Tesla recorded an unrealised gain of $1.01 billion on its equity investment in SpaceX during the second quarter, according to the shareholder deck published on Wednesday, a paper profit worth more than twice the company’s operating income for the period.
The gain equals 50.2% of the $2.00 billion Tesla paid for the stake three months earlier.
Shares in SpaceX closed at $115.26 on Wednesday, down 6.70% on the session and 14.6% below the $135 price at which the rocket company listed on Nasdaq on June 12.
The intraday low of $115.19 was the lowest since the listing.
The gain explained
Tesla first recorded the investment in its first-quarter cash flow statement, under investing activities, as a $2.00 billion purchase of SpaceX equity.
The holding originated elsewhere. Tesla invested $2 billion in xAI in January, and SpaceX absorbed xAI the following month in a transaction valuing the combined company at about $1.25 trillion.
US regulatory clearance to convert the holding into SpaceX equity followed on March 11.
SpaceX listed on June 12, giving the holding a public market price for the first time and requiring Tesla to mark it to that price at quarter end.
Other income, the only line on the statement of operations that can accommodate the gain, swung to a positive $590 million in the second quarter from a negative $535 million three months earlier. Tesla does not identify the line item.
Net of tax, the gain is worth $763 million.
A conference call with chief executive Elon Musk and other members of management follows the results at 5:30 p.m. Eastern time.
Why it matters to the headline
GAAP net income attributable to common stockholders was $1.11 billion in a quarter when income from operations was $398 million.
Two non-operating items account for almost all of the difference. Alongside the SpaceX gain, Tesla booked $274 million from tax items it described as the release of valuation allowances on certain California deferred tax assets and accruals related to pillar two.
Removing both from the GAAP figure leaves $77 million.
Tesla also disclosed the per-share effect. The SpaceX gain was worth $0.22 of diluted GAAP earnings of $0.32, and the tax items a further $0.08, leaving $0.02 attributable to everything else.
Operating margin for the quarter was 1.4%, down from 4.1% a year earlier, and operating income fell 57.0%.
Analysts had modelled operating income of $1.50 billion and non-GAAP earnings of $0.55 a share. Reported non-GAAP earnings were $0.33.
Tesla excludes it
The company does not count the gain in the profit figures it asks investors to focus on.
Tesla subtracted the $763 million after-tax amount to reach non-GAAP net income of $1.15 billion, and subtracted the full $1.01 billion to reach adjusted EBITDA of $3.27 billion.
Two new lines were added to the reconciliation this quarter to accommodate the gain and the tax items. Both show dashes across the four preceding quarters.
Non-GAAP net income is now defined as GAAP net income before stock-based compensation, digital asset movements, certain tax items and the SpaceX equity investment unrealised gain.
Both new adjustments reduce the reported figure rather than flatter it. Without them, the same calculation would have produced non-GAAP net income of $2.19 billion instead of $1.15 billion.
The same adjustment appears in the trailing twelve-month reconciliation, where the $1.01 billion is the only entry in an otherwise empty row stretching back to 2023.
The position has moved since
Marking took place at June 30. SpaceX shares have fallen since, and fell again on the day the gain was disclosed.
The stock reached $225.64 in the days after listing and closed Wednesday 48.9% below that level, on volume of 90.7 million shares against a three-month average of 130.1 million. Shares edged up 0.62% to $115.97 in after-hours trading.
At the listing price of $135 a share, the sale of about 555.6 million shares raised $75 billion and valued SpaceX at $1.77 trillion, briefly placing it ahead of Tesla among the most valuable US companies.
Market capitalisation stood at $1.51 trillion on Wednesday, roughly $260 billion below the level set at the offer.
The quarterly deck discloses neither the size of the stake in shares nor the price at which it was marked.
SpaceX’s own prospectus does, listing Tesla as the holder of nearly 19 million Class A shares as of May 1, less than 1.0% of the company after the offering.
Applying that count to the two figures Tesla has published gives a cost basis of about $105 a share and a June 30 carrying value of about $158.
At Wednesday’s close the holding is worth roughly $2.19 billion, against about $3.01 billion at the mark. The difference is approximately $817 million, or 27.2%.
Measured against what Tesla paid, the position remains about $188 million ahead.
Those figures are derived rather than disclosed, and depend on the share count being unchanged since May 1.
SpaceX is due to report its own results in early August.
Starlink supplied $11.39 billion of the company’s $18.67 billion in 2025 revenue, serving more than 10 million subscribers.
The rocket company grew revenue 33.0% to $18.67 billion during 2025 and reported first-quarter revenue of $4.69 billion, up 15.0% year on year, according to its prospectus.
SpaceX recorded a net loss in that quarter.
Two companies, one controlling shareholder
Musk controls more than 82.0% of the voting power at SpaceX, according to the prospectus filed before the listing, and is chief executive of both companies.
Commercial traffic runs in both directions. SpaceX disclosed that it spent $131 million on Tesla Cybertrucks during 2025 at the manufacturer’s suggested retail price, and $697 million on Megapack battery storage systems across 2024 and 2025.
Tesla confirmed this week that the Cybercab will be the first of its vehicles with integrated Starlink hardware, a SpaceX product, as EV reported.
SpaceX obtained $144 million of goods and services from Tesla during 2025, according to the prospectus.
Separate reporting on the same filing put Cybertruck purchases at $131 million in 2025 and Megapack purchases at $697 million across 2024 and 2025, and the periods covered by each figure differ.
The two are also building semiconductor capacity together. Tesla has described a partnership with SpaceX aimed at building the largest chip fabrication plant ever, beginning with a company-owned research fab at Gigafactory Texas, and reported continued construction and equipment procurement for a fab in Austin during the quarter.
An institutional shareholder asked management before the call how research and production responsibilities for that venture divide between the two companies, and what each will contribute in capital, as EV reported.
