SpaceX Just Reported a 161% Jump in Quarterly Revenue. Wall Street Analysts Were Off by $1.6 Billion as Stock Soars 9%
SpaceX just posted numbers that left Wall Street scrambling to explain a billion-dollar miss, and the quarter's most important line item had nothing to do with rockets or satellites.
SpaceX (NASDAQ:SPCX | SPCX Price Prediction) reported third-quarter results after the close on October 20, and investors liked them. Revenue came in at $14.6 billion, above the $13.02 billion consensus by $1.58 billion. That’s a 12.11% surprise. As of 10:40 AM ET, shares were up 9.4% to $161.64 in early trading. I thought the guidance counted more than the beat.
AI Compute Becomes SpaceX’s Biggest Business
CFO Bret Johnson said “Revenue grew an impressive 161% year-over-year, fueled by continued momentum in Connectivity and a clear inflection in our Super Intelligence business.” Super Intelligence brought in $7.6 billion, up 830%. It’s now SpaceX’s largest business. In plain terms, SpaceX leases AI computing power to outside customers, sells Grok products, and now has Cursor, the coding platform it bought on August 14.
Starlink also grew at a rapid pace. Connectivity revenue rose 69% to $5.2 billion, and consumer subscribers reached 13.6 million. Enterprise and government revenue grew 91%. The mix shift is encouraging, because management expects enterprise and government to eventually outgrow consumer. The computing expansion driving SpaceX’s Super Intelligence line is the same story playing out across the data-center supply chain, and we rounded up seven suppliers riding it in a free AI infrastructure report.
Spending Bill Keeps Climbing
Capital spending reached $19.6 billion in the quarter, and management expects $35 billion to $40 billion in the fourth quarter. Margins also got help that won’t repeat. Connectivity’s 55% gross margin included about 3% from one-time tariff refunds, so management expects fourth-quarter gross margins to look more like the second quarter’s.
Profits Arrive Alongside the Revenue Surge
Key Figures
- Revenue: $14.6B (vs. $13.02B expected)
- Operating Income: $2.8B
- Net Income: $4.4B (vs. a net loss of $1.1B a year ago)
- Adjusted EBITDA: $8.8B; up 306%
- Backlog: $63B, with about $42B expected to be recognized within a year
Operating income was SpaceX’s first operating profit as a public company, and that’s the line I’d focus on.
Musk Says SpaceX Has Hit an Inflection Point
Elon Musk said SpaceX is “in an inflection moment” across launch, connectivity, and superintelligence. He added, “We could rent out our compute several times over if we said yes to everyone.” He also said combining SpaceX with Tesla (NASDAQ:TSLA) “would be a good idea,” and both companies have formed special committees. Those committees have not agreed on any terms, and Musk said there’s no guarantee they will.
Q1 Guidance Points to Another Leap
SpaceX guided first-quarter 2027 revenue to $33 billion to $37 billion, pointing to better visibility into its pipeline of compute contracts. For context, analysts expect $117.08 billion in revenue for all of 2027. Three things are worth watching: whether new compute capacity comes online on schedule, how SpaceX pays for its rising capital spending, and whether AI growth holds up once the one-time boosts wear off.
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Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
