SpaceX Posts First Profit Since IPO as Tesla Merger Review Goes Public
SpaceX reported third-quarter revenue of $14.58 billion after the close on Tuesday, up 161% from a year earlier and well above the $12.72 billion analysts expected, according to Reuters.
Net income reached $4.4 billion, swinging from a $1.1 billion loss a year earlier and marking the company’s first profitable quarter since its June initial public offering. Adjusted earnings came to 35 cents a share, more than double the 14 cents expected, and adjusted EBITDA rose 306% to $8.8 billion.
The artificial intelligence business drove the growth. Revenue at the segment SpaceX calls Super Intelligence rose 830% to $7.56 billion, making it the company’s largest business for the first time. According to Reuters, most of that revenue comes not from its own Grok models but from renting data-center computing capacity to developers such as Anthropic, Google and Reflection AI. Cursor, the coding tool company acquired in August, added $608 million in revenue through the end of September. The segment turned an operating profit of $431 million, and nameplate computing capacity reached 1.7 gigawatts at the end of the quarter.
Connectivity, the segment built around the Starlink satellite internet service, grew revenue 69% to $5.25 billion, while operating income rose 99% to $2.37 billion. Starlink subscribers reached 13.6 million at the end of September, up 1.6 million from 12 million in June and 89% higher than a year earlier. Average monthly revenue per subscriber fell to $69 from $83 a year earlier. Enterprise and government revenue rose 91% to $2.13 billion, and more than 3,800 aircraft now carry Starlink equipment.
Revenue at the Space segment, the launch business, was $1.77 billion. SpaceX flew 35 missions in the quarter, 12 of them for customers, and Starship completed its first revenue-generating mission, placing 26 V3 Starlink satellites in orbit. Capital spending totaled $19.6 billion, most of it for AI infrastructure, and cash and marketable securities stood at about $89.9 billion.
The merger disclosure drew as much attention as the results. Chief Executive Elon Musk told analysts on the earnings call that the boards of SpaceX and Tesla have each formed a special committee to review a possible merger. The committees consist of independent directors and were created at the request of shareholders, according to TechCrunch and CNN.
Musk made clear he favors a combination, saying he sees a lot of merit in combining the companies. He also said that as the chief executive and largest individual shareholder of both companies, he is a conflicted party and cannot take part in the committee discussions. TechCrunch reported that Musk described the process as an odd arrangement in which two groups of people are talking and he cannot be in the conversation.
Whether a deal happens rests with shareholders, Musk stressed. Treating a merger as certain would be overstating it, he said, noting that approval from holders of at least half of all Tesla shares outstanding would be required and calling that threshold quite a high hurdle. Barclays analyst Dan Levy recently told clients a combination could be announced before Tesla’s annual shareholder meeting in December, and Wall Street broadly expects SpaceX to be the acquiring company. Gene Munster of Deepwater Asset Management put the chance of a merger within two years at 95%.
There is a counterargument. MarketWatch noted that Tesla investors may not welcome a structure in which Tesla helps fund SpaceX’s expensive AI buildout. Together the two companies are worth about $3.5 trillion, which would make any combination the largest corporate merger on record.
The stock reaction was immediate. SpaceX shares closed the regular session nearly flat at $147.79, then rose about 5% in after-hours trading to around $154. Tesla shares closed up 1.5% at $373.71 and added more than 1% after hours.
SpaceX went public in June at $135 a share, raising about $85.7 billion at a valuation near $1.75 trillion. The stock hit an intraday high of $225.64 in its first week of trading and fell as low as $104.83 in August. Its market value now stands at about $2 trillion.
Tesla reports its own third-quarter results after the close on Wednesday. With the merger review now public, the same question is likely to follow Tesla’s management onto its call.
