SpaceX reported third-quarter results on Tuesday that beat analyst forecasts on nearly every line, with revenue up 161% year on year and net income of $4.4bn — its first profitable quarter as a public company, according to Yahoo Finance. The company’s AI unit out-earned Starlink on revenue for the first time, but the satellite internet business still produced most of the profit.
Yahoo Finance and ainvest put group revenue at $14.6bn, while Payload Space reported about $14.7bn; the roughly $100m gap looks like rounding, since Payload’s figure is the sum of its own rounded segment lines rather than a different reading of the accounts. Consensus was $12.72bn, per the LSEG figure cited by Yahoo Finance.
Key facts
- Revenue rose 161% from a year earlier and 87% from the second quarter, per Payload Space.
- Net income of $4.4bn swung from a $1.1bn loss a year earlier, ainvest said.
- Starlink, reported in the Connectivity segment, had revenue of $5.25bn, up 69%, with 13.6 million subscribers and about $2.4bn of operating income — a margin near 46%.
- The AI unit, rebranded SpaceXSI for Super Intelligence and built on xAI and now Cursor, grew revenue 830% to $7.56bn, or 51.9% of the total, versus 14.6% a year earlier.
- Group operating income was $2.79bn, with Connectivity accounting for about 85% of it.
- Capital expenditure hit $19.6bn in the quarter, more than twice the $8.8bn of adjusted EBITDA.
- Shares rose about 4% after hours to roughly $154, from Tuesday’s $147.79 close and a market value near $2.0 trillion.
Why it matters
For anyone tracking satellite internet, the quarter marks the point where Starlink became the smaller half of SpaceX by revenue while remaining the part that pays. Its share of group revenue fell to 36% from 55% in the second quarter even as its own revenue grew 69%, Payload Space reported, because the AI unit grew faster.
That matters beyond the scoreboard. AI is about half of revenue but only around 15% of operating income, ainvest noted, which means the cash funding a 1.7-gigawatt compute buildout is being generated largely by Starlink dishes. Subscribers are, in effect, financing data centres — and the terms on which Starlink keeps that cash will shape how fast the constellation and its pricing move next.
What each subscriber is worth
Dividing the $5.25bn Connectivity line by 13.6 million subscribers implies roughly $386 per subscriber for the quarter, or about $129 a month. That average sits above standard residential plans in most markets because the segment also carries hardware sales and far pricier aviation, maritime and enterprise contracts, so it is best read as a blended figure rather than a bill — but it is the cleanest public proxy for Starlink’s revenue per user, and it rose with the quarter’s Starlink revenue line.
The margin behind it is not quite as rich as it looks. CFO Bret Johnsen told the earnings call that Connectivity’s 55% gross margin included a one-time benefit of roughly three percentage points, primarily from tariff refunds, Yahoo Finance said, and he guided total-company gross margin in the fourth quarter back toward the second quarter’s level. Citing S&P Global’s Morningstar parsing of the report, ainvest said the launch business roughly broke even, leaving Starlink and the AI unit to carry the segment picture; it put Starlink’s economics down to satellites already in orbit and fixed costs already spent, with each new subscriber a repeat subscription layered on top.
Where the $4.4bn came from
About $1.6bn of the profit, roughly 37%, came from below the operating line rather than from rockets, Starlink or AI, per Yahoo Finance, which itemised three contributors: $1.03bn of other income, including $561m from a related party; a $390m tax benefit against a $562m charge a year earlier; and $198m of net interest income.
On that interest line, SpaceX earned $873m on about $90bn of cash and securities after its June initial public offering, more than its $675m interest bill. In every earlier quarter on Yahoo Finance’s chart, net income had landed below operating income.
Spending is running ahead of cash
Of the $19.6bn of third-quarter capex, $16.4bn went to AI infrastructure alone, lifting nameplate compute capacity to 1.7GW from 0.6GW a year earlier, ainvest reported. Fourth-quarter capex is guided to $35bn to $40bn, roughly double the third quarter.
Over nine months the company generated $13.1bn of operating cash and spent $48.1bn on capex, a gap of about $35.0bn; the quarter’s roughly $9.6bn of operating cash covered about half its own spending. Free cash flow ran deeply negative, ainvest said, with the buildout financed out of the $90bn cash pile.
Johnsen said new compute pays for itself in less than a year, and Musk told the call SpaceX could rent its compute out several times over, with contracts kept short so the company can charge more at renewal, Payload Space reported. SpaceX expects 2.5GW to 3GW of compute by December, and Musk said he is “highly confident” of adding another 10GW next year.
Guidance and what it means for Starlink
Johnsen guided first-quarter 2027 revenue to $33bn to $37bn against a $22.2bn LSEG average, a midpoint 58% above consensus and 2.4 times third-quarter revenue. Musk went further, putting annualised revenue at $500bn to $1 trillion by the end of 2027, per Payload Space. The stock, which sank to fresh post-IPO lows in July, added only about $87bn after hours.
Neither executive broke out what any of that leaves for the constellation, and that is the gap satellite internet customers should watch. If fourth-quarter capex lands at the guided $35bn to $40bn with AI taking the bulk again, Starlink’s own expansion is competing for the same balance sheet — which is why Johnsen’s margin guidance and the next operating-income line, rather than the headline AI number, are the figures that will signal whether Starlink’s 46% margin keeps funding faster rollout and steady pricing, or starts being harvested to pay for gigawatts. It is also the question running underneath how analysts value the company.
Frequently Asked Questions
Who actually rents SpaceX’s AI computing capacity?
The Super Intelligence unit leases capacity in what it calls the neocloud business, with customers including Anthropic, Google and Reflection AI, according to ainvest. Payload Space reported that cloud deals drove most of the unit’s quarterly jump, with Cursor and Grok adding the rest.
How much did Cursor add to SpaceX’s revenue?
Cursor contributed $608m after the deal closed on 14 August, Yahoo Finance reported. The outlet also said the Super Intelligence unit’s $431m of operating income came after $1.2bn of Cursor stock compensation.
What is SpaceX’s order backlog?
SpaceX ended the third quarter with $63bn of backlog, about $42bn of it due within a year, per Yahoo Finance. The outlet described that contracted demand as the bull case, giving the Q1 2027 guidance a base beyond Musk’s own targets.
What did SpaceX say about the next Starship flight?
On the earnings call, Musk said SpaceX will try to catch both the booster and the ship on Flight 15 next month and called success “more likely than not,” Payload Space reported. He also said he expects weekly Starship flights in the first half of 2027.
Follow Starlink News on Google. Make us a preferred source to see more of our reporting in Google search results.
