AI-assisted research analysis by FutureKnowledge. Sources checked 21 October 2026. This is not investment advice.
Reviewed by FutureKnowledge: figures, dates and attributions were checked against the linked sources before publication.
SpaceX reported third-quarter net income of $4.4 billion on revenue of $14.6 billion, up 161%, as its AI computing business overtook Starlink. On the same call, Elon Musk said SpaceX and Tesla have set up special committees to study a possible merger.
SpaceX Q3 results: what happened
SpaceX posted the figures on 20 October, after the US market closed. It is only the company’s second report since its June listing. According to the company’s results release, revenue for the quarter ended 30 September was $14.58 billion, against about $5.6 billion a year earlier. Net income was $4.40 billion, or $0.35 per diluted share, compared with a net loss of $1.05 billion. Adjusted EBITDA rose 306% to $8.81 billion, and operating income came in at $2.79 billion.
The segment split shows how much the company has changed:
- SI (Super Intelligence), the renamed AI segment built from the xAI business, brought in $7.56 billion, up 830%. It earned an operating profit of $431 million.
- Connectivity, mainly Starlink, brought in $5.25 billion, up 69%. It earned an operating profit of $2.37 billion. Consumer subscribers reached 13.6 million, a gain of 1.6 million in the quarter, at an average of $69 a month.
- Space, covering launch and related work, brought in $1.77 billion, up 6%. It was roughly break-even, with a $7 million loss.
The results beat expectations by a wide margin. Reuters, as carried by The Korea Times, said analysts had expected net income of about $1.57 billion and 12.19 million Starlink subscribers. Investing.com put consensus revenue at $12.87 billion and EPS at $0.13. Reuters reported adjusted EPS of 45 cents, while the release gives diluted EPS of 35 cents. Each figure is labelled with its basis here. In extended trading the shares rose about 2% in the early reaction reported by the Associated Press. Reuters later reported a gain of about 8%. The shares had closed the regular session at $147.79.
Why profit jumped: renting out AI compute
Most of the growth came from leasing data-centre capacity to other companies. TechCrunch reports that the SI segment now includes the Grok chatbot, the acquired Cursor coding tool and a “neocloud” business with about 1.7 gigawatts of compute. That makes SpaceX a seller of AI capacity as well as a satellite operator.
Some of the quarter’s strength will not repeat. On the earnings call, finance chief Bret Johnsen said Connectivity’s 55% gross margin included a one-off benefit of about three percentage points, mainly from tariff refunds. He said fourth-quarter margins should look more like the second quarter’s. TechCrunch also reports about $1 billion of gains linked to bitcoin’s price recovery and related-party items. The quality of the profit is therefore more mixed than the headline number suggests.
The spending question
The other side of the AI build-out is cash. Capital expenditure was $19.59 billion in the quarter, and $16.44 billion of that went to the SI segment. Over nine months, the release shows operating cash flow of $13.1 billion against $48.1 billion of spending on property and equipment. Management guided fourth-quarter capex to $35–40 billion. SpaceX ended September with $51.3 billion in cash, $38.6 billion in marketable securities and $38.8 billion of debt and finance leases.
Johnsen guided first-quarter 2027 revenue to $33–37 billion and said the company is on track for a $100 billion annualised revenue run-rate based on December. Musk spoke of $500 billion to $1 trillion in annual recurring revenue by the end of 2027 and of adding about 10 gigawatts of compute next year. These are management ambitions, not reported results, and they depend on the build-out going to plan.
The Tesla merger talk
Musk said both companies have formed special committees of independent directors to look at a possible combination. He said he cannot take part because he is conflicted, and that the committees “have not reached agreement on the terms of any transaction.” Reuters quoted him as saying a merger would be a good idea, though it would be premature to assume one will happen. It also reported that Barclays thinks a deal could be announced before Tesla’s December annual meeting. Musk owns nearly a fifth of Tesla and just under half of SpaceX, according to Reuters, so any deal would raise governance questions for minority shareholders in both companies. Tesla shares rose about 1.8% after hours.
What it means for India and for businesses
For companies buying AI capacity, a large new supplier renting compute at near-spot rates adds supply to a market that has been tight. Musk said about half of SpaceX’s compute would go to outside customers. That matters for anyone weighing the AI-financing worries we covered after Microsoft’s reported exit from an Nscale data centre and the chip-stock losing streak. For Indian investors who hold US shares through overseas investment routes, SpaceX is now a very large listed company whose reported numbers swing with heavy capex and one-off items. It also sits next to other big AI listings, including the planned Anthropic IPO.
Who is more or less exposed
- More exposed: rival AI cloud and “neocloud” providers that compete on price for compute, satellite-broadband competitors facing a Starlink base of 13.6 million subscribers, and suppliers whose order books depend on SpaceX’s capex holding at these levels.
- Less exposed: AI model developers and enterprises that buy compute, which gain another source of supply, and launch customers, since the Space segment grew modestly and steadily.
Scenarios to watch
These are conditional scenarios, not predictions.
| If… | Then a plausible effect is… |
|---|---|
| Q4 capex lands in the $35–40 billion range and SI revenue keeps scaling | Guidance credibility improves, but borrowing or cash drawdown rises |
| Compute rental prices fall as supply grows | SI margins narrow and the run-rate target gets harder to reach |
| The special committees agree terms before December | Shareholder votes and governance scrutiny dominate both stocks |
| The committees fail to agree | Attention returns to SpaceX’s cash burn and Tesla’s own results |
What to watch next
- Tesla’s own quarterly report and any formal statement from either special committee.
- Whether compute capacity reaches the 2.5–3 GW year-end range management described.
- Gross margins in the fourth quarter, once the tariff-refund benefit drops out.
- Starship progress, which management links to future Starlink satellites.
Bottom line
SpaceX’s Q3 results show a company now driven more by AI compute rental than by rockets or Starlink. The headline profit beat is real, but it was helped by one-off items and is paired with fast-rising capital spending. The Tesla merger committees add a governance story that could matter as much as the operating one.
Method note: we compared SpaceX’s Q3 2026 results release and the earnings-call transcript (via The Motley Fool) with reporting from Reuters (via The Korea Times), the Associated Press (via WRAL), TechCrunch and Investing.com. Where after-hours share moves differed by timing, we give the range. Diluted EPS from the release is used as the headline figure, and Reuters’ adjusted figure is labelled as adjusted.