SpaceX revenue jumps 161%, beats estimates on AI surge

SpaceX on Tuesday, October 20, reported third-quarter revenue of $14.58 billion, up 161% from a year earlier and well above Wall Street forecasts. Most of the growth came from its AI business, which now brings in more than half of the company's sales. It was the company's second earnings report since going public, and all three of its divisions beat expectations. The results arrive as investors question whether the heavy spending on AI infrastructure will pay off.reuters.com+1

A swing to profit

Analysts surveyed by LSEG London Stock Exchange Group plc had expected revenue of $12.72 billion. SpaceX reported net profit of $4.4 billion against a forecast of $1.57 billion. That reverses a $541 million net loss in the second quarter. A year earlier, the company lost $1.05 billion. Earnings came to 35 cents per share, compared with a Zacks consensus of 10 cents. According to a summary of the company's SEC filing, adjusted EBITDA was $8.8 billion.axios.com+3

Shares rose about 1.5% to 2% in after-hours trading. Through Monday's close, the stock had been down about 9% from its IPO price.benzinga.com+1

AI leads the segments

AI revenue reached $7.56 billion, beating the S&P Capital IQ consensus of $6.47 billion. Connectivity brought in $5.25 billion and the space segment $1.77 billion. Both topped forecasts. Most of SpaceX's AI money comes from renting data-center capacity to developers, including Anthropic, Alphabet's ↘ 1.11% Google and Reflection AI, rather than from its own Grok models. The filing also credited new cloud agreements and the acquisition of Cursor. It said Starlink consumer subscribers reached 13.6 million and that Starship Flight 14 was the rocket's first revenue-generating mission.tradingview.com+2

"The combination of our launch leadership, recurring Starlink revenue, and the significant expansion of our SI infrastructure continues to drive meaningful operating leverage," said CFO Bret Johnsen, using the company's term for its Super Intelligence (AI) segment.benzinga.com

The capex question

Capital expenditures were $19.59 billion, up from $6.88 billion a year earlier. That is more than the quarter's revenue, and about $16.4 billion of it went to AI. Melissa Otto of S&P Global ↗ 2.41% expects SpaceX's capex to rise from $69.9 billion in 2026 to $194.3 billion in 2028. Before the report, she wrote that "there is increasing concern in the market that AI infrastructure investments will not be able to generate a return in line with the level of cash needed".investinglive.com+1

Investors will also be listening for Elon Musk's comments on a possible merger with Tesla ↗ 1.54%, which reports results on Wednesday.reuters.com