SpaceX Q3 2026 Earnings: AI Tops Starlink, Tesla Merger Talk

SpaceX reported third-quarter results after the close on Tuesday, October 20, 2026, posting revenue of $14.6 billion, up 161% from a year earlier, and its first profitable quarter since going public in June. For the first time, the company’s artificial intelligence business brought in more money than Starlink. Then, on the earnings call, chief executive Elon Musk confirmed that the boards of SpaceX and Tesla have each formed special committees to explore a possible merger of the two companies.

Shares of SpaceX (SPCX) rose roughly 8% in extended trading, according to market reports, after a quarter that beat Wall Street’s revenue consensus of about $12.7 billion to $12.9 billion by close to $2 billion.

The headline numbers

For the quarter ended September 30, SpaceX reported:

• Revenue: $14.6 billion, up 161% year over year, against analyst estimates in the $12.7 billion to $12.9 billion range.
• Net income: $4.4 billion, the company’s first quarterly profit as a public company. In the second quarter it reported a net loss of $541 million.
• Operating income: $2.8 billion.
• Adjusted EBITDA: $8.8 billion.
• Capital expenditures: $19.6 billion, up from $18.4 billion in the second quarter and above the roughly $18.7 billion analysts had modeled.
• Backlog: $63 billion, up from $47.5 billion at the end of the prior quarter, with about $42 billion expected to be recognized over the next twelve months, according to the company.

Adjusted earnings per share came in well ahead of consensus estimates in the low teens of cents, though outlets reporting the results differed on the exact adjusted figure.

The swing from a loss to a $4.4 billion profit in a single quarter is the clearest break yet from the story that defined SpaceX’s first public report in August, when spending overwhelmed growth in the eyes of investors and the stock sold off.

The AI business is now the biggest segment

The defining number in the release was the size of the Super Intelligence (SI) segment, the AI compute and model business SpaceX absorbed through its combination with xAI. SI generated $7.56 billion in revenue in the quarter, about 52% of the company’s total, and nearly triple its level a year earlier on a reported basis.

Of that, about $7 billion came from what the company calls SI Solutions and Infrastructure, which covers the sale of AI compute capacity to outside customers. The segment generated roughly $5 billion of adjusted EBITDA. The company’s chief financial officer described the quarter as an “inflection point” for the business on the call.

SpaceX said nameplate compute capacity rose to 1.7 gigawatts at the end of the quarter, up from 1.4 gigawatts at the end of June, as construction of the Colossus II cluster in Memphis continued.

The growth comes at a price. Of the $19.6 billion in capital spending during the quarter, $16.4 billion went to the SI business — more than 80% of the total — chiefly for GPUs, power, and data center construction.

Starlink growth beats, subscriber adds miss

The connectivity segment, made up mostly of Starlink, grew 69% to $5.25 billion, ahead of the roughly $4.92 billion analysts expected. Within it:

• Consumer revenue rose 57% to $3.1 billion.
• Enterprise and government revenue rose 91% to $2.1 billion.

Starlink reached 13.6 million consumer subscribers, up 89% from a year earlier. Net additions of 1.6 million in the quarter fell short of the roughly 2.29 million analysts had forecast, according to consensus figures cited in coverage of the report. Average revenue per user was about $69 a month, and the company said its direct-to-cell mobile service reached 22 million monthly users.

Launch segment flat as Starship costs mount

The space segment, which includes Falcon launches and government contracts, grew just 6% to $1.77 billion and posted an operating loss of $7 million. The company attributed the pressure to research and development spending on Starship.

On that front, SpaceX said Starship’s 14th flight reached orbit for the first time and deployed operational V3 Starlink satellites. For Flight 15, which the company said is expected next month, it plans to attempt to catch both the Super Heavy booster and the Starship upper stage.

Musk confirms Tesla merger committees

The most consequential disclosure came in response to a question on the call. Musk said the boards of SpaceX and Tesla have each formed special committees of independent directors to evaluate a potential combination of the two companies. He said the committees were formed at the request of shareholders.

Musk stressed that the process is at an early stage. He said the committees have not agreed on terms and that there is no guarantee they will, and cautioned against treating a deal as a foregone conclusion. Because he is the controlling figure at both companies, Musk said he is a conflicted party and is not a member of either committee and is not involved in the negotiations, citing securities rules.

He also pointed to the approval threshold, describing the requirement for a majority of all outstanding Tesla shares — not just those voted — as “quite a high hurdle.” Tesla’s proxy statement, filed a day earlier, does not include a merger proposal for shareholders to vote on.

Musk did not name the committee members. Reports citing the companies’ filings say the Tesla committee includes independent directors such as board chair Robyn Denholm, and that SpaceX’s includes independent directors including Ira Ehrenpreis. Fortune described the combination under discussion as a roughly $3.5 trillion merger based on the two companies’ market values.

The two companies are already tied together commercially, including through the jointly announced Terafab chip manufacturing project. Tesla is scheduled to report its own third-quarter results after the close on Wednesday, October 21.

How the stock got here

SpaceX shares had come into the report under pressure. The stock had fallen about 15% from its early-October level ahead of earnings, according to a Pepperstone preview, extending a volatile stretch since the company’s June listing that included a period trading below its IPO price. The after-hours move recovered a little over half of that decline.

The report was also closely watched by large institutional holders, among them Nvidia, whose disclosed stake in SpaceX ties the chipmaker to the success of the very compute buildout its GPUs are powering.

What it means

SpaceX is now, by revenue, an AI company that also launches rockets. With the Super Intelligence segment producing more than half of sales and the bulk of adjusted EBITDA, investors will increasingly value SPCX against AI infrastructure peers and neoclouds rather than aerospace or telecom comparables. That cuts both ways: it supports a higher multiple while growth runs at this pace, but it also exposes the stock to the same AI-spending skepticism that has hit chip and data center names in recent weeks.

The profit answers August’s objection — for now. The bear case after the second quarter was that capex was outrunning any visible return. A $4.4 billion profit and $8.8 billion in adjusted EBITDA, alongside a $63 billion backlog, give management an answer. But capital spending is still rising, and $16.4 billion a quarter into compute is a commitment that only pays off if outside demand for capacity holds. Watch backlog conversion and SI customer concentration in coming quarters.

Starlink’s subscriber miss is worth noting. Revenue beat, helped by enterprise, government and pricing, but net adds trailed forecasts by roughly 700,000. If consumer growth is slowing while the company prioritizes compute, the connectivity business may lean more on enterprise contracts and mobile to keep its growth rate.

The merger is the wild card. A Tesla–SpaceX combination would be one of the largest corporate deals ever, and it would merge Tesla’s vehicle, robotics, and chip ambitions with SpaceX’s compute and launch capacity. The hurdles are real: independent committees must agree on an exchange ratio between two richly valued stocks, and Tesla needs a majority of all outstanding shares, a bar Musk himself called high. Expect governance questions, fairness-opinion scrutiny, and likely litigation if talks progress.

What to watch next: Tesla’s results and call on Wednesday, any filings describing the committees’ mandates and advisers, Starship Flight 15 next month, and whether SpaceX’s compute capacity keeps climbing from 1.7 gigawatts at the pace this quarter implied.