Key Highlights

  • Revenue reached USD 14.6 billion, up 161%, versus a USD 12.87 billion estimate.
  • Adjusted earnings were USD 0.35 per share against a USD 0.13 estimate.
  • Capex was USD 19.6 billion, with USD 35 billion to USD 40 billion guided next.
  • Management said Tesla merger terms remain unagreed between two special committees.

Space Exploration Technologies (NASDAQ:SPCX), known as SpaceX, reported third quarter 2026 results on Oct. 20, with revenue of USD 14.6 billion, up 161% from USD 5.6 billion a year earlier. Net income was USD 4.4 billion, versus a net loss of USD 1.1 billion in the prior-year quarter, and adjusted EBITDA rose 306% to USD 8.8 billion. Adjusted earnings of USD 0.35 per share compared with a consensus estimate of USD 0.13, and revenue topped the USD 12.87 billion estimate.

Shares traded at USD 160.15 in premarket trading on Wednesday, up 8.36% from the USD 147.79 close.

Superintelligence Drives the Profit Swing

The superintelligence segment was the largest contributor to growth. Segment revenue reached USD 7.6 billion, up USD 5.0 billion from the second quarter, mainly from cloud services agreements. Segment adjusted EBITDA was USD 5.0 billion, and segment operating income was USD 431 million, or USD 1.6 billion before USD 1.2 billion of stock-based compensation tied to the Cursor acquisition.

Connectivity revenue was USD 5.2 billion, up 69% year over year, with 13.6 million Starlink consumer subscribers after adding 1.6 million in the quarter. Monthly revenue per consumer user rose 5% from the prior quarter to USD 69. Connectivity gross margin was 55%, including a one-time benefit of roughly 3 points, mostly from tariff refunds. Space revenue was USD 1.8 billion, up 6% year over year.

Spending Steps Up Across Compute and Starship

Capital expenditures in the third quarter were USD 19.6 billion, directed mainly at compute build-out, Starship infrastructure and satellite production. The company guides fourth quarter capital expenditures to USD 35 billion to USD 40 billion and said gross margins in that quarter are projected to resemble the second quarter, since the third quarter had one-time benefits.

The finance chief said funding can come from operating cash flow, debt markets open to an investment-grade borrower, and partnerships along the supply chain. Nameplate compute capacity ended the quarter at 1.7 gigawatts, with 2.5 to 3 gigawatts targeted by year end. Chief executive Elon Musk said he is highly confident of adding 10 gigawatts in 2027 and described a plan for as much as 20 gigawatts of incremental power and cooling infrastructure.

Backlog totaled USD 63 billion, of which about USD 42 billion is scheduled for recognition within a year. Management guides first quarter 2027 revenue to USD 33 billion to USD 37 billion and reiterated a goal of USD 100 billion in annualized revenue by the end of this year.

Tesla Merger Question Draws a Cautious Reply

An analyst at a large bank asked about the case for combining with Tesla. Musk said both companies have formed special committees of independent directors at shareholders' request, and that he is excluded from their talks because he is a conflicted party. He called the idea sensible but said treating a deal as certain would overstate it.

He added that the committees have not agreed on terms and that no agreement is guaranteed. On the Tesla side, approval would need a vote of 50% of all outstanding shares, not only those cast, which he described as a high hurdle. He pointed to possible cooperation in software, chip design, robotics and orbital systems.

Spending and Merger Markers to Follow

Fourth quarter capital expenditures against the USD 35 billion to USD 40 billion guidance, gross margin versus the second quarter, and compute capacity against the 2.5 to 3 gigawatt target are the main operating markers. The next merger markers are any terms from the special committees and any shareholder vote. Starship flight 15, planned for next month with an attempt to catch both stages, is also on the calendar.