Starlink is life changing for a lot of people. You would not believe how many different communities ISP market has been shaken up by Starlink. Many people went from high latency metered internet measured in kilobits to 100Mbps at 30ms. I've seen this both in the US and outside the US. Not mention previously unthinkable things like living on a sailboat and working remotely.
The biggest issue at this point is cost. It's mostly a premium product for high income people. I hope access gets cheaper as they scale. I think in general having a globally connected planet with high speed internet is going to make the world better (once we overcome the negative side effects of things like social media addiction)
Being cash flow positive is an extremely important milestone for a startup, but no, it doesn’t indicate profitability.
> While Musk said in October that Starlink was losing money, Shotwell offered a more upbeat assessment. “This year Starlink will make money,” she said, noting that the company’s Falcon launch vehicle and Dragon spacecraft, and other unspecified work, already makes money.
> “We actually had a cashflow positive quarter last year, excluding launch. This year, they’re paying for their own launches, and they will still make money,” she said.
> She said cash flow from operations pays for development, supplemented as needed by outside investment. Tackling both Starlink and the Starship launch vehicle at the same time, she argued, drives that need for outside investment.
> “If we had done Starlink and then Starship, or Starship and then Starlink, we probably could have funded them through customer contracts and revenue from Falcon and Dragon. But you do both of them at the same time it’s a lot of money every year.”
Combining this with today’s statement I think we can answer your questions:
> Breakeven including launch costs?
Yes - cash flow breakeven for the Starlink business unit which includes it’s launch costs.
> Breakeven on only satellite operation costs? Breakeven when you exclude all satellite and ground infrastructure costs? Breakeven when you exclude all costs except Elon’s ego stroking expenses?
No to all these alternatives. But why the dumb ad hominem?
[1] https://spacenews.com/shotwell-ukraine-weaponized-starlink-i...
Each launch burns about 120 tons of kerosene for about 360 tons of CO2.
If we take this Nature study as accurate, a ton of CO2 has a societal cost of about $185. If we add that all up, it's $70k per launch? Let's round up to $100k per launch.
Multiplied by launch count, that's only a few million dollars. They're still at breakeven when you include it.
This is not the same as some fiscal year net income calculation.
Edit: fixed
Cash flow positive tells you they're not going to go broke, at least until they need more capital expenses (5 years...), which is a milestone, sure.
But profit is a better measure of a business's value as a going concern. What happens in 5 years when they can finance with interest rates at 5% and they have competition? I don't know... If they were profitable and could give returns investors needed, that would tell you they can survive.
This is incorrect. Cash flow is cash flow. Net income smooths capital expenditures. Cash flow does not. What that means is if you have a ten-year capital asset, year 0 cash flow will suck while year 1 will be exaggerated. (Starlink is currently in year 0 as it’s building out its constellation. Presumably, capex will fall when it’s in maintenance.)
They're cashflow breakeven and could run net income negative over the next five years as a subscription market grab with the capex amortization over the 5 years.
It is possible they could become incredibly profitable when the capex investment in 5 years is much less than the initial capex.
Equipment costed $5 or $1/yr. Replacement equipment could cost $2.50 or $0.50/yr.
I see this plenty with business capex for on-prem/datacenters. What costed $5M over 5 years on a refresh replacement for 1:1 replacement is usually more than half the cost.
It is unclear if, as bad as many terrestrial ISPs are, Starlink has a TAM big enough. It's going to be slower and less reliable than terrestrial wireless, and expanding terrestrial wireless coverage is going to be cheaper for a very large percentage of potential customers. Starlink is not competitive with terrestrial fiber.
If that's the case, why has it taken until SpaceX for there to be viable Internet service to many of the rural areas they service? People are replacing 3Mbit DSL links, or even dial up (yes, in 2023, dial-up) service with starlink. terrestrial fiber beats Starlink handily, except where it hasn't been run. Which, even many urban areas still don't have gigabit fiber Internet service available, never mind when suburban or rural areas will get it (if ever). The other part of the addressable market is airplanes and boats/ships, and remote bases like McMurdo in Antarctica. Not sure how you're proposing we run fiber Internet to them.
I'm also seeing more commercial entities looking at it simply as a backup.
According to Wikipedia design started in 2015, which means it's taken them more than 8 years to get to cash-flow break even. This is why you need billions of dollars to get started. And that doesn't include the fact that they had to build a rocket company to launch their birds.
Looks like they picked the right 60 engineers.
They presumably also had to build all the ground stations and infrastructure to manage all those devices...unless they're using AWS Ground Control, which would be hilarious.
Surely you're aware that this sort of comment is exactly what sparks and fans the flames of said flame wars?
I’d have denied that request too.
Please make sure you communicate the facts correctly when spreading this meme.
More generally though: why do people love spreading false narratives? It’s ok not to like tech billionaires but I don’t get why they go around lying about stuff. There are plenty of legitimate criticisms of Elon Musk without making stuff up.
Exactly this.
Someday I would like to understand how we got here as a society.
BUT I am really rooting for SpaceX and Starlink. Honestly I hope the shiny toy that is X/Twitter keeps his attention for a while and he leaves those orgs to run as they have been.
According to SpaceX their satellites last 5 years. That means Starlink must make, at minimum, $8B/year to maintain the constellation.
`$8B/yr / ($200/mo * 12 mo) = 3.33 Million users`
3.3 million users paying $200/mo in order to break even. The starshield contract probably covers a good amount, too.
Falcon 9 costs 67 million for external customers, for internal use the cost will likely be lower. Let's say 50. 50 * 118 gives us a HIGH estimate of 5.6 billion, but i'd expect it to be much closer to 3-4 b.
Satellites are relatively cheap. Total cost below 10b, certainly not 40b
Additionally, $200/m is not price competitive compared to traditional ISPs in most of the world, $20-50 is more typical for many areas, less in Africa/Asia. Yes Starlink has a USP over traditional services, but that USP won't benefit users who are already well served by traditional ISPs, so to expand outside the remote market they will need to drop prices to compete.
The maths could easily end up being $12bn/year / ($30/mo * 12m) = 33.3 million users. Is that a reasonable goal? That's a lot of paying users. That's a 4% market share in Europe and the US where there are highly developed telcos with decades of experience in this. That's a hard one, particular to achieve it in the near term (~5 years or one replacement cycle).
I'll buy some shares if Starlink go IPO. this break even cash flow might bring the IPO one step closer.
https://www.nasdaq.com/articles/spacex-wins-a-$70-million-sp...
Starlink is going to start making obscene amounts of money
Personally, I hope it’s true. Starlink is good for the world.
> have probably been positively impacted by him
Well, every time my Model 3's wipers go batshit insane, I get a little irritated with his decision to forego a known good solution that the rest of the world has been using for decades. Not feeling positively impacted at that moment ;-)
Why do people always talk about needing to meet a guy to have an opinion on them? I haven’t met Dick Cheney either
For better or worse is up to the individual opinion, but its not really weird to have a strong view on a polarising figure, especially one with the influence of musk.
You can love him because rockets, EVs, and enormous satellite constellations are pretty cool, but you'd be a fool to trust him.
It doesn’t require strong opinions about Musk to understand the value in taking what he says with skepticism.
Musk's record is quite clear at this point: https://webcache.googleusercontent.com/search?q=cache:https:...
And no, it is not about predictions of this being done by that year alone.
Why would people most probably been positively impacted by him? He seems to constantly have knee-jerk reactions to things happening around him, and his companies seems to frequently have issues with overworking employees.
I'll never take anything he says at face value because anything that's ever come out of his mouth is posturing.
I'm frankly tired of billionaire windbags like him. I have no idea how someone could be a fan of his.
1. His only software contribution at PayPal was torn out and discarded 2. After his software at paypal was rejected he was fired by the board at paypal.
It is not that he does not have business skills to market. It is that he presents himself as someone that does quality engineering..which in fact is somewhat false.
It wasn't good for Ukraine when Musk pulled the plug on them.
More significantly, both NASA and the Space Force receive SpaceX financial statements because they require reassurance that all their vendors are viable ongoing concerns.
IOW, if this is a lie, then he could lose his 2 biggest customers. And I wouldn't be surprised if lying to the Space Force is an actual crime.
https://slate.com/technology/2023/10/x-linda-yaccarino-debt-...
The rub, of course, is that most of the cost for something like Starlink is designing, building, and launching the satellites, which shows up in investing cashflows.
Put differently, if the company was actually generating more cash than it consumes on all levels, start the IPO right now and SpaceX will be a $1tn+ company (instead of a $100bn+ company that people expect will one day generate cash and then be a $1tn+ company).
I've heard a few of them, like concerns about AI which I don't think are unreasonable but I'm curious about what other projections he's had that are unreasonable?
Those who control the data flow, access, search etc. control surveillance and the minds of the masses which is why funding is often seen from the sec state.
Especially relevant because Starlink has been causing numerous near-collisions over the past few years.
