SpaceX (SPCX) Q3 2026 earnings review
SpaceX turns profitable, but it spends more than it planned
SpaceX earned its first profit as a public company because its computing business grew far faster than its costs. Revenue reached $14.6 billion, up 161% from a year ago. Super Intelligence, the segment that rents out computing capacity, is now the largest part of the group. Net income was $4.4 billion against a loss a year earlier.
| Revenue | $14.6B +161% from a year ago |
|---|---|
| Super Intelligence revenue, excluding Cursor | $7.0B $2.6B last quarter, by our math |
| Net income | $4.4B a $1.1B loss a year ago |
| Capital spending | $19.6B about $18.4B indicated in August |
⚖️ Verdict: 🟢 Bullish
The story got better because rented computing delivered revenue and profit well beyond what the spring contracts suggested. Starlink's price per user also rose from the previous quarter for the first time in a year. The bad news: capital spending ran above the level the finance chief indicated in August, and the Space segment lost money as Falcon launches fell.
The question now is whether SpaceX can lift monthly revenue about 72% by December, as its $100 billion run-rate target requires. If the contracts signed this quarter bill on time, the step is already covered; if they ramp slowly, SpaceX misses its first public-year target. December's revenue will settle it.
🐂 Bull Case
Renting Out Computers Is Now SpaceX's Largest Business
SpaceX calls its computing arm Super Intelligence, or SI. It rents data-centre capacity to other companies, runs the Grok models and sells advertising on X. The finance chief described the quarter as "a clear inflection in our Super Intelligence business", and the segment's revenue now exceeds Starlink's.
Cloud customers that signed contracts in the spring paid for a full quarter, and Cursor, the coding software bought in August, added $608 million. Without Cursor, SI revenue still reached about $7.0 billion by our math, from $2.6 billion the quarter before. SpaceX also introduced Grok Bot, "our always-on agentic SI system", and kept building the Colossus II data centre.
- SI revenue: $7.6 billion, up 195% from last quarter
- Cash profit before depreciation and one-offs: $5.0 billion, 66% of SI revenue
- Computing capacity: 1.7 gigawatts, up 0.3 from June
- Operating income: $431 million after $1.2 billion of stock pay tied to Cursor
This matters because the standing worry was that rented computing earns a shortage price that falls once chip supply catches up. A margin this high argues against that for now. But one quarter cannot settle it, so the worry stays open until the first contracts come up for renewal.
What to watch: fourth-quarter SI revenue, when the contracts the finance chief said would begin billing in October first run in full. A figure well above this quarter's would mean customers lease the capacity as fast as SpaceX builds it.
Starlink Earns More per User and from Governments
Starlink sells satellite internet to households and, under managed contracts, to airlines, ships and governments, which SpaceX reports as enterprise and government revenue. The monthly revenue per consumer subscriber had fallen for a year as the company added cheaper plans in lower-income countries.
This quarter the monthly price per user rose to $69 from $66. SpaceX added 1.6 million subscribers, "driven by growth in developed markets", slightly fewer than the quarter before. Enterprise and government sales almost doubled from a year ago, and more than 3,800 aircraft now carry Starlink.
- Connectivity revenue: $5.2 billion, up 69% from a year ago
- Enterprise and government revenue: $2.1 billion, up 91%
- Cost of service: 45% of segment revenue, down 8 percentage points
- Operating margin: 45.1%, up from 38.4% a year ago
The margin rose because the cost of serving customers fell as a share of revenue. That held even though the group spent more on marketing and on delivering Starlink kits. Subscriber additions dipped, but that matters little, because the price increase and the government contracts lifted revenue 22% from last quarter.
What to watch: the monthly price per consumer subscriber next quarter. A second increase would mean Starlink can raise prices in wealthy countries faster than cheaper plans elsewhere pull the average down.
Costs Grew Half as Fast as Revenue
Revenue grew 161% from a year ago while total costs and expenses rose 101%. So SpaceX turned a loss into a $2.8 billion operating profit, its first since the June listing. The finance chief credited "meaningful operating leverage" from launch leadership, recurring Starlink revenue and the expansion of SI infrastructure.
- Cost of revenue: 37.6% of sales, down 10.9 percentage points
- Research and development: 31.5% of sales, down 9.6 points
- Selling and administrative costs: 11.7% of sales, up 1.4 points
- Net income: $4.4 billion, against a $1.1 billion loss a year ago
The gain came from scale: the data centres and satellites already built carried far more revenue, so the cost of serving each dollar of sales fell. One caution: net income exceeded operating profit by $1.6 billion. Interest on the listing cash, other income and a tax benefit supplied the difference, and those items depend on cash balances rather than on operations.
What to watch: fourth-quarter operating margin, when depreciation on the computing equipment bought this quarter reaches the accounts. A margin near this quarter's level would mean new contracts cover the new depreciation.
🐻 Bear Case
SpaceX Spent More Than the Finance Chief Indicated
In August the finance chief said capital spending in the next two quarters would stay close to the second-quarter level of $18.4 billion. This quarter's commentary describes a company "building the infrastructure of the future with discipline". SpaceX then spent $19.6 billion, with $16.4 billion of it on SI computing.
- Capital spending: $19.6 billion, 134% of revenue
- Operating cash flow: $9.6 billion by our math
- Free cash flow: about minus $10.0 billion by our math
- Cash and securities: $89.9 billion, down from $100.0 billion in June
The overrun is small next to the total, but it points the wrong way for a group that promises "capital efficiency". Operating cash flow covers less than half of the spending, so the listing proceeds fund the rest. The June cash pile shrank by a tenth in one quarter.
What to watch: fourth-quarter capital spending against the August indication of about $18.4 billion. A second quarter above it would mean the plan has moved up without the company saying so.
Related Parties Earn Half of SpaceX's Interest Bill
SpaceX finances part of its graphics-processor purchases through arrangements the accounts treat as debt. In its second-quarter filing it identified Valor, a firm affiliated with a director, as the lender. The release shows the cost: $351 million of the quarter's $675 million interest expense went to related parties, up from the quarter before.
- Related-party share of interest expense: 52%
- Related-party debt and leases: $12.9 billion, up from $4.5 billion in December
- Related-party other income: $561 million, a new line this quarter
- Related-party other assets: $570 million, up from $10 million in December
This matters because the group now holds a large cash pile from its listing and pays 5.9% on its own bonds. The release does not say why it still borrows from an affiliated lender. The $561 million of related-party other income is new and unexplained, and by our math equals an eighth of the quarter's net income.
What to watch: the related-party note in the quarterly filing, due within weeks. A disclosure of the rate on the Valor debt and the source of the $561 million would show whether the terms match what SpaceX pays unrelated lenders.
Falcon Flew Less While Starship Costs Rose
SpaceX's Space segment sells launches to NASA, the military and commercial customers, and builds Starship, the rocket designed to carry far larger loads at lower cost. This quarter Starship flew "our first revenue-generating Starship mission", carrying 26 Starlink V3 satellites. The company says they add about ten times the capacity of a Falcon 9 Starlink launch.
The rest of the segment went the other way. Launch counts and mass to orbit both fell from a year ago. The segment slipped into a small loss because SpaceX "continued to accelerate R&D investments in our Starship program".
- Total launches: 35, against 44 a year ago
- Mass to orbit: 476 tonnes, down 9%
- Research and development: $1.2 billion, up 44% from a year ago
- Operating result: a $7 million loss, against a $259 million profit a year ago
This matters because the Starlink capacity step the chief executive described in August needs roughly a thousand V3 satellites in orbit by mid-2027. Only Starship can carry them. One mission is a start, not a pace: by our math reaching that count at this quarter's load needs close to forty flights in three quarters.
What to watch: the number of Starship flights and V3 satellites delivered in the fourth quarter. A single-digit flight count would mean the mid-2027 capacity step depends on a far faster cadence next year.
Risks This Quarter Didn't Answer
Five standing concerns got no number in the release. The quarterly filing or the webcast transcript may supply them, and each would move the case on its own.
- December run-rate target of $100 billion: not restated in the release; the third quarter's average month was $4.9 billion by our math, so December must be about 72% higher.
- Customer concentration: two customers gave 38% of second-quarter revenue; the filing's concentration table will show whether the new cloud contracts widened the base.
- Contract lengths: the release says SpaceX "Signed additional cloud services agreements" but gives no value or term, so the pricing risk stays untested.
- Starlink Mobile: the group agreed to buy 800 MHz spectrum with no price and no network cost disclosed.
- Legal: the Colossus II turbine case and the Grok image suits got no update; the filing's legal note will carry the next reading.
👓 Other Themes
Cursor Closed, Bringing $23 Billion of Future Stock Pay
SpaceX completed the Cursor purchase in August at an implied equity value of $60 billion, to "vertically integrate compute infrastructure, SI models, and applications". The accounting splits the price: $42.5 billion as purchase consideration and $23.4 billion as equity awards that Cursor staff earn by staying. SpaceX will charge those awards against profit over the coming years. Goodwill more than quadrupled, to $48.4 billion.
Segment Renamed and Two Metrics Redefined
SpaceX renamed its Artificial Intelligence segment Super Intelligence with no change to what it contains. It also renamed the subscriber count to make clear it covers consumer plans only, not managed enterprise and government customers. And it widened the satellite count to include craft approved for de-orbit, adding about 400 satellites. None of this affects the financial figures, but readers comparing with older reports should note it.
💲 Other KPIs
Advertising on X grew again after two quarters of declines, reaching $538 million, up 19% from a year ago. The rise from last quarter was 47%, and the year-ago comparison turned positive for the first time in the quarters SpaceX has disclosed, so the ad-platform transition the company blamed last quarter appears to have run its course.
Deferred revenue — cash customers have paid for service not yet delivered — climbed to $17.5 billion, 23% above June. Since December it has grown 45%, and most of that came in the two quarters the cloud contracts have run. Customers are paying ahead, which eases the funding of the data-centre build.
The weighted share count for the quarter was 12.5 billion, more than four times a year ago, because of the June listing and the stock paid for Cursor. The count stands to rise further, because the Cursor awards vest over time and the EchoStar spectrum purchase, due to close next year, is paid partly in stock. Earnings per share therefore lag net income.
❓ Key Questions
Does SpaceX still expect $100 billion of December run-rate revenue?
The release has no outlook section and does not repeat the target the finance chief set in August. By our math December revenue must reach about $8.3 billion a month, 72% above this quarter's average, for the target to hold.
How long do the new cloud contracts run?
Rented computing is now half of group revenue. Whether that revenue is fixed for years or repriced within a year decides how exposed SpaceX is if chip supply catches up and rents fall; the release gives no value or term for the agreements signed this quarter.
What is Cursor earning now, and what did it cost?
Cursor contributed $608 million in the 48 days after closing, roughly $4.6 billion a year by our math. Investors need the pre-deal run rate and its growth to judge a $60 billion price paid largely in stock.
Which related party paid SpaceX $561 million of other income?
The income statement labels the item as related-party without naming the counterparty. It equals an eighth of net income by our math, and the related-party interest shows the director-affiliated financing is still in place despite the June bonds and the listing cash.
How much will Starlink Mobile's spectrum and network cost?
SpaceX agreed this month to buy a nationwide block of low-band 800 MHz spectrum, on top of the EchoStar licences, without disclosing a price. The August call left the ground network cost unsized; with capital spending already above plan, the figure matters.