SpaceX Revenue Jumps 161%, and a Tesla Merger Enters the Conversation
SpaceX reported third-quarter 2026 revenue of $14.6 billion and net income of $4.4 billion in a release issued after the market closed on Tuesday, October 20, 2026. Revenue is the money a company takes in from sales before its costs are subtracted. Net income is what remains after all costs and taxes, which makes it the bottom-line profit figure. Revenue rose 161% from $5.6 billion. The company moved from a net loss of $1.1 billion a year earlier to a profit, an improvement of $5.5 billion.
The quarter's growth was concentrated in one segment. Reuters reported that SpaceX's AI revenue rose more than ninefold to $7.6 billion, a little over half of the total. In the second quarter, the company reported revenue of $7.8 billion, up 92% from $4.1 billion, and a net loss of $541 million. Revenue nearly doubled compared with the previous quarter, and the company went from a loss to a profit within a single quarter.
The earnings were not the only news on the call. Bloomberg reported that Elon Musk said SpaceX and Tesla have formed special committees to explore a potential merger. A special committee is a group of board members set up to review a deal, ideally separate from the executives pushing it. Reuters quoted Musk calling a merger "a good idea." Bloomberg characterized the committees as a preliminary step toward what would rank as a major merger. This is an exploratory process, not an agreed transaction. Neither company has announced terms, and the committees' work has no stated end date.
The Tesla link is not new. Tesla's quarterly report for the period ended June 30, 2026 states that Tesla invested $2.00 billion in SpaceX common stock, meaning an ownership stake. SpaceX's own 10-Q for the same period discloses that in June 2026 the company issued senior unsecured notes, a type of debt sold to investors, with The Bank of New York Mellon Trust Company, N.A. as trustee. Reuters reported that SpaceX investors pressed Musk on a Tesla merger before the results were released. Reuters also estimated that a combined company would be worth about $3.5 trillion, ranking fifth globally.
Markets reacted quickly. CNBC reported that SpaceX shares climbed about 8% in extended trading after the 161% revenue growth was reported. Extended trading is buying and selling that happens after the regular session closes. MarketWatch reported that Tesla shares climbed nearly 2% in extended trading after Musk's comments.
On January 30, 2026, Tesla shares jumped nearly 5% after reports that SpaceX was in deal talks with Musk's other companies. Those reports did not produce a transaction.
In my view, the smaller Tesla move now is what you would expect when neither the buyer nor the target has been defined. The current move should be weighed the same way as January: a reaction to a process, not to a price or a deal structure.
In April 2023, a coalition of 17 Tesla shareholders asked the board to rein in Musk, arguing that his distraction with SpaceX and Twitter was hurting the EV maker.
The governance question deserves more attention than the share moves. A combination would put that same concern at the center of any deal. Special committees are the usual tool when a controlling figure sits on both sides of a transaction, and their composition, mandate, and independence will matter more to Tesla holders than any headline valuation.
For SpaceX holders, the picture is different. The quarter shows sharply higher revenue, an AI business that now accounts for most of the growth, and a return to profit. A merger would tie that profile to a publicly traded car company whose shares trade on different expectations. Whether that combination creates value is an open question, and the committees have not yet answered it.
The practical takeaway is narrow. The earnings are reported fact. The merger is announced intent, with committees formed and no agreed structure. Everything priced into either stock after hours is a judgment about what that intent might become.
