Author: Chen Junda, Zhidx
Editor | Xinyuan
Musk: $1 trillion in revenue by 2028 is not impossible.
Zhidx, October 21 — Today, U.S. space and AI technology company SpaceX released its financial results for the third quarter of 2026. Third-quarter revenue was $14.575 billion (approximately RMB 97.358 billion), up 161% year over year; GAAP net income was $4.404 billion (approximately RMB 29.418 billion), a substantial improvement from a net loss of $1.054 billion in the same period last year.
In addition, SpaceX's operating income was $2.791 billion (approximately RMB 18.643 billion), compared with an operating loss of $273 million in the same period last year; adjusted profit was $8.809 billion (approximately RMB 58.842 billion), up 306% year over year.
SpaceX's substantial improvement in profitability this quarter was mainly driven by the explosive **830%** growth of its Super Intelligence (SI) business and the steady growth of its Connectivity business. Together, the two businesses contributed $12.808 billion (approximately RMB 85.555 billion) in revenue, accounting for 87.9% of total revenue.
At yesterday's close in U.S. Eastern Time, SpaceX's market capitalization reached $1.947 trillion, just shy of returning to the ranks of $2 trillion market-cap companies. Thanks to the better-than-expected financial results, SpaceX's share price surged in after-hours trading. As of 8:05 p.m. U.S. Eastern Time, its share price had risen 8.01%, equivalent to a market-cap increase of more than $150 billion (approximately RMB 1.00 trillion) overnight.
The earnings call became the focus of the evening. Musk turned the earnings call into a livestream show, opening with a striking prediction: based on current momentum, by the end of 2027, SpaceX's annual recurring revenue (ARR) will be between $500 billion and $1 trillion.
Musk's forecast posted on the X platform was even more aggressive. He believes that SpaceX reaching $1 trillion in revenue in 2028 is no longer impossible — moving that timeline forward by two years from the previous 2030 target.
Musk also directly responded to a potential merger with Tesla, calling it a "good idea," and for the first time disclosed that both parties have, at shareholders' request, established special committees composed of independent directors to discuss it, but "assuming the merger is a certainty would be an overstatement." Tesla needs 50% voting support from all shareholders, a very high threshold, and the special committees have not yet reached agreement on transaction terms.
SpaceX CFO Bret Johnsen provided several forward-looking guidance items on the call: due to a large amount of new compute coming online this quarter, fourth-quarter capital expenditure is expected to be $35 billion-$40 billion (approximately RMB 233.8 billion-RMB 267.2 billion), and total gross margin in the fourth quarter is expected to return to a level comparable to the second quarter (the third quarter included one-time gains and a favorable customer mix).
At the same time, SpaceX will maintain its goal of achieving $100 billion in ARR by the end of this year (calculated by annualizing December's monthly revenue), and its revenue guidance for Q1 2027 is $33 billion to $37 billion (approximately RMB 220.4 billion-RMB 247.2 billion).
In the third quarter of 2026, SpaceX's total revenue was $14.575 billion, up 161% year over year, from three business segments: Space business revenue was $1.767 billion, up 6% year over year and up 84% quarter over quarter, accounting for 12.1% of total revenue; Connectivity business revenue was $5.248 billion, up 69% year over year and up 22% quarter over quarter, accounting for 36.0%; Super Intelligence business revenue was $7.560 billion, up 830% year over year and up 195% quarter over quarter, accounting for 51.9%, surpassing the Connectivity business for the first time to become the largest source of revenue.
At the operating income level, the Space segment had an operating loss of $7 million, a substantial narrowing of the loss, compared with a profit of $259 million in the same period last year; the Connectivity segment had operating income of $2.367 billion, up 99% year over year; the Super Intelligence segment had operating income of $431 million, turning profitable, compared with a loss of $1.722 billion in the same period last year.
It should be noted that the Super Intelligence segment's profit this quarter included $1.217 billion in share-based compensation expenses from the Cursor acquisition. Excluding this factor, its actual profitability would be even higher.
In terms of cash flow and capital expenditure, SpaceX's capital expenditure in the third quarter reached $19.593 billion, of which the Super Intelligence segment accounted for $16.444 billion, the bulk of it.
As of September 30, SpaceX had $51.294 billion in cash and cash equivalents, plus $38.561 billion in marketable securities, giving its balance sheet ample ammunition to support its large-scale compute buildout.
The biggest highlight in the financial results was the Super Intelligence business. In the third quarter, revenue growth in the Super Intelligence segment was jointly driven by the activation of new cloud service agreements, the consolidation of the Cursor acquisition, and accelerated penetration of Grok among enterprise customers and consumers.
Among this, Super Intelligence solutions and infrastructure revenue was $7.022 billion, an increase of $6.63 billion year over year; advertising revenue was $538 million, up 19% year over year.
In terms of compute scale, SpaceX's nominal compute reached 1.7 GW as of September 30, up from 1.4 GW on June 30 and 0.6 GW in the same period last year.
SpaceX is continuing to advance construction of the COLOSSUS II supercomputing cluster in Memphis. At the product level, SpaceX accelerated the release and deployment of the Grok model and launched the all-weather agent system Grok Bot.
This year, SpaceX completed the acquisition of AI coding tool company Cursor. According to disclosures in the financial results, the transaction was completed on August 14, 2026, with an **implied equity valuation of $60 billion and a GAAP purchase consideration of $42.5 billion.** About $23 billion of that (nearly 40% of the equity valuation) was allocated to core talent retention and replacement of unvested equity, and will be recognized as share-based compensation expense over a vesting period of about three years.
From the closing date to September 30, Cursor contributed $608 million in revenue to SpaceX on a consolidated basis. Even excluding Cursor, Super Intelligence solutions and infrastructure revenue still grew 192% quarter over quarter, mainly driven by the activation of new cloud service agreements.
SpaceX said in the financial results that the acquisition of Cursor advanced SpaceX's strategy of vertically integrating compute infrastructure, Super Intelligence models, and applications. The integration effects have already begun to appear: including Cursor, the number of customers with Grok Enterprise annual revenue run-rate exceeding $1 million grew 50% quarter over quarter. Last week, SpaceX also announced the integration of Grok, Grok Bot, Cursor, and X Premium into a single subscription plan.
As of September 30, SpaceX's total backlog reached $63 billion, of which about $42 billion is expected to be recognized as revenue within the next year.
On the funding side, Johnsen emphasized that SpaceX has an investment-grade rating and a strong balance sheet. In addition to operating cash flow, it has multiple debt capital market channels available, and the compute business "can almost self-fund once launched."
At the Space business level, the biggest milestone this quarter was Starship Flight 14 — SpaceX completed the first orbital-class Starship flight and used it to carry out the first revenue-generating Starship mission, delivering 26 Starlink V3 satellites to its broadband constellation. The downlink capacity brought by a single Starlink mission is about 10 times that of a single Starlink launch by Falcon 9.
Throughout the quarter, SpaceX completed 35 launches with 476 tons delivered to orbit, including using the Falcon Heavy rocket to send NASA's Nancy Grace Roman Space Telescope into deep space. On the orders front, SpaceX signed three new NASA Crew Dragon missions, 18 national security space launch missions, and a contract to deliver payloads to the lunar surface using Starship, and announced the construction of the Louisiana Starbase spaceport, targeting its first flight in 2029.SpaceX's connectivity business is represented by Starlink. On user data, as of September 30, 2026, Starlink consumer subscriptions reached 13.6 million, nearly double the 7.2 million in the same period last year, with average monthly ARPU of $69. In terms of revenue structure, consumer revenue was $3.121 billion, up 57% year over year; enterprise and government revenue was $2.127 billion, up 91% year over year, making it the fastest-growing sub-business, with about 12,000 aircraft already contracted in the aviation segment, close to a quarter of the global available fleet. On the mobile business, Starlink Mobile monthly active users exceeded 22 million, up 37% quarter over quarter. On October 8, SpaceX announced the acquisition of a nationwide 800MHz low-band spectrum license portfolio to advance the Starlink Mobile strategy, with the transaction expected to close in the first half of 2027.
On SpaceX's earnings call, compute expansion became the main theme. Musk said the bottleneck for superintelligence deployment is shifting from chips to power, cooling, and infrastructure, and SpaceX has brought in a team accounting for nearly 90% of global orbital mass to build terrestrial compute, with deployment speed "possibly exceeding that of all other players combined."
SpaceX's specific targets include: building about 2.5-3GW of nominal compute by the end of this year, and adding 10GW of compute in 2027. Musk is "quite confident" about this. SpaceX is advancing at a pace of bringing about 200,000 GB300 GPUs online per month, and this will remain the case for the rest of this year and unchanged next year, except that the main force will switch from GB300 to Vera Rubin GPUs.
The company is also planning 20GW of supporting power and cooling infrastructure in parallel. Musk said exceeding 20GW of compute in 2027 is "unlikely, but no longer zero." By the end of October this year, nominal compute will reach about 2.2GW. Before the end of June next year, SpaceX also plans to bring online the world's most powerful training cluster, deploying 440,000 Vera Rubin GPUs.
On in-house AI chip development, Musk revealed that SpaceX has set an aggressive goal: its R&D line in Austin plans to tape out the first batch of test chips in May-June 2027, and the main Terafab production line in Gibbons Creek aims to achieve mass production in the third quarter of 2028.
Musk stressed that "this is an extremely aggressive timeline" and said SpaceX holds **"potentially breakthrough technology"** in chip manufacturing processes. Terafab's ultimate goal is to produce 1 terawatt of compute chips per year.
Grok product data is equally eye-catching. Grok Bot launched in August this year, and by the beginning of this month paid weekly active users had reached 800,000, doubling within a month. Musk called it "the fastest-growing product I've seen in my life," and user time spent has risen rather than fallen over time.
Enterprise Grok Bot has already been deployed early with some customers and will roll out at scale within weeks. Musk expects Grok Bot may eventually consume most of SpaceX's superintelligence compute.
On compute leasing strategy, SpaceX prefers to sign short-term contracts at prices close to the spot market, with internal use and external leasing dynamically allocated roughly 50:50. Musk judges that effective intelligence output per watt of compute will continue to rise, compute unit prices will trend upward in the long term, SpaceX's short-term contract renewal prices for compute are rising, and "if we agreed to all leasing requests, we could lease out several times the compute."
SpaceX CFO Bret Johnsen added that the payback period for currently newly deployed compute is less than one year, and it may shorten to six months next year, with compute pricing already slightly above the upper end of the $30-50 per watt range given last quarter.
Regarding Starlink Mobile, SpaceX COO Gwynne Shotwell said the S-band will carry the main traffic, while the 800MHz low band is used for building penetration. Musk judges that SpaceX is expected to achieve hundreds of billions of dollars in annual connectivity revenue in the future.
Regarding Starlink V3 satellites, Shotwell said hundreds are needed for users to clearly perceive the improvement, and this goal is expected to be achieved by the middle of next year.
Speaking of the under-construction Starbase in Louisiana, Musk revealed that the internal target is actually first launch in 2028, with "scaled launch highly certain to be achieved in 2029."
Judging from the financial data, SpaceX has clearly crossed the profitability inflection point. On the one hand, Starship has reached orbit for the first time and begun commercial monetization, Starlink's user scale has nearly doubled in a year, and the base business is still expanding.
On the other hand, the superintelligence business's quarterly revenue of $7.56 billion and Adjusted EBITDA of $4.95 billion prove that SpaceX's second growth curve has substantially taken shape, and SpaceX is transforming from a rocket launch company into an infrastructure company spanning three major domains: space, connectivity, and superintelligence.
Of course, concerns also exist: of the nearly $20 billion in quarterly capital expenditure, more than 80% is directed toward superintelligence compute buildout. Whether such investment intensity can continue to generate returns will be the focus of market attention in the coming quarters.