Confidential financial reports from SpaceX for 2018 and 2019 provide a first look at the extent to which the company is likely dependent on its Starlink business unit and the entry into service of the Starship rocket to generate positive cash flow.
Although the comprehensive financial statements are five years old, they provide an intimate look into the operations of arguably one of the most important and secretive private companies in the United States, helping to shed light on what the company has spent money on and how much it has spent since the company is of unprofitable revenue grew from around $2 billion to a reported $9 billion in 2023, with an expected $15 billion in 2024 and a profit of $3 billion. Sources familiar told Reuters in November.
2018 and 2019 were pivotal years for the company: in February 2018, SpaceX launched its Falcon Heavy rocket for the first time; The following March, the company succeeded in a crucial flight test of its Crew Dragon capsule, but a month later the same capsule exploded during a ground test. SpaceX likely felt pressure to deliver a safe and reliable spacecraft for NASA astronauts so it could make more dollars from the multibillion-dollar government contract for crew transport services.
This year SpaceX also launched its first 60 Starlink satellites. The service has become an integral part of the company’s overall plans – the core of which is to establish a human colony on Mars, or, as CEO Elon Musk often puts it, to spread “the light of consciousness” throughout the universe.
So let’s take a look.
The company had revenues of $1.98 billion in 2018 and $1.45 billion in 2019, but reported net losses of -$308 million and -$501 million, respectively , according to comprehensive financial statements from these years seen by TechCrunch. The reason for the revenue decline from 2018 to 2019 was that due to a change in accounting rules, SpaceX essentially changed its revenue recognition method from the percentage of an overall contract completed to the percentage of individual aspects of each completed contract completed, the documents seen by TechCrunch explained. SpaceX declined to comment for this story.
The bulk of the losses came from “cost of sales,” a broad category that can include any costs associated with producing and distributing a product or service. This position also includes the costs of staff and contractors, operating costs and rent. SpaceX even factors in the depreciation of hardware costs for reusable launch vehicles into this equation.
The company also spent heavily on research and development – $559 million in 2018 and $661 million the following year. Often companies consider personnel costs in this position (i.e. it is the “development” part of research and development). But in SpaceX’s case, the financial report states that these costs primarily related to the Starlink and Starship programs. The Starlink program reached a milestone in 2019 when SpaceX launched the first batch of operational Starlink satellites in May of that year. The company ended the year with cash and cash equivalents of $868 million for 2018 and $990 million for 2019.
The tallies span the years after SpaceX secured NASA contracts to deliver astronauts and cargo to and from the International Space Station. So it’s probably no surprise that U.S. government money in the form of contracts with NASA accounted for 37% of revenue in 2018 and 83% in 2019.
The company, whose value rose to $180 billion at the end of last year, has made truly enormous progress since deploying 60 Starlink satellites in May 2019: there are now over 5,500 active satellites in orbit and serving over 2.5 million customers . This is certainly reflected in the booming sales.
The arrival of Starship could change the equation again. The giant rocket, which the company is currently undergoing an orbital flight test campaign from its launch site in Texas, will be necessary to maintain the launch frequency of second-generation satellites. These spacecraft will be nearly twice as heavy as the first-generation satellites, and additional spacecraft in orbit will help increase capacity for end users.
Meanwhile, SpaceX CEO Elon Musk admitted an interview from May 2022 that Starship is “the only thing that can carry the Starlink 2 satellites.”
“Falcon [9] has neither the volume nor mass-to-orbit capability required for Starlink 2,” he said.
There are countless questions about SpaceX’s recent financials. The company is launching its Starlink satellites with its own rocket, its workhorse Falcon 9, meaning it can launch the space-based internet satellites at unprecedented speeds. Because the rocket booster is reusable, the company can also recoup hardware costs over time. But the longer it takes to bring Starship online, the longer it will take to roll out Starlink to millions more users around the world.