Elon Musk’s SpaceX is approaching initial public offering (IPO) and while the company has made its name by launching reusable rockets and making headlines for its push into artificial intelligence (AI), a comparatively quieter part of the business has emerged as its true financial powerhouse. Citing SpaceX’s IPO prospectus released on Wednesday (May 20), CNBC reported that the satellite internet unit Starlink is completely eclipsing the rest of the company in terms of growth and profitability. The financial data revealed in the IPO filing shows a division between SpaceX’s highly publicised space exploration units and its commercial internet business. If revenue share is taken into account, Starlink generated $11.39 billion in revenue last year, accounting for 61% of SpaceX’s total sales. This grew even further in the first quarter of this year, with Starlink making up 69% of all company revenue.
SpaceX: Profits vs loss
Moreover, Starlink was the sole profitable division within the SpaceX empire last year, bringing in $4.42 billion in net income. By comparison, the core rocket launching unit, which handles high-profile contracts for NASA and the U.S. Department of Defense, recorded a loss of $657 million. Meanwhile, SpaceX’s newly expanded AI division, which recently merged with Musk’s xAI startup, faced a massive deficit of $6.35 billion.
Starlink is leader in Low Earth Orbit
Originally created in 2015 to take commercial advantage of SpaceX’s frequent rocket launches, Starlink has grown into the undisputed leader of space-based connectivity. The service operates a massive constellation of more than 10,200 satellites in low Earth orbit (LEO), keeping them positioned within 1,200 miles of the planet’s surface to ensure low-latency, high-speed connections. The network has also expanded to all seven continents, serving consumers and businesses across more than 160 countries. Further, Starlink’s global user base more than doubled over the past year, increasing to 10.3 million active subscribers in the first quarter.
Why Starlink is critical for Elon Musk’s Mars ambitions
Apart from bringing cash from everyday rural households, Starlink has successfully moved into high-paying commercial contracts, and is currently utilised by major maritime shipping fleets and dozens of commercial airlines to provide high-speed in-flight Wi-Fi, raking in billions.Starlink’s massive profit margins are critical because they provide the capital necessary to fund Elon Musk’s long-term visions, including colonising Mars. He also intends to build orbital data centers in space for AI compute to compete with Google, OpenAI and Anthropic.
