SpaceX’s artificial intelligence division, now renamed Super Intelligence (SI), surpassed Starlink connectivity revenue in the company’s third-quarter financial results reported on October 20. According to Via Satellite, total SpaceX Q3 results reached $14.6 billion in revenue, marking a 161% year-over-year increase. Shares jumped 10% on October 21 after the earnings beat consensus estimates and Elon Musk raised the possibility of a future merger between SpaceX and Tesla.
The earnings report arrived on October 20 alongside scrutiny over service disruptions in Ukraine involving Starlink and its military version, Starshield, which affected Ukrainian military operations. While Musk stated that any decision to limit Starshield would originate from the U.S. government, the Wall Street Journal reported on October 20 that Musk personally ordered the slowdown following talks with the White House. The situation has prompted U.S. Senators to call for an investigation and led to renewed pushes across Europe to reduce dependence on Starlink, though analysts did not ask about Ukraine during the October 20 earnings call.
Super Intelligence overtakes connectivity
Revenue from the renamed Super Intelligence segment climbed by $5 billion during the third quarter to hit $7.6 billion, representing an 830% year-over-year surge. SpaceX attributed this expansion to ramping cloud services agreements and revenue from its acquisition of Cursor.
Musk noted that he is dedicating a large portion of his schedule to the AI business, spending four days a week in Memphis to help bring the Colossus 2 supercomputer cluster online.
Thus far, unflagging AI demand has resulted in financials surprising to the upside. Mass manufacturing is SpaceX’s speciality, so the AI feeding frenzy is right in the company’s wheelhouse.
Louie DiPalma, Analyst, William Blair
Revenue targets and Q1 2027 outlook
Chief Financial Officer Brett Johnsen reiterated a goal set in September for SpaceX to achieve $100 billion in annual recurring revenue (ARR) by the end of 2026, defining the metric as annualized revenue based on the month of December. Johnsen also projected total company revenue between $33 billion and $37 billion for the first quarter of 2027, adding that SpaceX has access to debt capital that it could use to fund further expansion.
Starlink connectivity and aviation growth
SpaceX’s Connectivity segment generated $5.2 billion in third-quarter revenue, rising 69% year-over-year and 22% sequentially. Although the company highlighted Starlink gains in the enterprise and government markets, sequential growth slowed compared to the second quarter, when revenue rose 66% year-over-year and 32% quarter-over-quarter.
During the third quarter, Starlink added 1.6 million consumer subscribers, bringing its consumer total to 13.6 million. Following a connectivity agreement with American Airlines, SpaceX executives stated that Starlink is now under contract for approximately 12,000 aircraft, which leadership said accounts for nearly one-quarter of available planes.
President and Chief Operating Officer Gwynne Shotwell pointed to upcoming connectivity demand from linking vehicles and robots, as well as supporting the adoption of super intelligence. “We expect Starlink alone to represent a significant portion of global internet traffic,” Shotwell said.
Starlink Mobile and Starship launch cadence
Starlink Mobile exceeded 22 million monthly users in the third quarter, up 37% compared to the prior quarter. After acquiring low-band spectrum during the period, Shotwell said the spectrum purchase will “pave the way for Starlink Mobile to become a major mobile carrier in the U.S.” Musk added that more details on the mobile service will be shared later, stating that SpaceX sees a path for Starlink Mobile to become “a business that generates several hundred billion dollars in revenue a year.”
Expanding Starlink Mobile relies on establishing a regular launch schedule for the Starship rocket. While the latest Starship test flight deployed V3 Starlink satellites, SpaceX ended the mission early after one of the vehicle’s engines shut down.
Musk told investors it is “more likely than not that [Starship] succeeds on the next flight,” while cautioning that “success is not guaranteed” on the initial flights. He set a target for Starship to launch weekly during the first half of 2027, before increasing to twice a week or more by the end of 2027.
This article was written by AI from reporting by satellitetoday.com.
