Although Starlink generated $1.4 billion in revenue last year, this fell far short of SpaceX’s initial estimates for the service in 2015.
How much money Starlink makes has long been a mystery. But a new report suggests that the satellite internet service is struggling to meet SpaceX’s financial goals.
According to The Wall Street Journal, Starlink generated $1.4 billion in revenue last year and $222 million in 2021. Year-on-year growth has certainly been strong, but revenue is still far below the company’s initial projections. The Journal cites a 2015 presentation SpaceX gave to investors in which the company projected that Starlink would generate almost $12 billion in revenue and $7 billion in operating profit by 2022.
Furthermore, the company initially estimated that Starlink would have 20 million subscribers by 2022. But in December, SpaceX reported only 1 million active subscribers.
Clearly, the company is not even close to achieving its initial goals. But SpaceX may have revised its goals since its 2015 investor presentation due to regulatory scrutiny slowing the development of its satellite internet system and delays to the company’s Starship vehicle.
Still, generating enough revenue to keep the service online is critical. It is true that Starlink has emerged as a leader for satellite internet connectivity, as evidenced by the use of the system in the Ukraine war. But Starlink satellites are designed to orbit the planet for only about five years before descending into Earth’s atmosphere and burning up.
As a result, SpaceX has to continually refresh its satellite network with new hardware, potentially requiring billions of dollars more in capital expenditure. It is also unclear whether Starlink is making a profit. For this reason, some people think that Elon Musk may shut down Starlink satellites.
