Prepared remarks
Good afternoon, everyone. Thank you for joining us today for SpaceX's Second Quarter 2026 Earnings Conference Call. I'm Andrea Williams, Head of Investor Relations. Joining me today are Elon, Gwynne and Bret and we are speaking to you from our facility in Bastrop, Texas. Our second quarter financial results were announced just after 3:00 p.m. Central Time, and all relevant materials have been published to our Investor Relations website at ir.spacex.com. For this webcast, our prepared remarks will be followed by a question-and-answer session. We will take live Q&A from equity analysts and then move to questions directly from our investors that were polled on our dedicated earnings Q&A platform. Thank you to everyone who submitted your questions in advance. During this webcast, we will discuss our business outlook and make forward-looking statements. These statements are based on our predictions and expectations as of today. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our most recent filings with the SEC, including our final prospectus and today's published Form 10-Q. Additionally, during this call, we may discuss certain non-GAAP measures. In our press release and our filings with the SEC, you can find additional disclosures, including all reconciliations with comparable GAAP measures. For the second quarter of 2026, we announced the following financial results as compared to the prior-year quarter: Revenues of $7.8 billion, up 92% from $4.1 billion; a quarterly net loss of $541 million, an improvement of $467 million and adjusted EBITDA of $3.5 billion, up 191% from $1.2 billion. Now I will hand the call over to Elon for his opening remarks.
Thank you. It's been another milestone year for SpaceX so far. We're making great progress developing a fully and rapidly reusable, reliable rocket with Starship. We're connecting millions more people globally across 170 markets with fast, reliable Starlink Internet. We're building AI compute capacity at scale faster than anyone else, we believe. And we're significantly improving our AI models, most notably with the release of Grok 4.5 last month. And now I'll dive into each of those topics separately. So with Starship, we completed 2 successful flights of Starship V3 in the past 90 days. Flight 13 demonstrated core capabilities necessary to achieve an orbital mission and return to Starbase for catch. And Flight 14 will be our first flight to fly our Version 3 Starlink satellites or communication satellites to operational orbit. We'll try to actually catch the first and the second stage of Starlink V3 this year, and we could possibly catch the ship as soon as the next flight. And it's difficult to actually explain to most people just the incredible significance of Starship. I think perhaps describing it in terms of tonnage to orbit is a good way to appreciate the magnitude of the impact Starship will have on the future of civilization. Right now, we deliver roughly 2,500 tons a year to orbit via Falcon. The rest of the world, I think, delivers around 300 tons. So we deliver 80% to 90% of total Earth mass to orbit per year with Falcon. With Starship, our aspirations, and I think we will achieve these aspirations, are to deliver well over 1 million tons to orbit per year and probably ultimately 10 million tons per year. If you plotted things on a chart, you would need a very big chart to even see any of our competitors; our next biggest competitor would be one pixel high on the bar chart. We actually encourage our competitors to copy us. We do nothing to slow them down. We charge fair prices. We actively encourage copying, but it's quite difficult to copy something like Starship. Going from 2,500 tons a year to 1 million, potentially 10 million tons per year, is a ridiculously profound difference. That is our plan, and I think we will achieve that plan. Regarding Starlink, it's also worth noting that the Starlink V3 satellite is about an order of magnitude more capable than the Starlink V2 satellite, which was already very capable. We expect to launch about an order of magnitude more Starlink V3 satellites. That would mean roughly a two-order-of-magnitude increase in delivered bandwidth. Even if our monetization per bit dropped by a factor of 10, that would still mean a 10x increase in Starlink revenue. People are underestimating Starlink. It's not out of the question that Starlink will deliver a majority of the world's Internet where we're permitted to operate, which is the vast majority of countries. This could happen in less than 10 years. With the advent of AI, humanoid robotics, vehicle robotics, and a massive number of robots, appetite for bandwidth will be much greater. A human may produce perhaps a few hundred bits per second of output; actually the average human is outputting less than 1 bit per second over the course of a day. Computers easily do billions of bits per second continuously. This is why I expect appetite for bandwidth to grow dramatically, and I think Starlink is the only thing that can service that bandwidth. Regarding AI, we're making rapid progress on Grok. Grok 4.5 was a huge improvement. Grok 4.6 is coming out probably next week, and Grok 4.7 is about 3 or 4 weeks from today. We expect the cadence of AI development to improve dramatically. Grok 5, which should be out before the end of this year, will incorporate the entire corpus of SpaceX data. Basically, all the data that SpaceX has ever produced, which is a tremendous amount, will be incorporated into Grok training. We think this will make Grok by far the best engineer. We're providing compute to others, and we are building and deploying compute faster than anyone else. Our efficiency of compute deployment is also the highest. We expect to end this year with over 2 gigawatts of compute. Our cumulative compute online by the end of next year will be several times higher—closer to 10 gigawatts than 5 gigawatts. Going forward, we've decided to build exclusively on NVIDIA because we think the Vera Rubin architecture is the best AI computer. We greatly value our partnership with NVIDIA. We're exclusive to NVIDIA. This new capacity will benefit Grok development as well as our Cursor acquisition, which should close quite soon; I think we're through almost all the regulatory hurdles. Regarding the Starmind AI satellite, which will be essentially an optimized Vera Rubin NVL72 computer, this is not a far-future thing. We expect to start launching these next year. The NVL72 VR computer design is a much better design than typical rack-style designs, and we expect to deploy it on the ground as well as in orbit because it is a radical simplification: it will cost less and be more effective. In conclusion, the SpaceX team is solving some of the hardest engineering problems in the history of humanity. I think the team is succeeding because we have, in many ways, the smartest, most dedicated team of humans that has ever existed. I'm incredibly proud to work with such a team and I'd like to thank the team for their incredible hard work. And also thank you to investors who have supported us along the way.
Thanks, Elon. We had an exceptional second quarter. Today, I'll focus on the operational and commercial highlights as well as the initiatives we are prioritizing going forward. Starting with our Space business, we remain the leading launch provider globally with 78 total launches and 1,041 tons of mass to orbit delivered in the first half of this year, primarily allocated to our own internal Starlink missions, but with strong customer missions as well. While our launch capabilities are key to supporting our Connectivity business, we continue to have a very robust commercial manifest and a very robust and growing U.S. government mission demand, which drives revenue for the segment. We're currently launching at our highest Falcon cadence and are on the precipice of operationalizing Starship. As Elon said, the first 2 flights of our V3 Starship vehicles put us in an excellent position to achieve our near-term goals of reaching orbit, catching and reusing the ships and boosters, and deploying our V3 Starlink broadband satellites. Speaking of which, Starlink had a standout quarter, driven by continued growth across our consumer, enterprise and government businesses. During the second quarter, we added net more than 1.7 million Starlink subscribers globally on the consumer side. This reflects our best quarter of new customers to date, an increase from the 1.4 million we added during the first quarter. We achieved this by holding ARPU, which is average revenue per user, stable at $66 per month compared to the first quarter. We ended the second quarter with service availability in 167 markets and have continued to activate new markets since then with some very exciting announcements coming soon, maybe even as early as today. As of June 30, our constellation of operational Starlink broadband and mobile satellites in orbit grew to roughly 10,200 with our 9,600 broadband satellites delivering roughly 800 terabits per second of total downlink capacity. Following a successful speed run test of the V3 Starlink satellites on the most recent Starship launch, during which we connected every satellite through every laser link, we intend to deploy V3 satellites into the constellation for operational use on the upcoming Starship missions. The significant amount of capacity we're able to add to the Starlink constellation from the V3 satellites will enable us to continue providing even better service while serving more customers around the world. In the years ahead, we expect Starlink will represent a significant portion of global Internet traffic, which Elon also discussed. We also see significant growth opportunities for Starlink in enterprise and government. We believe revenue from these markets has the potential to reach a scale at least comparable to, but likely exceeding, our consumer business as we continue to gain share. In the second quarter, we signed a major agreement with American Airlines and activated our service with new partners, including Southwest, Virgin Atlantic, Iberia and Aer Lingus. We have become the provider of choice among major airlines with outstanding customer feedback, though we still have significant room for growth. In fact, we heard from one of our airline customers that passengers are choosing shorter hop flights instead of direct routes to ensure they're on a Starlink-activated flight. On the government side, we won more than $6 billion in U.S. contracts in Q2 supporting major Space Force programs that offer our nation mission-critical communications and sensing capabilities, and we see even more room for growth in this sector in the coming year. In Q2, we also launched new Starlink mobile partnerships with international carriers, including SoftBank, NTT Docomo and Spark New Zealand. Our near-term priority is launching mobile V2 satellites on Starship ahead of integrating the 65 megahertz of EchoStar spectrum later next year. This spectrum transfer was recently approved by the FCC and represents a foundational competitive advantage for Starlink mobile. In AI, the industry is moving toward ever more compute demands. We're rapidly expanding our compute capacity to meet our own needs as Grok expands as well as those for other leading companies such as Google and Anthropic. In terms of our own Grok models, enterprise feedback on the rollout of Grok 4.5 has been very positive so far. Token consumption tripled out of the gate after the July release, and we continue to see strong signals on usage and monetization for the model. We're looking forward to welcoming the Cursor team to SpaceX to integrate our engineering and begin to benefit from a combined sales capability. In review, our momentum as a business is extraordinary. Our engineering teams are scaling Starship and our next-gen satellites while our sales teams expand Starlink, aviation mobility and global markets. At the same time, we're bringing on additional compute capacity and expanding and deepening our AI partnerships across a broader set of customers. After 24 years in this business, I could not be more excited about the months ahead with all the amazing things going on. It really feels like we're just getting started all over again. Now I'll turn the call over to Bret.
Thank you, Gwynne. We demonstrated strong results in Q2. Revenue growth accelerated across every segment. We narrowed our net losses by nearly half year-over-year, and we grew adjusted EBITDA meaningfully faster than revenue. Importantly, we significantly strengthened the balance sheet through our IPO and inaugural investment-grade bond offering. The combination of our global launch leadership, recurring Starlink revenue and rapid growth in AI infrastructure continues to drive improved operating leverage. Now I'll walk through the financials for each segment. For the Space segment, revenue grew 55% sequentially and 29% year-over-year to $962 million, driven by a higher number of larger customer launches and a favorable customer mix. Segment costs and expenses rose $389 million year-over-year, and we continued to accelerate R&D investments in our Starship program. Starship aims to quadruple payload capacity and reduce launch costs by 10x compared to our Falcon 9 rocket, unlocking significant capabilities across all of our business segments. We continue to make progress building the infrastructure required to support thousands of Starship launches per year, including accelerating Raptor and launch vehicle production, the build-out of our Gigabays and making significant progress towards activating multiple launch pads at Starbase and in Cape Canaveral at Pad 39A and Pad 37. Space adjusted EBITDA was a loss of $205 million for the quarter, primarily reflecting these higher R&D expenses. Moving to the Connectivity segment, revenue was $4.3 billion, up 32% sequentially and 66% year-over-year. Growth was driven by record net additions of Starlink subscribers and a sharp increase in enterprise and government revenue. Starlink subscriber ARPU was $66, unchanged compared to Q1. As we continue our global expansion, we're taking a localized go-to-market approach that ensures our product and service offerings fit local needs. While our geographic expansion may drive down blended ARPU over time, we anticipate continued subscriber momentum to deliver strong revenue growth. Enterprise & Government revenue grew 108% year-over-year and represents a durable source of revenue, contributing to strong segment margins overall. As Gwynne mentioned, we are less than 10% penetrated in one of the largest segments, aviation, which represents a lot of headroom for growth. Total costs and expenses for the Connectivity segment increased $970 million or approximately 58% year-over-year. The increase was driven by higher spend to support our revenue growth, including growth in our satellite constellation, increased R&D investment for our next-gen Version 3 satellites and incremental marketing spend. Our Version 3 satellites are expected to deliver 10x the amount of broadband capacity and data density from current generations, which are already very capable, and are essential to supporting continued subscriber growth and higher value service tiers. Income from operations from the Connectivity segment increased 79% year-over-year to $1.7 billion, outpacing revenue growth and driving nearly 3 points of operating margin expansion. Connectivity segment adjusted EBITDA rose 64% year-over-year to $2.6 billion. AI segment revenue was $2.6 billion, up 213% sequentially and 247% year-over-year. The increase was driven primarily by new cloud services agreements as well as growth in Grok and X subscription revenue. Advertising revenue grew 7% sequentially as we overhauled our advertising platform technology to enable AI functionality and enhanced self-service for all customer types. In Q2, we entered into cloud services agreements providing access to compute capacity at our Colossus and Colossus II sites. The initial ramp from these agreements contributed $1.6 billion of incremental AI infrastructure revenue in the quarter. Total cost and expenses for the AI segment rose $1.6 billion year-over-year, reflecting increased R&D primarily due to higher infrastructure spend as we accelerated compute deployment. We meaningfully narrowed our AI segment net operating loss to $1.3 billion and turned adjusted EBITDA positive for the segment in the second quarter at $1.1 billion. The incremental revenue from new hosting deals generated high incremental EBITDA margins as we monetized available compute capacity. We ended the second quarter with 1.4 gigawatts of nameplate compute, up from 1 gigawatt in Q1 and 400 megawatts a year earlier. We expect to end this year at over 2 gigawatts of compute capacity. Total company capital expenditures in the second quarter were approximately $18.4 billion, of which roughly $15.8 billion supported AI compute infrastructure. The remainder funded ongoing Starship and launch infrastructure, satellite production and global ground station expansion. Additionally, we paid out $856 million during the quarter under our spectrum credit agreement related to our pending EchoStar transaction. Our capital allocation priorities remain clear and disciplined. We plan to continue to invest aggressively in the three areas we believe generate the highest long-term returns: Starship development and production scale, next-generation Starlink broadband and mobile constellations, and AI compute infrastructure. Across all three of these investments, we remain focused on capital efficiency, return on investment and preservation of a strong investment-grade balance sheet. The second quarter was transformative from a capital markets perspective. We completed our initial public offering, raising approximately $85.7 billion in net proceeds and followed that with a $25 billion inaugural investment-grade senior notes offering that was partially used to repay our $20 billion bridge loan. The senior notes were issued across five tranches with a weighted average interest rate of 5.855% and average maturity of 11.7 years. We ended the quarter with $100 billion of cash, cash equivalents and marketable securities and $47.5 billion in backlog. Looking ahead, we continue to see robust demand in all three of our business segments, particularly in our cloud services arrangements. We see increasingly favorable economics with each agreement we sign. As Elon mentioned, we expect the supply-demand imbalance in the compute market to continue. The current economics have translated into a less than one-year payback on our new capital deployments for compute. For example, in the first few weeks of the third quarter, we've already contracted an additional $6.7 billion of cloud services revenue over a six-month period that begins ramping starting in October of this year. We believe this puts us on a trajectory, including contribution from Cursor, to reach $100 billion of ARR by the end of this year based on our expected revenue in the month of December. With that, I'll turn the call back to Andrea.
Thank you, Elon, Gwynne, and Bret. This concludes our prepared remarks. For today's Q&A session, we will take our first questions from the equity analysts. Operator, please proceed with the queue.
Questions and answers
The first question comes from Eric Sheridan of Goldman Sachs.
Maybe just one on the Connectivity segment. Can you discuss the backlog of enterprise and government contracts in that segment and how we should think about that backlog converting to revenue and what that might mean for the pace and cadence of growth in the next couple of years?
Yes. We are quite bullish on our enterprise activities. I mentioned that we received over $6 billion in government contracts. You can look at those as tranches and beginnings of additional capability that we will bring online, some of which we will have to compete for. Fundamentally, we have contracts in place to fulfill many capabilities, both the ones we've recently announced and additional ones we'll be working on going forward. Enterprise revenue is quite sticky. We have never lost an enterprise customer. They're quite happy with the Starlink capability we have right now. Bret mentioned we are only 10% penetrated in the aviation industry, which represents a lot of headroom for revenue going forward. Maritime also opens up the TAM dramatically. Starlink offers capability for ships that can't afford VSATs to be outfitted with Starlink Maritime. So I'm quite bullish on enterprise, very bullish on government and very pleased with the stickiness we've seen in those markets.
I'll elaborate a little bit. To secure a large amount of enterprise revenue, you have to demonstrate very high reliability and uptime. In the early days, Starlink did not have high uptime, and many enterprise customers experienced a patchy early experience. We're building a large enterprise sales team to meet with enterprise, corporate and government customers, show them the current high uptime and low latency of Starlink, and help them see that Starlink can be treated as a primary provider, not just a backup. This requires educating customers about the current state of the Starlink system and its trajectory. I would expect enterprise revenue to substantially exceed consumer revenue.
Next question, operator?
Your next question comes from the line of Adam Jonas with Morgan Stanley.
Elon, first one for you. Just confirming, you said you expect to be closer to 10 gigawatts of nameplate compute by end of '27, closer to 10 than 5. Do you have line of sight? How confident is your line of sight on permitting, chips and turbines for that? And then I have a follow-up for Gwynne.
We're actually aiming to far exceed that gigawatt number in terms of power online, power cooling and electrical equipment. Our tentative target is to have 20 gigawatts at the power and cooling level online by the end of next year. I don't think we'll achieve 20 gigawatts, but we want a series of projects that cumulatively reach 20 gigawatts by the end of next year. Some projects won't pan out exactly on time, but I would expect something close to 15 gigawatts at the power plant level, assuming maybe a quarter of the projects take longer than expected. Our goal is to have far more power, cooling and electrical equipment than we have GPUs, which is logical given GPU cost relative to balance of system. SpaceX is very good at hardware; I would say SpaceX and Tesla are among the best companies globally at hardware. We're applying a small amount of our rocket and satellite hardware expertise to scaling terrestrial data centers and finding tremendous benefits. We expect to have far in excess of the power and cooling needed, and our understanding with NVIDIA is we will receive a very significant percent of their GPUs next year.
Okay. Just Gwynne, a follow-up. You were recently asked what is one of the more underappreciated parts of the SpaceX investment story and you said robotics. Can you elaborate on why you believe that? How do robots fit into the SpaceX TAM?
Let me clarify. I think I may have been referring to the underappreciated amount of connectivity that we will need going forward. Robotics, especially those tied to AI for automobiles and humanoid robots, will dramatically increase demand for connectivity, which Elon discussed in his remarks.
You can think about satellites as robots: they're autonomous and do not need servicing. In what may seem far future, but will come faster than people expect, using robots on the Moon to scale up manufacturing will enable a mass accelerator on the Moon. If you have a mass accelerator on the Moon and solar and radiator production there, you could potentially scale to orders-of-magnitude larger economies in terms of intelligence launch space. We will land a lot of tonnage on the Moon and build factories there. Robots will be helpful, and as we grow, we will ask how much intelligence we'd like as we grow toward being a Kardashev II scale civilization.
Your next question comes from the line of John Godyn with Citigroup.
One of the hallmarks of SpaceX to date is how efficiently the organization has used capital. But it's also no secret that capital needs are significant to support your vision. The company is moving fast. Could you talk more about the CapEx outlook across segments, touch upon any areas where buying versus building might accelerate growth—Starlink Mobile comes to mind—and any related thoughts on capital needs for next steps in extreme vertical integration like terrafab, anything needed to support future growth?
I appreciate the question. We're proud of how we've managed capital allocation, and we'll continue down that path. For the rest of this year, the next two quarters should be similar to the current quarter from a CapEx perspective. Looking longer term, not all CapEx is the same. On the AI compute side, we're deploying capital such that we're getting less than a one-year payback—capital is monetizing very quickly and resembling COGS in terms of speed to revenue. That's different from building assets like launch sites that benefit us for decades. We continually optimize ROI on our capital.
I'll add that we are expecting to reach a $100 billion-plus ARR in December. It's also worth mentioning our internal projections for reaching $1 trillion in revenue have moved from 2031 to 2030. There's a non-zero chance of reaching that in 2029.
Your next question comes from the line of Ronald Epstein with Bank of America.
Could you walk through what you learned on Starship Flight 13—what was better than expected, what was worse—and how we should think about the journey to rapid reusability, heat shields and so on?
Flight 13 exceeded expectations. I was a little worried, thinking about Apollo 13, but Flight 13 went incredibly well. The heat shield appears very robust. The ship is still floating in the ocean, and we expect to recover it for analysis. All indications are positive. Assuming we receive regulatory approval, we'll attempt to catch the ship with the tower on the next flight, tentatively scheduled for the end of this month. We expect flight cadence to increase rapidly. Probably a year from now, we'll be doing at least one flight a day, possibly more.
Your next question comes from the line of Doug Anmuth with JPMorgan.
Elon, can you elaborate on the key unlocks from leveraging your rockets and satellite expertise in accelerating the pace of compute build-out? Also, regarding the $6.7 billion in incremental compute deals, how do you expect the supply-demand environment to persist and whether you'll be able to keep premium pricing and sustain it?
Rockets are an extreme engineering challenge—'rocket science' is literally our daily work—because rockets tend to blow themselves to pieces. Convincing rockets not to blow up and to deliver payload reliably is very difficult. Applying even a small amount of that engineering skill to terrestrial data centers produces outsized benefits. Terrestrial data centers are trivial compared to making gigantic reusable rockets and launching frequently. Starlink satellites are also very advanced technology. Taking a fraction of that engineering and applying it to data centers yields amazing outcomes. Regarding monetization, my rough guess for monetization per watt of Rubins is somewhere between $30 and $50 per watt, but that's a guess. Intelligence per watt is increasing rapidly and smaller models are doing more and more. We might get to the point where even an H100 can deliver useful AI comparable to a human engineer. The limiting factor currently is memory, which increases by around 20% per year, while demand may be increasing by 200% per year or more. When demand outpaces supply, economics suggests prices rise, not fall.
Your next question comes from the line of Edison Yu with Deutsche Bank.
I wanted to come back on the comment about the $100 billion in ARR. Is there any way you can unpack that a little bit and perhaps what it takes to get there? And Elon, you mentioned you pulled the revenue target forward by a year. Can you call out a few things that gave you this extra confidence?
On unpacking the $100 billion ARR, growth across all three business segments contributes, but the largest piece is cloud services. We have momentum from deals already closed and additional business closed in the first weeks of July on the AI cloud services side. We've announced deals with Google and Anthropic that start to ramp later this quarter or in October. There's a lot of momentum from that side of the business, plus strength in our own models and Cursor coming into the fold. It's really all three segments driving that, with cloud services being the largest contributor.
To be clear, the $100 billion ARR in December is not a question mark—that's what we would achieve if we basically did nothing, so it may be higher. The breakdown of revenue is probably similar to what we shared pre-IPO; it's just happening a year sooner. We expect a rapid increase in revenue from Starlink communications from the V3 satellite because it's more than 10x the capability of the V2 satellite, and we'll be launching many more. We also have the direct-to-cell constellation going up. Some were modeling Starlink growth based on V2 historical growth, but V3 is a massive step change.
Your next question comes from the line of John Hodulik with UBS.
Two things. First, Elon, following up on Starlink Mobile: when do you expect to start launching the V2 mobile satellites? Can you talk about appetite for additional spectrum after the EchoStar deal? How big is the opportunity in mobile and how does it compare to broadband? Second, on compute ramping in 2027, how much of that capacity will be leased versus used to train Grok? How much will be withheld to train Grok versus leased to third parties?
I'll take the Starlink mobile questions. We'll start flying the next-generation Starlink mobile satellite next year—that's the second version distinct from V3 broadband. Currently, the system we operate uses about 5 megahertz of bandwidth through local telco providers. We have 65 megahertz available through the EchoStar spectrum, which greatly increases capability. Simplifying, you could view the next-generation mobile satellite plus EchoStar spectrum as roughly 100x better—10x satellites times 10x spectrum—than what we've got today. The current service already supports voice and video calls over apps like Signal and WhatsApp, and we anticipate strong uptake. Regarding revenue, a top-down view: the three big U.S. carriers together generate roughly $600 billion a year, and we expect to be able to acquire many of their customers because our service will eliminate dead zones and be better during disasters. We'll start flying the satellites next year and start providing service by the end of next year.
On compute and Grok training: if you are creating a financial model, you'd put a number here. We expect the percentage of compute used internally for Grok training to decrease over time as more compute is used for inference and leased to others. I would expect maybe 10% of our compute to be used for Grok training over time, something like that.
Your next question comes from the line of Kutgun Maral with Evercore ISI.
A follow-up on Starlink Mobile and your ambitions in the U.S. market. Many of us are trying to understand what a U.S. direct-to-consumer service could look like. To become a true fourth U.S. carrier would imply well over $100 billion of mobile CapEx over time, much of it auctioned spectrum and greenfield infrastructure. How are you weighing that potential build plan against an MVNO or acquisition path? What's your internal base case on how far you'll take this ambition? Or is it too premature?
The spectrum we purchased from EchoStar does have terrestrial components, so we intend to build out the terrestrial component. You'll have capacity from satellites and a terrestrial build-out of hardware and systems necessary to make a true mobile service. I'm not going to discuss the CapEx for that now. One hint: you could put a cellular base station on the same gear that holds a Starlink broadband dish. You can deploy many small cells or femtocells as needed rather than spending many billions upfront on low-band spectrum. We have efficient and novel ideas for deployment that should be CapEx efficient.
To add, instead of deploying very expensive large cellular base stations, we feel confident we can deploy many small stations—essentially Starlink dishes that also provide connectivity in mobile spectrum bands—and have them widely distributed. Starlink antennas are on roofs of houses and businesses, providing good coverage to cellphones on the ground. We believe this can provide better and higher bandwidth connectivity than current cellular providers.
Thank you. With the remaining time, we would like to cover some of the questions from individual shareholders. I will read them aloud. We got a lot of questions on the progress for Starship Human Landing System. Can we provide any updates?
For Starship, we need to make Starship extremely reliable for satellite launches before putting people on board. We are expecting to have a very high launch rate and thus achieve the level of safety needed for humans relatively quickly, probably by the end of next year.
As far as milestones go, propellant transfer in orbit is critical to our internal ambitions and our Human Landing System ambitions. Artemis III is next year, where we will dock with Orion. We will follow with a direct-to-lunar cargo uncrewed mission. We want to put boots on the Moon in 2028.
For the Cursor acquisition, there were several questions asking about the combined product roadmap for the companies once it closes.
We'll likely make announcements or discuss the combined roadmap outside of the earnings call. We don't want to jump the gun with regulators while closing the acquisition, so we're trying to get the acquisition closed as quickly as possible. I think we're pretty close, but we must be careful about regulatory timing.
Next question from the individual shareholders. Once you start launching broadband V3 satellites, how quickly will they translate into improved Starlink service?
We need some critical mass of V3 satellites, probably on the order of about 1,000. I expect that to be roughly in the second quarter of next year getting to that point.
And our last question, is the heat shield the hardest remaining problem for Starship?
I don't want to jinx it, but I would consider the heat shield problem solved at this point. We will analyze the ship currently floating in the ocean, but all indications from data and visual inspection suggest we've solved the heat shield problem, which was arguably the single biggest problem. We'll continue to make improvements, but we do not see any technical obstacles at this point to achieving full and rapid reusability.
Thank you. This concludes today's call. You can reach us at ir.spacex.com, and we will see you next quarter. Cheers.
This concludes today's call. Thank you for attending. You may now disconnect.