SpaceX posts $4.4 billion profit; Musk calls Tesla merger 'a good idea'
SpaceX reported $4.4 billion in third-quarter net income, its first profit as a public company, on revenue of $14.58 billion, up 161%. Elon Musk said Tesla and SpaceX have formed board committees to discuss a merger, and SpaceX shares jumped about 10% on Wednesday.
AI-assisted · US Brief desk · Sources listed below
What happened
SpaceX reported net income of $4.4 billion for the July-September quarter, reversing a $1.1 billion loss a year earlier, according to its earnings release. Revenue rose 161% to $14.58 billion. Analysts had expected about $12.72 billion in revenue, according to LSEG data cited by CNBC, and a $1.57 billion profit, Reuters said. Adjusted earnings were 45 cents a share against a 13-cent estimate. It is the company's first profitable quarter since its June stock debut; it reported a $541 million loss in August, The Washington Post noted.
Why it matters
SpaceX is now a public company whose biggest growth engine is AI, not rockets. Its AI revenue grew almost tenfold to $7.56 billion, mostly from renting data-center capacity to developers such as Anthropic, Google and Reflection AI, Reuters reported. Starlink's connectivity business grew revenue 69%, the release says. Investors read the quarter as a sign that heavy AI spending can pay off, and SpaceX shares rose about 10.7% to around $163 Wednesday morning, lifting the Nasdaq, Reuters reported.
More context
The merger talk: On the earnings call, Musk said the boards of SpaceX and Tesla have formed special committees of independent directors, "at the request of shareholders," to discuss combining the companies. "Do I think it would be a good idea? Yes," Musk said, according to CNBC. "But at the end of the day, the shareholders have to be supportive of this." Reuters called it the first official confirmation that the companies are formally talking. Tesla shares rose about 3.7% Wednesday.
What a deal would take: Musk said he is a "conflicted party" and can't take part in the committees' talks. On the Tesla side, he said, a deal would need "a 50% vote of all shares, not just those who vote," which he called "quite a high hurdle." He also said it would be premature to assume a merger, since the committees have not agreed on terms and may never do so, Reuters reported. Barclays suggested last week that a deal could be announced before Tesla's annual meeting in December, according to Reuters. Venture capitalist Ira Ehrenpreis sits on both boards, CNBC noted.
What the headline number hides: Profit from operations was $2.8 billion, smaller than the $4.4 billion net income, so items below the operating line added to the bottom line, the release's statements show. Over the first nine months of 2026, operating income was just $705 million. Spending is also huge: capital expenses nearly tripled to $19.6 billion in the quarter, Reuters said, as SpaceX built out computing capacity that reached 1.7 gigawatts by Sept. 30.
The big promise: Musk said he expects annual recurring revenue of $500 billion to $1 trillion by the end of 2027, driven by demand for data-center space, Reuters reported. That is his projection; the company's quarterly revenue is $14.58 billion today.
What's still unknown: No merger terms, price or timeline exist. Tesla, which has not announced any deal terms, reports its own third-quarter results after the market closes Wednesday, Reuters said, giving investors the next chance to hear about the merger talks.
5 listed sources
- SpaceX Q3 2026 earnings release (SEC filing), Oct. 20, 2026
- Reuters via Investing.com, Oct. 20, 2026
- CNBC, Oct. 20, 2026
- The Washington Post, Oct. 20, 2026
- Reuters via Investing.com, Oct. 21, 2026
References listed by US Brief; a source count is not a verification score.
Editorial sourcing notes
Results figures come from SpaceX's earnings release filed with the SEC; estimates and call quotes follow Reuters and CNBC. Musk's revenue target is his projection, not a forecast in the filing. Disclosure: US Brief's AI-assisted workflow uses Grok Bot, a SpaceX product named in this earnings release. Hero photo shows SpaceX headquarters in 2012 (file photo).
Like US Brief? You can support it with a tip.