Global markets, explained fast.

SpaceX Just Posted Its First Profit — a $14.6 Billion Quarter — and Confirmed Tesla Merger Talks

2026-10-20

earningsSpaceXstocksTesla


 

SpaceX just posted its first profit as a public company

SpaceX (SPCX) reported third-quarter revenue of $14.6 billion, up 161% year over year, and net income of $4.4 billion — its first profitable quarter since its record June IPO. On the same earnings call, Elon Musk confirmed that SpaceX and Tesla have each formed special committees of independent directors to study a possible merger. SpaceX shares rose about 8% in extended trading, according to Reuters, and Tesla shares rose in after-hours trade as well.

That combination — a blowout quarter and the first official confirmation of merger talks between two of the world's most valuable companies — is why this story took over finance feeds on Tuesday night, October 20, 2026.

What happened: the numbers that beat Wall Street

SpaceX cleared expectations on almost every line:

  • Revenue: $14.58 billion, up 161% from $5.6 billion a year earlier, versus analyst expectations of roughly $12.7–$12.9 billion.
  • Net income: $4.4 billion, versus a $1.1 billion loss a year earlier and a $541 million loss in the second quarter.
  • Earnings per share: $0.35 diluted, against a consensus estimate of about $0.14.
  • Adjusted EBITDA: $8.8 billion, up 306% year over year.
  • Cash: about $89.9 billion in cash and marketable securities at quarter-end.

The growth engine was not rockets. SpaceX's Super Intelligence segment — its AI and data-center business — brought in $7.56 billion, topping estimates and passing the connectivity business for the first time. Connectivity, which includes Starlink, grew 69% to $5.25 billion, with 13.6 million Starlink consumer subscribers. The space segment contributed about $1.77 billion.

Spending stayed enormous: capital expenditures were about $19.6 billion for the quarter, mostly for AI infrastructure, which left free cash flow negative despite the profit.

The merger news: committees are formed, nothing is agreed

Answering an analyst question on the call, Musk said both companies have formed special committees of independent directors, at the request of shareholders, to review a possible combination. He stressed the limits of what has happened so far:

  • The committees have not agreed on any terms, and no deal price has been set.
  • Musk said he cannot take part in the committees' discussions because he is a conflicted party — CEO and largest individual shareholder of both companies — calling it "an odd kabuki dance."
  • He said he thinks a merger would be "a good idea," citing shared work on superintelligence software, chip design, the joint Terafab chip project, robotics, and getting mass to orbit — but he pushed back on the idea that a deal is certain.
  • Any deal would need approval from shareholders, including, Musk said, a majority of all outstanding Tesla shares — a higher bar than a majority of votes cast.

At Tuesday's closing prices, SpaceX was worth about $2 trillion and Tesla nearly $1.5 trillion, for a combined value of roughly $3.5 trillion. Barclays had suggested last week that a deal could be announced before Tesla's annual meeting in December — that remains speculation, not a confirmed timeline.

Why it's blowing up

Three things landed at once. First, the profit: SpaceX priced its IPO at $135 in June in the largest offering on record, then rattled investors in August with a second-quarter loss — Tuesday's swing to a $4.4 billion profit is the first hard evidence the public-company story works. Second, the AI flip: the business famous for rockets and Starlink now makes most of its money from AI infrastructure, which reframes how the stock gets valued. Third, the merger confirmation turned a month of rumor into an on-the-record process, hours before Tesla reports its own earnings after the close on Wednesday, October 21.

What to watch next

Tesla's third-quarter report on Wednesday will be Musk's first call with Tesla analysts since confirming the committees. For SpaceX, Thursday brings a major lockup milestone: up to 1.3 billion shares become freely tradable under the staggered lockup from the June IPO, which could add supply even as demand spikes. And nothing about the merger is decided — the committees have to produce terms, and shareholders have to approve them. This post reports what happened and how markets reacted; it is not financial advice, and it does not recommend buying, selling, or holding any security.

FAQ

Did SpaceX really post its first profit?
Yes. SpaceX reported net income of $4.4 billion for Q3 2026, its first profitable quarter since its June IPO, versus a $1.1 billion loss a year earlier.

Are SpaceX and Tesla merging?
Not yet, and maybe not at all. Both boards have formed special committees of independent directors to study a merger, but no terms have been agreed and shareholders would still have to approve any deal.

Why did SpaceX stock jump after hours?
Revenue of $14.6 billion beat expectations of roughly $12.7–$12.9 billion, the company swung to a profit, and the merger-committee confirmation added a second catalyst; Reuters reported shares up about 8% in extended trading.

What is SpaceX's biggest business now?
Its Super Intelligence (AI) segment, at $7.56 billion in Q3 — ahead of Starlink-led connectivity at $5.25 billion for the first time.

Sources