SpaceX has always been -- and probably always will be -- best known for its rockets. It was founded as a small rocket company with its Falcon 1, which quickly evolved to launch large rockets (the Falcon 9), and it's currently testing the largest rocket in the world, the Starliner.
Rockets, however, are not how SpaceX makes most of its money.
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Starlink leads the way higher
By early 2023, researcher Payload Space says, it was already clear that SpaceX's new satellite internet business, Starlink, had become its biggest revenue driver. Its $4.2 billion in sales eclipsed its $3.5 billion in rocket launch fees.
Peering ahead, Payload predicted that 2024 would see the gap between these two revenue streams grow ever larger, forecasting that SpaceX would end 2024 with Starlink revenue of $6.8 billion, and launch revenue of only $5.5 billion.
And the actual results may be even more impressive than the forecast. In a report late last month, industry analyst Quilty Space estimated Starlink revenue actually came in closer to $7.7 billion in 2024, for 83% year-over-year growth.
Part of the reason for the outsize growth, says Quilty, is a surge in U.S. defense spending on contracts to use Starlink, including SpaceX's militarized Starshield project. And Starlink's commercial business also continues to grow and grow. In 2025, Quilty forecast that it will count 7.8 million people around the world as customers and generate $11.8 billion in sales.
Mind-blowing growth rates
To put that into perspective, as recently as May of 2024, SpaceX reported passing 3 million Starlink subscribers. Four months later, in September, the company upped that estimate to 4 million. That's 33% growth in about 33% of a year, translating to an annual increase of roughly 100% in 2024.
Now, you might think that growth rate difficult to maintain, and you may be right. But if Quilty is right, SpaceX will still come awfully close to notching another 100% gain in 2025. If Starlink had 4 million customers in September 2024, and is headed for 7.8 million by the end of 2025, it would work out to about a 76% growth rate.
Caveats and provisos
It's not all good news for SpaceX. A 76% increase in subscriber count is great and all, but Quilty's prediction of $11.8 billion in 2025 Starlink revenue, compared to the $7.7 billion it estimates for 2024, works out to growth of only 53%.
That's significantly slower than the increase in subscribers, despite Starlink raking in some extra revenue from its U.S. military work. This implies that as SpaceX expands outside the United States, and into lower-GDP countries around the world, the company can't charge as much for commercial Starlink service as American customers are willing to pay.
What it means for investors
This isn't a new problem. For example, a 2023 article in TechCentral, a South African businesstechnology newswebsite, surveyed Starlink prices globally. It found that compared to the usual $120 monthly cost of Starlink in the U.S., it costs about $41 in France and $30 in Brazil. The rate in Zambia was even cheaper at $24 a month.
This isn't necessarily a problem for SpaceX, though. To provide global service, it needs to build, launch, and keep satellites in orbit even above countries that can't pay a lot. It makes sense to charge at least something for use of those satellites locally, even if the price isn't as high as what it might be in the U.S.
Still, investors need to be aware of these trends if they hope to participate in an eventual initial public offering (IPO) for Starlink -- which Elon Musk has promised is on its way eventually. As it becomes more and more an international service, they should anticipate that hyperfast subscriber increases may translate into slower growth (if still fast) in revenue and profit.
If you're planning to invest in Starlink, you should probably treat it like any other stock, and value it more on its earnings growth than simply on increases in subscribers.
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