SpaceX reported third-quarter net income of $4.404 billion on Tuesday 20 October, of which $2.791 billion came from operations, and Elon Musk said on the earnings call that SpaceX and Tesla have formed special committees to discuss combining.
Revenue was $14.575 billion, up 161 per cent from $5.576 billion a year earlier, according to the results release SpaceX furnished to the SEC. That beat the $12.7 billion Bloomberg consensus cited by Yahoo Finance. The profit headline needs a footnote. The merger remark needs a bigger one.
How much of the profit came from operations?
About 63 per cent. Income from operations was $2.791 billion. The remaining $1.613 billion of net income came from interest income of $873 million, other income of $1.025 billion and a $390 million income tax benefit, less $675 million of interest expense. By this publication's arithmetic, that is 36.6 per cent of the quarter's net income. A year earlier the company posted a net loss of $1.054 billion, after a $562 million tax charge.
SpaceX has three reporting segments, and one of them did most of the work.
| Segment | Q3 2026 revenue | Q3 2025 revenue | Q3 2026 operating income | |---|---|---|---| | Connectivity (Starlink) | $5.248 billion | $3.097 billion | $2.367 billion | | Super Intelligence (AI) | $7.560 billion | $0.813 billion | $0.431 billion | | Space (launch) | $1.767 billion | $1.666 billion | -$0.007 billion | | Total | $14.575 billion | $5.576 billion | $2.791 billion |
Connectivity earned a 45 per cent operating margin by our calculation. Super Intelligence, which houses the artificial intelligence business, grew revenue more than ninefold but kept only about 5.7 per cent of it as operating income. Part of that jump is an acquisition: SpaceX completed its purchase of Cursor, the coding-software company, on 14 August at an implied equity value of $60 billion. Cursor contributed $608 million of revenue through 30 September, and the segment carried $1.217 billion of Cursor-related share-based compensation in the quarter.
Starlink ended September with 13.6 million consumer subscribers, up from 12.0 million in June and 7.2 million a year earlier. Consumer revenue per user was $69 a month, up from $66 in the second quarter but down from $83 a year earlier. The subscriber base has nearly doubled in a year at a lower price per head.
How much is SpaceX spending?
More than twice what it earns before depreciation. Capital spending was $19.593 billion in the quarter and $48.069 billion in the first nine months, the release shows. Of the quarterly total, $16.444 billion went to Super Intelligence, against $4.953 billion of adjusted EBITDA in that segment. Company-wide adjusted EBITDA, SpaceX's preferred profit measure, was $8.809 billion, so quarterly capital spending ran at about 2.2 times it.
The balance sheet absorbs that for now. SpaceX held $51.294 billion of cash and $38.561 billion of marketable securities at 30 September, about $89.9 billion combined, after $85.675 billion of net proceeds from its June share offering. Debt and finance leases totalled $38.844 billion. The release gives no numerical guidance. On the call, Chief Financial Officer Bret Johnsen said new compute deployments pay back their cost in less than a year at current pricing, according to Yahoo Finance's account of the call.
What did Musk say about Tesla?
That he believes committees exist and that a deal would be hard. "I think both SpaceX and Tesla have formed special committees to discuss this idea," Musk said on the call, as quoted by Yahoo Finance. "And because I'm a conflicted party, I can't actually be in the discussions of the special committees." "Do I think it would be a good idea? Yes," he said. Fortune reported that he said calling a deal certain would be "overstating it," and that approval would need a "majority of all outstanding" Tesla shares, which he called "quite a high hurdle."
The committees rest on that remark alone. Neither company has issued a statement about them, and a search of SEC filings on Wednesday found no 8-K from either. Tesla's annual proxy, filed on Monday, contains no merger proposal, Fortune said.
The control question is large, and the numbers depend on the date. SpaceX's final prospectus in June showed Musk with 84.4 per cent of the voting power after the offering, and, by this publication's arithmetic from the same table, about 49 per cent of all shares, a count that includes 1.30 billion restricted shares that vest only on performance conditions. SpaceX has issued stock since, including for Cursor. Current estimates differ: Yahoo Finance put Musk's stake at about 48 per cent and Fortune at about 45 per cent, with both putting his votes at about 82 per cent. Yahoo put his Tesla stake at about 20 per cent.
Barclays analyst Dan Levy, quoted by Yahoo Finance, estimated that SpaceX buying Tesla at current values, about $2.1 trillion and $1.5 trillion, would leave Musk with about 37 per cent of the combined company and 56 per cent of the vote. Levy wrote that a tie-up "has increasingly become the consensus expectation." Those are one analyst's estimates, not terms.
What to watch next
Tesla reports its own third quarter after the close on Wednesday, with capital spending already the number analysts are watching. Levy noted that Tesla must hold its annual meeting by 6 December, and said a later announcement "may increasingly challenge" approval at that meeting.
The market has its own calendar. SpaceX shares were up about 9 per cent before Wednesday's open, Yahoo Finance reported, against a $135 offering price in June. Evercore ISI analyst Kutgun Maral, quoted by Yahoo, said 1.30 billion shares come free of lock-up two days after the report and 329 million on 24 October. SpaceX has also agreed, after the quarter ended, to buy 800 MHz spectrum licences for Starlink Mobile, a deal it expects to close in the first half of 2027. The test for the next report is simple: how much of the profit comes from operations, and whether quarterly capital spending near $20 billion is a peak or a run rate.
Revenue, segment results, operating income, the non-operating items, net income, adjusted EBITDA, capital spending, cash, marketable securities, debt, IPO proceeds, Starlink subscriber and ARPU figures, the Cursor figures and the 800 MHz spectrum agreement come from SpaceX's third-quarter 2026 results release, furnished to the SEC on Form 8-K on 20 October 2026. The $135 offering price and the ownership table come from SpaceX's final prospectus of 12 June 2026. Musk's quotations on the committees and on whether a merger is a good idea, Musk's 20 per cent Tesla stake, the 48 per cent SpaceX estimate and the Barclays analysis by Dan Levy come from Yahoo Finance (Pras Subramanian, 21 October 2026). The 45 per cent estimate, the "majority of all outstanding" and "quite a high hurdle" remarks, the Tesla proxy and the governance details, including the 13 May letter, come from Fortune, 21 October 2026. Bret Johnsen's payback remark, the premarket move, the Bloomberg consensus figure and the Evercore ISI lock-up comments by Kutgun Maral come from Yahoo Finance's live coverage of 20-21 October 2026. A search of SEC full-text filings on 21 October found no 8-K from either company on the committees. The 36.6 per cent share of net income, the segment margins, the capital-spending ratios and the ownership share in the prospectus are this publication's arithmetic. The analysis is our own.
Topics businessSpaceXTeslaearningsStarlinkcapital spendingmergers
