A Starlink user terminal. Photo: SpaceX

SpaceX’s Starlink business is on track to hit $6.6 billion in revenue and post its first free cash flow positive year in 2024, Quilty Space estimates in a new report on the impact of the satellite constellation. 

Quilty Space conducted an in-depth analysis into Starlink financials, which are not publicly reported. The report is not based on financial information provided by SpaceX, so it is subject to uncertainties. The report looks solely at the Starlink business, not SpaceX’s launch business. 

The Quilty Space report estimates that Starlink had 2.7 million subscribers at the end of March 2024. SpaceX’s last public update on Starlink subscribers was in September 2023, when the service surpassed 2 million subscribers.

At $6.6 billion in estimated revenue, Starlink brings in more revenue than the proposed combination of SES and Intelsat, analyst Chris Quilty said in a webinar on Thursday. 

“What Starlink has achieved in the past three years is nothing short of mind-blowing,” Quilty said. “For 2024, we’re forecasting revenues of about $6.6 billion — that would be up 80% over 2023. If you want to put that in context, SES and Intelsat announced they’re going to combine — they’ll have combined revenues of about $4.1 billion.”

The report forecasts Starlink will reach $3.8 billion EBITDA in 2024, and estimates that Starlink achieved EBITDA-CapEx breakeven during late 2023. 

The report expects that Starlink will post its first free cash flow positive year this year. 

Does that make Starlink a business that could deliver attractive equity returns to shareholders? Whether or not Starlink will spin off into a standalone publicly traded company has been the subject of much discussion over the past few years. In March, COO Gwynne Shotwell said at SATELLITE 2024 that the company is not focused on a Starlink IPO right now. 

“The bottom line is that Starlink is on a path to delivering effective returns on invested capital, but it’s not there yet,” Quilty analyst Justin Cadman said. “They’re on that trajectory.” 

Chris Quilty noted that the constellation’s legacy consumer broadband competition, Viasat and Hughes Network Systems, achieved a peak combined subscriber base of 2.2 million subscribers in the first quarter of 2020 when Starlink was kicking off. Starlink achieved that number of subscribers within 36 months. 

“During that same period, we’ve seen Viasat and Hughes’ subscriber totals decline by 30%,” he added.  

Yet these SpaceX subscriber numbers still fall short of SpaceX’s own early projections. In 2015, SpaceX sent investors a presentation claiming that Starlink would have 20 million subscribers by 2022, according to a report from the The Wall Street Journal, written about by Ars Technica.

User Terminal Economics 

One of the key critiques when Starlink was starting out was that the user terminal would be too expensive for customers. This was one of the reasons the FCC cited for cutting Starlink from its rural broadband program. 

When SpaceX launched beta service in 2020 with a $500 user terminal, the terminal cost around $1,500 to manufacture and SpaceX was subsidizing the terminal. By mid-2023, SpaceX confirmed it is no longer subsidizing the terminal, and it currently sells for $600. 

Cadman said that Quilty analysis estimates that SpaceX is somewhere between breakeven and a modest gross margin when it comes to user terminals in the U.S. and enterprise markets, but that is not the case for the rest of the world. 

“They’re now in the enviable position where with free cash flow positive results, they can start to experiment with other means of accelerating revenue growth through programs like incentives, rentals, and other types of equipment programs,” Cadman said. “But key takeaway — terminal subsidies no longer appear to be an issue for Starlink.”

Starlink’s Subscriber Base Around the World 

The report says subscriber growth propelled Starlink from wide losses to profits during 2023 to 2024.

“By targeting consumers first, primarily via a direct-to-consumer sales model, Starlink was able to scale at an unprecedented pace for a satellite operator. Starlink is now evolving and expanding its strategy for enterprise, mobility, and government end markets,” the report says.

While Starlink is expanding into enterprise markets like maritime and aviation, the Quilty report estimates that 95% of the 2.7 million global subscribers are consumers. 

The report looks at Starlink in geographic markets around the world, estimating that about 57% of customers are based in the U.S., although that share is declining as international subscriber additions are starting to outpace U.S. subscriber additions. 

Starlink is seeing strong adoption in high-income countries around the world like Australia, the U.K., and across the EU and in some middle-income countries like Brazil and some other South American markets. 

Quilty analyst Caleb Henry said that countries in Latin America are familiar with satcom from their universal service obligation (USO) programs, which has paved the way for Starlink adoption. “This is a region that is more familiar with satcom and I think that’s why we’re seeing so much adoption there,” Henry said. 

According to the report, customer adoption is slow in emerging markets. While incomes are a constraint, regulatory issues are equally as challenging. India, Indonesia, and several countries in Africa have not yet authorized Starlink. 

“We’re keeping our eye on two more countries, specifically India and Indonesia, which have large population centers but have not yet licensed Starlink,” Henry said. “Those are future needle-movers for the constellation.”

Despite the global uptick in subscribers, Starlink is not truly connecting the unconnected, Cadman noted, as this growth is concentrated in higher income countries. 

“For the most part, Starlink is servicing consumers and middle- and upper-income countries, as well as premium end markets. This is not connecting the unconnected and that’s a  gap that Starlink will probably not be serving in a substantial sort of way anytime in the near future,” Cadman said.