v3.26.3
Acquisitions
 9 Months Ended
Sep. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions
Note 20 - Acquisitions
Cursor Merger
In April 2026, the Company entered into an option agreement (“Cursor Option Agreement”) providing the right, but not the obligation, to acquire Cursor. In June 2026, the Company exercised the call option and entered into the Cursor Merger Agreement to acquire Cursor. On August 14, 2026, the Cursor Merger was completed. The Cursor Merger is an extension of the Company’s strategy to vertically integrate compute infrastructure, SI models, and applications.
Concurrently with the Cursor Option Agreement, the Company entered into a compute agreement (“Cursor Compute Agreement”) where the Company would provide Cursor with certain GPU cluster compute capacity and the parties would collaborate to improve existing models, including Grok, and to jointly develop SI models and related model-specific deliverables or products. The Cursor Compute Agreement was terminated at the Closing Date of the Cursor Merger. The net amount attributable to this collaboration arrangement through the Closing Date was not material.
Purchase Consideration
Pursuant to the Cursor Merger Agreement, each share of Cursor's common stock and preferred stock outstanding immediately prior to the Closing Date was automatically converted into the right to receive shares of the Company's Class A common stock, plus cash in lieu of fractional shares, based on the Exchange Ratio of 9.7142. The Exchange Ratio was calculated based on an implied equity value of Cursor of $60 billion and VWAP of the Company's Class A common stock over the seven consecutive trading days immediately preceding the closing of the Cursor Merger of $128.65.
As part of the Cursor Merger Agreement, certain outstanding shares of Cursor common stock were converted to SpaceX equity awards with time-based vesting conditions in order to retain key talent, which are considered share-based compensation rather than purchase consideration under ASC 805, Business Combinations (“ASC 805”). In addition, any outstanding, unvested equity awards held by Cursor employees prior to the Cursor Merger were assumed and converted into equivalent SpaceX awards based on the Exchange Ratio. Refer to Note 14 - Share-based Compensation for additional details. The total value of these equity awards attributable to post-acquisition service as of the Closing Date is $23,376 million, subject to future forfeitures.
The following table summarizes the components of the aggregate purchase consideration paid to acquire Cursor:
SpaceX shares issued as purchase consideration271
SpaceX share price on Closing Date$141.29 
Total equity consideration$38,293 
Replacement equity awards for Cursor’s equity awards(1)
4,181 
Total aggregate purchase consideration$42,474 
__________________
(1)Represents the value of outstanding equity awards held by Cursor employees that were converted into replacement SpaceX awards. The fair value of replacement equity-based awards attributable to pre-acquisition service was recorded as part of the purchase consideration

Preliminary Purchase Price Allocation
The Company applied the acquisition method of accounting in accordance with ASC 805, and recognized assets acquired and liabilities assumed at their fair values as of the Closing Date, with the excess purchase consideration recorded to goodwill. Goodwill reflects the assembled workforce of Cursor as well as operating synergies that are expected to result from the Cursor Merger. All preliminary goodwill is not deductible for tax purposes.
The purchase price allocation is preliminary and subject to change. The Company is continuing to obtain information to complete its valuation of certain assets and liabilities, in addition to ensuring all other assets and liabilities and contingencies have been identified and recorded. The Company has estimated the preliminary fair value of assets acquired and liabilities assumed based on information currently available and will continue to adjust those estimates as additional information pertaining to events or circumstances present at the Closing Date becomes available during the measurement period. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments occur, and the Company will finalize its accounting for the Cursor Merger within one year of the Closing Date.
The following table presents the preliminary allocation of the purchase price to the assets acquired and liabilities assumed, and a reconciliation to total consideration transferred.
Cash and cash equivalents$461 Accounts payable$2 
Marketable securities557 Deferred revenue, current481 
Accounts receivable315 Accrued expenses and other current liabilities414 
Prepaid expenses and other current assets161 Deferred tax liabilities446 
Intangible assets5,300 Other liabilities18 
Other assets395 Total Liabilities$1,361 
Total Assets$7,189 
Fair value of net assets acquired$5,828 
Goodwill36,646 
Total Purchase Consideration$42,474 
The total value of goodwill from the Cursor Merger was allocated to the SI segment.
The following table presents a summary of intangible assets acquired and the useful life of these assets:
Fair ValueUseful Life (years)
Existing technology$4,400 4
Customer relationships700 4
Brand200 3
Total intangible assets acquired$5,300 
•Existing technology: Existing technology represents Cursor’s SI‑powered code editor sold to customers to help write, fix, and improve code. The preliminary fair value estimate of the existing technology was determined using the relief-from-royalty method. Key assumptions and other areas of judgments applied in the fair value measurement of the existing technology intangible asset include projected financial information, including projected revenue, obsolescence rate, royalty rate, discount rate used to present value future cash flows, economic useful life of assets, and tax rates, as relevant, that market participants would consider when estimating fair values.
•Customer relationships: The customer relationships primarily relate to Cursor’s established customer relationships with pre-existing customers that are expected to continue in the future. The preliminary fair value estimate of the customer relationships intangible asset was determined using the cost replacement method, which presumes that a market participant would pay no more for an asset than the amount for which the asset could be replaced in its current condition. Key assumptions and other areas of judgments applied in the fair value measurement of the customer relationships intangible asset include costs and time to replace the current customer relationships with new customers, obsolescence rate, developers’ profit, and entrepreneurial incentive, as relevant, that market participants would consider when estimating fair values.
•Brand: The preliminary fair value estimate of the brand intangible asset was determined using the relief-from-royalty method, which presumes the owner of the asset avoids hypothetical royalty payments that would need to be made for the use of the asset if the asset was not owned.
Results of Operations
The Company’s results of operations included $608 million of revenue attributable to Cursor from the Closing Date through September 30, 2026. It is impracticable to determine the effect on net income attributable to Cursor as the Cursor business was immediately integrated into the Company’s ongoing operations.
The Company incurred an immaterial amount of acquisition-related costs associated with the Cursor Merger during the three and nine months ended September 30, 2026.
Supplemental Unaudited Pro Forma Information
The following unaudited pro forma combined financial information presents the combined results of the Company and Cursor as if the Cursor Merger had been completed on January 1, 2025. The unaudited pro forma combined financial information was prepared in accordance with ASC 805 and includes adjustments for amortization of acquired intangible assets, share-based compensation expense adjustments, and transaction-related costs. Adjustments do not include costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined business.
These pro forma adjustments are based on available information as of the date hereof and upon assumptions that the Company believes are reasonable to reflect the impact of the Cursor Merger on the Company’s historical financial information on a supplemental pro forma basis. The unaudited pro forma combined financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the Cursor Merger had occurred on January 1, 2025, nor is it indicative of future results.
The following table presents the Company’s pro forma combined revenue and net income (loss) (unaudited):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Revenue$15,114 $5,801 $29,325 $14,130 
Net income (loss)$3,339 $(3,731)$(7,273)$(10,732)
Mesh Optical Merger
In May 2026, the Company entered into an Agreement and Plan of Merger with Mesh Optical Technologies Corporation (“Mesh Optical”) to acquire Mesh Optical (the “Mesh Optical Merger”). Mesh Optical designs and manufactures advanced optical devices, such as optical transceivers, to transmit data at high speeds across data centers. On July 6, 2026, the Company completed the Mesh Optical Merger for a total purchase consideration of $249 million in the Company’s Class A common stock. The Company recognized $158 million of goodwill from the Mesh Optical Merger related to the SI segment. The goodwill is not deductible for tax purposes. The results of operations for this acquisition were not material to the combined results of operations of the Company for the three and nine months ended September 30, 2026.