SpaceX shares rise 7.5% after return to profit and revenue beat
Key Facts
SpaceX returned to profitability in the third quarter of 2026, posting net income of $4,404 million, according to its earnings filing with the U.S. Securities and Exchange Commission. That compared with a net loss of $1,054 million in the same period of 2025, as revenue exceeded analysts' expectations. Quarterly revenue reached $14,575 million, according to the filing, exceeding S&P Capital IQ estimates of about $13 billion cited by Axios. The Associated Press reported that the company's shares rose 7.5% in after-hours trading on October 20. The shares gained as the company announced its results and Elon Musk disclosed that a potential merger with Tesla was being explored.
The superintelligence segment led the company's businesses by revenue, generating $7,560 million in the third quarter, according to the segment details in SpaceX's filing. The segment posted operating income of $431 million for the period, combining the largest contribution to sales with a positive operating result. The company attributed growth in the business to cloud services agreements, among the drivers it identified for superintelligence's performance during the quarter. It also listed the acquisition of Cursor among the reasons for growth, alongside agreements to provide cloud services. The company added increased use of Grok to the factors supporting the business, citing service expansion, the acquisition and demand for its products in explaining the segment's growth.
The connectivity segment recorded revenue of $5,248 million in the third quarter of 2026, according to the same filing, placing it behind superintelligence by sales. The business posted operating income of $2,367 million, exceeding the operating income recorded by the superintelligence segment during the period. The two businesses thus ranked differently by revenue and operating income, with superintelligence leading sales while connectivity contributed more to operating income. In the Starlink business, individual subscribers reached 13.6 million at the end of September, according to figures the company released in its earnings filing. The quarter's results thus combined Starlink's subscriber base at the end of the period with financial performance in connectivity that exceeded superintelligence in operating income.
Against the businesses' revenue and operating income, SpaceX's total capital expenditure reached $19,593 million in the third quarter, according to the company's filing with the U.S. regulator. Superintelligence accounted for the largest share of that spending, with capital expenditure of $16,444 million over the same period. The segment's capital expenditure exceeded its quarterly revenue, while the company's total capital expenditure exceeded group revenue for the quarter. The concentration of spending in superintelligence coincided with the business leading sales, while connectivity remained ahead in operating income. That level of spending coincided with the return to net profit, leaving the period's results with profitability at the group level and capital expenditure concentrated largely in superintelligence.
On the potential merger, Musk said SpaceX and Tesla had formed special committees of independent directors to explore the possibility, according to the Associated Press. He cautioned against treating a merger of the companies as certain, saying of that characterization: "I think that would be an overstatement." Clarifying his role in the process, Musk told Axios: "Because I am a conflicted party, I cannot actually participate in the discussions." The arrangement he announced places discussions of the possibility with independent directors at both companies, excluding him from participation because of the conflict of interest he acknowledged. The announcement of the committees was thus accompanied by an explicit reservation from Musk about the inevitability of a merger and a restriction on his personal participation in deliberations.
Looking ahead, SpaceX expects capital expenditure of between $35 billion and $40 billion in the fourth quarter of 2026, according to the Associated Press. The company's projected range for the next quarter exceeds its total capital expenditure in the third quarter, continuing the spending program reflected in its quarterly results. The estimate follows a quarter in which most capital expenditure was concentrated in superintelligence, a business whose growth the company attributed to cloud services, the acquisition and increased usage. In the next scheduled earnings announcement, Tesla set the release of its financial results for the third quarter of 2026 for after the market close on Wednesday, October 21, 2026, according to an investor relations statement. Tesla's earnings announcement follows SpaceX's results and Musk's disclosure of the special committees exploring a potential combination of the companies.