\nperson life insurance on Mr. Musk. Further, although Mr. Musk devotes significant time to our businesses and is\nhighly active in our management, he does not devote his full time and attention to our businesses and devotes time\nand attention to other significant roles (and may in the future serve in additional roles). For instance, Mr. Musk\ncurrently serves as Technoking and Chief Executive Officer of Tesla and is involved in other emerging technology\nventures, including Neuralink and The Boring Company. Mr. Musk has also previously served as Senior Advisor to\nthe President of the United States. Any such loss or reduced involvement in our business could result in a material\nadverse effect on our business, financial condition, results of operations, and future prospects. The process of\nidentifying and recruiting a successor with the combination of skills and experience possessed by Mr. Musk, as well\nas the ability to maintain the confidence of the market, could be lengthy and uncertain, and there can be no assurance\nthat we would be able to attract or retain a suitable replacement in a timely manner or at all.\nWe, Mr. Musk, and other companies Mr. Musk is affiliated with frequently receive an immense amount of media\nattention. The actions and statements of Mr. Musk and his affiliated ventures, whether or not directly relating to us,\nmay draw significant public attention and scrutiny to us and could potentially have a positive or negative impact on\nour business, relationships with customers and regulators, or stock price.\nIn addition to Mr. Musk, we have key personnel who are invaluable to our businesses. We rely upon their\nknowledge, expertise, and leadership to develop, manufacture, launch, sell, and support our products and services.\nNone of our key employees are bound by an employment agreement for any specific term and we may not be able to\nsuccessfully attract and retain the senior leadership necessary to continue to grow our business. Our compensation\narrangements, such as our equity award programs, may not always be successful in attracting new employees and\nretaining and motivating existing key personnel. Our success depends upon our ability to attract and retain key\npersonnel and any failure to do so could have a material adverse effect on our business, financial condition, results\nof operations, and future prospects.", - "path": "spacex-s1.pdf/p84", - "metadata": { - "length": 5447, - "summary": "57 Table of Contents Certain of our directors and key employees may have conflicts of interest because they are also employees or directors of affiliates of Mr. Musk or other large shareholders. The resolution of these conflicts of interest may not be in our or your best inter...", - "page_nums": [ - 84 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 84, "artifact_ref": "page_citation_assets/page-84.png", @@ -5844,24 +5976,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3af901cc-66ff-58e2-b88a-6d20e054ecc5", - "type": "page", - "content": "58\nTable of Contents\nA significant reduction by Mr. Musk or other existing shareholders of their ownership interest in us could\nadversely affect us.\nWe believe that Mr. Musk’s substantial ownership interest in us provides him with an economic incentive to assist\nus to be successful. Upon the expiration or earlier waiver of the lock-up restrictions on transfers or sales of our\nsecurities following the completion of this offering, Mr. Musk will not be subject to any obligation to maintain his\nownership interest in us and may elect at any time thereafter to sell all or a substantial portion of or otherwise reduce\nhis ownership interest in us. If Mr. Musk sells all or a substantial portion of his ownership interest in us, he may\nhave less incentive to assist in our success, which could adversely affect our future prospects. Additionally, future\nresales of our Class A common stock by Mr. Musk or other existing shareholders, or the perception that such sales\nmay occur, could cause the market price of our Class A common stock to decline significantly, regardless of our\nactual business performance. In particular, subject to the expiration or waiver of any applicable lock-up period,\nparties to the Investors’ Rights Agreement described in “Certain Relationships and Related Person Transactions—\nInvestors’ Rights Agreement” will have the right, subject to certain exceptions and conditions, to require us to\nregister approximately shares of Class A common stock under the Securities Act, and they will have the\nright to participate in certain future registrations of securities by us. Registration of any of such shares would result\nin such shares becoming freely tradable without compliance with Rule 144 limitations upon effectiveness of the\nregistration statement. In addition, approximately shares of Class A common stock will generally be\navailable for resale under Rule 144 starting 90 days after this offering, subject to lock-up restrictions described\nelsewhere in this prospectus. See “Certain Relationships and Related Person Transactions—Investors’ Rights\nAgreement” and “Shares Eligible for Future Sale—Registration Rights.”\nFollowing the consummation of this offering, we will be a “controlled company” within the meaning of the\nNasdaq and Nasdaq Texas listing rules and, as a result, will qualify for and rely on exemptions from certain\ncorporate governance requirements.\nBecause Mr. Musk will beneficially own shares of Class A common stock and shares of\nClass B common stock, which represents greater than 50% of the voting power of our common stock with respect to\ndirector elections and moreover, holders of our Class B common stock, voting separately as a class, will be entitled\nto elect 51% of the total number of authorized directors constituting our board (rounded up to the nearest whole\nnumber), following the completion of this offering, we will be a controlled company under the listing rules of\nNasdaq and Nasdaq Texas.\nUnder the listing rules of Nasdaq and Nasdaq Texas, a company of which more than 50% of the voting power with\nrespect to director elections is held by another person or group of persons acting together is a “controlled company”\nand may elect not to comply with certain Nasdaq and Nasdaq Texas corporate governance requirements, including\nthe requirements that:\n• a majority of such company’s board of directors consist of independent directors as defined under the listing\nrules of Nasdaq and Nasdaq Texas;\n• director nominees be selected or recommended for board of directors’ selection by a nominating committee\ncomposed entirely of independent directors, with a written charter addressing the nominations process as\nrequired under the listing rules of Nasdaq and Nasdaq Texas;\n• the compensation committee be composed entirely of independent directors with a written charter addressing\nthe committee’s purpose and responsibilities; and\n• annual performance evaluations of the compensation and nominating committees be conducted.\nFollowing the completion of this offering, we intend to utilize certain of these exemptions. As a result, we do not\nexpect to have a compensation and nominating committee that is composed entirely of independent directors or that\nhas a committee charter that addresses all Nasdaq and Nasdaq Texas requirements applicable to companies that are\nnot controlled companies. Additionally, we may elect to take advantage of certain other exemptions in the future for\nas long as we remain a “controlled company.” Accordingly, our Class A shareholders will not have the same\nprotections afforded to shareholders of companies that are subject to all of the corporate governance requirements of", - "path": "spacex-s1.pdf/p85", - "metadata": { - "length": 4749, - "summary": "58 Table of Contents A significant reduction by Mr. Musk or other existing shareholders of their ownership interest in us could adversely affect us. We believe that Mr. Musk’s substantial ownership interest in us provides him with an economic incentive to assist us to be succe...", - "page_nums": [ - 85 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 85, "artifact_ref": "page_citation_assets/page-85.png", @@ -5869,24 +5984,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e51b9bef-f6e3-54d8-a774-0fd894ea0c99", - "type": "page", - "content": "59\nTable of Contents\nNasdaq and Nasdaq Texas. In the event that we cease to be a “controlled company” and our shares continue to be\nlisted on Nasdaq and Nasdaq Texas, we will be required to comply with all of the applicable governance\nrequirements within the applicable transition periods. Please refer to “Management.”\nOur ability to provide returns to shareholders will depend on appreciation in our share price, as we do not plan to\npay dividends for the foreseeable future.\nThe ability of investors to realize a return on their investment will depend largely on the appreciation of the price of\nour Class A common stock, as we do not anticipate paying dividends in the foreseeable future. We have never\ndeclared or paid any cash dividends on our common stock, and we currently intend to retain all available funds and\nany future earnings to support the growth and operation of our business, including investment in new technologies\nand commercial opportunities. As a result, investors seeking cash returns from their investment will not receive any\ndividend income, and the only way to realize a return may be through an increase in the market price of our Class A\ncommon stock, which may not occur. The trading price of our Class A common stock may be volatile and subject to\nwide fluctuations in response to various factors, including our financial condition and operating results, changes in\nour business or future prospects, technological innovations, announcements by us or our competitors, changes in the\nregulatory environment, harm to our brand and reputation, broader market or economic conditions, and the fact that\na number of shares of our Class A common stock are expected to be allocated to retail investors in this offering.\nAdditionally, high retail investor interest in our Class A common stock may occur following this offering, which\nmay lead to increased volatility of the trading price. Some of these factors are outside of our control, and the trading\nprice of our Class A common stock may not reflect our actual operating performance. Accordingly, investors may\nnot be able to realize a gain on their investment and could lose all or part of their investment in our Class A common\nstock.\nUpon completion of this offering, Mr. Musk will serve as our Chief Executive Officer, Chief Technical Officer,\nand Chairman of our board and control the election of our directors, and our dual class structure concentrates\nvoting control with Mr. Musk and other holders of our Class B common stock. This will limit or preclude your\nability to influence corporate matters and the election of our directors.\nOur Class B common stock will have ten votes per share; our Class A common stock will have one vote per share;\nand, except as summarized here, our Class A common stock will vote together with our Class B common stock on\nany matter submitted to the shareholders for a vote. Under our charter, holders of our Class B common stock, voting\nseparately as a class, will be entitled to elect 51% of the total number of authorized directors constituting our board\n(rounded up to the nearest whole number) and will have the ability to remove those directors for as long as there is at\nleast one share of Class B common stock outstanding. As a result, holders of our Class B common stock will have\ncontrol over the composition of our board and significant influence over the outcome of matters requiring\nshareholder approval. Please refer to “Description of Capital Stock” for certain other actions that will require\napproval of a majority of the voting power of the outstanding shares of Class B common stock voting separately as a\nclass. This concentration of voting power will limit or preclude the ability of holders of our Class A common stock,\nincluding purchasers of Class A common stock in this offering, to influence corporate matters and the election of our\ndirectors.\nUpon completion of this offering, Mr. Musk will beneficially own a majority of the outstanding shares of our\nClass B common stock and a majority of the voting power of the common stock (the Class A common stock and the\nClass B common stock voting together) and therefore will be able to elect all the members of our board. Mr. Musk,\nwho will serve as our Chief Executive Officer and Chairman of our board under our charter and can only be\nremoved from our board or these positions by the vote of Class B holders, as set forth in our charter, will exert\nsignificant influence over our business and affairs.\nClass B common stock will continue to have ten votes per share, except that, subject to exceptions for certain inter-\nfamily transfers and transfers to certain entities that qualify as “permitted transferees” (as described elsewhere in this\nprospectus), transfers by holders of our Class B common stock will generally result in those shares converting to\nClass A common stock. The conversion of Class B common stock to Class A common stock will have the effect,\nover time, of increasing the relative voting power of those holders of Class B common stock who retain their shares.", - "path": "spacex-s1.pdf/p86", - "metadata": { - "length": 5073, - "summary": "59 Table of Contents Nasdaq and Nasdaq Texas. In the event that we cease to be a “controlled company” and our shares continue to be listed on Nasdaq and Nasdaq Texas, we will be required to comply with all of the applicable governance requirements within the applicable transit...", - "page_nums": [ - 86 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 86, "artifact_ref": "page_citation_assets/page-86.png", @@ -5894,24 +5992,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_205a93f2-e9be-5d75-ac95-306dff88d498", - "type": "page", - "content": "60\nTable of Contents\nIf Mr. Musk retains a significant portion of his holdings of Class B common stock for an extended period of time, he\ncould continue to control the election and removal of a majority of our board.\nHowever, other persons will also hold shares of Class B common stock. If Mr. Musk were to sell, transfer or\notherwise dispose of a sufficient number of his shares of Class B common stock such that he no longer holds a\nmajority of the outstanding shares of Class B common stock, another holder or group of holders of Class B common\nstock could obtain the ability to elect and remove a majority of our board and thereby effectively control the\nCompany. Any such change in control could result in changes to our strategic direction, management, business plans\nor policies that may not be aligned with the interests of holders of our Class A common stock.\nIn addition, our charter will provide that other than for specified class votes by the Class B common stock or any\nrights granted to other classes in the future, classes of stock will not be entitled to any separate class votes provided\nfor under the Texas Business Organizations Code (the “TBOC”), including among others (i) the increase or decrease\nof the aggregate number of authorized shares of a class outstanding, (ii) the exchange, reclassification, or\ncancellation of all or part of the shares of a class, (iii) a change of shares of a class, with or without par value, into\nthe same or a different number of shares of the same or another class, with or without par value, (iv) the creation of a\nnew class of shares with rights and preferences equal, prior, or superior to the shares of the class and (v) cancellation\nor other effectuation of the dividends on the shares of the class or series that have accrued but have not been\ndeclared.\nThe TBOC and our charter include provisions that may limit shareholders’ ability to bring a cause of action\nagainst our directors or officers for certain acts or omissions in their capacity as directors or officers of the\nCompany, including minimum share ownership for derivative proceedings and the presumption of the business\njudgment rule.\nThe TBOC and our governing documents include certain provisions that may limit our shareholders’ ability to bring\ncertain derivative claims against our officers and directors. For example, the TBOC provides that, if a corporation\nhas a class of stock listed on a national securities exchange, the governing documents may provide that the minimum\nownership threshold for a shareholder or group of shareholders to institute or maintain such derivative proceeding is\n3% of shares outstanding. A similar ownership threshold provision based on this 2025 TBOC provision has already\nbeen challenged in court proceedings involving another Texas corporation and, although the federal district court\nfound the provision enforceable in that case, its enforceability or governing documents containing its provisions\ncould be subject to further challenges or interpretation. The TBOC also permits corporations to request a court, at\nthe start of a transaction (including a related party transaction) or inquiry into a derivative claim, to determine the\nindependence and disinterestedness of directors serving on a special committee reviewing the transaction or\ndirectors or other individuals on panels reviewing derivative claims. Subsequent challenges to independence or\ndisinterestedness would require new facts. Our bylaws will provide that these TBOC provisions will apply to us.\nIn addition, Section 21.419 of the TBOC sets forth certain presumptions concerning compliance by directors and\nofficers with respect to their duties to a corporation, including the duty of care and duty of loyalty. Specifically, in\ntaking or declining to take any action on any matters of a corporation’s business, Section 21.419, which applies to\nus, provides that a director or officer is presumed to have acted (i) in good faith, (ii) on an informed basis, (iii) in\nfurtherance of the interests of the corporation and (iv) in obedience to the law and the corporation’s governing\ndocuments. These provisions are described as codifying the “business judgment rule.” In order to succeed in a cause\nof action against a director or officer, the Company or a shareholder pursuing such an action must rebut one or more\nof the foregoing presumptions and prove with particularity the director or officer’s act or omission constituted a\nbreach of duty as a director or officer and that such breach involved fraud, intentional misconduct, an ultra vires act\nor a knowing violation of law.\nOur bylaws will impose minimum stock ownership and solicitation requirements on shareholders seeking to\nsubmit proposals for shareholder approval, which could limit the ability of our shareholders to bring matters\nbefore a meeting of shareholders.\nUpon the completion of this offering, we will qualify as a “nationally listed corporation” under Section 21.373 of the\nTBOC, and our bylaws will provide that the shareholder proposal requirements permitted by that section will apply", - "path": "spacex-s1.pdf/p87", - "metadata": { - "length": 5092, - "summary": "60 Table of Contents If Mr. Musk retains a significant portion of his holdings of Class B common stock for an extended period of time, he could continue to control the election and removal of a majority of our board. However, other persons will also hold shares of Class B comm...", - "page_nums": [ - 87 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 87, "artifact_ref": "page_citation_assets/page-87.png", @@ -5919,24 +6000,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1727d16f-bc19-5592-be16-1db1a71a2969", - "type": "page", - "content": "61\nTable of Contents\nimmediately upon qualifying as a “nationally listed corporation.” As a result, except with respect to director\nnominations and procedural resolutions ancillary to the conduct of a shareholders’ meeting, a shareholder or group\nof shareholders seeking to submit a proposal for approval at a meeting of shareholders will be required to satisfy\nspecified ownership, holding-period and solicitation requirements. Under these provisions, the proposing\nshareholder or shareholder group must hold an amount of voting shares (determined as of the date of submission of\nthe proposal) equal to at least 3% of our voting shares, must have held that amount continuously for at least six\nmonths before the date of the meeting and throughout the entire duration of the meeting, and must solicit holders of\nshares representing at least 67% of the voting power of shares entitled to vote on the proposal at the shareholder\nmeeting. For the purpose of this paragraph, “voting shares” means shares that entitle the holder of the shares to vote\non the proposal. These requirements are more restrictive than the requirements that would otherwise apply absent\nsuch a bylaw provision and may make it more difficult, or in some cases impracticable, for shareholders to submit\nproposals for consideration at a shareholders’ meeting. As a result, our shareholders may have fewer opportunities to\npresent proposals for shareholder approval, even on matters they believe are important, which could limit\nshareholder influence over corporate governance and other matters. Section 21.373 of the TBOC was enacted in\n2025 and, while its enforceability has not yet been challenged in court and we do not have any material concerns\nrelated to enforceability of Section 21.373 or the related bylaws provision, like many new laws, we expect the\nenforceability of TBOC Section 21.373 will eventually be challenged.\nOur bylaws place restrictions on the forum, venue and procedures for legal actions or proceedings initiated by\nour shareholders, including certain requirements for mandatory arbitration. These provisions could limit our\nshareholders’ ability to pursue certain claims and/or increase the cost of doing so and could also affect the\nprocedures, rights, and remedies available to our shareholders in such legal actions or proceedings.\nOur bylaws will contain a section (the “Forum Section Bylaw”) that will provide that, unless the Company consents\nin writing to the selection of an alternative forum, the sole and exclusive forum for the filing, adjudication, and trial\nof all disputes between (i) one or more shareholders and (ii) the Company or its directors, officers, or controlling\npersons, or any underwriter of securities issued by the Company (or controlling person thereof) relating to any of the\nfollowing: (1) any derivative proceeding, meaning a civil dispute brought in the right of the Company; (2) any action\nbased on the governance, governing documents, or internal affairs of the Company; (3) any action based on state or\nfederal securities or trade regulation laws; (4) any action based on the alleged act(s) or omission(s) by a person in its\ncapacity as a shareholder, controlling person, director, officer or other managerial official of the Company; (5) any\naction based on the alleged breach(es) by one or more shareholders, controlling persons, directors, officers, or other\nmanagerial officials of a duty owed, in his or her capacity as such, to the Company or to any shareholder thereof; (6)\nan action seeking to hold a shareholder, controlling person, director, officer, or other managerial official of the\nCompany liable for an obligation of the Company, other than on account of a written contract signed by the person\nto be held liable in a capacity other than as a shareholder or managerial official; and (7) any action arising out of the\nTBOC, will be the Texas Business Court, Eleventh Division (the “Business Court”) (for purposes of this summary,\neach, an “Internal Dispute”).\nThe selection of the Business Court as the exclusive forum for Internal Disputes may limit a shareholder’s ability to\nbring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, other\nmanagerial officials, or other employees, which may discourage lawsuits against us and our directors, officers, other\nmanagerial officials, and other employees. Except to the extent that the Company consents in writing, or a court of\ncompetent jurisdiction determines in a final and unappealable judgment, that an Internal Dispute is not subject to the\nsole and exclusive venue and forum or jurisdiction of the Business Court or arbitration (as described further below),\na shareholder will not be permitted to litigate an Internal Dispute in federal court or in any state court other than the\nBusiness Court, and will not be able to avail itself of any potential advantages or procedural protections of such\nother forums. Any person or entity purchasing or otherwise acquiring any interest in our shares of capital stock will\nbe deemed to have notice of and have consented to these provisions. For more information, please refer to\n“Description of Capital Stock—Anti-Takeover Effects of Provisions of Our Charter, our Bylaws and Texas Law.”\nSpaceX maintains that the Forum Selection Bylaw, including without limitation the selection of the Business Court\nas the sole and exclusive forum for all actions brought under federal securities laws, accords with the law and is\nenforceable. However, the law governing the selection of a forum other than a federal court for certain actions\nbrought under the federal securities laws is unsettled, and there is some risk that, if an Internal Dispute were filed", - "path": "spacex-s1.pdf/p88", - "metadata": { - "length": 5738, - "summary": "61 Table of Contents immediately upon qualifying as a “nationally listed corporation.” As a result, except with respect to director nominations and procedural resolutions ancillary to the conduct of a shareholders’ meeting, a shareholder or group of shareholders seeking to sub...", - "page_nums": [ - 88 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 88, "artifact_ref": "page_citation_assets/page-88.png", @@ -5944,24 +6008,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4595b1ac-bd55-5ae8-9a3c-d13880d5adbd", - "type": "page", - "content": "62\nTable of Contents\nunder the Exchange Act (or the rules and regulations thereunder) in a court other than the Business Court, that court\ncould deny a motion to transfer the action to the Business Court pursuant to the Forum Selection Bylaw.\nAccordingly, the bylaws provide that to the extent that a court of competent jurisdiction were to determine in a final\nand unappealable judgment that an Internal Dispute is not subject to the sole and exclusive venue and forum or\njurisdiction of the Business Court (such Internal Dispute, an “Other Dispute”), such Other Dispute would be\nexclusively and finally settled by arbitration, pursuant to the Texas Arbitration Act, under the Expedited Procedure\nProvisions of the Rules of the International Chamber of Commerce, pursuant to Article 30 thereof. To be clear,\nabsent Company consent, a shareholder would not be able to file an arbitration demand pursuant to the Dispute\nResolution Clause without first obtaining a final and unappealable judgment that the shareholder’s Internal Dispute\nis not subject to the sole and exclusive venue and forum or jurisdiction of the Business Court. The governing law of\nsuch Other Dispute would be the federal law of the United States or the law of the State of Texas, as applicable to\nthe issues raised in the Other Dispute, including without limitation the pleading and discovery limitations of the\nPrivate Securities Litigation Reform Act.\nGiven the unsettled nature of the law in this area, there is also some risk that a court that has denied a motion to\ntransfer an Internal Dispute to the Business Court pursuant to the Forum Selection Bylaw would also deny a motion\nto compel arbitration of such Other Dispute pursuant to the Forum Selection Bylaw. Accordingly, the Forum\nSelection Bylaw further provides that to the extent that a court of competent jurisdiction determines in a final and\nunappealable judgment that such Other Dispute cannot be compelled to arbitration pursuant to the Forum Selection\nBylaw, the sole and exclusive forum for the adjudication and trial of such Other Dispute will be the United States\nDistrict Court for the Southern District of Texas, Houston Division (the “Federal Court”).\nFinally, the Forum Selection Bylaw provides that to the extent that a court of competent jurisdiction determines in a\nfinal and unappealable judgment that the Federal Court lacks jurisdiction over any such Other Dispute, the sole and\nexclusive forum and venue for such Other Dispute will be the state district courts of Harris County, Texas.\nRegardless of the forum, venue, or procedures selected for an Internal Dispute or Other Dispute, our bylaws shall\nrequire that any Internal Dispute or Other Disputes be brought only as an individual action or derivative proceeding,\nand, to the fullest extent permitted by law, shall prohibit shareholders from bringing such an Internal Dispute or\nOther Dispute as a class action, mass action, or other form of collective action or from being consolidated or joined,\nin whole or in part, consistent with the Arbitration Rules. However, the Company, at its sole option, may elect to\nseek consolidation or joinder of matters as consistent with the Arbitration Rules.\nIn addition, our bylaws will provide that any person or entity purchasing or otherwise acquiring or holding any\ninterest in shares of stock of the Company shall be deemed to have irrevocably and unconditionally waived any right\nit may have to a trial by jury in any Internal Dispute. This will prevent a shareholder from requesting that a jury\ndecide disputed issues of fact and may discourage lawsuits against us and our directors, officers, other managerial\nofficials, and other employees.\nThese dispute resolution rules that our bylaws will establish for Internal Disputes, as well as the Arbitration Rules to\nthe extent they will apply, are different from the procedural rules that would normally apply to the litigation of\nInternal Disputes in state or federal court. They may prevent a shareholder from availing itself of procedural\nprotections that would be available under litigation in state or federal court and may render available or affect\nadversely the rights and remedies available to shareholders in such proceedings. Particularly in the case of\narbitration, including its prohibition on class or collective actions, these dispute resolution rules may also result in\ngreater costs being imposed on shareholders to litigate Internal Disputes, and in some cases involving lower amounts\nin controversy, the additional costs that may be imposed on shareholders to litigate Internal Disputes could exceed\nthe potential recovery from such litigation.\nIt is possible that one or more provisions of our bylaws, including those regarding the exclusive forum for Internal\nDisputes, mandatory arbitration for Other Disputes, or waiver of the right to proceed on a class, mass, or collective\nbasis, may be found by a court to be inapplicable or unenforceable. In addition, the mandatory arbitration provision\nin our bylaws could be subject to litigation or regulatory scrutiny, which could result in the provision being enjoined\nor in additional costs or uncertainty. In such case, we may incur additional costs or delays associated with resolving", - "path": "spacex-s1.pdf/p89", - "metadata": { - "length": 5255, - "summary": "62 Table of Contents under the Exchange Act (or the rules and regulations thereunder) in a court other than the Business Court, that court could deny a motion to transfer the action to the Business Court pursuant to the Forum Selection Bylaw. Accordingly, the bylaws provide th...", - "page_nums": [ - 89 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 89, "artifact_ref": "page_citation_assets/page-89.png", @@ -5969,24 +6016,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_39a00bd9-3763-52d9-96ee-b4d3d7432ab8", - "type": "page", - "content": "63\nTable of Contents\nsuch actions, including in other jurisdictions, which could adversely affect our business, financial condition, or\nresults of operations.", - "path": "spacex-s1.pdf/p90", - "metadata": { - "length": 158, - "summary": "63 Table of Contents such actions, including in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.", - "page_nums": [ - 90 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 90, "artifact_ref": "page_citation_assets/page-90.png", @@ -5994,24 +6024,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e96a7c45-04d2-5a3a-a754-2f3d30b740f8", - "type": "page", - "content": "64\nTable of Contents\nCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS\nThis prospectus contains forward-looking statements. Forward-looking statements include those that express a\nbelief, expectation, or intention, as well as those that are not statements of historical fact. Forward-looking\nstatements contained in this prospectus include information regarding our future operating results and financial\nposition, our business strategy and plans and our objectives for future operations. Forward-looking statements\ncontained in this prospectus also include, but are not limited to, statements about:\n• the development and deployment of Starship in accordance with our anticipated schedule (including\ncommencement of payload delivery to orbit in 2026) and launch cadence and our ability to achieve expected\nperformance, reusability, and cost efficiencies;\n• the size and growth of our various existing and future markets, including the markets for commercial launch\nservices, satellite connectivity services, our AI platforms, AI compute infrastructure (terrestrial and orbital),\nlunar-related activities and interplanetary activities, including the extent to which such markets develop,\nparticularly emerging or unproven markets that may not materialize as expected or on anticipated timelines;\n• demand for our products and services, including our launch, connectivity, and AI offerings, and our ability to\ngrow our customer base and generate revenue;\n• the deployment of our next-generation Starlink satellites, satellite-to-mobile connectivity, and orbital AI\ncompute infrastructure (including potential deployment of our orbital AI compute satellites as early as 2028),\nincluding our ability to successfully develop, scale, and commercialize such technologies, which are subject to\nsignificant technical complexity, capital requirements, new innovations and regulatory approvals;\n• our target launch cadence and expansion of our manufacturing and operational capacity necessary to support our\nstrategies, including our ability to scale production, supply chain, infrastructure, and workforce efficiently;\n• our ability to execute our growth strategy and scale our operations efficiently, including managing costs,\ntimelines, and operational complexity;\n• our ability to solve novel issues and navigate and monetize technologies and environments that have never been\naccessed or economized before;\n• our ability to design, develop and successfully commercialize new and innovative technologies, products, and\nservices, including our AI platforms and Terafab, and our ability to achieve and maintain a low cost per token,\nin each case in rapidly evolving and competitive markets;\n• our ability to scale and monetize our AI products and services, including the development, performance, and\nadoption of our frontier models and related applications, and to realize benefits from related acquisitions and\ninitiatives, such as our arrangement with Cursor;\n• the amount, nature and timing of our capital expenditures and the impact of such capital expenditures on our\ngrowth and performance, including our ability to fund such expenditures, manage costs, strategically reduce\ncosts and achieve expected returns on investment;\n• our ability to obtain sufficient power, GPUs, and other critical components and manage our supply chain to\nsupport our operations and growth;\n• our ability to obtain and maintain required regulatory approvals, licenses and spectrum authorizations in the\nUnited States and internationally, and the timing, scope, and conditions of such approvals;\n• the competitive landscape in the industries in which we operate and our ability to compete effectively;\n• the implementation, interpretation, and impact of current or future regulations including laws and regulations\nrelating to space operations, communications, AI, data privacy, and other areas;\n• our ability to realize benefits and manage risks of being a public company; and", - "path": "spacex-s1.pdf/p91", - "metadata": { - "length": 3961, - "summary": "64 Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements. Forward-looking statements include those that express a belief, expectation, or intention, as well as those that are not statements of historical...", - "page_nums": [ - 91 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 91, "artifact_ref": "page_citation_assets/page-91.png", @@ -6019,24 +6032,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_34d69c94-b7eb-5269-83bb-9052b55fc7d4", - "type": "page", - "content": "65\nTable of Contents\n• general economic conditions.\nThese forward-looking statements may be accompanied by words such as “anticipate,” “believe,” “estimate,”\n“expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “will,” “should,” “could,” “would,”\n“likely,” “future,” “budget,” “goal,” “commit,” “pursue,” “target,” “seek,” “objective” or the negative of these\nwords, or similar expressions that are predictions of or indicate future events or trends that do not relate to historical\nmatters. We caution you that the foregoing list may not contain all of the forward-looking statements made in this\nprospectus.\nThe forward-looking statements in this prospectus speak only as of the date of this prospectus, or such other date as\nspecified herein. We undertake no obligation to update these statements unless required by law, and we caution you\nnot to place undue reliance on them. Forward-looking statements are not assurances of future performance and\ninvolve risks and uncertainties. We have based these forward-looking statements on our current expectations and\nassumptions about future events. Forecasts, goals, milestones, and expectations that cover multi-year time horizons,\nor unknown timelines, inherently involve increased risks with respect to predictability and actual results may differ\nmaterially from current expectations. While our management considers these expectations and assumptions to be\nreasonable, they are inherently subject to significant business, economic, competitive, regulatory, technological,\nenvironmental, political, and other risks, contingencies and uncertainties, which are difficult to predict and many of\nwhich are beyond our control. These risks, contingencies, and uncertainties and other important factors are described\nin the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of\nOperations” sections of this prospectus. Should one or more of such risks or uncertainties occur, or should\nunderlying assumptions prove incorrect, our actual results, performance, achievements or plans could differ\nmaterially from those expressed or implied in any forward-looking statements. In addition, because we operate in\nrapidly evolving and certain highly competitive markets, we may from time to time rapidly adjust, modify or change\nour strategic priorities, capital allocation, product or service focus or operational initiatives in response to\ntechnological developments, competitive dynamics, regulatory changes or other factors, which could cause actual\nresults to differ materially from those expressed or implied by the forward-looking statements contained herein. New\nrisks emerge from time to time, some risks are inherently unknown to us, and it is not possible for our management\nto predict all such risks. Many of the risks and uncertainties that could materially adversely affect us or our prospects\nare beyond our control or relate to portions of our business strategy that have a lengthy time horizon or involve\nunprecedented ventures. This can make assessment of certain risks more difficult and you should factor these\nuncertainties into your assessment of an investment in our Class A common stock. All forward-looking statements in\nthis prospectus are expressly qualified in their entirety by the cautionary statements in this section.", - "path": "spacex-s1.pdf/p92", - "metadata": { - "length": 3355, - "summary": "65 Table of Contents • general economic conditions. These forward-looking statements may be accompanied by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “will,” “should,” “could,” “would,” “l...", - "page_nums": [ - 92 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 92, "artifact_ref": "page_citation_assets/page-92.png", @@ -6044,24 +6040,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_90ad2e60-7622-55e5-b010-79c91cbc55c6", - "type": "page", - "content": "66\nTable of Contents\nUSE OF PROCEEDS\nWe expect to receive approximately $ of net proceeds from this offering (or $ if the underwriters\nexercise their option to purchase additional shares of Class A common stock in full), based upon the assumed initial\npublic offering price of $ per share (which is the midpoint of the price range set forth on the cover page of this\nprospectus) after deducting underwriting discounts and commissions and estimated offering expenses payable by us.\nWe intend to use the net proceeds from this offering to fund our growth strategy, including the expansion of our AI\ncompute infrastructure, enhancements to our launch infrastructure and launch vehicles, increases in the scale and\ncapacity of our satellite constellations, and any remaining amounts for general corporate purposes.\nAssuming no exercise of the underwriters’ option to purchase additional shares, each $1.00 change in the assumed\ninitial public offering price of $ per share (which is the midpoint of the price range set forth on the cover page\nof this prospectus) would cause the net proceeds from this offering, after deducting the underwriting discounts and\ncommissions and estimated offering expenses payable by us, to change by approximately $ million, assuming\nno change to the number of shares of our Class A common stock offered by us, as set forth on the cover page of this\nprospectus. Similarly, an increase (decrease) of one million shares of Class A common stock sold in this offering by\nus would increase (decrease) our net proceeds by $ million, assuming the initial public offering price of\n$ per share (which is the midpoint of the price range set forth on the cover page of this prospectus) remains\nthe same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable\nby us. If the net proceeds increase for any reason, we would use the additional net proceeds for the purposes set forth\nabove. If the net proceeds decrease for any reason, then we expect that we would use the lower amount of net\nproceeds for the purposes set forth above.\nThe expected use of net proceeds from this offering represents our intentions based upon our present plans and\nbusiness conditions. We cannot predict with certainty all of the particular uses for the net proceeds from this offering\nor the amounts that we will actually spend on each of the uses set forth above. Accordingly, our management will\nhave significant flexibility in applying the net proceeds from this offering. The timing and amount of our actual\nexpenditures will be based on many factors, including cash flows and the anticipated growth of our business.", - "path": "spacex-s1.pdf/p93", - "metadata": { - "length": 2730, - "summary": "66 Table of Contents USE OF PROCEEDS We expect to receive approximately $ of net proceeds from this offering (or $ if the underwriters exercise their option to purchase additional shares of Class A common stock in full), based upon the assumed initial public offering price of...", - "page_nums": [ - 93 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 93, "artifact_ref": "page_citation_assets/page-93.png", @@ -6069,24 +6048,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3577e459-dd88-5aa6-bc55-dbf42b6fd249", - "type": "page", - "content": "67\nTable of Contents\nDIVIDEND POLICY\nWe do not anticipate declaring or paying any cash dividends to holders of our common stock in the foreseeable\nfuture. We currently intend to retain future earnings, if any, to finance the growth of our business. Our future\ndividend policy is within the discretion of our board and will depend upon then-existing conditions, including our\nresults of operations, financial condition, capital requirements, investment opportunities, statutory restrictions on our\nability to pay dividends, restrictions in our existing and any future debt agreements and other factors our board may\ndeem relevant. Covenants under our Credit Agreements also restrict our ability to pay dividends, and we may enter\ninto credit agreements or other borrowing arrangements in the future that restrict our ability to declare or pay cash\ndividends or make distributions in the future. Please refer to “Management’s Discussion and Analysis of Financial\nCondition and Results of Operations—Liquidity and Capital Resources” for a description of the restrictions on our\nability to pay dividends.\nPlease refer to “Risk Factors—Risks Related to Our Corporate Structure, Ownership of our Class A Common Stock\nand This Offering—Our ability to provide returns to shareholders will depend on appreciation in our share price, as\nwe do not plan to pay dividends for the foreseeable future.”", - "path": "spacex-s1.pdf/p94", - "metadata": { - "length": 1387, - "summary": "67 Table of Contents DIVIDEND POLICY We do not anticipate declaring or paying any cash dividends to holders of our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the growth of our business. Our future dividend policy i...", - "page_nums": [ - 94 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 94, "artifact_ref": "page_citation_assets/page-94.png", @@ -6094,24 +6056,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_41a82574-4826-5c1c-9d99-aaa3d03d8484", - "type": "page", - "content": "68\nTable of Contents\nCAPITALIZATION\nThe following table sets forth our cash and cash equivalents and capitalization as of March 31, 2026:\n• on an actual basis;\n• on a pro forma basis, giving effect to (i) the Preferred Conversion as if such conversion had occurred on March\n31, 2026, (ii) the Class C Reclassification as if such reclassification had occurred on March 31, 2026, and (iii)\nthe effectiveness of our charter, which will become effective upon the completion of this offering; and\n• on a pro forma as adjusted basis, giving effect to (i) the pro forma adjustments set forth above, (ii) the sale of\nshares of our Class A common stock in this offering at an assumed initial offering price of $ per share,\nwhich is the midpoint of the range set forth on the cover page of this prospectus, and (iii) the application of the\nnet proceeds from this offering as described under “Use of Proceeds.”\nThe table below should be read in conjunction with, and is qualified in its entirety by reference to “Management’s\nDiscussion and Analysis of Financial Condition and Results of Operations,” “Description of Capital Stock” and our\nconsolidated financial statements and related notes included elsewhere in this prospectus.\nAs of March 31, 2026\n(Dollars in millions, except par values) Actual Pro Forma Pro Forma as Adjusted\nCash and cash equivalents\n\n............................................................. $ 15,852 $ 15,852 $\nLong-term debt:\nSpaceX Credit Facility (1)\n\n......................................................... $ — $ —\nSpaceX Bridge Loan (2)\n\n............................................................ 20,000 20,000\nX 2027 and X 2030 Notes\n\n........................................................ 27 27\nOther Financings (3)\n\n.................................................................. 9,105 9,105\nUnamortized deferred financing costs\n\n...................................... (21) (21)\nTotal long-term debt\n\n............................................................ $ 29,111 $ 29,111\nRedeemable convertible preferred stock:\nRedeemable convertible preferred stock, par value $0.001; 189,155,861 shares issued and 134,451,267 shares outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted\n\n............... $ 7,049 $ —\nShareholders’ equity:\nClass A common stock, par value $0.001; 2,964,501,353 shares issued and 2,882,444,444 shares outstanding, actual; 36,132,150,000 shares authorized, 6,824,581,339 shares issued and outstanding, pro forma; 36,132,150,000 shares authorized, shares issued and outstanding, pro forma as adjusted\n\n............................................................ 3 6\nClass B common stock, par value $0.001; 2,421,276,530 shares issued and outstanding, actual; 6,125,000,000 shares authorized, 5,695,729,430 shares issued and outstanding, pro forma and pro forma as adjusted\n\n................................................................................. 3 6\nClass C common stock, par value $0.001; 494,026,445 shares issued and outstanding, actual; 10,000,000,000 shares authorized, no shares issued or outstanding, pro forma and pro forma as adjusted\n.......................................... 0 —\nClass D common stock, par value $0.0001; no shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted\n\n............... — —", - "path": "spacex-s1.pdf/p95", - "metadata": { - "length": 3417, - "summary": "68 Table of Contents CAPITALIZATION The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2026: • on an actual basis; • on a pro forma basis, giving effect to (i) the Preferred Conversion as if such conversion had occurred on March 31,...", - "page_nums": [ - 95 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 95, "artifact_ref": "page_citation_assets/page-95.png", @@ -6119,24 +6064,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_04b44d94-0c22-5810-9e60-7be61cf67ebc", - "type": "page", - "content": "69\nTable of Contents\nPreferred stock, par value $0.001; no shares issued and outstanding, actual; 2,400,000,000 shares authorized, no shares issued or outstanding, pro forma and pro forma as adjusted\n\n................................................................................. — —\nAdditional paid-in capital\n\n......................................................... 74,083 81,126\nAccumulated deficit ................................................................. (41,311) (41,311)\nAccumulated other comprehensive income\n\n............................. 1,755 1,755\nTotal shareholders’ equity\n\n................................................... $ 34,533 $ 41,582\nTotal capitalization\n\n........................................................................ $ 70,693 $ 70,693\n________________\n(1) As of April 30, 2026, we had no borrowings outstanding under the SpaceX Credit Facility. In May 2026, the SpaceX Credit Facility was\namended to increase the borrowing capacity up to $5,000 million (“Amended SpaceX Credit Facility”). The Amended SpaceX Credit\nFacility terminates, and all outstanding loans become due and payable, on May 19, 2031, unless the parties agree to an extension in\naccordance with the terms of the Amended SpaceX Credit Facility. For more information on the SpaceX Credit Facility and Amended\nSpaceX Credit Facility, please see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity\nand Capital Resources—Debt Agreements.”\n(2) As of April 30, 2026, we had $20,000 million of borrowings outstanding under the SpaceX Bridge Loan. The SpaceX Bridge Loan matures\non September 2, 2027, subject to extension in accordance with the terms of the agreement. For more information on the SpaceX Bridge\nLoan, please see “Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital\nResources—Debt Agreements.”\n(3) Includes obligations related to certain AI infrastructure assets recorded as failed sale-leaseback transactions.", - "path": "spacex-s1.pdf/p96", - "metadata": { - "length": 2036, - "summary": "69 Table of Contents Preferred stock, par value $0.001; no shares issued and outstanding, actual; 2,400,000,000 shares authorized, no shares issued or outstanding, pro forma and pro forma as adjusted ................................................................................", - "page_nums": [ - 96 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 96, "artifact_ref": "page_citation_assets/page-96.png", @@ -6144,24 +6072,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_92073540-bb69-59d9-aee2-4466f9ea9615", - "type": "page", - "content": "70\nTable of Contents\nDILUTION\nPurchasers of the Class A common stock in this offering will experience immediate and substantial dilution in the\nnet tangible book value per share of the Class A common stock for accounting purposes. Our net tangible book value\nas of March 31, 2026 was approximately $ , or $ per share of Class A common stock. Net tangible\nbook value per share is determined by dividing our tangible net worth (tangible assets less total liabilities) by the\ntotal number of outstanding shares of all classes of common stock outstanding immediately prior to the completion\nof this offering. After giving effect to the sale of shares of Class A common stock in this offering, the payment of\nunderwriting discounts and commissions and estimated offering expenses by us, the Class C Reclassification and the\nPreferred Conversion as if such reclassification and conversion occurred on March 31, 2026, our adjusted pro forma\nnet tangible book value as of March 31, 2026 would have been approximately $ , or $ per share of\nClass A common stock. This represents an immediate decrease in the net tangible book value of $ per share\nof Class A common stock to Mr. Musk and other existing investors and an immediate dilution (i.e., the difference\nbetween the offering price and the adjusted pro forma net tangible book value immediately after this offering) to\nnew investors purchasing shares of Class A common stock in this offering of $ per share. The following\ntable illustrates the per share dilution to new investors purchasing shares of Class A common stock in this offering:\nInitial public offering price per share\n\n........................................................................ $\nPro forma net tangible book value per share as of March 31, 2026\n\n.......................... $\nDecrease per share attributable to new investors in this offering\n\n..............................\nAs adjusted pro forma net tangible book value per share after giving further effect to this offering\n\n........................................................................................................\nDilution in pro forma net tangible book value per share to new investors in this offering (1)\n\n............................................................................................................... $\n_______________\n(1) If the initial public offering price were to increase or decrease by $1.00 per share, then dilution in pro forma net tangible book value per\nshare of Class A common stock to new investors in this offering would equal $ or $ , respectively. Similarly, if the\nnumber of shares of Class A common stock offered by us were to increase or decrease by shares, then dilution in pro forma net\ntangible book value per share of Class A common stock to new investors in this offering would be $ or $ , respectively.\nThe following table summarizes, on an adjusted pro forma basis as of March 31, 2026, the total number of shares of\nClass A and Class B common stock owned by Mr. Musk and other existing investors and to be owned by new\ninvestors in this offering, the total consideration paid, and the average price per share paid by Mr. Musk and other\nexisting investors and to be paid by new investors in this offering at $ , calculated before deduction of\nunderwriting discounts and commissions and estimated offering expenses.\nShares Acquired(1) Total Consideration(2)\nAverage Price Per ShareNumber Percent Amount Percent\nElon Musk and other existing investors\n\n............................................ % $ % $\nNew investors in this offering\n\n\n............ % $ % $\nTotal\n\n\n................................................... 100.0% $ 100.0% $\n______________\n(1) If the underwriters exercise their option to purchase additional shares in full, Mr. Musk and other existing investors would own\napproximately % and our new investors in this offering would own approximately % of the total number of shares of our\ncommon stock outstanding after this offering.\n(2) If the underwriters exercise their option to purchase additional shares in full, the total consideration paid by our new investors would be\napproximately $ (or %).\nEach $1.00 increase or decrease in the assumed initial public offering price would increase or decrease, as\napplicable, the total consideration paid by new investors and the total consideration paid by all shareholders by\n$ million, assuming that the number of shares of Class A common stock offered by us remains the same and\nafter deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.\nSimilarly, an increase or decrease of shares in the number of shares of Class A common stock offered\nby us would increase or decrease, as applicable, the total consideration paid by new investors and the total", - "path": "spacex-s1.pdf/p97", - "metadata": { - "length": 5070, - "summary": "70 Table of Contents DILUTION Purchasers of the Class A common stock in this offering will experience immediate and substantial dilution in the net tangible book value per share of the Class A common stock for accounting purposes. Our net tangible book value as of March 31, 20...", - "page_nums": [ - 97 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 97, "artifact_ref": "page_citation_assets/page-97.png", @@ -6169,24 +6080,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_aac84c87-7191-5858-8628-bf5bf75ba4fd", - "type": "page", - "content": "71\nTable of Contents\nconsideration paid by all shareholders by $ million, assuming that the assumed initial public offering price\nremains the same and after deducting estimated underwriting discounts and commissions and estimated offering\nexpenses payable by us.", - "path": "spacex-s1.pdf/p98", - "metadata": { - "length": 275, - "summary": "71 Table of Contents consideration paid by all shareholders by $ million, assuming that the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.", - "page_nums": [ - 98 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 98, "artifact_ref": "page_citation_assets/page-98.png", @@ -6194,24 +6088,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c946e854-6a0b-53e5-9ac6-838eb2e4e5fa", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p99", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 99 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 99, "artifact_ref": "page_citation_assets/page-99.png", @@ -6219,24 +6096,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3cbbf144-557e-5b8b-adf3-540d2edaefff", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p100", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 100 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 100, "artifact_ref": "page_citation_assets/page-100.png", @@ -6244,24 +6104,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9749fb60-787d-58a9-bd81-e0093f4e20fe", - "type": "page", - "content": "74\nTable of Contents\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF\nOPERATIONS\nThe following discussion and analysis of our financial condition and results of operations should be read in\nconjunction with our audited consolidated financial statements and the related notes and other financial information\nincluded elsewhere in this prospectus. In addition to historical consolidated financial information, the following\ndiscussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results\ncould differ materially from those discussed in the forward-looking statements. You should review the sections titled\n“Cautionary Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and\n“Risk Factors” for a discussion of factors that could cause actual results to differ materially from the results\ndescribed in or implied by the forward-looking statements contained in the following discussion and analysis and\nelsewhere in this prospectus. Our audited consolidated financial statements and related notes have been prepared to\nreflect the retrospective combination of the companies for all periods presented as the acquisitions of xAI and X\nHoldings were accounted for as transactions between entities under common control.\nOur Mission\nOur mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true\nnature of the universe, and to extend the light of consciousness to the stars. To do this, we have formed the most\nambitious, vertically integrated innovation engine on (and off) Earth with unmatched capabilities to rapidly\nmanufacture and launch space-based communications that connect the world, to harness the Sun to power a truth-\nseeking artificial intelligence that advances scientific discovery, and ultimately to build a base on the Moon and\ncities on other planets.\nStarship Flight Test\nOverview\nFounded in 2002, SpaceX is the only company building the integrated hardware and software infrastructure of the\nfuture across space, connectivity, and AI. At our core, we are builders. We design, manufacture, launch, and operate\nproducts and services built on cutting-edge technologies, including the world’s most advanced rockets and\nspacecraft. We safely and reliably transport astronauts, satellites, and other payloads on missions that benefit life on", - "path": "spacex-s1.pdf/p101", - "metadata": { - "length": 2412, - "summary": "74 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statement...", - "page_nums": [ - 101 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 101, "artifact_ref": "page_citation_assets/page-101.png", @@ -6269,24 +6112,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_faf4d525-a40f-5f92-a7d0-0d4cf47328e7", - "type": "page", - "content": "75\nTable of Contents\nEarth. Since 2023, we have launched more than 80% of mass to orbit for the world each year with an over 99%\nmission success rate with Falcon rockets. We also operate a high-speed, low-latency global broadband data and\ncommunications network powered by approximately 9,600 Starlink broadband and mobile satellites in Low-Earth\nOrbit, delivering connectivity to millions of consumer, enterprise, and government customers across 164 countries,\nterritories, and other markets, as of March 31, 2026. Using our dedicated satellite-to-mobile constellation, we offer\nconnectivity services, supplementing terrestrial networks and substantially reducing mobile “dead zones” across\napproximately 30 countries.\nWith the potential to improve both space exploration and life on Earth, AI accelerates SpaceX’s mission to make life\nmultiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars.\nxAI, which was founded in 2023 and acquired by SpaceX in early 2026, is now an integral pillar of our vertically\nintegrated company. We are rapidly constructing AI compute infrastructure—starting on Earth with the goal of\nextending to space—at industry-leading pace and cost efficiency. Our infrastructure supports training and inference\nfor Grok, which has emerged as one of the world’s most advanced frontier models. Grok is designed as a truth-\nseeking AI model, built on our founder Elon Musk’s mission to enable humanity to understand the universe. We\nbelieve that accomplishing this mission requires a truth-seeking approach to AI. We define truth seeking as the\nactive, relentless pursuit of what is objectively true about reality, and grounded in evidence, logic, empirical data,\nand first principles thinking. Our goal is to understand and explain what the universe appears to be doing, as\naccurately as current knowledge allows. Within two years of its initial model release, Grok achieved frontier-level\nperformance in scientific reasoning, as measured by its GPQA Diamond score, an industry benchmark that evaluates\nAI models on a standardized set of questions written and validated by experts, on a faster timeline than reported by\nother leading model providers. Grok also benefits from integration with X, our real-time information, entertainment,\nand free speech platform, which serves as a foundational distribution and data engine for our AI ecosystem and\nfurther enhances Grok’s truth-seeking objective.\nWe believe that space represents the largest economic frontier in human history, unlocking unprecedented\nopportunities in orbit and on Earth. Earth has limits, so we must build infrastructure and industries in space,\nexpanding human capabilities to improve life on Earth and to establish life beyond. Connectivity infrastructure in\nspace is designed to help everyone on Earth have access to education, healthcare, entertainment, and\ncommunications, and to enable people to overcome many traditional limits, such as physical and political borders.\nWe believe AI infrastructure in space can utilize the virtually limitless power of the Sun and thereby enable the use\nof AI as a transformative force for understanding the universe and improving the daily lives of all humans. We\nbelieve the convergence of these areas will enable an unprecedented expansion in the global economy, leading to an\nage of abundance. Our innovations and technological advancements are redefining industries on Earth, while we aim\nto create new ones on the Moon, Mars, and beyond. We are truly building the infrastructure of the future.\nSpaceX is the only company that has cracked the code on accessing space at scale, revolutionizing an industry\ncharacterized by decades of stagnation, risk aversion, and economically perverse cost structures. SpaceX upended\nthis paradigm through the application of first-principles thinking, which rejects industry assumptions and builds\nsolutions based on the fundamental laws of physics. Our intense, mission-driven, engineering-first culture and focus\non extreme vertical integration have propelled us to achieve what many deemed impossible. We have demonstrated\nthe ability to achieve groundbreaking technological innovations with speed, quality control, and precision. We\npioneered high-cadence, reliable, and affordable access to space with our Falcon family of rockets, with a goal to\ntransform the rocket launch industry into airline-like operations. In 2015, we established at least a 10-year lead over\nthe industry by successfully landing our first Falcon 9 booster back from space before anyone else. We have\ncontinued to invest significantly in further increasing our lead by pursuing full and rapid reusability at scale,\nincluding investing over $15 billion in our next-generation rocket, Starship.\nWe believe rocket launches and landings should be as routine and commonplace as airplanes taking off and landing.\nTo achieve this sort of cadence, our iterative approach emphasizes rapid designing, testing, and process\noptimization, putting flight hardware in the flight environment as often as possible. This allows us to accelerate our\nlearning by repeatedly using and improving our systems. This has resulted in a significantly higher flight rate at\ncosts that are much lower than launch programs that existed before SpaceX. For example, according to NASA, the\nfirst version of Falcon 9 in 2010 had a launch cost of approximately $2,700 per kilogram, which represented a\nreduction of approximately 85% compared to the historical average launch cost per kilogram of $18,500. The first", - "path": "spacex-s1.pdf/p102", - "metadata": { - "length": 5585, - "summary": "75 Table of Contents Earth. Since 2023, we have launched more than 80% of mass to orbit for the world each year with an over 99% mission success rate with Falcon rockets. We also operate a high-speed, low-latency global broadband data and communications network powered by appr...", - "page_nums": [ - 102 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 102, "artifact_ref": "page_citation_assets/page-102.png", @@ -6294,24 +6120,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_766fc182-14c0-5c48-8e85-88353662e8b4", - "type": "page", - "content": "76\nTable of Contents\nversion of Falcon Heavy in 2018 further reduced this cost to approximately $1,400 per kilogram, a reduction of\napproximately 92% compared to the historical average cost. With the future deployment of Starship, which is\ndesigned to be the world’s first fully and rapidly reusable spacecraft, we aim to further reduce the cost to reach orbit\nby 99% or more relative to the historical average launch cost. Central to our cost advantage is the reusability of key\nhardware—most notably boosters—which we recover, refurbish, and refly many times instead of discarding after\nsingle use. This dramatically lowers per-launch costs by minimizing hardware replacement expenses and spreading\nfixed production costs across repeated uses. Space flight that historically cost billions per launch now costs in the\ntens of millions, fundamentally reducing the cost of space access, providing the opportunity to build new enterprises\nin space.\nSimilarly, xAI has cracked the code in the complexities of building and scaling AI compute infrastructure, becoming\nthe first company to deploy a coherent gigawatt-scale AI training cluster. We believe the combination of our\nproprietary AI infrastructure capability, our truth-seeking frontier model, Grok, and our access to real-time data on\nX creates a formidable competitive advantage, allowing us to maintain a leading position in the development of\nadvanced artificial intelligence. This advantage stems from our complete vertical integration and the common vision\ninfused by our founder, Elon Musk. In just a few years, we have demonstrated an ability to build coherent compute\nat scale and rapid speed with lower cost. COLOSSUS and COLOSSUS II collectively provide approximately 1.0\ngigawatt of compute power, with additional power capacity available for data center operations. We believe speed is\na competitive advantage. In order to bring compute clusters online as fast as possible, we employ a vertically\nintegrated, nimble approach to construction. At COLOSSUS, we brought online the first cluster of approximately\n100,000 H100 processors, approximately 130 megawatts of compute power, in just 122 days, repurposing the shell\nof an existing factory. At COLOSSUS II, we brought online the first cluster of approximately 110,000 GB200\nprocessors, approximately 210 megawatts of compute power, even faster in 91 days. As an illustrative comparison,\nan industry benchmark to bring online a 100 megawatt greenfield data center is approximately two years.\nFurthermore, in the case of COLOSSUS II, following the initial cluster, we brought online the second cluster of\n110,000 GB300 processors and 220 megawatts of compute power in 64 days, demonstrating our ability to rapidly\nscale our facilities once built. We expect that once fully operational, the next phase of expansion at COLOSSUS II\nwill bring online at least 220,000 additional GB300 processors and over 400 additional megawatts of compute\npower. We also demonstrated a significant improvement in cost efficiency, achieving data center construction costs\nfor COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis.\nWe are able to deploy power and compute significantly faster than other AI companies through first-principles\nthinking, behind-the-meter power generation, coupled with what we believe is the world’s largest network of\nsustainable battery storage systems, and innovations in advanced liquid cooling, high-density rack layouts, and\nefficient networking. Our facilities also incorporate innovative design features that limit the effects on regional\nelectricity pricing for neighbors and include advanced water cleaning, reclamation, and recycling processes to\nsupport sustainable operations. We partner with utilities and communities to connect to and enhance the grid over\ntime, and do so while pledging to cover costs of all new power delivery infrastructure upgrades to service our data\ncenters, including adequate network upgrade costs, to ensure that these expenses are not passed on to the ordinary\nhousehold. Our ability to rapidly and cost-effectively scale with the latest processors keeps us ahead of competitors\nwho deploy traditional and more expensive methods. As a result, we believe COLOSSUS II became one of the\nworld’s first data centers to deploy GB200s and GB300s, the most advanced AI processors available at the time, at\nsignificant scale, and is currently powering training for our next frontier models, including Grok-5. Furthermore,\nthrough our Terafab initiative together with Tesla to build a manufacturing facility capable of producing 1 terawatt\nper year of compute hardware, we intend to further extend our vertical integration to chip design and manufacturing\nto alleviate potential future chip shortages at SpaceX, optimize compute performance, and potentially reduce overall\ncompute costs. Intel, which has the ability to design, fabricate, and package ultra-high-performance chips at scale,\nalso joined the Terafab project in early April 2026. Our shovels-to-tokens approach allows us to train and iterate our\nfrontier models at high velocity, accelerating development cycles, eliminating external bottlenecks, and driving\nrapid, continuous improvements in model performance.\nWe were the first private company to develop and launch a liquid-fuel rocket to reach orbit with the successful\nlaunch of Falcon 1 in 2008. In 2019, we were the first to begin deploying a large-scale LEO broadband satellite", - "path": "spacex-s1.pdf/p103", - "metadata": { - "length": 5492, - "summary": "76 Table of Contents version of Falcon Heavy in 2018 further reduced this cost to approximately $1,400 per kilogram, a reduction of approximately 92% compared to the historical average cost. With the future deployment of Starship, which is designed to be the world’s first full...", - "page_nums": [ - 103 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 103, "artifact_ref": "page_citation_assets/page-103.png", @@ -6319,24 +6128,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_dcd9640d-b8d1-57a4-9314-7d354336859b", - "type": "page", - "content": "77\nTable of Contents\nconstellation. In February 2026, we acquired xAI, the first company to build a gigawatt-scale AI training cluster and\nlargest coherent supercomputer. The graphic below illustrates key milestones for our business.", - "path": "spacex-s1.pdf/p104", - "metadata": { - "length": 233, - "summary": "77 Table of Contents constellation. In February 2026, we acquired xAI, the first company to build a gigawatt-scale AI training cluster and largest coherent supercomputer. The graphic below illustrates key milestones for our business.", - "page_nums": [ - 104 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 104, "artifact_ref": "page_citation_assets/page-104.png", @@ -6344,24 +6136,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ecefc23a-c3dd-5a14-8d02-0bf80cfa1735", - "type": "page", - "content": "78\nTable of Contents\nOur Repeatable Business Model\nOur business model is built on a repeatable, engineering-driven framework that combines our unparalleled launch\ncapabilities, extreme vertical integration, rapid iteration, and disciplined capital investment to create durable, large-\nscale businesses. We execute this framework through the following core principles:\n1. Leverage our unparalleled launch capabilities to enable massive scale. Our rockets—with unmatched\nlaunch cadence, best-in-class reliability, and dramatically reduced cost-to-orbit—are the foundation that we\nexpect will enable us to create economic opportunities in space and deliver a diversified portfolio of services.\nOur launch capabilities enable large-scale deployment of assets that would not otherwise be economically\nviable.\n2. Identify and create new trillion-dollar market opportunities. We focus on market opportunities that are\nuseful for humanity and that present trillion-dollar opportunities, including global broadband and mobile\nconnectivity for consumers, enterprises, and governments; and AI applications and computational infrastructure.\nWe prioritize opportunities where structural inefficiencies or legacy technological limitations have constrained\nsupply.\n3. Design a solution with world-class engineering and first-principles thinking. We apply physics-based\nengineering and first-principles thinking to design products and systems from the ground up—boiling things\ndown to the most fundamental truths and reasoning up from there. This helps us drive massive, step-function\nimprovements in performance, scalability, and cost.\n4. Apply “The Algorithm” (make less dumb, delete, optimize, accelerate, automate). We operate under a set\nof core execution principles that we refer to as “The Algorithm,” a five-step iterative process that we use as our\nguiding principles day-to-day. We make the requirements less dumb, delete unnecessary processes or parts\n(embracing the principle that the best part is no part), only then optimize the necessary processes or parts, and\nthen accelerate cycle time (many entities have launched once; no one other than us has ever launched over 100\ntimes per year), and automate only proven processes after the first four steps are completed. We apply the\nAlgorithm across every aspect of our organization, creating a cultural and operational standard of excellence\nthat has defined SpaceX since inception.\n5. Vertically integrate all the way to the end customer. We design and manufacture a significant portion of our\ncomponents in-house, including engines, avionics, structures, and software, even producing the “tools that make\nthe tools,” enabling us to test, fail, and iterate rapidly. We can then release newer, more advanced hardware with\nspeed and cost efficiency.\n6. Continuously drive cost down and throughput up. Through rocket reusability, manufacturing at scale,\nadvanced automation, and rigorous operational discipline, we continuously reduce unit costs while increasing\nlaunch cadence, satellite network, and AI hosting capacity.\n7. Generate significant cash flow and reinvest in the future. As our businesses scale, they generate significant\ncash flow, which we reinvest into nascent market opportunities—driving a self-reinforcing cycle of constant\ninnovation and potentially creating significant additional value.\nSegments in Our Vertically-Integrated Innovation Engine\nWe have three reportable segments in our vertically integrated innovation engine: Space, Connectivity, and AI. In\nour Space segment, we design, manufacture, and launch reusable rockets to provide high cadence, reliable, and\naffordable access to space at unprecedented scale. In our Connectivity segment, we operate a worldwide high-speed,\nlow-latency broadband data and communications network powered by over 9,600 Starlink broadband and mobile\nsatellites in Low-Earth Orbit, delivering connectivity to millions of consumer, enterprise, and government customers\nacross 164 countries, territories, and other markets. In our AI segment, we operate a highly vertically integrated AI\nplatform spanning our truth-seeking frontier model Grok, AI solutions for consumer and enterprise customers, X—\nour real-time information, entertainment, and free speech platform—and AI computational infrastructure.", - "path": "spacex-s1.pdf/p105", - "metadata": { - "length": 4305, - "summary": "78 Table of Contents Our Repeatable Business Model Our business model is built on a repeatable, engineering-driven framework that combines our unparalleled launch capabilities, extreme vertical integration, rapid iteration, and disciplined capital investment to create durable,...", - "page_nums": [ - 105 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 105, "artifact_ref": "page_citation_assets/page-105.png", @@ -6369,24 +6144,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3d5be106-b2fc-55d9-9f4a-342188534838", - "type": "page", - "content": "79\nTable of Contents\nOur financial results reflect the strength of our operating model and our ability to create and scale multiple new\nbusinesses:\n• For the three months ended March 31, 2026, we generated revenue on a consolidated basis of $4,694 million,\nloss from operations of $(1,943) million and Adjusted EBITDA of $1,127 million. In 2025, we generated\nrevenue on a consolidated basis of $18,674 million, loss from operations of $(2,589) million and Adjusted\nEBITDA of $6,584 million. Our Space and Connectivity segments contributed the substantial majority of our\nconsolidated revenue in the three months ended March 31, 2026 and the year ended December 31, 2025,\ndemonstrating the benefits of their scale and operating leverage in our vertically integrated business model;\n• For the three months ended March 31, 2026, our Space segment generated revenue of $619 million, loss from\noperations of $(662) million, and Segment Adjusted EBITDA of $(351) million. In 2025, our Space segment\ngenerated revenue of $4,086 million, loss from operations of $(657) million, and Segment Adjusted EBITDA of\n$653 million. Additionally, our Space segment funded $930 million and $3,004 million in research and\ndevelopment expense during the three months ended March 31, 2026 and the year ended December 31, 2025,\nrespectively, for our next-generation Starship launch vehicle program. Starship is designed to enable a step-\nfunction change in our launch capability across reusability, payload capacity, and launch cadence, and is the key\nenabler of our long-term growth strategy by unlocking entirely new categories of missions;\n• For the three months ended March 31, 2026, our Connectivity segment generated revenue of $3,257 million,\nincome from operations of $1,188 million, and Segment Adjusted EBITDA of $2,087 million. Our Connectivity\nsegment, primarily driven by Starlink, generated revenue of $11,387 million, income from operations of $4,423\nmillion, and Segment Adjusted EBITDA of $7,168 million in 2025, representing year-over-year growth of\n49.8%, 120.4%, and 86.2%, respectively, benefiting from subscriber growth, increasing enterprise adoption, and\ncontinued improvement in network efficiency;\n• In our newly acquired AI segment, we plan to prioritize growth and investment to capture significant\nopportunities in AI applications and compute infrastructure. For the three months ended March 31, 2026, our AI\nsegment generated revenue of $818 million, loss from operations of $(2,469) million, and Segment Adjusted\nEBITDA of $(609) million. In 2025, our AI segment generated revenue of $3,201 million, loss from operations\nof $(6,355) million, and Segment Adjusted EBITDA of $(1,237) million, reflecting its earlier stage of\ndevelopment and continued investments to support long-term growth opportunities in AI; and\n• For the three months ended March 31, 2026, capital expenditures for our Space segment was $1,052 million, for\nour Connectivity segment was $1,332 million and for our AI segment was $7,723 million. In 2025, capital\nexpenditures for our Space segment was $3,832 million, for our Connectivity segment was $4,178 million and\nfor our AI segment was $12,727 million.\nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “—Non-GAAP Financial\nMeasures” for additional information on our non-GAAP financial measures, including reconciliations of Segment\nAdjusted EBITDA to segment income (loss) from operations, the most directly comparable GAAP measure.\nSpace\nSince our founding in 2002, SpaceX has cracked the code on accessing space at scale, transforming an industry\ncharacterized by decades of stagnation, risk aversion, and economically perverse cost structures. We design,\nmanufacture, launch, and refurbish reusable launch vehicles that provide cost-efficient, reliable, and high-cadence\naccess to space for our own purposes as well as for third-party commercial and government customers. In 2025, we\nlaunched from four primary launch pads in the United States and successfully recovered boosters across seven\nlanding facilities including autonomous drone ships and catch towers based on the vehicle type and mission profile.\nOur extensive vertical integration and end-to-end control over the entire value chain, from design to launch to\noperations, allows us to achieve unprecedented speed and cost efficiency.", - "path": "spacex-s1.pdf/p106", - "metadata": { - "length": 4364, - "summary": "79 Table of Contents Our financial results reflect the strength of our operating model and our ability to create and scale multiple new businesses: • For the three months ended March 31, 2026, we generated revenue on a consolidated basis of $4,694 million, loss from operations...", - "page_nums": [ - 106 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 106, "artifact_ref": "page_citation_assets/page-106.png", @@ -6394,24 +6152,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_857b6427-156c-58aa-81ff-29f68064c170", - "type": "page", - "content": "80\nTable of Contents\nFalcon 9 First Stage Booster Landing\nAs of March 31, 2026, SpaceX had launched a total mass to orbit of approximately 7,400 metric tons with an over\n99% mission success rate across our Falcon rockets. We have completed approximately 650 orbital space launches,\nand over 540 of those launches were completed by a flight-proven Falcon rocket. In 2025 alone, SpaceX completed\n170 missions across Falcon and Starship vehicles and 159 flight-proven booster launches with an over 99% success\nrate on attempted booster recoveries. We launched over 2,200 metric tons, representing over 80% of mass to orbit\nfor the world in 2025. With the first successful launch of Falcon 1 in 2008, we became the first private company to\nsuccessfully launch a liquid-fueled rocket to Earth’s orbit. Just two years later, in 2010, the commercial debut of the\nFalcon 9 rocket revolutionized space access by delivering unprecedented cost efficiency. For example, according to\nNASA, the first version of Falcon 9 in 2010 reduced launch cost to approximately $2,700 per kilogram, which\nrepresented a reduction of approximately 85% compared to the historical average launch cost per kilogram of\n$18,500. The first version of Falcon Heavy in 2018 further reduced this cost to $1,400 per kilogram, a reduction of\napproximately 92% compared to the historical average. We have also reduced our internal cost of launch through a\ncombination of engineering improvements, manufacturing efficiencies, and economies of scale—most notably,\nthrough our ability to drive more frequent reuse of rockets.\nWe generate Space revenue primarily through launch and mission services of Falcon 9, Falcon Heavy, and Dragon\nprovided to commercial and government customers. We fly to LEO, MEO, GEO, lunar, and interplanetary\ntrajectories, as well as the International Space Station. Our Space segment revenue is derived from fixed-price\ncontracts related to the development and provision of launch services for both commercial customers and\ngovernmental agency space programs, either at a “point in time” or “over time.”\nWe manage our Space segment to support our businesses and those of our customers. We plan launches and allocate\npayloads in advance, although it can be difficult to manage the timing of customer payload arrivals. When an\nexpected customer payload for a planned launch is not available, we instead use launch capacity for our satellites. As\na result, we adjust expected launch payloads frequently, impacting period-to-period financial comparison. For a\nmajority of customer payloads, revenue and costs are primarily recognized at the launch or deployment of the\ncustomer’s spacecraft to its intended orbit, with some revenues and costs being recognized over time. For launches\ndedicated to deploying our Starlink satellites, we capitalize the associated costs within our Connectivity segment and\ndepreciate them over time, and we do not recognize revenue for those launches in our Space segment. We allocate a", - "path": "spacex-s1.pdf/p107", - "metadata": { - "length": 2997, - "summary": "80 Table of Contents Falcon 9 First Stage Booster Landing As of March 31, 2026, SpaceX had launched a total mass to orbit of approximately 7,400 metric tons with an over 99% mission success rate across our Falcon rockets. We have completed approximately 650 orbital space launc...", - "page_nums": [ - 107 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 107, "artifact_ref": "page_citation_assets/page-107.png", @@ -6419,24 +6160,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b3807421-adfe-543b-ae79-2cad043918fa", - "type": "page", - "content": "81\nTable of Contents\nsignificant amount of launch capacity to our Connectivity segment, and expect to allocate a significant amount to\nour AI segment in the future. Our Space segment revenue only reflects customer launches and other customer\nactivities. As a result, notwithstanding an increasing launch cadence, our Space segment has relatively lower\nrevenue scale and revenue growth compared to our other segments, though its financial results do not reflect the\nfoundational strategic value that it provides to us in bolstering the growth of our Connectivity and AI segments.\nConnectivity. Starlink provides global access to high-speed internet, including underserved rural and remote\ncommunities worldwide. As of March 31, 2026, we had approximately 9,600 Starlink broadband and mobile\nsatellites in Low-Earth Orbit, providing broadband connectivity to approximately 10.3 million Starlink Subscribers\nacross 164 countries, territories, and other markets. We also provide satellite-to-mobile texting and over-the-top\nvoice services to approximately 7.4 million monthly unique devices across approximately 30 countries.\nStarlink Mini\n• Starlink Consumer Broadband. We operate the world’s largest and most advanced space-based internet\nbroadband service with median latency at approximately 25 milliseconds as of March 31, 2026. We provide\nfiber-like download speeds—at a median of 225 Mbps during peak hours for residential users as of March 31,\n2026—and the technological capability to provide service everywhere on Earth, including the poles. This\nservice quality is enabled by our vast network of approximately 9,600 Starlink broadband and mobile satellites\nin Low-Earth Orbit, which accounted for approximately 75% of all active maneuverable satellites in orbit as of\nMarch 31, 2026. We expect to commence deploying our next-generation V3 satellites, designed to offer one\nTbps of downlink capacity per satellite, using Starship in the second half of 2026. We expect that a single\nStarship launch will be capable of deploying up to 60 V3 satellites to LEO, representing a potential twenty-fold\nincrease in Starlink downlink capacity deployed relative to a Falcon 9 launch. As of March 31, 2026, we had\napproximately 10.3 million Starlink Subscribers, up approximately 105% from 5.0 million subscribers a year\nprior. We charge our Starlink Subscribers a monthly subscription fee, which varies based on geographic market\nand download speed, plus typically a one-time upfront terminal cost.\n• Enterprise Solutions. SpaceX is a critical partner to a wide array of enterprises. We offer Starlink’s high-\nspeed, low-latency, reliable internet services to enterprise customers across industries including construction,\nagriculture, retail, telecom, hospitality, aviation, maritime, and land mobility. Starlink’s unique capabilities are\nwell‐suited for deployments across field offices, remote worksites, research stations, drilling rigs, rural", - "path": "spacex-s1.pdf/p108", - "metadata": { - "length": 2942, - "summary": "81 Table of Contents significant amount of launch capacity to our Connectivity segment, and expect to allocate a significant amount to our AI segment in the future. Our Space segment revenue only reflects customer launches and other customer activities. As a result, notwithsta...", - "page_nums": [ - 108 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 108, "artifact_ref": "page_citation_assets/page-108.png", @@ -6444,24 +6168,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_46e6a3c9-2387-52a0-ba82-a73686ce49e5", - "type": "page", - "content": "82\nTable of Contents\nhospitals, aircraft, cruise ships, trains, and hotels. Our enterprise customers include companies such as United\nAirlines, Carnival, Maersk, and John Deere, among others. We also serve a broad fixed‐site customer base\nacross industries such as retail and financial services that require high availability for critical operations as well\nas reliable connectivity in remote or hard-to-serve locations. As companies continue to invest in secure and\nresilient networks and backup systems to keep critical infrastructure online—such as point‐of‐sale and payment\nprocessing systems—we often start as a backup solution and then transition to being the primary solution. Our\nenterprise contracts are based on a combination of subscriptions, data consumption, capacity, or other pricing\nmodels depending on each customer’s particular needs. Since 2023, no Starlink Enterprise customer having\ncontributed more than $750,000 of annual revenue has voluntarily discontinued their service, demonstrating the\nstrong performance and value of our offering. This is despite the ability of our customers to cancel the service at\nany time.\n• Government Solutions. For our government customers, we provide high-speed, resilient connectivity for\npublic services, social impact, humanitarian efforts, and disaster response in even the most remote and\nchallenging environments. Examples include support for the FEMA in coordinating disaster recovery after\nhurricanes and wildfires, the NOAA for at-sea testing and environmental monitoring, the Government of the\nPhilippines for linking remote islands, schools, and public institutions, the Government of Jamaica for\nimproving digital access in remote and maritime areas, and the Government of Ecuador for supporting\neducation and healthcare connectivity in isolated communities. Separately with Starshield, we have leveraged\nour commercial LEO satellite constellation engineering learnings and operational experiences to develop a\nsecure, dedicated satellite network designed specifically for United States Government customers and national\nsecurity applications.\n• Starlink Mobile. We provide satellite-to-mobile connectivity, supplementing terrestrial networks and\nsubstantially reducing mobile “dead zones” across approximately 30 countries. We partner with MNOs\nincluding major wireless carriers like T-Mobile in the United States, and other international operators including\nOne NZ, Optus, Telstra, Rogers, KDDI, Salt, Entel, Kyivstar, and VMO2. Through these partnerships, we\nenable consumers, businesses, and public-sector customers to use their existing phones in more places, support\ncritical connectivity during disasters and power outages, and open new applications for low-bandwidth mobile\nand IoT devices. Our current capabilities under our “V1” constellation (consisting of approximately 650 V1\nMobile satellites in orbit) include light data, text messaging (SMS), and over-the-top voice services (e.g.,\nWhatsApp and FaceTime). We are developing more comprehensive satellite-to-mobile services, including\nbroadband data and IoT connectivity, which are expected to deliver resilient, infrastructure-independent\nconnectivity worldwide and enable 5G connectivity. We have partnerships with approximately 30 MNOs on six\ncontinents, covering an area that is home to approximately 1.9 billion people. We charge MNOs either a fixed\nfee or a per-mobile user fee-based amount, which is typically passed through to the customer via the carrier as\nan “add-on” feature.\nWe generate revenue in our Connectivity segment primarily through subscription fees from consumer subscribers.\nWe drive consumer revenue through monthly subscription fees based on geographic market and download speed,\nrecognizing revenue ratably over the service period, plus typically a one-time sale of a kit. In addition, we generate\nrevenue from enterprises through contracts structured as a combination of subscriptions, data consumption, and\ncapacity, or on a percentage-of-completion basis, depending on each customer’s particular needs. We generate\ngovernment revenue via long term contracts for Starshield, a secure satellite network designed specifically for\ngovernment customers and national security applications. We also earn Starlink Mobile revenue through revenue-\nsharing arrangements with MNO partners, based on connectivity services included in their plans.\nIn 2025, revenue from consumer subscribers represented over 60% of Connectivity segment revenue. We expect\nrevenue from consumer subscribers, as well as enterprise and government customers, to be the primary driver of\nConnectivity segment growth, and that Starlink Mobile will become a significant new contributor of Connectivity\nsegment revenue.\nAI. We operate a highly vertically integrated AI platform spanning gigawatt-scale AI compute infrastructure, our\ntruth-seeking frontier AI model, Grok, AI solutions for consumer and enterprise customers, and X, our real-time\ninformation, entertainment, and free speech platform. We believe AI is rapidly converging toward AGI, where", - "path": "spacex-s1.pdf/p109", - "metadata": { - "length": 5075, - "summary": "82 Table of Contents hospitals, aircraft, cruise ships, trains, and hotels. Our enterprise customers include companies such as United Airlines, Carnival, Maersk, and John Deere, among others. We also serve a broad fixed‐site customer base across industries such as retail and f...", - "page_nums": [ - 109 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 109, "artifact_ref": "page_citation_assets/page-109.png", @@ -6469,24 +6176,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8a138021-9a4b-59db-8e37-19a97f6338d8", - "type": "page", - "content": "83\nTable of Contents\nhuman cognitive capabilities can be replicated and scaled at machine speeds, profoundly augmenting human\nproductivity. Once an AGI system exists, its true value derives from the ability to create limitless duplicates of\nhuman-like intelligence, necessitating vast computational resources and cost-efficient deployment to achieve\nmeaningful scale. Without large-scale, power-efficient infrastructure, AGI cannot be deployed broadly or\neconomically—making such infrastructure a critical strategic differentiator.\nCOLOSSUS II Facility in Memphis, Tennessee\n• AI Compute Infrastructure. xAI has established a leading position in building and scaling terrestrial AI\ncompute infrastructure, becoming the first company to deploy a coherent gigawatt-scale AI training cluster. Our\nAI compute facilities, COLOSSUS and COLOSSUS II, collectively provide approximately 1.0 gigawatt of\ncompute power, with additional power capacity available for data center operations. Our first-principles\nthinking enables us to build coherent compute at scale and at rapid speed with lower costs than most other\ncompanies in the industry. We brought the first cluster of COLOSSUS online in 122 days, repurposing the shell\nof an existing factory, and the first cluster of COLOSSUS II online even faster in 91 days. As an illustrative\ncomparison, an industry benchmark to bring online a 100 megawatt greenfield data center is approximately two\nyears. We also demonstrated a significant improvement in cost efficiency, achieving data center construction\ncosts for COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis. This\ndual speed and cost advantage stems from our complete vertical integration and the shared culture infused by\nour founder, Mr. Musk, across our Space, Connectivity, and AI segments. The addition of Terafab, an initiative\ntogether with Tesla to build a manufacturing facility capable of producing 1 terawatt per year of compute\nhardware, aims to further extend our vertical integration to chip design and manufacturing to alleviate potential\nfuture chip shortages at SpaceX, optimize compute performance, and potentially reduce overall compute costs.\nIntel, which has the ability to design, fabricate, and package ultra-high-performance chips at scale, has also\njoined the Terafab project. We believe that the key constraints in the continued growth of AI are physical—chip\nmanufacturing, data center infrastructure, and power generation; the future of AI will be determined by the\ncontrol of the physical stack.\n• Truth-Seeking Frontier Model. xAI has developed one of the world’s most advanced, truth-seeking frontier\nmodels with Grok. Since launching Grok-1 in November 2023, we have released four major versions and\nnotable variations thereof, achieving one of the fastest iteration cycles in the industry, culminating in Grok-4.3", - "path": "spacex-s1.pdf/p110", - "metadata": { - "length": 2882, - "summary": "83 Table of Contents human cognitive capabilities can be replicated and scaled at machine speeds, profoundly augmenting human productivity. Once an AGI system exists, its true value derives from the ability to create limitless duplicates of human-like intelligence, necessitati...", - "page_nums": [ - 110 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 110, "artifact_ref": "page_citation_assets/page-110.png", @@ -6494,24 +6184,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1b2616f4-ef30-50e3-b2d4-efbd5ef9fd16", - "type": "page", - "content": "84\nTable of Contents\n(April 2026). Building on this trajectory, we expect to continue scaling Grok through subsequent generations.\nOngoing training of next‐generation models is expected to scale toward multiple trillions of parameters, which\ncould represent a step change in reasoning in depth and overall intelligence. In this context, the number of\nparameters refers to the scale of the model, where parameters are the internal numerical values, such as\n“weights,” that are adjusted during training to enable the model to recognize patterns and relationships in data.\nA larger number of parameters generally allows the model to capture more complex relationships, store greater\namounts of knowledge, and achieve higher levels of reasoning capability. Within two years of its initial model\nrelease, Grok achieved frontier-level performance in scientific reasoning, as measured by its GPQA Diamond\nscore, an industry benchmark that evaluates AI models on a standardized set of questions written and validated\nby experts, on a faster timeline than reported by other leading model providers. This accelerated rate of\ninnovation stems from our highly vertically integrated stack: full ownership of training infrastructure, access to\nthe world’s most powerful compute clusters, and relentless focus on truth seeking and real-world utility. A key\ncompetitive differentiator is Grok’s deep integration with X, enabling proprietary access to a real-time\ninformation stream of approximately 350 million daily posts, which enhances freshness, relevance, and\ncontextual awareness for Grok. This direct, real-time access to the information and human discourse on X\nenhances Grok’s truth-seeking capabilities by grounding outputs in up-to-date knowledge and diverse\nviewpoints. We believe that this combination of compute infrastructure scale and the massive dataset available\nto us through X, subject to some limitations for certain content, has allowed us to achieve industry-leading\nperformance and provide model outputs that analyze real-time information on global events. We expect that our\ncompute infrastructure and direct access to real-time data via X constitute substantial performance advantages\nfor Grok that will result in increasingly rapid and dramatic iteration cycles.\n• Consumer and Enterprise Applications. We leverage our leading frontier models and compute infrastructure\nto deliver consumer and enterprise applications. In under six months, we developed Grok Voice, a real-time\nspeech engine, including in multilingual performance. Our image and video generation system, Imagine,\nproduced approximately 10 billion images and over 2 billion videos per month, on average, for the quarter\nending March 31, 2026. Together with Tesla, we are also developing Macrohard, an agentic AI platform\ndesigned to be capable of fully emulating digital workflows and augmenting human operation of computers—\nfrom coding and product development to management and entire business processes—using sophisticated\nautonomous agents. We believe Macrohard will have the potential to fundamentally transform how companies\nare structured and operate, thereby allowing dramatic increases in human productivity. In addition, we believe\nour existing government relationships and track record as large government contractors are a structural\nadvantage as governments become significant consumers of AI applications.\nOur integrated AI platforms across Grok and X have over 1.3 billion supported accounts active in the last\ntwelve months ended March 31, 2026, including approximately 550 million MAUs, up from over 1.1 billion\nsupported accounts and approximately 520 million MAUs as of December 31, 2025. Of our MAUs, we had\napproximately 117 million MAUs that used Grok’s AI features as of March 31, 2026. While MAUs provide an\nestimated measure of the size and engagement of our user base, we are focused on revenue and operating\nmargin, and manage our business with the objective of driving sustainable revenue growth and profitability\nrather than with the primary objective of growing or maintaining MAU levels.\nWe also monetize user activity through high-impact advertising inventory on X. We believe X’s scale, real-time\nengagement, and integration with Grok provide a differentiated foundation for building a unified user\nexperience across communication, content discovery, commerce, and financial services, among others. For\nenterprises that advertise on X, we offer large-scale user engagement, real-time content, and advanced AI-\ndriven performance marketing tools. For enterprises, we offer tailored deployments of Grok customized to\nspecific workflows and security needs through Grok Business and Grok Enterprise, sold on license-,\nconsumption-, or outcome-based pricing models.\nOur Capital Allocation and Funding Strategy\nSince our beginning, we have managed through multiple investment cycles. We initially raised capital to fund what\nis now our Space segment, which generates revenue from commercial and government customers while serving as\nthe backbone for our Connectivity segment. We invested in our Connectivity segment as we generated Segment", - "path": "spacex-s1.pdf/p111", - "metadata": { - "length": 5142, - "summary": "84 Table of Contents (April 2026). Building on this trajectory, we expect to continue scaling Grok through subsequent generations. Ongoing training of next‐generation models is expected to scale toward multiple trillions of parameters, which could represent a step change in re...", - "page_nums": [ - 111 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 111, "artifact_ref": "page_citation_assets/page-111.png", @@ -6519,24 +6192,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_01a0ef5a-6014-5948-9cda-ff24837fdbc8", - "type": "page", - "content": "85\nTable of Contents\nAdjusted EBITDA from our Space segment, along with additional equity capital that we raised externally, creating a\nsegment that generates predictable and recurring revenue from consumer, enterprise, and government customers. We\ncontinue to invest meaningfully in both our Space and Connectivity segments to build out the infrastructure of the\nfuture through our next-generation Starship launch platform and our expanded Starlink broadband and mobility\nnetworks.\nWe have a stellar track record of capital allocation and value creation in Space and Connectivity. Since SpaceX’s\nfounding in 2002, we have raised over $9 billion of equity capital to fund the development and growth of these two\nbusiness segments. The Space segment became Segment Adjusted EBITDA positive on a sustained basis beginning\nin 2018 and the Connectivity segment became in aggregate Segment Adjusted EBITDA positive on a sustained basis\nbeginning in 2023. In 2025, our Space segment generated a loss from operations of $(657) million and Segment\nAdjusted EBITDA of $653 million, including the impact of funding $3,004 million in research and development\nexpense for our next-generation Starship launch vehicle program. In 2025, our Connectivity segment generated\nincome from operations of $4,423 million and Segment Adjusted EBITDA of $7,168 million.\nWe acquired xAI in February 2026, which forms the basis of our AI segment. We expect to allocate substantial\ncapital to expand our compute infrastructure, and we expect a multi-year investment horizon before these\ndeployments translate into sustained positive AI Segment Adjusted EBITDA. During this investment period, our\ncapital expenditures will scale as quickly as we are able to deploy power and compute to address the $26.5 trillion\npotential market opportunity for AI. We plan to access a range of debt and equity financing solutions available to us\nas a public company to fund future investments in growth and to maintain strong liquidity. We aim to maintain an\ninvestment grade credit rating.\nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “—Non-GAAP Financial\nMeasures” for additional information on our non-GAAP financial measures, including reconciliations of Segment\nAdjusted EBITDA to segment income (loss) from operations, the most directly comparable GAAP measure.\nKey Business Metrics\nWe use the following key business metrics to evaluate our business, measure our performance, identify trends,\nformulate business plans, and make strategic decisions.\nSpace\nIn our Space segment, we use mass to orbit and launches as key business metrics to measure our scale and\nthroughput. Mass to orbit and launches grow more rapidly than Space segment revenue because these metrics\ninclude our internal constellation deployments from which we do not recognize inter-segment revenue.\nMass to Orbit: Mass to orbit is the total kilograms of payload that we deploy to orbit in a given period, and is a key\nindicator of SpaceX’s capacity and scalability that supports Space revenue and drives expansion across our\nConnectivity and AI segments. We calculate this metric by summing verified mass, including Starlink satellites,\ncustomer payloads, and development cargo, from all successful orbital and flight tests. This measure excludes failed\nor scrubbed attempts. We increased mass to orbit from 1,210 metric tons in 2023 to 1,699 metric tons in 2024 to\n2,213 metric tons in 2025, and from 450 metric tons in the three months ended March 31, 2025 to 556 metric tons in\nthe three months ended March 31, 2026. In 2023, 2024, and 2025, mass to orbit included 205, 282, and 312 metric\ntons attributable to customer payloads, respectively, and 1,005, 1,418, and 1,901 metric tons attributable to internal\npayloads, respectively (the amounts presented may not add up to the corresponding totals due to rounding). Falcon 9\nlaunches contribute steadily at an average capacity of 13 metric tons per mission since 2023 to various orbits while\nwe transition to Starship. As the most powerful launch system ever developed, we expect that Starship V3 will be\nable to carry a payload of 100 metric tons, with future generations of Starship being designed to double this payload.", - "path": "spacex-s1.pdf/p112", - "metadata": { - "length": 4243, - "summary": "85 Table of Contents Adjusted EBITDA from our Space segment, along with additional equity capital that we raised externally, creating a segment that generates predictable and recurring revenue from consumer, enterprise, and government customers. We continue to invest meaningfu...", - "page_nums": [ - 112 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 112, "artifact_ref": "page_citation_assets/page-112.png", @@ -6544,24 +6200,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ea584354-8aa2-533e-824b-2795993089ae", - "type": "page", - "content": "86\nTable of Contents\nLaunches: Launches are a key measure of our operational scale, which in turn supports our revenue growth and\nmission to expand humanity’s presence in space. Launches in a period represent the sum of all successful orbital and\nflight tests across our rockets, including internal Starlink deployments, development tests, and launches for our\nthird-party customers, and excluding any cancellations or scrubs that occurred in that period. Falcon 9 is the most\nactive orbital launch vehicle today, with approximately 620 orbital space launches as of March 31, 2026, and an\nover 99% mission success rate. During the three months ended March 31, 2026, we launched 40 Falcon rockets, of\nwhich 39 were flight-proven booster launches, and in 2025, we launched 165 Falcon 9 rockets, of which 157 were\nflight-proven booster launches. While we have steadily increased our Falcon 9 launch cadence over recent years, we\nexpect Falcon 9 launches to decrease over time. While Falcon 9 currently drives the majority of our launch activity,\nwe expect Starship, which is designed to be the world’s first fully, rapidly, reusable launch vehicle, to become a\nlarger contributor to our launch volume as it enters operational service. To date, we have executed 11 Starship flight\ntests to advance our goal of rapidly and fully reusable orbital capability, a breakthrough we believe will transform\nour launch economics and benefit both our business and customers who rely on our launch services. We have also\nscheduled a 12th flight test, which will debut the next generation Starship vehicle and Super Heavy booster,\npowered by the next evolution of our Raptor engine and launching from a newly designed pad at Starbase. We\nallocate a significant amount of launch capacity to our Connectivity segment, and expect to allocate a significant", - "path": "spacex-s1.pdf/p113", - "metadata": { - "length": 1835, - "summary": "86 Table of Contents Launches: Launches are a key measure of our operational scale, which in turn supports our revenue growth and mission to expand humanity’s presence in space. Launches in a period represent the sum of all successful orbital and flight tests across our rocket...", - "page_nums": [ - 113 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 113, "artifact_ref": "page_citation_assets/page-113.png", @@ -6569,24 +6208,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fc6ed021-8ce3-56e0-8888-1a24a701971f", - "type": "page", - "content": "87\nTable of Contents\namount to our AI segment in the future. Our Space segment revenue only reflects our customer launches and\ncustomer activities.\n__________________\n(1) With respect to Falcon launches, the number of launches for the years ended December 31, 2023, 2024, and 2025 totaled 96, 134, and 165,\nrespectively, of which customer launches totaled 33, 45, and 43, respectively, and internal launches totaled 63, 89, and 122, respectively.\nThe number of Falcon launches for the three months ended March 31, 2025 and 2026 totaled 36 and 40, respectively, of which customer\nlaunches totaled 12 and 7, respectively, and internal launches totaled 24 and 33, respectively. We designate a launch as a “customer launch”\nif an external customer payload constitutes the primary payload (i.e., where the principal objective is to deliver the customer payload) and\nthe mission parameters (e.g., launch window, orbital parameters, mission profile) are designed around the primary payload’s requirements.\nTo date, all Starship launches have been classified as internal.\nConnectivity\nIn our Connectivity segment, we view Starlink Subscribers and Starlink Subscriber ARPU as key business metrics to\nevaluate our growth and monetization.\nStarlink Subscribers: We define a Starlink Subscriber as a unique Service Line that is directly assigned to a\nStarlink.com account registered to a person or entity that does not have a direct, negotiated agreement with the\nStarlink sales team. A Service Line is an individual instance of Starlink broadband internet service provisioned\nunder a subscription plan, generally associated with a specific Starlink terminal or group of terminals, and billed\naccording to Starlink’s service plans and terms of service. The number of Service Lines is distinct from the number\nof unique devices, account holders, end users or physical persons. An individual, household, or business may share a\nsingle Service Line among multiple end-users. Likewise, an individual, household, or business may maintain\nmultiple service lines (e.g., both a Residential Service Line and a separate Roam Service Line, which would be\ndefined as two separate Service Lines and therefore two Starlink Subscribers).\nWe use this measure to assess the adoption of Starlink as we expand within and across geographies and business\nsegments. Starlink Subscribers includes both Personal (e.g., Residential and Roam) and Business (e.g., Local\nPriority and Global Priority) subscription plans, but does not include managed enterprise and government customers\nwith contracts in domains including aviation, maritime, land mobility, fixed sites and government entities. We\ncalculate Starlink Subscribers for a period as the number of unique Service Lines at the end of the period. Starlink", - "path": "spacex-s1.pdf/p114", - "metadata": { - "length": 2773, - "summary": "87 Table of Contents amount to our AI segment in the future. Our Space segment revenue only reflects our customer launches and customer activities. __________________ (1) With respect to Falcon launches, the number of launches for the years ended December 31, 2023, 2024, and 2...", - "page_nums": [ - 114 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 114, "artifact_ref": "page_citation_assets/page-114.png", @@ -6594,24 +6216,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_98bb783d-0cfd-5ff7-b20f-3e83ee47e2ee", - "type": "page", - "content": "88\nTable of Contents\nSubscribers totaled approximately 10.3 million and 5.0 million, up 105% and 91% on a year-over-year basis, in the\nquarters ended March 31, 2026 and March 31, 2025, respectively.\nStarlink Subscriber ARPU: We calculate ARPU as service revenue generated from Starlink Subscribers during the\nperiod divided by (i) the average number of Starlink Subscribers during the period and by (ii) the number of months\nin the period. Our strategy is focused on driving sustainable revenue growth and expanding our margins through\noperational efficiencies and technological advancements, rather than prioritizing increases in ARPU. This approach\naligns with our long-term vision of expanding global connectivity and market access. We generally expect Starlink\nSubscriber ARPU to continue to decline over the next few years as the portion of our subscriber base outside North\nAmerica continues to grow, as we add lower priced service plans, and as we adjust the monthly service plan fees we\ncharge for broadband offerings. However, we expect these dynamics to be offset by increased scale and\ntechnological advancement in our launch, satellite, and user terminal operations, ultimately supporting overall\nrevenue growth and cost reduction. Our Starlink Subscriber monthly ARPU decreased from $86 per month for the\nthree months ended March 31, 2025 to $66 per month for the three months ended March 31, 2026 and from $91 per", - "path": "spacex-s1.pdf/p115", - "metadata": { - "length": 1427, - "summary": "88 Table of Contents Subscribers totaled approximately 10.3 million and 5.0 million, up 105% and 91% on a year-over-year basis, in the quarters ended March 31, 2026 and March 31, 2025, respectively. Starlink Subscriber ARPU: We calculate ARPU as service revenue generated from...", - "page_nums": [ - 115 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 115, "artifact_ref": "page_citation_assets/page-115.png", @@ -6619,24 +6224,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6bd92de7-9f3a-51f4-9d00-420cc1a1935f", - "type": "page", - "content": "89\nTable of Contents\nmonth in 2024 to $81 per month in 2025. These decreases were driven primarily by international expansion and the\naddition of lower priced service plans.\nAI\nNameplate Compute Draw: We calculate Nameplate Compute Draw for a period as the number of GPUs installed in\nour data centers at the end of the period multiplied by their respective all-in power draw. Nameplate Compute Draw\nreflects installed capacity and does not represent actual power consumption or utilization. It does not include power\nwe install and use for our supporting infrastructure such as cooling systems, power distribution losses, lighting,\nsecurity systems, or facility-level overhead. Our Nameplate Compute Draw increased to 1.0 gigawatt as of March", - "path": "spacex-s1.pdf/p116", - "metadata": { - "length": 743, - "summary": "89 Table of Contents month in 2024 to $81 per month in 2025. These decreases were driven primarily by international expansion and the addition of lower priced service plans. AI Nameplate Compute Draw: We calculate Nameplate Compute Draw for a period as the number of GPUs insta...", - "page_nums": [ - 116 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 116, "artifact_ref": "page_citation_assets/page-116.png", @@ -6644,24 +6232,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5e332fcd-fc62-5268-afa3-a196ad2fe470", - "type": "page", - "content": "90\nTable of Contents\n31, 2026 as we brought COLOSSUS and COLOSSUS II online. We use this metric to assess our ability to deploy\nand scale compute capacity.\nSegment Income (Loss) from Operations\nSpace Income (Loss) from Operations\nSpace loss from operations for the three months ended March 31, 2026 increased by $592 million to $(662) million\ncompared to $(70) million for the three months ended March 31, 2025, primarily driven by an accelerated\ninvestment in development of the Starship vehicle as well as launch facilities to support future Starship launches,\nand a decrease in revenue from customer launches, partially offset by a decrease in cost of revenue, selling, general,\nand administrative expenses and impairment.\nSpace income (loss) from operations for the year ended December 31, 2025 decreased by $678 million to $(657)\nmillion compared to $21 million for the year ended December 31, 2024, while Space income (loss) from operations\nfor the year ended December 31, 2024 increased by $22 million to $21 million for the year ended December 31,\n2024 compared to $(1) million for the year ended December 31, 2023. The year-over-year decrease in 2025 was\nprimarily driven by an accelerated investment in development of the Starship vehicle as well as launch facilities to\nsupport future Starship launches, partially offset by an increase in revenue and decrease in cost of revenue.\nConnectivity Income (Loss) from Operations\nConnectivity income from operations for the three months ended March 31, 2026 increased by $155 million to\n$1,188 million compared to $1,033 million for the three months ended March 31, 2025, primarily driven by\nincreased revenue from our consumer subscribers (composed of 104.7% growth in Starlink Subscribers, offset by a\n22.9% decline in Starlink Subscriber ARPU, primarily due to international expansion and the addition of lower\npriced service plans) and enterprise business, partially offset by higher depreciation of capitalized launch and\nsatellite costs due to the increase in Starlink flights, as well as higher operating expenses including ground operating\ncosts and international expansion costs to support and drive subscriber growth.\nConnectivity income from operations for 2025 increased by $2,417 million to $4,423 million compared to $2,006\nmillion for the year ended December 31, 2024 while Connectivity income from operations for the year ended", - "path": "spacex-s1.pdf/p117", - "metadata": { - "length": 2397, - "summary": "90 Table of Contents 31, 2026 as we brought COLOSSUS and COLOSSUS II online. We use this metric to assess our ability to deploy and scale compute capacity. Segment Income (Loss) from Operations Space Income (Loss) from Operations Space loss from operations for the three months...", - "page_nums": [ - 117 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 117, "artifact_ref": "page_citation_assets/page-117.png", @@ -6669,24 +6240,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e7205a47-de81-5976-91bf-dc9d83b08195", - "type": "page", - "content": "91\nTable of Contents\nDecember 31, 2024 increased by $1,537 million to $2,006 million compared to $469 million for the year ended\nDecember 31, 2023. The year-over-year increase in 2025 was primarily driven by increased revenue from growth of\nour consumer and enterprise customers by $2,378 million and $1,410 million, respectively, partially offset by higher\ndepreciation of capitalized launch and satellite costs due to the increase in Starlink flights, as well as higher\nmarketing and international expansion costs to drive subscriber growth.\nAI Income (Loss) from Operations\nAI loss from operations for the three months ended March 31, 2026 increased by $1,533 million to $(2,469) million\ncompared to $(936) million for the three months ended March 31, 2025, primarily driven by higher cloud computing\nand GPU depreciation costs, data center infrastructure and employee expenses, partially offset by higher revenue.\nAI loss from operations for 2025 increased by $4,794 million to $(6,355) million compared to $(1,561) million for\nthe year ended December 31, 2024, while AI loss from operations for the year ended December 31, 2024 decreased\nby $2,412 million to $(1,561) million compared to $(3,973) million for the year ended December 31, 2023. The\nincrease in 2025 was primarily driven by higher cloud computing costs, facilities-related costs and employee\nexpenses, partially offset by higher revenue.\nSegment Adjusted EBITDA\nSegment Adjusted EBITDA is defined as segment income (loss) from operations excluding (i) depreciation and\namortization, (ii) share-based compensation, (iii) restructuring charges and (iv) impairment.\nSpace Segment Adjusted EBITDA\nSpace Segment Adjusted EBITDA for the three months ended March 31, 2026 decreased by $575 million to $(351)\nmillion compared to $224 million for the three months ended March 31, 2025, primarily driven by an accelerated\ninvestment in development of the Starship vehicle as well as launch facilities to support future Starship launches,\nand a decrease in revenue from customer launches, partially offset by a decrease in cost of revenue, selling, general,\nand administrative expenses.\nSpace Segment Adjusted EBITDA for 2025 decreased by $501 million to $653 million compared to $1,154 million\nin 2024, while Space Segment Adjusted EBITDA for 2024 increased by $157 million to $1,154 million compared to\n$997 million in 2023. The year-over-year decrease in 2025 was primarily driven by an accelerated investment in\ndevelopment of the Starship vehicle, as well as launch facilities to support future Starship launches, partially offset\nby an increase in NASA Cargo Resupply Services (CRS) for additional missions to the International Space Station,\nalong with increased revenue from a U.S. Department of War contract. Our Space Segment Adjusted EBITDA is\nalso driven by the reusability and efficiency of our rockets, which boosts cadence and reliability and supports a\ndiversified base of commercial and government customers. These efforts have created a strong foundation for our\nSpace Segment Adjusted EBITDA, and we believe position us to unlock further high-value opportunities in the\nexpanding space economy.\nConnectivity Segment Adjusted EBITDA\nConnectivity Segment Adjusted EBITDA for the three months ended March 31, 2026 increased by $469 million to\n$2,087 million compared to $1,618 million for the three months ended March 31, 2025, primarily driven by higher\nrevenue from growth in consumer and enterprise revenue. Consumer revenue was composed of 104.7% growth in\nStarlink Subscribers, offset by a 22.9% decline in Starlink Subscriber ARPU, primarily due to international\nexpansion and the addition of lower priced service plans. Enterprise and government revenue had an increase\nprimarily driven by the growth in our aviation, maritime, mobility, and other enterprise business, partially offset by a\ndecrease in our government business. These increases in revenue were offset by higher operating expenses for\ninternational expansion, and higher research and development costs.\nConnectivity Segment Adjusted EBITDA for 2025 increased by $3,319 million to $7,168 million compared to\n$3,849 million in 2024 while Connectivity Segment Adjusted EBITDA for 2024 increased by $2,247 million to\n$3,849 million compared to $1,602 million in 2023. The year-over-year increase in 2025 was primarily driven by", - "path": "spacex-s1.pdf/p118", - "metadata": { - "length": 4369, - "summary": "91 Table of Contents December 31, 2024 increased by $1,537 million to $2,006 million compared to $469 million for the year ended December 31, 2023. The year-over-year increase in 2025 was primarily driven by increased revenue from growth of our consumer and enterprise customer...", - "page_nums": [ - 118 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 118, "artifact_ref": "page_citation_assets/page-118.png", @@ -6694,24 +6248,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_213b381d-5714-5c52-9bc9-61aa4d3cca1f", - "type": "page", - "content": "92\nTable of Contents\nhigher revenue from growth in our consumer and enterprise customers, partially offset by higher marketing and\ninternational expansion costs to grow our subscribers, as well as higher research and development costs for our next-\ngeneration product development. We have driven our strong sequential Connectivity Segment Adjusted EBITDA\ngrowth by expanding the scale and efficiency of our LEO satellite constellations and our highly verticalized supply\nchain, which has delivered major cost reductions in user terminal production.\nAI Segment Adjusted EBITDA\nAI Segment Adjusted EBITDA for the three months ended March 31, 2026 decreased by $497 million to $(609)\nmillion compared to $(112) million for the three months ended March 31, 2025, primarily driven by higher cloud\ncompute and data center infrastructure and operating costs, and employee compensation expenses, partially offset by\nhigher revenue.\nAI Segment Adjusted EBITDA for 2025 decreased by $1,584 million to $(1,237) million compared to $347 million\nin 2024 while AI Segment Adjusted EBITDA for 2024 decreased by $875 million to $347 million, compared to\n$1,222 million in 2023. The decrease in 2025 was primarily driven by higher cloud computing costs, facilities-\nrelated costs and employee expenses, partially offset by higher revenue. AI Segment Adjusted EBITDA is primarily\ndriven by our strategy to rapidly and cost-effectively scale compute infrastructure. We expect to continue to expand\nour terrestrial data centers, and to launch orbital data centers, and we expect a multi-year investment horizon before\nthese deployments translate into sustained positive Segment Adjusted EBITDA for our AI segment.\nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “—Non-GAAP Financial\nMeasures” for additional information on our non-GAAP financial measures, including reconciliations of Segment\nAdjusted EBITDA to segment income (loss) from operations, the most directly comparable GAAP measure.\nCapital Expenditures\nThe following table presents our capital expenditures by segment:\nThree Months Ended March 31, Year Ended December 31,\n(in millions) 2026 2025 2025 2024 2023\nSpace\n\n.................................................. $ 1,052 $ 759 $ 3,832 $ 2,032 $ 1,497\nConnectivity\n\n....................................... 1,332 814 4,178 3,498 2,455\nAI\n\n\n........................................................ 7,723 2,567 12,727 5,633 463\nTotal Capital Expenditures\n\n................. $ 10,107 $ 4,140 $ 20,737 $ 11,163 $ 4,415\nSpace Capital Expenditures\nSpace capital expenditures for the three months ended March 31, 2026 increased $293 million to $1,052 million\ncompared to $759 million for the three months ended March 31, 2025. The increase was primarily driven by\nincreased investment in our launch site infrastructure for Starship.\nSpace capital expenditures for 2025 increased $1,800 million to $3,832 million compared to $2,032 million in 2024,\nwhile Space capital expenditures for 2024 increased $535 million to $2,032 million compared to $1,497 million in\n2023. The increase in each year-over-year period was primarily driven by increased investment in our launch site\ninfrastructure for Starship.\nConnectivity Capital Expenditures\nConnectivity capital expenditures for the three months ended March 31, 2026 increased $518 million to $1,332\nmillion compared to $814 million for the three months ended March 31, 2025. The increase was primarily driven by\nhigher satellite and ground equipment costs as we continue to increase our number of satellites and grow our satellite\nnetwork.\nConnectivity capital expenditures for 2025 increased $680 million to $4,178 million compared to $3,498 million in\n2024, while Connectivity capital expenditures for 2024 increased $1,043 million to $3,498 million compared to", - "path": "spacex-s1.pdf/p119", - "metadata": { - "length": 3833, - "summary": "92 Table of Contents higher revenue from growth in our consumer and enterprise customers, partially offset by higher marketing and international expansion costs to grow our subscribers, as well as higher research and development costs for our next- generation product developme...", - "page_nums": [ - 119 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 119, "artifact_ref": "page_citation_assets/page-119.png", @@ -6719,24 +6256,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_09e9932b-ea2f-530f-8345-628e61a23c85", - "type": "page", - "content": "93\nTable of Contents\n$2,455 million in 2023. The increase in each year-over-year period was primarily driven by higher satellite and\nground equipment costs as we continue to increase our number of satellites and grow our satellite network.\nAI Capital Expenditures\nAI capital expenditures for the three months ended March 31, 2026 increased $5,156 million to $7,723 million\ncompared to $2,567 million for the three months ended March 31, 2025. The increase was primarily driven by\ninvestments in the rapid expansion of our terrestrial data centers, including the development, construction, and\nequipping of new facilities and supporting infrastructure.\nAI capital expenditures for 2025 increased $7,094 million to $12,727 million compared to $5,633 million in 2024,\nwhile AI capital expenditures for 2024 increased $5,170 million to $5,633 million compared to $463 million in\n2023. This increase was primarily driven by significant investments in the rapid expansion of our terrestrial data\ncenters, including the development, construction, and equipping of new facilities and supporting infrastructure.\nDrivers of Our Performance\nDeveloping Starship. Starship is our next-generation vehicle that we expect will dramatically expand our launch\ncapability through full and rapid reusability combined with unprecedented mass to orbit capability. As the most\npowerful launch system ever developed, we expect that Starship V3 will be able to carry a payload of 100 metric\ntons, and that future generations could reach 200 metric tons, potentially as soon as Starship V4. Starship is central\nto our goal of unlocking growth through our unique vertically integrated business model. Starship is expected to be\nthe only vehicle with fully reusable first and second stages, which is critical to reducing launch costs and increasing\nlaunch cadence. We believe that Starship can eventually reduce the cost to reach orbit by 99% or more relative to the\nhistorical average launch cost per kilogram according to NASA of $18,500, establishing a scalable path to creating\nthe infrastructure of the future, such as orbital AI compute.\nWe have already demonstrated catching and reusing the first stage booster for Starship through our innovative\n“chopsticks” method to catch the booster. To date, we have executed 11 Starship flight tests. We have also\nscheduled a 12th flight test, which will debut the next generation Starship vehicle and Super Heavy booster. This\nnext-generation Starship introduces major changes for better orbital performance and reusability. We plan to\ndemonstrate key development milestones of catching the upper stage and demonstrating in-orbit propellant transfer\ncapabilities. These milestones will be the key unlocks for a rapidly reusable rocket that we expect will take hundreds\nof thousands of tons of mass to orbit to drive growth in our Connectivity and AI segments, and allow us to develop\nthe lunar economy and eventually to reach Mars. We expect Starship to commence payload delivery to orbit in the\nsecond half of 2026 following additional flight tests. For additional information about this risk, please refer to “Risk\nFactors—Risks Related to Our Business—Any failure or delay in the development of Starship at scale or in\nachieving the required launch cadence, reusability and capabilities thereafter would delay or limit our ability to\nexecute our growth strategy, including the deployment of next-generation satellites, global satellite-to-mobile\nconnectivity, and orbital AI compute, which could materially adversely affect our business, financial condition,\nresults of operations, and future prospects” in this prospectus.\nLaunch Costs and Cadence. Our launch costs and cadence underpin the foundational competitive advantage that\nenables the performance of each of our segments. The reusability of our launch vehicles meaningfully reduces the\ncost per kilogram to orbit by eliminating or limiting the need to manufacture new vehicles for every mission.\nReusability also enables higher launch cadence by shortening the time between flights, as vehicles can be rapidly\nreflown after their return. These factors enable performance in our Connectivity segment by supporting faster and\nmore cost‐effective deployment of our satellite constellations. We expect they will support our AI segment as we\naim to deploy a large fleet of orbital AI compute. We expect continued enhancements to our launch infrastructure\nand launch vehicles, including Starship, to drive cost down and throughput up, extending these benefits to our\nbusinesses, as well as to our third‐party customers who rely on our launch capabilities. As we continue to reduce\nlaunch costs and increase launch cadence, we expect to transform the rocket launch industry into airline-like\noperations, enabling continuous and affordable access to space. Period-to-period comparisons of launch costs and\ncadence are impacted by factors out of our control, including timing of delivery of customer payloads which impacts", - "path": "spacex-s1.pdf/p120", - "metadata": { - "length": 4995, - "summary": "93 Table of Contents $2,455 million in 2023. The increase in each year-over-year period was primarily driven by higher satellite and ground equipment costs as we continue to increase our number of satellites and grow our satellite network. AI Capital Expenditures AI capital ex...", - "page_nums": [ - 120 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 120, "artifact_ref": "page_citation_assets/page-120.png", @@ -6744,24 +6264,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c8c58974-bdd1-5fa6-b644-3c741de826eb", - "type": "page", - "content": "94\nTable of Contents\nthe mix of customer and internal payloads and related financial reporting, or weather which can delay a launch from\none period to another.\nIncreasing Satellite Capacity. The scale, reliability, and capacity of our LEO broadband and mobile satellite\nconstellations drive our Connectivity segment’s growth and operating performance. In 2025, launching and\noperating higher-throughput satellites supported Starlink’s service quality and customer reach by increasing\navailable network capacity and improving service consistency during peak usage periods. As of March 31, 2026, we\noperated over 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, with the majority composed of our\nsecond-generation, V2 Mini satellites. We expect to commence deploying our next-generation V3 satellites,\ndesigned to offer one Tbps of downlink capacity per satellite, using Starship in the second half of 2026 and expect\nthat a single Starship launch will be capable of deploying up to 60 V3 satellites to LEO, representing a twenty-fold\nincrease in Starlink downlink capacity deployed relative to a Falcon 9 launch.\nWe also provide satellite-to-mobile connectivity, supplementing terrestrial networks and substantially reducing\nmobile “dead zones” in approximately 30 countries. Since January 2025, we have grown our constellation from\napproximately 360 mobile V1 Mobile satellites to approximately 650 mobile V1 Mobile satellites. Through this\nconstellation and in partnership with more than 30 mobile network operators, we provided data, over-the-top voice,\nand messaging services to approximately 7.4 million monthly unique devices across approximately 30 countries.\nDuring 2025, we also entered into agreements to acquire 65 MHz of spectrum in the United States as well as certain\nglobal Mobile Satellite Service spectrum licenses from EchoStar for $19.6 billion of equity and cash consideration,\nas described below under “—Liquidity and Capital Resources—Material Cash Commitments.” We expect the\nspectrum acquisition to close in November 2027, subject to required regulatory approvals and other closing\nconditions. We expect the wider bandwidth operations enabled by this spectrum purchase, together with our\nauthorization to deploy 7,500 satellites including with the 2GHz spectrum band, will provide stronger support for\ncurrent performance and potential future services, including broadband data and IoT connectivity, and is expected to\nenable 5G connectivity.\nThese investments in satellite scale, per-satellite capacity, and expanded capabilities are instrumental to the growth\nand operating performance of our Connectivity segment, enabling us to onboard new users while improving service\nquality.\nIncreasing Starlink Brand Awareness and Acquiring New Subscribers. Our growth is driven in part by increased\nglobal awareness of Starlink’s capabilities and our ability to convert that awareness into customer adoption. Trust,\nvisibility, and demonstrated reliability are central to customer acquisition, particularly for those in remote and\ninfrastructure-limited regions. Proven performance in rural, remote, and disaster-affected areas, along with strong\nbrand awareness, reinforces Starlink’s reputation as essential infrastructure, leading to higher adoption in new\nmarkets.\nAs of March 31, 2026, we had over 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, operating the\nworld’s most advanced broadband constellation providing internet connectivity to approximately 10.3 million\nStarlink Subscribers across 164 countries, territories, and other markets, collectively home to more than 3.3 billion\npeople. We are focused on growing the number of Starlink Subscribers by expanding our consumer distribution\nnetwork across thousands of authorized retail stores globally, and executing region-specific marketing campaigns to\nincrease brand awareness. By clearly demonstrating Starlink’s superior speed, low-latency, and ease of installation,\nwe expect to drive meaningful subscriber growth.\nIncreasing Enterprise Customer Adoption. As we continue to grow our Starlink constellation and bandwidth, we\nsee a large opportunity to grow the enterprise connectivity market by providing solutions that had not previously\nbeen available. Our network is global and can provide primary connectivity for on-the-move applications as well as\na resilient backup option for enterprises serviced by land-based connectivity. We plan to deepen our penetration with\nenterprise and government customers through direct, vertical-specific acquisition strategies. In recent years, we have\nassembled dedicated sales and engineering teams to market and support fleet-wide conversions in aviation and\nmaritime, customized deployments for land mobility, which we expect to continue to grow as consumers who\nexperience Starlink begin to expect high-performance connectivity when traveling. We expect to enable more\ncustomized deployments for land mobility across existing use cases such as commercial trucking fleets, and new", - "path": "spacex-s1.pdf/p121", - "metadata": { - "length": 5040, - "summary": "94 Table of Contents the mix of customer and internal payloads and related financial reporting, or weather which can delay a launch from one period to another. Increasing Satellite Capacity. The scale, reliability, and capacity of our LEO broadband and mobile satellite constel...", - "page_nums": [ - 121 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 121, "artifact_ref": "page_citation_assets/page-121.png", @@ -6769,24 +6272,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6b0eb44d-c23f-53f3-b2f9-9bb5d2f8c45e", - "type": "page", - "content": "95\nTable of Contents\napplications enabled by more connected devices. We also continue to develop specialized networks for secure\ngovernment applications via Starshield. By leveraging proven performance in mission-critical environments and\nexpanding through channel partners in select geographies, we expect to drive increased adoption among high-value\nenterprise and government accounts.\nAccelerating Investment in Growth and Innovation. We are simultaneously developing and scaling a wide range of\ncomplex, capital‐intensive projects, including Starship and terrestrial and orbital AI compute. We believe speed is a\ncompetitive advantage, and periodically we decide to increase and accelerate our investments. For example, in 2025\nwe accelerated our timeline for Starship development, increasing R&D in our Space segment to $3,004 million,\ncompared to $1,835 million in 2024. In our AI segment, in 2025 we successfully accelerated deployment of compute\nfor the development of Grok, increasing R&D in our AI segment to $5,064 million, compared to $1,176 million in\n2024. We believe pursuing multiple ambitious programs in parallel enables us to compound advantages across our\nvertically integrated innovation engine and unlock new large addressable markets over time. The timing of our\ninvestments is not fixed and may accelerate based on technical progress, market opportunity, or resource\navailability. As a result, our operating results, margins and profitability may fluctuate from period to period as we\ncontinue to prioritize execution speed, capacity expansion, and technological leadership over near‐term margin\noptimization. We believe that this approach maximizes long‐term value creation by allowing us to move faster than\ncompetitors, scale earlier in emerging markets, and reinforce durable competitive advantages that we expect to\nbenefit our business over time.\nSupply Chain and Manufacturing Efficiency for User Terminals. The operating performance of our Connectivity\nsegment depends in part on the cost and availability of user terminals at scale. We are vertically integrated across\nterminal design, production, and support, including silicon, hardware, software, manufacturing, fulfillment, and\noperations, which enables us to control our means of production as well as rapidly iterate to continuously improve\nthe performance of our user terminals and optimize product cost. Since our initial launch of our user terminal, we\nhave optimized the design of our phased-array antennas, our self-aligning antenna responsible for connecting user\nequipment to our LEO satellite network, for manufacturability and high-volume scale. Over the past five years, we\nhave significantly lowered production costs and have scaled terminal output to approximately 200,000 terminals per\nweek. We plan to continue to further scale production significantly and make gains that improve margins, lower\ncustomer barriers, and broaden addressable markets.\nScaling our AI Compute Rapidly and Efficiently. Our ability to rapidly and cost-effectively scale AI compute is a\nsignificant driver of our competitiveness. We view scaling of compute capacity through a simple lens: power\navailability and the powered shell together determine how quickly we can deploy compute, and our model and\nserving stack in that powered shell determines how efficiently we convert that compute into useful tokens. In order\nto scale our AI segment rapidly and efficiently, our strategy is extreme vertical integration, “from shovels to tokens.”\nPower Availability and Powered Shells. We have demonstrated an industry-leading ability to rapidly deploy\nlarge-scale data center infrastructure at unprecedented speed and cost efficiency. Our COLOSSUS and\nCOLOSSUS II data centers collectively provide approximately 1.0 gigawatt of compute power, with additional\npower capacity available for data center operations. We brought the first cluster of COLOSSUS online in 122\ndays, repurposing the shell of an existing factory, and the first cluster of COLOSSUS II online even faster in 91\ndays. As an illustrative comparison, an industry benchmark to bring online a 100 megawatt greenfield data\ncenter is approximately two years. We also demonstrated a significant improvement in cost efficiency,\nachieving data center construction costs for COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis.\nCOLOSSUS and COLOSSUS II were brought online almost entirely through on-site power generation\ncapabilities that we designed, built, and deployed ourselves. We view our proven ability to construct power\ninfrastructure at this scale and speed as a significant competitive advantage. We partner closely with local\nutilities to fund grid infrastructure expansions and access excess capacity, while proactively curtailing our grid\nusage whenever required to prioritize community needs. Megapacks—utility-scale battery storage systems—\ndeliver critical redundancy and help stabilize operations during peak demand. Going forward, COLOSSUS II is\nexpected to be primarily powered by a dedicated natural gas power plant, supplemented over time by additional\ngrid capacity that we are directly funding through our local utility partners. Our comprehensive expertise across\nthe full infrastructure stack—from power procurement and on-site generation to distribution and advanced", - "path": "spacex-s1.pdf/p122", - "metadata": { - "length": 5361, - "summary": "95 Table of Contents applications enabled by more connected devices. We also continue to develop specialized networks for secure government applications via Starshield. By leveraging proven performance in mission-critical environments and expanding through channel partners in...", - "page_nums": [ - 122 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 122, "artifact_ref": "page_citation_assets/page-122.png", @@ -6794,24 +6280,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a3c7f22f-345b-5a11-82e7-47a2e0b27884", - "type": "page", - "content": "96\nTable of Contents\ncooling systems—enables us to translate available power into usable compute capacity with exceptional\nefficiency. As we continue to scale and optimize, we expect to drive further improvements in Power Usage\nEffectiveness. We expect these gains to accelerate the path from buildout to monetization.\nAI Token Generation Efficiency. We are highly vertically integrated. We design, own or lease, and install all of\nour powered shells and dedicated processor capacity. This full-stack ownership enables us to efficiently convert\npower capacity into usable compute, precisely control cluster configuration, and operate a true end-to-end\nsystem spanning infrastructure through to model deployment. Our operating performance depends on how\neffectively we utilize deployed compute once capacity comes online—specifically, our ability to convert raw\ninfrastructure into reliable, high-throughput token generation at scale. Achieving this requires tight coordination\nacross model training and inference workflows, hardware configuration, and data center operations so that\nutilization and throughput ramp efficiently as we expand. We believe we hold a meaningful efficiency\nadvantage by tightly integrating the model layer directly with the compute layer. Unlike third-party\nenvironments that impose multiple abstraction layers, we run our serving stack close to the processors and\noptimize serving, networking, and cluster configuration as a single unified system. This “model-to-compute”\nintegration reduces overhead, improves hardware utilization, and increases the proportion of available compute\nthat is converted into delivered output tokens. Output tokens represent the final generated response delivered to\nthe user, while total processing can be substantially higher when a request triggers additional inference-time\nreasoning steps. Because we control workload scheduling and serving logic, we can prioritize high token\nefficiency—intelligently balancing compute allocated to reasoning with strong final output to maintain or\nimprove response quality. This end-to-end control, combined with our sourcing relationships with leading\ncompute providers, gives us a performance-per-watt advantage and enables us to adopt new processor\ngenerations at scale more rapidly through a repeatable playbook for reconfiguration and recommissioning.\nOrbital AI Compute Has the Potential to Massively Increase Our Ability to Scale Our AI Compute,\nAccelerate Our Pace, and to Be More Cost Effective Relative to Terrestrial Options. We believe we are the\nonly company with a commercially viable path to building orbital AI compute at scale. This is underpinned by\nour unique ability to launch substantial mass into orbit cost efficiently through reusable rockets and manufacture\nsecure, reliable, and high performance satellites at low cost and high volume. We plan to develop orbital data\ncenters to enable scaling of compute capacity for us and our customers that is independent of terrestrial power\ninfrastructure constraints. Space offers the potential to access virtually limitless power and an operating\nenvironment that supports sustained high‐density compute, including structural advantages for power\ngeneration, cooling, and uninterrupted operations as capacity grows. We plan to employ a modular shell\napproach built around our scalable satellite constellation, which enables compute capacity to be deployed and\nexpanded efficiently as capacity requirements grow. The architecture also supports shorter refresh cycles at the\ntoken layer, as we can upgrade compute as successive chip generations arrive, increasing token output per unit\nof installed capacity. Our goal over time is to launch 100 gigawatts of compute to space each year. If operated\ncontinuously, the generation resources used to support 100 gigawatts of compute could generate approximately\none-fifth of the annual power production in the United States, which was 4.4 thousand terawatt hours in 2025,\naccording to the U.S. Energy Information Administration (EIA). We expect space‐based compute to massively\nincrease AI compute scale, while also improving token economics.\nAbility to Increase Revenue from our Consumer User Base. Our performance depends in part on our ability to\neffectively increase revenue from our over 1.3 billion accounts active in the last twelve months ended March 2026,\nincluding approximately 550 million monthly active AI users across Grok and X through multiple complementary\nmonetization channels:\nGrowing our Advertising Platform. Advertising remains a core monetization channel for our AI segment, with\nrevenue driven by our ability to deliver highly relevant ads. We aim to grow advertising revenue per user by\nstrengthening performance advertising, expanding AI‐driven targeting and measurement, and introducing richer\nad formats and creative tools. A central focus of ours is making ads feel like content—contextually relevant,\naligned with user interests, and integrated into real‐time conversations. Grok increasingly supports this strategy\nby helping advertisers with campaign creation, creative optimization, and alignment with trending topics and\nuser intent. While these factors help us drive advertising revenue, the pricing of our advertising products is also\naffected by other factors, including the global economy and the highly competitive nature of our industry. We", - "path": "spacex-s1.pdf/p123", - "metadata": { - "length": 5389, - "summary": "96 Table of Contents cooling systems—enables us to translate available power into usable compute capacity with exceptional efficiency. As we continue to scale and optimize, we expect to drive further improvements in Power Usage Effectiveness. We expect these gains to accelerat...", - "page_nums": [ - 123 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 123, "artifact_ref": "page_citation_assets/page-123.png", @@ -6819,24 +6288,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7cbb86ca-8a40-5010-964b-6b0c0955c694", - "type": "page", - "content": "97\nTable of Contents\nbelieve continued investment in AI‐powered advertising will further improve advertiser ROI while further\nenhancing user experience.\nConversion of Users to Paid Subscribers. In parallel, we are focused on converting a greater portion of our user\nbase into paying subscribers through our X subscription (Premium and Premium+) and Grok subscription\nofferings. Subscribers benefit from enhanced functionality, exclusive features, and access to our latest AI\nmodels. As of March 31, 2026, we reached approximately 6.3 million active paid subscribers, which was\ncomprised of approximately 4.4 million X Premium and Premium+ paid subscribers and approximately 1.9\nmillion SuperGrok, SuperGrok Heavy and SuperGrok Lite paid subscribers. We plan to continue adding new\nfeatures and functionality while releasing increasingly capable Grok models to increase the penetration rate of\nour subscriber base. Our AI segment has demonstrated exceptional model velocity: since launching Grok, we\nhave developed leading frontier models at a far faster rate of innovation than others. We believe this pace of\ninnovation strengthens the value proposition of our subscription offerings and supports long‐term subscriber\ngrowth.\nProgress Toward the Everything App and New Monetization Channels. We aim to evolve X into an\n“Everything App,” integrating real-time information, communications, media, payments, banking, commerce\nand more within one consumer experience. This can increase the usefulness of X, and therefore increase the\nusage and monetization potential of X. We have rapid product launch velocity, with a frequent cadence of new\nfeatures and products launched since 2023, including features such as long‐form video, improved group\ninteractions, and creator tools. We plan to further broaden the value proposition of X through offerings like\nMoney, a product we launched in beta in November 2025, which aims to expand platform utility by enabling\npayments and other financial services. We released X Chat in November 2025, which features end-to-end\nencryption and has no connection to advertising, unlike other services. We intend to further embed Grok\nthroughout the platform to enhance discovery, analysis of posts, user support, and personalization, making core\nworkflows more useful and reducing friction for users to adopt paid features.\nGrowing Enterprise and Government Adoption of Our AI Offerings. Our future growth and financial performance\ndepend in part on our ability to increase adoption and usage of our AI offerings among enterprise and government\ncustomers. We have launched Grok Business, Grok Enterprise, Grok API, and xAI Gov, products that we believe\nwill be attractive to enterprises and governments, and we expect substantial opportunities to acquire new customers.\nWe are also partnering with Cursor to advance Grok and potentially to create jointly-owned coding and knowledge\nwork AI models, trained on our compute infrastructure. Over time, we also believe enterprises and governments will\npresent significant opportunities for revenue expansion as they deploy our models more broadly across their\norganizations, adopt new capabilities, and build and operate solutions using our API. We also intend to continue to\noffer our compute infrastructure to third-party customers. Our ability to realize these expansion opportunities\ndepends on continued innovation, reliable performance, and meeting evolving technical, security, and compliance\nrequirements.\nComponents of Results of Operations\nDescription of Our Segments\nSpace\nRevenue - Space\nSpace segment generates revenue primarily through (i) Launch Services for the deployment of payloads to their\nintended orbits for both commercial and government customers utilizing Falcon 9 and Falcon Heavy, and (ii)\nLaunch and Development for the development of spacecraft and provision of launch and mission services for\ngovernment agency space programs utilizing Falcon 9, Falcon Heavy, Starship, and Dragon. Launch Services\nrevenue is derived from fixed-price contracts that range from one to five years. Launch and Development revenue is\nderived from fixed-price contracts that can range from one to fourteen years.", - "path": "spacex-s1.pdf/p124", - "metadata": { - "length": 4195, - "summary": "97 Table of Contents believe continued investment in AI‐powered advertising will further improve advertiser ROI while further enhancing user experience. Conversion of Users to Paid Subscribers. In parallel, we are focused on converting a greater portion of our user base into p...", - "page_nums": [ - 124 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 124, "artifact_ref": "page_citation_assets/page-124.png", @@ -6844,24 +6296,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a363ee08-1da6-567b-b15f-1564d35bc645", - "type": "page", - "content": "98\nTable of Contents\nThe Company recognizes Launch Services revenue at a point in time, due to the interchangeability of flight\nhardware and minimal unique engineering costs. Revenue and costs are deferred and not recognized until upon the\nlaunch or deployment of the customer’s payload to their intended orbit.\nThe Company recognizes Launch and Development revenue over time as the Company’s performance on the\ncontract creates an asset with no alternative use and the Company has an enforceable right to payment for\nperformance to date. The Company measures progress on these contracts using the cost-to-cost input method, which\nthe Company believes represents the most appropriate measure towards satisfaction of its performance obligation.\nFor launches of our Starlink satellites, the Company does not recognize any inter-segment revenue, rather those\nlaunch costs are capitalized in satellites in Property, plant, and equipment, net. We allocate a significant amount of\nlaunch capacity to our Connectivity segment, and expect to allocate a significant amount to our AI segment in the\nfuture. Our Space segment revenue only reflects our customer launches and customer activities.\nRevenue from Launch Services recognized at point in time and revenue from Launch and Development recognized\nover time as a percentage of total Space segment revenue are as follows:\nThree Months Ended March 31, Year Ended December 31,\n2026 2025 2025 2024 2023\nLaunch Services\n\n............................... 53.3% 65.4% 63.0% 68.2% 55.2%\nLaunch & Development\n\n................... 46.7% 34.6% 37.0% 31.8% 44.8%\nSpace\n\n\n................................................ 100.0% 100.0% 100.0% 100.0% 100.0%\nWe expect Space revenue growth to continue to be lower than total company revenue growth as our internal\nbusiness continues to absorb most of the growth in our launch capacity. In addition, we expect Launch and\nDevelopment to represent a larger portion of our Space revenue as we continue to serve our long-term contracts for\nour government customers. From period to period, Space revenue will vary based on the mix of launches used for\ncustomers and our own businesses.\nExpenses - Space\nCost of Revenue\nThe Company’s Falcon 9 and Falcon Heavy are composed of boosters (also known as first stages), second stages,\nMerlin engines, and fairings. Boosters, fairings, and Merlin engines are reusable and are classified as property, plant,\nand equipment and are depreciated to cost of revenue. The second stages are not reusable and are recorded to cost of\nrevenue when they are launched for Launch Services revenue transactions or assigned for Launch and Development\nrevenue transactions. Dragon is comprised of a fully reusable capsule that is classified as Property, plant, and\nequipment, net and is depreciated to cost of revenue. Starship is comprised of a booster, ship, and Raptor engines\nand is currently in the development stage. A majority of Starship costs are currently expensed to Research and\ndevelopment as incurred. Raptor engines are expensed when used in test flights.\nSpace segment’s cost of revenue includes second stages flown related to the Company’s Falcon 9 and Falcon Heavy\nlaunches, launch operations and overhead, depreciation (inclusive of booster, Merlin engine, and fairing\ndepreciation), employee compensation costs (including salaries, benefits, and share-based compensation) for our\noperations teams, launch testing and overhead, engineering costs, inventory excess and obsolescence, shared costs\nincurred in the production of launch hardware, and ongoing product support.\nWe expect Space cost of revenue to increase both in absolute dollars and as a percentage of revenue based on our\nexpected mix of Launch Services and Launch and Development. From period to period, Space segment cost of\nrevenue will vary based on the mix of customer and internal launches.\nResearch and Development\nSpace segment’s research and development (“R&D”) expenses mainly relate to the development, build, and testing\nof Starship. Starship costs consist of test flight hardware, Raptor engines, employee compensation costs (including", - "path": "spacex-s1.pdf/p125", - "metadata": { - "length": 4127, - "summary": "98 Table of Contents The Company recognizes Launch Services revenue at a point in time, due to the interchangeability of flight hardware and minimal unique engineering costs. Revenue and costs are deferred and not recognized until upon the launch or deployment of the customer’...", - "page_nums": [ - 125 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 125, "artifact_ref": "page_citation_assets/page-125.png", @@ -6869,24 +6304,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_952296fe-cc1c-5e37-b822-f7b39fc3ebfa", - "type": "page", - "content": "99\nTable of Contents\nsalaries, benefits, and share-based compensation), tooling and equipment expenses, depreciation for R&D\nequipment, and allocated overhead. R&D also includes certain expenses related to the development of features and\nmodules created through engineering services for the Company’s Falcon vehicles, where the Company retains the\nassociated intellectual property.\nWe expect Space research and development to increase both in absolute dollars and as a percentage of revenue in\n2026, as we invest in the development and commercialization of Starship, and to moderate both in absolute dollars\nand as a percentage of revenue once Starship is commercialized by delivering payload to orbit. At\ncommercialization, Starship costs generally will be capitalized and then depreciated in cost of revenue of the\nsegment associated with the payload delivered.\nSelling, General, and Administrative\nSpace segment’s selling, general, and administrative (“SG&A”) expenses include allocated employee compensation\ncosts (including salaries, benefits, and share-based compensation) for our sales, facilities, legal, finance, information\ntechnology, human resources, and other administrative employees, depreciation, and corporate aircraft costs.\nWe expect Space segment's SG&A to increase in absolute dollars to support growth of our business, and to decrease\nas a percentage of revenue as we continue to work to reduce operating costs as a percentage of revenue.\nImpairment\nSpace impairment includes impairment losses on fixed assets due to anomalies on the Company’s flight vehicles and\nlaunch sites, which occur outside our normal business operations.\nConnectivity\nRevenue - Connectivity\nConnectivity segment generates revenue from (i) the broadband and mobile connectivity services provided through\nStarlink and (ii) the sale of the Starlink Kit (inclusive of the terminal). The Company provides connectivity services\nand Starlink Kits to consumers or enterprise and government customers.\nThe Company recognizes revenue from broadband and mobile connectivity services over time as the customer\nsimultaneously receives and consumes the benefits provided. The Company generates service revenue from (i)\nfixed-price services that require advance or recurring monthly payments by the customer or (ii) variable-priced\nservices based on actual data consumption. The amounts received from customers for advanced payments for\nbroadband and mobile connectivity services are recognized either ratably over the subscription term or based on\nactual data consumption. The Company’s broadband contracts are generally month-to-month and the revenue\nrecognized for these recurring consumer customers is equal to the amount billed in that month. The Company’s\nmobile connectivity agreements are generally multi-year contractual obligations that range from one to five years,\nalthough the customer can generally terminate at any time.\nThe Company recognizes revenue over time for certain contracts related to our Starshield business that are multi-\nyear in nature. For revenue that is recognized over time, we use the cost-to-cost input method. The Company records\nrevenue based upon costs (such as materials and labor hours) incurred to date relative to the total estimated cost at\ncompletion.\nThe Company records revenue for the Starlink Kit upon delivery to the customer, or in the instance of certain\nenterprise customers, when it is installed. Starlink Kit revenue is reported net of sales returns, credits, and\nchargebacks.", - "path": "spacex-s1.pdf/p126", - "metadata": { - "length": 3514, - "summary": "99 Table of Contents salaries, benefits, and share-based compensation), tooling and equipment expenses, depreciation for R&D equipment, and allocated overhead. R&D also includes certain expenses related to the development of features and modules created through engineering ser...", - "page_nums": [ - 126 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 126, "artifact_ref": "page_citation_assets/page-126.png", @@ -6894,24 +6312,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2ad3d11c-1157-5845-8bb4-de6d5d76e9c7", - "type": "page", - "content": "100\nTable of Contents\nExpenses - Connectivity\nCost of Revenue\nConnectivity segment’s cost of revenue includes depreciation (inclusive of launch, satellite, and ground\ninfrastructure costs), Starlink Kit costs, shipping and handling costs, ground operating expenses, employee\ncompensation costs (including salaries, benefits, and share-based compensation) for our engineering and operations\nteams, payment processor fees, warranty expense, inventory excess and obsolescence, and customs and duties.\nWe expect Connectivity cost of revenue to increase in absolute dollars as we grow our revenue, and to decrease as a\npercentage of revenue as we continue to drive efficiencies in our next-generation satellites, Starlink Kits, and ground\ninfrastructure.\nResearch and Development\nConnectivity segment’s R&D expenses mainly relate to the development, build, and testing of our next-generation\nsatellites, Starlink Kits, and ground infrastructure. These costs include employee compensation costs (including\nsalaries, benefits, and share-based compensation), contractor compensation expenses, equipment lease expenses,\ndepreciation for R&D equipment, and allocated overhead.\nWe expect Connectivity research and development to increase in absolute dollars as we grow our revenue, and to\ndecrease as a percentage of revenue as we scale our business.\nSelling, General, and Administrative\nConnectivity segment’s SG&A expenses include allocated employee compensation costs (including salaries,\nbenefits, and share-based compensation) for our sales, facilities, legal, finance, information technology, human\nresources, and other administrative employees, licensing and regulatory fees, marketing expenses, depreciation, and\nbad debt expense.\nWe expect Connectivity SG&A to increase in absolute dollars and as a percentage of revenue in 2026 as we\nintroduce marketing spend to support growth of our business, and to decrease as a percentage of revenue over time\nas we continue to work to reduce operating costs as a percentage of revenue.\nImpairment\nConnectivity impairment includes costs related to discontinuation of a product line for Starlink Kits that is non-\nrecurring.\nAI\nRevenue - AI\nAI segment generates revenue from the sale of digital platform services, including advertising, subscription, and\nlicensing services offered to consumers and enterprise customers.\nThe Company generates revenue from (i) the sale of ad products displayed on its X platform, and (ii) providing AI\nsolutions and infrastructure, which includes subscription-related offerings, data licensing arrangements, and API\naccess to Grok models.\nRevenue for advertising services is recognized in the period when advertising is delivered as evidenced by a person\nengaging with an ad on the Company’s platforms in a manner satisfying the types of engagement selected by the\nadvertisers. The Company’s contract terms for advertising services are typically cancellable short-term\narrangements. We experience seasonality in our advertising revenues. Overall advertising spend tends to be highest\nin the fourth quarter of each year due in large part to end-of-year advertiser spending and lowest in the first quarter\nof each year.", - "path": "spacex-s1.pdf/p127", - "metadata": { - "length": 3188, - "summary": "100 Table of Contents Expenses - Connectivity Cost of Revenue Connectivity segment’s cost of revenue includes depreciation (inclusive of launch, satellite, and ground infrastructure costs), Starlink Kit costs, shipping and handling costs, ground operating expenses, employee co...", - "page_nums": [ - 127 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 127, "artifact_ref": "page_citation_assets/page-127.png", @@ -6919,24 +6320,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_83e07a7d-5236-5d52-ad89-cc58f16e2afa", - "type": "page", - "content": "101\nTable of Contents\nRevenue for AI solutions and infrastructure includes: (i) premium subscriptions on X and Grok which is recognized\nratably over the period of the subscription term (ranging from month-to-month to one year), (ii) data licensing\nrevenue which is generally recognized ratably over the period (from month-to-month to two years) in which the\nCompany provides data as the customer consumes and benefits from the use of the licensed data, (iii) revenue from\nproviding API access to Grok models recognized ratably over the contract term (typically month-to-month or up to\none year) for stand-ready access or as services are consumed for usage based arrangements.\nExpenses - AI\nCost of Revenue\nAI segment’s cost of revenue includes infrastructure costs, revenue share expenses, payment processor fees,\npayments to creators, amortization of acquired intangible assets, and allocated labor and overhead costs.\nInfrastructure costs consist primarily of costs related to data center facilities, including lease and hosting costs,\nrelated support, maintenance, energy, and bandwidth costs, depreciation of servers and networking equipment,\npublic cloud hosting costs, and employee compensation costs (including salaries, benefits, and share-based\ncompensation) for our operations teams.\nWe expect AI cost of revenue to increase in absolute dollars as we grow our revenue, and to decrease as a\npercentage of revenue as we monetize our products and as we expand our service offerings for AI solutions.\nResearch and Development\nAI segment’s R&D expenses mainly relate to the training of Grok, our leading frontier model, development, build,\nand testing of our next-generation AI-enabled products and data center costs to train AI-enabled products. These\ncosts include cloud computing expenses, employee compensation expenses (including salaries, benefits, and share-\nbased compensation), power generation costs, and depreciation of data center assets, including processors,\nequipment lease expenses, and networking equipment.\nWe expect AI R&D expenses to increase, both in absolute dollars and as a percentage of revenue, as we invest in\ncompute infrastructure for Grok. Additionally, AI R&D expenses may increase as a result of the compute agreement\nwith Cursor.\nSelling, General, and Administrative\nAI segment’s SG&A expenses consist primarily of employee compensation expenses (including salaries, benefits,\nand share-based compensation) for our sales, sales support, marketing, finance, legal, information technology,\nhuman resources and other administrative employees. In addition, SG&A expenses include fees and costs for\nprofessional services, including consulting, content moderation, third-party legal and accounting services and\nfacilities costs and other supporting overhead costs that are not allocated to other departments.\nWe expect AI SG&A to increase in absolute dollars to support growth of our business, and to decrease as a\npercentage of revenue as we continue to work to reduce operating costs as a percentage of revenue. Additionally, AI\nSG&A may increase as a result of the compute agreement with Cursor.\nRestructuring Charges\nAI restructuring charges are the result of the acquisition of Twitter in October 2022 by X Holdings. The charges\ninclude workforce restructuring for former Twitter employees, as well as impairment and early termination penalties\nas a result of consolidation of Twitter’s various office leases.\nImpairment\nAI impairment includes a one-time impairment of the Twitter brand when Twitter was rebranded to X in July 2023.", - "path": "spacex-s1.pdf/p128", - "metadata": { - "length": 3569, - "summary": "101 Table of Contents Revenue for AI solutions and infrastructure includes: (i) premium subscriptions on X and Grok which is recognized ratably over the period of the subscription term (ranging from month-to-month to one year), (ii) data licensing revenue which is generally re...", - "page_nums": [ - 128 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 128, "artifact_ref": "page_citation_assets/page-128.png", @@ -6944,24 +6328,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3af70437-cf85-551b-a418-5d5d8d1bbb97", - "type": "page", - "content": "102\nTable of Contents\nOther Corporate Expenses\nInterest Expense\nInterest expense includes interest expense related to our borrowings, amortization of associated debt issuance costs,\nundrawn fees, and finance leases. Interest expense is reflected net of capitalized interest.\nInterest Income\nInterest income includes interest income earned on cash and cash equivalents and marketable securities, and\ndividend income from our investments in mutual funds.\nOther Income (Expense), Net\nOther income (expense), net consists of gain or loss on digital assets, gain or loss on foreign currency transactions,\nand loss on extinguishment of debt.\nProvision for (Benefit from) Income Taxes\nThe provision for (benefit from) income taxes consists primarily of income taxes in certain federal, state, local and\nforeign jurisdictions in which we conduct business. Foreign jurisdictions typically have different statutory tax rates\nfrom those in the United States. Accordingly, our effective tax rates may vary depending on the impact of the\nvaluation allowance as well as the relative proportion of foreign income to domestic income, generation of tax\ncredits, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.\nComparison of the three months ended March 31, 2026 and 2025\nConsolidated Results of Operations\nThe following table sets forth our consolidated financial statements data for the periods indicated:\nThree Months Ended March 31, 2026 vs. 2025 Change\n(in millions) 2026 2025 $ Change % Change\nRevenue\n\n\n............................................................... $ 4,694 $ 4,067 $ 627 15.4%\nCosts and expenses\nCost of revenue\n\n.............................................. 2,388 1,962 426 21.7%\nResearch and development\n\n............................. 3,514 1,557 1,957 125.7%\nSelling, general, and administrative\n\n\n............... 746 493 253 51.3%\nRestructuring charges (credits)\n\n....................... (11) 4 (15) NM\nImpairment\n\n..................................................... — 24 (24) NM\nTotal costs and expenses\n\n........................... 6,637 4,040 2,597 64.3%\nIncome (loss) from operations\n\n............................ (1,943) 27 (1,970) NM\nInterest expense\n\n................................................... (664) (447) (217) 48.5%\nInterest income\n\n.................................................... 213 117 96 82.1%\nOther expense, net\n\n............................................... (1,876) (211) (1,665) 789.1%\nLoss before income taxes\n\n.................................... (4,270) (514) (3,756) 730.7%\nProvision for income taxes\n\n.................................. 6 14 (8) (57.1)%\nNet loss\n\n\n................................................................ $ (4,276) $ (528) $ (3,748) 709.8%\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.", - "path": "spacex-s1.pdf/p129", - "metadata": { - "length": 2897, - "summary": "102 Table of Contents Other Corporate Expenses Interest Expense Interest expense includes interest expense related to our borrowings, amortization of associated debt issuance costs, undrawn fees, and finance leases. Interest expense is reflected net of capitalized interest. In...", - "page_nums": [ - 129 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 129, "artifact_ref": "page_citation_assets/page-129.png", @@ -6969,24 +6336,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5813996c-18d1-5f10-88f6-3870fce9fd10", - "type": "page", - "content": "103\nTable of Contents\nRevenue\nRevenue for the three months ended March 31, 2026 increased by $627 million, or 15.4%, compared to the three\nmonths ended March 31, 2025. This increase was primarily due to an increase in revenue from our Connectivity\nsegment of $782 million as our Starlink Subscriber base continued to grow as well as an increase in revenue from\nour AI segment of $91 million from higher X and Grok subscriptions, partially offset by a decrease in revenue from\nour Space segment of $246 million due to lower Launch Services missions and timing of work for government\ncontracts.\nCost of Revenue\nCost of revenue for the three months ended March 31, 2026 increased by $426 million, or 21.7%, compared to the\nprior three months ended March 31, 2025. This increase was primarily due to an increase in costs in our\nConnectivity segment of $437 million driven by an increase in depreciation related to the number of satellites placed\ninto orbit and higher operating costs of $5 million in our AI segment, partially offset by a decrease in cost of revenue\nfrom our Space segment of $16 million due to less customer launches.\nResearch and Development\nResearch and development expense for the three months ended March 31, 2026 increased by $1,957 million, or\n125.7%, compared to the prior three months ended March 31, 2025. This increase was primarily due to higher costs\nin our AI segment of $1,471 million driven by depreciation of GPU hardware, and the cost of cloud computing and\ndata center infrastructure expenses as a result of our AI data center expansions and higher costs from our Space\nsegment of $404 million driven by accelerated investment in our Starship vehicle and related facilities.\nSelling, General, and Administrative\nSelling, general, and administrative expense for the three months ended March 31, 2026 increased by $253 million,\nor 51.3%, compared to the prior three months ended March 31, 2025. This increase was primarily due to higher\nemployee-related costs and professional fees for our AI segment of $163 million as our AI business grew rapidly,\nhigher marketing and international expansion costs of $79 million and $23 million, respectively, for our\nConnectivity segment. These increases were partially offset by lower expenses of $18 million in our Space segment.\nRestructuring Charges (Credits)\nRestructuring charges (credits) for the three months ended March 31, 2026 decreased by $15 million compared to\nthe prior three months ended March 31, 2025. This decrease was primarily due to change in estimated settlement\namounts for former Twitter employees as part of the workforce reduction program implemented in 2022.\nImpairment\nImpairment for the three months ended March 31, 2026 decreased by $24 million compared to the prior three\nmonths ended March 31, 2025. The impairment in the three months ended March 31, 2025 was related to a post-\nlanding anomaly in our Space segment. There was no impairment for the three months ended March 31, 2026.\nIncome (Loss) from Operations\nIncome (loss) from operations for the three months ended March 31, 2026 decreased by $1,970 million compared to\nthe prior three months ended March 31, 2025 driven by the factors described above.\nInterest Expense\nInterest expense for the three months ended March 31, 2026 increased by $217 million, or 48.5%, compared to the\nprior three months ended March 31, 2025. This increase was primarily due to additional debt raised by the Company\nand other financing arrangements entered into during the period by our AI segment.", - "path": "spacex-s1.pdf/p130", - "metadata": { - "length": 3537, - "summary": "103 Table of Contents Revenue Revenue for the three months ended March 31, 2026 increased by $627 million, or 15.4%, compared to the three months ended March 31, 2025. This increase was primarily due to an increase in revenue from our Connectivity segment of $782 million as ou...", - "page_nums": [ - 130 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 130, "artifact_ref": "page_citation_assets/page-130.png", @@ -6994,24 +6344,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a906eef7-8ec4-5c26-9968-0b22dc2765d4", - "type": "page", - "content": "104\nTable of Contents\nInterest Income\nInterest income for the three months ended March 31, 2026 increased by $96 million, or 82.1%, compared to the\nprior three months ended March 31, 2025. This increase was primarily due to an increase in interest income earned\nfrom cash equivalents and marketable securities.\nOther Income (Expense), Net\nOther expense, net for the three months ended March 31, 2026 increased by $1,665 million, compared to the prior\nthree months ended March 31, 2025. This increase was primarily due to the loss on extinguishment of debt and\nunrealized loss on digital assets.\nProvision for (Benefit from) Income Taxes\nProvision for income taxes for the three months ended March 31, 2026 decreased by $8 million compared to the\nprior three months ended March 31, 2025. This decrease was primarily due to the change in the mix of our\njurisdictional earnings subject to different tax rates.\nNet Income (Loss)\nNet loss for the three months ended March 31, 2026 increased by $3,748 million compared to the prior three months\nended March 31, 2025 driven by the factors described above.\nSegment Results\nSpace\nThree Months Ended March 31, 2026 vs. 2025 Change\n(in millions) 2026 2025 $ Change % Change\nRevenue\n\n............................................................. $ 619 $ 865 $ (246) (28.4)%\nCosts and expenses\nCost of revenue\n\n................................................... 281 297 (16) (5.4)%\nResearch and development\n\n............................. 930 526 404 76.8%\nSelling, general, and administrative\n\n\n............... 70 88 (18) (20.5)%\nImpairment\n\n..................................................... — 24 (24) NM\nTotal costs and expenses\n\n................................ $ 1,281 $ 935 $ 346 37.0%\nLoss from operations\n\n................................. $ (662) $ (70) $ (592) 845.7%\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue\nRevenue for the three months ended March 31, 2026 decreased $246 million, or 28.4%, compared to the prior three\nmonths ended March 31, 2025. This decrease was primarily driven by a decrease in Launch Services revenue of\n$236 million and a decrease of $10 million in Launch and Development revenue. The decrease in Launch Services\nrevenue is due to a decrease in customer launches period over period. While total Falcon launches increased by 4\nfrom 36 for the three months ended March 31, 2025 to 40 for the three months ended March 31, 2026, Launch\nServices missions decreased by 4 over the same period. Launch and Development revenue decreased due to timing\nof work performed on government contracts.\nCost of Revenue\nCost of revenue for the three months ended March 31, 2026 decreased by $16 million, or 5.4%, compared to the\nprior three months ended March 31, 2025. This decrease was primarily due to the decrease in customer launches and\ntiming of work on government contracts of $34 million, offset by an increase of $10 million in inventory excess and\nobsolescence reserves and $10 million in launch hardware disposals for damaged Falcon fairings.", - "path": "spacex-s1.pdf/p131", - "metadata": { - "length": 3115, - "summary": "104 Table of Contents Interest Income Interest income for the three months ended March 31, 2026 increased by $96 million, or 82.1%, compared to the prior three months ended March 31, 2025. This increase was primarily due to an increase in interest income earned from cash equiv...", - "page_nums": [ - 131 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 131, "artifact_ref": "page_citation_assets/page-131.png", @@ -7019,24 +6352,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_56cccf8c-f206-5c35-ad63-006f2bde564b", - "type": "page", - "content": "105\nTable of Contents\nResearch and Development\nResearch and development for the three months ended March 31, 2026 increased by $404 million, or 76.8%,\ncompared to the prior three months ended March 31, 2025. This increase was primarily driven by higher production\ncosts of $194 million, higher engineering costs of $95 million, and higher test and launch costs of $62 million, due\nto the accelerated investment in development of the Starship vehicle and continued development of production and\nlaunch facilities to support future Starship launches.\nSelling, General, and Administrative\nSelling, general, and administrative for the three months ended March 31, 2026 decreased by $18 million, or 20.5%,\ncompared to the prior three months ended March 31, 2025. This decrease was primarily due to lower allocated\ngeneral and administrative overhead of $13 million.\nImpairment\nImpairment for the three months ended March 31, 2026 decreased by $24 million compared to the prior three\nmonths ended March 31, 2025. This decrease was primarily due to a non-recurring impairment loss on a Falcon 9\nbooster due to a post-landing anomaly during the three months ended March 31, 2025. There was no impairment for\nthe three months ended March 31, 2026.\nLoss from Operations\nSpace loss from operations for the three months ended March 31, 2026 increased by $592 million compared to the\nprior three months ended March 31, 2025 driven by the factors described above.\nConnectivity\nThree Months Ended March 31, 2026 vs. 2025 Change\n(in millions) 2026 2025 $ Change % Change\nRevenue\n\n............................................................. $ 3,257 $ 2,475 $ 782 31.6%\nCosts and expenses\nCost of revenue\n\n.............................................. $ 1,651 $ 1,214 $ 437 36.0%\nResearch and development\n\n............................. 205 123 82 66.7%\nSelling, general, and administrative\n\n\n............... 213 105 108 102.9%\nTotal costs and expenses\n\n................................ $ 2,069 $ 1,442 $ 627 43.5%\nIncome from operations\n\n\n............................. $ 1,188 $ 1,033 $ 155 15.0%\nRevenue\nRevenue for the three months ended March 31, 2026 increased by $782 million, or 31.6%, compared to the prior\nthree months ended March 31, 2025. This increase was primarily driven by an increase of $656 million in revenue\nfrom our consumer subscribers, composed of 104.7% growth in Starlink Subscribers, offset by an 22.9% decline in\nStarlink Subscriber ARPU, primarily due to international expansion and the addition of lower priced service plans.\nIn addition, enterprise and government revenue had an increase of $126 million primarily driven by the growth in\nour aviation, maritime, and other enterprise business of $209 million, our mobile connectivity business of $85\nmillion, partially offset by a decrease of $175 million in our government connectivity business.\nCost of Revenue\nCost of revenue for the three months ended March 31, 2026 increased by $437 million, or 36.0%, compared to the\nprior three months ended March 31, 2025. This increase was primarily due to higher depreciation of $276 million\nfrom capitalized launch and satellite costs, higher operating expenses of $140 million mainly driven by ground\noperating costs of $50 million, customer support and installation costs of $42 million, payment processor fees of $19\nmillion, freight costs of $15 million, and warranty costs of $12 million.", - "path": "spacex-s1.pdf/p132", - "metadata": { - "length": 3400, - "summary": "105 Table of Contents Research and Development Research and development for the three months ended March 31, 2026 increased by $404 million, or 76.8%, compared to the prior three months ended March 31, 2025. This increase was primarily driven by higher production costs of $194...", - "page_nums": [ - 132 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 132, "artifact_ref": "page_citation_assets/page-132.png", @@ -7044,24 +6360,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c81f8965-d001-5bbf-a005-eb979ba5082f", - "type": "page", - "content": "106\nTable of Contents\nResearch and Development\nResearch and development for the three months ended March 31, 2026 increased by $82 million, or 66.7%,\ncompared to the prior three months ended March 31, 2025. This increase was primarily due to higher costs for the\nnext-generation production development of satellites of $62 million, Starlink Kits of $8 million, and ground\nequipment of $14 million.\nSelling, General, and Administrative\nSelling, general, and administrative for the three months ended March 31, 2026 increased by $108 million, or\n102.9%, compared to the prior three months ended March 31, 2025. This increase was primarily driven by higher\nmarketing costs of $79 million and higher international expansion costs of $23 million, partially offset by lower bad\ndebt expense of $9 million.\nIncome from Operations\nConnectivity income from operations for the three months ended March 31, 2026 increased by $155 million, or\n15.0%, compared to the prior three months ended March 31, 2025 driven by the factors described above.\nAI\nThree Months Ended March 31, 2026 vs. 2025 Change\n(in millions) 2026 2025 $ Change % Change\nRevenue\n\n............................................................. $ 818 $ 727 $ 91 12.5%\nCosts and expenses\nCost of revenue\n\n.............................................. 456 451 5 1.1%\nResearch and development\n\n............................. 2,379 908 1,471 162.0%\nSelling, general, and administrative\n\n\n............... 463 300 163 54.3%\nRestructuring charges\n\n..................................... (11) 4 (15) NM\nTotal costs and expenses\n\n........................... $ 3,287 $ 1,663 $ 1,624 97.7%\nLoss from operations\n\n................................. $ (2,469) $ (936) $ (1,533) 163.8%\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue\nRevenue for the three months ended March 31, 2026 increased by $91 million, or 12.5%, compared to the prior three\nmonths ended March 31, 2025 due to the increase in AI solutions and infrastructure revenue of $191 million, offset\nby decrease in advertising revenue of $100 million. The increase in AI solutions and infrastructure was primarily\ndue to an increase in Grok and X subscription revenue of $177 million and an increase in data licensing\narrangements of $12 million. The decrease in advertising revenue is due to an overhaul of the Company’s\nadvertising platform which impacted ad sales for a short period of time during the rebuild.\nCost of Revenue\nCost of revenue for the three months ended March 31, 2026 increased by $5 million, or 1.1%, compared to the prior\nthree months ended March 31, 2025. This increase was primarily due to an increase in revenue share and content\ncreator expenses of $71 million, and higher payment processing fees of $18 million, partially offset by a decrease in\namortization expenses of technology intangibles of $89 million that were fully amortized during 2025.\nResearch and Development\nResearch and development for the three months ended March 31, 2026 increased by $1,471 million, or 162.0%,\ncompared to the prior three months ended March 31, 2025. This increase was primarily due to higher GPU\ndepreciation expense of $908 million, and higher cloud computing and data center infrastructure expenses of $301", - "path": "spacex-s1.pdf/p133", - "metadata": { - "length": 3319, - "summary": "106 Table of Contents Research and Development Research and development for the three months ended March 31, 2026 increased by $82 million, or 66.7%, compared to the prior three months ended March 31, 2025. This increase was primarily due to higher costs for the next-generatio...", - "page_nums": [ - 133 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 133, "artifact_ref": "page_citation_assets/page-133.png", @@ -7069,24 +6368,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_56a46d57-c61c-5c2d-b925-e517d36cef3c", - "type": "page", - "content": "107\nTable of Contents\nmillion associated with the continued build out of our compute infrastructure, as well as higher employee\ncompensation expenses (including salaries, benefits, and share-based compensation) of $262 million.\nSelling, General, and Administrative\nSelling, general, and administrative for the three months ended March 31, 2026 increased by $163 million, or\n54.3%, compared to the prior three months ended March 31, 2025. This increase was primarily due to higher\nemployee compensation expenses (including salaries, benefits, and share-based compensation) of $148 million as\nwe continue to expand our AI business and higher legal expenses of $33 million, partially offset by a decrease in\nfacilities and general and administrative costs of $18 million.\nRestructuring Charges (Credits)\nRestructuring charges (credits) for the three months ended March 31, 2026 decreased by $15 million compared to\nthe prior three months ended March 31, 2025. This decrease was primarily due to a change in estimated settlement\namounts for former Twitter employees as part of the workforce reduction program implemented in 2022.\nLoss from Operations\nAI loss from operations for the three months ended March 31, 2026 increased by $1,533 million, or 163.8%,\ncompared to the prior three months ended March 31, 2025 driven by the factors described above.\nComparison of the Years Ended December 31, 2025 and 2024\nConsolidated Results of Operations\nThe following table sets forth our consolidated statements of operations data for the periods indicated:\nYear Ended December 31, 2025 vs. 2024 Change\n(in millions) 2025 2024 $ Change % Change\nRevenue\n\n\n............................................................... $ 18,674 $ 14,015 $ 4,659 33.2%\nCosts and expenses\nCost of revenue\n\n.............................................. 9,451 7,996 1,455 18.2%\nResearch and development\n\n............................. 8,643 3,464 5,179 149.5%\nSelling, general, and administrative\n\n\n............... 2,644 1,813 831 45.8%\nRestructuring charges\n\n..................................... 487 213 274 128.6%\nImpairment\n\n..................................................... 38 63 (25) (39.7)%\nTotal costs and expenses\n\n........................... 21,263 13,549 7,714 56.9%\nIncome (loss) from operations\n\n............................ (2,589) 466 (3,055) NM\nInterest expense\n\n................................................... (1,945) (1,580) (365) 23.1%\nInterest income\n\n.................................................... 492 371 121 32.6%\nOther income, net\n\n................................................ (177) 985 (1,162) NM\nIncome (loss) before income taxes\n\n...................... (4,219) 242 (4,461) NM\nProvision for (benefit from) income taxes\n\n\n.......... 718 (549) 1,267 NM\nNet income (loss)\n\n................................................ $ (4,937) $ 791 $ (5,728) NM\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue\nRevenue for the year ended December 31, 2025 increased by $4,659 million, or 33.2%, compared to the prior year\nended December 31, 2024. This increase was primarily due to an increase in revenue from our Connectivity segment\nof $3,788 million as our Starlink Subscriber base continued to grow as well as our Connectivity enterprise and\ngovernment sales, and increases in revenue from our Space segment of $290 million due to increases in Launch and", - "path": "spacex-s1.pdf/p134", - "metadata": { - "length": 3450, - "summary": "107 Table of Contents million associated with the continued build out of our compute infrastructure, as well as higher employee compensation expenses (including salaries, benefits, and share-based compensation) of $262 million. Selling, General, and Administrative Selling, gen...", - "page_nums": [ - 134 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 134, "artifact_ref": "page_citation_assets/page-134.png", @@ -7094,24 +6376,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_437a1fbd-db7e-5ab6-8bf3-00d11310cd0c", - "type": "page", - "content": "108\nTable of Contents\nDevelopment revenue for work performed on government contracts, and an increase in revenue from our AI\nsegment of $581 million as advertising, Grok and X subscriptions, and data licensing arrangements grew.\nCost of Revenue\nCost of revenue for the year ended December 31, 2025 increased by $1,455 million, or 18.2%, compared to the prior\nyear ended December 31, 2024. This increase was primarily due to an increase in costs in our Connectivity segment\nof $1,153 million driven by higher depreciation as the number of satellites placed into orbit grew and higher\noperating expenses, and higher infrastructure and cloud computing costs of $491 million in our AI segment, partially\noffset by a decrease in cost of revenue from our Space segment of $189 million due to the increased reusability of\nour Falcon launch vehicles resulting in lower depreciation.\nResearch and Development\nResearch and development expense for the year ended December 31, 2025 increased by $5,179 million, or 149.5%,\ncompared to the prior year ended December 31, 2024. This increase was primarily due to higher R&D costs in our\nAI segment of $3,888 million driven by the depreciation of GPU hardware and the cost of cloud computing as a\nresult of our AI data center expansions and higher R&D costs from our Space segment of $1,169 million driven by\naccelerated investment in our Starship vehicle.\nSelling, General, and Administrative\nSelling, general, and administrative expense for the year ended December 31, 2025 increased by $831 million, or\n45.8%, compared to the prior year ended December 31, 2024. This increase was primarily due to higher employee\nand facilities-related costs and higher legal expenses for our AI segment of $722 million as our AI business grew\nrapidly, and higher marketing and international expansion costs of $53 million and $37 million, respectively, for our\nConnectivity segment. These increases were partially offset by lower allocated general and administrative overhead\nin our Space segment.\nRestructuring Charges\nRestructuring charges for the year ended December 31, 2025 increased by $274 million, or 128.6%, compared to the\nprior year ended December 31, 2024. This increase was primarily due to additional expense related to the settlement\nto former Twitter employees as part of the workforce reduction program implemented in 2022.\nImpairment\nImpairment for the year ended December 31, 2025 decreased by $25 million, or 39.7%, compared to the prior year\nended December 31, 2024. The decrease was primarily related to a discontinuation of a Starlink Kit production line\nin our Connectivity segment that occurred during the year ended December 31, 2024 with no impairment in 2025,\npartially offset by an increase in impairment in our Space Segment during the year ended December 31, 2025\nprimarily related to a post-landing anomaly.\nIncome (Loss) from Operations\nIncome (loss) from operations for the year ended December 31, 2025 decreased by $3,055 million compared to the\nprior year ended December 31, 2024 driven by the factors described above.\nInterest Expense\nInterest expense for the year ended December 31, 2025 increased by $365 million, or 23.1%, compared to the prior\nyear ended December 31, 2024. This increase was primarily due to new term loans and senior notes entered into by\nthe Company and other financing arrangements for GPUs entered into during the year by our AI segment.", - "path": "spacex-s1.pdf/p135", - "metadata": { - "length": 3421, - "summary": "108 Table of Contents Development revenue for work performed on government contracts, and an increase in revenue from our AI segment of $581 million as advertising, Grok and X subscriptions, and data licensing arrangements grew. Cost of Revenue Cost of revenue for the year end...", - "page_nums": [ - 135 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 135, "artifact_ref": "page_citation_assets/page-135.png", @@ -7119,24 +6384,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7331ce80-c017-5b94-a31b-181d722ce39d", - "type": "page", - "content": "109\nTable of Contents\nInterest Income\nInterest income for the year ended December 31, 2025 increased by $121 million, or 32.6%, compared to the prior\nyear ended December 31, 2024. This increase was primarily due to an increase in dividend income earned from\nmarketable securities and cash equivalents.\nOther Income (Expense), Net\nOther income (expense), net for the year ended December 31, 2025 decreased by $1,162 million, compared to the\nprior year ended December 31, 2024. This decrease was primarily due to an unrealized loss on digital assets.\nProvision for (Benefit from) Income Taxes\nProvision for income taxes for the year ended December 31, 2025 increased by $1,267 million compared to the prior\nyear ended December 31, 2024. The increase was primarily due to a partial valuation allowance release in 2024 and\nthe establishment of a valuation allowance in 2025. For the year ended December 31, 2024, the Company released a\npartial valuation allowance on the Company’s U.S. deferred tax assets. As of December 31, 2024, the Company\nforecasted $659 million of deferred tax assets related to U.S. R&D credits would be utilized in the future. For the\nyear ended December 31, 2025, as a result of the enactment of the One Big Beautiful Bill Act (Public Law No.\n119-21), we assessed the realizability of our deferred tax assets and reversed the benefit that was recognized for the\nyear ended December 31, 2024.\nNet Income (Loss)\nNet income (loss) for the year ended December 31, 2025 decreased by $5,728 million compared to the prior year\nended December 31, 2024 driven by the factors described above.\nSegment Results\nSpace\nYear Ended December 31, 2025 vs. 2024 Change\n(in millions) 2025 2024 $ Change % Change\nRevenue\n\n\n............................................................... $ 4,086 $ 3,796 $ 290 7.6%\nCosts and expenses\nCost of revenue\n\n.............................................. 1,352 1,541 (189) (12.2)%\nResearch and development\n\n............................. 3,004 1,835 1,169 63.7%\nSelling, general, and administrative\n\n\n............... 349 375 (26) (6.9)%\nImpairment\n\n..................................................... 38 24 14 61.5%\nTotal costs and expenses\n\n........................... $ 4,743 $ 3,775 $ 968 25.7%\nIncome (loss) from operations\n\n............................ $ (657) $ 21 $ (678) NM\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue\nRevenue for the year ended December 31, 2025 increased by $290 million, or 7.6%, compared to the prior year\nended December 31, 2024. Launch Services revenue remained relatively flat year over year, while Launch and\nDevelopment revenue increased by $298 million. The Launch and Development revenue increase was primarily\ndriven by increased revenue for an extended contract with NASA for additional Cargo Resupply Services (CRS)\nmissions to the International Space Station and increased revenue from a U.S. Department of War contract. While\ntotal Falcon launches increased by 31 from 134 in 2024 to 165 in 2025, Space customer launches and average price\nper launch remained relatively flat year over year.", - "path": "spacex-s1.pdf/p136", - "metadata": { - "length": 3178, - "summary": "109 Table of Contents Interest Income Interest income for the year ended December 31, 2025 increased by $121 million, or 32.6%, compared to the prior year ended December 31, 2024. This increase was primarily due to an increase in dividend income earned from marketable securiti...", - "page_nums": [ - 136 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 136, "artifact_ref": "page_citation_assets/page-136.png", @@ -7144,24 +6392,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5c37d224-e13c-53ae-9f1e-bbf86b6d7c0a", - "type": "page", - "content": "110\nTable of Contents\nCost of Revenue\nCost of revenue for the year ended December 31, 2025 decreased by $189 million, or 12.2%, compared to the prior\nyear ended December 31, 2024. This decrease was primarily due increased reusability of our Falcon launch vehicles\nresulting in lower deprecation of $240 million, lowering the cost of each launch, and lower overhead costs of $11\nmillion. The decrease is also due to the relative increase in Starlink satellite launches from 89 launches in 2024 to\n122 launches in 2025, resulting in relatively more of our launch operations and overhead costs capitalized in our\nConnectivity segment of $14 million. This decrease was partially offset by an increase in inventory excess and\nobsolescence reserves of $51 million mainly due to less demand on rocket vehicle and spacecraft parts as reusability\nhas increased.\nResearch and Development\nResearch and development for the year ended December 31, 2025 increased by $1,169 million, or 63.7%, compared\nto the prior year ended December 31, 2024. This increase was primarily driven by higher production costs of $779\nmillion, higher launch costs of $218 million, and higher engineering costs of $185 million, due to the accelerated\ninvestment in development of the Starship vehicle and continued development of production and launch facilities to\nsupport future Starship launches.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2025 decreased by $26 million, or 6.9%,\ncompared to the prior year ended December 31, 2024. This decrease was primarily due to lower allocated general\nand administrative overhead of $52 million, partially offset by higher employee compensation expenses (including\nsalaries, benefits, and share-based compensation) of $16 million.\nImpairment\nImpairment for the year ended December 31, 2025 increased by $14 million, or 61.5%, compared to the prior year\nended December 31, 2024. This increase was primarily due to a non-recurring impairment loss on a Falcon 9 booster\ndue to a post-landing anomaly during the year.\nIncome (Loss) from Operations\nSpace income from operations for the year ended December 31, 2025 decreased by $678 million compared to the\nprior year ended December 31, 2024 driven by the factors described above.\nConnectivity\nYear Ended December 31, 2025 vs. 2024 Change\n(in millions) 2025 2024 $ Change % Change\nRevenue\n\n\n............................................................... $ 11,387 $ 7,599 $ 3,788 49.8%\nCosts and expenses\nCost of revenue\n\n.............................................. 5,921 4,768 1,153 24.2%\nResearch and development\n\n............................. 575 453 122 27.1%\nSelling, general, and administrative\n\n\n............... 468 333 135 40.4%\nImpairment\n\n..................................................... — 39 (39) NM\nTotal costs and expenses\n\n................................ $ 6,964 $ 5,593 $ 1,371 24.5%\nIncome from operations\n\n...................................... $ 4,423 $ 2,006 $ 2,417 120.4%\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.", - "path": "spacex-s1.pdf/p137", - "metadata": { - "length": 3154, - "summary": "110 Table of Contents Cost of Revenue Cost of revenue for the year ended December 31, 2025 decreased by $189 million, or 12.2%, compared to the prior year ended December 31, 2024. This decrease was primarily due increased reusability of our Falcon launch vehicles resulting in...", - "page_nums": [ - 137 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 137, "artifact_ref": "page_citation_assets/page-137.png", @@ -7169,24 +6400,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e10a88cb-1399-5c7b-b66a-1a2a4c36318d", - "type": "page", - "content": "111\nTable of Contents\nRevenue\nRevenue for the year ended December 31, 2025 increased by $3,788 million, or 49.8%, compared to the prior year\nended December 31, 2024. This increase was primarily driven by an increase of $2,377 million in revenue from our\nconsumer subscribers, composed of 99.9% growth in Starlink Subscribers, offset by an 11.2% decline in Starlink\nSubscriber ARPU, primarily due to international expansion and the addition of lower priced service plans. In\naddition, Connectivity revenue had an increase of $1,411 million from our enterprise and government customers,\nprimarily driven by the growth in our enterprise connectivity business of $1,218 million inclusive of growth in our\nmobile connectivity business of $632 million, and growth in our government connectivity business of $193 million.\nCost of Revenue\nCost of revenue for the year ended December 31, 2025 increased by $1,153 million, or 24.2%, compared to the prior\nyear ended December 31, 2024. This increase was primarily due to higher depreciation of $827 million from\ncapitalized launch and satellite costs, higher operating expenses of $283 million mainly driven by ground operating\ncosts of $134 million, payment processor fees of $45 million, international expansion of $44 million, warranty costs\nof $38 million, and employee compensation expenses (including salaries, benefits, and share-based compensation)\nof $12 million, and higher freight costs of $72 million.\nResearch and Development\nResearch and development for the year ended December 31, 2025 increased by $122 million, or 27.1%, compared to\nthe prior year ended December 31, 2024. This increase was primarily due to higher costs for the next-generation\nproduction development of satellites of $84 million, Starlink Kits of $22 million, and ground equipment of $15\nmillion.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2025 increased by $135 million, or 40.4%,\ncompared to the prior year ended December 31, 2024. This increase was primarily driven by higher marketing costs\nof $53 million, higher international expansion costs of $37 million, and higher allocated general and administrative\noverhead of $67 million.\nImpairment\nImpairment for the year ended December 31, 2025 decreased by $39 million compared to the prior year ended\nDecember 31, 2024. The decrease was primarily related to the discontinuation of a Starlink Kit production line in\n2024 with no impairment in 2025.\nIncome from Operations\nConnectivity income from operations for the year ended December 31, 2025 increased by $2,417 million, or\n120.4%, compared to the prior year ended December 31, 2024 driven by the factors described above.", - "path": "spacex-s1.pdf/p138", - "metadata": { - "length": 2713, - "summary": "111 Table of Contents Revenue Revenue for the year ended December 31, 2025 increased by $3,788 million, or 49.8%, compared to the prior year ended December 31, 2024. This increase was primarily driven by an increase of $2,377 million in revenue from our consumer subscribers, c...", - "page_nums": [ - 138 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 138, "artifact_ref": "page_citation_assets/page-138.png", @@ -7194,24 +6408,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c2c7f066-c5d5-501a-9048-e5de571c4862", - "type": "page", - "content": "112\nTable of Contents\nAI\nYear Ended December 31, 2025 vs. 2024 Change\n(in millions) 2025 2024 $ Change % Change\nRevenue\n\n\n............................................................... $ 3,201 $ 2,620 $ 581 22.2%\nCosts and expenses\nCost of revenue\n\n.............................................. 2,178 1,687 491 29.1%\nResearch and development\n\n............................. 5,064 1,176 3,888 330.8%\nSelling, general, and administrative\n\n\n............... 1,827 1,105 722 65.4%\nRestructuring charges\n\n..................................... 487 213 274 129.1%\nTotal costs and expenses\n\n........................... $ 9,556 $ 4,181 $ 5,375 128.6%\nLoss from operations\n\n\n........................................... $ (6,355) $ (1,561) $ (4,794) 307.1%\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue\nRevenue for the year ended December 31, 2025 increased by $581 million, or 22.2%, compared to the prior year\nended December 31, 2024. This increase was primarily due to an increase in advertising revenue of $116 million as\nadvertising spend increased from advertising partners on X and an increase in AI solutions and infrastructure\nrevenue of $465 million. The increase in AI solutions and infrastructure revenue is mainly due to an increase in X\nand Grok subscription revenue of $365 million and an increase in revenue from data licensing arrangements of $88\nmillion.\nCost of Revenue\nCost of revenue for the year ended December 31, 2025 increased by $491 million, or 29.1%, compared to the prior\nyear ended December 31, 2024. This increase was primarily due to higher infrastructure and cloud computing costs\nof $412 million attributable to increased subscriber revenue, higher employee compensation expenses (including\nsalaries, benefits, and share-based compensation) of $90 million, higher revenue share and content creator fees of\n$45 million, and higher payment processor fees of $28 million, partially offset by a decrease in depreciation and\namortization expense of $97 million driven by a decrease in amortization expense for intangible assets that were\nfully amortized during 2025.\nResearch and Development\nResearch and development for the year ended December 31, 2025 increased by $3,888 million, or 330.8%,\ncompared to the prior year ended December 31, 2024. This increase was primarily due to higher GPU depreciation\nexpense of $1,673 million, higher infrastructure and cloud computing expenses of $1,440 million associated with the\nbuild out of our compute infrastructure, and higher employee compensation expenses (including salaries, benefits,\nand share-based compensation) and allocated overhead costs of $775 million.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2025 increased by $722 million, or 65.4%,\ncompared to the prior year ended December 31, 2024. This increase was primarily due to higher employee\ncompensation expenses (including salaries, benefits, and share-based compensation) of $519 million as we continue\nto expand our AI business, higher legal expenses of $189 million, and higher facilities and general and\nadministrative costs of $14 million.\nRestructuring Charges\nRestructuring charges for the year ended December 31, 2025 increased by $274 million or 129.1%, compared to the\nprior year ended December 31, 2024. This increase was primarily due to additional expense recorded to settle with\nformer Twitter employees as part of the workforce reduction program implemented in 2022.", - "path": "spacex-s1.pdf/p139", - "metadata": { - "length": 3571, - "summary": "112 Table of Contents AI Year Ended December 31, 2025 vs. 2024 Change (in millions) 2025 2024 $ Change % Change Revenue ............................................................... $ 3,201 $ 2,620 $ 581 22.2% Costs and expenses Cost of revenue .................................", - "page_nums": [ - 139 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 139, "artifact_ref": "page_citation_assets/page-139.png", @@ -7219,24 +6416,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_99aff9cf-7948-5ae0-9ef7-5e76be59a1bd", - "type": "page", - "content": "113\nTable of Contents\nLoss from Operations\nAI loss from operations for the year ended December 31, 2025 increased by $4,794 million, or 307.1%, compared to\nthe prior year ended December 31, 2024 driven by the factors described above.\nComparison of the Years Ended December 31, 2024 and 2023\nConsolidated Results of Operations\nYear Ended December 31, 2024 vs. 2023 Change\n(in millions) 2024 2023 $ Change % Change\nRevenue\n\n\n............................................................... $ 14,015 $ 10,387 $ 3,628 34.9%\nCosts and expenses\nCost of revenue\n\n.............................................. 7,996 6,110 1,886 30.9%\nResearch and development\n\n............................. 3,464 2,105 1,359 64.6%\nSelling, general, and administrative\n\n\n............... 1,813 1,665 148 8.9%\nRestructuring charges\n\n..................................... 213 237 (24) (10.1)%\nImpairment\n\n..................................................... 63 3,775 (3,712) (98.3)%\nTotal costs and expenses\n\n........................... 13,549 13,892 (343) (2.5)%\nIncome (loss) from operations\n\n............................ 466 (3,505) 3,971 NM\nInterest expense\n\n................................................... (1,580) (1,693) 113 (6.7)%\nInterest income\n\n.................................................... 371 249 122 49.0%\nOther income, net\n\n................................................ 985 (42) 1,027 NM\nIncome (loss) before income taxes\n\n...................... 242 (4,991) 5,233 NM\nBenefit from income taxes\n\n\n.................................. (549) (363) (186) 51.2%\nNet income (loss)\n\n................................................ $ 791 $ (4,628) $ 5,419 NM\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue\nRevenue for the year ended December 31, 2024 increased by $3,628 million, or 34.9%, compared to the prior year\nended December 31, 2023. This increase was primarily due to an increase in revenue from our Connectivity segment\nof $3,730 million as both our Starlink consumer subscriber base continued to grow as well as our Connectivity\nenterprise and government sales, and an increase in revenue from our Space segment of $239 million due to the\nincrease in Falcon 9 launches partially offset by a decrease in Launch and Development revenue due to timing of\ngovernment contracts. This increase was partially offset by a decrease in revenue from our AI segment of $341\nmillion driven by a decrease in advertising sales, partially offset by an increase in X subscriptions and data licensing\narrangements.\nCost of Revenue\nCost of revenue for the year ended December 31, 2024 increased by $1,886 million, or 30.9%, compared to the prior\nyear ended December 31, 2023. This increase was primarily due to a higher cost of revenue from the Connectivity\nsegment of $1,982 million as a result of the higher volume spend on Starlink Kits as deliveries increased and higher\ndepreciation of launch costs driven by an increase in the number of satellites placed into orbit, partially offset by\ncost efficiency from increased reusability of our Falcon launch vehicles in our Space segment of $128 million.\nResearch and Development\nResearch and development for the year ended December 31, 2024 increased by $1,359 million, or 64.6%, compared\nto the prior year ended December 31, 2023. This increase was primarily due to higher cost in our AI segment of", - "path": "spacex-s1.pdf/p140", - "metadata": { - "length": 3429, - "summary": "113 Table of Contents Loss from Operations AI loss from operations for the year ended December 31, 2025 increased by $4,794 million, or 307.1%, compared to the prior year ended December 31, 2024 driven by the factors described above. Comparison of the Years Ended December 31,...", - "page_nums": [ - 140 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 140, "artifact_ref": "page_citation_assets/page-140.png", @@ -7244,24 +6424,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5e6a549c-ffa1-5b8e-8920-d8f347d336ae", - "type": "page", - "content": "114\nTable of Contents\n$990 million related to advancing our AI technologies and higher costs of $297 million in our Space segment for\ninvestment in Starship production, launch and engineering costs, and related facilities.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2024 increased by $148 million, or 8.9%,\ncompared to the prior year ended December 31, 2023. This increase was primarily due to: (i) higher international\nexpansion costs of $18 million, higher employee compensation expenses (including salaries, benefits, and share-\nbased compensation) of $11 million, and higher allocated general and administrative overhead of $54 million in our\nConnectivity segment, and (ii) higher employee compensation expenses (including salaries, benefits, and share-\nbased compensation) and professional fees of $25 million in our Space segment.\nRestructuring Charges\nRestructuring charges for the year ended December 31, 2024 decreased by $24 million, or 10.1%, compared to the\nprior year ended December 31, 2023. This decrease was due to the impairment on office leases assumed as part of\nthe Twitter acquisition that occurred during the year ended December 31, 2023, partially offset by an increase in\nworkforce-related restructuring charges.\nImpairment\nImpairment for the year ended December 31, 2024 decreased by $3,712 million, or 98.3%, compared to the prior\nyear ended December 31, 2023. The impairment during the year ended December 31, 2023 was primarily related to\nthe impairment of the Twitter brand following its rebranding to X.\nIncome (Loss) from Operations\nIncome from operations for the year ended December 31, 2024 increased by $3,971 million compared to the prior\nyear ended December 31, 2023 driven by the factors described above.\nInterest Expense\nInterest expense for the year ended December 31, 2024 decreased by $113 million, or 6.7%, compared to the prior\nyear ended December 31, 2023. This decrease was primarily due to the debt issuance costs related to the X Bridge\nCredit Facilities being amortized only through July 2024, the original maturity date, as compared to a full year of\namortization in 2023.\nInterest Income\nInterest income for the year ended December 31, 2024 increased by $122 million, or 49.0%, compared to the prior\nyear ended December 31, 2023. This increase was primarily due to an increase in dividend income earned from\nmarketable securities.\nOther Income (Expense), net\nOther income (expense), net for the year ended December 31, 2024 increased by $1,027 million compared to the\nprior year ended December 31, 2023. This increase was primarily due to an unrealized gain on digital assets.\nBenefit from Income Taxes\nBenefit from income taxes for the year ended December 31, 2024 increased by $186 million, or 51.2%, compared to\nthe prior year ended December 31, 2023. This increase was primarily due to the change in the realizability of our net\ndeferred tax assets. As of December 31, 2024, we forecasted additional deferred tax assets related to U.S. R&D\ncredits would be utilized.", - "path": "spacex-s1.pdf/p141", - "metadata": { - "length": 3086, - "summary": "114 Table of Contents $990 million related to advancing our AI technologies and higher costs of $297 million in our Space segment for investment in Starship production, launch and engineering costs, and related facilities. Selling, General, and Administrative Selling, general,...", - "page_nums": [ - 141 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 141, "artifact_ref": "page_citation_assets/page-141.png", @@ -7269,24 +6432,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1b678caf-a43b-5dc2-b3bc-22f813f4871c", - "type": "page", - "content": "115\nTable of Contents\nNet Income (Loss)\nNet income for the year ended December 31, 2024 increased by $5,419 million compared to the prior year ended\nDecember 31, 2023 driven by the factors described above.\nSpace\nYear Ended December 31, 2024 vs. 2023 Change\n(in millions) 2024 2023 $ Change % Change\nRevenue\n\n\n............................................................... $ 3,796 $ 3,557 $ 239 6.7%\nCosts and expenses\nCost of revenue\n\n.............................................. 1,541 1,669 (128) (7.6)%\nResearch and development\n\n............................. 1,835 1,538 297 19.3%\nSelling, general, and administrative\n\n\n............... 375 351 24 7.0%\nImpairment\n\n..................................................... 24 — 24 NM\nTotal costs and expenses\n\n........................... $ 3,775 $ 3,558 $ 217 6.1%\nIncome (loss) from operations\n\n............................ $ 21 $ (1) $ 22 NM\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue\nRevenue for the year ended December 31, 2024 increased by $239 million, or 6.7%, compared to the prior year\nended December 31, 2023. Launch Services revenue increased by $620 million as total Falcon launches increased by\n38 from 96 in 2023 to 134 in 2024, with Launch Services missions increasing by 8. This increase was partially\noffset by a decrease of $381 million for Launch and Development revenue due to decreased activity in our\nInternational Space Station contracts and lower revenue from a U.S. Department of War contract.\nCost of Revenue\nCost of revenue for the year ended December 31, 2024 decreased by $128 million, or 7.6%, compared to the prior\nyear ended December 31, 2023. This decrease was primarily due to increased reusability of our Falcon launch\nvehicles resulting in lower depreciation of $80 million, lowering the cost of each launch. The decrease was also due\nto the relative increase in Starlink satellite launches from 63 launches in 2023 to 89 launches in 2024, resulting in\nrelatively more of our launch operations and overhead costs capitalized in our Connectivity segment of $99 million.\nThis decrease was offset by an increase in launch overhead costs of $77 million due to the increase in Falcon\nlaunches.\nResearch and Development\nResearch and development for the year ended December 31, 2024 increased by $297 million, or 19.3%, compared to\nthe prior year ended December 31, 2023. This increase was primarily due to higher production costs of $159 million,\nhigher launch costs of $67 million, and higher engineering costs of $56 million due to the increased investment in\nthe development of the Starship vehicle and related launch facilities.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2024 increased by $24 million, or 7.0%,\ncompared to the prior year ended December 31, 2023. This increase was primarily due to higher employee\ncompensation expenses (including salaries, benefits, and share-based compensation) and professional fees of $25\nmillion.", - "path": "spacex-s1.pdf/p142", - "metadata": { - "length": 3085, - "summary": "115 Table of Contents Net Income (Loss) Net income for the year ended December 31, 2024 increased by $5,419 million compared to the prior year ended December 31, 2023 driven by the factors described above. Space Year Ended December 31, 2024 vs. 2023 Change (in millions) 2024 2...", - "page_nums": [ - 142 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 142, "artifact_ref": "page_citation_assets/page-142.png", @@ -7294,24 +6440,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e1dffa7e-d9d6-5564-a9ed-913b14dd5f0d", - "type": "page", - "content": "116\nTable of Contents\nImpairment\nImpairment for the year ended December 31, 2024 increased by $24 million compared to the prior year ended\nDecember 31, 2023. This increase was primarily due to non-recurring impairment losses resulting from one-time\nlaunch anomalies experienced during the year.\nIncome (Loss) from Operations\nIncome (loss) from operations for the year ended December 31, 2024 increased by $22 million compared to the prior\nyear ended December 31, 2023 driven by the factors described above.\nConnectivity\nYear Ended December 31, 2024 vs. 2023 Change\n(in millions) 2024 2023 $ Change % Change\nRevenue\n\n\n............................................................... $ 7,599 $ 3,869 $ 3,730 96.4%\nCosts and expenses\nCost of revenue\n\n.............................................. 4,768 2,786 1,982 71.1%\nResearch and development\n\n............................. 453 381 72 18.8%\nSelling, general, and administrative\n\n\n............... 333 233 100 43.0%\nImpairment\n\n..................................................... 39 — 39 NM\nTotal costs and expenses\n\n........................... $ 5,593 $ 3,400 $ 2,193 64.5%\nIncome from operations\n\n...................................... $ 2,006 $ 469 $ 1,537 327.4%\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue\nRevenue for the year ended December 31, 2024 increased by $3,730 million, or 96.4%, compared to the prior year\nended December 31, 2023. This increase was primarily driven by an increase of $2,013 million in revenue from our\nconsumer subscribers, composed of 96.5% growth in Starlink Subscribers offset by a 8.1% decline in Starlink\nSubscriber ARPU primarily due to international expansion. In addition, Connectivity revenue had an increase of\n$1,717 million from our enterprise and government customers, primarily driven by the growth in our enterprise\nconnectivity business of $466 million and growth in our government connectivity business of $1,250 million.\nCost of Revenue\nCost of revenue for the year ended December 31, 2024 increased by $1,982 million, or 71.1%, compared to the prior\nyear ended December 31, 2023. This increase was primarily due to higher volume spend on Starlink Kits of $907\nmillion driven by higher kit deliveries and higher depreciation of $555 million from capitalized launch and satellite\ncosts driven by an increase in the number of launches and satellites placed into orbit.\nResearch and Development\nResearch and development for the year ended December 31, 2024 increased by $72 million, or 18.8%, compared to\nthe prior year ended December 31, 2023. This increase was primarily due to higher costs for the next-generation\nproduction development of satellites of $73 million, ground equipment of $4 million, offset by lower costs of $4\nmillion for Starlink Kits.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2024 increased by $100 million, or 43.0%,\ncompared to the prior year ended December 31, 2023. This increase was primarily due to higher international\nexpansion costs of $18 million, higher employee compensation expenses (including salaries, benefits, and share-\nbased compensation) of $11 million, and higher allocated general and administrative overhead of $54 million.", - "path": "spacex-s1.pdf/p143", - "metadata": { - "length": 3333, - "summary": "116 Table of Contents Impairment Impairment for the year ended December 31, 2024 increased by $24 million compared to the prior year ended December 31, 2023. This increase was primarily due to non-recurring impairment losses resulting from one-time launch anomalies experienced...", - "page_nums": [ - 143 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 143, "artifact_ref": "page_citation_assets/page-143.png", @@ -7319,24 +6448,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7c16eb5b-32ae-5770-8671-48a742ebb3af", - "type": "page", - "content": "117\nTable of Contents\nImpairment\nImpairment for the year ended December 31, 2024 increased by $39 million compared to the prior year ended\nDecember 31, 2023. This increase was due to a discontinuation of a certain Starlink Kit production line.\nIncome from Operations\nIncome from operations for the year ended December 31, 2024 increased by $1,537 million, or 327.4%, compared to\nthe prior year ended December 31, 2023 driven by the factors described above.\nAI\nYear Ended December 31, 2024 vs. 2023 Change\n(in millions) 2024 2023 $ Change % Change\nRevenue\n\n\n............................................................... $ 2,620 $ 2,961 $ (341) (11.5)%\nCosts and expenses\nCost of revenue\n\n.............................................. 1,687 1,655 32 1.9%\nResearch and development\n\n............................. 1,176 186 990 531.5%\nSelling, general, and administrative\n\n\n............... 1,105 1,081 24 2.3%\nRestructuring charges\n\n..................................... 213 237 (24) (10.2)%\nImpairment\n\n..................................................... — 3,775 (3,775) NM\nTotal costs and expenses\n\n........................... $ 4,181 $ 6,934 $ (2,753) (39.7)%\nLoss from operations\n\n\n........................................... $ (1,561) $ (3,973) $ 2,412 (60.7)%\n_________________\nNM — Absolute percentage comparisons from positive to negative values or to zero values are considered not meaningful.\nRevenue\nRevenue for the year ended December 31, 2024 decreased by $341 million, or 11.5%, compared to the prior year\nended December 31, 2023. This decrease was due to a decrease in advertising revenue of $595 million, partially\noffset by an increase in AI solutions and infrastructure revenue of $254 million. The decrease in advertising revenue\nwas due to the loss of advertising partners for X. The increase in AI solutions and infrastructure was due to an\nincrease in X subscription revenue of $157 million and an increase in data licensing arrangements of $90 million. In\n2023 and 2024, substantially all of our AI segment revenue consisted of advertising, subscriptions, and data\nlicensing revenue generated from X, formerly known as Twitter.\nCost of Revenue\nCost of revenue for the year ended December 31, 2024 increased by $32 million, or 1.9%, compared to the prior\nyear ended December 31, 2023. This increase was primarily due to higher server depreciation of $97 million,\npartially offset by lower infrastructure and revenue share expenses of $46 million, and lower employee and\nfacilities-related expenses of $18 million resulting from the Company’s restructuring and cost reduction efforts.\nResearch and Development\nResearch and development for the year ended December 31, 2024 increased by $990 million, or 531.5%, compared\nto the prior year ended December 31, 2023. This increase was primarily due to increased investments made in\nadvancing our AI technologies, including employee compensation expenses (including salaries, benefits, and share-\nbased compensation) and infrastructure services of $703 million and higher depreciation of $321 million for our\nequipment hardware.\nSelling, General, and Administrative\nSelling, general, and administrative for the year ended December 31, 2024 increased by $24 million, or 2.3%,\ncompared to the prior year ended December 31, 2023. This increase was primarily due to an increase in our", - "path": "spacex-s1.pdf/p144", - "metadata": { - "length": 3346, - "summary": "117 Table of Contents Impairment Impairment for the year ended December 31, 2024 increased by $39 million compared to the prior year ended December 31, 2023. This increase was due to a discontinuation of a certain Starlink Kit production line. Income from Operations Income fro...", - "page_nums": [ - 144 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 144, "artifact_ref": "page_citation_assets/page-144.png", @@ -7344,24 +6456,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_949e70df-d624-503b-8965-4137d649928e", - "type": "page", - "content": "118\nTable of Contents\namortization expense of $107 million related to the Twitter brand becoming a finite-lived intangible asset and higher\nlegal costs of $65 million, partially offset by lower employee and facilities related costs of $125 million and lower\nprofessional fees of $23 million resulting from the Company’s restructuring and cost reduction efforts.\nRestructuring charges\nRestructuring charges for the year ended December 31, 2024 decreased by $24 million, or 10.2%, compared to the\nprior year ended December 31, 2023. This decrease was due to the impairment on the office leases assumed as part\nof the Twitter acquisition that primarily occurred during the year ended December 31, 2023, partially offset by an\nincrease in workforce-related restructuring charges.\nImpairment\nImpairment for the year ended December 31, 2024 decreased by $3,775 million compared to the prior year ended\nDecember 31, 2023. The impairment during the year ended December 31, 2023 was related to the impairment of the\nTwitter brand intangible asset following its rebranding to X.\nLoss from Operations\nLoss from operations for the year ended December 31, 2024 decreased by $2,412 million, or 60.7%, compared to the\nprior year ended December 31, 2023 driven by the factors described above.\nNon-GAAP Financial Measures\nManagement believes that certain financial measures that are not presented in accordance with GAAP provide\nmanagement and investors with useful supplemental information that provides a meaningful view of our financial\ncondition and results of operations across periods by removing the impact of items that management believes do not\ndirectly reflect our ongoing operating performance. Adjusted EBITDA and Segment Adjusted EBITDA are\nsupplemental measures that are not required by or presented in accordance with GAAP. In evaluating our\nperformance as measured by Adjusted EBITDA and Segment Adjusted EBITDA, management recognizes and\nconsiders the limitations of these measures. Other companies in our industry may calculate Adjusted EBITDA and\nSegment Adjusted EBITDA differently than we do or may not calculate them at all, limiting their usefulness as\ncomparative measures. Because of these limitations, Adjusted EBITDA and Segment Adjusted EBITDA should not\nbe considered in isolation or as a substitute for net income (loss), income (loss) from operations, or any other\nmeasure calculated in accordance with GAAP, and should be considered together with our GAAP financial\nmeasures and the reconciliations to the corresponding most directly comparable GAAP financial measures set forth\nin this prospectus.\nAdjusted EBITDA is defined as net income (loss) excluding (i) depreciation and amortization, (ii) share-based\ncompensation, (iii) impairment, (iv) restructuring charges, (v) interest expense, (vi) interest income, (vii) other\nincome (expense), net and (viii) provision for income taxes. Segment Adjusted EBITDA is defined as segment\nincome (loss) from operations excluding (i) depreciation and amortization, (ii) share-based compensation, (iii)\nrestructuring charges, and (iv) impairment. Adjusted EBITDA and Segment Adjusted EBITDA are key performance\nmeasures that our management uses to assess our financial performance as well as for internal planning and\nforecasting purposes. We consider Adjusted EBITDA and Segment Adjusted EBITDA to be meaningful\nperformance measures for investors to evaluate our operating performance and to compare the financial results\nbetween periods.", - "path": "spacex-s1.pdf/p145", - "metadata": { - "length": 3497, - "summary": "118 Table of Contents amortization expense of $107 million related to the Twitter brand becoming a finite-lived intangible asset and higher legal costs of $65 million, partially offset by lower employee and facilities related costs of $125 million and lower professional fees o...", - "page_nums": [ - 145 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 145, "artifact_ref": "page_citation_assets/page-145.png", @@ -7369,24 +6464,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1f21a0a8-667d-51a9-a9a5-ca33192ac33a", - "type": "page", - "content": "119\nTable of Contents\nThe following table sets forth a reconciliation of Net income (loss), the most directly comparable GAAP measure, to\nAdjusted EBITDA:\nThree Months Ended March 31, Year Ended December 31,\n(in millions) 2026 2025 2025 2024 2023\nNet income (loss)\n\n\n........................................ $ (4,276) $ (528) $ (4,937) $ 791 $ (4,628)\nAdd (deduct):\nDepreciation and amortization\n\n.................... 2,442 1,443 6,701 3,824 2,635\nShare-based compensation\n\n.......................... 639 232 1,947 784 679\nRestructuring charges\n\n.................................. (11) 4 487 213 237\nImpairments\n\n................................................ — 24 38 63 3,775\nInterest expense\n\n........................................... 664 447 1,945 1,580 1,693\nInterest income ............................................ (213) (117) (492) (371) (249)\nOther (income) expense, net\n\n....................... 1,876 211 177 (985) 42\nProvision for (benefit from) income taxes\n\n.. 6 14 718 (549) (363)\nAdjusted EBITDA\n\n..................................... $ 1,127 $ 1,730 $ 6,584 $ 5,350 $ 3,821", - "path": "spacex-s1.pdf/p146", - "metadata": { - "length": 1095, - "summary": "119 Table of Contents The following table sets forth a reconciliation of Net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA: Three Months Ended March 31, Year Ended December 31, (in millions) 2026 2025 2025 2024 2023 Net income (loss) ...............", - "page_nums": [ - 146 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 146, "artifact_ref": "page_citation_assets/page-146.png", @@ -7394,24 +6472,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ce293933-6eb6-587f-ba22-f3d0727b9c87", - "type": "page", - "content": "120\nTable of Contents\nThe following table sets forth a reconciliation of Income (loss) from operations for each segment, the most directly\ncomparable GAAP measure, to Segment Adjusted EBITDA:\nThree Months Ended March 31,\n2026\n(in millions) Space Connectivity AI Total Reportable Segments\nIncome (loss) from operations\n\n............................ $ (662) $ 1,188 $ (2,469) $ (1,943)\nAdd:\nDepreciation and amortization\n\n............................ 166 783 1,493 2,442\nShare-based compensation\n\n.................................. 145 116 378 639\nRestructuring charges\n\n.......................................... — — (11) (11)\nSegment Adjusted EBITDA\n\n................................ $ (351) $ 2,087 $ (609) $ 1,127\nThree Months Ended March 31,\n2025\n(in millions) Space Connectivity AI Total Reportable Segments\nIncome (loss) from operations\n............................ $ (70) $ 1,033 $ (936) $ 27\nAdd:\nDepreciation and amortization\n\n............................ 162 510 771 1,443\nShare-based compensation\n\n\n.................................. 108 75 49 232\nRestructuring charges\n\n.......................................... — — 4 4\nImpairment\n\n.......................................................... 24 — — 24\nSegment Adjusted EBITDA\n\n................................ $ 224 $ 1,618 $ (112) $ 1,730\nYear Ended December 31,\n2025\n(in millions) Space Connectivity AI Total Reportable Segments\nIncome (loss) from operations\n............................ $ (657) $ 4,423 $ (6,355) $ (2,589)\nAdd:\nDepreciation and amortization\n\n\n............................ 757 2,376 3,568 6,701\nShare-based compensation\n\n\n.................................. 515 369 1,063 1,947\nRestructuring charges\n.......................................... — — 487 487\nImpairment\n\n\n.......................................................... 38 — — 38\nSegment Adjusted EBITDA\n\n................................ $ 653 $ 7,168 $ (1,237) $ 6,584", - "path": "spacex-s1.pdf/p147", - "metadata": { - "length": 1905, - "summary": "120 Table of Contents The following table sets forth a reconciliation of Income (loss) from operations for each segment, the most directly comparable GAAP measure, to Segment Adjusted EBITDA: Three Months Ended March 31, 2026 (in millions) Space Connectivity AI Total Reportabl...", - "page_nums": [ - 147 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 147, "artifact_ref": "page_citation_assets/page-147.png", @@ -7419,24 +6480,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_756bd469-5378-5e2e-9090-746728428c13", - "type": "page", - "content": "121\nTable of Contents\nYear Ended December 31,\n2024\n(in millions) Space Connectivity AI Total Reportable Segments\nIncome (loss) from operations\n\n............................ $ 21 $ 2,006 $ (1,561) $ 466\nAdd:\nDepreciation and amortization\n\n............................ 637 1,508 1,679 3,824\nShare-based compensation\n\n.................................. 472 296 16 784\nRestructuring charges\n\n.......................................... — — 213 213\nImpairment\n\n.......................................................... 24 39 — 63\nSegment Adjusted EBITDA\n\n................................ $ 1,154 $ 3,849 $ 347 $ 5,350\nYear Ended December 31,\n2023\n(in millions) Space Connectivity AI Total Reportable Segments\nIncome (loss) from operations\n............................ $ (1) $ 469 $ (3,973) $ (3,505)\nAdd:\nDepreciation and amortization\n\n............................ 571 884 1,180 2,635\nShare-based compensation\n\n\n.................................. 427 249 3 679\nRestructuring charges\n\n.......................................... — — 237 237\nImpairment\n\n.......................................................... — — 3,775 3,775\nSegment Adjusted EBITDA\n\n................................ $ 997 $ 1,602 $ 1,222 $ 3,821\nLiquidity and Capital Resources\nOur primary sources of liquidity are cash flows generated from operations, our total cash and cash equivalents of\n$15,852 million as of March 31, 2026, short-term marketable securities of $7,823 million as of March 31, 2026, and\nborrowings under our credit facilities. As of March 31, 2026, we have $1,500 million available to borrow under the\nSpaceX Credit Facility. The cash we generate from our core operations also enables us to fund our research and\ndevelopment projects including our Starship rocket and next-generation satellites, the construction of future data\ncenters, and the continued expansion of our AI-enabled products.\nIn addition, because we expect a significant portion of our future expenditures to fund growth initiatives, we retain\nflexibility to adjust spending across segments. For example, if our near-term data center needs decrease in scale or\nramp more slowly than expected, including due to global economic, tax, trade or business conditions, we may\nreduce future capital expenditures in this segment and reallocate those expenditures to other segments based on\nbusiness priorities and growth opportunities. In addition, we continually evaluate our cash needs and may decide it is\nbest to raise additional capital or seek alternative financing sources to fund the rapid growth of our business,\nincluding through drawdowns on existing or new debt facilities. We may seek to refinance the SpaceX Bridge Loan,\nincluding with the proceeds from notes offerings, bank borrowings, or other financial arrangements. We may also\nfrom time to time determine that it is in our best interests to voluntarily repay certain indebtedness early.\nAccordingly, we believe we have sufficient sources of funding to meet our business requirements for at least the\nnext twelve months from the issuance of the consolidated financial statements.\nDebt Agreements\nSpaceX Credit Facility\nIn February 2025, SpaceX entered into a five-year senior unsecured revolving credit agreement with a syndicate of\nbanks, under which the Company may borrow up to $1,500 million (“SpaceX Credit Facility”). The SpaceX Credit\nFacility is subject to certain customary representations, warranties, covenants, and events of default, including a", - "path": "spacex-s1.pdf/p148", - "metadata": { - "length": 3468, - "summary": "121 Table of Contents Year Ended December 31, 2024 (in millions) Space Connectivity AI Total Reportable Segments Income (loss) from operations ............................ $ 21 $ 2,006 $ (1,561) $ 466 Add: Depreciation and amortization ............................ 637 1,508 1,...", - "page_nums": [ - 148 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 148, "artifact_ref": "page_citation_assets/page-148.png", @@ -7444,24 +6488,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_137187d6-c1a5-5e90-9f66-683ec8c0d695", - "type": "page", - "content": "122\nTable of Contents\nmaximum financial covenant requiring the Company to maintain a Consolidated Leverage Ratio (as defined in the\nSpaceX Credit Facility) of no greater than 3.75 to 1.0 as of the end of each fiscal quarter (subject to temporary\nincreases to 4.25 to 1.0 following certain qualified acquisitions) and other customary reporting requirements. The\nSpaceX Credit Facility also includes sublimits of up to $150 million for financial letters of credit and up to $1,000\nmillion for performance letters of credit. The SpaceX Credit Facility terminates, and all outstanding loans become\ndue and payable, on February 7, 2030, unless the parties agree to an extension in accordance with the terms of the\nSpaceX Credit Facility. As of March 31, 2026 and December 31, 2025, no amounts were outstanding under the\nSpaceX Credit Facility.\nBorrowings under the SpaceX Credit Facility bear interest, at the Company’s option, at a rate per annum equal to (i)\na forward-looking term rate based on SOFR (“Term SOFR”) plus an applicable margin ranging from 0.75% and\n1.25% (depending on the Company’s debt rating), or (ii) a base rate equal to the highest of (a) Federal Funds Rate\nplus 0.5%, (b) the Prime Rate, (c) Term SOFR plus 1.00%, and (d) 1.00% plus an applicable margin ranging from\n0.0% and 0.25% (depending on the Company’s debt rating). The Company may also borrow in various alternative\ncurrencies, with interest calculated at rates based on SONIA for Pound Sterling-denominated loans and EURIBOR\nfor Euro-denominated loans, plus an applicable margin. In addition, the Company pays a commitment fee on the\nunused portion of the SpaceX Credit Facility, which ranges from 0.07% (amended to 0.06% under the Amended\nSpaceX Credit Facility described below) to 0.11% per annum based on the Company’s debt rating. As of March 31,\n2026, the Company was in compliance with all covenants under the SpaceX Credit Facility.\nIn March 2026, the Company entered into a First Amendment to Credit Agreement and Waiver (the “First\nAmendment”) with its lenders, in connection with the Company’s entry into the SpaceX Bridge Loan (as defined\nbelow). The First Amendment, among other things, (i) waived certain specified defaults and (ii) amended certain\ndefinitions and covenants under the SpaceX Credit Facility to conform to the terms of the SpaceX Bridge Loan.\nIn May 2026, SpaceX amended the SpaceX Credit Facility to increase the borrowing capacity up to $5,000 million\n(“Amended SpaceX Credit Facility”). As part of the Amended SpaceX Credit Facility, the sublimit for performance\nletters of credit was increased to $2,000 million. The Amended SpaceX Credit Facility terminates, and all\noutstanding loans become due and payable, on May 19, 2031, unless the parties agree to an extension in accordance\nwith the terms of the Amended SpaceX Credit Facility. All other terms were consistent with the terms of the SpaceX\nCredit Facility.\nSpaceX Bridge Loan\nIn March 2026, SpaceX entered into a new bridge loan credit agreement (the “SpaceX Bridge Loan”) with a\nsyndicate of lenders, providing for an unsecured bridge term loan facility in an aggregate principal amount of\n$20,000 million. The SpaceX Bridge Loan matures on September 2, 2027, with two three-month extensions at the\nCompany’s option, subject to the absence of a continuing default and the payment of an extension fee of 0.25% of\nthe aggregate outstanding principal per extension, resulting in a final extended maturity date of March 2028.\nThe proceeds of the SpaceX Bridge Loan were used to repay the X B-1 Term Loan, the X B-3 Term Loan, the xAI\nFixed Rate Loan, the xAI Floating Rate Loan and the xAI 12.5% Senior Secured Notes (as defined and described in\nNote 10, Debt, to the consolidated financial statements included elsewhere in this prospectus). The Company may\nalso use the remaining proceeds for general corporate purposes.\nThe SpaceX Bridge Loan bears interest, at the Company’s election, at a rate per annum equal to (i) Term SOFR plus\nan applicable margin ranging from 0.75%-1.75% (depending on the Company’s debt rating), or (ii) a base rate equal\nto the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus 1.0% and (d) 1.00%,\nplus an applicable margin ranging from 0.00% to 0.75% (depending on the Company’s debt rating). In addition, the\nCompany is obligated to pay duration fees equal to 0.125% of outstanding principal on the first anniversary of\nclosing and 0.25% of outstanding principal on the fifteen-month anniversary of closing. As of March 31, 2026, the\nCompany was in compliance with all covenants under the SpaceX Bridge Loan.\nThe obligations of the Company under the SpaceX Bridge Loan are guaranteed on a joint and several basis by X\nCorp., X.AI LLC, and CTC Property LLC (each a subsidiary of the Company). The SpaceX Bridge Loan may be\nprepaid at any time, in whole or in part, without premium or penalty. The Company is required to use an amount", - "path": "spacex-s1.pdf/p149", - "metadata": { - "length": 4967, - "summary": "122 Table of Contents maximum financial covenant requiring the Company to maintain a Consolidated Leverage Ratio (as defined in the SpaceX Credit Facility) of no greater than 3.75 to 1.0 as of the end of each fiscal quarter (subject to temporary increases to 4.25 to 1.0 follow...", - "page_nums": [ - 149 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 149, "artifact_ref": "page_citation_assets/page-149.png", @@ -7469,24 +6496,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_eaa1c90b-3e64-575f-80d3-97d150a328bf", - "type": "page", - "content": "123\nTable of Contents\nequal to the net cash proceeds of certain debt financings to repay amounts outstanding under the SpaceX Bridge\nLoan and to apply an amount equal to the net proceeds of a qualified initial public offering, including this offering,\nto repay such amounts within six months following receipt of such proceeds.\nThe SpaceX Bridge Loan contains customary events of default and affirmative and negative covenants, including\nrestrictions on liens, subsidiary indebtedness, fundamental changes (including a prohibition on the disposition of\nStarlink assets and other material businesses outside the consolidated group), and changes in the nature of the\nCompany’s business. The sole financial maintenance covenant requires the Company to maintain a Consolidated\nLeverage Ratio — defined as consolidated funded indebtedness (net of 85% of unrestricted cash) to Consolidated\nEBITDA (as defined in the SpaceX Bridge Loan) — of no greater than 3.75 to 1.0 as of the end of each fiscal\nquarter, with a temporary step-up to 4.25 to 1.0 for four fiscal quarters following a qualifying acquisition of at least\n$1.0 billion.\nMaterial Cash Commitments\nFrom time to time in the ordinary course of business, we enter into agreements with suppliers for the purchase of\nparts and raw materials to manufacture our products. However, due to contractual terms, variability in the precise\ngrowth curves of our development and production ramps, and opportunities to renegotiate pricing, these contracts\ngenerally do not have long-term binding and enforceable purchase orders, and the timing and magnitude of purchase\norders beyond the short term is difficult to accurately project. Because we do not have long-term purchase orders for\nthese parts and raw materials, future purchases may result in material cash commitments. For additional information\nabout this risk, please refer to “Risk Factors” in this prospectus.\nOn September 7, 2025, the Company entered into a License Purchase Agreement (the “Spectrum License Purchase\nAgreement”) with Spectrum Business Trust 2025-1, a Nevada Business Trust (“Trust”) and EchoStar Corporation\n(“EchoStar” and the transactions contemplated thereby, “Spectrum Transaction”). On November 5, 2025 the parties\namended and restated the Spectrum License Purchase Agreement to include EchoStar’s licenses for up to 15 MHz of\nadditional unpaired AWS-3 spectrum. The total consideration for the acquisition of EchoStar’s spectrum is\napproximately $19.6 billion, consisting of (i) approximately $11.1 billion in equity, payable through the issuance of\napproximately 261.8 million shares of the Company’s Class A common stock at a fixed value of $42.40 per share,\nand (ii) up to $8.5 billion related to the payoff of designated EchoStar debt, with any shortfall below $8.5 billion to\nbe paid in cash. The allocation of cash and equity consideration is subject to certain adjustments based on the\namount of EchoStar debt satisfied at or prior to closing. The Spectrum Transaction was approved by the FCC on\nMay 12, 2026 and is expected to close on or about November 30, 2027 subject to other closing conditions. Upon\nclosing, the Company intends to either use cash and cash equivalents on hand or seek alternative financing sources\nto fund the cash payment to EchoStar.\nAs of March 31, 2026, we and our subsidiaries had outstanding $29,132 million in aggregate principal amount of\nindebtedness and no debt principal payments are due until August 28, 2027 if we choose not to extend. As of March\n31, 2026, our total minimum lease payments was $5,823 million, of which $1,026 million is due within this fiscal\nyear. For details regarding our indebtedness and lease obligations, refer to Note 10, Debt, and Note 11, Leases of our\naudited consolidated financial statements and Note 9, Debt of our unaudited consolidated financial statements\nincluded elsewhere in this prospectus.\nSummary of Cash flows\nThe following table summarizes our cash flows for the periods indicated:\nThree Months Ended March 31, Year Ended December 31,\n(in millions) 2026 2025 2025 2024 2023\nNet cash provided by (used in)\nOperating activities\n\n\n........................ $ 1,047 $ 727 $ 6,785 $ 5,776 $ 4,520\nInvesting activities\n\n......................... $ (16,724) $ (4,170) $ (19,575) $ (10,796) $ (4,867)\nFinancing activities\n\n\n........................ $ 7,125 $ 354 $ 26,350 $ 11,830 $ 422", - "path": "spacex-s1.pdf/p150", - "metadata": { - "length": 4388, - "summary": "123 Table of Contents equal to the net cash proceeds of certain debt financings to repay amounts outstanding under the SpaceX Bridge Loan and to apply an amount equal to the net proceeds of a qualified initial public offering, including this offering, to repay such amounts wit...", - "page_nums": [ - 150 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 150, "artifact_ref": "page_citation_assets/page-150.png", @@ -7494,24 +6504,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8fd47992-9178-5e91-86e9-14f9f92b7218", - "type": "page", - "content": "124\nTable of Contents\nOperating Activities\nNet cash provided by operating activities increased by $320 million from $727 million during the three months\nended March 31, 2025 to $1,047 million during the three months ended March 31, 2026. This increase was primarily\ndriven by an increase in working capital for deferred revenue of $1,153 million from upfront payments from our\nSpace and Connectivity customers, partially offset by lower net income exclusive of non-cash items.\nNet cash provided by operating activities increased by $1,009 million from $5,776 million during the year ended\nDecember 31, 2024 to $6,785 million during the year ended December 31, 2025. This increase was primarily driven\nby higher net income exclusive of non-cash items and an increase of $1,080 million for accounts payable and other\nliabilities as we continue to expand our infrastructure and timing of payments, and higher deferred revenue from\ncash received from upfront payments from our aviation customers. This increase was partially offset by an increase\nof $449 million for accounts receivable, prepaid expenses, and inventory.\nNet cash provided by operating activities increased by $1,256 million from $4,520 million during the year ended\nDecember 31, 2023 to $5,776 million during the year ended December 31, 2024. This increase was primarily driven\nby higher net income exclusive of non-cash items, partially offset by a decrease of $628 million for inventory,\naccounts receivable, prepaid expenses and other assets due to increase in our revenue and production of Starlink\nKits.\nInvesting Activities\nNet cash used in investing activities increased by $12,554 million from $4,170 million during the three months\nended March 31, 2025 to $16,724 million during the three months ended March 31, 2026. This increase was\nprimarily driven by an increase in capital expenditures of $5,967 million related to the build out of data centers and\nrelated infrastructure, and space launch facilities and related infrastructure, as well as an increase in purchases of\nmarketable securities of $7,489 million in the period. This increase was partially offset by an increase in cash\nreceived from product rebates of $1,195 million.\nNet cash used in investing activities increased by $8,779 million from $10,796 million during the year ended\nDecember 31, 2024 to $19,575 million during the year ended December 31, 2025. This increase was primarily\ndriven by an increase in capital expenditures of $9,574 million related to the build out of data centers and related\ninfrastructure, and space launch facilities and related infrastructure, partially offset by a net increase in cash received\nfrom marketable securities of $1,264 million.\nNet cash used in investing activities increased by $5,929 million from $4,867 million during the year ended\nDecember 31, 2023 to $10,796 million during the year ended December 31, 2024. This increase was primarily\ndriven by an increase in capital expenditures of $6,748 million related to the build out of data centers and related\ninfrastructure, and space launch facilities and related infrastructure, partially offset by an increase in cash received\nfor the maturities of marketable securities of $981 million.\nFinancing Activities\nNet cash provided by financing activities increased by $6,771 million from $354 million during the three months\nended March 31, 2025 to $7,125 million during the three months ended March 31, 2026. This increase was\nprimarily driven by an increase in proceeds from the SpaceX Bridge Loan and other financing arrangements of\n$17,950 million and proceeds from sale of our capital stock of $7,420 million, partially offset by an increase in\npayment on existing debt obligations and debt extinguishment costs of $14,703 million from the proceeds from the\nSpaceX Bridge Loan as well as an increase in repurchases of our capital stock of $3,838 million following the xAI\nMerger.\nNet cash provided by financing activities increased by $14,520 million from $11,830 million during the year ended\nDecember 31, 2024 to $26,350 million during the year ended December 31, 2025. This increase was primarily\ndriven by an increase in proceeds from debt and other financing arrangements for our AI segment of $16,055 million\nand proceeds from sale of our capital stock of $5,706 million, partially offset by an increase in repayments on debt\nand other financing arrangements for our AI segment of $6,781 million.", - "path": "spacex-s1.pdf/p151", - "metadata": { - "length": 4443, - "summary": "124 Table of Contents Operating Activities Net cash provided by operating activities increased by $320 million from $727 million during the three months ended March 31, 2025 to $1,047 million during the three months ended March 31, 2026. This increase was primarily driven by a...", - "page_nums": [ - 151 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 151, "artifact_ref": "page_citation_assets/page-151.png", @@ -7519,24 +6512,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_19e33e51-4edb-59ac-9529-a08be03a3b5c", - "type": "page", - "content": "125\nTable of Contents\nNet cash provided by financing activities increased by $11,408 million from $422 million during the year ended\nDecember 31, 2023 to $11,830 million during the year ended December 31, 2024. This increase was primarily\ndriven by an increase in proceeds from the sale of our capital stock of $12,327 million, partially offset by an increase\nin the buyback of common and preferred shares by the Company of $104 million.\nCritical Accounting Estimates\nThe preparation of financial statements and related disclosures in conformity with GAAP and the Company’s\ndiscussion and analysis of its financial condition and operating results require the Company’s management to make\njudgments, assumptions and estimates that affect the amounts reported. Note 2, “Summary of Significant\nAccounting Policies” of the Notes to audited consolidated financial statements included elsewhere in this prospectus\ndescribes the significant accounting policies and methods used in the preparation of the Company’s consolidated\nfinancial statements. Management bases its estimates on historical experience and on various other assumptions it\nbelieves to be reasonable under the circumstances, the results of which form the basis for making judgments about\nthe carrying values of assets and liabilities.\nRevenue Recognition\nSpace contract revenue is derived from fixed-price contracts related to the development and provision of launch\nservices for the deployment of spacecraft and other payloads to their intended orbit for both commercial customers\nand governmental agency space programs. Connectivity contract revenue for Starshield customers is mostly derived\nfrom fixed-price contracts related to the development of a secure satellite network designed specifically for\ngovernment and national security applications.\nThe Company recognizes revenue over time when the Company’s performance on the contract creates an asset with\nno alternative use and when the Company has an enforceable right to payment for performance to date. The\nCompany measures progress on these contracts using the cost-to-cost input method, as the Company believes this\nrepresents the most appropriate measure towards satisfaction of its performance obligation. Under the cost-to-cost\ninput method, the Company records revenue based upon costs (such as materials and labor hours) incurred to date\nrelative to the total estimated cost at completion.\nThe Company’s contracts recognized over time using the cost-to-cost input method are complex and require the\nCompany to estimate the total costs to perform over the term of the contracts, as well as the measurement of\nprogress towards completion for each performance obligation. For Space contracts, developing the estimated total\ncost at completion for each performance obligation requires the use of significant management judgment, including\nassumptions regarding launch timing, labor hours, allocation of shared costs for launch vehicles that have been\nidentified as reusable for multiple launches, as well as expected technological changes to launch vehicles and\nspacecraft. For Connectivity contracts, developing the estimated total cost at completion for each performance\nobligation requires the use of significant management judgment, including assumptions regarding labor hours,\nallocation of shared costs used in the production of satellites, satellite material costs, as well as expected\ntechnological changes to satellites. Material changes in estimated contract revenue or costs at completion and the\nresulting changes in contract profit could have a material impact on the Company’s financial condition and operating\nresults.\nThe impact of net adjustments from contracts recognized over time using the cost-to-cost input method to our\nrevenue and operating income was not material for the years ended December 31, 2025, 2024, and 2023 and for the\nthree months ended March 31, 2026. If the combined gross margins for our contracts recognized over time using the\ncost-to-cost input method had been estimated to be higher or lower by 1% during 2025, it would have increased or\ndecreased operating income for the year by approximately $110 million.\nProperty, Plant, and Equipment, Net\nProperty, plant, and equipment, net is stated at cost less accumulated depreciation. The Company depreciates these\nassets primarily using the straight-line method over the estimated useful lives of the assets except flight vehicles and\nspacecraft, which are depreciated over the expected number of average flights for each flight vehicle and spacecraft.\nLeasehold improvements are depreciated over the shorter of their estimated useful lives or the related lease term.", - "path": "spacex-s1.pdf/p152", - "metadata": { - "length": 4681, - "summary": "125 Table of Contents Net cash provided by financing activities increased by $11,408 million from $422 million during the year ended December 31, 2023 to $11,830 million during the year ended December 31, 2024. This increase was primarily driven by an increase in proceeds from...", - "page_nums": [ - 152 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 152, "artifact_ref": "page_citation_assets/page-152.png", @@ -7544,24 +6520,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_df63f136-b0f5-5365-8534-132afab4b981", - "type": "page", - "content": "126\nTable of Contents\nDetermining the useful lives and the number of average flights a flight vehicle and spacecraft can fly require the\nCompany to estimate the period over which we expect to recover the economic value of our property, plant, and\nequipment. For each of our flight vehicle hardware and spacecraft, we consider recovery and refurbishment success\nrates, refurbishment economics, customer acceptance limits that may prohibit the use of vehicles that have been\nflown more than a certain number of launches, expected future launches included in the mission manifest, as well as\nany anticipated retirement timing of certain flight vehicle and spacecraft models such as Falcon as a result of\nanticipated transition to Starship to determine the expected number of average flights for each vehicle.\nFor our satellites assets, we consider factors such as on-orbit performance, orbit-raise timing, expected service\ncapability, and the evolution of constellation density and technology.\nWhen we determine that the useful lives or expected remaining flights of assets are shorter or longer than we had\noriginally estimated, we adjust the rate of depreciation to reflect the assets' revised useful lives or number of\nremaining flights.\nThe Company periodically evaluates impairment of its property, plant, and equipment assets whenever events or\ncircumstances indicate that the carrying value of an asset or asset group may not be recoverable. Factors we consider\nto identify indicators of potential impairment include significant changes or planned changes in our use of certain\nproperty, plant and equipment, technological developments that reduce the utility of the existing assets, declines in\nforecasted cash flows, and significant negative industry or economic trends.\nImpairment is assessed at the lowest level for which identifiable cash flows are largely independent of the cash flows\nof other assets and liabilities. If estimated future cash flows are less than the carrying value of the asset or asset\ngroup, an impairment charge is recognized to the extent its carrying value exceeds its estimated fair value to cost of\nrevenue or selling, general, and administrative expenses depending on the nature of the assets, or to impairment\ncharges if the impairment is considered to be outside the normal course of business. For the years ended December\n31, 2025, 2024, and 2023, and for the three months ended March 31, 2026, impairments on fixed assets were not\nmaterial.\nIf the average remaining flights for our flight vehicle and spacecraft had been estimated to be five more or fewer\nflights, the impact to our operating income for the year ended December 31, 2025 and three months ended March 31,\n2026 would not be material. If the average useful life of our satellite assets had been changed by one year, it would\nhave an approximately $480 million and $170 million impact on our operating income for the year ended December\n31, 2025 and three months ended March 31, 2026, respectively.\nLegal and Other Contingencies\nThe Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the\noutcomes of which are inherently uncertain. The Company records a liability when it is probable a loss has been\nincurred and the amount is reasonably estimable, the determination of which requires significant judgment.\nResolution of legal matters in a manner inconsistent with management’s expectations could have a material impact\non the Company’s financial condition and operating results.\nRecent Accounting Pronouncements\nRefer to Note 2, Summary of Significant Accounting Policies, to the audited consolidated financial statements\nincluded elsewhere in this prospectus.\nQuantitative and Qualitative Disclosures About Market Risk\nForeign Currency Risk\nOur Connectivity and AI businesses operate in many countries and transact in multiple currencies. In general, we are\na net receiver of currencies other than the U.S. dollar for our foreign subsidiaries. Accordingly, we are exposed to\nforeign currency risk both from fluctuations in exchange rates affecting foreign-currency denominated transactions\nand from the impact of translating the assets, liabilities, revenues, costs of revenue, and other operating expenses of\nour foreign subsidiaries into U.S. dollars. We have experienced, and will continue to experience, fluctuations in our", - "path": "spacex-s1.pdf/p153", - "metadata": { - "length": 4386, - "summary": "126 Table of Contents Determining the useful lives and the number of average flights a flight vehicle and spacecraft can fly require the Company to estimate the period over which we expect to recover the economic value of our property, plant, and equipment. For each of our fli...", - "page_nums": [ - 153 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 153, "artifact_ref": "page_citation_assets/page-153.png", @@ -7569,24 +6528,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e39427e1-ed92-5f6b-bcee-cea06e14e0bd", - "type": "page", - "content": "127\nTable of Contents\nnet income as a result of gains (losses) on the settlement and the re-measurement of monetary assets and liabilities\nnot denominated in our functional currencies. We do not hedge foreign currency risk and changes in exchange rates\ncould have an adverse impact on our operating results and cash flows.\nWe considered the historical trends in foreign currency exchange rates and determined that it is reasonably possible\nthat adverse changes in foreign currency exchange rates of 10% for all currencies could be experienced in the near-\nterm. These changes were applied to our total monetary assets and liabilities denominated in our non-functional\ncurrencies at the balance sheet date to compute the impact these changes would have had on our income (loss)\nbefore income taxes. These changes would have resulted in an immaterial gain or loss as of March 31, 2026 and\nDecember 31, 2025, respectively.\nInterest Rate Risk\nOur exposure to changes in interest rates relates primarily to our investment portfolio, interest income on cash and\ncash equivalents and our credit facilities.\nOur cash and cash equivalents consist of cash, time deposits, money market funds, U.S. government and agency\nsecurities. Our investment policy and strategy are focused on preservation of capital and supporting our liquidity\nrequirements. Changes in U.S. interest rates affect the interest earned on our cash and cash equivalents. A\nhypothetical 100 basis point increase or decrease in market interest rates would have resulted in an immaterial\nincrease or decrease in interest income for the year ended December 31, 2025 and three months ended March 31,\n2026.\nThe effective interest rate on outstanding borrowings under the SpaceX Bridge Loan was 4.58% as of March 31,\n2026. A hypothetical 100 basis point increase in U.S. interest rates would increase annual interest expense by\napproximately $200 million.", - "path": "spacex-s1.pdf/p154", - "metadata": { - "length": 1908, - "summary": "127 Table of Contents net income as a result of gains (losses) on the settlement and the re-measurement of monetary assets and liabilities not denominated in our functional currencies. We do not hedge foreign currency risk and changes in exchange rates could have an adverse im...", - "page_nums": [ - 154 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 154, "artifact_ref": "page_citation_assets/page-154.png", @@ -7594,24 +6536,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_497783c5-9da0-5e2b-9a5c-a08ddd569adb", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p155", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 155 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 155, "artifact_ref": "page_citation_assets/page-155.png", @@ -7619,24 +6544,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b2ad1f16-b0de-5f75-b500-36c4640ec795", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p156", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 156 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 156, "artifact_ref": "page_citation_assets/page-156.png", @@ -7644,24 +6552,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_21bb05c0-0f12-5838-8c14-de0be8acd8e4", - "type": "page", - "content": "130\nTable of Contents\nBUSINESS\n“You want to wake up in the morning and think the future is going to be great—and that’s what being a space-faring\ncivilization is all about. It’s about believing in the future and thinking that the future will be better than the past. And\nI can’t think of anything more exciting than going out there and being among the stars.”\n—Elon Musk\nOur Mission\nOur mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true\nnature of the universe, and to extend the light of consciousness to the stars. To do this, we have formed the most\nambitious, vertically integrated innovation engine on (and off) Earth with unmatched capabilities to rapidly\nmanufacture and launch space-based communications that connect the world, to harness the Sun to power a truth-\nseeking artificial intelligence that advances scientific discovery, and ultimately to build a base on the Moon and\ncities on other planets.\nOverview\nFounded in 2002, SpaceX is the only company building the integrated hardware and software infrastructure of the\nfuture across space, connectivity, and AI. At our core, we are builders. We design, manufacture, launch, and operate\nproducts and services built on cutting-edge technologies, including the world’s most advanced rockets and\nspacecraft. We safely and reliably transport astronauts, satellites, and other payloads on missions that benefit life on\nEarth. Since 2023, we have launched more than 80% of mass to orbit for the world each year with an over 99%\nmission success rate with Falcon rockets. We also operate a high-speed, low-latency global broadband data and\ncommunications network powered by approximately 9,600 Starlink broadband and mobile satellites in Low-Earth\nOrbit, delivering connectivity to millions of consumer, enterprise, and government customers across 164 countries,\nterritories, and other markets, as of March 31, 2026. Using our dedicated satellite-to-mobile constellation, we offer\nconnectivity services, supplementing terrestrial networks and substantially reducing mobile “dead zones” across\napproximately 30 countries.\nWith the potential to improve both space exploration and life on Earth, AI accelerates SpaceX’s mission to make life\nmultiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars.\nxAI, which was founded in 2023 and acquired by SpaceX in early 2026, is now an integral pillar of our vertically\nintegrated company. We are rapidly constructing AI compute infrastructure—starting on Earth with the goal of\nextending to space—at industry-leading pace and cost efficiency. Our infrastructure supports training and inference\nfor Grok, which has emerged as one of the world’s most advanced frontier models. Grok is designed as a truth-\nseeking AI model, built on our founder Elon Musk’s mission to enable humanity to understand the universe. We\nbelieve that accomplishing this mission requires a truth-seeking approach to AI. We define truth seeking as the\nactive, relentless pursuit of what is objectively true about reality, and grounded in evidence, logic, empirical data,\nand first principles thinking. Our goal is to understand and explain what the universe appears to be doing, as\naccurately as current knowledge allows. Within two years of its initial model release, Grok achieved frontier-level\nperformance in scientific reasoning, as measured by its GPQA Diamond score, an industry benchmark that evaluates\nAI models on a standardized set of questions written and validated by experts, on a faster timeline than reported by\nother leading model providers. Grok also benefits from integration with X, our real-time information, entertainment,\nand free speech platform, which serves as a foundational distribution and data engine for our AI ecosystem and\nfurther enhances Grok’s truth-seeking objective.\nWe believe that space represents the largest economic frontier in human history, unlocking unprecedented\nopportunities in orbit and on Earth. Earth has limits, so we must build infrastructure and industries in space,\nexpanding human capabilities to improve life on Earth and to establish life beyond. Connectivity infrastructure in\nspace is designed to help everyone on Earth have access to education, healthcare, entertainment, and\ncommunications, and to enable people to overcome many traditional limits, such as physical and political borders.\nWe believe AI infrastructure in space can utilize the virtually limitless power of the Sun and thereby enable the use\nof AI as a transformative force for understanding the universe and improving the daily lives of all humans. We\nbelieve the convergence of these areas will enable an unprecedented expansion in the global economy, leading to an", - "path": "spacex-s1.pdf/p157", - "metadata": { - "length": 4784, - "summary": "130 Table of Contents BUSINESS “You want to wake up in the morning and think the future is going to be great—and that’s what being a space-faring civilization is all about. It’s about believing in the future and thinking that the future will be better than the past. And I can’...", - "page_nums": [ - 157 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 157, "artifact_ref": "page_citation_assets/page-157.png", @@ -7669,24 +6560,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1849a3e3-2128-5fe2-b454-a71a52dc3cd7", - "type": "page", - "content": "131\nTable of Contents\nage of abundance. Our innovations and technological advancements are redefining industries on Earth, while we aim\nto create new ones on the Moon, Mars, and beyond. We are truly building the infrastructure of the future.\nSpaceX is the only company that has cracked the code on accessing space at scale, revolutionizing an industry\ncharacterized by decades of stagnation, risk aversion, and economically perverse cost structures. SpaceX upended\nthis paradigm through the application of first-principles thinking, which rejects industry assumptions and builds\nsolutions based on the fundamental laws of physics. Our intense, mission-driven, engineering-first culture and focus\non extreme vertical integration have propelled us to achieve what many deemed impossible. We have demonstrated\nthe ability to achieve groundbreaking technological innovations with speed, quality control, and precision. We\npioneered high-cadence, reliable, and affordable access to space with our Falcon family of rockets, with a goal to\ntransform the rocket launch industry into airline-like operations. In 2015, we established at least a 10-year lead over\nthe industry by successfully landing our first Falcon 9 booster back from space before anyone else. We have\ncontinued to invest significantly in further increasing our lead by pursuing full and rapid reusability at scale,\nincluding investing over $15 billion in our next-generation rocket, Starship.\nWe believe rocket launches and landings should be as routine and commonplace as airplanes taking off and landing.\nTo achieve this sort of cadence, our iterative approach emphasizes rapid designing, testing, and process\noptimization, putting flight hardware in the flight environment as often as possible. This allows us to accelerate our\nlearning by repeatedly using and improving our systems. This has resulted in a significantly higher flight rate at\ncosts that are much lower than launch programs that existed before SpaceX. For example, according to NASA, the\nfirst version of Falcon 9 in 2010 had a launch cost of approximately $2,700 per kilogram, which represented a\nreduction of approximately 85% compared to the historical average launch cost per kilogram of $18,500. The first\nversion of Falcon Heavy in 2018 further reduced this cost to approximately $1,400 per kilogram, a reduction of\napproximately 92% compared to the historical average cost. With the future deployment of Starship, which is\ndesigned to be the world’s first fully and rapidly reusable spacecraft, we aim to further reduce the cost to reach orbit\nby 99% or more relative to the historical average launch cost. Central to our cost advantage is the reusability of key\nhardware—most notably boosters—which we recover, refurbish, and refly many times instead of discarding after\nsingle use. This dramatically lowers per-launch costs by minimizing hardware replacement expenses and spreading\nfixed production costs across repeated uses. Space flight that historically cost billions per launch now costs in the\ntens of millions, fundamentally reducing the cost of space access, providing the opportunity to build new enterprises\nin space.\nSimilarly, xAI has cracked the code in the complexities of building and scaling AI compute infrastructure, becoming\nthe first company to deploy a coherent gigawatt-scale AI training cluster. We believe the combination of our\nproprietary AI infrastructure capability, our truth-seeking frontier model, Grok, and our access to real-time data on\nX creates a formidable competitive advantage, allowing us to maintain a leading position in the development of\nadvanced artificial intelligence. This advantage stems from our complete vertical integration and the common vision\ninfused by our founder, Elon Musk. In just a few years, we have demonstrated an ability to build coherent compute\nat scale and rapid speed with lower cost. COLOSSUS and COLOSSUS II collectively provide approximately 1.0\ngigawatt of compute power, with additional power capacity available for data center operations. We believe speed is\na competitive advantage. In order to bring compute clusters online as fast as possible, we employ a vertically\nintegrated, nimble approach to construction. At COLOSSUS, we brought online the first cluster of approximately\n100,000 H100 processors, approximately 130 megawatts of compute power, in just 122 days, repurposing the shell\nof an existing factory. At COLOSSUS II, we brought online the first cluster of approximately 110,000 GB200\nprocessors, approximately 210 megawatts of compute power, even faster in 91 days. As an illustrative comparison,\nan industry benchmark to bring online a 100 megawatt greenfield data center is approximately two years.\nFurthermore, in the case of COLOSSUS II, following the initial cluster, we brought online the second cluster of\n110,000 GB300 processors and 220 megawatts of compute power in 64 days, demonstrating our ability to rapidly\nscale our facilities once built. We expect that once fully operational, the next phase of expansion at COLOSSUS II\nwill bring online at least 220,000 additional GB300 processors and over 400 additional megawatts of compute\npower. We also demonstrated a significant improvement in cost efficiency, achieving data center construction costs\nfor COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis.\nWe are able to deploy power and compute significantly faster than other AI companies through first-principles\nthinking, behind-the-meter power generation, coupled with what we believe is the world’s largest network of", - "path": "spacex-s1.pdf/p158", - "metadata": { - "length": 5599, - "summary": "131 Table of Contents age of abundance. Our innovations and technological advancements are redefining industries on Earth, while we aim to create new ones on the Moon, Mars, and beyond. We are truly building the infrastructure of the future. SpaceX is the only company that has...", - "page_nums": [ - 158 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 158, "artifact_ref": "page_citation_assets/page-158.png", @@ -7694,24 +6568,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fd234130-900a-5f55-b0c5-6f8e0727260c", - "type": "page", - "content": "132\nTable of Contents\nsustainable battery storage systems, and innovations in advanced liquid cooling, high-density rack layouts, and\nefficient networking. Our facilities also incorporate innovative design features that limit the effects on regional\nelectricity pricing for neighbors and include advanced water cleaning, reclamation, and recycling processes to\nsupport sustainable operations. We partner with utilities and communities to connect to and enhance the grid over\ntime, and do so while pledging to cover costs of all new power delivery infrastructure upgrades to service our data\ncenters, including adequate network upgrade costs, to ensure that these expenses are not passed on to the ordinary\nhousehold. Our ability to rapidly and cost-effectively scale with the latest processors keeps us ahead of competitors\nwho deploy traditional and more expensive methods. As a result, we believe COLOSSUS II became one of the\nworld’s first data centers to deploy GB200s and GB300s, the most advanced AI processors available at the time, at\nsignificant scale, and is currently powering training for our next frontier models, including Grok-5. Furthermore,\nthrough our Terafab initiative together with Tesla to build a manufacturing facility capable of producing 1 terawatt\nper year of compute hardware, we intend to further extend our vertical integration to chip design and manufacturing\nto alleviate potential future chip shortages at SpaceX, optimize compute performance, and potentially reduce overall\ncompute costs. Intel, which has the ability to design, fabricate, and package ultra-high-performance chips at scale,\nalso joined the Terafab project in early April 2026. Our shovels-to-tokens approach allows us to train and iterate our\nfrontier models at high velocity, accelerating development cycles, eliminating external bottlenecks, and driving\nrapid, continuous improvements in model performance.\nIn pursuing our mission, SpaceX has created new opportunities across our three foundational competitive\nadvantages, Space, Connectivity, and AI:\n• Space. Launch is one of our foundational competitive advantages. We were the first private company to\ndevelop and launch a liquid-fuel rocket to reach orbit (2008), the first private company to successfully dock a\nprivate spacecraft with the International Space Station (2012), the first company to propulsively land (2015) and\nrefly an orbital-class rocket booster (2017), the first to begin deploying a large-scale LEO broadband satellite\nconstellation (2019), and the first private company to launch astronauts to orbit, allowing American astronauts\nto again fly to and from the International Space Station on an American launch vehicle (2020). As of March 31,\n2026, SpaceX had completed approximately 650 orbital space launches, and over 540 of those launches were\ncompleted by a flight-proven Falcon rocket, drastically reducing the cost of access to space. We are the only\nprivate company that is certified by NASA to send human missions to orbit. We are currently developing\nStarship, designed to be the world’s most powerful launch vehicle. Starship is designed to be a fully and rapidly\nreusable transportation system capable of carrying larger payloads farther and at lower marginal cost per launch\nthan our current Falcon rockets. Our unparalleled launch capabilities power every aspect of our business.\n• Connectivity. Since activating service for customers in 2020, Starlink has rapidly expanded global access to\nhigh-speed internet, prioritizing underserved rural and remote communities worldwide. While building\nterrestrial networks in such communities can be prohibitively expensive, Starlink is capable of delivering\nbroadband connectivity anywhere on Earth with just a Starlink Kit. As of March 31, 2026, we had\napproximately 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, operating the world’s most\nadvanced broadband constellation providing internet connectivity to approximately 10.3 million Starlink\nSubscribers across 164 countries, territories, and other markets. In January 2024, we also began deploying our\nStarlink Mobile constellation that utilizes separate Starlink satellites with satellite-to-mobile capabilities,\nsubstantially reducing mobile “dead zones” around the world. As of March 31, 2026, our dedicated satellite-to-\nmobile constellation of approximately 650 V1 Mobile satellites provides satellite-to-mobile data, over-the-top\nvoice, and messaging services to approximately 7.4 million monthly unique devices across approximately 30\ncountries.\n• AI. We were the first company to deploy a coherent gigawatt-scale AI training cluster. We own and operate\nwhat we believe to be the largest AI training data center clusters on Earth, consisting of hundreds of thousands\nGPUs—all in the same spirit that enabled us to launch Grok faster than any other leading foundational AI model\n—while maintaining full vertical integration from on-site power generation and water reclamation to GPU\ndeployment. In under two years, we have established a dual advantage in both cost efficiency and deployment\nspeed at scale. By owning the compute infrastructure and vertically integrating across the full AI stack, we can\ntrain and iterate our frontier models at lower cost and higher velocity and accelerate development cycles. This\neliminates external bottlenecks and drives rapid, continuous improvements in model performance. The addition", - "path": "spacex-s1.pdf/p159", - "metadata": { - "length": 5438, - "summary": "132 Table of Contents sustainable battery storage systems, and innovations in advanced liquid cooling, high-density rack layouts, and efficient networking. Our facilities also incorporate innovative design features that limit the effects on regional electricity pricing for nei...", - "page_nums": [ - 159 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 159, "artifact_ref": "page_citation_assets/page-159.png", @@ -7719,24 +6576,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9618634c-0ee4-56bb-b669-297cd2fc44f9", - "type": "page", - "content": "133\nTable of Contents\nof the Terafab initiative aims to further extend our control to the foundational processor layer. We believe that\nthe key constraints in the continued growth of AI are physical—chip manufacturing, data center infrastructure,\nand power generation; the future of AI will be determined by the control of the physical stack. We believe no\nother AI company has better control over the full physical stack than SpaceX. We believe this combination of\nour state-of-the-art AI compute infrastructure, our truth-seeking frontier model, and our access to real-time data\non X creates a significant strategic advantage. Our integrated AI platforms across Grok and X have over 1.3\nbillion supported accounts active in the last twelve months ended March 31, 2026, including approximately 550\nmillion MAUs, up from over 1.1 billion supported accounts and approximately 520 million MAUs as of\nDecember 31, 2025, and generating approximately 350 million daily posts. Of our MAUs, we had\napproximately 117 million MAUs that used Grok’s AI features as of March 31, 2026. Grok’s deep integration\nwith X enables freshness, relevance, and contextual awareness that we believe is a competitive differentiator.\nThis direct, real-time access to the information and human discourse on X enhances Grok’s truth-seeking\ncapabilities by grounding outputs in up-to-date knowledge and diverse viewpoints. As a result, we believe Grok\ncan deliver the most objective and relevant insights and best serve high-frequency, high-value use cases across\nconsumer and enterprise AI applications.\nFor complex reasoning and agentic workloads, compute is directly correlated with the quality of intelligence\nand task completion speed. Over the long-term, however, we expect Earth’s finite resources will not be able to\nsustain the immense computational demands of advanced AI models. Sustainably satisfying this compute\ndemand will require space-based infrastructure that utilizes the ultimate fusion energy source: the Sun. We\nbelieve we are the only company with a commercially viable path to building orbital AI compute at scale, due to\nour unique ability to launch substantial mass into orbit through reusable, cost-efficient rockets, to manufacture\nsecure, reliable, and high-performance satellites at low cost and high volume, and to manage large-scale\nconstellations. We expect that owning scalable, power-efficient infrastructure to train and operate frontier\nmodels will be the most important driver for AI differentiation as AI systems converge toward artificial general\nintelligence (“AGI”)—which has the potential to unlock large-scale productivity gains, scientific discovery, and\nsocietal abundance.\nWe have created distinct new markets across the space, connectivity, and AI industries by building the integrated\nhardware and software infrastructure of the future and by combining our broad range of capabilities. For example,\nSpaceX’s recent acquisition of xAI unites SpaceX’s launch capabilities and global connectivity network with xAI’s\nAI development capabilities. Specifically, we believe SpaceX’s reusable rockets, scaled satellite manufacturing, and\noperational expertise can enable the cost-effective and rapid deployment of massive AI compute satellite\nconstellations—with potentially millions of satellites—for orbital data centers. We believe these AI compute\nsatellites in Sun-synchronous orbit will be able to handle energy-intensive AI workloads, such as inference demand,\nat far greater scale and efficiency than terrestrial alternatives, with Starlink providing low-latency, global\nconnectivity linking these orbital AI systems to people around the world and delivering real-time intelligence. Our\ngoal is to leverage our launch leadership, global connectivity network, and AI expertise to allow us to continue\nbuilding the integrated infrastructure of the future on Earth, the Moon, Mars, and beyond to benefit humanity.", - "path": "spacex-s1.pdf/p160", - "metadata": { - "length": 3930, - "summary": "133 Table of Contents of the Terafab initiative aims to further extend our control to the foundational processor layer. We believe that the key constraints in the continued growth of AI are physical—chip manufacturing, data center infrastructure, and power generation; the futu...", - "page_nums": [ - 160 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 160, "artifact_ref": "page_citation_assets/page-160.png", @@ -7744,24 +6584,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bef6c8e5-b2fa-5de7-9b7f-db1e0e5798ad", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p161", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 161 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 161, "artifact_ref": "page_citation_assets/page-161.png", @@ -7769,24 +6592,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c9b5d9b2-8e2e-5b73-add9-cd47bd39a39e", - "type": "page", - "content": "135\nTable of Contents\nWe have an intense, mission-driven, engineering-first culture that seeks to achieve what many have deemed\nimpossible. “The Algorithm,” as it is known internally, is a five-step iterative process that emphasizes making the\nrequirements less dumb, deleting unnecessary processes or parts (embracing the principle that the best part is no\npart), only then optimizing the necessary processes or parts, accelerating cycle time, and automating only proven\nprocesses. We strive to make the incredible and extraordinary accessible and repeatable, and we have grown rapidly\nby continuously leveraging our core strengths, including:\n• Global leadership in orbital launch services;\n• Unrivaled satellite and connectivity platform across design, manufacturing, deployment, and operations;\n• Truth-seeking AI model enhanced by real-time data;\n• Extreme vertical integration enabling high velocity and superior cost efficiency at scale;\n• Unique ability to scale new trillion-dollar markets across Space, Connectivity, and AI;\n• Business models that are incredibly difficult to replicate; and\n• Our mission-driven culture and world-class talent.\nWe have a stellar track record of capital allocation and value creation in Space and Connectivity. Since SpaceX’s\nfounding in 2002, we have raised over $9 billion of equity capital to fund the development and growth of these two\nbusiness segments. The Space segment became Segment Adjusted EBITDA positive on a sustained basis beginning\nin 2018 and the Connectivity segment became in aggregate Segment Adjusted EBITDA positive on a sustained basis\nbeginning in 2023. In 2025, our Space segment generated a loss from operations of $(657) million and Segment\nAdjusted EBITDA of $653 million, including the impact of funding $3,004 million in research and development\nexpense for our next-generation Starship launch vehicle program. In 2025, our Connectivity segment generated\nincome from operations of $4,423 million and Segment Adjusted EBITDA of $7,168 million.\nOur financial results reflect the strength of our operating model and our ability to create and scale multiple new\nbusinesses:\n• For the three months ended March 31, 2026, we generated revenue on a consolidated basis of $4,694 million,\nloss from operations of $(1,943) million and Adjusted EBITDA of $1,127 million. In 2025, we generated\nrevenue on a consolidated basis of $18,674 million, loss from operations of $(2,589) million and Adjusted\nEBITDA of $6,584 million. Our Space and Connectivity segments contributed the substantial majority of our\nconsolidated revenue in the three months ended March 31, 2026 and the year ended December 31, 2025,\ndemonstrating the benefits of their scale and operating leverage in our vertically integrated business model;\n• For the three months ended March 31, 2026, our Space segment generated revenue of $619 million, loss from\noperations of $(662) million, and Segment Adjusted EBITDA of $(351) million. In 2025, our Space segment\ngenerated revenue of $4,086 million, loss from operations of $(657) million, and Segment Adjusted EBITDA of\n$653 million Additionally, our Space segment funded $930 million and $3,004 million in research and\ndevelopment expense during the three months ended March 31, 2026 and the year ended December 31, 2025,\nrespectively, for our next-generation Starship launch vehicle program. Starship is designed to enable a step-\nfunction change in our launch capability across reusability, payload capacity, and launch cadence, and is the key\nenabler of our long-term growth strategy by unlocking entirely new categories of missions;\n• For the three months ended March 31, 2026, our Connectivity segment generated revenue of $3,257 million,\nincome from operations of $1,188 million, and Segment Adjusted EBITDA of $2,087 million. Our Connectivity\nsegment, primarily driven by Starlink, generated revenue of $11,387 million, income from operations of $4,423\nmillion, and Segment Adjusted EBITDA of $7,168 million in 2025, representing year-over-year growth of\n49.8%, 120.4%, and 86.2%, respectively, benefiting from subscriber growth, increasing enterprise adoption, and\ncontinued improvement in network efficiency;", - "path": "spacex-s1.pdf/p162", - "metadata": { - "length": 4194, - "summary": "135 Table of Contents We have an intense, mission-driven, engineering-first culture that seeks to achieve what many have deemed impossible. “The Algorithm,” as it is known internally, is a five-step iterative process that emphasizes making the requirements less dumb, deleting...", - "page_nums": [ - 162 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 162, "artifact_ref": "page_citation_assets/page-162.png", @@ -7794,24 +6600,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8378d106-a9ad-53a4-b253-fa62f11190a9", - "type": "page", - "content": "136\nTable of Contents\n• In our newly acquired AI segment, we plan to prioritize growth and investment to capture significant\nopportunities in AI applications and compute infrastructure. For the three months ended March 31, 2026, our AI\nsegment generated revenue of $818 million, loss from operations of $(2,469) million, and Segment Adjusted\nEBITDA of $(609) million. In 2025, our AI segment generated revenue of $3,201 million, loss from operations\nof $(6,355) million, and Segment Adjusted EBITDA of $(1,237) million, reflecting its earlier stage of\ndevelopment and continued investments to support long-term growth opportunities in AI; and\n• For the three months ended March 31, 2026, capital expenditures for our Space segment was $1,052 million, for\nour Connectivity segment was $1,332 million and for our AI segment was $7,723 million. In 2025, capital\nexpenditures for our Space segment was $3,832 million, for our Connectivity segment was $4,178 million and\nfor our AI segment was $12,727 million.\nSegment Adjusted EBITDA is a non-GAAP measure. Please refer to the section titled “Management’s Discussion\nand Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for additional\ninformation on our non-GAAP financial measures, including reconciliations of Segment Adjusted EBITDA to\nsegment income (loss) from operations, the most directly comparable GAAP measure.\nWhy This Matters Now\nFor the entirety of its existence, human civilization has lived on a single celestial body: Earth. The current paradigm,\nin which human civilization is confined to one planet, exposes humanity to existential threats that are unpredictable\nand uncontrollable on a planetary scale. These threats include naturally occurring catastrophic events—such as\nasteroid impacts, volcanic activity, or solar fluctuations—as well as man-made global conflicts. Geological and\nastronomical records indicate a non-zero probability of extinction-level events occurring over periods measurable in\nmillions of years. Reliance on a single planetary home constitutes a single point of failure and carries existential risk\nwith a probability of one that must be solved. By moving beyond the only home we have ever known, we ensure\nspecies-level redundancy and that the light of consciousness will not be tied to a single planet subject to the\ninevitable hazards of a harsh and vast universe. We do not want humans to have the same fate as dinosaurs. We want\nto give them a reason to look ahead with excitement, with the prospect that we are entering an age of abundance\nwith an endlessly prosperous and exciting future.\nArtist Visualization of Life on Mars", - "path": "spacex-s1.pdf/p163", - "metadata": { - "length": 2660, - "summary": "136 Table of Contents • In our newly acquired AI segment, we plan to prioritize growth and investment to capture significant opportunities in AI applications and compute infrastructure. For the three months ended March 31, 2026, our AI segment generated revenue of $818 million...", - "page_nums": [ - 163 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 163, "artifact_ref": "page_citation_assets/page-163.png", @@ -7819,24 +6608,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b340548f-5710-50e4-afb6-48de7731bcf4", - "type": "page", - "content": "137\nTable of Contents\nFor decades, a reality where humanity travels between the planets and the stars has felt tantalizingly close but still\nlocked in the pages and screens of science fiction. We are capable of better understanding the universe, exploring the\nuniverse, and ultimately making life multiplanetary across the universe. We are becoming a civilization with the\nability to reach beyond Earth’s cradle and begin to inhabit other worlds. While we remain dedicated to this\nfundamental mission, our progress in accessing space continues to yield opportunities that enrich life on Earth.\nWe believe our steps into the expanse will be accelerated by the rapid emergence of AI. As humanity moves into the\nunknown, we believe AI will be our greatest tool for innovation and navigation, helping us better understand day-to-\nday life and the universe, and master the complexity of establishing new civilizations in the far-flung reaches of\nspace. For AI to help us understand the universe, we believe it must be able to discard the often popular, but wrong,\nin favor of the unpopular, but true. By combining the innate human desire to seek truth and explore with our\nbreakthrough technologies, we believe humanity will eventually reach new frontiers across the universe, while\nenhancing the quality and resilience of life on Earth.\nThe rapid emergence of the AI era intensifies the urgency of our mission, as AI has the potential to accelerate not\nonly space exploration, but also transformative societal advancements on Earth. However, AI’s ability to\nrevolutionize human potential is directly dependent on meeting exponentially increasing resource demands. On\nEarth, the massive expansion of data center capacity to support growing compute demand is significantly outpacing\nelectricity generation, which was effectively flat in the United States for approximately 15 years, growing at a\ncompound annual growth rate of 0.1% from 2008 to 2023. Despite the recent increase in electricity demand from AI\ndata centers, electricity generation in the United States has grown at an annual rate of less than 3% between 2023\nand 2025, while electricity generation in China has grown at approximately twice that rate in the same time period.\nU.S. compute demand has already outpaced available power supply with estimated demand of 62 gigawatts in 2025\nexceeding the power generation of 49 gigawatts, according to industry sources. We expect the gap between demand\nfor compute and power supply to continue to widen meaningfully as AI compute needs proliferate. Such structural\npower shortages are expected to intensify over the coming years. This supply and demand imbalance is already\nimposing unsustainable strains on terrestrial power grids, supply chains, and the environment. The Sun contains\napproximately 99.8% of the solar system’s energy and, as a result, we believe it is the only truly scalable solution to\nterrestrial energy constraints in the age of AI. Harnessing this energy in space is considerably more efficient than on\nland. Space-based solar arrays can generate more than five times the energy per unit area of terrestrial solar due to\ncontinuous illumination, lack of atmospheric interference, and optimal orientation. SpaceX is well-positioned to\ncapture this space-based solar energy through our ability to rapidly access Sun-synchronous orbit through our\nsatellite manufacturing scale and launch capability. As a result, we are expanding our footprint and harnessing the\nvast resources of space that are essential to sustaining technological development. Our goal is to ensure that AI\nbecomes a force for human flourishing and a benefit to civilization, rather than a catalyst for terrestrial resource\ndepletion and instability. We believe owning scalable, power-efficient infrastructure to train and operate frontier\nmodels will be the most important competitive differentiator as AI systems converge toward AGI—which has the\npotential to unlock large-scale productivity gains, scientific discovery, and societal abundance.\nWe believe space represents the largest economic frontier in human history. Our unmatched launch cadence has\nmassively increased access to space, enabling rapid and reliable missions for humans, cargo, and satellites—creating\nunprecedented opportunities for innovation, scientific discovery, and global connectivity. SpaceX has always been a\nmission-driven company, founded with the goal of making humanity multiplanetary. By dramatically reducing the\ncost of access to space, we have been able to expand our mission to address some of the Earth’s most pressing\nchallenges, including bridging the digital divide by aiming to connect over three billion unconnected people to the\ninternet and humanity’s collective knowledge. Starlink is our groundbreaking solution for global internet\nconnectivity, delivering high-speed, low-latency access to the most remote and underserved corners of the world—\nfrom Antarctica’s frozen wilderness to vast oceans and towering mountaintops—overcoming barriers posed by\ntraditional terrestrial infrastructure. Starlink’s unparalleled global reach has the potential to enable society to educate\nbillions of people, to help lift entire communities out of poverty, and to provide essential connectivity to schools,\nhospitals, and critical services, fostering a more equitable and informed future for humanity. We support essential\napplications such as education in rural and underserved regions, telemedicine for hard-to-reach patients, seamless\nconnectivity for aviation and maritime users, and resilient communications during natural disasters. For example,\nduring the 2023 Maui wildfires, which devastated Lahaina and left thousands without power or cellular service,", - "path": "spacex-s1.pdf/p164", - "metadata": { - "length": 5740, - "summary": "137 Table of Contents For decades, a reality where humanity travels between the planets and the stars has felt tantalizingly close but still locked in the pages and screens of science fiction. We are capable of better understanding the universe, exploring the universe, and ult...", - "page_nums": [ - 164 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 164, "artifact_ref": "page_citation_assets/page-164.png", @@ -7844,24 +6616,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d6487b41-f151-5fed-aa58-7a4d4830aa5a", - "type": "page", - "content": "138\nTable of Contents\nStarlink rapidly deployed over 650 terminals to restore high-speed internet connectivity, enabling first responders,\nhumanitarian organizations, and survivors to coordinate relief efforts, access aid resources, communicate with\nfamily, and support recovery in areas where traditional infrastructure had completely failed. During Hurricanes\nHelene and Milton in 2024 in the southeastern United States, our Starlink terminals provided a rapid lifeline for\ncommunication and recovery when traditional cell towers, broadband lines, and power infrastructure were knocked\nout for days or weeks by widespread damage caused by flooding and high winds.\nOur AI technology also has the ability to elevate the quality of life for people and communities around the world.\nWe believe AI has the potential to revolutionize human potential—from advanced manufacturing and infrastructure\ndevelopment to scientific research and medicine—delivering tangible real-world benefits for individuals,\norganizations, and governments. For example, AI systems can expedite scientific discovery for researchers, aid\nhealthcare professionals in precise medical analysis and diagnosis, and empower educators to craft tailored learning\nexperiences for students. Moreover, these technologies can optimize Earth’s resource allocation, enhance disaster\nresponse strategies, and drive efficiencies in transportation and energy systems.\nWe believe that our current space efforts will catalyze transformative breakthroughs that could reshape terrestrial\nindustries and lead to the emergence of new trillion-dollar markets on the Moon, Mars, and beyond. In particular, we\nbelieve our goal of establishing a lunar presence will enable terawatt-scale annual AI compute growth, support\ndeeper space exploration and industrialization, and serve as a stepping stone to establishing a civilization on Mars.\nDue to technological advancements that we are working towards, such as in-space propellant transfer, we believe\nour Starship vehicle will be capable of landing massive amounts of cargo on the Moon. Once there, we believe it\nwill be possible to establish a permanent presence for scientific and manufacturing pursuits. For example, we believe\nthat factories on the Moon will be able to take advantage of lunar resources to manufacture millions of AI compute\nsatellites and deploy them farther into space. Our goal is to establish a sustainable lunar presence for scientific\nexploration, industrialization, and as a stepping stone to Mars, serving as a proving ground for habitats, resource\nutilization, and Starship systems essential for long-term human survival beyond Earth.\nWe believe the next paradigm shift for humanity is the creation of a resilient, perpetually expanding spacefaring\ncivilization that drives continuous innovation across new frontiers, ultimately propelling us to Kardashev Type II\nstatus—a civilization that harnesses the full energy output of our Sun. In the near term, we expect space-enabled\ntechnologies to enhance life on Earth through greater global connectivity and breakthroughs forged in the harsh\nenvironments of our solar system, leading to accelerating progress in energy and AI. As we build infrastructure in\nthe Earth’s orbit, and potentially on the Moon, Mars and beyond, we believe we are capable of unlocking an era of\nunprecedented economic expansion, while also contributing to the safeguards of humanity’s future against\nexistential risk.\nWho We Are\nOur mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true\nnature of the universe, and to extend the light of consciousness to the stars. To do this, we’ve formed the most\nambitious, vertically integrated innovation engine on (and off) Earth. We are combining the most transformative and\ncritical technologies in human history, including reusable rockets, a fully global internet service, satellite-to-mobile\ncommunications that enable connectivity everywhere, our real-time information, entertainment, and free speech\nplatform, and a truth-seeking AI system designed to accelerate scientific discovery and augment human capabilities.\nThese capabilities form a self-reinforcing ecosystem: launch systems deploy and maintain the satellite network,\nwhich delivers ubiquitous connectivity and vast data flows; the platform surfaces real-time information and supports\nopen discourse; and AI processes data at scale to drive breakthroughs in physics, materials science, and space\nexploration. Together, they create a foundation for the development of the infrastructure of the future and the\nultimate goal of establishing a self-sustaining human presence on other planets.\nSpaceX designs, manufactures, launches, and operates the world’s most advanced rockets and spacecraft. We safely\nand reliably transport astronauts, satellites, and other payloads on missions that benefit life on Earth. Since 2023, we\nhave launched more than 80% of mass to orbit for the world each year with an over 99% mission success rate. We\nbelieve our unparalleled launch capabilities represent the foundational competitive advantage that enables all other\nparts of our business. We operate a high-speed, low-latency broadband data and communications network powered", - "path": "spacex-s1.pdf/p165", - "metadata": { - "length": 5273, - "summary": "138 Table of Contents Starlink rapidly deployed over 650 terminals to restore high-speed internet connectivity, enabling first responders, humanitarian organizations, and survivors to coordinate relief efforts, access aid resources, communicate with family, and support recover...", - "page_nums": [ - 165 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 165, "artifact_ref": "page_citation_assets/page-165.png", @@ -7869,24 +6624,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9593ce72-85f2-579c-84dd-d33d73142c7f", - "type": "page", - "content": "139\nTable of Contents\nby approximately 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, delivering connectivity to\nmillions of consumer, enterprise, and government customers across 164 countries, territories, and other markets, as\nof March 31, 2026. We also built one of the world’s most advanced models in under two years and are rapidly\nscaling the associated AI compute infrastructure—starting on Earth with the goal of extending to space—at industry-\nleading pace and cost efficiency. We believe that space represents the largest economic frontier in human history\nand that AI is a transformative force for understanding the universe. Together, we believe that space and AI will\nenable an age of abundance that will lead to an unprecedented expansion in the global economy. We are the only\ncompany that has the foundational infrastructure across hardware and software necessary to drive transformative\ninnovation across space, connectivity, and AI. Our technological advancements are redefining industries on Earth,\nwhile aiming to create new ones on the Moon, Mars, and beyond.\nOur Unparalleled Launch Capabilities\nSince our founding in 2002, SpaceX has cracked the code on accessing space at scale, transforming an industry\ncharacterized by decades of stagnation, risk aversion, and economically perverse cost structures. We design,\nmanufacture, launch, and refurbish reusable launch vehicles that provide cost-efficient, reliable, and high-cadence\naccess to space for our own purposes as well as for third-party commercial and government customers. In 2025, we\nlaunched from four primary launch pads in the United States and successfully recovered boosters across seven\nlanding facilities including autonomous drone ships and catch towers based on the vehicle type and mission profile.\nOur extensive vertical integration and end-to-end control over the entire value chain, from design to launch to\noperations, allows us to achieve unprecedented speed and cost efficiency.\nAs of March 31, 2026, SpaceX had launched a total mass to orbit of approximately 7,400 metric tons with an over\n99% mission success rate across our Falcon rockets. We have completed approximately 650 orbital space launches,\nand over 540 of those launches were completed by a flight-proven Falcon rocket. In 2025 alone, SpaceX completed\n170 missions across Falcon and Starship vehicles and 159 flight-proven booster launches with an over 99% success\nrate on attempted booster recoveries. We launched over 2,200 metric tons, representing over 80% of mass to orbit\nfor the world in 2025. With the first successful launch of Falcon 1 in 2008, we became the first private company to\nsuccessfully launch a liquid-fueled rocket to Earth’s orbit. Just two years later, in 2010, the commercial debut of the\nFalcon 9 rocket revolutionized space access by delivering unprecedented cost efficiency. For example, according to\nNASA, the first version of Falcon 9 in 2010 reduced launch cost to approximately $2,700 per kilogram, which\nrepresented a reduction of approximately 85% compared to the historical average launch cost per kilogram of\n$18,500. The first version of Falcon Heavy in 2018 further reduced this cost to $1,400 per kilogram, a reduction of\napproximately 92% compared to the historical average. We have also reduced our internal cost of launch through a\ncombination of engineering improvements, manufacturing efficiencies, and economies of scale—most notably,\nthrough our ability to drive more frequent reuse of rockets.\nIn December 2015, we achieved what many deemed impossible: landing a rocket launched to space back on Earth.\nBy 2017, we were routinely recovering and reusing the Falcon 9 first-stage booster post-launch, delivering another\nstep-function drop in space access costs via groundbreaking reusability. As of March 31, 2026, our Falcon 9 rockets\nhave demonstrated the ability to refly a first-stage 34 times. Since 2020, our Dragon spacecraft has safely flown 78\ncrewmembers from 20 countries. With the future deployment of Starship, which is designed to be the world’s first\nfully and rapidly reusable spacecraft, we aim to reduce the cost to reach orbit by 99% or more relative to the\nhistorical average launch cost, establishing the most affordable and scalable path to creating new opportunities in\nspace, such as orbital AI compute and Mars exploration.", - "path": "spacex-s1.pdf/p166", - "metadata": { - "length": 4374, - "summary": "139 Table of Contents by approximately 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, delivering connectivity to millions of consumer, enterprise, and government customers across 164 countries, territories, and other markets, as of March 31, 2026. We also b...", - "page_nums": [ - 166 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 166, "artifact_ref": "page_citation_assets/page-166.png", @@ -7894,24 +6632,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_dde96a8b-10ae-5771-bc74-da14bb128d08", - "type": "page", - "content": "140\nTable of Contents\nBooster Reusability Enables Increasing Launch Rates\nOur principal launch vehicles and spacecraft include:\n• Falcon 9. As the world’s first orbital-class rapidly reusable rocket, Falcon 9 was first launched in 2010 and has\na payload capacity to LEO of approximately 23 metric tons when fully expendable. Falcon 9 has completed\napproximately 620 orbital space launches as of March 31, 2026, and an over 99% mission success rate, making\nit the most active orbital launch vehicle today. In 2025 alone, we launched 165 Falcon 9 rockets, of which 157\nwere flight-proven booster launches, and during the three months ended March 31, 2026, we launched 40\nFalcon rockets, of which 39 were flight-proven booster launches.\n• Falcon Heavy. Falcon Heavy first launched in 2018 when it put a Tesla Roadster and its mannequin passenger,\nknown as Starman, into orbit around the Sun. With a payload capacity to LEO of approximately 64 metric tons,\nFalcon Heavy is a partially reusable super heavy-lift launch vehicle designed to deliver large payloads to orbit.\nFalcon Heavy is one of the most powerful operational rockets in the world measured by liftoff thrust, with 11\nlaunches as of March 31, 2026 and a 100% mission success rate.\n• Dragon. Launched by Falcon 9 in 2012, our Dragon spacecraft became the first commercial spacecraft to\ndeliver cargo to and from the International Space Station and, eight years later, the first privately built vehicle to\nfly humans to the orbiting laboratory. Since its first flight, Dragon has visited the International Space Station\nover 50 times, and restored America’s ability to launch astronauts. Dragon has also supported all of NASA’s\nprivate astronaut missions to the International Space Station, flown the first all-commercial astronaut crew,\ncompleted the first human spaceflight over the Earth’s polar regions, and supported the first-ever commercial\nspacewalk.\n• Starship. First launched in 2023, Starship is designed to be a fully reusable, super heavy-lift launch vehicle.\nStarship V3 is designed to deliver 100 metric tons to Earth’s orbit in a fully reusable configuration while\nenabling rapid turnaround times akin to commercial aviation. Future generations of Starship are being designed\nto double this payload capacity. To date, we have executed 11 Starship flight tests. We have also scheduled a\n12th flight test, which will debut the next generation Starship vehicle and Super Heavy booster, powered by the\nnext evolution of our Raptor engine and launching from a newly designed pad at Starbase. We expect Starship\nto commence payload delivery to orbit in the second half of 2026. We have achieved innovative milestones", - "path": "spacex-s1.pdf/p167", - "metadata": { - "length": 2683, - "summary": "140 Table of Contents Booster Reusability Enables Increasing Launch Rates Our principal launch vehicles and spacecraft include: • Falcon 9. As the world’s first orbital-class rapidly reusable rocket, Falcon 9 was first launched in 2010 and has a payload capacity to LEO of appr...", - "page_nums": [ - 167 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 167, "artifact_ref": "page_citation_assets/page-167.png", @@ -7919,24 +6640,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c98fd2a1-55cf-5aee-b1b2-1ea7b51a25ba", - "type": "page", - "content": "141\nTable of Contents\nsuch as catching a booster using “chopstick” arms on the same tower it launched from. We expect this\ncapability will facilitate rapid refurbishment and reuse, allowing for multiple launches per day at reduced costs.\nUpon achieving rocket reusability, we recognized the immense potential of our launch business to enable new\nrevenue streams, as our launch capacity would eventually outstrip demand from traditional space customers alone.\nThis realization, along with our efforts to make life multiplanetary, drove us to reimagine what was possible when\naccess to space became more affordable. Rather than asking what was being done in space, we asked what large-\nscale global need could be better served from space. This led to the development of Starlink, our global satellite\ninternet constellation, consisting of thousands of LEO satellites designed to provide high-speed, low-latency\nbroadband connectivity to underserved areas worldwide. Although the concept of using satellites for global internet\nconnectivity dates back decades, technical challenges and the prohibitive cost of accessing space historically\nrendered attempts to provide such connectivity economically unviable. Within three years of our first satellite launch\nin 2019, we solved the technical and production challenges of the satellites, and within five years, we had deployed\nthe largest LEO constellation in existence. Today, Starlink is the sole low-latency network available globally.\nAs the leader in space access, our launch operations are an important and expanding competitive advantage. By\ncombining increasing launch cadence, expanding cargo capacity, and declining unit costs—driven by rapid\nreusability—we have generated a compounding competitive advantage. This not only fortifies our core business, but\nalso provides vast new market opportunities uniquely enabled by space.\nOur Leading Capabilities Across Space, Connectivity, and AI\nSpace. While our launch capabilities support our other businesses, such as Starlink Consumer Broadband and\nStarlink Mobile, we also sell launches to third-party customers. We offer launch services to commercial, civil, and\ngovernment customers through our reusable Falcon 9 and Falcon Heavy rockets for satellite, cargo, and crew\nmissions. We fly to LEO, MEO, GEO, lunar, and interplanetary trajectories, as well as the International Space\nStation. We are the primary launch provider for the U.S. government. In 2025, we launched 11 of 12 National\nSecurity Space Launch (“NSSL”) medium and heavy lift missions and all five U.S. crew and cargo missions to the\nInternational Space Station for NASA. We serve commercial and government customers—including NASA, the\nNational Reconnaissance Office (“NRO”), Axiom Space, SES, Eutelsat, and Oneweb. We charge our customers\nbased on the type of rocket, mass to orbit, size of payload, and type of service, such as whether the launch is\ndedicated to a single customer or part of a “rideshare” with other customers.\nStarship is our next-generation reusable rocket vehicle that we expect will expand our launch capability dramatically\nthrough full and rapid reusability combined with currently unprecedented mass to orbit capability. As the most\npowerful launch system ever developed, we expect that Starship V3 will be able to carry a payload of 100 metric\ntons, and that future generations could reach 200 metric tons, potentially as soon as Starship V4. Starship is designed\nto deliver our next-generation satellites to orbit, long-haul point-to-point transportation on Earth, the cargo and crew\nnecessary to develop a base on the Moon and a city on Mars for research and human spaceflight development.\nConnectivity. Starlink provides global access to high-speed internet, including underserved rural and remote\ncommunities worldwide. As of March 31, 2026, we had approximately 9,600 Starlink broadband and mobile\nsatellites in Low-Earth Orbit, providing broadband connectivity to approximately 10.3 million Starlink Subscribers\nacross 164 countries, territories, and other markets. We also provide satellite-to-mobile texting and over-the-top\nvoice services to approximately 7.4 million monthly unique devices across approximately 30 countries.\n• Starlink Consumer Broadband. We operate the world’s largest and most advanced space-based internet\nbroadband service with median latency at approximately 25 milliseconds as of March 31, 2026. We provide\nfiber-like download speeds—at a median of 225 Mbps during peak hours for residential users as of March 31,\n2026—and the technological capability to provide service everywhere on Earth, including the poles. This\nservice quality is enabled by our vast network of approximately 9,600 Starlink broadband and mobile satellites\nin Low-Earth Orbit, which accounted for approximately 75% of all active maneuverable satellites in orbit as of\nMarch 31, 2026. We expect to commence deploying our next-generation V3 satellites, designed to offer one\nTbps of downlink capacity per satellite, using Starship in the second half of 2026. We expect that a single\nStarship launch will be capable of deploying up to 60 V3 satellites to LEO, representing a potential twenty-fold", - "path": "spacex-s1.pdf/p168", - "metadata": { - "length": 5194, - "summary": "141 Table of Contents such as catching a booster using “chopstick” arms on the same tower it launched from. We expect this capability will facilitate rapid refurbishment and reuse, allowing for multiple launches per day at reduced costs. Upon achieving rocket reusability, we r...", - "page_nums": [ - 168 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 168, "artifact_ref": "page_citation_assets/page-168.png", @@ -7944,24 +6648,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5afef07e-6c6d-5f72-9a83-e200edf9b3f4", - "type": "page", - "content": "142\nTable of Contents\nincrease in Starlink downlink capacity deployed relative to a Falcon 9 launch. As of March 31, 2026, we had\napproximately 10.3 million Starlink Subscribers, up approximately 105% from 5.0 million subscribers a year\nprior. We charge our Starlink Subscribers a monthly subscription fee, which varies based on geographic market\nand download speed, plus typically a one-time upfront terminal cost.\n• Enterprise Solutions. SpaceX is a critical partner to a wide array of enterprises. We offer Starlink’s high-\nspeed, low-latency, reliable internet services to enterprise customers across industries including construction,\nagriculture, retail, telecom, hospitality, aviation, maritime, and land mobility. Starlink’s unique capabilities are\nwell‐suited for deployments across field offices, remote worksites, research stations, drilling rigs, rural\nhospitals, aircraft, cruise ships, trains, and hotels. Our enterprise customers include companies such as United\nAirlines, Carnival, Maersk, and John Deere, among others. We also serve a broad fixed‐site customer base\nacross industries such as retail and financial services that require high availability for critical operations as well\nas reliable connectivity in remote or hard-to-serve locations. As companies continue to invest in secure and\nresilient networks and backup systems to keep critical infrastructure online—such as point‐of‐sale and payment\nprocessing systems—we often start as a backup solution and then transition to being the primary solution. Our\nenterprise contracts are based on a combination of subscriptions, data consumption, capacity, or other pricing\nmodels depending on each customer’s particular needs. Since 2023, no Starlink Enterprise customer having\ncontributed more than $750,000 of annual revenue has voluntarily discontinued their service, demonstrating the\nstrong performance and value of our offering. This is despite the ability of our customers to cancel the service at\nany time.\n• Government Solutions. For our government customers, we provide high-speed, resilient connectivity for\npublic services, social impact, humanitarian efforts, and disaster response in even the most remote and\nchallenging environments. Examples include support for the FEMA in coordinating disaster recovery after\nhurricanes and wildfires, the NOAA for at-sea testing and environmental monitoring, the Government of the\nPhilippines for linking remote islands, schools, and public institutions, the Government of Jamaica for\nimproving digital access in remote and maritime areas, and the Government of Ecuador for supporting\neducation and healthcare connectivity in isolated communities. Separately with Starshield, we have leveraged\nour commercial LEO satellite constellation engineering learnings and operational experiences to develop a\nsecure, dedicated satellite network designed specifically for United States Government customers and national\nsecurity applications.\n• Starlink Mobile. We provide satellite-to-mobile connectivity, supplementing terrestrial networks and\nsubstantially reducing mobile “dead zones” across approximately 30 countries. We partner with MNOs\nincluding major wireless carriers like T-Mobile in the United States, and other international operators including\nOne NZ, Optus, Telstra, Rogers, KDDI, Salt, Entel, Kyivstar, and VMO2. Through these partnerships, we\nenable consumers, businesses, and public-sector customers to use their existing phones in more places, support\ncritical connectivity during disasters and power outages, and open new applications for low-bandwidth mobile\nand IoT devices. Our current capabilities under our “V1” constellation (consisting of approximately 650 V1\nMobile satellites in orbit) include light data, text messaging (SMS), and over-the-top voice services (e.g.,\nWhatsApp and FaceTime). We are developing more comprehensive satellite-to-mobile services, including\nbroadband data and IoT connectivity, which are expected to deliver resilient, infrastructure-independent\nconnectivity worldwide and enable 5G connectivity. We have partnerships with approximately 30 MNOs on six\ncontinents, covering an area that is home to approximately 1.9 billion people. We charge MNOs either a fixed\nfee or a per-mobile user fee-based amount, which is typically passed through to the customer via the carrier as\nan “add-on” feature.", - "path": "spacex-s1.pdf/p169", - "metadata": { - "length": 4362, - "summary": "142 Table of Contents increase in Starlink downlink capacity deployed relative to a Falcon 9 launch. As of March 31, 2026, we had approximately 10.3 million Starlink Subscribers, up approximately 105% from 5.0 million subscribers a year prior. We charge our Starlink Subscriber...", - "page_nums": [ - 169 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 169, "artifact_ref": "page_citation_assets/page-169.png", @@ -7969,24 +6656,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2534c07e-f305-5159-b63e-72d29e2d74ee", - "type": "page", - "content": "143\nTable of Contents\nOur Global Starlink Subscriber Base\nAI. We operate a highly vertically integrated AI platform spanning gigawatt-scale AI compute infrastructure, our\ntruth-seeking frontier AI model, Grok, AI solutions for consumer and enterprise customers, and X, our real-time\ninformation, entertainment, and free speech platform. We believe AI is rapidly converging toward AGI, where\nhuman cognitive capabilities can be replicated and scaled at machine speeds, profoundly augmenting human\nproductivity. Once an AGI system exists, its true value derives from the ability to create limitless duplicates of\nhuman-like intelligence, necessitating vast computational resources and cost-efficient deployment to achieve\nmeaningful scale. Without large-scale, power-efficient infrastructure, AGI cannot be deployed broadly or\neconomically—making such infrastructure a critical strategic differentiator.\n• AI Compute Infrastructure. xAI has established a leading position in building and scaling terrestrial AI\ncompute infrastructure, becoming the first company to deploy a coherent gigawatt-scale AI training cluster. Our\nAI compute facilities, COLOSSUS and COLOSSUS II, collectively provide approximately 1.0 gigawatt of\ncompute power, with additional power capacity available for data center operations. Our first-principles\nthinking enables us to build coherent compute at scale and at rapid speed with lower costs than most other\ncompanies in the industry. We brought the first cluster of COLOSSUS online in 122 days, repurposing the shell\nof an existing factory, and the first cluster of COLOSSUS II online even faster in 91 days. As an illustrative\ncomparison, an industry benchmark to bring online a 100 megawatt greenfield data center is approximately two\nyears. We also demonstrated a significant improvement in cost efficiency, achieving data center construction\ncosts for COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis. This\ndual speed and cost advantage stems from our complete vertical integration and the shared culture infused by\nour founder, Mr. Musk, across our Space, Connectivity, and AI segments. The addition of Terafab, an initiative\ntogether with Tesla to build a manufacturing facility capable of producing 1 terawatt per year of compute\nhardware, aims to further extend our vertical integration to chip design and manufacturing to alleviate potential\nfuture chip shortages at SpaceX, optimize compute performance, and potentially reduce overall compute costs.\nIntel, which has the ability to design, fabricate, and package ultra-high-performance chips at scale, has also\njoined the Terafab project. We believe that the key constraints in the continued growth of AI are physical—chip\nmanufacturing, data center infrastructure, and power generation; the future of AI will be determined by the\ncontrol of the physical stack.", - "path": "spacex-s1.pdf/p170", - "metadata": { - "length": 2887, - "summary": "143 Table of Contents Our Global Starlink Subscriber Base AI. We operate a highly vertically integrated AI platform spanning gigawatt-scale AI compute infrastructure, our truth-seeking frontier AI model, Grok, AI solutions for consumer and enterprise customers, and X, our real...", - "page_nums": [ - 170 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 170, "artifact_ref": "page_citation_assets/page-170.png", @@ -7994,24 +6664,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_821c78a5-d29e-5c44-9f4a-f7cb46916544", - "type": "page", - "content": "144\nTable of Contents\n• Truth-Seeking Frontier Model. xAI has developed one of the world’s most advanced, truth-seeking frontier\nmodels with Grok. Since launching Grok-1 in November 2023, we have released four major versions and\nnotable variations thereof, achieving one of the fastest iteration cycles in the industry, culminating in Grok-4.3\n(April 2026). Building on this trajectory, we expect to continue scaling Grok through subsequent generations.\nOngoing training of next‐generation models is expected to scale toward multiple trillions of parameters, which\ncould represent a step change in reasoning in depth and overall intelligence. In this context, the number of\nparameters refers to the scale of the model, where parameters are the internal numerical values, such as\n“weights,” that are adjusted during training to enable the model to recognize patterns and relationships in data.\nA larger number of parameters generally allows the model to capture more complex relationships, store greater\namounts of knowledge, and achieve higher levels of reasoning capability. Within two years of its initial model\nrelease, Grok achieved frontier-level performance in scientific reasoning, as measured by its GPQA Diamond\nscore, an industry benchmark that evaluates AI models on a standardized set of questions written and validated\nby experts, on a faster timeline than reported by other leading model providers. This accelerated rate of\ninnovation stems from our highly vertically integrated stack: full ownership of training infrastructure, access to\nthe world’s most powerful compute clusters, and relentless focus on truth seeking and real-world utility. A key\ncompetitive differentiator is Grok’s deep integration with X, enabling proprietary access to a real-time\ninformation stream of approximately 350 million daily posts, which enhances freshness, relevance, and\ncontextual awareness for Grok. This direct, real-time access to the information and human discourse on X\nenhances Grok’s truth-seeking capabilities by grounding outputs in up-to-date knowledge and diverse\nviewpoints. We believe that this combination of compute infrastructure scale and the massive dataset available\nto us through X, subject to some limitations for certain content, has allowed us to achieve industry-leading\nperformance and provide model outputs that analyze real-time information on global events. We expect that our\ncompute infrastructure and direct access to real-time data via X constitute substantial performance advantages\nfor Grok that will result in increasingly rapid and dramatic iteration cycles.\n• Consumer and Enterprise Applications. We leverage our leading frontier models and compute infrastructure\nto deliver consumer and enterprise applications. In under six months, we developed Grok Voice, a real-time\nspeech engine, including in multilingual performance. Our image and video generation system, Imagine,\nproduced approximately 10 billion images and over 2 billion videos per month, on average, for the quarter\nending March 31, 2026. Together with Tesla, we are also developing Macrohard, an agentic AI platform\ndesigned to be capable of fully emulating digital workflows and augmenting human operation of computers—\nfrom coding and product development to management and entire business processes—using sophisticated\nautonomous agents. We believe Macrohard will have the potential to fundamentally transform how companies\nare structured and operate, thereby allowing dramatic increases in human productivity. In addition, we believe\nour existing government relationships and track record as large government contractors are a structural\nadvantage as governments become significant consumers of AI applications.\nOur integrated AI platforms across Grok and X have over 1.3 billion supported accounts active in the last\ntwelve months ended March 31, 2026, including approximately 550 million MAUs, up from over 1.1 billion\nsupported accounts and approximately 520 million MAUs as of December 31, 2025. Of our MAUs, we had\napproximately 117 million MAUs that used Grok’s AI features as of March 31, 2026.\nWe also monetize user activity through high-impact advertising inventory on X. We believe X’s scale, real-time\nengagement, and integration with Grok provide a differentiated foundation for building a unified user\nexperience across communication, content discovery, commerce, and financial services, among others. For\nenterprises that advertise on X, we offer large-scale user engagement, real-time content, and advanced AI-\ndriven performance marketing tools. For enterprises, we offer tailored deployments of Grok customized to\nspecific workflows and security needs through Grok Business and Grok Enterprise, sold on license-,\nconsumption-, or outcome-based pricing models.\nCollaboration with Tesla\nSpaceX and Tesla developed the early foundation of a strong and constructive partnership through a series of limited\nbut successful commercial engagements. Our relationship with Tesla evolved meaningfully following Tesla’s\nJanuary 2026 commitment to invest in xAI—an investment that, upon SpaceX’s acquisition of xAI, was converted", - "path": "spacex-s1.pdf/p171", - "metadata": { - "length": 5140, - "summary": "144 Table of Contents • Truth-Seeking Frontier Model. xAI has developed one of the world’s most advanced, truth-seeking frontier models with Grok. Since launching Grok-1 in November 2023, we have released four major versions and notable variations thereof, achieving one of the...", - "page_nums": [ - 171 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 171, "artifact_ref": "page_citation_assets/page-171.png", @@ -8019,24 +6672,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_aefba0c5-073a-539e-a2e2-d4eb4ad3159c", - "type": "page", - "content": "145\nTable of Contents\ninto an equity interest in SpaceX. Tesla and xAI continue to build upon their longstanding collaborative relationship\nby evaluating future strategic opportunities between the companies.\nOne expected area of collaboration is an AI project called Macrohard. We expect Macrohard to benefit from running\non both state-of-the-art processors and cost efficient, next-generation Tesla processors, a critical advantage of our\nvertical integration.\nAnother expected area of collaboration is Terafab, an announced AI chip manufacturing initiative designed to\nvertically integrate the design, fabrication, and deployment of advanced logic and memory chips. We believe this\ninitiative will alleviate potential future chip shortages at SpaceX and optimize compute performance. We expect\nTerafab to be the world’s largest chip manufacturing facility. Our strategy for Terafab is to vertically integrate\nacross the design of lithography masks, fabrication of logic and memory chips, and design of advanced packaging in\na single closed-loop plant. Conducting all these activities end-to-end in a single facility enables rapid testing and\niterations, allowing us to improve chip design and scale manufacturing faster. We expect that our speed and cost\nadvantage from vertical integration will allow us to scale efficiently in AI chip manufacturing towards our long-term\ngoal of producing one terawatt of compute each year. We are partnering to build Terafab in order to support growth\nin two kinds of chips— one type optimized for terrestrial edge and inference to be used primarily in Tesla’s Optimus\nrobots and vehicles, and another type optimized for the space environment to be used in our orbital compute\ninfrastructure. While Terafab is intended to expand our internal chip manufacturing capabilities, we expect to\ncontinue sourcing a significant portion of our compute hardware from third-party suppliers. We view Terafab as\ncomplementary to these relationships, enabling us to augment our access to compute hardware at massive scale and\nfurther complete our highly vertically integrated compute platform by extending our control to the foundational chip\nlayer. We believe that the key constraints in the continued growth of AI are physical—chip manufacturing, data\ncenter infrastructure, and power generation; the future of AI will be determined by the control of the physical stack.\nWe believe that we are better positioned than other AI companies given our unique control over the full physical\nstack. We plan to explore other areas of strategic collaboration with Tesla in the future.\nCollaboration with Cursor\nOn April 19, 2026, we entered into a compute agreement with Cursor. Cursor develops and operates an AI-native\nintegrated development environment that enables professional software developers and engineering teams to write,\nedit, review, and refactor code using LLM-powered agents and workflows integrated via its proprietary model\nharness. In 2025, Cursor launched Composer, its own LLM trained for software development. It recently released\nComposer 2, which offers improvements in coding performance at lower cost. We believe the compute agreement\nand any acquisition of Cursor (described below), if completed, will extend our strategy to vertically integrate\ncompute infrastructure, models, and applications, can help accelerate our development of AI-native software tools,\nand combined with our significant compute capacity, will help strengthen our position in AI-assisted developer\nproductivity. We expect to accelerate the development of our existing AI models, including Grok, through our\ncollaboration with Cursor.\nUnder the compute agreement, we will provide Cursor with certain GPU cluster compute capacity for use in\nconnection with specified development, training, improvement and other activities related to AI models and other\ntechnology and intellectual property. In exchange, Cursor will contribute certain personnel, data and datasets,\ndocumentation, technical know-how, workflows, prompts, specifications and software code. We will collaborate\nwith Cursor to improve our existing models, including Grok, and potentially to jointly develop AI models and\nrelated model-specific deliverables. Each party retains ownership of its pre-existing and independently developed\nintellectual property (including, in the case of SpaceX, Grok) and related improvements and derivatives, including\nwhere they are utilized in connection with joint development activities. Any jointly developed models will be jointly\nowned, and each party will have a broad right to use, reproduce, modify, distribute, license, commercialize and\notherwise exploit them without an obligation to account to the other party.\nWe also entered into an option agreement pursuant to which we have the right, but not the obligation, to acquire\nCursor. The option agreement generally provides that we may exercise the call option at any time during the 30-day\nperiod following the earlier of (i) seven trading days following the completion of this offering and (ii) September 30,", - "path": "spacex-s1.pdf/p172", - "metadata": { - "length": 5082, - "summary": "145 Table of Contents into an equity interest in SpaceX. Tesla and xAI continue to build upon their longstanding collaborative relationship by evaluating future strategic opportunities between the companies. One expected area of collaboration is an AI project called Macrohard....", - "page_nums": [ - 172 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 172, "artifact_ref": "page_citation_assets/page-172.png", @@ -8044,24 +6680,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_85059002-c7aa-53fe-826d-766e5dc86245", - "type": "page", - "content": "146\nTable of Contents\n2026. Exercise of the call option is in our sole discretion and subject to further approval by our board of directors.\nCursor is also subject to certain exclusivity obligations under the option agreement.\nIf we exercise the call option, we would simultaneously execute a merger agreement with Cursor, pursuant to which,\nfollowing satisfaction of the closing conditions set forth in the merger agreement, including receipt of requisite\nregulatory approvals, Cursor would become our subsidiary, and, as a result, we would acquire all of Cursor’s cash,\nintellectual property, personnel, customer contracts and other assets. As of January 31, 2026 (Cursor’s fiscal year-\nend), Cursor had $3.1 billion of total assets, primarily comprising $2.7 billion of cash and cash equivalents, and\n$0.55 billion of total liabilities. The purchase price would primarily be allocated to goodwill on our balance sheet.\nCursor has historically earned some revenue by providing services to customers and, if we acquired Cursor, we may\nprovide these or similar services to customers after the acquisition although at revenue levels that may vary\nsignificantly from historical performance. If we exercise the call option to acquire Cursor, we would expect to retain\ncertain Cursor talent by committing to provide continuing employees with competitive compensation and retention-\nfocused incentives designed to support the long-term value of SpaceX.\nThe consideration for the acquisition of Cursor, if any, after the closing of this offering would consist of shares of\nour Class A common stock based on an implied equity value of Cursor of $60.0 billion, and the price of our Class A\ncommon stock that equals the volume-weighted average closing price thereof over the seven consecutive trading\ndays immediately preceding the closing of the acquisition. If either (i) we decide to terminate the option agreement\nor (ii) Cursor is eligible to and decides to terminate due to our material breach of the option agreement (subject to\nnotice and cure provisions), Cursor is entitled to a $1.5 billion termination fee under the option agreement and an\n$8.5 billion deferred services fee under the compute agreement. These fees are payable in cash (or Class A common\nstock, if this offering has not been consummated at the time the fees become payable).\nAny shares of our Class A common stock issuable pursuant to the merger agreement would be issued in reliance\nupon the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof. As\na result, any such shares of Class A common stock would be deemed “restricted securities” as such term is defined\nunder Rule 144 under the Securities Act. Such shares of Class A common stock would be eligible for resale only if\nregistered under the Securities Act or if such resales qualify for an exemption from registration.\nWe have conducted preliminary due diligence on Cursor’s business, technology and operations, and expect to\ncontinue such diligence in connection with any decision to exercise the call option. We cannot predict whether we\nwill elect to exercise the call option or, if exercised, whether the acquisition will close on the anticipated terms, or at\nall.\nCompute Services Agreements with Third Parties\nWe believe our compute infrastructure and related strategy provides us with substantial flexibility in how we\nallocate and monetize capacity. We have the ability to use compute resources to support our proprietary AI\napplications (such as Grok 5, which is currently being trained at COLOSSUS II), while also providing access to\nselect compute capacity to third-party customers. For example, in May 2026, we entered into Cloud Services\nAgreements with Anthropic, an AI research and development public benefit corporation, with respect to access to\ncompute capacity across COLOSSUS and COLOSSUS II. Pursuant to these agreements, the customer has agreed to\npay us $1.25 billion per month through May 2029, with capacity ramping in May and June 2026 at a reduced fee.\nThe agreements may be terminated by either party upon 90 days’ notice. The customer will retain ownership and\nintellectual property rights in its content, AI models, and related data. This structure allows us to monetize unused\ncompute capacity in our infrastructure, while still permitting reallocation of the capacity for our own internal\ninitiatives if needed in the future. We have sufficient capacity to provide compute for our own AI models, including\nsupport of our training and inference demands, and to satisfy the obligations under these agreements. We expect to\nenter into additional similar services contracts for compute capacity with third parties. To the extent we become\ncompute constrained due internal and external utilization, we would need to expand our compute infrastructure. We\nbelieve this opportunity highlights the increasing importance of large-scale, frontier-level AI infrastructure and\npositions us as a differentiated provider of high-performance compute capacity to both internal and third-party AI\nworkloads. We believe our dual monetization strategy provides multiple pathways to generate returns on invested\ncapital.", - "path": "spacex-s1.pdf/p173", - "metadata": { - "length": 5208, - "summary": "146 Table of Contents 2026. Exercise of the call option is in our sole discretion and subject to further approval by our board of directors. Cursor is also subject to certain exclusivity obligations under the option agreement. If we exercise the call option, we would simultane...", - "page_nums": [ - 173 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 173, "artifact_ref": "page_citation_assets/page-173.png", @@ -8069,24 +6688,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fe462561-6ab2-5b19-8fc9-4d5b2fe5386c", - "type": "page", - "content": "147\nTable of Contents\nOur Repeatable Business Model\nOur business model is built on a repeatable, engineering-driven framework that combines our unparalleled launch\ncapabilities, extreme vertical integration, rapid iteration, and disciplined capital investment to create durable, large-\nscale businesses. We execute this framework through the following core principles:\n1. Leverage our unparalleled launch capabilities to enable massive scale. Our rockets—with unmatched\nlaunch cadence, best-in-class reliability, and dramatically reduced cost-to-orbit—are the foundation that we\nexpect will enable us to create economic opportunities in space and deliver a diversified portfolio of services.\nOur launch capabilities enable large-scale deployment of assets that would not otherwise be economically\nviable.\n2. Identify and create new trillion-dollar market opportunities. We focus on market opportunities that are\nuseful for humanity and that present trillion-dollar opportunities, including global broadband and mobile\nconnectivity for consumers, enterprises, and governments; and AI applications and computational infrastructure.\nWe prioritize opportunities where structural inefficiencies or legacy technological limitations have constrained\nsupply.\n3. Design a solution with world-class engineering and first-principles thinking. We apply physics-based\nengineering and first-principles thinking to design products and systems from the ground up—boiling things\ndown to the most fundamental truths and reasoning up from there. This helps us drive massive, step-function\nimprovements in performance, scalability, and cost.\n4. Apply “The Algorithm” (make less dumb, delete, optimize, accelerate, automate). We operate under a set\nof core execution principles that we refer to as “The Algorithm,” a five-step iterative process that we use as our\nguiding principles day-to-day. We make the requirements less dumb, delete unnecessary processes or parts\n(embracing the principle that the best part is no part), only then optimize the necessary processes or parts, and\nthen accelerate cycle time (many entities have launched once; no one other than us has ever launched over 100\ntimes per year), and automate only proven processes after the first four steps are completed. We apply the\nAlgorithm across every aspect of our organization, creating a cultural and operational standard of excellence\nthat has defined SpaceX since inception.\n5. Vertically integrate all the way to the end customer. We design and manufacture a significant portion of our\ncomponents in-house, including engines, avionics, structures, and software, even producing the “tools that make\nthe tools,” enabling us to test, fail, and iterate rapidly. We can then release newer, more advanced hardware with\nspeed and cost efficiency.\n6. Continuously drive cost down and throughput up. Through rocket reusability, manufacturing at scale,\nadvanced automation, and rigorous operational discipline, we continuously reduce unit costs while increasing\nlaunch cadence, satellite network, and AI hosting capacity.\n7. Generate significant cash flow and reinvest in the future. As our businesses scale, they generate significant\ncash flow, which we reinvest into nascent market opportunities—driving a self-reinforcing cycle of constant\ninnovation and potentially creating significant additional value.\nStarship is a powerful example of this business model in action. Upon achieving a fully and rapidly reusable design,\nwe believe Starship will support a step-function increase in launch capacity and be capable of landing massive\namounts of cargo on the Moon. Once there, we believe it will be possible to establish a permanent presence for\nscientific and manufacturing pursuits. For example, we believe that factories on the Moon could take advantage of\nlunar resources to manufacture millions of AI compute satellites and deploy them farther into space. Additionally,\nwe are collaborating with NASA under the Artemis program to land humans on the Moon, with the goal of using\nStarship for transportation, which will be the first such mission since 1972.\nWe will continue leveraging our expanding launch capabilities, combined with our engineering and manufacturing\nexpertise, to create and scale new markets in space for the benefit of humanity—on Earth, the Moon, Mars, and\nbeyond.", - "path": "spacex-s1.pdf/p174", - "metadata": { - "length": 4337, - "summary": "147 Table of Contents Our Repeatable Business Model Our business model is built on a repeatable, engineering-driven framework that combines our unparalleled launch capabilities, extreme vertical integration, rapid iteration, and disciplined capital investment to create durable...", - "page_nums": [ - 174 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 174, "artifact_ref": "page_citation_assets/page-174.png", @@ -8094,24 +6696,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_329c4055-1c59-519a-a8d0-857ba0d30d7e", - "type": "page", - "content": "148\nTable of Contents\nOur Engineering-First Culture\nWe are able to achieve transformative technological breakthroughs because we accept only the laws of physics as\nthe limiting factors to our work and mission. Our core approach is deeply rooted in first-principles thinking, which\nrejects any preconceived notions or experience-based norms. Our unparalleled track record demonstrates our\ncapacity to execute space missions and achieve technological breakthroughs with speed and precision that others\nhave not achieved. We have a track record of achieving what many have deemed impossible. Some of our industry-\ndefining achievements and historic milestones include:\n• The first private company to develop and launch a liquid-fuel rocket to reach orbit (2008);\n• The first private company to successfully dock a private spacecraft with the International Space Station (2012);\n• The first to successfully propulsively land (2015) and refly orbital-class rocket boosters (2017);\n• The first to begin deploying a large-scale LEO broadband satellite constellation (2019);\n• The first private company to transport astronauts to orbit, returning America’s ability to fly astronauts to and\nfrom the International Space Station (2020);\n• The first to manufacture consumer-grade phased-array user terminals at scale (2022);\n• The first to deploy a large-scale LEO satellite-to-mobile constellation (2025);\n• The first to build a gigawatt-scale AI training cluster and largest coherent supercomputer (2026);\n• The first gigawatt-scale Megapack battery installation (2026); and\n• The only company capable of building orbital AI compute at scale.\nOur organizational philosophy fosters an engineering- and data-led culture that embraces failure as an essential\nlearning opportunity and is maniacally focused on efficiency and speed. This culture allows us to deliberately move\nquickly to test new hardware, knowing that early failures provide more valuable data than protracted analysis. We\nview our factories as the machines that build the machines and maintain a relentless focus on our ability to move,\nfail, and fix fast.\nOur AI Compute Infrastructure Advantage and Growth Strategy\nWe believe AI leadership will be defined by the ability to rapidly scale compute capacity to support exponential\nusage growth and frontier intelligence. There is a meaningful compounding benefit of greater usage, creating more\ndata for training, driving improvements in model performance, and in turn leading to greater usage. We believe that\nour highly vertically integrated, shovels-to-tokens approach allows us to train and iterate our frontier models at\nlower cost and higher velocity, accelerating development cycles, eliminating external bottlenecks, and driving rapid,\ncontinuous improvements in model performance. This dynamic reinforces the criticality of scale and cost efficiency\nin compute infrastructure as the primary differentiator in the AI landscape. In addition, our leadership in compute\ninfrastructure positions us to monetize not only AI software applications built on our models, but also the underlying\ncompute that powers them. As we continue to scale our terrestrial and orbital compute infrastructure to support\ninternal model development, training, and inference workloads, we intend to sell our high-performance compute\ncapacity to a limited number of third party customers.\nWhy Compute Matters. The training and inference demanded by advanced AI models require substantial\ncomputational resources. Greater compute capacity enables more intelligence by training new generations of models\nwith increasing frequency and creating more capable models, ability to support inference, or usage, across a large\nand growing user base, and extraction of the highest performance from those models. As the AI user base expands,\nwe also expect compute demand per user to increase significantly. Reasoning models introduced in 2024\ndemonstrated that allocating more computational resources during inference directly leads to higher-quality\nintelligence. AI agents popularized in 2026 demonstrated that allocating more computational resources enabled", - "path": "spacex-s1.pdf/p175", - "metadata": { - "length": 4135, - "summary": "148 Table of Contents Our Engineering-First Culture We are able to achieve transformative technological breakthroughs because we accept only the laws of physics as the limiting factors to our work and mission. Our core approach is deeply rooted in first-principles thinking, wh...", - "page_nums": [ - 175 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 175, "artifact_ref": "page_citation_assets/page-175.png", @@ -8119,24 +6704,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b3312cf8-eb18-5099-ab71-4df6507e777f", - "type": "page", - "content": "149\nTable of Contents\nmulti-step task execution, meaningfully increasing compute demand per human user interaction. In addition,\ncompute infrastructure with end-to-end, cluster-level coherence through tight integration across software and\nhardware systems enables more efficient, stable, and higher-fidelity training and inference at scale—ultimately\nenhancing model intelligence and performance. Within inference, we expect computationally-intensive reasoning,\nagentic, and multi-modal workloads will continue to grow as a portion of overall usage. We therefore expect\ndemand for compute will continue to increase across consumer, enterprise, and government applications as AI\nadoption accelerates. For example, U.S. compute demand has already outpaced available power supply with\nestimated demand of 62 gigawatts in 2025 exceeding the power generation of 49 gigawatts, according to industry\nsources. We expect the gap between demand for compute and power supply to continue to widen meaningfully as AI\ncompute needs proliferate. Furthermore, we believe that third-party estimates on data center demand are constrained\nby the practical supply limitations that exist in a terrestrial context and the power shortage may be far greater than\nwhat research estimates suggest. We believe operators with superior model-to-compute integration—the ability to\nefficiently support and allocate compute across both training and inference workloads—are best positioned to win\nthe AI race.\nSelf-Reinforcing Network Effects Among Lower Cost Per Token, Model Quality, and User Adoption. AI systems\nare ultimately constrained or differentiated by the cost, speed, and scale at which they can generate and process\ntokens. A “token” represents the fundamental unit of data consumed and produced by modern AI models, for\nexample corresponding to words, images, audio, or other modalities. It serves as the atomic unit through which\nmodels read, reason, and generate output. As such, tokens are the primary basis for measuring both the cost of\ntraining and cost of inference, making them a foundational economic metric in the AI space. Companies that can\nstructurally reduce energy, compute, networking, and deployment costs per token will be positioned to train faster,\niterate more rapidly, and ultimately manufacture greater intelligence, scale models more rapidly, and deliver\nincreasingly powerful and accessible AI solutions. This creates a self-reinforcing advantage in which lower token\ncosts drive greater model quality and user adoption, reinforcing AI leadership. This is because lower cost per token\nenables more frequent model training, larger and more sophisticated models, longer chains of processing for\nreasoning and agentic workloads, and significantly higher inference volumes at economically viable prices. This\ndynamic directly impacts model quality, responsiveness, and accessibility, while also determining the ability to\nserve the rising global demand across consumer, enterprise, and mission-critical AI applications. As AI systems\nscale toward increasingly complex reasoning tasks and higher usage intensity, improvement in cost per token\nenables meaningful advantages in performance quality, scaled distribution, and monetization. This is particularly\ntrue as the industry converges towards recursive self-improving learning that minimizes human intervention, which\nis highly token consumptive.\nCost of Compute is the Main Driver of Cost Per Token. The cost of compute is the primary driver of cost per token\nacross both training and inference workloads. Each token processed by an AI model requires a quantifiable amount\nof computational effort. The total cost per token is determined by the efficiency, availability, and unit economics of\nthe underlying compute resources. According to SemiAnalysis, for most AI companies without a build cost\nadvantage, their total capital cost of building compute infrastructure derives approximately 30% from data center\nconstruction costs (including, but not limited to, the shell; mechanical, electrical, and plumbing (“MEP”); and grid\ninterconnection) and approximately 70% from the cost of procuring processors and critical IT equipment. Ongoing\noperational costs of utilizing this compute infrastructure include the cost of power to run the processors, cost of\nmaintaining those processors, and cost of delivering inference workloads to the end user. Improvement in the cost of\nbuilding and operating this compute infrastructure—whether through lower data center construction cost, lower\npower infrastructure cost, shorter time to grid interconnection, or higher cluster-level throughput—translates directly\ninto lower cost per token. Accordingly, for a given level of intelligence, we expect the long-term economics of AI\ncompanies to be driven by the ability to consistently deliver bleeding-edge compute at the lowest possible cost per\ntoken. Put simply, we view cost per token as a function of three primary inputs—the underlying AI model, the\ncompute hardware, and energy, and we expect to have a competitive advantage in the latter two cost components.\nWe believe we have a pathway over time that will significantly reduce compute hardware costs through continued\nvertical integration and development of proprietary chips, building on our experience designing custom silicon for\nour Starlink satellites. We also expect that the marginal cost of energy for our AI compute satellites will be minimal\nbecause our satellites are powered by solar arrays in space. By driving the energy component to minimal levels and", - "path": "spacex-s1.pdf/p176", - "metadata": { - "length": 5569, - "summary": "149 Table of Contents multi-step task execution, meaningfully increasing compute demand per human user interaction. In addition, compute infrastructure with end-to-end, cluster-level coherence through tight integration across software and hardware systems enables more efficien...", - "page_nums": [ - 176 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 176, "artifact_ref": "page_citation_assets/page-176.png", @@ -8144,24 +6712,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e3d8daba-82d1-5ee0-b745-7a5b058bb5eb", - "type": "page", - "content": "150\nTable of Contents\npursuing improvements in compute hardware cost, we believe we can achieve a meaningfully lower overall cost per\ntoken in the future.\nWe Have a Dual Speed and Cost Advantage in Terrestrial AI Compute. We have established a leading position in\nbuilding and scaling terrestrial AI compute infrastructure, becoming the first company to deploy a coherent\ngigawatt-scale AI training cluster. We own and operate what we believe to be the largest AI training data center\nclusters on Earth. Our AI compute facilities, COLOSSUS and COLOSSUS II, collectively provide approximately\n1.0 gigawatt of compute power, with additional power capacity available for data center operations. Our first-\nprinciples thinking enables us to build coherent compute at scale and at rapid speed with lower costs than most other\ncompanies in the industry. We brought the first cluster of COLOSSUS online in 122 days, repurposing the shell of\nan existing factory, and the first cluster of COLOSSUS II online even faster in 91 days. As an illustrative\ncomparison, an industry benchmark to bring online a 100 megawatt greenfield data center is approximately two\nyears. We also demonstrated a significant improvement in cost efficiency, achieving data center construction costs\nfor COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis. We are able to\ndeploy power and compute significantly faster than other AI companies through first-principles thinking, behind-\nthe-meter power generation, coupled with what we believe is the world’s largest network of sustainable battery\nstorage systems, and innovations in advanced liquid cooling, high-density rack layouts, and efficient networking.\nOur first-principles thinking and innovations in advanced liquid cooling, high-density rack layouts, and efficient\nnetworking enable rapid, cost-effective scaling with the latest processors—keeping us ahead of competitors\ndeploying traditional methods. Faster deployments reinforce our cost advantage: we are able to access and bring\nonline the highest performing hardware before our competitors, allowing us to sustain a token cost advantage. For\nexample, we believe COLOSSUS II became one of the world’s first data centers to deploy GB200s and GB300s at\nsignificant scale and is currently powering training for our next frontier models, including Grok-5. We have already\nproven in multiple large-scale terrestrial data centers that we have built not only faster than competitors in the\nindustry, but also at a lower cost.\nWe have a Unique Right to Win in Orbital AI. The Sun contains approximately 99.8% of the solar system’s energy\nand offers what we believe is the only truly scalable solution to terrestrial energy constraints, as we expect the cost\nand availability of terrestrial energy sources over time will necessitate a transition to orbital AI solutions. The logical\npath forward is to move power-intensive AI workloads into orbit, where solar energy is near-constant and\nuninterrupted. With such accessibility to energy, we believe that our launch business will enable us to consistently\nactivate the highest performing hardware before our competitors without such access, shrinking the timeline to\nuseful tokens on bleeding-edge hardware and sustaining our token cost advantage. Manufacturing next-generation\nsatellites and launching them into space in very large numbers is a core component of our plans. We believe we are\nthe only company with a commercially viable path to building orbital AI compute at scale. This is underpinned by\nour unique ability to launch substantial mass into orbit cost-efficiently through reusable rockets and to manufacture\nsecure, reliable, and high-performance satellites at low cost and high volume.\n• Terrestrial compute leadership. We believe the same cost and build advantages that have underpinned our\nleadership in gigawatt-scale terrestrial data centers will enable us to innovate across other terrestrial data center\nformats such as modular data centers for inference. We believe our modular terrestrial data center architectures\nwill provide a foundation for the deployment of compute infrastructure in orbit given similarities in form factor\nin contrast to a gigawatt-scale campus.\n• Satellites. Just as we expect our expertise in terrestrial data centers will enable us to package AI compute into\nmodular, satellite form factors, we expect our leadership in satellite communications to allow us to interconnect\nour fleet of AI compute satellites into a massive, coherent constellation of compute. For example, as of March\n31, 2026, our constellation already incorporated over 23,000 inter-satellite lasers that create a dynamic mesh\nnetwork in space, enabling traffic to route through orbit rather than relying solely on terrestrial backhaul\ninfrastructure. We are designing next-generation, high-performance AI compute satellites built for high volume,\nlow cost, and with the reliability required for long-duration operation in space.\n• Starship. We expect each of our Starship V3 vehicles to carry 100 metric tons to Earth’s orbit in a reusable\nconfiguration, and future generations could reach 200 metric tons in capacity, potentially as soon as Starship", - "path": "spacex-s1.pdf/p177", - "metadata": { - "length": 5228, - "summary": "150 Table of Contents pursuing improvements in compute hardware cost, we believe we can achieve a meaningfully lower overall cost per token in the future. We Have a Dual Speed and Cost Advantage in Terrestrial AI Compute. We have established a leading position in building and...", - "page_nums": [ - 177 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 177, "artifact_ref": "page_citation_assets/page-177.png", @@ -8169,24 +6720,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5b1fcb70-70d6-5f40-a64f-5ba8cc37fc05", - "type": "page", - "content": "151\nTable of Contents\nV4. Future generations of Starship are being designed to eventually deliver millions of tons to orbit and beyond\nper year. Delivering large amounts of mass to orbit at low cost will be critical to deploying AI compute satellites\nat scale.\nWe Believe Orbital AI Can Accelerate Time to Power and Reduce Token Costs. The Sun contains approximately\n99.8% of the solar system’s energy and offers what we believe is the only truly scalable solution to the challenge of\naccelerating demand for compute relative to terrestrial energy constraints. The logical path forward is to move\npower-intensive AI workloads into orbit, where solar energy is near-constant and uninterrupted. With such\naccessibility to energy, we believe that our launch business will enable us to consistently activate the highest\nperforming hardware before our competitors without such access. We believe SpaceX is uniquely positioned to\ndeploy and operate data centers in orbit that can eventually achieve a lower cost than terrestrial data centers over\ntime due to our extreme vertically integrated approach across launch, satellite manufacturing at scale, network\nconnectivity and terrestrial data center expertise.\n• Time to useful tokens on new generations of infrastructure. Although we have already demonstrated an\nability to rapidly scale new generations of compute in terrestrial deployments, we believe orbital AI will\naccelerate our time to useful tokens on bleeding-edge AI infrastructure. Physical deployment of new hardware\nis expected to be enabled by our launch business, where we believe reusability and launch cost efficiency will\ndrive rapid cycles of payload delivery. Rapid time to useful tokens on that hardware will be enabled by the\nSun’s near-constant, uninterrupted supply of power, which would circumvent terrestrial power infrastructure\nconstraints such as power procurement, grid interconnections, and permitting. As new generations of AI\ninfrastructure continue to deliver step-function improvements in token efficiency, we believe that maintaining\nan AI fleet consistently at the bleeding edge of the frontier curve has the potential to deliver a sustainable cost\nper token advantage relative to our competitors.\n• Construction, power, and cooling infrastructure. In orbit, construction costs are replaced by launch costs and\nsatellite production costs. We expect reusable launch systems and high flight cadence will significantly reduce\nthe cost per kilogram to orbit, enabling more efficient deployment of compute payloads to orbit, and eventually\napproach the cost of fuel. We believe our advanced satellite manufacturing capabilities enable us to build AI\ncompute satellites at scale and lower cost than competitors. Other terrestrial data center construction costs such\nas building the shell, MEP, and grid interconnection are not applicable in space. As a result, once Starship and\nour AI compute satellites are fully deployed at scale, we believe that the initial deployment costs of in-orbit\ncompute in the aggregate will be less than construction costs of others’ terrestrial data centers.\n• Cost to procure and service processors. The cost of processors is a significant cost for both terrestrial and\norbital data centers. We do not believe that moving compute to space in and of itself will have a meaningful\nimpact on the cost of procuring processors. However, we believe that diversifying our long-term access to the\nsupply of processors, including through our Terafab initiative with Tesla and Intel, will be a key driver in\nreducing the overall cost of compute hardware over time. By combining internally manufactured, lower cost\nchips with those we source from third-party suppliers, we expect the overall cost of our processors to decline. In\naddition to reducing costs, we also expect that this hybrid sourcing strategy will help alleviate potential future\nchip shortages at SpaceX. In addition, we intend to conduct intensive pre-deployment testing to reduce the rate\nof chip failure in space, as we do not anticipate servicing or repairing processors in space.\n• Ongoing operations. The total cost of operating data centers is heavily influenced by energy, cooling, and\ndistribution requirements. In orbit, chips are expected to be powered by solar energy which is low cost and\nunlimited, and we expect to leverage radiative cooling architectures, which incur no operating costs compared\nto liquid or air cooling. Our integrated, space-based Starlink network architecture also enables more cost\nefficient routing of data between compute clusters and to end users on a global basis.\nWe Believe We Are Well-Positioned to Deliver Orbital AI Compute. We believe orbital AI compute is an incredibly\ndifficult technical challenge that only we can solve at scale in the near term. We are the only company that has\nalready accomplished the key technical challenges associated with evolving connectivity satellites into AI compute\nsatellites. In our view, due to our proven experience, we are well-positioned to deliver a full-scale AI compute\nsatellite constellation. Significant work remains, but we are confident in our singular leadership position.", - "path": "spacex-s1.pdf/p178", - "metadata": { - "length": 5180, - "summary": "151 Table of Contents V4. Future generations of Starship are being designed to eventually deliver millions of tons to orbit and beyond per year. Delivering large amounts of mass to orbit at low cost will be critical to deploying AI compute satellites at scale. We Believe Orbit...", - "page_nums": [ - 178 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 178, "artifact_ref": "page_citation_assets/page-178.png", @@ -8194,24 +6728,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_95d28746-30b3-554d-91d4-64127446d0b8", - "type": "page", - "content": "152\nTable of Contents\n• We have unmatched satellite launch capabilities to enable deployment at scale. Our ability to launch mass\nat scale and low cost is our foundational competitive advantage. Deployment of 100 gigawatts per year via\nsatellites carrying over 100 kilowatts of compute power per metric ton will require thousands of launches per\nyear and the transport of approximately one million metric tons to orbit annually. The fully reusable nature of\nStarship positions us to be capable of launching this level of mass. We plan to leverage our PEZ dispenser\nsystem, an integrated payload deployment system for Starship, along with our experience in developing fully\ndeployable single-unit systems that are designed to substantially reduce the risks associated with in-orbit\nassembly. Starlink Broadband V1 and V2 Mini satellites have already demonstrated launch survivability and\nhigh reliability under vibration, shock, g-loads, acoustic stress, and vacuum exposure, achieving 99.9% average\nuptime. Although introducing AI processors would traditionally increase component-level failure rates, we plan\nto subject compute hardware to extensive pre-deployment testing on Earth to identify early life failures before\nlaunch.\n• We have already solved many of the significant technical hurdles to evolving connectivity satellites into\nAI compute satellites. Through our leading expertise in connectivity satellites and Starlink’s existing technical\nand operational capabilities—including constellation-scale satellite management, autonomous operations, over-\nthe-air software updates, inter-satellite laser communications, mesh network deployment, radiation-hardened\nsystem design, proprietary chip development, and the ability to operate computers reliably in the space\nenvironment—we have already solved the hardest part in the development of AI compute satellites. AI compute\nsatellites represent an evolution of spacecraft engineering already demonstrated at scale through Starlink’s\nconnectivity satellites, and we believe development of AI compute satellites will be easier for us than for\nanyone else. AI compute satellites must integrate high-density compute payloads developed with radiation-\ntolerant designs and components with high electrical power generation, advanced thermal management, and\ninter satellite networking. To source the electricity needed to power our AI processors, we aim to continuously\nscale our existing space-grade solar technologies through insourced process development and build a\nconstellation in dawn-dusk Sun-synchronous orbit that delivers near-constant solar exposure. We expect solar\ncells optimized for the space environment will be produced at a rapid rate, with early satellites generating 100\nkilowatts of compute power and scaling from there. In orbit, thermal control must be accomplished through\nradiation rather than convection and conduction. We plan to advance thermal control systems—many of which\nhave been proven on Starlink—by using radiators, vapor chambers, active cooling loops, and coatings to\ndissipate the heat generated by AI hardware in space’s vacuum. We will also utilize inter-satellite lasers\npioneered by Starlink for mesh networking at scale, creating coherent computing clusters across free space\ninstead of wired connections used in terrestrial data centers. Our existing Starlink constellation, with over\n23,000 inter-satellite lasers, will be a crucial enabler of orbital AI compute, as its global network allows data\nfrom our AI compute satellites in Sun-synchronous orbit to reach ground stations anywhere on Earth. The\nSpaceX AI compute satellites will be designed for high rate, automated production to enable the scale of\nsatellites needed for the large amounts of compute planned in space.\nThere are material differences between connectivity satellites and AI compute satellites. Connectivity satellites\nare primarily designed for communications, with substantial onboard equipment dedicated to phased-array\nantennas, radio systems, and data transmission. In contrast, AI compute satellites are optimized for high-\nperformance computing. Key differences include significantly larger solar arrays to support higher power\nrequirements, substantially larger radiators for thermal management, different electronics centered on AI\naccelerators rather than communications processors, and the removal of much of the communications hardware.\nOur V3 satellite platform already incorporates proprietary chips, providing a strong foundation for the ability to\noperate AI-focused electronics in space, and we expect to begin deploying our orbital AI compute satellites as\nearly as 2028.\nThe primary remaining challenge is one of scale. For example, a deployment rate of approximately 10 gigawatts\nper year would require a materially lower manufacturing and launch cadence, which we believe would still\nenable a commercially attractive AI compute business with strong economic returns. While our long-term vision\nincludes the ambition of deploying up to 100 gigawatts of power to orbit annually, which would require the\ndeployment of thousands of launches per year, assuming 100 kilowatts of compute power per metric ton and\nStarship capacity to orbit of 100 metric tons, we believe we can be economically successful at significantly\nmore modest volumes.", - "path": "spacex-s1.pdf/p179", - "metadata": { - "length": 5325, - "summary": "152 Table of Contents • We have unmatched satellite launch capabilities to enable deployment at scale. Our ability to launch mass at scale and low cost is our foundational competitive advantage. Deployment of 100 gigawatts per year via satellites carrying over 100 kilowatts of...", - "page_nums": [ - 179 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 179, "artifact_ref": "page_citation_assets/page-179.png", @@ -8219,24 +6736,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_395ac888-f557-5f63-b14f-538e21eae659", - "type": "page", - "content": "153\nTable of Contents\nOur 100 gigawatt annual power deployment goal is based on reasoned engineering analyses and design\nparameters developed through our ongoing design and development work on next-generation AI compute\nsatellites. These analyses are based on currently available space-grade solar technology and do not require\nfundamental technological advances beyond existing capabilities. Specifically, we expect these satellites to\nleverage our already-designed V3 satellite platform. The core V3 satellite design is complete, and the AI\ncompute satellites are expected to generate substantially more power than V3 satellites. This performance is\nexpected to be achieved primarily through the use of significantly larger solar arrays. These satellites are\ntargeted to generate approximately 100 kW of compute power per ton, which initially will require\napproximately five times the solar array output compared to V3 satellite designs.\nWe currently do not anticipate material supply constraints for space-based solar panels, as global production\ncapacity, including through our vertical integration efforts, is believed to be sufficient to meet its requirements.\nWe are actively developing the manufacturing, launch cadence, and operational capabilities that we believe\nwould be needed to support such launch rates.\nThe precise solar collection area, total system mass per satellite, and on-orbit assembly requirements associated\nwith this goal continue to be refined as part of our ongoing engineering efforts. In general, the approach\ncontemplates larger deployable solar arrays on each satellite, with no significant on-orbit assembly currently\nanticipated.\n• We will use our proven Starlink in-orbit technology to optimize our orbital AI compute. In order to\noperate orbital AI compute satellites, we plan to build on our vast experience of operating approximately 9,600\nStarlink broadband and mobile satellites in Low-Earth Orbit. In 2025 alone, Starlink satellites proactively\nperformed over 1,000 automated collision avoidance maneuvers per day guided by this technology to safely and\nefficiently operate the constellation. This operating model gives us control over workload placement across\nEarth and space while maintaining resilience through redundancy and fail safe systems. To ensure optimized\nthermal management and power generation, we will design each satellite’s solar arrays to face the sun for\nconstant power while its housing radiator panels face cold deep space for radiative cooling. A high degree of\ncontrollability will allow the satellite to be optimized for brightness mitigation, disposal, and other modes of\noperation. As more advanced AI hardware becomes available, we plan to manage the lifecycle of deployed\nsystems by shifting older hardware to lower intensity workloads as performance characteristics evolve, and\nretiring systems that are no longer needed through controlled end of life disposition, including transition to\ngraveyard orbits where appropriate. These retirements may occur sooner than our estimates for the useful lives\nof our satellites, which estimates are based on engineering studies, historical on-orbit performance, propellant\nlife, utilization patterns, design enhancements across generations, and planned transitions to newer satellite\ntechnology. Space based compute also introduces orbital debris risk, which we already manage at constellation\nscale through our autonomous collision avoidance system across Starlink. To date, we have not experienced any\nfailures of our autonomous collision avoidance system that have resulted in satellite loss.\n• We can manufacture our AI compute constellations at scale with rapid upgrade cycles. We have built one\nof the largest satellite manufacturing operations in the world with standardized bus architectures, rapid iteration\ncycles, and automotive-style production lines, enabling us to evolve bus architecture and subsystem design with\nlimited reliance on third-party suppliers. Our highly vertically integrated approach will be key to our mass-\nscaling efforts and should allow us to deploy the latest AI processors. Our ability to quickly develop and deploy\nnew generations of AI compute to orbit will be a key advantage in maintaining frontier performance of the\nconstellation. We believe SpaceX will be the first and only company to manufacture satellites at the scale of\nautomotive manufacturing.\n• We are building chip manufacturing capabilities to scale our access to AI compute hardware. We\nannounced a collaboration with Tesla in March 2026 to build the Terafab initiative with a long-term goal of\nproducing one terawatt of compute hardware each year. Intel joined the project in April 2026 and is expected to\ncontribute its expertise in designing, fabricating, and packaging ultra-high-performance chips to help Terafab\nscale. In connection with such collaboration, we have agreed with Tesla on a general framework for the future\ndevelopment of Terafab. Any specific projects undertaken pursuant to this framework will be subject to separate\nnegotiations and agreements (including any development timelines, milestones and capital expenditures) and", - "path": "spacex-s1.pdf/p180", - "metadata": { - "length": 5163, - "summary": "153 Table of Contents Our 100 gigawatt annual power deployment goal is based on reasoned engineering analyses and design parameters developed through our ongoing design and development work on next-generation AI compute satellites. These analyses are based on currently availab...", - "page_nums": [ - 180 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 180, "artifact_ref": "page_citation_assets/page-180.png", @@ -8244,24 +6744,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_73a7b40f-dade-52b7-89d7-49bb10b77990", - "type": "page", - "content": "154\nTable of Contents\nhave not yet been determined. Our strategy for Terafab is to vertically integrate across design of lithography\nmasks, fabrication of logic and memory chips, design of advanced packaging and rapidly test and iterate in\norder to improve chip design and performance. With this internal manufacturing capability, we plan to alleviate\npotential future chip shortages at SpaceX, especially as we develop orbital AI at scale, and design chips that are\noptimized for the space environment. We expect that our speed and cost advantage from vertical integration will\nallow us to scale efficiently in AI chip manufacturing.\n• We can leverage our terrestrial experience to build and operate compute clusters and AI workloads at\nscale. We believe our experience operating compute infrastructure on Earth provides the technical and\noperational foundation to extend these capabilities into orbit. For example, manufacturing and silicon defects in\nAI processors can cause failures early in life. We plan to subject compute hardware to extensive pre-deployment\ntesting on Earth to identify early life failures before launch to reduce in-orbit disruption. Over time, we plan to\ndesign AI compute processors optimized for the space environment. Our operating experience will be critical in\ninforming our orbital data center designs for highly reliable operations even with potential chip failures. This\ncapability is further supported by our flexible allocation of AI workloads across compute clusters, enabling us to\nutilize orbital data centers for workloads without hardware reconfigurations or maintenance. For compute\nhardware that does fail, we plan to leverage existing Starlink fleet management software to reallocate traffic to\nother satellites and prevent cluster-level downtime. We further believe that our strong relationships with chip\nmakers enhance our ability to build a well-functioning, integrated AI compute system in space.\nWe Believe Our Infrastructure is a Distinct Advantage in Delivering Superior AI. We believe that the key\nconstraints in the continued growth of AI are physical – chip manufacturing, data center infrastructure, and power\ngeneration; the future of AI will be determined by the control of the physical stack. We believe no other AI company\nhas better control over the full physical stack than SpaceX. We expect the combination of competitive cost per\ntoken, our ability to deploy and operate data centers in orbit, and our strength in connectivity to result in more\nscalable intelligence that is accessible globally at high speeds by way of the following structural advantages:\n• Time to power. If we are able to deploy our AI compute satellite constellation, we believe it will enable\ncompute capacity to be deployed and expanded efficiently as capacity requirements grow. This approach will\nalso allow us to deploy new generations of compute hardware in quicker succession relative to terrestrial\napproaches where data centers cannot be easily retrofitted for new compute hardware. Due to terrestrial\nretrofitting limitations, adding terrestrial capacity typically demands building large, new data centers designed\nfor specific generations of compute hardware. This approach is usually burdened with long lead times for\nactivities such as power procurement, utility grid interconnections, and permitting before new computing\nhardware can generate useful tokens. We believe our orbital, modular approach will allow us to circumvent\nterrestrial power infrastructure constraints.\n• Highly scalable compute capacity. Unlike terrestrial facilities constrained by physical footprint and\navailability of power in a given location, orbital data centers leverage a decentralized mesh architecture. This\npermits the aggregation of massive compute clusters interconnected over long distances by inter-satellite lasers\npioneered by Starlink. Space offers effectively unlimited power and vast expanse to sustain uninterrupted\noperations as capacity grows. We believe this abundance of power and physical area will allow us to scale our\nconnected compute capacity faster and far beyond levels that are terrestrially viable.\n• Low latency. Our satellite constellation provides a direct, orbital data path that circumvents the bottlenecks of\nterrestrial communications networks. This architecture is particularly suitable to support high-speed\nconnectivity for latency-sensitive workloads, which we believe are increasingly valued in certain consumer- and\nenterprise-facing applications.\n• Global distribution. Because of the global coverage of our satellite constellation, not only can we deliver high-\nspeed, ultra-low latency AI solutions, we can do so anywhere in the world. We believe our increasingly global\nnetwork of Starlink satellites will enable us to deliver frontier intelligence, at high speed and reliability, to\ncommunities and economies around the world.", - "path": "spacex-s1.pdf/p181", - "metadata": { - "length": 4901, - "summary": "154 Table of Contents have not yet been determined. Our strategy for Terafab is to vertically integrate across design of lithography masks, fabrication of logic and memory chips, design of advanced packaging and rapidly test and iterate in order to improve chip design and perf...", - "page_nums": [ - 181 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 181, "artifact_ref": "page_citation_assets/page-181.png", @@ -8269,24 +6752,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7a03f19f-bf8b-5c2c-b6cd-65b6fa93e8ec", - "type": "page", - "content": "155\nTable of Contents\nDesign and manufacture our own chips. Terafab aims to be the world’s largest chip manufacturing facility, with\nthe goal of achieving one terawatt of annual compute production capacity. While Terafab is intended to expand our\ninternal chip manufacturing capabilities, we expect to continue sourcing a significant portion of our compute\nhardware from third-party suppliers. We view Terafab as complementary to these relationships, enabling us to\naugment our access to compute hardware at massive scale and further complete our highly vertically integrated\ncompute platform by extending our control to the foundational chip layer. By developing end-to-end capabilities\nspanning the design of lithography masks, fabrication of logic and memory chips, and advanced packaging, all in a\nvertically integrated closed-loop single plant, we will be able to more rapidly iterate to improve chip design and\nperformance. We plan to design chips that are optimized for the space environment. This collaboration directly\nenables our planned orders-of-magnitude increases in AI compute deployment in orbit which would be constrained\nby pure reliance on external foundries. Leveraging shared engineering resources, intellectual property, and\ninfrastructure across Tesla and SpaceX, as well as Intel’s proposed contribution of its expertise in designing,\nfabricating and packaging ultra-high-performance chips at scale, Terafab creates powerful ecosystem synergies that\naccelerate innovation cycles and reduce costs. Just as we manufacture approximately 80% of Starship in-house,\nenabling it to be the world’s most powerful and, eventually, the most cost-effective launch vehicle through full and\nrapid reusability, we expect significant speed and cost advantages from Terafab’s vertical integration. We believe\nthis will provide us with a critical competitive advantage in the race to scale AI infrastructure, especially as we begin\nour orbital AI compute satellite deployments.\nIndustry Overview\nWe are focused on three rapidly evolving industries: space, connectivity, and AI. Technological advancements and\nbreakthrough innovation are enabling what we believe is the next great economic frontier, as progress across space\nlaunch, global communications, frontier models, AI compute, robotics, and automation reshape what is possible on\nand off Earth. There are several key trends driving the growth and evolution of these industries in which we operate:\n• Reusable launch and industrialized space operations are materially reducing the cost of access to orbit,\nincreasing mass carried per launch, and enabling high-cadence deployment of space-based infrastructure;\n• High‐volume satellite manufacturing, combined with rapid constellation refresh cycles, is expanding the ability\nfor ubiquitous connectivity across unconnected, underconnected, and mobile “dead zone” areas; and\n• AI, automation, and robotics are accelerating engineering iteration cycles, streamlining operations, and\nrevolutionizing complex construction, reducing reliance on scarce specialized labor while delivering faster,\nmore precise, and cost-optimized infrastructure.\nThe Space Industry\nFor most of the space age—dating back to the first launches in the 1950s—spaceflight was shaped by onerous\nregulatory requirements and government budgets that determined launch cadence. The prevailing cost-plus\nprocurement model offered limited incentives to reduce costs or increase launch cadence, creating an operating\nenvironment that constrained technological innovation. Government agencies served as the primary launch services\nproviders and the industry remained stagnant for decades. According to NASA, until the 2000s and the introduction\nof the Falcon 9 rocket by SpaceX, global commercial launch activity averaged 25 to 35 launches per year. As a\nresult, the space industry remained a niche domain with limited ability to support large commercial markets or\nscaled space-based infrastructure.\nDuring this period, satellites—which comprised the majority of launch payload—were typically bespoke, expensive\nsystems requiring significant non-recurring engineering that consisted of development cycles that were measured in\ndecades. Launch vehicles were designed to be largely expendable and optimized for single-mission use, reinforcing\na low-throughput ecosystem that lacked flexibility, scalability, and responsiveness to evolving customer\nrequirements.\nThe need for more advanced launch capabilities became clear as space-based use cases expanded to include\ncommunications, navigation, Earth observation, environmental monitoring, scientific research, Intelligence,\nSurveillance and Reconnaissance, and access to the International Space Station. In 2006, NASA awarded SpaceX,", - "path": "spacex-s1.pdf/p182", - "metadata": { - "length": 4755, - "summary": "155 Table of Contents Design and manufacture our own chips. Terafab aims to be the world’s largest chip manufacturing facility, with the goal of achieving one terawatt of annual compute production capacity. While Terafab is intended to expand our internal chip manufacturing ca...", - "page_nums": [ - 182 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 182, "artifact_ref": "page_citation_assets/page-182.png", @@ -8294,24 +6760,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a94bb8ef-7d0f-58a7-b35b-6e359fe578a0", - "type": "page", - "content": "156\nTable of Contents\nalong with Rocketplane Kistler, the landmark Commercial Orbital Transportation Services contract that heralded the\nage of commercial space launch, marking a shift toward a more scalable approach to accessing space. This inflection\npoint catalyzed a transition toward systems designed for more frequent operations, lower cost, and greater\noperational flexibility.\nFundamental breakthroughs in high cadence, reliable, and affordable access to space—driven largely by SpaceX—\nhave expanded space from a purely mission-driven activity to a fully industrialized and commercial sector capable\nof supporting and enabling industries far beyond traditional launch and satellites. SpaceX’s advancements reduced\nthe cost of access to orbit from tens of thousands of dollars per kilogram to just a few thousand dollars per kilogram.\nCost of Space Launches to Low-Earth Orbit\n(constant 2021 $ per kilogram; plotted on a logarithmic axis)\nAs launch economics have changed rapidly over the last decade, demand for orbital infrastructure has expanded\ndramatically. Commercial operators have launched thousands of satellites since 2015 as constellation architectures\nscale and diversify. The number of active maneuverable satellites in orbit has grown from less than 1,000 in 2015 to\napproximately 12,700 as of March 31, 2026. With approximately 9,600 Starlink broadband and mobile satellites in\nLow-Earth Orbit as of March 31, 2026, SpaceX owns and operates approximately 75% of all active maneuverable\nsatellites. Additionally, launch activity has continued to grow, with approximately 220 metric tons of payload\nlaunched to orbit in 2012 increasing to approximately 2,600 metric tons in 2025, of which over 80% was launched\nby SpaceX.\nGovernment demand is rising in parallel: according to the Space Foundation, excluding classified spending, U.S.\nGovernment space spending in 2024 totaled approximately $77 billion. Notably, U.S. national security customers\nhave also awarded approximately $13.7 billion across the National Security Space Launch (“NSSL”) Program’s\nPhase 3 Lane 2 contracts through 2032, supporting approximately 54 missions from 2025 to 2032, with the overall\nPhase 3 manifest nearly doubling Phase 2’s manifest to 84 missions. Amid escalating geopolitical tensions that\nfurther underscore the critical role of resilient launch infrastructure, we believe government space budgets around\nthe world are positioned for sustained, long‐term growth.", - "path": "spacex-s1.pdf/p183", - "metadata": { - "length": 2469, - "summary": "156 Table of Contents along with Rocketplane Kistler, the landmark Commercial Orbital Transportation Services contract that heralded the age of commercial space launch, marking a shift toward a more scalable approach to accessing space. This inflection point catalyzed a transi...", - "page_nums": [ - 183 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 183, "artifact_ref": "page_citation_assets/page-183.png", @@ -8319,24 +6768,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_725dbe97-236d-5aa1-816d-588972a73f88", - "type": "page", - "content": "157\nTable of Contents\nFalcon Heavy Boosters Landing\nOn the back of dramatically reduced launch cost pioneered by SpaceX over the past two decades, the global\neconomy is reorganizing around a new domain: space. We believe the development of a lunar economy will be\ncentral to unlocking the full potential of this new domain and advancing the long-term transition to a multiplanetary\ncivilization.\nThe Connectivity Industry\nModern life relies on connectivity. Over the past several decades, the technologies that underpin global connectivity\nhave evolved rapidly, reshaping the way individuals, families, and organizations communicate, collaborate, and\naccess information.\nDespite remarkable technological advancements, terrestrial networks remain constrained by the same inherent\nstructural limitations that have hindered them since their inception. According to the Global Satellite Operators\nAssociation, terrestrial network infrastructure only covers approximately 20% of global land mass, resulting in\nsignificant unserved and underserved regions across both developed and developing economies. This terrestrial\nconnectivity gap spans areas that are remote, difficult to build in, or economically impractical to serve—and also\nincludes mobile “dead zones” within otherwise well-connected areas and in urban markets. According to the J.D.\nPower U.S. Wireless Network Quality Performance Study, U.S. wireless customers experienced service problems in\napproximately one out of every 11 mobile interactions, even in well-connected areas. As demand for ubiquitous,\nhigh-reliability connectivity continues to rise, terrestrial networks alone are increasingly unable to bridge the\nwidening gap between user demand and available coverage.\nThe development of large-scale LEO constellations represented a paradigm shift, breaking from the long-standing\ndependence on terrestrial networks for global connectivity. Deployed at unprecedented scale—such as through\nSpaceX’s Starlink and Mobile constellations—these satellites can provide high-speed, low-latency service that\nintegrates seamlessly with terrestrial infrastructure. This evolution has transformed satellite connectivity from a\nsolution of last resort into a core pillar of resilient, ubiquitous global communications.", - "path": "spacex-s1.pdf/p184", - "metadata": { - "length": 2270, - "summary": "157 Table of Contents Falcon Heavy Boosters Landing On the back of dramatically reduced launch cost pioneered by SpaceX over the past two decades, the global economy is reorganizing around a new domain: space. We believe the development of a lunar economy will be central to un...", - "page_nums": [ - 184 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 184, "artifact_ref": "page_citation_assets/page-184.png", @@ -8344,24 +6776,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e108ad9b-5655-58cf-8219-f157b96f0f18", - "type": "page", - "content": "158\nTable of Contents\nConsumer Broadband\nResidential internet access began with the dial-up connection in the late 1990s with maximum speeds of .056 Mbps,\nwhen early users relied on narrowband copper phone lines to connect. As demand for speed and reliability grew,\ndial-up gave way to DSL, cable, and eventually fiber, each increasing bandwidth and enabling more connected\ndevices. According to the Speedtest Global Index, the global average broadband download speed has increased to\napproximately 120 Mbps. Satellite internet also emerged in the 1990s through geostationary orbit (GEO) systems\nthat extended coverage to remote and unconnected regions—beginning with early offerings such as Hughesnet’s\nfirst satellite service DirecPC, which provided downstream speeds of roughly 400 kbps compared to dial-up\naverages of 28.8 kbps—but these systems were constrained by limited throughput and high latency, making it\ndifficult to keep pace as consumer requirements evolved. Starlink satellites operate in Low-Earth Orbit, substantially\ncloser to the Earth’s surface than traditional geostationary communications satellites. This architecture reduces\nsignal latency and is designed to support broadband connectivity in remote and underserved areas. Each launch of\nadditional Starlink satellites increases the overall capacity of the network, which provides service globally.\nIn today’s digital landscape, consumers increasingly rely on seamless, high-performance connectivity to power all\naspects of connected life—from every day digital services to demanding applications that require high throughput,\nconsistent performance, and low latency. These needs are particularly challenging to satisfy in regions where\nterrestrial networks are limited, degraded, or unavailable due to prohibitive deployment costs, rugged terrain, low\npopulation density, or outdated infrastructure. Consequently, consumer broadband has evolved into a multifaceted\necosystem, where diverse access technologies converge and providers compete based on superior reliability,\nconsistent performance, and an exceptional overall user experience.\nConsumer demand for data is surging at a pace that terrestrial infrastructure has struggled to match. According to\nInternational Data Corporation’s Global DataSphere, in 2025, global data generation was estimated to have reached\nmore than 585 exabytes of per day—up from approximately 10.8 exabytes per day in 2010—reflecting an immense\nescalation in consumption. With fixed broadband connections projected to reach two billion by 2030 according to\nEricsson, and terrestrial expansion often economically unfeasible in remote and challenging regions, only space-\nbased systems can deliver truly global, ubiquitous, high-throughput coverage capable of supporting this explosive\ngrowth in data demand.\nEnterprise and Government Broadband\nEnterprise broadband internet has evolved alongside residential internet, beginning with fixed private lines that\nconnected offices and infrastructure. As businesses adopted real-time, distributed workflows, they needed secure,\nlow-latency connectivity across multiple sites and mobile assets. Mobility became essential in sectors like\nmanufacturing, transportation, and logistics, extending connectivity demands beyond fixed locations into dynamic\nenvironments that terrestrial networks often cannot support reliably or economically. Enterprises now expect\nseamless, uninterrupted performance with instant failover where terrestrial systems are unavailable or unstable—\ndriving adoption of hybrid architectures that combine ground networks with space-based solutions.\nEnterprise connectivity demand continues to rise as organizations digitize operations and rely on real‐time,\ncloud‐based workflows that require secure, low‐latency connectivity across distributed sites and mobile\nenvironments. This is particularly true in the case of aviation, maritime, and land mobility applications, where\naircraft, vessels, and ground fleets are inherently mobile and therefore unable to depend on continuous terrestrial\nnetwork coverage for connectivity. These platforms increasingly require resilient communications to support flight\nand voyage operations, crew applications, passenger internet access, telematics, and port or shipboard logistics. In\naviation, legacy GEO-based systems that are still prevalent across most major commercial fleets typically provide\nlow Mbps speeds and significantly higher latency, often exceeding 500 milliseconds, falling well short of the\napproximately 100 Mbps throughput and sub-50 milliseconds latency that today’s applications—such as streaming,\ncloud services, and real-time collaboration—increasingly demand. Therefore, there is a need for modern LEO-\npowered in-flight connectivity systems—such as Starlink Broadband—that can deliver passenger download speeds\nexceeding 400 Mbps with latency as low as 21 milliseconds. Terrestrial networks cannot meet these evolving\ndemands where deployment is costly, complex, and slowed by regulatory constraints, and legacy satellite solutions", - "path": "spacex-s1.pdf/p185", - "metadata": { - "length": 5066, - "summary": "158 Table of Contents Consumer Broadband Residential internet access began with the dial-up connection in the late 1990s with maximum speeds of .056 Mbps, when early users relied on narrowband copper phone lines to connect. As demand for speed and reliability grew, dial-up gav...", - "page_nums": [ - 185 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 185, "artifact_ref": "page_citation_assets/page-185.png", @@ -8369,24 +6784,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e5698b8f-15c6-50b8-8859-5b0b84cb2fa6", - "type": "page", - "content": "159\nTable of Contents\nhave not delivered the latency or consistency needed for enterprise‐grade applications, with average terrestrial ISP\ndownload speeds at 120 Mbps and average latency from 7-34 milliseconds.\nDefense and civil agencies similarly require secure, resilient, and global connectivity, often operating in contested or\ninfrastructure-poor regions where terrestrial networks are unavailable or vulnerable. As the battlefield becomes\nincreasingly connected, the need for robust, persistent connectivity across all domains is more urgent than ever.\nModern missions depend on high-throughput, low-latency connectivity for command and control, autonomous\nsystems, emergency response, and humanitarian operations, driving demand for architectures that maintain\nperformance where terrestrial systems fail. Substantial government investment into mission-critical, space-based\ncommunication services illustrates the institutional reliance on LEO architecture for defense applications. High-\nthroughput, low-latency LEO constellations add a new architectural layer that enhances redundancy, operational\ncontinuity, and flexibility across mission sets. There is an increasing need for purpose-built secure platforms—such\nas Starshield, that can provide encrypted, high-assurance communications and modular payload integration—further\nexpand the utility of space-based connectivity for defense, civil, and national resilience needs. Together, these\nadvances position space as the foundational component of future mission‐critical communications architectures.\nSatellite-to-Mobile Service\nSince the early rise of mobile phones, terrestrial networks have expanded at immense cost and increasing density to\nsupport successive generations of cellular technology—from the primarily voice-centric networks of the 1980s to\ntoday’s high-speed 5G data networks. These investments have enabled much of the global population to become\nwell‐connected, yet the capital‐intensive nature of terrestrial build‐outs has resulted in vast geographic mobile “dead\nzones” where coverage remains too expensive or is nonexistent. In many regions particularly those that are remote\nor sparsely populated, extending towers is economically impractical for mobile network operators, resulting in large\nsegments of the population with limited or no access to reliable connectivity. Early satellite-based cellular options,\nbeginning in the 1980s with dedicated satellite phones, helped fill these gaps but required bulky hardware and\ncarried high usage cost, limiting them to narrow and mission-driven use cases. As consumer expectations for\nubiquitous coverage have grown, mobile network operators face structural limits in closing these “dead zones” with\nterrestrial infrastructure alone, making LEO-based augmentation the most viable path to continuous, reliable mobile\nconnectivity at global scale.\nEarly satellite-to-mobile services (i.e., those connecting directly to standard smartphones) emerged in the 2020s with\nsupport for basic messaging and, in some cases, voice in areas without terrestrial coverage. These offerings provided\nmore contiguous communication for safety, continuity, and remote operations. However, they were introduced at the\nsame time mobile data consumption was accelerating dramatically, and consumer expectations for “always-\nconnected” devices were rising. As a result, satellite-to-mobile technology is now evolving beyond emergency-only\ncommunication. It is shifting toward enabling everyday smartphones to remain seamlessly connected when outside\ntraditional cellular or Wi-Fi range, integrating satellite connectivity into routine mobile usage, rather than treating it\nas a contingency layer. At the same time, telecom operators have been reducing capital expenditures amid slower\nrevenue growth, weaker monetization, and declining returns on invested capital—pressures that have limited their\nwillingness to maintain historically high levels of network deployment. These shifts are also increasing demand for\nharmonized, scalable spectrum allocations capable of supporting higher-capacity satellite-to-mobile services without\ninterfering with terrestrial networks, with the potential to add an incremental $1.4 trillion of economic growth over\nthe next 10 years, as forecasted by Cellular Telecommunications and Internet Association.\nThese industry shifts have opened the door for deeper collaboration among satellite operators, MNOs, carriers,\nspectrum owners, device manufacturers, and regulators. As satellite network performance continues to improve and\nthese partnerships expand, satellite-to-mobile offerings—such as Starlink Mobile—are poised to evolve from a\n“backup” layer into a meaningful complement to terrestrial networks, extending coverage and enhancing overall\nnetwork resilience and performance.\nThe AI Industry\nHumanity is defined by our relentless pursuit of knowledge, with each transformative breakthrough dramatically\nexpanding our capacity to create, preserve, and share ideas across time and space. AI marks the next—and arguably", - "path": "spacex-s1.pdf/p186", - "metadata": { - "length": 5063, - "summary": "159 Table of Contents have not delivered the latency or consistency needed for enterprise‐grade applications, with average terrestrial ISP download speeds at 120 Mbps and average latency from 7-34 milliseconds. Defense and civil agencies similarly require secure, resilient, an...", - "page_nums": [ - 186 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 186, "artifact_ref": "page_citation_assets/page-186.png", @@ -8394,24 +6792,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f7d60262-2d1c-5d29-a14f-c1b7f26ee7cc", - "type": "page", - "content": "160\nTable of Contents\nmost consequential—chapter in this progression. For the first time, we are creating systems that do more than simply\namplify or transmit human-generated knowledge. These systems can reason, learn, and generate new knowledge\nautonomously—synthesizing information, forming hypotheses, and in some domains even making original\ndiscoveries. In doing so, they augment, accelerate, and will likely surpass unaided human cognition. This represents\na profound shift: we are moving from tools that simply extend the mind to autonomous agents and companions that\nactively participate in the act of knowing.\nOver the past decade, the convergence of big data, advances in AI hardware, and the breakthrough development of\nLLMs have transformed AI from a speculative academic field into a foundational driver of the modern economy.\nAI Compute\nMassive demand for frontier AI models is accelerating the build-out of AI infrastructure at a pace and scale with few\nhistorical precedents. Meeting projected AI needs will require $7 trillion in global data center investment through\n2030, with generative AI workloads expected to account for roughly 70% of total data-center power demand by the\nend of the decade. Each new generation of frontier models requires exponentially greater compute, following well-\nestablished scaling laws that link model performance to the volume and quality of training data, parameter count,\nand total compute expected. The rise of agentic AI and the potential emergence of artificial general intelligence are\nexpected to further amplify inference workloads, driving a step-function increase in compute requirements and the\ncorresponding data center capacity needed to support them. Frontier AI has become fundamentally infrastructure-\nconstrained. Only operators with access to massive amounts of power, very large GPU clusters and tightly integrated\ntraining infrastructure can train cutting-edge models, and these systems exhibit non-linear performance advantages\nthat compound over time. Compute infrastructure scale helps determine model iteration speed, model quality, and\ncapital efficiency—making infrastructure itself a critical capability.\nAI Frontier Models\nA new class of frontier models has emerged, which includes LLMs and multimodal models. LLMs are neural\nnetwork-based models trained on massive datasets to interpret user questions and generate responses to highly\ncomplex questions. LLMs can synthesize existing research, propose new ideas, and communicate in a natural\nlanguage that requires no programming expertise by the user. Demand for these tools has been explosive—according\nto a YouGov survey, approximately 60% of Americans have used AI tools since December 2024, and 34% use AI\ntools at least weekly. Multimodal models are AI systems that can process, understand, and generate outputs across\nmultiple types of data simultaneously—such as text, images, audio, video, and sometimes other modalities—rather\nthan being limited to just one (like text-only language models). Multimodal models offer several key benefits over\ntraditional unimodal (e.g., text-only) systems by processing and integrating multiple data types like text, images,\naudio, video, and sometimes sensor data simultaneously. They provide richer contextual understanding, capturing\nrelationships and nuances across modalities that are invisible in isolation, leading to more accurate predictions and\nreasoning.\nAI frontier models are shaped by the values, objectives, and design choices of their creators. Model intelligence and\nperformance reflect decisions around data curation, training methodologies, alignment frameworks, and system\nconstraints, resulting in different reasoning styles, interpretations, and responses across models. Therefore, values\ncan be embedded in the technology, influencing accuracy, logic, and utility of the model outputs and how well\nmodels can serve end users.\nFollowing rapid frontier model innovation and broad adoption of chat-based tools, organizations are now beginning\nto deploy agentic systems—AI that can use tools and operate with limited supervision. This marks the beginning of\nwhat we believe will be a broader transition from co-pilots to agentic systems that enable high-complexity\nworkflows and create materially higher inference demand.\nConsumer and Enterprise Applications\nAdvances in digital communication have reshaped how information is created, shared, and consumed, laying the\nfoundation for today’s social media platforms. These platforms have become essential channels for digital\nadvertising by combining large‐scale user engagement with targeted content and ad distribution. Recent advances in", - "path": "spacex-s1.pdf/p187", - "metadata": { - "length": 4679, - "summary": "160 Table of Contents most consequential—chapter in this progression. For the first time, we are creating systems that do more than simply amplify or transmit human-generated knowledge. These systems can reason, learn, and generate new knowledge autonomously—synthesizing infor...", - "page_nums": [ - 187 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 187, "artifact_ref": "page_citation_assets/page-187.png", @@ -8419,24 +6800,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a89650e8-a171-5d19-9f13-e2f88189a9c7", - "type": "page", - "content": "161\nTable of Contents\nAI are further strengthening advertising, allowing enterprises to optimize campaigns and measure outcomes. At the\nsame time, consumer expectations for AI‐powered tools are rising, with users seeking timely, accurate and\ntrustworthy information across an expanding universe of digital content.\nWe believe the ongoing convergence of consumer platforms, consumer AI, and integrated digital services will\naccelerate the emergence of super‐app ecosystems that combine communication, content creation, information,\ncommerce, and banking within a single platform. These trends are expected to expand the role of internet platforms\nas distribution channels and support next‐generation AI‐enabled applications and advertising solutions.\nFor enterprises and governments, frontier models and agentic AI—autonomous systems capable of multi-step\nreasoning and independent task execution—are beginning to manage increasingly complex processes and\nworkflows. As of February 2026, more than 80% of Fortune 500 companies were using AI active agents. Entire\nindustries are being reshaped by AI-driven applications, including agentic commerce (personalized AI-directed\nshopping), vibe coding (software development with minimal or no human-written code), and autonomous driving for\nvehicles.\nThe ultimate frontier in AI is human augmentation: creating systems that amplify and multiply human reasoning,\ncreativity, decision-making, and productivity, enabling people to perform highly complex tasks with unprecedented\nspeed, scale, and insight. By enhancing how humans think, learn, and interact, such systems act as cognitive\nmultipliers, supercharging individual and collective capabilities far beyond biological limits. As AI evolves, we\nexpect both consumer platforms and enterprises to adopt increasingly agentic systems that serve as powerful\nextensions of human intelligence. These tools will orchestrate multi-step workflows, interact seamlessly with\nbusiness applications, and accelerate operational processes, with humans at the center of judgment, creativity, and\nstrategy. Emerging efforts in enterprise AI illustrate how future systems could coordinate entire business functions\nas force multipliers—dramatically expanding what a human team can achieve with minimal scaling friction and\nmaximal leverage. Human augmentation also offers a transformative solution to the escalating effort required for\nbreakthroughs in technology and beyond. For example, the human effort needed to sustain Moore’s Law (chip\ndensity doubling approximately every two years) has increased eighteenfold since the early 1970s; AI augmentation\ncould reverse this trend by empowering engineers, researchers, and innovators to iterate faster, explore more\npossibilities, and achieve exponential progress with smaller, core teams of experts.\nAs humanity expands beyond Earth, augmented human intelligence will be essential to managing the immense\noperational, scientific, and logistical complexity of a spacefaring civilization. The core promise of augmentation lies\nin multiplication: AI not as a substitute for human minds, but as an amplifier for human ingenuity, curiosity and\npurpose that unlocks new frontiers of what humans can accomplish together.\nOur Strengths\nWe have an intense, mission-driven, and engineering-first culture that seeks to achieve what many have deemed\nimpossible. We make the incredible and extraordinary possible and repeatable by continuously leveraging our core\nstrengths:\nGlobal Leadership in Orbital Launch Services\nOur unique ability to reliably, quickly, and cost efficiently launch rockets at scale into space is our core competitive\nadvantage that enables other parts of our business. Our launch capabilities form the foundation of our orbital\ninfrastructure and have created new multi-trillion-dollar opportunities in space, global connectivity, and AI. We\nbelieve no other launch provider is competitive at this scale today, nor is likely to become so in the near term. Our\nfleet of 24 flight-proven, reusable rockets and our growing share of total mass delivered to orbit has increased every\nyear since 2021. Reusability completely changes the economics of space access. Qualified for 40 launches, our\nreusable rockets can fly multiple times with only minimal refurbishment between missions, sharply lowering the\ncost per launch, while boosting our launch rate, asset use, and overall efficiency compared to traditional expendable\nrockets. As a result, we can offer competitive launch prices, rapidly deploy our own satellites and infrastructure, and\nmake it easier and cheaper for us to pursue new opportunities requiring orbital access. Our higher launch rates and\nreusability also create a virtuous cycle: more flights lead to faster improvements in design, manufacturing, and\noperations through accumulated experience. Additionally, not only did we demonstrate at least a 10-year advantage", - "path": "spacex-s1.pdf/p188", - "metadata": { - "length": 4920, - "summary": "161 Table of Contents AI are further strengthening advertising, allowing enterprises to optimize campaigns and measure outcomes. At the same time, consumer expectations for AI‐powered tools are rising, with users seeking timely, accurate and trustworthy information across an e...", - "page_nums": [ - 188 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 188, "artifact_ref": "page_citation_assets/page-188.png", @@ -8444,24 +6808,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5446123d-26c1-52ae-a4a7-cf98a2f13ba5", - "type": "page", - "content": "162\nTable of Contents\nover the rest of the industry when we first landed our Falcon 9 booster back from space in 2015, but we have\ncontinued to invest significantly in further increasing our lead by pursuing full and rapid reusability at scale,\nincluding investing over $15 billion in our next-generation rocket, Starship.\nUnrivaled Satellite and Connectivity Platform across Design, Manufacturing, Deployment, and Operations\nWe are able to design, engineer, and manufacture the world’s most advanced satellites at scale, enabling the creation\nand scaling of new businesses leveraging this core satellite technology platform, including: Starlink Broadband, our\nspace-based internet broadband service; Starlink Mobile, our global satellite-to-mobile service; and emerging AI\ninitiatives. Unlike traditional satellite manufacturers that rely on fragmented supply chains and low-volume\nproduction, we have built an integrated satellite platform that spans architecture, chip design, software, power\nsystems, and final assembly. As we rapidly iterate on our next-generation satellites in-house, some others are\ncontracting outsourced manufacturers to build satellite architectures with capacity comparable to satellites that we\nretired years ago. As of March 31, 2026, our constellation also incorporates over 23,000 inter-satellite lasers that\ncreate a dynamic mesh network in space, enabling data traffic to route through orbit rather than relying solely on\nterrestrial backhaul infrastructure. By controlling satellite design, production, launch and operations, we can tailor\npayloads, networking capabilities, and power requirements to support new use cases. For example, our AI compute\nconstellations will leverage our core satellite technologies already developed for our existing Starlink constellations.\nWe will build new satellites that can host processors for high-density compute payloads, offer enhanced power\ngeneration with larger solar panels and storage systems, and enable higher-capacity networking capabilities to\nsupport low-latency workloads in orbit. Our high-throughput manufacturing capabilities—combined with our launch\ncapabilities—enable us to produce and deploy thousands of satellites per year, an uneconomic proposition for those\nlacking an ability to deliver substantial mass into space. This capability accelerates our deployment timelines and\nallows us to commercialize entire constellations with capital efficiency that we believe is difficult to replicate.\nOur global connectivity platform, Starlink, is powered by the world’s largest LEO constellation and supported by\nour vertically integrated launch and satellite manufacturing capabilities to enable the delivery of high-speed, low-\nlatency broadband and mobile connectivity to homes and businesses everywhere in the world. Our vertically\nintegrated model allows us to provide reliable service with unmatched speed and cost across geographies where\ntraditional terrestrial infrastructure has been limited, uneconomical, or unavailable.\nTruth-Seeking AI Model Enhanced by Real-Time Data\nAI frontier models are shaped by the values, objectives, and design choices of their creators that influence accuracy,\nlogic, and utility of the model outputs. We believe Grok represents a differentiated approach to AI, grounded in a\ncore objective of truth seeking and powered by continuous, proprietary access to real-time data inflows through its\nintegration with X. With approximately 350 million daily posts, X enables freshness, relevance, and contextual\nawareness for Grok that we believe is a competitive differentiator. This direct, real-time access to the information\nand human discourse on X enhances Grok’s truth-seeking capabilities by grounding outputs in up-to-date knowledge\nand diverse viewpoints.\nThis architecture reflects our core philosophy that maximizing truth seeking—through the active, relentless pursuit\nof what is objectively true about reality, grounded in evidence, logic, empirical data, and first principles thinking—\ndrives superior model outputs and higher utility intelligence. By combining our unique truth-seeking model with\nproprietary access to one of the world’s largest real-time information platforms, we believe Grok can deliver the\nmost objective and relevant insights and best serve high-frequency, high-value use cases across consumer and\nenterprise AI applications.\nExtreme Vertical Integration Enabling High Velocity and Superior Cost Efficiency at Scale\nWhile conventional aerospace manufacturing relies heavily on fragmented and outsourced supply chains, we operate\nwith extreme vertical integration. By designing and manufacturing a significant portion of our components in-house,\nwe bypass many of the slow, bloated sourcing channels that structurally constrain the rest of the industry. For\nexample, approximately 80% of Starship, SpaceX’s next-generation launch vehicle, is manufactured in-house. Our\nvertical integration allows us to achieve iterative cycles in weeks, compared to years for some legacy companies,\nenabling us to build newer, more technologically advanced products faster than many of our competitors. We", - "path": "spacex-s1.pdf/p189", - "metadata": { - "length": 5146, - "summary": "162 Table of Contents over the rest of the industry when we first landed our Falcon 9 booster back from space in 2015, but we have continued to invest significantly in further increasing our lead by pursuing full and rapid reusability at scale, including investing over $15 bil...", - "page_nums": [ - 189 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 189, "artifact_ref": "page_citation_assets/page-189.png", @@ -8469,24 +6816,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d94ff9ef-2c62-5068-93a4-ca6b69e7bc3b", - "type": "page", - "content": "163\nTable of Contents\nbelieve this technological and logistical gap is widening meaningfully as our speed and cost advantage compound.\nOur vertical integration extends beyond design and manufacturing—it permeates our entire business model,\nencompassing engineering, deployment, and operations. We are the only company building integrated hardware and\nsoftware infrastructure of the future across space, connectivity and AI. This end-to-end control allows us to deliver\nvalue through structural advantages in speed, cost and quality.\nOur strong belief in the benefits of extreme vertical integration is further exemplified by our acquisition of xAI. We\nnot only develop best-in-class models to support the application layer of AI, where we leverage real-time data\ningestion from X (subject to some limitations for certain content), but we also own and operate the physical compute\ninfrastructure required to train and run inference on those models, providing a substantial cost and speed advantage.\nThrough our Terafab initiative together with Tesla and Intel, we intend to further extend our vertical integration to\nchip design and manufacturing to alleviate potential future chip shortages at SpaceX, optimize compute\nperformance, and reduce overall compute costs. Intel will contribute its expertise in designing, fabricating, and\npackaging ultra-high-performance chips to help Terafab scale. This highly vertically integrated approach allows us\nto train and iterate our frontier models at high velocity, accelerating development cycles, eliminating external\nbottlenecks, and driving rapid, continuous improvements in model performance. Compute availability is also critical\nfor running more complex workloads and delivering higher performance inference at scale. As AI adoption\naccelerates and demand for low-latency, high-throughput inference increases, we believe operators with the ability\nto support and efficiently allocate compute across both training and inference workloads are best positioned to win\nthe AI race. Our human augmentation solutions are being designed to capitalize on this shift, enabling us to deliver\nsuperior performance for our customers. This advantage of vertical integration exists in both a terrestrial context,\nwhere we own our own data centers and the associated power infrastructure, and eventually in a space-based\ncontext, where we are planning to build our own orbital AI compute infrastructure. The key constraints in the\ncontinued growth of AI are physical—chip manufacturing, data center infrastructure, and power generation.\nDifferentiation is rapidly shifting from model architecture alone to AI compute scale, cost efficiency, power\navailability, and speed of deployment. We believe that physical infrastructure, not models, will be the primary\ncompetitive differentiator for AI companies, and no other AI company has better control over the full physical\ninfrastructure than SpaceX.\nUnique Ability to Scale New Trillion-Dollar Markets Across Space, Connectivity, and AI\nWe believe space represents the largest economic frontier in human history. We believe we have a distinct ability to\nidentify, activate, and commercialize new multi-trillion-dollar markets that did not previously exist. Historically,\nspace access was impaired by high launch costs, low flight cadence, and limited demand. While such constraints\nmay limit others’ ability to access space at a scale, our ability to build large-scale and complex hardware\ninfrastructure is a meaningful competitive advantage. By pioneering the world’s first and only fleet of reusable\nrockets at scale, we revolutionized space access through dramatically lower cost and unmatched reliability.\nLowering costs by orders of magnitude does not just expand the launch market, it enables the creation of entirely\nnew industries on Earth and in space that have historically been technologically and economically infeasible for\nothers to access historically.\nWhen we have identified a new trillion-dollar market opportunity to pursue, we design a solution rooted in the same\nworld-class engineering and first-principles thinking that has driven our technological breakthroughs and success to\ndate. Our first trillion-dollar market was connectivity: we founded Starlink, a satellite service supported by our low-\nlatency, high-speed LEO constellation. Starlink required the rapid, low-cost deployment of millions of kilograms of\nhardware into orbit, a feat economically impossible to solve for anyone lacking our foundational launch capabilities.\nOur Starlink constellation powers a global connectivity platform capable of supporting the world’s largest and most\nadvanced space-based internet broadband service and satellite-to-mobile service, enabling high-speed internet access\nto homes, enterprises, governments, and mobile users around the world. We believe our next trillion-dollar market is\nAI compute, and we expect to leverage our rockets and satellites for massive orbital deployments of AI\ninfrastructure. We believe this AI compute infrastructure will help us develop and monetize the Grok model faster\nthan other AI companies that are dependent on finite sources of power on Earth. No other company has built the\ncapabilities to create value across all these end markets at scale.", - "path": "spacex-s1.pdf/p190", - "metadata": { - "length": 5281, - "summary": "163 Table of Contents believe this technological and logistical gap is widening meaningfully as our speed and cost advantage compound. Our vertical integration extends beyond design and manufacturing—it permeates our entire business model, encompassing engineering, deployment,...", - "page_nums": [ - 190 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 190, "artifact_ref": "page_citation_assets/page-190.png", @@ -8494,24 +6824,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_910b06c0-0ce4-551c-b564-59b9d07316cb", - "type": "page", - "content": "164\nTable of Contents\nIn addition, we believe we are poised to catalyze transformative breakthroughs in other industries on Earth and in\nspace such as long haul point-to-point terrestrial travel, in-orbit manufacturing, passenger and cargo transportation to\nthe Moon and Mars, manufacturing and energy production on the Moon and Mars, and asteroid mining. In\nparticular, we believe that if we achieve our goal of establishing a lunar presence, it will potentially enable terawatt-\nscale annual AI compute growth, support deeper space exploration and industrialization, and serve as a stepping\nstone to establishing a civilization on Mars. As we continue to scale and expand into new trillion-dollar markets, we\nexpect our more mature businesses will continue to generate substantial cash flows, enabling us to reinvest in\nemerging opportunities.\nBusiness Models that Are Incredibly Difficult to Replicate\nOur business model is simple to describe: leverage our unparalleled launch capabilities to reduce the cost of access\nto space, apply first-principles thinking and world-class engineering to solve large structural constraints, vertically\nintegrate across the value chain, continuously improve cost efficiency and throughput, and reinvest cash flow to\nexpand our capabilities and create new markets. While simple to describe, we believe this model is extraordinarily\ndifficult to replicate. We believe no other organization can execute this combination of reusable orbital launch\nsystems at industrial scale, breakthrough engineering designs with reliable high-volume manufacturing, full stack\nproprietary software, and end-to-end operational control. These capabilities reinforce each other, and our vertical\nintegration enables faster innovation cycles and structural cost advantages that widen our competitive advantage.\nOur business model has allowed us to build a diversified portfolio of complementary businesses and revenue streams\nfrom a common technological foundation. Our Space segment generates revenue from commercial and government\ncustomers, while also serving as the backbone for our Connectivity segment which generates highly predictable and\nrecurring subscription revenue from Starlink broadband consumer, enterprise, and government customers, as well as\nStarlink Mobile subscribers. The result is a powerful, self-reinforcing value creation cycle: success in one business\nfuels faster growth in the others, enabling reinvestment into the next frontier. We believe this model has the potential\nto create compounding value across our ecosystem, allowing our lead to grow and become more durable over time.\nMission-Driven Culture and World-Class Talent\nWe have the benefit of being founded and led by Elon Musk, one of the great visionaries of our generation. We\nbelieve that our ability to attract and retain world-class technical and engineering talent is a significant competitive\nadvantage. Our founding goal of making life multiplanetary serves as the ultimate mission-driven filter and retention\ntool, which has only been enhanced by xAI’s truth-seeking mission of understanding the universe. Top engineers are\ndrawn to SpaceX to work on some of the hardest, most consequential problems facing humanity—doing things that\nhave never been done before, like landing and re-using rockets, working towards making humanity multiplanetary,\nand gaining a better understanding of the mysteries of the universe through AI. They are also drawn to our intense,\nengineering-led, first-principles culture, which treats the laws of physics as the only true constraints. We reinforce\nthis culture through “The Algorithm,” a five-step iterative process that emphasizes making the requirements less\ndumb, deleting unnecessary processes or parts (embracing the principle that the best part is no part), only then\noptimizing what remains, accelerating cycle time, and automating only proven processes. Our organizational\nphilosophy embraces failure as an essential learning opportunity and maintains a relentless focus on efficiency and\nspeed, enabling rapid iteration and repeatable execution on the hardest technical problems. To this end, our\nengineering-oriented organization maintains access to some of the world’s most selective talent pool. In 2025, we\naccepted under 2% of our engineering applicants, reflecting our ability to be highly selective and hire among the\nbest talent in the industry. We also foster commitment by aligning employee interests with organizational success:\nour broad-based employee ownership program ensures that those who help us build the future are also direct\nbeneficiaries of our success. This commitment to quality and mission results in exceptional employee loyalty,\nreflected by an average tenure across our broader SpaceX leadership team of 12 years.\nOur Growth Strategies\nWe have created what we believe to be the world’s most ambitious vertically integrated innovation engine that\ncaptures significant growth across three domains: Space, Connectivity, and AI. While our Space segment provides\nus with a foundational competitive advantage that enables all other parts of our business, our Connectivity and AI", - "path": "spacex-s1.pdf/p191", - "metadata": { - "length": 5156, - "summary": "164 Table of Contents In addition, we believe we are poised to catalyze transformative breakthroughs in other industries on Earth and in space such as long haul point-to-point terrestrial travel, in-orbit manufacturing, passenger and cargo transportation to the Moon and Mars,...", - "page_nums": [ - 191 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 191, "artifact_ref": "page_citation_assets/page-191.png", @@ -8519,24 +6832,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1370ec06-e2bb-509d-bf25-924316fc5858", - "type": "page", - "content": "165\nTable of Contents\nsegments are expected to be the primary driver of revenue growth in the near term. In the next few years, we are\nfocused on increasing the monetization of our existing Connectivity infrastructure and our existing AI user base. We\nalso intend to continue to build out our AI infrastructure, which we expect to enable growth as we address the\nsignificant AI market opportunity. Our growth strategy aligns with our value creation cycle where we identify\nemerging opportunities, invest in innovation, rigorously test and iterate, launch new offerings, and generate strong\ncash flows to fuel the next wave of breakthroughs.\nSpace\nIncrease launch payload capacity. We plan to drive meaningful growth in payload delivered to orbit (mass to orbit)\nthrough higher launch cadence and increased payload per launch, while enhancing launch efficiency and reducing\ncosts. Our next-generation fully and rapidly reusable Starship V3 vehicle is designed to carry 100 metric tons to\nEarth’s orbit in a reusable configuration, driving substantial improvements in payload capacity per launch, while\nenabling significantly more frequent flights, at unparalleled cost efficiency. To date, we have executed 11 Starship\nflight tests. We have also scheduled a 12th flight test, which will debut the next generation Starship vehicle and\nSuper Heavy booster, powered by the next evolution of our Raptor engine and launching from a newly designed pad\nat Starbase. We expect Starship to commence payload delivery to orbit in the second half of 2026. We have\nachieved innovative milestones, such as the creation of booster catches using “chopstick” arms that facilitate rapid\nrefurbishment and reuse, including launching multiple times per day. To enable a more frequent launch cadence and\noverall greater payload delivery, we are also expanding our ground launch infrastructure, including investing in\nadditional pads, on-site propellant production, and other support facilities, and investing in future generations of\nStarship, which could carry 200 metric tons in capacity, potentially as soon as Starship V4. We expect these efforts\nto continue to drive launch payload growth that is expected to provide the foundational capacity needed to scale our\nStarlink Broadband and Starlink Mobile constellations that underpin our Connectivity platform. Our growing\npayload capacity is also intended to underpin the deployment of orbital AI compute that will accelerate our AI\nbusiness, as well as benefit third-party customers who use our launch offerings.\nEstablish the lunar economy. Advancing access to the lunar surface represents an important next step in the\nevolution of our Space segment and is a prerequisite for long-term commercialization beyond Earth. We are focused\non developing the capability to transport significant amounts of cargo and crew to the lunar surface in a repeatable\nand economically viable manner. We believe this capability will also enable creating a petawatt-scale AI\nconstellation through the use of lunar satellite production and a lunar mass driver for launch activities. By leveraging\nStarship’s expected fully and rapidly reusable capabilities and in‐space refueling, we expect to materially reduce the\ncost of lunar missions relative to historical norms. Our initial efforts will prioritize lunar cargo landings and\nreturning Americans to the Moon, followed by expanded crewed missions that we believe can establish a continuous\nflow of cargo and humans between Earth and the lunar surface.\nWe believe that the foundation of a commercial lunar economy begins with achieving infrastructure development,\nlunar resource utilization, and high bandwidth communications at scale. This requires the ability to mine, extract and\nprocess raw material for the production of solar power on the lunar surface. Combined with the ability to locally\nproduce water and fuel, we believe these capabilities would enable sustained lunar operations, support lunar\nexploration, and provide the foundation for humanity’s permanent presence on the Moon. The lunar base would then\nallow sustained, high volume testing of new technologies in a space environment much closer to Earth than deep\nspace.\nWe intend to establish lunar‐based manufacturing capabilities, including factories to produce large‐scale AI compute\nsatellites. We believe we can efficiently launch our satellites at scale, namely due to the potential use of a lunar mass\ndriver that is capable of high-frequency, low-cost launches of satellites from the lunar surface. By shifting energy\nand material and mass-intensive satellite and solar manufacturing activities off Earth that leverage sustainable power\ngeneration and the Moon’s low gravity, we aim to significantly reduce costs and terrestrial resource constraints. We\nexpect to use raw materials from the Moon to construct most of the mass of the satellites and ship chips and other\nlower mass elements from Earth. This roadmap positions the Moon not only as a potential gateway to Mars and\nspace exploration, but as the first space-based industrial economy at scale.", - "path": "spacex-s1.pdf/p192", - "metadata": { - "length": 5093, - "summary": "165 Table of Contents segments are expected to be the primary driver of revenue growth in the near term. In the next few years, we are focused on increasing the monetization of our existing Connectivity infrastructure and our existing AI user base. We also intend to continue t...", - "page_nums": [ - 192 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 192, "artifact_ref": "page_citation_assets/page-192.png", @@ -8544,24 +6840,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_0d491bfe-743e-5632-9a41-367aa608c2c3", - "type": "page", - "content": "166\nTable of Contents\nOnce resource utilization capabilities are proven feasible, we believe there is an opportunity to commercialize the\nharvesting and exportation of rare materials, which is estimated to be present on the Moon in quantities exceeding\none million tons and has potential applications in future nuclear energy and quantum computing systems. Large-\nscale access to these resources, coupled with the Moon’s low gravity, could unlock the potential for scalable growth\nby establishing a vertically-integrated resource extraction, processing and exportation hub. Using Starship’s high\npayload capacity, we believe these materials could be economically transported directly to Earth. In parallel, the\nMoon could function as a proving ground for closed-loop ecosystems, long-duration habitats, and autonomous\nconstruction techniques, all of which are essential for industrialization. Over time, this infrastructure has the\npotential to position the Moon as a strategic industrial and transportation node.\nEstablishing lunar operations for mining, refueling, manufacturing, and habitation is subject to a variety of\ninterconnected engineering and other hurdles as well as known and currently unknown risks and uncertainties. These\ninclude hurdles, risks and uncertainties that relate to, among other things, transporting and deploying heavy\nequipment to the lunar surface, developing reliable power generation and storage systems, extracting and processing\nlunar resources at commercial scale, operating equipment in extreme temperature, radiation and dust conditions,\nmaintaining communications and navigation infrastructure, and supporting long-duration human presence in a\nremote and hazardous environment.\nConnectivity\nGrow Starlink Broadband customers. In the near term, we are focused on increasing global awareness of our\nStarlink brand and capabilities to grow our base of Starlink Broadband subscribers and to increase Starlink\nBroadband adoption in new and existing markets.\n• Starlink Consumer Broadband. We have grown the number of Starlink Subscribers rapidly over the last\nseveral years. As of March 31, 2026, we had approximately 10.3 million Starlink Subscribers across 164\ncountries, territories, and other markets. These subscribers represent a small fraction of the estimated 3.3 billion\npotential end users in the markets we currently serve, many of whom still lack reliable high-speed broadband.\nBecause we report Starlink Subscribers on a per‐Service Line basis, the number of individual end users who\naccess Starlink is already likely meaningfully higher than 10.3 million, as multiple people may share a single\nService Line, including within a household. We intend to grow the number of Starlink Subscribers by\nexpanding our consumer distribution network across thousands of authorized retail stores globally and execute\nregion-specific marketing campaigns to increase Starlink brand awareness. By clearly demonstrating Starlink’s\nsuperior speed, low-latency, affordability, and ease of installation—not only in rural, remote, and infrastructure-\nlimited areas, but also in suburban and urban areas with wireline broadband options—we expect to drive\nmeaningful subscriber and revenue growth.\n• Enterprise and Government Starlink Customers. We plan to drive growth in enterprise and government\nStarlink customers through our direct, vertical-specific sales model. In recent years, we have assembled\ndedicated sales and engineering teams to market and support fleet-wide conversions in the aviation and\nmaritime sectors. This has enabled partnerships with many of the world’s leading airlines, including United\nAirlines, Southwest Airlines, Qatar Airways, Lufthansa Group, British Airways, Alaska Airlines, and Hawaiian\nAirlines, many of which have implemented or committed to fleet-wide Starlink installations for seamless in-\nflight connectivity. We have also partnered with premier cruise operators, such as Carnival Corporation, Royal\nCaribbean Group, MSC Cruises, and Norwegian Cruise Line Holdings, for full-fleet deployments that deliver\nreliable high-speed internet across thousands of vessels worldwide. In addition, we have partnered with land\nmobility operators, including John Deere and the California Fire Department, as well as passenger rail operators\nsuch as Brightline (Florida), and Italo Treno, to provide remote monitoring and management of their fleets. We\nare actively driving growth in these sectors by onboarding new major airlines, cruise lines, and land mobility\noperators around the world, expanding existing relationships through deeper fleet penetration, and introducing\nadvanced service tiers to make Starlink the standard connectivity solution for aviation, maritime, and land\nmobility customers globally. We also intend to expand our government customer base, securing major contracts\nwith the United States and allied governments while delivering secure, resilient, and mission-critical\nconnectivity for defense operations, humanitarian efforts, disaster response, and national security applications in\neven the most remote and challenging environments. We also serve a broad fixed‐site customer base across", - "path": "spacex-s1.pdf/p193", - "metadata": { - "length": 5170, - "summary": "166 Table of Contents Once resource utilization capabilities are proven feasible, we believe there is an opportunity to commercialize the harvesting and exportation of rare materials, which is estimated to be present on the Moon in quantities exceeding one million tons and has...", - "page_nums": [ - 193 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 193, "artifact_ref": "page_citation_assets/page-193.png", @@ -8569,24 +6848,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c546ab04-fed1-5fec-bdd6-14112c1eac2d", - "type": "page", - "content": "167\nTable of Contents\nindustries such as retail and financial services that require high availability for critical operations as well as\nreliable connectivity in remote or hard-to-serve locations. As companies continue to invest in secure and\nresilient networks to keep critical infrastructure—such as point‐of‐sale and payment processing systems—we\nsee an opportunity to grow our broad fixed‐site customer base, often starting as back-up and then transitioning\nto primary.\nExpand our Starlink Mobile offering. As of March 31, 2026, we provide Starlink Mobile services to approximately\n7.4 million monthly unique devices across approximately 30 countries. We partner with leading device\nmanufacturers, application developers, and mobile network operators to enhance the services we provide over one\nsatellite network, including over-the-top voice, video, and messaging. In 2025, we entered into agreements to\nacquire 65 MHz of spectrum in the United States and certain global Mobile Satellite Service spectrum licenses from\nEchoStar, which will enable a step-change in the possibilities for our Starlink Mobile service. Furthermore, we\nanticipate that Starship will be able to deploy approximately 50 mobile satellites per launch, significantly increasing\ncapacity per launch and accelerating the deployment of our next-generation constellation. With the deployment of\nour next-generation constellation, which is designed to fully utilize the acquired spectrum, and the expansion of our\nMNO partnerships, we aim to further deliver on our goal of providing connectivity for everyone and substantially\nreducing mobile “dead zones” worldwide—eventually with 5G connectivity to unmodified cell phones and IoT\ndevices globally.\nIncrease the capacity of our constellations. Our current constellations of approximately 9,600 Starlink broadband\nand mobile satellites, including over 3,000 satellites deployed in 2025, support over 700 Tbps of cumulative\ndownlink capacity. To support larger numbers of customers through our Connectivity segment, we plan to materially\nincrease the capacity of our broadband and mobile constellations. For our Starlink broadband constellation, we will\ncontinue deployment of more of our V2 Mini satellites, and in the second half of 2026, we expect to begin\ndeployment of our next-generation V3 satellites, each of which is designed to offer one Tbps of downlink capacity\nper satellite. We expect Starship will be able to deploy up to 60 V3 satellites per launch, representing a twenty-fold\nincrease in downlink capacity deployed per launch compared to Falcon 9, enabling a more rapid expansion of our\nStarlink broadband constellation at a significantly lower cost. For our Starlink Mobile constellation, we currently\nhave approximately 650 existing dedicated mobile satellites. We are developing more comprehensive satellite-to\nmobile services, which we refer to as our Starlink Mobile Gen2 services, including broadband data and IoT\nconnectivity, which are expected to deliver resilient, infrastructure-independent connectivity worldwide and enable\n5G connectivity.\nWe plan to expand our mobile constellation by deploying our next-generation mobile V2 Mobile satellites in 2027\nwhich, combined with the EchoStar spectrum acquisition and optimized 5G protocols, are expected to increase\ncapacity by orders of magnitude compared to our first-generation constellation. In the U.S., the FCC approved the\nEchoStar license transfer in May 2026, and we separately expect to receive the remaining necessary U.S. regulatory\nauthorizations in the second or third quarter of 2026. While these authorizations would be sufficient from a U.S.\nregulatory perspective, we still require our V2 Mobile satellites to be in orbit and must complete the acquisition of\nthe relevant spectrum from EchoStar before we can commence our planned commercial Gen2 service in the United\nStates. Internationally, we have filed applications in nearly every country in which we intend to operate our Gen2\nservice, and approvals have been granted in a limited number of these jurisdictions to date. Each international\njurisdiction presents its own regulatory process and timeline, and we cannot predict when or whether approvals will\nbe granted in any given market. In addition, our Gen2 service is subject to ITU coordination requirements. We have\nan operational coordination agreement with EchoStar, which we expect to continue through 2026 and 2027, under\nwhich EchoStar has agreed to protect our lower-priority S-band V2 Mobile constellation. By prioritizing these step-\nchange capacity increases in our satellite-to-mobile capabilities, we expect to both enhance high-speed, low-latency\nservice quality in existing markets and provide services to previously capacity-limited and unserved regions,\nincluding dense urban areas and emerging markets.\nAI\nGrow consumer AI platform monetization. We plan to continue to grow revenue from our AI platform, the Grok\napplication, by increasing monetization of our existing user base. We will leverage our unique combination of\nreal‐time data, large‐scale distribution, leading foundational model, and hardware expertise to increase the number", - "path": "spacex-s1.pdf/p194", - "metadata": { - "length": 5178, - "summary": "167 Table of Contents industries such as retail and financial services that require high availability for critical operations as well as reliable connectivity in remote or hard-to-serve locations. As companies continue to invest in secure and resilient networks to keep critica...", - "page_nums": [ - 194 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 194, "artifact_ref": "page_citation_assets/page-194.png", @@ -8594,24 +6856,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b86ec4c3-70f8-5f4a-89b0-282920a8629a", - "type": "page", - "content": "168\nTable of Contents\nof Grok subscribers. Subscribers benefit from enhanced functionality, exclusive features, and access to our latest AI\nmodels. Since the introduction of our Grok subscription offering in 2025, we have increased the number of available\nfeatures to add value to our subscribers, including providing access to our latest and enhanced AI tools. We plan to\ncontinue adding new features and functionality while releasing increasingly capable Grok models to increase the\npenetration rate of our subscriber base. Our AI segment has demonstrated exceptional model velocity: since\nlaunching Grok, we have developed leading frontier models at a far faster rate of innovation than others. We\ncontinue to invest in scaling Grok through subsequent generations, including Grok 5. Our roadmap for future models\ncontains multi-trillion parameter models, which could represent a step change in reasoning depth and overall\nintelligence. We believe this pace of innovation strengthens the value proposition of our subscription offerings and\nsupports long term subscriber growth. While our subscriber growth has been strong, we believe we are still early in\nincreasing paid penetration across our Grok user base. We further believe there might be an incremental\nmonetization opportunity by introducing advertising into our stand-alone Grok offering.\nGrow X monetization. We intend to drive X revenue growth by increasing engagement across our users, increasing\nX Premium subscriber conversion, growing advertising revenue per user, and diversifying our advertising base. We\ncontinue to evolve X into an “Everything App,” integrating real-time information, communications, media,\npayments, banking, and more within one consumer app experience. This can improve the usefulness of X, and\ntherefore increase the usage and monetization potential of X. We have demonstrated rapid product launch velocity,\nwith frequent features and products launched since 2023, including Grok integration, long‐form video, audio and\nvideo calling, secure messaging, tool calling, long-form articles, and creator tools. We plan to further broaden the\nvalue proposition of X through offerings like Money, a product we launched in beta in November 2025, which aims\nto expand platform utility by enabling payments and other financial services. We updated X chat in 2025, featuring\nend-to-end encryption and no connection to our ad personalization, unlike other messaging services. We intend to\nfurther embed Grok throughout X to enhance discovery, analysis of posts, user support, and personalization,\nincreasing the usefulness of X and further improving the value of a paid subscription.\nWe also expect to grow advertising revenue per user and to diversify our advertiser base over time because of X’s\ncompelling advertiser value proposition—large-scale user engagement, real-time content, and advanced AI-driven\nperformance marketing tools. We intend to drive further advertising revenue growth by improving our performance\nadvertising capabilities, embedding AI to optimize ad campaigns, and launching richer ad formats, including those\nthat increase advertiser return on ad spending and their spend with us. In determining our advertising rates, we use\nan auction process in which advertisers bid to have their ads shown to the audience they are targeting, except for\ncertain reserved inventory, which is sold on a fixed price basis. We provide advertisers with several engagement\nmetrics, including: the number of impressions, price per ad, clicks, and conversions. Currently, Grok API access is\nnot included in our advertising rates to advertisers. We do not currently sell or offer advertisers the ability to place\nads on the Grok API.\nWe also expect X’s real-time content stream and engagement feedback, subject to some limitations for certain\ncontent, to strengthen our advertising product performance and relevance, improving outcomes for both consumers\nand advertisers, and increasing retention. We also began a phased roll-out of our new advertising platform, including\nthe new X Ads Manager, in April 2026. X Ads Manager is designed to help advertisers launch better campaigns\nfaster, with AI-powered systems enabling more precise, relevant, and dynamic ad delivery and a centralized\nworkflow for campaign creation, optimization, and real-time monitoring. Grok supports this strategy by helping\nadvertisers with campaign creation, creative optimization, and alignment with trending topics and user intent.\nDeepen enterprise and government adoption. We believe adoption of AI by both enterprise and government reflects\na structural industry shift, with room for substantial long-term growth. Our Grok Business, Grok Enterprise, and xAI\nGov offerings position us to scale in tandem with broader enterprise and governmental AI adoption. Our Grok API\nfurther extends our reach by enabling developers to integrate our models directly into their applications and\nworkflows. We intend to further support our enterprise offerings with a specialized salesforce and forward deployed\nengineers, engineers who embed directly with a client to implement our solution, to support customer acquisition\nand expansion.\nIncrease the scale of our terrestrial power and AI compute infrastructure. We plan to rapidly scale our terrestrial\nAI compute infrastructure through the continued deployment of large-scale clusters to support the training and", - "path": "spacex-s1.pdf/p195", - "metadata": { - "length": 5414, - "summary": "168 Table of Contents of Grok subscribers. Subscribers benefit from enhanced functionality, exclusive features, and access to our latest AI models. Since the introduction of our Grok subscription offering in 2025, we have increased the number of available features to add value...", - "page_nums": [ - 195 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 195, "artifact_ref": "page_citation_assets/page-195.png", @@ -8619,24 +6864,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4bb56e64-c0bb-5478-bc4a-5b5a1ebfbb14", - "type": "page", - "content": "169\nTable of Contents\ninference of our AI models. To rapidly bring gigawatt-scale data centers online, we leverage world-class\nengineering, first-principles thinking and deep “shovels-to-tokens” vertical integration. Our AI compute facilities,\nCOLOSSUS and COLOSSUS II, collectively provide approximately 1.0 gigawatt of compute power, with additional\npower capacity available for data center operations. COLOSSUS II will also provide the compute to train our next-\ngeneration Grok 5 AI model. We expect that once fully operational, the next phase of expansion at COLOSSUS II\nwill represent an additional 400MW of compute capacity. Our first-principles thinking enables us to build coherent\ncompute at scale and at rapid speed with lower costs than most other companies in the industry. We brought the first\ncluster of COLOSSUS online in 122 days, repurposing the shell of an existing factory, and the first cluster of\nCOLOSSUS II online even faster in 91 days. As an illustrative comparison, an industry benchmark to bring online a\n100 megawatt greenfield data center is approximately two years. We also demonstrated a significant improvement in\ncost efficiency, achieving data center construction costs for COLOSSUS II that are considerably lower than industry\nbenchmarks on a per megawatt basis. As AI workloads increase in complexity and scale, data center operators face\nconstraints related to power density, cooling, network bandwidth, supply chain management, construction expertise\nand capital deployment. Our experience in designing mission-critical hardware systems, optimizing power\nefficiency, and operating distributed infrastructure networks provides a differentiated foundation for continuing to\ngrow and advance the next-generation compute platform. We believe that continued investment in our compute\ninfrastructure is critical to supporting long-term consumer and enterprise growth as AI adoption accelerates, while\nalso providing a powerful foundation for our transition to orbital AI compute at scale.\nIn addition, our leadership in compute infrastructure positions us to monetize not only AI software applications built\non our models, but also the underlying compute that powers them. As we continue to scale our terrestrial compute\ninfrastructure to support internal model development, training, and inference workloads, we intend to sell our high-\nperformance compute capacity to a limited number of third party customers.\nDeploy orbital AI compute at scale. We believe growth of the projected $26.5 trillion-dollar AI market will be\nconstrained by Earth’s inability to rapidly scale power generation, underscoring the challenge of achieving terawatt-\nscale compute without harming people and the environment. While we expect terrestrial power generation to\ncontinue to grow, we believe the physical, environmental, and regulatory constraints will prevent it from delivering\nthe orders-of-magnitude increases needed to match future energy demands of the AI era. Power from the Sun, an\nenormous, free fusion reactor in the sky, represents approximately 99.8% of the solar system’s energy and offers the\nonly truly scalable solution to terrestrial energy constraints. By combining virtually unlimited solar power in space\nwith our industry-leading launch costs and satellite manufacturing capabilities, we believe we can deliver compute\nover time at a fundamentally lower cost structure than is possible on Earth. By the end of the decade, we intend to\ndeploy the first modular orbital AI compute shells and begin monetizing capacity through the sale of AI software\nand AI compute. We aim to launch 100 gigawatts of AI compute capacity on solar-powered satellites each year,\nequivalent to roughly one fifth of total annual U.S. power production in 2025. The amount of compute capacity we\ncan launch depends on three components—payload, satellite capacity, and launch frequency. With respect to\npayload, Starship V3 is designed to deliver 100 metric tons to space in a fully reusable configuration while enabling\nrapid turnaround times, and future generations could reach 200 metric tons, potentially as soon as Starship V4. With\nrespect to satellite capacity, we expect solar cells optimized for the space environment will be produced at a rapid\nrate, with early satellites generating 100 kilowatts of compute power and scaling from there. Finally, with respect to\nlaunch frequency, we expect to be able to scale to thousands of launches per year. Together, we expect these\nachievements will allow us to transport approximately one million metric tons to orbit annually, powering 100\ngigawatts of AI compute. Such compute capacity will also play a critical role in advancing our human augmentation\nvision by expanding the reach, speed, and capability of AI beyond what is possible with terrestrial compute\ninfrastructure alone.\nWe believe we are well-positioned to execute and deliver orbital AI compute to build the infrastructure of the future.\nWe believe orbital AI compute is an incredibly difficult challenge that only we can solve at scale in the near term.\nDesign and manufacture our own chips. We plan to deepen our strategic collaboration with Tesla and Intel through\nTerafab. In connection with such collaboration, we have agreed with Tesla on a general framework for the future\ndevelopment of Terafab. Any specific projects undertaken pursuant to this framework will be subject to separate\nnegotiations and agreements (including any development timelines, milestones and capital expenditures) and have\nnot yet been determined. We expect Terafab to be the world’s largest chip manufacturing facility, with the goal of", - "path": "spacex-s1.pdf/p196", - "metadata": { - "length": 5648, - "summary": "169 Table of Contents inference of our AI models. To rapidly bring gigawatt-scale data centers online, we leverage world-class engineering, first-principles thinking and deep “shovels-to-tokens” vertical integration. Our AI compute facilities, COLOSSUS and COLOSSUS II, collect...", - "page_nums": [ - 196 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 196, "artifact_ref": "page_citation_assets/page-196.png", @@ -8644,24 +6872,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6aef6fc7-4388-5a58-afe6-aba077ae0d48", - "type": "page", - "content": "170\nTable of Contents\neventually achieving one terawatt of annual compute production capacity. While Terafab is intended to expand our\ninternal chip manufacturing capabilities, we expect to continue sourcing a significant portion of our compute\nhardware from third-party suppliers. We view Terafab as complementary to these relationships, enabling us to\naugment our access to compute hardware at massive scale and further complete our highly vertically integrated\ncompute platform by extending our control to the foundational chip layer. By developing end-to-end capabilities\nspanning the design of lithography masks, fabrication of logic and memory chips, and advanced packaging, all in a\nvertically integrated closed-loop single plant, we will be able to more rapidly iterate to improve chip design and\nperformance. We plan to design chips that are optimized for the space environment. This collaboration directly\nenables our planned orders-of-magnitude increases in AI compute deployment in orbit which would be constrained\nby pure reliance on external foundries. Leveraging shared engineering resources, intellectual property, and\ninfrastructure across Tesla and SpaceX, as well as Intel’s expertise in designing, fabricating and packaging ultra-\nhigh-performance chips at scale, Terafab is designed to create powerful ecosystem synergies that accelerate\ninnovation cycles and reduce costs. Just as we manufacture approximately 80% of Starship in-house, we expect\nsignificant speed and cost advantages from Terafab’s vertical integration. We believe this integration, if achieved,\nwill provide us with a critical competitive advantage in the race to scale AI infrastructure, especially as we begin our\norbital AI compute satellite deployments.\nLaunch digital human augmentation. In partnership with Tesla, we are developing Macrohard, an agentic platform\ndesigned to fully emulate digital workflows and augment human operation of computers—from coding and product\ndevelopment to management and entire business processes. Similar to how autonomous systems emulate human\ninputs to execute complex tasks, Macrohard is designed to augment how humans operate computers and tools to\nanalyze, create, and manage workflows. Unlike other enterprise software and AI applications that primarily digitize\nworkflows and systematize historical processes, our solutions are designed to operate as real-time, intelligence-\ndriven extensions of the user. Macrohard aims to combine our frontier AI model with Tesla’s physical AI prowess to\nachieve the goal of augmenting the operational functions of entire companies. We expect Macrohard to benefit from\nrunning on both state-of-the-art processors and cost efficient Tesla processors, a critical advantage of our vertical\nintegration. We believe Macrohard has the potential to fundamentally transform how companies across all industries\nare structured and operate, thereby allowing dramatic increases in human productivity and prosperity.\nFuture Markets\nWe aim to build the infrastructure of the future in Space, leveraging our foundational competitive advantage, the\nability to launch mass at scale. By opening access to space to industries on Earth, we can grow our business by\ncreating new markets. Our technological capabilities enable us to repeatedly create new markets by pushing the\nboundaries of what space can support. As we continue to advance and scale, we expect to unlock new market\nopportunities. Over the long-term, we expect our Starship-enabled opportunities to include:\n• Point-to-point terrestrial travel. We plan to develop ultra-fast long-haul point-to-point Earth transport using\nStarship, enabling passengers and cargo to travel between major cities in a fraction of current transit times,\nrevolutionizing global logistics and passenger travel with unprecedented speed and efficiency.\n• Space tourism. With meaningful advances in space technology and the continued build-out of orbital flight\ninfrastructure, we expect increasing interest in human space travel as it becomes easier and more common to\naccess space.\n• In-orbit manufacturing. We aim to establish in-space manufacturing facilities that leverage the unique\nmicrogravity conditions of space to produce materials, pharmaceuticals, and advanced components that are\ndifficult or impossible to manufacture on Earth, opening new high-value industrial markets.\n• Passenger and cargo transport to the Moon and Mars. We intend to support large-scale passenger and cargo\nmissions to the Moon and Mars, delivering the people, equipment, and supplies needed to establish permanent\nhuman settlements and accelerate the path to becoming a self-sustaining multiplanetary civilization.\n• Energy production on the Moon and Mars. We aim to develop large-scale solar energy production on the\nMoon and Mars, taking advantage of the thin atmosphere and constant solar exposure to generate power for\nmanufacturing, habitats, and future infrastructure at scale.", - "path": "spacex-s1.pdf/p197", - "metadata": { - "length": 4961, - "summary": "170 Table of Contents eventually achieving one terawatt of annual compute production capacity. While Terafab is intended to expand our internal chip manufacturing capabilities, we expect to continue sourcing a significant portion of our compute hardware from third-party suppli...", - "page_nums": [ - 197 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 197, "artifact_ref": "page_citation_assets/page-197.png", @@ -8669,24 +6880,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a1e04708-7995-5b68-a99a-35eb406a8b12", - "type": "page", - "content": "171\nTable of Contents\n• Manufacturing capabilities on the Moon and Mars. We plan to build manufacturing infrastructure on the\nMoon and Mars that utilizes local resources to produce fuel, construction materials, and other essential\nresources, reducing dependence on Earth resupply and enabling sustainable long-term presence.\n• Asteroid mining. We plan to pursue asteroid mining operations to extract metals and other critical resources\nfrom near-Earth and main-belt asteroids, providing abundant raw materials for space-based industries and\nreducing the need to launch mass from Earth.\nOur Market Opportunity\nWe believe space represents the largest economic frontier in human history. Our innovations and technological\nadvancements are redefining existing industries and creating new market opportunities across Space, Connectivity\nand AI. We believe we have a distinct ability to identify, develop, and commercialize new multi-trillion-dollar\nmarkets that did not previously exist. We currently stand alone in our ability to deliver revolutionary breakthroughs\nacross spaceflight and exploration, global connectivity, and artificial intelligence, enabling an age of abundance that\nwe believe has the potential to propel an unprecedented expansion in the global economy.\nBy pioneering the world’s first and only fleet of reusable rockets at scale, we revolutionized space access through\ndramatically lower cost and unmatched reliability. Lowering costs by orders of magnitude creates entirely new\nindustries on Earth and in space that were technologically and economically infeasible for others to access\nhistorically. Our first trillion-dollar market was Starlink, a satellite service supported by our low-latency, high-speed\nLEO constellation that required the rapid, low-cost deployment of millions of kilograms of hardware into orbit. Our\nStarlink constellation powers a global connectivity platform capable of supporting broadband and mobile services,\nenabling high-speed internet access to homes, enterprises, governments, and mobile users across virtually any\nlocation on Earth. We believe our next trillion-dollar market is AI compute, which we contemplate will leverage our\nrockets and satellites for massive orbital deployment.\nWe believe we have identified the largest TAM in human history. We estimate that our quantifiable TAM is $28.5\ntrillion, consisting of $370 billion in Space from space-enabled solutions; $1.6 trillion in Connectivity across $870\nbillion in Starlink Broadband and $740 billion in Starlink Mobile as well as additional opportunities in enterprise\nand government; $26.5 trillion in AI across $2.4 trillion in AI infrastructure, $760 billion in consumer subscriptions,\n$600 billion in digital advertising, and $22.7 trillion in enterprise applications. For illustrative purposes of sizing our\naddressable market opportunity, we exclude China and Russia from our global estimates.\nIn addition to the markets we serve today, we believe we are poised to catalyze transformative breakthroughs and\ncreate entirely new markets. Given these are longer-term opportunities at earlier stages of development, we do not\nquantify them in our TAM estimates; however, we believe that over time each of these markets could eventually\nrepresent multi-trillion-dollar economic opportunities. These new markets include long haul point-to-point terrestrial\ntravel, space tourism, in-orbit manufacturing, asteroid mining, energy production and manufacturing on the Moon\nand Mars, and passenger and cargo transportation to the Moon and Mars.", - "path": "spacex-s1.pdf/p198", - "metadata": { - "length": 3553, - "summary": "171 Table of Contents • Manufacturing capabilities on the Moon and Mars. We plan to build manufacturing infrastructure on the Moon and Mars that utilizes local resources to produce fuel, construction materials, and other essential resources, reducing dependence on Earth resupp...", - "page_nums": [ - 198 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 198, "artifact_ref": "page_citation_assets/page-198.png", @@ -8694,24 +6888,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8faa6e29-4c9a-5b3b-ba7c-eb90401a639f", - "type": "page", - "content": "172\nTable of Contents\nSpaceX’s Estimated TAM by Segment\nSpace\nWhile the size of the space market is massive for any company to address, our capabilities in space represent a\nfoundational competitive advantage that allow us to address markets that represent significant portions of global\ngross domestic product (“GDP”)—connectivity and AI. We estimate a total market opportunity of $370 billion\nacross space-enabled solutions, with the lunar economy presenting a significant upside not included in the estimate.\nSpace-Enabled Solutions. According to Novaspace, space-enabled solutions represented a $370 billion market in\n2025, including spacecraft manufacturing, launch services, satellite operations, positioning, navigation and timing\n(“PNT”) devices and value-added services, as well as uncontracted costs of government space agencies. Both\ncommercial and government customers participate in this market, with growing space-based defense budgets\nreflecting prioritization of security, resilience, and strategic autonomy by governments globally. For the purpose of\nsizing our TAM, we exclude the value of satellite communications services, as we include those within our\nConnectivity segment.\nLunar Economy. We believe the development of a sustained human and commercial presence on the Moon has the\npotential to give rise to a new lunar economy encompassing transportation, infrastructure, communications, energy,\nmanufacturing (including the production of satellites and advanced chips), resource extraction, and scientific and\ncommercial activity. Early demand is already emerging from government space agencies and research institutions,\nand we expect this to expand over time to include commercial enterprises seeking to leverage the Moon as a\nplatform for logistics, industrial activity, and deep-space exploration. Establishing a lunar economy requires first\nproving reliable extraction of water ice to sustain life and producing hydrogen-oxygen propellant, alongside building\npower, transport, and storage infrastructure in an extreme, high-cost environment. If achieved, we believe these\nsame resources and the Moon’s low gravity unlock the potential for scalable growth through an efficient fuel\nproduction and refueling hub, creating a strategic access point that can potentially support deeper space\nindustrialization and serve as a stepping stone to establishing a civilization on Mars. Although we believe the\npotential size and scope of the lunar economy is extraordinarily large, we are not providing an estimate of the TAM\nfor this opportunity at this time because expectations regarding the timing, pace of adoption, regulatory frameworks,\nand ultimate scope of commercial activity beyond Earth are rapidly evolving alongside the development and\ndeployment of the technology necessary to establish a lunar presence (such as Starship). As the Moon transitions", - "path": "spacex-s1.pdf/p199", - "metadata": { - "length": 2879, - "summary": "172 Table of Contents SpaceX’s Estimated TAM by Segment Space While the size of the space market is massive for any company to address, our capabilities in space represent a foundational competitive advantage that allow us to address markets that represent significant portions...", - "page_nums": [ - 199 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 199, "artifact_ref": "page_citation_assets/page-199.png", @@ -8719,24 +6896,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_16ee5fcb-57cd-5711-a03e-d8cb1e90ffa9", - "type": "page", - "content": "173\nTable of Contents\nfrom a scientific outpost into an industrial frontier, SpaceX is positioned to spearhead this revolutionary expansion,\nand we believe that continued advancements in our launch capabilities, space infrastructure capabilities, and cost\nefficiency will allow us to meaningfully accelerate the development of a sustainable lunar economy.\nConnectivity\nWe believe the global connectivity market represents a substantial and durable opportunity, driven by the increasing\nreliance of consumers, enterprises, and governments on high-speed, low-latency, reliable connectivity across both\nterrestrial and remote environments. Across Starlink Broadband and Starlink Mobile, we estimate a total market\nopportunity of $1.6 trillion reflecting primarily consumer use cases. We believe these traditional use cases, however,\ndo not account for the long-term market opportunity, as connectivity is evolving into a critical infrastructure layer\nunderpinning the global economy, enabling entirely new categories of demand. As high-performance, ubiquitous\nconnectivity becomes embedded across transportation networks, autonomous systems, and smart devices, we expect\nthe scope of the market to extend well beyond the traditional definitions.\nStarlink Broadband. The global demand for ubiquitous, high-speed broadband internet creates an approximately\n$870 billion dollar opportunity. Our satellite broadband service, Starlink, is positioned to capture value across\nmultiple massive and rapidly expanding markets:\n• Consumer Broadband. As the digital economy continues to expand, ubiquitous, high-speed, reliable internet\nhas become a structural necessity for households worldwide—powering opportunity and the next wave of\nglobal prosperity. According to Euromonitor, there were approximately 1.8 billion global households in 2025.\nAs Starlink develops, we believe that our broadband network can connect, and improve the existing connection,\nof every household globally. Given varying economic conditions and consumer purchasing power across\ndifferent countries, we use a different monthly ARPU for different parts of the world based on country-specific\nconsumer broadband ARPU from Omdia as we seek to make our service affordable and accessible across\ndifferent economic development contexts. Region-specific ARPU assumptions result in a weighted average of\n$31 monthly ARPU for residential broadband internet services globally, according to Omdia. This global\naverage consists of a weighted average monthly ARPU of $43 in high-income markets, $16 in upper-middle\nincome markets, and $9 in lower-middle income and low income markets per World Bank classification.\nTogether this represents a total addressable market of $660 billion based on 1.8 billion households.\nApproximately 40% of the global population lives in rural areas, remaining structurally underserved by\nterrestrial broadband infrastructure due to unfavorable deployment economics, limited network density and high\nlast-mile costs.\nThis structural imbalance creates a large, durable and relatively uncontested baseline market for satellite-based\nconnectivity solutions. For many of these households, Starlink represents the first viable option for high-speed,\nlow-latency internet access, with limited competition from terrestrial providers. Unlike terrestrial networks,\nwhich require significant incremental capital to extend coverage to low-density areas, our space-based\narchitecture enables economically scalable service delivery across these regions with minimal marginal cost per\nadditional user.\nImportantly, while rural and underserved geographies provide a compelling initial adoption vector, we believe\nStarlink’s value proposition extends well beyond these markets. As network capacity increases and product\nperformance continues to improve, we expect to compete increasingly in suburban and urban environments.\nAccordingly, while rural households represent a large and durable entry point for our connectivity offering, we\nview this segment as a foundational layer upon which significantly broader consumer, enterprise and\ngovernment demand can be built.\n• Enterprise Solutions. We offer fixed site broadband solutions tailored for the needs of our enterprise customers\nacross many different industries, including construction, agriculture, retail, telecom, hospitality and others. For\nthe purpose of sizing market opportunity, we include small and medium sized businesses within our Enterprise\nSolutions market opportunity. Our Starlink enterprise offerings can provide important primary or back-up\nconnectivity for every business in the geographies where we are licensed to operate. According to Grand View", - "path": "spacex-s1.pdf/p200", - "metadata": { - "length": 4685, - "summary": "173 Table of Contents from a scientific outpost into an industrial frontier, SpaceX is positioned to spearhead this revolutionary expansion, and we believe that continued advancements in our launch capabilities, space infrastructure capabilities, and cost efficiency will allow...", - "page_nums": [ - 200 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 200, "artifact_ref": "page_citation_assets/page-200.png", @@ -8744,24 +6904,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_85099a67-4950-55a0-a471-df4b3c878b27", - "type": "page", - "content": "174\nTable of Contents\nResearch, the global business broadband market in 2025 across small to medium sized business and enterprise\nusage is estimated to be $200 billion.\n• Government Solutions. Driven by increasing demand for resilient, low-latency, and highly secure\ncommunications in contested and remote environments, defense organizations and governments around the\nworld are increasingly turning to commercial satellite providers with connectivity solutions to supplement and\nenhance traditional military networks. According to Novaspace, the global satellite communications market\ndriven by defense and government demand in 2025 was $5 billion. The estimate of the government\ncommunications market includes only publicly disclosed programs and budgets and does not include classified\nmissions or other restricted uses, which we believe represent additional sources of demand.\nStarlink Mobile. According to Omdia, as of December 31, 2025, there were eight billion mobile connected devices\nglobally. We believe our Starlink Mobile offering will be able to provide continuous global coverage and\nsubstantially reduce mobile “dead zones,” which remain areas that are structurally underserved by the limitations of\nthe networks of current mobile network operators. For example, according to the J.D. Power U.S. Wireless Network\nQuality Performance Study, U.S. wireless customers experienced service problems in approximately one out of\nevery 11 mobile interactions, even in well-connected areas. In addition, an estimated 40% of the global population\nresided in rural areas in 2024 according to the World Bank, where terrestrial mobile coverage can be limited or\nunreliable. While we expect Starlink Mobile service today to be most impactful for customers in remote areas\nuncovered by terrestrial mobile networks, as our constellation grows and our product performance continues to\nimprove, we will compete to be the preferred connectivity experience to our customers no matter where they are\nlocated, whether in rural, suburban, or urban areas. The next-generation of Starlink Mobile satellites, in combination\nwith our recent purchase of wireless spectrum from EchoStar, is designed to provide high bandwidth and low\nlatency connectivity directly to end user devices, enabling a connectivity solution on par with terrestrial mobile\nnetworks. Given varying economic conditions and consumer purchasing power across different countries, we\nassume a different monthly ARPU for different parts of the world as we seek to make our service affordable and\naccessible across different economic development contexts. Our region-specific ARPU assumptions result in a\nweighted average monthly mobile ARPU of $8 per user. This global average consists of a weighted average monthly\nARPU of $18 in high-income markets, $5 in upper-middle income markets, $2 in lower-middle, and $2 in low\nincome markets. Based on the total number of connected devices globally and the mobile ARPU, we estimate the\nStarlink Mobile market opportunity to be $740 billion. We expect to continue to partner with mobile network\noperators globally as we expand coverage and participate in the broader mobile connectivity market.\nAdditional and Future Starlink Applications. We believe the long-term market opportunity for Starlink extends\nmaterially beyond traditional fixed broadband and satellite-to-mobile connectivity. Many of these use cases\nrepresent new categories of demand that were not previously addressable with legacy terrestrial or satellite solutions\ndue to limitations in coverage, latency, capacity, or cost. While these additional and future use cases are early stage\nand not yet captured in conventional industry market definitions, we believe they have the potential to significantly\nexpand the total addressable market for connectivity over time.\n• Enterprise Mobility. Because our Starlink solutions are uniquely well-suited for in-motion environments,\nremote, or hard-to-serve locations, we are able to provide high-performance connectivity across land, air, and\nsea. We believe we have a differentiated right to win these verticals as existing connectivity solutions are not\nable to provide sufficient speed, latency and reliability, with frequent service outages driven by weather, orbital\nmechanics and coverage gaps. Our Starlink constellation directly addresses these deficiencies, creating a\ncompelling path for us to capture a substantial share of opportunities and to unlock previously unattainable\nlevels of service quality and customer willingness to pay.\nIn land mobility, Starlink supports connectivity for vehicle fleets, including trucking, rail, public safety vehicles,\nand autonomous systems, enabling real-time telematics, route optimization, safety monitoring, and onboard\npassenger connectivity, as fleets become increasingly connected and data-driven.\nIn aviation, Starlink delivers high-speed, low-latency in-flight connectivity for commercial airlines, business\naviation, and government aircraft, supporting passenger broadband, operational communications, and real-time\naircraft data transmission, as airlines increasingly prioritize differentiated onboard experiences and operational", - "path": "spacex-s1.pdf/p201", - "metadata": { - "length": 5193, - "summary": "174 Table of Contents Research, the global business broadband market in 2025 across small to medium sized business and enterprise usage is estimated to be $200 billion. • Government Solutions. Driven by increasing demand for resilient, low-latency, and highly secure communicat...", - "page_nums": [ - 201 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 201, "artifact_ref": "page_citation_assets/page-201.png", @@ -8769,24 +6912,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c0f8fa3f-8d4e-543c-8ad6-e07bc13cf47e", - "type": "page", - "content": "175\nTable of Contents\nefficiency. There are approximately 23,900 commercial aircraft, according to Oliver Wyman, and\napproximately 24,500 privately owned aircraft, according to Corporate Jet Investor, in the world, which can be\nserved by our aviation offering.\nIn maritime, Starlink provides connectivity for commercial shipping, offshore energy platforms, cruise lines,\nand government vessels, enabling crew welfare, operational optimization, safety systems, and real-time data\ntransfer, as connectivity becomes a standard requirement across global fleets. Our potential customer base as of\n2025 consists of approximately 99,000 commercial merchant ships, defined as being 100 gross tons or more,\napproximately 21,000 fishing vessels, and approximately 4,000 cruise ships and private yachts, according to\nMarine Traffic Dashboard.\n• Expanded Enterprise and Government Applications\nEnterprise Back-Up and Failover Connectivity. As connectivity becomes a mission critical component of\nenterprise operations, we believe back-up and failover connectivity is evolving into a foundational layer of\nenterprise infrastructure. The increasing cost of downtime, combined with the proliferation of cloud-based and\nlatency-sensitive applications, is driving enterprises to prioritize uptime, business continuity, and network\nresilience and adopt multi-layered connectivity architectures. We believe this shift will result in a meaningful\nexpansion of the connectivity market.\nExpanded Government Applications. We believe traditional connectivity market estimates do not fully\ncapture the scope of government-related demand, particularly in mission-critical and classified applications. The\ngrowing importance of secure communications, real-time intelligence, and resilient network architectures is\ndriving sustained investment in connectivity capabilities across defense and civilian agencies. These use cases\ntend to command higher value and longer-duration contracts, contributing to a meaningful and durable\nexpansion of the connectivity market.\nSmart Device Connectivity. The proliferation of connected devices across various physical environments—\nincluding sensors, wearables, vehicles, appliances, and infrastructure systems—is driving increasing demand for\nubiquitous, reliable, and low-latency connectivity. As of 2025, there were approximately 22 billion IoT\nconnected devices globally, forecasted to reach 47 billion by 2031. As billions of connected devices generate,\ntransmit, and act on data, connectivity becomes an essential enabler of new categories of economic activity. As\nthese devices grow in scale into the tens of billions globally and become more intelligent and data-intensive, we\nbelieve the scope of the connectivity market will expand significantly beyond traditional human-centric usage.\nIn-Orbit Data Transport. We operate a large constellation of over 23,000 inter-satellite lasers that create a\ndynamic mesh network in space and enable traffic rerouting through orbit. We believe this laser mesh network\nwill help us unlock a new connectivity market by enabling third-party satellites to utilize our in-orbit data\ntransport layer. While most of our laser mesh network capacity is used to power our Starlink services, we\nselectively monetize excess capacity through our Plaser program. We allow third parties to purchase our space\nlaser hardware and connect their satellites to our Starlink network, allowing them to offload data to a ground\nstation anywhere on Earth while bypassing the need to build their own relay architecture or ground stations. As\nsatellite constellations grow, we expect market demand for high-throughput, low-latency data relay to increase\nacross commercial and government operators. While this market remains nascent, we believe the opportunity\nrepresents a meaningful expansion beyond traditional satellite connectivity TAM.\nArtificial Intelligence\nThe market for artificial intelligence is currently undergoing explosive structural growth, emerging as a foundational\nutility for the modern global economy and unlocking a multi-trillion-dollar opportunity. Our frontier models,\nconsumer and enterprise applications, and AI infrastructure solutions are strategically positioned to capture value\nacross four key components of this vast ecosystem, resulting in an estimated total market opportunity of $26.5\ntrillion.\nAI Infrastructure. According to RAND Corporation, global data center compute demand is estimated to be 235\ngigawatts in 2030, of which 70% is estimated to be utilized for AI workloads. Assuming a target Power Usage", - "path": "spacex-s1.pdf/p202", - "metadata": { - "length": 4576, - "summary": "175 Table of Contents efficiency. There are approximately 23,900 commercial aircraft, according to Oliver Wyman, and approximately 24,500 privately owned aircraft, according to Corporate Jet Investor, in the world, which can be served by our aviation offering. In maritime, Sta...", - "page_nums": [ - 202 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 202, "artifact_ref": "page_citation_assets/page-202.png", @@ -8794,24 +6920,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ff16ee97-d896-508e-bd44-fe8c2e7fefe1", - "type": "page", - "content": "176\nTable of Contents\nEffectiveness of 1.2 and an all-in chip power consumption per GPU of 1.3 kilowatts per GPU—that of an H100\nSXM—this AI workload demand corresponds to 104 million GPUs required. We apply an 80% utilization rate per\nthe National Electrical Installation Standards and a GPU rental rate of $3.33 per hour, according to Silicon Data,\nwhich is based on the median of neocloud GPU rental rates in 2025; we note that the rental rate has historically\nvaried subject to market conditions. As a result, we estimate the AI compute infrastructure market opportunity to be\napproximately $2.4 trillion.\nConsumer Subscriptions. As demand for AI solutions surges, fueled by widespread adoption of AI tools that\nenhance productivity, creativity, personalization, and real-time assistance in everyday life, consumers are\nincreasingly turning to subscription-based access to high-performance AI platforms. These platforms, equipped with\nadvanced reasoning, seamless real-time data integration, and multimodal capabilities, are essential in today’s ever-\nmore receptive and interconnected world. We believe SpaceX is well positioned to address this opportunity through\nour X and Grok platforms by delivering a differentiated product centered on truth-seeking and real-time relevance.\nOur roadmap for future models contains multi-trillion parameter models, which could represent a step change in\nreasoning depth and overall intelligence. Through Grok’s integration with X and proprietary access to real-time data\ninflows, we believe we can better address a broader set of high-frequency, high-value consumer use cases and\nincrease user engagement and willingness to pay, positioning Grok to capture a larger share of the consumer AI\nsubscription market relative to standalone, non-integrated offerings. We estimate our market opportunity based on\nthe global population of individuals aged 10 and over in 2025—approximately five and a half billion according to\nEuromonitor—multiplied by the weighted average monthly subscription revenue of $12, resulting in an annualized\nmarket opportunity of approximately $760 billion. Our weighted average monthly revenue assumes different\nmonthly subscription fees across different geographies around the world. We assume $30 monthly cost of a\nSuperGrok subscription in high-income countries, $8 monthly cost in upper-middle and lower-middle income\ncountries, and significantly lower monthly cost in low income countries, as defined by the World Bank.\nDigital Advertising. Digital advertising represents a large and growing global market opportunity as businesses\nincrease marketing budgets towards digital platforms that enable targeted advertising, measurable performance, and\ndirect engagement with consumers. In 2025, global digital advertising spending totaled $600 billion according to\nS&P Global Market Intelligence. We believe that X’s ability to combine large-scale user engagement, real-time\ncontent, and advanced AI-driven performance marketing tools positions us well to participate in this significant\nmarket opportunity.\nEnterprise Applications. AI is revolutionizing enterprise applications as organizations across industries increasingly\nadopt AI solutions to automate complex workflows, augment knowledge workers, enhance decision-making,\nredefine productivity, and improve operational efficiency. Specifically, we believe that our enterprise applications,\nincluding Macrohard, agentic AI, will increasingly support knowledge workers across industries by automating\nroutine cognitive tasks, assisting with research and analysis, generating content and code, and refining decision-\nmaking processes. Ultimately, we believe this transformation could evolve knowledge workers into empowered\nmanagers of autonomous agents, unlocking unprecedented levels of creativity and productivity.\nWe believe we are still in the early days of AI transforming enterprises, with AI-powered enterprise applications\npoised to reshape the digital economy. The Digital Cooperation Organization (“DCO”) defines the digital economy\nas economic activity reliant on, significantly enhanced, or enabled by digital technologies and their applications,\nincluding the following products and services: AI and advanced analytics, blockchain and decentralized\ntechnologies, cloud services, digital connectivity, digital devices and the IoT, encryption and cybersecurity,\nimmersive technologies, and robotics and autonomous systems. DCO estimates that the digital economy will grow\nthree times faster in 2026 on a year-over-year basis compared to the estimated growth of the global GDP, reaching\napproximately $22.7 trillion in 2026. In a survey of CTOs, senior technologists, policymakers, and digital economy\nexperts, also conducted by DCO, AI and advanced analytics were identified by 69% of respondents as their top\ndigital technology priority—higher than any other surveyed priority. We believe that our enterprise strategy, which\nis focused on serving the digital needs of the world’s largest industries with AI solutions, positions us competitively\nto pursue this rapidly growing opportunity.", - "path": "spacex-s1.pdf/p203", - "metadata": { - "length": 5119, - "summary": "176 Table of Contents Effectiveness of 1.2 and an all-in chip power consumption per GPU of 1.3 kilowatts per GPU—that of an H100 SXM—this AI workload demand corresponds to 104 million GPUs required. We apply an 80% utilization rate per the National Electrical Installation Stan...", - "page_nums": [ - 203 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 203, "artifact_ref": "page_citation_assets/page-203.png", @@ -8819,24 +6928,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_197146af-8c42-5e12-819e-de1e691f30b2", - "type": "page", - "content": "177\nTable of Contents\nFuture Markets\nBeyond the established markets reflected in our TAM, we envision that ongoing advancements in our technology\nand infrastructure will unlock entirely new markets over time. As launch costs decline, satellite capabilities advance,\nand large-scale compute infrastructure expands, innovative applications and new markets may emerge that harness\nour integrated infrastructure across space, connectivity, and AI. Although these prospects remain nascent, with\nuncertain timing and scale—and thus are excluded from our quantified total addressable market estimates—we\nbelieve they hold trillions of dollars of eventual potential for groundbreaking innovation and value creation,\neventually representing multi-trillion-dollar economic opportunities.\nLong-Haul Point-to-Point Terrestrial Travel. Our Starship vehicle has the potential to revolutionize terrestrial\ncommercial transportation by achieving an unparalleled combination of speed, reliability and cost efficiency. This\ncapability could reduce most international long-haul flights to under 30 minutes, enabling point-to-point travel to the\nfurthest location in an hour or less. While we must surmount technological, economic and regulatory obstacles to\nfully capitalize on this opportunity—such as restrictions on supersonic flights over land in certain regions due to\nsonic booms, and the economic feasibility of shorter routes—we believe we are strategically positioned to take share\nof the terrestrial logistics and transportation market.\nSpace Tourism. Historically, human spaceflight has been limited to government astronauts, augmented by a limited\nnumber of privately funded missions. Yet, with meaningful advances in space technology and the ongoing\nexpansion of orbital flight infrastructure, we anticipate a gradual increase in accessibility of spaceflight over time,\npotentially enabling a new category of commercial human spaceflight and tourism. Under 30 people out of the\nglobal population visited Earth’s orbit in 2025, which we believe could be a far greater number in the future.\nPassenger and Cargo Transport to the Moon and Mars. Looking further ahead, advances in reusable launch\nsystems and deep-space transportation infrastructure may enable new forms of interplanetary logistics, including\npassenger and cargo transportation to the Moon and Mars. Supporting a sustained human presence on another planet\nwould require the regular transport of people, equipment, and materials at a scale not previously possible.\nEnergy Production and Manufacturing on the Moon and Mars. Establishing a sustained human and industrial\npresence on the Moon and Mars would require reliable, large-scale energy generation to support habitats,\nmanufacturing, and scientific operations. Potential solutions could include solar power systems, taking advantage of\nthe thin atmosphere, constant solar exposure, and other advanced energy technologies designed to operate in the\nunique environmental conditions of the Moon and Mars. Over time, we believe that advances in planetary\ninfrastructure may enable manufacturing on the Moon and Mars using locally available resources.\nIn-Orbit Manufacturing. Terrestrial manufacturing is inherently constrained by gravity, which imposes\nfundamental limitations on processes at the atomic and molecular level. Establishing in-orbit infrastructure unlocks\nlarge-scale, high-value production free from those traditional barriers, enabling breakthroughs in precision and\nefficiency. The microgravity environment of space fosters innovative advancements in key industries, such as\npharmaceuticals—where it enhances drug solubility, purity, crystallization, and stability—as well as, advanced\nmaterials and semiconductors, allowing for superior crystal formation and material properties unattainable on Earth.\nBeyond these particle-level innovations, in-orbit facilities overcome Earth’s energy constraints by harnessing\nabundant, uninterrupted solar power, facilitating energy-intensive operations with unparalleled sustainability.\nAsteroid Mining. Asteroid resources, including platinum-group metals, rare earth elements, nickel, cobalt, iron and\nwater, represent a vast untapped reservoir beyond Earth’s gravity well, with some near-Earth objects containing\nconcentrations of elements far exceeding typical terrestrial ore grades. With meaningful advances in reusable launch\ncapabilities, autonomous robotics, and in-situ processing technologies, we believe the accessibility of asteroid\nresources will expand over time, unlocking a new category of commercial space resource extraction. We believe our\nexperience in launch systems, spacecraft development, and space infrastructure uniquely positions us to pursue\nasteroid mining operations to extract metals and other critical resources from near-Earth and main-belt asteroids,\nproviding abundant raw materials for space-based infrastructure, reducing the need to launch all mass from Earth.", - "path": "spacex-s1.pdf/p204", - "metadata": { - "length": 4960, - "summary": "177 Table of Contents Future Markets Beyond the established markets reflected in our TAM, we envision that ongoing advancements in our technology and infrastructure will unlock entirely new markets over time. As launch costs decline, satellite capabilities advance, and large-s...", - "page_nums": [ - 204 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 204, "artifact_ref": "page_citation_assets/page-204.png", @@ -8844,24 +6936,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b90928fb-c238-5f96-8c82-1709ba0551d5", - "type": "page", - "content": "178\nTable of Contents\nOur Solutions & Services\nUnparalleled Launch Capability\nOur unmatched launch capability is the foundational competitive advantage that enables our unique solutions and\nservices. We are the market leader in orbital launch, providing low-cost, reliable, and frequent access to space for\ncommercial and government customers. Our launch services are built around a fleet of reusable rockets and\nspacecraft. SpaceX’s family of rocket systems and spacecraft address missions ranging from routine cargo delivery\nto the International Space Station to deep-space exploration. The Falcon class of rockets delivered over 80% of mass\nto orbit in the year ending December 31, 2025. Starship, a two-stage super heavy-lift launch vehicle that we have\nbeen flight testing since 2023, further enhances our industry-defining launch offerings.\nSeparate from our fleet of reusable rockets, SpaceX’s launch advantage is equally underpinned by our fleet of\nadvanced spacecraft. Our International Space Station cargo and human spaceflight missions are launched on Falcon\n9 and flown on the Dragon crew and cargo spacecraft. The vehicles autonomously dock to the station, delivering\npressurized and unpressurized cargo, and passengers. Both Dragon variants are partially reusable and perform fully\nautonomous rendezvous, docking, and return operations.\nOur Fleet of Launch Vehicles and Spacecraft\nOur Fleet of Launch Vehicles\nFalcon 9. The Falcon 9 rocket is a reusable, two-stage rocket designed and manufactured by SpaceX for the safe,\nreliable, and cost-effective transport of satellites, scientific payloads, cargo, and crew to Earth orbit and beyond.\nPowered by liquid oxygen and rocket-grade kerosene, the first-stage is equipped with nine Merlin 1D engines\nproducing over 1.7 million pounds of thrust at sea level, while the second stage utilizes a single vacuum-optimized\nMerlin engine for precise orbital insertion. First launched in 2010, Falcon 9 is the world’s first orbital-class rapidly\nreusable rocket, and has become the most active orbital launch vehicle today, with approximately 620 orbital space\nlaunches as of March 31, 2026 and an over 99% mission success rate. Falcon 9 is capable of delivering\napproximately 23 metric tons to LEO and eight metric tons to geosynchronous transfer orbit. Reusability allows\nSpaceX to refly the most expensive parts of the rocket, which in turn drives down the cost of space access. Falcon\n9’s reusable components primarily include its booster, which lands on one of our autonomous drone ships out on the", - "path": "spacex-s1.pdf/p205", - "metadata": { - "length": 2556, - "summary": "178 Table of Contents Our Solutions & Services Unparalleled Launch Capability Our unmatched launch capability is the foundational competitive advantage that enables our unique solutions and services. We are the market leader in orbital launch, providing low-cost, reliable, and...", - "page_nums": [ - 205 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 205, "artifact_ref": "page_citation_assets/page-205.png", @@ -8869,24 +6944,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d820e5f1-ce24-5732-9c9b-8775c0daad63", - "type": "page", - "content": "179\nTable of Contents\nocean or on one of our landing zones near our launch pads ahead of being refurbished for a future launch, and its\npayload fairing halves, which are recovered via parachute-assisted splashdowns and are refurbished and reused after\nretrieval. The second stage is not designed for recovery or reuse and instead safely deorbits after successful payload\ndeployment.\nFalcon 9 Overview\nFalcon 9 introduced a combination of technical innovation, cost reduction, and operational scale that materially\naltered the economics of orbital launch and established our position as the leading commercial launch provider.\n• First Orbital-Class Rapidly Reusable Rocket: In December 2015, Falcon 9 achieved the first vertical landing\nof an orbital-class booster, followed in April 2016 by the first autonomous drone ship landing in the Atlantic\nOcean. Reuse of boosters and fairings, a practice pioneered by SpaceX in the launch industry, fundamentally\nenables our launch rate and capacity and forms the basis for the launch system’s inherent reliability. Through\nrecovering, inspecting, and evaluating flown hardware, SpaceX gains insight into system performance that\nwould not be otherwise achievable. Partial reusability for orbital spaceflight has reduced cost per ton to orbit by\napproximately 85% as compared to the historical average launch cost per kilogram of $18,500.\n• Reusability Enabled Cost Structure Advantage: Reuse of the first-stage—representing the majority of\nvehicle manufacturing cost—has materially reduced marginal launch costs relative to fully expendable systems.\n• Highest Operational Tempo in History: With approximately 620 orbital space launches over 15 years of\noperation, Falcon 9 is the most frequently flown active orbital launch vehicle to date. In 2025, Falcon 9\nconducted 165 launches, accounting for over half of all global orbital launches in the year while delivering over\n80% of mass to orbit.\n• Track Record of Success: As of March 31, 2026, Falcon 9 has achieved an over 99% mission success rate.\nFalcon 9 has achieved over 530 successful booster landings and more than 540 launches completed by a flight-\nproven Falcon rocket, underscoring the reliability of its reusability architecture.\n• Human Spaceflight Certified: Falcon 9, paired with SpaceX’s Dragon crew spacecraft, is the only U.S.-based\nlaunch vehicle certified by NASA under the Commercial Crew Program to transport astronauts to and from the", - "path": "spacex-s1.pdf/p206", - "metadata": { - "length": 2450, - "summary": "179 Table of Contents ocean or on one of our landing zones near our launch pads ahead of being refurbished for a future launch, and its payload fairing halves, which are recovered via parachute-assisted splashdowns and are refurbished and reused after retrieval. The second sta...", - "page_nums": [ - 206 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 206, "artifact_ref": "page_citation_assets/page-206.png", @@ -8894,24 +6952,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4c146e36-567f-5fb0-b45d-eac37fdd63dd", - "type": "page", - "content": "180\nTable of Contents\nInternational Space Station. As of December 31, 2025, Falcon 9 has successfully launched 19 human\nspaceflight missions with a 100% mission success rate.\n• In-House Engine Development and Manufacturing: Falcon 9 is powered by Merlin engines that are\ndesigned, developed, and manufactured in‐house, providing vertical integration across propulsion design,\nproduction, and testing. The Merlin engine achieves one of the highest thrust‐to‐weight ratios of any rocket\nengine in operational service, contributing to Falcon 9’s performance and payload capacity.\nFalcon 9\nAs we transition primary production and development resources toward the fully and rapidly reusable Starship\nsystem, Falcon 9 continues to serve as the backbone of our launch revenue base; generating high-margin recurring\ncash flows while providing critical operational experience in high-cadence reuse. The proven capabilities of Falcon\n9 established us as the leading provider of launch services globally and laid the technological and economic\nfoundation for the next era of space transportation.\nFalcon Heavy. Falcon Heavy is a partially reusable super heavy-lift launch vehicle, designed to deliver large\npayloads to orbit. Building on the proven architecture of the Falcon 9 rocket, Falcon Heavy is composed of three\nreusable Falcon 9 nine-engine boosters whose combined 27 Merlin engines generate more than five million pounds\nof thrust at liftoff—one of the most powerful operational rockets in the world today. It is capable of carrying\napproximately 64 metric tons of payload to LEO and 27 metric tons to geosynchronous transfer orbit. Falcon\nHeavy’s reusable components primarily include its three boosters, which are designed to land vertically on drone\nships in the ocean and landing zones near our launch sites, and its payload-faring halves, which are recovered via\nparachute-assisted splashdown and are refurbished and reused after retrieval. The second stage is not designed for\nrecovery or reuse and is designed to safely deorbit after successful payload deployment, similar to Falcon 9.", - "path": "spacex-s1.pdf/p207", - "metadata": { - "length": 2091, - "summary": "180 Table of Contents International Space Station. As of December 31, 2025, Falcon 9 has successfully launched 19 human spaceflight missions with a 100% mission success rate. • In-House Engine Development and Manufacturing: Falcon 9 is powered by Merlin engines that are design...", - "page_nums": [ - 207 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 207, "artifact_ref": "page_citation_assets/page-207.png", @@ -8919,24 +6960,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f741e4be-7e98-53ee-afba-12320a9b0e75", - "type": "page", - "content": "181\nTable of Contents\nFalcon Heavy Overview\n• Reusability: Falcon Heavy incorporates a design focused on reusability, which has contributed to lowering the\ncost of access to space and altering the launch industry’s economic model for large or high-value payloads. The\nvehicle’s two side boosters, equipped with hypersonic grid fins and advanced propulsion systems, enable\ncontrolled recovery and soft landings. This capability enables reusability, with missions launching on flight-\nproven boosters generally priced below those of traditional expendable flights. Our Falcon 9 boosters, which are\nqualified for up to 40 flights, are also used on Falcon Heavy, with an average of 6 flights per booster on Falcon\nHeavy. Although our Falcon 9 boosters have been engineered and demonstrated to support up to 40 flights, we\nhave established a maximum accounting useful life of 25 flights as an estimate based on forecasted utilization.\nThis estimate reflects: (i) our strategic transition to Starship, which is expected to materially reduce future\nFalcon 9 flight demand; and (ii) restrictions under certain government contracts that prohibit the use of boosters\nflown more than five times on their missions. These useful life estimates are periodically reassessed based on\nengineering qualification data, post-flight inspections, recovery success rates, actual fleet performance, cost\nsensitivity analyses, and the long-range launch manifest.", - "path": "spacex-s1.pdf/p208", - "metadata": { - "length": 1437, - "summary": "181 Table of Contents Falcon Heavy Overview • Reusability: Falcon Heavy incorporates a design focused on reusability, which has contributed to lowering the cost of access to space and altering the launch industry’s economic model for large or high-value payloads. The vehicle’s...", - "page_nums": [ - 208 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 208, "artifact_ref": "page_citation_assets/page-208.png", @@ -8944,24 +6968,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f8a0147e-b33f-5163-ade1-2c046c416c06", - "type": "page", - "content": "182\nTable of Contents\nFalcon Heavy\n• Exploratory Missions Beyond Earth’s Orbit: Falcon Heavy first launched in February 2018, when it put a\nTesla Roadster and its mannequin passenger, Starman, into orbit around the Sun. This was the first instance of a\ncar sent into deep space and demonstrated the rocket’s capability for trans-Mars injection. Since its inaugural\nflight, Falcon Heavy has completed missions that expanded the scope of space exploration and commercial\nspaceflight. Falcon Heavy has been selected by NASA to launch critical weather satellites, interplanetary probes\nincluding Europa Clipper (Jupiter) and Dragonfly (Saturn), and the upcoming Nancy Grace Roman telescope,\ndesigned to study exoplanets and dark energy and matter.", - "path": "spacex-s1.pdf/p209", - "metadata": { - "length": 743, - "summary": "182 Table of Contents Falcon Heavy • Exploratory Missions Beyond Earth’s Orbit: Falcon Heavy first launched in February 2018, when it put a Tesla Roadster and its mannequin passenger, Starman, into orbit around the Sun. This was the first instance of a car sent into deep space...", - "page_nums": [ - 209 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 209, "artifact_ref": "page_citation_assets/page-209.png", @@ -8969,24 +6976,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a23825b8-0e2d-51fd-851e-3b968f89e2c3", - "type": "page", - "content": "183\nTable of Contents\nStarman in Orbit\n• Perfect Performance Record: As of March 31, 2026, Falcon Heavy had successfully completed 11 launches,\nall resulting in successful payload delivery. Falcon Heavy flown boosters have also safely completed 18 total\nrecoveries and 16 reflights. It was certified for National Security Space Launch in 2019, authorizing its use for\nU.S. government operations alongside Falcon 9.\nStarship. A fully reusable two-stage super heavy-lift launch vehicle, Starship stands to fundamentally transform\nspaceflight by making it more accessible, cost-effective, and scalable than ever before. Comprising the Super Heavy\nbooster (powered by 33 Raptor engines) and the Starship upper stage (with three sea-level and three vacuum Raptor\nengines), Starship V3 is designed to deliver 100 metric tons to space in a fully reusable configuration while enabling\nrapid turnaround times akin to commercial aviation, and future generations could reach 200 metric tons, potentially\nas soon as Starship V4. To date, we have executed 11 Starship flight tests. We have also scheduled a 12th flight test,\nwhich will debut the next generation Starship vehicle and Super Heavy booster, powered by the next evolution of\nour Raptor engine and launching from a newly designed pad at Starbase. We expect Starship to commence payload\ndelivery to orbit in the second half of 2026. We have achieved innovative milestones, including multiple successful\nascents of the world’s most powerful rocket; the launch, return, catch, and reuse of the Super Heavy booster; the\nreturn of its upper stage within three meters of its intended landing point; the transfer of approximately five metric\ntons of cryogenic propellant between tanks while in space, a first of its kind operation that provides key data for\nfuture full-scale propellant transfer operations; successful in-space relights of the Raptor engines; and multiple\ncontrolled reentries through Earth’s atmosphere. The purpose of flight tests is to collect data so no result, even loss\nof a vehicle, is considered a failure because we learn something.\nStarship is a key enabler of our growth objectives, including the deployment of next-generation V3 satellites, direct-\nto-cell constellations, and orbital AI compute at scale. Achieving our targeted launch cadence with Starship will\nrequire significant progress on several key milestones and the investment of significant capital resources. These\ninclude: securing additional land and developing high-rate launch sites and supporting infrastructure across multiple\nlocations; scaling production of Starship vehicles and Raptor engines; constructing propellant production facilities,\nincluding air separation units and methane liquefaction plants co-located with launch sites; securing sufficient power\nsupply; and obtaining the necessary regulatory approvals, particularly from the FAA, to support a high launch\ncadence while addressing public safety and environmental considerations. Our development of Starship and its", - "path": "spacex-s1.pdf/p210", - "metadata": { - "length": 3020, - "summary": "183 Table of Contents Starman in Orbit • Perfect Performance Record: As of March 31, 2026, Falcon Heavy had successfully completed 11 launches, all resulting in successful payload delivery. Falcon Heavy flown boosters have also safely completed 18 total recoveries and 16 refli...", - "page_nums": [ - 210 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 210, "artifact_ref": "page_citation_assets/page-210.png", @@ -8994,24 +6984,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_167406e2-468d-5eab-b876-774a0293d7f1", - "type": "page", - "content": "184\nTable of Contents\nassociated infrastructure assumes continued successful iteration through flight testing, regulatory progress, supply\nchain scaling, and cost reduction driven by increasing reusability. We have made substantial investments in\nmanufacturing scale-up, including Starfactory for high-volume vehicle production, multiple large-scale vertical\nintegration and refurbishment facilities, additional launch towers, test infrastructure, propellant production assets,\nand power generation capabilities.\nFull reusability of Starship’s upper stage is not required to deploy our V3 satellites and V2 Mobile satellites in low-\nEarth orbit. In-orbit refueling is also not required for any of these LEO programs and is instead intended for\nmissions beyond LEO, such as lunar and interplanetary transport. Starship’s substantial payload capacity to LEO,\neven in partially reusable or expendable configurations, enables meaningful progress toward these objectives. We\nhave already demonstrated Super Heavy booster reusability in multiple integrated flight tests. As a result,\nmeaningful advancement across the deployment of next-generation V3 satellites, direct-to-cell constellations, and\nthe orbital AI compute program is not dependent on achieving full reusability.\nStarship Overview\n• Full and Rapid Reusability and Drastically Reduced Launch Costs: Starship’s core design innovation is its\nfull and rapid approach to reusability: both stages return to Earth for catch and rapid refurbishment. The Super\nHeavy booster returns to the launch site following stage separation and is caught mid-air by the launch tower’s\nmechanical arms, also known as “chopsticks,” to facilitate immediate inspection, refurbishment, and relaunch.", - "path": "spacex-s1.pdf/p211", - "metadata": { - "length": 1731, - "summary": "184 Table of Contents associated infrastructure assumes continued successful iteration through flight testing, regulatory progress, supply chain scaling, and cost reduction driven by increasing reusability. We have made substantial investments in manufacturing scale-up, includ...", - "page_nums": [ - 211 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 211, "artifact_ref": "page_citation_assets/page-211.png", @@ -9019,24 +6992,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b38edf7e-26b9-5bf6-a5d5-319ecdc07741", - "type": "page", - "content": "185\nTable of Contents\n“Chopstick” Super Heavy Booster Catch\nThe Starship upper stage, after orbital delivery or missions beyond, is designed to reenter protected by advanced\nheat shield tiles, execute a propulsive landing burn, and be similarly caught mid-air by the launch tower’s\nmechanical arms. We believe that Starship’s full and rapid reusability will enable sub-one hour reflights,\ncausing a paradigm shift in launch cadence.\nStarship Landing Burn", - "path": "spacex-s1.pdf/p212", - "metadata": { - "length": 454, - "summary": "185 Table of Contents “Chopstick” Super Heavy Booster Catch The Starship upper stage, after orbital delivery or missions beyond, is designed to reenter protected by advanced heat shield tiles, execute a propulsive landing burn, and be similarly caught mid-air by the launch tow...", - "page_nums": [ - 212 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 212, "artifact_ref": "page_citation_assets/page-212.png", @@ -9044,24 +7000,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8e117c47-c272-58cc-a7be-9afdd5036196", - "type": "page", - "content": "186\nTable of Contents\n• Improvements in Engine Development Underpin Starship’s Massive Payload Capacity: With a payload\nbay volume rivaling the pressurized sections of the International Space Station, Starship is designed to deploy\nstructures like space station modules, large telescopes, our next-generation V3 satellites, and future AI compute\nsatellites. Starship is powered by 39 Raptor engines, which are full-flow staged combustion cycle rocket engines\nburning cryogenic liquid methane and liquid oxygen. Raptor engines offer nearly triple the thrust per engine,\nhigher efficiency, and better performance for heavy-lift and deep space missions compared to the Merlin engine\nused on Falcon 9. Each Raptor 3 engine in Starship saves nearly a ton of vehicle mass compared to previous\ngenerations by removing heat shields and simplifying plumbing. Starship’s capacity enables the next leg of our\ngrowth, including scaling our Starlink Mobile constellation and orbital AI compute.\n• Orbital Refueling: Starship’s expected orbital refueling capability will allow tanker variants to refill the upper\nstage in LEO and extend its range for deep-space missions beyond Earth’s orbit. These capabilities are expected\nto revolutionize mission architecture, with each Starship designed to be capable of transporting large numbers\nof people or hundreds of metric tons of cargo to destinations like the surface of the Moon and Mars.\n• Sustainable Human Exploration Beyond Earth: Starship was designed from the beginning to fly to other\nworlds and enable self-growing bases on the Moon, an entire civilization on Mars, and ultimately expansion\nbeyond our solar system. As NASA’s Human Landing System for Artemis, Starship is built to deliver\nastronauts and cargo to the lunar surface and serve as the key enabler for supporting permanent presence on the\nMoon.\n• Versatility Across Mission Profiles: Beyond deep space, Starship is designed to adapt to diverse roles\nincluding the U.S. Space Force’s Rocket Cargo program for rapid point-to-point global logistics, Starlink and\nother commercial satellite constellations, in-orbit manufacturing components and hardware, space tourism, and\nothers.\nStarship is designed to enable a step-function advancement in our capabilities, featuring rapid, full reusability of\nboth the Super Heavy booster and the Starship spacecraft to achieve unprecedented throughput at significantly\nreduced costs compared to existing systems. As Starship progresses toward full operational utilization, the Falcon 9\nand Falcon Heavy platforms will remain key assets for specialized missions, including NASA crew rotations and\nnational security payloads.\nDragon Cargo Spacecraft. The Dragon cargo spacecraft is an uncrewed vehicle designed primarily for transporting\ncargo to and from the International Space Station under NASA’s Commercial Resupply Services program. As an\nevolution of the original Dragon spacecraft, this vehicle represents a critical component of our portfolio, enabling\nreliable, cost-effective logistics for space missions. The spacecraft consists of a pressurized section for\nenvironmentally controlled cargo and an unpressurized trunk section for additional payloads. It has a launch payload\nmass of up to 6,000 kilograms and a return payload mass of 3,000 kilograms, making it uniquely suited for both\ndelivery and retrieval of scientific experiments, supplies, and hardware, and establishing SpaceX as the only\ncompany capable of returning significant amounts of cargo from the International Space Station back to Earth.", - "path": "spacex-s1.pdf/p213", - "metadata": { - "length": 3555, - "summary": "186 Table of Contents • Improvements in Engine Development Underpin Starship’s Massive Payload Capacity: With a payload bay volume rivaling the pressurized sections of the International Space Station, Starship is designed to deploy structures like space station modules, large...", - "page_nums": [ - 213 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 213, "artifact_ref": "page_citation_assets/page-213.png", @@ -9069,24 +7008,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e1414718-b4e9-5ef8-b0d1-77c099a89f6c", - "type": "page", - "content": "187\nTable of Contents\nDragon Cargo Overview\n• Key features: Key highlights of the Dragon cargo spacecraft include its propulsion system with 16 Draco\nthrusters for precise orbital maneuvering, autonomous docking capabilities via NASA’s International Docking\nSystem Standard (IDSS), and a trunk equipped with solar panels for power generation during flight.\n• Launch vehicle, return mechanism and mission profiles: The spacecraft is launched atop the Falcon 9 rocket\nand returns to Earth via parachute-assisted splashdown in the ocean, where it is recovered for refurbishment and\nreuse. Dragon supports extended in-orbit durations, typically spending several weeks docked to the International\nSpace Station before undocking with returned cargo.\n• Historic accomplishments: Launched by Falcon 9 in 2012, our Dragon spacecraft became the first commercial\nspacecraft to deliver cargo to and from the International Space Station and, eight years later, the first privately\nbuilt vehicle to fly humans to the orbiting laboratory. This achievement ended U.S. reliance on foreign vehicles\nfor International Space Station resupply following the Space Shuttle’s retirement in 2011. The original Dragon\nvariant (later known as Dragon 1) established a critical role in advancing research on the space station as the\nonly spacecraft capable of returning significant amounts of cargo to Earth. The upgraded cargo spacecraft\npioneered autonomous docking without robotic arm assistance, delivered major hardware upgrades for the\nstation including new solar arrays, and recently debuted the ability to reboost the station’s altitude. It remains\nthe only reusable cargo spacecraft in operation. As of March 31, 2026, our Dragon spacecraft has completed\nover 30 cargo missions to the International Space Station.\nDragon Crew Spacecraft. Dragon is engineered to fly humans to and from Earth orbit, including the International\nSpace Station. The spacecraft is designed to accommodate up to seven passengers, with a pressurized cabin for crew\nhabitation, life support systems, and cargo.", - "path": "spacex-s1.pdf/p214", - "metadata": { - "length": 2065, - "summary": "187 Table of Contents Dragon Cargo Overview • Key features: Key highlights of the Dragon cargo spacecraft include its propulsion system with 16 Draco thrusters for precise orbital maneuvering, autonomous docking capabilities via NASA’s International Docking System Standard (ID...", - "page_nums": [ - 214 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 214, "artifact_ref": "page_citation_assets/page-214.png", @@ -9094,24 +7016,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_adf16559-4452-508d-b336-1a1c22404908", - "type": "page", - "content": "188\nTable of Contents\nDragon Orbiting Earth's Poles\n• Key features: Dragon Crew spacecraft is equipped with advanced avionics, touchscreen interfaces for manual\ncontrol, and an integrated trunk with solar power generation. Dragon Crew’s propulsion includes 16 Draco\nthrusters for orbital adjustments and 8 Super Draco engines for its launch escape system, enabling rapid\nseparation from the rocket in the unlikely event of an emergency.\n• Launch vehicle, return mechanism and mission profiles: The spacecraft is launched atop the Falcon 9 rocket\nand returns to Earth via parachute-assisted splashdown in the ocean, where it is recovered for refurbishment and\nreuse. The design emphasizes reusability, with vehicles certified for multiple flights after refurbishment, and\nsupports missions lasting up to nine months on the International Space Station.\n• Historic accomplishments: Revolutionary accomplishments of Dragon include being the first privately\ndeveloped spacecraft to transport humans to and from the International Space Station, achieved during the\nDemo-2 mission in May 2020 which carried NASA astronauts Doug Hurley and Bob Behnken. This milestone\nreturned human spaceflight capabilities to the United States for the first time since the Space Shuttle’s\nretirement in 2011, reducing dependence on foreign spacecraft. Dragon has enabled regular astronaut rotations\nunder NASA’s Commercial Crew Program, flying nearly 15 successful Crew and Private Astronaut missions to\nthe International Space Station to date, while pioneering space tourism by carrying commercial astronauts on\nprivate flights. Its autonomous docking technology, life support for extended durations, and abort system have\nset new safety standards achieving a flawless record in crewed operations.\nConnectivity\nStarlink Consumer Broadband\nStarlink Consumer Broadband is a broadband network powered by our global LEO satellite constellation, designed\nto deliver high-speed, low-latency internet connectivity anywhere on Earth. The service provides fiber-like\ndownload speeds with latency low enough to support intensive real-time applications, such as content streaming,\nvideo calls, and online gaming, while requiring only visible sight to the sky and electricity for installation. Since\nlaunch, Starlink has scaled rapidly, serving approximately 10.3 million subscribers across 164 countries, territories,\nand other markets as of March 31, 2026.", - "path": "spacex-s1.pdf/p215", - "metadata": { - "length": 2424, - "summary": "188 Table of Contents Dragon Orbiting Earth's Poles • Key features: Dragon Crew spacecraft is equipped with advanced avionics, touchscreen interfaces for manual control, and an integrated trunk with solar power generation. Dragon Crew’s propulsion includes 16 Draco thrusters f...", - "page_nums": [ - 215 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 215, "artifact_ref": "page_citation_assets/page-215.png", @@ -9119,24 +7024,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_cc5c14d9-a398-5796-ae7b-a1cba51e056b", - "type": "page", - "content": "189\nTable of Contents\nStarlink Consumer Broadband is enabled by the largest satellite constellation in human history with approximately\n9,000 broadband satellites as of March 31, 2026, operating in LEO to deliver latency comparable to many terrestrial\nbroadband connections. We launched approximately 3,100 Starlink broadband and mobile satellites in 2025, which\nis approximately five times more than the total number of active satellites in the entire second largest LEO satellite\nconstellation. We provide download speeds exceeding 400 Mbps with round-trip latencies as low as 21 milliseconds\n—performance that rivals or surpasses traditional terrestrial broadband while also reaching locations no traditional\nfiber or cellular network can economically serve. Satellite-based communications are uniquely suited to reach\nunderserved and remote areas by delivering coverage directly from LEO without requiring local infrastructure. In\ncontrast, terrestrial networks depend on costly, ground-based buildouts that are often uneconomical in low-density or\nhard-to-access regions. As of March 31, 2026, the constellation incorporated over 23,000 inter-satellite lasers that\ncreate a dynamic mesh network in space, enabling traffic to route through orbit rather than relying solely on\nterrestrial backhaul infrastructure. Satellites autonomously maneuver to avoid collisions and are designed for\ncontrolled end-of-life deorbit, supporting long-term orbital sustainability. Successive generations of our broadband\nsatellites, including V3 satellites, are expected to increase throughput, power capacity, and network efficiency, with\nproduction vertically integrated and performed largely in-house. Our focus on vertical integration has allowed us to\nreduce the Starlink satellite manufacturing cost per one Gbps of downlink capacity by approximately three times\nfrom Starlink V1 Broadband satellites to V2 Mini satellites. We expect to achieve a total cost reduction of nine times\nfrom Starlink V1 Broadband satellites to V3 satellites.\nStarlink Broadband V2 and V3 Satellites\nOn Earth, users access the network through proprietary Starlink terminals that we design and manufacture. As of\nMarch 31, 2026, we have reduced the cost of Starlink terminals—achieving an approximately 59% reduction in the\naverage manufacturing cost of a Starlink Kit since 2022—while improving performance and reliability, which we\nbelieve collectively provides us a meaningful and durable competitive advantage over other terrestrial and satellite\nbroadband providers. Our portfolio of terminals, which we are able to manufacture and sell for a fraction of the cost\nof terminals used by other satellite internet providers, includes three primary consumer configurations including: a\nStandard terminal designed for fixed residential and small business use, featuring a wide field of view; a Mini\nterminal roughly the size of a laptop, designed for mobility and travel use cases with a built-in Wi-Fi router and the\nability to operate on portable battery systems or 12V vehicle power; and the Performance terminal, designed for\ndemanding environments, with a maximum download speed over 450 Mbps and a higher power consumption of", - "path": "spacex-s1.pdf/p216", - "metadata": { - "length": 3200, - "summary": "189 Table of Contents Starlink Consumer Broadband is enabled by the largest satellite constellation in human history with approximately 9,000 broadband satellites as of March 31, 2026, operating in LEO to deliver latency comparable to many terrestrial broadband connections. We...", - "page_nums": [ - 216 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 216, "artifact_ref": "page_citation_assets/page-216.png", @@ -9144,24 +7032,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c3069532-bd27-5b6b-8701-82911559bdbb", - "type": "page", - "content": "190\nTable of Contents\n110W or more under load. Each type of terminal is designed to be quick and seamless for a consumer to self-set up,\nsupport in-motion connectivity up to speeds of 100 mph, and deliver global, oceanwide coverage for consumer\nmaritime use. We believe that this combination of low cost, portability (particularly in the case of our Starlink Mini\nterminal), and ease of installation of our terminals will help scale our consumer broadband offering.\nStarlink Standard and Mini User Terminals\nWe monetize Starlink primarily through subscription plans paired with hardware sales. Service tiers vary by speed,\npriority access, geographic coverage, and mobility requirements, including Local and Global Priority options for\nsmall to medium sized business, enterprise, and government Starlink customers. As the constellation scales and\ncapacity expands with next-generation satellites, we expect Starlink to continue growing as a global, recurring-\nrevenue connectivity platform and foundational layer of a space-enabled digital economy.\nEnterprise Solutions\nEnterprise Solutions offers the same fundamental advantages of Starlink Consumer Broadband—high throughput,\nlow-latency, and global coverage—into mission-critical, in-motion, and distributed connectivity environments for\nenterprises. Starlink’s architecture is designed to deliver consistent performance across routes, oceans, and remote\nindustrial sites. Enterprise services are supported by dedicated hardware configurations and commercial structures\ntailored to usage intensity, service-level requirements, and fleet-scale deployments.", - "path": "spacex-s1.pdf/p217", - "metadata": { - "length": 1608, - "summary": "190 Table of Contents 110W or more under load. Each type of terminal is designed to be quick and seamless for a consumer to self-set up, support in-motion connectivity up to speeds of 100 mph, and deliver global, oceanwide coverage for consumer maritime use. We believe that th...", - "page_nums": [ - 217 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 217, "artifact_ref": "page_citation_assets/page-217.png", @@ -9169,24 +7040,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_43ab860f-c3a4-5768-92ea-f3204368cf37", - "type": "page", - "content": "191\nTable of Contents\nEnterprise Solutions\nAviation Connectivity\nStarlink Aviation provides broadband connectivity for commercial and private aircraft, enabling high-quality\ninternet service for passengers and crew from gate to gate, including during taxi and prior to take-off. The service is\ndifferentiated by materially lower latency and higher throughput than legacy in-flight connectivity systems, enabling\nstreaming, video conferencing, and real-time applications at scale while in flight—even bandwidth-intensive\napplications such as gaming, previously impractical from an airplane. Starlink’s global network is designed to\neliminate “dead zones” and supports performance on polar and high-latitude routes that can be challenging for\ntraditional providers. In recent years, we have assembled dedicated sales and engineering teams to market and\nsupport fleet-wide conversions in the aviation sector. This has enabled partnerships with many of the world’s\nleading airlines, including United Airlines, Southwest Airlines, Qatar Airways, Lufthansa Group, British Airways,\nAlaska Airlines, and Hawaiian Airlines, many of which have implemented or committed to fleet-wide Starlink\ninstallations for seamless in-flight connectivity.\nMaritime Connectivity\nStarlink Maritime provides broadband connectivity for vessels operating in coastal and deep-ocean environments,\nsupporting both operational requirements (navigation, telemetry, maintenance, logistics) and end-user connectivity\n(crew welfare and passenger internet). The service is designed for consistent coverage regardless of proximity to\nland, including routes that may experience service degradation under legacy satellite architectures. Starlink terminals\nare engineered for marine operating conditions and are designed to be installed or swapped efficiently alongside\nexisting onboard communications systems, reducing downtime during retrofit. For many maritime operators,\nStarlink functions as a wholesale or “syndicated” connectivity layer: vessel owners or cruise operators purchase and\nallocate capacity across passengers, crew, and critical ship systems, including when reselling Wi-Fi access as an\nonboard service. Pricing structures vary by vessel class, expected consumption, coverage requirements (coastal vs.\nocean), and priority level, and are generally implemented through recurring subscription arrangements with fleet-\nbased commercial terms. To support fleet-wide conversions in the maritime sector, we have partnered with premier\ncruise operators, such as Carnival Corporation, Royal Caribbean Group, MSC Cruises, and Norwegian Cruise Line\nHoldings, for full-fleet deployments that deliver reliable high-speed internet across thousands of vessels worldwide.", - "path": "spacex-s1.pdf/p218", - "metadata": { - "length": 2734, - "summary": "191 Table of Contents Enterprise Solutions Aviation Connectivity Starlink Aviation provides broadband connectivity for commercial and private aircraft, enabling high-quality internet service for passengers and crew from gate to gate, including during taxi and prior to take-off...", - "page_nums": [ - 218 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 218, "artifact_ref": "page_citation_assets/page-218.png", @@ -9194,24 +7048,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1d659570-db46-5991-b2e4-ef913d11066b", - "type": "page", - "content": "192\nTable of Contents\nLand Mobility and IoT\nStarlink supports in-motion connectivity for land mobility and industrial IoT applications where terrestrial networks\nare intermittent or unavailable. These deployments include fleet vehicles, remote field operations, and ruggedized\nuse cases that require continuous broadband while moving, often across large geographies. The service is\nparticularly relevant for emergency responders, disaster recovery, and critical infrastructure continuity, where\nresilient communications materially impact safety and response effectiveness. In industrial settings, Starlink can\nserve as a connectivity backbone for connected equipment and telemetry-driven workflows, enabling real-time\nmonitoring and remote operations in agriculture, energy, and logistics environments. Commercial deployments are\ntypically structured around fleets or enterprise accounts, with hardware and service tiers aligned to mobility\nrequirements, usage intensity, and priority performance. We have partnered with land mobility operators, including\nJohn Deere and the California Fire Department, as well as passenger rail operators such as Brightline (Florida), and\nItalo Treno, to provide remote monitoring and management of their fleets.\nStarlink Fixed Site\nStarlink Fixed Site is designed to provide primary or backup connectivity for distributed business locations globally,\nincluding sites that are difficult to serve economically with fiber or that require redundancy for uptime. Starlink’s\nlack of dependence on wireline infrastructure—which is subject to damage or disruption from natural disasters,\nconflict, and other events—makes it well-suited for businesses that rely on continuous broadband connectivity and\ncannot afford a terrestrial offering going temporarily “offline.” Customers deploy Starlink to support point-of-sale\nsystems, corporate networking, video and security systems, and business continuity, including during disasters and\nlocalized outages where terrestrial infrastructure may be impaired. The service is differentiated by rapid\ninstallability, geographic flexibility, and reliable performance in remote and hard-to-reach locations, making it\nsuitable for retailers, industrial operators, and remote facilities (including offshore and field sites). Pricing models\ninclude multiple tiers and configurations depending on speed, priority access, coverage footprint, and the number of\nsites deployed, with typical enterprise arrangements structured as recurring subscriptions paired with hardware.\nGovernment Solutions\nWe provide U.S. civil, state, and local government agencies as well as international civil government agencies high-\nspeed, resilient connectivity for public services, social impact, humanitarian efforts, and disaster response in even\nthe most remote and challenging environments. Examples include support for the FEMA in coordinating disaster\nrecovery after hurricanes and wildfires, the NOAA for at-sea testing and environmental monitoring, the Government\nof the Philippines for linking remote islands, schools, and public institutions, the Government of Jamaica for\nimproving digital access in remote and maritime areas, and the Government of Ecuador for supporting education and\nhealthcare connectivity in isolated communities.\nSeparately, we operate Starshield, a secure satellite network designed specifically for national security applications.\nBuilt on the technology, manufacturing, and launch infrastructure that underpin Starlink, Starshield is focused on\nthree core mission areas: Earth observation, global secure communications, and hosted payloads. Starshield satellites\nare designed to integrate a wide range of sensors and instruments, allowing government customers to deploy\nmission-specific capabilities in LEO without having to design, build, and launch standalone spacecraft for every\nprogram.\nStarshield builds on the end-to-end data encryption used in our commercial network by adding high-assurance\ncryptographic capabilities tailored to military and other government requirements. By combining this security\nposture with our high-cadence launch capability and evolving Starlink-derived infrastructure, we aim to offer a\nscalable national security platform that can be updated, replenished, and expanded as mission needs change over\ntime.\nStarlink Mobile\nWe are extending the reach of Starlink beyond fixed and mobility terminals through our mobile service, connecting\nsmartphones (with no modifications or incremental hardware) and other terrestrial devices directly to our satellites.\nWe aim to entirely eliminate mobile “dead zones.” By using satellites that effectively function as cell towers in", - "path": "spacex-s1.pdf/p219", - "metadata": { - "length": 4677, - "summary": "192 Table of Contents Land Mobility and IoT Starlink supports in-motion connectivity for land mobility and industrial IoT applications where terrestrial networks are intermittent or unavailable. These deployments include fleet vehicles, remote field operations, and ruggedized...", - "page_nums": [ - 219 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 219, "artifact_ref": "page_citation_assets/page-219.png", @@ -9219,24 +7056,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_37c9ab66-d023-5d15-80fb-5475c2921093", - "type": "page", - "content": "193\nTable of Contents\nspace, we enable data, over-the-top voice, video and messaging in remote and hard-to-reach locations where\nterrestrial networks have historically been unavailable or unreliable. Starlink Mobile is already commercially\navailable for messaging in select markets and has been used to support emergency communications following\nnatural disasters, demonstrating its strength as resilient, infrastructure-independent connectivity.\nV1 Mobile Satellites and V2 Mobile Satellites\nOur mobile constellation builds on the same LEO architecture as our broadband network, with satellites specifically\ndesigned to communicate directly with everyday LTE handsets and IoT devices without requiring specialized or\nadditional hardware. These satellites use exclusive licensed spectrum, allowing us to integrate into MNOs’ existing\nnetworks while delivering coverage far beyond the reach of ground-based towers. Since launching the first mobile\nsatellites in early 2024, we have rapidly scaled the network to hundreds of in-orbit spacecraft and demonstrated key\ntechnical milestones, including the first SMS tests within days of launch, live video calls, and public posts sent\ndirectly from standard smartphones through a Starlink Mobile satellite. Our ability to design, manufacture and\nlaunch these satellites on our own vehicles enables us to iterate quickly on payloads and software, expanding\ncapacity and performance over time.\nToday, our Starlink Mobile service is delivered in partnership with leading mobile network operators around the\nworld. We are initially focused on messaging for consumer subscribers in areas with limited or no terrestrial\ncoverage, with a roadmap to support broader data, voice and IoT services. We partner with approximately 30 MNOs\nacross six continents, including T-Mobile in the United States, and other international operators including One NZ,\nOptus, Telstra, Rogers, KDDI, Salt, Entel, Kyivstar, and VMO2. Through these partnerships, we enable consumers,\nbusinesses and public-sector customers to use their existing phones in more places, support critical connectivity\nduring disasters and power outages, and open new applications for low-bandwidth mobile and IoT devices.", - "path": "spacex-s1.pdf/p220", - "metadata": { - "length": 2215, - "summary": "193 Table of Contents space, we enable data, over-the-top voice, video and messaging in remote and hard-to-reach locations where terrestrial networks have historically been unavailable or unreliable. Starlink Mobile is already commercially available for messaging in select mar...", - "page_nums": [ - 220 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 220, "artifact_ref": "page_citation_assets/page-220.png", @@ -9244,24 +7064,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b391a71a-1aa5-5023-9885-4f81d3602d59", - "type": "page", - "content": "194\nTable of Contents\nMap of Starlink Mobile Coverage\nSatellite Life\nWe estimate that our satellites have useful lives of three to five years based on engineering studies, historical on-\norbit performance, propellant life, utilization patterns, design enhancements across generations, and planned\ntransitions to newer satellite technology. We, however, often deorbit satellites before the end of their useful lives,\nprimarily to reduce degradation risks that could impair our autonomous collision avoidance system and compromise\nconstellation safety. To date, our autonomous collision avoidance system has not experienced any failures resulting\nin satellite loss, and satellite losses from other causes remain de minimis.\nAI\nGrok\nGrok represents a core pillar of our mission to advance humanity’s understanding of the universe through the\ndevelopment of truth-seeking artificial intelligence. Grok is designed and optimized for rigorous reasoning, real-time\ninformation synthesis, and transparent outputs, with a product philosophy centered on intellectual honesty, first-\nprinciples thinking, and engagement with complex topics.\nGrok is designed as a truth-seeking AI model, built on our founder Elon Musk’s mission to enable humanity to\nunderstand the universe. We believe that accomplishing this mission requires a truth-seeking approach to AI. We\ndefine truth seeking as the active, relentless pursuit of what is objectively true about reality, and grounded in\nevidence, logic, empirical data, and first principles thinking. Our goal is to understand and explain what the universe\nappears to be doing, as accurately as current knowledge allows. In pursuit of this truth-seeking objective, Grok also\nbenefits from its integration with X, our real-time information, entertainment, and free speech platform. This direct,\nreal-time access to the information and human discourse on X enhances Grok’s truth-seeking capabilities by\ngrounding outputs in up-to-date knowledge and diverse viewpoints.\nSince the initial release of Grok 1, we have iterated rapidly, releasing Grok 2, Grok 3, and, the current version, Grok\n4, each delivering material improvements in pre-training, reasoning depth, multimodal capabilities, latency, and\nscale. Building on this trajectory, we expect to continue scaling Grok through subsequent generations. Ongoing", - "path": "spacex-s1.pdf/p221", - "metadata": { - "length": 2338, - "summary": "194 Table of Contents Map of Starlink Mobile Coverage Satellite Life We estimate that our satellites have useful lives of three to five years based on engineering studies, historical on- orbit performance, propellant life, utilization patterns, design enhancements across gener...", - "page_nums": [ - 221 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 221, "artifact_ref": "page_citation_assets/page-221.png", @@ -9269,24 +7072,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_577bdf01-34ea-5542-8417-9deab59d364a", - "type": "page", - "content": "195\nTable of Contents\ntraining of next‐generation models is expected to scale toward multiple trillions of parameters, which could\nrepresent a step change in reasoning in depth and overall intelligence. In this context, the number of parameters\nrefers to the scale of the model, where parameters are the internal numerical values, such as “weights,” that are\nadjusted during training to enable the model to recognize patterns and relationships in data. A larger number of\nparameters generally allows the model to capture more complex relationships, store greater amounts of knowledge,\nand achieve higher levels of reasoning capability. Our accelerated development cadence positions Grok among the\nfastest-advancing frontier models relative to peers, including OpenAI, Anthropic, and Google. Grok is differentiated\nby its emphasis on real-time data integration, particularly through insights derived from the X platform (subject to\nsome limitations for certain content), enabling dynamic awareness of current events and user discourse, as well as by\nexplicit investment in reasoning transparency and explainability. Grok enhances the X ecosystem by improving\ncontent understanding, personalization, and recommendation systems, thereby increasing user engagement and\nplatform intelligence. We are currently developing next-generation iterations, including Grok 5, which are expected\nto further expand reasoning fidelity, multimodal integration, and domain-specific performance.\nTerrestrial AI Compute\nOur terrestrial AI compute forms the backbone of the Grok model family and is anchored by the COLOSSUS and\nCOLOSSUS II data centers that boast some of the world’s largest and most advanced AI training clusters.\nCOLOSSUS and COLOSSUS II collectively provide approximately 1.0 gigawatt of compute power, with the\nadditional power capacity available for data center operations. We brought the first cluster of COLOSSUS online in\n122 days, repurposing the shell of an existing factory, and the first cluster of COLOSSUS II online even faster in 91\ndays. As an illustrative comparison, an industry benchmark to bring online a 100 megawatt greenfield data center is\napproximately two years. We also demonstrated a significant improvement in cost efficiency, achieving data center\nconstruction costs for COLOSSUS II that are considerably lower than industry benchmarks on a per megawatt basis.\nCOLOSSUS II is capable of operating entirely by our self-built behind-the-meter gigawatt-scale natural gas power\nplant. Our data centers are integrated with the world’s largest Megapack deployment, providing additional layers of\nreliability and operating performance. At all our existing data centers we have employed a brownfield retrofit\nstrategy leveraging existing industrial sites, advanced direct-to-chip cooling to support higher rack densities, and\nhigh-speed networking. The clusters deploy leading-edge GPUs to maximize training throughput and model\nperformance. The next phase of expansion at COLOSSUS II is designed to train our next-generation Grok 5 AI\nmodel. As we continue to expand our AI compute infrastructure, we will also continue to enhance our power\ncapabilities utilizing a combination of grid-power and behind-the-meter natural gas power plant buildouts. At\nCOLOSSUS, our grid power capabilities are designed to purchase power from the grid as available, and to rely on\nour behind-the-meter, self-generated power and Megapack installations when grid power is curtailed.", - "path": "spacex-s1.pdf/p222", - "metadata": { - "length": 3480, - "summary": "195 Table of Contents training of next‐generation models is expected to scale toward multiple trillions of parameters, which could represent a step change in reasoning in depth and overall intelligence. In this context, the number of parameters refers to the scale of the model...", - "page_nums": [ - 222 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 222, "artifact_ref": "page_citation_assets/page-222.png", @@ -9294,24 +7080,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8bb6f123-2796-5591-8f22-8074aae73345", - "type": "page", - "content": "196\nTable of Contents\nCOLOSSUS II Facility\nX Platform\nX is a real-time information, entertainment, and free speech platform that serves as a foundational distribution and\ndata engine for our AI ecosystem. With a global user base generating substantial volumes of content at all times\nacross a wide variety of topics, X provides a uniquely dynamic data for model training and real-time context\nintegration, subject to some limitations for certain content, which significantly differentiates Grok from the other\nfrontier lab offerings.", - "path": "spacex-s1.pdf/p223", - "metadata": { - "length": 533, - "summary": "196 Table of Contents COLOSSUS II Facility X Platform X is a real-time information, entertainment, and free speech platform that serves as a foundational distribution and data engine for our AI ecosystem. With a global user base generating substantial volumes of content at all...", - "page_nums": [ - 223 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 223, "artifact_ref": "page_citation_assets/page-223.png", @@ -9319,24 +7088,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ee803e9b-0c73-5711-920a-c15bcfa82757", - "type": "page", - "content": "197\nTable of Contents\nX is Our Real-time Information, Entertainment, and Free Speech Platform\nX is our real-time information, entertainment, and free speech platform that serves as a global town square with\nintegrated AI capabilities powered by Grok. Designed to evolve toward an “everything app,” X enables users to post\ncontent, share media, engage in conversations, host, view, and participate in live group discussions, follow real-time\nevents, use encrypted messaging, and leverage advanced features such as Grok-assisted post creation, content\ndiscovery, and conversational AI directly within the interface via the prominent Grok icon.", - "path": "spacex-s1.pdf/p224", - "metadata": { - "length": 641, - "summary": "197 Table of Contents X is Our Real-time Information, Entertainment, and Free Speech Platform X is our real-time information, entertainment, and free speech platform that serves as a global town square with integrated AI capabilities powered by Grok. Designed to evolve toward...", - "page_nums": [ - 224 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 224, "artifact_ref": "page_citation_assets/page-224.png", @@ -9344,24 +7096,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b942f4fa-6f2a-57db-abc3-dcb3272ff02b", - "type": "page", - "content": "198\nTable of Contents\nGrok Holds Front and Center Real Estate on the X Platform\nWith native integration of Grok’s frontier models, including real-time access to X data for up-to-date insights,\ntrending analysis, and enhanced search, X delivers personalized feeds, smarter recommendations, and low-latency\nAI assistance for our users worldwide. Our X Premium subscription options, including Basic, Premium and\nPremium+ tiers, offer expanded features, ad-reduced experiences, and priority Grok interactions. In 2023, Grok’s\nchat functionality was integrated into the X app allowing for the user to open the chat interface to type prompts and\nget real time answers.\nPublic X data enhances Grok’s training and reasoning capabilities, while the platform continues to deliver\nmeasurable performance outcomes for advertisers, with an increasing strategic focus on performance-based\nmarketing solutions.\nIn addition to X consumer products, X offers advertisers and developers a powerful suite of tools to reach highly\nengaged audiences. Advertisers can target audiences through diverse ad formats—such as Promoted Ads, Vertical\nVideo Ads, Collection Ads, and premium options such as X Amplify and Takeovers—blending seamlessly with\norganic content for authentic engagement. With advanced targeting based on public conversations, events,\nkeywords, interests, locations, and look-alike audiences, brands can connect with audiences while benefiting from\nflexible, performance-based pricing (pay only for actions such as clicks or engagements) and often lower costs\ncompared to other platforms. We expect that our ongoing innovations—including Grok-powered integrations, new\ncontextual ad tests, and expanded aspect ratio support for easy reuse of ad creative—make X a competitive choice\nfor driving traffic, conversions, and brand awareness and visibility among X’s hundreds of millions of MAUs.\nDevelopers have access to a continuous, high-volume, real-time stream of data around current events, trends, or\nsentiment, which they can access through an official X Developer Platform and APIs.\nIn April 2026, we began a phased roll-out of our new advertising platform, that we rebuilt from the ground up. The\nnew Ads Manager is built to help advertisers launch better campaigns, faster, with stronger ROI. Powered by AI, the\nnew systems enable more precise, relevant and dynamic ad delivery. Ads are seamlessly integrated into a User’s X\nfeed.", - "path": "spacex-s1.pdf/p225", - "metadata": { - "length": 2430, - "summary": "198 Table of Contents Grok Holds Front and Center Real Estate on the X Platform With native integration of Grok’s frontier models, including real-time access to X data for up-to-date insights, trending analysis, and enhanced search, X delivers personalized feeds, smarter recom...", - "page_nums": [ - 225 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 225, "artifact_ref": "page_citation_assets/page-225.png", @@ -9369,24 +7104,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bcb25eb7-1034-5a11-8e25-3a0e8d4366fd", - "type": "page", - "content": "199\nTable of Contents\nBy combining high-volume user interactions with frontier AI, AI compute infrastructure, and vertical integration, X\naccelerates progress toward ubiquitous connectivity, real-time global awareness, and the foundational social layer\nfor multiplanetary human endeavors.\nX Ads Manager. X provides a comprehensive suite of advertising products, including promoted posts, video ads,\ncarousels, and sponsored content, which enable businesses to reach targeted audiences in real time across the\nplatform. Powered by real-time conversation data, interest-based targeting, and behavioral signals, these solutions\nsupport objective-based campaigns focused on website traffic, video views, app installs, lead generation, and brand\nawareness. X’s Ad Manager provides a centralized platform that allows advertisers to manage creation,\noptimization, and real-time monitoring of ad campaigns with detailed audience insights, bidding controls,\nperformance analytics, and A/B testing capabilities. Integration with Grok AI further streamlines creative\ndevelopment, making X’s scalable ad solutions effective for businesses of all sizes seeking efficient engagement in a\ndynamic public conversation environment.\nGrok Consumer Products\nOur consumer products are powered by Grok, including Grok language and coding models, Grok image and video\ngeneration models (more commonly known as Grok Imagine), and Grokipedia. These applications leverage the\nunderlying Grok model family to deliver advanced multimodal interaction, real-time information awareness, and\ntransparent reasoning outputs. We currently offer three different tiers of subscription for Grok—basic, SuperGrok,\nSuperGrok Heavy, and SuperGrok Lite, each priced on a monthly or annual basis. Higher pricing tiers unlock\nexpanded access to advanced models, increased usage limits, priority compute, and a suite of premium features\ntailored to power users and enterprise-grade applications.\nGrok Chat. Grok Chat represents the primary conversational interface of Grok, enabling users to submit text or\nvoice queries for explanations, problem-solving, research, coding, brainstorming, and in-depth discussions with real-\ntime integration of web search, X data, code execution, and multimodal analysis of images or documents. Available\nvia grok.com, dedicated mobile apps, X platform integration, and the xAI API, it provides truth-seeking, helpful,\nand minimally censored responses optimized for factual precision and complex reasoning.\nGrok Chat", - "path": "spacex-s1.pdf/p226", - "metadata": { - "length": 2505, - "summary": "199 Table of Contents By combining high-volume user interactions with frontier AI, AI compute infrastructure, and vertical integration, X accelerates progress toward ubiquitous connectivity, real-time global awareness, and the foundational social layer for multiplanetary human...", - "page_nums": [ - 226 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 226, "artifact_ref": "page_citation_assets/page-226.png", @@ -9394,24 +7112,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2e49ef0c-d4ef-51f9-81fc-3c78aa33f2d4", - "type": "page", - "content": "200\nTable of Contents\nGrok Imagine. Grok Imagine is Grok’s generative visual and multimedia creation suite, powered by proprietary\nmodels for producing high-quality images, short videos (up to 15 seconds at 720p in current iterations), and\nsynchronized audio from text prompts, reference images, or existing visuals. It supports text-to-image/video editing,\nimage-to-video editing, and video-to-video editing, style transfer, and cinematic motion with strong prompt\nadherence and photorealistic output, accessible through the Grok platform, Imagine tab, and dedicated API.\nGrok Imagine\nGrok Voice. Grok Voice delivers natural, real-time conversational AI through voice interactions, allowing users to\nseamlessly speak and listen to Grok for faster access to information and task execution.\nGrok Enterprise Products\nGrok Teams. Grok Teams empowers small-to-medium-sized organizations to integrate Grok’s advanced AI\ncapabilities directly into collaborative workflows. Teams gain access to dedicated workspaces with secure sharing,\nenhanced privacy protections, and administrative controls for inviting users and managing access. Grok Teams\naccelerates analysis, innovation, and creation while ensuring data remains private and is never used for training.\nGrok API. The Grok API provides programmatic access to Grok’s frontier models, including advanced reasoning,\nvision, tool-use, image generation, voice AI, and real-time search capabilities, tailored for enterprise-scale\nintegration. It offers features like agentic workflows, and enterprise-grade options such as custom allocations, secure\nauthentication, and dedicated support. Designed for developers and organizations building production applications,\nthe API enables seamless embedding of Grok’s powerful AI into custom solutions, driving innovation across\nindustries with speed, precision, and reliability. For example, the enterprise version of the Grok Voice Agent API\nallows developers and businesses to build multilingual voice agents capable of speech recognition, tool calling, real-\ntime data querying, and low-latency responses. It supports production-grade voice applications that enhance\ncustomer service, internal operations, and interactive experiences with high performance in audio reasoning\nbenchmarks.", - "path": "spacex-s1.pdf/p227", - "metadata": { - "length": 2276, - "summary": "200 Table of Contents Grok Imagine. Grok Imagine is Grok’s generative visual and multimedia creation suite, powered by proprietary models for producing high-quality images, short videos (up to 15 seconds at 720p in current iterations), and synchronized audio from text prompts,...", - "page_nums": [ - 227 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 227, "artifact_ref": "page_citation_assets/page-227.png", @@ -9419,24 +7120,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d9cee4fc-2f00-530d-95e6-531d5e97281c", - "type": "page", - "content": "201\nTable of Contents\nInfrastructure and Facilities\nSpaceX maintains a highly vertically integrated, geographically diverse manufacturing ecosystem that designs,\nproduces, and qualifies a significant share of components in-house, from raw materials and rocket engines to\ncomplete launch vehicles, crewed spacecraft, satellites, and user terminals, enabling unprecedented iteration speed,\nquality control, and cost efficiency essential for successful production of reusable systems and high-cadence\noperations. Our manufacturing facilities are complemented by our physical infrastructure, which supports launch\nand orbital operations for human spaceflight, satellite deployment, and cargo missions, as well as large-scale\nartificial intelligence training and inference. We continue to invest in expansions and improvements across our sites\nto accommodate anticipated growth in launch cadence, Starlink Subscribers, and AI compute requirements.\nSpaceX Facilities\nWhile none of our properties are individually material to our operations because of the long-term timetables for\nrenewal and the opportunities for alternative sites, we maintain an effective network of vertically integrated facilities\nacross the United States, including:\n• Starbase, Texas: Development, manufacturing, testing, and launch of Starship currently takes place at\nStarbase, home to SpaceX headquarters and one of the world’s first commercial spaceports designed for orbital\nmissions. The site is located at the newly created city of Starbase in Cameron County, Texas, along the Gulf of\nAmerica. Its infrastructure includes Starfactory, a manufacturing facility designed to mass produce Starship and\nSuper Heavy at scale; a large office structure co-locating engineering and production personnel; and large,\nvertical integration buildings including the upcoming Gigabay, which will be able to support Starship and Super\nHeavy vehicles up to 85 meters (279 feet) tall and will provide 24 work cells for integration and refurbishment\nwork, along with cranes capable of lifting up to 400 tons. Starbase also has an orbital launch pad for flight of the\nworld’s most powerful rocket, complete with one of the tallest launch towers in the world, specially designed to\nintegrate, test, launch, and catch Starship and Super Heavy vehicles, with an additional pad underway to support\nStarship V3. The Starbase team also operates a site for full and subscale vehicle structural testing, static fires,\nand component level testing.\nStarbase is also home to several hundred SpaceX employees and their families, many of whom have relocated\nfrom across the country to the community to support the development and operation of Starship. SpaceX, in", - "path": "spacex-s1.pdf/p228", - "metadata": { - "length": 2703, - "summary": "201 Table of Contents Infrastructure and Facilities SpaceX maintains a highly vertically integrated, geographically diverse manufacturing ecosystem that designs, produces, and qualifies a significant share of components in-house, from raw materials and rocket engines to comple...", - "page_nums": [ - 228 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 228, "artifact_ref": "page_citation_assets/page-228.png", @@ -9444,24 +7128,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_0cdcd0cf-1bd2-5f2e-b54d-10aa6bb2a6c7", - "type": "page", - "content": "202\nTable of Contents\npartnership with the newly formed city, is developing local infrastructure and municipal services, including\nutilities, governance, schools, and environmental conservation initiatives, to support a world-class, concentrated\nengineering and manufacturing community focused on the rapid advancement of Starship and SpaceX’s long-\nterm mission. This close integration of residential life, engineering, and manufacturing around a single program\nenables a mission-focused environment designed to accelerate development, testing, and launch operations.\nSpaceX Headquarters at Starbase, Texas", - "path": "spacex-s1.pdf/p229", - "metadata": { - "length": 607, - "summary": "202 Table of Contents partnership with the newly formed city, is developing local infrastructure and municipal services, including utilities, governance, schools, and environmental conservation initiatives, to support a world-class, concentrated engineering and manufacturing c...", - "page_nums": [ - 229 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 229, "artifact_ref": "page_citation_assets/page-229.png", @@ -9469,24 +7136,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_07190c0e-efd3-5f7b-9acf-80418732b7b8", - "type": "page", - "content": "203\nTable of Contents\n• Hawthorne, California: Our original flagship facility in Hawthorne, California manufactures Falcon 9 and\nFalcon Heavy first and second stages, Dragon Crew and Dragon Cargo spacecraft, Merlin engines, Starship’s\nRaptor engines, Starlink User Terminals, as well as other various Starship components. The site supports high-\nreliability production for hundreds of successful missions, including NASA-certified crew rotations. We also\nmaintain a corporate presence in Hawthorne.\nHawthorne, California", - "path": "spacex-s1.pdf/p230", - "metadata": { - "length": 520, - "summary": "203 Table of Contents • Hawthorne, California: Our original flagship facility in Hawthorne, California manufactures Falcon 9 and Falcon Heavy first and second stages, Dragon Crew and Dragon Cargo spacecraft, Merlin engines, Starship’s Raptor engines, Starlink User Terminals, a...", - "page_nums": [ - 230 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 230, "artifact_ref": "page_citation_assets/page-230.png", @@ -9494,24 +7144,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f55ae5d8-c1dc-530b-938e-b75da002fc29", - "type": "page", - "content": "204\nTable of Contents\n• McGregor, Texas: The McGregor rocket engine complex is the most active rocket development and testing\nfacility in the world. It serves as the primary site for qualification, acceptance, and post-flight testing of Merlin\nand Raptor engines. It features 15 specialized test stands, including dedicated vertical stands for Raptor engines\nand multiple stands for Falcon 9’s Merlin engines, as well as component-level testing facilities for Starship\nhardware, including composite overwrapped pressure vessels, tanks, and experimental systems.\nMcGregor, Texas", - "path": "spacex-s1.pdf/p231", - "metadata": { - "length": 577, - "summary": "204 Table of Contents • McGregor, Texas: The McGregor rocket engine complex is the most active rocket development and testing facility in the world. It serves as the primary site for qualification, acceptance, and post-flight testing of Merlin and Raptor engines. It features 1...", - "page_nums": [ - 231 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 231, "artifact_ref": "page_citation_assets/page-231.png", @@ -9519,24 +7152,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_40a0c1cc-d817-54a3-acb7-92e418022695", - "type": "page", - "content": "205\nTable of Contents\n• Redmond, Washington: The Redmond Starlink satellite manufacturing facility has produced an average of\napproximately 70 satellites per week (approximately 3,640 per year at full rate) from December 2025 to April\n2026, covering bus structures, phased-array antennas, propulsion, solar arrays, and inter-satellite lasers,\nenabling rapid Starlink constellation expansion.\nRedmond, Washington", - "path": "spacex-s1.pdf/p232", - "metadata": { - "length": 411, - "summary": "205 Table of Contents • Redmond, Washington: The Redmond Starlink satellite manufacturing facility has produced an average of approximately 70 satellites per week (approximately 3,640 per year at full rate) from December 2025 to April 2026, covering bus structures, phased-arra...", - "page_nums": [ - 232 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 232, "artifact_ref": "page_citation_assets/page-232.png", @@ -9544,24 +7160,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8c798fe5-2547-52ef-b682-9a9d9335aa08", - "type": "page", - "content": "206\nTable of Contents\n• Bastrop, Texas: We build the majority of Starlink products at our manufacturing facility in Bastrop, Texas,\nwhich opened in 2023, producing tens of thousands of Starlink Kits per day and all of the current generation\nStarlink Standard and Performance Kits.\nIn 2026, we expect to more than double the size of the Bastrop facility, expanding our design and\nmanufacturing capabilities to support new Starlink products, plus deepening our vertical integration by adding\nthe production of Starlink gateway antennas, solar cells and AI compute satellites.\nBastrop, Texas\n• Kennedy Space Center and Cape Canaveral, Florida: SpaceX operations in Florida span across NASA’s\nKennedy Space Center and Cape Canaveral Space Force Station, which includes two active launch sites—\nLaunch Complex 39A (LC-39A) and Space Launch Complex 40 (SLC-40)—Falcon booster and Dragon\nspacecraft refurbishing facilities, launch operations, and payload processing buildings. Both launch sites support\ncritical missions to geostationary orbit and the International Space Station while also providing launch\nopportunities to a wide range of low, mid, and polar orbit inclinations for science and national security\nmissions. SpaceX also utilizes Landing Zones 40 and 2 at the Cape, which support Return to Launch Site\nlandings for Falcon boosters ahead of recovery and refurbishment for future missions.\nOnce recovered, flight hardware is refurbished at one of two state-of-the-art SpaceX facilities, HangarX and X2,\non Kennedy Space Center. These facilities also house our Falcon Launch and Landing Control Center, where\nour Dragon spacecraft are refurbished and prepared for their next missions after they are recovered off the coast\nof southern California, where we produce Starship heatshield tiles in the Bakery, and where we process\ncustomer payloads before launch in our Payload Processing Facility.\nFor future launches, SpaceX is expanding its operations in Florida to bring Starship to the Cape. In addition to\nthe under-construction Starship launch pad at LC-39A expected to be completed by the end of 2026, SpaceX is\nconstructing Space Launch Complex 37 (SLC-37) on Cape Canaveral Space Force Station as another Starship\nlaunch site. SLC-37 will host two orbital launch pads, including up to two towers for Starship launch, catch, and\ntesting operations, culminating in a total of four operational launch pads for Starship by the end of 2027.\nSpaceX is also building a new integration facility called Gigabay, next to its HangarX location at Kennedy\nSpace Center by late 2026.", - "path": "spacex-s1.pdf/p233", - "metadata": { - "length": 2579, - "summary": "206 Table of Contents • Bastrop, Texas: We build the majority of Starlink products at our manufacturing facility in Bastrop, Texas, which opened in 2023, producing tens of thousands of Starlink Kits per day and all of the current generation Starlink Standard and Performance Ki...", - "page_nums": [ - 233 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 233, "artifact_ref": "page_citation_assets/page-233.png", @@ -9569,24 +7168,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3e1ebb5c-a785-5747-b277-e658289d4ed9", - "type": "page", - "content": "207\nTable of Contents\nIn connection with preparing leased real property for our launch operations, we make significant capital\nimprovements and install extensive real and personal property at these government-owned sites. The launch\nfacilities we build are a unique capital improvement compared to standard commercial use sites because the\nfederal government specifically designates these launch sites for aerospace activities, such as rocket launches.\nGiven the specific use requirements of these government-owned sites, we have historically entered into\nhandover agreements with the relevant government entities upon expiration or termination of the leases,\npursuant to which the improvements are transferred to the government rather than removed. This fact pattern\nhas historically been the case with previous leases such as at Cape Canaveral Space Force Station.\nNASA’s Kennedy Space Center, Florida", - "path": "spacex-s1.pdf/p234", - "metadata": { - "length": 903, - "summary": "207 Table of Contents In connection with preparing leased real property for our launch operations, we make significant capital improvements and install extensive real and personal property at these government-owned sites. The launch facilities we build are a unique capital imp...", - "page_nums": [ - 234 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 234, "artifact_ref": "page_citation_assets/page-234.png", @@ -9594,24 +7176,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_aa405d9f-179a-5f86-a60e-da9ca293a5af", - "type": "page", - "content": "208\nTable of Contents\nCape Canaveral Space Force Station, Florida\n• Vandenberg Space Force Base, Space Launch Complex 4: Space Launch Complex 4 East at Vandenberg\nSpace Force Base is our West Coast launch site and serves as our primary facility for polar and high-inclination\norbit missions critical to Starlink constellation deployment, national security payloads, Earth observation\nsatellites, and select lunar trajectories. The facility includes a modernized orbital launch pad optimized for\nFalcon 9 launches, featuring a fixed launch mount, integration tower, propellant loading infrastructure, flame\ntrench, and support systems enabling frequent operations. Adjacent Space Launch Complex 4 West functions as\na dedicated Falcon 9 booster landing zone, supporting downrange recoveries to maximize reusability. Please\nrefer to “—Kennedy Space Center and Cape Canaveral, Florida” for additional information regarding our lease\narrangements with government entities.", - "path": "spacex-s1.pdf/p235", - "metadata": { - "length": 967, - "summary": "208 Table of Contents Cape Canaveral Space Force Station, Florida • Vandenberg Space Force Base, Space Launch Complex 4: Space Launch Complex 4 East at Vandenberg Space Force Base is our West Coast launch site and serves as our primary facility for polar and high-inclination o...", - "page_nums": [ - 235 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 235, "artifact_ref": "page_citation_assets/page-235.png", @@ -9619,24 +7184,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2cb9ae9c-6769-5c15-be95-63b74aeeb8b4", - "type": "page", - "content": "209\nTable of Contents\nVandenberg Space Force Base, California", - "path": "spacex-s1.pdf/p236", - "metadata": { - "length": 61, - "summary": "209 Table of Contents Vandenberg Space Force Base, California", - "page_nums": [ - 236 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 236, "artifact_ref": "page_citation_assets/page-236.png", @@ -9644,24 +7192,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3500d133-2511-53dd-9271-c69bdc40a931", - "type": "page", - "content": "210\nTable of Contents\n• Memphis, Tennessee and Southaven, Mississippi: We operate a cluster of high-density data centers in the\nGreater Memphis Area extending into northern Mississippi along the state border, to power training and\ninference for frontier AI models, including the Grok family. The flagship COLOSSUS supercomputer campus\nis located on Paul R. Lowry Road in Memphis, Tennessee; the COLOSSUS II facilities are located on Tulane\nRoad in Memphis, Tennessee and on Stateline Road in Southaven, Mississippi.\nMemphis, Tennessee", - "path": "spacex-s1.pdf/p237", - "metadata": { - "length": 534, - "summary": "210 Table of Contents • Memphis, Tennessee and Southaven, Mississippi: We operate a cluster of high-density data centers in the Greater Memphis Area extending into northern Mississippi along the state border, to power training and inference for frontier AI models, including th...", - "page_nums": [ - 237 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 237, "artifact_ref": "page_citation_assets/page-237.png", @@ -9669,24 +7200,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8bf8351a-c9d2-56cf-819e-22c2fca78019", - "type": "page", - "content": "211\nTable of Contents\n• Palo Alto, California: The corporate headquarters for our AI operations following the acquisition of xAI in\nFebruary 2026 is located in Palo Alto, California. This location, under long-term lease, houses our advanced AI\nresearch, development, and engineering teams and is strategically situated in Silicon Valley to attract and retain\ntop AI research talent. The engineers responsible for the design, training, and continued evolution of Grok, our\nproprietary frontier AI model, are based at this facility.\nPalo Alto, California\nIn addition to our infrastructure and facilities across the United States, we also operate a fleet of recovery vessels,\nautonomous spaceport drone ships (“ASDS”), and a network of Starlink ground stations.\n• Our recovery fleet: Our fleet of ASDS forms the maritime backbone of SpaceX’s reusable rocket architecture,\nenabling high-probability downrange booster landings for Falcon 9 and Falcon Heavy missions while\nmaximizing vehicle recovery and rapid refurbishment. The core ASDS fleet consists of three operational\nvessels: “Of Course I Still Love You,” the pioneering East Coast-to-Pacific vessel homeported at the Port of\nLong Beach, California, and dedicated to supporting primarily polar and high-inclination launches from\nVandenberg Space Force Base with its large landing deck and thruster-based dynamic positioning; “Just Read\nthe Instructions,” stationed at Port Canaveral, Florida, serving East Coast operations from Cape Canaveral and\nKennedy Space Center; and “A Shortfall of Gravitas,” the newest and most advanced addition since 2021, also\nbased at Port Canaveral with enhanced autonomy, station-keeping precision, and upgraded deck infrastructure\nto handle frequent, high-cadence missions. These autonomous ships have collectively facilitated hundreds of\nsuccessful booster touchdowns, dramatically reducing expendable flight profiles and enabling the reuse of\nboosters 34 times as of March 31, 2026. Complementing the drone ships are dedicated support vessels for\nfairing half recovery, such as “Bob” and “Doug,” named after astronauts Bob Behnken and Doug Hurley, and\nDragon retrieval vessel “Shannon,” named in honor of astronaut Shannon Walker. These support vessels ensure\ncomprehensive ocean-based recovery operations across Atlantic and Pacific theaters and underpin our\nconstellation deployments, national security launches, and crewed missions while advancing toward full\nreusability for Starship in future offshore scenarios.", - "path": "spacex-s1.pdf/p238", - "metadata": { - "length": 2504, - "summary": "211 Table of Contents • Palo Alto, California: The corporate headquarters for our AI operations following the acquisition of xAI in February 2026 is located in Palo Alto, California. This location, under long-term lease, houses our advanced AI research, development, and engine...", - "page_nums": [ - 238 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 238, "artifact_ref": "page_citation_assets/page-238.png", @@ -9694,24 +7208,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_61a9e0a1-6a68-5618-bc5d-1116db2e68c0", - "type": "page", - "content": "212\nTable of Contents\nAutonomous Drone Ship “A Shortfall of Gravitas”\n• Starlink ground stations: A Starlink ground station, also referred to as a gateway, is a terrestrial relay station\nthat communicates with our satellite constellation. These stations transmit data between satellites and terrestrial\ninternet networks. We operate ground stations around the world, with over 400 sites globally.\nCustomer Case Studies\nThe following examples illustrate ways in which customers across a range of industries have used and benefited\nfrom our solutions within our Space, Connectivity, and AI segments. These examples are intended to highlight\nrepresentative applications of our offerings and the types of operational, performance and efficiency benefits that\ncustomers may realize.\nIn addition, we include examples of our deployment of Starlink services in response to natural disasters, which\ndemonstrate our ability to rapidly establish communications infrastructure to support emergency response and\nrecovery efforts in challenging environments.", - "path": "spacex-s1.pdf/p239", - "metadata": { - "length": 1044, - "summary": "212 Table of Contents Autonomous Drone Ship “A Shortfall of Gravitas” • Starlink ground stations: A Starlink ground station, also referred to as a gateway, is a terrestrial relay station that communicates with our satellite constellation. These stations transmit data between s...", - "page_nums": [ - 239 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 239, "artifact_ref": "page_citation_assets/page-239.png", @@ -9719,24 +7216,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4cd9f602-4422-5b08-940b-5da35e910643", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p240", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 240 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 240, "artifact_ref": "page_citation_assets/page-240.png", @@ -9744,24 +7224,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bda1fa41-63c9-5f2d-a1de-b5399eecae10", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p241", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 241 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 241, "artifact_ref": "page_citation_assets/page-241.png", @@ -9769,24 +7232,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6266ac08-4b7a-549a-a0fd-4da27205bb74", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p242", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 242 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 242, "artifact_ref": "page_citation_assets/page-242.png", @@ -9794,24 +7240,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_263435ec-3f3b-52d9-9fa5-f92bf9413e57", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p243", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 243 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 243, "artifact_ref": "page_citation_assets/page-243.png", @@ -9819,24 +7248,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d038edeb-6cd2-5346-95df-fc374631ec97", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p244", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 244 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 244, "artifact_ref": "page_citation_assets/page-244.png", @@ -9844,24 +7256,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_90b7156b-25ce-5e84-9188-0dabd72813f6", - "type": "page", - "content": "", - "path": "spacex-s1.pdf/p245", - "metadata": { - "length": 0, - "summary": "", - "page_nums": [ - 245 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 245, "artifact_ref": "page_citation_assets/page-245.png", @@ -9869,24 +7264,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bdb48ea9-b5e3-506f-808a-ba3fc635e573", - "type": "page", - "content": "219\nTable of Contents\nCompetition\nOur principal sources of competition vary based on the segment and market in which our business operates.\nIn Space, we compete with launch service providers that transport small, medium, and heavy payloads and\nastronauts to Earth’s orbit and beyond. Participants in this market include established aerospace and defense\ncompanies, emerging commercial launch providers, and national space agencies. Key established aerospace and\ndefense competitors providing launch services include, among others, United Launch Alliance, a joint venture\nbetween Boeing and Lockheed Martin, Arianespace, a French-based aerospace company operating a family of\nEuropean-developed rockets, and Northrop Grumman, manufacturer of the Cygnus cargo spacecraft. Emerging\ncommercial launch providers include Blue Origin, which has developed launch vehicles intended to compete with\nour Falcon 9 rocket, and Rocket Lab, which operates in the small-lift launch market but is expanding into medium-\nlift payloads, as well as other domestic competitors such as Firefly Aerospace and Relativity Space. While we\ntypically do not compete directly for the same missions, national space agencies also provide launch services in their\nrespective markets.\nHowever, the launch services market is characterized by significant barriers to entry, including substantial capital\nrequirements, advanced technological expertise, regulatory licenses and approvals, and established relationships\nwith government and commercial customers. Competition in this market is based on factors that include launch\nreliability and cadence, payload capacity, mission flexibility, manufacturing capabilities and price. For this reason,\nwhile the established aerospace and defense competitors and emerging commercial launch providers may provide\nlaunch services at varying degrees of scale, we believe that SpaceX holds a meaningful advantage in terms of the\nbreadth of our launch solutions and services and the cadence at which we are able to launch, and thus a significant\ncompetitive advantage relative to these players.\nIn Connectivity, we compete with operators of terrestrial and satellite communications infrastructure and providers\nof satellite-to-mobile connectivity solutions, including terrestrial fixed network providers, terrestrial mobile network\ncompanies, and other satellite service providers, as described below:\n• Consumer and Enterprise Broadband. Our Starlink Consumer and Enterprise broadband offerings compete with\nterrestrial fixed network providers, terrestrial mobile network companies, and other satellite service providers.\nTerrestrial fixed network providers include operators of cable and fiber networks such as Verizon, Comcast,\nAT&T, T-Mobile, Lumen, Charter Communications, Google Fiber, Astound, BT, Deutsche Telekom, and\nLiberty Global. Terrestrial mobile network companies also operate land-based infrastructure, including wireless\nantennas affixed to mobile towers used to provide fixed wireless services, and include AT&T, Telefónica, T-\nMobile, Verizon, and Vodafone Group. These network providers typically serve customers in one or more\ncountries (for example, Verizon in the United States, or Telefónica in Spain and Brazil, among others), but are\nnot global players insofar as they do not sell to a global customer base, nor does their network infrastructure\nexist globally. Satellite service providers include, among others, GEO satellite network operators such as\nEchoStar, SES, Telesat Corporation (“Telesat”) GEO, and Viasat, as well as current and planned LEO and\nMEO constellations including Amazon LEO, Blue Origin’s TeraWave, Eutelsat OneWeb, Iridium NEXT and\nTelesat Lightspeed. Some of these service providers are also launch customers of SpaceX as they contract with\nus to launch their satellite constellations into orbit.\n• Government Solutions. Our Starlink broadband offering for government use cases competes primarily with the\nsame terrestrial network providers and satellite service providers with which our Starlink Consumer and\nEnterprise broadband offerings compete, as well as defense prime contractors. In certain cases, these providers\nalso have dedicated subsidiaries or business units focused on serving government customers, such as Telesat\nGovernment Solutions.\n• Starlink Mobile. Our Starlink Mobile offering competes with other satellite-to-mobile satellite operators\nincluding, among others, AST SpaceMobile, Lynk, Globalstar and Skylo.\nThe satellite connectivity market involves significant barriers to entry, including substantial capital requirements,\nadvanced technological capabilities, access to spectrum and orbital resources, regulatory licenses and approvals, and\nthe development of relationships with government, enterprise and commercial customers. Competition in this market", - "path": "spacex-s1.pdf/p246", - "metadata": { - "length": 4832, - "summary": "219 Table of Contents Competition Our principal sources of competition vary based on the segment and market in which our business operates. In Space, we compete with launch service providers that transport small, medium, and heavy payloads and astronauts to Earth’s orbit and b...", - "page_nums": [ - 246 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 246, "artifact_ref": "page_citation_assets/page-246.png", @@ -9894,24 +7272,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_02cd60dd-85f2-59cf-8e57-5a2a742877bc", - "type": "page", - "content": "220\nTable of Contents\nis based on factors that include network coverage, capacity, latency and reliability, spectrum access, density of urban\nenvironments, satellite deployment capability and efficiency, price and user acquisition, retention, and experience.\nIn AI, we compete with developers of foundational AI models and providers of AI products and services, as well as\ngeneral purpose and vertical search engines, information services, online advertising platforms and social networks.\nParticipants in this market include large technology companies, emerging AI model developers and providers of AI-\nenabled products and services. Key competitors in these markets include, among others, AI model developers and\nplatform providers such as OpenAI, Anthropic, Google, Meta, Microsoft, and various open source model providers,\nas well as social networks such as Threads (owned by Meta), Reddit, and TikTok. As we continue to build out our\nAI compute infrastructure, we intend to sell our excess capacity by offering it to a limited number of third parties\nand intend to continue to explore monetizing excess capacity, potentially positioning us to emerge as a competitor to\nAI cloud providers such as Coreweave and Nebius as well as hyperscalers.\nOur AI businesses likewise compete in markets characterized by significant barriers to entry, including substantial\ncomputational and infrastructure requirements, access to large datasets and the ability to attract and retain highly\nskilled technical talent. Competition in these markets is based on factors including pricing and cost efficiency, the\nperformance and technical features of AI platforms, customer experience across our products and services, the\nability to attract new and retain existing subscribers, users and advertisers and the ability to deploy compute and\ninnovative technologies at scale.\nIntellectual Property\nThe intellectual property that is material to our business includes our proprietary knowledge and software, as well as\nour brands and our selectively patented inventions and technologies. Our proprietary knowledge includes expertise\nin design, testing, manufacturing, software, in-orbit operations, real-time platforms, and artificial intelligence\ndevelopment. The protection of our technology and intellectual property is an important aspect of our business. We\nrely upon a combination of patents, trademarks, trade secrets, copyrights, confidentiality procedures, contractual\ncommitments and other legal rights to establish and protect our intellectual property. We have registered, and\napplied for the registration of, U.S. and international trademarks, service marks, domain names, and copyrights. We\nhave also filed patent applications and acquired patents in the United States and foreign countries covering certain\naspects of our technology, and in some cases, we have acquired patent assets of others to supplement our portfolio.\nWe have licensed in the past, and expect that we may license in the future, certain of our rights to other parties or\nfrom other parties. We generally enter into confidentiality agreements and invention or work product assignment\nagreements with our employees, contractors, and consultants to control access to, and clarify ownership of, our\nproprietary information and other intellectual property. For additional information, please refer to “Risk Factors—\nRisks Related to Our Business—We may face substantial potential liability and operational disruptions if we violate\nthe intellectual property rights or other rights of third parties, and if we fail to adequately protect, maintain, defend\nor enforce our intellectual property and other similar rights, we could lose an important competitive advantage, in\neach case which could have a material adverse effect on our business, financial condition, results of operations,\ncustomer trust and future prospects.”\nHuman Capital\nAs of March 31, 2026, we employed over 22,000 full-time employees worldwide, none of whom are subject to any\ncollective bargaining agreement. We believe our strong culture of collaboration and innovation distinguishes us and\nserves as an important driver of our business performance.\nRegulatory Environment\nWe are required to comply with a variety of governmental regulations, which could have a significant impact on our\nbusiness, including our capital expenditures, earnings and competitive position. In particular, our ability to (i)\nconduct launches and reentries, (ii) operate and expand our satellite systems and related ground infrastructure and\n(iii) perform certain U.S. government programs depends on maintaining key governmental authorizations and\ncomplying with evolving safety, spectrum, national security, environmental, contractual, and trade-control\nrequirements. Our ability to provide our AI products and X platform depends on complying with evolving AI, data\nprivacy, online services, cybersecurity and environmental requirements. We incur and will continue to incur", - "path": "spacex-s1.pdf/p247", - "metadata": { - "length": 4981, - "summary": "220 Table of Contents is based on factors that include network coverage, capacity, latency and reliability, spectrum access, density of urban environments, satellite deployment capability and efficiency, price and user acquisition, retention, and experience. In AI, we compete...", - "page_nums": [ - 247 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 247, "artifact_ref": "page_citation_assets/page-247.png", @@ -9919,24 +7280,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e125cf19-3478-5542-a692-772b8765225f", - "type": "page", - "content": "221\nTable of Contents\nsubstantial costs to monitor and take actions to comply with governmental and other regulations that are or will be\napplicable to our businesses, including, among others, restrictions and regulations of the U.S. Department of\nTransportation, the FAA, the FCC and other government agencies in the United States and the other countries in\nwhich we operate, economic sanctions and trade embargo laws, export controls, import controls and customs. For\nadditional information, please refer to “Risk Factors—Risks Related to Our Business—Our ability to continue and\nexpand launch and satellite operations depends upon our ability to obtain new and leverage existing U.S. export\ncontrol and sanctions authorizations, and any significant changes to the geopolitical landscape or U.S. government\nregulatory approach to licensing could materially and adversely impact our international business operations by\ncompromising existing licenses or limiting our ability to engage in commercial dealings in or involving\ngeopolitically sensitive countries.” We will also be subject to additional laws and regulations as a result of being a\npublic company, which will require us to devote significant management resources and incur additional legal,\naccounting and other expenses.\nSpace\nOur Space segment is subject to extensive regulation in the United States and internationally, including (i)\nregulations administered by the FAA relating to commercial space launches and reentries, (ii) regulations\nadministered by the FCC relating to radio communications used in launch activities and spacecraft operations, and\nrelated domestic and international coordination processes, including through the International Telecommunication\nUnion, (iii) U.S. export and import regulatory regimes, and (iv) additional regulations that relate to being a U.S.\ngovernment contractor.\nCommercial space launch and reentry activities require licenses and permits from the FAA. FAA licenses are\ngenerally granted on a launch-by-launch basis and may incorporate safety, environmental and operational\nconditions. Where applicable, reentry operations require separate authorization. We are generally required to obtain\nlicenses or license modifications from the FAA in connection with changes to vehicles, launch sites, flight profiles,\noperational procedures, payloads, or other mission parameters, and our launch and range operations may also be\nsubject to environmental reviews, consultations, and permits. We depend on timely approvals of licenses or license\nmodifications from the FAA and the timing and outcome of the FAA approval process may affect our ability to\nconduct launches and reentries or require operational restrictions or mitigation measures. For additional information,\nplease refer to “Risk Factors—Risks Related to Our Business—Any delays or difficulties in obtaining, maintaining\nor renewing required regulatory approvals and licenses required for our space-related activities, including FAA\nlaunch and reentry licenses, would materially delay or disrupt our operations, harm our business, or limit our ability\nto execute our business strategy.”\nRadio communications for launch activities and spacecraft operations require licenses from the FCC and are subject\nto technical and operational conditions, coordination requirements, and interference-mitigation frameworks. We rely\non obtaining licenses from the FCC to conduct our launch and spacecraft operations, and many of our FCC licenses\ninclude conditions regarding milestone schedules, reporting and surety‐bond requirements, among other conditions.\nIn addition, our spacecraft and satellite operations are subject to evolving regulatory expectations relating to space\nsituational awareness and orbital debris mitigation, including requirements regarding collision avoidance and post-\nmission disposal. International spacecraft frequency use is coordinated via International Telecommunication Union\nfilings made through the FCC and similar international regulatory bodies, and through country‐by‐country market\naccess approvals for non‐U.S. service. For additional information, please refer to “Risk Factors—Risks Related to\nOur Business—Any delays or difficulties in obtaining, maintaining or renewing required regulatory approvals and\nlicenses required for our space-related activities, including FAA launch and reentry licenses, would materially delay\nor disrupt our operations, harm our business, or limit our ability to execute our business strategy.”\nAdditionally, as a contractor and subcontractor to certain agencies of the U.S. government, we are subject to the\nFederal Acquisition Regulation, and other applicable laws, security requirements, and regulations, including\nsupplemental agency regulations, which comprehensively regulate the formation, administration, and performance\nunder government contracts. Certain contracts with the U.S. government may require us to be issued facility security\nclearances under the National Industrial Security Program Operating Manual Rule, as a result of which we are\nrequired to maintain with the Department of War mitigation measures with respect to foreign ownership, control and\ninfluence. Additionally, certain transactions in which we may be involved from time to time may be subject to the", - "path": "spacex-s1.pdf/p248", - "metadata": { - "length": 5302, - "summary": "221 Table of Contents substantial costs to monitor and take actions to comply with governmental and other regulations that are or will be applicable to our businesses, including, among others, restrictions and regulations of the U.S. Department of Transportation, the FAA, the...", - "page_nums": [ - 248 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 248, "artifact_ref": "page_citation_assets/page-248.png", @@ -9944,24 +7288,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7156d102-5039-5f46-932d-8084a774aa17", - "type": "page", - "content": "222\nTable of Contents\njurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”), which has authority to conduct\nnational security reviews of certain foreign investments. CFIUS may impose mitigation conditions to grant clearance\nof a particular transaction, may unilaterally initiate national security review of certain transactions, and may\nrecommend that the President of the United States order parties to divest their shareholdings in certain situations,\namong other actions.\nConnectivity\nOur Connectivity services, including our global satellite-to-mobile connectivity services under Starlink Mobile,\ndepend on authorizations from the FCC in the United States and telecommunications regulators in other countries.\nWithout these licenses and approvals, we generally cannot offer connectivity services in a given market. In the\nUnited States, these authorizations include FCC approvals for our satellite system and related earth stations and use\nof radio frequency spectrum, and they may be subject to technical, operational, and reporting conditions and\nongoing compliance obligations (including interference mitigation, coordination requirements and orbital debris\nmitigation requirements). All communications services that rely on radio frequency communications require use of\nradio frequency spectrum, the assignment and distribution of which is subject to FCC oversight. Our access to\nspectrum and orbital resources is also subject to international coordination processes, including through International\nTelecommunication Union filing and coordination processes, and disputes or delays in these processes could\nadversely affect our operations. If demand continues to increase or if new spectrum is required for a future\ngeneration of technology, we may need to obtain additional spectrum usage rights or related authorizations through\nFCC proceedings (including modification applications), coordination processes, auctions or secondary market\ntransactions, or partnerships with third parties, each of which may be subject to review, approval, and conditions.\nWe hold FCC authorizations and licenses that allow us to provide a wide range of satellite-based connectivity\nservices, including through the operation of our satellite system and related earth stations. FCC spectrum licenses\nand authorizations typically have terms of 10-15 years, at which time they are subject to renewal. Similarly, our\nsubsidiaries operating outside the United States are subject to the jurisdiction of regulatory authorities in the\nterritories in which the subsidiaries operate, including any requirements to obtain spectrum licenses or other market\naccess authorization. Our licensing, compliance and advocacy initiatives in foreign countries support our ability to\noffer enterprise and consumer connectivity services in various international markets. Although we generally seek to\nrenew and maintain these authorizations, challenges could be raised in the future, and there can be no assurance that\nour applications to renew, modify, or expand our authorizations will be granted on a timely basis, or at all, or\nwithout additional conditions. If a spectrum license was revoked or not renewed, we would not be permitted to\nprovide services on the spectrum covered by that license or could be required to modify or curtail operations.\nWithin the United States, the Communications Act generally preempts regulation by state and local governments of\nthe entry of, or the rates charged by, wireless carriers. It does not prohibit states from regulating the other “terms and\nconditions” of wireless service. For example, some states impose reporting and consumer protection requirements.\nSeveral states also have laws or regulations that address safety issues (for example, use of wireless handsets while\ndriving), universal service funding, and taxation matters. Some states are also considering new network reliability or\nservice quality requirements that may affect how and where we provide services if not preempted by federal law.\nAI\nCertain enacted and proposed laws and regulations related to AI may impose requirements with respect to our\ndevelopment, deployment, and use of AI systems and models, including obligations relating to security, integrity,\ntransparency, labeling, detection, and provenance of AI data, models and AI-generated content, as well as\nrestrictions on the export or import of AI-related systems and components. AI regulation is evolving rapidly across\njurisdictions, with regulators applying, or considering applying, existing laws or adopting new, non-harmonized\nframeworks with respect thereto, including emerging AI laws. Development, deployment, and use of AI can also be\nsubject to existing, technology-agnostic regulatory frameworks, including, for example, those addressing consumer\nprotection, data privacy, cybersecurity, intellectual property, content moderation, non-discrimination, and\nemployment. Data centers necessary for AI-related systems may also be subject to changing regulatory frameworks\nunder federal, state, local, and foreign environmental, health, and safety laws. The scope and enforcement of these\nregimes remain uncertain, and their potential impact on our multiple and overlapping business lines is difficult to", - "path": "spacex-s1.pdf/p249", - "metadata": { - "length": 5282, - "summary": "222 Table of Contents jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”), which has authority to conduct national security reviews of certain foreign investments. CFIUS may impose mitigation conditions to grant clearance of a particular transact...", - "page_nums": [ - 249 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 249, "artifact_ref": "page_citation_assets/page-249.png", @@ -9969,24 +7296,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4b6ebf47-4321-567f-bebc-e202fb980464", - "type": "page", - "content": "223\nTable of Contents\npredict. Divergent or conflicting regulatory approaches across jurisdictions, as well as evolving enforcement\npriorities, may also create compliance uncertainty and require market-specific limitations or modifications to AI-\nrelated functionality, increasing operational complexity.\nIn addition, third parties may allege intellectual property violations, or misappropriation relating to the training data\nused in, or the outputs generated by, AI systems and models. The uncertain and evolving legal status of AI-\ngenerated content may create legal and operational risk, including with respect to the ownership of, and ability to\nobtain intellectual property protection for, such outputs, as well as our ability to offer services in certain markets.\nOpen-source and other license terms applicable to AI systems and models may limit the distribution of AI-related\nfunctionality or constrain product design.\nSeparately, AI systems and models may present legal operational and reputational risks. Legal and reputational risk\nmay arise in the context of datasets used in the development or operation of AI systems and models as well as the\nuse of AI-enabled products or services to generate output that is perceived as objectionable or inappropriate.\nEmerging legislation, such as the European Union’s Artificial Intelligence Act, California’s Transparency in\nFrontier Artificial Intelligence Act (SB 53) and New York’s Responsible AI Safety and Education Act (RAISE Act),\nmay impose requirements relating to, among other things, safety, governance, transparency, and incident reporting\non developers of large or frontier AI models. Misuse of our AI systems, models, products, or services by customers\nor partners may similarly create safety, compliance, or brand risks. These risks have in the past and may in the future\nresult in regulatory scrutiny, legal liability, or reputational harm and adversely affect our business, results of\noperations, and financial condition. Addressing these risks may require substantial investment in testing,\nmoderation, guardrails, enforcement, and other mitigation measures. For additional information, please refer to\n“Risk Factors—Risks Related to Our Business—If the recommendations, forecasts, content, analyses or other output\nthat our AI technologies, including Grok, assist in producing are or are alleged to be deficient, inaccurate, harmful,\nillegal, or used for an improper purpose, we could continue to be subjected to claims and investigations, and we\ncould be subjected to legal liability and brand, reputational, or competitive harm.”\nPrivacy, Cybersecurity, Data Protection, Online Safety, and Digital Platform Regulation\nWe are subject to complex and evolving global legal and regulatory frameworks relating to privacy, cybersecurity,\nAI, data protection, lawful access, content moderation, and digital platform regulation, as well as contractual and\nother commitments we make in the course of doing business and our internal and external policies, procedures and\ncontrols. These laws and regulations vary across jurisdictions and sectors, are not harmonized, and may conflict or\nimpose overlapping or inconsistent obligations, and continue to evolve and emerge. In particular, the California\nConsumer Privacy Act (as amended), the European Union’s General Data Protection Regulation (and its equivalent\nin the United Kingdom) and other data privacy laws and regulations impose stringent and burdensome requirements\nin connection with the processing of personal information and include significant penalties for non-compliance.\nAdditionally, as a government contractor, we are also subject to the Department of War’s Cybersecurity Maturity\nModel Certification requirements, which requires companies that do business with the Department of War to,\ndepending on the level of security required, meet or exceed certain specified cybersecurity standards to be eligible\nfor new contract awards. The interpretation and application of these and other existing laws not originally enacted to\naddress privacy, cybersecurity, AI, data protection, lawful access, content moderation, or digital platforms are\nuncertain and continue to develop as they are applied to new technologies and data-driven products and services.\nThese frameworks impose obligations regarding, among other things, the collection, use, storage, protection,\ndisclosure, transfer, and other processing of data, including personal information, and may restrict or condition\ncross-border data transfers, require data localization, or impose content moderation or other platform-related\nrequirements, and may be interpreted or enforced in ways that are inconsistent, unclear, or subject to significant\nregulatory discretion. The risks are particularly acute for us because we operate globally across multiple industries\nand develop cutting-edge technologies that present novel regulatory and security issues. The data we collect and\notherwise process is integral to our business, technology, and services, and regulatory restrictions or limitations on\nour ability to secure and process such data could materially affect our operations and business model.\nIn addition, our products and services, including those enabled by AI, may also be subject to online safety and\nyouth-protection laws and regulations. Such laws and regulations may impose obligations relating to content risk\nmitigation, age assurance, platform governance, and, in certain jurisdictions, content reporting and removal", - "path": "spacex-s1.pdf/p250", - "metadata": { - "length": 5514, - "summary": "223 Table of Contents predict. Divergent or conflicting regulatory approaches across jurisdictions, as well as evolving enforcement priorities, may also create compliance uncertainty and require market-specific limitations or modifications to AI- related functionality, increas...", - "page_nums": [ - 250 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 250, "artifact_ref": "page_citation_assets/page-250.png", @@ -9994,24 +7304,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_09d2b476-add8-5b7a-ab2d-14bb721fa4f1", - "type": "page", - "content": "224\nTable of Contents\nrequirements. For example, the UK’s Online Safety Act 2023 and Australia’s Online Safety Amendment (Social\nMedia Minimum Age) Act 2024 impose risk mitigation and age-related requirements on certain online platforms. As\na result of these requirements or to otherwise seek to maintain the safety of our platforms, we maintain content\npolicies and enforcement mechanisms across our platforms and related products and services. These include a\ncombination of automated detection tools, classifiers and filters, algorithmic signals, and human review processes.\nWe also employ measures to help detect and challenge suspicious accounts during sign-up and ongoing use, provide\nuser reporting channels, and apply enforcement actions. Additional safeguards to help mitigate safety concerns\ninclude age-related controls, content restrictions, and specialized modes; and labeling or watermarks on certain\noutputs and other market-specific restrictions on certain content categories where required by local laws.\nThis evolving landscape will continue to affect our ability to maintain, develop, or launch products and services,\nincluding those that rely on the processing of personal information or other sensitive data, including targeted\nadvertising and other data-driven offerings, and may require market-specific changes to our products, services, or\nbusiness practices, increasing operational complexity and cost. In addition, emerging laws and regulations seeking to\nrestrict cross-border transfer of or access to certain data in light of perceived national security considerations may\nincrease compliance costs and restrict our operational flexibility, investment activities, or ability to achieve our\nstrategic objectives. As our business evolves, and if we expand into additional industries or jurisdictions, our\ncompliance requirements and associated costs may increase and we may be subject to heightened regulatory\nscrutiny.\nWe also face cybersecurity risks, including the potential unlawful, accidental, or unauthorized access to, or use,\ndisclosure, alteration, loss, or disruption of, our technology, products, systems, and data, or those of our service\nproviders and partners, which could result in a loss of confidentiality, integrity, or availability. We operate in\nindustries that have been, and will continue to be, targeted by sophisticated and persistent internal and external threat\nactors, including those controlled by or affiliated with nation states. For additional information, please refer to “Risk\nFactors—Risks Related to Our Business—Any significant disruption in, or unauthorized access to, our computer and\ndata systems or those of third parties that we utilize in our operations could result in a loss or degradation of service,\nloss of trust in us and harm to our business.” Many jurisdictions impose mandatory breach notification and reporting\nobligations, and compliance with such requirements can be costly, time-sensitive, and operationally burdensome,\nand we may bear such costs in the event of a material incident. As we continue to use and integrate advanced\ntechnologies, including AI systems and models, into our operations, products, and services, our exposure to\ncybersecurity incidents may increase, particularly as threat actors also try to adopt and deploy AI-enabled tools to\nevade detection and compromise systems or data. Compliance with applicable privacy, cybersecurity, AI, data\nprotection, lawful access, content moderation and digital platform obligations can be costly and operationally\ndemanding and may require changes to our products, services, business practices, or technical infrastructure.\nEnvironmental, Health, and Safety\nOur operations and facilities, as well as existing and planned infrastructure, are subject to an extensive regulatory\nframework of federal, state, local, and foreign environmental, health, and safety laws, and regulations and permits\nthat govern, among other things, employee health and safety, discharges of pollutants into the air and water, the\ngeneration, handling, storage, and disposal of hazardous materials and wastes and the investigation and remediation\nof certain materials, substances, and wastes. These include various regulations promulgated by federal, state, and\nlocal regulatory agencies and legislative bodies. Certain of our operations, including launch, reentry, testing, and\nmanufacturing activities and the development or expansion of facilities, as well as the siting, construction and\noperation of data centers, may require environmental reviews, consultations, and permits and may be subject to\nconditions or mitigation measures that could increase costs or limit operations.\nWe are required to obtain a number of permits and entitlements from various government agencies to construct and\noperate our facilities, including zoning, land use and building code permits, air quality permits for permanent\ncombustion equipment (including both diesel generators and natural gas turbines), stormwater and wastewater\ndischarge permits, and fire and life safety approvals. We have issued or pending permit applications for certain of\nour facilities. For additional information, please refer to “Risk Factors—Risks Related to Our Business—\nEnvironmental laws, regulations, litigation, liabilities and proceedings may adversely affect our operations,", - "path": "spacex-s1.pdf/p251", - "metadata": { - "length": 5363, - "summary": "224 Table of Contents requirements. For example, the UK’s Online Safety Act 2023 and Australia’s Online Safety Amendment (Social Media Minimum Age) Act 2024 impose risk mitigation and age-related requirements on certain online platforms. As a result of these requirements or to...", - "page_nums": [ - 251 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 251, "artifact_ref": "page_citation_assets/page-251.png", @@ -10019,24 +7312,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_895f7fa0-dc0a-551d-8600-6c9f96522cc4", - "type": "page", - "content": "225\nTable of Contents\nincluding our launch operations, manufacturing activities, fuel storage and handling operations, launch facilities and\nground infrastructure, and data center operations and expansion plans.”\nGovernment Contracts\nA portion of our revenue is derived from contracts, directly or indirectly, with the U.S. government. We have\nnumerous direct contracts with the U.S. government, primarily NASA, the Department of War, the General Services\nAdministration, and certain Intelligence Community agencies. These contracts focus mainly on launch services,\nspacecraft development, and satellite deployment, and artificial intelligence products. We are almost always the\nprime contractor on our government contracts, and we rarely use subcontractors. All of our launch contracts with\nU.S. government agencies are firm fixed-price contracts with milestone-based payments.\nThese contracts are subject to U.S. government contracting rules and regulations (Federal Acquisition Regulation\n(FAR) and Defense Federal Acquisition Regulation Supplement (DFARS)), and therefore, we are subject to the\nbusiness risks specific to the defense industry. These regulations impose stringent requirements on our operations,\nbusiness practices and reporting, and noncompliance could result in civil or criminal penalties, suspension or\ndebarment from government contracting, or loss of existing or future business. These requirements, although\ncustomary in U.S. government contracts, increase our performance and compliance costs. These costs might increase\nin the future. The U.S. government has the ability to unilaterally: (i) declare us ineligible to receive new contracts;\n(ii) terminate existing contracts at its convenience and without advance notice; (iii) reduce the scope and value of\nexisting contracts; (iv) audit our contract-related costs and fees, including allocated indirect costs; and (v) revoke\nrequired security clearances. Violations of government procurement laws could result in civil or criminal penalties.\nWe are also required to maintain special security clearances and comply with executive orders, federal laws and\nregulations, and customer security requirements for classified programs, and our government contracts impose\ncybersecurity and information assurance requirements, including implementation of information security protections\nin accordance with NIST Special Publication 800-171 and obligations to review and report certain cyber incidents.\nFailure to comply could result in suspension of payments, termination of contracts, civil or criminal penalties, or\nexclusion from future government contracting opportunities. For additional information, please refer to “Risk\nFactors—Risks Related to Our Business—Our services are subject to risks related to supplying services to the U.S.\ngovernment.”\nIn addition, in connection with preparing leased real property for our launch operations at Kennedy Space Center\nand Cape Canaveral, Florida, and Space Launch Complex 4 at Vandenberg Space Force Base, California, we make\nsignificant capital improvements and install extensive real and personal property at these government-owned sites.\nThe launch facilities we build are a unique capital improvement compared to standard commercial use sites because\nthe federal government specifically designates these launch sites for aerospace activities, such as rocket launches.\nGiven the specific use requirements of these government-owned sites, we have historically entered into handover\nagreements with the relevant government entities upon expiration or termination of the leases, pursuant to which the\nimprovements are transferred to the government rather than removed. This fact pattern has historically been the case\nwith previous leases such as at Cape Canaveral Space Force Station.\nLegal Proceedings\nWe are involved in the legal proceedings described in Note 17, Commitments and Contingencies, in our audited\nconsolidated financial statements and Note 16, Commitments and Contingencies in our unaudited consolidated\nfinancial statements included elsewhere in this prospectus, and we are subject to other claims and litigation arising in\nthe ordinary course of business. The outcome of any litigation is inherently uncertain, and if decided adversely to us,\nor if we determine that settlement of particular litigation is appropriate, we may be subject to liability that could\nhave a material adverse effect on our business.", - "path": "spacex-s1.pdf/p252", - "metadata": { - "length": 4445, - "summary": "225 Table of Contents including our launch operations, manufacturing activities, fuel storage and handling operations, launch facilities and ground infrastructure, and data center operations and expansion plans.” Government Contracts A portion of our revenue is derived from co...", - "page_nums": [ - 252 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 252, "artifact_ref": "page_citation_assets/page-252.png", @@ -10044,24 +7320,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ad59b18f-1fe3-5c0a-9b46-91bdb05ca039", - "type": "page", - "content": "226\nTable of Contents\nMANAGEMENT\nBelow is certain information as of May 1, 2026 regarding individuals who are expected to serve as our executive\nofficers and directors upon the completion of this offering.\nName Age Position\nElon Musk\n\n...................... 54 Chief Executive Officer, Chief Technical Officer and Chairman of the Board\nGwynne Shotwell\n\n........... 62 President, Chief Operating Officer and Director\nBret Johnsen\n\n................... 57 Chief Financial Officer\nIra Ehrenpreis\n\n................. 57 Director\nRandy Glein\n\n.................... 60 Director\nAntonio J. Gracias\n\n\n.......... 55 Director\nDonald Harrison\n\n............. 54 Director\nSteve Jurvetson\n\n............... 59 Director\nLuke Nosek\n\n\n..................... 50 Director\nExecutive Officers and Management Directors\nElon Musk has served as our Chief Executive Officer, Chief Technical Officer and Chairman of our board since\nMay 2002. Mr. Musk is also the Technoking of Tesla and has served as Chief Executive Officer of Tesla since\nOctober 2008. Mr. Musk was Chief Technology Officer and on the board of directors of X, beginning October 2022\nand served as the Chief Executive Officer and on the board of directors of xAI, beginning March 2023, in each case\nthrough the March 2025 merger of X and xAI. Following the merger, Mr. Musk served as the President, Treasurer,\nand Chief Executive Officer and on the board of directors of xAI, until it was acquired by the Company in February\n2026. Mr. Musk is also a founder and Chief Executive Officer of Neuralink Corp., a company focused on\ndeveloping brain-machine interfaces, and The Boring Company, an infrastructure company. Prior to the Company,\nMr. Musk co-founded PayPal, an electronic payment system, which was acquired by eBay in October 2002, and\nZip2 Corporation, a provider of Internet enterprise software and services, which was acquired by Compaq in March\n1999. Mr. Musk serves on the board of directors of Tesla and previously served on the board of directors of\nEndeavor Group Holdings, Inc. from April 2021 to June 2022. Mr. Musk holds a B.A. in Physics from the\nUniversity of Pennsylvania and a B.S. in Business from the Wharton School of the University of Pennsylvania. Mr.\nMusk brings to our board historical knowledge, operational and technical expertise, and continuity.\nGwynne Shotwell has served as our President and Chief Operating Officer since 2008 and has been a member of our\nboard since March 2009. Previously, Ms. Shotwell served as our Vice President, Business Development, from 2002\nto 2008. Prior to joining the Company, Ms. Shotwell held positions with Microcosm, Inc., an aerospace company, as\na director, and The Aerospace Corporation, an independent, non-profit organization performing objective technical\nanalyses and assessments for a variety of government, civil, and commercial customers, as a senior project engineer.\nMs. Shotwell also serves on the board of directors of Polaris, Inc., a manufacturer of powersports vehicles, and on\nNorthwestern University’s Board of Trustees. Ms. Shotwell was inducted into the National Academy of Engineering\nand was previously named the Satellite Executive of the Year, included on Time’s 100 Most Influential People, and\nFortune Magazine’s World’s 50 Greatest Leaders. Ms. Shotwell holds a B.S. in Mechanical Engineering and an\nM.S. in Applied Mathematics from Northwestern University. As one of the key members of our leadership team,\nMs. Shotwell brings to our board extensive operational experience and in-house knowledge of the Company’s\noperations, technology, research and development and business management.\nBret Johnsen has served as our Chief Financial Officer since 2011. In this role, Mr. Johnsen leads our global\nfinance organization and is responsible for our long-term financial strategy, internal financial operations,\ninteractions with the financial community, and the financial aspects of our growth initiatives. With more than two\ndecades of experience in financial leadership, primarily in high-profile technology and semiconductor companies,\nhis leadership continues to play a key role in driving our financial performance, long-term value creation and\noperational discipline. Prior to joining the Company, Mr. Johnsen served as Chief Financial Officer at Mindspeed\nTechnologies, Inc., a publicly traded semiconductor company, from 2008 to 2011. Prior to that role, he spent nearly", - "path": "spacex-s1.pdf/p253", - "metadata": { - "length": 4406, - "summary": "226 Table of Contents MANAGEMENT Below is certain information as of May 1, 2026 regarding individuals who are expected to serve as our executive officers and directors upon the completion of this offering. Name Age Position Elon Musk ...................... 54 Chief Executive O...", - "page_nums": [ - 253 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 253, "artifact_ref": "page_citation_assets/page-253.png", @@ -10069,24 +7328,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_89d9f888-1912-5ec4-9537-34248551d952", - "type": "page", - "content": "227\nTable of Contents\na decade at Broadcom Inc., a global semiconductor company, from 1999 to 2008, holding roles of increasing\nresponsibility within the organization, including serving as Vice President and Corporate Controller. Mr. Johnsen\nserves as a Trustee of the University of Southern California and holds a B.S. in Accounting from the University of\nSouthern California and an M.S. in Finance from San Diego State University, and he is a Certified Public\nAccountant (CPA).\nNon-Management Directors\nIra Ehrenpreis has served on our board since February 2026. Mr. Ehrenpreis is a founder and managing member of\nDBL Partners, a leading impact investing venture capital firm, formed in 2015. Previously, he was a partner at\nTechnology Partners, a venture capital firm. Mr. Ehrenpreis serves on the board of directors of Tesla. He serves as\nthe Chairman of the VCNetwork, the largest and most active California venture capital organization. Mr. Ehrenpreis\nalso serves as the Chair of the National Association of Corporate Directors (NACD) Northern California and the Co-\nChair of the Stanford Precourt Institute for Energy Advisory Council. Among several other awards and honors, Mr.\nEhrenpreis has been named a member of the NACD Directorship 100 for being “one of the most influential leaders\nin the boardroom and corporate governance community.” Mr. Ehrenpreis holds a B.A. from the University of\nCalifornia, Los Angeles and a J.D. and M.B.A. from Stanford University. Mr. Ehrenpreis brings to our board\nexperience in the technology, impact and venture capital industries, as well as valuable insights in corporate\ngovernance, strategic growth and shareholder values.\nRandy Glein has served on our board since February 2026 and previously served as a board observer since 2009.\nMr. Glein is co-founder and managing partner of DFJ Growth, a venture capital firm that has invested in more than\n100 growth-stage technology companies over the past 20 years. He currently serves on the board of directors of\nseveral private technology companies and has previously served on the board of directors of Anaplan, Inc. and\nTremor Video, Inc. Prior to DFJ Growth, Mr. Glein served as Chief Financial Officer of FeedBurner (acquired by\nGoogle in 2007) and Vice President of Tribune Company and its corporate investment group, Tribune Ventures. Mr.\nGlein began his career in the aerospace industry as a systems engineer with Hughes Space & Communications and\nin business development roles with its DIRECTV and New Ventures units. Mr. Glein holds a B.S.E.E. in Electrical\nEngineering from the University of Florida, an M.S.E.E. in Electrical Engineering from the University of Southern\nCalifornia, and an M.B.A. from the UCLA Anderson School of Management. Mr. Glein brings to our board\nexperience in the venture capital industry and more than 35 years of business and leadership experience in the\ntechnology, media, and satellite communications industries.\nAntonio J. Gracias has served on our board since October 2010. Since 2001, Mr. Gracias has been Chief Executive\nOfficer and Chief Investment Officer of Valor Management LLC, a private equity firm. As Founder, CEO, and CIO\nof Valor, he oversees one of the leading growth-focused investment firms in the United States with over $55 billion\nin assets under management. He has served on the board of Neuralink Corp., a company focused on developing\nbrain-machine interfaces, since May 2026, served on the board of The Boring Company, an infrastructure company,\nsince May 2026 and served as a director of Harmony Biosciences Holdings, Inc., a pharmaceutical company, from\nSeptember 2017 to May 2026. He also served as a director of Marathon Pharmaceuticals, LLC from November 2013\nuntil its acquisition by PTC Therapeutics in May 2017, and SolarCity Corporation from 2012 to 2016. Mr. Gracias\npreviously served as a director of Tesla from 2007 to 2021 helping take the company public and acting as Lead\nIndependent Director for eight years. Prior to founding Valor Management LLC in 2001, Mr. Gracias served as\nFounder and Managing Member of MG Capital, a private equity firm headquartered in Chicago, where he was the\nlead transaction principal from 1995 through 2000. Prior to MG Capital, Mr. Gracias was an associate with\nGoldman, Sachs & Co. in New York, where he served the firm’s institutional clients in the International Equity\nDivision. Mr. Gracias is also actively involved in philanthropic activities. He is a trustee of The Aspen Institute,\nwhere he was a 2009 Henry Crown Fellow, an Aspen Institute program designed to engage the next generation of\nleaders in the challenge of community-spirited leadership. Additionally, he serves as a member of several\nprestigious non-profit and endowment boards, including the Board of Visitors for the Georgetown University School\nof Foreign Service and the Pritzker School of Molecular Engineering at the University of Chicago. He is also a\nmember of the University of Chicago Board of Trustees. Mr. Gracias holds a joint B.S. and M.S.F.S. (Honors\nDegree) in International Finance and Economics from the Georgetown University School of Foreign Service and a\nJ.D. from the University of Chicago Law School. Mr. Gracias brings to our board skills and experience in", - "path": "spacex-s1.pdf/p254", - "metadata": { - "length": 5258, - "summary": "227 Table of Contents a decade at Broadcom Inc., a global semiconductor company, from 1999 to 2008, holding roles of increasing responsibility within the organization, including serving as Vice President and Corporate Controller. Mr. Johnsen serves as a Trustee of the Universi...", - "page_nums": [ - 254 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 254, "artifact_ref": "page_citation_assets/page-254.png", @@ -10094,24 +7336,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_55705373-1e19-59c4-86b6-bf014ff70a4f", - "type": "page", - "content": "228\nTable of Contents\ninvestment strategy, portfolio company management and improvement, operations of business, and finance across\nseveral industries, including aerospace, technology, and manufacturing.\nDonald Harrison has served on our board since February 2015. Mr. Harrison has served as President, Global\nPartnerships and Corporate Development at Google LLC, a technology company, since 2017. Mr. Harrison\npreviously served as Vice-President, Corporate Development at Google from 2012 to 2017 and as Vice-President\nand Deputy General Counsel from 2005 to 2012. Mr. Harrison also sits on the board of directors of Reliance Jio, the\nlargest mobile telecommunications services provider in India. Mr. Harrison holds a B.A. in Philosophy and Political\nScience from the University of King’s College and a J.D. and LLB from the University of Toronto. Mr. Harrison\nbrings to our board years of business and leadership experience and provides valuable experience in the areas of\nstrategic transactions and partnerships.\nSteve Jurvetson has served on our board since March 2009. Mr. Jurvetson is a co-founder of Future Ventures, a\nventure capital firm, which he founded in 2019, and previously he co-founded and served as Managing Director of\nDraper Fisher Jurvetson, a venture capital firm, from 1995 to 2017. Mr. Jurvetson serves as a director of The Metals\nCompany, a deep sea mining exploration company, and also previously served as a director of Tesla from 2009 to\n2020, and NeoPhotonics Corp. from 2004 to 2011. Mr. Jurvetson also served as a director of Planet Labs from 2011\nto 2017 and a director of D-Wave from 2003 to 2020. Before co-founding Future Ventures and Draper Fisher\nJurvetson, Mr. Jurvetson was an R&D Engineer at Hewlett-Packard, where seven of his chip designs were\nfabricated. He also worked in product marketing at Apple Inc. and NeXT and management consulting with Bain &\nCompany. Mr. Jurvetson holds B.S. and M.S. degrees in Electrical Engineering from Stanford University and an\nM.B.A. from the Stanford Business School. Mr. Jurvetson brings to our board experience in the venture capital\nindustry and years of business and leadership experience.\nLuke Nosek has served on our board since July 2008. Mr. Nosek co-founded Gigafund, a venture capital firm, in\nJuly 2017, and has been Managing Partner since inception. Mr. Nosek previously co-founded Founders Fund, a\nventure capital fund, in April 2006, and served as General Partner through July 2017. Prior to that, Mr. Nosek co-\nfounded and served as Vice President of Business Development, Vice President of Marketing, and Vice President of\nStrategy of PayPal, an electronic payment system, from November 1998 to February 2002. Mr. Nosek also serves as\na member of the board of directors of various private companies, including Last Energy, a nuclear energy company\nthat designs and manufactures small modular reactors, Emerald Cloud Lab, which operates remotely accessible and\nlargely autonomous life science laboratories, and ResearchGate, an online platform connecting scientists and\nresearchers with each other and their work. Mr. Nosek also served as a board member of DeepMind prior to its\nacquisition by Google. Mr. Nosek holds a B.S. in Computer Engineering from the University of Illinois Urbana-\nChampaign. Mr. Nosek brings to the board experience in the venture capital industry and years of business and\nleadership experience.\nAdditional Information\nOn October 16, 2018, the U.S. District Court for the Southern District of New York entered a final judgment\napproving the terms of a settlement, filed with the court on September 29, 2018, in connection with the actions taken\nby the SEC relating to Mr. Musk’s August 7, 2018 Twitter (now known as X) posts stating that he was considering\ntaking Tesla private at a specified price and with secured financing. The SEC alleged that these posts were\nmaterially false and misleading, in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5\nthereunder. In settling the action, Mr. Musk did not admit or deny the SEC’s allegations and consented to the entry\nof a judgment that enjoined him from violating these laws, ordered him to pay a $20 million civil penalty and\nrequired him to comply with procedures implemented by Tesla with respect to preclearing his public statements\nabout Tesla. While he was required to step down as chairman of the board of Tesla for three years, there is no\nrestriction on Mr. Musk’s ability to serve as an officer or director on the board of directors of any public or private\ncompany. On April 26, 2019, this settlement was amended to further clarify the pre-clearance procedures applicable\nto his making certain public statements about Tesla. The amendment was subsequently approved by the District\nCourt.\nOn April 3, 2026, in Pampena v. Musk, the U.S. District Court for the Northern District of California entered a\npartial judgment against Mr. Musk in his personal capacity only in favor of lead plaintiffs on behalf of themselves", - "path": "spacex-s1.pdf/p255", - "metadata": { - "length": 5026, - "summary": "228 Table of Contents investment strategy, portfolio company management and improvement, operations of business, and finance across several industries, including aerospace, technology, and manufacturing. Donald Harrison has served on our board since February 2015. Mr. Harrison...", - "page_nums": [ - 255 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 255, "artifact_ref": "page_citation_assets/page-255.png", @@ -10119,24 +7344,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6578eb65-e5da-5034-a24d-9d7eefd5cc9e", - "type": "page", - "content": "229\nTable of Contents\nand a class of investors who sold certain Twitter, Inc. equity securities between May 13 and October 4, 2022. The\njudgment is based on a jury verdict rendered on March 20, 2026 that found (i) in favor of plaintiffs on claims\nalleging that Mr. Musk violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder in\nconnection with two statements made by Mr. Musk in May 2022 and (ii) in favor of Mr. Musk on claims challenging\na third statement and alleging a “scheme to defraud” under Rules 10b-5(a) and (c). The claims in this case all\nconcern Mr. Musk’s then-pending potential purchase of Twitter, Inc. On May 1, 2026, Mr. Musk challenged the\npartial judgment by filing a post-trial motion for judgment as a matter of law and motion to decertify the class. The\nmotion practice is ongoing, and the Court is expected to hear these motions in June 2026.\nFamily Relationships\nThere are no family relationships among any of our directors or executive officers.\nControlled Company Exemption\nUpon completion of this offering, Mr. Musk will beneficially own approximately % of our outstanding Class B\ncommon stock, which under our charter, as described under “Description of Capital Stock,” will be entitled to elect\n51% of the total number of authorized directors (rounded up to the nearest whole number), and % of the total\nvoting power of our outstanding common stock (or % if the underwriters exercise their option to purchase\nadditional shares of Class A common stock in full). As a result, we will be a “controlled company” within the\nmeaning of Nasdaq and Nasdaq Texas corporate governance standards. Under the listing rules of Nasdaq and\nNasdaq Texas, a company of which more than 50% of the voting power with respect to director elections is held by\nanother person or group of persons acting together is a “controlled company” and may elect not to comply with\ncertain Nasdaq and Nasdaq Texas corporate governance requirements, including the requirements that:\n• a majority of such company’s board of directors consist of independent directors as defined under the listing\nrules of Nasdaq and Nasdaq Texas;\n• director nominees be selected or recommended for board of directors’ selection by a nominating committee\ncomposed entirely of independent directors, with a written charter addressing the nominations process as\nrequired under the listing rules of Nasdaq and Nasdaq Texas;\n• the compensation committee be composed entirely of independent directors with a written charter addressing\nthe committee’s purpose and responsibilities; and\n• annual performance evaluations of the compensation and nominating committees be conducted.\nFollowing the completion of this offering, we intend to utilize certain of these exemptions. As a result, we do not\nexpect to have a compensation and nominating committee that is composed entirely of independent directors or that\nhas a committee charter that addresses all Nasdaq and Nasdaq Texas requirements applicable to companies that are\nnot controlled companies. Additionally, we may elect to take advantage of certain other exemptions in the future for\nas long as we remain a “controlled company.” Accordingly, our Class A shareholders will not have the same\nprotections afforded to shareholders of companies that are subject to all of the corporate governance requirements of\nNasdaq and Nasdaq Texas. In the event that we cease to be a “controlled company” and our shares continue to be\nlisted on Nasdaq and Nasdaq Texas, we will be required to comply with all of the applicable governance\nrequirements within the applicable transition periods.\nComposition of Our Board\nUpon the consummation of the offering, our board will consist of eight directors. Subject to the terms of our charter\nand bylaws, the number of directors on our board will be determined from time to time by our board. Under the\nterms of our charter, the holders of our outstanding Class B common stock, voting separately as a class, will have\nthe right to elect 51% of the total number of authorized directors, rounded up to the nearest whole number (the\n“Class B Directors”). Holders of Class A and Class B common stock, voting together as a single class, will elect the\nremaining members of our board (the “Common Stock Directors”). We expect that upon the completion of the\noffering Mr. Musk, Gwynne Shotwell, Antonio J. Gracias, Donald Harrison, and Luke Nosek will serve as the initial", - "path": "spacex-s1.pdf/p256", - "metadata": { - "length": 4481, - "summary": "229 Table of Contents and a class of investors who sold certain Twitter, Inc. equity securities between May 13 and October 4, 2022. The judgment is based on a jury verdict rendered on March 20, 2026 that found (i) in favor of plaintiffs on claims alleging that Mr. Musk violate...", - "page_nums": [ - 256 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 256, "artifact_ref": "page_citation_assets/page-256.png", @@ -10144,24 +7352,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4006c0f4-37cf-58f3-af63-1fba5f2604d5", - "type": "page", - "content": "230\nTable of Contents\nClass B Directors and Ira Ehrenpreis, Randy Glein, and Steve Jurvetson will serve as the initial Common Stock\nDirectors.\nOur board will be subject to annual elections. Each director will hold office until the next annual meeting of our\nshareholders and until his or her successor is duly elected and qualified or until his or her earlier death, resignation\nor removal (as provided in our charter). For additional information, please refer to “Description of Capital Stock.”\nRole of our Board in Risk Oversight\nWe face a number of risks, including those described under the section titled “Risk Factors” included elsewhere in\nthis prospectus. Our board believes that risk management is an important part of establishing, updating and\nexecuting on our business strategy. Our board, as a whole and at the committee level, has oversight responsibility\nrelating to risks that could affect our corporate strategy, business objectives, compliance, operations and financial\ncondition and performance. Our board focuses its oversight on the most significant risks facing us and on the\nprocesses to identify, prioritize, assess, manage and mitigate those risks. While our board has an oversight role,\nmanagement is principally tasked with direct responsibility for management and assessment of risks and the\nimplementation of processes and controls to mitigate their effects on us.\nDirector Independence\nBased upon information requested from and provided by each director concerning his or her background,\nemployment and affiliations, our board has determined that each of Ira Ehrenpreis, Randy Glein, Donald Harrison,\nSteve Jurvetson, and Luke Nosek is independent within the meaning of the listing standards of Nasdaq and Nasdaq\nTexas currently in effect. In making this determination, our board considered the relationships that each of these\ndirectors has with our company and all other facts and circumstances our board deemed relevant in determining their\nindependence, including (i) the beneficial ownership of our capital stock by each such director and/or investment\nfunds or other entities affiliated with them and (ii) the relationships set forth below under “Certain Relationships and\nRelated Person Transactions.” The board also considered that Donald Harrison was employed by an organization\nthat does business with Company. The amount received by the Company or such other organization in each of the\nlast three fiscal years did not exceed the greater of $200,000 or 5% of either the Company’s or such organization’s\nconsolidated gross revenues.\nBoard Leadership Structure\nUpon the completion of this offering, as provided in our charter, our board will continue to be led by Mr. Musk.\nPursuant to the terms of our charter, he can only be removed from the board and these leadership positions by the\naffirmative vote of the holders of a majority of the outstanding shares of our Class B common stock, voting\nseparately as a class.\nOur board has concluded that our current leadership structure is appropriate at this time.\nBoard Committees\nIn connection with the completion of this offering, our board will establish an audit committee and a compensation\nand nominating committee. Audit and compensation and nominating committees will be governed by their charters\nthat will be available on our website at www.spacex.com. Pursuant to our bylaws, our board may, from time to time,\nestablish other committees to facilitate the management of our business and operations. Information contained on\nour website or linked therein or otherwise connected thereto does not constitute part of nor is it incorporated by\nreference into this prospectus or the registration statement of which this prospectus forms a part.\nAudit Committee\nThe primary responsibilities of our audit committee will include, among other things:\n• assisting our board in its oversight responsibilities regarding the integrity of our financial statements, our\ncompliance with legal and regulatory requirements, the independent accountant’s qualifications and\nindependence and our accounting and financial reporting processes of and the audits of our financial statements;", - "path": "spacex-s1.pdf/p257", - "metadata": { - "length": 4160, - "summary": "230 Table of Contents Class B Directors and Ira Ehrenpreis, Randy Glein, and Steve Jurvetson will serve as the initial Common Stock Directors. Our board will be subject to annual elections. Each director will hold office until the next annual meeting of our shareholders and un...", - "page_nums": [ - 257 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 257, "artifact_ref": "page_citation_assets/page-257.png", @@ -10169,24 +7360,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_82137aef-50a8-55aa-8faf-4e8725833f24", - "type": "page", - "content": "231\nTable of Contents\n• preparing the report required by the SEC for inclusion in our annual proxy or information statement;\n• approving audit and non-audit services to be performed by the independent accountants; and\n• performing such other functions as our board may from time to time assign to the audit committee.\nThe audit committee will be empowered to retain any advisors as it deems necessary or appropriate to assist it in\nfulfilling its responsibilities, and to approve the fees and other retention terms of such advisors.\nUpon the completion of this offering, Randy Glein and Steve Jurvetson are expected to be the members of our audit\ncommittee. Randy Glein is expected to qualify as an “audit committee financial expert” as such term is defined\nunder the rules of the SEC implementing Section 407 of the Sarbanes-Oxley Act and each of Randy Glein and Steve\nJurvetson qualifies as an independent director for purposes of Rule 10A-3 of the Exchange Act and the listing\nstandards of Nasdaq and Nasdaq Texas. We will identify the third member to serve on the audit committee within\nthe applicable one year period under the Nasdaq and Nasdaq Texas listing rules. Randy Glein is expected to serve as\nthe chair of the audit committee.\nCompensation and Nominating Committee\nThe primary responsibilities of our compensation and nominating committee will include, among other things:\n• overseeing the Company’s overall compensation philosophy;\n• reviewing and approving, or recommending to the full board for approval, the compensation and other benefits\nfor executive officers;\n• reviewing and recommending to our board for approval the form and amount of compensation for our\nindependent directors;\n• making recommendations to our board regarding director candidates and assisting our board in determining the\ncomposition of our board and its committees, subject to the terms of our charter; and\n• performing such other functions as our board may from time to time assign to the committee.\nUpon the completion of this offering, Ira Ehrenpreis, Antonio J. Gracias, and Luke Nosek are expected to be the\nmembers of our compensation and nominating committee. As a “controlled company,” we will rely upon the\nexemption from Nasdaq’s and Nasdaq Texas’ requirement that we have a compensation and nominating committee\nthat is composed entirely of independent directors with a committee charter that addresses all Nasdaq and Nasdaq\nTexas’ requirements applicable to companies that are not controlled companies. Each of Ira Ehrenpreis and Luke\nNosek qualifies as an independent director under the listing standards of Nasdaq and Nasdaq Texas, including the\nheightened independence standards for members of a compensation committee, and as a “non-employee director” as\ndefined in Rule 16b-3 of the Exchange Act. Ira Ehrenpreis is expected to serve as the chair of the compensation and\nnominating committee.\nCompensation Committee Interlocks and Insider Participation\nDuring the last completed fiscal year, we were not a publicly traded company and did not have a compensation\ncommittee or any other committee serving a similar function. Historically, the board has been responsible for\ndetermining, and has made all decisions regarding, the compensation for Mr. Musk. With respect to those expected\nto serve as our other executive officers, Mr. Musk has had primary responsibility for compensation-related\ndecisions; however, all equity awards were approved by the board.\nCode of Business Conduct and Ethics\nIn connection with this offering, our board will adopt a code of business conduct and ethics applicable to our\nemployees, directors and officers, in accordance with applicable SEC rules and the corporate governance rules of\nNasdaq and Nasdaq Texas. We expect that any amendments to the code or any waivers of its requirements\napplicable to our directors and executive officers will be disclosed on our website at www.spacex.com, as and to the", - "path": "spacex-s1.pdf/p258", - "metadata": { - "length": 3946, - "summary": "231 Table of Contents • preparing the report required by the SEC for inclusion in our annual proxy or information statement; • approving audit and non-audit services to be performed by the independent accountants; and • performing such other functions as our board may from tim...", - "page_nums": [ - 258 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 258, "artifact_ref": "page_citation_assets/page-258.png", @@ -10194,24 +7368,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5bb0f851-f89f-5b4a-8026-888fd0af5fb8", - "type": "page", - "content": "232\nTable of Contents\nextent required by applicable SEC rules and the corporate governance rules of Nasdaq and Nasdaq Texas.\nInformation contained on our website or linked therein or otherwise connected thereto does not constitute part of,\nnor is it incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a\npart.\nCorporate Governance Guidelines\nIn connection with the completion of this offering, we intend to adopt corporate governance guidelines, which will\nset forth expectations for directors, director qualification standards, committee structure and functions and other\npolicies for the governance of our company. A copy of our corporate governance guidelines will be posted on our\nwebsite at www.spacex.com. Information contained on our website or linked therein or otherwise connected thereto\ndoes not constitute part of, nor is it incorporated by reference into, this prospectus or the registration statement of\nwhich this prospectus forms a part.", - "path": "spacex-s1.pdf/p259", - "metadata": { - "length": 1010, - "summary": "232 Table of Contents extent required by applicable SEC rules and the corporate governance rules of Nasdaq and Nasdaq Texas. Information contained on our website or linked therein or otherwise connected thereto does not constitute part of, nor is it incorporated by reference i...", - "page_nums": [ - 259 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 259, "artifact_ref": "page_citation_assets/page-259.png", @@ -10219,24 +7376,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_befe1f11-b2b7-513c-b887-ab1186551958", - "type": "page", - "content": "233\nTable of Contents\nEXECUTIVE COMPENSATION\nCompensation Discussion and Analysis\nThis Compensation Discussion and Analysis, or CD&A, provides an overview of our executive compensation\nphilosophy, objectives, and design and each element of our executive compensation program with regard to the\ncompensation awarded, to, earned by, or paid to the following named executive officers (collectively, our “NEOs”)\nfor the fiscal year ended December 31, 2025 (the “2025 Fiscal Year”), which includes all of our executive officers\nfor the 2025 Fiscal Year. For the 2025 Fiscal Year, our NEOs were:\nName Position\nElon Musk\n\n...................................... Chief Executive Officer, Chief Technical Officer and Chairman of the Board\nGwynne Shotwell ........................... President, Chief Operating Officer and Director\nBret Johnsen\n\n\n................................... Chief Financial Officer\nOur Compensation Philosophy and Objectives\nOur compensation program is designed to attract, retain and reward executives and employees, with a heavy\nemphasis on equity compensation to provide employees with a financial stake in our business and an ownership\nmindset. We offer a number of programs that allow employees to voluntarily elect to receive elements of their\ncompensation in equity or to otherwise increase their ownership interests in the Company.\nProcess for Setting Compensation\nHistorically, our board has been responsible for determining, and has made all decisions regarding, the\ncompensation for Mr. Musk. With respect to the other NEOs, Mr. Musk has had primary responsibility for\ncompensation-related decisions (in consultation with Ms. Shotwell with respect to Mr. Johnsen’s compensation). All\nequity awards are approved by our board.\nIn connection with this offering, we plan to establish a compensation and nominating committee of our board who\nwill oversee our executive compensation program going forward. The compensation and nominating committee, in\nconsultation with Mr. Musk (other than with respect to his own compensation), will have primary responsibility for\nevaluating and approving the compensation of our NEOs or making recommendations regarding such compensation\nto our board when appropriate, including with respect to Mr. Musk’s compensation.\nElements of Compensation\nBase Salary\nEach NEO’s base salary is a fixed component of compensation for performing specific job duties and functions.\nBase salaries are generally reviewed on an annual basis, taking into account the NEO’s experience and\nresponsibilities. Mr. Musk’s base salary of $54,080 has remained unchanged since 2019, and prior to our relocation\nto Texas in 2024 was tied to California’s minimum salary for exempt employees. Mr. Musk has historically\ndetermined the base salary for Ms. Shotwell, which was increased from $1,040,000 to $1,080,000 effective April 20,\n2025. Mr. Musk and Ms. Shotwell have historically determined the base salary for Mr. Johnsen, which was\nincreased from $780,000 to $825,000 on April 6, 2025, with retroactive effect for the full 2025 Fiscal Year.\nAs participants in a broader employee equity election program, our NEOs, other than Mr. Musk, were eligible to\nelect to receive all or a portion of their base salary in the form of restricted stock units (“RSUs”). For the 2025 Fiscal\nYear, Ms. Shotwell received $353,077 of her base salary in cash and the remainder as a grant of 19,650 RSUs that\nvested 50% on May 15, 2025 and 50% on November 15, 2025, and Mr. Johnsen elected to receive his base salary\nfully in cash. The base salaries paid to our NEOs reflect the only cash compensation that they are eligible to receive,\nas no NEO participates in an annual bonus program.", - "path": "spacex-s1.pdf/p260", - "metadata": { - "length": 3699, - "summary": "233 Table of Contents EXECUTIVE COMPENSATION Compensation Discussion and Analysis This Compensation Discussion and Analysis, or CD&A, provides an overview of our executive compensation philosophy, objectives, and design and each element of our executive compensation program wi...", - "page_nums": [ - 260 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 260, "artifact_ref": "page_citation_assets/page-260.png", @@ -10244,24 +7384,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_87f303f8-692f-5dca-88ae-e6212f0e8d3e", - "type": "page", - "content": "234\nTable of Contents\nLong-Term Incentive Compensation\nIn 2025, we granted long-term incentive compensation under our 2024 Equity Incentive Plan (the “2024 Plan”),\nwhich replaced our 2015 Equity Incentive Plan (the “2015 Plan”) with respect to new grants; however, outstanding\ngrants under the 2015 Plan remained outstanding and subject to the terms of the 2015 Plan, which are substantially\nsimilar to the terms of the 2024 Plan. The 2024 Plan provides for the issuance of up to 365,950,000 shares of Class\nC common stock thereunder pursuant to stock options (which may be either incentive stock options or nonstatutory\nstock options), RSUs, and other equity awards, in each case, on the terms determined by our board. It is expected\nthat, in connection with and following the completion of this offering, all outstanding awards under the 2015 Plan\nand the 2024 Plan will remain outstanding and continue to be subject to their existing terms; however, awards in\nrespect of Class C common stock will be converted into awards in respect of Class A common stock on a one-for-\none basis as part of the Class C Reclassification. It is expected that the 2024 Plan will be amended and restated in\nconnection with this offering, as described below.\nGiven his significant ownership interest in our Company, Mr. Musk was not granted any annual long-term incentive\ncompensation in 2025, and generally does not participate in our annual long-term incentive compensation program.\nHowever, as part of our efforts to further incentivize Mr. Musk to achieve our long-term business objectives, the\nboard granted him a performance-based award of restricted shares of Class B common stock in January 2026, as\ndescribed further under “—2026 Compensation Developments” below.\nMs. Shotwell was eligible to participate in our long-term incentive election program with a target award of $5\nmillion, pursuant to which she could elect to receive 20% of her target award in cash or RSUs that vest after six\nmonths and 80% of her target award in cash vesting over five years, RSUs vesting over five years or stock options\nvesting over six years. In accordance with her elections, on May 10, 2025, our board granted Ms. Shotwell 27,030\nRSUs, representing $1 million of her target award, that vested on November 15, 2025 and stock options to purchase\n324,325 shares of Class C common stock, representing $4 million of her target award, which vest as to 12.5% on\nMay 15, 2027 and monthly thereafter in equal installments through November 15, 2030, in each case, subject to Ms.\nShotwell’s continued employment with us through the applicable vesting date.\nBecause Mr. Johnsen held outstanding stock options tied to aggressive performance milestones, a portion of which\nwere adjusted in 2026 as described further under “—2026 Compensation Developments” below, he was not eligible\nto participate in the long-term incentive election program described above. Instead, Mr. Johnsen’s long-term\nincentive award for the 2025 Fiscal Year consisted exclusively of stock options to purchase 324,325 shares of Class\nC common stock, which was granted by our board on May 10, 2025. These stock options vest as to 40% in equal\nmonthly installments from January 1, 2027 through December 1, 2027 and as to 60% in equal monthly installments\nfrom January 1, 2028 through December 1, 2030, in each case, subject to Mr. Johnsen’s continued employment with\nus through the applicable vesting date.\nOn October 20, 2025, as a special equity grant intended to further promote their retention, reward their individual\nperformance, and encourage efforts to continue growing the Company, our board granted Ms. Shotwell stock\noptions to purchase 3,537,740 shares of Class C common stock and granted Mr. Johnsen stock options to purchase\n141,510 shares of Class C common stock. These special stock options vest as to 20% on September 30, 2027 and\nmonthly thereafter in equal installments through September 30, 2031, in each case, subject to the NEO’s continued\nemployment with us through the applicable vesting date.\nOther Elements of Compensation\nRetirement Benefits\nAll of our U.S. employees, including our NEOs, are eligible to participate in our 401(k) plan, which is a broad-\nbased, tax-qualified defined contribution retirement plan. Under the 401(k) plan, we may make discretionary\nmatching and non-elective contributions, subject to certain limits under the Internal Revenue Code of 1986, as\namended (the “Code”), and such contributions would vest ratably and would be 100% vested after five years of\ncredited service; however, no such company contributions were made for 2025.", - "path": "spacex-s1.pdf/p261", - "metadata": { - "length": 4622, - "summary": "234 Table of Contents Long-Term Incentive Compensation In 2025, we granted long-term incentive compensation under our 2024 Equity Incentive Plan (the “2024 Plan”), which replaced our 2015 Equity Incentive Plan (the “2015 Plan”) with respect to new grants; however, outstanding...", - "page_nums": [ - 261 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 261, "artifact_ref": "page_citation_assets/page-261.png", @@ -10269,24 +7392,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_60752cdc-e73c-5569-a7d9-0f0d3bede130", - "type": "page", - "content": "235\nTable of Contents\nEmployee Stock Purchase Plans\nHistorically, we have provided two employee stock purchase plans in which all of our U.S. employees, including the\nNEOs, are eligible to participate. Our Amended and Restated 2017 Employee Stock Purchase Plan (the “2017\nESPP”) is intended to qualify under Section 423 of the Code and allows eligible employees to purchase shares of\nClass C common stock using accumulated payroll contributions at a discount. It is expected that the 2017 ESPP will\nbe amended and restated in connection with this offering, as described below. Our 2023 Non-Qualified ESPP (the\n“NQ ESPP”) is not intended to qualify under Section 423 of the Code and allows eligible employees to purchase\nshares of Class C common stock using accumulated payroll contributions at fair market value. Our NQ ESPP will be\ndiscontinued in connection with this offering.\nPerquisites\nThe Company provides security equipment to enhance security at Ms. Shotwell’s personal residence. The aggregate\nincremental cost of these security benefits are reported in the “—Executive Compensation Tables—2025 Summary\nCompensation Table” below. No other material perquisites are provided to our NEOs.\nOther Matters\n2026 Compensation Developments\nOn January 13, 2026, our board approved the grant of 1 billion performance-based restricted shares of Class B\ncommon stock to Mr. Musk. The restricted shares vest upon (i) our achievement of specified market capitalization\nmilestones across 15 equal tranches and (ii) the Company’s establishment of a permanent human colony on Mars\nwith at least one million inhabitants, in each case, subject to Mr. Musk’s continued employment with us through the\ndate on which achievement is certified by our board. For any tranche of the award to vest, both the applicable market\ncapitalization milestone for such tranche and the human colony milestone must be met. In connection with the xAI\nMerger that closed on February 2, 2026, the market capitalization milestones were equitably adjusted in accordance\nwith the terms of the award agreement to the following:\nRestricted Shares Subject to Tranche Market Capitalization Milestone\n66,666,665\n\n............................................................................................................................... $ 500,000,000,000\n66,666,665\n\n............................................................................................................................... $ 1,000,000,000,000\n66,666,665\n\n............................................................................................................................... $ 1,500,000,000,000\n66,666,665\n\n............................................................................................................................... $ 2,000,000,000,000\n66,666,665\n\n............................................................................................................................... $ 2,500,000,000,000\n66,666,665\n\n............................................................................................................................... $ 3,000,000,000,000\n66,666,665\n\n............................................................................................................................... $ 3,500,000,000,000\n66,666,665\n\n............................................................................................................................... $ 4,000,000,000,000\n66,666,665\n\n............................................................................................................................... $ 4,500,000,000,000\n66,666,665\n\n............................................................................................................................... $ 5,000,000,000,000\n66,666,670\n\n............................................................................................................................... $ 5,500,000,000,000\n66,666,670\n\n............................................................................................................................... $ 6,000,000,000,000\n66,666,670\n\n............................................................................................................................... $ 6,500,000,000,000\n66,666,670\n\n............................................................................................................................... $ 7,000,000,000,000\n66,666,670\n\n............................................................................................................................... $ 7,500,000,000,000\nIn connection with the xAI Merger, we also assumed a performance stock award originally granted to Mr. Musk by\nxAI on November 26, 2025. In accordance with the terms of that award agreement, the award was adjusted to\naccount for the xAI Merger and, following such adjustment, reflected Mr. Musk’s right to receive shares of our\nClass A common stock equal to 0.20% of the fully diluted capitalization of the Company upon achievement of each\nof 12 valuation milestones ranging from $1.065 trillion to $6.565 trillion, with each milestone reflecting $500 billion", - "path": "spacex-s1.pdf/p262", - "metadata": { - "length": 5117, - "summary": "235 Table of Contents Employee Stock Purchase Plans Historically, we have provided two employee stock purchase plans in which all of our U.S. employees, including the NEOs, are eligible to participate. Our Amended and Restated 2017 Employee Stock Purchase Plan (the “2017 ESPP”...", - "page_nums": [ - 262 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 262, "artifact_ref": "page_citation_assets/page-262.png", @@ -10294,24 +7400,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f32ece9a-8e5d-578a-be0d-479ea251c58b", - "type": "page", - "content": "236\nTable of Contents\nin additional valuation, in each case, subject to Mr. Musk’s continued employment with us. The first valuation\nmilestone was achieved prior to the xAI Merger, and Mr. Musk was issued 25,172,695 shares of our Class A\ncommon stock in settlement of that portion of the award. On March 23, 2026, this award and the 25,172,695 shares\nearned upon achievement of the first valuation milestone were cancelled and replaced with a grant of 302,072,285\nperformance-based restricted shares of Class B common stock, which vest upon both (i) achievement of specified\nmarket capitalization milestones across 12 equal tranches ranging from $1.065 trillion to $6.565 trillion, with each\nmilestone reflecting $500 billion in additional valuation, and (ii) the Company’s completion of non-Earth-based data\ncenters capable of delivering 100 terawatts of compute per year, in each case, subject to Mr. Musk’s continued\nemployment with us through the date on which achievement is certified by our board.\nOn January 4, 2026, our board approved an amendment to Mr. Johnsen’s 4 million performance-based stock options\noriginally granted in 2024. In lieu of vesting based on free cash flow achievement in excess of a baseline, 371,125 of\nthe stock options will vest for each $10 billion in adjusted EBITDA achieved during the 2025 through 2029 fiscal\nyears, assessed on an annual basis. For purposes of this award, adjusted EBITDA is calculated as income from\noperations excluding (i) depreciation and amortization, (ii) share-based compensation, (iii) impairment, and (iv)\nrestructuring impacts. Once a tranche of the stock options have become earned as a result of our adjusted EBITDA\nperformance as of the end of a particular fiscal year, such stock options remain subject to an additional one-year and\none day service-based vesting requirement following December 31 of the fiscal year in which such tranche was\nearned. None of the stock options became earned on account of our 2025 Fiscal Year adjusted EBITDA\nperformance.\nClawback Policy\nIn connection with this offering, we will adopt a compensation recoupment (clawback) policy that complies with the\nNasdaq and Nasdaq Texas listing standards implementing Rule 10D-1 of the Exchange Act.\nExecutive Compensation Tables\n2025 Summary Compensation Table\nThe following table presents information regarding the total compensation awarded to, earned by, and paid to the\nNEOs for the 2025 Fiscal Year.\nName and Principal Position Year Salary ($)\nOption Awards ($)(1)\nStock Awards ($)(2)\nAll Other Compensation($)(3)\nTotal Compensation ($)\nElon Musk Chief Executive Officer, Chief Technical Officer and Chairman of the Board\n\n\n............ 2025 54,080 — — — 54,080\nGwynne Shotwell President, Chief Operating Officer and Director\n................ 2025 1,080,127 (4) 82,969,515 1,727,160 30,095 85,806,897\nBret Johnsen Chief Financial Officer\n\n............... 2025 825,000 9,013,002 — — 9,838,002\n__________________\n(1) Amounts in this column represent the grant date fair value of stock options granted to the NEOs during the 2025 Fiscal Year calculated in\naccordance with FASB ASC Topic 718, disregarding the effect of estimated forfeitures. For additional information regarding the\nassumptions underlying this calculation, please refer to Note 15, Share-based Compensation—Fair Value Determination, to the consolidated\nfinancial statements included elsewhere in this prospectus.\n(2) Amounts in this column represent the grant date fair value of RSUs granted to the NEOs calculated in accordance with FASB ASC Topic\n718, disregarding the effect of estimated forfeitures, based on the fair market value of a share of our Class C common stock on the\napplicable date.\n(3) Amounts in the column include, for Ms. Shotwell, the incremental cost to the Company of security equipment to enhance security at Ms.\nShotwell’s personal residence. From time to time, each NEO may also be accompanied by personal guests on travel on Company-owned\naircraft that otherwise has a business purpose; however, there is no incremental cost to the Company of such travel.\n(4) This amount includes the grant date fair value of 19,650 RSUs granted to Ms. Shotwell in lieu of base salary, calculated in accordance with\nFASB ASC Topic 718, disregarding the effect of estimated forfeitures, based on the fair market value of a share of our Class C common\nstock on the applicable date ($37 on May 10, 2025). For additional information, please refer to “—Compensation Discussion and Analysis\n—Elements of Compensation—Base Salary” above and “Grants of Plan-Based Awards” below.", - "path": "spacex-s1.pdf/p263", - "metadata": { - "length": 4591, - "summary": "236 Table of Contents in additional valuation, in each case, subject to Mr. Musk’s continued employment with us. The first valuation milestone was achieved prior to the xAI Merger, and Mr. Musk was issued 25,172,695 shares of our Class A common stock in settlement of that port...", - "page_nums": [ - 263 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 263, "artifact_ref": "page_citation_assets/page-263.png", @@ -10319,24 +7408,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f97db31e-972e-5867-9ccc-d33936b9300c", - "type": "page", - "content": "237\nTable of Contents\nGrants of Plan-Based Awards\nThe following table provides information on the stock options to purchase shares of our Class C common stock and\nRSUs representing a right to receive shares of our Class C common stock, in each case, granted to each NEO during\nthe 2025 Fiscal Year under the 2024 Plan. Mr. Musk did not receive any equity grants from the Company during the\n2025 Fiscal Year.\nName Grant Date\nAll Other Stock Awards: Number of Shares of Stock or Units (#)(1)\nAll Other Option Awards: Number of Securities Underlying Options (#)(2)\nExercise or Base Price of Option Awards ($/Sh)(3)\nGrant Date Fair Value of Stock and Option Awards ($)(4)\nGwynne Shotwell\nRSUs\n\n...................................... 5/10/25 19,650 (5) $ 727,050\nRSUs\n\n...................................... 5/10/25 27,030 $ 1,000,110\nOptions\n\n................................... 5/10/25 324,325 $ 37.00 $ 6,136,878\nOptions\n\n................................... 10/20/25 3,537,740 $ 42.40 $ 76,832,637\nBret Johnsen\nOptions\n\n................................... 5/10/25 324,325 $ 37.00 $ 5,939,688\nOptions\n\n................................... 10/20/25 141,510 $ 42.40 $ 3,073,314\n__________________\n(1) Amounts in this column represent RSUs granted during the 2025 Fiscal Year. For more information, please refer to “—Compensation\nDiscussion and Analysis—Elements of Compensation—Long-Term Incentive Compensation” and “Compensation Discussion and Analysis\n—Elements of Compensation—Base Salaries” above.\n(2) Amounts in this column represent stock options granted during the 2025 Fiscal Year. For more information, please refer to “—\nCompensation Discussion and Analysis—Elements of Compensation—Long-Term Incentive Compensation” above.\n(3) The exercise price of each stock option granted during the 2025 Fiscal Year reflects the fair market value of a share of our Class C common\nstock on the date of grant and was determined based on a third-party valuation obtained in accordance with Section 409A of the Code.\n(4) Amounts in this column represent the grant date fair value of stock options and RSUs, calculated in accordance with FASB ASC Topic 718,\ndisregarding the effect of estimated forfeitures. For additional information regarding the assumptions underlying this calculation, refer to\nNote 15, Share-based Compensation—Fair Value Determination, to the audited financial statements included elsewhere in this prospectus.\n(5) Represents the RSUs granted to Ms. Shotwell in lieu of $726,923 of her 2025 base salary. For additional information, please refer to “—\nCompensation Discussion and Analysis—Elements of Compensation—Base Salary” above.\nOutstanding Equity Awards at Fiscal Year-End\nThe following table presents information regarding the outstanding stock option awards held by our NEOs as of\nDecember 31, 2025. No NEOs held outstanding RSUs or other unvested stock awards in the Company as of\nDecember 31, 2025. Awards in respect of Class C common stock reflected in this following table will be converted\ninto awards in respect of Class A common stock on a one-for-one basis as part of the Class C Reclassification.", - "path": "spacex-s1.pdf/p264", - "metadata": { - "length": 3122, - "summary": "237 Table of Contents Grants of Plan-Based Awards The following table provides information on the stock options to purchase shares of our Class C common stock and RSUs representing a right to receive shares of our Class C common stock, in each case, granted to each NEO during...", - "page_nums": [ - 264 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 264, "artifact_ref": "page_citation_assets/page-264.png", @@ -10344,24 +7416,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d7f5b978-9842-513f-84d7-b5bbb0ceb188", - "type": "page", - "content": "238\nTable of Contents\nName\nOption Awards\nNumber of Securities Underlying Unexercised Options (#) Exercisable\nNumber of Securities Underlying Unexercised Options (#) Unexercisable\nEquity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)\nOption Exercise Price ($)\nOption Expiration Date\nElon Musk\nClass B Options\n\n..................... 344,166,650 8,333,350 (1) — $ 8.3998 2/11/31\nGwynne Shotwell\nClass C Options\n\n..................... 27,800 305,550 (2) — $ 8.3998 4/20/31\nClass C Options\n\n..................... 14,885 163,690 (2) — $ 11.20 4/27/32\nClass C Options\n\n..................... — 618,560 (3) — $ 19.40 5/16/34\nClass C Options\n\n..................... — 324,325 (4) — $ 37.00 5/10/35\nClass C Options\n\n..................... — 3,537,740 (5) — $ 42.40 10/20/35\nBret Johnsen\nClass C Options\n\n..................... 711,850 — — $ 4.40 4/24/30\nClass C Options\n\n..................... 1,019,400 480,600 (2) — $ 8.3998 4/20/31\nClass C Options\n\n..................... 535,715 — 2,142,860 (6) $ 11.20 4/27/32\nClass C Options\n\n..................... 139,285 375,005 (7) — $ 15.40 5/1/33\nClass C Options\n\n..................... — 371,135 (3) — $ 19.40 5/16/34\nClass C Options\n\n..................... — — 4,000,000 (8) $ 19.40 5/16/34\nClass C Options\n\n..................... — 324,325 (9) — $ 37.00 5/10/35\nClass C Options\n\n..................... — 141,510 (5) — $ 42.40 10/20/35\n__________________\n(1) These stock options to purchase shares of our Class B common stock vested on January 1, 2026.\n(2) These stock options to purchase shares of our Class C common stock vest in approximately equal monthly installments through November\n15, 2026, subject to the NEO’s continued employment.\n(3) These stock options to purchase shares of our Class C common stock vest as to 12.5% on May 15, 2026 and thereafter in approximately\nequal monthly installments through November 15, 2029, subject to the NEO’s continued employment.\n(4) These stock options to purchase shares of our Class C common stock vest as to 12.5% on May 15, 2027 and thereafter in approximately\nequal monthly installments through November 15, 2030, subject to the NEO’s continued employment.\n(5) These stock options to purchase shares of our Class C common stock vest as to 20% on September 30, 2027 and thereafter in approximately\nequal monthly installments through September 30, 2031, subject to the NEO’s continued employment.\n(6) These stock options to purchase shares of our Class C common stock vest as follows: (i) 75% vests in three equal tranches upon\nachievement of a 50%, 80% and 90% reduction in cost per ton to orbit from such cost in April 2022, and (ii) 25% vests in two equal\ntranches upon achievement of 80% and 90% reduction in Starlink service delivery costs from such costs in April 2022, in each case, subject\nto the NEO’s continued employment.\n(7) These stock options to purchase shares of our Class C common stock vest in approximately equal monthly installments through November\n15, 2028, subject to the NEO’s continued employment.\n(8) These stock options to purchase shares of our Class C common stock were eligible to vest based on our free cash flow performance\nexceeding $2 billion beginning in 2025, subject to the NEO’s continued employment. In 2026, these stock options were amended as\ndescribed in more detail under —”Compensation Discussion and Analysis—Other Matters—2026 Compensation Developments” above.\n(9) These stock options to purchase shares of our Class C common stock vest as follows: (i) 129,730 vest in approximately equal monthly\ninstallments from January 1, 2027 through December 1, 2027 and (ii) 194,595 vest in approximately equal monthly installments from\nJanuary 1, 2028 through December 1, 2030, in each case, subject to the NEO’s continued employment.", - "path": "spacex-s1.pdf/p265", - "metadata": { - "length": 3788, - "summary": "238 Table of Contents Name Option Awards Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Opt...", - "page_nums": [ - 265 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 265, "artifact_ref": "page_citation_assets/page-265.png", @@ -10369,24 +7424,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8ab8df39-c1ca-525c-961c-2982529d8738", - "type": "page", - "content": "239\nTable of Contents\nOption Exercises and Stock Vested\nThe following table reflects stock options to purchase Class C common stock exercised by our NEOs during the\n2025 Fiscal Years and RSUs held by our NEOs which vested during 2025.\nName\nOption Awards Stock Awards\nNumber of Shares Acquired on Exercise (#)\nValue Realized on Exercise ($)(1)\nNumber of Shares Acquired on Vesting (#)\nValue Realized on Vesting ($)(2)\nElon Musk\n\n.......................................................... — — — —\nGwynne Shotwell\n\n............................................... 1,684,515 44,800,662 46,680 1,926,177\nBret Johnsen\n\n....................................................... 1,182,150 41,906,655 — —\n__________________\n(1) The value realized on the exercise of stock options is determined based on the fair market value of a share of our Class C common stock on\nthe exercise date, less the applicable exercise price.\n(2) The value realized on the vesting of RSUs is determined based on the fair market value of a share of our Class C common stock on the\nvesting date.\nPotential Payments Upon Termination or Change in Control\nNone of our NEOs are party to an employment agreement or severance arrangement that provides for payments or\nbenefits upon termination of employment or a change in control of the Company. Under the terms of the RSU award\nagreements, in the event of an NEO’s death, the RSUs scheduled to vest within the following 12-month period\nwould become vested. No NEOs held outstanding RSUs as of December 31, 2025. No other equity award\nagreements provide for benefits upon termination of employment or a change in control of the Company.\nAmended and Restated 2024 Equity Incentive Plan\nIn connection with this offering, we intend to amend and restate our 2024 Plan (the “A&R 2024 Plan”). The purpose\nof the A&R 2024 Plan is to secure and retain the services of eligible employees, directors and consultants to provide\nincentives for such persons to exert maximum efforts for the success of the Company and to provide a means by\nwhich such eligible recipients may be given an opportunity to benefit from increases in value of our Class A\ncommon stock. The A&R 2024 Plan allows for the grant of stock options, both incentive stock options and\n“nonstatutory” stock options; stock appreciation rights (“SARs”); restricted stock; RSUs; and other equity awards.\nWe refer to these collectively herein as “Awards.”\nThe following description of the A&R 2024 Plan is not intended to be complete and is qualified in its entirety by\nreference to the complete text of the A&R 2024 Plan, a copy of which will be filed as an exhibit to the registration\nstatement of which this prospectus forms a part. Please read the A&R 2024 Plan in its entirety.\nAdministration\nThe A&R 2024 Plan will be administered by our board or a committee thereof designated by our board to administer\nthe A&R 2024 Plan, which we refer to herein as the “Plan Administrator.” The Plan Administrator will have broad\nauthority, subject to the provisions of the A&R 2024 Plan, to administer and interpret the A&R 2024 Plan and\nAwards granted thereunder. All decisions and actions of the Plan Administrator will be final, binding and conclusive\non all persons.\nStock Subject to A&R 2024 Plan\nThe maximum number of shares of Class A common stock that may be issued under the A&R 2024 Plan will not\nexceed 365,950,000 shares (the “Share Reserve”), inclusive of shares issued under the 2024 Plan prior to the\nadoption of the A&R 2024 Plan. The Share Reserve is subject to certain adjustments in the event of a change in our\ncapitalization. Shares of Class A common stock issued under the A&R 2024 Plan may be authorized but unissued or\nreacquired shares, including shares repurchased by the Company on the open market or otherwise.", - "path": "spacex-s1.pdf/p266", - "metadata": { - "length": 3792, - "summary": "239 Table of Contents Option Exercises and Stock Vested The following table reflects stock options to purchase Class C common stock exercised by our NEOs during the 2025 Fiscal Years and RSUs held by our NEOs which vested during 2025. Name Option Awards Stock Awards Number of...", - "page_nums": [ - 266 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 266, "artifact_ref": "page_citation_assets/page-266.png", @@ -10394,24 +7432,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a6e2d3fa-27c2-5e10-8035-1f810266186f", - "type": "page", - "content": "240\nTable of Contents\nShares of Class A common stock subject to any award under our 2012 Equity Incentive Plan or the 2015 Plan that\nexpires, terminates or is forfeited or that are reacquired, withheld or not issued to satisfy a tax withholding obligation\nwill be added to the Share Reserve. Shares of Class A common stock subject to any award under the A&R 2024 Plan\nthat expires, terminates or is forfeited or that are reacquired, withheld or not issued to satisfy a tax withholding\nobligation or payment of an exercise price will be again be available for issuance under the A&R 2024 Plan.\nEligibility\nCurrent or prospective employees, non-employee directors and consultants of the Company and its affiliates will be\neligible to participate in the A&R 2024 Plan.\nTypes of Awards\nStock Options. Stock options granted under the A&R 2024 Plan may be granted as incentive stock options or\nnonstatutory stock options, in either case with a term not to exceed 10 years (or five years for incentive stock options\ngranted to 10% shareholders). Subject to the express provisions of the A&R 2024 Plan, stock options generally may\nbe exercised over such period, in installments or otherwise, as the Plan Administrator may determine. The exercise\nprice for any stock option granted may not generally be less than the fair market value of the Class A common stock\nsubject to that option on the grant date (or 110% of the fair market value for incentive stock options granted to 10%\nshareholders). The exercise price may be paid in cash or such other method as determined by the Plan Administrator,\nincluding an irrevocable commitment by a broker to pay over such amount from a sale of the shares issuable under\nan option, the delivery of previously owned shares, or withholding of shares deliverable upon exercise.\nStock Appreciation Rights. SARs represent, upon exercise, the right to receive the amount by which the fair market\nvalue of the Class A common stock at the time of exercise exceeds the exercise price of the SAR. This amount is\npayable in Class A common stock, cash, or a combination thereof, or in any other form of consideration at the Plan\nAdministrator’s discretion. The exercise price for any SARs may not generally be less than the fair market value of\nthe Class A common stock subject to the SAR on the grant date and may not have a term in excess of 10 years.\nRestricted Stock and RSUs. Awards of restricted stock consist of shares of stock that are transferred to the\nparticipant subject to restrictions that may result in forfeiture if specified conditions are not satisfied. RSUs result in\nthe transfer of shares of Class A common stock, cash or other form of consideration to the participant only after\nspecified conditions are satisfied. The Plan Administrator will determine the restrictions and conditions applicable to\neach award of restricted stock or RSUs, which may include performance vesting conditions.\nOther Equity Awards. Other equity awards are Awards valued in whole or in part by reference to, or otherwise\nbased, on Class A common stock, including the appreciation in value thereof. Other equity awards may be granted\neither alone or in tandem with other Awards under the A&R 2024 Plan.\nPerformance Criteria\nThe Plan Administrator may specify certain performance criteria which must be satisfied before Awards will be\ngranted or will vest. The performance goals may vary from participant to participant, group to group, and period to\nperiod.\nTransferability\nExcept as otherwise permitted by the Plan Administrator, Awards generally are not transferable except by will or by\nthe laws of descent and distribution, and each stock option or SAR will be exercisable during the lifetime of the\nparticipant only by the participant.\nClawback\nAwards will be subject to recoupment in accordance with any clawback policy that we adopt, including any\nclawback policy required under Rule 10D-1 of the Exchange Act.", - "path": "spacex-s1.pdf/p267", - "metadata": { - "length": 3933, - "summary": "240 Table of Contents Shares of Class A common stock subject to any award under our 2012 Equity Incentive Plan or the 2015 Plan that expires, terminates or is forfeited or that are reacquired, withheld or not issued to satisfy a tax withholding obligation will be added to the...", - "page_nums": [ - 267 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 267, "artifact_ref": "page_citation_assets/page-267.png", @@ -10419,24 +7440,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ca99555e-473d-5254-b15c-0f9b622c20d9", - "type": "page", - "content": "241\nTable of Contents\nAmendment and Termination\nThe Plan Administrator may amend, suspend or terminate the A&R 2024 Plan at any time; however certain\nenumerated material amendments may not be made without shareholder approval. Suspension or termination of the\nA&R 2024 Plan may not impair the rights and obligations of any outstanding Award. The Plan Administrator may\nalso amend any outstanding Award, subject to the participant’s consent in the event such amendment impairs such\nparticipant’s rights under such Award. The A&R 2024 Plan is expected to be adopted by our board in connection\nwith this offering and will terminate on December 10, 2034, unless earlier terminated by our board.\nSecond Amended and Restated 2017 Employee Stock Purchase Plan\nIn connection with this offering, we intend to further amend and restated our 2017 ESPP. The purpose of the A&R\n2017 ESPP is to encourage and enable our eligible employees to acquire a proprietary interest in us through the\nownership of our Class A common stock. The A&R 2017 ESPP, and the rights of participants to make purchases\nthereunder, is intended to qualify under the provisions of Section 423 of the Code.\nThe following description of the A&R 2017 ESPP is not intended to be complete and is qualified in its entirety by\nreference to the complete text of the A&R 2017 ESPP, a copy of which will be filed as an exhibit to the registration\nstatement of which this prospectus forms a part. Please read the A&R 2017 ESPP in its entirety.\nAdministration\nThe A&R 2017 ESPP will be administered by our board or a committee thereof designated by our board to\nadminister the A&R 2017 ESPP, which we refer to herein as the “ESPP Administrator.” The ESPP Administrator\nhas the final power to determine all questions of policy and expediency that may arise in the administration of the\nA&R 2017 ESPP. The ESPP Administrator may delegate its responsibilities under the A&R 2017 ESPP to one or\nmore other persons.\nStock Subject to A&R 2017 ESPP\nThe maximum number of shares of Class A common stock that may be issued under the A&R 2017 ESPP will not\nexceed 75,000,000 shares (the “ESPP Share Pool”), inclusive of shares issued under the 2017 ESPP prior to the\nadoption of the A&R 2017 Plan. The ESPP Share Pool is subject to certain adjustments in the event of a change in\nour capitalization. Shares of Class A common stock issued under the A&R 2017 ESPP may be either authorized and\nunissued shares or previously issued shares acquired by us. A participant does not have the rights of a shareholder\nuntil the shares are actually issued to the participant.\nEligibility; Limitations\nAn employee is eligible to participate in the A&R 2017 ESPP if the employee has been continuously employed by\nus our one of our related corporations incorporated in the United States since at least the last day of the calendar\nmonth preceding the month in which the offering date occurs and does not own 5% or more of the combined voting\npower of the Company or any related corporations (as determined under Section 423 and 424 of the Code). Eligible\nemployees must enroll in a particular offering at least 10 business days prior to the offering date of such offering,\nand once enrolled for an offering, employees will be automatically enrolled in subsequent offerings unless the\nemployee withdraws.\nA participant is not permitted to purchase shares of our Class A common stock with a fair market value in excess of\n$25,000 in any one calendar year (calculated based on the fair market value on the offering date).\nOfferings\nThe offerings and purchase periods will be determined by the ESPP Administrator, subject to limitations under the\nSection 423 of the Code. It is expected that we will continue six-month successive purchase periods with purchase\ndates occurring on April 15th and October 15th of each year.", - "path": "spacex-s1.pdf/p268", - "metadata": { - "length": 3842, - "summary": "241 Table of Contents Amendment and Termination The Plan Administrator may amend, suspend or terminate the A&R 2024 Plan at any time; however certain enumerated material amendments may not be made without shareholder approval. Suspension or termination of the A&R 2024 Plan may...", - "page_nums": [ - 268 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 268, "artifact_ref": "page_citation_assets/page-268.png", @@ -10444,24 +7448,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c4f66e66-535b-5d1f-a808-956b6cd2bf17", - "type": "page", - "content": "242\nTable of Contents\nDuring the purchase period, a participant may contribute between 1% and 100% of their eligible earnings (in whole\npercentage increments) through payroll deductions. A participant may change their payroll deduction prior to the\nbeginning of an offering; however, during an offering, a participant may not increase the contribution percentage\nand may only decrease it up to two times (with the second decrease required to be to 0%), subject to the withdrawal\nprovisions. At the end of each offering period, unless the participant has withdrawn from the A&R 2017 ESPP,\npayroll deductions are applied automatically to purchase shares of Class A common stock at the purchase price\ndescribed below. The number of shares purchased is determined by dividing the payroll deductions by the applicable\npurchase price, with any remaining funds held in the participant’s account for the subsequent purchase period\n(subject to the withdrawal provisions).\nIn the event of a participant’s termination of employment or a participant’s withdrawal from an offering (which may\noccur at any time prior to the ten-business day period preceding the purchase date), such participant’s accumulated\ndeductions will be returned to the participant as soon as administratively practicable.\nPurchase Price\nThe price per share at which shares are purchased under the A&R 2017 ESPP in a particular offering period is\ndetermined by the ESPP Administrator, but in no event will be less than 85% of the lower of the fair market value of\nthe Class A common stock on the offering date or the fair market value of the Class A common stock on the\npurchase date.\nAdjustments\nIn the event of any reorganizations, recapitalizations, stock splits, reverse stock splits, stock dividends, extraordinary\ndividends or distributions, or similar events, the ESPP Administrator will appropriately adjust the number and class\nof shares available under the A&R 2017 ESPP and subject to the purchase limits under each ongoing offering and\nthe applicable purchase price of such shares in each ongoing offering.\nTransferability\nRights to purchase Class A common stock under the A&R 2017 ESPP may not be transferred by a participant and\nmay be exercised during a participant’s lifetime only by the participant.\nAmendment and Termination\nThe A&R 2017 ESPP will become effective when it is approved by our board. Our board may amend, alter, or\ndiscontinue the A&R 2017 ESPP in any respect at any time, subject to shareholder approval as required by\napplicable laws and regulations.\nDirector Compensation\nDuring 2025, our non-employee directors did not receive cash or equity compensation for their service on our board.\nMr. Musk and Ms. Shotwell do not receive any additional compensation for their respective services as directors.", - "path": "spacex-s1.pdf/p269", - "metadata": { - "length": 2796, - "summary": "242 Table of Contents During the purchase period, a participant may contribute between 1% and 100% of their eligible earnings (in whole percentage increments) through payroll deductions. A participant may change their payroll deduction prior to the beginning of an offering; ho...", - "page_nums": [ - 269 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 269, "artifact_ref": "page_citation_assets/page-269.png", @@ -10469,24 +7456,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d909d023-bd9d-5cf8-9e7b-f54c83085607", - "type": "page", - "content": "243\nTable of Contents\nCERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS\nThe following is a description of certain relationships and transactions that exist, are proposed to exist or have\nexisted or that we have entered into or propose to enter into with our directors, executive officers, holders of more\nthan 5% of our capital stock or their affiliates and immediate family members since January 1, 2023 and where:\n• we have been or are to be a participant;\n• the amount involved exceeded or will exceed $120,000; and\n• any of our directors, executive officers, or holders of more than 5% of our capital stock, or any immediate\nfamily member of, or persons sharing their household with, any of these individuals, had or will have a direct or\nindirect material interest.\nNote Regarding the xAI Merger\nOn February 2, 2026, we effected the xAI Merger, pursuant to which we acquired xAI (which includes X). For the\npurposes of the disclosures set forth in this section pursuant to Item 404 of Regulation S-K, the transactions\ndescribed below also include certain agreements and transactions originally entered into by xAI or X Holdings prior\nto the xAI Merger to the extent that such agreements and transactions are ongoing following the consummation of\nthe xAI Merger.\nTransactions with Elon Musk and Affiliated Entities\nElon Musk, our founder, Chief Executive Officer, Chief Technical Officer, Chairman of our board, and principal\nshareholder, also serves as the Technoking, Chief Executive Officer and director of Tesla, and is an approximately\n20% shareholder of Tesla as of November 10, 2025. Mr. Musk is also the founder of several other ventures,\nincluding The Boring Company (an infrastructure company). In addition, Mr. Musk was a stockholder, director, and\nofficer of each of xAI and X prior to the X Merger and the xAI Merger. We have certain relationships and/or\ntransactions with Mr. Musk and affiliated entities, as described below.\nTransactions with Tesla\nTesla is the beneficial owner of 18,990,195 shares of our Class A common stock as of May 1, 2026, representing an\nownership interest of less than 1.0% of the total outstanding number of shares of our Class A common stock, after\ngiving effect to the sale of shares of Class A common stock in this offering.\nTesla designs, develops, manufactures, sells, and leases fully electric vehicles and energy generation and storage\nsystems that deliver AI-related and enhanced software and services to its customers. We have historically\ncollaborated with Tesla through commercial, licensing, and support agreements. Certain amounts presented below\nthat may have been incurred in one year could be paid in another year.\n• SpaceX commercial, licensing and support agreements. We are party with Tesla to certain agreements which\ngenerally relate to commercial, licensing, and support agreements and standardized commercial transactions\nwith Tesla done on terms no less favorable to SpaceX than those generally available to unaffiliated third parties\nunder similar circumstances. Pursuant to those agreements, we obtained goods and services of $11 million in\n2023, $4 million in 2024, $144 million in 2025, and $0.2 million from January 1, 2026 through February 28,\n2026.\n• xAI commercial, licensing and support agreements. xAI is party to certain commercial, licensing, and\nsupport agreements with Tesla. Under these agreements, xAI obtained goods and services of $191 million in\n2024, $506 million in 2025, and $34 million from January 1, 2026 through February 28, 2026, and xAI\nrecognized revenue of $2 million in 2025 and $0.4 million from January 1, 2026 through February 28, 2026\nfrom Tesla.", - "path": "spacex-s1.pdf/p270", - "metadata": { - "length": 3655, - "summary": "243 Table of Contents CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS The following is a description of certain relationships and transactions that exist, are proposed to exist or have existed or that we have entered into or propose to enter into with our directors, exec...", - "page_nums": [ - 270 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 270, "artifact_ref": "page_citation_assets/page-270.png", @@ -10494,24 +7464,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fa2aab2e-913e-5f31-8dde-a4840eedb90e", - "type": "page", - "content": "244\nTable of Contents\n• X Holdings advertising agreements. Tesla has directly and indirectly purchased advertising on our X\nplatform. These amounts totaled $0.5 million in 2024, $4 million in 2025, and $0 from January 1, 2026 through\nFebruary 28, 2026.\n• Aircraft usage. Since April 2016, we have owned and operated aircraft used by Mr. Musk, in his capacity as\nthe Chief Executive Officer of Tesla, and other Tesla personnel for business travel, and we have invoiced Tesla\nfor the use of such aircraft owned and operated by us at rates determined by Tesla and SpaceX, subject to rules\nof the Federal Aviation Administration governing such arrangements. For such aircraft use, we charged Tesla\n$1 million in 2023, $1 million in 2024, $2 million in 2025, and $0 from January 1, 2026 through February 28,\n2026.\nTransactions with The Boring Company\nIn 2024, X entered into a lease for office space with a subsidiary owned by The Boring Company (an entity\naffiliated with Mr. Musk). Under this agreement, X made lease payments of $0.1 million in 2024, $1 million in\n2025, and $0.1 million from January 1, 2026 through February 28, 2026. In addition, SpaceX incurred expenses of\n$1 million in 2025 in connection with the construction of tunnels by The Boring Company in Bastrop, Texas.\nRelationships with Musk Industries LLC\nxAI leases a real property owned by the Musk Industries LLC, which is owned by Mr. Musk. Under this agreement,\nxAI made lease payments of $0.5 million in 2024, $2 million in 2025, and $0.2 million from January 1, 2026\nthrough February 28, 2026.\nSecurity Services provided to Mr. Musk\nWe are party to a services agreement with a security company owned by Mr. Musk and organized to provide\nsecurity services concerning him, including in connection with his duties to and work for SpaceX. SpaceX incurred\nexpenses of $2 million for such SpaceX-related security services in 2023, $3 million for such security services in\n2024, $4 million for such security services in 2025, and $1 million for such security services from January 1, 2026\nthrough February 28, 2026.\nRelationship with Antonio J. Gracias and Affiliated Entities\nTransactions with Valor Equity Partners and Affiliated Entities\nMr. Antonio J. Gracias, a member of our board, also serves as the founder, CEO and Chief Investment Officer of\nValor Equity Partners (together with its affiliates, “Valor”).\nCertain subsidiaries of xAI, have entered into certain equipment lease, sublease, and access agreements with Valor.\nThese arrangements include (i) an equipment lease agreement under which a subsidiary of xAI leases computing and\nrelated equipment from Valor, which provides for aggregate cash payments of $6,986 million to be made by such\nsubsidiary over the life of the lease, (ii) a second equipment lease agreement under which such subsidiary leases\ncertain computing and related equipment from Valor, which provides for aggregate cash payments of $6,633 million\nto be made by such subsidiary over the life of the lease, and (iii) a third equipment lease under which such\nsubsidiary leases certain computing and related equipment from Valor, which provides for aggregate cash payments\nof $6,587 million to be made by such subsidiary over the life of the lease. The lessees’ payments and performance\nobligations under these agreements are guaranteed by Space Exploration Technologies Corp. or one of its\nsubsidiaries. Pursuant to the lease agreements described above, our subsidiaries have made payments of $885\nmillion in 2025, and $857 million from January 1, 2026 through February 28, 2026.\nIn connection with certain X API services, X received payments from Valor of $1 million in 2024, $1 million in\n2025, and $0.1 million from January 1, 2026 through February 28, 2026.", - "path": "spacex-s1.pdf/p271", - "metadata": { - "length": 3756, - "summary": "244 Table of Contents • X Holdings advertising agreements. Tesla has directly and indirectly purchased advertising on our X platform. These amounts totaled $0.5 million in 2024, $4 million in 2025, and $0 from January 1, 2026 through February 28, 2026. • Aircraft usage. Since...", - "page_nums": [ - 271 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 271, "artifact_ref": "page_citation_assets/page-271.png", @@ -10519,24 +7472,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a3311c4e-aeb5-5762-aef1-8b6f02640ed4", - "type": "page", - "content": "245\nTable of Contents\nOther Transactions with our Directors and Executive Officers\nWe own and operate, through our subsidiary, Falcon Landing, LLC, three aircraft for use by our directors, executive\nofficers and employees in connection with the performance of their duties for business purposes. One of the aircraft\nis maintained and serviced by Craft Aviation Services, LLC, an affiliate of Mr. Musk. The amount of the expenses\nincurred by us for the maintenance and service of this aircraft was $1 million in 2023, $1 million in 2024, $3 million\nin 2025, and $1 million from January 1, 2026 through February 28, 2026. As disclosed above, we have also invoiced\nTesla for their use of one of the aircraft owned and operated by us at rates determined by Tesla and SpaceX, subject\nto rules of the Federal Aviation Administration governing such arrangements.\nIn certain circumstances, when our aircraft are unavailable, Mr. Musk uses his personal aircraft for SpaceX business\npurposes and is reimbursed by us, subject to rules of the Federal Aviation Administration governing such\narrangements. In connection with the use of such aircraft, SpaceX has incurred expenses of $0.1 million in 2023, $3\nmillion in 2024, $2 million in 2025, and $0.2 million from January 1, 2026 through February 28, 2026.\nMs. Shotwell, our President, Chief Operating Officer and Director, and Mr. Johnsen, our Chief Financial Officer,\nseparately co-own an aircraft for their personal use. In certain circumstances, when none of our aircraft are available\nfor business use, our directors and employees, including Ms. Shotwell and Mr. Johnsen, have used this aircraft for\nSpaceX business purposes. Any leasing fees for the use of such aircraft for our business purposes have been waived\nby the owners, and we have agreed to assume the cost of maintenance, crew and operation of such aircraft for such\nuse, subject to rules of the Federal Aviation Administration governing such arrangements. In connection with the use\nof this aircraft, SpaceX has incurred expenses of $3 million in 2023, $3 million in 2024, $3 million in 2025, and $1\nmillion from January 1, 2026 through February 28, 2026.\nInvestors’ Rights Agreement\nCertain existing investors in our equity securities, including entities affiliated with Elon Musk, Google, Valor, and\nDFJ Growth, are party to an Amended and Restated Investors’ Rights Agreement, dated as of August 4, 2020 (the\n“Investors’ Rights Agreement”). Under the Investors’ Rights Agreement, such existing investors are entitled to\nregistration rights with respect to shares of our Class A common stock beneficially owned by them (collectively, the\n“Registrable Securities”). These registration rights, if exercised, would require us to register such existing investors’\nRegistrable Securities under the Securities Act, and would facilitate the resale of such securities by such existing\ninvestors into the public markets.\nWe will pay all registration expenses, other than underwriting discounts and commissions, associated with\nregistrations effected pursuant to the Investors’ Rights Agreement, subject to limited exceptions.\nDemand Registration Rights\nAt any time commencing six months after the effective date of the first registration statement for a public offering of\nour securities (other than a registration on certain registration forms or for transactions not providing for the sale of\nRegistrable Securities), such holders of a majority of the then‐outstanding Registrable Securities, excluding for this\npurpose shares issuable or issued upon conversion of certain series of our preferred stock, may request that we file a\nregistration statement within 60 days after receipt of the request covering the offer and sale of Registrable Securities,\nprovided that, among other things, the anticipated aggregate offering price, net of underwriting discounts and selling\nexpenses, exceeds $250.0 million. Further, the initiating holders may require that such registration be an\nunderwritten offering, in which case the underwriter will be selected by a majority in interest of the initiating\nholders, subject to our reasonable approval.\nPiggyback Registration Rights\nIf we propose to register any of our securities under the Securities Act for sale to the public for cash (other than on\ncertain registration forms or for transactions that do not permit piggyback participation), we must promptly give\neach holder of Registrable Securities notice of such proposed registration and, upon timely request, cause to be\nregistered all Registrable Securities that such holder requests to be included, subject to any cutbacks, as permitted by\nthe agreement.", - "path": "spacex-s1.pdf/p272", - "metadata": { - "length": 4652, - "summary": "245 Table of Contents Other Transactions with our Directors and Executive Officers We own and operate, through our subsidiary, Falcon Landing, LLC, three aircraft for use by our directors, executive officers and employees in connection with the performance of their duties for...", - "page_nums": [ - 272 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 272, "artifact_ref": "page_citation_assets/page-272.png", @@ -10544,24 +7480,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_12ebe7a3-f6e0-5713-9675-3120aa33e887", - "type": "page", - "content": "246\nTable of Contents\nPolicies and Procedures for Review of Related Person Transactions\nIn connection with the completion of this offering, we will adopt a written policy pursuant to which the audit\ncommittee will review and approve or disapprove certain “related person transactions” (as defined in the policy and\nsummarized below) with our directors, executive officers and holders of more than 5% of any class of our voting\nsecurities and certain of their family members and affiliates. In approving or disapproving any such transaction, we\nexpect that our audit committee will consider the relevant facts and circumstances available and deemed relevant to\nthe audit committee. Any member of the audit committee who is a related person with respect to a transaction under\nreview will not be permitted to participate in the deliberations or vote on approval or disapproval of the transaction.\nIn addition, certain transactions (including compensation arrangements with our executives and directors) will\nconstitute pre-approved related person transactions under the terms of our policy.\nFor purposes of the policy, (i) “related person transaction” is a transaction, arrangement or relationship in which we\nor any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in\nwhich any related person had, has or will have a direct or indirect material interest; and (ii) “related person” means:\n(1) any person who is, or at any time during the applicable period was, one of our executive officers or one of our\ndirectors; (2) any person who is known by us to be the beneficial owner of more than 5.0% of any class of our\ncommon stock; and (3) any immediate family member of any of the foregoing persons, which means any child,\nstepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-\nlaw or sister-in-law of a director, executive officer or a beneficial owner of more than 5.0% of any class of our\ncommon stock, and any person (other than a tenant or employee) sharing the household of such director, executive\nofficer or beneficial owner of more than 5.0% of any class of our common stock.", - "path": "spacex-s1.pdf/p273", - "metadata": { - "length": 2200, - "summary": "246 Table of Contents Policies and Procedures for Review of Related Person Transactions In connection with the completion of this offering, we will adopt a written policy pursuant to which the audit committee will review and approve or disapprove certain “related person transa...", - "page_nums": [ - 273 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 273, "artifact_ref": "page_citation_assets/page-273.png", @@ -10569,24 +7488,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4a8bd326-8f13-58e4-a8ed-a6011aa6dad3", - "type": "page", - "content": "247\nTable of Contents\nSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT\nThe following table sets forth certain information with respect to the beneficial ownership of our common stock as\nof May 1, 2026 and as adjusted to give effect to the completion of this offering and transactions related thereto, for:\n• each person (or group of affiliated persons) known to us to beneficially own more than 5% of any class of our\nvoting securities;\n• each of our named executive officers and directors; and\n• all of our executive officers and directors as a group.\nUnless otherwise indicated, the address of each beneficial owner listed below is c/o Space Exploration Technologies\nCorp., 1 Rocket Road, Starbase, Texas 78521.\nThe percentage ownership information before this offering shown in the table is based on 6,932,508,000 shares of\nour Class A common stock and 5,602,790,410 shares of our Class B common stock outstanding as of May 1, 2026,\nafter giving effect to the Class C Reclassification, the Preferred Conversion, and the 2026 Stock Split. The\npercentage ownership information after this offering shown in the table is based on shares of our Class A\ncommon stock and shares of our Class B common stock outstanding as of May 1, 2026, after giving effect\nto the sale of shares of Class A common stock in this offering and to the Class C Reclassification, the\nPreferred Conversion, and the 2026 Stock Split.\nTo the extent that the underwriters sell more than shares of Class A common stock, the underwriters have\nthe option to purchase up to an additional shares of Class A common stock from us. These amounts are\nshown assuming no exercise of the underwriters’ option to purchase additional shares of Class A common stock.\nThe following table does not reflect any of the shares of Class A common stock that may be purchased in this\noffering through the directed share program described in “Underwriting—Directed Share Program.”\nWe have determined beneficial ownership in accordance with the rules of the SEC. Shares of common stock subject\nto options, warrants and rights that are exercisable within 60 days of May 1, 2026 are considered outstanding and\nbeneficially owned by the person holding such options or warrants for the purpose of computing the percentage\nownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership\nof any other person, except with respect to the percentage ownership of all directors and executive officers as a\ngroup.", - "path": "spacex-s1.pdf/p274", - "metadata": { - "length": 2582, - "summary": "247 Table of Contents SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information with respect to the beneficial ownership of our common stock as of May 1, 2026 and as adjusted to give effect to the completion of this offer...", - "page_nums": [ - 274 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 274, "artifact_ref": "page_citation_assets/page-274.png", @@ -10594,24 +7496,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2e5b8bb6-e41a-5a61-bdc6-4567b5b567fd", - "type": "page", - "content": "248\nTable of Contents\nShares Beneficially Owned Before This Offering Shares Beneficially Owned After This Offering (No Exercise)\nClass A common stock(8) Class B common stock\nCombinedvoting power Class A common stock Class B common stock\nCombinedvoting power\nNumber % Number % % Number % Number % %\n5% Shareholders:\nElon Musk (1) ................................... 849,494,440 12.3% 5,569,053,075 93.6% 85.1% % % %\nNamed Executive Officers and Directors:\nElon Musk (1) ................................... 849,494,440 12.3% 5,569,053,075 93.6% 85.1% % % %\nGwynne Shotwell (2)\n\n........................ 5,460,400 * 7,113,550 * * % % %\nBret Johnsen (3)\n\n................................ 9,583,690 * — * * % % %\nIra Ehrenpreis (4)\n\n.............................. 809,050 * 564,650 * * % % %\nRandy Glein (5)\n\n................................. 277,800 * — * * % % %\nAntonio J. Gracias (6)\n\n\n....................... 503,414,530 7.3% — * * % % %\nDonald Harrison\n\n.............................. — * — * * % % %\nSteve Jurvetson\n\n............................... — * — * * % % %\nLuke Nosek (7)\n\n................................. 32,987,360 * — * * % % %\nAll executive officers and directors as a group ( persons) ...... 1,402,027,270 20.2% 5,576,731,275 93.7% 86.0% % % %\n__________________\n* Represents beneficial ownership or voting power of less than 1%.\n(1) Includes (i) 1,302,072,285 shares of restricted Class B common stock issued to and held of record by Mr. Musk, which may be voted by Mr. Musk and the vesting\nof which is subject to the satisfaction of certain performance and other conditions, (ii) 842,091,670 shares of Class A common stock and 3,788,654,145 shares of\nClass B common stock held of record by the Elon Musk Revocable Trust dated July 22, 2003, of which Mr. Musk serves as trustee, (iii) 900,495 shares of Class B\ncommon stock held of record by the Musk 2017 Sprinkling Trust dated 12/12/2017, of which Mr. Musk serves as trustee, (iv) 7,402,770 shares of Class A\ncommon stock held of record by the EM 2024 GRAT-A under agreement dated November 26, 2024, of which Mr. Musk serves as trustee, (v) 127,426,150 shares\nof Class B common stock held of record by the Mission Trust dated December 12, 2019, of which Mr. Musk serves as trustee, and (vi) 350,000,000 shares of\nClass B common stock issuable to Mr. Musk upon exercise of options exercisable within 60 days of May 1, 2026. The reported amounts include 237,530 shares of\nClass A common stock pledged as security for personal indebtedness.\n(2) Includes (i) 2,258,135 shares of Class A common stock and 7,113,550 shares of Class B common stock held of record by Ms. Shotwell, (ii) 1,556,055 shares of\nClass A common stock held of record by QM GS 2021 Exempt Trust, of which Ms. Shotwell and her spouse serve as trustees, (iii) 1,556,005 shares of Class A\ncommon stock held of record by QM RS 2021 Exempt Trust, of which Ms. Shotwell and her spouse serve as trustees, and (iv) 90,205 shares of Class A common\nstock issuable to Ms. Shotwell upon exercise of options exercisable within 60 days of May 1, 2026.\n(3) Includes (i) 2,518,540 shares of Class A common stock held of record by B & C Johnsen Holdings LLC, of which Mr. Johnsen and his spouse serve as managers,\n(ii) 3,866,970 shares of Class A common stock held of record by the Bret and Catherine Johnsen Family Trust dated July 2, 2015, of which Mr. Johnsen and his\nspouse serve as trustees, and (iii) 3,198,180 shares of Class A common stock issuable to Mr. Johnsen upon exercise of options exercisable within 60 days of May\n1, 2026.\n(4) Consists of 809,050 shares of Class A common stock and 564,650 shares of Class B common stock held of record by a revocable trust, of which Mr. Ehrenpreis\nand his spouse serve as trustees.\n(5) Represents 277,800 shares of Class A common stock held of record by Galaxy2021 Partners, LLC for which Mr. Glein serves as a manager. Mr. Glein disclaims\nbeneficial ownership of the shares held of record by Galaxy2021 Partners, LLC, except to the extent of his pecuniary interest therein.\n(6) Consists of shares of Class A common stock held of record by the following: (i) 16,250,015 shares held by CV Consortio A LLC, (ii) 5,154,650 shares held by CV\nConsortio F LLC, (iii) 4,464,250 shares held by CV Consortio G LLC, (iv) 2,375,295 shares held by CV Consortio M LLC, (v) 4,652,600 shares held by CV\nConsortio N LLC, (vi) 3,648,645 shares held by KVSX I L.P., (vii) 1,118,920 shares held by TM33 Partner Holdings LLC, (viii) 911,430 shares held by Valor\nEquity Partners Opportunity Fund I L.P., (ix) 190,610 shares held by Valor Equity Partners Opportunity Fund I-A L.P., (x) 1,576,525 shares held by Valor Equity\nPartners Opportunity Fund I-B L.P., (xi) 20,529,605 shares held by Valor Equity Partners VI L.P., (xii) 495,880 shares held by Valor Equity Partners VI-A L.P.,\n(xiii) 13,152,840 shares held by Valor Equity Partners VI-B L.P., (xiv) 52,569,550 shares held by Valor IV Space Holdings, LLC, (xv) 39,793,000 shares held by\nValor M33 II L.P., (xvi) 22,066,800 shares held by Valor M33 IV L.P., (xvii) 77,810,800 shares held by Valor M33 V L.P., (xviii) 8,939,445 shares held by Valor\nM33 VI L.P., (xix) 31,083,705 shares held by Valor M33 L.P., (xx) 7,552,000 shares held by Valor R&D Series LLC, (xxi) 97,883,000 shares held by Valor\nSpace Holdings, LLC, (xxii) 34,051,100 shares held by Valor V Space Holdings, L.P., (xxiii) 1,179,245 shares held by Valor VII Space Holdings, L.P., (xxiv)\n20,497,155 shares held by VG 1.0 L.P., (xxv) 4,272,795 shares held by VG 2.0 L.P., (xxvi) 783,920 shares held by VG AI Holdings L.P., (xxvii) 27,462,910\nshares held by VGX 1.0 L.P., (xxviii) 669,600 shares held by VOF Space Holdings L.P., (xxix) 1,197,160 shares held by VSV II XAI Holdings L.P., and (xxx)\n1,081,080 shares held by VX Holdings L.P. (collectively, “Valor Entities”). By virtue of his position with the Valor Entities or the general partners of the Valor\nEntities, Antonio J. Gracias may be deemed to have beneficial ownership of the shares held of record by the Valor Entities. Mr. Gracias disclaims beneficial\nownership of the shares held of record by each of the Valor Entities, except to the extent of his pecuniary interest therein. The address for each of the Valor\nEntities identified in this footnote and Antonio Gracias is c/o Valor Equity Partners, 320 North Sangamon Street, Suite 1200, Chicago, IL 60607.\n(7) Includes (i) 24,987,340 shares of Class A common stock held of record by Mr. Nosek and (ii) 8,000,020 shares of Class A common stock held of record by Nosek\nCapital, LLC, for which Mr. Nosek is the managing member. The reported amounts include 2,381,000 shares of Class A common stock pledged as security for\npersonal indebtedness.", - "path": "spacex-s1.pdf/p275", - "metadata": { - "length": 6739, - "summary": "248 Table of Contents Shares Beneficially Owned Before This Offering Shares Beneficially Owned After This Offering (No Exercise) Class A common stock(8) Class B common stock Combinedvoting power Class A common stock Class B common stock Combinedvoting power Number % Number % %...", - "page_nums": [ - 275 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 275, "artifact_ref": "page_citation_assets/page-275.png", @@ -10619,24 +7504,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7b59ab44-72ee-5a2f-9111-85a27f367feb", - "type": "page", - "content": "249\nTable of Contents\n(8) The amounts in the table with respect to Class A Common Stock do not include the shares of Class B Common Stock beneficially owned by the persons listed\ntherein. Each share of Class B common stock is convertible at any time at the option of the holder into one share of our Class A common stock. In addition,\nsubject to certain exceptions, each share of Class B common stock will convert automatically into one share of Class A common stock upon any sale of such share\nof Class B common stock or any legal or beneficial interest in such share, as described in “Description of Capital Stock—Common Stock—Conversion.”\nBeneficial ownership is determined in accordance with the rules of the SEC, which generally attribute ownership to persons who have or share voting or\ninvestment power with respect to the relevant securities. Shares of Class A Common Stock that may be acquired within 60 days upon conversion of outstanding\nClass B Common Stock are deemed to be beneficially owned. Securities not outstanding, but included in the beneficial ownership of each such person, are deemed\nto be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such person, but are not deemed to be outstanding\nfor the purpose of computing the percentage of the class(es) of securities owned by any other person. Except as indicated in these footnotes, and subject to\ncommunity property laws where applicable, the persons named in the table have sole voting and investment power with respect to all securities shown as\nbeneficially owned by them. Moreover, as described in “Description of Capital Stock—Voting Rights,” subject to the terms of our charter, each holder of our\nClass A common stock is entitled to one vote per share, and each holder of our Class B common stock is entitled to ten votes per share. Holders of our Class B\ncommon stock, voting separately as a class, are entitled to elect 51% of the total number of authorized directors (rounded up to the nearest whole number).", - "path": "spacex-s1.pdf/p276", - "metadata": { - "length": 2046, - "summary": "249 Table of Contents (8) The amounts in the table with respect to Class A Common Stock do not include the shares of Class B Common Stock beneficially owned by the persons listed therein. Each share of Class B common stock is convertible at any time at the option of the holder...", - "page_nums": [ - 276 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 276, "artifact_ref": "page_citation_assets/page-276.png", @@ -10644,24 +7512,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fc629b5a-5d39-511f-ae67-6fa0b138f758", - "type": "page", - "content": "250\nTable of Contents\nDESCRIPTION OF CAPITAL STOCK\nThe following summary of the Company’s capital stock and charter and bylaws (each as in effect upon completion of\nthis offering) does not purport to be complete and is qualified in its entirety by reference to the provisions of\napplicable law and to our charter and bylaws, which are filed as exhibits to the registration statement of which this\nprospectus is a part. To understand the material terms of our common stock and preferred stock, you should read\nour charter and our bylaws in their entirety. For purposes of this section, the term “common stock” refers to our\nClass A, Class B, and Class C common stock.\nGeneral\nUpon completion of this offering, the authorized capital stock of the Company will consist of 36,132,150,000 shares\nof Class A common stock, par value $0.001 per share, of which shares will be issued and outstanding,\n6,125,000,000 shares of Class B common stock, par value $0.001 per share, of which shares will be issued and\noutstanding, 10,000,000,000 shares of Class C common stock, par value $0.001 per share, of which no shares will be\nissued and outstanding, and 2,400,000,000 shares of preferred stock, par value $0.001 per share, of which no shares\nwill be issued and outstanding.\nCommon Stock\nVoting Rights\nGeneral\nSubject to the terms of our charter, each holder of our Class A common stock is entitled to one vote per share; each\nholder of our Class B common stock is entitled to ten votes per share; and the holders of our Class C common stock\nwill have no voting rights. Generally speaking, with respect to matters to be voted on by shareholders of the\nCompany, the holders of all classes of our voting common stock will vote together as a single class. Notwithstanding\nthe foregoing, our charter will provide that (i) as further described below, (1) holders of our Class B common stock,\nvoting separately as a class, are entitled to elect 51% of the total number of authorized directors (rounded up to the\nnearest whole number); and (2) removal of Mr. Musk from his board and leadership roles (Chief Executive Officer\nand Chairman of our board) requires the approval of the holders of at least a majority of the voting power of the\noutstanding shares of Class B common stock, voting separately as a class; and (ii) in addition to any other required\nvote, under our charter, the approval of the Class B common stock, voting separately as a class, is required to\napprove (1) any amendment to our charter that would make any change in the rights, powers, preferences and\nprivileges of the Class B common stock (including with respect to Class B Directors); and (2) certain combinations,\nmergers or sales, as described in our charter. Otherwise, classes of common stock will not be entitled to any separate\nclass votes, as our charter will provide for an opt-out from class votes that would otherwise be required under the\nTBOC.\nElection and Removal of Directors\nWith respect to the election of directors, our charter will provide that (i) holders of our Class B common stock,\nvoting separately as a class, are entitled to elect 51% of the total number of authorized directors (rounded up to the\nnearest whole number) for so long as any shares of Class B common stock remain outstanding; and that (ii) holders\nof all classes of our voting common stock, voting together as a single class, are entitled to elect the remaining\ndirectors (the “Common Stock Directors”). Class B Directors may be removed with or without cause by the\naffirmative vote of the holders of at least a majority of the voting power of the outstanding shares of Class B\ncommon stock, voting separately as a class. Vacancies occurring with respect to the Class B Directors, including as\na result of newly created directorships on the board, may be filled at any time by the affirmative vote of the holders\nof at least a majority of the voting power of the outstanding shares of Class B common stock, voting separately as a\nclass, or by the remaining Class B Directors, and not any other persons, subject to the terms of our charter. Common\nStock Directors may be removed with or without cause by the affirmative vote of the holders of at least a majority of\nthe voting power of the outstanding shares of voting common stock, voting together as a single class. Vacancies\noccurring with respect to the Common Stock Directors, including as a result of newly created directorships on the\nboard, may be filled at any time by the affirmative vote of the holders of at least a majority of the voting power of", - "path": "spacex-s1.pdf/p277", - "metadata": { - "length": 4574, - "summary": "250 Table of Contents DESCRIPTION OF CAPITAL STOCK The following summary of the Company’s capital stock and charter and bylaws (each as in effect upon completion of this offering) does not purport to be complete and is qualified in its entirety by reference to the provisions o...", - "page_nums": [ - 277 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 277, "artifact_ref": "page_citation_assets/page-277.png", @@ -10669,24 +7520,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_072019de-2829-5ee9-9b23-848e01aec766", - "type": "page", - "content": "251\nTable of Contents\nthe outstanding shares of voting common stock, voting together as a single class, or by the remaining directors,\nsubject to the terms of our charter.\nUpon completion of this offering, Mr. Musk will continue to serve as our Chief Executive Officer, Chief Technical\nOfficer and Chairman of the board. Notwithstanding the preceding paragraph, pursuant to the terms of our charter,\nMr. Musk will only be subject to removal from the board and from his Chief Executive Officer and Chairman of the\nboard leadership positions with the approval of the holders of at least a majority of the voting power of the\noutstanding shares of our Class B common stock, voting separately as a class.\nNotwithstanding the above, each of the voting rights described above will be subject to the rights that may be\ngranted in the future to the holders of any one or more series of preferred stock, as applicable.\nDividends\nSubject to the prior rights of holders of all classes and series of the Company’s capital stock at the time outstanding\nhaving prior rights as to dividends, the holders of shares of Class A common stock, Class B common stock and Class\nC common stock will be entitled to receive such dividends as may be declared from time to time by the board. Any\ndividends paid to the holders of shares of Class A common stock, Class B common stock and Class C common stock\nwill be paid pro rata, on an equal priority, pari passu basis.\nDissolution and Liquidation\nUpon the Company’s liquidation, dissolution or winding up, holders of shares of Class A common stock, Class B\ncommon stock and Class C common stock are entitled to share ratably in all assets remaining after payment of\nliabilities and the liquidation preference of any then outstanding shares of capital stock of the Company.\nConversion\nHolders of our Class A common stock and Class C common stock do not have conversion rights. Each share of\nClass B common stock is convertible at any time at the option of the holder into one share of our Class A common\nstock. In addition, subject to certain exceptions specified in the charter that do not constitute a “Transfer” (as defined\nbelow) and other than in the case of certain “permitted transfers” (as summarized below), each share of Class B\ncommon stock will convert automatically into one share of Class A common stock upon any sale, assignment,\nencumbrance, transfer, conveyance, hypothecation, pledge, gift, or other transfer or disposition of any kind of such\nshare of Class B common stock or any legal or beneficial interest in such share, whether or not for value and\nwhether voluntary or involuntary or by operation of law, including, without limitation, the transfer of, or entering\ninto a binding agreement with respect to, voting control over such share by proxy or otherwise (each, a “Transfer”).\nFor purposes of our charter, “permitted transfers” will include transfers to and from (i) the registered holders of\nClass B common stock; (ii) each natural person who transferred shares of Class B common stock or equity awards\n(including any option or warrant exercisable or convertible into shares of Class B common stock) to certain\n“permitted entities” (as defined in the charter); (iii) one or more family members of shareholders specified in clauses\n(i) and (ii); (iv) certain other trusts, general partnerships, limited partnerships, limited liability companies,\ncorporations, or other entities owned by certain qualified shareholders (as defined in the charter), including certain\npermitted non-for-profits; as well as (v) certain transfers to bona fide trusts for the benefit of a charitable\norganization, contributions to which are deductible for federal income, estate, gift and generation skipping transfer\ntax purposes, to certain retirement accounts, and for certain estate or succession planning purposes. “Permitted\nTransferees” will include a transferee of shares of Class B common stock received in a Transfer that constitutes a\n“permitted transfer.”\nNo Preemptive or Other Rights\nHolders of the Company’s Class A common stock, Class B common stock, and Class C common stock do not have\npreemptive, subscription, redemption rights, or sinking fund.", - "path": "spacex-s1.pdf/p278", - "metadata": { - "length": 4193, - "summary": "251 Table of Contents the outstanding shares of voting common stock, voting together as a single class, or by the remaining directors, subject to the terms of our charter. Upon completion of this offering, Mr. Musk will continue to serve as our Chief Executive Officer, Chief T...", - "page_nums": [ - 278 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 278, "artifact_ref": "page_citation_assets/page-278.png", @@ -10694,24 +7528,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d2b884e7-43e2-5770-bf00-88494dc16724", - "type": "page", - "content": "252\nTable of Contents\nIssuance of Additional Shares\nWe may issue additional authorized shares of Class A common stock, Class B common stock and Class C common\nstock at any time or from time to time, subject to applicable provisions of our charter, our bylaws and Texas law.\nOur charter will provide that additional shares of Class B common stock may only be issued in the future to Mr.\nMusk, his family members and certain entities permitted under our charter.\nPreferred Stock\nOur charter authorizes our board, subject to any limitations prescribed by applicable law and any stock exchange,\nwithout further shareholder approval, to establish and to issue from time to time one or more series of preferred\nstock. Each series of preferred stock will have the powers, designations, preferences and relative, participation,\noptional or other rights, if any, including voting rights, and the qualifications, limitations or restrictions thereof, if\nany, and the number of shares constituting the series, as determined by the board. Any issuance of preferred stock\ncould have the effect of decreasing the market price of our Class A common stock.\nAnti-takeover Effects of Provisions of Our Charter, our Bylaws and Texas Law\nSome provisions of Texas law, and our charter and our bylaws contain provisions that could make the following\ntransactions more difficult: acquisitions of us by means of a tender offer, a proxy contest or otherwise; or removal of\nour incumbent officers and directors. These provisions may also have the effect of preventing changes in our\nmanagement. It is possible that these provisions could make it more difficult to accomplish or could deter\ntransactions that shareholders may otherwise consider to be in their best interest or in our best interests, including\ntransactions that might result in a premium over the market price for our shares of Class A common stock.\nThese provisions, as summarized below, are expected to discourage coercive takeover practices and inadequate\ntakeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first\nnegotiate with us. We believe that the benefits of increased protection and our potential ability to negotiate with the\nproponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of\ndiscouraging these proposals because, among other things, negotiation of these proposals could result in an\nimprovement of their terms.\nAnti-takeover statute under Texas law\nWe will be subject to Section 21.606 of the TBOC, which in general, prohibits a publicly held Texas corporation,\nlike the Company after the completion of this offering, from engaging, under certain circumstances, in a business\ncombination with an affiliated shareholder (as defined in the TBOC) for a period of three years following the date\nthe person became an affiliated shareholder unless:\n• the board approved either the business combination or the transaction that resulted in the shareholder becoming\nan affiliated shareholder before the affiliated shareholder’s share acquisition date; or\n• at or subsequent to the date of the transaction, the business combination is approved by the board and authorized\nat an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of at least\ntwo-thirds of the outstanding voting shares not beneficially owned by the affiliated shareholder or any of its\naffiliates or associates at a meeting of shareholders called for that purpose not less than six months after the\naffiliated shareholder’s share acquisition date.\nProvisions of our charter and our bylaws that may have an anti-takeover effect\nElection of Class B Directors\nAs discussed above, our charter will provide that holders of our Class B common stock, voting separately as a class,\nare entitled to elect 51% of the total number of authorized directors (rounded up to the nearest whole number). Upon\ncompletion of this offering, Mr. Musk will beneficially own shares of our Class A common stock\nand shares of our Class B common stock, representing approximately % of the combined voting\npower of our outstanding shares of voting common stock. As the holder of a majority of our outstanding shares of", - "path": "spacex-s1.pdf/p279", - "metadata": { - "length": 4303, - "summary": "252 Table of Contents Issuance of Additional Shares We may issue additional authorized shares of Class A common stock, Class B common stock and Class C common stock at any time or from time to time, subject to applicable provisions of our charter, our bylaws and Texas law. Our...", - "page_nums": [ - 279 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 279, "artifact_ref": "page_citation_assets/page-279.png", @@ -10719,24 +7536,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_0682d4a7-baed-5f28-9446-51a237e33892", - "type": "page", - "content": "253\nTable of Contents\nClass B common stock, Mr. Musk will be able to elect, remove or fill any vacancy among the Class B Directors. As\na result, Mr. Musk will have the power to control the outcome of matters requiring shareholder approval, including\nelection of the board, and our business and affairs. This may have the effect of deferring, delaying or discouraging\nhostile takeovers, or changes in control or management, of the Company.\nNo cumulative voting\nOur charter will not permit cumulative voting in the election of directors.\nSpecial meetings of shareholders\nOur charter will provide that special meetings of shareholders may be called by the chairman of the board, the chief\nexecutive officer, the president (to the extent required by the TBOC), our board, our founder or by shareholders\nholding not less than 50% (or the highest percentage of ownership that may be set under the TBOC) of the\nCompany’s then outstanding shares of capital stock entitled to vote on the proposed action at the meeting.\nShareholder action by written consent\nOur charter will provide that any action required to be taken at any annual or special meeting of the shareholders\nmay be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting\nforth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of\nvotes that would be necessary to authorize or take such action at a meeting at which all shares of stock entitled to\nvote thereon were present and voted. Our charter will also provide that any action required or permitted to be taken\nby the holders of Class B common stock, voting separately as a class, may be taken without a meeting, without prior\nnotice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the\nholders of outstanding Class B common stock having not less than the minimum number of votes that would be\nnecessary to authorize or take such action at a meeting at which all shares of Class B common stock entitled to vote\nthereon were present and voted.\nRequirements for advance notification of shareholder meetings, nominations and proposals\nOur bylaws will establish advance notice procedures with respect to shareholder proposals and the nomination of\ncandidates for election as a director. In order for any matter to be “properly brought” before a meeting, a shareholder\n(other than Mr. Musk and his permitted transferees) must comply with such advance notice procedures and provide\nus with certain information.\nSection 21.373 of the TBOC permits a “nationally listed corporation” to amend its governing documents to elect to\nimpose stock ownership requirements on shareholders seeking to submit a proposal on a matter (other than director\nnominations and procedural resolutions ancillary to the conduct of a shareholder meeting) to the shareholders of\nsuch corporation for approval at a shareholder meeting. If a “nationally listed corporation” elects to be governed by\nSection 21.373 of the TBOC, a shareholder or group of shareholders may submit a proposal on a matter to the\nshareholders of such corporation for approval at a meeting of shareholders only if such shareholder or group of\nshareholders (i) holds an amount of voting shares (determined as of the date of submission of the proposal) equal to\nat least $1,000,000 in market value or 3% of the corporation’s voting shares, and (ii) holds such amount for a\ncontinuous period of at least six months before the date of the meeting and throughout the entire duration of the\nmeeting and (iii) solicits the holders of shares representing at least 67% of the voting power of shares entitled to vote\non the proposal at the shareholder meeting. For the purpose of this paragraph, “voting shares” means shares that\nentitle the holder of the shares to vote on the proposal. Our bylaws will adopt these requirements for submitting a\nshareholder proposal to go into effect immediately upon the completion of this offering, when we will qualify as a\n“nationally listed corporation.”\nAuthorized but unissued shares\nAs mentioned above, our authorized but unissued shares of common stock and preferred stock will generally be\navailable for future issuance without the approval of our shareholders. The TBOC does not require shareholder\napproval for any issuance of authorized shares. However, the Nasdaq and Nasdaq Texas listing requirements require", - "path": "spacex-s1.pdf/p280", - "metadata": { - "length": 4463, - "summary": "253 Table of Contents Class B common stock, Mr. Musk will be able to elect, remove or fill any vacancy among the Class B Directors. As a result, Mr. Musk will have the power to control the outcome of matters requiring shareholder approval, including election of the board, and...", - "page_nums": [ - 280 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 280, "artifact_ref": "page_citation_assets/page-280.png", @@ -10744,24 +7544,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c5e09b1c-afd8-59ea-9d36-0f79b1ac84d5", - "type": "page", - "content": "254\nTable of Contents\nshareholder approval of certain issuances equal to or exceeding 20% of the then-outstanding voting power or the\nthen-outstanding number of shares of common stock. We may issue additional shares for a variety of corporate\npurposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit\nplans.\nCorporate Opportunities\nUnder our charter, to the fullest extent permitted by applicable law, we will renounce any interest or expectancy of\nthe Company or its subsidiaries in, or in being offered an opportunity to participate in, certain business opportunities\n(as specified in our charter) that are from time to time presented to any member of the board or board observer or\nattendee, regardless of whether any such person is an employee of the Company and their respective affiliates (other\nthan the Company and its subsidiaries) (together, the “Business Opportunities Exempt Party”), even if the business\nopportunity is one that we or our subsidiaries might reasonably be deemed to have pursued or had the ability or\ndesire to pursue if granted the opportunity to do so, and no Business Opportunities Exempt Party shall have any duty\nto present any such business opportunity to us or be liable to us or any of our subsidiaries or any shareholder,\nincluding for breach of any fiduciary or other duty, as a director or officer or controlling shareholder or otherwise,\nand we shall indemnify each Business Opportunities Exempt Party against any claim that such person is liable to us\nor our shareholders for breach of any fiduciary duty, by reason of the fact that such person (i) fails to present any\nsuch business opportunity, (ii) pursues, acquires or exploits any such business opportunity, or (iii) directs, sells,\nassigns or transfers any such business opportunity to another person or entity, unless, in the case of a person who is\nour director or officer, such business opportunity is presented to, or acquired, created or developed by, or otherwise\ncomes into the possession of, such Business Opportunities Exempt Party expressly and solely in his or her capacity\nas an employee, director, board observer or attendee, or shareholder of the Company.\nExclusive Forum and Venue and Arbitration, Jury Trial Waiver\nOur bylaws will provide that, unless the Company consents in writing to the selection of an alternative forum, the\nsole and exclusive forum for any of the filing, adjudication and trial of all disputes (“Internal Disputes”) between (i)\none or more shareholders and (ii) the Company or its directors, officers, or controlling persons, or any underwriter of\nsecurities issued by the Company (or controlling person thereof) relating to any of the following: (1) any derivative\nproceeding, meaning a civil dispute brought in the right of the Company; (2) any action based on the governance,\ngoverning documents, or internal affairs of the Company; (3) any action based on state or federal securities or trade\nregulation laws; (4) any action based on the alleged act(s) or omission(s) by a person in its capacity as a shareholder,\ncontrolling person, director, officer, or other managerial official of the Company; (5) any action based on the alleged\nbreach(es) by one or more shareholders, controlling persons, directors, officers, or other managerial officials of a\nduty owed, in his or her capacity as such, to the Company or to any shareholder thereof; (6) an action seeking to\nhold a shareholder, controlling person, director, officer, or other managerial official of the Company liable for an\nobligation of the Company, other than on account of a written contract signed by the person to be held liable in a\ncapacity other than as a shareholder or managerial official; and (7) any action arising out of the TBOC, will be the\nBusiness Court.\nOur bylaws will further provide that to the extent, and solely to the extent, that a court of competent jurisdiction\ndetermines in a final and unappealable judgment that an Internal Dispute is not subject to the sole and exclusive\nvenue and forum provision or to the jurisdiction of the Business Court (such Internal Dispute, an “Other Dispute”),\nsuch Other Dispute, irrespective of the amount in dispute, shall be exclusively and finally settled by arbitration\nbefore the International Chamber of Commerce (“ICC”) in Houston, Texas, conducted under the Expedited\nProcedure Provisions of the Rules (the “Arbitration Rules”) of the ICC as those rules may be periodically updated.\nOur bylaws will provide the following for arbitration:\n• The tribunal will include one arbitrator for claims of $5 million or less or a panel of three arbitrators for claims\nexceeding $5 million, and our bylaws will specify procedures governing the selection of the panel. The ICC fees\nand arbitrator(s) fees will be governed by the ICC fee and arbitrator fee schedule as may apply depending on the\nnature and amount of the claim.", - "path": "spacex-s1.pdf/p281", - "metadata": { - "length": 4938, - "summary": "254 Table of Contents shareholder approval of certain issuances equal to or exceeding 20% of the then-outstanding voting power or the then-outstanding number of shares of common stock. We may issue additional shares for a variety of corporate purposes, including future public...", - "page_nums": [ - 281 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 281, "artifact_ref": "page_citation_assets/page-281.png", @@ -10769,24 +7552,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_0ce4de9d-5d1c-5724-8b51-10bfb68f4c48", - "type": "page", - "content": "255\nTable of Contents\n• If more than three claims arising from the same or similar conduct, transaction, or occurrence are submitted to\narbitration within any three-year period, all but the first-filed claim shall be stayed pending final resolution of\nthat first-filed claim. In such circumstance, the Company and each shareholder asserting such a claim shall bear\nequal shares of the ICC fees and arbitrator(s) fees. However, if any shareholder party or parties are ultimately\nsuccessful on all of their claims, the Company shall reimburse the successful shareholder party or parties for the\nICC fees and arbitrator(s) fees paid by such shareholder party or parties.\n• If more than three claims are submitted by the same shareholder(s) within any three-year period, then the\nCompany shall pay the ICC fees and arbitrator(s) fees associated with the first three claims only. However, if\nany shareholder party or parties are ultimately successful on all of their claims, the Company shall reimburse the\nsuccessful shareholder party or parties for the ICC fees and arbitrator(s) fees paid by such shareholder party or\nparties.\n• If any claim submitted to arbitration is determined by the tribunal to be frivolous, without reasonable cause, or\nfor an improper purpose such as bad faith or vexatious litigation, the Company shall be entitled to recover its\nreasonable attorney’s fees and costs incurred in defending against such claim, including any ICC fees and\narbitrator(s) fees.\n• The tribunal’s authority is subject to the same limits as the authority of a judge in a Texas court of law. The\ntribunal does not have authority to issue an award that (i) exceeds the tribunal’s authority under the Texas\nArbitration Act; (ii) contains a reversible error of state or federal law, including as to the admissibility of\nevidence, or a clearly erroneous finding of fact; or (iii) applies a cause of action or provides a remedy not\nexpressly provided for under applicable Texas or federal law. The tribunal’s application of the pleading and\ndiscovery limitations imposed by the Private Securities Litigation Reform Act is mandatory for applicable\nclaims and shall not constitute a refusal to hear evidence pertinent and/or material to the controversy under\nTexas or federal law.\n• Pursuant to the Texas Arbitration Act, the scope of judicial review of the tribunal’s award includes the ordinary\ngrounds for vacatur, modification, and correction imposed by the Texas Civil Practice & Remedies Code §§\n171.088 and 171.091, and is expanded beyond what is otherwise available under the Texas Civil Practice &\nRemedies Code to include review of whether the award: (i) contains a reversible error of state or federal law,\nincluding as to the admissibility of evidence, or a clearly erroneous finding of fact; or (ii) applies a cause of\naction or provides a remedy not expressly provided for under applicable Texas or federal law. The arbitral\ntribunal’s award and the findings of fact and conclusions of law shall be reviewable upon the same standards of\nreview as if said award and supporting findings of fact and conclusions of law were entered by a Texas court.\n• Any action seeking to confirm, vacate, modify, correct, or otherwise challenge the tribunal’s award shall be\nbrought in the Business Court. In any such action, the parties shall file all court filings under seal, to the fullest\nextent allowed by applicable law.\nOur bylaws will further provide that the extent, and solely to the extent, that a court of competent jurisdiction\ndetermines in a final and unappealable judgment that the requirement that Other Disputes be exclusively and finally\nsettled by arbitration is unenforceable in whole or part, the sole and exclusive forum and venue for such Other\nDisputes which are determined not to be subject to mandatory arbitration shall be the United States District Court for\nthe Southern District of Texas, Houston Division (the “Federal Court”), or if a court of competent jurisdiction\ndetermines in a final and unappealable judgment that the Federal Court lacks jurisdiction over any such Other\nDispute, the sole and exclusive forum and venue for such Other Dispute shall be the state district courts of Harris\nCounty, Texas.\nOur bylaws will further provide that Other Disputes will be governed either by Texas state law or federal law,\ndepending on the claim asserted.\nOur bylaws will also provide that:\n• The Company and each shareholder, director, and officer of the Company irrevocably and unconditionally\nwaives, and any person or entity purchasing or otherwise acquiring or holding any interest in shares of stock of", - "path": "spacex-s1.pdf/p282", - "metadata": { - "length": 4625, - "summary": "255 Table of Contents • If more than three claims arising from the same or similar conduct, transaction, or occurrence are submitted to arbitration within any three-year period, all but the first-filed claim shall be stayed pending final resolution of that first-filed claim. I...", - "page_nums": [ - 282 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 282, "artifact_ref": "page_citation_assets/page-282.png", @@ -10794,24 +7560,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5954d13c-6309-50d4-9a39-42b095f4221a", - "type": "page", - "content": "256\nTable of Contents\nthe Company shall be deemed to have irrevocably and unconditionally waived, any right it may have to a trial\nby jury in any legal action or proceeding relating to Internal Disputes described above.\n• Internal Disputes may not be brought as a class, or consolidated or joined, except at the Company’s option.\nAlthough we believe these provisions will benefit us by providing increased consistency in the application of Texas\nlaw for the specified types of actions and proceedings, the provisions may have the effect of discouraging or\nincreasing the costs of lawsuits against our directors, officers, other managerial officials employees and agents.\nHowever, it is possible that, in connection with a future legal proceeding, a court could rule that all or a portion of\nthese provisions in our bylaws purporting to require an exclusive forum for certain disputes, to waive the right to a\njury trial or to require arbitration for shareholder claims are inapplicable, unconstitutional or otherwise\nunenforceable.\nStock Ownership Requirement for Derivative Suits\nOur bylaws will specify that the required ownership threshold for a shareholder or group of shareholders to institute\nor maintain a derivative proceeding in the right of the Company for purposes of Section 21.552(a)(3) of the TBOC\nwill be 3% of the outstanding shares of common stock of the Company. This provision will continue to apply so\nlong as any shares of the Company’s common stock are listed for trading on a national securities exchange or the\nCompany affirmatively elects to be governed by TBOC 21.419 and has 500 or more shareholders.\nLimitations on Liability and Indemnification of Officers and Directors\nOur charter will include a provision eliminating the liability of our directors and officers for monetary damages for\nan act or omission by the person in the person’s capacity as a director or officer, respectively, except for: (i) a breach\nof the duty of loyalty to the Company or its shareholders; (ii) an act or omission not in good faith that constitutes a\nbreach of duty of the person to the Company or involves intentional misconduct or a knowing violation of applicable\nlaw; (iii) a transaction from which the director or officer obtains an improper benefit, regardless of whether the\nbenefit resulted from an action taken within the scope of the person’s duties; or (iv) an act or omission for which the\nliability of a director or officer is expressly provided by an applicable statute (such as wrongful distributions). Our\ncharter also will provide that if the TBOC is amended in the future to authorize corporate action further eliminating\nor limiting of the personal liability of directors and officers, the liability of directors and officers will be eliminated\nor limited to the fullest extent permitted by the TBOC as so amended.\nAny amendment, repeal or modification of these provisions will be prospective only and would not affect any\nlimitation on liability of a director or officer for acts or omissions that occurred prior to any such amendment, repeal\nor modification.\nOur bylaws also provide that we will indemnify and advance expenses to our directors and officers to the fullest\nextent permitted by the TBOC, subject to reimbursement in the event it is ultimately determined that the individual\nwas not entitled to indemnification under the TBOC or the indemnification agreement. Our bylaws also will permit\nus to purchase insurance on behalf of any officer, director, employee, or other agent for any liability arising out of\nthat person’s actions as our officer, director, employee or agent, regardless of whether the TBOC would permit\nindemnification. We intend to enter into indemnification agreements with each of our current and future directors\nand officers. These agreements will require us to indemnify these individuals against liability that may arise by\nreason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which\nthey could be indemnified. As permitted by the TBOC, because these agreements are expected to be approved by\nour shareholders, the agreements may require indemnification or payment of expenses in favor of the indemnitee in\ncertain circumstances in which we would not otherwise have the power to do so under the provisions of the TBOC\nor our charter or bylaws. We believe that the limitation of liability provision that will be in our charter and the\nindemnification agreements will facilitate our ability to continue to attract and retain qualified individuals to serve as\ndirectors and officers.\nOur bylaws will provide that the Company affirmatively elects to be governed by Section 21.419 of the TBOC and\nany successor provision thereto. Because the Company will have a class of voting common stock (our Class A\ncommon stock) listed on a national securities exchange, Section 21.419 will also be deemed to apply to the", - "path": "spacex-s1.pdf/p283", - "metadata": { - "length": 4929, - "summary": "256 Table of Contents the Company shall be deemed to have irrevocably and unconditionally waived, any right it may have to a trial by jury in any legal action or proceeding relating to Internal Disputes described above. • Internal Disputes may not be brought as a class, or con...", - "page_nums": [ - 283 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 283, "artifact_ref": "page_citation_assets/page-283.png", @@ -10819,24 +7568,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_748da6b1-cf94-51d2-8af9-8947e331e403", - "type": "page", - "content": "257\nTable of Contents\nCompany. Under Section 21.419 of the TBOC, in taking or declining to take any action on any matters of a\ncorporation’s business, a director or officer of the Company is presumed to act (i) in good faith, (ii) on an informed\nbasis, (iii) in furtherance of the interests of the Company, and (iv) in obedience to the law and the Company’s\ngoverning documents. In addition, neither the Company nor any of its shareholders has a cause of action against the\ndirector or officer as a result of any act or omission in the person’s capacity as such unless the claimant rebuts one or\nmore of the foregoing presumptions and it is proven by the claimant that (A) the director’s or officer’s act or\nomission constitutes a breach of one or more of the person’s duties as a director or officer and (B) the breach\ninvolved fraud, intentional misconduct, an ultra vires act or a knowing violation of law.\nProtection for Conflicts of Interest\nSection 21.418 of the TBOC provides that, at any time a corporation’s voting common stock is listed for trading on a\nnational securities exchange, the corporation’s directors and officers will not be liable to the corporation or its\nshareholders for claims alleging a breach of duty arising from the making, authorization, or performance of a\ncontract or transaction solely because the director or officer had an interest in the transaction unless the claim would\nbe permitted under Section 21.419 of the TBOC as described above. Because the Company will have a class of\nvoting common stock (our Class A common stock) listed on a national securities exchange, Section 21.418 of the\nTBOC will be deemed to apply to the Company.\nRegistration Rights\nFor a description of registration rights with respect to our Class A common stock, see “Certain Relationships and\nRelated Person Transactions—Investors' Rights Agreement.”\nTransfer Agent and Registrar\nThe Transfer Agent and Registrar for our Class A common stock is .\nListing\nWe have applied to list our Class A common stock on Nasdaq and Nasdaq Texas under the symbol “SPCX.”", - "path": "spacex-s1.pdf/p284", - "metadata": { - "length": 2089, - "summary": "257 Table of Contents Company. Under Section 21.419 of the TBOC, in taking or declining to take any action on any matters of a corporation’s business, a director or officer of the Company is presumed to act (i) in good faith, (ii) on an informed basis, (iii) in furtherance of...", - "page_nums": [ - 284 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 284, "artifact_ref": "page_citation_assets/page-284.png", @@ -10844,24 +7576,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8b879a69-4b23-55b0-b6b2-9dff969df878", - "type": "page", - "content": "258\nTable of Contents\nSHARES ELIGIBLE FOR FUTURE SALE\nPrior to this offering, there has been no public market for our Class A common stock. Future sales of our Class A\ncommon stock in the public market, or the availability of such shares for sale in the public market, could adversely\naffect the market price of our Class A common stock prevailing from time to time. As described below, only a\nlimited number of shares will be available for sale shortly after this offering due to contractual and legal restrictions\non resale. Nevertheless, sales of a substantial number of shares of our Class A common stock in the public market\nafter such restrictions lapse, or the perception that those sales may occur, could adversely affect the prevailing\nmarket price of our Class A common stock at such time and our ability to raise equity-related capital at a time and\nprice we deem appropriate.\nSales of Restricted Shares\nUpon the completion of this offering, we will have outstanding an aggregate of shares of Class A\ncommon stock. Of these shares, all shares of Class A common stock sold in this offering will be freely tradable\nwithout restriction or further registration under the Securities Act, unless the shares are held by any of our\n“affiliates” as such term is defined in Rule 144 under the Securities Act. All shares of Class A and Class B common\nstock issued prior to the closing of this offering, including shares held by Mr. Musk and other existing investors, will\nbe deemed “restricted securities” as such term is defined under Rule 144. The restricted securities were issued in\nprivate transactions and are eligible for public sale only if registered under the Securities Act or if they qualify for an\nexemption from registration under Rule 144 or Rule 701 under the Securities Act, which rules are summarized\nbelow.\nAs a result of the lock-up agreements described below, shares of Class A common stock, and potentially\nan additional shares of Class A common stock, assuming that 100% of our Class B common stock has\nbeen converted into Class A common stock on a one-for-one basis, will be eligible for sale upon the expiration of\nthe lock-up agreements, beginning days after the date of this prospectus when permitted under Rule 144\nor Rule 701.\nLock-Up Agreements\nWe and all of our directors and executive officers have agreed not to sell any shares of Class A common stock for a\nperiod of days after the date of this prospectus, subject to certain exceptions. Please refer to\n“Underwriting” for a description of these lock-up provisions.\nRegistration Rights\nAfter the completion of this offering, holders of an aggregate of approximately shares of our Class A\ncommon stock will be entitled to certain rights with respect to the registration of such shares under the Securities\nAct. The registration of these shares of our Class A common stock under the Securities Act would result in these\nshares becoming eligible for sale in the public market without restriction under the Securities Act immediately upon\nthe effectiveness of such registration, subject to certain limitations applicable to affiliates. See “Certain\nRelationships and Related Person Transactions—Investors' Rights Agreement” for a description of these registration\nrights.\nRule 144\nIn general, under Rule 144 under the Securities Act as currently in effect, a person (or persons whose shares are\naggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale,\nand who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months\n(including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those\nshares, subject only to the availability of current public information about us. A non-affiliated person (who has been\nunaffiliated for at least the past three months) who has beneficially owned restricted securities within the meaning of\nRule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.", - "path": "spacex-s1.pdf/p285", - "metadata": { - "length": 4183, - "summary": "258 Table of Contents SHARES ELIGIBLE FOR FUTURE SALE Prior to this offering, there has been no public market for our Class A common stock. Future sales of our Class A common stock in the public market, or the availability of such shares for sale in the public market, could ad...", - "page_nums": [ - 285 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 285, "artifact_ref": "page_citation_assets/page-285.png", @@ -10869,24 +7584,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_629265f0-6018-5f9e-9457-0ef6cedf271a", - "type": "page", - "content": "259\nTable of Contents\nBeginning 90 days after the effective date of the registration statement of which this prospectus forms a part, a\nperson (or persons whose shares are aggregated) who is deemed to be an affiliate of ours and who has beneficially\nowned restricted securities within the meaning of Rule 144 for at least nine months would be entitled to sell within\nany three-month period a number of shares that does not exceed the greater of one percent of the then outstanding\nshares of our Class A common stock or the average weekly trading volume of our Class A common stock reported\nthrough Nasdaq and Nasdaq Texas during the four calendar weeks preceding the filing of a notice on Form 144 with\nrespect to the sale. Such sales are also subject to certain manner of sale provisions, notice requirements and the\navailability of current public information about us.\nRegulation S\nRegulation S under the Securities Act (“Regulation S”) provides that ordinary shares owned by any person may be\nsold without registration in the United States, provided that the sale is effected in an offshore transaction and no\ndirected selling efforts are made in the United States (as these terms are defined in Regulation S), subject to certain\nother conditions. In general, this means that our Class A common stock may be sold outside the United States under\ncertain circumstances without registration in the United States being required.\nRule 701\nIn general, under Rule 701 under the Securities Act, any of our employees, directors, officers, consultants or\nadvisors who purchases shares from us in connection with a compensatory stock or option plan or other written\nagreement before the effective date of this offering is entitled to sell such shares 90 days after the effective date of\nthis offering in reliance on Rule 144, without having to comply with the holding period requirement of Rule 144\nand, in the case of non-affiliates, without having to comply with the public information, volume limitation or notice\nfiling provisions of Rule 144. The SEC has indicated that Rule 701 will apply to typical stock options granted by an\nissuer before it becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired\nupon exercise of such options, including exercises after the date of this prospectus.\nStock Issued Under Employee Plans\nWe intend to file a registration statement on Form S-8 under the Securities Act to register stock issuable under our\nA&R 2024 Plan and A&R 2017 ESPP and to register stock issuable pursuant to outstanding awards under our other\nEquity Plans. This registration statement on Form S-8 is expected to be filed following the effective date of the\nregistration statement of which this prospectus is a part and will be effective immediately upon filing. Accordingly,\nshares of Class A common stock registered under such registration statement will be available for sale in the open\nmarket following the effective date, unless such shares are subject to vesting restrictions with us or the lock-up\nrestrictions described above.", - "path": "spacex-s1.pdf/p286", - "metadata": { - "length": 3079, - "summary": "259 Table of Contents Beginning 90 days after the effective date of the registration statement of which this prospectus forms a part, a person (or persons whose shares are aggregated) who is deemed to be an affiliate of ours and who has beneficially owned restricted securities...", - "page_nums": [ - 286 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 286, "artifact_ref": "page_citation_assets/page-286.png", @@ -10894,24 +7592,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fd2d36dd-3e2b-509e-a3ea-a007277aa61c", - "type": "page", - "content": "260\nTable of Contents\nMATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF CLASS\nA COMMON STOCK\nThe following discussion is a summary of the material U.S. federal income tax consequences of the purchase,\nownership, and disposition of shares of our Class A common stock by a Non-U.S. Holder (as defined below). This\ndiscussion does not address all aspects of U.S. federal income taxation that may be relevant to particular taxpayers in\nlight of their special circumstances (including the impact of the Medicare contribution tax on net investment income\nand the alternative minimum tax) or to taxpayers subject to special tax rules (including a “controlled foreign\ncorporation,” a “passive foreign investment company,” a company that accumulates earnings to avoid U.S. federal\nincome tax, a tax-exempt organization or a governmental organization, a financial institution, a person that elects to\nmark their securities to market, a person required to conform the timing of income accruals to financial statements\npursuant to Section 451 of the Internal Revenue Code of 1986, as amended (the “Code”), a person holding our Class\nA common stock as part of a hedge, straddle, or other risk reduction strategy or as part of a conversion transaction or\nother integrated investment, a person who holds or receives our Class A common stock pursuant to the exercise of\nany employee stock option or otherwise as compensation, a tax-qualified retirement plan, a “qualified foreign\npension fund” as defined in Section 897(l)(2) of “Code” or an entity all of the interests of which are held by\nqualified foreign pension funds, a broker or dealer in securities or currencies, a U.S. expatriate, a former U.S. citizen\nor resident, or a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax\npurposes).\nExcept as specifically provided herein, this discussion does not address any aspect of U.S. federal taxation other than\nU.S. federal income taxation or any aspect of state, local or foreign taxation. In addition, this discussion deals only\nwith U.S. federal income tax consequences to a Non-U.S. Holder that acquires our Class A common stock in this\noffering and holds our Class A common stock as a capital asset.\nThis discussion is based on the Code, Treasury Regulations promulgated thereunder, judicial decisions, and\npublished rulings and administrative pronouncements of the Internal Revenue Service (the “IRS”), in each case, in\neffect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change\nor differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder of\nour Class A common stock. We have not sought and will not seek any rulings from the IRS regarding the matters\ndiscussed below. We cannot assure that the IRS or a court will not take a contrary position to that discussed below\nregarding the tax consequences of the purchase, ownership, and disposition of our Class A common stock, or that a\nchange in law will not alter significantly the tax considerations that we describe in this summary.\nA “Non-U.S. Holder” is a beneficial owner of our Class A common stock that is an individual, corporation (or other\nentity treated as a corporation for U.S. federal income tax purposes), trust or estate that is not, for U.S. federal\nincome tax purposes:\n• an individual who is a citizen or resident of the United States;\n• a corporation created or organized in or under the laws of the United States or any State thereof (including the\nDistrict of Columbia);\n• an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or\n• a trust, the administration of which is subject to the primary supervision of a court within the United States and\nfor which one or more U.S. persons have the authority to control all substantial decisions, or that has a valid\nelection in effect under applicable Treasury Regulations to be treated as a U.S. person.\nIf a partnership or an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds our\nClass A common stock, the U.S. federal income tax treatment of a partner generally will depend upon the status of\nthe partner and the activities of the partnership. Partnerships holding our Class A common stock and partners in such\npartnerships should consult their tax advisors concerning the U.S. federal income and other tax consequences of\ninvesting in our Class A common stock.", - "path": "spacex-s1.pdf/p287", - "metadata": { - "length": 4536, - "summary": "260 Table of Contents MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF CLASS A COMMON STOCK The following discussion is a summary of the material U.S. federal income tax consequences of the purchase, ownership, and disposition of shares of our Class A co...", - "page_nums": [ - 287 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 287, "artifact_ref": "page_citation_assets/page-287.png", @@ -10919,24 +7600,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_42c56314-e5ba-53ab-860b-90ea4b1384d4", - "type": "page", - "content": "261\nTable of Contents\nTHIS DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL\nINFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE HOLDERS SHOULD\nCONSULT THEIR TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES\nTO THEM OF PURCHASING, OWNING, AND DISPOSING OF OUR CLASS A COMMON STOCK, AS WELL\nAS THE APPLICATION OF ANY U.S. FEDERAL NON-INCOME, STATE, LOCAL AND NON-U.S. INCOME,\nGIFT, ESTATE AND OTHER TAX LAWS.\nDistributions\nAs described in the section titled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of\nour Class A common stock in the foreseeable future. However, if we do make distributions of cash or property on\nour Class A common stock (other than certain pro rata distributions of our stock), such distributions will be treated\nas dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S.\nfederal income tax principles). Amounts not treated as dividends for U.S. federal income tax purposes will be treated\nas a tax-free return of capital and first be applied against and reduce a Non-U.S. Holder’s tax basis in its shares of\nour Class A common stock, but not below zero. Any excess will be treated as capital gain from the sale or exchange\nof the Non-U.S. Holder’s shares of Class A common stock taxable as described below under “—Sale or Disposition\nof Class A Common Stock.”\nSubject to the discussion below on backup withholding and FATCA, dividends paid to a Non-U.S. Holder of our\nClass A common stock that are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business\nwithin the United States will generally be subject to withholding of U.S. federal income tax at a 30% rate or such\nlower rate as may be specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a valid\nIRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty\nrate. These certifications must be provided to the applicable withholding agent prior to the payment of dividends and\nmust be updated periodically. A Non-U.S. Holder that does not timely furnish the required documentation, but is\neligible for a reduced rate of withholding tax under an income tax treaty, may obtain a refund or credit of any excess\namounts withheld by filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax\nadvisors regarding their entitlement to benefits under an applicable income tax treaty and the manner of claiming the\nbenefits of such treaty.\nDividends that are effectively connected with a Non-U.S. Holder’s conduct of a trade or business within the United\nStates (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed\nbase that such holder maintains or maintained in the United States) are not subject to the withholding tax described\nabove but instead are subject to U.S. federal income tax on a net income basis at applicable graduated U.S. federal\nincome tax rates. In order for its effectively connected dividends to be exempt from the withholding tax described\nabove, a Non-U.S. Holder will be required to provide a duly completed and properly executed IRS Form W-8ECI,\ncertifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business\nwithin the United States. Dividends received by a Non-U.S. Holder that is a corporation that are effectively\nconnected with its conduct of a trade or business within the United States may be subject to an additional “branch\nprofits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. Non-U.S.\nHolders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.\nSale or Disposition of Class A Common Stock\nSubject to the discussion below on backup withholding and FATCA, a Non-U.S. Holder generally will not be\nsubject to U.S. federal income or withholding tax on any gain recognized upon the sale, exchange or other taxable\ndisposition of shares of our Class A common stock, unless:\n• such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business within the\nUnited States and, if the Non-U.S. Holder is entitled to claim treaty benefits (and the Non-U.S. Holder complies\nwith applicable certification and other requirements), is attributable to a permanent establishment or fixed base\nmaintained by the Non-U.S. Holder within the United States;\n• such Non-U.S. Holder is a nonresident alien individual who is present in the United States for 183 days or more\nin the taxable year of disposition and certain other conditions are met; or", - "path": "spacex-s1.pdf/p288", - "metadata": { - "length": 4749, - "summary": "261 Table of Contents THIS DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE HOLDERS SHOULD CONSULT THEIR TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF PURCHASING, OWNI...", - "page_nums": [ - 288 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 288, "artifact_ref": "page_citation_assets/page-288.png", @@ -10944,24 +7608,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b99eccfa-7dce-5eb4-9067-3a1f6df68a33", - "type": "page", - "content": "262\nTable of Contents\n• we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at\nany time within the shorter of the five-year period ending on the date of disposition or the period that such Non-\nU.S. Holder held shares of our Class A common stock.\nA Non-U.S. Holder described in the first bullet point immediately above will be subject to tax on the gain derived\nfrom the sale or other disposition in the same manner as if the Non-U.S. Holder were a U.S. person as defined under\nthe Code. In addition, if any Non-U.S. Holder described in the first bullet point immediately above is a corporation,\nthe gain realized by such Non-U.S. Holder may be subject to an additional “branch profits tax” at a 30% rate or such\nlower rate as may be specified by an applicable income tax treaty. An individual Non-U.S. Holder described in the\nsecond bullet point immediately above will be subject to a 30% (or such lower rate as may be specified by an\napplicable income tax treaty) tax on the gain derived from the sale or other taxable disposition, which gain may be\noffset by U.S. source capital losses even though the individual is not considered a resident of the United States,\nprovided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.\nGenerally, a corporation is a “United States real property holding corporation” (“USRPHC”) if the fair market value\nof its United States real property interests equals or exceeds 50% of the sum of the fair market value of its\nworldwide real property interests and its other assets used or held for use in a trade or business (all as determined for\nU.S. federal income tax purposes). We believe we are not and do not anticipate becoming a USRPHC for U.S.\nfederal income tax purposes. However, because the determination of whether we are a USRPHC depends on the fair\nmarket value of our U.S. real property interests relative to the fair market value of our business assets, there can be\nno assurances that we are not a USRPHC or will not become one in the future. Even if we became a USRPHC, a\nNon-U.S. Holder would not be subject to U.S. federal income tax on a sale, exchange, or other taxable disposition of\nour Class A common stock by reason of our status as USRPHC so long as our Class A common stock is regularly\ntraded on an established securities market (within the meaning of the applicable regulations) and such Non-U.S.\nHolder does not own and is not deemed to own (directly, indirectly or constructively) more than 5% of our\noutstanding Class A common stock at any time during the shorter of the five year period ending on the date of\ndisposition and such holder’s holding period. Each Non-U.S. Holder should consult its tax advisor regarding the\npossible consequences to them if we are, or were to become, a USRPHC.\nInformation Reporting Requirements and Backup Withholding\nThe amount of dividends or proceeds paid to a Non-U.S. Holder, the name and address of the Non-U.S. Holder and\nthe amount of tax, if any, withheld generally will be reported to the IRS. Copies of these information returns may\nalso be made available under the provisions of a specific treaty or agreement to the tax authorities of the country in\nwhich the Non-U.S. Holder resides. A Non-U.S. Holder generally will be required to provide proper certification\n(usually on an IRS Form W-8BEN, W-8BEN-E or W-8ECI, as applicable) to establish that the Non-U.S. Holder is\nnot a U.S. person or otherwise qualifies for an exemption in order to avoid backup withholding tax with respect to\nour payment of dividends on, or the proceeds from the disposition of, our Class A common stock. Backup\nwithholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a\nrefund or a credit against that Non-U.S. Holder’s U.S. federal income tax liability provided the required information\nis timely furnished to the IRS. Each Non-U.S. Holder should consult its tax advisor regarding the application of the\ninformation reporting rules and backup withholding to it.\nAdditional Withholding Tax on Payments Made to Foreign Accounts\nWithholding taxes may be imposed under Sections 1471 to 1474 of the Code, the Treasury Regulations promulgated\nthereunder and other official guidance (commonly referred to as “FATCA”) on certain types of payments made to\nnon-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be\nimposed on dividends on, or (subject to the proposed Treasury Regulations discussed below) gross proceeds from\nthe sale or other disposition of, our Class A common stock paid to a “foreign financial institution” or a “non-\nfinancial foreign entity” (each as defined in the Code), unless applicable exceptions apply. Foreign financial\ninstitutions located in jurisdictions that have an intergovernmental agreement with the United States governing\nFATCA may be subject to different rules.", - "path": "spacex-s1.pdf/p289", - "metadata": { - "length": 4991, - "summary": "262 Table of Contents • we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time within the shorter of the five-year period ending on the date of disposition or the period that such Non- U.S. Holder held shares of...", - "page_nums": [ - 289 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 289, "artifact_ref": "page_citation_assets/page-289.png", @@ -10969,24 +7616,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_30d385b9-d280-57f5-86d2-ab384357adf7", - "type": "page", - "content": "263\nTable of Contents\nUnder the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally\napplies to payments of dividends on our Class A common stock. However, under proposed Treasury Regulations (on\nwhich taxpayers may rely until final Treasury Regulations are issued), this withholding tax will not apply to the\ngross proceeds from the sale, exchange, redemption or other taxable disposition of our Class A common stock.\nThere can be no assurance that the proposed Treasury Regulations will be finalized in their present form.\nEach Non-U.S. Holder should consult its tax advisor regarding the effects of FATCA on its investment in our Class\nA common stock.\nTHE PRECEDING DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS NOT TAX\nADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR REGARDING THE\nPARTICULAR U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING,\nOWNING, AND DISPOSING OF OUR CLASS A COMMON STOCK, INCLUDING THE CONSEQUENCES\nOF ANY PROPOSED CHANGE IN APPLICABLE LAWS, INTERGOVERNMENTAL AGREEMENTS, OR\nTAX TREATIES.", - "path": "spacex-s1.pdf/p290", - "metadata": { - "length": 1104, - "summary": "263 Table of Contents Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on our Class A common stock. However, under proposed Treasury Regulations (on which taxpayers may rely until final Tr...", - "page_nums": [ - 290 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 290, "artifact_ref": "page_citation_assets/page-290.png", @@ -10994,24 +7624,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_33eb613c-4d89-50ce-be15-c5a02b8c6fc2", - "type": "page", - "content": "264\nTable of Contents\nUNDERWRITING\nUnder the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus, the\nunderwriters named below, for whom Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, BofA Securities,\nInc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are acting as representatives, have severally\nagreed to purchase, and we have agreed to sell to them, severally, the number of shares of Class A common stock\nindicated below:\nName Number of Shares\nGoldman Sachs & Co. LLC\n\n.................................................................................................................\nMorgan Stanley & Co. LLC\n\n................................................................................................................\nBofA Securities, Inc.\n\n............................................................................................................................\nCitigroup Global Markets Inc.\n\n.............................................................................................................\nJ.P. Morgan Securities LLC\n\n.................................................................................................................\nBarclays Capital Inc.\n\n............................................................................................................................\nDeutsche Bank Securities Inc.\n\n\n.............................................................................................................\nRBC Capital Markets, LLC\n\n\n.................................................................................................................\nUBS Securities LLC\n\n............................................................................................................................\nWells Fargo Securities, LLC\n\n...............................................................................................................\nBanco BTG Pactual S.A. – Cayman Branch\n\n.......................................................................................\nING Bank N.V.\n\n....................................................................................................................................\nMacquarie Capital (USA) Inc.\n\n.............................................................................................................\nMirae Asset Securities Co., Ltd.\n\n.........................................................................................................\nMizuho Securities USA LLC\n\n...............................................................................................................\nSantander US Capital Markets LLC\n\n...................................................................................................\nAllen & Company LLC\n\n.......................................................................................................................\nCantor Fitzgerald & Co.\n\n.....................................................................................................................\nNeedham & Company, LLC\n\n................................................................................................................\nRaymond James & Associates, Inc.\n\n....................................................................................................\nSG Americas Securities, LLC\n\n\n..............................................................................................................\nStifel, Nicolaus & Company, Incorporated\n\n.........................................................................................\nWilliam Blair & Company, L.L.C.\n\n......................................................................................................\nTotal\n\n..............................................................................................................................................\nThe underwriters and the representatives are collectively referred to as the “underwriters” and the “representatives,”\nrespectively. The underwriters are offering the shares of Class A common stock subject to their acceptance of such\nshares from us and subject to prior sale. The underwriting agreement provides that the obligations of the several\nunderwriters to pay for and accept delivery of the shares of Class A common stock offered by this prospectus are\nsubject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are\nobligated to take and pay for all of the shares of Class A common stock offered by this prospectus if any such shares\nare taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters’\noption to purchase additional shares described below. The offering of the shares of Class A common stock by the\nunderwriters is subject to their receipt and acceptance of the shares being offered and subject to the underwriters’\nright to reject any order in whole or in part.\nThe underwriters initially propose to offer part of the shares of Class A common stock directly to the public at the\noffering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a\nconcession not in excess of $ per share of Class A common stock under the public offering price. After the\ninitial offering of the shares of Class A common stock, the offering price and other selling terms may from time to", - "path": "spacex-s1.pdf/p291", - "metadata": { - "length": 5445, - "summary": "264 Table of Contents UNDERWRITING Under the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, BofA Securities, Inc., Citigroup Global Ma...", - "page_nums": [ - 291 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 291, "artifact_ref": "page_citation_assets/page-291.png", @@ -11019,24 +7632,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fdcf0843-1929-5d39-bd50-927a49490e5c", - "type": "page", - "content": "265\nTable of Contents\ntime be varied by the representatives. Sales of Class A common stock made outside of the United States may be\nmade by affiliates of the underwriters.\nWe have granted to the underwriters an option, exercisable for 30 days after the date of this prospectus, to purchase\nup to additional shares of Class A common stock at the public offering price listed on the cover page of\nthis prospectus, less underwriting discounts and commissions. To the extent the option is exercised, each underwriter\nwill become obligated, subject to certain conditions, to purchase about the same percentage of the additional shares\nof Class A common stock as the number listed next to the underwriter’s name in the preceding table bears to the\ntotal number of shares of Class A common stock listed next to the names of all underwriters in the preceding table.\nING Bank N.V., Banco BTG Pactual S.A. – Cayman Branch and Mirae Asset Securities Co., Ltd. are not broker-\ndealers registered with the SEC and therefore may not make sales of any shares of Class A common stock in the\nUnited States or to U.S. persons except in compliance with applicable U.S. laws and regulations.\nThe following table shows the per share and total public offering price, underwriting discounts and commissions,\nand proceeds before expenses to us. These amounts are shown assuming both no exercise and full exercise of the\nunderwriters’ option to purchase up to an additional shares of Class A common stock.\nTotal\nPer Share No Exercise Full Exercise\nPublic offering price\n\n....................................................................... $ $ $\nUnderwriting discounts and commissions to be paid by us\n\n........... $ $ $\nProceeds, before expenses, to us\n\n.................................................... $ $ $\nThe estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are\napproximately $ . We have agreed to reimburse the underwriters for their reasonable expenses relating to\nclearance of this offering with the Financial Industry Regulatory Authority up to $ .\nThe underwriters have informed us that they do not intend sales to discretionary accounts to exceed 5% of the total\nnumber of shares of Class A common stock offered by them.\nWe have applied to list our Class A common stock on Nasdaq and Nasdaq Texas under the trading symbol “SPCX.”\nIn addition to allocations made to retail investors by the underwriters, we currently anticipate that certain of the\nshares of Class A common stock offered hereby will, at our request, be offered to retail investors through Charles\nSchwab & Co., Inc., Fidelity Brokerage Services LLC and Fidelity Capital Markets, a division of National Financial\nServices LLC, Robinhood Financial, LLC, and SoFi Securities LLC, as selling group members, via their respective\nonline brokerage platforms. We also anticipate that certain of the shares of Class A common stock will be offered to\nretail investors through E*TRADE by Morgan Stanley, an affiliate of Morgan Stanley & Co. LLC, one of the\nunderwriters of this offering. These platforms are not affiliated with us. Purchases through these platforms will be\nsubject to the terms, conditions and requirements set by each selling group member. Any purchase of our Class A\ncommon stock in this offering through these platforms will be at the same initial public offering price, and at the\nsame time, as any other purchases in this offering, including purchases by institutions and other large investors. The\nselling group members’ platforms and information on the selling group members’ applications do not form a part of\nnor are they incorporated by reference into this prospectus.\nWe have agreed with the underwriters that during the period of 180 days after the date of this prospectus (the “lock-\nup period”), without the prior written consent of Goldman Sachs & Co. LLC, on behalf of the underwriters, subject\nto certain exceptions, we will not (a) offer, sell, contract to sell, pledge, grant any option to purchase, make any short\nsale or otherwise transfer or dispose of, directly or indirectly, or file with the SEC a registration statement under the\nSecurities Act relating to, any of our common stock or other securities substantially similar to our common stock,\nincluding but not limited to any options or warrants to purchase shares of our common stock or any securities that\nare convertible into or exchangeable for, or that represent the right to receive, common stock or any such\nsubstantially similar securities, or publicly disclose the intention to do any of the foregoing, or (b) enter into any\nswap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of any", - "path": "spacex-s1.pdf/p292", - "metadata": { - "length": 4926, - "summary": "265 Table of Contents time be varied by the representatives. Sales of Class A common stock made outside of the United States may be made by affiliates of the underwriters. We have granted to the underwriters an option, exercisable for 30 days after the date of this prospectus,...", - "page_nums": [ - 292 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 292, "artifact_ref": "page_citation_assets/page-292.png", @@ -11044,24 +7640,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_900a509b-cb34-502c-b39b-c5259c61c70b", - "type": "page", - "content": "266\nTable of Contents\nof our common stock or such other securities, whether any such transaction described in clause (a) or (b) above is to\nbe settled by delivery of our common stock or such other securities, in cash or otherwise. These restrictions will not\napply to securities to be issued by the Company in connection with any mergers, acquisitions or similar transactions\nduring the lock-up period. Certain additional exceptions to these restrictions will be detailed in a subsequent\namendment to the registration statement of which this prospectus forms a part.\nOur Founder and certain significant investors have agreed with the underwriters, that during a period of 366 days\nafter the date of this prospectus, an aggregate of shares owned by them (including 100% of the shares owned by\nour Founder), representing % of our shares outstanding, are subject to the restrictions described in the paragraph\nbelow. This total amount of shares will not be subject to any early release provisions.\nThese shareholders and our Founder may not (and may not cause any of their direct or indirect affiliates to), without\nthe prior written consent of Goldman Sachs & Co. LLC, on behalf of the underwriters, subject to certain exceptions:\n(a) offer, sell, contract to sell, pledge, grant any option, right or warrant to purchase, purchase any option or contract\nto sell, lend or otherwise transfer or dispose of (directly or indirectly) any shares of our common stock, or any\noptions, rights, or warrants to purchase any shares of our common stock or any securities convertible into,\nexchangeable for or that represent the right to receive shares of our common stock (such shares of common stock,\noptions, rights, warrants or other securities, collectively, the \"lock-up securities\"), including without limitation any\nsuch lock-up securities now owned or hereafter acquired, (b) engage in any hedging or other transaction or\narrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call\noption, or combination thereof, forward, swap or any other derivative transaction or instrument, however described\nor defined) which is designed to or which reasonably could be expected to lead to or result in a sale, loan, pledge, or\nother disposition (whether by the applicable lock-up party or someone other than such lock-up party), or transfer of\nany of the economic consequences of ownership, in whole or in part, directly or indirectly, of any lock-up securities,\nwhether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of\nour common stock or such other securities, in cash or otherwise, (c) make any demand for or exercise any right with\nrespect to the registration of any lock-up securities, or (d) otherwise publicly announce any intention to engage in or\ncause any action, activity, transaction or arrangement described in clause (a), (b) or (c) above. Certain exceptions to\nthese restrictions will be detailed in a subsequent amendment to the registration statement of which this prospectus\nforms a part.\nIn addition, all of the remaining shares of our common stock, and securities convertible into, exchangeable for or\nthat represent the right to receive our common stock, are subject to a variety of other terms governing restrictions on\nthe sale, short sale, transfer, hedging, pledging, or other disposition of their interests in our equity, pursuant to a\nnumber of different agreements, for 180 days from the date of this prospectus.\nFurthermore, there are automatic releases from these restrictions on a portion of securities earlier than 180 days as\nfollows, for (i) the total number of shares of common stock comprising or underlying (as applicable) the outstanding\nlock-up securities, as of the date of this offering, subject to the 180-day lock-up period described above, and (ii) %\nof the total number of shares of common stock comprising or underlying (as applicable) the outstanding lock-up\nsecurities, as of the date of this offering, subject to the 366-day lock-up period described above (together, the “Early\nRelease Eligible Shares”):\na. on or after the second full trading day on Nasdaq immediately following the public release of our quarterly\nfinancial results (which for this purpose does not include “flash” numbers or preliminary, partial earnings) for\nthe quarter ended June 30, 2026 (such date, the “First Earnings Release Date”), up to 20% of the Early Release\nEligible Shares may be transferred;\nb. if the reported closing price of our Class A common stock on Nasdaq is at least 30% greater than the public\noffering price set forth on the cover page of this prospectus for at least five of the ten consecutive trading days\nending on, and including, the First Earnings Release Date,, on or after the second full trading day immediately\nafter the First Earnings Release Date, up to additional 10% of the Early Release Eligible Shares may be\ntransferred;", - "path": "spacex-s1.pdf/p293", - "metadata": { - "length": 4996, - "summary": "266 Table of Contents of our common stock or such other securities, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of our common stock or such other securities, in cash or otherwise. These restrictions will not apply to securitie...", - "page_nums": [ - 293 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 293, "artifact_ref": "page_citation_assets/page-293.png", @@ -11069,24 +7648,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1324cf6b-65ae-5d2a-bea4-197aba48398e", - "type": "page", - "content": "267\nTable of Contents\nc. up to additional 7% of the Early Release Eligible Shares may be transferred on or after each of the dates that are\n70 days, 90 days, 105 days, 120 days, and 135 days, respectively, after this offering;\nd. on the second full trading day immediately following the public release of our quarterly financial results (which\nfor this purpose does not include “flash” numbers or preliminary, partial earnings) for the quarter ended\nSeptember 30, 2026, up to additional 28% of the Early Release Eligible Shares may be transferred; and\ne. on or after the date that is 180 days after this offering, all remaining Early Release Eligible Shares may be\ntransferred.\nOur Founder is not party to any of the early release provisions during the extended lock-up period.\nIn order to facilitate the offering of our Class A common stock, the underwriters, with Morgan Stanley & Co. LLC\nacting as stabilization agent, may engage in transactions that stabilize, maintain or otherwise affect the price of our\nClass A common stock. Specifically, the underwriters may sell more shares of Class A common stock than they are\nobligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short\nposition is no greater than the number of shares available for purchase by the underwriters under the option to\npurchase additional shares. The underwriters can close out a covered short sale by exercising the option to purchase\nadditional shares or purchasing shares in the open market. In determining the source of shares to close out a covered\nshort sale, the underwriters will consider, among other things, the open market price of our Class A common stock\ncompared to the price available under the option to purchase additional shares. The underwriters may also sell shares\nof Class A common stock in excess of the option to purchase additional shares, creating a naked short position. The\nunderwriters must close out any naked short position by purchasing shares of Class A common stock in the open\nmarket. A naked short position is more likely to be created if the underwriters are concerned that there may be\ndownward pressure on the price of our Class A common stock in the open market after pricing that could adversely\naffect investors who purchase shares of Class A common stock in this offering. As an additional means of\nfacilitating this offering, the underwriters may bid for, and purchase, shares of Class A common stock in the open\nmarket to stabilize the price of our Class A common stock. These activities may raise or maintain the market price of\nour Class A common stock above independent market levels or prevent or retard a decline in the market price of our\nClass A common stock. The underwriters are not required to engage in these activities and may end any of these\nactivities at any time.\nWe and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under\nthe Securities Act.\nA prospectus in electronic format may be made available on websites maintained by one or more underwriters, or\nselling group members, if any, participating in this offering. The representatives may agree to allocate a number of\nshares of Class A common stock to underwriters for sale to their online brokerage account holders. Internet\ndistributions will be allocated by the representatives to the underwriters that may make internet distributions on the\nsame basis as other allocations.\nThe underwriters and their respective affiliates are full service financial institutions engaged in various activities,\nwhich may include securities trading, commercial and investment banking, financial advisory, investment\nmanagement, investment research, principal investment, hedging, financing and brokerage activities. Certain of the\nunderwriters and their respective affiliates have, from time to time, performed, and may in the future perform,\nvarious financial advisory and investment banking services for us, for which they received or will receive customary\nfees and expenses. Certain of the underwriters and their respective affiliates have in the past been, are currently, and\nmay in the future be, our customers in arm’s length transactions. In addition, Morgan Stanley & Co. LLC advised us\nin connection with the acquisition of xAI. Affiliates of Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC,\nBofA Securities, Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC serve as lenders or\nadministrative agents under the SpaceX Bridge Loan. Affiliates of Barclays Capital Inc., Deutsche Bank Securities\nInc., RBC Capital Markets, LLC, UBS Securities LLC and Wells Fargo Securities, LLC are lenders under the\nSpaceX Bridge Loan. Affiliates of BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs & Co.\nLLC, Morgan Stanley & Co. LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., Wells Fargo Securities,\nLLC, RBC Capital Markets, LLC and UBS Securities LLC are lenders under the SpaceX Credit Facility. Affiliates", - "path": "spacex-s1.pdf/p294", - "metadata": { - "length": 5047, - "summary": "267 Table of Contents c. up to additional 7% of the Early Release Eligible Shares may be transferred on or after each of the dates that are 70 days, 90 days, 105 days, 120 days, and 135 days, respectively, after this offering; d. on the second full trading day immediately foll...", - "page_nums": [ - 294 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 294, "artifact_ref": "page_citation_assets/page-294.png", @@ -11094,24 +7656,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_465ada7f-ccea-59cf-aeab-b1ebea320637", - "type": "page", - "content": "268\nTable of Contents\nof Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC serve as co-\nsyndication agents; affiliates of Barclays Capital Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities,\nLLC serve as co-documentation agents; affiliates of BofA Securities, Inc., Citigroup Global Markets Inc., Goldman\nSachs & Co. LLC and Morgan Stanley & Co. LLC serve as joint lead arrangers; affiliates of BofA Securities, Inc.,\nCitigroup Global Markets Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Barclays Capital Inc.,\nDeutsche Bank Securities Inc. and Wells Fargo Securities, LLC serve as joint bookrunners; and an affiliate of BofA\nSecurities, Inc. serves as administrative agent under the SpaceX Credit Facility.\nIn addition, in the ordinary course of their various business activities, the underwriters and their respective affiliates\nmay make or hold a broad array of investments and actively trade debt and equity securities (or related derivative\nsecurities) and financial instruments (including bank loans) for their own account and for the accounts of their\ncustomers and may at any time hold long and short positions, or provide loans or other financing on or secured by,\nin such securities and instruments. Such investment and securities activities may involve our securities and\ninstruments. The underwriters and their respective affiliates may also make investment recommendations or publish\nor express independent research views in respect of such securities or instruments and may at any time hold, or\nrecommend to clients that they acquire, long or short positions in such securities and instruments.\nPricing of the Offering\nPrior to this offering, there has been no public market for our Class A common stock. The initial public offering\nprice has been determined by negotiations between us and the representatives. Among the factors considered in\ndetermining the initial public offering price were prevailing market conditions, our future prospects and those of our\nindustry in general, our historical financial and operating performance in recent periods, an assessment by our\nmanagement and the consideration of the above factors in relation to market valuation of companies engaged in\nactivities similar to ours.\nDirected Share Program\nAt our request, the underwriters have reserved up to percent of the shares of Class A common stock\noffered by this prospectus for sale at the initial public offering price through a directed share program to certain\nemployees and persons identified by our management, which may include parties with whom we have a business\nrelationship and friends and family of management. If purchased by these persons, these shares will not be subject to\na lock-up restriction. The number of shares of Class A common stock available for sale to the general public will be\nreduced by the number of reserved shares sold to these persons. Any reserved shares not purchased by these persons\nwill be offered by the underwriters to the general public on the same basis as the other shares of Class A common\nstock offered by this prospectus. We will agree to indemnify the underwriters and their affiliates against certain\nliabilities and expenses, including liabilities under the Securities Act, in connection with sales of the shares reserved\nfor the directed share program. Morgan Stanley & Co. LLC, an underwriter in this offering, and its affiliates will\nadminister the global directed share program.\nOfferings Outside the United States\nThis offering includes public offerings in Australia, certain provinces and territories of Canada, certain member\nstates of the European Economic Area, Japan, Switzerland, and the United Kingdom. We do not currently intend to\nlist our Class A common stock on any exchange in such jurisdictions.\nSubject to applicable law, the underwriters may offer shares of our Class A common stock outside of the United\nStates, Australia, Canada, the European Economic Area, Japan, Switzerland and the United Kingdom. The\nunderwriters may use one or more affiliates in order to offer and sell shares outside of the United States. No shares\nof our Class A common stock will be offered or sold in any jurisdiction except by or through brokers or dealers duly\nregistered under the applicable securities laws of that jurisdiction, or in circumstances where any exemption from\nsuch registration requirements is available.", - "path": "spacex-s1.pdf/p295", - "metadata": { - "length": 4446, - "summary": "268 Table of Contents of Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC serve as co- syndication agents; affiliates of Barclays Capital Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities, LLC serve as co-documentation agents; af...", - "page_nums": [ - 295 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 295, "artifact_ref": "page_citation_assets/page-295.png", @@ -11119,24 +7664,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_15e89d37-1abf-5358-b612-61ca90b7cf8b", - "type": "page", - "content": "269\nTable of Contents\nSelling Restrictions\nArgentina\nThe shares of Class A common stock are not authorized for public offering in Argentina by the Comisión Nacional\nde Valores pursuant to Argentine Public Offering Law No. 17,811, as amended, and they shall not be sold publicly.\nTherefore, any transaction carried out in Argentina must be made privately.\nAustralia\nThis prospectus does not constitute a prospectus, product disclosure statement, or other disclosure document under\nChapter 6D.2 of the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the\ninformation required for a prospectus, product disclosure statement or other disclosure document under the\nCorporations Act.\nAny offer in Australia of the shares of Class A common stock made pursuant to this prospectus may only be made to\npersons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the\nCorporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or\notherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to\noffer the shares of Class A common stock without disclosure to investors under Chapter 6D of the Corporations Act.\nThe shares of Class A common stock applied for by Exempt Investors in Australia pursuant to this prospectus must\nnot be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in\ncircumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required\npursuant to an exemption under section 708 of the Corporations Act or otherwise, or where the offer is pursuant to a\ndisclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring the shares of\nClass A common stock pursuant to this prospectus must observe such Australian on-sale restrictions.\nThe public offering in Australia will be made pursuant to a separate prospectus (“Australian Prospectus”) which\ncomplies with the requirements of the Corporations Act and will be lodged with the Australian Securities and\nInvestments Commission. Any non-Exempt Investor who wishes to participate in the offering must apply pursuant\nto the Australian Prospectus, through an application form which accompanies the Australian Prospectus.\nThis prospectus contains general information only and does not take account of the investment objectives, financial\nsituation or particular needs of any particular person. It does not contain any securities recommendations or financial\nproduct advice. Before making an investment decision, investors need to consider whether the information in this\nprospectus is appropriate to their needs, objectives and circumstances and, if necessary, seek expert advice on those\nmatters.\nBrazil\nThe offer and sale of the shares of Class A common stock have not been and will not be registered with the Brazilian\nSecurities Commission (Comissão de Valores Mobiliários, or “CVM”) and, therefore, will not be carried out by any\nmeans that would constitute a public offering in Brazil under CVM Resolution No. 160, dated 13 July 2022, as\namended, or unauthorized distribution under Brazilian laws and regulations. The shares of Class A common stock\nwill be authorized for trading on organized non-Brazilian securities markets and may only be offered to Brazilian\nProfessional Investors (as defined by applicable CVM regulation), who may only acquire the shares of Class A\ncommon stock through a non-Brazilian account, with settlement outside Brazil in non-Brazilian currency. The\ntrading of the shares of Class A common stock on regulated securities markets in Brazil is prohibited.\nChile\nThe shares of Class A common stock offered by this prospectus are not registered in the Securities Registry\n(Registro de Valores) or subject to the control of the Chilean Securities and Exchange Commission\n(Superintendencia de Valores y Seguros de Chile). This prospectus and other offering materials relating to the offer\nof the shares of Class A common stock do not constitute a public offer of, or an invitation to subscribe for or\npurchase, the shares of Class A common stock in the Republic of Chile, other than to individually identified", - "path": "spacex-s1.pdf/p296", - "metadata": { - "length": 4299, - "summary": "269 Table of Contents Selling Restrictions Argentina The shares of Class A common stock are not authorized for public offering in Argentina by the Comisión Nacional de Valores pursuant to Argentine Public Offering Law No. 17,811, as amended, and they shall not be sold publicly...", - "page_nums": [ - 296 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 296, "artifact_ref": "page_citation_assets/page-296.png", @@ -11144,24 +7672,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_19a4c6e6-305b-592d-a97a-026a2b6384a8", - "type": "page", - "content": "270\nTable of Contents\npurchasers pursuant to a private offering within the meaning of Article 4 of the Chilean Securities Market Act (Ley\nde Mercado de Valores) (an offer that is not “addressed to the public at large or to a certain sector or specific group\nof the public”).\nChina\nThis prospectus will not be circulated or distributed in the People’s Republic of China (the “PRC”) and the shares of\nClass A common stock will not be offered or sold, and will not be offered or sold to any person for re-offering or\nresale directly or indirectly, to any residents of the PRC (for such purposes, not including the Hong Kong and Macau\nSpecial Administrative Regions or Taiwan), except pursuant to any applicable laws and regulations of the PRC.\nNeither this prospectus nor any advertisement or other offering material may be distributed or published in the PRC,\nexcept under circumstances that will result in compliance with applicable laws and regulations.\nColombia\nThe shares of Class A common stock have not been and will not be registered with the Colombian National Registry\nof Securities and Issuers (Registro Nacional de Valores y Emisores - RNVE) maintained by the Financial\nSuperintendence of Colombia (Superintendencia Financiera de Colombia; the “SFC”) and, therefore, the shares of\nClass A common stock may not be publicly offered or delivered in Colombia. However, the shares of Class A\ncommon stock may be offered in Colombia under Colombian law pursuant to the private placement exemption set\nforth in the Colombian regulation (Decree 2555 of 2010), in accordance of which an offering shall be deemed a\nprivate placement if it is addressed to fewer than one hundred (100) specific persons (article 6.1.1.1.1, Decree 2555\nof 2010). These materials are solely our responsibility and have not been reviewed or authorized by the SFC and\nmay not be publicly distributed in Colombia. In making an investment decision, all investors, including any\nColombian investor who may acquire shares of the Class A common stock from time to time, must rely on their own\nexamination of the terms of the offering and shares of the Class A common stock, including the merits and risks\ninvolved.\nDubai\nThis prospectus relates to an “Exempt Offer” in accordance with the Offered Securities Rules of the Dubai Financial\nServices Authority (the “DFSA”). This prospectus is intended for distribution only to persons of a type specified in\nthe Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA\nhas no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has\nnot approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for\nthe prospectus. The shares of Class A common stock to which this prospectus relates may be illiquid or subject to\nrestrictions on their resale. Prospective purchasers of the shares of Class A common stock should conduct their own\ndue diligence on the shares of Class A common stock. If you do not understand the contents of this prospectus, you\nshould consult an authorized financial advisor.\nHong Kong\nThe shares of Class A common stock have not been offered or sold and will not be offered or sold in Hong Kong, by\nmeans of any document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance\n(Cap. 571 of the laws of Hong Kong) (the “SFO”) and any rules made thereunder; or (b) in other circumstances\nwhich do not result in this prospectus being a “prospectus” as defined in the Companies (Winding Up and\nMiscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) (the “CO”) or which do not constitute an\noffer to the public within the meaning of the CO. No advertisement, invitation or document relating to the shares of\nClass A common stock has been or may be issued or has been or may be in the possession of any person for the\npurposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be\naccessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong)\nother than with respect to the shares of Class A common stock which are or are intended to be disposed of only to\npersons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made\nthereunder.", - "path": "spacex-s1.pdf/p297", - "metadata": { - "length": 4414, - "summary": "270 Table of Contents purchasers pursuant to a private offering within the meaning of Article 4 of the Chilean Securities Market Act (Ley de Mercado de Valores) (an offer that is not “addressed to the public at large or to a certain sector or specific group of the public”). Ch...", - "page_nums": [ - 297 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 297, "artifact_ref": "page_citation_assets/page-297.png", @@ -11169,24 +7680,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fca534e3-7f10-529a-8376-89e91f398225", - "type": "page", - "content": "271\nTable of Contents\nIndia\nThis prospectus has not been and will not be registered as a prospectus with any registrar of companies in India. This\nprospectus has not been and will not be reviewed or approved by any regulatory authority in India, including the\nSecurities and Exchange Board of India, any registrar of companies in India or any stock exchange in India. This\nprospectus and this offering of the shares of Class A common stock are not and should not be construed as an\ninvitation, offer or sale of any securities to the public in India. Other than in compliance with the private placement\nexemptions under applicable laws and regulations in India, including the Companies Act, 2013, as amended, the\nshares of Class A common stock have not been, and will not be, offered or sold to the public or any member of the\npublic in India. This prospectus is strictly personal to the recipient and neither this prospectus nor the offering of the\nshares of Class A common stock is calculated to result, directly or indirectly, in the shares of Class A common stock\nbecoming available for subscription or purchase by persons other than those receiving the invitation or offer. Each\ninvestor is deemed to have acknowledged, represented and agreed that it is eligible to invest in the shares of Class A\ncommon stock under applicable laws, rules and regulations in India, without the requirement to obtain any prior\napproval, and that it is not prohibited or prevented under any law, rule or regulation in India from acquiring, owning\nor selling the shares of Class A common stock.\nIndonesia\nThis prospectus does not, and is not intended to, constitute a public offering in Indonesia under Law Number 8 of\n1995 regarding Capital Market. This prospectus may not be distributed in the Republic of Indonesia and the shares\nof Class A common stock may not be offered or sold in the Republic of Indonesia or to Indonesian citizens wherever\nthey are domiciled, or to Indonesia residents, in a manner which constitutes a public offering under the laws of the\nRepublic of Indonesia.\nIsrael\nIn the State of Israel this prospectus shall not be regarded as an offer to the public to purchase shares of Class A\ncommon stock under the Israeli Securities Law, 5728—1968, which requires a prospectus to be published and\nauthorized by the Israel Securities Authority, if it complies with certain provisions of Section 15 of the Israeli\nSecurities Law, 5728–1968, including, inter alia, if: (i) the offer is made, distributed or directed to not more than 35\ninvestors, subject to certain conditions (the “Addressed Investors”), or (ii) the offer is made, distributed or directed\nto certain qualified investors defined in the First Addendum of the Israeli Securities Law, 5728—1968, subject to\ncertain conditions (the “Qualified Investors”). The Qualified Investors shall not be taken into account in the count of\nthe Addressed Investors and may be offered to purchase securities in addition to the 35 Addressed Investors. We\nhave not and will not take any action that would require it to publish a prospectus in accordance with and subject to\nthe Israeli Securities Law, 5728—1968. We have not and will not distribute this prospectus or make, distribute or\ndirect an offer to subscribe for our Class A common stock to any person within the State of Israel, other than to\nQualified Investors and up to 35 Addressed Investors.\nQualified Investors may have to submit written evidence that they meet the definitions set out in of the First\nAddendum to the Israeli Securities Law, 5728—1968. In particular, we may request, as a condition to be offered\nshares of Class A common stock, that Qualified Investors will each represent, warrant and certify to us and/or to\nanyone acting on our behalf: (i) that it is an investor falling within one of the categories listed in the First Addendum\nto the Israeli Securities Law, 5728—1968; (ii) which of the categories listed in the First Addendum to the Israeli\nSecurities Law, 5728—1968 regarding Qualified Investors is applicable to it; (iii) that it will abide by all provisions\nset forth in the Israeli Securities Law, 5728—1968 and the regulations promulgated thereunder in connection with\nthe offer to be issued shares of Class A common stock; (iv) that the shares of Class A common stock that it will be\nissued are, subject to exemptions available under the Israeli Securities Law, 5728—1968: (a) for its own account; (b)\nfor investment purposes only; and (c) not issued with a view to resale within the State of Israel, other than in\naccordance with the provisions of the Israeli Securities Law, 5728—1968; and (v) that it is willing to provide further\nevidence of its Qualified Investor status. Addressed Investors may have to submit written evidence in respect of their\nidentity and may have to sign and submit a declaration containing, inter alia, the Addressed Investor’s name, address\nand passport number or Israeli identification number.", - "path": "spacex-s1.pdf/p298", - "metadata": { - "length": 4968, - "summary": "271 Table of Contents India This prospectus has not been and will not be registered as a prospectus with any registrar of companies in India. This prospectus has not been and will not be reviewed or approved by any regulatory authority in India, including the Securities and Ex...", - "page_nums": [ - 298 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 298, "artifact_ref": "page_citation_assets/page-298.png", @@ -11194,24 +7688,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bdd6980c-df7b-57fc-8c45-03978171d47e", - "type": "page", - "content": "272\nTable of Contents\nMalaysia\nNo prospectus or other offering material or document in connection with the offer and sale of shares of Class A\ncommon stock offered by this prospectus has been or will be registered with the Securities Commission of Malaysia\n(the “Malaysian Commission”) for the Malaysian Commission’s approval pursuant to the Capital Markets and\nServices Act 2007. Accordingly, this prospectus and any other document or material in connection with the offer or\nsale, or invitation for subscription or purchase, of the shares of Class A common stock may not be circulated or\ndistributed, nor may the shares of Class A common stock be offered or sold, or be made the subject of an invitation\nfor subscription or purchase, whether directly or indirectly, to persons in Malaysia other than (i) a closed-end fund\napproved by the Malaysian Commission; (ii) a holder of a Capital Markets Services License; (iii) a person who\nacquires shares of Class A common stock, as principal, if the offer is on terms that the shares if Class A common\nstock may only be acquired at a consideration of not less than RM250,000 (or its equivalent in foreign currencies)\nfor each transaction; (iv) an individual whose total net personal assets or total net joint assets with his or her spouse\nexceeds RM3 million (or its equivalent in foreign currencies), excluding the value of the primary residence of the\nindividual; (v) an individual who has a gross annual income exceeding RM300,000 (or its equivalent in foreign\ncurrencies) per annum in the preceding twelve months; (vi) an individual who, jointly with his or her spouse, has a\ngross annual income of RM400,000 (or its equivalent in foreign currencies), per annum in the preceding twelve\nmonths; (vii) a corporation with total net assets exceeding RM10 million (or its equivalent in foreign currencies)\nbased on the last audited accounts; (viii) a partnership with total net assets exceeding RM10 million (or its\nequivalent in foreign currencies); (ix) a bank licensee or insurance licensee as defined in the Labuan Financial\nServices and Securities Act 2010; (x) an Islamic bank licensee or takaful licensee as defined in the Labuan Financial\nServices and Securities Act 2010; and (xi) any other person as may be specified by the Commission; provided that,\nin each of the preceding categories (i) to (xi), the distribution of the shares of Class A common stock is made by a\nholder of a Capital Markets Services License who carries on the business of dealing in securities. The distribution in\nMalaysia of this prospectus is subject to Malaysian laws. This prospectus does not constitute and may not be used\nfor the purpose of a public offering or an issue, offer for subscription or purchase, or invitation to subscribe for or\npurchase any securities requiring the registration of a prospectus with the Malaysian Commission under the Capital\nMarkets and Services Act 2007.\nMexico\nThe shares of Class A common stock have not been and will not be registered with the Mexican National Securities\nRegistry (Registro Nacional de Valores or the “RNV”) maintained by the Mexican National Banking and Securities\nCommission (Comisión Nacional Bancaria y de Valores, or the “CNBV”), and therefore, may not be offered or sold\npublicly in Mexico or otherwise be subject to intermediation activities in Mexico. However, the shares of Class A\ncommon stock may only be offered and sold in Mexico on a private placement basis to investors that qualify as\ninstitutional or qualified investors pursuant to the private placement exemption set forth in Article 8 of the Mexican\nSecurities Market Law (Ley del Mercado de Valores) and regulations thereunder. The information contained in this\nprospectus is solely our responsibility and has not been reviewed or authorized by the CNBV and may not be\npublicly distributed in Mexico. In making an investment decision, all investors, including any Mexican investor,\nwho may acquire the shares of Class A common stock from time to time, must rely on their own examination of us\nand the terms of this offering and the shares of Class A common stock, including the merits and risks involved.\nNew Zealand\nThis document has not been registered, filed with or approved by any New Zealand regulatory authority under the\nFinancial Markets Conduct Act 2013 (the “FMC Act”). The shares of Class A common stock may only be offered or\nsold in New Zealand (or allotted with a view to being offered for sale in New Zealand) to a person who:\n• is an investment business within the meaning of clause 37 of Schedule I of the FMC Act;\n• meets the investment activity criteria in clause 38 of Schedule I of the FMC Act;\n• is large within the meaning of clause 39 of Schedule I of the FMC Act;\n• is a government agency within the meaning of clause 40 of Schedule I of the FMC Act; or", - "path": "spacex-s1.pdf/p299", - "metadata": { - "length": 4837, - "summary": "272 Table of Contents Malaysia No prospectus or other offering material or document in connection with the offer and sale of shares of Class A common stock offered by this prospectus has been or will be registered with the Securities Commission of Malaysia (the “Malaysian Comm...", - "page_nums": [ - 299 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 299, "artifact_ref": "page_citation_assets/page-299.png", @@ -11219,24 +7696,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b89b67b5-8983-5852-9bac-fbb2420b5052", - "type": "page", - "content": "273\nTable of Contents\n• is an eligible investor within the meaning of clause 41 of Schedule I of the FMC Act.\nPeru\nThe shares of Class A common stock and the information contained herein are not being publicly marketed or\noffered in Peru and will not be distributed or caused to be distributed to the general public in Peru. Peruvian\nsecurities laws and regulations on public offerings will not be applicable to this offering and therefore, the disclosure\nobligations set forth therein will not be applicable to the Company or the sellers of the shares of Class A common\nstock before or after their acquisition by prospective investors. The shares of Class A common stock and the\ninformation contained herein have not been and will not be reviewed, confirmed, approved or in any way submitted\nto the Superintendencia del Mercado de Valores (Peruvian capital market regulator) (the “SMV”), nor have they\nbeen registered with the SMV’s Securities Market Public Registry (Registro Público del Mercado de Valores).\nAccordingly, the shares of Class A common stock cannot be offered or sold within Peruvian territory except to the\nextent any such offering or sale qualifies as a private offering under Peruvian law and regulations and complies with\nthe provisions on private offerings set forth therein.\nPhilippines\nThe shares of Class A common stock being offered or sold have not been and will not be registered with the\nPhilippine Securities and Exchange Commission under the Securities Regulation Code of the Philippines (the\n“SCR”). Any future offer or sale of the shares of Class A common stock within the Philippines is subject to the\nregistration requirements under the SRC unless such offer or sale qualifies as a transaction exempt from the\nregistration under the SRC.\nAccordingly, this prospectus, and any other document or material in connection with the offer or sale, or invitation\nfor subscription or purchase of the shares of Class A common stock, may not be circulated or distributed in the\nPhilippines, and the shares of Class A common stock may not be offered or sold, or be made the subject of an\ninvitation for subscription or purchase, to persons in the Philippines, other than (i) to qualified investors in\ntransactions that are exempt from the registration requirements of the SRC; and (ii) by persons licensed to make\nsuch offers or sales in the Philippines.\nQatar\nIn the State of Qatar, the offer contained in this prospectus is made on an exclusive basis to the specifically intended\nrecipient thereof, upon that person’s request and initiative, for personal use only and shall in no way be construed as\na general offer for the sale of the shares of Class A common stock to the public or an attempt to do business as a\nbank, an investment company or otherwise in the State of Qatar. This prospectus and the underlying securities have\nnot been approved or licensed by the Qatar Central Bank or the Qatar Financial Center Regulatory Authority or any\nother regulator in the State of Qatar. The information contained in this prospectus shall only be shared with any third\nparties in the State of Qatar on a need to know basis for the purpose of evaluating the offering. Any distribution of\nthis prospectus by the recipient to third parties in the State of Qatar beyond the terms hereof is not permitted and\nshall be at the liability of such recipient.\nSaudi Arabia\nThis prospectus may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted\nunder the Rules on the Offer of Securities and Continuing Obligations Regulations as issued by the board of the\nSaudi Arabian Capital Market Authority (the “CMA”) pursuant to resolution number 3-123-2017 dated 27\nDecember 2017, as amended. The CMA does not make any representation as to the accuracy or completeness of this\nprospectus and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon,\nany part of this prospectus. Prospective purchasers of the shares of Class A common stock offered hereby should\nconduct their own due diligence on the accuracy of the information relating to the shares of Class A common stock.\nIf you do not understand the contents of this prospectus, you should consult an authorized financial adviser.", - "path": "spacex-s1.pdf/p300", - "metadata": { - "length": 4269, - "summary": "273 Table of Contents • is an eligible investor within the meaning of clause 41 of Schedule I of the FMC Act. Peru The shares of Class A common stock and the information contained herein are not being publicly marketed or offered in Peru and will not be distributed or caused t...", - "page_nums": [ - 300 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 300, "artifact_ref": "page_citation_assets/page-300.png", @@ -11244,24 +7704,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_15835676-ee74-59f1-bb8e-686d13a0f16f", - "type": "page", - "content": "274\nTable of Contents\nSingapore\nThis prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the\nshares of Class A common stock may not be offered or sold, or made the subject of an invitation for subscription or\npurchase, nor may this prospectus or any other document or material in connection with the offer or sale, or\ninvitation for subscription or purchase of the shares of Class A common stock be circulated, whether directly or\nindirectly, to any person in Singapore other than (i) to an institutional investor (as defined in Section 4A of the\nSecurities and Futures Act 2001 of Singapore, as modified or amended from time to time (the “SFA”)) pursuant to\nSection 274 of the SFA or (ii) to an accredited investor (as defined in Section 4A of the SFA) pursuant to and in\naccordance with the conditions specified in Section 275 of the SFA.\nSouth Africa\nDue to restrictions under the securities laws of South Africa, no “offer to the public” (as such term is defined in the\nSouth African Companies Act, No. 71 of 2008 (as amended or re-enacted) (the South African Companies Act)) is\nbeing made in connection with the issue of the shares of Class A common stock in South Africa. Accordingly, this\ndocument does not, nor is it intended to, constitute a “registered prospectus” (as that term is defined in the South\nAfrican Companies Act) prepared and registered under the South African Companies Act and has not been approved\nby, and/or filed with, the South African Companies and Intellectual Property Commission or any other regulatory\nauthority in South Africa. The shares of Class A common stock are not offered, and the offer should not be\ntransferred, sold, renounced, or delivered in South Africa or to a person with an address in South Africa, unless one\nor other of the following exemptions stipulated in section 96(1) applies:\nSection 96(1)(a) the offer, transfer, sale, renunciation or delivery is to:\ni. persons whose ordinary business, or part of whose ordinary business, is to deal in securities, as principal or\nagent;\nii. the South African Public Investment Corporation;\niii. persons or entities regulated by the Reserve Bank of South Africa;\niv. authorized financial service providers under South African law;\nv. financial institutions recognized as such under South African law;\nvi. a wholly-owned subsidiary of any person or entity contemplated in (iii), (iv) or (v), acting as agent in the\ncapacity of an authorized portfolio manager for a pension fund, or as manager for a collective investment\nscheme (in each case duly registered as such under South African law); or\nvii. any combination of the person in (i) to (vi);\nSection 96(1)(b) the total contemplated acquisition cost of the shares of Class A common stock, for any single\naddressee acting as a principal is equal to or greater than ZAR 1,000,000 or such higher amount as may be\npromulgated by notice in the Government Gazette of South Africa pursuant to section 96(2)(a) of the South African\nCompanies Act.\nInformation made available in this prospectus should not be considered as “advice” as defined in the South African\nFinancial Advisory and Intermediary Services Act 2002.\nSouth Korea\nThe shares of Class A common stock offered by this prospectus have not been and will not be registered under the\nFinancial Investments Services and Capital Markets Act of Korea and the decrees and regulations thereunder (the\n“FSCMA”), and the shares of Class A common stock have been and will be offered in Korea as a private placement\nunder the FSCMA. None of the shares of Class A common stock may be offered, sold or delivered directly or\nindirectly, or offered or sold to any person for re-offering or resale, directly or indirectly, in Korea or to any resident", - "path": "spacex-s1.pdf/p301", - "metadata": { - "length": 3786, - "summary": "274 Table of Contents Singapore This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the shares of Class A common stock may not be offered or sold, or made the subject of an invitation for subscription or purchase, nor...", - "page_nums": [ - 301 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 301, "artifact_ref": "page_citation_assets/page-301.png", @@ -11269,24 +7712,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9f099cde-fe49-56fb-8753-e18dc8ca7aac", - "type": "page", - "content": "275\nTable of Contents\nof Korea except pursuant to the applicable laws and regulations of Korea, including the FSCMA and the Foreign\nExchange Transaction Law of Korea and the decrees and regulations thereunder (the “FETL”). The shares of Class\nA common stock have not been listed on any of securities exchanges in the world including, without limitation, the\nKorea Exchange in Korea. Furthermore, the purchaser of the shares of Class A common stock will comply with all\napplicable regulatory requirements (including but not limited to requirements under the FETL) in connection with\nthe purchase of shares of Class A common stock. By the purchase of shares of Class A common stock, the relevant\nholder thereof will be deemed to represent and warrant that if it is in Korea or is a resident of Korea, it purchased the\nshares of Class A common stock pursuant to the applicable laws and regulations of Korea.\nSwitzerland\nExcept pursuant to the Swiss public offering described above, the shares of Class A common stock may not be\npublicly offered in Switzerland. In addition, the Class A common stock will not be listed on any trading venue in\nSwitzerland.\nOther than in the context of the Swiss public offering described above, the shares of Class A common stock may\nonly be offered, sold or advertised, directly or indirectly, in or into Switzerland (i) to any investor that qualifies as a\nprofessional client within the meaning of the Swiss Financial Services Act (\"FinSA\") or (ii) in any other\ncircumstances falling within Article 36 FinSA.\nThis document does not constitute a prospectus within the meaning of the FinSA and has not been and will not be\nfiled with, or reviewed or approved by, a Swiss review body pursuant to Article 51 FinSA. This document does not\ncomply with the disclosure requirements applicable to a prospectus within the meaning of the FinSA. This document\nmay not be publicly distributed or otherwise made publicly available in Switzerland.\nTaiwan\nThe shares of Class A common stock have not been and will not be registered with the Financial Supervisory\nCommission of Taiwan pursuant to relevant securities laws and regulations and may not be sold, issued or offered\nwithin Taiwan through a public offering or in circumstances which constitutes an offer within the meaning of the\nSecurities and Exchange Act of Taiwan that requires a registration or approval of the Financial Supervisory\nCommission of Taiwan. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or\notherwise intermediate the offering and sale of the shares of Class A common stock in Taiwan.\nThailand\nThis prospectus does not, and is not intended to, constitute a public offering in Thailand. The shares of Class A\ncommon stock may not be offered or sold to persons in Thailand, unless such offering is made under the exemptions\nfrom approval and filing requirements under applicable laws, or under circumstances which do not constitute an\noffer for sale of the shares Class A common stock to the public for the purposes of the Securities and Exchange Act\nof 1992 of Thailand, nor require approval from the Office of the Securities and Exchange Commission of Thailand.\nUnited Arab Emirates\nThe shares of Class A common stock have not been, and are not being, publicly offered, sold, promoted or\nadvertised in the United Arab Emirates (including the Dubai International Financial Centre) other than in\ncompliance with the laws of the United Arab Emirates (and the Dubai International Financial Centre) governing the\nissue, offering and sale of the shares of Class A common stock. Further, this prospectus does not constitute a public\noffer of securities in the United Arab Emirates (including the Dubai International Financial Centre) and is not\nintended to be a public offer. This prospectus has not been approved by or filed with the Central Bank of the United\nArab Emirates, the Securities and Commodities Authority, Financial Services Regulatory Authority or the Dubai\nFinancial Services Authority.\nUnited Kingdom\nThis prospectus has been prepared on the basis that the offering of the shares of Class A common stock falls within\none of the exceptions specified in Part 1 of Schedule 1 of the Public Offers and Admissions to Trading Regulations", - "path": "spacex-s1.pdf/p302", - "metadata": { - "length": 4274, - "summary": "275 Table of Contents of Korea except pursuant to the applicable laws and regulations of Korea, including the FSCMA and the Foreign Exchange Transaction Law of Korea and the decrees and regulations thereunder (the “FETL”). The shares of Class A common stock have not been liste...", - "page_nums": [ - 302 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 302, "artifact_ref": "page_citation_assets/page-302.png", @@ -11294,24 +7720,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_56e62768-49a3-5abd-93d7-a341b9ae0f41", - "type": "page", - "content": "276\nTable of Contents\n2024 (the “POATRs”) and, accordingly, there will not be a prospectus prepared or published for the purposes of the\nPOATRs. This prospectus does not constitute a prospectus for the purposes of the POATRs.\nEach underwriter has represented and agreed that it has not made and will not make an offer of the shares of Class A\ncommon stock which are the subject of this prospectus to the public in the United Kingdom, except that it may make\nan offer:\n• at any time to any legal entity which is a qualified investor as defined in paragraph 15 of Schedule 1 to the\nPOATRs;\n• at any time to fewer than 150 persons (other than qualified investors as defined in paragraph 15 of Schedule 1 to\nthe POATRs) in the United Kingdom subject to obtaining the prior consent of the relevant underwriters\nnominated by us for any such offer; or\n• at any time in any other circumstances falling within Part 1 of Schedule 1 to the POATRs.\nFor the purposes of this provision, the expression an “offer to the public” in relation to the shares of Class A\ncommon stock in the United Kingdom means the communication in any form and by any means of sufficient\ninformation on the terms of the offer and the shares of Class A common stock to be offered so as to enable an\ninvestor to decide to purchase or subscribe for the shares of Class A common stock.", - "path": "spacex-s1.pdf/p303", - "metadata": { - "length": 1345, - "summary": "276 Table of Contents 2024 (the “POATRs”) and, accordingly, there will not be a prospectus prepared or published for the purposes of the POATRs. This prospectus does not constitute a prospectus for the purposes of the POATRs. Each underwriter has represented and agreed that it...", - "page_nums": [ - 303 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 303, "artifact_ref": "page_citation_assets/page-303.png", @@ -11319,24 +7728,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b2cba59f-7fe4-5205-887a-e40968f64e13", - "type": "page", - "content": "277\nTable of Contents\nLEGAL MATTERS\nThe validity of the shares of Class A common stock offered by this prospectus will be passed upon for us by Gibson,\nDunn & Crutcher LLP, Houston, Texas. Certain legal matters in connection with this offering will be passed upon\nfor the underwriters by Davis Polk & Wardwell LLP, New York, New York.\nEXPERTS\nThe financial statements as of December 31, 2025 and 2024 and for each of the three years in the period ended\nDecember 31, 2025 included in this prospectus have been so included in reliance on the report of\nPricewaterhouseCoopers LLP (which contains an explanatory paragraph relating to the Company’s significant\ntransactions with related parties, as described in Note 18 to the consolidated financial statements), an independent\nregistered public accounting firm, given on the authority of said firm as experts in auditing and accounting.\nWHERE YOU CAN FIND ADDITIONAL INFORMATION\nWe have filed with the SEC a registration statement on Form S-1 under the Securities Act relating to the shares of\nour Class A common stock offered by this prospectus. This prospectus, which constitutes a part of the registration\nstatement, does not contain all of the information set forth in the registration statement or the exhibits and schedules\nthereto. For more information regarding us and the shares of our Class A common stock offered by this prospectus,\nwe refer you to the full registration statement, including the exhibits and schedules filed therewith. This prospectus\nsummarizes certain provisions of certain contracts and other documents filed as exhibits to which we refer you.\nBecause the summaries may not contain all of the information that you may find important, you should review the\nfull text of those documents.\nThe SEC maintains a website at www.sec.gov that contains reports, information statements and other information\nregarding issuers that file electronically with the SEC. Our registration statement, of which this prospectus\nconstitutes a part, can be downloaded from the SEC’s website. As a result of the offering, we will become subject to\nthe reporting requirements of the Exchange Act and will file with or furnish to the SEC periodic reports and other\ninformation. We intend to furnish or make available to our shareholders annual reports containing our audited\nconsolidated financial statements prepared in accordance with GAAP. We also intend to furnish or make available to\nour shareholders quarterly reports containing our unaudited interim financial information, for the first three fiscal\nquarters of each fiscal year. Our website is located at www.spacex.com. Following the completion of this offering,\nwe intend to make our periodic reports and other information filed with or furnished to the SEC available, free of\ncharge, through our website, as soon as reasonably practicable after those reports and other information are\nelectronically filed with or furnished to the SEC. Information contained on our website or linked therein or\notherwise connected thereto does not constitute part of nor is it incorporated by reference into this prospectus or the\nregistration statement of which this prospectus forms a part. We may use our website www.spacex.com/ or\nour X account to make information publicly available for purposes of Regulation FD from time to time.", - "path": "spacex-s1.pdf/p304", - "metadata": { - "length": 3346, - "summary": "277 Table of Contents LEGAL MATTERS The validity of the shares of Class A common stock offered by this prospectus will be passed upon for us by Gibson, Dunn & Crutcher LLP, Houston, Texas. Certain legal matters in connection with this offering will be passed upon for the under...", - "page_nums": [ - 304 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 304, "artifact_ref": "page_citation_assets/page-304.png", @@ -11344,24 +7736,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a7390948-77d1-5d1a-9bc5-0def3081ec12", - "type": "page", - "content": "F-1\nTable of Contents\nINDEX TO FINANCIAL STATEMENTS\nPage\nSpace Exploration Technologies Corp.\nAudited Consolidated Financial Statements\nReport of Independent Registered Public Accounting Firm\n\n................................................................... F-2\nConsolidated Balance Sheets as of December 31, 2025 and 2024\n\n.......................................................... F-4\nConsolidated Statements of Operations for the Years Ended December 31, 2025, 2024, and 2023\n\n...... F-5\nConsolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2025, 2024, and 2023\n\n..................................................................................................................................... F-6\nConsolidated Statements of Redeemable Convertible Preferred Stock and Shareholders' Equity for the Years Ended December 31, 2025, 2024, and 2023\n\n........................................................................ F-7\nConsolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023\n\n..... F-8\nNotes to Consolidated Financial Statements\n\n........................................................................................... F-10\nUnaudited Consolidated Financial Statements\nConsolidated Balance Sheets as of March 31, 2026 and December 31, 2025\n\n........................................ F-63\nConsolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025\n\n.......... F-64\nConsolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2026 and 2025\n..................................................................................................................................................... F-65\nConsolidated Statements of Redeemable Convertible Preferred Stock and Shareholders' Equity for the Three Months Ended March 31, 2026 and 2025\n\n.......................................................................... F-66\nConsolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025\n\n......... F-67\nNotes to Consolidated Financial Statements\n\n........................................................................................... F-69", - "path": "spacex-s1.pdf/p305", - "metadata": { - "length": 2198, - "summary": "F-1 Table of Contents INDEX TO FINANCIAL STATEMENTS Page Space Exploration Technologies Corp. Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Firm ................................................................... F-2 Consolidated...", - "page_nums": [ - 305 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 305, "artifact_ref": "page_citation_assets/page-305.png", @@ -11369,24 +7744,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7635bcb5-10bf-540d-a1fc-41f7f900d879", - "type": "page", - "content": "F-2\nTable of Contents\nReport of Independent Registered Public Accounting Firm\nTo the Board of Directors and Shareholders of Space Exploration Technologies Corp.\nOpinion on the Financial Statements\nWe have audited the accompanying consolidated balance sheets of Space Exploration Technologies Corp. and its\nsubsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of\noperations, of comprehensive income (loss), of redeemable convertible preferred stock and shareholders' equity and\nof cash flows for each of the three years in the period ended December 31, 2025, including the related notes\n(collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial\nstatements present fairly, in all material respects, the financial position of the Company as of December 31, 2025\nand 2024, and the results of its operations and its cash flows for each of the three years in the period ended\nDecember 31, 2025 in conformity with accounting principles generally accepted in the United States of America.\nChange in Accounting Principle\nAs discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it\naccounts for digital assets in 2024.\nBasis for Opinion\nThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is\nto express an opinion on the Company’s consolidated financial statements based on our audits. We are a public\naccounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are\nrequired to be independent with respect to the Company in accordance with the U.S. federal securities laws and the\napplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\nWe conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.\nThose standards require that we plan and perform the audits to obtain reasonable assurance about whether the\nconsolidated financial statements are free of material misstatement, whether due to error or fraud.\nOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial\nstatements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures\nincluded examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial\nstatements. Our audits also included evaluating the accounting principles used and significant estimates made by\nmanagement, as well as evaluating the overall presentation of the consolidated financial statements. We believe that\nour audits provide a reasonable basis for our opinion.\nSignificant Transactions with Related Parties\nAs discussed in Note 18 to the consolidated financial statements, the Company has entered into significant\ntransactions with related parties.\nCritical Audit Matters\nThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated\nfinancial statements that was communicated or required to be communicated to the audit committee and that (i)\nrelates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our\nespecially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter\nin any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by\ncommunicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the\naccounts or disclosures to which it relates.", - "path": "spacex-s1.pdf/p306", - "metadata": { - "length": 3703, - "summary": "F-2 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Space Exploration Technologies Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Space Exploratio...", - "page_nums": [ - 306 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 306, "artifact_ref": "page_citation_assets/page-306.png", @@ -11394,24 +7752,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4a3b6830-ac24-5ea2-bcf9-16ba50b68f2b", - "type": "page", - "content": "F-3\nTable of Contents\nRevenue Recognition – Estimate of Total Cost at Completion for Certain Contracts Recognized Over Time\nAs described in Notes 2 and 3 to the consolidated financial statements, the Company recognized revenue of $4.1\nbillion and $11.4 billion for the year ended December 31, 2025 within the Space and Connectivity segments,\nrespectively, a portion of which related to contracts recognized over time using the cost-to-cost input method. Under\nthe cost-to-cost input method, the Company records revenue based upon costs (such as materials and labor hours)\nincurred to date relative to the total estimated cost at completion. Developing the estimated total cost at completion\nfor each performance obligation requires the use of significant management judgment, including assumptions\nregarding (i) launch timing, labor hours, allocation of shared costs for launch vehicles that have been identified as\nreusable for multiple launches, as well as expected technological changes to launch vehicles and spacecraft for\nSpace contracts, and (ii) labor hours, allocation of shared costs used in the production of satellites, satellite material\ncosts, as well as expected technological changes to satellites for Connectivity contracts. The Company recognizes\nchanges in estimated contract revenue or costs at completion and the resulting changes in contract profit on a\ncumulative basis.\nThe principal considerations for our determination that performing procedures relating to revenue recognition –\nestimate of total cost at completion for certain contracts recognized over time is a critical audit matter are (i) the\nsignificant judgment by management in developing the estimate of total cost at completion, including significant\njudgments and assumptions on a contract by contract basis, and (ii) a high degree of auditor judgment, subjectivity,\nand effort in performing procedures and evaluating audit evidence related to management’s estimate of total cost at\ncompletion, including estimated labor hours.\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming\nour overall opinion on the consolidated financial statements. These procedures included, among others, (i) testing\nthe completeness and accuracy of underlying data used by management related to actual costs to date, (ii) testing\nmanagement’s process for developing the estimate of total cost at completion, including evaluating on a test basis,\nthe reasonableness of certain significant judgments and assumptions considered by management specific to each\ncontract, including estimated labor hours. Evaluating the significant judgments and assumptions related to the\nestimates of total cost at completion involved evaluating whether the significant judgments and assumptions used by\nmanagement were reasonable considering (i) management’s historical forecasting accuracy; (ii) evidence to support\nthe relevant aforementioned assumptions; (iii) the consistent application of accounting policies; and (iv) the timely\nidentification of circumstances which may require a modification to a previous estimate.\n/s/PricewaterhouseCoopers LLP\nLos Angeles, California\nMarch 30, 2026, except for the effects of the reorganization of entities under common control and the effects of the\nstock split discussed in Note 1 to the consolidated financial statements and the change in reportable segments\ndiscussed in Note 19 to the consolidated financial statements, as to which the date is May 7, 2026\nWe have served as the Company’s auditor since 2012.", - "path": "spacex-s1.pdf/p307", - "metadata": { - "length": 3561, - "summary": "F-3 Table of Contents Revenue Recognition – Estimate of Total Cost at Completion for Certain Contracts Recognized Over Time As described in Notes 2 and 3 to the consolidated financial statements, the Company recognized revenue of $4.1 billion and $11.4 billion for the year end...", - "page_nums": [ - 307 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 307, "artifact_ref": "page_citation_assets/page-307.png", @@ -11419,24 +7760,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e50ffba7-5c7c-5f85-ab83-e1b250256742", - "type": "page", - "content": "F-4\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Balance Sheets\n(in millions, except per share data)\nDecember 31,\n2025 2024\nAssets\nCurrent assets\nCash and cash equivalents\n .............................................................................................................................$ 24,747 $ 11,385\nMarketable securities .....................................................................................................................................— 800\nAccounts receivable, net of allowance for credit losses of $39 and $119 at December 31, 2025 and 2024, respectively\n ...............................................................................................................................................1,579 1,052\nInventory\n\n ........................................................................................................................................................2,416 2,003\nPrepaid expenses and other current assets\n .....................................................................................................2,210 868\nTotal current assets\n\n .....................................................................................................................................30,952 16,108\nProperty, plant, and equipment, net(a)\n ...................................................................................................................42,602 21,147\nFinance lease right-of-use assets\n ..........................................................................................................................1,260 1,686\nIntangible assets, net\n ............................................................................................................................................1,548 2,211\nDigital assets .........................................................................................................................................................1,637 1,749\nGoodwill\n...............................................................................................................................................................11,809 11,129\nDeferred tax assets ................................................................................................................................................141 696\nOther assets ...........................................................................................................................................................2,130 2,336\nTotal assets\n ...............................................................................................................................................$ 92,079 $ 57,062\nLiabilities, Redeemable Convertible Preferred Stock, and Shareholders’ Equity\nCurrent liabilities\nAccounts payable\n\n ...........................................................................................................................................11,792 4,413\nDeferred revenue, current\n\n.............................................................................................................................6,111 5,498\nDebt and finance leases, current (related party of $455 and $- at December 31, 2025 and 2024, respectively)\n..............................................................................................................................................928 372\nAccrued expenses and other current liabilities\n\n ..............................................................................................2,569 1,508\nTotal current liabilities\n\n ................................................................................................................................21,400 11,791\nLong-term liabilities\n\n.............................................................................................................................................\nDeferred revenue, net of current ..........................................................................................................................6,005 4,681\nDebt and finance leases, net of current (related party of $4,052 and $- at December 31, 2025 and 2024, respectively)\n ....................................................................................................................................................21,968 13,421\nOther liabilities\n\n .....................................................................................................................................................1,381 1,365\nTotal liabilities\n\n ..........................................................................................................................................50,754 31,258\nCommitments and contingencies (Note 17)\nRedeemable convertible preferred stock\nRedeemable convertible preferred stock, par value $0.001; 2,351 and 1,997 shares issued; 2,046 and 1,748 shares outstanding as of December 31, 2025 and 2024, respectively\n ............................................. 38,752 20,941\nShareholders’ equity\nClass A common stock, par value $0.001; 2,036 and 1,832 shares issued; 1,954 and 1,832 shares outstanding as of December 31, 2025 and 2024, respectively\n .................................................................. 3 2\nClass B common stock, par value $0.001; 644 and 768 shares issued and outstanding as of December 31, 2025 and 2024, respectively\n\n ................................................................................................................1 1\nClass C common stock, par value $0.001; 482 and 421 shares issued and outstanding as of December 31, 2025 and 2024, respectively\n\n ................................................................................................................0 0\nClass D common stock, par value $0.0001; no shares issued and outstanding as of December 31, 2025 and 2024, respectively\n\n ...............................................................................................................................— —\nAdditional paid-in capital\n .....................................................................................................................................37,706 35,865\nAccumulated deficit\n .............................................................................................................................................(37,035) (32,098)\nAccumulated other comprehensive income\n\n .........................................................................................................1,898 1,093\nTotal shareholders’ equity\n\n......................................................................................................................2,573 4,863\nTotal liabilities, redeemable convertible preferred stock, and shareholders’ equity\n\n.......................$ 92,079 $ 57,062\n__________________\n(a) Refer to Note 18, Related Party Transactions for additional details on related party arrangements.\nThe accompanying notes are an integral part of these consolidated financial statements.", - "path": "spacex-s1.pdf/p308", - "metadata": { - "length": 6978, - "summary": "F-4 Table of Contents Space Exploration Technologies Corp. Consolidated Balance Sheets (in millions, except per share data) December 31, 2025 2024 Assets Current assets Cash and cash equivalents .....................................................................................", - "page_nums": [ - 308 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 308, "artifact_ref": "page_citation_assets/page-308.png", @@ -11444,24 +7768,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_cd6f0544-11f0-525b-b874-db430917e65e", - "type": "page", - "content": "F-5\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Operations\n(in millions, except per share data)\nYear Ended December 31,\n2025 2024 2023\nRevenue\n\n........................................................................................ $ 18,674 $ 14,015 $ 10,387\nCosts and expenses\n\n......................................................................\nCost of revenue\n\n............................................................................ 9,451 7,996 6,110\nResearch and development\n\n.......................................................... 8,643 3,464 2,105\nSelling, general, and administrative\n\n............................................. 2,644 1,813 1,665\nRestructuring charges\n\n................................................................... 487 213 237\nImpairment\n\n................................................................................... 38 63 3,775\nTotal costs and expenses\n\n........................................................... 21,263 13,549 13,892\nIncome (loss) from operations\n\n.................................................... (2,589) 466 (3,505)\nInterest expense (related party of $66, $-, and $- for December 31, 2025, 2024, and 2023, respectively)\n\n..................................... (1,945) (1,580) (1,693)\nInterest income\n\n............................................................................... 492 371 249\nOther income (expense), net\n\n\n........................................................... (177) 985 (42)\nIncome (loss) before income taxes\n\n\n.............................................. (4,219) 242 (4,991)\nProvision for (benefit from) income taxes\n\n..................................... 718 (549) (363)\nNet income (loss)\n\n.......................................................................... $ (4,937) $ 791 $ (4,628)\nNet income (loss) attributable to shareholders - basic\n\n................. $ (4,937) $ 18 $ (4,628)\nNet income (loss) attributable to shareholders - diluted\n\n.............. $ (4,937) $ 21 $ (4,628)\nNet income (loss) per share of common stock attributable to common shareholders\nBasic\n\n............................................................................................... $ (1.69) $ 0.01 $ (1.68)\nDiluted\n\n............................................................................................ $ (1.69) $ 0.00 $ (1.68)\nWeighted average shares used in computing net income (loss) per share of common stock\nBasic\n\n............................................................................................... 2,926 2,848 2,759\nDiluted\n\n............................................................................................ 2,926 9,956 2,759\nThe accompanying notes are an integral part of these consolidated financial statements.", - "path": "spacex-s1.pdf/p309", - "metadata": { - "length": 2775, - "summary": "F-5 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Operations (in millions, except per share data) Year Ended December 31, 2025 2024 2023 Revenue ........................................................................................ $ 18,67...", - "page_nums": [ - 309 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 309, "artifact_ref": "page_citation_assets/page-309.png", @@ -11469,24 +7776,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_39a79c1f-2afc-5095-9933-9a49da2634f0", - "type": "page", - "content": "F-6\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Comprehensive Income (Loss)\n(in millions)\nYear Ended December 31,\n2025 2024 2023\nNet income (loss)\n\n\n......................................................................... $ (4,937) $ 791 $ (4,628)\nOther comprehensive income (loss)\nChange in foreign currency translation adjustments, net of tax\n\n.... 805 (391) 222\nUnrealized gains (losses) on marketable securities, net of tax\n\n\n...... 0 (1) 1\nOther comprehensive income (loss)\n\n.............................................. 805 (392) 223\nComprehensive income (loss)\n\n.................................................... $ (4,132) $ 399 $ (4,405)\nThe accompanying notes are an integral part of these consolidated financial statements.", - "path": "spacex-s1.pdf/p310", - "metadata": { - "length": 775, - "summary": "F-6 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Comprehensive Income (Loss) (in millions) Year Ended December 31, 2025 2024 2023 Net income (loss) ......................................................................... $ (4,937) $ 791 $...", - "page_nums": [ - 310 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 310, "artifact_ref": "page_citation_assets/page-310.png", @@ -11494,24 +7784,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a3b68080-f4e1-5cb8-82ca-4972289b790f", - "type": "page", - "content": "F-7\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Redeemable Convertible Preferred Stock and Shareholders’ Equity\n(in millions)\nRedeemable Convertible Preferred Stock Common Stock\nShares Amount Shares Amount Additional Paid-in Capital Accumulated Deficit\nAccuOCompIn\nBalances at December 31, 2022\n\n.................................... 136 $ 7,239 2,742 $ 3 $ 35,275 $ (28,757) $\nShare-based compensation\n\n............................................... — 3 — — 784 —\nIssuance of redeemable convertible preferred stock\n\n........ 750 750 — — — —\nCommon stock issued, net of tax withholding\n\n................. — — 249 0 (41) —\nRepurchase of common stock\n\n.......................................... — — (11) 0 (170) —\nNet loss\n............................................................................. — — — — — (4,628)\nOther comprehensive income (loss)\n\n\n................................. — — — — — —\nBalances at December 31, 2023\n\n.................................... 886 $ 7,992 2,980 $ 3 $ 35,848 $ (33,385) $\nAdjustment for prior periods from adoption of ASU 2023-08\n\n....................................................................... — — — — — 496\nShare-based compensation\n\n.............................................. — — — — 914 —\nIssuance of redeemable convertible preferred stock\n\n........ 862 13,001 — — — —\nCommon stock issued, net of tax withholding\n\n................. — — 75 0 72 —\nRepurchase of common and redeemable convertible preferred stock\n\n............................................................. 0 (21) (46) 0 (1,000) —\nConversion of redeemable convertible preferred stock to common stock\n.......................................................... 0 (31) 14 0 31 —\nNet income\n\n...................................................................... — — — — — 791\nOther comprehensive income (loss)\n\n\n................................. — — — — — —\nBalances at December 31, 2024\n\n.................................... 1,748 $ 20,941 3,023 $ 3 $ 35,865 $ (32,098) $\nShare-based compensation\n\n.............................................. — — — — 2,087 —\nIssuance of redeemable convertible preferred stock\n\n........ 299 17,898 — — — —\nCommon stock issued, net of tax withholding\n\n................. — — 97 1 740 —\nRepurchase of common stock\n\n.......................................... — — (69) 0 (1,125) —\nConversion of redeemable convertible preferred stock to common stock\n.......................................................... (1) (87) 28 0 87 —\nTransfer of equity in business combination\n\n..................... — — 0 0 52 —\nNet loss\n............................................................................. — — — — — (4,937)\nOther comprehensive income (loss)\n\n\n................................. — — — — — —\nBalances at December 31, 2025\n\n.................................... 2,046 $ 38,752 3,079 $ 4 $ 37,706 $ (37,035) $\nThe accompanying notes are an integral part of these consolidated financial statements.", - "path": "spacex-s1.pdf/p311", - "metadata": { - "length": 2982, - "summary": "F-7 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Redeemable Convertible Preferred Stock and Shareholders’ Equity (in millions) Redeemable Convertible Preferred Stock Common Stock Shares Amount Shares Amount Additional Paid-in Capital Accumu...", - "page_nums": [ - 311 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 311, "artifact_ref": "page_citation_assets/page-311.png", @@ -11519,24 +7792,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bb5eef87-26e2-5508-89fc-c2d79a9b891e", - "type": "page", - "content": "F-8\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Cash Flows\n(in millions)\nYear Ended December 31,\n2025 2024 2023\nCash flows from operating activities\nNet income (loss)\n\n........................................................................... $ (4,937) $ 791 $ (4,628)\nAdjustments to reconcile net income (loss) to net cash provided by operating activities:\nDepreciation and amortization\n\n................................................... 6,701 3,824 2,635\nShare-based compensation\n\n........................................................ 1,947 784 679\nIntangible asset impairment\n\n....................................................... — — 3,775\nDeferred income taxes\n\n............................................................... 626 (675) (409)\nUnrealized (gain) loss on digital assets\n\n..................................... 112 (955) —\nImpairment and loss on disposal of fixed assets, net\n\n\n................. 88 135 36\nAmortization of debt discount and issuance costs\n\n..................... 93 84 212\nOther\n\n.......................................................................................... 66 115 214\nChanges in operating assets and liabilities\nAccounts receivable\n\n.............................................................. (543) (347) 345\nInventory\n\n............................................................................... (413) (309) (72)\nPrepaid expenses and other assets\n\n........................................ (673) (328) 41\nAccounts payable\n\n.................................................................. 709 472 220\nDeferred revenue\n\n.................................................................. 1,929 1,876 1,695\nOperating lease liabilities, net\n\n\n............................................... (56) (37) (15)\nOther liabilities\n\n..................................................................... 1,136 346 (208)\nNet cash provided by operating activities\n\n........................ $ 6,785 $ 5,776 $ 4,520\nCash flows from investing activities\nPurchases of property, plant, and equipment (related party of $666, $171, and $11 for December 31, 2025, 2024, and 2023, respectively)\n\n................................................................................ (20,737) (11,163) (4,415)\nCapitalized interest\n\n......................................................................... (169) — —\nProceeds from product rebates\n\n....................................................... 118 — —\nPurchases of marketable securities\n\n................................................. (611) (3,542) (3,535)\nMaturities of marketable securities\n\n................................................ 548 3,712 2,731\nProceeds from sales of marketable securities\n\n................................. 1,457 193 333\nInvestments in unconsolidated affiliates\n\n........................................ (86) — —\nOther investing activities, net\n\n......................................................... (95) 4 19\nNet cash used in investing activities\n\n.......................................... $ (19,575) $ (10,796) $ (4,867)\nCash flows from financing activities\nPrincipal repayments on finance leases\n\n.......................................... (295) (154) —\nProceeds from debt and other financing obligations\n\n...................... 16,055 — —\nPayment of debt issuance costs\n\n...................................................... (66) — —\nRepayments on debt and other financing obligations\n\n.................... (6,858) (77) (112)\nProceeds from issuance of capital stock, net of issuance costs ...... 18,807 13,101 774\nProceeds from employee equity award plans\n\n................................. 328 224 141", - "path": "spacex-s1.pdf/p312", - "metadata": { - "length": 3673, - "summary": "F-8 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Cash Flows (in millions) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities Net income (loss) ...........................................................................", - "page_nums": [ - 312 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 312, "artifact_ref": "page_citation_assets/page-312.png", @@ -11544,24 +7800,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b972bd74-e80f-5121-bee8-23efd7095c57", - "type": "page", - "content": "F-9\nTable of Contents\nYear Ended December 31,\n2025 2024 2023\nPayments for repurchase of common and redeemable convertible preferred stock\n\n............................................................................ (1,125) (1,021) (170)\nTaxes paid related to net share settlement of equity award\n\n............ (496) (243) (211)\nNet cash provided by financing activities\n\n.................................. $ 26,350 $ 11,830 $ 422\nEffect of exchange rate changes on cash and cash equivalents\n\n...... 63 1 (2)\nNet change in cash and cash equivalents and restricted cash\n\n......... 13,623 6,811 73\nCash and cash equivalents and restricted cash, beginning of year\n\n. 11,501 4,690 4,617\nCash and cash equivalents and restricted cash, end of year\n\n\n........... $ 25,124 $ 11,501 $ 4,690\nSupplemental disclosures of cash flow information\nCash paid for the following:\nInterest, net of interest capitalized\n\n............................................. $ 1,476 $ 1,500 $ 1,365\nIncome taxes, net\n\n....................................................................... $ 154 $ 134 $ 45\nSupplemental schedule of noncash investing and financing activities\nShare-based compensation capitalized in property, plant, and equipment, net\n\n............................................................................. $ 154 $ 132 $ 108\nAcquisition of property, plant, and equipment included in accounts payable\n\n......................................................................... $ 7,088 $ 2,481 $ 505\nThe accompanying notes are an integral part of these consolidated financial statements.", - "path": "spacex-s1.pdf/p313", - "metadata": { - "length": 1578, - "summary": "F-9 Table of Contents Year Ended December 31, 2025 2024 2023 Payments for repurchase of common and redeemable convertible preferred stock ............................................................................ (1,125) (1,021) (170) Taxes paid related to net share settleme...", - "page_nums": [ - 313 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 313, "artifact_ref": "page_citation_assets/page-313.png", @@ -11569,24 +7808,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f33081fe-3d65-5cbd-9a82-839c14c1f548", - "type": "page", - "content": "F-10\nTable of Contents\nSPACE EXPLORATION TECHNOLOGIES CORP.\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n(tables in millions, except per share data)\nNote 1 - Nature of Business\nDescription of Business\nSpace Exploration Technologies Corp. and its wholly owned subsidiaries, collectively referred to as the “Company”\nor “SpaceX,” operate three segments – (i) the Space segment designs, manufactures, and launches reusable rockets\nto provide high cadence, reliable, and affordable access to space at unprecedented scale, (ii) the Connectivity\nsegment operates a worldwide high-speed, low-latency broadband network powered by thousands of Starlink\nsatellites in Low-Earth Orbit, delivering connectivity to millions of consumer, enterprise, and government customers\nthrough our Starlink offering, and (iii) the AI segment operates a vertically integrated AI platform spanning a\nfrontier LLM Grok, AI solutions for consumer and enterprise customers, X — a real-time information,\nentertainment, and free speech platform — and AI computational infrastructure.\nSpaceX is advancing the boundaries of space technology and human spaceflight through its Falcon launch vehicles\nand Dragon spacecraft and is currently developing Starship, a fully reusable transportation system that is designed to\ncarry crew, cargo, satellites, and data centers to Earth orbit, the Moon, Mars, and beyond.\nSpaceX operates Starlink which delivers high-speed, low-latency broadband internet to customers around the globe,\nincluding to those who live in some of the most remote places on Earth. The Company also provides access to\nsatellite-to-mobile texting and voice services to mobile users (referred to as “Starlink Mobile”).\nSpaceX operates a global platform for public conversation known as X (formerly known as Twitter) as well as the\nGrok suite of text and multi-modal AI models, accessible to individual users via online platforms such as x.com and\nto enterprise clients for applications in research, productivity, and decision-making.\nThe Company’s corporate headquarters is located in Starbase, Texas. SpaceX was incorporated in the state of\nDelaware on March 14, 2002 and converted into a corporation organized under the laws of the State of Texas on\nFebruary 14, 2024.\nOn May 4, 2026, the Company effected a five-for-one forward stock split of its authorized, issued, and outstanding\nshares of Class A, Class B, and Class C Common Stock (“2026 Stock Split”). The conversion rate of SpaceX\nRedeemable Convertible Preferred Stock was proportionately adjusted to factor in the 2026 Stock Split. All share\nand per share information has been retroactively adjusted to reflect the 2026 Stock Split for all periods presented.\nOn February 2, 2026, the Company completed its acquisition of X.AI Holdings Corp. (“xAI”), pursuant to which\nxAI became a wholly-owned subsidiary of the Company (“xAI Merger”). Prior to the xAI Merger, on March 28,\n2025, xAI completed its acquisition of X Holdings Corp. (“X”) and X.AI Corp., in which X and X.AI Corp. became\nwholly-owned subsidiaries of xAI (“X Merger”, and collectively with xAI Merger, “Mergers”). X.AI Corp began\noperations in March 2023 and Twitter, Inc. (“Twitter”) was acquired by Mr. Elon Musk in October 2022. The\nMergers were each effected through a share exchange.\nThe Mergers have been accounted for as reorganizations of entities under common control as Mr. Elon Musk had a\ncontrolling financial interest in the Company, xAI and X through his majority voting interest in each such entity\nduring the years presented in these consolidated financial statements. The Company’s consolidated financial\nstatements have been prepared to reflect the retrospective combination of the net assets of the entities at their\nhistorical carrying amounts for all periods presented. No new goodwill or other intangible assets have been recorded\nand all historical related party transactions between the entities have been eliminated in consolidation. The capital\nstock and shareholders’ equity for all periods presented reflects a continuation of the historical SpaceX capital stock\nand shareholders’ equity, combined with the historical capital stock and shareholders’ equity of X and xAI merged\nunder common control, as adjusted by the respective exchange ratios used to effect the Mergers, except for xAI’s\nhistorical redeemable convertible preferred stock. This presentation constitutes a change in reporting entity. Refer to", - "path": "spacex-s1.pdf/p314", - "metadata": { - "length": 4441, - "summary": "F-10 Table of Contents SPACE EXPLORATION TECHNOLOGIES CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (tables in millions, except per share data) Note 1 - Nature of Business Description of Business Space Exploration Technologies Corp. and its wholly owned subsidiaries, co...", - "page_nums": [ - 314 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 314, "artifact_ref": "page_citation_assets/page-314.png", @@ -11594,24 +7816,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_be7f8bb0-5157-5e39-b8f1-8752e6d8ab40", - "type": "page", - "content": "F-11\nTable of Contents\nNote 13, Redeemable Convertible Preferred Stock and Shareholders’ Equity for additional details.\nAs the consolidated financial statements already reflect the reorganization of entities under common control for all\nperiods presented, separate financial statements of xAI and X are not provided.\nNote 2 - Summary of Significant Accounting Policies\nBasis of Presentation\nThe consolidated financial statements are presented in accordance with generally accepted accounting principles\n(“GAAP”) in the United States of America (“U.S.”).\nPrinciples of Consolidation\nThe consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All\nintercompany balances and transactions have been eliminated in consolidation.\nUse of Estimates\nThe preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make\nestimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent\nassets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and\nexpenses during the reporting period. Actual results could differ from those estimates. Amounts which are subject to\nsignificant judgment and use of estimates include revenues recognized over time using the cost-to-cost input\nmethod, the determination of valuation allowances associated with deferred tax assets and estimates of tax liabilities,\nreserves for excess and obsolete inventory, fair value of indefinite-lived intangible assets and goodwill, useful lives\nof property, plant, and equipment, the determination of incremental borrowing rate for lease liabilities, litigation and\nsettlement costs, and the valuation and assumptions underlying share-based compensation. On an ongoing basis, the\nCompany evaluates its estimates compared to historical experience and current trends, which forms the basis for\nmaking judgments about the carrying value of assets and liabilities. In addition, the Company engages valuation\nspecialists to assist in the valuation of equity instruments.\nConcentration of Supplier Risk\nCertain materials and products that are key inputs in the Company’s Space, Connectivity, and AI segments are\navailable from a limited number of suppliers, including sole or limited-source suppliers; and the Company’s direct\nchip suppliers are dependent on a concentrated group of advanced semiconductor fabrication facilities. The\nCompany believes that alternative suppliers are available for many, but not all, of these products and services. The\ninability of these suppliers to deliver necessary components of the products in a timely manner and at prices, quality\nlevels, and volumes acceptable to the Company, or interruptions in supply of materials or products on which these\nsuppliers rely, could have an adverse effect on the Company’s ability to meet customer demands and contractual\nobligations, to execute on its growth strategy, or to manage its expenses or timelines as expected, which could\nadversely impact the Company’s financial condition and operating results.\nCash and Cash Equivalents and Restricted Cash\nCash and cash equivalents consist of cash in checking accounts, money market accounts, and certificates of deposit\nat high quality financial institutions primarily in the U.S. All highly liquid investments with an original maturity of\nthree months or less at the date of purchase are considered to be cash equivalents. The Company maintains certain\ncash and cash equivalents for which the withdrawal or use is restricted. The restricted cash and cash equivalents are\ngenerally held in separate, dedicated accounts required to secure letters of credit related to various customer,\ninsurance, and facility lease agreements.", - "path": "spacex-s1.pdf/p315", - "metadata": { - "length": 3795, - "summary": "F-11 Table of Contents Note 13, Redeemable Convertible Preferred Stock and Shareholders’ Equity for additional details. As the consolidated financial statements already reflect the reorganization of entities under common control for all periods presented, separate financial st...", - "page_nums": [ - 315 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 315, "artifact_ref": "page_citation_assets/page-315.png", @@ -11619,24 +7824,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_895134b8-ebf8-5334-98b7-16dc77514934", - "type": "page", - "content": "F-12\nTable of Contents\nThe Company’s total cash and cash equivalents and restricted cash, as presented in the consolidated statements of\ncash flows, are as follows:\nYear Ended December 31,\n2025 2024 2023\nCash and cash equivalents\n\n.............................................................. $ 24,747 $ 11,385 $ 4,620\nRestricted cash included in prepaid expenses and other current assets\n\n........................................................................................... 182 23 28\nRestricted cash included in other assets\n......................................... 195 93 42\nTotal as presented in the consolidated statements of cash flows\n\n.......................................................................................... $ 25,124 $ 11,501 $ 4,690\nMarketable Securities\nThe Company’s marketable securities consist primarily of debt securities of the U.S. Government, time deposits and\ncertificates of deposits, and are classified and accounted for as either available-for-sale or held-to-maturity.\nManagement determines the classification of its investments at the time of purchase and reevaluates the\nclassification at each balance sheet date. Marketable securities are classified as held-to-maturity when the Company\nhas the positive intent and ability to hold the securities to maturity and are carried at cost. The Company’s available-\nfor-sale investments in marketable securities are recorded at fair value, with any unrealized gains and losses, net of\ntaxes, reported as a component of accumulated other comprehensive income (loss) in shareholders’ equity until\nrealized. Realized gains and losses on the sale of available-for-sale marketable securities are recorded in Other\nincome (expense), net. Interest on marketable securities is included in Interest income.\nThe Company classifies its marketable securities as either short-term or long-term based on each instrument’s\nunderlying contractual maturity date. Marketable securities with maturities of 12 months or less from the balance\nsheet date are classified as short-term, and maturities greater than 12 months from the balance sheet date are\nclassified as long-term and included in Other assets.\nAccounts Receivable, Unbilled Receivables, and Allowance for Credit Losses\nThe Company extends credit in the normal course of business to its customers and performs credit evaluations on a\ncase-by-case basis. The Company generally does not obtain collateral or other security to secure accounts receivable.\nBilled receivables are recorded at their carrying amount, net of allowance for credit losses, and do not bear interest.\nUnbilled receivables is comprised principally of revenue recognized on contracts that are not contractually billable at\nthe balance sheet date.\nThe allowance for credit losses is established through a provision for bad debt expense which is recorded in Selling,\ngeneral, and administrative expense in the consolidated statements of operations. The Company determines the\nadequacy of its allowance for credit losses by considering a number of factors including: age of invoices, each\ncustomer’s expected ability to pay and collection history, customer-specific information, and current economic\nconditions that may impact a customer’s ability to pay. Accounts receivable are written off when they are deemed\nuncollectible.\nFair Value Measurement\nFinancial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair\nValue Measurement, states that fair value is an exit price, representing the amount that would be received to sell an\nasset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a\nmarket-based measurement that should be determined based on assumptions that market participants would use in\npricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes which inputs should be used in\nmeasuring fair value, is comprised of:\nLevel I Observable inputs such as quoted prices in active markets", - "path": "spacex-s1.pdf/p316", - "metadata": { - "length": 4028, - "summary": "F-12 Table of Contents The Company’s total cash and cash equivalents and restricted cash, as presented in the consolidated statements of cash flows, are as follows: Year Ended December 31, 2025 2024 2023 Cash and cash equivalents ..................................................", - "page_nums": [ - 316 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 316, "artifact_ref": "page_citation_assets/page-316.png", @@ -11644,24 +7832,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d4b132fa-e8d5-519b-ad00-df2371fe5ea0", - "type": "page", - "content": "F-13\nTable of Contents\nLevel II Inputs other than quoted prices in active markets that are observable either directly or indirectly\nLevel III Unobservable inputs for which there is little or no market data\nThe fair value hierarchy requires the use of observable market data when available in determining fair value. The\nCompany’s financial assets only include cash equivalents, certain restricted cash accounts, digital assets and\nmarketable securities that are measured and recorded at fair value on a recurring basis. The carrying amounts of the\nCompany’s other financial instruments, including cash, accounts receivable, and accounts payable approximate fair\nvalue because of their short maturities. The carrying value of financing obligations approximate fair value based on\nthe interest rate remaining relatively consistent from the dates these arrangements were initially entered into and/or\nthe overall materiality of the related liability balances.\nLaunch Vehicles and Spacecraft\nThe Company has four types of launch vehicles - Falcon 9, Falcon Heavy, Dragon, and Starship. Falcon 9 and\nFalcon Heavy are comprised of the following significant components: boosters (also known as first stages), second\nstages, Merlin engines, and fairings. Boosters, fairings, and Merlin engines are reusable and are classified as\nProperty, plant, and equipment, net. The second stages are not reusable and are recorded as inventory until they are\nlaunched for point-in-time revenue transactions or assigned for over-time revenue transactions. Dragon is composed\nof a fully reusable capsule that is classified as Property, plant, and equipment, net. Starship is a fully reusable rocket\ncomposed of boosters, ships, and Raptor engines and is currently in the development stage. A majority of Starship\ncosts are expensed to Research and development as incurred.\nInventory\nInventory consists primarily of raw materials and work-in-progress used in the production of launch vehicles and\nStarlink Kits, and finished goods for Starlink Kits, Falcon 9 and Falcon Heavy second stages awaiting launch.\nInventory is computed using standard cost or weighted average, which approximates actual cost on a first-in, first-\nout basis and is stated at the lower of cost or net realizable value. The Company records inventory write-downs in\nCost of revenue in the consolidated statements of operations for estimated obsolescence or unmarketable inventories\nbased upon assumptions about future demand and design, and technological or other changes.\nProperty, Plant, and Equipment, net\nProperty, plant, and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the\nstraight-line method over the estimated useful lives of the assets except flight vehicles, which is computed based on\nthe expected number of average flights for each flight vehicle. Leasehold improvements are depreciated over the\nshorter of their estimated useful lives or the related lease term. Management periodically reviews these useful life\nestimates with engineering and operations teams and revises them as additional data becomes available.\nThe Company estimates the useful lives of its satellite assets based on engineering studies, historical on-orbit\nperformance, propellant life, utilization patterns, design enhancements across generations, and planned transitions to\nnewer satellite technology. The Company estimates broadband satellites to have a five-year useful life and the first\ngeneration mobile satellites to have a three-year useful life.\nThe Company estimates the expected flights for its flight vehicle hardware based on three key criteria: (1) the\ncontinued ability to successfully recover and refurbish the hardware for additional flights, (2) the continued\neconomic feasibility of using the hardware on incremental flights, supported by declining refurbishment costs and\nsensitivity analyses, and (3) customer acceptance for reflown hardware as evidenced by the Company’s launch\nmanifest.\nExpenditures for maintenance and repairs that do not extend the lives of the respective assets are expensed as\nincurred while significant refurbishment, renewals, and enhancements that increase the functionality, output or\nexpected life of an asset are capitalized and depreciated ratably over the identified useful life.", - "path": "spacex-s1.pdf/p317", - "metadata": { - "length": 4316, - "summary": "F-13 Table of Contents Level II Inputs other than quoted prices in active markets that are observable either directly or indirectly Level III Unobservable inputs for which there is little or no market data The fair value hierarchy requires the use of observable market data whe...", - "page_nums": [ - 317 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 317, "artifact_ref": "page_citation_assets/page-317.png", @@ -11669,24 +7840,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_32f02e4f-ebef-5b09-a1d2-8a03cd5b27fb", - "type": "page", - "content": "F-14\nTable of Contents\nSatellites include costs to build the satellites (parts, labor, and allocated overhead) as well as capitalized launch costs\nincurred by the Space segment to launch the satellites to orbit, which include an allocation of the flight vehicle\nhardware costs.\nThe Company capitalizes certain interest costs associated with significant acquisition or construction of certain\nProperty, plant, and equipment, net. The Company begins to capitalize qualified interest cost once activities\nnecessary to get the asset ready for its intended use have commenced. The Company calculates qualified interest\ncapitalization using the average amount of accumulated expenditures during the period the asset is being prepared\nfor its intended use and a capitalization rate which is derived from the Company’s weighted average borrowing rate\nduring such time, in the absence of specific borrowings related to the significant long term construction projects.\nThe Company ceases capitalization on any portions substantially completed and ready for their intended use.\nCapitalized interest is considered a part of the assets’ historical cost, and depreciates over the estimated useful lives\nof the underlying assets.\nThe Company evaluates impairment of its Property, plant, and equipment assets at the lowest level for which\nidentifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company\nreviews Property, plant, and equipment for impairment whenever events or circumstances indicate that the carrying\nvalue of an asset or asset group may not be recoverable. If estimated future cash flows are less than the carrying\nvalue of the asset or asset group, an impairment charge is recognized to the extent its carrying value exceeds its\nestimated fair value. Routine asset disposals, scrapping, gateway decommissions, and other recurring operational\nlosses are charged to Cost of revenue or Selling, general, and administrative expenses depending on the nature of the\nassets, or to impairment if the impairment is considered to be outside the normal course of business.\nThe estimated useful lives of the Company’s Property, plant, and equipment, net are as follows:\nClassification Estimated Useful Life\nServers and networking equipment\n\n................................... 5 - 6 years\nSatellites\n\n............................................................................ 3 - 5 years\nMachinery and equipment\n\n................................................. 3 - 10 years\nFlight vehicle hardware\n\n..................................................... 5 - 25 flights\nData center infrastructure\n\n.................................................. 20 - 25 years\nLaunch sites\n\n....................................................................... 7 - 20 years\nBuildings and improvements\n\n............................................. 30 years\nLeasehold improvements\n\n................................................... Shorter of 7 - 20 years or the life of the lease\nLeases\nThe Company leases facilities, corporate offices, data centers, and manufacturing equipment primarily in the U.S.\nunder various operating and finance leases. In addition, the Company enters into various lease agreements for its\nsatellite gateway sites throughout the world.\nThe Company determines whether an arrangement is or contains a lease at inception. If a lease exists, any lease\narrangements with contractual terms longer than twelve months are classified as either an operating or finance lease.\nFinance leases are generally those leases that allow the Company to substantially utilize or pay for the entire asset\nover its estimated life. All other leases that do not meet any of the criteria for finance lease classification are\nclassified as operating leases.\nLeases with a lease term of twelve months or less are not recorded on the consolidated balance sheets and are\nexpensed on a straight-line basis over the lease term in the consolidated statements of operations.\nCertain lease agreements include options that grant the Company the ability to renew or extend the lease term, or\nearly terminate the lease. When determining the lease term, the Company does not include renewal or early\ntermination options unless they are deemed to be reasonably certain of being exercised at the lease commencement\ndate.", - "path": "spacex-s1.pdf/p318", - "metadata": { - "length": 4334, - "summary": "F-14 Table of Contents Satellites include costs to build the satellites (parts, labor, and allocated overhead) as well as capitalized launch costs incurred by the Space segment to launch the satellites to orbit, which include an allocation of the flight vehicle hardware costs....", - "page_nums": [ - 318 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 318, "artifact_ref": "page_citation_assets/page-318.png", @@ -11694,24 +7848,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3f291acd-5047-5593-87b5-fab96f1ac1ba", - "type": "page", - "content": "F-15\nTable of Contents\nUpon lease commencement, the Company recognizes a lease liability measured at the present value of the fixed\nfuture minimum lease payments and a right-of-use asset for an amount equal to the lease liability, adjusted by\nprepaid and accrued rent, lease incentives, and initial direct costs. The Company has elected the practical expedient\nto not separate lease and non-lease components. Operating lease expense is recognized on a straight-line basis over\nthe lease term, with the cost presented as a component of Cost of revenue, Research and development, or Selling,\ngeneral, and administrative expenses in the consolidated statements of operations depending on the nature of the\noperating lease. Finance lease cost is composed of a separate interest component and amortization component. The\ninterest component of a finance lease is included in Interest expense in the consolidated statements of operations and\nthe amortization component of a finance lease is included in Cost of revenue, Research and development, or Selling,\ngeneral, and administrative expenses in the consolidated statements of operations depending on the nature of the\nfinance lease.\nThe Company’s leases generally do not provide information about the rate implicit in the lease. Therefore, the\nCompany utilizes an incremental borrowing rate to calculate the present value of future lease obligations. The\nCompany’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with\nsimilar terms and payments, and in economic environments where the leased asset is located.\nGoodwill and Indefinite-Lived Intangible Assets\nGoodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and the\nliabilities assumed in connection with a business combination. Goodwill and indefinite-lived intangible assets are\nnot amortized but rather, are tested for impairment annually on October 1 and more frequently if events and\ncircumstances indicate that the asset might be impaired. Events that could indicate impairment of goodwill and other\nindefinite-lived intangible assets that trigger an impairment assessment include, but are not limited to, adverse\neconomic market conditions, long-term declining industry outlook conditions, entity-specific financial\nunderperformance, changes in the use of the asset, and other adverse legal and regulatory events. Goodwill is tested\nfor impairment at the reporting unit level.\nThe Company may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair\nvalue of a reporting unit or indefinite-lived intangible asset is less than its carrying value and if so, the Company\nperforms a quantitative test. Impairment is recognized when the quantitative assessment results in the carrying value\nexceeding the fair value. The reporting unit’s estimated fair value is determined on the basis of discounted future\ncash flows and market approach using the guideline public company method.\nThe Company conducted its annual goodwill impairment test and no goodwill impairments were identified for the\nyears ended December 31, 2025, 2024, and 2023. Refer to Note 6, Intangible Assets and Goodwill for additional\ndiscussion on indefinite-lived intangible assets.\nDigital Assets\nThe Company has ownership of and control over its digital assets, which consist of bitcoin, and utilizes, and expects\nto continue to utilize, third-party custodians to hold its bitcoin.\nThe Company determines and records the fair value of its bitcoin based on quoted prices on the active exchange that\nthe Company has determined is the principal market for bitcoin (Level I inputs). The cost of bitcoin is based upon\nthe specific identification method. Realized and unrealized gains and losses are recorded to Other income (expense),\nnet in the Company’s consolidated statements of operations.\nThe Company adopted Accounting Standards Update No. 2023-08, Intangibles—Goodwill and Other—Crypto\nAssets (Subtopic 350-60) (“ASU 2023-08”), using a modified retrospective approach effective January 1, 2024. The", - "path": "spacex-s1.pdf/p319", - "metadata": { - "length": 4121, - "summary": "F-15 Table of Contents Upon lease commencement, the Company recognizes a lease liability measured at the present value of the fixed future minimum lease payments and a right-of-use asset for an amount equal to the lease liability, adjusted by prepaid and accrued rent, lease in...", - "page_nums": [ - 319 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 319, "artifact_ref": "page_citation_assets/page-319.png", @@ -11719,24 +7856,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8c6879c4-b102-53a4-8138-abd395a98647", - "type": "page", - "content": "F-16\nTable of Contents\ncumulative effect of the changes made on the Company’s January 1, 2024 consolidated balance sheet for the\nadoption of ASU 2023-08 were as follows:\nBalance at December 31, 2023\nAdjustment from adoption of ASU 2023-08 Balance at January 1, 2024\nAssets\nDigital assets\n\n.................................................................................. $ 299 $ 496 $ 794\nShareholders’ Equity\nAccumulated deficit ....................................................................... $ (4,664) $ 496 $ (4,168)\nLoss Contingencies\nThe Company is currently involved in, and may in the future be involved in, legal proceedings, claims,\ninvestigations, and government inquiries and investigations arising in the ordinary course of business. The Company\nrecords a liability when it believes that it is both probable that a loss has been incurred and the amount or range can\nbe reasonably estimated. If the Company determines there is a reasonable possibility that it may incur a loss and the\nloss or range of loss can be estimated, it discloses the possible loss to the extent material. Significant judgment is\nrequired to determine both probability and the estimated amount. The Company reviews these provisions on a\nregular basis and adjusts these provisions accordingly to reflect the impact of negotiations, settlements, rulings,\nadvice of legal counsel, and updated information. Legal fees are expensed as incurred.\nJoint Ventures and Investments\nThe Company has made strategic investments in joint ventures. The Company evaluates each investment to\ndetermine if the investee is a variable interest entity, and, if so, whether the Company is the primary beneficiary of\nthe variable interest entity. The Company has determined, as of December 31, 2025, there were no variable interest\nentities required to be consolidated in the Company’s consolidated financial statements. The Company’s investments\nin unconsolidated affiliates are primarily non-marketable equity securities without readily determinable fair values.\nThe Company accounts for each of its investments in unconsolidated affiliates either under equity method\naccounting, fair value, or by adjusting the carrying value of its non-marketable equity securities to fair value upon\nobservable transactions for identical or similar investments of the same issuer or upon impairment (referred to as the\nmeasurement alternative). The investments in unconsolidated affiliates are included within Other assets on the\nconsolidated balance sheets. Gains and losses on the Company’s non-marketable equity securities are recognized in\nOther income (expense), net in the consolidated statements of operations. Refer to Note 9, Investments in\nunconsolidated affiliates for additional details.\nRevenue Recognition\nBelow describes the Company’s significant revenue recognition policies by segment.\nSpace Segment\nThe Company’s Space segment generates revenue primarily through (i) Launch Services for the deployment of\npayloads to their intended orbits for both commercial and government customers utilizing Falcon 9 and Falcon\nHeavy, and (ii) Launch and Development for the development of spacecraft and provision of launch and mission\nservices for government agency space programs utilizing Falcon 9, Falcon Heavy, Starship, and Dragon.\nSpace revenue is derived from fixed-price contracts related to the development and provision of launch services for\nthe deployment of spacecraft and other payloads to its intended orbit for both commercial customers and\ngovernmental agency space programs. The Company recognizes revenue as control is transferred to the customer,\neither “over time” or at a “point in time”. The Company recognizes revenue over time for Launch and Development\ncontracts when the Company’s performance on the contract creates an asset with no alternative use and when the\nCompany has an enforceable right to payment for performance to date. The Company measures progress on these", - "path": "spacex-s1.pdf/p320", - "metadata": { - "length": 3963, - "summary": "F-16 Table of Contents cumulative effect of the changes made on the Company’s January 1, 2024 consolidated balance sheet for the adoption of ASU 2023-08 were as follows: Balance at December 31, 2023 Adjustment from adoption of ASU 2023-08 Balance at January 1, 2024 Assets Digi...", - "page_nums": [ - 320 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 320, "artifact_ref": "page_citation_assets/page-320.png", @@ -11744,24 +7864,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_32147b0d-4065-5121-9314-9fac119739c9", - "type": "page", - "content": "F-17\nTable of Contents\ncontracts using the cost-to-cost input method, as the Company believes this represents the most appropriate measure\ntowards satisfaction of its performance obligation. Under the cost-to-cost input method, the Company records\nrevenue based upon costs (such as materials and labor hours) incurred to date relative to the total estimated cost at\ncompletion. For Launch Services contracts where revenue is recognized at a point in time, due to the\ninterchangeability of flight hardware and minimal unique engineering costs, revenue and costs are deferred and not\nrecognized until the launch or deployment of the customer’s spacecraft to its intended orbit.\nThe Company’s contracts are complex and require the Company to estimate total costs to perform over the term of\nthe contracts, as well as the measurement of progress towards completion for each performance obligation.\nDeveloping the estimated total cost at completion for each performance obligation requires the use of significant\nmanagement judgment, including assumptions regarding launch timing, labor hours, allocation of shared costs for\nlaunch vehicles that have been identified as reusable for multiple launches, as well as expected technological\nchanges to launch vehicles and spacecraft. The Company recognizes changes in estimated contract revenue or costs\nat completion and the resulting changes in contract profit on a cumulative basis.\nConnectivity Segment\nThe Company’s Connectivity segment generates revenue primarily through broadband and Starlink Mobile services\nto consumers, and enterprise and government customers throughout 156 markets.\nSubstantially all of the Company’s contracts with Starlink customers contain multiple performance obligations.\nThese performance obligations typically include (i) the broadband services provided through Starlink and (ii) the\nsale of the Starlink Kit (inclusive of the terminal). For customer contracts that include multiple performance\nobligations, the Company accounts for individual performance obligations if they are distinct. The transaction price\nis allocated to each performance obligation based on its standalone selling price. The Company determines the\nstandalone selling price based on the price at which the good or service is sold separately on a standalone basis to\nsimilar customers in similar locations. Starlink Mobile services have one performance obligation.\nThe Company’s performance obligation to provide broadband and Starlink Mobile services is satisfied over time as\nthe customer simultaneously receives and consumes the benefits provided. The Company generates service revenue\nby (i) fixed price services that require advanced or recurring monthly payments by the customer or (ii) variable\npriced services based on actual data usage of the Starlink broadband. The amounts received from customers for\nadvanced payment for broadband and Starlink Mobile service are included in deferred revenue on the Company’s\nconsolidated balance sheets and revenue is recognized either ratably over the subscription term or based on actual\ndata usage. The Company’s contracts are generally month to month and the revenue recognized for these recurring\ncustomers is equal to the amount billed in that month.\nThe Company’s performance obligation to provide the Starlink Kit and other related hardware is satisfied at the\npoint in time when control is transferred to the customer. In almost all circumstances, control passes to the customer\nupon delivery of the Starlink Kit and other related hardware to the customer, or in the instance of certain enterprise\ncustomers, when it is installed. Starlink Kit revenue is reported net of sales returns and chargebacks. Shipping and\nhandling charges are included in the transaction price. The Company recognizes shipping and handling activities as\nfulfillment activities and not as a separate performance obligation.\nThe Company recognizes revenue over time for certain contracts related to the Starshield business that are long-term\nin nature using the cost-to-cost input method. The Company records revenue based upon costs (such as materials\nand labor hours) incurred to date relative to the total estimated cost at completion.\nThe Company’s Starshield contracts are complex and require the Company to estimate the total costs to perform\nover the term of the contracts, as well as the measurement of progress towards completion for each performance\nobligation. Developing the estimated total cost at completion for each performance obligation requires the use of\nsignificant management judgment, including assumptions regarding labor hours, allocation of shared costs used in\nthe production of satellites, satellite material costs, as well as expected technological changes to satellites. The\nCompany recognizes changes in estimated contract revenue or costs at completion and the resulting changes in\ncontract profit on a cumulative basis.", - "path": "spacex-s1.pdf/p321", - "metadata": { - "length": 4931, - "summary": "F-17 Table of Contents contracts using the cost-to-cost input method, as the Company believes this represents the most appropriate measure towards satisfaction of its performance obligation. Under the cost-to-cost input method, the Company records revenue based upon costs (suc...", - "page_nums": [ - 321 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 321, "artifact_ref": "page_citation_assets/page-321.png", @@ -11769,24 +7872,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fec908ae-d26e-5e10-819a-f5b7399f51a3", - "type": "page", - "content": "F-18\nTable of Contents\nAI Segment\nThe AI segment generates revenue from the sale of advertising and from AI solutions and infrastructure services,\nwhich include (i) subscription offerings, (ii) data licensing arrangements, and (iii) API access to Grok models.\nRevenue from advertising is recognized in the period in which the advertising is delivered, as evidenced by a user\nengaging with the ad in a manner that satisfies the advertiser’s selected engagement criteria. The Company evaluates\nwhether it acts as principal or agent when third parties are involved. For advertising products sold directly through\nits X platform, the Company controls the specified ad services prior to transfer to the advertiser, is responsible for\nserving the advertisements, and fulfills the advertiser’s engagement criteria. Accordingly, it acts as principal and\nrecognizes revenue on a gross basis. For advertising sold through supply side platform (“SSP”) partners, the\nCompany receives a percentage share of gross advertising spend. The SSP partner controls the advertising inventory\nprior to its transfer to the advertisers, is primarily responsible for fulfilling the performance obligation to the\nadvertiser, and has discretion in pricing. As a result, the Company acts as agent and recognizes revenue on a net\nbasis.\nSubscription revenue is recognized ratably over the period of the subscription term.\nData licensing arrangements grant customers a right to access, search, and analyze the Company’s historical and\nreal-time intellectual property (“IP”) on the X platform through the developer channel for a defined period. These\narrangements may contain a single performance obligation (satisfied at a point in time for historical IP or over time\nfor future IP) or multiple performance obligations satisfied separately. For arrangements with a fixed monthly fee\nand a single future IP performance obligation, revenue is recognized on a straight-line basis over the period in which\nthe Company provides the data. When such arrangements contain multiple performance obligations, the Company\nallocates revenue on a relative basis between the performance obligations based on standalone selling price based on\ndirectly observable standalone transactions and recognizes revenue as the performance obligations are satisfied. For\ncertain data licensing arrangements, the Company charges customers based on the amount of sales they generate\nfrom downstream customers using its data. For arrangements with a minimum guarantee and a single future IP\nperformance obligation, the minimum guarantee is recognized on a straight-line basis over the period. For\narrangements with a minimum guarantee and two or more performance obligations, the Company allocates revenue\non a relative basis between the performance obligations based on standalone selling price based on directly\nobservable standalone transactions and recognizes revenue as each performance obligation is satisfied. Any royalties\nin excess of minimum guarantees, if any, are recognized over the contract term, on a straight-line, on a cumulative\ncatch-up basis.\nFor the Company’s API services, the primary performance obligation is to stand ready to provide customers with\naccess to the platform to process data through token-based inputs and utilize compute hours for outputs. Revenue is\nrecognized ratably on a straight-line basis over the contract term for subscription arrangements that provide stand-\nready access. For usage-based arrangements, revenue is recognized as the services are consumed (i.e., as tokens are\nprocessed or compute hours are utilized).\nFor all segments, the Company records payment processing fees for its credit card sales within Cost of revenue.\nTaxes collected from customers and remitted to government authorities are not included in the transaction price. The\nCompany expenses sales commissions as incurred when the amortization period is one year or less within Selling,\ngeneral, and administrative expenses in the consolidated statements of operations.\nCost of Revenue\nCost of revenue includes the cost of materials, depreciation and amortization, shipping and handling, payment\nprocessor fees, customs and duties, revenue share costs, infrastructure costs, allocated overhead, and employee\ncompensation costs (including salaries, benefits, and share-based compensation). Infrastructure costs consist\nprimarily of rocket, kit, and satellite manufacturing facilities and data center costs related to the Company’s\ncolocated facilities, which include lease and hosting costs, related support and maintenance costs, energy and\nbandwidth costs, and public cloud hosting costs.", - "path": "spacex-s1.pdf/p322", - "metadata": { - "length": 4647, - "summary": "F-18 Table of Contents AI Segment The AI segment generates revenue from the sale of advertising and from AI solutions and infrastructure services, which include (i) subscription offerings, (ii) data licensing arrangements, and (iii) API access to Grok models. Revenue from adve...", - "page_nums": [ - 322 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 322, "artifact_ref": "page_citation_assets/page-322.png", @@ -11794,24 +7880,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_deb93d8e-278c-5558-8c3b-5e5b3d42101f", - "type": "page", - "content": "F-19\nTable of Contents\nWarranty on Starlink Kits\nThe Company offers a standard product warranty for a period of one to two years on Starlink Kits. The Company\nhas an obligation to either repair or replace the defective Starlink Kit. At the time revenue is recognized, an estimate\nof future warranty costs is recorded as a component of Cost of revenue. Factors that affect the warranty obligation\ninclude historical as well as current product failure rates and costs incurred in correcting product failures. Warranty\nexpenses and related liabilities are not material to the consolidated financial statements.\nResearch and Development Expenses\nThe Company sponsors various research and development projects, whose costs are expensed as incurred. Research\nand development (“R&D”) expenses consist of cost of materials, employee compensation costs (including salaries,\nbenefits, and share-based compensation), contractor compensation expenses, cloud computing expenses, data\nservices, equipment lease expenses, depreciation for R&D equipment and allocated overhead. R&D costs also\ninclude certain expenses related to the development of features and modules created through engineering services\nfor the Company’s products, where the Company retains the associated intellectual property.\nSoftware Development Costs\nThe Company expenses software development costs marketed under on-premise perpetual license agreements. Costs\nincurred prior to the establishment of technological feasibility are expensed as research and development costs. Due\nto the nature of the Company’s development cycle, technological feasibility typically occurs shortly before the\nproduct is available for general release. All software development costs for the years ended December 31, 2025,\n2024, and 2023 were expensed as incurred.\nShare-Based Compensation\nThe fair value of stock options, restricted share units (“RSUs”) and restricted share awards (“RSAs”) with service\nand/or performance conditions and the employee share purchase plan (“ESPP”) are estimated on the grant or\noffering date. The fair value of RSUs, RSAs, and ESPP is determined based on the fair value of the Company’s\ncommon stock on the date of grant and the fair value of stock options is determined using the Black-Scholes option-\npricing model. The Black-Scholes option-pricing model requires inputs such as the fair value of the Company’s\ncommon stock, risk-free interest rate, expected award term and expected share price volatility.\nShare-based compensation expense for equity awards with performance conditions is recognized over the requisite\nservice period when the vesting of the award becomes probable. Share-based compensation expense is recognized\non a straight-line basis for equity awards with only a service condition and on a graded vesting basis for equity\nawards with a performance condition. The Company accounts for forfeitures as they occur rather than on an\nestimated basis.\nThe fair value and derived service period of awards granted to the Company’s CEO with market, service, and\nperformance conditions are estimated on the grant date using a Monte Carlo simulation model. A Monte Carlo\nsimulation model requires inputs such as fair value of the Company’s common stock, the risk-free interest rate,\nexpected award term, expected share dilution and expected share price volatility. These inputs, which are subjective\nand generally require judgment, are unique to each award based on the best available information at the valuation\ndate. For these awards, share-based compensation expense is not recognized until the performance condition is\nprobable. Once the performance condition is met, share-based compensation is recorded based on the requisite\nservice period associated with the probable performance condition.\nAdvertising Expense\nThe Company expenses the cost of advertising and other promotional expenditures to primarily market Starlink\nservices as incurred. For the years ended December 31, 2025, 2024, and 2023, advertising expenses included in\nSelling, general, and administrative expenses on the consolidated statements of operations are $69 million, $31\nmillion, and $29 million, respectively.", - "path": "spacex-s1.pdf/p323", - "metadata": { - "length": 4171, - "summary": "F-19 Table of Contents Warranty on Starlink Kits The Company offers a standard product warranty for a period of one to two years on Starlink Kits. The Company has an obligation to either repair or replace the defective Starlink Kit. At the time revenue is recognized, an estima...", - "page_nums": [ - 323 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 323, "artifact_ref": "page_citation_assets/page-323.png", @@ -11819,24 +7888,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_31929b9d-a9d2-512c-9e87-c9e540beef0e", - "type": "page", - "content": "F-20\nTable of Contents\nNet Income (Loss) per Share of Common Stock Attributable to Common Shareholders\nNet income (loss) per share attributable to common shareholders is computed using the two-class method required\nfor participating securities. Under this method, net income is allocated to common shareholders and participating\nsecurities based on their respective rights to receive dividends as if all earnings for the period had been distributed.\nCertain series of the Company’s redeemable convertible preferred stock are considered participating securities\nbecause they are entitled to receive dividends on an as-converted basis if and when dividends are declared on\ncommon stock. These securities do not participate in net losses. The Company’s classes of common stock have\nidentical economic rights, resulting in the same net income (loss) per share for each class. Accordingly, the\nCompany presents a single net income (loss) per share for all classes of common stock.\nDiluted net (loss) income per share is computed based on the more dilutive of (i) the two-class method or (ii) the if-\nconverted method. Potentially dilutive shares from outstanding share-based compensation awards, including stock\noptions and restricted stock units, are included when calculating diluted net income (loss) per share of attributable to\ncommon shareholders using the treasury stock method when their effect is dilutive.\nRefer to Note 13, Redeemable Convertible Preferred Stock and Shareholders’ Equity for additional details of the\nCompany’s preferred and common stock.\nIncome Taxes\nThe Company utilizes the asset and liability method of accounting for income taxes as set forth in ASC Topic 740,\nIncome Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized using enacted tax\nrates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities.\nASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that\nsome portion or all of the net deferred tax assets will not be realized. The Company’s ability to realize deferred tax\nassets is assessed at each year-end and a valuation allowance is established if necessary. The factors used to assess\nthe likelihood of realization may include forecasts of future taxable income, future reversal of existing taxable\ntemporary differences, and available tax planning strategies that could be implemented to realize net deferred tax\nassets.\nThe Company applies the provisions of ASC 740-10, which requires the Company to recognize in the consolidated\nfinancial statements the impact of a tax position only if it is more likely than not to be sustained upon examination\nbased on the technical merits of the position. The Company recognizes interest and penalties related to uncertain tax\npositions in income tax expense.\nIn December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740)\n(“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate\nreconciliation as well as additional information on income taxes paid. The Company adopted this ASU on a\nprospective basis effective January 1, 2025. Refer to Note 16, Income Taxes for the inclusion of new disclosures\nrequired.\nInvestment Tax Credits\nThe Company recognizes investment tax credits when there is reasonable assurance that the credit will be received\nand the Company will comply with the conditions specified in the agreement or statutory requirements. The\nCompany records capital-related credits as a reduction to Property, plant, and equipment, net within the consolidated\nbalance sheets and recognizes a reduction to depreciation expense over the useful life of the corresponding acquired\nasset.\nForeign Currency\nThe reporting currency of the Company is the United States (“U.S.”) dollar. The Company determines the functional\nand reporting currency of each of its international subsidiaries based on the primary currency in which they operate.\nIf the functional currency is not the U.S. dollar, the Company recognizes a cumulative translation adjustment created\nby the different rates the Company applies to current period income or loss and the balance sheet. For each", - "path": "spacex-s1.pdf/p324", - "metadata": { - "length": 4285, - "summary": "F-20 Table of Contents Net Income (Loss) per Share of Common Stock Attributable to Common Shareholders Net income (loss) per share attributable to common shareholders is computed using the two-class method required for participating securities. Under this method, net income is...", - "page_nums": [ - 324 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 324, "artifact_ref": "page_citation_assets/page-324.png", @@ -11844,24 +7896,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5a85f266-1ad0-5384-8a4c-6f674b1a6859", - "type": "page", - "content": "F-21\nTable of Contents\nsubsidiary, the Company applies the monthly average functional exchange rate to its monthly income or loss and the\nmonth-end functional currency rate to translate the balance sheet.\nForeign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions\ndenominated in currencies other than the functional currency. Transaction gains and losses are recognized in Other\nincome (expense), net in the consolidated statements of operations. Net foreign currency transaction gains (losses)\nwere not material to the consolidated financial statements.\nRecent Accounting Pronouncements\nIn November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic\n220-40). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of\ninventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This\nASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses.\nThe ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years\nbeginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated\nfinancial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all\nprior periods presented in the consolidated financial statements. This ASU will likely result in the required\nadditional disclosures being included in the consolidated financial statements, once adopted. The Company is\ncurrently evaluating the provisions of this ASU.\nIn July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement\nof Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical\nexpedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of\nthe asset when estimating expected credit losses for current classified accounts receivable and contract assets. This\nupdate is effective for annual periods beginning after December 15, 2025, including interim periods within those\nfiscal years. Adoption of this ASU can be applied prospectively for reporting periods after its effective date. Early\nadoption is permitted. The Company is currently evaluating the provisions of this ASU and does not expect this\nASU to have a material impact on the consolidated financial statements.\nIn September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software\n(Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU simplifies the\ncapitalization guidance by removing all references to prescriptive and sequential software development stages\n(referred to as “project stages”) throughout ASC 350-40. The ASU is effective for annual periods beginning after\nDecember 15, 2027, and interim periods within those fiscal years. Adoption of this ASU can be applied\nprospectively for reporting periods after its effective date; or follow a modified transition approach that is based on\nthe status of the respective projects and whether software costs were capitalized before the date of adoption; or\nretrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is\npermitted. The Company is currently evaluating the provisions of this ASU and does not expect this ASU to have a\nmaterial impact on the consolidated financial statements.\nIn December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for\nGovernment Grants Received by Business Entities. The ASU establishes authoritative guidance in GAAP about\naccounting for government grants received by business entities, clarifies the appropriate accounting, in an effort to\nreduce diversity in practice, and increase consistency of application across business entities. The ASU is effective\nfor annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual\nreporting periods. Adoption of this ASU can be applied a modified prospective approach, a modified retrospective\napproach, or a retrospective approach. Early adoption is permitted. The Company is currently evaluating the\nprovisions of this ASU and does not expect this ASU to have a material impact on the consolidated financial\nstatements.", - "path": "spacex-s1.pdf/p325", - "metadata": { - "length": 4518, - "summary": "F-21 Table of Contents subsidiary, the Company applies the monthly average functional exchange rate to its monthly income or loss and the month-end functional currency rate to translate the balance sheet. Foreign currency transaction gains and losses are a result of the effect...", - "page_nums": [ - 325 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 325, "artifact_ref": "page_citation_assets/page-325.png", @@ -11869,24 +7904,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_98fcfb08-d1da-572b-8131-f2e33626d111", - "type": "page", - "content": "F-22\nTable of Contents\nNote 3 - Revenue\nRevenue disaggregated by products and services is as follows:\nYear Ended December 31,\n2025 2024 2023\nProducts\n\n.......................................................................................... $ 1,510 $ 1,470 $ 1,093\nServices\n\n.......................................................................................... 17,164 12,545 9,294\nTotal revenues\n\n.............................................................................. $ 18,674 $ 14,015 $ 10,387\nAll of products revenue is attributable to the Connectivity segment.\nRevenue disaggregated by type and segment is as follows:\nYear Ended December 31,\n2025 2024 2023\nLaunch Services\n\n........................................................................... $ 2,576 $ 2,584 $ 1,964\nLaunch & Development\n\n\n............................................................... 1,510 1,212 1,593\nSpace\n\n............................................................................................. 4,086 3,796 3,557\nConsumer\n\n..................................................................................... 7,208 4,830 2,817\nEnterprise & Government (1)\n\n\n........................................................ 4,179 2,769 1,052\nConnectivity\n\n................................................................................. 11,387 7,599 3,869\nAdvertising\n\n\n................................................................................... 1,844 1,728 2,323\nAI Solutions & Infrastructure\n...................................................... 1,357 892 638\nAI\n\n.................................................................................................. 3,201 2,620 2,961\nTotal revenues ......................................................................... $ 18,674 $ 14,015 $ 10,387\n___________________\n(1) Enterprise & Government revenue includes revenue from Starlink Mobile service offerings.\nDeferred revenue\nDeferred revenue is recorded when cash payments are received or due, in advance of the Company’s performance.\nDeferred revenue primarily relates to Space agreements and Connectivity enterprise and government contracts. Total\ndeferred revenue as of December 31, 2024 was $10,179 million, of which $4,080 million was recognized as revenue\nfor the year ended December 31, 2025. Total deferred revenue as of December 31, 2025 was $12,116 million.\nRevenue recognized during the years ended December 31, 2024 and 2023 that were included in the deferred revenue\nbalance at the beginning of each period was $3,414 million and $2,691 million, respectively.\nBacklog\nThe Company’s backlog represents the transaction price of performance obligations to customers for which work\nremains to be performed. The amount of backlog increases with new contracts or additions to existing contracts and\ndecreases as revenue is recognized on existing contracts. Contracts are included in backlog when an enforceable\nagreement has been reached. Backlog does not include amounts related to performance obligations that are billed\nand recognized as they are delivered, optional purchases that do not represent material rights and any estimated\namounts of variable consideration that are subject to constraint. Backlog totaled $28,377 million as of December 31,\n2025, of which $12,116 million was recognized as deferred revenue at December 31, 2025. Approximately 32% is\nexpected to be recognized within one year, and approximately 53% to be recognized in 2027 and 2028, with the\nremaining 15% to be recognized thereafter.", - "path": "spacex-s1.pdf/p326", - "metadata": { - "length": 3530, - "summary": "F-22 Table of Contents Note 3 - Revenue Revenue disaggregated by products and services is as follows: Year Ended December 31, 2025 2024 2023 Products .......................................................................................... $ 1,510 $ 1,470 $ 1,093 Services ......", - "page_nums": [ - 326 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 326, "artifact_ref": "page_citation_assets/page-326.png", @@ -11894,24 +7912,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_075fa42d-6bd5-5c98-97f3-878719a8fffa", - "type": "page", - "content": "F-23\nTable of Contents\nConcentration of risk\nConsolidated revenue from a significant customer is as follows:\nYear Ended December 31,\n2025 2024 2023\nCustomer A\n\n.................................................................................... 20.9% 24.2% 25.2%\nRevenue from this customer relates to all three segments. No other customers represented more than 10% of\nconsolidated revenue during the years ended December 31, 2025, 2024 and 2023.\nNote 4 - Inventory\nInventory consists of the following:\nDecember 31,\n2025 2024\nRaw materials\n\n............................................................................................................ $ 1,030 $ 923\nWork-in-progress ....................................................................................................... 803 730\nFinished goods\n\n\n........................................................................................................... 583 350\nInventory\n................................................................................................................. $ 2,416 $ 2,003\nNote 5 - Property, Plant, and Equipment, Net\nProperty, plant, and equipment, net consist of the following:\nDecember 31,\n2025 2024\nServers and networking equipment\n\n\n........................................................................... $ 22,694 $ 6,892\nSatellites\n\n..................................................................................................................... 11,949 7,591\nMachinery and equipment\n\n\n......................................................................................... 6,343 5,343\nData center infrastructure\n\n\n.......................................................................................... 2,960 224\nLaunch sites\n\n............................................................................................................... 2,404 2,121\nLand, buildings and improvements (1)\n....................................................................... 1,876 913\nFlight vehicle hardware\n\n\n............................................................................................. 1,689 1,577\nLeasehold improvements\n........................................................................................... 784 1,019\nConstruction-in-progress\n\n\n........................................................................................... 4,604 3,007\nProperty, plant, and equipment\n.................................................................................. 55,303 28,687\nLess: Accumulated depreciation\n\n\n................................................................................ (12,701) (7,540)\nProperty, plant, and equipment, net\n\n\n..................................................................... $ 42,602 $ 21,147\n__________________\n(1) Land is not a depreciable asset.\nConstruction in progress is primarily comprised of ongoing construction and expansion of the facilities and\nequipment as well as AI infrastructure that has not yet been placed in service.\nDepreciation expense for the years ended December 31, 2025, 2024 and 2023 was $5,915 million, $2,977 million\nand $1,897 million respectively.\nInterest is capitalized during the construction period for significant long term construction projects, such as the AI\ninfrastructure data centers. For the year ended December 31, 2025, the Company capitalized $169 million of interest,", - "path": "spacex-s1.pdf/p327", - "metadata": { - "length": 3376, - "summary": "F-23 Table of Contents Concentration of risk Consolidated revenue from a significant customer is as follows: Year Ended December 31, 2025 2024 2023 Customer A .................................................................................... 20.9% 24.2% 25.2% Revenue from th...", - "page_nums": [ - 327 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 327, "artifact_ref": "page_citation_assets/page-327.png", @@ -11919,24 +7920,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f561e978-05c5-51af-a165-87b31872b471", - "type": "page", - "content": "F-24\nTable of Contents\nwhich is included in Construction-in-progress amounts above. No interest was capitalized during the years ended\nDecember 31, 2024 and 2023.\nFor the years ended December 31, 2025 and 2024, the Company recorded impairment charges of $38 million and\n$63 million, respectively, related to the write off of (i) damaged flight vehicle in the Space segment, and (ii)\nabandoned production line and damaged satellite hardware in the Connectivity segment. These charges are reflected\nin Impairment in the consolidated statements of operations. There was no impairment related to Property, plant, and\nequipment recorded in Impairment during the year ended December 31, 2023.\nDuring the years ended December 31, 2024 and 2023, the Company also recorded impairment charges of $36\nmillion and $54 million, respectively, related to its leasehold improvements and office equipment as part of its\nfacilities consolidation efforts in the AI segment in Restructuring charges in the consolidated statements of\noperations. There was no impairment related to Property, plant, and equipment recorded in Restructuring charges\nduring the year ended December 31, 2025. Refer to Note 20, Restructuring for additional details.\nIn 2024, the Company closed two taxable revenue bond transactions with a local municipality, in order to receive a\npersonal property tax abatement on newly acquired server and networking equipment in the state. Pursuant to this\ntransaction, the municipality issued taxable revenue bonds of $442 million and $258 million principal amount each\nto the Company and used the constructive proceeds to purchase the server and networking equipment from the\nCompany, and then leased the equipment back to the Company. As this effectively created a bond receivable and a\ncorresponding financing obligation with the municipality, and the Company has the legal right to set-off and intends\nto set-off the corresponding lease expense and bond service payments received, there was no impact to the\nconsolidated statements of operations and consolidated balance sheets.\nNote 6 - Intangible Assets and Goodwill\nIntangible Assets\nFinite-lived intangible assets consist of the following:\nDecember 31, 2025\nWeighted-Average Useful Life (years) Gross Carrying Value Accumulated Amortization Net Carrying Value\nBrand\n\n...................................................................... 5.0 $ 743 $ (335) $ 408\nUser base\n\n................................................................. 9.0 1,291 (456) 835\nExisting technology\n\n\n................................................ 3.2 27 (16) 11\nAdvertising customer relationships\n\n........................ 5.0 752 (478) 274\nAcquired workforce\n\n................................................ 2.0 9 — 9\nTotal\n................................................................. $ 2,822 $ (1,285) $ 1,537\nDecember 31, 2024\nWeighted-Average Useful Life (in years) Gross Carrying Value Accumulated Amortization Net Carrying Value\nBrand\n\n...................................................................... 5.0 $ 707 $ (177) $ 530\nUser base\n\n................................................................. 9.0 1,225 (297) 928\nExisting technology\n\n................................................ 3.0 1,140 (823) 317\nAdvertising customer relationships\n\n........................ 5.0 714 (311) 403\nData licensing customer relationships\n\n.................... 3.0 102 (74) 28\nDeveloped technology\n\n............................................ 2.0 3 (2) 1\nTotal\n................................................................. $ 3,891 $ (1,684) $ 2,207", - "path": "spacex-s1.pdf/p328", - "metadata": { - "length": 3596, - "summary": "F-24 Table of Contents which is included in Construction-in-progress amounts above. No interest was capitalized during the years ended December 31, 2024 and 2023. For the years ended December 31, 2025 and 2024, the Company recorded impairment charges of $38 million and $63 mil...", - "page_nums": [ - 328 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 328, "artifact_ref": "page_citation_assets/page-328.png", @@ -11944,24 +7928,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_26a63f8f-516b-5c4d-b36c-2b3816ecdcb8", - "type": "page", - "content": "F-25\nTable of Contents\nAmortization expense associated with finite-lived intangible assets was $786 million, $847 million, and $738\nmillion in the years ended December 31, 2025, 2024, and 2023, respectively.\nThe Company also has indefinite-lived intangible assets of $11 million and $4 million as of December 31, 2025 and\n2024, respectively. Indefinite-lived intangible assets primarily consist of domain names, which are expected to\nprovide long-term branding and marketing benefits. No impairment charges were recognized on indefinite-lived\nintangible assets for the years ended December 31, 2025, 2024, and 2023 other than the Twitter impairment\ndescribed below.\nEstimated future amortization expense of finite-lived intangible assets as of December 31, 2025 is as follows:\n2026\n\n...................................................................................................................................................... $ 452\n2027\n\n...................................................................................................................................................... 421\n2028\n\n...................................................................................................................................................... 256\n2029\n\n...................................................................................................................................................... 143\n2030\n\n...................................................................................................................................................... 142\nThereafter\n\n.............................................................................................................................................. 123\n$ 1,537\nTwitter Impairment\nIn 2023, the Company rebranded its Twitter platform to X. As a result of the rebranding, the Company performed an\nimpairment assessment and recorded an impairment charge of $3,775 million on its previously indefinite-lived brand\nintangible for the AI segment. The Company’s brand intangible asset was determined to no longer be indefinite-\nlived and is presented as a finite-lived intangible asset with a five-year useful life. The fair value of the brand\nintangible asset was determined using the relief-from-royalty method.\nSpectrum Transactions\nOn September 7, 2025, the Company entered into a License Purchase Agreement (the “Spectrum License Purchase\nAgreement”) with Spectrum Business Trust 2025-1, a Nevada Business Trust (“Trust”) and EchoStar Corporation\n(“EchoStar”, and the transactions contemplated thereby, “Spectrum Transactions”) for total consideration of $17,000\nmillion as discussed below.\nPursuant to the terms and subject to the conditions set forth in the Spectrum License Purchase Agreement, the\nCompany agreed to purchase EchoStar’s rights and licenses related to an aggregate of 50 MHz of spectrum in\nfrequency ranges 2000–2020, 2180–2200, 1915–1920 and 1995–2000 (the “AWS-4 and H-Block Licenses” and\nsuch spectrum, “the Spectrum”) granted by the Federal Communication Commissions (“FCC”), together with\ncertain international authorizations, filings, concessions, licenses, rights and priorities related to that spectrum and\ncertain assets associated therewith (collectively, the “Foreign Assets”). The transfer of the AWS-4 and H-Block\nLicenses will occur in two steps: first, the AWS-4 and H-Block Licenses will be transferred by EchoStar to the Trust\n(the “Spectrum Transfer Closing”), and second, the AWS-4 and H-Block Licenses will be transferred by the Trust to\nthe Company (the “Spectrum Acquisition Closing”). The Foreign Assets will be transferred directly to the Company\nat the Spectrum Acquisition Closing, to the extent the required regulatory approvals have been obtained by such\ndate; provided, however, that the failure to obtain such approvals will not delay or prevent the Spectrum Acquisition\nClosing.\nIn connection with the Spectrum License Purchase Agreement and the Spectrum Transactions, on September 7,\n2025, the Company and the Trust entered into a Credit Agreement, pursuant to which the Company has agreed upon\nthe Spectrum Transfer Closing, to loan to the Trust (via loans which are able to be canceled at six-month intervals)\nto be used by the Trust to make debt service payments on EchoStar’s debt through at least November 30, 2027, but\nin no event later than November 30, 2028. These loans will be secured on a junior lien basis by the AWS-4 and H-\nBlock Licenses. The aggregate amount of debt service payments through November 30, 2028 will equal\napproximately $3,000 million.", - "path": "spacex-s1.pdf/p329", - "metadata": { - "length": 4604, - "summary": "F-25 Table of Contents Amortization expense associated with finite-lived intangible assets was $786 million, $847 million, and $738 million in the years ended December 31, 2025, 2024, and 2023, respectively. The Company also has indefinite-lived intangible assets of $11 millio...", - "page_nums": [ - 329 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 329, "artifact_ref": "page_citation_assets/page-329.png", @@ -11969,24 +7936,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_231bc1d0-6111-56ee-85fe-7c5a5755ac89", - "type": "page", - "content": "F-26\nTable of Contents\nOn November 5, 2025, the parties amended and restated the Spectrum License Purchase Agreement to include\nEchoStar’s licenses for up to 15MHz of additional unpaired AWS-3 spectrum, and increased the consideration by\n$2,600 million, to a total amount of consideration of $19,600 million. The cash payoff consideration (as noted\nbelow), two-step transfer process, debt service payments, trust structure, and maintenance obligations remain\nunchanged.\nThe total consideration, approximating $19.6 billion, consisting of (i) approximately $11.1 billion in equity, payable\nthrough the issuance of approximately 261.8 million shares of the Company’s Class A common stock at a fixed\nvalue of $42.40 per share, and (ii) up to $8.5 billion related to the payoff of designated EchoStar debt, with any\nshortfall below $8.5 billion to be paid in cash. The allocation of cash and equity consideration is subject to certain\nadjustments based on the amount of EchoStar debt satisfied at or prior to closing.\nThe Spectrum Acquisition Closing is expected to occur on or about November 30, 2027. The completion of the\nSpectrum Transactions is subject to the satisfaction or waiver of customary closing conditions, including, among\nothers, receipt of certain consents and approvals from the FCC and the Department of Justice (“DOJ”). The\nSpectrum License Purchase Agreement also provides for specified termination rights. As of December 31, 2025, the\nSpectrum Transfer Closing has not yet occurred, and as a result, the Company is not yet obligated to make any\npayments under the Credit Agreement with the Trust. Once the Spectrum Transfer Closing occurs, the Spectrum\nTransactions will be recognized as acquired intangible assets.\nGoodwill\nThe activity for goodwill is as follows:\nBalance at December 31, 2023\n\n............................................................................................................. $ 11,418\nCumulative translation adjustments\n\n\n................................................................................................. (289)\nBalance at December 31, 2024\n\n............................................................................................................. 11,129\nBusiness combination\n\n....................................................................................................................... 52\nCumulative translation adjustments\n\n\n................................................................................................ 628\nBalance at December 31, 2025\n\n.......................................................................................................... $ 11,809\nAs of December 31, 2025 and 2024, goodwill attributable to the Connectivity segment was $513 million and $505\nmillion, respectively, and goodwill attributable to the AI segment was $11,296 million and $10,624 million,\nrespectively.\nNote 7 - Digital Assets\nDigital assets consist of the following:\nDecember 31,\n2025 2024\n(in millions except units of digital assets) Units Cost Basis Fair Value Units Cost Basis Fair Value\nDigital assets held:\nBitcoin\n\n......................................... 18,712 $ 661 $ 1,637 18,712 $ 661 $ 1,749\nTotal\n\n................................................ 18,712 $ 661 $ 1,637 18,712 $ 661 $ 1,749", - "path": "spacex-s1.pdf/p330", - "metadata": { - "length": 3282, - "summary": "F-26 Table of Contents On November 5, 2025, the parties amended and restated the Spectrum License Purchase Agreement to include EchoStar’s licenses for up to 15MHz of additional unpaired AWS-3 spectrum, and increased the consideration by $2,600 million, to a total amount of co...", - "page_nums": [ - 330 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 330, "artifact_ref": "page_citation_assets/page-330.png", @@ -11994,24 +7944,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b5fbfe94-bc88-502a-9ec1-297c17d4771a", - "type": "page", - "content": "F-27\nTable of Contents\nThe fair value of digital assets is determined using a Level I in the fair value hierarchy. The following table\nprovides activities related to digital assets:\nYear Ended December 31,\n2025 2024\nBeginning balance, at fair value\n\n................................................................................ $ 1,749 $ 794\nUnrealized gain (loss), net\n\n......................................................................................... (112) 955\nEnding balance, at fair value\n\n................................................................................. $ 1,637 $ 1,749\nNote 8 - Financial Instruments\nThe Company’s assets that are measured at fair value on a recurring basis are as follows:\nAs of December 31, 2025\nLevel Cost Unrealized Gain Unrealized Loss Fair Value\nCash and cash equivalents\nCash\n\n................................................. I $ 3,408 $ — $ — $ 3,408\nMoney market funds\n\n........................ I 21,339 — — 21,339\nPrepaid expenses and other current assets\nRestricted cash\n\n................................. I 30 — — 30\nRestricted cash in money market funds\n............................................... I 152 — — 152\nOther assets\nRestricted cash\n\n................................. I 182 — — 182\nRestricted cash in money market funds\n............................................... I 13 — — 13\nTotal\n.................................................. $ 25,124 $ — $ — $ 25,124\n As of December 31, 2024\nLevel Cost Unrealized Gain Unrealized Loss Fair Value\nCash and cash equivalents\nCash\n................................................. I $ 3,865 $ — $ — $ 3,865\nMoney market funds\n\n........................ I 7,520 — — 7,520\nMarketable securities\nGovernment securities\n ..................... II 800 1 (1) 800\nPrepaid expenses and other current assets\nRestricted cash\n\n................................. I 23 — — 23\nOther assets\nRestricted cash\n\n................................. I 88 — — 88\nRestricted cash in money market funds\n\n\n............................................... I 5 — — 5\nGovernment securities\n ..................... II 581 1 — 582\nTotal\n .................................................. $ 12,882 $ 2 $ (1) $ 12,883", - "path": "spacex-s1.pdf/p331", - "metadata": { - "length": 2197, - "summary": "F-27 Table of Contents The fair value of digital assets is determined using a Level I in the fair value hierarchy. The following table provides activities related to digital assets: Year Ended December 31, 2025 2024 Beginning balance, at fair value ...............................", - "page_nums": [ - 331 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 331, "artifact_ref": "page_citation_assets/page-331.png", @@ -12019,24 +7952,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7544fa0e-a1a7-5f56-a044-cd4742ceeeb6", - "type": "page", - "content": "F-28\nTable of Contents\nNote 9 - Investments in Unconsolidated Affiliates\nEquity method investment\nIn April 2025, the Company, through its wholly-owned subsidiary CTC Property LLC (“CTC”), entered into a joint\nventure Stateline Power, LLC (“Stateline”), with Solaris Power Solutions Stateline, LLC (“Stateline Power\nSolutions”), a wholly owned subsidiary of Solaris Energy Infrastructure, Inc. (“Solaris”).\nStateline was formed to provide off-grid power to CTC’s data center campus pursuant to a long-term equipment\nrental arrangement. In connection with the formation of Stateline, Solaris contributed non-cash assets valued at $86\nmillion, consisting primarily of progress payments on power generation equipment now owned by Stateline and pre-\nfunded expenses, in exchange for a 50.1% equity interest in Stateline. CTC contributed $86 million in cash in\nexchange for the remaining 49.9% equity interest. Interests in Stateline held by CTC were subsequently assigned to\nMZX Tech LLC (“MZX”), another wholly-owned subsidiary of the Company.\nConcurrent with its formation, CTC (subsequently assigned to MZX) entered into a master equipment rental\nagreement (“Rental Agreement”) with Stateline under which Stateline will lease power generation equipment to\nMZX for use at the Company’s data center facility. The Rental Agreement lease commences upon completion of\nequipment deployment and commissioning activities by Stateline. No rental payments were made by the Company\nfor the year ended December 31, 2025.\nThe Company evaluated its interest in Stateline under ASC 810 and determined that Stateline is a variable interest\nentity but the Company is not the primary beneficiary because it does not have the power to direct the activities that\nmost significantly impact Stateline’s economic performance, which are the operations of the assets managed by a\nsubsidiary of Solaris and the Company’s lack of control over how the assets are managed and redeployed after the\ninitial term of the Rental Agreement. As a result, the Company accounts for its interest in Stateline using the equity\nmethod of accounting. As of December 31, 2025, the carrying value of the equity method investment was $86\nmillion, which represents the Company’s initial investment in Stateline. Activity in Stateline during the year ended\nDecember 31, 2025 was not material.\nEquity investments without readily determinable fair value\nAs of December 31, 2025 and 2024, the Company held investments in unconsolidated affiliates which are accounted\nfor as equity investments without readily determinable fair values of $157 million and $154 million, respectively.\nFor the years ended December 31, 2025, 2024, and 2023, the Company recorded a total of $0 million, $1 million,\nand $45 million of impairment charges related to the equity method investments in Other income (expense), net in\nthe consolidated statements of operations. The Company recorded cumulative downward adjustments of $59 million\non these investments as of December 31, 2025. No upward adjustments were recorded in the years ended December\n31, 2025, 2024 and 2023.", - "path": "spacex-s1.pdf/p332", - "metadata": { - "length": 3099, - "summary": "F-28 Table of Contents Note 9 - Investments in Unconsolidated Affiliates Equity method investment In April 2025, the Company, through its wholly-owned subsidiary CTC Property LLC (“CTC”), entered into a joint venture Stateline Power, LLC (“Stateline”), with Solaris Power Solut...", - "page_nums": [ - 332 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 332, "artifact_ref": "page_citation_assets/page-332.png", @@ -12044,24 +7960,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_989da463-1fb3-5666-9f18-0981d480dfcc", - "type": "page", - "content": "F-29\nTable of Contents\nNote 10 - Debt\nAs of December 31, 2025\nPrincipal\nUnamortized Deferred Financing Costs Net\nX 2027 and X 2030 Notes\n\n.............................................................. $ 27 $ — $ 27\nX B-1 Term Loan\n\n........................................................................... 6,504 280 6,224\nX B-3 Term Loan\n\n........................................................................... 5,966 54 5,912\nxAI Fixed Rate Term Loan\n\n............................................................ 995 4 991\nxAI Floating Rate Term Loan\n\n........................................................ 995 40 955\nxAI 12.5% Secured Senior Notes\n\n................................................... 3,000 12 2,988\nOther financings (1)\n\n\n......................................................................... 4,562 — 4,562\nTotal debt\n\n\n........................................................................................ 22,049 390 21,659\nFinance lease liability\n\n..................................................................... 1,237 — 1,237\nTotal debt and finance leases\n\n.......................................................... $ 23,286 $ 390 $ 22,896\nLess: Short-term portion\n\n\n................................................................. 928 — 928\nTotal debt and finance leases, net of current\n\n............................ 22,358 390 21,968\nAs of December 31, 2024\nPrincipal\nUnamortized Deferred Financing Costs Net\nX 2027 and X 2030 Notes\n\n.............................................................. $ 27 $ — $ 27\nX B-1 Term Loan\n\n........................................................................... 6,571 359 6,212\nX Bridge Credit Facilities\n\n............................................................... 5,966 — 5,966\nOther financings\n\n............................................................................. 57 — 57\nTotal debt\n\n\n........................................................................................ 12,621 359 12,262\nFinance lease liability\n\n\n..................................................................... 1,531 — 1,531\nTotal debt and finance leases\n\n.......................................................... 14,152 359 13,793\nLess: Short-term portion\n\n\n................................................................. 372 — 372\nTotal debt and finance leases, net of current\n\n............................ 13,780 359 13,421\n__________________\n(1) Includes obligations related to certain AI infrastructure assets recorded as failed sale-leaseback transactions. Refer to Other Financings\nbelow for additional details.\nSpaceX ABL Credit Agreement\nGeneral. In 2018 and subsequently amended through 2023, SpaceX entered into a senior secured asset-based\nrevolving credit agreement (“SpaceX ABL Credit Agreement”) with a syndicate of banks. The SpaceX ABL Credit\nAgreement provided for a senior secured asset-based revolving credit facility, from which the Company may draw\nupon as needed for up to $1,500 million. The SpaceX ABL Credit Agreement was collateralized primarily by a\npledge of certain of SpaceX’s inventory and equipment, and availability under the SpaceX ABL Credit Agreement\nwas based on the estimated fair value of such assets, as reduced by certain reserves. The Company was required to\nmeet various covenants, including meeting certain reporting requirements, and certain financial covenants applied\nonce more than 85.0% of the SpaceX ABL Credit Agreement was drawn upon. In February 2025, SpaceX\nterminated the SpaceX ABL Credit Agreement. No amounts were outstanding at the time of termination.\nSpaceX Credit Facility\nGeneral. In February 2025, the Company entered into a five-year senior unsecured revolving credit agreement\n(“SpaceX Credit Facility”) with a syndicate of banks, under which the Company may draw up to $1,500 million,", - "path": "spacex-s1.pdf/p333", - "metadata": { - "length": 3832, - "summary": "F-29 Table of Contents Note 10 - Debt As of December 31, 2025 Principal Unamortized Deferred Financing Costs Net X 2027 and X 2030 Notes .............................................................. $ 27 $ — $ 27 X B-1 Term Loan ..................................................", - "page_nums": [ - 333 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 333, "artifact_ref": "page_citation_assets/page-333.png", @@ -12069,24 +7968,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5fa6c8a7-805e-5a45-b6f8-52e2cc381c9d", - "type": "page", - "content": "F-30\nTable of Contents\nsubject to a customary financial covenant and other reporting requirements. The SpaceX Credit Facility terminates,\nand all outstanding loans become due and payable, on February 7, 2030, unless the parties agree to an extension. No\namounts were borrowed under the SpaceX Credit Facility during 2025.\nInterest Rates. Under the SpaceX Credit Facility, borrowings bear interest at the Company’s option, at a rate per\nannum of (i) between 0.75%-1.25%, depending on the Company’s current debt rating, plus the relevant Term SOFR\nor (ii) between 0.0%-0.25% depending on the Company’s current debt rating plus the greater of (a) the Federal\nFunds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus 1.0% and (d) 1.0%. The Company may also borrow\nin various alternative currencies at various alternative rates, including rates based on SONIA for Pound Sterling\nloans and EURIBOR for Euro loans plus an applicable margin. The fee for undrawn amounts is between\n0.07%-0.11% per annum, depending on the Company’s current debt rating. Interest is payable either monthly or\nquarterly, depending on the interest loan option.\nCovenants. The Company was in compliance with the covenants of the SpaceX Credit Facility as of December 31,\n2025; however, the Company had a technical default when the Company acquired xAI on February 2, 2026 due to\nthe amount of debt assumed as part of the acquisition at the subsidiary level. On March 2, 2026, the Company\nobtained a waiver from the syndicate of banks and amended the SpaceX Credit Facility allowing for the debt\nrefinance completed on March 2, 2026 (refer to Note 21, Subsequent Events for additional details), resulting in the\nCompany being in compliance with all covenants.\nX 2027 and 2030 Notes\nGeneral. In 2019, a subsidiary of X, an indirect subsidiary of the Company, issued $700 million aggregate principal\namount of 3.875% senior notes due 2027 (the “X 2027 Notes”) in a private placement. The X 2027 Notes mature on\nDecember 15, 2027. In 2022, a subsidiary of X issued $1,000 million aggregate principal amount of 5.000% senior\nnotes due 2030 (the “X 2030 Notes”) in a private placement. The X 2030 Notes mature on March 1, 2030. The X\n2027 and X 2030 Notes represent senior unsecured obligations of the Company.\nInterest Rates. For the X 2027 Notes, the interest rate is fixed at 3.875% per annum and interest is payable semi-\nannually in arrears on June 15 and December 15 of each year. For the X 2030 Notes, the interest rate is fixed at\n5.000% per annum and interest is payable semi-annually in arrears on March 1 and September 1 of each year.\nPrincipal Repayments. In November 2022, the Company purchased approximately $675 million aggregate principal\namount of X 2027 Notes and $998 million aggregate principal amount of the X 2030 Notes in settlement of the\nchange in control of Twitter. The X 2027 Notes and X 2030 Notes that remain outstanding may be redeemed at the\noption of the Company, in whole or in part, at any time prior to September 15, 2027 and December 1, 2029,\nrespectively, at a price equal to 100.0% of the principal amounts plus a “make-whole” premium and accrued and\nunpaid interest, if any, up to, but excluding, the redemption date.\nCovenants. The Company was in compliance with the covenants of the X 2027 Notes and X 2030 Notes as of\nDecember 31, 2025.\nX First Lien Senior Credit Facilities\nGeneral. In 2022, X Corp., an indirect subsidiary of the Company, entered into the First Lien Credit Agreement\nwhich provided for a new term loan commitment of $6,705 million (“X B-1 Term Loan”) and a $500 million\nSecured First Lien Revolving Credit Facility (including a letter of credit subfacility with an aggregate face value of\nup to $100 million) (together referred to as “X First Lien Senior Credit Facilities”). The Secured First Lien\nRevolving Credit Facility matures on October 27, 2027 and the X B-1 Term Loan matures on October 27, 2029.\nAmendments. In February 2025, X Corp., an indirect subsidiary of the Company, amended the X First Lien Senior\nCredit Facilities and entered into a new term loan commitment for $4,741 million with a maturity date of October\n27, 2029 (“X B-3 Term Loan”) and reduced the Secured First Lien Revolving Credit Facility commitment to $0.\nAs part of the issuance of the X B-3 Term Loan, the Company is required to pay an arrangement fee of $51 million,\nwhich is due and payable on February 19, 2027. In April 2025, the Company entered into an amendment to the X", - "path": "spacex-s1.pdf/p334", - "metadata": { - "length": 4494, - "summary": "F-30 Table of Contents subject to a customary financial covenant and other reporting requirements. The SpaceX Credit Facility terminates, and all outstanding loans become due and payable, on February 7, 2030, unless the parties agree to an extension. No amounts were borrowed u...", - "page_nums": [ - 334 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 334, "artifact_ref": "page_citation_assets/page-334.png", @@ -12094,24 +7976,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_155f8bd6-3943-57bb-87ee-7aeb4519851e", - "type": "page", - "content": "F-31\nTable of Contents\nB-3 Term Loan for an additional commitment of $1,225 million with the same terms and conditions, increasing the\ntotal X B-3 Term Loan borrowings to $5,966 million.\nProceeds. The proceeds from the X B-3 Term Loan were used to pay down and extinguish the First Lien Bridge\nCredit Facility and the Second Lien Bridge Credit Facility. The Company accounted for the pay down as a partial\nmodification and extinguishment of debt, expensing immaterial debt issuance costs.\nInterest Rates. The X B-1 Term Loan bears interest at a rate per annum of, initially, adjusted Term SOFR plus\n6.50%. The Secured First Lien Revolving Credit Facility bore interest at a rate per annum of, initially, an adjusted\nTerm SOFR plus 4.50%, with leverage-based step-downs. Undrawn commitments under the Secured First Lien\nRevolving Credit Facility were subject to an unused commitment fee of 0.50% per annum, subject to quarterly\nleverage based step-downs. The X B-3 Term Loan has a fixed interest rate of 9.50% per annum. Interest on the X\nB-1 Term Loan and X B-3 Term Loan is payable monthly, quarterly, or bi-annually at the option of the Company.\nThe effective interest rate on outstanding borrowings under the X B-1 Term Loan and X B-3 Term Loan was\n12.40% and 9.80%, respectively, as of December 31, 2025.\nPrincipal Repayments. The X B-1 Term Loan is repayable at any time, in whole or in part, without premium or\npenalty, subject to mandatory quarterly prepayments of principal beginning on the last day of the fiscal quarter\nended March 31, 2023, in amounts equal to 0.25% of the original principal amount of borrowings thereunder, with\nthe unpaid balance being payable on the final maturity date thereof. The X B-1 Term Loan is also subject to\nadditional customary mandatory prepayment provisions from the proceeds of certain debt issuances and asset sales,\nas well as sweeps of a portion of excess cash flow, subject to certain leverage-based step-downs and exceptions.\nNone of these additional customary mandatory prepayment provisions have been triggered as of December 31, 2025.\nThe X B-3 Term Loan has prepayment penalties of 107.13% of the outstanding principal before October 27, 2026,\n104.75% of the outstanding principal before October 27, 2027, and 102.38% of the outstanding principal before\nOctober 27, 2028.\nGuarantors and Collateral. Obligations under the First Lien Senior Credit Facilities were guaranteed by X, and were\ncollateralized by a first priority lien on substantially all of the assets of X and its subsidiaries (subject to customary\nexceptions) which had a carrying amount of $42,132 million as of December 31, 2025.\nCovenants. The Company was in compliance with the covenants of the First Lien Senior Credit Facilities as of\nDecember 31, 2025.\nX Bridge Credit Facilities\nGeneral. On October 27, 2022, X Corp., an indirect subsidiary of the Company, entered into the First Lien Bridge\nLoan Credit Agreement and the Second Lien Bridge Loan Credit Agreement as borrower, which provided for a\n$3,000 million First Lien Bridge Credit Facility and a $3,000 million Second Lien Bridge Credit Facility (together,\nthe “X Bridge Credit Facilities”), respectively. The initial term loans under each Bridge Credit Facility automatically\nconvert to permanent term loans (“Permanent Bridge Loans”) on July 31, 2025 (“Bridge Conversion Date”), as\namended. The Permanent Bridge Loans mature on October 27, 2029 and October 27, 2030 for the First Lien Bridge\nCredit Facility and the Second Lien Bridge Credit Facility, respectively. In February 2025, the Company repaid the\nfull outstanding amount of $2,966 million resulting in the full payoff of the First Lien Bridge Credit Facility prior to\nthe Bridge Conversation Date. In February and April 2025, the Company made principal payments of $1,775\nmillion and $1,225 million respectively, resulting in the full payoff of the Second Lien Bridge Credit Facility prior\nto the Bridge Conversation Date.\nInterest Rates. Borrowings under the First Lien Bridge Credit Facility bore interest at a rate per annum of, initially,\nan adjusted term SOFR plus 6.75%, with 0.50% step-ups occurring on each successive three-month period until the\nBridge Conversion Date, but subject to a maximum all-in rate of, prior to January 20, 2023, 9.25% and, on and after\nJanuary 20, 2023, 9.50% (“First Lien Bridge Total Cap”). After the Bridge Conversion Date, any outstanding\nborrowings under the First Lien Bridge Credit Facility bore interest at the First Lien Bridge Total Cap. Borrowings\nunder the Second Lien Bridge Credit Facility bore interest at a rate per annum of, initially, an adjusted term SOFR\nplus 10.00%, with 0.50% step-ups occurring on each successive three-month period thereafter until the Bridge\nConversion Date, but subject to a maximum all-in rate of, prior to January 20, 2023, 12.75% and, on and after", - "path": "spacex-s1.pdf/p335", - "metadata": { - "length": 4880, - "summary": "F-31 Table of Contents B-3 Term Loan for an additional commitment of $1,225 million with the same terms and conditions, increasing the total X B-3 Term Loan borrowings to $5,966 million. Proceeds. The proceeds from the X B-3 Term Loan were used to pay down and extinguish the F...", - "page_nums": [ - 335 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 335, "artifact_ref": "page_citation_assets/page-335.png", @@ -12119,24 +7984,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_933520e7-145d-5ac6-bddc-80587140b632", - "type": "page", - "content": "F-32\nTable of Contents\nJanuary 20, 2023, 13.00% (“Second Lien Bridge Total Cap”). After the Bridge Conversion Date, any outstanding\nborrowings under the Second Lien Bridge Credit Facility bore interest at the Second Lien Bridge Total Cap.\nxAI First Lien Credit Agreement\nGeneral. In June 2025, X.AI Corp. and X.AI LLC, indirect subsidiaries of the Company, entered into the First Lien\nCredit Agreement to provide borrowings up to $2,000 million. The Company executed a $1,000 million Fixed Rate\nTerm Loan maturing on June 30, 2030 (“xAI Fixed Rate Term Loan”); and a $1,000 million Floating Rate Term\nLoan maturing on June 30, 2030 (“xAI Floating Rate Term Loan”).\nInterest Rates. The xAI Fixed Rate Term Loan has a fixed interest rate of 12.50% per annum and the xAI Floating\nRate Term Loan has a floating interest rate per annum of Term SOFR plus 7.25% or ABR plus 6.25%. Interest on\nthe xAI Fixed Rate Term Loan is payable bi-annually on January 31 and July 31, commencing on January 31, 2026.\nInterest on the xAI Floating Rate Term loan is payable monthly, quarterly, or bi-annually at the option of the\nCompany. The effective interest rate on outstanding borrowings under the xAI Fixed Rate Term Loan and xAI\nFloating Rate Term Loan was 11.91% and 12.48%, respectively, as of December 31, 2025.\nPrincipal Repayments. The xAI Fixed Rate Term Loan and the xAI Floating Rate Term Loan have prepayment\npenalties of 103% on the principal outstanding balance prior to June 30, 2027 and 101% on the principal outstanding\nbalance prior to June 30, 2028.\nGuarantors. Obligations under the xAI Fixed Rate Term Loan and xAI Floating Rate Term Loan were guaranteed\neach jointly and severally by X.AI Corp. and the following subsidiaries of X.AI Corp.: AIQ Phase LLC, CTC\nHolding LLC, CTC, LLZ Build LLC, and MZX.\nCovenants. The Company was in compliance with the covenants of the xAI Fixed Rate Term Loan and xAI Floating\nRate Term Loan as of December 31, 2025.\nxAI 12.5% Secured Senior Notes\nGeneral. In June 2025, X.AI LLC and, X.AI Co Issuer Corp, indirect subsidiaries of the Company, issued $3,000\nmillion aggregate principal amount of 12.5% interest Senior Secured Notes due in 2030 (“xAI 12.5% Senior Secured\nNotes”). The Senior Secured Notes were issued at 100% of the principal amount and the entire principal amount\nwill be due on June 30, 2030.\nInterest Rates. The xAI 12.5% Senior Secured Notes have a fixed interest rate of 12.50% per annum. Interest is\npayable bi-annually on January 15 and July 15, commencing on January 15, 2026.\nPrincipal Repayments. The xAI 12.5% Senior Secured Notes have prepayment penalties of 106.25% on the principal\noutstanding balance prior to July 15, 2027 and 103.13% on the principal outstanding balance prior to July 15, 2028.\nGuarantors. Obligations under the xAI 12.5% Senior Secured Notes were guaranteed each jointly and severally by\nxAI and the following subsidiaries of xAI: AIQ Phase LLC, CTC Holding LLC, CTC, LLZ Build LLC, and MZX.\nCovenants. The Company was in compliance with the covenants of the 12.5% Senior Secured Notes as of\nDecember 31, 2025.\nxAI Revolving Line of Credit\nGeneral. In April 2024 and amended in May 2024, a subsidiary of xAI, an indirect subsidiary of the Company,\nentered into a revolving line of credit for an aggregate face amount up to $150 million. The Company had no", - "path": "spacex-s1.pdf/p336", - "metadata": { - "length": 3351, - "summary": "F-32 Table of Contents January 20, 2023, 13.00% (“Second Lien Bridge Total Cap”). After the Bridge Conversion Date, any outstanding borrowings under the Second Lien Bridge Credit Facility bore interest at the Second Lien Bridge Total Cap. xAI First Lien Credit Agreement Genera...", - "page_nums": [ - 336 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 336, "artifact_ref": "page_citation_assets/page-336.png", @@ -12144,24 +7992,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d3363ff8-355a-5d00-962b-02752e1567b4", - "type": "page", - "content": "F-33\nTable of Contents\nborrowings under the line of credit during 2025. Letters of credit issued under the revolving line of credit were $145\nmillion as of December 31, 2025.\nInterest Rates. Interest on any borrowings is calculated based on the 30-day average SOFR plus the International\nSwaps and Derivatives Association spread adjustment plus a spread of 40 basis points.\nGuarantors and Collateral. The agreement permits borrowings up to the value of the pledged collateral held in\ncustody, less any outstanding loan balances, accrued interest, and fees. The pledged collateral consisted of securities\nheld in xAI’s custodial account.\nOther Financings\nThe Company has entered into various other financing arrangements, generally collateralized by specific machinery\nand equipment. These arrangements have an average fixed interest rate of 5.5% and 5.3% per annum as of\nDecember 31, 2025 and 2024, respectively, with principal and interest payments due monthly, and in certain\ninstances, a lump sum payment at the end of term.\nIn addition, in November 2025, CTC completed a sale-leaseback transaction for its AI infrastructure assets which\nwould have been deemed finance leases resulting in failed sale-leaseback transactions. X.AI Corp. guarantees certain\nof CTC’s obligations under the lease agreement. As a result, the Company recorded the related debt of $455 million\nand $4,052 million within Debt and finance leases, current and Debt and finance leases, net of current, respectively,\nin the Company’s consolidated balance sheets. Refer to Note 18, Related Party Transactions for additional details.\nThe future scheduled principal maturities of debt as of December 31, 2025 are as follows:\n2026\n\n...................................................................................................................................................... $ 560\n2027\n\n...................................................................................................................................................... 858\n2028\n\n...................................................................................................................................................... 1,063\n2029\n\n...................................................................................................................................................... 13,539\n2030\n\n...................................................................................................................................................... 6,029\nThereafter\n\n.............................................................................................................................................. —\n$ 22,049\nThe Company recognized interest expense for debt prior to capitalization of interest of $1,797 million, $1,580\nmillion and $1,693 million, in the years ended December 31, 2025, 2024, and 2023, respectively.\nThe Company measures the fair value of its long-term fixed-rate debt for disclosure purposes. The fair value\nestimates for these debts were determined based on a discounted cash flow approach using yields calibrated from\nrecent issuances of the securities, resulting in Level II measurement.\nThe carrying amounts and fair values of the long-term fixed-rate debt included in the consolidated balance sheets are\nas follows:\nAs of December 31, 2025\nCarrying Amount Fair Value\nX B-3 Term Loan\n\n...................................................................................................... $ 5,912 $ 6,190\nxAI Fixed Rate Term Loan\n........................................................................................ $ 991 $ 1,057\nxAI 12.5% Secured Senior Notes .............................................................................. $ 2,988 $ 3,173", - "path": "spacex-s1.pdf/p337", - "metadata": { - "length": 3746, - "summary": "F-33 Table of Contents borrowings under the line of credit during 2025. Letters of credit issued under the revolving line of credit were $145 million as of December 31, 2025. Interest Rates. Interest on any borrowings is calculated based on the 30-day average SOFR plus the Int...", - "page_nums": [ - 337 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 337, "artifact_ref": "page_citation_assets/page-337.png", @@ -12169,24 +8000,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_75734aa8-83c9-5d28-bfc8-5b70d1a6c369", - "type": "page", - "content": "F-34\nTable of Contents\nNote 11 - Leases\nThe balances of the Company’s operating and finance leases, included in Other assets, Accrued expenses and other\ncurrent liabilities, and Other liabilities for operating leases, and Finance lease right-of-use assets, Debt and finance\nleases, current, and Debt and finance leases, net of current for finance leases, in the consolidated balance sheets, are\nas follows:\nDecember 31,\n2025 2024\nOperating leases:\nOperating lease right-of-use assets\n\n....................................................................... $ 1,338 $ 1,367\nOperating lease liabilities, current\n\n........................................................................ 422 382\nOperating lease liabilities, net of current\n\n.............................................................. 1,136 1,259\nTotal operating lease liabilities\n\n\n................................................................... $ 1,558 $ 1,641\nFinance leases:\nFinance lease right-of-use assets\n\n\n........................................................................... $ 1,260 $ 1,686\nFinance lease liabilities, current\n\n\n............................................................................ 369 295\nFinance lease liabilities, net of current\n\n................................................................. 868 1,236\nTotal finance lease liabilities\n\n\n........................................................................ $ 1,237 $ 1,531\nThe components of lease expense are as follows within the consolidated statements of operations:\nYear Ended December 31,\n2025 2024 2023\nOperating lease expense:\nOperating lease expense\n\n............................................................ $ 475 $ 311 $ 295\nShort-term lease cost\n\n\n................................................................. 267 101 25\nVariable lease cost\n\n..................................................................... 106 83 75\nTotal operating lease expense\n\n............................................... 848 495 395\nFinance lease expense:\nAmortization of leased assets\n\n.................................................... 330 — —\nInterest on lease liabilities\n......................................................... 317 — —\nTotal finance lease expense\n\n.................................................. 647 — —\nTotal lease expense\n\n...................................................................... $ 1,495 $ 495 $ 395", - "path": "spacex-s1.pdf/p338", - "metadata": { - "length": 2408, - "summary": "F-34 Table of Contents Note 11 - Leases The balances of the Company’s operating and finance leases, included in Other assets, Accrued expenses and other current liabilities, and Other liabilities for operating leases, and Finance lease right-of-use assets, Debt and finance lea...", - "page_nums": [ - 338 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 338, "artifact_ref": "page_citation_assets/page-338.png", @@ -12194,24 +8008,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ed24b25f-eb94-551d-89bf-fd273803a3f0", - "type": "page", - "content": "F-35\nTable of Contents\nOther information related to leases is as follows:\nDecember 31,\n2025 2024\nWeighted-average remaining lease term (in years):\nOperating leases\n\n......................................................................................................... 5.9 5.2\nFinance leases ............................................................................................................ 3.0 4.0\nWeighted-average discount rate:\nOperating leases\n\n......................................................................................................... 10.3% 10.9%\nFinance leases ............................................................................................................ 22.6% 22.6%\nDuring the years ended December 31, 2024 and 2023, the Company recorded restructuring charges of $30 million\nand $106 million, respectively, for operating lease right-of-use assets as part of its facilities consolidation\nrestructuring efforts in Restructuring charges in the consolidated statements of operations. There was no impairment\nrelated to leases during the year ended December 31, 2025.\nSupplemental cash flow and other information related to the Company’s leases are as follows:\nYear Ended December 31,\n2025 2024 2023\nCash paid for amounts included in the measurement of lease liabilities:\nOperating cash outflows from operating leases\n\n\n......................... $ 533 $ 372 $ 303\nOperating cash outflows from finance leases\n\n............................ $ 317 $ — $ —\nFinancing cash outflows from finance leases\n\n............................ $ 295 $ 154 $ —\nLeased assets obtained in exchange for operating lease liabilities\n\n. $ 288 $ 564 $ 168\nLeased assets obtained in exchange for finance lease liabilities\n\n.... $ — $ 1,686 $ —\nThe above tables exclude operating lease agreements that have been signed as of December 31, 2025, but not yet\ncommenced for the aggregate lease payments of $1,627 million and an average lease term of 7.2 years, including the\noperating lease arrangement with Stateline. Refer to Note 9, Investments in unconsolidated affiliates for additional\ndetails.\nThe maturities of the Company’s lease liabilities as of December 31, 2025 are as follows:\nOperating Leases Finance Leases\n2026\n........................................................................................................................... $ 682 $ 611\n2027\n........................................................................................................................... 593 611\n2028\n........................................................................................................................... 531 459\n2029\n........................................................................................................................... 492 —\n2030\n........................................................................................................................... 446 —\nThereafter ................................................................................................................... 995 —\nTotal undiscounted liabilities\n\n..................................................................................... 3,739 1,681\nLess: Leases not yet commenced\n\n............................................................................... (1,627) —\nLess: Imputed interest\n................................................................................................ (554) (444)\nTotal lease liabilities\n\n\n............................................................................................... $ 1,558 $ 1,237", - "path": "spacex-s1.pdf/p339", - "metadata": { - "length": 3575, - "summary": "F-35 Table of Contents Other information related to leases is as follows: December 31, 2025 2024 Weighted-average remaining lease term (in years): Operating leases ......................................................................................................... 5.9 5.2...", - "page_nums": [ - 339 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 339, "artifact_ref": "page_citation_assets/page-339.png", @@ -12219,24 +8016,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_43c0af9c-5654-5876-b04f-508ab3ee868d", - "type": "page", - "content": "F-36\nTable of Contents\nNote 12 - Balance Sheet Components\nCertain financial statement details are as follows:\nDecember 31,\n2025 2024\nPrepaid expenses and other current assets\nTax related assets\n\n....................................................................................................... $ 618 $ 160\nRebates and credits\n\n\n.................................................................................................... 597 —\nUnbilled receivables\n\n.................................................................................................. 223 314\nRestricted cash and deposits\n\n...................................................................................... 182 23\nOther\n\n\n.......................................................................................................................... 590 371\nPrepaid expenses and other current assets\n\n...................................................... $ 2,210 $ 868\nAccrued expenses and other current liabilities\nTax related liabilities\n\n................................................................................................. $ 563 $ 112\nOperating lease liabilities, current\n\n............................................................................. 422 382\nAccrued interest\n\n......................................................................................................... 416 118\nRestructuring liabilities\n\n\n.............................................................................................. 339 149\nPayroll & employee benefit accruals\n\n......................................................................... 322 366\nOther current liabilities\n\n.............................................................................................. 507 381\nAccrued expenses and other current liabilities\n\n............................................... $ 2,569 $ 1,508\nNote 13 - Redeemable Convertible Preferred Stock and Shareholders’ Equity\nSpaceX Preferred and Common Stock\nOn February 14, 2024, the holders of outstanding stock of the Company approved and adopted a Plan of Conversion,\npursuant to which the Company converted from a Delaware corporation into a corporation organized under the laws\nof the State of Texas.\nIn connection with the Plan of Conversion, the Company updated its authorized capitalization to issue five classes of\nstock - four classes to be designated Class A common stock (“Class A”), Class B common stock (“Class B”),\nClass C common stock (“Class C”), Class D common stock (“Class D”) (collectively the “SpaceX Common Stock”),\nand one class of stock to be designated preferred stock and subdivided into several series of redeemable convertible\npreferred stock (collectively the “SpaceX Redeemable Convertible Preferred Stock”). All references to “Class” refer\nto that particular class of SpaceX Common Stock and all references to “Series” refer to that particular series of\nSpaceX Redeemable Convertible Preferred Stock.\nAs of December 31, 2025, the total number of shares of SpaceX Common Stock the Company is authorized to issue\nis 53,855 million shares, each with a par value of $0.001 per share, except for Class D, which has a par value of\n$0.0001 per share. 36,130 million shares are Class A, 5,325 million shares are Class B, 10,000 million shares are\nClass C, and 2,400 million shares are Class D. The total number of SpaceX Redeemable Convertible Preferred Stock\nthat the Company is authorized to issue is 2,607 million shares, of which 2,400 million shares are undesignated.\nWith the exception of the expanded conversion rights described below, there were no changes to the dividend\nprovisions, liquidation preferences, conversion rights, redemption rights or the voting rights of the SpaceX\nConvertible Redeemable Preferred Stock and SpaceX Common Stock during the years ended December 31, 2025,\n2024, and 2023.\nIn 2022, the Board approved a stock split (the “2022 Stock Split”), pursuant to which each share of the SpaceX\nCommon Stock issued and outstanding was split into ten shares of SpaceX Common Stock. In May 2026, the Board", - "path": "spacex-s1.pdf/p340", - "metadata": { - "length": 4078, - "summary": "F-36 Table of Contents Note 12 - Balance Sheet Components Certain financial statement details are as follows: December 31, 2025 2024 Prepaid expenses and other current assets Tax related assets ......................................................................................", - "page_nums": [ - 340 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 340, "artifact_ref": "page_citation_assets/page-340.png", @@ -12244,24 +8024,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f0af840a-9c7c-5a1c-9039-6930bc5176ff", - "type": "page", - "content": "F-37\nTable of Contents\napproved the 2026 Stock Split, pursuant to which each share of the Class A, Class B, and Class C SpaceX Common\nStock issued and outstanding was split into five shares of SpaceX Common Stock.\nxAI Redeemable Convertible Preferred Stock and Common Stock\nOn March 28, 2025, xAI adopted an Amended and Restated Articles of Incorporation, which established its capital\nstructure and designated multiple classes of common stock and several series of redeemable convertible preferred\nstock. The Articles were subsequently amended and restated through January 30, 2026 (collectively, the “xAI\nArticles of Incorporation”) to add and authorize additional series of redeemable convertible preferred stock with no\neconomic changes to any previously existing series.\nPursuant to the xAI Articles of Incorporation, xAI’s authorized capitalization prior to the xAI Merger consisted of\nthree classes of common, stock, which are designated Class A common stock (“xAI Class A”), Class B common\nstock (“xAI Class B”), Limited Voting common stock (“xAI Limited Voting”), (collectively the “xAI Common\nStock”) and several series of redeemable convertible preferred stock (collectively the “xAI Redeemable Convertible\nPreferred Stock”). All references to “xAI Class” refer to that particular class of xAI Common Stock and all\nreferences to “xAI Series” refer to that particular series of xAI Redeemable Convertible Preferred Stock.\nAs of December 31, 2025, the total number of xAI Common Stock that xAI authorized to issue is 7,884 million\nshares, each with a par value of $0.001 per share, 5,874 million shares are xAI Class A, 2,000 million shares are xAI\nClass B, and 10 million shares are xAI Limited Voting. The total number of xAI Redeemable Convertible Preferred\nStock that the Company is authorized to issue is 3,302 million shares.\nEffect of the xAI Merger\nxAI Redeemable Convertible Preferred Stock\nUpon the effective date of the xAI Merger, all outstanding shares of xAI Redeemable Convertible Preferred Stock\nconverted into shares of SpaceX Common Stock, based on the share-for-share exchange mechanics specified in the\nMerger Agreement. Each share of xAI Series A‐1, B, C, D, and E redeemable convertible preferred stock (classified\nas “xAI Low Vote Stock”) was converted into 0.1433 shares of SpaceX Class A Common Stock per preferred share\n(on a pre-2026 Stock Split basis), rounded up to the nearest whole number for fractional shares. Each share of xAI\nSeries A redeemable convertible preferred stock (classified as “xAI High Vote Stock”) was converted into 0.1433\nshares of SpaceX Class B Common Stock per preferred share (on a pre-2026 Stock Split basis), rounded up to the\nnearest whole number for fractional shares. For xAI Series A Redeemable Convertible Preferred Stock, all holders\nthat are an eligible service provider may instead elect to receive cash of $75.46 per share (on a pre-2026 Stock Split\nbasis) of xAI Series A Redeemable Convertible Preferred Stock. Upon conversion, all shares of xAI Redeemable\nConvertible Preferred Stock were canceled and retired, and former xAI Redeemable Convertible Preferred Stock\nshareholders received the applicable shares of SpaceX Common Stock. Any shares of xAI Redeemable Convertible\nPreferred Stock previously held by the Company were canceled and retired and did not receive any consideration.\nAlthough xAI Redeemable Convertible Preferred Stock converted into SpaceX Common Stock upon the xAI Merger\nclosing, the xAI Redeemable Convertible Preferred Stock balances are presented as Redeemable Convertible\nPreferred Stock in the consolidated financial statements for all periods presented. Because the xAI Redeemable\nConvertible Preferred Stock was legally outstanding during all historical periods prior to the xAI Merger and\nrepresented a separate equity class of a legally distinct predecessor entity, the conversion of xAI Redeemable\nConvertible Preferred Stock into SpaceX Common Stock is recognized only in the period in which the exchange\nactually occurs, and not retrospectively. Accordingly, the historical consolidated balance sheets and consolidated\nstatements of redeemable convertible preferred stock and shareholders’ equity reflect the xAI Redeemable\nConvertible Preferred Stock as outstanding xAI Redeemable Convertible Preferred Stock consistent with its legal\nform and rights during those periods and are not recast on an as-converted basis. The impact of the conversion will\nbe presented prospectively in the period of the merger (Q1 2026).", - "path": "spacex-s1.pdf/p341", - "metadata": { - "length": 4529, - "summary": "F-37 Table of Contents approved the 2026 Stock Split, pursuant to which each share of the Class A, Class B, and Class C SpaceX Common Stock issued and outstanding was split into five shares of SpaceX Common Stock. xAI Redeemable Convertible Preferred Stock and Common Stock On...", - "page_nums": [ - 341 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 341, "artifact_ref": "page_citation_assets/page-341.png", @@ -12269,24 +8032,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_fea90b8c-1e7a-5d8e-a3aa-4aad5d913e3c", - "type": "page", - "content": "F-38\nTable of Contents\nxAI Warrants\nxAI also issued warrants to customer that were outstanding as of the effective date of the xAI Merger, which had a\nten-year term originally set to expire in 2035, with an exercise price equal to the par value of the stock, and vesting\nterms that resulted in the warrants vesting proportionally to the payments received under the related agreement. The\nclosing of the xAI Merger triggered an acceleration clause in which all outstanding xAI warrants, both vested and\nunvested components, were automatically exercised on a cashless basis exercised and converted into fully vested\nSpaceX Class A Common Stock at the exchange ratio of 0.1433 (on a pre-2026 Stock Split basis).\nxAI and X Common Stock\nUpon the effective date of the xAI Merger, every outstanding share of xAI Common Stock, whether Class A, Class\nB, or Limited Voting, converted into the right to receive SpaceX Common Stock at a fixed exchange ratio of 0.1433\nSpaceX shares per share of xAI Common Stock (on a pre-2026 Stock Split basis), unless the holder was an eligible\nservice provider and elected to receive cash of $75.46 per share of xAI Class A or Class B. No fractional SpaceX\nshares were issued and all share amounts were rounded up to the nearest whole number. Any shares of xAI Common\nStock previously held by the Company were canceled and retired and did not receive any consideration.\nEffect of the X Merger\nUpon the effective date of the X Merger, each class of common stock of X Holdings Corp. (“X Common Stock”)\nwas converted to 2.776 shares of xAI Common Stock of the same class (rounded down to the nearest whole share),\neach class of common stock of X.AI Corp. (“xAI Corp. Common Stock”) was converted to 1.000 share of xAI\nCommon Stock of the same class, and each series of X.AI Corp. preferred stock (“xAI Corp. Preferred Stock”)\n(other than shares held by X or any of its subsidiaries) was converted to 1.000 share of xAI Redeemable Convertible\nPreferred Stock of the same series.\nAs a result of the Mergers, all of X, X.AI Corp. and xAI Common Stock are being presented in the historical\nfinancial statements as if they had been converted into SpaceX Common Stock at the applicable exchange rate for all\nperiods presented. As such, all shares of historical X, X.AI Corp. and xAI Common Stock are included in the share\ncounts for SpaceX Common Stock below. X.AI Corp. and xAI Redeemable Convertible Preferred Stock are being\npresented in the consolidated financial statements at historical values with an adjustment to the conversion rate at the\napplicable exchange ratio per the xAI Merger.\nRedeemable Convertible Preferred Stock\nInformation for each series of SpaceX and xAI Redeemable Convertible Preferred Stock (collectively, the\n“Combined Redeemable Convertible Preferred Stock”) at December 31 is as follows:\nDividend Per Share Initial Price Per Share Authorized Shares Outstanding (1) Liquidation Preference Net Carrying Value\n2025 2025 2025 2025 2024 2025 2025\nSpaceX Redeemable Convertible Preferred Stock\nSeries A\n\n................................ $ 0.05 $ 1.00 61.0 60.4 60.5 $ 60 $ 59\nSeries A-1\n\n............................. $ 0.05 $ 1.00 61.0 0.2 0.2 — —\nSeries B\n\n................................. $ 0.10 $ 2.00 5.5 5.1 5.1 10 10\nSeries B-1\n\n............................. $ 0.10 $ 2.00 5.5 0.1 0.1 — —\nSeries C\n\n................................. $ 0.15 $ 3.00 10.5 9.7 9.7 29 23\nSeries D\n\n................................ $ 0.19 $ 3.88 7.5 5.2 5.2 40 20\nSeries E\n\n................................. $ 0.23 $ 4.50 10.5 10.2 10.2 46 647\nSeries F\n\n................................. $ 0.38 $ 7.50 6.8 6.7 6.7 50 48\nSeries G\n\n................................ $ 3.87 $ 77.46 13.0 12.6 12.8 978 978\nSeries H\n\n................................ $ 6.75 $ 135.00 3.4 3.2 3.3 429 429\nSeries I\n .................................. $ 8.45 $ 169.00 3.0 3.0 3.0 499 499\nSeries J\n\n.................................. $ 9.30 $ 186.00 2.7 2.5 2.6 457 457", - "path": "spacex-s1.pdf/p342", - "metadata": { - "length": 3968, - "summary": "F-38 Table of Contents xAI Warrants xAI also issued warrants to customer that were outstanding as of the effective date of the xAI Merger, which had a ten-year term originally set to expire in 2035, with an exercise price equal to the par value of the stock, and vesting terms...", - "page_nums": [ - 342 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 342, "artifact_ref": "page_citation_assets/page-342.png", @@ -12294,24 +8040,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8ed9fed2-1aae-50de-9f89-812f91568899", - "type": "page", - "content": "F-39\nTable of Contents\nDividend Per Share Initial Price Per Share Authorized Shares Outstanding (1) Liquidation Preference Net Carrying Value\n2025 2025 2025 2025 2024 2025 2025\nSeries K\n\n................................ $ 10.20 $ 204.00 2.7 2.5 2.5 518 518\nSeries L\n\n................................. $ 10.70 $ 214.00 1.5 1.4 1.4 295 295\nSeries M\n\n................................ $ 11.00 $ 220.00 2.7 2.7 2.7 596 596\nSeries N\n\n................................ $ 13.50 $ 270.00 9.5 9.3 9.4 2,520 2,520\nTotal SpaceX Redeemable Convertible Preferred Stock\n\n\n............................... 206.8 134.8 135.4 $ 6,527 $ 7,099\nxAI Redeemable Convertible Preferred Stock\nSeries A\n\n................................ $ 0.05 $ 1.00 1,000.0 750.0 750.0 $ 750 $ 753\nSeries A-1\n\n............................. $ 0.05 $ 1.00 1,000.0 — — — —\nSeries B\n\n................................. $ 0.60 $ 11.97 584.9 584.9 584.9 7,001 7,001\nSeries C\n\n................................. $ 1.08 $ 21.65 277.1 277.1 277.1 6,000 6,000\nSeries D\n\n................................ $ 1.83 $ 36.56 174.8 120.1 — 4,390 4,388\nSeries E\n\n................................. $ 3.77 $ 75.46 265.0 179.2 — 13,523 13,510\nTotal xAI Redeemable Convertible Preferred Stock\n\n\n............................... 3,301.8 1,911.3 1,612.0 $ 31,664 $ 31,652\nTotal Combined Redeemable Convertible Preferred Stock\n\n\n............................... 3,508.6 2,046.1 1,747.4 $ 38,191 $ 38,751\n______________\n(1) The number of issued redeemable convertible preferred stock is equal to the number of outstanding redeemable convertible preferred stock,\nwith the exception of xAI Series A and xAI Series D, of which the number of issued shares is 1,000.0 million and 175.0 million,\nrespectively, due to redeemable convertible preferred stock held by X and SpaceX, respectively.\nThe following describes the various rights and preferences of the SpaceX Redeemable Convertible Preferred Stock:\nDividend Provisions\nOn a per annum basis, holders of shares of SpaceX Redeemable Convertible Preferred Stock are entitled to receive\ndividends prior and in preference to any declaration or payment of any dividend to common shareholders at a rate\ndescribed in the table above for each outstanding share of SpaceX Redeemable Convertible Preferred Stock. Any\nsuch dividends are declared at the discretion of the Board of Directors and are not cumulative. For the period from\ninception through December 31, 2025, no dividends on SpaceX Redeemable Convertible Preferred Stock have been\ndeclared. The SpaceX Redeemable Convertible Preferred Stock do not participate in distributions beyond their\npreferred dividend as described above.\nLiquidation Preference\nThe series of SpaceX Redeemable Convertible Preferred Stock listed in the table above were issued by the Company\nchronologically and in alphabetical order, with Series A issued first and Series N issued most recently. Each series\nof SpaceX Redeemable Convertible Preferred Stock is senior in rank to all earlier issued series and junior in rank to\nall later issued series, except that: (i) Series A, A-1, B, B-1, and C SpaceX Redeemable Convertible Preferred Stock\nare all on parity with each other and junior in rank to all subsequently issued series of SpaceX Redeemable\nConvertible Preferred Stock; and (ii) series E, F, and G SpaceX redeemable convertible preferred stock are all on\nparity with each other, are senior in rank to all earlier issued series of SpaceX Redeemable Convertible Preferred\nStock, and junior in rank to all subsequently issued series of SpaceX Redeemable Convertible Preferred Stock.\nIn the event of a liquidation, dissolution, or winding up of the Company, holders of a given series of SpaceX\nRedeemable Convertible Preferred Stock are entitled to receive, in preference to the holders of SpaceX Common\nStock and any junior-ranking SpaceX Redeemable Convertible Preferred Stock, the liquidation preference indicated\nin the table above for such series of SpaceX Redeemable Convertible Preferred Stock, plus any declared but unpaid\ndividends. Holders of all series of SpaceX Redeemable Convertible Preferred Stock are entitled to receive the", - "path": "spacex-s1.pdf/p343", - "metadata": { - "length": 4144, - "summary": "F-39 Table of Contents Dividend Per Share Initial Price Per Share Authorized Shares Outstanding (1) Liquidation Preference Net Carrying Value 2025 2025 2025 2025 2024 2025 2025 Series K ................................ $ 10.20 $ 204.00 2.7 2.5 2.5 518 518 Series L ...............", - "page_nums": [ - 343 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 343, "artifact_ref": "page_citation_assets/page-343.png", @@ -12319,24 +8048,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2dc66f00-3b23-5ff1-8ae3-f51d3e9fe01f", - "type": "page", - "content": "F-40\nTable of Contents\ngreater of the liquidation preference per share indicated above, or the amount each series would be entitled to receive\nif all such outstanding SpaceX Redeemable Convertible Preferred Stock were converted to Class A or Class B\nSpaceX Common Stock, as applicable, immediately prior to such liquidation, dissolution, or winding up of the\nCompany. Upon completion of the distributions described above, if any assets remain in the Company, the then\nremaining assets will be distributed on an equal priority, pro rata basis to the holders of SpaceX Common Stock.\nConversion Rights\nEach share of Series A and Series B SpaceX Redeemable Convertible Preferred Stock is convertible at the option of\nthe holder at any time after the date of issuance of such share into shares of Class A, Class B, or Class C SpaceX\nCommon Stock and each share of all other series of preferred stock are convertible at the option of the holder at any\ntime after the date of issuance of such share into shares of Class A or Class C SpaceX Common Stock. The number\nof shares of SpaceX Common Stock to which a holder of SpaceX Redeemable Convertible Preferred Stock is\nentitled shall be at a conversion rate determined by dividing the initial price by the conversion price. Each share of\nSpaceX Redeemable Convertible Preferred Stock is convertible into fifty shares of SpaceX Common Stock\nfollowing the 2026 Stock Split. The conversion price is subject to adjustment set forth in the charter for certain\ndilutive issuances, splits and combinations. Prior to Company’s conversion to a Texas entity, holders of Series A and\nSeries B SpaceX Redeemable Convertible Preferred Stock were only permitted to convert to Class B SpaceX\nCommon Stock, and holders of other series of SpaceX Redeemable Convertible Preferred Stock were only permitted\nto convert to Class A SpaceX Common Stock.\nThe SpaceX Redeemable Convertible Preferred Stock automatically converts upon the earlier of (i) the Company’s\nsale of its common stock in a public offering pursuant to a registration statement under the Securities Act of 1933, in\nwhich the pre-public offering market capitalization of the Company is at least $6.0 billion and which results in\naggregate cash proceeds to the Company of not less than $250 million (“Qualified IPO”) or (ii) the date specified by\nwritten consent or agreement of the applicable holders of shares of SpaceX Redeemable Convertible Preferred Stock\n(with respect to each applicable series of SpaceX Redeemable Convertible Preferred Stock), voting in accordance\nwith the charter.\nIn the event of a transfer of a share of Series A or Series B (other than a Permitted Transfer as defined in the\ncharter), such share shall automatically be cancelled and converted into a corresponding share of Series A-1 or\nSeries B-1.\nVoting Rights\nHolders of each share of Series A and Series B have the right to ten votes for each share of Class B into which such\nshare is convertible. Holders of each share of all other series of SpaceX Redeemable Convertible Preferred Stock\nhave the right to one vote for each share of Class A into which such share is convertible. Such holders will have full\nvoting rights and powers equal to the voting rights and powers of the holders of SpaceX Common Stock, except as\nrequired by law.\nClassification\nThe liquidation preference provisions of the SpaceX Redeemable Convertible Preferred Stock are considered\ncontingent redemption provisions as deemed liquidation events such as a change of control are not solely within the\ncontrol of the Company. Accordingly, SpaceX Redeemable Convertible Preferred Stock are presented outside of\npermanent equity on the Company’s consolidated balance sheets as Redeemable convertible preferred stock. SpaceX\nRedeemable Convertible Preferred Stock has not been remeasured to their redemption amount as they are not\ncurrently redeemable or probable of becoming redeemable.\nThe following describes the various rights and preferences of the xAI Redeemable Convertible Preferred Stock:\nDividend Provisions\nOn a per annum basis, holders of shares of xAI Redeemable Convertible Preferred Stock are entitled to receive\ndividends prior and in preference to any declaration or payment of any dividend to common shareholders at a rate", - "path": "spacex-s1.pdf/p344", - "metadata": { - "length": 4279, - "summary": "F-40 Table of Contents greater of the liquidation preference per share indicated above, or the amount each series would be entitled to receive if all such outstanding SpaceX Redeemable Convertible Preferred Stock were converted to Class A or Class B SpaceX Common Stock, as app...", - "page_nums": [ - 344 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 344, "artifact_ref": "page_citation_assets/page-344.png", @@ -12344,24 +8056,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_cc12ad49-23e0-52dd-9b90-06c93f6825c4", - "type": "page", - "content": "F-41\nTable of Contents\ndescribed in the table above for each outstanding share of xAI Redeemable Convertible Preferred Stock. Any such\ndividends declared at the discretion of the Board of Directors and are not cumulative. After payment of any such\npreferred dividends, holders of xAI Redeemable Convertible Preferred Stock are entitled to participate in any\nadditional dividends or distributions on an as‐converted basis with holders of xAI Common Stock. For the period\nfrom inception through December 31, 2025, no dividends were declared on xAI Redeemable Convertible Preferred\nStock.\nLiquidation Preference\nThe series of xAI Redeemable Convertible Preferred Stock listed in the table above were issued by xAI\nchronologically and in alphabetical order, with Series A issued first and Series E issued most recently. Each of\nSeries A, Series A‐1, Series B, Series C, Series D, and Series E xAI Redeemable Convertible Preferred Stock has a\nliquidation preference equal to the greater of (i) the applicable original issue price plus any declared but unpaid\ndividends or (ii) the amount the holder would receive if the xAI Redeemable Convertible Preferred Stock were\nconverted to xAI Common Stock immediately prior to such event. In the event of a liquidation, dissolution, winding\nup, or deemed liquidation event, holders of xAI Redeemable Convertible Preferred Stock would receive their\nliquidation preference prior to holders of xAI Common Stock. After payment of all liquidation amounts owed to xAI\nRedeemable Convertible Preferred Stock, remaining assets or consideration not payable to holders of xAI\nRedeemable Convertible Preferred Stock (as applicable), if any, would be distributed to holders of xAI Common\nStock on a pro rata basis.\nConversion Rights\nEach share of xAI Redeemable Convertible Preferred Stock is convertible at the option of the holder into xAI\nCommon Stock at any time after the date of issuance. The number of shares of xAI Common Stock issuable upon\nconversion is determined by dividing the initial price of the applicable series by its conversion price, with the\nconversion price subject to adjustment for customary anti‐dilution events, including stock splits, combinations, and\ncertain dilutive issuances as presented in the table above. Each share of xAI Series A Redeemable Convertible\nPreferred Stock is convertible into xAI Class B Common Stock or Series A-1 Redeemable Convertible Preferred\nStock, while each remaining series of xAI Redeemable Convertible Preferred Stock is convertible into xAI Class A\nCommon Stock.\nThe xAI Redeemable Convertible Preferred Stock would automatically convert into xAI Common Stock upon the\nearlier of (i) the consummation of a qualified public offering that meets the criteria set forth in the Articles, or (ii)\nthe written consent of the requisite percentage of voting power of the outstanding shares of xAI Redeemable\nConvertible Preferred Stock.\nVoting Rights\nHolders of each share of xAI Series A have the right to ten votes for each share of Series A held by such holder.\nHolders of each share of all other series of xAI Redeemable Convertible Preferred Stock have the right to one vote\nfor each share of xAI Class A into which such share is convertible. Such holders have full voting rights and powers\nequal to the voting rights and powers of the holders of xAI Common Stock (other than xAI Limited Voting).\nClassification\nThe liquidation preference provisions of the xAI Redeemable Convertible Preferred Stock are considered contingent\nredemption provisions as deemed liquidation events such as a change of control are not solely within the control of\nxAI. Accordingly, xAI Redeemable Convertible Preferred Stock are presented outside of permanent equity on the\nCompany’s consolidated balance sheets as Redeemable convertible preferred stock. xAI Redeemable Convertible\nPreferred Stock has not been remeasured to their redemption amount as they are not currently redeemable or\nprobable of becoming redeemable.", - "path": "spacex-s1.pdf/p345", - "metadata": { - "length": 3983, - "summary": "F-41 Table of Contents described in the table above for each outstanding share of xAI Redeemable Convertible Preferred Stock. Any such dividends declared at the discretion of the Board of Directors and are not cumulative. After payment of any such preferred dividends, holders...", - "page_nums": [ - 345 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 345, "artifact_ref": "page_citation_assets/page-345.png", @@ -12369,24 +8064,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d006d6ea-b7d9-5a7a-8d3f-3ebe6fc965c0", - "type": "page", - "content": "F-42\nTable of Contents\nCommon Stock\nThe following describes all of the activity that occurred within each class of SpaceX Common Stock during the\nyears ended December 31, 2025 and 2024, incorporating all activity that occurred within the class of xAI Common\nStock on an as-converted basis to the class of SpaceX Common Stock it was converted into per the xAI Merger and\nX Merger.\nClass A Class B Class C Class D\nCommon Stock Common Stock Common Stock Common Stock\nShares Amount Shares Amount Shares Amount Shares Amount\nBalance at December 31, 2022\n\n......... 1,778 $ 2 647 $ 1 317 $ 0 — $ —\nCommon stock issued, net of tax withholding\n\n............................... 6 0 188 0 55 0 — —\nConversion between classes of common stock\n........................... 32 0 (32) 0 — — — —\nRepurchase of common stock\n\n..... (6) 0 0 0 (5) 0 — —\nBalance at December 31, 2023\n\n......... 1,810 2 803 1 367 0 — —\nCommon stock issued, net of tax withholding\n\n............................... 8 0 9 0 58 0 — —\nRepurchase of common stock\n\n..... (35) 0 (8) 0 (3) 0 — —\nConversion of redeemable convertible preferred stock to common stock\n........................... 13 0 — — 1 — — —\nConversion between classes of common stock\n........................... 36 0 (36) 0 — — — —\nBalance at December 31, 2024\n\n......... 1,832 2 768 1 423 0 — —\nCommon stock issued, net of tax withholding\n\n............................... 33 1 4 0 60 0 — —\nRepurchase of common stock\n\n..... (31) 0 (38) 0 — — — —\nConversion of redeemable convertible preferred stock to common stock\n........................... 27 0 — — 1 0 — —\nConversion between classes of common stock\n........................... 91 0 (91) 0 — — — —\nBalance at December 31, 2025\n\n......... 1,952 $ 3 643 $ 1 484 $ 0 — $ —\nThe following describes the various rights and preferences of the SpaceX Common Stock:\nDividend Provisions\nSubject to the prior rights of holders of all classes and series of stock at the time outstanding having prior rights as to\ndividends, holders of SpaceX Common Stock shall be entitled to receive, when, as and if declared by the Board of\nDirectors, out of any funds legally available, such dividends as may be declared from time to time by the Board of\nDirectors. For the period from inception through December 31, 2025, no dividends were declared on SpaceX\nCommon Stock.\nLiquidation Rights\nIn the event of a liquidation, dissolution, or winding up of the Company, upon the completion of the distributions\nrequired with respect to the SpaceX Redeemable Convertible Preferred Stock, if assets remain in the Company, the\nthen remaining assets will be distributed on an equal priority, pro rata basis to the holders of SpaceX Common\nStock.", - "path": "spacex-s1.pdf/p346", - "metadata": { - "length": 2687, - "summary": "F-42 Table of Contents Common Stock The following describes all of the activity that occurred within each class of SpaceX Common Stock during the years ended December 31, 2025 and 2024, incorporating all activity that occurred within the class of xAI Common Stock on an as-conv...", - "page_nums": [ - 346 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 346, "artifact_ref": "page_citation_assets/page-346.png", @@ -12394,24 +8072,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_de6fe2dd-46d2-5796-8594-ce3166bb5c2b", - "type": "page", - "content": "F-43\nTable of Contents\nConversion Rights\nEach share of Class B is convertible at the option of the holder, at any time, into one share of Class A. Each share of\nClass B will automatically convert into one share of Class A upon a transfer, other than a Permitted Transfer (as\ndefined in the charter), of such share of Class B.\nVoting Rights\nEach holder of Class A is entitled to one vote for each share held. Each holder of Class B is entitled to ten votes for\neach share held. The holders of Class C have no voting rights, except as required by law. Voting rights with respect\nto Class D will be established when and if any shares of Class D are issued by the Board of Directors.\nReserve for Unissued Shares of Common Stock\nThe Company is required to reserve and keep available out of its authorized but unissued shares of SpaceX Common\nStock such number of shares sufficient to effect the conversion of all outstanding shares of SpaceX Redeemable\nConvertible Preferred Stock and Class B, as applicable, plus shares granted and available for grant under the\nCompany’s share plans.\nThe amount of such shares of the SpaceX Common Stock reserved for these purposes at December 31, 2025 is as\nfollows:\nNumber of Shares\nClass A Class B Class C Class D\nRedeemable Convertible Preferred Stock issued (low-vote)\n\n\n........................................................ 4,291 — 3,459 —\nRedeemable Convertible Preferred Stock issued (high-vote) ....................................................... 3,275 3,812 3,275 —\nOutstanding Class B\n\n............................................ 644 — — —\nOutstanding stock options\n\n................................... 10 468 474 —\nOutstanding RSUs\n\n............................................... 47 43 62 —\nFuture grants under share-based compensation\n\n.. 161 — 383 —\n8,428 4,323 7,653 —\nShare Repurchases\nSpaceX Share Repurchases\nDuring the year ended December 31, 2025, SpaceX repurchased $522 million or 14.0 million shares of SpaceX\nCommon Stock from eligible current and former employees. Similarly, the Company repurchased $920 million or\n38.7 million shares of SpaceX Common Stock from eligible current and former employees and existing shareholders\nduring the year ended December 31, 2024, as well as $101 million or 0.1 million shares of SpaceX Redeemable\nConvertible Preferred Stock in a number of unrelated transactions with existing shareholders at their then-current\nfair market value. The Company only repurchased shares held by eligible participants for more than six months at a\npurchase price per share equal to the then current fair market value.\nAll SpaceX shares repurchased to date have been retired.\nxAI Share Repurchase\nDuring the year ended December 31, 2025, the Company also purchased 11.8 million shares of xAI Common Stock\nfor $600 million from an existing shareholder of xAI. Following the xAI Merger, this transaction is considered as a\nrepurchase of xAI Common Stock in the consolidated statements of redeemable convertible preferred stock and\nshareholders’ equity.\nAll xAI shares repurchased to date have been retired.", - "path": "spacex-s1.pdf/p347", - "metadata": { - "length": 3085, - "summary": "F-43 Table of Contents Conversion Rights Each share of Class B is convertible at the option of the holder, at any time, into one share of Class A. Each share of Class B will automatically convert into one share of Class A upon a transfer, other than a Permitted Transfer (as de...", - "page_nums": [ - 347 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 347, "artifact_ref": "page_citation_assets/page-347.png", @@ -12419,24 +8080,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b008875b-c8ca-5d44-8c18-2922548286aa", - "type": "page", - "content": "F-44\nTable of Contents\nNote 14 - Earnings per Share\nThe following table presents the reconciliation of net income (loss) attributable to common shareholders to net\nincome (loss) used in computing basic and diluted net income (loss) per share of common stock:\nYear Ended December 31,\n2025 2024 2023\nNumerator:\nNet income (loss)\n\n.......................................................................... $ (4,937) $ 791 $ (4,628)\nLess: Deemed dividend(1)\n\n.......................................................... — 80 —\nLess: Dividends and undistributed earnings allocated to participating securities\n\n........................................................... — 693 —\nNet income (loss) attributable to common shareholders - basic\n.... (4,937) 18 (4,628)\nAdd: Effect of assumed conversion of SpaceX Redeemable Convertible Preferred Stock\n\n................................................... — 3 —\nAdd: Effect of assumed conversion of stock options\n\n................ — 0 —\nAdd: Effect of assumed conversion of restricted stock units\n\n.... — 0 —\nAdd: Effect of assumed issuance of shares under the ESPP\n\n..... — 0 —\nNet income (loss) attributable to common shareholders - diluted\n\n\n.. $ (4,937) $ 21 $ (4,628)\nDenominator:\nWeighted average shares of common stock outstanding - basic\n\n.... 2,926 2,848 2,759\nWeighted average shares of common stock equivalents:\nConversion of SpaceX Redeemable Convertible Preferred Stock\n\n...................................................................................... — 6,771 —\nExercise of stock options\n\n........................................................... — 292 —\nConversion of restricted stock units\n\n.......................................... — 45 —\nConversion of ESPPs\n\n................................................................. — 0 —\nWeighted average common stock and common stock equivalent outstanding - diluted\n\n................................................................... 2,926 9,956 2,759\nEarnings (loss) per share attributable to common shareholders\nBasic\n\n.......................................................................................... $ (1.69) $ 0.01 $ (1.68)\nDiluted\n\n\n....................................................................................... $ (1.69) $ 0.00 $ (1.68)\n__________________\n(1) The excess of fair market value over the consideration transferred for the repurchase of SpaceX Redeemable Convertible Preferred Stock\nwas treated as a deemed dividend and resulted in a decrease to net income (loss) attributable to common shareholders in the calculation of\nearnings (loss) per share.", - "path": "spacex-s1.pdf/p348", - "metadata": { - "length": 2592, - "summary": "F-44 Table of Contents Note 14 - Earnings per Share The following table presents the reconciliation of net income (loss) attributable to common shareholders to net income (loss) used in computing basic and diluted net income (loss) per share of common stock: Year Ended Decembe...", - "page_nums": [ - 348 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 348, "artifact_ref": "page_citation_assets/page-348.png", @@ -12444,24 +8088,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_dff68a52-1c82-5234-8baa-38df508cc2cf", - "type": "page", - "content": "F-45\nTable of Contents\nThe following potentially dilutive securities on an as-converted basis are excluded from the calculation of diluted net\nincome (loss) per share attributable to common shareholders for the periods presented because the impact of\nincluding them would be anti-dilutive (refer to Note 15, Share-based Compensation for additional details):\nYear Ended December 31,\n2025 2024 2023\nxAI Redeemable Convertible Preferred Stock\n\n\n............................... 1,369 — 537\nSpaceX Redeemable Convertible Preferred Stock\n\n......................... 6,733 — 6,780\nShare-based compensation\n\n............................................................. 623 18 767\nThe table above excludes 14.5 million, 38.3 million, and 21.2 million share-based compensation awards outstanding\nas of December 31, 2025, 2024, and 2023, respectively, as these awards are subject to performance and market\nconditions that were not met as of those dates.\nNote 15 - Share-based Compensation\nX and xAI Mergers\nAs part of the xAI Merger, each xAI option for a share of xAI common stock outstanding and unexercised at the\ntime of the xAI Merger (vested and unvested) was converted into a SpaceX option to receive 0.1433 shares of\nSpaceX Class A or Class B Common Stock (on a pre-2026 Stock Split basis), as applicable, under the same terms\nand conditions (including the vesting and exercisability conditions) as the original xAI stock options at an exercise\nprice equal to the original xAI option exercise price divided by 0.1433 (on a pre-2026 Stock Split basis). Each xAI\nRSU that was vested and outstanding was converted to the right to receive 0.1433 of a share of SpaceX Class A or\nClass B Common Stock (on a pre-2026 Stock Split basis), as applicable. Each xAI RSU that was unvested was\nconverted to 0.1433 of a SpaceX RSU (on a pre-2026 Stock Split basis). Each xAI RSA was converted to 0.1433\nshares of SpaceX RSA for SpaceX Class A or Class B Common Stock (on a pre-2026 Stock Split basis), as\napplicable, with the same terms and conditions (including the vesting terms). Holders of vested xAI options and\nvested xAI RSUs also had the option to receive cash payment for $75.46 per share in lieu of conversion. Refer to\nNote 13, Redeemable Convertible Preferred Stock and Shareholders’ Equity for additional details.\nAs part of the X Merger, each X RSU that was outstanding was converted to a xAI RSU to receive 2.776 shares of\nxAI Common Stock.\nGeneral\nThe Company grants RSUs, RSAs, and non-statutory options to eligible employees, key executives, and certain non-\nemployee service providers (collectively, the “Plans”). The Company also has a number of performance-based\nawards. RSUs entitle the grantee to receive shares of Class A or Class B Common Stock upon vesting, with vesting\ngenerally occurring either (i) 25% after the first service year with quarterly vesting for the remaining four-year\nservice period, (ii) 12.5% after the first six months of service with quarterly vesting for the remaining four-year\nservice period, or (iii) 20% after the first service year with semi-annual vesting for the remaining five-year service\nperiod, subject to continued service through the applicable vesting date. RSAs entitle the grantee to receive shares of\nClass A or Class B Common Stock with 25% after the first service year with monthly vesting for the remaining four-\nyear service period. Options generally vest over (i) four years with 25% vesting after one year then one thirty-sixth\nof the remainder vesting thereafter on a monthly basis or (ii) six years with 20% vesting after two years, and then\none forty-eighth of the remainder vesting thereafter on a monthly basis. Options are exercisable up to ten years from\nthe date of grant. At December 31, 2025, 543.8 million shares remained available for future grant under the Plans.\nThe Company offers an ESPP, under which eligible employees can purchase the Company’s Common Stock at a\ndiscounted price. The Company also offers a Non-Qualified Employee Stock Purchase Plan (“NQ ESPP”), under\nwhich employees can purchase the Company’s Common Stock at the fair market value. At December 31, 2025, 27.0\nmillion and 4.8 million shares remained available for future grant under the ESPP and NQ ESPP plans, respectively.", - "path": "spacex-s1.pdf/p349", - "metadata": { - "length": 4268, - "summary": "F-45 Table of Contents The following potentially dilutive securities on an as-converted basis are excluded from the calculation of diluted net income (loss) per share attributable to common shareholders for the periods presented because the impact of including them would be an...", - "page_nums": [ - 349 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 349, "artifact_ref": "page_citation_assets/page-349.png", @@ -12469,24 +8096,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e48079a5-351d-5d91-bb67-b23cd318d2fd", - "type": "page", - "content": "F-46\nTable of Contents\nSummary Activity under the Plans\nBelow table summarizes activities related to the Company’s Plans, presented on an as-converted basis per the xAI\nMerger. For the purposes of the table below, each xAI option, RSU and RSA is presented as 0.1433 SpaceX option,\nRSU and RSA, respectively.\nStock Options\nNumber of Options\nWeighted Average Exercise Price\nWeighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value\nBalance at December 31, 2024\n\n........................ 530 $ 8.86 6.5 $ 14,342\nGranted\n\n................................................................ 20 $ 37.27\nExercised\n\n............................................................. (34) $ 5.80\nCancelled ............................................................. (20) $ 9.81\nOutstanding at December 31, 2025 ................. 496 $ 10.18 5.7 $ 37,171\nVested and expected to vest at December 31, 2025\n\n.................................................................. 496 $ 10.18 5.7 $ 37,171\nVested and exercisable at December 31, 2025\n\n.. 398 $ 8.31 5.2 $ 30,346\nRSUs RSAs\nNumber of Restricted Stock Units\nWeighted Average Grant Date Fair Value Per Share\nNumber of Restricted Stock Awards\nWeighted Average Grant Date Fair Value Per Share\nBalance at December 31, 2024\n\n........................ 110 $ 12.57 109 $ 0.00\nGranted\n\n................................................................ 74 $ 54.84 0 $ 93.87\nExercised\n\n\n............................................................. (51) $ 25.53 (34) $ 0.42\nCancelled ............................................................. (24) $ 33.44 (42) $ 0.00\nBalance at December 31, 2025\n\n........................ 109 $ 40.49 34 $ 0.11\nThe weighted-average grant-date fair value per share of options granted during the years ended December 31, 2025,\n2024, and 2023 was $21.29, $5.02, and $7.60 respectively. The total intrinsic value of options exercised during the\nyears ended December 31, 2025, 2024, and 2023 was $1,249 million, $392 million and $261 million, respectively.\nThe weighted-average grant date fair value per share of RSUs granted during the years ended December 31, 2025,\n2024, and 2023 was $54.84, $17.68, and $15.60, respectively. The total fair market value of RSUs released for the\nyears ended December 31, 2025, 2024, and 2023 was $2,151 million, $871 million and $729 million, respectively.\nThe weighted-average grant date fair value per share of RSAs granted during the years ended December 31, 2025,\n2024, and 2023 was $93.87, $—, and $0.00, respectively. There were no RSAs released during the years ended\nDecember 31, 2025 and 2024, and the total fair value of the RSAs released during the year ended December 31,\n2023 was $38 million.\nAt December 31, 2025, total remaining share-based compensation expense for unvested stock options, RSUs, and\nRSAs was $4,842 million, which is expected to be recognized over a weighted-average period of 3.2 years.\nESPP\nDuring the years ended December 31, 2025, 2024, and 2023, under the ESPP, the Company issued 6.3 million, 8.0\nmillion and 6.5 million shares, respectively. For the year ended December 31, 2025, the Company issued 0.2 million\nshares under the NQ ESPP. No shares were issued under NQ ESPP during the years ended December 31, 2024 and\n2023.", - "path": "spacex-s1.pdf/p350", - "metadata": { - "length": 3278, - "summary": "F-46 Table of Contents Summary Activity under the Plans Below table summarizes activities related to the Company’s Plans, presented on an as-converted basis per the xAI Merger. For the purposes of the table below, each xAI option, RSU and RSA is presented as 0.1433 SpaceX opti...", - "page_nums": [ - 350 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 350, "artifact_ref": "page_citation_assets/page-350.png", @@ -12494,24 +8104,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8b66c0cf-51cd-5986-acba-67847ab25a9f", - "type": "page", - "content": "F-47\nTable of Contents\nCEO Award\nIn November 2025, the Company granted a performance-based award (“xAI Award”) to Elon Musk consisting of\ntwelve tranches. Each tranche represents the right to receive a number of shares at fair market value equal to 1.0% of\nxAI’s valuation at the valuation milestone. The xAI Award is subject to market conditions based on valuation\nmilestones, ranging from $213 billion to $1,313 billion, performance condition requiring the Company to receive not\nless than $2,000 million in proceeds from investors through capital raises on the milestone date, and a service\ncondition requiring Mr. Musk’s continued service over the ten-year performance period.\nThe grant date fair value of the award was determined to be $2,205 million and the Company recorded $28 million\nof share-based compensation expense for the year ended December 31, 2025. In March 2026, the Company\nterminated the xAI Award, refer to Note 21, Subsequent Events for further discussion.\nPerformance-based awards\nIn March 2023, X issued performance-based RSU awards to all X employees that also included service conditions.\nThe performance conditions would only be satisfied upon a change in control or completion of an initial public\noffering (deemed a liquidity event). For the years ended December 31, 2024 and 2023, no share-based compensation\nexpense was recorded as it was not probable the performance-based vesting condition would be met. In 2025, these\nawards were modified to remove the performance-based condition, resulting in additional share-based compensation\nexpense of $588 million.\nFair Value Determination\nThe weighted-average assumptions that were used to calculate the grant date fair value of the Company’s employee\nstock option grants are as follows:\nYear Ended December 31,\n2025 2024 2023\nExpected term (years)\n\n\n..................................................................... 6.94 6.80 6.70\nVolatility\n\n\n......................................................................................... 43.14% 39.80% 43.20%\nRisk-free interest rate\n\n..................................................................... 4.02% 4.30% 3.60%\nDividend yield\n\n................................................................................ —% —% —%\nThe expected term of employee stock options represents the weighted-average period that the stock options are\nexpected to remain outstanding. The Company determined the expected term of options granted using the simplified\nmethod. Under the simplified method, the expected term of an award is presumed to be the mid-point between the\nvesting period and the contractual life of the award.\nThe Company determined the expected volatility assumption using the frequency of daily historical prices of\ncomparable public companies’ common stock for a period equal to the expected term of the options.\nThe risk-free interest rate assumption is based upon observed interest rates on U.S. Government securities for a\nperiod consistent with the expected term of the Company’s employee stock options.\nThe dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The\nCompany has never declared or paid any cash dividends on its Common Stock and does not anticipate paying any\ncash dividends in the foreseeable future.", - "path": "spacex-s1.pdf/p351", - "metadata": { - "length": 3302, - "summary": "F-47 Table of Contents CEO Award In November 2025, the Company granted a performance-based award (“xAI Award”) to Elon Musk consisting of twelve tranches. Each tranche represents the right to receive a number of shares at fair market value equal to 1.0% of xAI’s valuation at t...", - "page_nums": [ - 351 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 351, "artifact_ref": "page_citation_assets/page-351.png", @@ -12519,24 +8112,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ebbdc2e9-b3a3-5ea5-8958-6c0d78ffc646", - "type": "page", - "content": "F-48\nTable of Contents\nThe weighted-average assumptions that were used to calculate the grant date fair value of the CEO’s xAI Award are\nas follows:\nExpected term (years)\n\n........................................................................................................................... 10.0\nVolatility\n\n............................................................................................................................................... 45% – 55%\nRisk-free interest rate\n\n............................................................................................................................ 4.06\nDividend yield\n\n....................................................................................................................................... 0.00\nThe expected term is the period from the grant date to the end of the performance period. The Company determined\nthe expected volatility assumption using the frequency of daily historical prices of comparable public companies’\ncommon stock for a period equal to the expected term. The risk-free interest rate assumption is based upon observed\ninterest rates on U.S. Government securities for a period consistent with the expected term. The dividend yield\nassumption is based on the Company’s history and expectation of dividend payouts. The Company has never\ndeclared or paid any cash dividends on its Common Stock and does not anticipate paying any cash dividends in the\nforeseeable future.\nSummary of Share-Based Compensation Information\nThe following table summarizes our share-based compensation expense by line item in the consolidated statements\nof operations:\nYear Ended December 31,\n2025 2024 2023\nCost of revenue\n\n\n............................................................................... $ 253 $ 193 $ 167\nResearch and development\n\n\n............................................................. 859 230 179\nSelling, general, and administrative\n\n............................................... 835 360 333\nTotal\n\n......................................................................................... $ 1,947 $ 784 $ 679\nDuring the years ended December 31, 2025, 2024, and 2023, share-based compensation expense capitalized to the\nconsolidated balance sheets was $154 million, $132 million, and $108 million, respectively. No income tax benefit\nwas recognized from share-based compensation expense during the years ended December 31, 2025, 2024, and 2023\ndue to the valuation allowance on U.S. deferred tax assets. Refer to Note 16, Income Taxes for additional details.\nNote 16 - Income Taxes\nThe U.S. and foreign components of consolidated income (loss) before income taxes for the years ended December\n31, 2025, 2024, and 2023 are as follows:\nYear Ended December 31,\n2025 2024 2023\nDomestic\n\n......................................................................................... $ (3,959) $ 73 $ (3,598)\nForeign\n ........................................................................................... (260) 169 (1,393)\nIncome (loss) before income taxes\n\n.............................................. $ (4,219) $ 242 $ (4,991)", - "path": "spacex-s1.pdf/p352", - "metadata": { - "length": 3131, - "summary": "F-48 Table of Contents The weighted-average assumptions that were used to calculate the grant date fair value of the CEO’s xAI Award are as follows: Expected term (years) .............................................................................................................", - "page_nums": [ - 352 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 352, "artifact_ref": "page_citation_assets/page-352.png", @@ -12544,24 +8120,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3b156f69-e677-5d45-b674-b4877bccd467", - "type": "page", - "content": "F-49\nTable of Contents\nThe current and deferred provisions (benefits) for federal, state, and foreign income taxes consist of the following:\nYear Ended December 31,\n2025 2024 2023\nCurrent:\nFederal\n\n\n....................................................................................... $ (11) $ 57 $ 11\nState\n\n\n........................................................................................... 18 18 24\nForeign\n\n....................................................................................... 82 51 15\nTotal current provision\n\n............................................................... 89 126 50\nDeferred:\nFederal\n\n\n....................................................................................... 659 (667) (305)\nState\n\n\n........................................................................................... 4 2 (70)\nForeign\n\n....................................................................................... (34) (10) (38)\nTotal deferred provision\n\n............................................................. 629 (675) (413)\nTotal provision for (benefit from) income taxes\n\n....................... $ 718 $ (549) $ (363)\nUpon adoption of ASU 2023-09, as described in Note 2, Summary of Significant Accounting Policies, the\nreconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows:\nYear Ended December 31,\n2025\nU.S. federal statutory income tax rate\n\n\n....................................................................... $ (886) 21.0%\nState and local income taxes, net of federal income tax effect(1)\n\n\n............................... (105) 2.5%\nForeign tax effects\n\n.....................................................................................................\nIreland\n\n................................................................................................................... 81 (1.9)%\nOther\n..................................................................................................................... 22 (0.5)%\nEffect of cross-border tax laws\n\n.................................................................................. (1) —%\nTax credits\nResearch and development tax credits\n.................................................................. (602) 14.3%\nForeign tax credits\n\n................................................................................................ (27) 0.6%\nOther\n..................................................................................................................... (11) 0.3%\nChange in valuation allowance\n\n.................................................................................. 2,194 (51.6)%\nNontaxable or nondeductible items\nShare-based compensation\n\n.................................................................................... (274) 6.5%\nOther\n..................................................................................................................... 45 (1.1)%\nChange in unrecognized tax benefits\n\n\n......................................................................... 297 (7.0)%\nOther adjustments\n\n...................................................................................................... (15) (0.1)%\nEffective tax rate\n\n..................................................................................................... $ 718 (17.0)%\n__________________\n(1) State taxes in California made up the majority (greater than 50%) of the tax effect in this category.", - "path": "spacex-s1.pdf/p353", - "metadata": { - "length": 3490, - "summary": "F-49 Table of Contents The current and deferred provisions (benefits) for federal, state, and foreign income taxes consist of the following: Year Ended December 31, 2025 2024 2023 Current: Federal ...................................................................................", - "page_nums": [ - 353 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 353, "artifact_ref": "page_citation_assets/page-353.png", @@ -12569,24 +8128,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_beeda3f2-5364-5aff-87ec-ccaa2425fb5f", - "type": "page", - "content": "F-50\nTable of Contents\nThe following table is a reconciliation of taxes at the U.S. federal statutory income tax rate to the Company’s benefit\nfrom income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the\nCompany’s adoption of ASU 2023-09:\nYear Ended December 31,\n2024 2023\nFederal statutory income tax rate\n\n\n............................................................................... $ 51 $ (1,048)\nState and local income taxes, net of federal income tax effect\n\n.................................. (213) (276)\nShare-based compensation\n\n........................................................................................ (90) (73)\nForeign tax effects\n\n..................................................................................................... (3) 84\nResearch and development tax credits\n\n\n....................................................................... (689) (489)\nChange in valuation allowance\n.................................................................................. 137 1,209\nChange in unrecognized tax benefits\n\n......................................................................... 299 206\nOther adjustments\n\n...................................................................................................... (41) 24\nProvision for (benefit from) income taxes\n\n............................................................ $ (549) $ (363)\nUpon adoption of ASU 2023-09, cash paid for income taxes, net of refunds, during the year ended December 31,\n2025 is as follows:\nYear Ended December 31,\n2025\nFederal................................................................................................................................................... $ 70\nState and Local\n\n...................................................................................................................................... 17\nForeign\nIreland\n\n\n.............................................................................................................................................. 20\nMexico\n\n............................................................................................................................................. 9\nOther\n\n\n................................................................................................................................................. 38\nTotal cash paid for income taxes, net of refunds\n\n............................................................................. $ 154", - "path": "spacex-s1.pdf/p354", - "metadata": { - "length": 2513, - "summary": "F-50 Table of Contents The following table is a reconciliation of taxes at the U.S. federal statutory income tax rate to the Company’s benefit from income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the Company’s adoption of AS...", - "page_nums": [ - 354 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 354, "artifact_ref": "page_citation_assets/page-354.png", @@ -12594,24 +8136,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_666f24dd-6186-55e9-82eb-093e8865e859", - "type": "page", - "content": "F-51\nTable of Contents\nThe significant components of the deferred tax assets and liabilities are as follows:\nDecember 31,\n2025 2024\nDeferred tax assets:\n Net operating loss carryforwards\n\n............................................................................. $ 2,275 $ 572\n Research and development and other credits\n\n........................................................... 3,627 2,988\n Intangible assets\n\n....................................................................................................... 812 568\n Operating lease liability\n\n........................................................................................... 1,613 313\n Capitalized research and development costs\n\n........................................................... 4,077 3,215\n Share-based compensation\n\n...................................................................................... 366 254\n Deferred revenue\n\n..................................................................................................... 757 664\n Disallowed interest expense\n\n.................................................................................... 762 785\n Other\n\n\n........................................................................................................................ 233 206\n Total deferred tax assets\n\n.......................................................................................... 14,522 9,565\n Valuation allowance\n\n................................................................................................ (8,286) (5,621)\n Deferred tax assets, net of valuation allowance\n\n....................................................... 6,236 3,944\nDeferred tax liabilities:\n Fixed assets\n\n.............................................................................................................. (5,209) (2,372)\n Operating lease right-of-use asset\n\n\n............................................................................ (627) (632)\n Unrealized gains/losses\n\n\n............................................................................................ (248) (244)\n Other\n\n\n........................................................................................................................ (39) (32)\n Total deferred tax liabilities\n\n..................................................................................... (6,123) (3,280)\nDeferred tax assets, net of valuation allowance\n\n................................................. $ 113 $ 664\nIn assessing the realizability of deferred tax assets, management considered whether it is more likely than not that\nsome or all of the deferred tax assets will not be realizable based on the relevant weight of all positive and negative\nevidence, including the retrospective combination of the financial results of the entities due to the Mergers described\nin Note 1, Nature of Business. As a result of the Mergers, management assessed the realizability of the deferred tax\nassets of the combined group and concluded that the majority of the U.S. federal and state deferred tax assets are not\nmore likely than not to be realized based on cumulative pretax losses adjusted for permanent differences and other\nnegative evidence. Accordingly, the Company has recorded a full valuation allowance against its net U.S. deferred\ntax assets as of December 31, 2025 with the exception of certain state deferred tax assets and transferrable\ninvestment tax credits that are expected to be realizable. The Company will continue to assess the realizability of its\ndeferred tax assets in future periods and will adjust the valuation allowance as necessary based on changes in facts\nand circumstances.\nIn addition, the Company continues to record a valuation allowance in certain foreign jurisdictions where the\nCompany has concluded it is more likely than not that the deferred tax assets will not be realized.\nA reconciliation of the valuation allowance is as follows:\nYear Ended December 31,\n2025 2024 2023\nBeginning balance\n\n.......................................................................... $ 5,621 $ 5,582 $ 4,347\nCharged to income tax expense\n\n...................................................... 2,551 204 1,210\nCharged to other comprehensive income\n\n....................................... 114 (55) 25\nCumulative effect adjustment\n\n......................................................... — (110) —\nEnding balance\n\n\n............................................................................ $ 8,286 $ 5,621 $ 5,582", - "path": "spacex-s1.pdf/p355", - "metadata": { - "length": 4524, - "summary": "F-51 Table of Contents The significant components of the deferred tax assets and liabilities are as follows: December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards ............................................................................. $ 2,275 $ 572...", - "page_nums": [ - 355 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 355, "artifact_ref": "page_citation_assets/page-355.png", @@ -12619,24 +8144,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_eebed44b-1489-5dd0-8a2a-b0d0fe903d78", - "type": "page", - "content": "F-52\nTable of Contents\nThe valuation allowance on the Company’s net deferred tax assets increased by $2,665 million, $39 million and\n$1,235 million during the years ended December 31, 2025, 2024, and 2023, respectively. The changes in valuation\nallowance are primarily driven by the generation of net operating loss carry-forwards (“NOLs”) and tax credits,\nwhich are not more likely than not to be realizable. For the year ended December 31, 2024, the Company released a\npartial valuation allowance on SpaceX’s U.S. deferred tax assets for the retrospectively combined comparative\nresults. Based on available projections as of December 31, 2024, management forecasted $659 million of deferred\ntax assets related to U.S. R&D credits would be utilized in the following year on a separate company basis in 2025\nbefore the Mergers occurred, and as such, no valuation allowance was recorded on those credits.\nAt December 31, 2025, the Company had NOLs for federal and state income tax purposes of $9,728 million and\n$5,234 million, which are available to offset taxable income in future periods. The federal NOLs generated through\nDecember 31, 2017 expire at various dates beginning in 2034 and will continue to expire through 2037, while U.S.\nfederal net operating loss carryforwards generated in 2018 or later do not expire. The state NOLs will expire at\nvarious dates beginning in 2027.\nAt December 31, 2025, the Company had tax credits for federal and state income tax purposes of $3,586 million and\n$2,104 million, respectively, which are available to offset future periods and begin to expire in 2036 for federal\nincome tax purposes. Of the $2,104 million in state tax credits, $161 million will begin to expire in 2026 and the\nremaining credits do not expire.\nAdditionally, the Company’s net operating loss carryforwards and other tax attributes are subject to various\nlimitations and restrictions, including those arising from ownership changes under applicable tax laws, which may\nlimit the Company’s ability to utilize such attributes in the future.\nAt December 31, 2025, the Company had foreign NOLs of $126 million, which will expire at various dates based on\nthe tax laws of the different jurisdictions we operate in.\nIn assessing whether uncertain tax positions should be recognized in the financial statements, the Company first\ndetermines whether it is more likely than-not that a tax position will be sustained upon examination, including\nresolution of any related appeals or litigation process, based on the technical merits of the position. In evaluating\nwhether a tax position has met the more likely than-not recognition threshold, the Company presumes that the\nposition will be examined by the appropriate taxing authority that would have full knowledge of all relevant\ninformation. For tax positions that meet the more likely than not recognition threshold, the Company measures the\namount of benefit recognized in its financial statements at the largest amount of benefit that is greater than 50.0%\nlikely of being realized upon ultimate settlement.\nThe following table reflects changes in gross unrecognized tax benefits:\nYear Ended December 31,\n2025 2024 2023\nBeginning balance\n\n.......................................................................... $ 1,619 $ 1,320 $ 1,114\nGross increases - current year tax positions\n\n\n................................... 282 302 233\nGross increases - prior year tax positions ....................................... 16 — —\nGross decreases - current year tax positions\n\n.................................. — — —\nGross decreases - prior year tax positions\n\n...................................... (1) (3) (27)\nGross decreases - settlements with tax authorities\n\n\n......................... — — —\nGross decreases - lapse of statute of limitations\n\n............................. — — —\nEnding balance\n\n............................................................................ $ 1,916 $ 1,619 $ 1,320\nFor the years ended December 31, 2025, 2024, and 2023, the Company had unrecognized tax benefits of $1,916\nmillion, $1,619 million, and $1,320 million respectively. The Company’s policy is to recognize interest and\npenalties associated with uncertain tax benefits as part of the income tax provision. The amount of interest and\npenalties recognized in the periods presented were insignificant. As of December 31, 2025 and 2024, the Company\nhas accrued $6 million and $5 million, respectively, related to interest and penalties on our unrecognized tax", - "path": "spacex-s1.pdf/p356", - "metadata": { - "length": 4507, - "summary": "F-52 Table of Contents The valuation allowance on the Company’s net deferred tax assets increased by $2,665 million, $39 million and $1,235 million during the years ended December 31, 2025, 2024, and 2023, respectively. The changes in valuation allowance are primarily driven b...", - "page_nums": [ - 356 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 356, "artifact_ref": "page_citation_assets/page-356.png", @@ -12644,24 +8152,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_eb4a1c6f-527b-529b-84ba-a469c88665e1", - "type": "page", - "content": "F-53\nTable of Contents\nbenefits. As of December 31, 2025, unrecognized tax benefits of $11 million, if recognized, would affect our\neffective tax rate.\nThe Company files income tax returns in the U.S. and all state and various foreign jurisdictions. To the extent the\nCompany has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted\nupon examination by the federal, state or foreign tax authorities to the extent utilized in a future period. As of\nDecember 31, 2025, the major jurisdictions in which the Company remains subject to examinations are U.S. federal\nand California for tax years 2003 and forward. Based on all available information, the Company is not aware of any\nnew information that would require the remeasurement of its uncertain tax positions.\nOn July 4, 2025, the One Big Beautiful Bill Act, Public Law No. 119-21 and formally titled “An Act to Provide for\nReconciliation Pursuant to Title II of H. Con. Res. 14” (“OBBBA”) was enacted in the United States. The OBBBA\nincludes a broad range of tax provisions, such as the permanent extension of certain provisions of the 2017 Act and\nthe restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates,\nwith certain provisions effective in 2025 and others implemented through 2027. The Company has evaluated the\nprovisions of the OBBBA and determined that the most significant impacts relate to the expensing of research and\nexperimental expenditures under IRC Section 174A and interest expense limitation under IRC Section 163(j). The\neffects of applicable provisions of OBBBA have been reflected in the Company’s income tax provision.\nNote 17 - Commitments and Contingencies\nUnconditional Obligations\nThe Company’s unconditional obligations are non-cancelable contractual commitments primarily relate to the\nCompany’s investments in AI infrastructure and third-party cloud capacity arrangements and other service\narrangements. It also includes the Company’s commitments under the Spectrum Transaction, which are payable in\ncash and in the Company’s Class A Common Stock. Refer to Note 6, Intangible Assets and Goodwill for additional\ndetails. The following table summarizes the Company’s non-cancelable contractual commitments as of\nDecember 31, 2025:\n2026\n\n...................................................................................................................................................... $ 2,720\n2027\n\n...................................................................................................................................................... 21,476\n2028\n\n...................................................................................................................................................... 1,250\n2029\n\n...................................................................................................................................................... 4\n2030\n\n...................................................................................................................................................... 1\nThereafter\n\n.............................................................................................................................................. —\nTotal\n\n.................................................................................................................................................... $ 25,451\nLetters of Credit and Surety Bonds\nThe Company had outstanding letters of credit of $348 million at December 31, 2025 related to various customer\ncontracts, insurance agreements, and facility lease agreements. All of the outstanding letters of credit were\ncollateralized by restricted cash. The Company also had surety bonds of $51 million for self-insured workers’\ncompensation programs and other governmental licenses at December 31, 2025.\nLegal Proceedings\nIn the normal course of its business, the Company is involved from time to time in various arbitrations, class actions,\ncommercial litigation, investigations and other legal, regulatory or governmental actions, including the significant\nmatters described below that could have a material impact on our results of operations. The Company assesses, in\nconjunction with its legal counsel, the need to record a liability for litigation and contingencies. With respect to the\ncases, actions, and inquiries described below, the Company evaluates the associated developments on a regular basis\nand will accrue a liability when it believes a loss is probable and the amount can be reasonably estimated. In", - "path": "spacex-s1.pdf/p357", - "metadata": { - "length": 4612, - "summary": "F-53 Table of Contents benefits. As of December 31, 2025, unrecognized tax benefits of $11 million, if recognized, would affect our effective tax rate. The Company files income tax returns in the U.S. and all state and various foreign jurisdictions. To the extent the Company h...", - "page_nums": [ - 357 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 357, "artifact_ref": "page_citation_assets/page-357.png", @@ -12669,24 +8160,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2a3e8ab1-ce40-53c2-8c43-fab4e4dd3a43", - "type": "page", - "content": "F-54\nTable of Contents\naddition, the Company believes there is a reasonable possibility that it may incur a loss in some of these matters and\nthe loss may be material or exceed its estimated ranges of possible loss.\nThe outcomes of the matters described in this section, such as whether the likelihood of loss is remote, reasonably\npossible, or probable, or if and when the reasonably possible range of loss is estimable, are inherently uncertain, and\nunless specified otherwise, possible losses are not reasonably estimable at this time. If one or more of these matters\nwere resolved against the Company for amounts above management’s estimates, the Company’s financial condition\nand results of operations, including in a particular reporting period in which any such outcome becomes probable\nand estimable, could be materially adversely affected.\nIn November 2022, the European Union’s Digital Services Act (“DSA”) came into force as a result of which X has\nto comply with extensive content moderation and other duties. The Company published its first Transparency Report\nunder the DSA in November 2023. In December 2023, the European Commission (“EC”) opened a formal\ninvestigation into X and its Irish subsidiary, Twitter International Unlimited Company (“TIUC”), which was later\nrenamed to X Internet Unlimited Company (XIUC). On July 12, 2024, in relation to alleged breaches of Articles\n25(1), 39 and 40(12) of the DSA, the EC issued preliminary findings that X’s blue checkmark is deceptive, its\nadvertisement repository does not meet DSA requirements, and it grants inadequate access to data to third-party\nresearchers. On September 26, 2024, XIUC and X submitted their observations challenging the EC’s preliminary\nfindings. On December 5, 2025, the EC delivered a final decision in which it upheld its preliminary findings and\nimposed a fine of EUR 120 million on XIUC, X., x.AI, and Elon Musk (together, the “parties”). On February 16,\n2026, the parties challenged the EC’s decision in the General Court of the European Union. This challenge remains\npending.\nIn March 2016, non-practicing entity Youtoo Technologies filed suit against Twitter, Inc. in the United States\nDistrict Court for the Northern District of Texas alleging its Vine and Periscope products infringe Youtoo’s video-\nsharing patents (the ‘304, ‘506, and ‘997 patents). On Twitter’s motion, the district court dismissed the ‘304 and\n’506 patents as invalid. Twitter filed petitions for Inter Partes Review before the Patent Trial and Appeals Board\n(PTAB) challenging all three patents-in-suit. The PTAB upheld the ‘304 and ‘506 Patents and invalidated the ‘997\nPatent; the Federal Circuit affirmed. On March 16, 2020, Plaintiff (now Vidstream LLC, which allegedly acquired\nthe patents from Youtoo Technologies in a bankruptcy proceeding), moved the Court to reconsider its earlier ruling\ninvalidating the ‘304 and ‘506 patents. On April 1, 2022, the Court reversed its original ruling on the ‘304 and ‘506\npatents. On September 27, 2024, Vidstream filed a motion for partial summary judgment, which the Court granted in\npart. The case went to a jury trial, and on April 16, 2025, the jury rendered a verdict finding (i) that Twitter did not\ninfringe any claim of the ‘506 patent and two out of three claims of the ‘304 patent and that each of those patent\nclaims was invalid, but (ii) that Twitter willfully infringed one claim of the ‘304 patent. The jury awarded Plaintiff\n$105 million in damages. In November 2025, the district court affirmed the jury’s award and awarded an additional\n$67 million in prejudgment interest. Twitter has appealed and Vidstream has cross-appealed. Both appeals remain\npending before the Federal Circuit.\nIn June 2023, music publishing companies that are members of the National Music Publishers’ Association (the\n“NMPA”) filed a complaint against X in the U.S. District Court for the Middle District of Tennessee, claiming\ndirect, contributory, and vicarious copyright infringement based on Twitter’s alleged failure to expeditiously take\ndown infringing music posted by users after the music publishers allegedly gave Twitter notice of those\ninfringements. The music publishers also allege that Twitter did not suspend the accounts of “repeat infringers,” so\nthat Twitter is not entitled to a “safe harbor” from liability under the DMCA. X filed a motion to dismiss the\ncomplaint on August 14, 2023. On March 5, 2024, the Court dismissed plaintiffs’ direct infringement and vicarious\ninfringement claims, and part of plaintiffs’ claim for contributory infringement. X answered the complaint on April\n9, 2024. Litigation was stayed from June 11, 2025 to September 9, 2025 for settlement discussions that were not\nsuccessful. Accordingly, discovery is ongoing.\nIn September 2023, Dutch foundation Stichting Data Bescherming Nederland (“SDBN”) filed a putative class action\nlawsuit in the District Court of Amsterdam in the Netherlands against TIUC, Twitter, Inc., X Corp., and Twitter\nNetherlands b.v. related to Twitter’s operation of the MoPub platform. SDBN primarily claims that MoPub’s real-\ntime bidding ad exchange violated the GDPR. SDBN claims to represent 11 million Dutch internet users who\ndownloaded and used third-party mobile apps containing the MoPub software development kit during the period", - "path": "spacex-s1.pdf/p358", - "metadata": { - "length": 5323, - "summary": "F-54 Table of Contents addition, the Company believes there is a reasonable possibility that it may incur a loss in some of these matters and the loss may be material or exceed its estimated ranges of possible loss. The outcomes of the matters described in this section, such a...", - "page_nums": [ - 358 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 358, "artifact_ref": "page_citation_assets/page-358.png", @@ -12694,24 +8168,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d23e08ab-e62b-53f6-a9a0-1adfc3e68f62", - "type": "page", - "content": "F-55\nTable of Contents\n2013-2022 and it seeks a monetary award in the range of € 250 to € 2,500 per person. On February 4, 2026, the\nCourt declined to allow the case to proceed as a class action and indicated that it is considering staying the\nproceedings until the Court of Justice of the European Union has ruled in a separate case concerning the\napplicability of Dutch class action requirements to GDPR claims. The Twitter parties filed a brief in support of the\nproposed stay, which the plaintiffs opposed, on March 4, 2026.\nIn August 2024, Dutch foundation Stichting Onderzoek Marktinformatie (SOMI) initiated a collective action in the\nDistrict Court of Amsterdam in the Netherlands on behalf of approximately 7.8 million Dutch X users. Among other\nthings, SOMI seeks damages against TIUC, X Corp. and Twitter Netherlands B.V. (collectively, the “X entities”)\nfor: (1) alleged data breaches and insufficient security measures; (2) alleged unauthorized microtargeting and lack of\ntransparency; and (3) the alleged failure to moderate hate speech and the obstruction of research, all in violation of\nthe GDPR and/or DSA. The alleged data breaches relate to a Twitter API bug that came to light in 2022 and that had\nallowed persons who knew the email address or phone number of a user to determine the user’s Twitter ID. SOMI\nhas requested compensation (to be assessed at a later stage) for each member of the class, including symbolic\ndamages of EUR 1 for each member of the class that is allegedly affected by hate speech on the X platform. The X\nentities filed a procedural defense on March 12, 2025. A hearing has been scheduled for April 2, 2026.\nIn September 2025, non-practicing entity Search and Share Technologies, LLC (“SaS”) filed a patent complaint\nagainst X Corp. in the Federal District Court for the Western District of Texas. SaS alleges that X Corp. infringed on\nU.S. Patent Nos. 10,180,952 and 11,106,744, through features in its mobile app and website enabling users to\ninteract with content through dedicated interfaces that directly share what other users see in ranked feeds and search\nresults. SaS filed an Amended Complaint on January 5, 2026. On January 20, 2026, X Corp. moved to dismiss SaS’s\nwillful infringement and induced infringement claims. On February 3, 2026, SAS responded to, but did not oppose,\nX Corp.’s partial motion to dismiss. On February 10, 2026, X Corp. filed its reply. On February 4, 2026, X Corp.\nfiled an IPR petition challenging the ‘744 Patent and on February 18, 2026, filed an IPR petition challenging the\n'952 Patent.\nBeginning in January 2026, the Company and certain subsidiaries have been named as defendants in multiple\nlawsuits arising from Grok’s image-generation and editing features. The complaints generally allege that Grok’s\nimage-generation and editing features enabled the creation and dissemination of nonconsensual explicit images and/\nor content representing women and/or children in sexualized contexts. The actions include Jane Doe v. X.AI Corp.\nand X.AI LLC, instituted in the U.S. District Court for the Northern District of California on January 23, 2026, and\nJane Doe 1 et al. v. X.AI Corp. and X.AI LLC (the “Jane Doe 1 Case”) instituted in the U.S. District Court for the\nNorthern District of California on March 16, 2026. These cases are putative class actions, asserting claims\nincluding, among other things, claims of strict liability, negligence, nuisance, rights of privacy or publicity, and, in\nthe Jane Doe 1 Case, certain federal statutory claims. Plaintiffs in these two cases seek, among other things,\ncompensatory, statutory and punitive damages, restitution, disgorgement and injunctive relief. In addition, a case,\nMayor and City Council of Baltimore ex rel. Ebony M. Thompson v. X Corp., X.AI Corp., X.AI LLC, and Space\nExploration Technologies Corp, was instituted in the Baltimore City Circuit Court on March 24, 2026 (the\n“Baltimore Case”). The plaintiff in the Baltimore Case, the Mayor and City Council of Baltimore, asserts similar\nclaims to those in the two cases discussed above under Baltimore’s Consumer Protection Ordinances. The plaintiff\nin the Baltimore Case seeks statutory penalties and/or injunctive relief. The defendants intend to defend themselves\nvigorously in these actions.\nThe Company has recorded an accrual of $530 million for litigation losses that are probable and reasonably\nestimable in Accrued expenses and other current liabilities and Other liabilities on the consolidated balance sheet as\nof December 31, 2025. For other matters, the Company is not currently able to estimate the reasonably possible loss\nor range of loss.\nNon-Income Taxes\nThe Company is under various non-income tax audits by domestic and foreign tax authorities. These audits\nprimarily revolve around routine inquiries, refund requests, and employee benefits. The Company accrues non-\nincome taxes that may result from these audits when they are probable and can be reasonably estimated. Due to the", - "path": "spacex-s1.pdf/p359", - "metadata": { - "length": 5003, - "summary": "F-55 Table of Contents 2013-2022 and it seeks a monetary award in the range of € 250 to € 2,500 per person. On February 4, 2026, the Court declined to allow the case to proceed as a class action and indicated that it is considering staying the proceedings until the Court of Ju...", - "page_nums": [ - 359 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 359, "artifact_ref": "page_citation_assets/page-359.png", @@ -12719,24 +8176,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_d15e0835-9a4d-5a22-ba39-01bffa323f08", - "type": "page", - "content": "F-56\nTable of Contents\ncomplexity and uncertainty of some of these matters, however, as well as the judicial process in certain jurisdictions,\nthe final outcome of these audits may be materially different from the Company’s expectations.\nIndemnifications\nIn the ordinary course of business, the Company may provide indemnifications of varying scope and terms to\ncustomers, vendors, lessors, investors, directors, officers, employees, and other parties with respect to certain\nmatters, including, but not limited to, losses arising out of the Company’s breach of certain agreements, services to\nbe provided by the Company, or from intellectual property infringement claims made by third parties. These\nindemnifications may survive the termination of the underlying agreement and the maximum potential amount of\nfuture payments the Company could be required to make under these indemnification provisions may not be subject\nto maximum loss clauses. It is not possible to determine the maximum potential amount under these indemnification\nagreements due to the unique facts and circumstances involved in each particular agreement. Historically, payments\nmade by us under these agreements have not had a material impact on our consolidated financial statements. At\nDecember 31, 2025 and 2024, the Company has not accrued a liability for any indemnification claims, because the\nlikelihood of incurring a payment obligation, if any, in connection with any such indemnification claims is not\nprobable or reasonably estimable.\nNote 18 - Related Party Transactions\nThe Company periodically does business with certain entities with which its CEO and directors are affiliated.\nDuring the years ended December 31, 2025 and 2024, the Company purchased $506 million and $191 million of\nMegapack products, respectively, from Tesla, Inc. (“Tesla”) recorded in Property, plant, and equipment, net in the\nconsolidated balance sheets. The Company also obtained $131 million of Cybertrucks at manufacturer’s suggested\nretail price from Tesla recorded in Property, plant, and equipment, net in the consolidated balance sheets during the\nyear ended December 31, 2025.\nOn October 12, 2025, and as subsequently amended on November 10, 2025, CTC, a subsidiary of xAI and an\nindirect subsidiary of the Company, entered into an equipment lease agreement with Valor Equity Partners (“Valor”)\nfor certain AI infrastructure hardware (the “Valor transaction”). The founder, CEO and Chief Investment Officer of\nValor, Antonio J. Gracias, serves as one of the directors of the Company. The Valor transaction was deemed to be a\nfailed sale-leaseback transaction and the Company recorded the related debt of $455 million and $4,052 million\nwithin Debt and finance leases, current and Debt and finance leases, net of current, respectively, as of December 31,\n2025 in the Company’s consolidated balance sheets, and $66 million in Interest expense for the year ended\nDecember 31, 2025 in the Company’s consolidated statements of operations. Refer to Note 10, Debt for additional\ndetails. The related asset is recorded within Property, plant, and equipment, net in the Company’s consolidated\nbalance sheets.\nIn 2025, Elon Musk, through his trust, purchased $1,421 million of common stock from current and former\nemployees.\nOther transactions with Tesla and other related parties during the years ended December 31, 2025, 2024, and 2023\nwere immaterial.", - "path": "spacex-s1.pdf/p360", - "metadata": { - "length": 3414, - "summary": "F-56 Table of Contents complexity and uncertainty of some of these matters, however, as well as the judicial process in certain jurisdictions, the final outcome of these audits may be materially different from the Company’s expectations. Indemnifications In the ordinary course...", - "page_nums": [ - 360 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 360, "artifact_ref": "page_citation_assets/page-360.png", @@ -12744,24 +8184,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6afedbe0-49d2-5c3b-9738-c03cce700854", - "type": "page", - "content": "F-57\nTable of Contents\nNote 19 - Segments\nFollowing the Mergers, the Company evaluated how to view and measure performance of the combined company\nand potential realignment of individual entity’s historical segment structure. Following this evaluation, the Company\ndetermined that as a combined company, effective in Q1 2026, the Company’s Chief Executive Officer, as the Chief\nOperating Decision Maker (“CODM”), organizes the Company, manages resource allocations, and measures\nperformance among three operating and reportable segments: (i) Space, (ii) Connectivity, and (iii) AI. Prior period\npresentations for segments conform to the current segment reporting structure.\nThe Company’s CODM assesses performance and allocates resources to operating segments based on segment\nincome (loss) from operations by comparing actual income (loss) from operations to historical results and previously\nforecasted financial information. The Company’s CODM does not evaluate operating and reportable segments using\nasset or liability information.\nThe following tables present information as to revenues, significant segment expenses, and income (loss) from\noperations by the Company’s reportable segments:\nYear Ended December 31,\n2025\nSpace Connectivity AI Total Reportable Segments\nRevenue\n\n............................................................. $ 4,086 $ 11,387 $ 3,201 $ 18,674\nCosts and expenses\nCost of revenue\n\n................................................. 1,352 5,921 2,178 9,451\nResearch and development\n\n............................... 3,004 575 5,064 8,643\nSelling, general, and administrative\n\n................. 349 468 1,827 2,644\nRestructuring charges\n\n....................................... — — 487 487\nImpairment\n\n........................................................ 38 — — 38\nTotal costs and expenses\n\n................................ 4,743 6,964 9,556 21,263\nIncome (loss) from operations\n\n......................... (657) 4,423 (6,355) (2,589)\nInterest expense\n\n................................................... (1,945)\nInterest income\n\n.................................................... 492\nOther income (expense), net\n\n............................... (177)\nIncome (loss) before income taxes\n\n.................. $ (4,219)\nSupplemental segment information\nDepreciation and amortization\n\n............................ $ 757 $ 2,376 $ 3,568 $ 6,701\nShare-based compensation\n\n.................................. $ 515 $ 369 $ 1,063 $ 1,947\nImpairment\n\n.......................................................... $ 38 $ — $ — $ 38\nCapital expenditures\n\n............................................ $ 3,832 $ 4,178 $ 12,727 $ 20,737", - "path": "spacex-s1.pdf/p361", - "metadata": { - "length": 2651, - "summary": "F-57 Table of Contents Note 19 - Segments Following the Mergers, the Company evaluated how to view and measure performance of the combined company and potential realignment of individual entity’s historical segment structure. Following this evaluation, the Company determined t...", - "page_nums": [ - 361 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 361, "artifact_ref": "page_citation_assets/page-361.png", @@ -12769,24 +8192,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_10d34b2b-d867-5692-a490-c684f765a29d", - "type": "page", - "content": "F-58\nTable of Contents\nYear Ended December 31,\n2024\nSpace Connectivity AI Total Reportable Segments\nRevenue\n\n............................................................. $ 3,796 $ 7,599 $ 2,620 $ 14,015\nCosts and expenses\nCost of revenue\n\n................................................. 1,541 4,768 1,687 7,996\nResearch and development\n\n............................... 1,835 453 1,176 3,464\nSelling, general, and administrative\n\n................. 375 333 1,105 1,813\nRestructuring charges\n\n....................................... — — 213 213\nImpairment\n\n........................................................ 24 39 — 63\nTotal costs and expenses\n\n................................ 3,775 5,593 4,181 13,549\nIncome (loss) from operations\n\n......................... 21 2,006 (1,561) 466\nInterest expense\n\n................................................... (1,580)\nInterest income\n\n.................................................... 371\nOther income (expense), net\n\n............................... 985\nIncome (loss) before income taxes\n\n.................. $ 242\nSupplemental segment information\nDepreciation and amortization\n\n............................ $ 637 $ 1,508 $ 1,679 $ 3,824\nShare-based compensation\n\n.................................. $ 472 $ 296 $ 16 $ 784\nImpairment\n\n.......................................................... $ 24 $ 39 $ — $ 63\nCapital expenditures\n\n............................................ $ 2,032 $ 3,498 $ 5,633 $ 11,163\nYear Ended December 31,\n2023\nSpace Connectivity AI Total Reportable Segments\nRevenue\n\n............................................................. $ 3,557 $ 3,869 $ 2,961 $ 10,387\nCosts and expenses\nCost of revenue\n\n................................................. 1,669 2,786 1,655 6,110\nResearch and development\n\n............................... 1,538 381 186 2,105\nSelling, general, and administrative\n\n................. 351 233 1,081 1,665\nRestructuring charges\n\n....................................... — — 237 237\nImpairment\n\n........................................................ — — 3,775 3,775\nTotal costs and expenses\n\n................................ 3,558 3,400 6,934 13,892\nIncome (loss) from operations\n\n......................... (1) 469 (3,973) (3,505)\nInterest expense\n\n................................................... (1,693)\nInterest income\n\n\n.................................................... 249\nOther income (expense), net\n............................... (42)\nIncome (loss) before income taxes\n.................. $ (4,991)\nSupplemental segment information\nDepreciation and amortization\n\n............................ $ 571 $ 884 $ 1,180 $ 2,635\nShare-based compensation\n\n\n.................................. $ 427 $ 249 $ 3 $ 679\nImpairment\n\n.......................................................... $ — $ — $ 3,775 $ 3,775\nCapital expenditures ............................................ $ 1,497 $ 2,455 $ 463 $ 4,415", - "path": "spacex-s1.pdf/p362", - "metadata": { - "length": 2907, - "summary": "F-58 Table of Contents Year Ended December 31, 2024 Space Connectivity AI Total Reportable Segments Revenue ............................................................. $ 3,796 $ 7,599 $ 2,620 $ 14,015 Costs and expenses Cost of revenue ..........................................", - "page_nums": [ - 362 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 362, "artifact_ref": "page_citation_assets/page-362.png", @@ -12794,24 +8200,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_065a94a5-247a-58b6-8228-10d1319e0915", - "type": "page", - "content": "F-59\nTable of Contents\nThe following tables provide revenue by geography based on the country of domicile in which the transaction\noriginated:\nYear Ended December 31,\n2025 2024 2023\nUSA\n\n................................................................................................ $ 12,966 $ 10,008 $ 7,473\nIreland\n\n\n............................................................................................. 1,827 1,371 1,047\nCanada\n\n............................................................................................ 764 582 447\nAll Other\n......................................................................................... 3,117 2,054 1,420\nTotal Revenues\n\n.......................................................................... $ 18,674 $ 14,015 $ 10,387\nAs of December 31, 2025 and 2024, substantially all of the Company’s long-lived assets were located within the\nUnited States.\nNote 20 - Restructuring\nIn 2022. X, an indirect subsidiary of the Company (through the X Merger and subsequently, xAI Merger), initiated\nglobal employee workforce reductions, the effects of which continued through 2025. The charges associated with\nthe workforce reduction include cash severance expense and other termination benefits. Restructuring charges also\ninclude impairment of operating lease right-of-use assets for excess office space and related leasehold improvements\nand office equipment, as well as lease termination penalties for office space terminated before the end of the lease\nterm as a result of the workforce reduction.\nTotal charges of $487 million, $147 million, and $77 million associated with the workforce reduction were recorded\nin Restructuring charges in the consolidated statements of operations for the years ended December 31, 2025, 2024,\nand 2023, respectively. Additionally, the Company recorded restructuring charges of $36 million, and $54 million\nrelated to its leasehold improvements and office equipment, and restructuring charges of $30 million, and $106\nmillion for operating lease right-of-use assets as part of its facilities consolidation efforts for the years ended\nDecember 31, 2024 and 2023, respectively.\nThe following table is a summary of the changes in the restructuring liabilities for each period presented, included\nwithin Accrued expenses and other current liabilities and Other liabilities on the consolidated balance sheets:\nRestructuring liabilities as of December 31, 2023\n................................................................................ $ 8\nSeverance and other personnel costs\n................................................................................................. 147\nCash payments\n\n\n................................................................................................................................... (11)\nOther adjustments\n.............................................................................................................................. 8\nRestructuring liabilities as of December 31, 2024\n................................................................................ 152\nSeverance and other personnel costs\n................................................................................................. 487\nCash payments\n\n\n................................................................................................................................... (212)\nOther adjustments\n.............................................................................................................................. 16\nRestructuring liabilities as of December 31, 2025\n................................................................................ $ 443\nNote 21 - Subsequent Events\nThe Company has evaluated subsequent events that occurred from January 1, 2026 through March 30, 2026, which\nis the date the consolidated financial statements were available to be issued, and determined that there were no\nsubsequent events or transactions that required recognition or disclosure in the consolidated financial statements,\nexcept as discussed below.", - "path": "spacex-s1.pdf/p363", - "metadata": { - "length": 4066, - "summary": "F-59 Table of Contents The following tables provide revenue by geography based on the country of domicile in which the transaction originated: Year Ended December 31, 2025 2024 2023 USA ..............................................................................................", - "page_nums": [ - 363 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 363, "artifact_ref": "page_citation_assets/page-363.png", @@ -12819,24 +8208,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_cccd2dbc-1616-5115-b474-444e3461d2b7", - "type": "page", - "content": "F-60\nTable of Contents\nOfficer Equity Awards\nIn January 2026, the Company granted 1,000 million performance-based restricted shares of Class B common stock\nto Elon Musk. The restricted shares vest upon (i) the Company’s achievement of specified market capitalization\nmilestones across 15 equal tranches ranging from $500 billion to $7.5 trillion, with each milestone reflecting $500\nbillion in additional valuation, and (ii) the Company’s establishment of a permanent human colony on Mars with at\nleast one million inhabitants, in each case, subject to Mr. Musk’s continued employment.\nIn March 2026, the Company cancelled Mr. Musk’s xAI Award and replaced it with a grant of 302.1 million\nperformance-based restricted shares of Class B common stock, which vest upon (i) the achievement of specified\nmarket capitalization milestones across 12 equal tranches ranging from $1.065 trillion to $6.565 trillion, with each\nmilestone reflecting $500 billion in additional valuation, and (ii) the Company’s completion of non-Earth-based data\ncenters capable of delivering 100 terawatts of compute per year, in each case, subject to Mr. Musk’s continued\nemployment.\nIn January 2026, the Company approved an amendment to 4 million performance-based stock options granted to\nBret Johnsen, Chief Financial Officer, that were originally issued in 2024. In lieu of vesting based on free cash flow\nachievement in excess of a baseline, 371 thousand of the stock options will vest for each $10 billion in adjusted\nEBITDA achieved during the 2025 through 2029 fiscal years, assessed on an annual basis. For purposes of this\naward, adjusted EBITDA is calculated as income from operations excluding (i) depreciation and amortization, (ii)\nshare-based compensation, (iii) impairment, and (iv) restructuring impacts. Once a tranche of the stock options have\nbecome earned as a result of the Company’s adjusted EBITDA performance as of the end of a particular fiscal year,\nsuch stock options remain subject to an additional one-year and one day service-based vesting requirement\nfollowing December 31 of the fiscal year in which such tranche was earned. The number of options granted was not\nchanged in the amendment. None of the stock options became earned on account of the Company’s adjusted\nEBITDA performance for the year ended December 31, 2025.\nShare Repurchases\nBetween January and March 2026, the Company repurchased Redeemable Convertible Preferred Stock and\nCommon Stock from eligible current and former employees as well as third-party investors totaling $1,396 million.\nSale-Leaseback Transaction\nIn January 2026, and as further amended on February 18, 2026, CTC entered into an equipment lease agreement\nwith Valor for certain AI infrastructure hardware (“Valor transaction II”). Similar to the Valor transaction, the Valor\ntransaction II was considered to be a transaction with a related party. The Valor transaction II is deemed to be a\nfailed sale-leaseback transaction and the Company recorded the related debt of $5,365 million in the Company’s\nconsolidated balance sheets.\nxAI Merger Closing\nPursuant to the terms of the xAI Merger on February 2, 2026, the Company issued, prior to the 2026 Stock Split,\n321.7 million shares of Class A Common Stock, 121.7 million shares of Class B Common Stock and paid $2,947\nmillion in cash to holders of xAI Common Stock and Redeemable Convertible Preferred Stock. Refer to Note 13,\nRedeemable Convertible Preferred Stock and Shareholders’ Equity for additional details.\nTesla’s xAI Investment and SpaceX Class A Common Stock Issuance\nIn January 2026, Tesla entered into an agreement with xAI to invest $2,000 million via a purchase of xAI Series E\nRedeemable Convertible Preferred Stock. Pursuant to the terms of that agreement and a letter agreement entered into\nbetween xAI and Tesla on January 16, 2026, xAI’s issuance of the shares of Series E Redeemable Convertible\nPreferred Stock, and Tesla’s payment therefore, was conditioned upon the receipt of required regulatory approvals.\nFollowing the xAI Merger, Tesla’s right to acquire Series E Redeemable Convertible Preferred Stock of xAI was\nconverted into the right to acquire SpaceX Class A common stock. On March 12, 2026, following expiration of the", - "path": "spacex-s1.pdf/p364", - "metadata": { - "length": 4242, - "summary": "F-60 Table of Contents Officer Equity Awards In January 2026, the Company granted 1,000 million performance-based restricted shares of Class B common stock to Elon Musk. The restricted shares vest upon (i) the Company’s achievement of specified market capitalization milestones...", - "page_nums": [ - 364 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 364, "artifact_ref": "page_citation_assets/page-364.png", @@ -12844,24 +8216,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f6ae0d0d-db72-5f78-8654-4a8fbc8b6a17", - "type": "page", - "content": "F-61\nTable of Contents\napplicable regulatory waiting period, SpaceX issued 3.8 million shares of Class A Common Stock (on a pre-2026\nStock Split basis) to Tesla in accordance with the terms of the foregoing agreements.\nTesla Collaboration\nIn March 2026, the Company announced a collaboration with Tesla to build a chip manufacturing facility (referred\nto as Terafab).\nSpaceX Bridge Loan Credit Agreement\nIn March 2026, SpaceX entered into a new bridge loan credit agreement (“SpaceX Bridge Loan”) for\n$20,000 million with a syndicate of banks. The SpaceX Bridge Loan matures on September 2, 2027 with two three-\nmonth extensions, at the option of the Company, reaching a final maturity date of March 2, 2028. The SpaceX\nBridge Loan proceeds were used to extinguish and pay off the X B-1 Term Loan, X B-3 Term Loan, xAI Fixed Rate\nLoan, xAI Floating Rate Loan, and the xAI 12.5% Senior Secured Notes. The SpaceX Bridge Loan bears interest at\na rate per annum of (i) between 0.75%-1.75%, dependent upon the debt rating of the Company, plus the relevant\nTerm SOFR or (ii) the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus\n1.0% and (d) 1.0%, plus an applicable margin ranging from 0.00% to 0.75% (depending on the Company’s debt\nrating). Obligations under the SpaceX Bridge Loan were guaranteed jointly and severally by certain subsidiaries of\nthe Company. The SpaceX Bridge Loan is repayable at any time, in whole or in part, without premium or penalty.\nThe Company is required to meet various covenants, including meeting certain reporting requirements, and certain\nfinancial covenants.\nConcurrently with the SpaceX Bridge Loan, the Company repaid the outstanding principal and accrued interests of\nthe X B-1 Term Loan, X B-3 Term Loan, xAI Fixed Rate Term Loan, xAI Floating Rate Term Loan and xAI 12.5%\nSecured Senior Notes for an aggregate amount of $18,905 million, including $1,163 million of prepayment penalty.\nPurchase Commitments\nIn March 2026, the Company executed a purchase agreement with an unaffiliated third party to acquire additional\nturbines for the AI infrastructure totaling $805 million through 2029.\nNote 22 - Subsequent Events to the Original Issuance of the Consolidated Financial Statements (Unaudited)\nThe Company has evaluated subsequent events that occurred from the date the consolidated financial statements\nwere originally issued on March 30, 2026 through May 7, 2026, the date the consolidated financial statements were\navailable to be reissued, and determined that the following subsequent events require disclosure in the consolidated\nfinancial statements.\nCollaboration Agreement\nOn April 19, 2026, the Company entered into a compute agreement with Anysphere, Inc., doing business as Cursor,\na San Francisco-based private software company (“Cursor”). Pursuant to the compute agreement, the Company will\ncollaborate with Cursor to improve the Company’s existing models, including Grok, and potentially to jointly\ndevelop AI models and related model-specific deliverables.\nConcurrent with the compute agreement, the Company also entered into an option agreement for the right, but not\nthe obligation, to acquire Cursor. The option agreement generally provides that the Company may exercise the call\noption at any time during the 30-day period following the earlier of (i) seven trading days following the completion\nof the Company’s IPO and (ii) September 30, 2026. Exercise of the call option is in the Company’s sole discretion\nand subject to further approval by the board of directors. Cursor is also subject to certain exclusivity obligations\nunder the option agreement. The consideration for the acquisition of Cursor would consist of shares of Class A\ncommon stock based on an implied equity value of Cursor of $60.0 billion, and the price of Class A common stock\nthat equals, if the acquisition closed prior to the completion of this offering, the most recent quarterly valuation, or,\nif the acquisition closed after the completion of the Company’s IPO, the volume-weighted average closing price\nthereof over the seven consecutive trading days immediately preceding the closing of the acquisition. If either (i) the\nCompany decides to terminate the option agreement or (ii) Cursor is eligible to and decides to terminate due to the", - "path": "spacex-s1.pdf/p365", - "metadata": { - "length": 4312, - "summary": "F-61 Table of Contents applicable regulatory waiting period, SpaceX issued 3.8 million shares of Class A Common Stock (on a pre-2026 Stock Split basis) to Tesla in accordance with the terms of the foregoing agreements. Tesla Collaboration In March 2026, the Company announced a...", - "page_nums": [ - 365 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 365, "artifact_ref": "page_citation_assets/page-365.png", @@ -12869,24 +8224,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_27796449-7551-5550-aa91-1345ce6590df", - "type": "page", - "content": "F-62\nTable of Contents\nCompany’s material breach of the option agreement, Cursor is entitled to a $1.5 billion termination fee under the\noption agreement and an $8.5 billion deferred services fee under the compute agreement. These fees are payable in\ncash (or Class A common stock, if the Company’s IPO has not been consummated at the time the fees become\npayable).\nThe Company has conducted preliminary due diligence on Cursor’s business, technology and operations, and expect\nto continue such diligence in connection with any decision to exercise the call option. The Company cannot predict\nwhether the Company will elect to exercise the call option or, if exercised, whether the acquisition will close on the\nanticipated terms or at all.\nSale-Leaseback Transaction\nOn April 24, 2026, CTC entered into a five-year equipment lease agreement with Valor, a related party, for certain\nAI infrastructure hardware (“Valor transaction III”) for total undiscounted lease payments of $6,587 million.\nAsset Acquisition\nOn April 30, 2026, the Company entered into an asset purchase agreement with an unaffiliated third party to\npurchase certain mobile gas turbines and related packages for approximately $2,000 million (the “Turbine\nAcquisition”). The closing of the Turbine Acquisition is expected to occur in May 2026 and is subject to customary\nclosing conditions. The seller has also agreed to enter into a post-closing services agreement to support the\nCompany's turbine operations. The Turbine Acquisition will help provide power to the Company's data centers.\nCloud Services Agreement\nOn May 3, 2026, the Company entered into a cloud services agreement with Anthropic PBC, an AI research and\ndevelopment public benefit corporation, with respect to access to compute capacity. Pursuant to this agreement, the\ncustomer has agreed to pay a monthly fee through May 2029, with capacity ramping in May 2026 at a reduced fee.\nThe agreement may be terminated by either party upon 90 days’ notice. The customer will retain ownership and\nintellectual property rights in its content, AI models, and related data.", - "path": "spacex-s1.pdf/p366", - "metadata": { - "length": 2099, - "summary": "F-62 Table of Contents Company’s material breach of the option agreement, Cursor is entitled to a $1.5 billion termination fee under the option agreement and an $8.5 billion deferred services fee under the compute agreement. These fees are payable in cash (or Class A common st...", - "page_nums": [ - 366 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 366, "artifact_ref": "page_citation_assets/page-366.png", @@ -12894,24 +8232,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_bdc14696-c848-5816-ab19-e04fc77dbe89", - "type": "page", - "content": "F-63\nTable of Contents\n\nSpace Exploration Technologies Corp.\nConsolidated Balance Sheets\n(in millions, except per share data)\n(unaudited)\nMarch 31, 2026 December 31, 2025\nAssets\nCurrent assets\nCash and cash equivalents\n\n................................................................................................................ $ 15,852 $ 24,747\nMarketable securities\n....................................................................................................................... 7,823 —\nAccounts receivable, net of allowance for credit losses of $47 and $39 at March 31, 2026 and December 31, 2025, respectively\n\n\n............................................................................................... 1,833 1,579\nInventory\n\n\n.......................................................................................................................................... 2,588 2,416\nPrepaid expenses and other current assets\n....................................................................................... 1,636 2,210\nTotal current assets\n\n..................................................................................................................... 29,732 30,952\nProperty, plant, and equipment, net(a)\n\n\n.................................................................................................... 53,879 42,602\nFinance lease right-of-use assets\n\n\n............................................................................................................ 1,182 1,260\nIntangible assets, net\n\n.............................................................................................................................. 1,432 1,548\nDigital assets\n\n.......................................................................................................................................... 1,293 1,637\nGoodwill\n\n................................................................................................................................................. 11,681 11,809\nDeferred tax assets\n\n................................................................................................................................. 213 141\nOther assets\n\n............................................................................................................................................ 2,682 2,130\nTotal assets\n\n\n............................................................................................................................... $ 102,094 $ 92,079\nLiabilities, Redeemable Convertible Preferred Stock, and Shareholders’ Equity\nCurrent liabilities\nAccounts payable\n\n\n................................................................................................................................... 10,002 11,792\nDeferred revenue, current\n\n\n..................................................................................................................... 7,207 6,111\nDebt and finance leases, current (related party of $1,121 and $455 at March 31, 2026 and December 31, 2025, respectively)\n\n\n..................................................................................................... 1,538 928\nAccrued expenses and other current liabilities ...................................................................................... 5,689 2,569\nTotal current liabilities\n........................................................................................................................... 24,436 21,400\nLong-term liabilities\nDeferred revenue, net of current\n\n........................................................................................................... 6,029 6,005\nDebt and finance leases, net of current (related party of $7,920 and $4,052 at March 31, 2026 and December 31, 2025, respectively)\n..................................................................................................... 28,727 21,968\nOther liabilities\n\n....................................................................................................................................... 1,320 1,381\nTotal liabilities\n...................................................................................................................................... 60,512 50,754\nCommitments and contingencies (Note 16)\nRedeemable convertible preferred stock\nRedeemable convertible preferred stock, par value $0.001; 189 and 2,351 shares issued; 135 and 2,046 shares outstanding as of March 31, 2026 and December 31, 2025, respectively\n\n.................... 7,049 38,752\nShareholders’ equity\nClass A common stock, par value $0.001; 2,965 and 2,036 shares issued; 2,883 and 1,952 shares outstanding as of March 31, 2026 and December 31, 2025, respectively\n......................................... 3 3\nClass B common stock, par value $0.001; 2,421 and 643 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively\n\n................................................................................. 3 1\nClass C common stock, par value $0.001; 494 and 484 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively\n\n................................................................................. 0 0\nClass D common stock, par value $0.0001; no shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively\n\n................................................................................................ — —\nAdditional paid-in capital\n\n....................................................................................................................... 74,083 37,706\nAccumulated deficit\n\n\n............................................................................................................................... (41,311) (37,035)\nAccumulated other comprehensive income\n\n\n........................................................................................... 1,755 1,898\nTotal shareholders’ equity\n\n................................................................................................................. 34,533 2,573\nTotal liabilities, redeemable convertible preferred stock, and shareholders’ equity\n\n................... $ 102,094 $ 92,079\n__________________\n(a) Refer to Note 17, Related Party Transactions for additional details on related party arrangements.\nThe accompanying notes are an integral part of these consolidated financial statements.", - "path": "spacex-s1.pdf/p367", - "metadata": { - "length": 6392, - "summary": "F-63 Table of Contents Space Exploration Technologies Corp. Consolidated Balance Sheets (in millions, except per share data) (unaudited) March 31, 2026 December 31, 2025 Assets Current assets Cash and cash equivalents ..............................................................", - "page_nums": [ - 367 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 367, "artifact_ref": "page_citation_assets/page-367.png", @@ -12919,24 +8240,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b4b04525-1290-5c2d-a5eb-53e6b215b89a", - "type": "page", - "content": "F-64\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Operations\n(in millions, except per share data)\n(unaudited)\nThree Months Ended March 31,\n2026 2025\nRevenue\n\n........................................................................................................................ $ 4,694 $ 4,067\nCosts and expenses\nCost of revenue\n\n......................................................................................................... 2,388 1,962\nResearch and development\n\n........................................................................................ 3,514 1,557\nSelling, general, and administrative\n\n.......................................................................... 746 493\nRestructuring charges (credits)\n\n................................................................................. (11) 4\nImpairment\n\n................................................................................................................ — 24\nTotal costs and expenses\n\n...................................................................................... 6,637 4,040\nIncome (loss) from operations\n\n\n.................................................................................... (1,943) 27\nInterest expense (related party of $186 and $- for March 31, 2026 and 2025, respectively)\n\n............................................................................................................... (664) (447)\nInterest income\n\n............................................................................................................... 213 117\nOther expense, net\n\n.......................................................................................................... (1,876) (211)\nLoss before income taxes\n\n\n............................................................................................. (4,270) (514)\nProvision for income taxes\n\n............................................................................................ 6 14\nNet loss\n\n\n.......................................................................................................................... $ (4,276) $ (528)\nNet loss attributable to shareholders - basic and diluted\n\n........................................... $ (4,947) $ (528)\nNet loss per share of common stock attributable to common shareholders\nBasic and Diluted\n\n........................................................................................................... $ (1.27) $ (0.18)\nWeighted average shares used in computing net loss per share of common stock\nBasic and Diluted\n\n........................................................................................................... 3,884 2,875\nThe accompanying notes are an integral part of these consolidated financial statements.", - "path": "spacex-s1.pdf/p368", - "metadata": { - "length": 2785, - "summary": "F-64 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Operations (in millions, except per share data) (unaudited) Three Months Ended March 31, 2026 2025 Revenue ......................................................................................", - "page_nums": [ - 368 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 368, "artifact_ref": "page_citation_assets/page-368.png", @@ -12944,24 +8248,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_21265e22-4e35-597d-96cb-636aac5c2a03", - "type": "page", - "content": "F-65\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Comprehensive Loss\n(in millions)\n(unaudited)\nThree Months Ended March 31,\n2026 2025\nNet loss\n\n..................................................................................................................... $ (4,276) $ (528)\nOther comprehensive income (loss)\nChange in foreign currency translation adjustments, net of tax\n\n\n............................... (140) 257\nUnrealized gains (losses) on marketable securities, net of tax\n\n................................. (3) 2\nOther comprehensive income (loss)\n\n......................................................................... (143) 259\nComprehensive loss\n\n\n\n................................................................................................ $ (4,419) $ (269)\nThe accompanying notes are an integral part of these consolidated financial statements.", - "path": "spacex-s1.pdf/p369", - "metadata": { - "length": 905, - "summary": "F-65 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Comprehensive Loss (in millions) (unaudited) Three Months Ended March 31, 2026 2025 Net loss ....................................................................................................", - "page_nums": [ - 369 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 369, "artifact_ref": "page_citation_assets/page-369.png", @@ -12969,24 +8256,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_e7a7c97e-9465-5f9b-ba82-c68c8581175c", - "type": "page", - "content": "F-66\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Redeemable Convertible Preferred Stock and Shareholders’ Equity\n(in millions)\n(unaudited)\nRedeemable Convertible Preferred Stock Common Stock\nShares Amount Shares Amount\nAdditional Paid-in Capital Accumulated Deficit\nAccuOCompIn\nBalances at December 31, 2024\n\n........................................ 1,748 $ 20,941 3,023 $ 3 $ 35,865 $ (32,098) $\nShare-based compensation\n\n.................................................. — — — — 262 —\nCommon stock issued, net of tax withholding\n\n.................... — — 26 0 931 —\nRepurchase of common stock\n\n............................................. — — (28) 0 (508) —\nConversion of redeemable convertible preferred stock to common stock\n\n\n................................................................. 0 (1) 2 0 1 —\nTransfer of equity in business combination\n\n........................ — — 1 0 39 —\nNet loss\n................................................................................ — — — — — (528)\nOther comprehensive income\n\n.............................................. — — — — — —\nBalances at March 31, 2025\n.............................................. 1,748 $ 20,940 3,024 $ 3 $ 36,590 $ (32,626) $\nRedeemable Convertible Preferred Stock Common Stock\nShares Amount Shares Amount\nAdditional Paid-in Capital Accumulated Deficit\nAccuOCompIn\nBalances at December 31, 2025\n\n\n.......................................... 2,046 $ 38,752 3,079 $ 4 $ 37,706 $ (37,035) $\nShare-based compensation\n\n\n.................................................. — — — — 693 —\nIssuance of redeemable convertible preferred stock\n\n........... 78 5,869 — — — —\nCommon stock issued, net of tax withholding\n\n\n.................... — — 1,346 1 2,460 —\nRepurchase of common and redeemable convertible preferred stock\n\n................................................................ (2) (69) (31) — (1,864) —\nConversion of redeemable convertible preferred stock pursuant to the xAI Merger\n\n............................................. (1,987) (37,476) 1,424 1 37,474 —\nRepurchase of common stock pursuant to xAI Merger\n\n....... — — (25) — (2,413) —\nConversion of redeemable convertible preferred stock to common stock\n\n\n................................................................. — (27) 5 — 27 —\nNet loss\n................................................................................ — — — — — (4,276)\nOther comprehensive loss\n................................................... — — — — — —\nBalances at March 31, 2026\n.............................................. 135 $ 7,049 5,798 $ 6 $ 74,083 $ (41,311) $\nThe accompanying notes are an integral part of these consolidated financial statements.", - "path": "spacex-s1.pdf/p370", - "metadata": { - "length": 2722, - "summary": "F-66 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Redeemable Convertible Preferred Stock and Shareholders’ Equity (in millions) (unaudited) Redeemable Convertible Preferred Stock Common Stock Shares Amount Shares Amount Additional Paid-in C...", - "page_nums": [ - 370 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 370, "artifact_ref": "page_citation_assets/page-370.png", @@ -12994,24 +8264,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_486a83fe-787d-53e9-a2be-18b16bb6c2c2", - "type": "page", - "content": "F-67\nTable of Contents\nSpace Exploration Technologies Corp.\nConsolidated Statements of Cash Flows\n(in millions)\n(unaudited)\nThree Months Ended March 31,\n2026 2025\nCash flows from operating activities\nNet loss\n.....................................................................................................................................$ (4,276)$ (528)\nAdjustments to reconcile net loss to net cash provided by operating activities:\nDepreciation and amortization\n............................................................................................2,442 1,443\nShare-based compensation\n..................................................................................................639 232\nUnrealized loss on digital assets\n\n.........................................................................................344 188\nImpairment and loss on disposal of fixed assets, net\n.......................................................... 5 32\nAmortization of debt discount and issuance costs\n\n.............................................................. 19 18\nLoss on debt extinguishment\n..............................................................................................1,526 —\nOther\n...................................................................................................................................(26) 31\nChanges in operating assets and liabilities\nAccounts receivable\n.......................................................................................................(218) (197)\nInventory\n\n........................................................................................................................(384) (322)\nPrepaid expenses and other assets .................................................................................(74) (88)\nAccounts payable\n\n...........................................................................................................(528) 93\nDeferred revenue\n...........................................................................................................1,119 (34)\nOperating lease liabilities, net\n.......................................................................................(5) (1)\nOther liabilities\n\n..............................................................................................................464 (140)\nNet cash provided by operating activities\n................................................................$ 1,047 $ 727\nCash flows from investing activities\nPurchases of property, plant, and equipment (related party of $34 and $84 for March 31, 2026 and 2025, respectively)\n...............................................................................................(10,107) (4,140)\nCapitalized interest\n...................................................................................................................(7) —\nProceeds from product rebates\n\n.................................................................................................1,195 —\nPurchases of marketable securities\n...........................................................................................(7,801) (312)\nMaturities of marketable securities\n..........................................................................................— 289\nOther investing activities, net\n...................................................................................................(4) (7)\nNet cash used in investing activities\n\n...................................................................................$ (16,724)$ (4,170)\nCash flows from financing activities\nPrincipal repayments on finance leases\n....................................................................................(82) (66)\nProceeds from debt and other financing obligations\n................................................................22,694 4,744\nPayment of debt issuance costs (23) (3)\nRepayments on debt and other financing obligations\n..............................................................(18,295) (4,745)\nPayment of debt extinguishment premium (1,153) —\nProceeds from issuance of capital stock, net of issuance costs\n................................................ 8,319 899\nProceeds from employee equity award plans\n...........................................................................111 33\nPayments for repurchase of common and redeemable convertible preferred stock\n................. (4,346) (508)\nTaxes paid related to net share settlement of equity awards\n.................................................... (100) —\nNet cash provided by financing activities\n...........................................................................$ 7,125 $ 354\nEffect of exchange rate changes on cash and cash equivalents\n\n................................................ 36 70\nNet change in cash and cash equivalents and restricted cash\n...................................................(8,516) (3,019)\nCash and cash equivalents and restricted cash, beginning of the period\n\n.................................. 25,124 11,501\nCash and cash equivalents and restricted cash, end of the period\n............................................$ 16,608$ 8,482", - "path": "spacex-s1.pdf/p371", - "metadata": { - "length": 5161, - "summary": "F-67 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Cash Flows (in millions) (unaudited) Three Months Ended March 31, 2026 2025 Cash flows from operating activities Net loss .......................................................................", - "page_nums": [ - 371 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 371, "artifact_ref": "page_citation_assets/page-371.png", @@ -13019,24 +8272,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_47664c4b-5cf6-5e51-8665-13cd134431ad", - "type": "page", - "content": "F-68\nTable of Contents\nThree Months Ended March 31,\n2026 2025\nSupplemental disclosures of cash flow information\nCash paid for the following:\nInterest, net of interest capitalized\n......................................................................................$ 990 $ 382\nIncome taxes, net\n................................................................................................................$ 8 $ 7\nSupplemental schedule of noncash investing and financing activities\nShare-based compensation capitalized in property, plant, and equipment, net\n\n........................$ 60 $ 30\nPurchases of property, plant, and equipment included in accrued expenses and accounts payable\n.................................................................................................................................$ 10,649$ 565\nPurchases of property, plant, and equipment financed by other financings\n............................$ 2,684 $ —\nThe accompanying notes are an integral part of these consolidated financial statements.", - "path": "spacex-s1.pdf/p372", - "metadata": { - "length": 1032, - "summary": "F-68 Table of Contents Three Months Ended March 31, 2026 2025 Supplemental disclosures of cash flow information Cash paid for the following: Interest, net of interest capitalized ......................................................................................$ 990 $ 382...", - "page_nums": [ - 372 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 372, "artifact_ref": "page_citation_assets/page-372.png", @@ -13044,24 +8280,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_30170437-7239-5f8e-906c-bac8314e801c", - "type": "page", - "content": "F-69\nTable of Contents\nSPACE EXPLORATION TECHNOLOGIES CORP.\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n(tables in millions, except per share data)\n(unaudited)\nNote 1 - Nature of Business\nDescription of Business\nSpace Exploration Technologies Corp. and its wholly owned subsidiaries, collectively referred to as the “Company”\nor “SpaceX,” operate three segments – (i) the Space segment designs, manufactures, and launches reusable rockets\nto provide high cadence, reliable, and affordable access to space at unprecedented scale, (ii) the Connectivity\nsegment operates a worldwide high-speed, low-latency broadband network powered by thousands of Starlink\nsatellites in Low-Earth Orbit, delivering connectivity to millions of consumer, enterprise, and government customers\nthrough our Starlink offering, and (iii) the AI segment operates a vertically integrated AI platform spanning a\nfrontier LLM Grok, AI solutions for consumer and enterprise customers, X — a real-time information,\nentertainment, and free speech platform — and AI computational infrastructure.\nOn February 2, 2026 (“xAI Merger Date”), the Company completed its acquisition of X.AI Holdings Corp. (“xAI”),\npursuant to which xAI became a wholly-owned subsidiary of the Company (“xAI Merger”). Prior to the xAI\nMerger, on March 28, 2025, xAI completed its acquisition of X Holdings Corp. (“X”) and X.AI Corp., in which X\nand X.AI Corp. became wholly-owned subsidiaries of xAI (“X Merger”, and collectively with xAI Merger,\n“Mergers”). X.AI Corp began operations in March 2023 and Twitter, Inc. (“Twitter”) was acquired by Mr. Elon\nMusk in October 2022. The Mergers were each effected through a share exchange.\nThe Mergers have been accounted for as reorganizations of entities under common control as Mr. Elon Musk had a\ncontrolling financial interest in the Company, xAI and X through his majority voting interest in each such entity\nduring the periods presented in these consolidated financial statements. The Company’s consolidated financial\nstatements have been prepared to reflect the retrospective combination of the net assets of the entities at their\nhistorical carrying amounts for all periods presented. No new goodwill or other intangible assets have been recorded\nand all historical related party transactions between the entities have been eliminated in consolidation. The capital\nstock and shareholders’ equity for all periods presented reflects a continuation of the historical SpaceX capital stock\nand shareholders’ equity, combined with the historical capital stock and shareholders’ equity of X and xAI merged\nunder common control, as adjusted by the respective exchange ratios used to effect the Mergers, except for xAI’s\nhistorical redeemable convertible preferred stock through the date of the xAI Merger. All of xAI’s redeemable\nconvertible preferred stock were converted to SpaceX common stock as part of the xAI Merger and are presented as\nsuch from the date of the xAI Merger. This presentation constitutes a change in reporting entity. Refer to Note 12 -\nRedeemable Convertible Preferred Stock and Shareholders’ Equity for additional details.\nOn May 4, 2026, the Company effected a five-for-one forward stock split of its authorized, issued, and outstanding\nshares of Class A, Class B, and Class C Common Stock (“2026 Stock Split”). The conversion rate of SpaceX\nRedeemable Convertible Preferred Stock was proportionately adjusted to factor in the 2026 Stock Split. All share\nand per share information has been retroactively adjusted to reflect the 2026 Stock Split for all periods presented.\nNote 2 - Summary of Significant Accounting Policies\nUnaudited Interim Financial Statements\nThe consolidated financial statements, including the consolidated balance sheet as of March 31, 2026, the\nconsolidated statements of operations, the consolidated statements of comprehensive loss, the consolidated\nstatements of redeemable convertible preferred stock and shareholders’ equity and the consolidated statements of\ncash flows for the three months ended March 31, 2026 and 2025, as well as other information disclosed in the\naccompanying notes, are unaudited. The consolidated balance sheet as of December 31, 2025 was derived from the\naudited consolidated financial statements as of that date. The interim consolidated financial statements and the", - "path": "spacex-s1.pdf/p373", - "metadata": { - "length": 4337, - "summary": "F-69 Table of Contents SPACE EXPLORATION TECHNOLOGIES CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (tables in millions, except per share data) (unaudited) Note 1 - Nature of Business Description of Business Space Exploration Technologies Corp. and its wholly owned subs...", - "page_nums": [ - 373 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 373, "artifact_ref": "page_citation_assets/page-373.png", @@ -13069,24 +8288,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8535cb95-cb90-5051-bea9-17179127446e", - "type": "page", - "content": "F-70\nTable of Contents\naccompanying notes should be read in conjunction with the annual consolidated financial statements and the\naccompanying notes.\nThe interim consolidated financial statements and the accompanying notes have been prepared on the same basis as\nthe annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which\ninclude only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods\npresented. The consolidated results of operations for any interim period are not necessarily indicative of the results\nto be expected for the full year or for any other future years or interim periods.\nUse of Estimates\nThe preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make\nestimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent\nassets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and\nexpenses during the reporting period. Actual results could differ from those estimates. Amounts which are subject to\nsignificant judgment and use of estimates include revenues recognized over time using the cost-to-cost input\nmethod, the determination of valuation allowances associated with deferred tax assets and estimates of tax liabilities,\nreserves for excess and obsolete inventory, fair value of indefinite-lived intangible assets and goodwill, useful lives\nof property, plant, and equipment, the determination of incremental borrowing rate for lease liabilities, litigation and\nsettlement costs, and the valuation and assumptions underlying share-based compensation. On an ongoing basis, the\nCompany evaluates its estimates compared to historical experience and current trends, which forms the basis for\nmaking judgments about the carrying value of assets and liabilities. In addition, the Company engages valuation\nspecialists to assist in the valuation of equity instruments.\nCash and Cash Equivalents and Restricted Cash\nThe Company’s total cash and cash equivalents and restricted cash, as presented in the consolidated statements of\ncash flows, are as follows:\nMarch 31, 2026 December 31, 2025\nCash and cash equivalents\n\n\n......................................................................................... $ 15,852 $ 24,747\nRestricted cash included in prepaid expenses and other current assets\n\n..................... 67 182\nRestricted cash included in other assets\n\n..................................................................... 689 195\nTotal as presented in the consolidated statements of cash flows\n\n........................ $ 16,608 $ 25,124\nSignificant Accounting Policies\nThere have been no material changes to the Company’s significant accounting policies from the annual consolidated\nfinancial statements for the year ended December 31, 2025.\nRecent Accounting Pronouncements\nIn December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope\nImprovements. The ASU improves the guidance in Topic 270 by improving the navigability of the required interim\ndisclosures and clarifying when that guidance is applicable. The amendments also provide additional guidance on\nwhat disclosures should be provided in interim reporting periods. The amendments add to Topic 270 a principle that\nrequires entities to disclose events since the end of the last annual reporting period that have a material impact on the\nentity. The ASU is effective for interim reporting periods within annual reporting periods beginning after December\n15, 2027. Adoption of this ASU can either be applied prospectively or retrospectively to any or all prior periods\npresented in the financial statements, and early adoption is permitted. The Company is currently evaluating the\nprovisions of this ASU and does not expect this ASU to have a material impact on the consolidated financial\nstatements.", - "path": "spacex-s1.pdf/p374", - "metadata": { - "length": 3980, - "summary": "F-70 Table of Contents accompanying notes should be read in conjunction with the annual consolidated financial statements and the accompanying notes. The interim consolidated financial statements and the accompanying notes have been prepared on the same basis as the annual con...", - "page_nums": [ - 374 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 374, "artifact_ref": "page_citation_assets/page-374.png", @@ -13094,24 +8296,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4b33e5fa-8c6c-50fc-8141-b6a736653cd4", - "type": "page", - "content": "F-71\nTable of Contents\nRecently adopted accounting pronouncements\nIn July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement\nof Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical\nexpedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of\nthe asset when estimating expected credit losses for current classified accounts receivable and contract assets. The\nCompany adopted this ASU on a prospective basis effective January 1, 2026. While this ASU was adopted, the\nCompany did not elect the practical expedient permitted under this ASU. Therefore, the adoption has no impact on\nthe consolidated financial statements.\nNote 3 - Revenue\nRevenue disaggregated by products and services is as follows:\nThree Months Ended March 31,\n2026 2025\nProducts\n..................................................................................................................... $ 380 $ 352\nServices\n\n...................................................................................................................... 4,314 3,715\nTotal revenues\n\n......................................................................................................... $ 4,694 $ 4,067\nAll of products revenue is attributable to the Connectivity segment.\nRevenue disaggregated by type and segment is as follows:\nThree Months Ended March 31,\n2026 2025\nLaunch Services\n\n\n................................................................................................... $ 330 $ 566\nLaunch & Development\n........................................................................................ 289 299\nSpace\n........................................................................................................................ 619 865\nConsumer\n.............................................................................................................. 2,148 1,492\nEnterprise & Government (1)\n\n\n\n................................................................................. 1,109 983\nConnectivity\n\n............................................................................................................ 3,257 2,475\nAdvertising\n\n............................................................................................................ 343 443\nAI Solutions & Infrastructure\n\n............................................................................... 475 284\nAI\n\n.............................................................................................................................. 818 727\nTotal revenues\n\n......................................................................................................... $ 4,694 $ 4,067\n___________________\n(1) Enterprise & Government revenue includes revenue from Starlink Mobile service offerings.\nDeferred revenue\nDeferred revenue is recorded when cash payments are received or due, in advance of the Company’s performance.\nDeferred revenue primarily relates to Space agreements and Connectivity enterprise and government contracts. Total\ndeferred revenue as of December 31, 2025 was $12,116 million, of which $1,165 million was recognized as revenue\nfor the three months ended March 31, 2026. Total deferred revenue as of March 31, 2026 was $13,236 million.\nBacklog\nThe Company’s backlog represents the transaction price of performance obligations to customers for which work\nremains to be performed. The amount of backlog increases with new contracts or additions to existing contracts and\ndecreases as revenue is recognized on existing contracts. Contracts are included in backlog when an enforceable\nagreement has been reached. Backlog does not include amounts related to performance obligations that are billed\nand recognized as they are delivered, optional purchases that do not represent material rights and any estimated\namounts of variable consideration that are subject to constraint. Backlog totaled $27,621 million as of March 31,", - "path": "spacex-s1.pdf/p375", - "metadata": { - "length": 4038, - "summary": "F-71 Table of Contents Recently adopted accounting pronouncements In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a p...", - "page_nums": [ - 375 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 375, "artifact_ref": "page_citation_assets/page-375.png", @@ -13119,24 +8304,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ff101654-48bb-5f76-a0e6-9f349bc61e23", - "type": "page", - "content": "F-72\nTable of Contents\n2026, of which $13,236 million was recognized as deferred revenue at March 31, 2026. Approximately 36% is\nexpected to be recognized within one year, and approximately 46% is expected to be recognized between one and\nthree years, with the remaining 18% to be recognized thereafter.\nNote 4 - Inventory\nInventory consists of the following:\nMarch 31, 2026 December 31, 2025\nRaw materials\n\n............................................................................................................ $ 1,054 $ 1,030\nWork-in-progress\n\n....................................................................................................... 835 803\nFinished goods\n\n........................................................................................................... 699 583\nInventory\n\n\n................................................................................................................. $ 2,588 $ 2,416\nNote 5 - Property, Plant, and Equipment, Net\nProperty, plant, and equipment, net consist of the following:\nMarch 31, 2026 December 31, 2025\nServers and networking equipment\n\n\n........................................................................... $ 23,850 $ 22,694\nSatellites\n\n..................................................................................................................... 12,893 11,949\nMachinery and equipment\n\n......................................................................................... 8,020 6,343\nData center infrastructure\n\n\n.......................................................................................... 2,965 2,960\nLaunch sites\n\n............................................................................................................... 2,479 2,404\nLand, buildings and improvements (1)\n\n....................................................................... 2,018 1,876\nFlight vehicle hardware\n\n............................................................................................. 1,459 1,689\nLeasehold improvements\n\n........................................................................................... 842 784\nConstruction-in-progress\n\n........................................................................................... 14,045 4,604\nProperty, plant, and equipment\n.................................................................................. 68,571 55,303\nLess: Accumulated depreciation\n\n................................................................................ (14,692) (12,701)\nProperty, plant, and equipment, net\n\n..................................................................... $ 53,879 $ 42,602\n__________________\n(1) Land is not a depreciable asset.\nConstruction in progress is primarily comprised of ongoing construction and expansion of the facilities and\nequipment as well as AI infrastructure that has not yet been placed in service.\nDepreciation expense for the three months ended March 31, 2026 and 2025 was $2,329 million and $1,237 million,\nrespectively.\nInterest is capitalized during the construction period for significant long term construction projects, such as the AI\ninfrastructure data centers and launch facilities. For the three months ended March 31, 2026, the Company\ncapitalized $7 million of interest, which is included in Construction-in-progress amounts above. No interest was\ncapitalized during the three months ended March 31, 2025.\nFor the three months ended March 31, 2025, the Company recorded impairment charges of $24 million related to the\nwrite off of damaged flight vehicles in the Space segment. These charges are reflected in Impairment in the\nconsolidated statements of operations. There were no impairment charges related to Property, plant, and equipment\nduring the three months ended March 31, 2026.", - "path": "spacex-s1.pdf/p376", - "metadata": { - "length": 3784, - "summary": "F-72 Table of Contents 2026, of which $13,236 million was recognized as deferred revenue at March 31, 2026. Approximately 36% is expected to be recognized within one year, and approximately 46% is expected to be recognized between one and three years, with the remaining 18% to...", - "page_nums": [ - 376 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 376, "artifact_ref": "page_citation_assets/page-376.png", @@ -13144,24 +8312,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_449759a3-68b6-5438-a296-b9d1dbd2b585", - "type": "page", - "content": "F-73\nTable of Contents\nNote 6 - Intangible Assets and Goodwill\nIntangible Assets\nFinite-lived intangible assets consist of the following:\nMarch 31, 2026\nWeighted-Average Useful Life (years) Gross Carrying Value Accumulated Amortization Net Carrying Value\nBrand\n\n...................................................................... 5.0 $ 735 $ (367) $ 368\nUser base\n\n................................................................. 9.0 1,277 (486) 791\nExisting technology\n\n\n................................................ 3.0 27 (17) 10\nAdvertising customer relationships\n\n........................ 5.0 745 (510) 235\nAcquired workforce\n\n................................................ 2.0 11 (2) 9\nTotal\n................................................................. $ 2,795 $ (1,382) $ 1,413\nDecember 31, 2025\nWeighted-Average Useful Life (in years) Gross Carrying Value Accumulated Amortization Net Carrying Value\nBrand\n\n...................................................................... 5.0 $ 743 $ (335) $ 408\nUser base\n\n................................................................. 9.0 1,291 (456) 835\nExisting technology\n\n................................................ 3.2 27 (16) 11\nAdvertising customer relationships\n\n........................ 5.0 752 (478) 274\nAcquired workforce\n\n................................................ 2.0 9 — 9\nTotal\n................................................................. $ 2,822 $ (1,285) $ 1,537\nAmortization expense associated with finite-lived intangible assets was $113 million and $206 million in the three\nmonths ended March 31, 2026 and 2025, respectively.\nThe Company also has indefinite-lived intangible assets of $19 million and $11 million as of March 31, 2026 and\nDecember 31, 2025, respectively. Indefinite-lived intangible assets primarily consist of trade names and domain\nnames, which are expected to provide long-term branding and marketing benefits.\nGoodwill\nThe activity for goodwill is as follows:\nBalance at December 31, 2025\n\n\n............................................................................................................. 11,809\nBusiness combination\n\n....................................................................................................................... 3\nCumulative translation adjustments\n\n................................................................................................ (131)\nBalance at March 31, 2026\n\n................................................................................................................. $ 11,681\nAs of March 31, 2026 and December 31, 2025, goodwill attributable to the Connectivity segment was $515 million\nand $513 million, respectively, and goodwill attributable to the AI segment was $11,166 million and $11,296\nmillion, respectively.", - "path": "spacex-s1.pdf/p377", - "metadata": { - "length": 2805, - "summary": "F-73 Table of Contents Note 6 - Intangible Assets and Goodwill Intangible Assets Finite-lived intangible assets consist of the following: March 31, 2026 Weighted-Average Useful Life (years) Gross Carrying Value Accumulated Amortization Net Carrying Value Brand ...................", - "page_nums": [ - 377 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 377, "artifact_ref": "page_citation_assets/page-377.png", @@ -13169,24 +8320,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_615d35a3-e89b-5808-85be-010bafd39fe7", - "type": "page", - "content": "F-74\nTable of Contents\nNote 7 - Financial Instruments\nThe Company’s assets that are measured at fair value on a recurring basis are as follows:\nMarch 31, 2026\nLevel Cost Unrealized Gain Unrealized Loss Fair Value\nCash and cash equivalents\nCash\n............................................. I 7,181 — — 7,181\nMoney market funds\n\n.................... I 6,950 — — 6,950\nGovernment securities\n\n\n................. II 1,721 — — 1,721\nMarketable securities\n\n\n.....................\nGovernment securities\n\n\n................. II 7,823 — 0 7,823\nPrepaid expenses and other current assets\nRestricted cash\n\n............................. I 15 — — 15\nRestricted cash in money market funds\n\n......................................... I 52 — — 52\nOther assets\n\n.....................................\nRestricted cash\n\n............................. I 512 — — 512\nRestricted cash in money market funds\n\n......................................... I 146 — — 146\nRestricted cash in government securities\n\n................................... II 31 — — 31\nTotal\n................................................. $ 24,431 $ — $ — $ 24,431\nDecember 31, 2025\nLevel Cost Unrealized Gain Unrealized Loss Fair Value\nCash and cash equivalents\nCash\n\n.............................................. I $ 3,408 $ — $ — $ 3,408\nMoney market funds\n\n.................... I 21,339 — — 21,339\nPrepaid expenses and other current assets\nRestricted cash\n............................. I 30 — — 30\nMoney market funds\n\n.................... I 152 — — 152\nOther assets\n....................................\nRestricted cash\n............................. I 182 — — 182\nRestricted cash in money market funds\n\n......................................... I 13 — — 13\nTotal\n\n................................................. $ 25,124 $ — $ — $ 25,124\nAs of March 31, 2026 and December 31, 2025, the Company also held 18,712 units of Bitcoin with a cost basis of\n$661 million and fair value of $1,293 million and $1,637 million, respectively. The fair value of these digital assets\nis determined using Level I in the fair value hierarchy.", - "path": "spacex-s1.pdf/p378", - "metadata": { - "length": 2075, - "summary": "F-74 Table of Contents Note 7 - Financial Instruments The Company’s assets that are measured at fair value on a recurring basis are as follows: March 31, 2026 Level Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents Cash ....................................", - "page_nums": [ - 378 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 378, "artifact_ref": "page_citation_assets/page-378.png", @@ -13194,24 +8328,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b9155103-4258-5c7a-963d-6de88728c362", - "type": "page", - "content": "F-75\nTable of Contents\nNote 8 - Investments in Unconsolidated Affiliates\nEquity method investment\nAs of March 31, 2026 and December 31, 2025, the Company held an investment in Stateline Power, LLC, which is\naccounted for as an equity method investment, of $80 million and $86 million, respectively.\nEquity investments without readily determinable fair value\nAs of March 31, 2026 and December 31, 2025, the Company held investments in unconsolidated affiliates which are\naccounted for as equity investments without readily determinable fair values of $168 million and $157 million,\nrespectively. The Company recorded cumulative downward adjustments of $59 million on these investments as of\nMarch 31, 2026. Upward adjustments or impairment on these investments during the three months ended March 31,\n2026 and 2025 were not material.\nNote 9 - Debt\nMarch 31, 2026\nPrincipal\nUnamortized Deferred Financing Costs Net\nSpaceX Bridge Loan\n\n...................................................................... 20,000 21 19,979\nX 2027 and X 2030 Notes\n\n.............................................................. 27 — 27\nOther financings (1)\n\n\n......................................................................... 9,105 — 9,105\nTotal debt\n\n\n........................................................................................ 29,132 21 29,111\nFinance lease liability\n\n..................................................................... 1,154 — 1,154\nTotal debt and finance leases\n\n.......................................................... 30,286 21 30,265\nLess: Short-term portion\n\n\n................................................................. 1,538 — 1,538\nTotal debt and finance leases, net of current\n\n\n............................. $ 28,748 $ 21 $ 28,727\nDecember 31, 2025\nPrincipal\nUnamortized Deferred Financing Costs Net\nX 2027 and X 2030 Notes\n\n.............................................................. 27 — 27\nX B-1 Term Loan\n\n........................................................................... 6,504 280 6,224\nX B-3 Term Loan\n\n........................................................................... 5,966 54 5,912\nxAI Fixed Rate Term Loan\n\n\n............................................................ 995 4 991\nxAI Floating Rate Term Loan\n\n........................................................ 995 40 955\nxAI 12.5% Secured Senior Notes\n\n................................................... 3,000 12 2,988\nOther financings (1)\n\n......................................................................... 4,562 — 4,562\nTotal debt\n\n\n........................................................................................ 22,049 390 21,659\nFinance lease liability\n\n\n..................................................................... 1,237 — 1,237\nTotal debt and finance leases\n\n.......................................................... 23,286 390 22,896\nLess: Short-term portion\n\n\n................................................................. 928 — 928\nTotal debt and finance leases, net of current\n\n............................. $ 22,358 $ 390 $ 21,968\n__________________\n(1) Includes obligations related to certain AI infrastructure assets recorded as failed sale-leaseback transactions. Refer to Other Financings\nbelow for additional details.", - "path": "spacex-s1.pdf/p379", - "metadata": { - "length": 3290, - "summary": "F-75 Table of Contents Note 8 - Investments in Unconsolidated Affiliates Equity method investment As of March 31, 2026 and December 31, 2025, the Company held an investment in Stateline Power, LLC, which is accounted for as an equity method investment, of $80 million and $86 m...", - "page_nums": [ - 379 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 379, "artifact_ref": "page_citation_assets/page-379.png", @@ -13219,24 +8336,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_09306327-f41a-504b-9000-347248343b88", - "type": "page", - "content": "F-76\nTable of Contents\nSpaceX Bridge Loan\nGeneral. In March 2026, SpaceX entered into a new bridge loan credit agreement (the “SpaceX Bridge Loan”) with\na syndicate of lenders, providing for an unsecured bridge term loan facility in an aggregate principal amount of\n$20,000 million. The SpaceX Bridge Loan matures on September 2, 2027, with two three-month extensions at the\nCompany’s option, subject to the absence of a continuing default and the payment of an extension fee of 0.25% of\nthe aggregate outstanding principal per extension, resulting in a final extended maturity date in March 2028.\nProceeds. The proceeds of the SpaceX Bridge Loan were used to repay the X B-1 Term Loan, the X B-3 Term\nLoan, the xAI Fixed Rate Loan, the xAI Floating Rate Loan, and the xAI 12.5% Senior Secured Notes (as defined\nand described below). The remaining proceeds were used for general corporate purposes.\nInterest Rates. The SpaceX Bridge Loan bears interest, at the Company’s election, at a rate per annum equal to (i)\nTerm SOFR plus an applicable margin ranging from 0.75%-1.75% (depending on the Company’s debt rating), or (ii)\na base rate equal to the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus\n1.00% and (d) 1.00%, plus an applicable margin ranging from 0.00% to 0.75% (depending on the Company’s debt\nrating). In addition, the Company is obligated to pay duration fees equal to 0.125% of outstanding principal on the\nfirst anniversary of closing and 0.25% of outstanding principal on the fifteen-month anniversary of closing. The\neffective interest rate on outstanding borrowings under the SpaceX Bridge Loan was 4.58% as of March 31, 2026.\nPrincipal Repayments. The SpaceX Bridge Loan may be prepaid at any time, in whole or in part, without premium\nor penalty. The Company is required to use the net proceeds of certain debt financings to repay amounts outstanding\nunder the SpaceX Bridge Loan and to apply the net proceeds of a qualified initial public offering (“IPO”) to repay\nsuch amounts within six months following receipt.\nGuarantors and Collateral. The obligations of the Company under the SpaceX Bridge Loan are guaranteed on a\njoint and several basis by X Corp., X.AI LLC, and CTC Property LLC (each a subsidiary of the Company).\nCovenants. The SpaceX Bridge Loan contains customary events of default and affirmative and negative covenants,\nincluding restrictions on liens, subsidiary indebtedness, fundamental changes (including a prohibition on the\ndisposition of Starlink assets and other material businesses outside the consolidated group), and changes in the\nnature of the Company’s business. The sole financial maintenance covenant requires the Company to maintain a\nConsolidated Leverage Ratio — defined as consolidated funded indebtedness (net of 85% of unrestricted cash) to\nConsolidated EBITDA (as defined in the SpaceX Bridge Loan) — of no greater than 3.75 to 1.0 as of the end of\neach fiscal quarter, with a temporary step-up to 4.25 to 1.0 for four fiscal quarters following a qualifying acquisition\nof at least $1.0 billion. The Company was in compliance with the covenants as of March 31, 2026.\nAccounting Treatment. The Company accounted for the repayment of the X B-1 Term Loan, the X B-3 Term Loan,\nthe xAI Fixed Rate Loan, the xAI Floating Rate Loan and the xAI 12.5% Senior Secured Notes as an\nextinguishment of debt, resulting in a loss on extinguishment of $1,526 million, recorded in Other expense, net.\nSpaceX Credit Facility\nGeneral. In February 2025, the Company entered into a five-year senior unsecured revolving credit agreement\n(“SpaceX Credit Facility”) with a syndicate of banks, under which the Company may draw up to $1,500 million,\nsubject to a customary financial covenant and other reporting requirements. The SpaceX Credit Facility terminates,\nand all outstanding loans become due and payable, on February 7, 2030, unless the parties agree to an extension. No\namounts were borrowed under the SpaceX Credit Facility during the three months ended March 31, 2026 and 2025.\nAmendment. In March 2026, the Company entered into a First Amendment to Credit Agreement and Waiver (the\n“First Amendment”) with its lenders, in connection with the Company’s entry into the SpaceX Bridge Loan (as\ndefined above). The First Amendment, among other things, (i) waived certain specified defaults and (ii) amended", - "path": "spacex-s1.pdf/p380", - "metadata": { - "length": 4397, - "summary": "F-76 Table of Contents SpaceX Bridge Loan General. In March 2026, SpaceX entered into a new bridge loan credit agreement (the “SpaceX Bridge Loan”) with a syndicate of lenders, providing for an unsecured bridge term loan facility in an aggregate principal amount of $20,000 mil...", - "page_nums": [ - 380 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 380, "artifact_ref": "page_citation_assets/page-380.png", @@ -13244,24 +8344,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_b4b09b96-282b-54b7-bba6-e81ca0dc2084", - "type": "page", - "content": "F-77\nTable of Contents\ncertain definitions and covenants under the SpaceX Credit Facility to conform to the terms of the SpaceX Bridge\nLoan.\nInterest Rates. Under the SpaceX Credit Facility, borrowings bear interest at the Company’s option, at a rate per\nannum of (i) between 0.75%-1.25%, depending on the Company’s current debt rating, plus the relevant Term SOFR\nor (ii) between 0.0%-0.25% depending on the Company’s current debt rating plus the greater of (a) the Federal\nFunds Rate plus 0.5%, (b) the Prime Rate, (c) Term SOFR plus 1.0% and (d) 1.0%. The Company may also borrow\nin various alternative currencies at various alternative rates, including rates based on SONIA for Pound Sterling\nloans and EURIBOR for Euro loans plus an applicable margin. The fee for undrawn amounts is between\n0.07%-0.11% per annum, depending on the Company’s current debt rating. Interest is payable either monthly or\nquarterly, depending on the interest loan option.\nCovenants. The Company was in compliance with the covenants as of March 31, 2026; however, the Company had\na technical default when the Company acquired xAI on February 2, 2026 due to the amount of debt assumed as part\nof the acquisition at the subsidiary level. On March 2, 2026, the Company obtained a waiver from the syndicate of\nbanks and amended the SpaceX Credit Facility allowing for the debt refinance completed on March 2, 2026,\nresulting in the Company being in compliance with all covenants.\nX 2027 and 2030 Notes\nGeneral. In 2019, a subsidiary of X, an indirect subsidiary of the Company, issued $700 million aggregate principal\namount of 3.875% senior notes due 2027 (the “X 2027 Notes”) in a private placement. The X 2027 Notes mature on\nDecember 15, 2027. In 2022, a subsidiary of X issued $1,000 million aggregate principal amount of 5.000% senior\nnotes due 2030 (the “X 2030 Notes”) in a private placement. The X 2030 Notes mature on March 1, 2030. The X\n2027 and X 2030 Notes represent senior unsecured obligations of the Company.\nInterest Rates. For the X 2027 Notes, the interest rate is fixed at 3.875% per annum and interest is payable semi-\nannually in arrears on June 15 and December 15 of each year. For the X 2030 Notes, the interest rate is fixed at\n5.000% per annum and interest is payable semi-annually in arrears on March 1 and September 1 of each year.\nPrincipal Repayments. In November 2022, the Company purchased approximately $675 million aggregate principal\namount of X 2027 Notes and $998 million aggregate principal amount of the X 2030 Notes in settlement of the\nchange in control of Twitter. The X 2027 Notes and X 2030 Notes that remain outstanding may be redeemed at the\noption of the Company, in whole or in part, at any time prior to September 15, 2027 and December 1, 2029,\nrespectively, at a price equal to 100.0% of the principal amounts plus a “make-whole” premium and accrued and\nunpaid interest, if any, up to, but excluding, the redemption date.\nCovenants. The Company was in compliance with the covenants as of March 31, 2026.\nX First Lien Senior Credit Facilities\nGeneral. In 2022, X Corp., an indirect subsidiary of the Company, entered into the First Lien Credit Agreement\nwhich provided for a new term loan commitment of $6,705 million (“X B-1 Term Loan”) and a $500 million\nSecured First Lien Revolving Credit Facility (including a letter of credit subfacility with an aggregate face value of\nup to $100 million) (together referred to as “X First Lien Senior Credit Facilities”). The Secured First Lien\nRevolving Credit Facility matures on October 27, 2027 and the X B-1 Term Loan matures on October 27, 2029.\nAmendments. In February 2025, X Corp., an indirect subsidiary of the Company, amended the X First Lien Senior\nCredit Facilities and entered into a new term loan commitment for $4,741 million with a maturity date of October\n27, 2029 (“X B-3 Term Loan”) and reduced the Secured First Lien Revolving Credit Facility commitment to $0.\nAs part of the issuance of the X B-3 Term Loan, the Company is required to pay an arrangement fee of $51 million,\nwhich is due and payable on February 19, 2027. In April 2025, the Company entered into an amendment to the X", - "path": "spacex-s1.pdf/p381", - "metadata": { - "length": 4179, - "summary": "F-77 Table of Contents certain definitions and covenants under the SpaceX Credit Facility to conform to the terms of the SpaceX Bridge Loan. Interest Rates. Under the SpaceX Credit Facility, borrowings bear interest at the Company’s option, at a rate per annum of (i) between 0...", - "page_nums": [ - 381 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 381, "artifact_ref": "page_citation_assets/page-381.png", @@ -13269,24 +8352,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_9d0f969a-ef5b-5ed6-b3ee-af1e78b9325f", - "type": "page", - "content": "F-78\nTable of Contents\nB-3 Term Loan for an additional commitment of $1,225 million with the same terms and conditions, increasing the\ntotal X B-3 Term Loan borrowings to $5,966 million.\nInterest Rates. The X B-1 Term Loan bore interest at a rate per annum of, initially, adjusted Term SOFR plus\n6.50%. The Secured First Lien Revolving Credit Facility bore interest at a rate per annum of, initially, an adjusted\nTerm SOFR plus 4.50%, with leverage-based step-downs. Undrawn commitments under the Secured First Lien\nRevolving Credit Facility were subject to an unused commitment fee of 0.50% per annum, subject to quarterly\nleverage based step-downs. The X B-3 Term Loan had a fixed interest rate of 9.50% per annum. Interest on the X\nB-1 Term Loan and X B-3 Term Loan was payable monthly, quarterly, or bi-annually at the option of the Company.\nPrincipal Repayments. On March 2, 2026, the Company repaid the full outstanding principal balance and accrued\ninterest, including a prepayment penalty of $425 million, resulting in the extinguishment of the X B-1 Term Loan\nand X B-3 Term Loan. The X B-1 Term Loan was repayable at any time, in whole or in part, without premium or\npenalty, subject to mandatory quarterly prepayments of principal beginning on the last day of the fiscal quarter\nended March 31, 2023, in amounts equal to 0.25% of the original principal amount of borrowings thereunder, with\nthe unpaid balance being payable on the final maturity date thereof. The X B-1 Term Loan was also subject to\nadditional customary mandatory prepayment provisions from the proceeds of certain debt issuances and asset sales,\nas well as sweeps of a portion of excess cash flow, subject to certain leverage-based step-downs and exceptions.\nThe X B-3 Term Loan had prepayment penalties of 107.13% of the outstanding principal before October 27, 2026,\n104.75% of the outstanding principal before October 27, 2027, and 102.38% of the outstanding principal before\nOctober 27, 2028.\nGuarantors and Collateral. Obligations under the First Lien Senior Credit Facilities were guaranteed by X, and were\ncollateralized by a first priority lien on substantially all of the assets of X and its subsidiaries (subject to customary\nexceptions).\nxAI First Lien Credit Agreement\nGeneral. In June 2025, X.AI Corp. and X.AI LLC, indirect subsidiaries of the Company, entered into the First Lien\nCredit Agreement to provide borrowings up to $2,000 million. The Company executed a $1,000 million Fixed Rate\nTerm Loan maturing on June 30, 2030 (“xAI Fixed Rate Term Loan”); and a $1,000 million Floating Rate Term\nLoan maturing on June 30, 2030 (“xAI Floating Rate Term Loan”).\nInterest Rates. The xAI Fixed Rate Term Loan had a fixed interest rate of 12.50% per annum and the xAI Floating\nRate Term Loan had a floating interest rate per annum of Term SOFR plus 7.25% or ABR plus 6.25%. Interest on\nthe xAI Fixed Rate Term Loan was payable bi-annually on January 31 and July 31, commencing on January 31,\n2026. Interest on the xAI Floating Rate Term loan was payable monthly, quarterly, or bi-annually at the option of\nthe Company.\nPrincipal Repayments. On March 2, 2026, the Company repaid the full outstanding principal balance and accrued\ninterest, including a prepayment penalty of $221 million, resulting in the extinguishment of the xAI Fixed Rate\nTerm Loan and xAI Floating Rate Term Loan. The xAI Fixed Rate Term Loan and the xAI Floating Rate Term\nLoan had prepayment penalties of 103% on the principal outstanding balance prior to June 30, 2027 and 101% on\nthe principal outstanding balance prior to June 30, 2028.\nGuarantors. Obligations under the xAI Fixed Rate Term Loan and xAI Floating Rate Term Loan were guaranteed\neach jointly and severally by X.AI Corp. and the following subsidiaries of X.AI Corp.: AIQ Phase LLC, CTC\nHolding LLC, CTC, LLZ Build LLC, and MZX.\nxAI 12.5% Secured Senior Notes\nGeneral. In June 2025, X.AI LLC and, X.AI Co Issuer Corp, indirect subsidiaries of the Company, issued $3,000\nmillion aggregate principal amount of 12.5% interest Senior Secured Notes due in 2030 (“xAI 12.5% Senior Secured\nNotes”). The Senior Secured Notes were issued at 100% of the principal amount and the entire principal amount\nwill be due on June 30, 2030.", - "path": "spacex-s1.pdf/p382", - "metadata": { - "length": 4258, - "summary": "F-78 Table of Contents B-3 Term Loan for an additional commitment of $1,225 million with the same terms and conditions, increasing the total X B-3 Term Loan borrowings to $5,966 million. Interest Rates. The X B-1 Term Loan bore interest at a rate per annum of, initially, adjus...", - "page_nums": [ - 382 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 382, "artifact_ref": "page_citation_assets/page-382.png", @@ -13294,24 +8360,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_7511d0d5-7393-5dde-bebd-1f052aa2d4de", - "type": "page", - "content": "F-79\nTable of Contents\nInterest Rates. The xAI 12.5% Senior Secured Notes had a fixed interest rate of 12.50% per annum. Interest was\npayable bi-annually on January 15 and July 15, commencing on January 15, 2026.\nPrincipal Repayments. On March 5, 2026, the Company repaid the full outstanding principal balance and accrued\ninterest, including a prepayment penalty of $518 million, resulting in the extinguishment of the xAI 12.5% Senior\nSecured Notes. The xAI 12.5% Senior Secured Notes had prepayment penalties of 106.25% on the principal\noutstanding balance prior to July 15, 2027 and 103.13% on the principal outstanding balance prior to July 15, 2028.\nGuarantors. Obligations under the xAI 12.5% Senior Secured Notes were guaranteed each jointly and severally by\nxAI and the following subsidiaries of xAI: AIQ Phase LLC, CTC Holding LLC, CTC, LLZ Build LLC, and MZX.\nxAI Revolving Line of Credit\nGeneral. In April 2024 and amended through March 2026, a subsidiary of xAI, an indirect subsidiary of the\nCompany, entered into a revolving line of credit up to borrowing capacity of $250 million. The Company had no\nborrowings under the line of credit during the three months ended March 31, 2026 and 2025.\nInterest Rates. Interest on any borrowings is calculated based on the 30-day average SOFR plus the International\nSwaps and Derivatives Association spread adjustment plus a spread of 40 basis points.\nGuarantors and Collateral. The agreement permits borrowings up to the value of the pledged collateral held in\ncustody, less any outstanding loan balances, accrued interest, and fees. The pledged collateral consisted of securities\nheld in xAI’s custodial account.\nOther Financings\nThe Company has entered into various other financing arrangements, generally collateralized by specific machinery\nand equipment. These arrangements have an average fixed interest rate of 4.4% and 5.5% per annum as of March\n31, 2026 and December 31, 2025, respectively, with principal and interest payments due monthly, and in certain\ninstances, a lump sum payment at the end of term.\nIn addition, in November 2025 and January 2026, CTC completed sale-leaseback transactions for its AI\ninfrastructure assets which would have been deemed finance leases resulting in failed sale-leaseback transactions. As\na result, the Company recorded the related debt of $1,121 million and $7,920 million within Debt and finance leases,\ncurrent and Debt and finance leases, net of current, respectively, in the Company’s consolidated balance sheets as of\nMarch 31, 2026 for these two failed sale-leaseback transactions. Refer to Note 17, Related Party Transactions for\nadditional details.\nThe future scheduled principal maturities of debt as of March 31, 2026 are as follows:\n2026 (remaining nine months)\n\n.............................................................................................................. $ 801\n2027\n\n...................................................................................................................................................... 21,540\n2028\n\n...................................................................................................................................................... 1,938\n2029\n\n...................................................................................................................................................... 2,393\n2030\n\n...................................................................................................................................................... 2,460\nThereafter\n\n.............................................................................................................................................. —\nTotal\n\n\n..................................................................................................................................................... $ 29,132", - "path": "spacex-s1.pdf/p383", - "metadata": { - "length": 3870, - "summary": "F-79 Table of Contents Interest Rates. The xAI 12.5% Senior Secured Notes had a fixed interest rate of 12.50% per annum. Interest was payable bi-annually on January 15 and July 15, commencing on January 15, 2026. Principal Repayments. On March 5, 2026, the Company repaid the f...", - "page_nums": [ - 383 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 383, "artifact_ref": "page_citation_assets/page-383.png", @@ -13319,49 +8368,15 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a9f4f505-16d6-5ad0-829b-cc8e88f7fbd2", - "type": "page", - "content": "F-80\nTable of Contents\nNote 10 - Leases\nThe components of lease expense are as follows within the consolidated statements of operations:\nThree Months Ended March 31,\n2026 2025\nOperating lease expense:\nOperating lease expense\n\n........................................................................................ $ 107 $ 120\nShort-term lease cost\n\n............................................................................................. 113 29\nVariable lease cost\n\n................................................................................................ 31 23\nTotal operating lease expense\n\n.......................................................................... 251 172\nFinance lease expense:\nAmortization of leased assets\n............................................................................... $ 79 $ 84\nInterest on lease liabilities\n\n\n..................................................................................... 68 85\nTotal finance lease expense\n\n.............................................................................. 147 169\nTotal lease expense\n\n.................................................................................................. $ 398 $ 341\nDuring the three months ended March 31, 2026, there has been no material changes in the Company’s lease portfolio\nsince December 31, 2025.\nNote 11 - Balance Sheet Components\nCertain financial statement details are as follows:\nMarch 31, 2026 December 31, 2025\nPrepaid expenses and other current assets\nTax related assets\n\n....................................................................................................... $ 690 $ 618\nUnbilled receivables\n\n.................................................................................................. 275 223\nRebates and credits\n\n\n.................................................................................................... 109 597\nRestricted cash and deposits\n\n...................................................................................... 67 182\nOther\n\n\n.......................................................................................................................... 495 590\nPrepaid expenses and other current assets\n\n\n...................................................... $ 1,636 $ 2,210\nAccrued expenses and other current liabilities\nAccrued infrastructure purchases\n\n.............................................................................. $ 2,669 $ —\nTax related liabilities\n\n................................................................................................. 601 563\nPayroll & employee benefit accruals\n\n......................................................................... 436 322\nOperating lease liabilities, current\n\n............................................................................. 338 422\nRestructuring liabilities\n\n\n.............................................................................................. 220 339\nAccrued interest\n\n......................................................................................................... 68 416\nOther current liabilities\n\n.............................................................................................. 1,357 507\nAccrued expenses and other current liabilities\n............................................... $ 5,689 $ 2,569", - "path": "spacex-s1.pdf/p384", - "metadata": { - "length": 3329, - "summary": "F-80 Table of Contents Note 10 - Leases The components of lease expense are as follows within the consolidated statements of operations: Three Months Ended March 31, 2026 2025 Operating lease expense: Operating lease expense .......................................................", - "page_nums": [ - 384 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 384, "artifact_ref": "page_citation_assets/page-384.png", - "content_type": "image/png", - "source": "knowhere-rendered-page-citation-source", - "width": 1224, - "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_33e18e60-b141-561a-bd10-92e8c4125714", - "type": "page", - "content": "F-81\nTable of Contents\nNote 12 - Redeemable Convertible Preferred Stock and Shareholders’ Equity\nSpaceX Preferred and Common Stock\nThe Company has five classes of stock - four classes to be designated Class A common stock (“Class A”), Class B\ncommon stock (“Class B”), Class C common stock (“Class C”), Class D common stock (“Class D”) (collectively the\n“SpaceX Common Stock”), and one class of stock to be designated preferred stock and subdivided into several\nseries of redeemable convertible preferred stock (collectively the “SpaceX Redeemable Convertible Preferred\nStock”). All references to “Class” refer to that particular class of SpaceX Common Stock and all references to\n“Series” refer to that particular series of SpaceX Redeemable Convertible Preferred Stock.\nAs of March 31, 2026, the total number of shares of SpaceX Common Stock the Company is authorized to issue is\n54,657 million shares, each with a par value of $0.001 per share, except for Class D, which has a par value of\n$0.0001 per share. 36,132 million shares are Class A, 6,125 million shares are Class B, 10,000 million shares are\nClass C, and 2,400 million shares are Class D. The total number of SpaceX Redeemable Convertible Preferred Stock\nthat the Company is authorized to issue is 2,607 million shares, of which 2,400 million shares are undesignated.\nWith the exception of the expanded conversion rights described below, there were no changes to the dividend\nprovisions, liquidation preferences, conversion rights, redemption rights or the voting rights of the SpaceX\nConvertible Redeemable Preferred Stock and SpaceX Common Stock during the three months ended March 31,\n2026.\nIn May 2026, the Board approved the 2026 Stock Split, pursuant to which each share of the Class A, Class B, and\nClass C SpaceX Common Stock issued and outstanding was split into five shares of the same class of SpaceX\nCommon Stock.\nxAI Redeemable Convertible Preferred Stock and Common Stock\nOn March 28, 2025, xAI adopted an Amended and Restated Articles of Incorporation, which established its capital\nstructure and designated multiple classes of common stock and several series of redeemable convertible preferred\nstock. The Articles were subsequently amended and restated through January 30, 2026 (collectively, the “xAI\nArticles of Incorporation”) to add and authorize additional series of redeemable convertible preferred stock with no\neconomic changes to any previously existing series.\nPursuant to the xAI Articles of Incorporation, xAI’s authorized capitalization prior to the xAI Merger consisted of\nthree classes of common, stock, which are designated Class A common stock (“xAI Class A”), Class B common\nstock (“xAI Class B”), Limited Voting common stock (“xAI Limited Voting”), (collectively the “xAI Common\nStock”) and several series of redeemable convertible preferred stock (collectively the “xAI Redeemable Convertible\nPreferred Stock”). All references to “xAI Class” refer to that particular class of xAI Common Stock and all\nreferences to “xAI Series” refer to that particular series of xAI Redeemable Convertible Preferred Stock.\nEffect of the xAI Merger\nxAI Redeemable Convertible Preferred Stock\nOn xAI Merger Date, all outstanding shares of xAI Redeemable Convertible Preferred Stock converted into shares\nof SpaceX Common Stock, based on the share-for-share exchange mechanics specified in the Merger Agreement.\nEach share of xAI Series A‐1, B, C, D, and E redeemable convertible preferred stock (classified as “xAI Low Vote\nStock”) was converted into 0.1433 shares of SpaceX Class A Common Stock per preferred share (on a pre-2026\nStock Split basis), rounded up to the nearest whole number for fractional shares. Each share of xAI Series A\nredeemable convertible preferred stock (classified as “xAI High Vote Stock”) was converted into 0.1433 shares of\nSpaceX Class B Common Stock per preferred share (on a pre-2026 Stock Split basis), rounded up to the nearest\nwhole number for fractional shares. For xAI Series A Redeemable Convertible Preferred Stock, all holders that were\nan eligible service provider could elect to receive cash of $75.46 per share of xAI Series A Redeemable Convertible\nPreferred Stock (on a pre-2026 Stock Split basis). Upon conversion, all shares of xAI Redeemable Convertible\nPreferred Stock were canceled and retired, and former xAI Redeemable Convertible Preferred Stock shareholders", - "path": "spacex-s1.pdf/p385", - "metadata": { - "length": 4398, - "summary": "F-81 Table of Contents Note 12 - Redeemable Convertible Preferred Stock and Shareholders’ Equity SpaceX Preferred and Common Stock The Company has five classes of stock - four classes to be designated Class A common stock (“Class A”), Class B common stock (“Class B”), Class C...", - "page_nums": [ - 385 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + "content_type": "image/png", + "source": "knowhere-rendered-page-citation-source", + "width": 1224, + "height": 1584 + }, { "page_num": 385, "artifact_ref": "page_citation_assets/page-385.png", @@ -13369,24 +8384,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c7655189-f317-5f3b-990c-24bcf913acf8", - "type": "page", - "content": "F-82\nTable of Contents\nreceived the applicable shares of SpaceX Common Stock. Any shares of xAI Redeemable Convertible Preferred\nStock previously held by the Company were canceled and retired and did not receive any consideration.\nBecause the xAI Redeemable Convertible Preferred Stock was legally outstanding during all historical periods prior\nto the xAI Merger and represented a separate equity class of a legally distinct predecessor entity, the conversion of\nxAI Redeemable Convertible Preferred Stock into SpaceX Common Stock is recognized only as of the closing of the\nxAI Merger, and not retrospectively. Accordingly, the historical consolidated balance sheets and consolidated\nstatements of redeemable convertible preferred stock and shareholders’ equity reflect the xAI Redeemable\nConvertible Preferred Stock as outstanding xAI Redeemable Convertible Preferred Stock consistent with its legal\nform and rights during those periods and are not recast on an as-converted basis for all periods presented prior to the\nxAI Merger Date. The impact of the conversion is presented separately in the consolidated statements of redeemable\nconvertible preferred stock and shareholders’ equity for the three months ended March 31, 2026.\nxAI Warrants\nxAI also issued warrants to customers that were outstanding as of the effective date of the xAI Merger, which had a\nten-year term originally set to expire in 2035, with an exercise price equal to the par value of the stock, and vesting\nterms that resulted in the warrants vesting proportionally to the payments received under the related agreement. The\nclosing of the xAI Merger triggered an acceleration clause in which all outstanding xAI warrants, both vested and\nunvested components, were automatically exercised on a cashless basis exercised and converted into fully vested\nSpaceX Class A Common Stock at the exchange ratio of 0.1433 (on a pre-2026 Stock Split basis).\nxAI and X Common Stock\nUpon the effective date of the xAI Merger, every outstanding share of xAI Common Stock, whether Class A, Class\nB, or Limited Voting, converted into the right to receive SpaceX Common Stock at a fixed exchange ratio of 0.1433\nSpaceX shares per share of xAI Common Stock, unless the holder was an eligible service provider and elected to\nreceive cash of $75.46 per share of xAI Class A or Class B (on a pre-2026 Stock Split basis). No fractional SpaceX\nshares were issued and all share amounts were rounded up to the nearest whole number. Any shares of xAI Common\nStock previously held by the Company were canceled and retired and did not receive any consideration.\nEffect of the X Merger\nUpon the effective date of the X Merger, each class of common stock of X Holdings Corp. (“X Common Stock”)\nwas converted to 2.776 shares of xAI Common Stock of the same class (rounded down to the nearest whole share),\neach class of common stock of X.AI Corp. (“xAI Corp. Common Stock”) was converted to 1.000 share of xAI\nCommon Stock of the same class, and each series of X.AI Corp. preferred stock (“xAI Corp. Preferred Stock”)\n(other than shares held by X or any of its subsidiaries) was converted to 1.000 share of xAI Redeemable Convertible\nPreferred Stock of the same series.\nAs a result of the Mergers, all of X, X.AI Corp. and xAI Common Stock are being presented in the historical\nfinancial statements as if they had been converted into SpaceX Common Stock at the applicable exchange rate for all\nperiods presented through the date of the xAI Merger. As such, all shares of historical X, X.AI Corp. and xAI\nCommon Stock are included in the share counts for SpaceX Common Stock below. X.AI Corp. and xAI Redeemable\nConvertible Preferred Stock are being presented in the consolidated financial statements at historical values with an\nadjustment to the conversion rate at the applicable exchange ratio per the xAI Merger.", - "path": "spacex-s1.pdf/p386", - "metadata": { - "length": 3858, - "summary": "F-82 Table of Contents received the applicable shares of SpaceX Common Stock. Any shares of xAI Redeemable Convertible Preferred Stock previously held by the Company were canceled and retired and did not receive any consideration. Because the xAI Redeemable Convertible Preferr...", - "page_nums": [ - 386 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 386, "artifact_ref": "page_citation_assets/page-386.png", @@ -13394,24 +8392,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8d93bac6-3e40-5b31-8ee1-3f8ecf0c4d74", - "type": "page", - "content": "F-83\nTable of Contents\nRedeemable Convertible Preferred Stock\nInformation for each series of SpaceX and xAI Redeemable Convertible Preferred Stock (collectively, the\n“Combined Redeemable Convertible Preferred Stock”) is as follows:\nDividend Per Share Initial Price Per Share Authorized Shares Outstanding (1) Liquidation Preference Net Carrying Value\nMarch 31, 2026 March 31, 2026 March 31, 2026 March 31, 2026 December 31, 2025 March 31, 2026 March 31, 2026\nSpaceX Redeemable Convertible Preferred Stock\nSeries A\n\n................................ $ 0.05 $ 1.00 61.0 60.4 60.4 $ 60 $ 59\nSeries A-1\n\n............................. $ 0.05 $ 1.00 61.0 0.2 0.2 — —\nSeries B\n\n................................. $ 0.10 $ 2.00 5.5 5.1 5.1 10 10\nSeries B-1\n\n............................. $ 0.10 $ 2.00 5.5 0.1 0.1 — —\nSeries C\n\n................................. $ 0.15 $ 3.00 10.5 9.7 9.7 29 23\nSeries D\n\n................................ $ 0.19 $ 3.88 7.5 5.2 5.2 40 20\nSeries E\n\n................................. $ 0.23 $ 4.50 10.5 10.2 10.2 46 647\nSeries F\n\n................................. $ 0.38 $ 7.50 6.8 6.7 6.7 50 48\nSeries G\n\n................................ $ 3.87 $ 77.46 13.0 12.6 12.6 978 978\nSeries H\n\n................................ $ 6.75 $ 135.00 3.4 3.2 3.2 429 429\nSeries I\n .................................. $ 8.45 $ 169.00 3.0 3.0 3.0 499 499\nSeries J\n\n.................................. $ 9.30 $ 186.00 2.7 2.5 2.5 457 457\nSeries K\n\n................................ $ 10.20 $ 204.00 2.7 2.5 2.5 515 515\nSeries L\n\n................................. $ 10.70 $ 214.00 1.5 1.4 1.4 295 295\nSeries M\n\n................................ $ 11.00 $ 220.00 2.7 2.6 2.7 575 575\nSeries N\n\n................................ $ 13.50 $ 270.00 9.5 9.2 9.3 2,492 2,494\nTotal SpaceX Redeemable Convertible Preferred Stock\n\n\n................................ 206.6 134.6 134.7 $ 6,475 $ 7,049\nxAI Redeemable Convertible Preferred Stock\nSeries A\n\n................................ $ — $ — — — 750.0 $ — $ —\nSeries A-1\n\n............................. $ — $ — — — — — —\nSeries B\n\n................................. $ — $ — — — 584.9 — —\nSeries C\n\n................................. $ — $ — — — 277.1 — —\nSeries D\n\n................................ $ — $ — — — 120.1 — —\nSeries E\n\n................................. $ — $ — — — 179.2 — —\nTotal xAI Redeemable Convertible Preferred Stock\n\n\n................................ — — 1,911.3 $ — $ —\nTotal Combined Redeemable Convertible Preferred Stock\n\n\n................................ 206.6 134.6 2,046.0 $ 6,475 $ 7,049\n__________________\n(1) The number of issued redeemable convertible preferred stock is equal to the number of outstanding redeemable convertible preferred stock,\nwith the exception of xAI Series A and xAI Series D, of which the number of issued shares is 1,000.0 million and 175.0 million as of\nDecember 31, 2025, respectively, due to redeemable convertible preferred stock held by X and SpaceX, respectively.", - "path": "spacex-s1.pdf/p387", - "metadata": { - "length": 2956, - "summary": "F-83 Table of Contents Redeemable Convertible Preferred Stock Information for each series of SpaceX and xAI Redeemable Convertible Preferred Stock (collectively, the “Combined Redeemable Convertible Preferred Stock”) is as follows: Dividend Per Share Initial Price Per Share Au...", - "page_nums": [ - 387 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 387, "artifact_ref": "page_citation_assets/page-387.png", @@ -13419,24 +8400,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6052fa33-2762-5221-9c8e-cfc3044a8784", - "type": "page", - "content": "F-84\nTable of Contents\nThe following describes the various rights and preferences of the SpaceX Redeemable Convertible Preferred Stock:\nDividend Provisions\nOn a per annum basis, holders of shares of SpaceX Redeemable Convertible Preferred Stock are entitled to receive\ndividends prior and in preference to any declaration or payment of any dividend to common shareholders at a rate\ndescribed in the table above for each outstanding share of SpaceX Redeemable Convertible Preferred Stock. Any\nsuch dividends are declared at the discretion of the Board of Directors and are not cumulative. For the period from\ninception through March 31, 2026, no dividends on SpaceX Redeemable Convertible Preferred Stock have been\ndeclared. The SpaceX Redeemable Convertible Preferred Stock do not participate in distributions beyond their\npreferred dividend as described above.\nLiquidation Preference\nThe series of SpaceX Redeemable Convertible Preferred Stock listed in the table above were issued by the Company\nchronologically and in alphabetical order, with Series A issued first and Series N issued most recently. Each series\nof SpaceX Redeemable Convertible Preferred Stock is senior in rank to all earlier issued series and junior in rank to\nall later issued series, except that: (i) Series A, A-1, B, B-1, and C SpaceX Redeemable Convertible Preferred Stock\nare all on parity with each other and junior in rank to all subsequently issued series of SpaceX Redeemable\nConvertible Preferred Stock; and (ii) series E, F, and G SpaceX redeemable convertible preferred stock are all on\nparity with each other, are senior in rank to all earlier issued series of SpaceX Redeemable Convertible Preferred\nStock, and junior in rank to all subsequently issued series of SpaceX Redeemable Convertible Preferred Stock.\nIn the event of a liquidation, dissolution, or winding up of the Company, holders of a given series of SpaceX\nRedeemable Convertible Preferred Stock are entitled to receive, in preference to the holders of SpaceX Common\nStock and any junior-ranking SpaceX Redeemable Convertible Preferred Stock, the liquidation preference indicated\nin the table above for such series of SpaceX Redeemable Convertible Preferred Stock, plus any declared but unpaid\ndividends. Holders of all series of SpaceX Redeemable Convertible Preferred Stock are entitled to receive the\ngreater of the liquidation preference per share indicated above, or the amount each series would be entitled to receive\nif all such outstanding SpaceX Redeemable Convertible Preferred Stock were converted to Class A or Class B\nSpaceX Common Stock, as applicable, immediately prior to such liquidation, dissolution, or winding up of the\nCompany. Upon completion of the distributions described above, if any assets remain in the Company, the then\nremaining assets will be distributed on an equal priority, pro rata basis to the holders of SpaceX Common Stock.\nConversion Rights\nEach share of Series A and Series B SpaceX Redeemable Convertible Preferred Stock is convertible at the option of\nthe holder at any time after the date of issuance of such share into shares of Class A, Class B, or Class C SpaceX\nCommon Stock and each share of all other series of preferred stock are convertible at the option of the holder at any\ntime after the date of issuance of such share into shares of Class A or Class C SpaceX Common Stock. The number\nof shares of SpaceX Common Stock to which a holder of SpaceX Redeemable Convertible Preferred Stock is\nentitled shall be at a conversion rate determined by dividing the initial price by the conversion price. Each share of\nSpaceX Redeemable Convertible Preferred Stock is convertible into fifty shares of SpaceX Common Stock\nfollowing the 2026 Stock Split. The conversion price is subject to adjustment set forth in the charter for certain\ndilutive issuances, splits and combinations.\nThe SpaceX Redeemable Convertible Preferred Stock automatically converts upon the earlier of (i) the Company’s\nsale of its common stock in a public offering pursuant to a registration statement under the Securities Act of 1933, in\nwhich the pre-public offering market capitalization of the Company is at least $6.0 billion and which results in\naggregate cash proceeds to the Company of not less than $250 million (“Qualified IPO”) or (ii) the date specified by\nwritten consent or agreement of the applicable holders of shares of SpaceX Redeemable Convertible Preferred Stock\n(with respect to each applicable series of SpaceX Redeemable Convertible Preferred Stock), voting in accordance\nwith the charter.", - "path": "spacex-s1.pdf/p388", - "metadata": { - "length": 4577, - "summary": "F-84 Table of Contents The following describes the various rights and preferences of the SpaceX Redeemable Convertible Preferred Stock: Dividend Provisions On a per annum basis, holders of shares of SpaceX Redeemable Convertible Preferred Stock are entitled to receive dividend...", - "page_nums": [ - 388 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 388, "artifact_ref": "page_citation_assets/page-388.png", @@ -13444,24 +8408,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_5daf86d1-cd41-5668-b8a2-c0820c1ec9d0", - "type": "page", - "content": "F-85\nTable of Contents\nIn the event of a transfer of a share of Series A or Series B (other than a Permitted Transfer as defined in the\ncharter), such share shall automatically be cancelled and converted into a corresponding share of Series A-1 or\nSeries B-1.\nVoting Rights\nHolders of each share of Series A and Series B have the right to ten votes for each share of Class B into which such\nshare is convertible. Holders of each share of all other series of SpaceX Redeemable Convertible Preferred Stock\nhave the right to one vote for each share of Class A into which such share is convertible. Such holders will have full\nvoting rights and powers equal to the voting rights and powers of the holders of SpaceX Common Stock, except as\nrequired by law.\nClassification\nThe liquidation preference provisions of the SpaceX Redeemable Convertible Preferred Stock are considered\ncontingent redemption provisions as deemed liquidation events such as a change of control are not solely within the\ncontrol of the Company. Accordingly, SpaceX Redeemable Convertible Preferred Stock are presented outside of\npermanent equity on the Company’s consolidated balance sheets as Redeemable convertible preferred stock. SpaceX\nRedeemable Convertible Preferred Stock has not been remeasured to their redemption amount as they are not\ncurrently redeemable or probable of becoming redeemable.\nCommon Stock\nThe following describes all of the activity that occurred within each class of SpaceX Common Stock during the three\nmonths ended March 31, 2026 and 2025, incorporating all activity that occurred within the class of xAI Common\nStock on an as-converted basis to the class of SpaceX Common Stock it was converted into per the xAI Merger and\nX Merger.\nClass A Common Stock Class B Common Stock Class C Common Stock Class D Common Stock\nShares Amount Shares Amount Shares Amount Shares Amount\nBalances at December 31, 2024\n\n\n................................... 1,832 $ 2 768 $ 1 423 $ 0 — $ —\nCommon stock issued, net of tax withholding\n\n.................. 18 0 1 0 7 0 — —\nRepurchase of common stock\n\n................................... (14) 0 (14) 0 — — — —\nConversion of redeemable convertible preferred stock to common stock\n\n............... 1 0 — — 1 0 — —\nConversion between classes of common stock\n\n............... 24 0 (24) 0 — — — —\nTransfer of equity in business combination\n\n........ 1 0 — — — — — —\nBalances at March 31, 2025 1,862 $ 2 731 $ 1 431 $ 0 — $ —", - "path": "spacex-s1.pdf/p389", - "metadata": { - "length": 2449, - "summary": "F-85 Table of Contents In the event of a transfer of a share of Series A or Series B (other than a Permitted Transfer as defined in the charter), such share shall automatically be cancelled and converted into a corresponding share of Series A-1 or Series B-1. Voting Rights Hol...", - "page_nums": [ - 389 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 389, "artifact_ref": "page_citation_assets/page-389.png", @@ -13469,24 +8416,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_1c653e79-b178-5806-8220-0a155522db6f", - "type": "page", - "content": "F-86\nTable of Contents\nClass A Common Stock Class B Common Stock Class C Common Stock Class D Common Stock\nShares Amount Shares Amount Shares Amount Shares Amount\nBalances at December 31, 2025\n\n\n................................... 1,952 $ 3 643 $ 1 484 $ 0 — $ —\nCommon stock issued, net of tax withholding\n\n.................. 28 — 1,305 1 13 — — —\nRepurchase of common stock\n\n................................... (9) — (22) — — — — —\nConversion of redeemable convertible preferred stock pursuant to the xAI Merger\n\n............................... 886 — 537 1 — — — —\nRepurchase of common stock pursuant to xAI Merger\n\n............................... (3) — (20) — — — — —\nConversion of redeemable convertible preferred stock to common stock\n\n............... 5 — — — — — — —\nConversion between classes of common stock\n\n............... 25 — (25) — — — — —\nBalances at March 31, 2026 2,884 $ 3 2,418 $ 3 497 $ 0 — $ —\nThe following describes the various rights and preferences of the SpaceX Common Stock:\nDividend Provisions\nSubject to the prior rights of holders of all classes and series of stock at the time outstanding having prior rights as to\ndividends, holders of SpaceX Common Stock shall be entitled to receive, when, as and if declared by the Board of\nDirectors, out of any funds legally available, such dividends as may be declared from time to time by the Board of\nDirectors. For the period from inception through March 31, 2026, no dividends were declared on SpaceX Common\nStock.\nLiquidation Rights\nIn the event of a liquidation, dissolution, or winding up of the Company, upon the completion of the distributions\nrequired with respect to the SpaceX Redeemable Convertible Preferred Stock, if assets remain in the Company, the\nthen remaining assets will be distributed on an equal priority, pro rata basis to the holders of SpaceX Common\nStock.\nConversion Rights\nEach share of Class B is convertible at the option of the holder, at any time, into one share of Class A. Each share of\nClass B will automatically convert into one share of Class A upon a transfer, other than a Permitted Transfer (as\ndefined in the charter), of such share of Class B.\nVoting Rights\nEach holder of Class A is entitled to one vote for each share held. Each holder of Class B is entitled to ten votes for\neach share held. The holders of Class C have no voting rights, except as required by law. Voting rights with respect\nto Class D will be established when and if any shares of Class D are issued by the Board of Directors.\nReserve for Unissued Shares of Common Stock\nThe Company is required to reserve and keep available out of its authorized but unissued shares of SpaceX Common\nStock such number of shares sufficient to effect the conversion of all outstanding shares of SpaceX Redeemable", - "path": "spacex-s1.pdf/p390", - "metadata": { - "length": 2778, - "summary": "F-86 Table of Contents Class A Common Stock Class B Common Stock Class C Common Stock Class D Common Stock Shares Amount Shares Amount Shares Amount Shares Amount Balances at December 31, 2025 ................................... 1,952 $ 3 643 $ 1 484 $ 0 — $ — Common stock iss...", - "page_nums": [ - 390 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 390, "artifact_ref": "page_citation_assets/page-390.png", @@ -13494,24 +8424,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_a56bd933-d8ff-5034-8021-f6b47dfe1930", - "type": "page", - "content": "F-87\nTable of Contents\nConvertible Preferred Stock and Class B, as applicable, plus shares granted and available for grant under the\nCompany’s share plans.\nThe amount of such shares of the SpaceX Common Stock reserved for these purposes at March 31, 2026 is as\nfollows:\nNumber of Shares\nClass A Class B Class C Class D\nRedeemable Convertible Preferred Stock issued (low-vote)\n\n................................................................. 3,448 — 3,448 —\nRedeemable Convertible Preferred Stock issued (high-vote)\n\n............................................................... 3,274 3,274 3,274 —\nOutstanding Class B\n\n\n.................................................... 2,421 — — —\nOutstanding stock options\n\n........................................... 8 450 476 —\nOutstanding RSUs\n\n\n....................................................... 49 1 79 —\nFuture grants under share-based compensation ........... 150 — 350 —\n9,350 3,725 7,627 —\nShare Repurchases\nDuring the three months ended March 31, 2026, the Company repurchased $2,413 million or 25.4 million shares of\nSpaceX Common Stock from eligible current and former xAI employees as part of the xAI Merger. During the three\nmonths ended March 31, 2026, the Company also repurchased of 30.5 million shares of SpaceX Common Stock and\n2.1 million shares of SpaceX Redeemable Convertible Preferred Stock for $1,933 million in a number of unrelated\ntransactions with existing shareholders at their then-current fair market value.\nSimilarly, the Company repurchased $508 million or 28.0 million shares of SpaceX Common Stock from eligible\ncurrent and former employees and existing shareholders during the three ended March 31, 2025. The Company only\nrepurchased shares held by eligible participants for more than six months at a purchase price per share equal to the\nthen current fair market value.\nAll SpaceX shares repurchased to date have been retired.", - "path": "spacex-s1.pdf/p391", - "metadata": { - "length": 1911, - "summary": "F-87 Table of Contents Convertible Preferred Stock and Class B, as applicable, plus shares granted and available for grant under the Company’s share plans. The amount of such shares of the SpaceX Common Stock reserved for these purposes at March 31, 2026 is as follows: Number...", - "page_nums": [ - 391 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 391, "artifact_ref": "page_citation_assets/page-391.png", @@ -13519,24 +8432,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2a456b06-3fb5-598d-920d-da6a38567b58", - "type": "page", - "content": "F-88\nTable of Contents\nNote 13 - Earnings per Share\nThe following table presents the reconciliation of net loss attributable to common shareholders to net loss used in\ncomputing basic and diluted net income loss per share of common stock:\nThree Months Ended March 31,\n2026 2025\nNumerator:\nNet loss\n\n...................................................................................................................... $ (4,276) $ (528)\nLess: Deemed dividend(1)\n\n\n...................................................................................... 671 —\nNet loss attributable to common shareholders - basic and diluted\n\n............................ (4,947) (528)\nDenominator:\nWeighted average shares of common stock outstanding - basic and diluted\n\n............ 3,884 2,875\nLoss per share attributable to common shareholders\nBasic and Diluted\n\n.................................................................................................. $ (1.27) $ (0.18)\n__________________\n(1) The excess of fair market value over the consideration transferred for the repurchase of SpaceX Redeemable Convertible Preferred Stock\nwas treated as a deemed dividend and resulted in an increase to net loss attributable to common shareholders in the calculation of loss per\nshare.\nThe following potentially dilutive securities on an as-converted basis are excluded from the calculation of diluted net\nloss per share attributable to common shareholders for the periods presented because the impact of including them\nwould be anti-dilutive (refer to Note 14, Share-based Compensation for additional details):\nThree Months Ended March 31,\n2026 2025\nxAI Redeemable Convertible Preferred Stock\n\n.......................................................... — 1,155\nSpaceX Redeemable Convertible Preferred Stock\n\n.................................................... 6,723 6,760\nShare-based compensation\n\n........................................................................................ 598 674\nThe table above excludes 1,319.1 million and 14.3 million share-based compensation awards outstanding as of\nMarch 31, 2026 and 2025, respectively, as these awards are subject to performance and market conditions that were\nnot met as of those dates.\nNote 14 - Share-based Compensation\nX and xAI Mergers\nAs part of the xAI Merger, each xAI option for a share of xAI common stock outstanding and unexercised at the\ntime of the xAI Merger (vested and unvested) was converted into a SpaceX option to receive 0.1433 shares of\nSpaceX Class A or Class B Common Stock (on a pre-2026 Stock Split basis), as applicable, under the same terms\nand conditions (including the vesting and exercisability conditions) as the original xAI stock options at an exercise\nprice equal to the original xAI option exercise price divided by 0.1433. Each xAI RSU that was vested and\noutstanding was converted to the right to receive 0.1433 of a share of SpaceX Class A or Class B Common Stock\n(on a pre-2026 Stock Split basis), as applicable. Each xAI RSU that was unvested was converted to 0.1433 of a\nSpaceX RSU. Each xAI RSA was converted to 0.1433 shares of SpaceX RSA for SpaceX Class A or Class B\nCommon Stock (on a pre-2026 Stock Split basis), as applicable, with the same terms and conditions (including the\nvesting terms). Refer to Note 12, Redeemable Convertible Preferred Stock and Shareholders’ Equity for additional\ndetails.", - "path": "spacex-s1.pdf/p392", - "metadata": { - "length": 3388, - "summary": "F-88 Table of Contents Note 13 - Earnings per Share The following table presents the reconciliation of net loss attributable to common shareholders to net loss used in computing basic and diluted net income loss per share of common stock: Three Months Ended March 31, 2026 2025...", - "page_nums": [ - 392 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 392, "artifact_ref": "page_citation_assets/page-392.png", @@ -13544,24 +8440,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_451c747a-74b1-57ff-b7ed-f6d854ee65c9", - "type": "page", - "content": "F-89\nTable of Contents\nAs part of the X Merger, each X RSU that was outstanding was converted to a xAI RSU to receive 2.776 shares of\nxAI Common Stock.\nGeneral\nThe Company grants RSUs, RSAs, and non-statutory options to eligible employees, key executives, and certain non-\nemployee service providers (collectively, the “Plans”). The Company also has a number of performance-based\nawards. The Company offers an ESPP, under which eligible employees can purchase the Company’s Common\nStock at a discounted price. The Company also offers a Non-Qualified Employee Stock Purchase Plan (“NQ\nESPP”), under which employees can purchase the Company’s Common Stock at the fair market value. In April\n2026, the Company cancelled the NQ ESPP.\nOfficer Equity Awards\nIn January 2026, the Company granted 1,000 million performance-based restricted shares of Class B common stock\nto Elon Musk. The restricted shares vest upon (i) the Company’s achievement of specified market capitalization\nmilestones across 15 equal tranches ranging from $500 billion to $7.5 trillion, with each milestone reflecting $500\nbillion in additional valuation, and (ii) the Company’s establishment of a permanent human colony on Mars with at\nleast one million inhabitants, in each case, subject to Mr. Musk’s continued employment (“SpaceX CEO Award”).\nThe grant date fair value of the SpaceX CEO Award was determined to be $90.40 to $95.92 per share for each\ntranche.\nIn November 2025, the Company granted a performance-based award (“xAI Award”) to Elon Musk consisting of\ntwelve tranches with certain market, performance and service conditions. In March 2026, the Company cancelled the\nxAI Award and replaced it with a grant of 302.1 million performance-based restricted shares of Class B common\nstock, which vest upon (i) the achievement of specified market capitalization milestones across 12 equal tranches\nranging from $1.065 trillion to $6.565 trillion, with each milestone reflecting $500 billion in additional valuation,\nand (ii) the Company’s completion of non-Earth-based data centers capable of delivering 100 terawatts of compute\nper year, in each case, subject to Mr. Musk’s continued employment (“AI CEO Award”). The grant date fair value\nof the AI CEO Award was determined to be $91.47 to $95.92 per share for each tranche. The cancellation of the xAI\nAward and the grant of the AI CEO Award was considered an accounting modification. Share-based compensation\nwill continue to be recognized over the original remaining service period equal to the fair value of the portion of the\noriginal xAI Award that was deemed probable of vesting as of the modification date. No incremental expense will\nbe recognized based on the modified terms of the new AI CEO Award until the new performance conditions are\ndeemed probable of vesting.\nShare-based compensation expense recognition for the SpaceX CEO Award and AI CEO Award commences when\nthe performance condition milestone is considered probable of achievement for each award regardless of the\nprogress made towards achieving the next market capitalization milestone. As of March 31, 2026, both performance\nmilestones were considered improbable and no share-based compensation expense has been recognized related to\nthe SpaceX CEO Award and AI CEO Award. Once the performance milestone is considered probable of\nachievement, share-based compensation expense associated with the tranche will be recognized over the expected\nachievement date of the performance milestone.\nIn January 2026, the Company approved an amendment to 4 million performance-based stock options granted to\nBret Johnsen, Chief Financial Officer, that were originally issued in 2024 (“CFO Award”). In lieu of vesting based\non free cash flow achievement in excess of a baseline, 371 thousand of the stock options will vest for each $10\nbillion in adjusted EBITDA achieved during the 2025 through 2029 fiscal years, assessed on an annual basis. For\npurposes of this award, adjusted EBITDA is calculated as income from operations excluding (i) depreciation and\namortization, (ii) share-based compensation, (iii) impairment, and (iv) restructuring impacts. Once a tranche of the\nstock options have become earned as a result of the Company’s adjusted EBITDA performance as of the end of a\nparticular fiscal year, such stock options remain subject to an additional one-year and one day service-based vesting\nrequirement following December 31 of the fiscal year in which such tranche was earned. The number of options\ngranted was not changed in the amendment. The impact of the modification of the CFO Award was not material.", - "path": "spacex-s1.pdf/p393", - "metadata": { - "length": 4607, - "summary": "F-89 Table of Contents As part of the X Merger, each X RSU that was outstanding was converted to a xAI RSU to receive 2.776 shares of xAI Common Stock. General The Company grants RSUs, RSAs, and non-statutory options to eligible employees, key executives, and certain non- empl...", - "page_nums": [ - 393 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 393, "artifact_ref": "page_citation_assets/page-393.png", @@ -13569,24 +8448,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8e0ef44f-c7cc-5d5b-8ebc-9ed9973d4270", - "type": "page", - "content": "F-90\nTable of Contents\nFair Value Determination\nThe fair value and derived service period of the SpaceX CEO Award and AI CEO Award are estimated on the grant\ndate using a Monte Carlo simulation model. The weighted-average assumptions that were used to calculate the grant\ndate fair value of the SpaceX CEO Award and modification date fair value of the AI CEO Award are as follows:\nExpected term (years)\n\n........................................................................................................................... 30.0\nVolatility\n\n............................................................................................................................................... 45.0%\nRisk-free interest rate\n\n............................................................................................................................ 4.91%\nDividend yield\n\n....................................................................................................................................... —%\nThe SpaceX CEO Award and AI CEO Award do not have a defined performance period other than Mr. Musk’s\ncontinued employment through the date each milestone is achieved. Therefore, an analysis was performed for an\nexpected term of ten to fifty years and a midpoint of thirty years was used. The Company determined the expected\nvolatility assumption using the frequency of daily historical prices of comparable public companies’ common stock\nfor a period equal to the expected term. The risk-free interest rate assumption is based upon observed interest rates\non U.S. Government securities for a period consistent with the expected term. The dividend yield assumption is\nbased on the Company’s history and expectation of dividend payouts. The Company has never declared or paid any\ncash dividends on its Common Stock and does not anticipate paying any cash dividends in the foreseeable future.\nSummary of Share-Based Compensation Information\nThe following table summarizes our share-based compensation expense by line item in the consolidated statements\nof operations:\nThree Months Ended March 31,\n2026 2025\nCost of revenue\n\n.......................................................................................................... $ 76 $ 39\nResearch and development\n\n........................................................................................ 362 75\nSelling, general, and administrative\n\n.......................................................................... 201 118\nTotal\n.................................................................................................................... $ 639 $ 232\nDuring the three months ended March 31, 2026 and 2025, share-based compensation expense capitalized to the\nconsolidated balance sheets was $60 million and $30 million, respectively.\nNote 15 - Income Taxes\nThe Company’s effective tax rate was (0.1)% for the three months ended March 31, 2026, compared to (2.7)% for\nthe three months ended March 31, 2025. The change in the Company’s effective tax rate was primarily due to the\nchanges in the mix of its jurisdictional earnings.\nThe Company’s effective tax rates for the three months ended March 31, 2026 and 2025 as compared to the U.S.\nfederal statutory rate of 21.0% were primarily impacted by the mix of its jurisdictional earnings subject to different\ntax rates and the valuation allowances on its deferred tax assets.\nIn assessing the realizability of deferred tax assets, the Company considered whether it is more likely than not that\nsome or all of its net deferred tax assets will not be realizable based on the relevant weight of all positive and\nnegative evidence. As of March 31, 2026, the Company continues to maintain a full valuation allowance against its\ndeferred tax assets in the United States, with the exception of certain state deferred tax assets and transferrable\ninvestment tax credits that are expected to be realizable. The Company has also recorded valuation allowances in\ncertain foreign jurisdictions where it concluded that it is more likely than not that the deferred tax assets will not be\nrealized. The Company will continue to assess the realizability of its deferred tax assets in future periods and will\nadjust the valuation allowance as necessary based on changes in facts and circumstances.", - "path": "spacex-s1.pdf/p394", - "metadata": { - "length": 4298, - "summary": "F-90 Table of Contents Fair Value Determination The fair value and derived service period of the SpaceX CEO Award and AI CEO Award are estimated on the grant date using a Monte Carlo simulation model. The weighted-average assumptions that were used to calculate the grant date...", - "page_nums": [ - 394 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 394, "artifact_ref": "page_citation_assets/page-394.png", @@ -13594,24 +8456,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_c4348667-1f6d-51aa-a1c0-cccc2f4323ea", - "type": "page", - "content": "F-91\nTable of Contents\nNote 16 - Commitments and Contingencies\nUnconditional Obligations\nDuring the three months ended March 31, 2026, there have been no material changes to the Company’s\nunconditional obligation since December 31, 2025 other than the execution of certain purchase agreements with an\nunaffiliated third party to acquire additional turbines for the AI infrastructure totaling $925 million through 2029.\nLetters of Credit and Surety Bonds\nThe Company had outstanding letters of credit of $517 million at March 31, 2026 related to various customer\ncontracts, insurance agreements, and facility lease agreements. All of the outstanding letters of credit were\ncollateralized by restricted cash. The Company also had surety bonds of $447 million for self-insured workers’\ncompensation programs and other governmental licenses at March 31, 2026.\nLegal Proceedings\nIn the normal course of its business, the Company is involved from time to time in various arbitrations, class actions,\ncommercial litigation, investigations and other legal, regulatory or governmental actions, including the significant\nmatters described below that could have a material impact on our results of operations. The Company assesses, in\nconjunction with its legal counsel, the need to record a liability for litigation and contingencies. With respect to the\ncases, actions, and inquiries described below, the Company evaluates the associated developments on a regular basis\nand will accrue a liability when it believes a loss is probable and the amount can be reasonably estimated. In\naddition, the Company believes there is a reasonable possibility that it may incur a loss in some of these matters and\nthe loss may be material or exceed its estimated ranges of possible loss.\nThe outcomes of the matters described in this section, such as whether the likelihood of loss is remote, reasonably\npossible, or probable, or if and when the reasonably possible range of loss is estimable, are inherently uncertain, and\nunless specified otherwise, possible losses are not reasonably estimable at this time. If one or more of these matters\nwere resolved against the Company for amounts above management’s estimates, the Company’s financial condition\nand results of operations, including in a particular reporting period in which any such outcome becomes probable\nand estimable, could be materially adversely affected.\nIn November 2022, the European Union’s Digital Services Act (“DSA”) came into force as a result of which X has\nto comply with extensive content moderation and other duties. The Company published its first Transparency Report\nunder the DSA in November 2023. In December 2023, the European Commission (“EC”) opened a formal\ninvestigation into X and its Irish subsidiary, Twitter International Unlimited Company (“TIUC”), which was later\nrenamed to X Internet Unlimited Company (XIUC). On July 12, 2024, in relation to alleged breaches of Articles\n25(1), 39 and 40(12) of the DSA, the EC issued preliminary findings that X’s blue checkmark is deceptive, its\nadvertisement repository does not meet DSA requirements, and it grants inadequate access to data to third-party\nresearchers. On September 26, 2024, XIUC and X submitted their observations challenging the EC’s preliminary\nfindings. On December 5, 2025, the EC delivered a final decision in which it upheld its preliminary findings and\nimposed a fine of EUR 120 million on XIUC, X., x.AI, and Elon Musk (together, the “parties”). On February 16,\n2026, the parties challenged the EC’s decision in the General Court of the European Union. This challenge remains\npending.\nIn March 2016, non-practicing entity Youtoo Technologies filed suit against Twitter, Inc. in the United States\nDistrict Court for the Northern District of Texas alleging its Vine and Periscope products infringe Youtoo’s video-\nsharing patents (the ‘304, ‘506, and ‘997 patents). On Twitter’s motion, the district court dismissed the ‘304 and\n’506 patents as invalid. Twitter filed petitions for Inter Partes Review before the Patent Trial and Appeals Board\n(PTAB) challenging all three patents-in-suit. The PTAB upheld the ‘304 and ‘506 Patents and invalidated the ‘997\nPatent; the Federal Circuit affirmed. On March 16, 2020, Plaintiff (now Vidstream LLC, which allegedly acquired\nthe patents from Youtoo Technologies in a bankruptcy proceeding), moved the Court to reconsider its earlier ruling\ninvalidating the ‘304 and ‘506 patents. On April 1, 2022, the Court reversed its original ruling on the ‘304 and ‘506\npatents. On September 27, 2024, Vidstream filed a motion for partial summary judgment, which the Court granted in\npart. The case went to a jury trial, and on April 16, 2025, the jury rendered a verdict finding (i) that Twitter did not", - "path": "spacex-s1.pdf/p395", - "metadata": { - "length": 4770, - "summary": "F-91 Table of Contents Note 16 - Commitments and Contingencies Unconditional Obligations During the three months ended March 31, 2026, there have been no material changes to the Company’s unconditional obligation since December 31, 2025 other than the execution of certain purc...", - "page_nums": [ - 395 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 395, "artifact_ref": "page_citation_assets/page-395.png", @@ -13619,24 +8464,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_8f5aab40-fa87-5d71-a170-45dc5bf769f0", - "type": "page", - "content": "F-92\nTable of Contents\ninfringe any claim of the ‘506 patent and two out of three claims of the ‘304 patent and that each of those patent\nclaims was invalid, but (ii) that Twitter willfully infringed one claim of the ‘304 patent. The jury awarded Plaintiff\n$105 million in damages. In November 2025, the district court affirmed the jury’s award and awarded an additional\n$67 million in prejudgment interest. Twitter has appealed and Vidstream has cross-appealed. Both appeals remain\npending before the Federal Circuit.\nIn June 2023, music publishing companies that are members of the National Music Publishers’ Association (the\n“NMPA”) filed a complaint against X in the U.S. District Court for the Middle District of Tennessee, claiming\ndirect, contributory, and vicarious copyright infringement based on Twitter’s alleged failure to expeditiously take\ndown infringing music posted by users after the music publishers allegedly gave Twitter notice of those\ninfringements. The music publishers also allege that Twitter did not suspend the accounts of “repeat infringers,” so\nthat Twitter is not entitled to a “safe harbor” from liability under the DMCA. X filed a motion to dismiss the\ncomplaint on August 14, 2023. On March 5, 2024, the Court dismissed plaintiffs’ direct infringement and vicarious\ninfringement claims, and part of plaintiffs’ claim for contributory infringement. X answered the complaint on April\n9, 2024. Litigation was stayed from June 11, 2025 to September 9, 2025 for settlement discussions that were not\nsuccessful. Accordingly, discovery is ongoing. On April 1, 2026, the Court granted the parties’ joint motion for a\nstay to allow X to file a renewed motion to dismiss the suit based on the Supreme Court’s decision in Cox Comm’s,\nInc. v. Sony Music Entm’t. Fact discovery is now closed. In light of this Supreme Court ruling, the parties have\nstipulated to a May 11, 2026 deadline for the music publishers to amend their complaint with respect to their\nremaining claims for contributory infringement, and a June 11, 2026 deadline for X to file a renewed motion to\ndismiss.\nIn September 2023, Dutch foundation Stichting Data Bescherming Nederland (“SDBN”) filed a putative class action\nlawsuit in the District Court of Amsterdam in the Netherlands against TIUC, Twitter, Inc., X Corp., and Twitter\nNetherlands b.v. related to Twitter’s operation of the MoPub platform. SDBN primarily claims that MoPub’s real-\ntime bidding ad exchange violated the GDPR. SDBN claims to represent 11 million Dutch internet users who\ndownloaded and used third-party mobile apps containing the MoPub software development kit during the period\n2013-2022 and it seeks a monetary award in the range of € 250 to € 2,500 per person. On February 4, 2026, the\nCourt declined to allow the case to proceed as a class action and indicated that it is considering staying the\nproceedings until the Court of Justice of the European Union has ruled in a separate case concerning the\napplicability of Dutch class action requirements to GDPR claims. The Twitter parties filed a brief in support of the\nproposed stay, which the plaintiffs opposed, on March 4, 2026.\nIn August 2024, Dutch foundation Stichting Onderzoek Marktinformatie (SOMI) initiated a collective action in the\nDistrict Court of Amsterdam in the Netherlands on behalf of approximately 7.8 million Dutch X users. Among other\nthings, SOMI seeks damages against TIUC, X Corp. and Twitter Netherlands B.V. (collectively, the “X entities”)\nfor: (1) alleged data breaches and insufficient security measures; (2) alleged unauthorized microtargeting and lack of\ntransparency; and (3) the alleged failure to moderate hate speech and the obstruction of research, all in violation of\nthe GDPR and/or DSA. The alleged data breaches relate to a Twitter API bug that came to light in 2022 and that had\nallowed persons who knew the email address or phone number of a user to determine the user’s Twitter ID. SOMI\nhas requested compensation (to be assessed at a later stage) for each member of the class, including symbolic\ndamages of EUR 1 for each member of the class that is allegedly affected by hate speech on the X platform. The X\nentities filed a procedural defense on March 12, 2025. The court held a hearing on April 2, 2026, and indicated that\nit would hand down its decision on May 27, 2026.\nIn September 2025, non-practicing entity Search and Share Technologies, LLC (“SaS”) filed a patent complaint\nagainst X Corp. in the Federal District Court for the Western District of Texas. SaS alleges that X Corp. infringed on\nU.S. Patent Nos. 10,180,952 and 11,106,744, through features in its mobile app and website enabling users to\ninteract with content through dedicated interfaces that directly share what other users see in ranked feeds and search\nresults. SaS filed an Amended Complaint on January 5, 2026. On January 20, 2026, X Corp. moved to dismiss SaS’s\nwillful infringement and induced infringement claims. On February 3, 2026, SAS responded to, but did not oppose,\nX Corp.’s partial motion to dismiss. On February 10, 2026, X Corp. filed its reply. On February 4, 2026, X Corp.\nfiled an IPR petition challenging the ‘744 Patent and on February 18, 2026, filed an IPR petition challenging the\n'952 Patent.", - "path": "spacex-s1.pdf/p396", - "metadata": { - "length": 5268, - "summary": "F-92 Table of Contents infringe any claim of the ‘506 patent and two out of three claims of the ‘304 patent and that each of those patent claims was invalid, but (ii) that Twitter willfully infringed one claim of the ‘304 patent. The jury awarded Plaintiff $105 million in dama...", - "page_nums": [ - 396 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 396, "artifact_ref": "page_citation_assets/page-396.png", @@ -13644,24 +8472,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2a251c3e-ccd0-51fe-b7be-6469dc0929dc", - "type": "page", - "content": "F-93\nTable of Contents\nBeginning in January 2026, the Company and certain subsidiaries have been named as defendants in multiple\nlawsuits arising from Grok’s image-generation and editing features. The complaints generally allege that Grok’s\nimage-generation and editing features enabled the creation and dissemination of nonconsensual explicit images and/\nor content representing women and/or children in sexualized contexts. The actions include Jane Doe v. X.AI Corp.\nand X.AI LLC, instituted in the U.S. District Court for the Northern District of California on January 23, 2026, and\nJane Doe 1 et al. v. X.AI Corp. and X.AI LLC (the “Jane Doe 1 Case”) instituted in the U.S. District Court for the\nNorthern District of California on March 16, 2026. These cases are putative class actions, asserting claims\nincluding, among other things, claims of strict liability, negligence, nuisance, rights of privacy or publicity, and, in\nthe Jane Doe 1 Case, certain federal statutory claims. Plaintiffs in these two cases seek, among other things,\ncompensatory, statutory and punitive damages, restitution, disgorgement and injunctive relief. In addition, a case,\nMayor and City Council of Baltimore ex rel. Ebony M. Thompson v. X Corp., X.AI Corp., X.AI LLC, and Space\nExploration Technologies Corp, was instituted in the Baltimore City Circuit Court on March 24, 2026 (the\n“Baltimore Case”). The plaintiff in the Baltimore Case, the Mayor and City Council of Baltimore, asserts similar\nclaims to those in the two cases discussed above under Baltimore’s Consumer Protection Ordinances. The plaintiff\nin the Baltimore Case seeks statutory penalties and/or injunctive relief. The Company intends to defend itself\nvigorously in these actions.\nOn April 14, 2026, the National Association for the Advancement of Colored People and the NAACP Mississippi\nState Conference (together, the “NAACP”) filed suit against X.AI Corp. and MZX Tech, LLC alleging that the\nmobile gas turbines powering the COLOSSUS II data center with the permission of the Mississippi Department of\nEnvironmental Quality are in violation of the Clean Air Act because they allegedly constitute stationary sources\nwithout the proper permits. On May 6, 2026, the NAACP filed a preliminary injunction motion seeking to enjoin\nthe operation of the turbines. The Company intends to defend itself vigorously in these actions.\nThe Company has recorded an accrual of $399 million for litigation losses that are probable and reasonably\nestimable in Accrued expenses and other current liabilities and Other liabilities on the consolidated balance sheet as\nof March 31, 2026. For other matters, the Company is not currently able to estimate the reasonably possible loss or\nrange of loss.\nNote 17 - Related Party Transactions\nThe Company periodically does business with certain entities with which its CEO and directors are affiliated.\nDuring the three months ended March 31, 2026, the Company purchased $34 million of Megapack products from\nTesla, Inc. (“Tesla”) recorded in Property, plant, and equipment, net in the consolidated balance sheets. As of\nDecember 31, 2025, the Company purchased $506 million of Megapack products and $131 million of Cybertrucks\nat manufacturer’s suggested retail price from Tesla, recorded in Property, plant, and equipment, net in the\nconsolidated balance sheets.\nIn January 2026, and as further amended on February 18, 2026, CTC entered into an equipment lease agreement\nwith Valor Equity Partners (“Valor”) for certain AI infrastructure hardware (“Valor transaction II”). The founder,\nCEO and Chief Investment Officer of Valor, Antonio Gracias, serves as one of the directors of the Company. The\nValor transaction II was deemed to be a failed sale-leaseback transaction. The Company has previously entered into\na similar agreement with Valor for other AI infrastructure hardware. As of March 31, 2026, the Company recorded\ndebt of $1,121 million and $7,920 million within Debt and finance leases, current and Debt and finance leases, net\nof current, respectively, in the Company’s consolidated balance sheet, and $186 million in Interest expense for the\nthree months ended March 31, 2026 in the Company’s consolidated statement of operations related to equipment\nlease agreements with Valor. As of December 31, 2025, the Company recorded debt of $455 million and $4,052\nmillion within Debt and finance leases, current and Debt and finance leases, net of current, respectively, in the\nCompany’s consolidated balance sheet related to equipment lease agreements with Valor. Refer to Note 9, Debt for\nadditional details. The related asset is recorded within Property, plant, and equipment, net in the Company’s\nconsolidated balance sheets.\nOther transactions with Tesla and other related parties during the three months ended March 31, 2026 and 2025 were\nimmaterial.", - "path": "spacex-s1.pdf/p397", - "metadata": { - "length": 4849, - "summary": "F-93 Table of Contents Beginning in January 2026, the Company and certain subsidiaries have been named as defendants in multiple lawsuits arising from Grok’s image-generation and editing features. The complaints generally allege that Grok’s image-generation and editing feature...", - "page_nums": [ - 397 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 397, "artifact_ref": "page_citation_assets/page-397.png", @@ -13669,24 +8480,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_ad5bf306-9e16-5bfb-a909-447a561bd23a", - "type": "page", - "content": "F-94\nTable of Contents\nNote 18 - Segments\nFollowing the Mergers, the Company evaluated how to view and measure performance of the combined company\nand potential realignment of individual entity’s historical segment structure. Following this evaluation, the Company\ndetermined that as a combined company, effective in Q1 2026, the Company’s Chief Executive Officer, as the Chief\nOperating Decision Maker (“CODM”), organizes the Company, manages resource allocations, and measures\nperformance among three operating and reportable segments: (i) Space, (ii) Connectivity, and (iii) AI. Prior period\npresentations for segments conform to the current segment reporting structure.\nThe Company’s CODM assesses performance and allocates resources to operating segments based on segment\nincome (loss) from operations by comparing actual income (loss) from operations to historical results and previously\nforecasted financial information. The Company’s CODM does not evaluate operating and reportable segments using\nasset or liability information.\nThe following tables present information as to revenues, significant segment expenses, and income (loss) from\noperations by the Company’s reportable segments:\nThree Months Ended March 31,\n2026\nSpace Connectivity AI Total Reportable Segments\nRevenue\n\n\n............................................................. $ 619 $ 3,257 $ 818 $ 4,694\nCosts and expenses\nCost of revenue\n\n.............................................. 281 1,651 456 2,388\nResearch and development\n\n............................. 930 205 2,379 3,514\nSelling, general and administrative\n\n\n................ 70 213 463 746\nRestructuring charges\n\n..................................... — — (11) (11)\nTotal costs and expenses\n\n........................... 1,281 2,069 3,287 6,637\nIncome (loss) from operations\n.......................... (662) 1,188 (2,469) (1,943)\nInterest expense\n\n................................................... (664)\nInterest income\n\n.................................................... 213\nOther expense, net\n\n............................................... (1,876)\nLoss before income taxes\n\n.................................. $ (4,270)\nSupplemental segment information\nDepreciation and amortization\n\n............................ $ 166 $ 783 $ 1,493 $ 2,442\nShare-based compensation\n\n.................................. $ 145 $ 116 $ 378 $ 639\nCapital expenditures\n\n............................................ $ 1,052 $ 1,332 $ 7,723 $ 10,107", - "path": "spacex-s1.pdf/p398", - "metadata": { - "length": 2467, - "summary": "F-94 Table of Contents Note 18 - Segments Following the Mergers, the Company evaluated how to view and measure performance of the combined company and potential realignment of individual entity’s historical segment structure. Following this evaluation, the Company determined t...", - "page_nums": [ - 398 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 398, "artifact_ref": "page_citation_assets/page-398.png", @@ -13694,24 +8488,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_3ee2b37a-4069-57a3-82e5-062184bc5c07", - "type": "page", - "content": "F-95\nTable of Contents\nThree Months Ended March 31,\n2025\nSpace Connectivity AI Total Reportable Segments\nRevenue\n\n\n.............................................................. $ 865 $ 2,475 $ 727 $ 4,067\nCosts and expenses\nCost of revenue\n\n.............................................. 297 1,214 451 1,962\nResearch and development\n\n............................. 526 123 908 1,557\nSelling, general and administrative\n\n\n................ 88 105 300 493\nRestructuring charges\n\n..................................... — — 4 4\nImpairment\n\n..................................................... 24 — — 24\nTotal costs and expenses\n\n........................... 935 1,442 1,663 4,040\nIncome (loss) from operations\n.......................... (70) 1,033 (936) 27\nInterest expense\n\n................................................... (447)\nInterest income\n\n.................................................... 117\nOther expense, net\n\n............................................... (211)\nLoss before income taxes\n\n.................................. $ (514)\nSupplemental segment information\nDepreciation and amortization\n\n............................ $ 162 $ 510 $ 771 $ 1,443\nShare-based compensation\n\n.................................. $ 108 $ 75 $ 49 $ 232\nImpairment\n\n.......................................................... $ 24 $ — $ — $ 24\nCapital expenditures\n\n............................................ $ 759 $ 814 $ 2,567 $ 4,140\nNote 19 - Restructuring\nIn 2022, X, an indirect subsidiary of the Company (through the X Merger and subsequently, xAI Merger), initiated\nglobal employee workforce reductions, the effects of which continued into 2026. The charges and credits associated\nwith the workforce reduction include cash severance expense and other termination benefits. Total charges (credits)\nof $(11) million and $4 million associated with the workforce reduction were recorded in Restructuring charges\n(credits) in the consolidated statements of operations for the three months ended March 31, 2026, and 2025,\nrespectively.\nThe following table is a summary of the changes in the restructuring liabilities for each period presented, included\nwithin Accrued expenses and other current liabilities and Other liabilities on the consolidated balance sheets:\nRestructuring liabilities as of December 31, 2025\n................................................................................ $ 443\nSeverance and other personnel costs\n................................................................................................. (11)\nCash payments\n\n\n................................................................................................................................... (123)\nOther adjustments\n.............................................................................................................................. 3\nRestructuring liabilities as of March 31, 2026\n...................................................................................... $ 312", - "path": "spacex-s1.pdf/p399", - "metadata": { - "length": 2976, - "summary": "F-95 Table of Contents Three Months Ended March 31, 2025 Space Connectivity AI Total Reportable Segments Revenue .............................................................. $ 865 $ 2,475 $ 727 $ 4,067 Costs and expenses Cost of revenue .........................................", - "page_nums": [ - 399 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 399, "artifact_ref": "page_citation_assets/page-399.png", @@ -13719,24 +8496,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_4cb70fb0-cc3b-5648-aba9-27cf8d68857a", - "type": "page", - "content": "F-96\nTable of Contents\nNote 20 - Subsequent Events\nThe Company has evaluated subsequent events that occurred from April 1, 2026 through May 7, 2026, which is the\ndate the consolidated financial statements were available to be issued, and determined that there were no subsequent\nevents or transactions that required recognition or disclosure in the consolidated financial statements, except as\ndiscussed below.\nCollaboration Agreement\nOn April 19, 2026, the Company entered into a compute agreement with Anysphere, Inc., doing business as Cursor,\na San Francisco-based private software company (“Cursor”). Pursuant to the compute agreement, the Company will\ncollaborate with Cursor to improve the Company’s existing models, including Grok, and potentially to jointly\ndevelop AI models and related model-specific deliverables.\nConcurrent with the compute agreement, the Company also entered into an option agreement for the right, but not\nthe obligation, to acquire Cursor. The option agreement generally provides that the Company may exercise the call\noption at any time during the 30-day period following the earlier of (i) seven trading days following the completion\nof the Company’s IPO and (ii) September 30, 2026. Exercise of the call option is in the Company’s sole discretion\nand subject to further approval by the board of directors. Cursor is also subject to certain exclusivity obligations\nunder the option agreement. The consideration for the acquisition of Cursor would consist of shares of Class A\ncommon stock based on an implied equity value of Cursor of $60.0 billion, and the price of Class A common stock\nthat equals, if the acquisition closed prior to the completion of this offering, the most recent quarterly valuation, or,\nif the acquisition closed after the completion of the Company’s IPO, the volume-weighted average closing price\nthereof over the seven consecutive trading days immediately preceding the closing of the acquisition. If either (i) the\nCompany decides to terminate the option agreement or (ii) Cursor is eligible to and decides to terminate due to the\nCompany’s material breach of the option agreement, Cursor is entitled to a $1.5 billion termination fee under the\noption agreement and an $8.5 billion deferred services fee under the compute agreement. These fees are payable in\ncash (or Class A common stock, if the Company’s IPO has not been consummated at the time the fees become\npayable).\nThe Company has conducted preliminary due diligence on Cursor’s business, technology and operations, and expect\nto continue such diligence in connection with any decision to exercise the call option. The Company cannot predict\nwhether the Company will elect to exercise the call option or, if exercised, whether the acquisition will close on the\nanticipated terms or at all.\nSale-Leaseback Transaction\nOn April 24, 2026, CTC entered into a five-year equipment lease agreement with Valor, a related party, for certain\nAI infrastructure hardware (“Valor transaction III”) for total undiscounted lease payments of $6,587 million.\nAsset Acquisition\nOn April 30, 2026, the Company entered into an asset purchase agreement with an unaffiliated third party to\npurchase certain mobile gas turbines and related packages for approximately $2,000 million (the “Turbine\nAcquisition”). The closing of the Turbine Acquisition is expected to occur in May 2026 and is subject to customary\nclosing conditions. The seller has also agreed to enter into a post-closing services agreement to support the\nCompany's turbine operations. The Turbine Acquisition will help provide power to the Company's data centers.\nCloud Services Agreement\nOn May 3, 2026, the Company entered into a cloud services agreement with Anthropic PBC, an AI research and\ndevelopment public benefit corporation, with respect to access to compute capacity. Pursuant to this agreement, the\ncustomer has agreed to pay a monthly fee through May 2029, with capacity ramping in May 2026 at a reduced fee.\nThe agreement may be terminated by either party upon 90 days’ notice. The customer will retain ownership and\nintellectual property rights in its content, AI models, and related data.", - "path": "spacex-s1.pdf/p400", - "metadata": { - "length": 4169, - "summary": "F-96 Table of Contents Note 20 - Subsequent Events The Company has evaluated subsequent events that occurred from April 1, 2026 through May 7, 2026, which is the date the consolidated financial statements were available to be issued, and determined that there were no subsequen...", - "page_nums": [ - 400 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 400, "artifact_ref": "page_citation_assets/page-400.png", @@ -13744,24 +8504,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_6bcfccac-582b-5fca-aa37-ed12a4724ebb", - "type": "page", - "content": "Table of Contents\n Shares\nSpace Exploration Technologies Corp.\nClass A Common Stock\nPRELIMINARY PROSPECTUS\n , 2026\nThrough and including , 2026 (the 25th day after the date of this prospectus), all dealers effecting\ntransactions in our Class A common stock, whether or not participating in this offering, may be required to deliver a\nprospectus. This delivery requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an\nunderwriter and with respect to an unsold allotment or subscription.", - "path": "spacex-s1.pdf/p401", - "metadata": { - "length": 580, - "summary": "Table of Contents Shares Space Exploration Technologies Corp. Class A Common Stock PRELIMINARY PROSPECTUS , 2026 Through and including , 2026 (the 25th day after the date of this prospectus), all dealers effecting transactions in our Class A common stock, whether or not partic...", - "page_nums": [ - 401 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 401, "artifact_ref": "page_citation_assets/page-401.png", @@ -13769,24 +8512,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_2344a204-1d52-5252-818e-cde951df0fba", - "type": "page", - "content": "II-1\nTable of Contents\nPART II\nINFORMATION NOT REQUIRED IN PROSPECTUS\nItem 13.Other Expenses of Issuance and Distribution.\nThe following table shows the costs and expenses, other than underwriting discounts and commissions, payable in\nconnection with the sale and distribution of the securities being registered. All amounts except the SEC registration\nfee, the FINRA fee and the stock exchange listing fee are estimated.\nSEC Registration Fee\n\n............................................................................................................................ $ 138,100\nFINRA Filing Fee\n\n................................................................................................................................. 150,500\nNasdaq Listing Fee 335,000\nPrinting Costs\n\n........................................................................................................................................ *\nLegal Fees and Expenses\n\n....................................................................................................................... *\nAccounting Fees and Expenses\n\n............................................................................................................. *\nTransfer Agent Fees and Expenses\n\n....................................................................................................... *\nMiscellaneous Expenses\n\n\n........................................................................................................................ *\nTotal\n\n...................................................................................................................................................... $ *\n__________________\n* To be provided by amendment.\nItem 14.Indemnification of Directors and Officers.\nUnder the Texas Business Organizations Code (the “TBOC”), the charter of a corporation may provide that a\ndirector or officer of the corporation is not liable, or is liable only to the extent provided by the charter, to the\ncorporation or its shareholders for monetary damages for an act or omission by the person in the person’s capacity as\na director or officer. The TBOC does not authorize elimination or limitation of liability to the extent the director or\nofficer is found liable under applicable law for:\n• any breach of the director’s or officer’s duty of loyalty to the corporation or its shareholders;\n• any act or omission not in good faith that constitutes a breach of duty of the director or officer to the corporation\nor that involves intentional misconduct or a knowing violation of law;\n• any transaction from which the director or officer receives an improper benefit, whether or not the benefit\nresulted from an action taken within the scope of the director’s duties; or\n• an act or omission for which the liability of the director or officer is expressly provided by an applicable statute.\nOur charter will provide that our directors and officers are not liable to the Company or its shareholders for\nmonetary damages for an act or omission by the director or officer in his or her capacity as a director or officer or\nfor a breach of any duty as a director or officer to the fullest extent permitted by the TBOC, as it exists or as\namended from time to time.\nThe TBOC provides that a corporation must indemnify a director or former director against reasonable expenses\nactually incurred by the person in connection with a proceeding in which the person is a respondent because the\nperson is or was a director, or is or was serving as a representative of another enterprise or organization or an\nemployee benefit plan while serving as a director, if the director or former director is wholly successful, on the\nmerits or otherwise, in the defense of the proceeding. If a court determines that a director, former director or\nrepresentative is entitled to indemnification, the court will order indemnification by the corporation and award the\nperson expenses incurred in securing the indemnification. The TBOC also permits corporations to indemnify present\nor former directors where indemnification is not mandated by the TBOC; however, such permissive indemnification\nis subject to certain limitations and the director satisfying specified standards of conduct. The TBOC also provides\nthat officers must be indemnified to the same extent as directors are required to be indemnified under the TBOC and", - "path": "spacex-s1.pdf/p402", - "metadata": { - "length": 4375, - "summary": "II-1 Table of Contents PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 13.Other Expenses of Issuance and Distribution. The following table shows the costs and expenses, other than underwriting discounts and commissions, payable in connection with the sale and distribution...", - "page_nums": [ - 402 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 402, "artifact_ref": "page_citation_assets/page-402.png", @@ -13794,24 +8520,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f7785e98-5260-5563-a5c8-edd4b44057e4", - "type": "page", - "content": "II-2\nTable of Contents\nthat a court may also order indemnification under various circumstances. In addition, the TBOC permits\nindemnification in certain circumstances in which we would not otherwise have the power to do so under the\nprovisions of the TBOC or our charter or bylaws if that indemnification is approved by the shareholders of the\nCompany.\nOur bylaws will also provide that, to the fullest extent permitted by the TBOC, the Company must indemnify any\nperson who was or is, or is threatened to be made, a party to any threatened, pending or completed action, suit or\nproceeding, whether civil, criminal, administrative, arbitrative, legislative or investigative, including an appeal\nthereof, by reason of the fact that the person is or was a director or an officer (who is appointed by our board or\nspecifically designated as such by our chief executive officer, president or chief financial officer) of the Company,\nor while a director or officer of the Company is or was serving at the request of the Company as a director, officer,\npartner, venturer, trustee, employee, administrator or agent of another entity, trust or enterprise, against expenses\n(including attorneys’ fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably\nincurred by the person in connection with the action, suit or proceeding if the person satisfied a specified standard of\nconduct. Our bylaws will also provide that expenses (including attorneys’ fees) actually and reasonably incurred by\nsuch director or officer in defending any proceeding will be paid by the Company in advance of the final disposition\nof the proceeding upon written request from that person subject to the person satisfying certain conditions. To the\nextent that indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers\nand controlling persons, we have been advised that, in the opinion of the SEC, this indemnification is against public\npolicy as expressed in the Securities Act and is, therefore, unenforceable.\nThe TBOC and our bylaws permit the Company to purchase insurance on behalf of existing or former officers,\nemployees, directors or agents against any liability asserted against and incurred by that person in such capacity, or\narising out of that person’s status in such capacity, whether or not the Company would have the power to indemnify\nthat person under the TBOC. Pursuant to this authority, we expect to obtain such insurance for the officers,\nemployees, directors and agents of the Company and its subsidiaries. We will also enter into written indemnification\nagreements with each of our officers and directors that provide, in general, that we will indemnify them against loss\nand liability arising from, and will pay or reimburse their actual and reasonable expenses incurred in advance of the\nfinal disposition of any legal proceeding involving their service to us or on our behalf. As permitted by the TBOC,\nbecause these agreements are expected to be approved by our shareholders, the agreements may require\nindemnification or payment of expenses in favor of the indemnitee in certain circumstances in which we would not\notherwise have the power to do so under the provisions of the TBOC or our charter or bylaws. Pursuant to a written\nundertaking provided by any director or officer who requests the Company to reimburse or pay that person’s\nexpenses in advance of the final disposition of the proceeding, the director or officer will be required to repay the\nadvanced expenses to the Company if it is found that such director or officer is not entitled to indemnification under\napplicable law and our bylaws.\nThe proposed form of Underwriting Agreement filed as Exhibit 1.1 to this Registration Statement will provide for\nindemnification of our directors and officers by the underwriters against certain liabilities in connection with this\noffering.", - "path": "spacex-s1.pdf/p403", - "metadata": { - "length": 3925, - "summary": "II-2 Table of Contents that a court may also order indemnification under various circumstances. In addition, the TBOC permits indemnification in certain circumstances in which we would not otherwise have the power to do so under the provisions of the TBOC or our charter or byl...", - "page_nums": [ - 403 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 403, "artifact_ref": "page_citation_assets/page-403.png", @@ -13819,24 +8528,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_39d9cd04-7e05-59c9-abf1-31bd96ebcb18", - "type": "page", - "content": "II-3\nTable of Contents\nItem 15.Recent Sales of Unregistered Securities.\nThe following sets forth information regarding all unregistered securities we have issued in the last three years.\nUnless stated otherwise, the sale of the securities listed below were deemed to be exempt from registration pursuant\nto Section 4(a)(2) of the Securities Act, including Regulation D and Rule 506 promulgated thereunder, as\ntransactions by an issuer not involving a public offering. Share amounts in this Item 15. do not give effect to the\n2026 Stock Split.\nOn February 2, 2026, we consummated the xAI Merger and, in connection therewith, issued 321,681,643 shares of\nClass A common stock and 121,683,400 shares of Class B common stock as partial consideration, including\n3,798,039 shares of Class A common stock to Tesla following the completion of a regulatory review period on\nMarch 12, 2026.\nOn January 13, 2026, we granted 200 million performance-based restricted shares of Class B common stock to Mr.\nMusk to vest upon (i) our achievement of specified market capitalization milestones across 15 equal tranches and (ii)\nthe Company’s establishment of a permanent human colony on Mars with at least one million inhabitants, in each\ncase, subject to Mr. Musk’s continued employment with us through the date on which achievement is certified by\nour board.\nOn September 7, 2025, we entered into a License Purchase Agreement with Spectrum Business Trust 2025-1, a\nNevada Business Trust, and EchoStar. The total consideration for the acquisition of EchoStar’s spectrum is\napproximately $19.6 billion, consisting of (i) approximately $11.1 billion in equity, payable through the issuance of\napproximately 52.4 million shares of Class A common stock at a fixed value of $212 per share, and (ii) up to $8.5\nbillion related to the payoff of designated EchoStar debt, with any shortfall below $8.5 billion to be paid in cash.\nSuch amounts do not give effect to the 2026 Stock Split. The allocation of cash and equity consideration is subject to\ncertain adjustments based on the amount of EchoStar debt satisfied at or prior to closing. The Spectrum Transaction\nis expected to close in November 2027.\nItem 16.Exhibits and Financial Statement Schedules.\n(a) Exhibits\nExhibit No. Description of Exhibit\n1.1* Form of Underwriting Agreement.\n2.1^ Agreement and Plan of Merger and Reorganization, by and among Space Exploration Technologies Corp., X.AI Holdings Corp., K2 Merger Sub Inc. and K2 Merger Sub 2 LLC, dated January 31, 2026.\n3.1 Form of Restated Certificate of Formation of Space Exploration Technologies Corp.\n3.2 Form of Amended and Restated Bylaws of Space Exploration Technologies Corp.\n4.1 Form of Class A Common Stock Certificate of Space Exploration Technologies Corp.\n4.2 Amended and Restated Investors’ Rights Agreement, dated as of August 4, 2020, by and among Space Exploration Technologies Corp. and the investors listed on the exhibits thereto.\n5.1 Form of Opinion of Gibson, Dunn & Crutcher LLP.\n10.1 Form of Indemnification Agreement.\n10.2† Form of Space Exploration Technologies Corp. Second Amended and Restated 2017 Employee Stock Purchase Plan.\n10.3† Space Exploration Technologies Corp. Amended & Restated 2015 Equity Incentive Plan and Form of Stock Option Grant Notice and Option Agreement.\n10.4† Form of Space Exploration Technologies Corp. Amended and Restated 2024 Equity Incentive Plan.\n10.5† Space Exploration Technologies Corp. 2024 Equity Incentive Plan and Forms of Grant Notices and Award Agreements.\n10.6† Class B Restricted Stock Award Agreement between Space Exploration Technologies Corp. and Elon R. Musk, dated as of January 13, 2026.\n10.7† Class B Restricted Stock Award Agreement between Space Exploration Technologies Corp. and Elon R. Musk, dated as of March 23, 2026.", - "path": "spacex-s1.pdf/p404", - "metadata": { - "length": 3794, - "summary": "II-3 Table of Contents Item 15.Recent Sales of Unregistered Securities. The following sets forth information regarding all unregistered securities we have issued in the last three years. Unless stated otherwise, the sale of the securities listed below were deemed to be exempt...", - "page_nums": [ - 404 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 404, "artifact_ref": "page_citation_assets/page-404.png", @@ -13844,24 +8536,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_13588195-de2a-5c28-87f0-4b7e727a572f", - "type": "page", - "content": "II-4\nTable of Contents\nExhibit No. Description of Exhibit\n10.8^ Amended and Restated License Purchase Agreement, dated as of November 5, 2025, by and among EchoStar Corporation, Space Exploration Technologies Corp. and Spectrum Business Trust 2025-1.\n10.9^ Bridge Loan Credit Agreement, dated as of March 2, 2026, by and among Space Exploration Technologies Corp., as borrower, the guarantors from time to time party thereto, the lenders from time to time party thereto and Goldman Sachs Bank USA, as administrative agent and a lender.\n10.10* Amended and Restated Credit Agreement, dated as of May 19, 2026, by and among Space Exploration Technologies Corp., the Guarantors party thereto, the Lenders party thereto, Bank of America, NA., as the administrative agent, an L/C Issuer and the Swing Line Lender, and the other L/C Issuers from time to time party thereto.\n21.1 List of subsidiaries of Space Exploration Technologies Corp.\n23.1 Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm to Space Exploration Technologies Corp.\n23.2 Consent of Gibson, Dunn & Crutcher LLP (form included in Exhibit 5.1).\n24.1 Power of Attorney (included on the signature page hereto).\n107 Filing Fee Table.\n__________________\n* To be filed by amendment.\n^ Certain of the schedules and attachments to this exhibit have been omitted pursuant to Regulation S-K, Item 601(a)(5). The registrant\nhereby undertakes to provide further information regarding such omitted materials to the SEC upon request.\n† Management contract or compensatory plan or arrangement.\n(b) Financial Statement Schedules\nFinancial statement schedules have been omitted because the information is not applicable or included in our\nconsolidated financial statements in the prospectus that forms a part of this Registration Statement.\nItem 17.Undertakings.\nThe undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the\nunderwriting agreement certificates in such denominations and registered in such names as required by the\nunderwriters to permit prompt delivery to each purchaser.\nInsofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and\ncontrolling persons of the registrant pursuant to the provisions referenced in Item 14 of this Registration Statement,\nor otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such\nindemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the\nevent that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses\nincurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action,\nsuit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being\nregistered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling\nprecedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against\npublic policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.\nThe undersigned registrant hereby undertakes that:\n(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of\nprospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of\nprospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be\ndeemed to be part of this Registration Statement as of the time it was declared effective.\n(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that\ncontains a form of prospectus shall be deemed to be a new registration statement relating to the securities\noffered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide\noffering thereof.", - "path": "spacex-s1.pdf/p405", - "metadata": { - "length": 4104, - "summary": "II-4 Table of Contents Exhibit No. Description of Exhibit 10.8^ Amended and Restated License Purchase Agreement, dated as of November 5, 2025, by and among EchoStar Corporation, Space Exploration Technologies Corp. and Spectrum Business Trust 2025-1. 10.9^ Bridge Loan Credit A...", - "page_nums": [ - 405 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 405, "artifact_ref": "page_citation_assets/page-405.png", @@ -13869,24 +8544,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_f66d7563-c50a-5dde-979d-3deff90ded6e", - "type": "page", - "content": "II-5\nTable of Contents\nSIGNATURES\nPursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement\nto be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Starbase, Texas, on May 20,\n2026.\nSpace Exploration Technologies Corp.\nBy: /s/ Elon Musk\nName: Elon Musk\nTitle: Chief Executive Officer and Chief Technical Officer", - "path": "spacex-s1.pdf/p406", - "metadata": { - "length": 405, - "summary": "II-5 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Starbase, Texas, on May 20, 2026. S...", - "page_nums": [ - 406 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 406, "artifact_ref": "page_citation_assets/page-406.png", @@ -13894,24 +8552,7 @@ "source": "knowhere-rendered-page-citation-source", "width": 1224, "height": 1584 - } - ] - } - }, - { - "chunk_id": "node_aa65e974-ac51-5444-8223-7fcb784fd648", - "type": "page", - "content": "II-6\nTable of Contents\nPOWER OF ATTORNEY\nKNOW ALL PEOPLE BY THESE PRESENTS, that each person whose signature appears below constitutes and\nappoints Gwynne Shotwell and Bret Johnsen, and each of them, as his or her true and lawful attorneys-in-fact and\nagents, each with full power of substitution and resubstitution, for him or her and in his or her name, place or stead,\nin any and all capacities (including, without limitation, the capacities listed below), to sign any and all amendments\n(including post-effective amendments) to this Registration Statement, and to sign any registration statement for the\nsame offering covered by this Registration Statement that is to be effective upon filing pursuant to Rule 462(b)\npromulgated under the Securities Act of 1933, as amended, and all post-effective amendments thereto, and to file the\nsame, with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange\nCommission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to\ndo and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to\nall intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said\nattorneys-in-fact and agents, or any of them, or his or her substitute or substitutes, may lawfully do or cause to be\ndone by virtue hereof.\nPursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed\nby the following persons in the capacities indicated on the 20th day of May, 2026.\nSignature Title\n/s/ Elon Musk Elon Musk\nChief Executive Officer, Chief Technical Officer and Chairman of the Board(principal executive officer)\n/s/ Gwynne Shotwell Gwynne Shotwell\nPresident, Chief Operating Officer and Director\n/s/ Bret Johnsen Bret Johnsen\nChief Financial Officer(principal financial and accounting officer)\n/s/ Ira Ehrenpreis Ira Ehrenpreis\nDirector\n/s/ Randy Glein Randy Glein\nDirector\n/s/ Antonio J. Gracias Antonio J. Gracias\nDirector\n/s/ Donald Harrison Donald Harrison\nDirector\n/s/ Steve Jurvetson Steve Jurvetson\nDirector\n/s/ Luke Nosek Luke Nosek\nDirector", - "path": "spacex-s1.pdf/p407", - "metadata": { - "length": 2216, - "summary": "II-6 Table of Contents POWER OF ATTORNEY KNOW ALL PEOPLE BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gwynne Shotwell and Bret Johnsen, and each of them, as his or her true and lawful attorneys-in-fact and agents, each with full po...", - "page_nums": [ - 407 - ], - "keywords": [], - "connect_to": [], - "page_assets": [ + }, { "page_num": 407, "artifact_ref": "page_citation_assets/page-407.png", diff --git a/apps/api/app/data/demo_documents/spacex-s1/doc_nav.json b/apps/api/app/data/demo_documents/spacex-s1/doc_nav.json index 557d34aad..e75758e72 100644 --- a/apps/api/app/data/demo_documents/spacex-s1/doc_nav.json +++ b/apps/api/app/data/demo_documents/spacex-s1/doc_nav.json @@ -2,3268 +2,20 @@ "version": "1.0", "file_name": "spacex-s1.pdf", "stats": { - "total_chunks": 633, + "total_chunks": 227, "text_chunks": 0, "image_chunks": 94, "table_chunks": 132, - "page_chunks": 407, + "page_chunks": 1, "max_depth": 1 }, "sections": [ { - "title": "p1", - "path": "spacex-s1.pdf/p1", + "title": "Root", + "path": "spacex-s1.pdf/Root", "level": 1, - "summary": "S-1 1 spaceexplorationtechnologi.htm S-1 As filed with the U.S. Securities and Exchange Commission on May 20, 2026 Registration No. 333- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Space...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p2", - "path": "spacex-s1.pdf/p2", - "level": 1, - "summary": "Shares Space Exploration Technologies Corp. Class A Common Stock This is the initial public offering of shares of Class A common stock, par value $0.001 per share, of Space Exploration Technologies Corp., a Texas corporation. We are offering shares of our Class A common stock....", - "chunk_count": 1, - "children": [] - }, - { - "title": "p3", - "path": "spacex-s1.pdf/p3", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p4", - "path": "spacex-s1.pdf/p4", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p5", - "path": "spacex-s1.pdf/p5", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p6", - "path": "spacex-s1.pdf/p6", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p7", - "path": "spacex-s1.pdf/p7", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p8", - "path": "spacex-s1.pdf/p8", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p9", - "path": "spacex-s1.pdf/p9", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p10", - "path": "spacex-s1.pdf/p10", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p11", - "path": "spacex-s1.pdf/p11", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p12", - "path": "spacex-s1.pdf/p12", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p13", - "path": "spacex-s1.pdf/p13", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p14", - "path": "spacex-s1.pdf/p14", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p15", - "path": "spacex-s1.pdf/p15", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p16", - "path": "spacex-s1.pdf/p16", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p17", - "path": "spacex-s1.pdf/p17", - "level": 1, - "summary": "Table of Contents TABLE OF CONTENTS Page GLOSSARY OF TERMS ................................................................................................................................. iv PROSPECTUS SUMMARY .....................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p18", - "path": "spacex-s1.pdf/p18", - "level": 1, - "summary": "ii Table of Contents General Information Except as otherwise indicated or required by the context, all references to “SpaceX,” the “Company,” “we,” “our” and “us” or similar terms refer to Space Exploration Technologies Corp. and its consolidated subsidiaries. For the definiti...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p19", - "path": "spacex-s1.pdf/p19", - "level": 1, - "summary": "iii Table of Contents Inference, Jensen Math, Feynman, dated March 18, 2025, by SemiAnalysis; (xxix) NVIDIA Blackwell Ultra Datasheet, dated February 16, 2026, by SemiAnalysis; (xxx) H100 Rental Price Over Time (2023–2025): A Complete Market Analysis, dated December 21, 2025,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p20", - "path": "spacex-s1.pdf/p20", - "level": 1, - "summary": "iv Table of Contents GLOSSARY OF TERMS The terms and abbreviations defined in this section are used throughout this prospectus: • “AI” or “artificial intelligence” refers to advanced computational technologies and systems enabling machines to learn, comprehend reality, solve c...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p21", - "path": "spacex-s1.pdf/p21", - "level": 1, - "summary": "v Table of Contents • “daily posts” on X and Grok refers to the aggregate volume of original posts, replies, reposts, quotes and media shared daily by users on the X platform, and the real-time interactions, analysis and generative capabilities provided to a user by Grok. This...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p22", - "path": "spacex-s1.pdf/p22", - "level": 1, - "summary": "vi Table of Contents • “Imagine” refers to our image and video generation system. • “inference” refers to the process by which a trained artificial intelligence model generates outputs (such as text, images, or predictions) from new input data. • “International Docking System...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p23", - "path": "spacex-s1.pdf/p23", - "level": 1, - "summary": "vii Table of Contents when measuring MAU. Furthermore, only users who have registered for an X or Grok account are included. While we believe our methodologies provide a reasonable approximation of MAU based on the number of unique users, they may not fully capture all instanc...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p24", - "path": "spacex-s1.pdf/p24", - "level": 1, - "summary": "viii Table of Contents • “propellant” refers to the chemical substance or combination of substances consumed by a rocket engine to produce thrust by generating high-velocity exhaust gases. • “propulsive landing” refers to the process of landing a rocket or spacecraft using its...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p25", - "path": "spacex-s1.pdf/p25", - "level": 1, - "summary": "ix Table of Contents • “Starlink Consumer Broadband” refers to a category of Starlink active users encompassing both individual residential users (households and personal use) and small-to-medium-sized businesses. • “Starlink Fixed Site” refers to a category of Starlink active...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p26", - "path": "spacex-s1.pdf/p26", - "level": 1, - "summary": "x Table of Contents • “throughput” refers to the rate at which data or material can be processed or transferred, often referring to network capacity or production output. • “tokens” refers to the basic units of text or images processed and generated by an AI model, used to mea...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p27", - "path": "spacex-s1.pdf/p27", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p28", - "path": "spacex-s1.pdf/p28", - "level": 1, - "summary": "1 Table of Contents PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider before investing in our Class A common stock. You should read this en...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p29", - "path": "spacex-s1.pdf/p29", - "level": 1, - "summary": "2 Table of Contents We believe that space represents the largest economic frontier in human history. Connectivity infrastructure in space is designed to help everyone on Earth have access to education, healthcare, entertainment, and communications, and to enable people to over...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p30", - "path": "spacex-s1.pdf/p30", - "level": 1, - "summary": "3 Table of Contents constellations—with potentially millions of satellites—for orbital data centers. We believe these AI compute satellites in Sun-synchronous orbit will be able to handle energy-intensive AI workloads, such as inference demand, at far greater scale and efficie...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p31", - "path": "spacex-s1.pdf/p31", - "level": 1, - "summary": "4 Table of Contents them a reason to look ahead with excitement, with the prospect that we are entering an age of abundance with an endlessly prosperous and exciting future. For decades, a reality where humanity travels between the planets and the stars has felt tantalizingly...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p32", - "path": "spacex-s1.pdf/p32", - "level": 1, - "summary": "5 Table of Contents As of March 31, 2026, SpaceX had launched a total mass to orbit of approximately 7,400 metric tons with an over 99% mission success rate across our Falcon rockets. We have completed approximately 650 orbital space launches, and over 540 of those launches we...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p33", - "path": "spacex-s1.pdf/p33", - "level": 1, - "summary": "6 Table of Contents Our Leading Capabilities Across Space, Connectivity, and AI Space. While our launch capabilities support our other businesses, such as Starlink Consumer Broadband and Starlink Mobile, we also sell launches to third-party customers. We offer launch services...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p34", - "path": "spacex-s1.pdf/p34", - "level": 1, - "summary": "7 Table of Contents chip manufacturing, data center infrastructure, and power generation; the future of AI will be determined by the control of the physical stack. • Truth-Seeking Frontier Model. Since launching Grok-1 in November 2023, we have released four major versions and...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p35", - "path": "spacex-s1.pdf/p35", - "level": 1, - "summary": "8 Table of Contents • The first to manufacture consumer-grade phased-array user terminals at scale (2022); • The first to deploy a large-scale LEO satellite-to-mobile constellation (2025); • The first to build a gigawatt-scale AI training cluster and largest coherent supercomp...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p36", - "path": "spacex-s1.pdf/p36", - "level": 1, - "summary": "9 Table of Contents We Believe Orbital AI Can Accelerate Time to Power and Reduce Token Costs. The Sun contains approximately 99.8% of the solar system’s energy and offers what we believe is the only truly scalable solution to the challenge of accelerating demand for compute r...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p37", - "path": "spacex-s1.pdf/p37", - "level": 1, - "summary": "10 Table of Contents have not yet been determined. With this internal manufacturing capability, we plan to alleviate potential future chip shortages at SpaceX, especially as we develop orbital AI at scale, and design chips that are optimized for the space environment. • We can...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p38", - "path": "spacex-s1.pdf/p38", - "level": 1, - "summary": "11 Table of Contents Our Market Opportunity We believe we have identified the largest actionable total addressable market (“TAM”) in human history. We estimate that our quantifiable TAM is $28.5 trillion, consisting of $370 billion in Space from space-enabled solutions; $1.6 t...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p39", - "path": "spacex-s1.pdf/p39", - "level": 1, - "summary": "12 Table of Contents annual compute power to orbit, the establishment of a lunar economy and interplanetary industrialization, and the launch cadence required to achieve these goals may be difficult or impossible to determine. Our growth strategy may take longer to execute tha...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p40", - "path": "spacex-s1.pdf/p40", - "level": 1, - "summary": "13 Table of Contents consider software development as a strategically important use case for AI given its combination of high-quality structured data, rapid feedback cycles and frequent, mission-critical usage. AI-assisted coding workflows generate context-rich, verifiable dat...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p41", - "path": "spacex-s1.pdf/p41", - "level": 1, - "summary": "14 Table of Contents the outcome of matters requiring shareholder approval, including election of all our directors, and to control our business and affairs. Our Controlled Company Status We will be a controlled company as of the completion of this offering under Nasdaq and Na...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p42", - "path": "spacex-s1.pdf/p42", - "level": 1, - "summary": "15 Table of Contents Summary of Risk Factors An investment in our Class A common stock involves risks and uncertainties. The following is a summary of the principal factors that make an investment in our Class A common stock speculative or risky, all of which are more fully de...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p43", - "path": "spacex-s1.pdf/p43", - "level": 1, - "summary": "16 Table of Contents services, and any supply shortages or disruptions or failures in their performance could have a material adverse effect on our business, financial condition, results of operations, and future prospects. • Our ability to scale our AI products relies on our...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p44", - "path": "spacex-s1.pdf/p44", - "level": 1, - "summary": "17 Table of Contents The Offering Issuer ...................................................................... Space Exploration Technologies Corp. Class A common stock offered by us ..................... shares (or shares if the underwriters exercise their option to purchase...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p45", - "path": "spacex-s1.pdf/p45", - "level": 1, - "summary": "18 Table of Contents Dividend policy ...................................................... We do not anticipate declaring or paying any cash dividends to holders of our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance t...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p46", - "path": "spacex-s1.pdf/p46", - "level": 1, - "summary": "19 Table of Contents • shares of Class A common stock issuable upon the exercise of outstanding stock options granted under the Equity Plans (as defined below) granted after March 31, 2026 with a weighted-average exercise price of $ per share; • shares of Class A common stock...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p47", - "path": "spacex-s1.pdf/p47", - "level": 1, - "summary": "20 Table of Contents • an initial public offering price of $ per share of Class A common stock (the midpoint of the price range set forth on the cover of this prospectus); • that the underwriters do not exercise their option to purchase additional shares of Class A common stoc...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p48", - "path": "spacex-s1.pdf/p48", - "level": 1, - "summary": "21 Table of Contents Summary Historical Consolidated Financial and Operating Data The following table sets forth the summary historical consolidated financial and operating data for the periods and as of the dates presented. The summary historical consolidated financial data a...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p49", - "path": "spacex-s1.pdf/p49", - "level": 1, - "summary": "22 Table of Contents The following table sets forth the computation of unaudited pro forma basic and diluted net loss per share of common stock attributable to common shareholders for the period presented: (in millions, except per share data) Three Months EndedMarch 31, 2026 Y...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p50", - "path": "spacex-s1.pdf/p50", - "level": 1, - "summary": "23 Table of Contents Balance Sheet Data: March 31, December 31, 2026 2025 2024 (in millions) (unaudited) Cash and cash equivalents .............................................................. $ 15,852 $ 24,747 $ 11,385 Total current assets ......................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p51", - "path": "spacex-s1.pdf/p51", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p52", - "path": "spacex-s1.pdf/p52", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p53", - "path": "spacex-s1.pdf/p53", - "level": 1, - "summary": "26 Table of Contents RISK FACTORS Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this prospectus, including our consolidate...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p54", - "path": "spacex-s1.pdf/p54", - "level": 1, - "summary": "27 Table of Contents Our ability to execute our growth strategy is highly dependent on Starship. If we are unable to achieve the commercial development, anticipated performance, launch cadence, or cost efficiencies associated with Starship within expected timeframes, our abili...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p55", - "path": "spacex-s1.pdf/p55", - "level": 1, - "summary": "28 Table of Contents forced to delay or cancel planned launches, which could cause missed customer commitments, increased costs, and underutilization of our launch resources. Obtaining a launch license involves rigorous safety and environmental reviews, and unforeseen issues i...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p56", - "path": "spacex-s1.pdf/p56", - "level": 1, - "summary": "29 Table of Contents providers – for example, mandates to partner with a local entity, to host certain infrastructure within its borders, or to adhere to specific standards relating to data privacy and cybersecurity (including data localization) and, in some cases, regulators...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p57", - "path": "spacex-s1.pdf/p57", - "level": 1, - "summary": "30 Table of Contents regulations relating to the responsible use of AI, public confidence in AI could be undermined, adoption of our AI products and services could slow, and we may suffer reputational or financial harm. Certain of our AI products, including Grok, offer feature...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p58", - "path": "spacex-s1.pdf/p58", - "level": 1, - "summary": "31 Table of Contents personal data. The validity of various data transfer mechanisms we currently rely upon remains subject to legal, regulatory and political developments globally, which may require us to adapt our existing arrangements. Evolving data protection laws and regu...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p59", - "path": "spacex-s1.pdf/p59", - "level": 1, - "summary": "32 Table of Contents and cybersecurity laws and regulations, may subject us to enforcement actions, investigations, litigation, reputational harm or requirements to modify or cease our business practices. Our business strategy depends on successfully designing, developing, and...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p60", - "path": "spacex-s1.pdf/p60", - "level": 1, - "summary": "33 Table of Contents materially reduce a satellite’s operational life, impair performance, increase fuel consumption, or render the satellite unusable. Our satellites, launch vehicles, and other space-related technologies operate, and in the case of orbital AI compute, will op...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p61", - "path": "spacex-s1.pdf/p61", - "level": 1, - "summary": "34 Table of Contents environmental effects of emissions and other byproducts from rocket launches in Earth’s upper atmosphere. Additional regulation in this area could adversely impact our business, financial condition, results of operations, and future prospects. Furthermore,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p62", - "path": "spacex-s1.pdf/p62", - "level": 1, - "summary": "35 Table of Contents Manufacturing, testing and launching rockets, satellites, and spacecraft, including our efforts to reuse rockets and spacecraft, involve inherent risks that could result in human injury or death, property damage and environmental damage or other adverse en...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p63", - "path": "spacex-s1.pdf/p63", - "level": 1, - "summary": "36 Table of Contents Our ability to scale our AI products relies on our terrestrial and orbital AI compute infrastructure, which depends on the availability of power, AI processors, and other critical components, telecommunications services, and any shortages or disruptions th...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p64", - "path": "spacex-s1.pdf/p64", - "level": 1, - "summary": "37 Table of Contents We face intense competition in the markets in which we operate, and while we have historically outperformed certain competitors in our Space and Connectivity segments, we may not continue to do so, which could adversely affect our business, financial condi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p65", - "path": "spacex-s1.pdf/p65", - "level": 1, - "summary": "38 Table of Contents volatility in the market price of their stock have been subject to securities litigation, including class action litigation. Such matters could be costly, time-consuming, and divert management’s attention from executing our strategic initiatives and operat...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p66", - "path": "spacex-s1.pdf/p66", - "level": 1, - "summary": "39 Table of Contents cybersecurity laws and regulations, disruptions in, or unauthorized access to, our customers’ computer systems, increased costs, loss of revenue, loss of trust, litigation or regulatory penalties. As the scale, frequency, sophistication, or intensity of cy...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p67", - "path": "spacex-s1.pdf/p67", - "level": 1, - "summary": "40 Table of Contents operational flexibility and make it more difficult for us to obtain additional capital and to pursue business opportunities. Our ability to access the capital markets or secure other sources of financing may be adversely affected by factors beyond our cont...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p68", - "path": "spacex-s1.pdf/p68", - "level": 1, - "summary": "41 Table of Contents availability, and the success of our partnerships with mobile carriers. In addition, the X platform faces intense competition from social media, messaging and media companies and traditional media outlets, such as television, radio and print, for advertisi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p69", - "path": "spacex-s1.pdf/p69", - "level": 1, - "summary": "42 Table of Contents Many of our initiatives, including those to develop orbital AI compute at scale, manufacture AI chips at scale, establish a lunar economy, develop human augmentation systems, and transport humans and cargo to the Moon and Mars, involve significant technica...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p70", - "path": "spacex-s1.pdf/p70", - "level": 1, - "summary": "43 Table of Contents The global nature of our business poses risks with respect to unstable, malicious or arbitrary legal regimes and authorities. We, particularly through Starlink, maintain global operations. As a result, we may face risks that our operations will be subject...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p71", - "path": "spacex-s1.pdf/p71", - "level": 1, - "summary": "44 Table of Contents affect our sales in the United States and internationally. We and our facilities could also be targeted by foreign adversaries and non-state actors due to such perception. Government customers may also subject our contracts to rigorous audits and investiga...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p72", - "path": "spacex-s1.pdf/p72", - "level": 1, - "summary": "45 Table of Contents environment in the United States is highly polarized, and shifts in the composition of the U.S. Congress or changes in the presidential administration can result in significant changes in government spending priorities, regulatory posture, and the allocati...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p73", - "path": "spacex-s1.pdf/p73", - "level": 1, - "summary": "46 Table of Contents drive such adoption. There can be no assurance that these modifications will be adopted on our preferred timeline, or at all. Internationally, we face similar constraints until handset manufacturers implement hardware and software modifications to support...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p74", - "path": "spacex-s1.pdf/p74", - "level": 1, - "summary": "47 Table of Contents the practices of third parties who may utilize our AI technologies. As such, third parties have in the past used, and may in the future use, such AI technologies for improper purposes, including through the dissemination of illegal, inaccurate, defamatory...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p75", - "path": "spacex-s1.pdf/p75", - "level": 1, - "summary": "48 Table of Contents utilize power generation sources that are required for the operation of these data centers and would adversely affect our AI business. We cannot predict with certainty how future legislative or regulatory developments will affect our business, but complian...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p76", - "path": "spacex-s1.pdf/p76", - "level": 1, - "summary": "49 Table of Contents plaintiffs may file infringement or other litigation relating to the training or development of our AI models. In addition, we are currently subject to, and in the future may be subject to claims from various “non-practicing entities” or other companies th...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p77", - "path": "spacex-s1.pdf/p77", - "level": 1, - "summary": "50 Table of Contents rights. Despite our efforts, we may not be able to prevent unauthorized use, copy, reverse engineering, misappropriation of our technology or intellectual property rights to create technology that compete with ours, or independent development of similar te...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p78", - "path": "spacex-s1.pdf/p78", - "level": 1, - "summary": "51 Table of Contents inoperability of satellites or related infrastructure may require us to accelerate depreciation or recognize impairment charges, thereby adversely affecting our business, financial condition, results of operations, and future prospects. Even minor anomalie...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p79", - "path": "spacex-s1.pdf/p79", - "level": 1, - "summary": "52 Table of Contents include open source software, and it is possible that certain outputs of our AI products may be subject to open source license restrictions or obligations. The terms of many open source licenses are ambiguous and have not been interpreted by United States...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p80", - "path": "spacex-s1.pdf/p80", - "level": 1, - "summary": "53 Table of Contents banking, and other financial services initiatives, which may subject us to many of the foregoing risks and additional licensing requirements. Our efforts to support the creation of permanent installations on the Moon and Mars depend on the successful devel...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p81", - "path": "spacex-s1.pdf/p81", - "level": 1, - "summary": "54 Table of Contents The artificial intelligence industry is highly dynamic and rapidly evolving. We face significant uncertainty relating to technological developments, changing customer preferences, evolving regulatory and legal frameworks, increasing public scrutiny, and in...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p82", - "path": "spacex-s1.pdf/p82", - "level": 1, - "summary": "55 Table of Contents unable to execute on our growth strategy and as a result of the other risks described in this prospectus. Furthermore, if we fail to maintain or increase our revenue to offset increases in our operating expenses or manage our costs as we invest in our busi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p83", - "path": "spacex-s1.pdf/p83", - "level": 1, - "summary": "56 Table of Contents remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by our independent r...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p84", - "path": "spacex-s1.pdf/p84", - "level": 1, - "summary": "57 Table of Contents Certain of our directors and key employees may have conflicts of interest because they are also employees or directors of affiliates of Mr. Musk or other large shareholders. The resolution of these conflicts of interest may not be in our or your best inter...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p85", - "path": "spacex-s1.pdf/p85", - "level": 1, - "summary": "58 Table of Contents A significant reduction by Mr. Musk or other existing shareholders of their ownership interest in us could adversely affect us. We believe that Mr. Musk’s substantial ownership interest in us provides him with an economic incentive to assist us to be succe...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p86", - "path": "spacex-s1.pdf/p86", - "level": 1, - "summary": "59 Table of Contents Nasdaq and Nasdaq Texas. In the event that we cease to be a “controlled company” and our shares continue to be listed on Nasdaq and Nasdaq Texas, we will be required to comply with all of the applicable governance requirements within the applicable transit...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p87", - "path": "spacex-s1.pdf/p87", - "level": 1, - "summary": "60 Table of Contents If Mr. Musk retains a significant portion of his holdings of Class B common stock for an extended period of time, he could continue to control the election and removal of a majority of our board. However, other persons will also hold shares of Class B comm...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p88", - "path": "spacex-s1.pdf/p88", - "level": 1, - "summary": "61 Table of Contents immediately upon qualifying as a “nationally listed corporation.” As a result, except with respect to director nominations and procedural resolutions ancillary to the conduct of a shareholders’ meeting, a shareholder or group of shareholders seeking to sub...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p89", - "path": "spacex-s1.pdf/p89", - "level": 1, - "summary": "62 Table of Contents under the Exchange Act (or the rules and regulations thereunder) in a court other than the Business Court, that court could deny a motion to transfer the action to the Business Court pursuant to the Forum Selection Bylaw. Accordingly, the bylaws provide th...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p90", - "path": "spacex-s1.pdf/p90", - "level": 1, - "summary": "63 Table of Contents such actions, including in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.", - "chunk_count": 1, - "children": [] - }, - { - "title": "p91", - "path": "spacex-s1.pdf/p91", - "level": 1, - "summary": "64 Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements. Forward-looking statements include those that express a belief, expectation, or intention, as well as those that are not statements of historical...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p92", - "path": "spacex-s1.pdf/p92", - "level": 1, - "summary": "65 Table of Contents • general economic conditions. These forward-looking statements may be accompanied by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “will,” “should,” “could,” “would,” “l...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p93", - "path": "spacex-s1.pdf/p93", - "level": 1, - "summary": "66 Table of Contents USE OF PROCEEDS We expect to receive approximately $ of net proceeds from this offering (or $ if the underwriters exercise their option to purchase additional shares of Class A common stock in full), based upon the assumed initial public offering price of...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p94", - "path": "spacex-s1.pdf/p94", - "level": 1, - "summary": "67 Table of Contents DIVIDEND POLICY We do not anticipate declaring or paying any cash dividends to holders of our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the growth of our business. Our future dividend policy i...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p95", - "path": "spacex-s1.pdf/p95", - "level": 1, - "summary": "68 Table of Contents CAPITALIZATION The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2026: • on an actual basis; • on a pro forma basis, giving effect to (i) the Preferred Conversion as if such conversion had occurred on March 31,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p96", - "path": "spacex-s1.pdf/p96", - "level": 1, - "summary": "69 Table of Contents Preferred stock, par value $0.001; no shares issued and outstanding, actual; 2,400,000,000 shares authorized, no shares issued or outstanding, pro forma and pro forma as adjusted ................................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p97", - "path": "spacex-s1.pdf/p97", - "level": 1, - "summary": "70 Table of Contents DILUTION Purchasers of the Class A common stock in this offering will experience immediate and substantial dilution in the net tangible book value per share of the Class A common stock for accounting purposes. Our net tangible book value as of March 31, 20...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p98", - "path": "spacex-s1.pdf/p98", - "level": 1, - "summary": "71 Table of Contents consideration paid by all shareholders by $ million, assuming that the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.", - "chunk_count": 1, - "children": [] - }, - { - "title": "p99", - "path": "spacex-s1.pdf/p99", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p100", - "path": "spacex-s1.pdf/p100", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p101", - "path": "spacex-s1.pdf/p101", - "level": 1, - "summary": "74 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statement...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p102", - "path": "spacex-s1.pdf/p102", - "level": 1, - "summary": "75 Table of Contents Earth. Since 2023, we have launched more than 80% of mass to orbit for the world each year with an over 99% mission success rate with Falcon rockets. We also operate a high-speed, low-latency global broadband data and communications network powered by appr...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p103", - "path": "spacex-s1.pdf/p103", - "level": 1, - "summary": "76 Table of Contents version of Falcon Heavy in 2018 further reduced this cost to approximately $1,400 per kilogram, a reduction of approximately 92% compared to the historical average cost. With the future deployment of Starship, which is designed to be the world’s first full...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p104", - "path": "spacex-s1.pdf/p104", - "level": 1, - "summary": "77 Table of Contents constellation. In February 2026, we acquired xAI, the first company to build a gigawatt-scale AI training cluster and largest coherent supercomputer. The graphic below illustrates key milestones for our business.", - "chunk_count": 1, - "children": [] - }, - { - "title": "p105", - "path": "spacex-s1.pdf/p105", - "level": 1, - "summary": "78 Table of Contents Our Repeatable Business Model Our business model is built on a repeatable, engineering-driven framework that combines our unparalleled launch capabilities, extreme vertical integration, rapid iteration, and disciplined capital investment to create durable,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p106", - "path": "spacex-s1.pdf/p106", - "level": 1, - "summary": "79 Table of Contents Our financial results reflect the strength of our operating model and our ability to create and scale multiple new businesses: • For the three months ended March 31, 2026, we generated revenue on a consolidated basis of $4,694 million, loss from operations...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p107", - "path": "spacex-s1.pdf/p107", - "level": 1, - "summary": "80 Table of Contents Falcon 9 First Stage Booster Landing As of March 31, 2026, SpaceX had launched a total mass to orbit of approximately 7,400 metric tons with an over 99% mission success rate across our Falcon rockets. We have completed approximately 650 orbital space launc...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p108", - "path": "spacex-s1.pdf/p108", - "level": 1, - "summary": "81 Table of Contents significant amount of launch capacity to our Connectivity segment, and expect to allocate a significant amount to our AI segment in the future. Our Space segment revenue only reflects customer launches and other customer activities. As a result, notwithsta...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p109", - "path": "spacex-s1.pdf/p109", - "level": 1, - "summary": "82 Table of Contents hospitals, aircraft, cruise ships, trains, and hotels. Our enterprise customers include companies such as United Airlines, Carnival, Maersk, and John Deere, among others. We also serve a broad fixed‐site customer base across industries such as retail and f...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p110", - "path": "spacex-s1.pdf/p110", - "level": 1, - "summary": "83 Table of Contents human cognitive capabilities can be replicated and scaled at machine speeds, profoundly augmenting human productivity. Once an AGI system exists, its true value derives from the ability to create limitless duplicates of human-like intelligence, necessitati...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p111", - "path": "spacex-s1.pdf/p111", - "level": 1, - "summary": "84 Table of Contents (April 2026). Building on this trajectory, we expect to continue scaling Grok through subsequent generations. Ongoing training of next‐generation models is expected to scale toward multiple trillions of parameters, which could represent a step change in re...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p112", - "path": "spacex-s1.pdf/p112", - "level": 1, - "summary": "85 Table of Contents Adjusted EBITDA from our Space segment, along with additional equity capital that we raised externally, creating a segment that generates predictable and recurring revenue from consumer, enterprise, and government customers. We continue to invest meaningfu...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p113", - "path": "spacex-s1.pdf/p113", - "level": 1, - "summary": "86 Table of Contents Launches: Launches are a key measure of our operational scale, which in turn supports our revenue growth and mission to expand humanity’s presence in space. Launches in a period represent the sum of all successful orbital and flight tests across our rocket...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p114", - "path": "spacex-s1.pdf/p114", - "level": 1, - "summary": "87 Table of Contents amount to our AI segment in the future. Our Space segment revenue only reflects our customer launches and customer activities. __________________ (1) With respect to Falcon launches, the number of launches for the years ended December 31, 2023, 2024, and 2...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p115", - "path": "spacex-s1.pdf/p115", - "level": 1, - "summary": "88 Table of Contents Subscribers totaled approximately 10.3 million and 5.0 million, up 105% and 91% on a year-over-year basis, in the quarters ended March 31, 2026 and March 31, 2025, respectively. Starlink Subscriber ARPU: We calculate ARPU as service revenue generated from...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p116", - "path": "spacex-s1.pdf/p116", - "level": 1, - "summary": "89 Table of Contents month in 2024 to $81 per month in 2025. These decreases were driven primarily by international expansion and the addition of lower priced service plans. AI Nameplate Compute Draw: We calculate Nameplate Compute Draw for a period as the number of GPUs insta...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p117", - "path": "spacex-s1.pdf/p117", - "level": 1, - "summary": "90 Table of Contents 31, 2026 as we brought COLOSSUS and COLOSSUS II online. We use this metric to assess our ability to deploy and scale compute capacity. Segment Income (Loss) from Operations Space Income (Loss) from Operations Space loss from operations for the three months...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p118", - "path": "spacex-s1.pdf/p118", - "level": 1, - "summary": "91 Table of Contents December 31, 2024 increased by $1,537 million to $2,006 million compared to $469 million for the year ended December 31, 2023. The year-over-year increase in 2025 was primarily driven by increased revenue from growth of our consumer and enterprise customer...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p119", - "path": "spacex-s1.pdf/p119", - "level": 1, - "summary": "92 Table of Contents higher revenue from growth in our consumer and enterprise customers, partially offset by higher marketing and international expansion costs to grow our subscribers, as well as higher research and development costs for our next- generation product developme...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p120", - "path": "spacex-s1.pdf/p120", - "level": 1, - "summary": "93 Table of Contents $2,455 million in 2023. The increase in each year-over-year period was primarily driven by higher satellite and ground equipment costs as we continue to increase our number of satellites and grow our satellite network. AI Capital Expenditures AI capital ex...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p121", - "path": "spacex-s1.pdf/p121", - "level": 1, - "summary": "94 Table of Contents the mix of customer and internal payloads and related financial reporting, or weather which can delay a launch from one period to another. Increasing Satellite Capacity. The scale, reliability, and capacity of our LEO broadband and mobile satellite constel...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p122", - "path": "spacex-s1.pdf/p122", - "level": 1, - "summary": "95 Table of Contents applications enabled by more connected devices. We also continue to develop specialized networks for secure government applications via Starshield. By leveraging proven performance in mission-critical environments and expanding through channel partners in...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p123", - "path": "spacex-s1.pdf/p123", - "level": 1, - "summary": "96 Table of Contents cooling systems—enables us to translate available power into usable compute capacity with exceptional efficiency. As we continue to scale and optimize, we expect to drive further improvements in Power Usage Effectiveness. We expect these gains to accelerat...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p124", - "path": "spacex-s1.pdf/p124", - "level": 1, - "summary": "97 Table of Contents believe continued investment in AI‐powered advertising will further improve advertiser ROI while further enhancing user experience. Conversion of Users to Paid Subscribers. In parallel, we are focused on converting a greater portion of our user base into p...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p125", - "path": "spacex-s1.pdf/p125", - "level": 1, - "summary": "98 Table of Contents The Company recognizes Launch Services revenue at a point in time, due to the interchangeability of flight hardware and minimal unique engineering costs. Revenue and costs are deferred and not recognized until upon the launch or deployment of the customer’...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p126", - "path": "spacex-s1.pdf/p126", - "level": 1, - "summary": "99 Table of Contents salaries, benefits, and share-based compensation), tooling and equipment expenses, depreciation for R&D equipment, and allocated overhead. R&D also includes certain expenses related to the development of features and modules created through engineering ser...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p127", - "path": "spacex-s1.pdf/p127", - "level": 1, - "summary": "100 Table of Contents Expenses - Connectivity Cost of Revenue Connectivity segment’s cost of revenue includes depreciation (inclusive of launch, satellite, and ground infrastructure costs), Starlink Kit costs, shipping and handling costs, ground operating expenses, employee co...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p128", - "path": "spacex-s1.pdf/p128", - "level": 1, - "summary": "101 Table of Contents Revenue for AI solutions and infrastructure includes: (i) premium subscriptions on X and Grok which is recognized ratably over the period of the subscription term (ranging from month-to-month to one year), (ii) data licensing revenue which is generally re...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p129", - "path": "spacex-s1.pdf/p129", - "level": 1, - "summary": "102 Table of Contents Other Corporate Expenses Interest Expense Interest expense includes interest expense related to our borrowings, amortization of associated debt issuance costs, undrawn fees, and finance leases. Interest expense is reflected net of capitalized interest. In...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p130", - "path": "spacex-s1.pdf/p130", - "level": 1, - "summary": "103 Table of Contents Revenue Revenue for the three months ended March 31, 2026 increased by $627 million, or 15.4%, compared to the three months ended March 31, 2025. This increase was primarily due to an increase in revenue from our Connectivity segment of $782 million as ou...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p131", - "path": "spacex-s1.pdf/p131", - "level": 1, - "summary": "104 Table of Contents Interest Income Interest income for the three months ended March 31, 2026 increased by $96 million, or 82.1%, compared to the prior three months ended March 31, 2025. This increase was primarily due to an increase in interest income earned from cash equiv...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p132", - "path": "spacex-s1.pdf/p132", - "level": 1, - "summary": "105 Table of Contents Research and Development Research and development for the three months ended March 31, 2026 increased by $404 million, or 76.8%, compared to the prior three months ended March 31, 2025. This increase was primarily driven by higher production costs of $194...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p133", - "path": "spacex-s1.pdf/p133", - "level": 1, - "summary": "106 Table of Contents Research and Development Research and development for the three months ended March 31, 2026 increased by $82 million, or 66.7%, compared to the prior three months ended March 31, 2025. This increase was primarily due to higher costs for the next-generatio...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p134", - "path": "spacex-s1.pdf/p134", - "level": 1, - "summary": "107 Table of Contents million associated with the continued build out of our compute infrastructure, as well as higher employee compensation expenses (including salaries, benefits, and share-based compensation) of $262 million. Selling, General, and Administrative Selling, gen...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p135", - "path": "spacex-s1.pdf/p135", - "level": 1, - "summary": "108 Table of Contents Development revenue for work performed on government contracts, and an increase in revenue from our AI segment of $581 million as advertising, Grok and X subscriptions, and data licensing arrangements grew. Cost of Revenue Cost of revenue for the year end...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p136", - "path": "spacex-s1.pdf/p136", - "level": 1, - "summary": "109 Table of Contents Interest Income Interest income for the year ended December 31, 2025 increased by $121 million, or 32.6%, compared to the prior year ended December 31, 2024. This increase was primarily due to an increase in dividend income earned from marketable securiti...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p137", - "path": "spacex-s1.pdf/p137", - "level": 1, - "summary": "110 Table of Contents Cost of Revenue Cost of revenue for the year ended December 31, 2025 decreased by $189 million, or 12.2%, compared to the prior year ended December 31, 2024. This decrease was primarily due increased reusability of our Falcon launch vehicles resulting in...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p138", - "path": "spacex-s1.pdf/p138", - "level": 1, - "summary": "111 Table of Contents Revenue Revenue for the year ended December 31, 2025 increased by $3,788 million, or 49.8%, compared to the prior year ended December 31, 2024. This increase was primarily driven by an increase of $2,377 million in revenue from our consumer subscribers, c...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p139", - "path": "spacex-s1.pdf/p139", - "level": 1, - "summary": "112 Table of Contents AI Year Ended December 31, 2025 vs. 2024 Change (in millions) 2025 2024 $ Change % Change Revenue ............................................................... $ 3,201 $ 2,620 $ 581 22.2% Costs and expenses Cost of revenue .................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p140", - "path": "spacex-s1.pdf/p140", - "level": 1, - "summary": "113 Table of Contents Loss from Operations AI loss from operations for the year ended December 31, 2025 increased by $4,794 million, or 307.1%, compared to the prior year ended December 31, 2024 driven by the factors described above. Comparison of the Years Ended December 31,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p141", - "path": "spacex-s1.pdf/p141", - "level": 1, - "summary": "114 Table of Contents $990 million related to advancing our AI technologies and higher costs of $297 million in our Space segment for investment in Starship production, launch and engineering costs, and related facilities. Selling, General, and Administrative Selling, general,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p142", - "path": "spacex-s1.pdf/p142", - "level": 1, - "summary": "115 Table of Contents Net Income (Loss) Net income for the year ended December 31, 2024 increased by $5,419 million compared to the prior year ended December 31, 2023 driven by the factors described above. Space Year Ended December 31, 2024 vs. 2023 Change (in millions) 2024 2...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p143", - "path": "spacex-s1.pdf/p143", - "level": 1, - "summary": "116 Table of Contents Impairment Impairment for the year ended December 31, 2024 increased by $24 million compared to the prior year ended December 31, 2023. This increase was primarily due to non-recurring impairment losses resulting from one-time launch anomalies experienced...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p144", - "path": "spacex-s1.pdf/p144", - "level": 1, - "summary": "117 Table of Contents Impairment Impairment for the year ended December 31, 2024 increased by $39 million compared to the prior year ended December 31, 2023. This increase was due to a discontinuation of a certain Starlink Kit production line. Income from Operations Income fro...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p145", - "path": "spacex-s1.pdf/p145", - "level": 1, - "summary": "118 Table of Contents amortization expense of $107 million related to the Twitter brand becoming a finite-lived intangible asset and higher legal costs of $65 million, partially offset by lower employee and facilities related costs of $125 million and lower professional fees o...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p146", - "path": "spacex-s1.pdf/p146", - "level": 1, - "summary": "119 Table of Contents The following table sets forth a reconciliation of Net income (loss), the most directly comparable GAAP measure, to Adjusted EBITDA: Three Months Ended March 31, Year Ended December 31, (in millions) 2026 2025 2025 2024 2023 Net income (loss) ...............", - "chunk_count": 1, - "children": [] - }, - { - "title": "p147", - "path": "spacex-s1.pdf/p147", - "level": 1, - "summary": "120 Table of Contents The following table sets forth a reconciliation of Income (loss) from operations for each segment, the most directly comparable GAAP measure, to Segment Adjusted EBITDA: Three Months Ended March 31, 2026 (in millions) Space Connectivity AI Total Reportabl...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p148", - "path": "spacex-s1.pdf/p148", - "level": 1, - "summary": "121 Table of Contents Year Ended December 31, 2024 (in millions) Space Connectivity AI Total Reportable Segments Income (loss) from operations ............................ $ 21 $ 2,006 $ (1,561) $ 466 Add: Depreciation and amortization ............................ 637 1,508 1,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p149", - "path": "spacex-s1.pdf/p149", - "level": 1, - "summary": "122 Table of Contents maximum financial covenant requiring the Company to maintain a Consolidated Leverage Ratio (as defined in the SpaceX Credit Facility) of no greater than 3.75 to 1.0 as of the end of each fiscal quarter (subject to temporary increases to 4.25 to 1.0 follow...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p150", - "path": "spacex-s1.pdf/p150", - "level": 1, - "summary": "123 Table of Contents equal to the net cash proceeds of certain debt financings to repay amounts outstanding under the SpaceX Bridge Loan and to apply an amount equal to the net proceeds of a qualified initial public offering, including this offering, to repay such amounts wit...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p151", - "path": "spacex-s1.pdf/p151", - "level": 1, - "summary": "124 Table of Contents Operating Activities Net cash provided by operating activities increased by $320 million from $727 million during the three months ended March 31, 2025 to $1,047 million during the three months ended March 31, 2026. This increase was primarily driven by a...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p152", - "path": "spacex-s1.pdf/p152", - "level": 1, - "summary": "125 Table of Contents Net cash provided by financing activities increased by $11,408 million from $422 million during the year ended December 31, 2023 to $11,830 million during the year ended December 31, 2024. This increase was primarily driven by an increase in proceeds from...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p153", - "path": "spacex-s1.pdf/p153", - "level": 1, - "summary": "126 Table of Contents Determining the useful lives and the number of average flights a flight vehicle and spacecraft can fly require the Company to estimate the period over which we expect to recover the economic value of our property, plant, and equipment. For each of our fli...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p154", - "path": "spacex-s1.pdf/p154", - "level": 1, - "summary": "127 Table of Contents net income as a result of gains (losses) on the settlement and the re-measurement of monetary assets and liabilities not denominated in our functional currencies. We do not hedge foreign currency risk and changes in exchange rates could have an adverse im...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p155", - "path": "spacex-s1.pdf/p155", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p156", - "path": "spacex-s1.pdf/p156", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p157", - "path": "spacex-s1.pdf/p157", - "level": 1, - "summary": "130 Table of Contents BUSINESS “You want to wake up in the morning and think the future is going to be great—and that’s what being a space-faring civilization is all about. It’s about believing in the future and thinking that the future will be better than the past. And I can’...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p158", - "path": "spacex-s1.pdf/p158", - "level": 1, - "summary": "131 Table of Contents age of abundance. Our innovations and technological advancements are redefining industries on Earth, while we aim to create new ones on the Moon, Mars, and beyond. We are truly building the infrastructure of the future. SpaceX is the only company that has...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p159", - "path": "spacex-s1.pdf/p159", - "level": 1, - "summary": "132 Table of Contents sustainable battery storage systems, and innovations in advanced liquid cooling, high-density rack layouts, and efficient networking. Our facilities also incorporate innovative design features that limit the effects on regional electricity pricing for nei...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p160", - "path": "spacex-s1.pdf/p160", - "level": 1, - "summary": "133 Table of Contents of the Terafab initiative aims to further extend our control to the foundational processor layer. We believe that the key constraints in the continued growth of AI are physical—chip manufacturing, data center infrastructure, and power generation; the futu...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p161", - "path": "spacex-s1.pdf/p161", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p162", - "path": "spacex-s1.pdf/p162", - "level": 1, - "summary": "135 Table of Contents We have an intense, mission-driven, engineering-first culture that seeks to achieve what many have deemed impossible. “The Algorithm,” as it is known internally, is a five-step iterative process that emphasizes making the requirements less dumb, deleting...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p163", - "path": "spacex-s1.pdf/p163", - "level": 1, - "summary": "136 Table of Contents • In our newly acquired AI segment, we plan to prioritize growth and investment to capture significant opportunities in AI applications and compute infrastructure. For the three months ended March 31, 2026, our AI segment generated revenue of $818 million...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p164", - "path": "spacex-s1.pdf/p164", - "level": 1, - "summary": "137 Table of Contents For decades, a reality where humanity travels between the planets and the stars has felt tantalizingly close but still locked in the pages and screens of science fiction. We are capable of better understanding the universe, exploring the universe, and ult...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p165", - "path": "spacex-s1.pdf/p165", - "level": 1, - "summary": "138 Table of Contents Starlink rapidly deployed over 650 terminals to restore high-speed internet connectivity, enabling first responders, humanitarian organizations, and survivors to coordinate relief efforts, access aid resources, communicate with family, and support recover...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p166", - "path": "spacex-s1.pdf/p166", - "level": 1, - "summary": "139 Table of Contents by approximately 9,600 Starlink broadband and mobile satellites in Low-Earth Orbit, delivering connectivity to millions of consumer, enterprise, and government customers across 164 countries, territories, and other markets, as of March 31, 2026. We also b...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p167", - "path": "spacex-s1.pdf/p167", - "level": 1, - "summary": "140 Table of Contents Booster Reusability Enables Increasing Launch Rates Our principal launch vehicles and spacecraft include: • Falcon 9. As the world’s first orbital-class rapidly reusable rocket, Falcon 9 was first launched in 2010 and has a payload capacity to LEO of appr...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p168", - "path": "spacex-s1.pdf/p168", - "level": 1, - "summary": "141 Table of Contents such as catching a booster using “chopstick” arms on the same tower it launched from. We expect this capability will facilitate rapid refurbishment and reuse, allowing for multiple launches per day at reduced costs. Upon achieving rocket reusability, we r...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p169", - "path": "spacex-s1.pdf/p169", - "level": 1, - "summary": "142 Table of Contents increase in Starlink downlink capacity deployed relative to a Falcon 9 launch. As of March 31, 2026, we had approximately 10.3 million Starlink Subscribers, up approximately 105% from 5.0 million subscribers a year prior. We charge our Starlink Subscriber...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p170", - "path": "spacex-s1.pdf/p170", - "level": 1, - "summary": "143 Table of Contents Our Global Starlink Subscriber Base AI. We operate a highly vertically integrated AI platform spanning gigawatt-scale AI compute infrastructure, our truth-seeking frontier AI model, Grok, AI solutions for consumer and enterprise customers, and X, our real...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p171", - "path": "spacex-s1.pdf/p171", - "level": 1, - "summary": "144 Table of Contents • Truth-Seeking Frontier Model. xAI has developed one of the world’s most advanced, truth-seeking frontier models with Grok. Since launching Grok-1 in November 2023, we have released four major versions and notable variations thereof, achieving one of the...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p172", - "path": "spacex-s1.pdf/p172", - "level": 1, - "summary": "145 Table of Contents into an equity interest in SpaceX. Tesla and xAI continue to build upon their longstanding collaborative relationship by evaluating future strategic opportunities between the companies. One expected area of collaboration is an AI project called Macrohard....", - "chunk_count": 1, - "children": [] - }, - { - "title": "p173", - "path": "spacex-s1.pdf/p173", - "level": 1, - "summary": "146 Table of Contents 2026. Exercise of the call option is in our sole discretion and subject to further approval by our board of directors. Cursor is also subject to certain exclusivity obligations under the option agreement. If we exercise the call option, we would simultane...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p174", - "path": "spacex-s1.pdf/p174", - "level": 1, - "summary": "147 Table of Contents Our Repeatable Business Model Our business model is built on a repeatable, engineering-driven framework that combines our unparalleled launch capabilities, extreme vertical integration, rapid iteration, and disciplined capital investment to create durable...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p175", - "path": "spacex-s1.pdf/p175", - "level": 1, - "summary": "148 Table of Contents Our Engineering-First Culture We are able to achieve transformative technological breakthroughs because we accept only the laws of physics as the limiting factors to our work and mission. Our core approach is deeply rooted in first-principles thinking, wh...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p176", - "path": "spacex-s1.pdf/p176", - "level": 1, - "summary": "149 Table of Contents multi-step task execution, meaningfully increasing compute demand per human user interaction. In addition, compute infrastructure with end-to-end, cluster-level coherence through tight integration across software and hardware systems enables more efficien...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p177", - "path": "spacex-s1.pdf/p177", - "level": 1, - "summary": "150 Table of Contents pursuing improvements in compute hardware cost, we believe we can achieve a meaningfully lower overall cost per token in the future. We Have a Dual Speed and Cost Advantage in Terrestrial AI Compute. We have established a leading position in building and...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p178", - "path": "spacex-s1.pdf/p178", - "level": 1, - "summary": "151 Table of Contents V4. Future generations of Starship are being designed to eventually deliver millions of tons to orbit and beyond per year. Delivering large amounts of mass to orbit at low cost will be critical to deploying AI compute satellites at scale. We Believe Orbit...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p179", - "path": "spacex-s1.pdf/p179", - "level": 1, - "summary": "152 Table of Contents • We have unmatched satellite launch capabilities to enable deployment at scale. Our ability to launch mass at scale and low cost is our foundational competitive advantage. Deployment of 100 gigawatts per year via satellites carrying over 100 kilowatts of...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p180", - "path": "spacex-s1.pdf/p180", - "level": 1, - "summary": "153 Table of Contents Our 100 gigawatt annual power deployment goal is based on reasoned engineering analyses and design parameters developed through our ongoing design and development work on next-generation AI compute satellites. These analyses are based on currently availab...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p181", - "path": "spacex-s1.pdf/p181", - "level": 1, - "summary": "154 Table of Contents have not yet been determined. Our strategy for Terafab is to vertically integrate across design of lithography masks, fabrication of logic and memory chips, design of advanced packaging and rapidly test and iterate in order to improve chip design and perf...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p182", - "path": "spacex-s1.pdf/p182", - "level": 1, - "summary": "155 Table of Contents Design and manufacture our own chips. Terafab aims to be the world’s largest chip manufacturing facility, with the goal of achieving one terawatt of annual compute production capacity. While Terafab is intended to expand our internal chip manufacturing ca...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p183", - "path": "spacex-s1.pdf/p183", - "level": 1, - "summary": "156 Table of Contents along with Rocketplane Kistler, the landmark Commercial Orbital Transportation Services contract that heralded the age of commercial space launch, marking a shift toward a more scalable approach to accessing space. This inflection point catalyzed a transi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p184", - "path": "spacex-s1.pdf/p184", - "level": 1, - "summary": "157 Table of Contents Falcon Heavy Boosters Landing On the back of dramatically reduced launch cost pioneered by SpaceX over the past two decades, the global economy is reorganizing around a new domain: space. We believe the development of a lunar economy will be central to un...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p185", - "path": "spacex-s1.pdf/p185", - "level": 1, - "summary": "158 Table of Contents Consumer Broadband Residential internet access began with the dial-up connection in the late 1990s with maximum speeds of .056 Mbps, when early users relied on narrowband copper phone lines to connect. As demand for speed and reliability grew, dial-up gav...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p186", - "path": "spacex-s1.pdf/p186", - "level": 1, - "summary": "159 Table of Contents have not delivered the latency or consistency needed for enterprise‐grade applications, with average terrestrial ISP download speeds at 120 Mbps and average latency from 7-34 milliseconds. Defense and civil agencies similarly require secure, resilient, an...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p187", - "path": "spacex-s1.pdf/p187", - "level": 1, - "summary": "160 Table of Contents most consequential—chapter in this progression. For the first time, we are creating systems that do more than simply amplify or transmit human-generated knowledge. These systems can reason, learn, and generate new knowledge autonomously—synthesizing infor...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p188", - "path": "spacex-s1.pdf/p188", - "level": 1, - "summary": "161 Table of Contents AI are further strengthening advertising, allowing enterprises to optimize campaigns and measure outcomes. At the same time, consumer expectations for AI‐powered tools are rising, with users seeking timely, accurate and trustworthy information across an e...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p189", - "path": "spacex-s1.pdf/p189", - "level": 1, - "summary": "162 Table of Contents over the rest of the industry when we first landed our Falcon 9 booster back from space in 2015, but we have continued to invest significantly in further increasing our lead by pursuing full and rapid reusability at scale, including investing over $15 bil...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p190", - "path": "spacex-s1.pdf/p190", - "level": 1, - "summary": "163 Table of Contents believe this technological and logistical gap is widening meaningfully as our speed and cost advantage compound. Our vertical integration extends beyond design and manufacturing—it permeates our entire business model, encompassing engineering, deployment,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p191", - "path": "spacex-s1.pdf/p191", - "level": 1, - "summary": "164 Table of Contents In addition, we believe we are poised to catalyze transformative breakthroughs in other industries on Earth and in space such as long haul point-to-point terrestrial travel, in-orbit manufacturing, passenger and cargo transportation to the Moon and Mars,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p192", - "path": "spacex-s1.pdf/p192", - "level": 1, - "summary": "165 Table of Contents segments are expected to be the primary driver of revenue growth in the near term. In the next few years, we are focused on increasing the monetization of our existing Connectivity infrastructure and our existing AI user base. We also intend to continue t...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p193", - "path": "spacex-s1.pdf/p193", - "level": 1, - "summary": "166 Table of Contents Once resource utilization capabilities are proven feasible, we believe there is an opportunity to commercialize the harvesting and exportation of rare materials, which is estimated to be present on the Moon in quantities exceeding one million tons and has...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p194", - "path": "spacex-s1.pdf/p194", - "level": 1, - "summary": "167 Table of Contents industries such as retail and financial services that require high availability for critical operations as well as reliable connectivity in remote or hard-to-serve locations. As companies continue to invest in secure and resilient networks to keep critica...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p195", - "path": "spacex-s1.pdf/p195", - "level": 1, - "summary": "168 Table of Contents of Grok subscribers. Subscribers benefit from enhanced functionality, exclusive features, and access to our latest AI models. Since the introduction of our Grok subscription offering in 2025, we have increased the number of available features to add value...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p196", - "path": "spacex-s1.pdf/p196", - "level": 1, - "summary": "169 Table of Contents inference of our AI models. To rapidly bring gigawatt-scale data centers online, we leverage world-class engineering, first-principles thinking and deep “shovels-to-tokens” vertical integration. Our AI compute facilities, COLOSSUS and COLOSSUS II, collect...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p197", - "path": "spacex-s1.pdf/p197", - "level": 1, - "summary": "170 Table of Contents eventually achieving one terawatt of annual compute production capacity. While Terafab is intended to expand our internal chip manufacturing capabilities, we expect to continue sourcing a significant portion of our compute hardware from third-party suppli...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p198", - "path": "spacex-s1.pdf/p198", - "level": 1, - "summary": "171 Table of Contents • Manufacturing capabilities on the Moon and Mars. We plan to build manufacturing infrastructure on the Moon and Mars that utilizes local resources to produce fuel, construction materials, and other essential resources, reducing dependence on Earth resupp...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p199", - "path": "spacex-s1.pdf/p199", - "level": 1, - "summary": "172 Table of Contents SpaceX’s Estimated TAM by Segment Space While the size of the space market is massive for any company to address, our capabilities in space represent a foundational competitive advantage that allow us to address markets that represent significant portions...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p200", - "path": "spacex-s1.pdf/p200", - "level": 1, - "summary": "173 Table of Contents from a scientific outpost into an industrial frontier, SpaceX is positioned to spearhead this revolutionary expansion, and we believe that continued advancements in our launch capabilities, space infrastructure capabilities, and cost efficiency will allow...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p201", - "path": "spacex-s1.pdf/p201", - "level": 1, - "summary": "174 Table of Contents Research, the global business broadband market in 2025 across small to medium sized business and enterprise usage is estimated to be $200 billion. • Government Solutions. Driven by increasing demand for resilient, low-latency, and highly secure communicat...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p202", - "path": "spacex-s1.pdf/p202", - "level": 1, - "summary": "175 Table of Contents efficiency. There are approximately 23,900 commercial aircraft, according to Oliver Wyman, and approximately 24,500 privately owned aircraft, according to Corporate Jet Investor, in the world, which can be served by our aviation offering. In maritime, Sta...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p203", - "path": "spacex-s1.pdf/p203", - "level": 1, - "summary": "176 Table of Contents Effectiveness of 1.2 and an all-in chip power consumption per GPU of 1.3 kilowatts per GPU—that of an H100 SXM—this AI workload demand corresponds to 104 million GPUs required. We apply an 80% utilization rate per the National Electrical Installation Stan...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p204", - "path": "spacex-s1.pdf/p204", - "level": 1, - "summary": "177 Table of Contents Future Markets Beyond the established markets reflected in our TAM, we envision that ongoing advancements in our technology and infrastructure will unlock entirely new markets over time. As launch costs decline, satellite capabilities advance, and large-s...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p205", - "path": "spacex-s1.pdf/p205", - "level": 1, - "summary": "178 Table of Contents Our Solutions & Services Unparalleled Launch Capability Our unmatched launch capability is the foundational competitive advantage that enables our unique solutions and services. We are the market leader in orbital launch, providing low-cost, reliable, and...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p206", - "path": "spacex-s1.pdf/p206", - "level": 1, - "summary": "179 Table of Contents ocean or on one of our landing zones near our launch pads ahead of being refurbished for a future launch, and its payload fairing halves, which are recovered via parachute-assisted splashdowns and are refurbished and reused after retrieval. The second sta...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p207", - "path": "spacex-s1.pdf/p207", - "level": 1, - "summary": "180 Table of Contents International Space Station. As of December 31, 2025, Falcon 9 has successfully launched 19 human spaceflight missions with a 100% mission success rate. • In-House Engine Development and Manufacturing: Falcon 9 is powered by Merlin engines that are design...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p208", - "path": "spacex-s1.pdf/p208", - "level": 1, - "summary": "181 Table of Contents Falcon Heavy Overview • Reusability: Falcon Heavy incorporates a design focused on reusability, which has contributed to lowering the cost of access to space and altering the launch industry’s economic model for large or high-value payloads. The vehicle’s...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p209", - "path": "spacex-s1.pdf/p209", - "level": 1, - "summary": "182 Table of Contents Falcon Heavy • Exploratory Missions Beyond Earth’s Orbit: Falcon Heavy first launched in February 2018, when it put a Tesla Roadster and its mannequin passenger, Starman, into orbit around the Sun. This was the first instance of a car sent into deep space...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p210", - "path": "spacex-s1.pdf/p210", - "level": 1, - "summary": "183 Table of Contents Starman in Orbit • Perfect Performance Record: As of March 31, 2026, Falcon Heavy had successfully completed 11 launches, all resulting in successful payload delivery. Falcon Heavy flown boosters have also safely completed 18 total recoveries and 16 refli...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p211", - "path": "spacex-s1.pdf/p211", - "level": 1, - "summary": "184 Table of Contents associated infrastructure assumes continued successful iteration through flight testing, regulatory progress, supply chain scaling, and cost reduction driven by increasing reusability. We have made substantial investments in manufacturing scale-up, includ...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p212", - "path": "spacex-s1.pdf/p212", - "level": 1, - "summary": "185 Table of Contents “Chopstick” Super Heavy Booster Catch The Starship upper stage, after orbital delivery or missions beyond, is designed to reenter protected by advanced heat shield tiles, execute a propulsive landing burn, and be similarly caught mid-air by the launch tow...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p213", - "path": "spacex-s1.pdf/p213", - "level": 1, - "summary": "186 Table of Contents • Improvements in Engine Development Underpin Starship’s Massive Payload Capacity: With a payload bay volume rivaling the pressurized sections of the International Space Station, Starship is designed to deploy structures like space station modules, large...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p214", - "path": "spacex-s1.pdf/p214", - "level": 1, - "summary": "187 Table of Contents Dragon Cargo Overview • Key features: Key highlights of the Dragon cargo spacecraft include its propulsion system with 16 Draco thrusters for precise orbital maneuvering, autonomous docking capabilities via NASA’s International Docking System Standard (ID...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p215", - "path": "spacex-s1.pdf/p215", - "level": 1, - "summary": "188 Table of Contents Dragon Orbiting Earth's Poles • Key features: Dragon Crew spacecraft is equipped with advanced avionics, touchscreen interfaces for manual control, and an integrated trunk with solar power generation. Dragon Crew’s propulsion includes 16 Draco thrusters f...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p216", - "path": "spacex-s1.pdf/p216", - "level": 1, - "summary": "189 Table of Contents Starlink Consumer Broadband is enabled by the largest satellite constellation in human history with approximately 9,000 broadband satellites as of March 31, 2026, operating in LEO to deliver latency comparable to many terrestrial broadband connections. We...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p217", - "path": "spacex-s1.pdf/p217", - "level": 1, - "summary": "190 Table of Contents 110W or more under load. Each type of terminal is designed to be quick and seamless for a consumer to self-set up, support in-motion connectivity up to speeds of 100 mph, and deliver global, oceanwide coverage for consumer maritime use. We believe that th...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p218", - "path": "spacex-s1.pdf/p218", - "level": 1, - "summary": "191 Table of Contents Enterprise Solutions Aviation Connectivity Starlink Aviation provides broadband connectivity for commercial and private aircraft, enabling high-quality internet service for passengers and crew from gate to gate, including during taxi and prior to take-off...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p219", - "path": "spacex-s1.pdf/p219", - "level": 1, - "summary": "192 Table of Contents Land Mobility and IoT Starlink supports in-motion connectivity for land mobility and industrial IoT applications where terrestrial networks are intermittent or unavailable. These deployments include fleet vehicles, remote field operations, and ruggedized...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p220", - "path": "spacex-s1.pdf/p220", - "level": 1, - "summary": "193 Table of Contents space, we enable data, over-the-top voice, video and messaging in remote and hard-to-reach locations where terrestrial networks have historically been unavailable or unreliable. Starlink Mobile is already commercially available for messaging in select mar...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p221", - "path": "spacex-s1.pdf/p221", - "level": 1, - "summary": "194 Table of Contents Map of Starlink Mobile Coverage Satellite Life We estimate that our satellites have useful lives of three to five years based on engineering studies, historical on- orbit performance, propellant life, utilization patterns, design enhancements across gener...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p222", - "path": "spacex-s1.pdf/p222", - "level": 1, - "summary": "195 Table of Contents training of next‐generation models is expected to scale toward multiple trillions of parameters, which could represent a step change in reasoning in depth and overall intelligence. In this context, the number of parameters refers to the scale of the model...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p223", - "path": "spacex-s1.pdf/p223", - "level": 1, - "summary": "196 Table of Contents COLOSSUS II Facility X Platform X is a real-time information, entertainment, and free speech platform that serves as a foundational distribution and data engine for our AI ecosystem. With a global user base generating substantial volumes of content at all...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p224", - "path": "spacex-s1.pdf/p224", - "level": 1, - "summary": "197 Table of Contents X is Our Real-time Information, Entertainment, and Free Speech Platform X is our real-time information, entertainment, and free speech platform that serves as a global town square with integrated AI capabilities powered by Grok. Designed to evolve toward...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p225", - "path": "spacex-s1.pdf/p225", - "level": 1, - "summary": "198 Table of Contents Grok Holds Front and Center Real Estate on the X Platform With native integration of Grok’s frontier models, including real-time access to X data for up-to-date insights, trending analysis, and enhanced search, X delivers personalized feeds, smarter recom...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p226", - "path": "spacex-s1.pdf/p226", - "level": 1, - "summary": "199 Table of Contents By combining high-volume user interactions with frontier AI, AI compute infrastructure, and vertical integration, X accelerates progress toward ubiquitous connectivity, real-time global awareness, and the foundational social layer for multiplanetary human...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p227", - "path": "spacex-s1.pdf/p227", - "level": 1, - "summary": "200 Table of Contents Grok Imagine. Grok Imagine is Grok’s generative visual and multimedia creation suite, powered by proprietary models for producing high-quality images, short videos (up to 15 seconds at 720p in current iterations), and synchronized audio from text prompts,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p228", - "path": "spacex-s1.pdf/p228", - "level": 1, - "summary": "201 Table of Contents Infrastructure and Facilities SpaceX maintains a highly vertically integrated, geographically diverse manufacturing ecosystem that designs, produces, and qualifies a significant share of components in-house, from raw materials and rocket engines to comple...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p229", - "path": "spacex-s1.pdf/p229", - "level": 1, - "summary": "202 Table of Contents partnership with the newly formed city, is developing local infrastructure and municipal services, including utilities, governance, schools, and environmental conservation initiatives, to support a world-class, concentrated engineering and manufacturing c...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p230", - "path": "spacex-s1.pdf/p230", - "level": 1, - "summary": "203 Table of Contents • Hawthorne, California: Our original flagship facility in Hawthorne, California manufactures Falcon 9 and Falcon Heavy first and second stages, Dragon Crew and Dragon Cargo spacecraft, Merlin engines, Starship’s Raptor engines, Starlink User Terminals, a...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p231", - "path": "spacex-s1.pdf/p231", - "level": 1, - "summary": "204 Table of Contents • McGregor, Texas: The McGregor rocket engine complex is the most active rocket development and testing facility in the world. It serves as the primary site for qualification, acceptance, and post-flight testing of Merlin and Raptor engines. It features 1...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p232", - "path": "spacex-s1.pdf/p232", - "level": 1, - "summary": "205 Table of Contents • Redmond, Washington: The Redmond Starlink satellite manufacturing facility has produced an average of approximately 70 satellites per week (approximately 3,640 per year at full rate) from December 2025 to April 2026, covering bus structures, phased-arra...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p233", - "path": "spacex-s1.pdf/p233", - "level": 1, - "summary": "206 Table of Contents • Bastrop, Texas: We build the majority of Starlink products at our manufacturing facility in Bastrop, Texas, which opened in 2023, producing tens of thousands of Starlink Kits per day and all of the current generation Starlink Standard and Performance Ki...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p234", - "path": "spacex-s1.pdf/p234", - "level": 1, - "summary": "207 Table of Contents In connection with preparing leased real property for our launch operations, we make significant capital improvements and install extensive real and personal property at these government-owned sites. The launch facilities we build are a unique capital imp...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p235", - "path": "spacex-s1.pdf/p235", - "level": 1, - "summary": "208 Table of Contents Cape Canaveral Space Force Station, Florida • Vandenberg Space Force Base, Space Launch Complex 4: Space Launch Complex 4 East at Vandenberg Space Force Base is our West Coast launch site and serves as our primary facility for polar and high-inclination o...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p236", - "path": "spacex-s1.pdf/p236", - "level": 1, - "summary": "209 Table of Contents Vandenberg Space Force Base, California", - "chunk_count": 1, - "children": [] - }, - { - "title": "p237", - "path": "spacex-s1.pdf/p237", - "level": 1, - "summary": "210 Table of Contents • Memphis, Tennessee and Southaven, Mississippi: We operate a cluster of high-density data centers in the Greater Memphis Area extending into northern Mississippi along the state border, to power training and inference for frontier AI models, including th...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p238", - "path": "spacex-s1.pdf/p238", - "level": 1, - "summary": "211 Table of Contents • Palo Alto, California: The corporate headquarters for our AI operations following the acquisition of xAI in February 2026 is located in Palo Alto, California. This location, under long-term lease, houses our advanced AI research, development, and engine...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p239", - "path": "spacex-s1.pdf/p239", - "level": 1, - "summary": "212 Table of Contents Autonomous Drone Ship “A Shortfall of Gravitas” • Starlink ground stations: A Starlink ground station, also referred to as a gateway, is a terrestrial relay station that communicates with our satellite constellation. These stations transmit data between s...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p240", - "path": "spacex-s1.pdf/p240", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p241", - "path": "spacex-s1.pdf/p241", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p242", - "path": "spacex-s1.pdf/p242", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p243", - "path": "spacex-s1.pdf/p243", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p244", - "path": "spacex-s1.pdf/p244", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p245", - "path": "spacex-s1.pdf/p245", - "level": 1, - "summary": "", - "chunk_count": 1, - "children": [] - }, - { - "title": "p246", - "path": "spacex-s1.pdf/p246", - "level": 1, - "summary": "219 Table of Contents Competition Our principal sources of competition vary based on the segment and market in which our business operates. In Space, we compete with launch service providers that transport small, medium, and heavy payloads and astronauts to Earth’s orbit and b...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p247", - "path": "spacex-s1.pdf/p247", - "level": 1, - "summary": "220 Table of Contents is based on factors that include network coverage, capacity, latency and reliability, spectrum access, density of urban environments, satellite deployment capability and efficiency, price and user acquisition, retention, and experience. In AI, we compete...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p248", - "path": "spacex-s1.pdf/p248", - "level": 1, - "summary": "221 Table of Contents substantial costs to monitor and take actions to comply with governmental and other regulations that are or will be applicable to our businesses, including, among others, restrictions and regulations of the U.S. Department of Transportation, the FAA, the...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p249", - "path": "spacex-s1.pdf/p249", - "level": 1, - "summary": "222 Table of Contents jurisdiction of the Committee on Foreign Investment in the United States (“CFIUS”), which has authority to conduct national security reviews of certain foreign investments. CFIUS may impose mitigation conditions to grant clearance of a particular transact...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p250", - "path": "spacex-s1.pdf/p250", - "level": 1, - "summary": "223 Table of Contents predict. Divergent or conflicting regulatory approaches across jurisdictions, as well as evolving enforcement priorities, may also create compliance uncertainty and require market-specific limitations or modifications to AI- related functionality, increas...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p251", - "path": "spacex-s1.pdf/p251", - "level": 1, - "summary": "224 Table of Contents requirements. For example, the UK’s Online Safety Act 2023 and Australia’s Online Safety Amendment (Social Media Minimum Age) Act 2024 impose risk mitigation and age-related requirements on certain online platforms. As a result of these requirements or to...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p252", - "path": "spacex-s1.pdf/p252", - "level": 1, - "summary": "225 Table of Contents including our launch operations, manufacturing activities, fuel storage and handling operations, launch facilities and ground infrastructure, and data center operations and expansion plans.” Government Contracts A portion of our revenue is derived from co...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p253", - "path": "spacex-s1.pdf/p253", - "level": 1, - "summary": "226 Table of Contents MANAGEMENT Below is certain information as of May 1, 2026 regarding individuals who are expected to serve as our executive officers and directors upon the completion of this offering. Name Age Position Elon Musk ...................... 54 Chief Executive O...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p254", - "path": "spacex-s1.pdf/p254", - "level": 1, - "summary": "227 Table of Contents a decade at Broadcom Inc., a global semiconductor company, from 1999 to 2008, holding roles of increasing responsibility within the organization, including serving as Vice President and Corporate Controller. Mr. Johnsen serves as a Trustee of the Universi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p255", - "path": "spacex-s1.pdf/p255", - "level": 1, - "summary": "228 Table of Contents investment strategy, portfolio company management and improvement, operations of business, and finance across several industries, including aerospace, technology, and manufacturing. Donald Harrison has served on our board since February 2015. Mr. Harrison...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p256", - "path": "spacex-s1.pdf/p256", - "level": 1, - "summary": "229 Table of Contents and a class of investors who sold certain Twitter, Inc. equity securities between May 13 and October 4, 2022. The judgment is based on a jury verdict rendered on March 20, 2026 that found (i) in favor of plaintiffs on claims alleging that Mr. Musk violate...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p257", - "path": "spacex-s1.pdf/p257", - "level": 1, - "summary": "230 Table of Contents Class B Directors and Ira Ehrenpreis, Randy Glein, and Steve Jurvetson will serve as the initial Common Stock Directors. Our board will be subject to annual elections. Each director will hold office until the next annual meeting of our shareholders and un...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p258", - "path": "spacex-s1.pdf/p258", - "level": 1, - "summary": "231 Table of Contents • preparing the report required by the SEC for inclusion in our annual proxy or information statement; • approving audit and non-audit services to be performed by the independent accountants; and • performing such other functions as our board may from tim...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p259", - "path": "spacex-s1.pdf/p259", - "level": 1, - "summary": "232 Table of Contents extent required by applicable SEC rules and the corporate governance rules of Nasdaq and Nasdaq Texas. Information contained on our website or linked therein or otherwise connected thereto does not constitute part of, nor is it incorporated by reference i...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p260", - "path": "spacex-s1.pdf/p260", - "level": 1, - "summary": "233 Table of Contents EXECUTIVE COMPENSATION Compensation Discussion and Analysis This Compensation Discussion and Analysis, or CD&A, provides an overview of our executive compensation philosophy, objectives, and design and each element of our executive compensation program wi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p261", - "path": "spacex-s1.pdf/p261", - "level": 1, - "summary": "234 Table of Contents Long-Term Incentive Compensation In 2025, we granted long-term incentive compensation under our 2024 Equity Incentive Plan (the “2024 Plan”), which replaced our 2015 Equity Incentive Plan (the “2015 Plan”) with respect to new grants; however, outstanding...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p262", - "path": "spacex-s1.pdf/p262", - "level": 1, - "summary": "235 Table of Contents Employee Stock Purchase Plans Historically, we have provided two employee stock purchase plans in which all of our U.S. employees, including the NEOs, are eligible to participate. Our Amended and Restated 2017 Employee Stock Purchase Plan (the “2017 ESPP”...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p263", - "path": "spacex-s1.pdf/p263", - "level": 1, - "summary": "236 Table of Contents in additional valuation, in each case, subject to Mr. Musk’s continued employment with us. The first valuation milestone was achieved prior to the xAI Merger, and Mr. Musk was issued 25,172,695 shares of our Class A common stock in settlement of that port...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p264", - "path": "spacex-s1.pdf/p264", - "level": 1, - "summary": "237 Table of Contents Grants of Plan-Based Awards The following table provides information on the stock options to purchase shares of our Class C common stock and RSUs representing a right to receive shares of our Class C common stock, in each case, granted to each NEO during...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p265", - "path": "spacex-s1.pdf/p265", - "level": 1, - "summary": "238 Table of Contents Name Option Awards Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Opt...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p266", - "path": "spacex-s1.pdf/p266", - "level": 1, - "summary": "239 Table of Contents Option Exercises and Stock Vested The following table reflects stock options to purchase Class C common stock exercised by our NEOs during the 2025 Fiscal Years and RSUs held by our NEOs which vested during 2025. Name Option Awards Stock Awards Number of...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p267", - "path": "spacex-s1.pdf/p267", - "level": 1, - "summary": "240 Table of Contents Shares of Class A common stock subject to any award under our 2012 Equity Incentive Plan or the 2015 Plan that expires, terminates or is forfeited or that are reacquired, withheld or not issued to satisfy a tax withholding obligation will be added to the...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p268", - "path": "spacex-s1.pdf/p268", - "level": 1, - "summary": "241 Table of Contents Amendment and Termination The Plan Administrator may amend, suspend or terminate the A&R 2024 Plan at any time; however certain enumerated material amendments may not be made without shareholder approval. Suspension or termination of the A&R 2024 Plan may...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p269", - "path": "spacex-s1.pdf/p269", - "level": 1, - "summary": "242 Table of Contents During the purchase period, a participant may contribute between 1% and 100% of their eligible earnings (in whole percentage increments) through payroll deductions. A participant may change their payroll deduction prior to the beginning of an offering; ho...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p270", - "path": "spacex-s1.pdf/p270", - "level": 1, - "summary": "243 Table of Contents CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS The following is a description of certain relationships and transactions that exist, are proposed to exist or have existed or that we have entered into or propose to enter into with our directors, exec...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p271", - "path": "spacex-s1.pdf/p271", - "level": 1, - "summary": "244 Table of Contents • X Holdings advertising agreements. Tesla has directly and indirectly purchased advertising on our X platform. These amounts totaled $0.5 million in 2024, $4 million in 2025, and $0 from January 1, 2026 through February 28, 2026. • Aircraft usage. Since...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p272", - "path": "spacex-s1.pdf/p272", - "level": 1, - "summary": "245 Table of Contents Other Transactions with our Directors and Executive Officers We own and operate, through our subsidiary, Falcon Landing, LLC, three aircraft for use by our directors, executive officers and employees in connection with the performance of their duties for...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p273", - "path": "spacex-s1.pdf/p273", - "level": 1, - "summary": "246 Table of Contents Policies and Procedures for Review of Related Person Transactions In connection with the completion of this offering, we will adopt a written policy pursuant to which the audit committee will review and approve or disapprove certain “related person transa...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p274", - "path": "spacex-s1.pdf/p274", - "level": 1, - "summary": "247 Table of Contents SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information with respect to the beneficial ownership of our common stock as of May 1, 2026 and as adjusted to give effect to the completion of this offer...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p275", - "path": "spacex-s1.pdf/p275", - "level": 1, - "summary": "248 Table of Contents Shares Beneficially Owned Before This Offering Shares Beneficially Owned After This Offering (No Exercise) Class A common stock(8) Class B common stock Combinedvoting power Class A common stock Class B common stock Combinedvoting power Number % Number % %...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p276", - "path": "spacex-s1.pdf/p276", - "level": 1, - "summary": "249 Table of Contents (8) The amounts in the table with respect to Class A Common Stock do not include the shares of Class B Common Stock beneficially owned by the persons listed therein. Each share of Class B common stock is convertible at any time at the option of the holder...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p277", - "path": "spacex-s1.pdf/p277", - "level": 1, - "summary": "250 Table of Contents DESCRIPTION OF CAPITAL STOCK The following summary of the Company’s capital stock and charter and bylaws (each as in effect upon completion of this offering) does not purport to be complete and is qualified in its entirety by reference to the provisions o...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p278", - "path": "spacex-s1.pdf/p278", - "level": 1, - "summary": "251 Table of Contents the outstanding shares of voting common stock, voting together as a single class, or by the remaining directors, subject to the terms of our charter. Upon completion of this offering, Mr. Musk will continue to serve as our Chief Executive Officer, Chief T...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p279", - "path": "spacex-s1.pdf/p279", - "level": 1, - "summary": "252 Table of Contents Issuance of Additional Shares We may issue additional authorized shares of Class A common stock, Class B common stock and Class C common stock at any time or from time to time, subject to applicable provisions of our charter, our bylaws and Texas law. Our...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p280", - "path": "spacex-s1.pdf/p280", - "level": 1, - "summary": "253 Table of Contents Class B common stock, Mr. Musk will be able to elect, remove or fill any vacancy among the Class B Directors. As a result, Mr. Musk will have the power to control the outcome of matters requiring shareholder approval, including election of the board, and...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p281", - "path": "spacex-s1.pdf/p281", - "level": 1, - "summary": "254 Table of Contents shareholder approval of certain issuances equal to or exceeding 20% of the then-outstanding voting power or the then-outstanding number of shares of common stock. We may issue additional shares for a variety of corporate purposes, including future public...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p282", - "path": "spacex-s1.pdf/p282", - "level": 1, - "summary": "255 Table of Contents • If more than three claims arising from the same or similar conduct, transaction, or occurrence are submitted to arbitration within any three-year period, all but the first-filed claim shall be stayed pending final resolution of that first-filed claim. I...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p283", - "path": "spacex-s1.pdf/p283", - "level": 1, - "summary": "256 Table of Contents the Company shall be deemed to have irrevocably and unconditionally waived, any right it may have to a trial by jury in any legal action or proceeding relating to Internal Disputes described above. • Internal Disputes may not be brought as a class, or con...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p284", - "path": "spacex-s1.pdf/p284", - "level": 1, - "summary": "257 Table of Contents Company. Under Section 21.419 of the TBOC, in taking or declining to take any action on any matters of a corporation’s business, a director or officer of the Company is presumed to act (i) in good faith, (ii) on an informed basis, (iii) in furtherance of...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p285", - "path": "spacex-s1.pdf/p285", - "level": 1, - "summary": "258 Table of Contents SHARES ELIGIBLE FOR FUTURE SALE Prior to this offering, there has been no public market for our Class A common stock. Future sales of our Class A common stock in the public market, or the availability of such shares for sale in the public market, could ad...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p286", - "path": "spacex-s1.pdf/p286", - "level": 1, - "summary": "259 Table of Contents Beginning 90 days after the effective date of the registration statement of which this prospectus forms a part, a person (or persons whose shares are aggregated) who is deemed to be an affiliate of ours and who has beneficially owned restricted securities...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p287", - "path": "spacex-s1.pdf/p287", - "level": 1, - "summary": "260 Table of Contents MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF CLASS A COMMON STOCK The following discussion is a summary of the material U.S. federal income tax consequences of the purchase, ownership, and disposition of shares of our Class A co...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p288", - "path": "spacex-s1.pdf/p288", - "level": 1, - "summary": "261 Table of Contents THIS DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE HOLDERS SHOULD CONSULT THEIR TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF PURCHASING, OWNI...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p289", - "path": "spacex-s1.pdf/p289", - "level": 1, - "summary": "262 Table of Contents • we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time within the shorter of the five-year period ending on the date of disposition or the period that such Non- U.S. Holder held shares of...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p290", - "path": "spacex-s1.pdf/p290", - "level": 1, - "summary": "263 Table of Contents Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on our Class A common stock. However, under proposed Treasury Regulations (on which taxpayers may rely until final Tr...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p291", - "path": "spacex-s1.pdf/p291", - "level": 1, - "summary": "264 Table of Contents UNDERWRITING Under the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, BofA Securities, Inc., Citigroup Global Ma...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p292", - "path": "spacex-s1.pdf/p292", - "level": 1, - "summary": "265 Table of Contents time be varied by the representatives. Sales of Class A common stock made outside of the United States may be made by affiliates of the underwriters. We have granted to the underwriters an option, exercisable for 30 days after the date of this prospectus,...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p293", - "path": "spacex-s1.pdf/p293", - "level": 1, - "summary": "266 Table of Contents of our common stock or such other securities, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of our common stock or such other securities, in cash or otherwise. These restrictions will not apply to securitie...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p294", - "path": "spacex-s1.pdf/p294", - "level": 1, - "summary": "267 Table of Contents c. up to additional 7% of the Early Release Eligible Shares may be transferred on or after each of the dates that are 70 days, 90 days, 105 days, 120 days, and 135 days, respectively, after this offering; d. on the second full trading day immediately foll...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p295", - "path": "spacex-s1.pdf/p295", - "level": 1, - "summary": "268 Table of Contents of Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC serve as co- syndication agents; affiliates of Barclays Capital Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities, LLC serve as co-documentation agents; af...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p296", - "path": "spacex-s1.pdf/p296", - "level": 1, - "summary": "269 Table of Contents Selling Restrictions Argentina The shares of Class A common stock are not authorized for public offering in Argentina by the Comisión Nacional de Valores pursuant to Argentine Public Offering Law No. 17,811, as amended, and they shall not be sold publicly...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p297", - "path": "spacex-s1.pdf/p297", - "level": 1, - "summary": "270 Table of Contents purchasers pursuant to a private offering within the meaning of Article 4 of the Chilean Securities Market Act (Ley de Mercado de Valores) (an offer that is not “addressed to the public at large or to a certain sector or specific group of the public”). Ch...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p298", - "path": "spacex-s1.pdf/p298", - "level": 1, - "summary": "271 Table of Contents India This prospectus has not been and will not be registered as a prospectus with any registrar of companies in India. This prospectus has not been and will not be reviewed or approved by any regulatory authority in India, including the Securities and Ex...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p299", - "path": "spacex-s1.pdf/p299", - "level": 1, - "summary": "272 Table of Contents Malaysia No prospectus or other offering material or document in connection with the offer and sale of shares of Class A common stock offered by this prospectus has been or will be registered with the Securities Commission of Malaysia (the “Malaysian Comm...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p300", - "path": "spacex-s1.pdf/p300", - "level": 1, - "summary": "273 Table of Contents • is an eligible investor within the meaning of clause 41 of Schedule I of the FMC Act. Peru The shares of Class A common stock and the information contained herein are not being publicly marketed or offered in Peru and will not be distributed or caused t...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p301", - "path": "spacex-s1.pdf/p301", - "level": 1, - "summary": "274 Table of Contents Singapore This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the shares of Class A common stock may not be offered or sold, or made the subject of an invitation for subscription or purchase, nor...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p302", - "path": "spacex-s1.pdf/p302", - "level": 1, - "summary": "275 Table of Contents of Korea except pursuant to the applicable laws and regulations of Korea, including the FSCMA and the Foreign Exchange Transaction Law of Korea and the decrees and regulations thereunder (the “FETL”). The shares of Class A common stock have not been liste...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p303", - "path": "spacex-s1.pdf/p303", - "level": 1, - "summary": "276 Table of Contents 2024 (the “POATRs”) and, accordingly, there will not be a prospectus prepared or published for the purposes of the POATRs. This prospectus does not constitute a prospectus for the purposes of the POATRs. Each underwriter has represented and agreed that it...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p304", - "path": "spacex-s1.pdf/p304", - "level": 1, - "summary": "277 Table of Contents LEGAL MATTERS The validity of the shares of Class A common stock offered by this prospectus will be passed upon for us by Gibson, Dunn & Crutcher LLP, Houston, Texas. Certain legal matters in connection with this offering will be passed upon for the under...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p305", - "path": "spacex-s1.pdf/p305", - "level": 1, - "summary": "F-1 Table of Contents INDEX TO FINANCIAL STATEMENTS Page Space Exploration Technologies Corp. Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Firm ................................................................... F-2 Consolidated...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p306", - "path": "spacex-s1.pdf/p306", - "level": 1, - "summary": "F-2 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Space Exploration Technologies Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Space Exploratio...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p307", - "path": "spacex-s1.pdf/p307", - "level": 1, - "summary": "F-3 Table of Contents Revenue Recognition – Estimate of Total Cost at Completion for Certain Contracts Recognized Over Time As described in Notes 2 and 3 to the consolidated financial statements, the Company recognized revenue of $4.1 billion and $11.4 billion for the year end...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p308", - "path": "spacex-s1.pdf/p308", - "level": 1, - "summary": "F-4 Table of Contents Space Exploration Technologies Corp. Consolidated Balance Sheets (in millions, except per share data) December 31, 2025 2024 Assets Current assets Cash and cash equivalents .....................................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p309", - "path": "spacex-s1.pdf/p309", - "level": 1, - "summary": "F-5 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Operations (in millions, except per share data) Year Ended December 31, 2025 2024 2023 Revenue ........................................................................................ $ 18,67...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p310", - "path": "spacex-s1.pdf/p310", - "level": 1, - "summary": "F-6 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Comprehensive Income (Loss) (in millions) Year Ended December 31, 2025 2024 2023 Net income (loss) ......................................................................... $ (4,937) $ 791 $...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p311", - "path": "spacex-s1.pdf/p311", - "level": 1, - "summary": "F-7 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Redeemable Convertible Preferred Stock and Shareholders’ Equity (in millions) Redeemable Convertible Preferred Stock Common Stock Shares Amount Shares Amount Additional Paid-in Capital Accumu...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p312", - "path": "spacex-s1.pdf/p312", - "level": 1, - "summary": "F-8 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Cash Flows (in millions) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities Net income (loss) ...........................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p313", - "path": "spacex-s1.pdf/p313", - "level": 1, - "summary": "F-9 Table of Contents Year Ended December 31, 2025 2024 2023 Payments for repurchase of common and redeemable convertible preferred stock ............................................................................ (1,125) (1,021) (170) Taxes paid related to net share settleme...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p314", - "path": "spacex-s1.pdf/p314", - "level": 1, - "summary": "F-10 Table of Contents SPACE EXPLORATION TECHNOLOGIES CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (tables in millions, except per share data) Note 1 - Nature of Business Description of Business Space Exploration Technologies Corp. and its wholly owned subsidiaries, co...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p315", - "path": "spacex-s1.pdf/p315", - "level": 1, - "summary": "F-11 Table of Contents Note 13, Redeemable Convertible Preferred Stock and Shareholders’ Equity for additional details. As the consolidated financial statements already reflect the reorganization of entities under common control for all periods presented, separate financial st...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p316", - "path": "spacex-s1.pdf/p316", - "level": 1, - "summary": "F-12 Table of Contents The Company’s total cash and cash equivalents and restricted cash, as presented in the consolidated statements of cash flows, are as follows: Year Ended December 31, 2025 2024 2023 Cash and cash equivalents ..................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p317", - "path": "spacex-s1.pdf/p317", - "level": 1, - "summary": "F-13 Table of Contents Level II Inputs other than quoted prices in active markets that are observable either directly or indirectly Level III Unobservable inputs for which there is little or no market data The fair value hierarchy requires the use of observable market data whe...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p318", - "path": "spacex-s1.pdf/p318", - "level": 1, - "summary": "F-14 Table of Contents Satellites include costs to build the satellites (parts, labor, and allocated overhead) as well as capitalized launch costs incurred by the Space segment to launch the satellites to orbit, which include an allocation of the flight vehicle hardware costs....", - "chunk_count": 1, - "children": [] - }, - { - "title": "p319", - "path": "spacex-s1.pdf/p319", - "level": 1, - "summary": "F-15 Table of Contents Upon lease commencement, the Company recognizes a lease liability measured at the present value of the fixed future minimum lease payments and a right-of-use asset for an amount equal to the lease liability, adjusted by prepaid and accrued rent, lease in...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p320", - "path": "spacex-s1.pdf/p320", - "level": 1, - "summary": "F-16 Table of Contents cumulative effect of the changes made on the Company’s January 1, 2024 consolidated balance sheet for the adoption of ASU 2023-08 were as follows: Balance at December 31, 2023 Adjustment from adoption of ASU 2023-08 Balance at January 1, 2024 Assets Digi...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p321", - "path": "spacex-s1.pdf/p321", - "level": 1, - "summary": "F-17 Table of Contents contracts using the cost-to-cost input method, as the Company believes this represents the most appropriate measure towards satisfaction of its performance obligation. Under the cost-to-cost input method, the Company records revenue based upon costs (suc...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p322", - "path": "spacex-s1.pdf/p322", - "level": 1, - "summary": "F-18 Table of Contents AI Segment The AI segment generates revenue from the sale of advertising and from AI solutions and infrastructure services, which include (i) subscription offerings, (ii) data licensing arrangements, and (iii) API access to Grok models. Revenue from adve...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p323", - "path": "spacex-s1.pdf/p323", - "level": 1, - "summary": "F-19 Table of Contents Warranty on Starlink Kits The Company offers a standard product warranty for a period of one to two years on Starlink Kits. The Company has an obligation to either repair or replace the defective Starlink Kit. At the time revenue is recognized, an estima...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p324", - "path": "spacex-s1.pdf/p324", - "level": 1, - "summary": "F-20 Table of Contents Net Income (Loss) per Share of Common Stock Attributable to Common Shareholders Net income (loss) per share attributable to common shareholders is computed using the two-class method required for participating securities. Under this method, net income is...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p325", - "path": "spacex-s1.pdf/p325", - "level": 1, - "summary": "F-21 Table of Contents subsidiary, the Company applies the monthly average functional exchange rate to its monthly income or loss and the month-end functional currency rate to translate the balance sheet. Foreign currency transaction gains and losses are a result of the effect...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p326", - "path": "spacex-s1.pdf/p326", - "level": 1, - "summary": "F-22 Table of Contents Note 3 - Revenue Revenue disaggregated by products and services is as follows: Year Ended December 31, 2025 2024 2023 Products .......................................................................................... $ 1,510 $ 1,470 $ 1,093 Services ......", - "chunk_count": 1, - "children": [] - }, - { - "title": "p327", - "path": "spacex-s1.pdf/p327", - "level": 1, - "summary": "F-23 Table of Contents Concentration of risk Consolidated revenue from a significant customer is as follows: Year Ended December 31, 2025 2024 2023 Customer A .................................................................................... 20.9% 24.2% 25.2% Revenue from th...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p328", - "path": "spacex-s1.pdf/p328", - "level": 1, - "summary": "F-24 Table of Contents which is included in Construction-in-progress amounts above. No interest was capitalized during the years ended December 31, 2024 and 2023. For the years ended December 31, 2025 and 2024, the Company recorded impairment charges of $38 million and $63 mil...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p329", - "path": "spacex-s1.pdf/p329", - "level": 1, - "summary": "F-25 Table of Contents Amortization expense associated with finite-lived intangible assets was $786 million, $847 million, and $738 million in the years ended December 31, 2025, 2024, and 2023, respectively. The Company also has indefinite-lived intangible assets of $11 millio...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p330", - "path": "spacex-s1.pdf/p330", - "level": 1, - "summary": "F-26 Table of Contents On November 5, 2025, the parties amended and restated the Spectrum License Purchase Agreement to include EchoStar’s licenses for up to 15MHz of additional unpaired AWS-3 spectrum, and increased the consideration by $2,600 million, to a total amount of co...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p331", - "path": "spacex-s1.pdf/p331", - "level": 1, - "summary": "F-27 Table of Contents The fair value of digital assets is determined using a Level I in the fair value hierarchy. The following table provides activities related to digital assets: Year Ended December 31, 2025 2024 Beginning balance, at fair value ...............................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p332", - "path": "spacex-s1.pdf/p332", - "level": 1, - "summary": "F-28 Table of Contents Note 9 - Investments in Unconsolidated Affiliates Equity method investment In April 2025, the Company, through its wholly-owned subsidiary CTC Property LLC (“CTC”), entered into a joint venture Stateline Power, LLC (“Stateline”), with Solaris Power Solut...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p333", - "path": "spacex-s1.pdf/p333", - "level": 1, - "summary": "F-29 Table of Contents Note 10 - Debt As of December 31, 2025 Principal Unamortized Deferred Financing Costs Net X 2027 and X 2030 Notes .............................................................. $ 27 $ — $ 27 X B-1 Term Loan ..................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p334", - "path": "spacex-s1.pdf/p334", - "level": 1, - "summary": "F-30 Table of Contents subject to a customary financial covenant and other reporting requirements. The SpaceX Credit Facility terminates, and all outstanding loans become due and payable, on February 7, 2030, unless the parties agree to an extension. No amounts were borrowed u...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p335", - "path": "spacex-s1.pdf/p335", - "level": 1, - "summary": "F-31 Table of Contents B-3 Term Loan for an additional commitment of $1,225 million with the same terms and conditions, increasing the total X B-3 Term Loan borrowings to $5,966 million. Proceeds. The proceeds from the X B-3 Term Loan were used to pay down and extinguish the F...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p336", - "path": "spacex-s1.pdf/p336", - "level": 1, - "summary": "F-32 Table of Contents January 20, 2023, 13.00% (“Second Lien Bridge Total Cap”). After the Bridge Conversion Date, any outstanding borrowings under the Second Lien Bridge Credit Facility bore interest at the Second Lien Bridge Total Cap. xAI First Lien Credit Agreement Genera...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p337", - "path": "spacex-s1.pdf/p337", - "level": 1, - "summary": "F-33 Table of Contents borrowings under the line of credit during 2025. Letters of credit issued under the revolving line of credit were $145 million as of December 31, 2025. Interest Rates. Interest on any borrowings is calculated based on the 30-day average SOFR plus the Int...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p338", - "path": "spacex-s1.pdf/p338", - "level": 1, - "summary": "F-34 Table of Contents Note 11 - Leases The balances of the Company’s operating and finance leases, included in Other assets, Accrued expenses and other current liabilities, and Other liabilities for operating leases, and Finance lease right-of-use assets, Debt and finance lea...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p339", - "path": "spacex-s1.pdf/p339", - "level": 1, - "summary": "F-35 Table of Contents Other information related to leases is as follows: December 31, 2025 2024 Weighted-average remaining lease term (in years): Operating leases ......................................................................................................... 5.9 5.2...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p340", - "path": "spacex-s1.pdf/p340", - "level": 1, - "summary": "F-36 Table of Contents Note 12 - Balance Sheet Components Certain financial statement details are as follows: December 31, 2025 2024 Prepaid expenses and other current assets Tax related assets ......................................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p341", - "path": "spacex-s1.pdf/p341", - "level": 1, - "summary": "F-37 Table of Contents approved the 2026 Stock Split, pursuant to which each share of the Class A, Class B, and Class C SpaceX Common Stock issued and outstanding was split into five shares of SpaceX Common Stock. xAI Redeemable Convertible Preferred Stock and Common Stock On...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p342", - "path": "spacex-s1.pdf/p342", - "level": 1, - "summary": "F-38 Table of Contents xAI Warrants xAI also issued warrants to customer that were outstanding as of the effective date of the xAI Merger, which had a ten-year term originally set to expire in 2035, with an exercise price equal to the par value of the stock, and vesting terms...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p343", - "path": "spacex-s1.pdf/p343", - "level": 1, - "summary": "F-39 Table of Contents Dividend Per Share Initial Price Per Share Authorized Shares Outstanding (1) Liquidation Preference Net Carrying Value 2025 2025 2025 2025 2024 2025 2025 Series K ................................ $ 10.20 $ 204.00 2.7 2.5 2.5 518 518 Series L ...............", - "chunk_count": 1, - "children": [] - }, - { - "title": "p344", - "path": "spacex-s1.pdf/p344", - "level": 1, - "summary": "F-40 Table of Contents greater of the liquidation preference per share indicated above, or the amount each series would be entitled to receive if all such outstanding SpaceX Redeemable Convertible Preferred Stock were converted to Class A or Class B SpaceX Common Stock, as app...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p345", - "path": "spacex-s1.pdf/p345", - "level": 1, - "summary": "F-41 Table of Contents described in the table above for each outstanding share of xAI Redeemable Convertible Preferred Stock. Any such dividends declared at the discretion of the Board of Directors and are not cumulative. After payment of any such preferred dividends, holders...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p346", - "path": "spacex-s1.pdf/p346", - "level": 1, - "summary": "F-42 Table of Contents Common Stock The following describes all of the activity that occurred within each class of SpaceX Common Stock during the years ended December 31, 2025 and 2024, incorporating all activity that occurred within the class of xAI Common Stock on an as-conv...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p347", - "path": "spacex-s1.pdf/p347", - "level": 1, - "summary": "F-43 Table of Contents Conversion Rights Each share of Class B is convertible at the option of the holder, at any time, into one share of Class A. Each share of Class B will automatically convert into one share of Class A upon a transfer, other than a Permitted Transfer (as de...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p348", - "path": "spacex-s1.pdf/p348", - "level": 1, - "summary": "F-44 Table of Contents Note 14 - Earnings per Share The following table presents the reconciliation of net income (loss) attributable to common shareholders to net income (loss) used in computing basic and diluted net income (loss) per share of common stock: Year Ended Decembe...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p349", - "path": "spacex-s1.pdf/p349", - "level": 1, - "summary": "F-45 Table of Contents The following potentially dilutive securities on an as-converted basis are excluded from the calculation of diluted net income (loss) per share attributable to common shareholders for the periods presented because the impact of including them would be an...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p350", - "path": "spacex-s1.pdf/p350", - "level": 1, - "summary": "F-46 Table of Contents Summary Activity under the Plans Below table summarizes activities related to the Company’s Plans, presented on an as-converted basis per the xAI Merger. For the purposes of the table below, each xAI option, RSU and RSA is presented as 0.1433 SpaceX opti...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p351", - "path": "spacex-s1.pdf/p351", - "level": 1, - "summary": "F-47 Table of Contents CEO Award In November 2025, the Company granted a performance-based award (“xAI Award”) to Elon Musk consisting of twelve tranches. Each tranche represents the right to receive a number of shares at fair market value equal to 1.0% of xAI’s valuation at t...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p352", - "path": "spacex-s1.pdf/p352", - "level": 1, - "summary": "F-48 Table of Contents The weighted-average assumptions that were used to calculate the grant date fair value of the CEO’s xAI Award are as follows: Expected term (years) .............................................................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p353", - "path": "spacex-s1.pdf/p353", - "level": 1, - "summary": "F-49 Table of Contents The current and deferred provisions (benefits) for federal, state, and foreign income taxes consist of the following: Year Ended December 31, 2025 2024 2023 Current: Federal ...................................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p354", - "path": "spacex-s1.pdf/p354", - "level": 1, - "summary": "F-50 Table of Contents The following table is a reconciliation of taxes at the U.S. federal statutory income tax rate to the Company’s benefit from income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the Company’s adoption of AS...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p355", - "path": "spacex-s1.pdf/p355", - "level": 1, - "summary": "F-51 Table of Contents The significant components of the deferred tax assets and liabilities are as follows: December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards ............................................................................. $ 2,275 $ 572...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p356", - "path": "spacex-s1.pdf/p356", - "level": 1, - "summary": "F-52 Table of Contents The valuation allowance on the Company’s net deferred tax assets increased by $2,665 million, $39 million and $1,235 million during the years ended December 31, 2025, 2024, and 2023, respectively. The changes in valuation allowance are primarily driven b...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p357", - "path": "spacex-s1.pdf/p357", - "level": 1, - "summary": "F-53 Table of Contents benefits. As of December 31, 2025, unrecognized tax benefits of $11 million, if recognized, would affect our effective tax rate. The Company files income tax returns in the U.S. and all state and various foreign jurisdictions. To the extent the Company h...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p358", - "path": "spacex-s1.pdf/p358", - "level": 1, - "summary": "F-54 Table of Contents addition, the Company believes there is a reasonable possibility that it may incur a loss in some of these matters and the loss may be material or exceed its estimated ranges of possible loss. The outcomes of the matters described in this section, such a...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p359", - "path": "spacex-s1.pdf/p359", - "level": 1, - "summary": "F-55 Table of Contents 2013-2022 and it seeks a monetary award in the range of € 250 to € 2,500 per person. On February 4, 2026, the Court declined to allow the case to proceed as a class action and indicated that it is considering staying the proceedings until the Court of Ju...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p360", - "path": "spacex-s1.pdf/p360", - "level": 1, - "summary": "F-56 Table of Contents complexity and uncertainty of some of these matters, however, as well as the judicial process in certain jurisdictions, the final outcome of these audits may be materially different from the Company’s expectations. Indemnifications In the ordinary course...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p361", - "path": "spacex-s1.pdf/p361", - "level": 1, - "summary": "F-57 Table of Contents Note 19 - Segments Following the Mergers, the Company evaluated how to view and measure performance of the combined company and potential realignment of individual entity’s historical segment structure. Following this evaluation, the Company determined t...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p362", - "path": "spacex-s1.pdf/p362", - "level": 1, - "summary": "F-58 Table of Contents Year Ended December 31, 2024 Space Connectivity AI Total Reportable Segments Revenue ............................................................. $ 3,796 $ 7,599 $ 2,620 $ 14,015 Costs and expenses Cost of revenue ..........................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p363", - "path": "spacex-s1.pdf/p363", - "level": 1, - "summary": "F-59 Table of Contents The following tables provide revenue by geography based on the country of domicile in which the transaction originated: Year Ended December 31, 2025 2024 2023 USA ..............................................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p364", - "path": "spacex-s1.pdf/p364", - "level": 1, - "summary": "F-60 Table of Contents Officer Equity Awards In January 2026, the Company granted 1,000 million performance-based restricted shares of Class B common stock to Elon Musk. The restricted shares vest upon (i) the Company’s achievement of specified market capitalization milestones...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p365", - "path": "spacex-s1.pdf/p365", - "level": 1, - "summary": "F-61 Table of Contents applicable regulatory waiting period, SpaceX issued 3.8 million shares of Class A Common Stock (on a pre-2026 Stock Split basis) to Tesla in accordance with the terms of the foregoing agreements. Tesla Collaboration In March 2026, the Company announced a...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p366", - "path": "spacex-s1.pdf/p366", - "level": 1, - "summary": "F-62 Table of Contents Company’s material breach of the option agreement, Cursor is entitled to a $1.5 billion termination fee under the option agreement and an $8.5 billion deferred services fee under the compute agreement. These fees are payable in cash (or Class A common st...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p367", - "path": "spacex-s1.pdf/p367", - "level": 1, - "summary": "F-63 Table of Contents Space Exploration Technologies Corp. Consolidated Balance Sheets (in millions, except per share data) (unaudited) March 31, 2026 December 31, 2025 Assets Current assets Cash and cash equivalents ..............................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p368", - "path": "spacex-s1.pdf/p368", - "level": 1, - "summary": "F-64 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Operations (in millions, except per share data) (unaudited) Three Months Ended March 31, 2026 2025 Revenue ......................................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p369", - "path": "spacex-s1.pdf/p369", - "level": 1, - "summary": "F-65 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Comprehensive Loss (in millions) (unaudited) Three Months Ended March 31, 2026 2025 Net loss ....................................................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p370", - "path": "spacex-s1.pdf/p370", - "level": 1, - "summary": "F-66 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Redeemable Convertible Preferred Stock and Shareholders’ Equity (in millions) (unaudited) Redeemable Convertible Preferred Stock Common Stock Shares Amount Shares Amount Additional Paid-in C...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p371", - "path": "spacex-s1.pdf/p371", - "level": 1, - "summary": "F-67 Table of Contents Space Exploration Technologies Corp. Consolidated Statements of Cash Flows (in millions) (unaudited) Three Months Ended March 31, 2026 2025 Cash flows from operating activities Net loss .......................................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p372", - "path": "spacex-s1.pdf/p372", - "level": 1, - "summary": "F-68 Table of Contents Three Months Ended March 31, 2026 2025 Supplemental disclosures of cash flow information Cash paid for the following: Interest, net of interest capitalized ......................................................................................$ 990 $ 382...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p373", - "path": "spacex-s1.pdf/p373", - "level": 1, - "summary": "F-69 Table of Contents SPACE EXPLORATION TECHNOLOGIES CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (tables in millions, except per share data) (unaudited) Note 1 - Nature of Business Description of Business Space Exploration Technologies Corp. and its wholly owned subs...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p374", - "path": "spacex-s1.pdf/p374", - "level": 1, - "summary": "F-70 Table of Contents accompanying notes should be read in conjunction with the annual consolidated financial statements and the accompanying notes. The interim consolidated financial statements and the accompanying notes have been prepared on the same basis as the annual con...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p375", - "path": "spacex-s1.pdf/p375", - "level": 1, - "summary": "F-71 Table of Contents Recently adopted accounting pronouncements In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a p...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p376", - "path": "spacex-s1.pdf/p376", - "level": 1, - "summary": "F-72 Table of Contents 2026, of which $13,236 million was recognized as deferred revenue at March 31, 2026. Approximately 36% is expected to be recognized within one year, and approximately 46% is expected to be recognized between one and three years, with the remaining 18% to...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p377", - "path": "spacex-s1.pdf/p377", - "level": 1, - "summary": "F-73 Table of Contents Note 6 - Intangible Assets and Goodwill Intangible Assets Finite-lived intangible assets consist of the following: March 31, 2026 Weighted-Average Useful Life (years) Gross Carrying Value Accumulated Amortization Net Carrying Value Brand ...................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p378", - "path": "spacex-s1.pdf/p378", - "level": 1, - "summary": "F-74 Table of Contents Note 7 - Financial Instruments The Company’s assets that are measured at fair value on a recurring basis are as follows: March 31, 2026 Level Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents Cash ....................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p379", - "path": "spacex-s1.pdf/p379", - "level": 1, - "summary": "F-75 Table of Contents Note 8 - Investments in Unconsolidated Affiliates Equity method investment As of March 31, 2026 and December 31, 2025, the Company held an investment in Stateline Power, LLC, which is accounted for as an equity method investment, of $80 million and $86 m...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p380", - "path": "spacex-s1.pdf/p380", - "level": 1, - "summary": "F-76 Table of Contents SpaceX Bridge Loan General. In March 2026, SpaceX entered into a new bridge loan credit agreement (the “SpaceX Bridge Loan”) with a syndicate of lenders, providing for an unsecured bridge term loan facility in an aggregate principal amount of $20,000 mil...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p381", - "path": "spacex-s1.pdf/p381", - "level": 1, - "summary": "F-77 Table of Contents certain definitions and covenants under the SpaceX Credit Facility to conform to the terms of the SpaceX Bridge Loan. Interest Rates. Under the SpaceX Credit Facility, borrowings bear interest at the Company’s option, at a rate per annum of (i) between 0...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p382", - "path": "spacex-s1.pdf/p382", - "level": 1, - "summary": "F-78 Table of Contents B-3 Term Loan for an additional commitment of $1,225 million with the same terms and conditions, increasing the total X B-3 Term Loan borrowings to $5,966 million. Interest Rates. The X B-1 Term Loan bore interest at a rate per annum of, initially, adjus...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p383", - "path": "spacex-s1.pdf/p383", - "level": 1, - "summary": "F-79 Table of Contents Interest Rates. The xAI 12.5% Senior Secured Notes had a fixed interest rate of 12.50% per annum. Interest was payable bi-annually on January 15 and July 15, commencing on January 15, 2026. Principal Repayments. On March 5, 2026, the Company repaid the f...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p384", - "path": "spacex-s1.pdf/p384", - "level": 1, - "summary": "F-80 Table of Contents Note 10 - Leases The components of lease expense are as follows within the consolidated statements of operations: Three Months Ended March 31, 2026 2025 Operating lease expense: Operating lease expense .......................................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p385", - "path": "spacex-s1.pdf/p385", - "level": 1, - "summary": "F-81 Table of Contents Note 12 - Redeemable Convertible Preferred Stock and Shareholders’ Equity SpaceX Preferred and Common Stock The Company has five classes of stock - four classes to be designated Class A common stock (“Class A”), Class B common stock (“Class B”), Class C...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p386", - "path": "spacex-s1.pdf/p386", - "level": 1, - "summary": "F-82 Table of Contents received the applicable shares of SpaceX Common Stock. Any shares of xAI Redeemable Convertible Preferred Stock previously held by the Company were canceled and retired and did not receive any consideration. Because the xAI Redeemable Convertible Preferr...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p387", - "path": "spacex-s1.pdf/p387", - "level": 1, - "summary": "F-83 Table of Contents Redeemable Convertible Preferred Stock Information for each series of SpaceX and xAI Redeemable Convertible Preferred Stock (collectively, the “Combined Redeemable Convertible Preferred Stock”) is as follows: Dividend Per Share Initial Price Per Share Au...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p388", - "path": "spacex-s1.pdf/p388", - "level": 1, - "summary": "F-84 Table of Contents The following describes the various rights and preferences of the SpaceX Redeemable Convertible Preferred Stock: Dividend Provisions On a per annum basis, holders of shares of SpaceX Redeemable Convertible Preferred Stock are entitled to receive dividend...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p389", - "path": "spacex-s1.pdf/p389", - "level": 1, - "summary": "F-85 Table of Contents In the event of a transfer of a share of Series A or Series B (other than a Permitted Transfer as defined in the charter), such share shall automatically be cancelled and converted into a corresponding share of Series A-1 or Series B-1. Voting Rights Hol...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p390", - "path": "spacex-s1.pdf/p390", - "level": 1, - "summary": "F-86 Table of Contents Class A Common Stock Class B Common Stock Class C Common Stock Class D Common Stock Shares Amount Shares Amount Shares Amount Shares Amount Balances at December 31, 2025 ................................... 1,952 $ 3 643 $ 1 484 $ 0 — $ — Common stock iss...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p391", - "path": "spacex-s1.pdf/p391", - "level": 1, - "summary": "F-87 Table of Contents Convertible Preferred Stock and Class B, as applicable, plus shares granted and available for grant under the Company’s share plans. The amount of such shares of the SpaceX Common Stock reserved for these purposes at March 31, 2026 is as follows: Number...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p392", - "path": "spacex-s1.pdf/p392", - "level": 1, - "summary": "F-88 Table of Contents Note 13 - Earnings per Share The following table presents the reconciliation of net loss attributable to common shareholders to net loss used in computing basic and diluted net income loss per share of common stock: Three Months Ended March 31, 2026 2025...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p393", - "path": "spacex-s1.pdf/p393", - "level": 1, - "summary": "F-89 Table of Contents As part of the X Merger, each X RSU that was outstanding was converted to a xAI RSU to receive 2.776 shares of xAI Common Stock. General The Company grants RSUs, RSAs, and non-statutory options to eligible employees, key executives, and certain non- empl...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p394", - "path": "spacex-s1.pdf/p394", - "level": 1, - "summary": "F-90 Table of Contents Fair Value Determination The fair value and derived service period of the SpaceX CEO Award and AI CEO Award are estimated on the grant date using a Monte Carlo simulation model. The weighted-average assumptions that were used to calculate the grant date...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p395", - "path": "spacex-s1.pdf/p395", - "level": 1, - "summary": "F-91 Table of Contents Note 16 - Commitments and Contingencies Unconditional Obligations During the three months ended March 31, 2026, there have been no material changes to the Company’s unconditional obligation since December 31, 2025 other than the execution of certain purc...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p396", - "path": "spacex-s1.pdf/p396", - "level": 1, - "summary": "F-92 Table of Contents infringe any claim of the ‘506 patent and two out of three claims of the ‘304 patent and that each of those patent claims was invalid, but (ii) that Twitter willfully infringed one claim of the ‘304 patent. The jury awarded Plaintiff $105 million in dama...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p397", - "path": "spacex-s1.pdf/p397", - "level": 1, - "summary": "F-93 Table of Contents Beginning in January 2026, the Company and certain subsidiaries have been named as defendants in multiple lawsuits arising from Grok’s image-generation and editing features. The complaints generally allege that Grok’s image-generation and editing feature...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p398", - "path": "spacex-s1.pdf/p398", - "level": 1, - "summary": "F-94 Table of Contents Note 18 - Segments Following the Mergers, the Company evaluated how to view and measure performance of the combined company and potential realignment of individual entity’s historical segment structure. Following this evaluation, the Company determined t...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p399", - "path": "spacex-s1.pdf/p399", - "level": 1, - "summary": "F-95 Table of Contents Three Months Ended March 31, 2025 Space Connectivity AI Total Reportable Segments Revenue .............................................................. $ 865 $ 2,475 $ 727 $ 4,067 Costs and expenses Cost of revenue .........................................", - "chunk_count": 1, - "children": [] - }, - { - "title": "p400", - "path": "spacex-s1.pdf/p400", - "level": 1, - "summary": "F-96 Table of Contents Note 20 - Subsequent Events The Company has evaluated subsequent events that occurred from April 1, 2026 through May 7, 2026, which is the date the consolidated financial statements were available to be issued, and determined that there were no subsequen...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p401", - "path": "spacex-s1.pdf/p401", - "level": 1, - "summary": "Table of Contents Shares Space Exploration Technologies Corp. Class A Common Stock PRELIMINARY PROSPECTUS , 2026 Through and including , 2026 (the 25th day after the date of this prospectus), all dealers effecting transactions in our Class A common stock, whether or not partic...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p402", - "path": "spacex-s1.pdf/p402", - "level": 1, - "summary": "II-1 Table of Contents PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 13.Other Expenses of Issuance and Distribution. The following table shows the costs and expenses, other than underwriting discounts and commissions, payable in connection with the sale and distribution...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p403", - "path": "spacex-s1.pdf/p403", - "level": 1, - "summary": "II-2 Table of Contents that a court may also order indemnification under various circumstances. In addition, the TBOC permits indemnification in certain circumstances in which we would not otherwise have the power to do so under the provisions of the TBOC or our charter or byl...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p404", - "path": "spacex-s1.pdf/p404", - "level": 1, - "summary": "II-3 Table of Contents Item 15.Recent Sales of Unregistered Securities. The following sets forth information regarding all unregistered securities we have issued in the last three years. Unless stated otherwise, the sale of the securities listed below were deemed to be exempt...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p405", - "path": "spacex-s1.pdf/p405", - "level": 1, - "summary": "II-4 Table of Contents Exhibit No. Description of Exhibit 10.8^ Amended and Restated License Purchase Agreement, dated as of November 5, 2025, by and among EchoStar Corporation, Space Exploration Technologies Corp. and Spectrum Business Trust 2025-1. 10.9^ Bridge Loan Credit A...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p406", - "path": "spacex-s1.pdf/p406", - "level": 1, - "summary": "II-5 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Starbase, Texas, on May 20, 2026. S...", - "chunk_count": 1, - "children": [] - }, - { - "title": "p407", - "path": "spacex-s1.pdf/p407", - "level": 1, - "summary": "II-6 Table of Contents POWER OF ATTORNEY KNOW ALL PEOPLE BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gwynne Shotwell and Bret Johnsen, and each of them, as his or her true and lawful attorneys-in-fact and agents, each with full po...", - "chunk_count": 1, + "summary": "This section, titled 'Root', serves as the introductory part of a registration statement and prospectus for Space Exploration Technologies Corp. (SpaceX). It details the company's initial public offering (IPO) of Class A common stock, including its ticker symbol ('SPCX'), the two classes of stock structure (Class A and Class B), and the significant voting control held by founder Elon Musk. The section also provides key business metrics and historical milestones for SpaceX's space launch operations and Starlink connectivity services.", + "chunk_count": 407, "children": [] } ], diff --git a/apps/api/app/data/demo_documents/spacex-s1/manifest.json b/apps/api/app/data/demo_documents/spacex-s1/manifest.json index 45d5d6225..656181e59 100644 --- a/apps/api/app/data/demo_documents/spacex-s1/manifest.json +++ b/apps/api/app/data/demo_documents/spacex-s1/manifest.json @@ -341,420 +341,14 @@ } }, "statistics": { - "total_chunks": 633, + "total_chunks": 227, "text_chunks": 0, "image_chunks": 94, "table_chunks": 132, - "page_chunks": 407, + "page_chunks": 1, "total_pages": null }, "HIERARCHY": { - "p1": {}, - "p2": {}, - "p3": {}, - "p4": {}, - "p5": {}, - "p6": {}, - "p7": {}, - "p8": {}, - "p9": {}, - "p10": {}, - "p11": {}, - "p12": {}, - "p13": {}, - "p14": {}, - "p15": {}, - "p16": {}, - "p17": {}, - "p18": {}, - "p19": {}, - "p20": {}, - "p21": {}, - "p22": {}, - "p23": {}, - 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" + "[[cite:1]]\n\n" "The document also says Tesla and xAI entered a framework " "agreement to evaluate AI collaboration, with the investment " "expected to close in Q1 2026 subject to customary regulatory " - "conditions." + "conditions. [[cite:1]]" ), citations=( DemoCitationDefinition( @@ -83,11 +85,12 @@ class DemoSourceDefinition: question="What does the document say about energy storage?", answer=( "Tesla achieved its highest quarterly energy storage " - "deployments, driven by record Megapack deployments.\n\n" + "deployments, driven by record Megapack deployments. " + "[[cite:1]]\n\n" "Energy gross profit reached a record $1.1 billion, marking " - "the fifth consecutive record quarter.\n\n" + "the fifth consecutive record quarter. [[cite:1]]\n\n" "Tesla also plans to begin Megapack 3 and Megablock " - "production at Megafactory Houston in 2026." + "production at Megafactory Houston in 2026. [[cite:1]]" ), citations=( DemoCitationDefinition( @@ -109,10 +112,11 @@ class DemoSourceDefinition: question="What production plans does Tesla mention for 2026?", answer=( "Tesla says Cybercab, Tesla Semi, and Megapack 3 are on " - "schedule for volume production starting in 2026.\n\n" + "schedule for volume production starting in 2026. " + "[[cite:1]]\n\n" "The same product update also notes that first-generation " "Optimus production lines are being installed before volume " - "production." + "production. [[cite:1]]" ), citations=( DemoCitationDefinition( @@ -134,7 +138,7 @@ class DemoSourceDefinition: mime_type="application/pdf", size_bytes=7_441_414, asset_directory="spacex-s1", - chunk_count=633, + chunk_count=227, examples=( DemoExampleDefinition( id="demo-spacex-s1-starlink-scale", @@ -142,19 +146,21 @@ class DemoSourceDefinition: answer=( "The filing says SpaceX operates a high-speed, low-latency " "global broadband network powered by about 9,600 Starlink " - "broadband and mobile satellites in Low-Earth Orbit.\n\n" + "broadband and mobile satellites in Low-Earth Orbit. " + "[[cite:1]]\n\n" "It says that network serves consumer, enterprise, and " "government customers across 164 countries, territories, " - "and other markets as of March 31, 2026." + "and other markets as of March 31, 2026. [[cite:1]]" ), citations=( DemoCitationDefinition( - section_path="spacex-s1.pdf/p28", + section_path="spacex-s1.pdf/Root", description="Starlink network scale", content=( "approximately 9,600 Starlink broadband " "and mobile satellites" ), + page_number=28, ), ), ), @@ -163,17 +169,18 @@ class DemoSourceDefinition: question="How does the filing describe SpaceX's launch reusability?", answer=( "The filing says Falcon 9 reusability gave SpaceX a " - "step-function cost advantage in space access.\n\n" + "step-function cost advantage in space access. [[cite:1]]\n\n" "It also says Falcon 9 first stages had demonstrated the " - "ability to refly 34 times as of March 31, 2026." + "ability to refly 34 times as of March 31, 2026. [[cite:1]]" ), citations=( DemoCitationDefinition( - section_path="spacex-s1.pdf/p32", + section_path="spacex-s1.pdf/Root", description="Falcon 9 booster reuse", content=( "refly a first-stage 34 times" ), + page_number=32, ), ), ), @@ -182,16 +189,18 @@ class DemoSourceDefinition: question="What offering does the filing describe?", answer=( "The filing describes an initial public offering of shares " - "of Space Exploration Technologies Corp. Class A common stock." + "of Space Exploration Technologies Corp. Class A common stock. " + "[[cite:1]]" ), citations=( DemoCitationDefinition( - section_path="spacex-s1.pdf/p2", + section_path="spacex-s1.pdf/Root", description="Class A common stock offering", content=( "This is the initial public offering of shares of " "Class A common stock" ), + page_number=2, ), ), ), @@ -293,7 +302,7 @@ class DemoSourceDefinition: mime_type="application/pdf", size_bytes=940_068, asset_directory="financial-goog-10-k-2025", - chunk_count=99, + chunk_count=1, examples=(), original_file_name=None, ), @@ -326,7 +335,7 @@ class DemoSourceDefinition: mime_type="application/pdf", size_bytes=131_758, asset_directory="financial-meta-q1-2026-earnings-call", - chunk_count=20, + chunk_count=3, examples=(), original_file_name=None, ), diff --git a/apps/api/app/services/demo/source_projection.py b/apps/api/app/services/demo/source_projection.py index a749bd1d8..4c717206c 100644 --- a/apps/api/app/services/demo/source_projection.py +++ b/apps/api/app/services/demo/source_projection.py @@ -193,7 +193,14 @@ def _citation_payload( chunks: tuple[dict[str, Any], ...], ) -> dict[str, Any]: chunk = _resolve_citation_chunk(source=source, citation=citation, chunks=chunks) - return { + page_numbers = _citation_page_numbers(citation=citation, chunk=chunk) + page_citation_page_number = page_numbers[0] if page_numbers else None + page_citation_asset_url = _page_citation_asset_url( + source=source, + chunk=chunk, + page_number=page_citation_page_number, + ) + payload: dict[str, Any] = { "demo_source_id": source.demo_source_id, "canonical_document_id": source.canonical_document_id, "canonical_chunk_id": self.canonical_chunk_id(source=source, chunk=chunk), @@ -207,6 +214,13 @@ def _citation_payload( "section_path": str(chunk.get("path") or citation.section_path), }, } + if page_citation_page_number is not None: + payload["page_citation_page_number"] = page_citation_page_number + if page_numbers: + payload["page_nums"] = page_numbers + if page_citation_asset_url: + payload["page_citation_asset_url"] = page_citation_asset_url + return payload def _publication_chunk( @@ -288,6 +302,96 @@ def _resolve_citation_chunk( ) +def _citation_page_numbers( + *, + citation: _DemoCitationDefinition, + chunk: dict[str, Any], +) -> list[int]: + chunk_page_numbers = _page_numbers_from_chunk(chunk) + requested_page_number = getattr(citation, "page_number", None) + if requested_page_number is None: + return chunk_page_numbers + if ( + not isinstance(requested_page_number, int) + or isinstance(requested_page_number, bool) + or requested_page_number < 1 + ): + raise ValueError( + "Demo citation page_number must be a positive integer: " + f"section_path={citation.section_path}, " + f"page_number={requested_page_number!r}" + ) + if requested_page_number not in chunk_page_numbers: + raise ValueError( + "Demo citation page_number is not in the resolved chunk: " + f"section_path={citation.section_path}, " + f"page_number={requested_page_number}" + ) + return [requested_page_number] + + +def _page_numbers_from_chunk(chunk: dict[str, Any]) -> list[int]: + metadata = _metadata(chunk) + collected: list[int] = [] + _collect_page_numbers(metadata.get("page_nums"), collected) + _collect_page_numbers(metadata.get("pageNums"), collected) + unique = sorted({page for page in collected if page > 0}) + return unique + + +def _collect_page_numbers(value: object, collected: list[int]) -> None: + if isinstance(value, bool): + return + if isinstance(value, int): + collected.append(value) + return + if isinstance(value, float) and value.is_integer(): + collected.append(int(value)) + return + if isinstance(value, str): + for part in value.split(","): + stripped = part.strip() + if stripped.isdigit(): + collected.append(int(stripped)) + return + if isinstance(value, list): + for item in value: + _collect_page_numbers(item, collected) + + +def _page_citation_asset_url( + *, + source: _DemoSourceDefinition, + chunk: dict[str, Any], + page_number: int | None, +) -> str | None: + metadata = _metadata(chunk) + raw_assets = metadata.get("page_assets") + if not isinstance(raw_assets, list): + return None + matching: dict[str, Any] | None = None + fallback: dict[str, Any] | None = None + for item in raw_assets: + if not isinstance(item, dict): + continue + artifact_ref = str(item.get("artifact_ref") or "").strip() + if not artifact_ref.startswith("page_citation_assets/"): + continue + if fallback is None: + fallback = item + asset_page = item.get("page_num") + if page_number is not None and asset_page == page_number: + matching = item + break + chosen = matching or fallback + if chosen is None: + return None + return _asset_url( + source=source, + file_path=str(chosen.get("artifact_ref") or "").strip(), + ) + + def _metadata(chunk: dict[str, Any]) -> dict[str, Any]: metadata = chunk.get("metadata") return dict(metadata) if isinstance(metadata, dict) else {} diff --git a/apps/api/tests/contract/test_demo_documents_contract.py b/apps/api/tests/contract/test_demo_documents_contract.py index edc54359f..bfe13e105 100644 --- a/apps/api/tests/contract/test_demo_documents_contract.py +++ b/apps/api/tests/contract/test_demo_documents_contract.py @@ -117,6 +117,31 @@ def load_source_chunks( assert NVDA_EARNINGS_CALL_DEMO_SOURCE_ID not in loaded_demo_source_ids +def test_should_project_demo_example_cite_markers_and_page_numbers() -> None: + catalog = _load_source_catalog_module().DemoSourceCatalog().get_catalog() + sources = { + str(source["demo_source_id"]): source + for source in catalog["sources"] + } + tesla = sources[DEMO_SOURCE_ID] + spacex = sources[SPACEX_DEMO_SOURCE_ID] + tesla_example = tesla["examples"][0] + tesla_citation = tesla_example["citations"][0] + spacex_example = spacex["examples"][0] + spacex_citation = spacex_example["citations"][0] + + assert "[[cite:1]]" in tesla_example["answer"] + assert tesla_citation["page_citation_page_number"] == 12 + assert tesla_citation["page_nums"] == [12] + assert str(tesla_citation["page_citation_asset_url"]).endswith( + "/page_citation_assets/page-12.png" + ) + assert "[[cite:1]]" in spacex_example["answer"] + assert spacex_citation["page_citation_page_number"] == 28 + assert spacex_citation["page_nums"] == [28] + assert str(spacex_citation["source"]["section_path"]).endswith("/Root") + + def test_should_preserve_filename_rooted_sections_when_publishing_demo_chunks() -> None: source_catalog_module = _load_source_catalog_module() catalog = source_catalog_module.DemoSourceCatalog() @@ -164,14 +189,24 @@ async def test_should_return_demo_catalog_with_resolvable_canonical_citations( assert source["original_file"]["can_download"] is False assert citation["canonical_document_id"] == "demo-doc-tsla-q4-2025" assert citation["canonical_chunk_id"].startswith(f"{DEMO_SOURCE_ID}:") + assert "[[cite:1]]" in examples[0]["answer"] + assert citation["page_citation_page_number"] == 12 + assert citation["page_nums"] == [12] + assert str(citation["page_citation_asset_url"]).endswith( + "/page_citation_assets/page-12.png" + ) assert spacex_source["official_library"]["library_source_id"] == ( "financial-spacex-s1" ) assert spacex_source["canonical_document_id"] == "demo-doc-spacex-s1" - assert spacex_source["chunk_count"] == 633 + assert spacex_source["chunk_count"] == 227 assert spacex_citations[0]["canonical_chunk_id"].startswith( f"{SPACEX_DEMO_SOURCE_ID}:" ) + assert "[[cite:1]]" in spacex_examples[0]["answer"] + assert spacex_citations[0]["page_citation_page_number"] == 28 + assert spacex_citations[0]["page_nums"] == [28] + assert str(spacex_citations[0]["source"]["section_path"]).endswith("/Root") assert [ category["category_id"] for category in cast(list[dict[str, Any]], official_library["categories"]) @@ -180,7 +215,7 @@ async def test_should_return_demo_catalog_with_resolvable_canonical_citations( assert library_sources_by_id["financial-spacex-s1"]["demo_source_id"] == ( SPACEX_DEMO_SOURCE_ID ) - assert library_sources_by_id["financial-spacex-s1"]["chunk_count"] == 633 + assert library_sources_by_id["financial-spacex-s1"]["chunk_count"] == 227 assert library_sources_by_id["stem-statistical-learning"]["status"] == "ready" assert library_sources_by_id["stem-statistical-learning"]["demo_source_id"] == ( "demo-stem-statistical-learning" diff --git a/apps/api/tests/contract/test_retrieval_mapnav_session_contract.py b/apps/api/tests/contract/test_retrieval_mapnav_session_contract.py index ca271f66f..a277c4c03 100644 --- a/apps/api/tests/contract/test_retrieval_mapnav_session_contract.py +++ b/apps/api/tests/contract/test_retrieval_mapnav_session_contract.py @@ -220,5 +220,5 @@ async def fake_assemble_retrieval_results( "fresh_db_close", ] assert outcome.response["router_used"] == "mapnav" - assert outcome.response["results"][0]["citation"]["document_id"] == "doc_contract" + assert outcome.response["results"][0]["document_id"] == "doc_contract" assert outcome.completion_label == "MAPNAV RETRIEVAL" diff --git a/apps/worker/app/services/document_agent/calibration/phase1.py b/apps/worker/app/services/document_agent/calibration/phase1.py index 8d8eba256..87ae08bdf 100644 --- a/apps/worker/app/services/document_agent/calibration/phase1.py +++ b/apps/worker/app/services/document_agent/calibration/phase1.py @@ -1,10 +1,14 @@ """Deterministic calibration Phase-1: regime partition + forward-scan offsets. Entries are partitioned by printed-label kind (the same classifier Phase-2 -uses). Each regime takes its first few entries as probes and scans forward from -the page after this TOC region's ``toc_range`` end until one is confirmed; that -single confirmation fixes the regime's candidate offset. Phase-2 owns tail -verification and bulk anchoring. +uses). Each regime takes leaf probes from its first few distinct printed pages +and scans forward until one is confirmed; that single confirmation fixes the +regime's candidate offset. Phase-2 owns tail verification and bulk anchoring. + +A probe scans from ``max(toc_range end + 1, printed)``: a printed label never +resolves to a physical page before itself, so the offset a scan can yield is +structurally non-negative. Scanning below the printed page would let a section +divider that repeats the heading confirm ahead of the numbered body page. """ from __future__ import annotations @@ -58,13 +62,17 @@ def _regime_probes( *, limit: int, ) -> dict[str, list[_Probe]]: - """Group entries by printed-label kind, keeping the first ``limit`` per kind.""" + """Keep leaf probes from the first distinct printed pages of each kind.""" from app.services.document_parser.structure.body_boundary import ( normalize_heading_text, ) probes: dict[str, list[_Probe]] = {} - for entry in entries: + seen_printed: dict[str, set[int]] = {} + levels = [int(entry.get("level") or 1) for entry in entries] + for index, entry in enumerate(entries): + if index + 1 < len(entries) and levels[index + 1] > levels[index]: + continue label = entry.get("page_number") kind = classify_page_number_kind(label) if len(probes.get(kind, ())) >= limit: @@ -72,10 +80,13 @@ def _regime_probes( printed = parse_printed_page(label, kind=kind) if printed is None: continue + if printed in seen_printed.get(kind, set()): + continue title = normalize_heading_text(str(entry.get("heading") or "")) if not title: continue probes.setdefault(kind, []).append(_Probe(title=title, printed=printed)) + seen_printed.setdefault(kind, set()).add(printed) return probes @@ -116,11 +127,14 @@ def run_calibration_phase1( failure_kind=FAILURE_TOC_EMPTY, region_index=region_index, ) - scan_start = toc_end + 1 - if scan_start > resolved_page_count: + region_scan_start = toc_end + 1 + if region_scan_start > resolved_page_count: return CalibrationResult( status="failed", - notes=f"scan start {scan_start} beyond page_count {resolved_page_count}", + notes=( + f"scan start {region_scan_start} beyond " + f"page_count {resolved_page_count}" + ), failure_kind=FAILURE_NO_OFFSET, region_index=region_index, ) @@ -136,7 +150,7 @@ def run_calibration_phase1( scan = scan_title_forward( ctx=ctx, title=probe.title, - start_page=scan_start, + start_page=max(region_scan_start, probe.printed), page_count=resolved_page_count, ) scans.append(scan) diff --git a/apps/worker/app/services/document_parser/formats/pptx/parser.py b/apps/worker/app/services/document_parser/formats/pptx/parser.py index d26439c4e..e74049835 100755 --- a/apps/worker/app/services/document_parser/formats/pptx/parser.py +++ b/apps/worker/app/services/document_parser/formats/pptx/parser.py @@ -77,7 +77,7 @@ def _get_iloveapi_token_lease(): def pptx_to_pdf_api(pptx_path, outdir="."): """ - use iloveapi to convert pptx to pdf (file-path based, used by debug_parse.py) + use iloveapi to convert pptx to pdf (file-path based) API docs: https://www.iloveapi.com/docs/api-reference """ with open(pptx_path, "rb") as f: diff --git a/apps/worker/scripts/debug_parse.py b/apps/worker/scripts/debug_parse.py deleted file mode 100644 index 005d2c04b..000000000 --- a/apps/worker/scripts/debug_parse.py +++ /dev/null @@ -1,712 +0,0 @@ -#!/usr/bin/env python3 -"""Unified production-style document parsing debug script. - -Supports all chunk-track Knowhere formats (PDF, DOCX, XLSX, PPTX, MD, Image, -Fragment) through the same checkerboard parser entry used by the worker. Use -``debug_page_memory.py`` for page-track step debugging. - -Pipeline stages: - 1. checkerboard_parse_output → DataFrame - 2. dataframe_to_chunks → list[ChunkPayload] - 3. ZipResultService → chunks.json / manifest.json / doc_nav.json / *.zip - 4. enrich_doc_nav → summary enrichment + top_summary - 5. DB publication → DocumentSection + DocumentChunk (optional, --run-db) - -Output directory: - default → ~/.knowhere/chengke_kb// - -Usage: - cd apps/worker - - # All formats (full pipeline) - python scripts/debug_parse.py --file /path/to/any.pdf - python scripts/debug_parse.py --file /path/to/doc.docx - python scripts/debug_parse.py --file /path/to/sheet.xlsx - python scripts/debug_parse.py --fragment "粘贴的文本..." - - # Options - python scripts/debug_parse.py --spacex --run-db # Enable DB publication -""" - -from __future__ import annotations - -import argparse -import json -import os -import shutil -import sys -import time -import zipfile -from pathlib import Path -from typing import Any - -# ── Bootstrap: path + env ────────────────────────────────────────────────────── -ROOT = Path(__file__).resolve().parents[3] -WORKER_ROOT = ROOT / "apps" / "worker" -sys.path.insert(0, str(WORKER_ROOT)) -sys.path.insert(0, str(ROOT / "packages" / "shared-python")) - -from dotenv import load_dotenv # noqa: E402 - -load_dotenv(WORKER_ROOT / ".env") -os.environ.setdefault("LOCAL_DEBUG", "1") -os.environ.setdefault("OVERSIZED_PDF_SHARD_ENABLED", "true") - -from loguru import logger # noqa: E402 - -from shared.core.config import settings # noqa: E402 - -# ── Constants ────────────────────────────────────────────────────────────────── -DEFAULT_SPACEX_PDF = Path("/Users/wuchengke/Desktop/temp/test_docs/spacex-s1.pdf") -DEFAULT_SJSYJ_PDF = Path( - "/Users/wuchengke/Desktop/temp/test_docs/" - "SJSYJ-SC-2024 企业制度汇编（上册）.pdf" -) - -PRODUCTION_OUTPUT_ROOT = Path("~/.knowhere/chengke_kb").expanduser() -PROFILE_TRANSIENT_DIRS = ( - "_doc_agent", - "coarse_profile_pages", - "calibration_scan", - "calibration_verify", - "toc_pages", - "ocr_pages", - "inspect_pages", - "profile_visuals", - # Legacy dirs from older runs. - "agent_visuals", - "planner_pages", - "page_locate_pages", - "verify_pages", - "calibration_inspect", -) - -# ══════════════════════════════════════════════════════════════════════════════ -# Section A: DB Publication (Stage 10) — preserved from original debug_parse.py -# ══════════════════════════════════════════════════════════════════════════════ - -def _run_db_publication( - chunks: list, - add_dir: str, - source_file_name: str, -): - """Stage 10: publish an already finalized debug result to local DB/S3.""" - from scripts._debug_publish import publish_debug_result_dir - - result = publish_debug_result_dir( - result_dir=add_dir, - source_file_name=source_file_name, - chunks=chunks, - upload_assets=True, - ) - logger.info(" ✅ DB transaction committed (job_id={})", result.job_id) - - -# ══════════════════════════════════════════════════════════════════════════════ -# Section C: Common Post-Parse Pipeline (Stage 7-10) -# ══════════════════════════════════════════════════════════════════════════════ - -def _finalize_output( - parsed_df, - add_dir: str, - source_file_name: str, - *, - run_db: bool = False, - job_metadata: dict[str, Any] | None = None, -) -> list[dict[str, Any]]: - """Stage 7-10: chunks → ZIP → enrich → optional DB. - - Mirrors production flow: - - parse_result_package.py L49 → dataframe_to_chunks - - success_finalization.py L196 → ZipResultService - - success_finalization.py L126 → enrich_doc_nav_summaries - - debug_parse.py _run_db_publication → DB write - - Returns the chunks list. - """ - from shared.services.chunks.dataframe_chunk_converter import dataframe_to_chunks - from shared.services.storage.zip_result_service import ZipResultService - from app.services.connect_builder.summary_builder import ( - build_section_summary_lookup, - enrich_doc_nav_summaries, - ensure_doc_nav_json, - load_nav_top_summary, - ) - - timings: dict[str, float] = {} - - # ── Stage 7: DataFrame → chunks (mirrors parse_result_package.py L49) ── - logger.info("=" * 60) - logger.info("📦 Stage 7: dataframe_to_chunks") - logger.info("=" * 60) - - t0 = time.time() - chunks = dataframe_to_chunks(parsed_df) - timings["Stage 7: chunks"] = time.time() - t0 - - text_count = sum(1 for c in chunks if c.get("type") == "text") - image_count = sum(1 for c in chunks if c.get("type") == "image") - table_count = sum(1 for c in chunks if c.get("type") == "table") - page_count = sum(1 for c in chunks if c.get("type") == "page") - table_ref_count = sum( - 1 - for c in chunks - if c.get("type") == "table" - and str(c.get("content") or "").strip().startswith("tables/") - ) - table_inline_html_count = sum( - 1 - for c in chunks - if c.get("type") == "table" - and " 0: - logger.info("") - logger.info("═" * 58) - logger.info(" 📊 POST-PARSE TIMELINE") - logger.info("═" * 58) - for phase, elapsed in timings.items(): - pct = elapsed / t_total * 100 - logger.info(f" {phase:<35s} │ {elapsed:>7.2f}s ({pct:>5.1f}%)") - logger.info(" " + "─" * 55) - logger.info(f" {'TOTAL':<35s} │ {t_total:>7.2f}s (100.0%)") - logger.info("═" * 58) - - return chunks - - -def _cleanup_agent_transient_dirs(add_dir: str) -> None: - """Remove VLM render caches before packaging debug output.""" - removed: list[str] = [] - for dirname in PROFILE_TRANSIENT_DIRS: - path = os.path.join(add_dir, dirname) - if os.path.isdir(path): - shutil.rmtree(path) - removed.append(dirname) - nested_doc_agent = os.path.join(add_dir, "_doc_agent") - if os.path.isdir(nested_doc_agent): - for dirname in PROFILE_TRANSIENT_DIRS: - path = os.path.join(nested_doc_agent, dirname) - if os.path.isdir(path): - shutil.rmtree(path) - removed.append(f"_doc_agent/{dirname}") - if not os.listdir(nested_doc_agent): - os.rmdir(nested_doc_agent) - removed.append("_doc_agent") - if removed: - logger.info(f" Cleaned transient agent dirs: {', '.join(removed)}") - - -# ══════════════════════════════════════════════════════════════════════════════ -# Section D: Pipeline Entry Points -# ══════════════════════════════════════════════════════════════════════════════ - -def _run_standard_pipeline( - file_path: str, - source_file_name: str, - output_root: str, - *, - run_db: bool = False, - fragment_content: str = "", -) -> dict[str, Any]: - """Standard pipeline for all formats: checkerboard_parse_output → finalize. - - Uses the production black-box entry point. Handles all formats including - oversized PDFs (which are routed internally by parse_pdfs). - - Token/time tracking mirrors production parse_execution.py exactly: - init trackers → parse → collect stats → cleanup. - """ - from app.services.document_parser.parse_service import checkerboard_parse_output - from app.services.document_parser.support.stage_profiler import ( - init_stage_tracker, - cleanup_stage_tracker, - get_current_stage_tracker, - ) - from shared.services.ai.token_tracking import ( - init_token_tracker, - cleanup_token_tracker, - get_current_token_tracker, - ) - - filename = source_file_name - is_fragment = ".fragment" in file_path.lower() - - logger.info("=" * 60) - logger.info(f"📄 Standard pipeline: {filename}") - logger.info(f" Output root: {output_root}") - logger.info("=" * 60) - - # ── Init trackers (same as parse_execution.py; reuse run_pipeline tracker) ── - token_usage_dict = get_current_token_tracker() - owns_token_tracker = token_usage_dict is None - if token_usage_dict is None: - token_usage_dict = init_token_tracker() - - stage_timing_dict = get_current_stage_tracker() - owns_stage_tracker = stage_timing_dict is None - if stage_timing_dict is None: - stage_timing_dict = init_stage_tracker() - - try: - t0 = time.time() - result = checkerboard_parse_output( - file_full_path=file_path, - filename=filename, - output_dir=output_root, - internal_output_filename=filename, - smart_title_parse=True, - summary_image=True, - summary_table=True, - summary_txt=True, - doc_type="auto", - fragment_content=fragment_content if is_fragment else "", - ) - parse_elapsed = time.time() - t0 - - # ── Snapshot stats before cleanup ── - stages_snapshot = { - "timing_ms": dict(stage_timing_dict), - "token_usage": dict(token_usage_dict), - } - finally: - if owns_token_tracker: - cleanup_token_tracker() - if owns_stage_tracker: - cleanup_stage_tracker() - - add_dir = result.output_dir - parsed_df = result.parsed_df - - logger.info("=" * 60) - logger.info(f"✅ Parse complete in {parse_elapsed:.1f}s") - logger.info(f" Output path: {add_dir}") - if parsed_df is not None: - logger.info(f" DataFrame rows: {len(parsed_df)}") - logger.info("=" * 60) - - # ── Print consumption stats ── - logger.info("") - logger.info("═" * 58) - logger.info(" 📊 CONSUMPTION STATS (mirrors manifest.processing.stages)") - logger.info("═" * 58) - token_usage = stages_snapshot["token_usage"] - logger.info( - f" Token usage: prompt={token_usage['prompt_tokens']}, " - f"completion={token_usage['completion_tokens']}, " - f"total={token_usage['total_tokens']}" - ) - timing_ms = stages_snapshot["timing_ms"] - if timing_ms: - logger.info(" Stage timings:") - for stage, ms in sorted(timing_ms.items()): - logger.info(f" {stage:<45s} │ {ms:>8,}ms") - else: - logger.info(" Stage timings: (none recorded)") - logger.info("═" * 58) - - if not add_dir or not os.path.exists(add_dir) or parsed_df is None or parsed_df.empty: - logger.error("❌ Parse returned empty result, cannot proceed") - return {"status": "error", "parse_elapsed": parse_elapsed} - - # Build job_metadata matching production parse_execution.py + success_finalization.py - from datetime import datetime, timezone - - processing_completed_at = datetime.now(timezone.utc) - debug_job_metadata: dict[str, Any] = { - "stages": stages_snapshot, - "processing_started_at": processing_completed_at.isoformat(), - "processing_completed_at": processing_completed_at.isoformat(), - "processing_duration_ms": int(parse_elapsed * 1000), - } - - try: - # Stage 7-10 - chunks = _finalize_output( - parsed_df, add_dir, source_file_name, - run_db=run_db, - job_metadata=debug_job_metadata, - ) - finally: - debug_job_metadata["stages"] = { - "timing_ms": dict(stage_timing_dict), - "token_usage": dict(token_usage_dict), - } - - return { - "status": "success", - "parse_elapsed": round(parse_elapsed, 1), - "output_dir": add_dir, - "chunks_count": len(chunks) if chunks else 0, - "stages": stages_snapshot, - } - - - -def run_pipeline( - file_path: str, - source_file_name: str, - *, - run_db: bool = False, - fragment_content: str = "", - output_root_override: str | None = None, -) -> dict[str, Any]: - """Unified production-style E2E parser entry point.""" - from app.services.document_parser.support.stage_profiler import ( - cleanup_stage_tracker, - get_current_stage_tracker, - init_stage_tracker, - ) - from shared.services.ai.token_tracking import ( - cleanup_token_tracker, - get_current_token_tracker, - init_token_tracker, - ) - - owns_token_tracker = get_current_token_tracker() is None - if owns_token_tracker: - init_token_tracker() - - owns_stage_tracker = get_current_stage_tracker() is None - if owns_stage_tracker: - init_stage_tracker() - - try: - if output_root_override: - output_root = output_root_override - else: - output_root = str(PRODUCTION_OUTPUT_ROOT) - - return _run_standard_pipeline( - file_path, - source_file_name, - output_root, - run_db=run_db, - fragment_content=fragment_content, - ) - finally: - if owns_token_tracker: - cleanup_token_tracker() - if owns_stage_tracker: - cleanup_stage_tracker() - - -# ══════════════════════════════════════════════════════════════════════════════ -# Section E: CLI -# ══════════════════════════════════════════════════════════════════════════════ - -def test_config(): - """Print current configuration.""" - logger.info("=== Current Config ===") - logger.info(f"ENVIRONMENT: {getattr(settings, 'ENVIRONMENT', 'N/A')}") - logger.info( - f"DATABASE_URL: {getattr(settings, 'DATABASE_URL', 'N/A')[:50]}..." - ) - logger.info(f"REDIS_HOST: {getattr(settings, 'REDIS_HOST', 'N/A')}") - logger.info( - f"DS_KEY: {'set' if getattr(settings, 'DS_KEY', None) else 'unset'}" - ) - logger.info( - f"ALI_API_KEYS: {'set' if getattr(settings, 'ALI_API_KEYS', None) else 'unset'}" - ) - logger.info(f"IMAGE_MODEL: {getattr(settings, 'IMAGE_MODEL', 'N/A')}") - logger.info(f"NORMOL_MODEL: {getattr(settings, 'NORMOL_MODEL', 'N/A')}") - logger.info( - f"HIERARCHY_LLM_MODEL: {getattr(settings, 'HIERARCHY_LLM_MODEL', 'N/A')}" - ) - logger.info( - f"MAX_PDF_PAGE_LIMIT: {getattr(settings, 'MAX_PDF_PAGE_LIMIT', 'N/A')}" - ) - - -def _parse_cases(args: argparse.Namespace) -> list[tuple[str, str, str]]: - """Parse CLI args into [(name, file_path, fragment_content), ...]. - - Returns a list of tuples: (job_name, file_path, fragment_content). - For non-fragment cases, fragment_content is "". - """ - cases: list[tuple[str, str, str]] = [] - - for raw_case in args.case or []: - if "=" not in raw_case: - raise ValueError("--case must use name=/path/to/file") - name, path = raw_case.split("=", 1) - resolved = str(Path(path).expanduser().resolve()) - cases.append((name.strip(), resolved, "")) - - if args.file: - file_path = str(Path(args.file).expanduser().resolve()) - job_id = args.job_id or Path(args.file).stem - cases.append((job_id, file_path, "")) - - if args.fragment: - cases.append(("fragment", ".fragment", args.fragment)) - - if args.spacex: - cases.append( - ("spacex-s1", str(DEFAULT_SPACEX_PDF.expanduser().resolve()), "") - ) - if args.sjsyj: - cases.append( - ("sjsyj", str(DEFAULT_SJSYJ_PDF.expanduser().resolve()), "") - ) - - return cases - - -def main() -> int: - parser = argparse.ArgumentParser( - description="Unified document parsing debug script — supports all Knowhere formats.", - formatter_class=argparse.RawDescriptionHelpFormatter, - epilog="""examples: - # Full pipeline (any format) - python scripts/debug_parse.py --file /path/to/doc.pdf - python scripts/debug_parse.py --file /path/to/doc.docx - python scripts/debug_parse.py --fragment "粘贴的文本..." - - # Optional DB publication - python scripts/debug_parse.py --spacex --run-db -""", - ) - - # Input sources - input_group = parser.add_argument_group("input") - input_group.add_argument("--file", help="Path to file to parse (any format)") - input_group.add_argument("--job-id", help="Job id override for --file") - input_group.add_argument( - "--fragment", help="Text content for fragment mode parsing" - ) - input_group.add_argument( - "--spacex", - action="store_true", - help=f"SpaceX S-1 fixture: {DEFAULT_SPACEX_PDF}", - ) - input_group.add_argument( - "--sjsyj", - action="store_true", - help=f"企业制度汇编 fixture: {DEFAULT_SJSYJ_PDF}", - ) - input_group.add_argument( - "--case", - action="append", - help="Named fixture: name=/path/to/file", - ) - - # Post-processing - post_group = parser.add_argument_group("post-processing") - post_group.add_argument( - "--run-db", - action="store_true", - help="Enable Stage 10: DB publication (requires running database)", - ) - - # Output control - output_group = parser.add_argument_group("output") - output_group.add_argument( - "--output-root", - default=None, - help=( - "Override output root directory. Default: " - f"{PRODUCTION_OUTPUT_ROOT}" - ), - ) - output_group.add_argument( - "--clean", - action="store_true", - help="Delete existing output before running", - ) - output_group.add_argument( - "--test-config", - action="store_true", - help="Print current configuration and exit", - ) - - args = parser.parse_args() - - if args.test_config: - test_config() - return 0 - - cases = _parse_cases(args) - if not cases: - parser.error( - "provide --file, --fragment, --spacex, --sjsyj, or at least one --case" - ) - - summaries = [] - - for name, file_path, fragment_content in cases: - if file_path != ".fragment" and not os.path.exists(file_path): - raise FileNotFoundError(f"File not found: {file_path}") - - source_file_name = ( - os.path.basename(file_path) if file_path != ".fragment" else "" - ) - - # Clean if requested - if args.clean: - from app.services.document_parser.orchestration.path_segment import ( - build_parser_path_segment, - ) - dir_name = build_parser_path_segment(source_file_name) - clean_root = Path(args.output_root) if args.output_root else PRODUCTION_OUTPUT_ROOT - clean_dir = clean_root / dir_name - if clean_dir.exists(): - logger.info(f"🗑️ Cleaning {clean_dir}") - shutil.rmtree(clean_dir) - - logger.info("") - logger.info("█" * 60) - logger.info(f" CASE: {name}") - logger.info(f" FILE: {file_path}") - logger.info("█" * 60) - - result = run_pipeline( - file_path, - source_file_name, - run_db=args.run_db, - fragment_content=fragment_content, - output_root_override=args.output_root, - ) - result["job_id"] = name - summaries.append(result) - - # Final JSON summary - print(json.dumps({"cases": summaries}, ensure_ascii=False, indent=2)) - return 0 - - -if __name__ == "__main__": - raise SystemExit(main()) diff --git a/apps/worker/scripts/debug_retrieval.py b/apps/worker/scripts/debug_retrieval.py index 28bf75551..e9ac74383 100644 --- a/apps/worker/scripts/debug_retrieval.py +++ b/apps/worker/scripts/debug_retrieval.py @@ -69,47 +69,6 @@ def _print_box(title: str, body: Any) -> None: print(line) -def _summarize_tool_payload(payload: dict[str, Any] | None) -> str: - """Keep tool logs readable; full LLM prompts/responses are printed separately.""" - if not isinstance(payload, dict): - return str(payload) - - lines: list[str] = [] - if 'top_doc_ids' in payload: - lines.append(f'top_doc_ids={payload.get("top_doc_ids")}') - if 'channel_counts' in payload: - lines.append(f'channel_counts={payload.get("channel_counts")}') - if 'fused_rows' in payload: - rows = payload.get('fused_rows') or [] - lines.append(f'fused_rows={len(rows)}') - for row in rows[:5]: - lines.append( - f' - score={row.get("score", 0):.4f} ' - f'doc={str(row.get("document_id", ""))[:12]} ' - f'path="{row.get("section_path") or row.get("source_chunk_path")}" ' - f'chunk={row.get("chunk_id")}' - ) - if 'candidate_docs' in payload: - docs = payload.get('candidate_docs') or [] - lines.append(f'candidate_docs={len(docs)}') - for doc in docs: - lines.append( - f' - doc={doc.get("document_id")} ' - f'name="{doc.get("source_file_name", "")}" ' - f'confidence={doc.get("confidence")}' - ) - if 'document_id' in payload: - lines.append(f'document_id={payload.get("document_id")}') - if 'has_outline' in payload: - lines.append(f'has_outline={payload.get("has_outline")} ' - f'leaf_count={payload.get("leaf_count", 0)} ' - f'children_count={payload.get("children_count", 0)}') - for key in ('reason', 'document_id', 'raw_response', 'overflowed'): - if key in payload: - lines.append(f'{key}={payload.get(key)}') - return '\n'.join(lines) or str(payload) - - def _decision_stage(kind: str) -> tuple[str, str]: return { 'kg_document_select': ( diff --git a/apps/worker/scripts/page_memory/_debug_pm_shared.py b/apps/worker/scripts/page_memory/_debug_pm_shared.py index 88aa9e62b..13270c720 100644 --- a/apps/worker/scripts/page_memory/_debug_pm_shared.py +++ b/apps/worker/scripts/page_memory/_debug_pm_shared.py @@ -2,7 +2,7 @@ # ruff: noqa: E402, F401 """Shared utilities for the staged page-memory debug scripts. -All stage scripts (debug_pm_stage0..6) import from here instead of +All stage scripts (debug_pm_stage0..5) import from here instead of duplicating bootstrap, artifact I/O, and argparse helpers. """ @@ -191,6 +191,11 @@ def base_argparser(description: str) -> argparse.ArgumentParser: parser.add_argument("--model", default=None, help="Override hierarchy/profiler model") parser.add_argument("--vlm-model", default=None, help="VLM model override") parser.add_argument("--no-vlm", action="store_true", help="Disable VLM calls") + parser.add_argument( + "--clean", + action="store_true", + help="Delete the page_memory output dir before running (full retest wipe)", + ) parser.add_argument( "--out-suffix", default="", @@ -217,58 +222,23 @@ def resolve_paths(args: argparse.Namespace) -> tuple[str, str, Path]: safe = "".join(ch if ch.isalnum() or ch in "-_" else "_" for ch in suffix) dir_name = f"{dir_name}__{safe}" out_dir = OUTPUT_ROOT / dir_name / "page_memory" + if bool(getattr(args, "clean", False)) and out_dir.exists(): + import shutil + + logger.info("🗑️ Cleaning {}", out_dir) + shutil.rmtree(out_dir) out_dir.mkdir(parents=True, exist_ok=True) return pdf_path, filename, out_dir -# ── ToolContext builder ─────────────────────────────────────────────────────── - - -def build_ctx( - *, pdf_path: str, job_id: str, out_dir: Path, - page_count: int, page_texts: dict[int, str], vlm_model: str | None, - asset_extraction_enabled: bool = False, -): - from app.services.document_agent.manifest import ToolContext - from app.services.document_agent.state import ProfileBlackboard - - blackboard = ProfileBlackboard() - blackboard.page_count = page_count - blackboard.page_full_text_cache = dict(page_texts) - - vmodel = vlm_model or os.environ.get("IMAGE_MODEL") - reason_model = os.environ.get("PAGE_LOCATE_REASON_MODEL") or os.environ.get("NORMOL_MODEL") - - return ToolContext( - pdf_path=pdf_path, - job_id=job_id, - blackboard=blackboard, - trace=None, - output_dir=str(out_dir / "_doc_agent"), - settings={ - "vlm_model": vmodel, - "model": reason_model, - "profile_png_dpi": os.environ.get("AGENT_PNG_DPI", "144"), - }, - ) - - # ── Anatomy / doc-profile cache ────────────────────────────────────────────── def resolve_anatomy_cache_path(out_dir: Path) -> Path: - """Prefer package-root ``doc_profile.json``; fall back to legacy paths.""" + """Canonical package-root ``doc_profile.json`` written by Stage 0/1.""" from app.services.document_agent.persist import DOC_PROFILE_FILENAME - candidates = ( - out_dir / DOC_PROFILE_FILENAME, - out_dir / "_doc_agent" / DOC_PROFILE_FILENAME, - out_dir / "_doc_agent" / "anatomy_map.json", - ) - for path in candidates: - if path.is_file(): - return path - return candidates[0] + return out_dir / DOC_PROFILE_FILENAME def load_anatomy_cache(cache_path: Path, pdf_path: str, job_id: str): @@ -392,88 +362,7 @@ def load_anatomy_cache(cache_path: Path, pdf_path: str, job_id: str): ) -# ── Profile ─────────────────────────────────────────────────────────────────── - - -def run_profile( - pdf_path: str, - job_id: str, - out_dir: Path, - model: str | None, - *, - skip_toc_anchoring: bool = False, -): - """Run page-memory profile exactly like production ``memory_service.run``. - - Uses ``profile_document(..., skip_shard_plan=True, oversized_policy="page_memory")`` - so coarse → anatomy matches the live track (no LLM shard planning). - - ``skip_toc_anchoring=True`` stops after TOC extract (legacy monolithic - helper). Prefer staged debug: Stage-0 bootstrap then Stage-1 TOC. - """ - from app.services.document_parser.profiling.doc_profiler import profile_document - from shared.core.config import settings - - logger.info("=" * 70) - logger.info(f"🧬 DOC_PROFILE (page_memory, monolithic) — {job_id}") - logger.info("=" * 70) - if skip_toc_anchoring: - logger.info(" skip_toc_anchoring=True (TOC extract only; no calibration)") - - previous_image_model = settings.IMAGE_MODEL - if model: - settings.IMAGE_MODEL = model - logger.info(f" IMAGE_MODEL override → {model}") - - t0 = time.time() - try: - profile = profile_document( - pdf_path, - job_id, - job_id=job_id, - output_dir=str(out_dir), - skip_shard_plan=True, - oversized_policy="page_memory", - skip_toc_anchoring=skip_toc_anchoring, - ) - finally: - if model: - settings.IMAGE_MODEL = previous_image_model - - logger.info(f" profile done in {time.time() - t0:.1f}s") - logger.info( - " category={} routing={} page_count={} is_atlas={}", - profile.category, - getattr(profile.routing_category, "value", profile.routing_category), - profile.page_count, - profile.is_atlas, - ) - - anatomy = profile.anatomy - if anatomy is None: - raise RuntimeError( - "page_memory profile returned no anatomy " - f"(routing={profile.routing_category}). Atlas / no-anatomy path " - "cannot continue Stage 1." - ) - - from app.services.document_agent.persist import DOC_PROFILE_FILENAME - - profile_path = out_dir / DOC_PROFILE_FILENAME - if not profile_path.exists(): - write_debug_json(profile_path, anatomy.to_dict()) - - asset_pages = sum(1 for f in anatomy.page_features if getattr(f, "has_asset", False)) - logger.info(f" page_count={anatomy.page_count}") - logger.info(f" toc_pages={anatomy.toc_result.toc_pages}") - logger.info(f" has_asset_pages={asset_pages}/{anatomy.page_count}") - logger.info( - " shard_plan.enabled={} shards={}", - anatomy.shard_plan.enabled, - len(anatomy.shard_plan.shards), - ) - logger.info(f" doc_profile → {profile_path}") - return anatomy +# ── Profile helpers (staged Stage-0 / Stage-1) ───────────────────────────────── def _build_debug_coordinator( @@ -912,48 +801,22 @@ def page_text_cache_path(out_dir: Path) -> Path: def load_pipeline_state( state_path: Path, - *, - legacy_locate_cache: Path | None = None, ) -> dict[str, Any]: - """Load the shared Stage 0-6 ledger, with locate-cache compatibility.""" - if state_path.exists(): - data = json.loads(state_path.read_text(encoding="utf-8")) - if not isinstance(data, dict): - raise ValueError(f"pipeline state must be an object: {state_path}") - data.setdefault("version", PIPELINE_STATE_VERSION) - data.setdefault("stages", {}) - return data - - if legacy_locate_cache is not None and legacy_locate_cache.exists(): - rows = json.loads(legacy_locate_cache.read_text(encoding="utf-8")) - if not isinstance(rows, list): - raise ValueError( - f"legacy locate cache must be a list: {legacy_locate_cache}" - ) - logger.warning( - "Legacy locate cache detected; it will be migrated on the next stage write: {}", - legacy_locate_cache, - ) - return { - "version": PIPELINE_STATE_VERSION, - "stages": { - "stage2": { - "status": "legacy", - "skeletons": rows, - } - }, - } - - raise FileNotFoundError(state_path) + """Load the shared Stage 0-6 ledger from ``pipeline_state.json``.""" + if not state_path.exists(): + raise FileNotFoundError(state_path) + data = json.loads(state_path.read_text(encoding="utf-8")) + if not isinstance(data, dict): + raise ValueError(f"pipeline state must be an object: {state_path}") + data.setdefault("version", PIPELINE_STATE_VERSION) + data.setdefault("stages", {}) + return data def _pipeline_skeleton_rows(state: dict[str, Any]) -> list[dict[str, Any]]: stages = state.get("stages") stage2 = stages.get("stage2") if isinstance(stages, dict) else None rows = stage2.get("skeletons") if isinstance(stage2, dict) else None - if rows is None: - # Compatibility with the short-lived ``stage2_state.json`` proposal. - rows = state.get("skeletons") if not isinstance(rows, list): raise ValueError("pipeline state is missing stages.stage2.skeletons[]") return [row for row in rows if isinstance(row, dict)] @@ -961,15 +824,10 @@ def _pipeline_skeleton_rows(state: dict[str, Any]) -> list[dict[str, Any]]: def load_pipeline_skeletons( state_path: Path, - *, - legacy_locate_cache: Path | None = None, ) -> list[Any]: from app.services.page_memory.skeleton_extractor import SectionSkeleton - state = load_pipeline_state( - state_path, - legacy_locate_cache=legacy_locate_cache, - ) + state = load_pipeline_state(state_path) return [ SectionSkeleton( section_path=str(row["section_path"]), @@ -1035,53 +893,6 @@ def update_pipeline_state( return state -def remove_legacy_doc_agent_artifacts( - doc_agent_dir: Path, - *, - include_stage2: bool = False, - keep_resume_cache: bool = True, -) -> None: - """Drop nested doc-agent clutter; keep resume + pipeline history by default. - - Canonical package artifacts live at ``page_memory/`` root - (``doc_profile.json``, ``trace.json``). Nested ``anatomy_map.json`` and - calibration page PNGs are duplicates / inspect leftovers. - """ - import shutil - - names = { - "parser_profile.json", - "toc_hierarchies.json", - "anatomy_map.json", - "trace.json", - "doc_profile.json", - } - if include_stage2: - names.update( - { - "calibration_result.json", - "null_page_parent_locate.json", - "locate_cache.json", - "stage2_state.json", - } - ) - if not keep_resume_cache: - names.update( - { - STAGE0_STATE_NAME, - PAGE_TEXT_CACHE_NAME, - "stage_costs.json", - } - ) - for name in names: - (doc_agent_dir / name).unlink(missing_ok=True) - for dirname in ("coarse_assets", "calibration_inspect"): - legacy_dir = doc_agent_dir / dirname - if legacy_dir.is_dir(): - shutil.rmtree(legacy_dir) - (doc_agent_dir / "coarse_assets.html").unlink(missing_ok=True) - - def record_stage( stages: list[dict[str, Any]], stage: str, @@ -1101,7 +912,7 @@ def record_stage( STAGE_COSTS_VERSION = "1.0" STAGE_COSTS_NAME = "stage_costs.json" -_COST_STAGE_KEYS = tuple(f"stage{number}" for number in range(0, 7)) +_COST_STAGE_KEYS = tuple(f"stage{number}" for number in range(0, 6)) def stage_costs_path(out_dir: Path) -> Path: @@ -1414,7 +1225,6 @@ def stop_with_trace( summary=summary, ) remove_nested_doc_agent_trace(out_dir) - remove_legacy_doc_agent_artifacts(out_dir / "_doc_agent", include_stage2=True) maybe_purge_debug_visuals(out_dir) return 0 @@ -1475,40 +1285,6 @@ def write_top_level_artifacts( (out_dir / "assets.json").unlink(missing_ok=True) -def cleanup_page_memory_artifacts(out_dir: Path) -> None: - stale_files = { - "assets.json", - "chunks.json", - "coarse_scopes.json", - "doc_nav.json", - "hierarchy.json", - "manifest.json", - "node_rows.csv", - "node_rows.json", - "page_plans.json", - "page_rendered.json", - "page_tags.json", - "report.md", - "trace.json", - } - for name in stale_files: - path = out_dir / name - try: - if path.is_file(): - path.unlink() - except Exception: - logger.debug(f"cleanup failed for {path}") - for name in ("asset_annotate", "debug", "images", "pages", "scopes", "tables"): - path = out_dir / name - try: - if path.is_dir(): - import shutil - - shutil.rmtree(path) - except Exception: - logger.debug(f"cleanup failed for {path}") - - # ── Tree helpers ────────────────────────────────────────────────────────────── @@ -1520,21 +1296,6 @@ def walk(nodes: list, depth: int = 0) -> list[tuple[int, Any]]: return rows -def walk_node_count(nodes: list) -> int: - return len(walk(nodes)) - - -def hierarchy_metrics(nodes: list, *, source: str) -> dict[str, Any]: - rows = walk(nodes) - depths = [depth + 1 for depth, _node in rows] - return { - "hierarchy_source": source, - "title_node_count": len(rows), - "title_leaf_count": sum(1 for _depth, node in rows if not node.children), - "title_max_depth": max(depths) if depths else 0, - } - - # ── Artifact loaders ────────────────────────────────────────────────────────── @@ -1569,12 +1330,6 @@ def load_hierarchy_artifact(path: Path) -> tuple[dict[str, Any], list[Any]]: return dict(scope) if isinstance(scope, dict) else {}, sort_skeletons(skeletons) -def load_skeletons_from_hierarchy_artifact(path: Path) -> list[Any]: - """Compatibility reader for callers that only need hierarchy nodes.""" - _scope, skeletons = load_hierarchy_artifact(path) - return skeletons - - def load_page_tags_artifact(path: Path) -> list[Any]: """Load ``page_tags.json`` written by ``serialize_page_tags``.""" from app.services.page_memory.page_tagger import PageTagResult @@ -1724,24 +1479,6 @@ def _scope_meta_from_dir(scope_dir: Path) -> dict[str, Any]: } -def load_locate_cache(locate_cache: Path) -> list[Any]: - from app.services.page_memory.skeleton_extractor import SectionSkeleton - - raw = json.loads(locate_cache.read_text(encoding="utf-8")) - return [ - SectionSkeleton( - section_path=r["section_path"], - title=r["title"], - level=r["level"], - start_page=r["start_page"], - end_page=r["end_page"], - parent_path=r.get("parent_path"), - evidence=r.get("evidence", {}), - ) - for r in raw - ] - - def _serialize_skeletons(skeletons: list[Any]) -> list[dict[str, Any]]: return [ { @@ -1797,7 +1534,7 @@ def build_debug_coarse_scopes( def add_scope_selection_args(parser: argparse.ArgumentParser) -> None: - """Flags shared by stage 4/5/6 for picking one or more coarse scopes.""" + """Flags shared by stage 3/4/5 for picking one or more coarse scopes.""" parser.add_argument( "--scope-id", default=None, @@ -1806,12 +1543,12 @@ def add_scope_selection_args(parser: argparse.ArgumentParser) -> None: parser.add_argument( "--all-scopes", action="store_true", - help="Process every scope under scopes/ (default when no selector is set)", + help="Process every coarse scope (default when no selector is set)", ) parser.add_argument( "--page-range", default=None, - help="Select scope(s) overlapping this page range (e.g. 14-23 or 225)", + help="Page-range selector (e.g. 14-23 or 225)", ) parser.add_argument( "--fat-only", @@ -1900,7 +1637,7 @@ def resolve_debug_scope_ids( logger.error("❌ No scope directories with {} found under {}", require_file, scopes_dir) logger.error( " Run Stage 3 first: uv run python scripts/page_memory/" - "debug_pm_stage3_coarse_scope.py --file ..." + "debug_pm_stage3_scope_fine_hierarchy.py --file ..." ) raise SystemExit(1) diff --git a/apps/worker/scripts/page_memory/debug_pm_stage1_hierarchy.py b/apps/worker/scripts/page_memory/debug_pm_stage1_hierarchy.py index 14e9e3f37..c30c95a80 100644 --- a/apps/worker/scripts/page_memory/debug_pm_stage1_hierarchy.py +++ b/apps/worker/scripts/page_memory/debug_pm_stage1_hierarchy.py @@ -33,7 +33,6 @@ load_anatomy_cache, resolve_anatomy_cache_path, record_stage, - remove_legacy_doc_agent_artifacts, require_file, resolve_paths, run_stage1_toc, @@ -87,7 +86,6 @@ def main() -> int: trace_stages: list[dict] = [] token_cost_tracker = TokenCostTracker() - doc_agent_dir = out_dir / "_doc_agent" anatomy_cache = resolve_anatomy_cache_path(out_dir) if args.reuse_anatomy and anatomy_cache.exists(): @@ -119,7 +117,6 @@ def main() -> int: }, ) token_cost_tracker.snapshot_stage("toc") - remove_legacy_doc_agent_artifacts(doc_agent_dir) logger.info("=" * 70) logger.info("🧠 TOC hierarchy (Stage-1 debug dump)") diff --git a/apps/worker/scripts/page_memory/debug_pm_stage2_calibration.py b/apps/worker/scripts/page_memory/debug_pm_stage2_calibration.py index 32140c90f..5034d429d 100644 --- a/apps/worker/scripts/page_memory/debug_pm_stage2_calibration.py +++ b/apps/worker/scripts/page_memory/debug_pm_stage2_calibration.py @@ -8,7 +8,7 @@ classify contained/parallel → graft contained → write skeleton_* Also resolves coarse skeletons (C4 resolve-only) into pipeline state so -Stage 3 can resume without re-anchoring. No fine hierarchy. +Stage 3 can resume without re-anchoring. No scope build or fine hierarchy. Requires Stage 0 → Stage 1 first: uv run python scripts/page_memory/debug_pm_stage0_bootstrap.py --file ... diff --git a/apps/worker/scripts/page_memory/debug_pm_stage3_coarse_scope.py b/apps/worker/scripts/page_memory/debug_pm_stage3_coarse_scope.py deleted file mode 100644 index 9ed64bde3..000000000 --- a/apps/worker/scripts/page_memory/debug_pm_stage3_coarse_scope.py +++ /dev/null @@ -1,292 +0,0 @@ -#!/usr/bin/env python3 -# ruff: noqa: E402 -"""Stage 3: Coarse scope generation + per-scope directory creation. - -Generates coarse hierarchy scopes from skeletons and creates per-scope -directories with ``skeletons.json`` (meta + coarse nodes) plus empty -``page_tags.json`` / ``assets.json`` placeholders for later stages. - -Requires Stage 2 output: _doc_agent/pipeline_state.json (with skeletons), -doc_profile.json (after production ``run_toc_anchoring``). - -Usage: - cd apps/worker - uv run python scripts/page_memory/debug_pm_stage3_coarse_scope.py --file /path/to/doc.pdf - uv run python scripts/page_memory/debug_pm_stage3_coarse_scope.py --fat-only - uv run python scripts/page_memory/debug_pm_stage3_coarse_scope.py --page-range 225-302 -""" - -import sys -from pathlib import Path as _Path - -sys.path.insert(0, str(_Path(__file__).resolve().parent)) - -import time - -from loguru import logger - -from _debug_pm_shared import ( - TokenCostTracker, - base_argparser, - build_debug_coarse_scopes, - load_anatomy_cache, - resolve_anatomy_cache_path, - load_pipeline_skeletons, - pipeline_state_path, - record_stage, - require_file, - resolve_paths, - scope_id_for_pages, - stop_with_trace, - update_pipeline_state, - write_debug_json, - _serialize_skeletons, - _serialize_scope_skeletons, -) - - -def main() -> int: - parser = base_argparser("Stage 3: Coarse scope generation") - parser.add_argument( - "--fat-only", action="store_true", - help="Auto-select the largest coarse scope only", - ) - parser.add_argument( - "--page-range", default=None, - help="Only process page range, e.g. '225-302'", - ) - parser.add_argument( - "--all-scopes", action="store_true", - help="Process all coarse scopes (default behavior)", - ) - args = parser.parse_args() - - from app.services.page_memory.skeleton_extractor import SectionSkeleton - - pdf_path, filename, out_dir = resolve_paths(args) - doc_agent_dir = out_dir / "_doc_agent" - anatomy_cache = resolve_anatomy_cache_path(out_dir) - state_path = pipeline_state_path(out_dir) - legacy_locate_cache = doc_agent_dir / "locate_cache.json" - - if not state_path.exists() and not legacy_locate_cache.exists(): - require_file( - state_path, - hint="Run Stage 2 first: uv run python scripts/page_memory/debug_pm_stage2_calibration.py --file ...", - ) - require_file( - anatomy_cache, - hint="Run Stage 1 first: uv run python scripts/page_memory/debug_pm_stage1_hierarchy.py --file ...", - ) - - anatomy = load_anatomy_cache(anatomy_cache, pdf_path, filename) - page_count = anatomy.page_count - skeletons = load_pipeline_skeletons( - state_path, - legacy_locate_cache=legacy_locate_cache, - ) - if not state_path.exists(): - update_pipeline_state( - state_path, - stage=2, - document={ - "source_file_name": filename, - "page_count": page_count, - "anatomy_path": str(anatomy_cache), - }, - payload={ - "calibration": {}, - "null_page_parent_locate": {}, - "skeletons": _serialize_skeletons(skeletons), - "migrated_from": str(legacy_locate_cache), - }, - ) - - logger.info("█" * 70) - logger.info(f" STAGE 3: COARSE SCOPE GENERATION — {filename}") - logger.info(f" OUTPUT: {out_dir}") - logger.info("█" * 70) - - t_start = time.time() - trace_stages: list[dict] = [] - token_cost_tracker = TokenCostTracker() - from toc_page_policy import TocPagePolicy - - toc_policy = TocPagePolicy.from_anatomy(anatomy) - - # ── Build coarse scopes ── - coarse_scopes = build_debug_coarse_scopes( - skeletons=skeletons, - filename=filename, - page_count=page_count, - anatomy=anatomy, - ) - - if not coarse_scopes: - root_skel = SectionSkeleton( - section_path=f"{filename}/Root", - level=1, - start_page=1, - end_page=page_count, - title="Root", - parent_path=filename, - evidence={"source": "fallback_root"}, - ) - coarse_scopes = [ - { - "scope_id": scope_id_for_pages(1, page_count), - "skeletons": [root_skel], - "start_page": 1, - "end_page": page_count, - "strategy": "fallback_root", - "processing_pages": toc_policy.filter_processing_pages( - list(range(1, page_count + 1)) - ), - "excluded_toc_pages": sorted(toc_policy.pure_toc_pages), - } - ] - logger.info(" no skeleton hierarchy → fallback Root scope p1-{}", page_count) - - # ── Scope selection ── - if args.fat_only: - selected_scopes = [ - max(coarse_scopes, key=lambda s: int(s["end_page"]) - int(s["start_page"])) - ] - logger.info( - "🎯 --fat-only: 1/{} scopes selected {} p{}-{}", - len(coarse_scopes), - selected_scopes[0]["scope_id"], - selected_scopes[0]["start_page"], - selected_scopes[0]["end_page"], - ) - elif args.page_range: - parts = args.page_range.split("-") - pr_start = int(parts[0]) - pr_end = int(parts[1]) if len(parts) > 1 else pr_start - requested_pages = list(range(pr_start, pr_end + 1)) - pr_skeletons = [ - s for s in skeletons - if s.start_page <= pr_end and s.end_page >= pr_start - ] - selected_scopes = [ - { - "scope_id": scope_id_for_pages(pr_start, pr_end), - "skeletons": pr_skeletons, - "start_page": pr_start, - "end_page": pr_end, - "strategy": "manual_page_range", - "processing_pages": toc_policy.filter_processing_pages( - requested_pages - ), - "excluded_toc_pages": sorted( - set(requested_pages) & toc_policy.pure_toc_pages - ), - } - ] - logger.info(f" --page-range: p{pr_start}-{pr_end} ({len(pr_skeletons)} skeletons)") - else: - selected_scopes = coarse_scopes - logger.info( - " default: all {} scopes selected", len(selected_scopes), - ) - - record_stage( - trace_stages, - "C4.coarse_scopes", - variables={ - "total_coarse_scopes": len(coarse_scopes), - "selected_scopes": len(selected_scopes), - "mode": ( - "fat_only" if args.fat_only - else "page_range" if args.page_range - else "all_scopes" - ), - "scopes": [ - { - "scope_id": s["scope_id"], - "start_page": s["start_page"], - "end_page": s["end_page"], - "strategy": s.get("strategy", ""), - "skeleton_count": len(s["skeletons"]), - "processing_pages": list(s.get("processing_pages") or []), - "excluded_toc_pages": list(s.get("excluded_toc_pages") or []), - } - for s in selected_scopes - ], - }, - ) - - # ── Create per-scope directories ── - scopes_dir = out_dir / "scopes" - scopes_dir.mkdir(parents=True, exist_ok=True) - for s in selected_scopes: - scope_dir = scopes_dir / s["scope_id"] - scope_dir.mkdir(parents=True, exist_ok=True) - write_debug_json( - scope_dir / "skeletons.json", - { - **_serialize_scope_skeletons( - scope_id=str(s["scope_id"]), - start_page=int(s["start_page"]), - end_page=int(s["end_page"]), - strategy=str(s.get("strategy") or ""), - skeletons=s["skeletons"], - ), - "processing_pages": list(s.get("processing_pages") or []), - "excluded_toc_pages": list(s.get("excluded_toc_pages") or []), - }, - ) - # Placeholders for later stages (explicit empty slots for viewing). - write_debug_json(scope_dir / "page_tags.json", []) - write_debug_json(scope_dir / "assets.json", []) - - scope_rows = [ - { - "scope_id": str(scope["scope_id"]), - "start_page": int(scope["start_page"]), - "end_page": int(scope["end_page"]), - "strategy": str(scope.get("strategy") or ""), - "skeleton_count": len(scope["skeletons"]), - "processing_pages": list(scope.get("processing_pages") or []), - "excluded_toc_pages": list(scope.get("excluded_toc_pages") or []), - "artifact_path": str( - scopes_dir / str(scope["scope_id"]) / "skeletons.json" - ), - } - for scope in selected_scopes - ] - update_pipeline_state( - state_path, - stage=3, - payload={ - "selection_mode": ( - "fat_only" - if args.fat_only - else "page_range" - if args.page_range - else "all_scopes" - ), - "total_scope_count": len(coarse_scopes), - "selected_scope_count": len(selected_scopes), - "scopes": scope_rows, - }, - ) - (out_dir / "coarse_scopes.json").unlink(missing_ok=True) - - elapsed = time.time() - t_start - logger.info(f"✅ Stage 3 done in {elapsed:.1f}s") - logger.info(f" {len(selected_scopes)} scope dirs created → {scopes_dir}/") - - return stop_with_trace( - out_dir=out_dir, - stages=trace_stages, - stop_at="scope", - page_count=page_count, - pipeline_stage=3, - elapsed_s=elapsed, - token_cost_tracker=token_cost_tracker, - ) - - -if __name__ == "__main__": - raise SystemExit(main()) diff --git a/apps/worker/scripts/page_memory/debug_pm_stage4_fine_hierarchy.py b/apps/worker/scripts/page_memory/debug_pm_stage3_scope_fine_hierarchy.py similarity index 60% rename from apps/worker/scripts/page_memory/debug_pm_stage4_fine_hierarchy.py rename to apps/worker/scripts/page_memory/debug_pm_stage3_scope_fine_hierarchy.py index 497a657d6..81a2e7e9d 100644 --- a/apps/worker/scripts/page_memory/debug_pm_stage4_fine_hierarchy.py +++ b/apps/worker/scripts/page_memory/debug_pm_stage3_scope_fine_hierarchy.py @@ -1,18 +1,20 @@ #!/usr/bin/env python3 # ruff: noqa: E402 -"""Stage 4: Document-level page tagging + per-scope fine hierarchy. +"""Stage 3: Coarse scopes + document page tagging + per-scope fine hierarchy. -Renders and tags each processing page once (global concurrency), then fans +Builds coarse hierarchy scopes, writes ``scopes//skeletons.json``, renders +and tags each selected processing page once (global concurrency), then fans tag subsets into scopes for fine hierarchy refinement. -Requires Stage 3 output: scopes//skeletons.json -Uses Stage 2 skeletons in pipeline_state for ``next_title_by_path``. +Requires Stage 2 output: _doc_agent/pipeline_state.json (with skeletons), +doc_profile.json (after production ``run_toc_anchoring``). Usage: cd apps/worker - uv run python scripts/page_memory/debug_pm_stage4_fine_hierarchy.py \\ - --file /path/to/doc.pdf --scope-id p14-23 --out-suffix boundary_clip - uv run python scripts/page_memory/debug_pm_stage4_fine_hierarchy.py --file ... --all-scopes + uv run python scripts/page_memory/debug_pm_stage3_scope_fine_hierarchy.py --file /path/to/doc.pdf + uv run python scripts/page_memory/debug_pm_stage3_scope_fine_hierarchy.py --fat-only + uv run python scripts/page_memory/debug_pm_stage3_scope_fine_hierarchy.py --all-scopes + uv run python scripts/page_memory/debug_pm_stage3_scope_fine_hierarchy.py --file ... --scope-id p14-23 """ import sys @@ -33,24 +35,27 @@ TraceStageAdapter, add_scope_selection_args, base_argparser, - list_scope_dirs, + build_debug_coarse_scopes, load_anatomy_cache, resolve_anatomy_cache_path, load_pipeline_skeletons, load_scope_skeletons_artifact, + list_scope_dirs, pipeline_state_path, record_stage, require_file, - resolve_debug_scope_ids, resolve_paths, + scope_id_for_pages, sort_skeletons, stop_with_trace, update_pipeline_state, + write_debug_json, write_scope_artifacts, write_top_level_artifacts, page_scope_info, _derive_hierarchy_page_scope, _scope_manifest, + _serialize_scope_skeletons, _serialize_skeletons, ) @@ -111,7 +116,7 @@ def _run_fine_hierarchy_for_scope( token_cost_tracker.register_child_thread() skel_path = scope_dir / "skeletons.json" - require_file(skel_path, hint=f"Run Stage 3 first to create {skel_path}") + require_file(skel_path, hint=f"Stage 3 should have created {skel_path}") scope_meta, active_skeletons = load_scope_skeletons_artifact(skel_path) strategy = str(scope_meta.get("strategy") or "coarse_scope") processing_pages, excluded_toc_pages = _resolve_scope_processing_pages( @@ -231,7 +236,7 @@ def _run_fine_hierarchy_for_scope( def main() -> int: - parser = base_argparser("Stage 4: Combined page tagging + fine hierarchy") + parser = base_argparser("Stage 3: Coarse scopes + fine hierarchy") add_scope_selection_args(parser) parser.add_argument( "--max-workers", type=int, default=5, @@ -242,25 +247,23 @@ def main() -> int: from app.services.document_agent.pdf_text import read_page_texts from app.services.page_memory.fine_hierarchy import build_next_title_by_path from app.services.page_memory.memory_service import _render_and_tag_document_pages + from app.services.page_memory.skeleton_extractor import SectionSkeleton from toc_page_policy import TocPagePolicy from shared.models.schemas.page_memory_config import PageMemoryConfig pdf_path, filename, out_dir = resolve_paths(args) - doc_agent_dir = out_dir / "_doc_agent" anatomy_cache = resolve_anatomy_cache_path(out_dir) state_path = pipeline_state_path(out_dir) - legacy_locate_cache = doc_agent_dir / "locate_cache.json" scopes_dir = out_dir / "scopes" + require_file( + state_path, + hint="Run Stage 2 first: uv run python scripts/page_memory/debug_pm_stage2_calibration.py --file ...", + ) require_file( anatomy_cache, hint="Run Stage 1 first: uv run python scripts/page_memory/debug_pm_stage1_hierarchy.py --file ...", ) - if not state_path.exists() and not legacy_locate_cache.exists(): - require_file( - state_path, - hint="Run Stage 2 first: uv run python scripts/page_memory/debug_pm_stage2_calibration.py --file ...", - ) anatomy = load_anatomy_cache(anatomy_cache, pdf_path, filename) page_count = anatomy.page_count @@ -268,49 +271,195 @@ def main() -> int: page_labels = anatomy.page_labels if anatomy else [] toc_policy = TocPagePolicy.from_anatomy(anatomy) page_memory_config = PageMemoryConfig.default() + skeletons = load_pipeline_skeletons(state_path) - all_skeletons = load_pipeline_skeletons( - state_path, - legacy_locate_cache=legacy_locate_cache, - ) - next_title_by_path = build_next_title_by_path(all_skeletons) - logger.info( - " next_title_by_path: {} paths ({} with tail anchor)", - len(next_title_by_path), - sum(1 for title in next_title_by_path.values() if title), + logger.info("█" * 70) + logger.info(f" STAGE 3: SCOPE + FINE HIERARCHY — {filename}") + logger.info(f" OUTPUT: {out_dir}") + logger.info("█" * 70) + + t_start = time.time() + trace_stages: list[dict] = [] + token_cost_tracker = TokenCostTracker() + + # ── Build coarse scopes ── + coarse_scopes = build_debug_coarse_scopes( + skeletons=skeletons, + filename=filename, + page_count=page_count, + anatomy=anatomy, ) - scope_ids = resolve_debug_scope_ids( - scopes_dir=scopes_dir, - scope_id=args.scope_id, - page_range=args.page_range, - fat_only=args.fat_only, - all_scopes=args.all_scopes, - list_scopes=args.list_scopes, - require_file="skeletons.json", + if not coarse_scopes: + root_skel = SectionSkeleton( + section_path=f"{filename}/Root", + level=1, + start_page=1, + end_page=page_count, + title="Root", + parent_path=filename, + evidence={"source": "fallback_root"}, + ) + coarse_scopes = [ + { + "scope_id": scope_id_for_pages(1, page_count), + "skeletons": [root_skel], + "start_page": 1, + "end_page": page_count, + "strategy": "fallback_root", + "processing_pages": toc_policy.filter_processing_pages( + list(range(1, page_count + 1)) + ), + "excluded_toc_pages": sorted(toc_policy.pure_toc_pages), + } + ] + logger.info(" no skeleton hierarchy → fallback Root scope p1-{}", page_count) + + if args.list_scopes: + logger.info("Available scopes ({}):", len(coarse_scopes)) + for scope in coarse_scopes: + start = int(scope["start_page"]) + end = int(scope["end_page"]) + logger.info( + " {} p{}-{} pages={} skeletons={} {}", + scope["scope_id"], + start, + end, + max(end - start + 1, 0), + len(scope["skeletons"]), + scope.get("strategy") or "", + ) + raise SystemExit(0) + + # ── Scope selection (same priority as resolve_debug_scope_ids) ── + if args.scope_id: + requested = [ + part.strip() for part in str(args.scope_id).split(",") if part.strip() + ] + by_id = {str(scope["scope_id"]): scope for scope in coarse_scopes} + missing = [sid for sid in requested if sid not in by_id] + if missing: + logger.error("❌ Unknown scope-id(s): {}", ", ".join(missing)) + logger.error( + " Available: {}", + ", ".join(str(scope["scope_id"]) for scope in coarse_scopes), + ) + raise SystemExit(1) + selected_scopes = [by_id[sid] for sid in requested] + elif args.fat_only: + selected_scopes = [ + max(coarse_scopes, key=lambda s: int(s["end_page"]) - int(s["start_page"])) + ] + logger.info( + "🎯 --fat-only: 1/{} scopes selected {} p{}-{}", + len(coarse_scopes), + selected_scopes[0]["scope_id"], + selected_scopes[0]["start_page"], + selected_scopes[0]["end_page"], + ) + elif args.page_range: + parts = args.page_range.split("-") + pr_start = int(parts[0]) + pr_end = int(parts[1]) if len(parts) > 1 else pr_start + requested_pages = list(range(pr_start, pr_end + 1)) + pr_skeletons = [ + s for s in skeletons + if s.start_page <= pr_end and s.end_page >= pr_start + ] + selected_scopes = [ + { + "scope_id": scope_id_for_pages(pr_start, pr_end), + "skeletons": pr_skeletons, + "start_page": pr_start, + "end_page": pr_end, + "strategy": "manual_page_range", + "processing_pages": toc_policy.filter_processing_pages( + requested_pages + ), + "excluded_toc_pages": sorted( + set(requested_pages) & toc_policy.pure_toc_pages + ), + } + ] + logger.info(f" --page-range: p{pr_start}-{pr_end} ({len(pr_skeletons)} skeletons)") + else: + selected_scopes = coarse_scopes + logger.info( + " default: all {} scopes selected", len(selected_scopes), + ) + + record_stage( + trace_stages, + "C4.coarse_scopes", + variables={ + "total_coarse_scopes": len(coarse_scopes), + "selected_scopes": len(selected_scopes), + "mode": ( + "scope_id" if args.scope_id + else "fat_only" if args.fat_only + else "page_range" if args.page_range + else "all_scopes" + ), + "scopes": [ + { + "scope_id": s["scope_id"], + "start_page": s["start_page"], + "end_page": s["end_page"], + "strategy": s.get("strategy", ""), + "skeleton_count": len(s["skeletons"]), + "processing_pages": list(s.get("processing_pages") or []), + "excluded_toc_pages": list(s.get("excluded_toc_pages") or []), + } + for s in selected_scopes + ], + }, ) - partial_run = len(scope_ids) < len(list_scope_dirs(scopes_dir)) - logger.info("█" * 70) - logger.info(f" STAGE 4: FINE HIERARCHY — {filename}") - logger.info(f" OUTPUT: {out_dir}") + # ── Create per-scope directories ── + scopes_dir.mkdir(parents=True, exist_ok=True) + for s in selected_scopes: + scope_dir = scopes_dir / s["scope_id"] + scope_dir.mkdir(parents=True, exist_ok=True) + write_debug_json( + scope_dir / "skeletons.json", + { + **_serialize_scope_skeletons( + scope_id=str(s["scope_id"]), + start_page=int(s["start_page"]), + end_page=int(s["end_page"]), + strategy=str(s.get("strategy") or ""), + skeletons=s["skeletons"], + ), + "processing_pages": list(s.get("processing_pages") or []), + "excluded_toc_pages": list(s.get("excluded_toc_pages") or []), + }, + ) + write_debug_json(scope_dir / "page_tags.json", []) + write_debug_json(scope_dir / "assets.json", []) + + scope_ids = [str(s["scope_id"]) for s in selected_scopes] + partial_run = len(scope_ids) < len(list_scope_dirs(scopes_dir)) logger.info(f" SCOPES ({len(scope_ids)}): {scope_ids}") if partial_run: logger.info(" MODE: partial — will not overwrite top-level hierarchy.json") - logger.info("█" * 70) - t_start = time.time() - trace_stages: list[dict] = [] - token_cost_tracker = TokenCostTracker() + next_title_by_path = build_next_title_by_path(skeletons) + logger.info( + " next_title_by_path: {} paths ({} with tail anchor)", + len(next_title_by_path), + sum(1 for title in next_title_by_path.values() if title), + ) selected_processing_pages: set[int] = set() scope_payloads: list[tuple[str, Path, list[int]]] = [] for sid in scope_ids: scope_dir = scopes_dir / sid - scope_meta, skeletons = load_scope_skeletons_artifact(scope_dir / "skeletons.json") + scope_meta, scope_skeletons = load_scope_skeletons_artifact( + scope_dir / "skeletons.json" + ) processing_pages, _excluded = _resolve_scope_processing_pages( scope_meta=scope_meta, - skeletons=skeletons, + skeletons=scope_skeletons, page_count=page_count, toc_policy=toc_policy, ) @@ -412,7 +561,7 @@ def _run_selected_scope(scope_id: str, scope_dir: Path) -> ScopeResult: ) elapsed = time.time() - t_start - logger.info(f"✅ Stage 4 done in {elapsed:.1f}s") + logger.info(f"✅ Stage 3 done in {elapsed:.1f}s") logger.info( f" {len(scope_results)} scopes processed, " f"{len(merged_skeletons)} skeletons this run, " @@ -421,11 +570,38 @@ def _run_selected_scope(scope_id: str, scope_dir: Path) -> ScopeResult: for sid in scope_ids: logger.info(f" → {scopes_dir / sid / 'fine_hierarchy.json'}") + scope_rows = [ + { + "scope_id": str(scope["scope_id"]), + "start_page": int(scope["start_page"]), + "end_page": int(scope["end_page"]), + "strategy": str(scope.get("strategy") or ""), + "skeleton_count": len(scope["skeletons"]), + "processing_pages": list(scope.get("processing_pages") or []), + "excluded_toc_pages": list(scope.get("excluded_toc_pages") or []), + "artifact_path": str( + scopes_dir / str(scope["scope_id"]) / "skeletons.json" + ), + } + for scope in selected_scopes + ] update_pipeline_state( state_path, - stage=4, + stage=3, payload={ + "selection_mode": ( + "scope_id" + if args.scope_id + else "fat_only" + if args.fat_only + else "page_range" + if args.page_range + else "all_scopes" + ), "partial_run": partial_run, + "total_scope_count": len(coarse_scopes), + "selected_scope_count": len(selected_scopes), + "scopes": scope_rows, "processed_scope_ids": scope_ids, "processed_scope_count": len(scope_results), "skeleton_count": len(merged_skeletons), @@ -436,13 +612,14 @@ def _run_selected_scope(scope_id: str, scope_dir: Path) -> ScopeResult: ], }, ) + (out_dir / "coarse_scopes.json").unlink(missing_ok=True) return stop_with_trace( out_dir=out_dir, stages=trace_stages, stop_at="fine_hierarchy", page_count=page_count, - pipeline_stage=4, + pipeline_stage=3, elapsed_s=elapsed, scope_id=scope_ids[0] if len(scope_ids) == 1 else None, token_cost_tracker=token_cost_tracker, diff --git a/apps/worker/scripts/page_memory/debug_pm_stage5_assets.py b/apps/worker/scripts/page_memory/debug_pm_stage4_assets.py similarity index 92% rename from apps/worker/scripts/page_memory/debug_pm_stage5_assets.py rename to apps/worker/scripts/page_memory/debug_pm_stage4_assets.py index 5344ea08e..41b06b105 100644 --- a/apps/worker/scripts/page_memory/debug_pm_stage5_assets.py +++ b/apps/worker/scripts/page_memory/debug_pm_stage4_assets.py @@ -1,18 +1,18 @@ #!/usr/bin/env python3 # ruff: noqa: E402 -"""Stage 5: Document-level page asset extraction (C5) — NO page tagging. +"""Stage 4: Document-level page asset extraction (C5) — NO page tagging. Unions processing pages from selected scopes, renders/extracts each unique page once, writes top-level ``assets.json``, and projects references into scope dirs. -Does NOT run page tagging (C3) — Stage 4 already produced shared document-level tags. +Does NOT run page tagging (C3) — Stage 3 already produced shared document-level tags. -Requires Stage 4 output: scopes//fine_hierarchy.json +Requires Stage 3 output: scopes//fine_hierarchy.json Usage: cd apps/worker - uv run python scripts/page_memory/debug_pm_stage5_assets.py --file /path/to/doc.pdf - uv run python scripts/page_memory/debug_pm_stage5_assets.py --scope-id p1-100 - uv run python scripts/page_memory/debug_pm_stage5_assets.py --all-scopes + uv run python scripts/page_memory/debug_pm_stage4_assets.py --file /path/to/doc.pdf + uv run python scripts/page_memory/debug_pm_stage4_assets.py --scope-id p1-100 + uv run python scripts/page_memory/debug_pm_stage4_assets.py --all-scopes """ import sys @@ -69,7 +69,7 @@ def _load_scope_asset_context( fine_hierarchy_path = scope_dir / "fine_hierarchy.json" require_file( fine_hierarchy_path, - hint=f"Run Stage 4 first to produce {fine_hierarchy_path}", + hint=f"Run Stage 3 first to produce {fine_hierarchy_path}", ) prior_scope, active_skeletons = load_hierarchy_artifact(fine_hierarchy_path) if not active_skeletons: @@ -113,13 +113,13 @@ def _load_scope_asset_context( def main() -> int: - parser = base_argparser("Stage 5: Document-level asset extraction (C5)") + parser = base_argparser("Stage 4: Document-level asset extraction (C5)") add_scope_selection_args(parser) parser.add_argument( "--max-workers", type=int, default=5, - help="Kept for CLI compatibility; Stage 5 extracts once at document level", + help="Kept for CLI compatibility; Stage 4 extracts once at document level", ) args = parser.parse_args() @@ -164,7 +164,7 @@ def main() -> int: nonempty_json=True, ) logger.info("█" * 70) - logger.info(f" STAGE 5: DOCUMENT ASSET EXTRACTION — {filename}") + logger.info(f" STAGE 4: DOCUMENT ASSET EXTRACTION — {filename}") logger.info(f" OUTPUT: {out_dir}") logger.info(f" SCOPES: {scope_ids}") logger.info("█" * 70) @@ -276,14 +276,14 @@ def main() -> int: ) elapsed = time.time() - t_start - logger.info(f"✅ Stage 5 done in {elapsed:.1f}s") + logger.info(f"✅ Stage 4 done in {elapsed:.1f}s") logger.info( f" {len(scope_contexts)} scopes, {asset_count} assets, " f"{len(union_pages)} unique pages" ) update_pipeline_state( state_path, - stage=5, + stage=4, payload={ "processed_scope_ids": [context.scope_id for context in scope_contexts], "processed_scope_count": len(scope_contexts), @@ -303,7 +303,7 @@ def main() -> int: stages=trace_stages, stop_at="assets", page_count=page_count, - pipeline_stage=5, + pipeline_stage=4, elapsed_s=elapsed, token_cost_tracker=token_cost_tracker, ) diff --git a/apps/worker/scripts/page_memory/debug_pm_stage6_tagging_finalize.py b/apps/worker/scripts/page_memory/debug_pm_stage5_tagging_finalize.py similarity index 95% rename from apps/worker/scripts/page_memory/debug_pm_stage6_tagging_finalize.py rename to apps/worker/scripts/page_memory/debug_pm_stage5_tagging_finalize.py index cec8ccb00..281040759 100644 --- a/apps/worker/scripts/page_memory/debug_pm_stage6_tagging_finalize.py +++ b/apps/worker/scripts/page_memory/debug_pm_stage5_tagging_finalize.py @@ -1,19 +1,19 @@ #!/usr/bin/env python3 # ruff: noqa: E402 -"""Stage 6: Canonical chunk assembly (C7) + finalize (C9). +"""Stage 5: Canonical chunk assembly (C7) + finalize (C9). -Loads the combined page tags produced by Stage 4, assembles canonical chunks, +Loads the combined page tags produced by Stage 3, assembles canonical chunks, and optionally produces chunks.json / doc_nav.json / manifest.json. -Requires Stage 4 output: scopes//fine_hierarchy.json -Prefer Stage 5 document assets: assets.json -Legacy fallback: scopes//assets.json (deduped by asset_id) +Requires Stage 3 output: scopes//fine_hierarchy.json +Prefer Stage 4 document assets: assets.json +Fallback: scopes//assets.json (deduped by asset_id) Usage: cd apps/worker - uv run python scripts/page_memory/debug_pm_stage6_tagging_finalize.py --file /path/to/doc.pdf - uv run python scripts/page_memory/debug_pm_stage6_tagging_finalize.py --all-scopes --finalize - uv run python scripts/page_memory/debug_pm_stage6_tagging_finalize.py --scope-id p1-100 --finalize --run-db + uv run python scripts/page_memory/debug_pm_stage5_tagging_finalize.py --file /path/to/doc.pdf + uv run python scripts/page_memory/debug_pm_stage5_tagging_finalize.py --all-scopes --finalize + uv run python scripts/page_memory/debug_pm_stage5_tagging_finalize.py --scope-id p1-100 --finalize --run-db """ import sys @@ -75,7 +75,7 @@ def _run_tagging_for_scope( args: Any, token_cost_tracker: TokenCostTracker | None = None, ) -> ScopeResult: - """Load Stage-4 combined tags and rehydrate renders for final assembly.""" + """Load Stage-3 combined tags and rehydrate renders for final assembly.""" from app.services.page_memory.page_renderer import render_document_pages scope_stages: list[dict[str, Any]] = [] @@ -83,7 +83,7 @@ def _run_tagging_for_scope( token_cost_tracker.register_child_thread() fine_hierarchy_path = scope_dir / "fine_hierarchy.json" - require_file(fine_hierarchy_path, hint=f"Run Stage 4 to produce {fine_hierarchy_path}") + require_file(fine_hierarchy_path, hint=f"Run Stage 3 to produce {fine_hierarchy_path}") prior_scope, active_skeletons = load_hierarchy_artifact(fine_hierarchy_path) if not active_skeletons: logger.warning(" [scope {}] no skeletons — skipping", scope_id) @@ -93,7 +93,7 @@ def _run_tagging_for_scope( ) tags_path = scope_dir / "page_tags.json" - require_file(tags_path, hint=f"Run Stage 4 to produce {tags_path}") + require_file(tags_path, hint=f"Run Stage 3 to produce {tags_path}") tags = load_page_tags_artifact(tags_path) # Load existing assets if available @@ -109,7 +109,7 @@ def _run_tagging_for_scope( exc, ) - # Reuse Stage-4's exact scope contract. Fall back only for old artifacts. + # Reuse Stage-3's exact scope contract. Fall back only for older artifacts. recorded_pages = prior_scope.get("processing_pages") final_pages = ( [int(page) for page in recorded_pages] @@ -161,7 +161,7 @@ def _run_tagging_for_scope( }, ) - # Preserve Stage-4 tags while attaching Stage-5 assets. + # Preserve Stage-3 tags while attaching Stage-4 assets. write_scope_artifacts( out_dir=out_dir, scope_id=scope_id, @@ -247,7 +247,7 @@ def _build_report( def main() -> int: - parser = base_argparser("Stage 6: Node assembly + finalize") + parser = base_argparser("Stage 5: Node assembly + finalize") add_scope_selection_args(parser) parser.add_argument( "--max-workers", type=int, default=5, @@ -315,7 +315,7 @@ def main() -> int: nonempty_json=True, ) logger.info("█" * 70) - logger.info(f" STAGE 6: ASSEMBLY + FINALIZE — {filename}") + logger.info(f" STAGE 5: ASSEMBLY + FINALIZE — {filename}") logger.info(f" OUTPUT: {out_dir}") logger.info(f" SCOPES: {scope_ids}") logger.info("█" * 70) @@ -578,7 +578,7 @@ def _load_selected_scope(scope_id: str) -> ScopeResult: stages=trace_stages, stop_at="finalize" if args.finalize else "assembly", page_count=page_count, - pipeline_stage=6, + pipeline_stage=5, elapsed_s=elapsed, token_cost_tracker=token_cost_tracker, final_status="success", @@ -662,7 +662,7 @@ def _load_selected_scope(scope_id: str) -> ScopeResult: update_pipeline_state( state_path, - stage=6, + stage=5, payload={ "processed_scope_ids": [sr.scope_id for sr in scope_results], "finalized": bool(args.finalize), diff --git a/apps/worker/tests/contract/test_calibration_phase1_contract.py b/apps/worker/tests/contract/test_calibration_phase1_contract.py index fdbe2c247..fe649f35e 100644 --- a/apps/worker/tests/contract/test_calibration_phase1_contract.py +++ b/apps/worker/tests/contract/test_calibration_phase1_contract.py @@ -96,8 +96,8 @@ def test_offset_is_found_page_minus_printed(patch_scan) -> None: assert result.status == "ok" assert [(r.kind, r.offset) for r in result.regimes] == [("decimal", 5)] - # toc_range=[1, 3] → scan starts at page after TOC end. - assert fake.calls == [("Chapter 1", 4)] + # toc_range=[1, 3], printed=10 → scan starts at the printed page. + assert fake.calls == [("Chapter 1", 10)] def test_first_hit_stops_the_regime(patch_scan) -> None: @@ -111,7 +111,7 @@ def test_first_hit_stops_the_regime(patch_scan) -> None: run_calibration_phase1(ctx=_ctx(), toc_hierarchies=hierarchies, page_count=60) - assert fake.calls == [("Chapter 1", 4)] + assert fake.calls == [("Chapter 1", 10)] def test_second_probe_runs_when_the_first_misses(patch_scan) -> None: @@ -128,7 +128,43 @@ def test_second_probe_runs_when_the_first_misses(patch_scan) -> None: ctx=_ctx(), toc_hierarchies=hierarchies, page_count=60 ) - assert fake.calls == [("Chapter 1", 4), ("Chapter 2", 4)] + assert fake.calls == [("Chapter 1", 10), ("Chapter 2", 20)] + assert [r.offset for r in result.regimes] == [5] + + +def test_probes_use_distinct_printed_pages(patch_scan) -> None: + fake = patch_scan(_FakeScan({"Chapter 2": 25})) + hierarchies = _hierarchy( + [ + {"heading": "Chapter 1", "page_number": "10", "level": 1}, + {"heading": "Chapter 1 Detail", "page_number": "10", "level": 1}, + {"heading": "Chapter 2", "page_number": "20", "level": 1}, + ] + ) + + result = run_calibration_phase1( + ctx=_ctx(), toc_hierarchies=hierarchies, page_count=60 + ) + + assert fake.calls == [("Chapter 1", 10), ("Chapter 2", 20)] + assert [r.offset for r in result.regimes] == [5] + + +def test_probe_prefers_leaf_within_a_printed_page(patch_scan) -> None: + fake = patch_scan(_FakeScan({"A1 Purpose": 15})) + hierarchies = _hierarchy( + [ + {"heading": "Part A", "page_number": "10", "level": 1}, + {"heading": "A1 Purpose", "page_number": "10", "level": 2}, + {"heading": "A2 Scope", "page_number": "20", "level": 2}, + ] + ) + + result = run_calibration_phase1( + ctx=_ctx(), toc_hierarchies=hierarchies, page_count=60 + ) + + assert fake.calls == [("A1 Purpose", 10)] assert [r.offset for r in result.regimes] == [5] @@ -169,7 +205,49 @@ def test_roman_and_decimal_regimes_calibrate_independently(patch_scan) -> None: ("roman", 2), ("decimal", 5), } - assert fake.calls == [("Preface", 4), ("Chapter 1", 4)] + # printed=2 sits inside the TOC range → floor at toc end + 1; printed=10 wins. + assert fake.calls == [("Preface", 4), ("Chapter 1", 10)] + + +def test_scan_floor_is_the_printed_page_so_offset_is_never_negative( + monkeypatch: pytest.MonkeyPatch, +) -> None: + """A divider repeating the heading cannot confirm ahead of the printed page.""" + + class _ConfirmFirstPage: + def __init__(self) -> None: + self.calls: list[tuple[str, int]] = [] + + def __call__( + self, + *, + ctx: ToolContext, + title: str, + start_page: int, + page_count: int, + **kwargs: Any, + ) -> TitleScanResult: + self.calls.append((title, start_page)) + return TitleScanResult( + title=title, + found=True, + found_page=start_page, + scanned_pages=[start_page], + next_start=start_page + 1, + ) + + fake = _ConfirmFirstPage() + monkeypatch.setattr(phase1_module, "scan_title_forward", fake) + hierarchies = _hierarchy( + [{"heading": "Chapter 1", "page_number": "10", "level": 1}] + ) + + result = run_calibration_phase1( + ctx=_ctx(), toc_hierarchies=hierarchies, page_count=60 + ) + + assert fake.calls == [("Chapter 1", 10)] + assert [r.offset for r in result.regimes] == [0] def test_confirmed_anchor_is_reported_as_a_sample(patch_scan) -> None: @@ -197,7 +275,7 @@ def test_entries_without_a_parseable_printed_page_are_skipped(patch_scan) -> Non run_calibration_phase1(ctx=_ctx(), toc_hierarchies=hierarchies, page_count=60) - assert fake.calls == [("Chapter 1", 4)] + assert fake.calls == [("Chapter 1", 10)] def test_empty_toc_fails_without_scanning(patch_scan) -> None: diff --git a/apps/worker/tests/unit/test_summary_builder.py b/apps/worker/tests/unit/test_summary_builder.py index a0eaf2c73..a7f0d3084 100644 --- a/apps/worker/tests/unit/test_summary_builder.py +++ b/apps/worker/tests/unit/test_summary_builder.py @@ -2,17 +2,20 @@ from __future__ import annotations +import importlib +from types import ModuleType from typing import Any, Dict, List import pytest -from app.services.connect_builder.summary_builder import ( - SUMMARY_MAX_LEN, - _deterministic_section_summary, - _llm_summarize, - _recursive_summarize_nav, - build_self_only_lookup, -) + +def _summary_builder() -> ModuleType: + """Resolve the live module. + + Worker contract tests may evict/reimport ``app.*``. Calling functions bound at + collection time would miss later monkeypatches on the new module object. + """ + return importlib.import_module("app.services.connect_builder.summary_builder") def _leaf(title: str, summary: str = "", path: str = "") -> Dict[str, Any]: @@ -41,7 +44,8 @@ def _parent( class TestDeterministicAssembly: def test_order_covers_self_only_then_titles(self) -> None: - text = _deterministic_section_summary( + sb = _summary_builder() + text = sb._deterministic_section_summary( is_top_level=False, self_only="intro paragraph here", child_titles=["Alpha", "Beta"], @@ -53,6 +57,7 @@ def test_order_covers_self_only_then_titles(self) -> None: assert text.index("intro paragraph here") < text.index("Alpha, Beta") def test_all_child_titles_even_when_summary_empty(self) -> None: + sb = _summary_builder() parent = _parent( "Parent", [ @@ -61,7 +66,7 @@ def test_all_child_titles_even_when_summary_empty(self) -> None: ], path="doc.pdf/Parent", ) - result = _recursive_summarize_nav( + result = sb._recursive_summarize_nav( parent, use_llm=False, source_file_name="doc.pdf", @@ -73,6 +78,7 @@ def test_all_child_titles_even_when_summary_empty(self) -> None: class TestSelfOnlyLookup: def test_exact_path_only_excludes_descendants(self) -> None: + sb = _summary_builder() chunks = [ { "path": "doc.pdf/2.4.4 隐患治理", @@ -83,12 +89,13 @@ def test_exact_path_only_excludes_descendants(self) -> None: "content": "CHILD_BODY_SHOULD_NOT_APPEAR", }, ] - lookup = build_self_only_lookup(chunks, source_file_name="doc.pdf") + lookup = sb.build_self_only_lookup(chunks, source_file_name="doc.pdf") assert lookup["2.4.4 隐患治理"] == "PARENT_INTRO_ONLY" assert "CHILD_BODY_SHOULD_NOT_APPEAR" not in lookup["2.4.4 隐患治理"] assert "2.4.4 隐患治理 / 清单项A" in lookup def test_nonleaf_includes_self_only_in_deterministic(self) -> None: + sb = _summary_builder() parent = _parent( "2.4.4 隐患治理", [ @@ -97,11 +104,11 @@ def test_nonleaf_includes_self_only_in_deterministic(self) -> None: ], path="doc.pdf/2.4.4 隐患治理", ) - lookup = build_self_only_lookup( + lookup = sb.build_self_only_lookup( [{"path": "doc.pdf/2.4.4 隐患治理", "content": "方案包括以下内容："}], source_file_name="doc.pdf", ) - result = _recursive_summarize_nav( + result = sb._recursive_summarize_nav( parent, use_llm=False, self_only_lookup=lookup, @@ -115,22 +122,22 @@ def test_nonleaf_includes_self_only_in_deterministic(self) -> None: class TestLlmTrigger: def test_short_contrib_skips_llm(self, monkeypatch: pytest.MonkeyPatch) -> None: + sb = _summary_builder() called = {"n": 0} def _boom(**kwargs: Any) -> str: called["n"] += 1 return "SHOULD_NOT_USE" - monkeypatch.setattr( - "app.services.connect_builder.summary_builder._llm_summarize", - _boom, - ) + monkeypatch.setattr(sb, "_llm_summarize", _boom) parent = _parent( "P", [_leaf("A", summary="x"), _leaf("B", summary="y")], path="doc.pdf/P", ) - result = _recursive_summarize_nav(parent, use_llm=True, source_file_name="doc.pdf") + result = sb._recursive_summarize_nav( + parent, use_llm=True, source_file_name="doc.pdf" + ) assert called["n"] == 0 assert result.startswith("This section covers: ") assert "A" in result and "B" in result @@ -138,17 +145,15 @@ def _boom(**kwargs: Any) -> str: def test_long_contrib_calls_llm_with_title_for_empty_summary( self, monkeypatch: pytest.MonkeyPatch ) -> None: + sb = _summary_builder() captured: Dict[str, Any] = {} def _fake_llm(**kwargs: Any) -> str: captured.update(kwargs) return "LLM_SUMMARY" - monkeypatch.setattr( - "app.services.connect_builder.summary_builder._llm_summarize", - _fake_llm, - ) - long_a = "A" * (SUMMARY_MAX_LEN + 5) + monkeypatch.setattr(sb, "_llm_summarize", _fake_llm) + long_a = "A" * (sb.SUMMARY_MAX_LEN + 5) parent = _parent( "P", [ @@ -159,7 +164,7 @@ def _fake_llm(**kwargs: Any) -> str: ) lookup = {"P": "SELF_ONLY_INTRO"} # section path from doc.pdf/P is "P" - result = _recursive_summarize_nav( + result = sb._recursive_summarize_nav( parent, use_llm=True, self_only_lookup=lookup, @@ -176,17 +181,19 @@ def _fake_llm(**kwargs: Any) -> str: def test_single_child_with_self_only_does_not_copy_child( self, monkeypatch: pytest.MonkeyPatch ) -> None: + sb = _summary_builder() monkeypatch.setattr( - "app.services.connect_builder.summary_builder._llm_summarize", + sb, + "_llm_summarize", lambda **kwargs: "MERGED", ) - long_child = "C" * (SUMMARY_MAX_LEN + 1) + long_child = "C" * (sb.SUMMARY_MAX_LEN + 1) parent = _parent( "P", [_leaf("OnlyChild", summary=long_child)], path="doc.pdf/P", ) - result = _recursive_summarize_nav( + result = sb._recursive_summarize_nav( parent, use_llm=True, self_only_lookup={"P": "intro"}, @@ -200,6 +207,7 @@ class TestPromptPayload: def test_file_summary_prompt_contains_scope_blocks( self, monkeypatch: pytest.MonkeyPatch ) -> None: + sb = _summary_builder() captured: Dict[str, Any] = {} def _fake_client(**_kwargs: Any) -> Any: @@ -215,7 +223,7 @@ def chat_completion(self, **kwargs: Any) -> str: _fake_client, ) # Ensure build_prompt path works - out = _llm_summarize( + out = sb._llm_summarize( node_name="Parent", self_only="intro text", child_rows=[("ChildA", "summary A"), ("ChildB", "ChildB")], @@ -239,11 +247,7 @@ def test_enrich_persists_top_summary_and_defaults_top_llm( ) -> None: import json - from app.services.connect_builder.summary_builder import ( - enrich_doc_nav_summaries, - load_nav_top_summary, - ) - + sb = _summary_builder() captured: Dict[str, Any] = {} def _fake_llm(**kwargs: Any) -> str: @@ -252,14 +256,11 @@ def _fake_llm(**kwargs: Any) -> str: captured["calls"] = int(captured.get("calls") or 0) + 1 return "LLM document overview" - monkeypatch.setattr( - "app.services.connect_builder.summary_builder._llm_summarize", - _fake_llm, - ) + monkeypatch.setattr(sb, "_llm_summarize", _fake_llm) file_dir = tmp_path / "report.pdf" file_dir.mkdir() - long_leaf = "L" * (SUMMARY_MAX_LEN + 5) + long_leaf = "L" * (sb.SUMMARY_MAX_LEN + 5) doc_nav = { "version": "1.0", "file_name": "report.pdf", @@ -287,7 +288,7 @@ def _fake_llm(**kwargs: Any) -> str: encoding="utf-8", ) - results = enrich_doc_nav_summaries( + results = sb.enrich_doc_nav_summaries( str(tmp_path), source_file="report.pdf", use_llm=False, @@ -301,6 +302,6 @@ def _fake_llm(**kwargs: Any) -> str: assert saved["top_summary"] == "LLM document overview" # Section leaves keep original summaries; top LLM must not rewrite them. assert saved["sections"][0]["summary"] == long_leaf - assert load_nav_top_summary(str(file_dir), "report.pdf") == ( + assert sb.load_nav_top_summary(str(file_dir), "report.pdf") == ( "LLM document overview" ) diff --git a/packages/shared-python/shared/services/retrieval/execution/plan.py b/packages/shared-python/shared/services/retrieval/execution/plan.py index ed9f9f591..8d05753ab 100644 --- a/packages/shared-python/shared/services/retrieval/execution/plan.py +++ b/packages/shared-python/shared/services/retrieval/execution/plan.py @@ -286,12 +286,11 @@ def _log_retrieval_complete( results = outcome.get("results", []) if isinstance(results, list): for index, result in enumerate(results[:10]): - source = result.get("source", {}) logger.info( f" [{index + 1}] type={result.get('chunk_type', '?')} " f"score={result.get('score') or 0.0:.4f}" - f" path={source.get('section_path', '')}" - f" file={source.get('source_file_name', '')}" + f" path={result.get('section_path') or ''}" + f" file={result.get('source_file_name') or ''}" ) if len(results) > 10: logger.info(f" ... and {len(results) - 10} more") diff --git a/packages/shared-python/shared/services/retrieval/execution/reference_resolver.py b/packages/shared-python/shared/services/retrieval/execution/reference_resolver.py index d5e2c3586..802fa2786 100644 --- a/packages/shared-python/shared/services/retrieval/execution/reference_resolver.py +++ b/packages/shared-python/shared/services/retrieval/execution/reference_resolver.py @@ -9,7 +9,10 @@ from shared.services.retrieval.execution.response_projection import ( enrich_referenced_chunks_with_asset_url, ) -from shared.services.retrieval.hydration.row_utils import build_reference_lookup_key +from shared.services.retrieval.hydration.row_utils import ( + build_reference_lookup_key, + extract_page_nums, +) @dataclass(frozen=True) @@ -36,7 +39,7 @@ async def resolve_workflow_references( resolved = _select_matching_references(refs, hydrated_rows) enriched_rows = await enrich_referenced_chunks_with_asset_url(resolved.rows) return ResolvedWorkflowReferences( - refs=_merge_reference_asset_url(resolved.refs, enriched_rows), + refs=_merge_reference_projection(resolved.refs, enriched_rows), rows=resolved.rows, ) @@ -95,7 +98,7 @@ def _row_key(row: dict[str, Any]) -> tuple[str, str, str, str]: ) -def _merge_reference_asset_url( +def _merge_reference_projection( refs: list[dict[str, Any]], rows: list[dict[str, Any]], ) -> list[dict[str, Any]]: @@ -116,6 +119,9 @@ def _merge_reference_asset_url( if row is not None: if row.get("asset_url"): merged["asset_url"] = row["asset_url"] + page_nums = extract_page_nums(row) + if page_nums is not None: + merged["page_nums"] = page_nums merged_refs.append(merged) return merged_refs diff --git a/packages/shared-python/shared/services/retrieval/execution/response_projection.py b/packages/shared-python/shared/services/retrieval/execution/response_projection.py index 313eb8ece..656533c65 100644 --- a/packages/shared-python/shared/services/retrieval/execution/response_projection.py +++ b/packages/shared-python/shared/services/retrieval/execution/response_projection.py @@ -9,18 +9,8 @@ ) -def attach_citation(row: dict[str, Any]) -> dict[str, Any]: - citation = { - 'document_id': row.get('document_id'), - 'chunk_id': row.get('chunk_id'), - 'source_file_name': row.get('source_file_name'), - 'section_path': row.get('section_path'), - } - return {**row, 'citation': citation} - - def to_public_source(row: dict[str, Any]) -> dict[str, Any]: - return {field: row.get(field) for field in PUBLIC_SOURCE_FIELDS} + return {field: row[field] for field in PUBLIC_SOURCE_FIELDS if field in row} async def enrich_referenced_chunks_with_asset_url(refs: list[dict[str, Any]]) -> list[dict[str, Any]]: @@ -63,10 +53,7 @@ async def project_public_retrieval_response(response: dict[str, Any]) -> dict[st metadata = row.get('chunk_metadata') if isinstance(metadata, dict): public_row['metadata'] = metadata - if 'source' in row: - public_row['source'] = row['source'] - else: - public_row['source'] = to_public_source(row) + public_row['source'] = to_public_source(row) public_results.append(public_row) public_response['results'] = public_results diff --git a/packages/shared-python/shared/services/retrieval/execution/routes.py b/packages/shared-python/shared/services/retrieval/execution/routes.py index df521e4d6..e67a1ead8 100644 --- a/packages/shared-python/shared/services/retrieval/execution/routes.py +++ b/packages/shared-python/shared/services/retrieval/execution/routes.py @@ -9,9 +9,6 @@ from shared.services.retrieval.search.discovery import bottom_discovery from shared.services.retrieval.execution.reference_resolver import resolve_workflow_references from shared.services.retrieval.hydration.result_assembly import assemble_retrieval_results -from shared.services.retrieval.execution.response_projection import ( - attach_citation, -) from shared.services.retrieval.hydration.legacy_evidence import render_legacy_evidence_text from shared.services.retrieval.execution.route_types import ( RetrievalRouteContext, @@ -84,7 +81,7 @@ async def _try_run_small_corpus_route( exclude_sections=context.exclude_sections, allowed_chunk_types=context.allowed_chunk_types, ) - results = [attach_citation(row) for row in assembled_rows] + results = assembled_rows response = { "namespace": context.namespace, "query": context.query, @@ -143,7 +140,7 @@ async def _run_classic_topk_route( exclude_sections=context.exclude_sections, allowed_chunk_types=context.allowed_chunk_types, ) - results = [attach_citation(row) for row in assembled_rows] + results = assembled_rows response = { "namespace": context.namespace, "query": context.query, @@ -269,7 +266,7 @@ async def _run_mapnav_route( "evidence_text": evidence_text, "answer_text": "", "referenced_chunks": resolved.refs, - "results": [attach_citation(row) for row in assembled_rows], + "results": assembled_rows, "stop_reason": stop_reason, "decision_trace": decision_trace, } diff --git a/packages/shared-python/shared/services/retrieval/hydration/result_assembly.py b/packages/shared-python/shared/services/retrieval/hydration/result_assembly.py index 96534bce3..ed4487046 100644 --- a/packages/shared-python/shared/services/retrieval/hydration/result_assembly.py +++ b/packages/shared-python/shared/services/retrieval/hydration/result_assembly.py @@ -7,6 +7,7 @@ from shared.services.retrieval.hydration.connected import hydrate_connected_target_rows from shared.services.retrieval.hydration.row_utils import ( clean_content, + extract_page_nums, filter_excluded_rows, iter_connected_target_ids, normalize_chunk_type, @@ -59,6 +60,9 @@ async def assemble_retrieval_results( if chunk_type == 'page': assembled_row['content'] = _page_summary(row) assembled_row['content_source'] = 'summary' + page_nums = extract_page_nums(row) + if page_nums is not None: + assembled_row['page_nums'] = page_nums elif chunk_type == 'table': assembled_row['content'] = _compose_table_content(row, rows_by_chunk_id) assembled_row['content_source'] = 'summary' diff --git a/packages/shared-python/shared/services/retrieval/hydration/row_utils.py b/packages/shared-python/shared/services/retrieval/hydration/row_utils.py index fe8ab4f0e..32bcb2ba2 100644 --- a/packages/shared-python/shared/services/retrieval/hydration/row_utils.py +++ b/packages/shared-python/shared/services/retrieval/hydration/row_utils.py @@ -17,7 +17,7 @@ 'file_path', } PUBLIC_SOURCE_FIELDS = { - 'document_id', 'source_file_name', 'section_path', + 'document_id', 'source_file_name', 'section_path', 'page_nums', } ReferenceLookupKey = tuple[str, str, str, str] @@ -40,6 +40,14 @@ def is_media_chunk(row: dict[str, Any]) -> bool: return normalize_chunk_type(row.get('chunk_type')) in MEDIA_CHUNK_TYPES +def extract_page_nums(row: dict[str, Any]) -> list[int] | None: + metadata = row.get('chunk_metadata') or row.get('metadata') or {} + if not isinstance(metadata, dict): + return None + page_nums = metadata.get('page_nums') + return page_nums if isinstance(page_nums, list) else None + + def build_reference_lookup_key( *, document_id: object, diff --git a/packages/shared-python/shared/tests/test_page_memory_vlm_limiter.py b/packages/shared-python/shared/tests/test_page_memory_vlm_limiter.py index c69854395..619133b9f 100644 --- a/packages/shared-python/shared/tests/test_page_memory_vlm_limiter.py +++ b/packages/shared-python/shared/tests/test_page_memory_vlm_limiter.py @@ -179,7 +179,7 @@ def chat_completion_with_usage(self, **kwargs: Any) -> Any: monkeypatch.setattr( summary_engine._client_mod, "get_openai_client", - lambda model=None: _FakeClient(), + lambda model=None, api_key=None, api_url=None, **_kwargs: _FakeClient(), ) with pytest.raises(UnavailableException): @@ -208,7 +208,7 @@ def chat_completion_with_usage(self, **kwargs: Any) -> Any: monkeypatch.setattr( summary_engine._client_mod, "get_openai_client", - lambda model=None: _FakeClient(), + lambda model=None, api_key=None, api_url=None, **_kwargs: _FakeClient(), ) with pytest.raises(UnavailableException):