(Photo by ODD ANDERSEN/AFP via Getty Images)
It costs SpaceX billions to launch rockets and build its satellite internet system, Starlink. But the company now says it’s making enough revenue to pay off its expenses.
Amid reports that SpaceX is struggling to turn a profit, CEO Elon Musk tweeted that SpaceX and Starlink have “achieved break-even cash flow."
It’s an important achievement since SpaceX’s spending is only expected to ramp up as it prepares to launch its Starship vehicle, which is integral to expanding Starlink. Hence, Musk's tweet is already setting off speculation he may launch another funding round.
SpaceX is a privately held company, so it doesn’t need to publicly report its earnings. But in August, The Wall Street Journal obtained company documents that revealed SpaceX took a loss of $559 million last year, a decrease from a $968 million loss in 2021.
This year, though, the company made $55 million in profit during Q1. Meanwhile, SpaceX’s Starlink business raked in $1.4 billion in sales last year, up from a mere $222 million in 2021. The revenue growth is critical for keeping the service online since SpaceX needs to continually refresh Starlink with new satellites. The system currently spans 5,000 satellites, but SpaceX has plans to eventually expand it to as many as 30,000.
In his tweet, Musk added: “Starlink is also now a majority of all active satellites and will have launched a majority of all satellites cumulatively from Earth by next year.”
But not everyone is convinced that SpaceX is balancing its books. Tim Farrar, a consultant in the satellite communications industry, suspects the company is deducting capital expenditures, or funds used to buy physical assets, from its finances to reach the break-even status.
Although SpaceX has yet to make huge profits, it’s become the dominant launch provider when its competitors have encountered delays and setbacks with their own rocket or satellite technologies. So the company is poised to only attract more business. On Wednesday, the US Space Force announced it had contracted with SpaceX and United Launch Alliance for 21 rocket launches valued at about $2.5 billion.