Elon Musk Is One Step Closer to Taking SpaceX’s Starlink Public

Starlink has achieved positive cash flow and is on track to turn a profit in 2023, meeting Elon Musk's condition for taking the satellite business public.

SpaceX plans to spin off Starlink as a separate company. Joan Cros/NurPhoto via Getty Images

Starlink, SpaceX’s satellite-based internet service, recorded its first quarter of positive cash flow in 2022 and is on track to turn a profit this year, said SpaceX President Gwynne Shotwell. The news rekindles hopes for a Starlink initial public offering in the near future after a year of sparse news on the topic, because reaching the cash flow milestone was one of Elon Musk’s key conditions for taking Starlink public.

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“This year, Starlink will make money. We actually had a cash flow positive quarter last year,” Shotwell said at the Federal Aviation Administration’s annual Commercial Space Transportation conference in Washington, D.C. on Feb. 8. She didn’t say in which quarter Starlink achieved positive cash flow.

Musk has said SpaceX will spin Starlink off as a separate company and take it public when its satellite internet business proves financially viable. “Once we can predict cash flow reasonably well, Starlink will IPO,” he tweeted in February 2021. At the time he estimated SpaceX’s overall cash flow would be sustainable by the end of 2022. Shotwell’s speech this week suggest the goal has been met.

A positive cash flow means a company receives more cash than it spends in a certain period. It’s a key metric in gauging a company’s ability to sustain long-term growth.

Starlink generates an estimated $1 billion in annual revenue

SpaceX is one of the world’s most valuable private companies, with a valuation of $137 billion. Retail and institutional investors alike are eager to own a piece of SpaceX, but access to its equity is limited because the company is private. If Starlink goes public, it could be one of the largest IPOs in recent years.

Last year, SpaceX generated $3.3 billion in revenue, including about $1 billion from Starlink and the rest from its commercial launch business, according to Mo Islam, a former JPMorgan analyst and the author of Payload Space, a space industry newsletter. SpaceX didn’t respond to an inquiry to confirm those estimates or comment on its Starlink IPO plan.

Starlink provides broadband internet service through a network of satellites deployed in low Earth orbit. To date, SpaceX has launched more than 3,500 Starlink satellites into space and the service has gained more than one million subscribers who pay $110 or more monthly, plus a  $599 one-time fee for installing a ground terminal. Starlink’s customers range from residential internet users to businesses to travelers who use the service in cars and boats.

SpaceX’s main launch business is already profitable, Shotwell said at yesterday’s event. “The cash flow from those operations basically pay for our development. Where it falls short, we take external investment,” she said.

SpaceX most recently raised a $750 million funding round from a roster of venture capital firms, including Sequoia and Andreessen Horowitz.

Elon Musk Is One Step Closer to Taking SpaceX’s Starlink Public