“Confidential financial statements from SpaceX for 2018 and 2019 reveal a glimpse into the company’s dependence on its Starlink business unit and the Starship rocket to achieve positive cash flow.”
Intriguing insights into the operations of one of the most influential private companies in the United States are revealed in the five-year-old balance sheets. These documents provide a rare and intimate look into the spending habits of SpaceX, from its modest revenue of $2 billion in 2018 to its impressive projection of $15 billion in 2024, with an estimated $3 billion in earnings. This information was shared with Reuters by sources familiar with the company’s finances in November.
2018 and 2019 marked crucial years for SpaceX. In February 2018, the Falcon Heavy rocket was successfully launched for the first time. Just a month later, the company faced a setback when its crew Dragon capsule exploded during ground testing, after nailing a pivotal flight test in March. The pressure was on for SpaceX to deliver a safe and reliable spacecraft for NASA astronauts, as they had secured a multi-billion-dollar government contract for crew transportation services.
This was also the year that SpaceX launched its first 60 Starlink satellites. This service has become a crucial part of the company’s overall strategy, which revolves around establishing a human colony on Mars and fulfilling CEO Elon Musk’s vision to “expand the light of consciousness” throughout the universe.
So, let’s dive deeper into these financial statements.
In 2018, SpaceX recorded $1.98 billion in revenue, which slightly declined to $1.45 billion in 2019. However, the company was operating at a net loss of -$308 million and -$501 million, respectively, according to the comprehensive balance sheets viewed by TechCrunch. This decline in revenue can be attributed to a change in the accounting regulations for recognizing revenue. Instead of calculating the percentage of total contract completion, SpaceX began recognizing revenue based on the completion of each aspect of the contract. The company declined to comment on these findings.
The majority of the losses incurred by SpaceX were under the category of “cost of revenue.” This includes all costs related to production and distribution, as well as personnel, contractors, utilities, and rent. The company even accounted for the depreciation of reusable launch vehicle hardware in this section.
SpaceX also invested a considerable amount of money in research and development, spending $559 million in 2018 and $661 million in 2019. It is worth noting that this line item primarily covers the costs of the Starlink and Starship programs, rather than personnel costs as seen in other companies. In 2019, SpaceX achieved a significant milestone when it launched its first batch of operational Starlink satellites in May. The company ended 2019 with cash and cash equivalents of $990 million, up from $868 million in 2018.
The balance sheets span the years immediately after SpaceX secured contracts with NASA for delivering astronauts and cargo to and from the International Space Station. Therefore, it is no surprise that 37% of the company’s revenue in 2018 and a staggering 83% in 2019 came from these government contracts.
With a valuation of $180 billion, SpaceX has made impressive progress since deploying its first batch of 60 Starlink satellites in May 2019. Today, there are over 5,500 active satellites in orbit, with more than 2.5 million customers. This is undoubtedly reflected in the company’s growing sales.
However, the introduction of the Starship rocket may change the equation once again. Currently undergoing an orbital flight test campaign from its Texas launch site, the massive rocket will be essential in maintaining launch cadence for the second generation of satellites. These newer satellites will be nearly twice as heavy, and more spacecraft in orbit will increase capacity for end-users.
In an interview in May 2022, SpaceX CEO Elon Musk acknowledged that Starship is the only rocket capable of carrying the Starlink 2 satellites. He stated, “Falcon 9 doesn’t have the volume or mass-to-orbit capability required for Starlink 2.”
There are many lingering questions about SpaceX’s recent financials. The company utilizes its own Falcon 9 rocket to launch its Starlink satellites at unprecedented rates. Furthermore, since the rocket booster is reusable, SpaceX can spread out the hardware costs over time. However, the longer it takes to bring Starship online, the longer it will take to expand Starlink’s reach to millions more users worldwide.
