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They are charging more than it costs to launch, but remember they employee thousands of extremely expensive engineers all year, and unless there are new busines

They are charging more than it costs to launch, but remember they employee thousands of extremely expensive engineers all year, and unless there are new businesses, that business isn't sustainable: https://www.wsj.com/articles/exclusive-peek-at-spacex-data-shows-loss-in-2015-heavy-expectations-for-nascent-internet-service-1484316455 https://www.wsj.com/articles/exclusive-peek-at-spacex-data-s...

fastball 6y ago
The OC claimed they did not have a profitable business model. They do have a profitable business model (in fact they have multiple), they have just not scaled it up enough while at the same time are pumping massive amounts of money into new projects / R&D, so they are not a profitable business. There is a difference between the two things. Space launch and satellite internet are both proven profitable business models where SpaceX is actively growing their marketshare. In fact I wouldn't be surprised if in 2 years time SpaceX is the satellite internet market. No one will want the subpar internet experience provided by geosync satellites when Starlink is fully operational. Also worth noting that the article is about data from 2015, which was the first year they had ever landed an orbital-class booster (Falcon 9), and only the one time (in December 2015). The first time they ever re-used a booster for a customer payload was in 2017 (after the WSJ article you cite was published). Since then they've re-used boosters many times, with their recent launch actually being the 8th launch+recovery of the same booster. So what was iffy/nascent in 2015/2017 is now proven/consistent in 2021. They are doing much, much better from when that article as published.
- shaklee3 6y ago
  Sure, StarLink may be profitable, especially if they continue to get RDOF funding from the government. I'm skeptical it would be profitable otherwise given the cost of the terminal. I don't believe their launch business will be profitable since the number of launches has been dropping every year, and they are becoming their main customer.
  - fastball 6y ago
    Sorry, I significantly edited my comment before seeing your reply. Also are we looking at the same chart? Not sure how you can make the claim that the number of launches has been dropping every year... every year since when? 2020 was the most launches ever, and in 2021 they are expected to do more commercial customer launches than all launches in 2020 + Starlink launches on top of that. https://en.wikipedia.org/wiki/Falcon_9#Launch_outcomes https://en.wikipedia.org/wiki/Falcon_9#Launch_outcomes
    - shaklee3 6y ago
      Take a look here: https://en.wikipedia.org/wiki/List_of_Falcon_9_and_Falcon_Heavy_launches https://en.wikipedia.org/wiki/List_of_Falcon_9_and_Falcon_He... and remove all launches where SpaceX was the customer (a net loss unless the payload they launch has payoff), and specifically look at the GTO launches (the ones that pay the most money). There are fewer and fewer GTO launches, and the number of customers has been going down. A cursory glance shows 2017 had 8, 8 in 2018, 4 in 2019, 2 in 2020, and about 8 planned in 2021 (we'll see, these typically slip quite a bit. The point being that they need profitable launches (not a small satellite they rideshare with 10 starlinks on) to sustain a launch business with that many engineers on it. I think 2021 will launch maybe half the GTO/GEO they're targeting this year due to delays, as was the case in 2020.
      - deleted 6y ago
        [deleted]
      - fastball 6y ago
        I mean, clearly the payloads they're launching themselves will have a payoff, that's why they're launching them? Regardless, commercial launches is what I was talking about as well. Do you have a reference for the idea that GTO launches are the only ones which are profitable / significantly more profitable than other launches? I haven't seen that. Because otherwise it seems pretty out there to only look at a small subset of their commercial launches. And I'm assuming they'll do more GTO launches once Starship + Superheavy is online.
Cogito 6y ago
What do you mean by profitable? You seem to be using the definition of cash-flow-positive, or something like that. Taking a loan, or investment, does not suddenly make a company unprofitable, that would be a silly way of looking at the world. I don't have any figures for SpaceX, but I suspect the amount of cash they've be able to raise relates directly to the expected future value of the company. That they're able to launch 60 satellites at once for a fraction of the cost of other launch companies probably helps. Part of the reason I asked what you meant by profitable is that you seem to be conflating operating and capital expenses. From the perspective of the 'launch-arm' of SpaceX, launch costs are operational expenses and profitability analysis will typically balance that against payment for the service provided. From the perspective of the 'starlink-arm' of SpaceX, launch costs are capital expenses and should be accounted for by depreciating the cost over the life of the asset (the satellites). If you want to look at the profitability across the entire business then you have to be very specific about what you're measuring, and clear what you mean when you say profitable - at least if you want your analysis to be useful.

fastball 6y ago

The OC claimed they did not have a profitable business model. They do have a profitable business model (in fact they have multiple), they have just not scaled it up enough while at the same time are pumping massive amounts of money into new projects / R&D, so they are not a profitable business. There is a difference between the two things. Space launch and satellite internet are both proven profitable business models where SpaceX is actively growing their marketshare. In fact I wouldn't be surprised if in 2 years time SpaceX is the satellite internet market. No one will want the subpar internet experience provided by geosync satellites when Starlink is fully operational. Also worth noting that the article is about data from 2015, which was the first year they had ever landed an orbital-class booster (Falcon 9), and only the one time (in December 2015). The first time they ever re-used a booster for a customer payload was in 2017 (after the WSJ article you cite was published). Since then they've re-used boosters many times, with their recent launch actually being the 8th launch+recovery of the same booster. So what was iffy/nascent in 2015/2017 is now proven/consistent in 2021. They are doing much, much better from when that article as published.

shaklee3 6y ago
Sure, StarLink may be profitable, especially if they continue to get RDOF funding from the government. I'm skeptical it would be profitable otherwise given the cost of the terminal. I don't believe their launch business will be profitable since the number of launches has been dropping every year, and they are becoming their main customer.
- fastball 6y ago
  Sorry, I significantly edited my comment before seeing your reply. Also are we looking at the same chart? Not sure how you can make the claim that the number of launches has been dropping every year... every year since when? 2020 was the most launches ever, and in 2021 they are expected to do more commercial customer launches than all launches in 2020 + Starlink launches on top of that. https://en.wikipedia.org/wiki/Falcon_9#Launch_outcomes https://en.wikipedia.org/wiki/Falcon_9#Launch_outcomes
  - shaklee3 6y ago
    Take a look here: https://en.wikipedia.org/wiki/List_of_Falcon_9_and_Falcon_Heavy_launches https://en.wikipedia.org/wiki/List_of_Falcon_9_and_Falcon_He... and remove all launches where SpaceX was the customer (a net loss unless the payload they launch has payoff), and specifically look at the GTO launches (the ones that pay the most money). There are fewer and fewer GTO launches, and the number of customers has been going down. A cursory glance shows 2017 had 8, 8 in 2018, 4 in 2019, 2 in 2020, and about 8 planned in 2021 (we'll see, these typically slip quite a bit. The point being that they need profitable launches (not a small satellite they rideshare with 10 starlinks on) to sustain a launch business with that many engineers on it. I think 2021 will launch maybe half the GTO/GEO they're targeting this year due to delays, as was the case in 2020.
    - deleted 6y ago
      [deleted]
    - fastball 6y ago
      I mean, clearly the payloads they're launching themselves will have a payoff, that's why they're launching them? Regardless, commercial launches is what I was talking about as well. Do you have a reference for the idea that GTO launches are the only ones which are profitable / significantly more profitable than other launches? I haven't seen that. Because otherwise it seems pretty out there to only look at a small subset of their commercial launches. And I'm assuming they'll do more GTO launches once Starship + Superheavy is online.

Cogito 6y ago

What do you mean by profitable? You seem to be using the definition of cash-flow-positive, or something like that. Taking a loan, or investment, does not suddenly make a company unprofitable, that would be a silly way of looking at the world. I don't have any figures for SpaceX, but I suspect the amount of cash they've be able to raise relates directly to the expected future value of the company. That they're able to launch 60 satellites at once for a fraction of the cost of other launch companies probably helps. Part of the reason I asked what you meant by profitable is that you seem to be conflating operating and capital expenses. From the perspective of the 'launch-arm' of SpaceX, launch costs are operational expenses and profitability analysis will typically balance that against payment for the service provided. From the perspective of the 'starlink-arm' of SpaceX, launch costs are capital expenses and should be accounted for by depreciating the cost over the life of the asset (the satellites). If you want to look at the profitability across the entire business then you have to be very specific about what you're measuring, and clear what you mean when you say profitable - at least if you want your analysis to be useful.