If there’s one thing that really jumped out at me from Payload Space’s just-released report “Estimating SpaceX’s 2024 Revenue,” it’s the sheer size of SpaceX’s Starlink satellite internet business — and its growth rate.

It’s been less than five years now since SpaceX first announced the opening of beta service for Starlink. Less than five years ago, this business was making $0 revenue, $0 profit. But my, what a difference five years make. According to Payload’s latest estimates, five years’ hard work has turned Starlink into an absolute space business giant, generating an estimated $8.2 billion in 2024 revenue, up from $4.2 billion a year ago, and growing its customer count by 100%, from 2.3 million registered users to 4.6 million in a year.

Image source: Getty Images.

Starlink über alles (like, literally)

That’s 20% more revenue SpaceX generated from Starlink than what Payload estimated the SpaceX subsidiary would make, back when it published its first prediction at the start of last year. It’s also 95% more revenue than SpaceX made last year from what used to be its core business of launching rockets. And this means that for the second year in a row, Starlink is the driving force behind SpaceX’s success as a company.

And where is all this money coming from? Crunching data from public announcements and its own financial models, Payload believes these are the primary sources:

A few observations are in order here. First, the specialized Starlink service known as Starshield, which focuses on providing encrypted communications (and other services) to the U.S. government and military, has, in the barely two years since it was first announced, already rocketed to become the No. 2 revenue contributor within Starlink. Nearly a quarter of the entire business — $2 billion in estimated revenue — now comes from Starshield and related services. And at the rate Starshield is growing, Starlink’s military sideline business could well become the biggest part of Starlink.

That said, for the time being, residential Starlink service is still the subsidiary’s biggest revenue driver. The fact that Starlink users doubled in size last year probably has a lot to do with that. At the same time, a lot of Starlink’s new users come from outside the U.S., in countries where SpaceX charges discounted rates for Starlink. This has already driven the average monthly revenue per Starlink residential user down from the $120 rate charged in the U.S. to $85 with international users included in the tally.

As Starlink shifts from a primarily U.S. service (59% of Starlink users were based in the U.S. in 2023) to a primarily international service (52% of users were outside the U.S. in 2024), expect the number of users to keep rising rapidly, and the average revenue per user (ARPU) to decline.

Helping to make up the difference, and keep total revenues rising at a brisk clip, will be SpaceX’s savvy move to differentiate the service by offering Starlink at higher rates to global travelers (Starlink Roam), to business users (Starlink Business), to users on boats (Starlink Maritime), and to air travelers as well (Starlink Aviation). Investors will need to keep a sharp eye on these business segments particularly, as well as the fast-growing Starshield military business, to gauge the rate at which Starlink revenues are growing.

The upshot for investors (in a Starlink IPO)

Assuming these estimates are correct (and Payload has been pretty spot on with its estimates so far), Starlink’s rapid rise has profound implications for investors hoping to participate in the Starlink initial public offering (IPO) — that Musk has said is coming. Just over $1.7 billion, or 21% of the revenue Starlink generated last year, came from one-time equipment sales. The remaining nearly four-fifths of Starlink’s income, meanwhile, is recurring revenue from providing Starlink services.

That’s roughly $6.5 billion in of the kind of smooth and predictable annual revenue that Musk said he wants to see before agreeing to IPO Starlink. And with Starlink revenue doubling year over year, I’d say the conditions have now been met for that IPO to proceed… basically, anytime Musk decides the market conditions are favorable for it.

We will probably IPO Starlink, but only several years in the future when revenue growth is smooth & predictable. Public market does *not* like erratic cash flow haha. I’m a huge fan of small retail investors. Will make sure they get top priority. You can hold me to it.

— Elon Musk (@elonmusk) September 28, 2020