SpaceX, one of the most secretive and important private companies in the U.S., may be heavily dependent on its Starlink business unit and the launch of its Starship rocket to achieve positive cash flow, according to confidential financial statements from 2018 and 2019. These statements offer a rare glimpse into the operations of SpaceX, which reportedly saw its revenue increase from $2 billion in 2018 to an estimated $9 billion in 2023, with projected earnings of $15 billion in 2024. The documents reveal that in 2018 and 2019, SpaceX generated $1.98 billion and $1.45 billion in revenue, respectively, but operated at a net loss of -$308 million and -$501 million.
The decline in revenue from 2018 to 2019 can be attributed to a change in the method used by SpaceX to recognize revenue. The company shifted from recognizing revenue based on the completion percentage of a total contract to the completion percentage of discrete aspects of each contract, due to changes in accounting regulations. This change in accounting practices affected the revenue figures for those years.
The majority of SpaceX’s losses came from “cost of revenue,” which includes all costs related to production and distribution, as well as personnel costs, contractors, utilities, rent, and even the depreciation of reusable launch vehicle hardware costs. The company also allocated significant funds for research and development, particularly for its Starlink and Starship programs. In 2018, SpaceX spent $559 million on R&D, which increased to $661 million in 2019. By the end of 2019, the company had cash and cash equivalents of $990 million.
The balance sheets analyzed cover the years following SpaceX’s contracts with NASA for crew transportation services to the International Space Station. Unsurprisingly, revenue from NASA contracts accounted for a significant portion of SpaceX’s revenue, with 37% in 2018 and 83% in 2019. The company’s valuation skyrocketed to $180 billion in 2021, thanks in part to the successful deployment of over 5,500 active Starlink satellites and a customer base of more than 2.5 million.
However, the introduction of the Starship rocket could potentially disrupt this equation once again. Elon Musk, SpaceX’s CEO, acknowledged that Starship is essential for launching the second-generation Starlink satellites, which will be much heavier than their predecessors. The increased capacity provided by these additional satellites will enable SpaceX to serve more end users. While the company currently launches Starlink satellites using its Falcon 9 rocket, Musk has stated that Falcon 9 lacks the necessary volume and mass-to-orbit capability for Starlink 2.
The financial statements offer only a glimpse into SpaceX’s recent financials, and there are still many questions surrounding the company’s current financial situation. SpaceX’s ability to roll out Starlink to millions more users worldwide depends on the successful launch of Starship. The longer it takes to bring Starship online, the longer it will take for Starlink to reach its full potential. Nonetheless, with its impressive track record and ambitious plans for the future, SpaceX remains a major player in the space industry.
