SpaceX’s satellite-internet arm generated more operating profit than any other part of the company in the third quarter of 2026, even though its artificial-intelligence division overtook it on revenue. TECHi reported the results were released on Tuesday; rs295, an individual investor who publishes on the Japanese platform note.com, reported the 8-K filing reached the US Securities and Exchange Commission at 5:00 a.m. Japan time on 21 October, with the earnings call streamed on X by Elon Musk, Gwynne Shotwell and chief financial officer Bret Johnsen.
Both accounts are secondary readings of that filing rather than quotations from it. The underlying 8-K is retrievable from the SEC’s EDGAR full-text search, and SpaceX’s own version belongs on ir.spacex.com; every figure below is attributed to whichever of the two reports carried it.
Key facts
- Connectivity, the segment that contains Starlink, posted revenue of $5.248 billion, up 69% year on year, with operating income up 99% to $2.367 billion, according to TECHi.
- Connectivity’s operating margin was 45.1%, against 5.7% for the Super Intelligence segment, TECHi reports.
- Starlink consumer ARPU was $69 a month, up from $66 in the second quarter but down from $83 a year earlier, per TECHi.
- Super Intelligence spent $16.444 billion of capital in the quarter — 84% of the company total of $19.593 billion, which equalled 134% of group revenue, by TECHi’s reading of the release.
- Group revenue was $14.575 billion with net income of $4.404 billion, but SpaceX remains $413 million in the red for the nine months to 30 September, both reports state.
Why it matters
For readers following satellite internet rather than AI, the quarter puts a number on how profitable Starlink currently is relative to the rest of SpaceX, and on the split between Starlink’s profit and the AI division’s revenue. Writing on note.com, rs295 summarised the mismatch bluntly: “I think Starlink is what is currently supporting SpaceX’s profits, and SI is in a stage where it is first capturing the scale of revenue.”
Margin on one side, volume on the other
Super Intelligence — the division previously called Artificial Intelligence, rs295 notes — produced $7.560 billion of revenue, 51.9% of everything SpaceX sold, and more than Connectivity and Space combined, according to TECHi. It also turned its first operating profit, $431 million, after a $1.257 billion operating loss in the second quarter.
rs295 flags a footnote in the release stating that figure includes $1.2 billion of stock-based compensation tied to the Cursor acquisition. TECHi’s conclusion on the comparison is that the satellite business remains far more profitable per dollar of revenue, and that SI’s expansion is capital-hungry in a way Starlink never was. Nameplate compute reached 1.7 gigawatts at 30 September, up from 1.4 GW three months earlier.
Price is the trade-off on subscriber growth
Starlink’s consumer base reached 13.6 million at 30 September, up from 7.2 million a year earlier, TECHi reports, including the quarter’s 1.6 million subscriber additions. TECHi describes the falling year-on-year ARPU as the trade-off for that growth, attributing it to cheaper plans and markets — which is also, in effect, a read on satellite internet availability, since each newly opened country adds users at a lower price than the early US and European base, so widening availability and rising ARPU pull against each other.
Neither report publishes country-level pricing or subscriber data, so nothing in the release speaks directly to markets such as Nigeria, where the size of Starlink’s user base has become the centre of a licence debate. The direction of the ARPU line is the only pricing signal either one draws from the quarter.
Launches now mostly serve Starlink
The Space segment recorded revenue of $1.767 billion and an operating loss of $7 million, close to break-even and narrower than the second quarter’s $542 million loss, both reports state. SpaceX flew 35 launches, 12 of them for customers and 23 internal.
rs295 reads Space as a department operating Starlink and SI rather than a business earning money on its own, with most internal launches carrying Starlink satellites. TECHi adds that the quarter included SpaceX’s first revenue-generating Starship mission, delivering 26 Starlink V3 satellites, which the company says carry about ten times the downlink capacity of a Falcon 9 Starlink launch.
Where the two reports diverge
rs295 stresses that the release contains no free cash flow figure and no guidance, and for that reason declines to forecast the next quarter. TECHi calculated free cash flow itself from the nine-month statements: $13.097 billion of operating cash flow against $48.069 billion spent on property, plant and equipment, or roughly negative $35.0 billion. Cash and equivalents stood at $51.294 billion at 30 September.
TECHi also breaks the profit down by where it was earned, finding $2.791 billion came from operations and about 37% of net income arrived below the operating line, including $873 million of interest income, $1.025 billion of other income net — $561 million of it related-party — and a $390 million income-tax benefit. The outlet says the release does not explain the related-party gain and expects that detail in the 10-Q. The call recording and transcript had not appeared on the investor-relations site by the morning of 21 October, rs295 reports.
Merger talk and a $1 trillion line
On the call, Musk said the boards of SpaceX and Tesla have formed committees to discuss a merger and argued there is “a lot of merit” in combining them. That quote reaches this article third-hand: TECHi is relaying other outlets’ reports of the call, not a transcript, and with no recording posted neither we nor TECHi have checked it against the audio. The same caveat applies more sharply to the market-moving number attached to it — TECHi’s report that Wedbush’s Dan Ives puts an 80% to 90% chance on a merger by the end of 2027, a brokerage estimate this article cannot verify at source. TECHi itself notes nothing about a transaction appears in the earnings release and says investors should treat the committee news as a direction of travel rather than a deal.
Afterwards, rs295 records, Musk posted on X: “As crazy as this sounds, $1T in SpaceX revenue in 2028 is no longer impossible.” That is his personal outlook, not company guidance.
Frequently Asked Questions
How much of Starlink’s segment revenue came from enterprise and government customers?
Enterprise and government revenue inside the Connectivity segment was $2.127 billion in the third quarter, according to the segment detail in the release as reported by TECHi. The rest of the segment’s $5.248 billion came from the consumer business.
What drove the Super Intelligence segment’s revenue jump?
TECHi says the company attributes the growth to new cloud services agreements, the acquisition of the software firm Cursor — completed in August and consolidated for a full quarter for the first time — and adoption of its SI models and software, including Grok Bot.
What were SpaceX’s earnings per share, and did they beat expectations?
Diluted earnings per share were $0.35 and basic earnings per share $0.37, according to rs295’s reading of the release. TECHi reports consensus expectations had been about $0.14, and that total revenue came in roughly 15% above the $12.72 billion LSEG consensus.
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