SpaceX now makes more money from its SI segment, the compute, Grok, Cursor and X business formerly known as AI, than from Starlink. SI revenue was $7,560 million in the third quarter, 9.3 times the $813 million of a year earlier, against $5,248 million for Starlink’s Connectivity segment, according to SpaceX’s 10-Q.
An evergreen Business Engineer explainer on vertical integration, the term SpaceX’s 10-Q uses for its three segments. It teaches the general idea only and does not discuss SpaceX.
The key insight: As we read the 10-Q, SpaceX now runs three different businesses under one ticker: a compute and software line that grew 19.6 times in a year to $7,022 million, a Starlink business that earned $2,367 million of the $2,791 million segment operating income, and a launch business that lost $7 million, by our arithmetic.
The 10-Q describes “three reportable segments in our vertically integrated innovation engine: Space, Connectivity, and SI (formerly known as AI)”. Its revenue note splits them into six lines. In the third quarter, SI Solutions & Infrastructure brought in $7,022 million, Consumer $3,121 million, Enterprise & Government $2,127 million, Launch Services $1,130 million, Launch & Development $637 million and Advertising $538 million.
That makes SI Solutions & Infrastructure 48.2% of revenue, up from 6.4% a year earlier, when at $359 million it was the smallest of the six lines, by our arithmetic. Starlink’s two lines fell from 55.5% of revenue to 36.0% while still growing, by our arithmetic. Over the first nine months Connectivity, at $12,796 million, was still larger than SI at $10,939 million.
SpaceX quarterly revenue by reported line, third quarter of 2025 against third quarter of 2026, from its 10-Q revenue note; Launch combines Launch Services and Launch & Development, and the 19.6x multiple is our arithmetic.
Launch: Paid One Mission at a Time
The Space segment earns money two ways, the 10-Q says: Launch Services, “the deployment of payloads to their intended orbits for both commercial and government customers”, and Launch and Development, building spacecraft and missions for government space programs. Launch Services contracts are fixed-price and run one to five years; revenue is recognised when the payload reaches orbit.
SpaceX flew 35 launches in the quarter, but only 12 were customer launches; the rest were internal launches, including Starlink deployments and development tests, and the 10-Q says SpaceX records no revenue for launching its own Starlink satellites. Internal payloads were 358 of the 476 metric tons it put in orbit, 75%, by our arithmetic. Launch Services revenue works out to about $94 million per customer launch, up from about $67 million a year earlier, a simple average by our arithmetic and not a price.
The segment lost $7 million from operations in the quarter. Its $1,225 million of research and development, which the 10-Q says “mainly relate to the development, build, and testing of Starship”, was more than two-thirds of segment revenue, by our arithmetic.
Starlink: Subscriptions, Kits and Contracts
Connectivity sells monthly broadband service and the Starlink Kit, the dish. The 10-Q says all $771 million of productrevenue in the quarter came from Connectivity, which sells the kits. Consumer revenue rose to $3,121 million as Starlink consumer subscribers reached 13.6 million, from 7.2 million, while consumer ARPU fell to $69 a month from $83, which the filing attributes to international expansion and “lower-priced service plans”.
Enterprise & Government, at $2,127 million, nearly doubled, primarily on “additional aircraft activations”, the 10-Q says. The line includes revenue from Starlink Mobile service offerings, and the filing says some multi-year Starshield contracts are booked over time. Connectivity earned $2,367 million from operations, a 45.1% margin and about 85% of all segment operating income, by our arithmetic.
SI: Renting Compute, Selling Software
The SI segment’s biggest source is cloud services, billed as “a fixed monthly services fee which is recognized ratably over the contract term (typically three years and terminable by either party upon 90 days’ notice)”. The same line holds Grok, Cursor and X subscriptions, data licensing and Grok API access; Cursor added $608 million after the August acquisition.
One customer accounts for most of it. The 10-Q says a customer it calls Customer B, whose revenue relates to the SI segment, was 34.5% of third-quarter revenue, about $5.03 billion or two-thirds of SI revenue, by our arithmetic; our earlier piece covers the disclosure. SI kept $431 million from operations, a 5.7% margin, while its $16,444 million of capital spending was 2.2 times its revenue, by our arithmetic. Our explainer on the compute build-out covers where that spending goes.
SpaceX’s revenue, operating income and capital expenditures by segment in the third quarter of 2026, from its 10-Q segment note and results release; the 2.2x capex-to-revenue ratio for SI is our arithmetic.
What to Watch
Backlog: $62,959 million at 30 September, of which the 10-Q says about 67% is expected to be recognised within a year, about $42.2 billion by our arithmetic. Guidance: chief financial officer Bret Johnsen gave first-quarter 2027 revenue of “$33 billion to $37 billion” on the 20 October call, and fourth-quarter capital spending of “$35 billion to $40 billion”.
Starlink pricing: whether ARPU keeps falling as cheaper plans spread. Launch: the results release reported “our first revenue-generating Starship mission”, which carried Starlink satellites. Structure: SpaceX’s board has formed a special committee to evaluate a potential combination with Tesla, the 10-Q says, with no determination made.
The Structural Read
As we read the segment table, the profit and the spending sit in different places: Connectivity kept a 45.1% operating margin, while the SI segment kept 5.7% and spent $16,444 million on capital expenditures, 2.2 times its revenue, by our arithmetic.
As we read the concentration note, the fastest-growing line is also the most concentrated: Customer B, whose revenue the 10-Q ties to the SI segment, was 34.5% of company revenue, about two-thirds of SI revenue by our arithmetic, on cloud contracts the filing says either party can end on 90 days’ notice.
“Looking ahead, demand remains robust across all three segments, particularly in our cloud services business.”
Three Implications
FOR STARLINK Consumer subscribers rose to 13.6 million from 7.2 million while consumer ARPU fell to $69 from $83 a month, the 10-Q shows, as SpaceX added lower-priced plans.
FOR LAUNCH Launch Services revenue averaged about $94 million per customer launch in the quarter, by our arithmetic, across 12 customer launches out of 35.
FOR THE SI SEGMENT Its $7,022 million Solutions & Infrastructure line includes cloud services, Grok, Cursor and X subscriptions, data licensing and API access, the 10-Q says; Cursor added $608 million.
The framework’s thesis: “the capex race is no longer a corporate spending cycle. It is a sovereign-scale financing problem dressed in tech-company clothing”.
As we read it, SpaceX’s SI segment shows that pattern inside one company: $16,444 million of capital spending in a quarter against $7,560 million of revenue, by our arithmetic. The framework predates the 10-Q and does not discuss SpaceX.
What Is Not Established
The 10-Q does not name Customer A or Customer B. The revenue table gives no separate figures for Starshield or Starlink Mobile, which sit inside Connectivity. Revenue per launch is our average across different missions, not a list price. Deutsche Bank’s figures are estimates, as posted on X, not company guidance.
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SpaceX’s revenue now rests on three engines. Compute and software, sold mostly to one large customer, brought in $7,560 million. Starlink subscriptions and contracts brought in $5,248 million and most of the operating profit, $2,367 million. Launch ran near break-even, a $7 million operating loss, while paying for Starship. The SI line grew 9.3 times in a year, by our arithmetic on the 10-Q.
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A note on sourcing. Every revenue, margin, customer and capital-spending figure here comes from SpaceX’s own filings with the SEC: its 10-Q for the quarter to 30 September 2026 and its third-quarter results release (Form 8-K, Exhibit 99.1). Guidance quotes from the 20 October call come from The Motley Fool’s transcript. Deutsche Bank’s estimates are as posted on X and covered in our earlier pieces. Shares, multiples, margins and per-launch averages are our arithmetic. SpaceX was not contacted for this piece.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
