Starlink made $1.4B in revenue in 2022, SpaceX thinks it can do better

Key Points

• 💰 Starlink generated $1.4 billion in revenue in 2022, marking substantial growth from $222 million in 2021.
• 🚀 SpaceX predicts that Starlink could achieve annual revenue exceeding $1.4 billion in the future.
• 📈 While Starlink saw impressive revenue growth, it reported an overall loss in 2022, with a slim profit in the first quarter of the year.
• 🛰️ SpaceX had initially projected Starlink to generate nearly $12 billion in revenue and $7 billion in operating profit by 2022, but it fell significantly short of these targets.
• 🌍 Starlink faces challenges as it competes in regions where high-speed broadband is readily available and often cheaper, posing obstacles to subscription growth.

SpaceX’s Starlink high-speed internet service made $1.4 billion in revenue in 2022. The aerospace company predicts that Starlink rein in more than $1.4 billion in one year. 

Documents viewed by the Wall Street Journal reveal Starlink made $1.4 billion in revenue last year, up from $222 million in 2021. However, the records also showed SpaceX reported Starlink an overall loss in 2022 with a slim profit in the first quarter of the year.

A 2015 presentation to SpaceX investors reveals how far Starlink is from the aerospace company’s initial goal. SpaceX projected Starlink’s satellite internet services would generate nearly $12 billion in revenue and $7 billion in operating profit by 2022. SpaceX expected Starlink to have over a million active subscribers by last year. It reached 1.5 million Starlink customers earlier this year.

WSJ reported that consumers aren’t signing up for the internet subscription service as quickly as SpaceX predicted. 

“Starlink is bumping up against a reality articulated by many skeptics of satellite internet. The majority of the world’s population that the business could serve and that can afford high-speed broadband lives in cities. In those regions, internet service is readily available, usually offers cheaper monthly costs than Starlink, and doesn’t require specialized equipment,” noted the New York-based daily newspaper.

According to McKinsey & Company, the uptake of satellite internet has been limited for various reasons. Chief among those reasons are high costs and poor performance. Starlink has addressed performance issues by using a low Earth orbit satellite constellation. SpaceX also managed hardware costs by slashing the prices of Starlink terminals. 

Recently, SpaceX’s Vice President of Starlink Jonathan Hofeller announced that the company was no longer losing money producing Starlink terminals. Hofeller noted that mass-producing Starlink terminals was one of the internet provider’s keys to success. 

“We were subsidizing terminals, but we’ve been iterating on our terminal production so much that we’re no longer subsidizing terminals, which is a good place to be,” Hofeller said during the World Satellite Business Week conference.