SpaceX has made a name for itself with its impressive rockets, and it’s not hard to see why. Beginning with the modest Falcon 1, the company quickly advanced to the large-scale Falcon 9 and is now testing the mighty Starliner, which currently holds the title of the world’s largest rocket. While these rockets capture much of the public’s attention, they’re not the main driver of SpaceX’s revenue.
In recent times, SpaceX’s satellite internet venture, Starlink, has emerged as its top source of income. By 2023, according to research by Payload Space, Starlink’s sales had soared to an impressive $4.2 billion, surpassing the $3.5 billion generated from rocket launches. Looking ahead, Payload predicted a widening gap in 2024, with Starlink’s earnings projected to reach $6.8 billion compared to $5.5 billion from its launches.
The actual figures could be even more striking. Late in the year, Quilty Space, an industry analyst, estimated that Starlink’s revenues might actually hit $7.7 billion for 2024, reflecting an 83% year-over-year growth. A significant portion of this growth comes from increased U.S. defense spending on contracts utilizing Starlink, including the specialized Starshield project. Starlink’s commercial side isn’t slowing down either. In fact, Quilty forecasts that by 2025, Starlink could serve 7.8 million customers globally, bringing in a staggering $11.8 billion in revenue.
Let’s put these growth rates into context. As of May 2024, SpaceX reported that over 3 million customers had subscribed to Starlink. By September, that number grew to 4 million, which is a 33% increase in just four months, suggesting a potential annual growth rate of around 100% for 2024. Such a rapid expansion rate might seem unsustainable, and skeptics might brace themselves for a slowdown. However, if Quilty’s projections hold true, SpaceX is set to come close to another remarkable growth period, aiming for 7.8 million users by the end of 2025. This translates into a growth rate of about 76%.
However, it’s important to temper expectations. While a 76% boost in subscribers is excellent, Quilty predicts that Starlink’s revenue for 2025 will grow by only 53%, reaching $11.8 billion. This slower revenue growth, despite added income from U.S. military ventures, suggests that as SpaceX expands globally, particularly into lower-GDP countries, it may not be able to charge the premium prices U.S. customers are accustomed to.
This discrepancy isn’t new. A 2023 TechCentral article highlighted Starlink’s varying global prices. While U.S. customers might pay $120 monthly, users in France and Brazil pay about $41 and $30, respectively, with even lower rates like Zambia’s $24 a month. This pricing strategy, while limiting revenue growth, is a logical move for SpaceX. To offer worldwide service, building and maintaining satellites orbiting every region is essential, even if it means offering competitive local rates.
As SpaceX continually expands Starlink’s reach, investors eyeing its potential IPO should remain aware of these dynamics. Though its subscriber count might skyrocket, revenue growth could face relative deceleration. For those considering investment, valuing Starlink should focus more on its earnings growth rather than just subscriber numbers.
