SpaceX's AI Unit Out-Earned Starlink in Q3: $14.58 Billion Revenue, $4.4 Billion Net Income, $19.6 Billion in Spending

SpaceX reported third-quarter results on Oct. 20, the second report since the company's Nasdaq listing under the ticker SPCX. The earnings are worth a closer look.

The numbers

Revenue came in at $14.58 billion, up 161% from $5.58 billion a year earlier. Analysts had expected roughly $12.7 billion, according to LSEG data.

SpaceX posted net income of $4.4 billion, or 35 cents a share, against a net loss of about $1.05 billion a year ago. Operating income was $2.8 billion.

Pre-earnings consensus on adjusted EPS was about 14 to 15 cents. CNBC cautioned that it was not immediately clear whether the reported 35 cents is comparable to that adjusted figure.

Shares rose in after-hours trading on Oct. 20. The size of the move varies by account, from roughly 1.5% to more than 6%.

AI passes Starlink, but not on profit

The AI business, now called Super Intelligence, brought in $7.56 billion, up from $813 million a year earlier. That is more than half of total sales and beat the $6.47 billion StreetAccount estimate.

Most of it is rented data-center computing power. Anthropic, Google and Reflection AI are among the customers. The segment also houses Grok, the X social network and the coding tool Cursor. SpaceX closed its $60 billion Cursor purchase during the quarter.

Crypto Briefing reports that a multi-year Anthropic compute contract worth about $15 billion annualized anchors much of the segment's growth. That is a large share of the unit's revenue resting on one customer.

Profit tells a different story. The AI segment earned $431 million in operating profit. Connectivity, which is Starlink, roughly doubled its operating income to $2.37 billion. The space division, which covers launch, lost $7 million.

Starlink revenue rose 69% to $5.25 billion, beating the $4.84 billion estimate. Consumer subscribers reached 13.6 million, up from 12 million the prior quarter. But the average monthly revenue per subscriber has fallen to $69 from $99 in 2023, as Starlink adds cheaper plans and expands into poorer markets, according to Reuters.

Launch revenue crept up to $1.77 billion from $1.67 billion. Starship is not yet carrying paying customers. Its latest orbital test flight released several Starlink satellites, but an engine fault cut the flight short by several hours.

The spending bill

SpaceX spent $19.6 billion on capital investment in the quarter, nearly triple the $6.9 billion of a year earlier. About $16.4 billion went to AI and data centers. Nameplate compute capacity reached 1.7 GW.

On the earnings call, the company said it expects $35 billion to $40 billion in capex in the fourth quarter as more capacity comes online. It is also trying to raise $40 billion to buy advanced Nvidia chips, according to the Epoch Times.

The company's chief financial officer told analysts that new computing capacity pays for itself in under a year at current prices. SpaceX guided to first-quarter 2027 revenue of $33 billion to $37 billion.

In a statement, the company said it is focused on "capital efficiency, strong returns on invested capital, and maintaining a robust, investment-grade balance sheet."

As of Sept. 30, SpaceX held about $89.9 billion in cash and marketable securities against $38.8 billion in debt and finance leases, according to Crypto Briefing. It also held $1.573 billion in digital assets, tied to 18,712 bitcoin bought at a cost basis of about $661 million, according to TradingView.

The Tesla question

On the call, Musk said SpaceX and Tesla have each formed special committees of independent directors at shareholders' request to consider a merger. Musk is recusing himself as a conflicted party.

He pushed back on the idea that a deal is a lock. "Some people out there assume that a SpaceX and Tesla merger is a certainty, and I think that would be overstating it," Musk told analysts. "The special committees have not reached agreement on the terms of any transaction. And obviously there's no guarantee that they will."

He also said there is merit in a combination "as we are pretty much in the super intelligence singularity," citing shared work on AI software, chip design, the Terafab, robotics and orbital mass with the Starmind constellation.

Musk separately pledged to give every American child a SpaceX share next year, according to Fox News.

What is still open

No merger terms have been announced. The two special committees, not Musk, will decide whether any proposal goes to shareholders.

The fourth-quarter capex guidance of $35 billion to $40 billion would roughly double this quarter's outlay. The next report will show whether AI profit can catch up with AI spending.