45 ms·
Starlink has achieved breakeven cash flow
- goalieca 3y agoI can’t understate how revolutionary this technology is for those outside of dense urban center. It has even been well utilized by Ukraine in the war and is jamming resistant.
- te_chris 3y agoUnless the jamming is being performed by an anxious and needy tech mogul after a phone call with a dictator.
- deleted 3y ago[deleted]
- zirgs 3y agoYeah - this is why critical military infrastructure should not depend on the private sector.
- scottyah 3y agoLast I heard Elon wasn't able to get more than a Secret Clearance and does not know a decent amount of what happens with Starshield
- mlindner 3y agoAll military technology in the us is built by the private sector, and much of it is operated by the private sector, like the military communications. One of the major problems in Ukraine’s case is they depended on the private sector _without a contract_ leaving them up to the pro bono will of the owner.
- sneak 3y agoStarlink was already shut off in Crimea because of the war. He denied a request by the Ukrainians to turn it back on in that geofence that they made specifically so that they could use it to conduct an airstrike. I’d have denied that request too. Please make sure you communicate the facts correctly when spreading this meme. More generally though: why do people love spreading false narratives? It’s ok not to like tech billionaires but I don’t get why they go around lying about stuff. There are plenty of legitimate criticisms of Elon Musk without making stuff up.
- bryanlarsen 3y ago> turn it back on It was never turned on in the first place.
- signatoremo 3y agoIt has been turned on, according to Kyrylo Budanov, commander of Ukraine's Defense Intelligence Directorate: [KB] There have been no problems since it's been turned on over Crimea. https://www.thedrive.com/the-war-zone/exclusive-interview-with-ukraines-spy-boss-from-his-dc-hotel-room https://www.thedrive.com/the-war-zone/exclusive-interview-wi...
- bryanlarsen 3y agoYes, the Department of Defense is now in control of the geofencing in the Ukraine theatre.
- The_Colonel 3y agoI think the military implications of Starlink/Starshield are actually the most revolutionary. The "unjammability", low latency, high throughput and the sheer amount of them (which makes it very difficult to destroy them) makes a lot of unmanned military platforms very viable. Another aspect is that it might be accessible to smaller countries which can't afford their own military satellites.
- deleted 3y ago[deleted]
- kossTKR 3y agoIsn't Starlink basically a part of the US military-industrial complex hiding behind stories of private enterprise, just like many other Silicon Valley companies intricate relationship with the security state as laid out in Yasha Levines Surveillance Valley?
- doublemint2203 3y agoyou're thinking of Starshield
- kossTKR 3y agoActually not, infrastructure has great geopolitical and geostrategic importance as laid out in the book just mentioned by Levine. Those who control the data flow, access, search etc. control surveillance and the minds of the masses which is why funding is often seen from the sec state.
- seydor 3y agomost definitely yes. they can see me typing now
- GartzenDeHaes 3y agoMilitary industrial MEDIA complex.
- rpmisms 3y agoThis is huge. Space-based individual consumer services being profitable was a pipe dream a decade ago.
- somethingwitty1 3y agoYou mean like the numerous space-based services that have been making money over the past ~30 years?
- anthonyskipper 3y agoI mostly remember them going out of business like Iridium did in 1999. Clearly the market wasn't there as no one I knew used satellite services for anything other than TV, and that model failed against broadband. Starlink is first time regular consumers like my family members actually paid for a satellite service.
- Maxion 3y agoUhm, no? Do you think all communications satellites operate at a loss?
- foobiekr 3y agoFor literally decades. Exactly this. Someday I would like to understand how we got here as a society.
- sidibe 3y agoDo you think these faceless comms companies could have achieved what a superhero's company only just now achieved?
- rpmisms 3y agoEdited for clarity. Something like starlink existing and being profitable was a pipe dream a decade ago.
- drannex 3y agoI don't trust a single thing he says at this point without evidence, I just can't possibly see it as breakeven without it, which we likely won't receive as they are a private corp.
- next_xibalba 3y agoWhy does it matter to you? I am fascinated by people who have such strong opinions about Musk, particularly on the negative side. The vast majority have never met him and, if they were honest, have probably been positively impacted by him (or not at all). Personally, I hope it’s true. Starlink is good for the world.
- JauntyHatAngle 3y agoI don't really see why it would be surprising. He is an influential figure that is greatly impacting tech, culture and politics. For better or worse is up to the individual opinion, but its not really weird to have a strong view on a polarising figure, especially one with the influence of musk.
- Waterluvian 3y agoI think Starlink has colossal potential to do tremendous good in the world. That's exactly why I care so much about how much control and impact a character like Musk has. Would suck if my ISP suddenly just started sending me dank memes and poop emojis one day because the CEO got broken up with.
- beepbooptheory 3y agoThe fact that, at this point, this is not a totally ridiculous thing to be concerned about is very surreal but also pretty funny honestly.
- Waterluvian 3y agoIt’s absolutely hilarious when it’s something like Twitter. When it’s an ISP or a rocket or an autonomous car, I laugh a wee bit less. XD
- fdaslkjlkjklj 3y agoFor those who don't know, capital expenses are depreciated over their useful lifetime (for StarLink sats, estimated at 5 years) and aren't accounted for by cashflow. Cash flow positive tells you they're not going to go broke, at least until they need more capital expenses (5 years...), which is a milestone, sure. But profit is a better measure of a business's value as a going concern. What happens in 5 years when they can finance with interest rates at 5% and they have competition? I don't know... If they were profitable and could give returns investors needed, that would tell you they can survive.
- ckdarby 3y agoI get where this comment is coming from, but isn't it much more complicated? They're cashflow breakeven and could run net income negative over the next five years as a subscription market grab with the capex amortization over the 5 years. It is possible they could become incredibly profitable when the capex investment in 5 years is much less than the initial capex. Equipment costed $5 or $1/yr. Replacement equipment could cost $2.50 or $0.50/yr. I see this plenty with business capex for on-prem/datacenters. What costed $5M over 5 years on a refresh replacement for 1:1 replacement is usually more than half the cost.
- Zigurd 3y agoStarlink also has capex and subsequent opex for ground stations. Even with inter-satellite communications links in the 1.5gen satellites, it needs ground stations and interconnection with backbone operators. It is unclear if, as bad as many terrestrial ISPs are, Starlink has a TAM big enough. It's going to be slower and less reliable than terrestrial wireless, and expanding terrestrial wireless coverage is going to be cheaper for a very large percentage of potential customers. Starlink is not competitive with terrestrial fiber.
- ckdarby 3y agoThey might be able to sustain just simply via country contracts using it as a breakglass in the event of a telecommunications attack. I'm also seeing more commercial entities looking at it simply as a backup.
- dougmwne 3y agoWho knows what this even means. Breakeven including launch costs? Breakeven on only satellite operation costs? Breakeven when you exclude all satellite and ground infrastructure costs? Breakeven when you exclude all costs except Elon’s ego stroking expenses?
- bequanna 3y agoIt says right in the description: cash flow break even. This is not the same as some fiscal year net income calculation. Edit: fixed
- next_xibalba 3y agoEBITDA is an approximation of cash flow profit. I think you mean net income.
- next_xibalba 3y agoLikely Starlink operates as a distinct business unit, having its own financial statements (income, balance sheet, and cash flow). Breakeven means that the unit didn’t lose cash (but didn’t necessarily produce positive cash). Launch costs are very likely capitalized and amortized over the useful life of the equipment that was launched. Any costs hit cash flows as soon as invoices are paid, but is not recognized all at once on the income statement. Being cash flow positive is an extremely important milestone for a startup, but no, it doesn’t indicate profitability.
- juujian 3y agoIt definitely does not include the cost associated with polluting our atmosphere
- Dylan16807 3y agoDid you check any numbers before being so sure? Each launch burns about 120 tons of kerosene for about 360 tons of CO2. If we take this Nature study as accurate, a ton of CO2 has a societal cost of about $185. If we add that all up, it's $70k per launch? Let's round up to $100k per launch. Multiplied by launch count, that's only a few million dollars. They're still at breakeven when you include it.
- duckhelmet 3y ago[flagged]
- Difwif 3y agoI know a lot of people with access to fiber in cities discount Starlink and I miss my 1Gbps fiber. Also the Elon hate train probably has something to do with it. Starlink is life changing for a lot of people. You would not believe how many different communities ISP market has been shaken up by Starlink. Many people went from high latency metered internet measured in kilobits to 100Mbps at 30ms. I've seen this both in the US and outside the US. Not mention previously unthinkable things like living on a sailboat and working remotely. The biggest issue at this point is cost. It's mostly a premium product for high income people. I hope access gets cheaper as they scale. I think in general having a globally connected planet with high speed internet is going to make the world better (once we overcome the negative side effects of things like social media addiction)
- progne 3y agoIt replaced not just my old slow DSL, but also my landline phone service. Every cent I was paying the small regional phone company now goes to Starlink, for usually about 20x the performance. The small regional telephone company did not sound happy about it when I left.
- MagicMoonlight 3y agoIf I didn’t live in a city I would absolutely get one
- megaman821 3y agoIt's cool that Starlink is sustainable. Space-based, fast internet is the infrastructure we never knew we needed. It seems too useful to fail, there are a lot of areas where satellite internet is the best choice, from airplanes, boats, remote science outposts, emergency situations, and rural communities.
- olalonde 3y agoWait, all the HN commenters who asserted this would never happen were wrong?
- seattle_spring 3y agoThat doesn't seem like a common sentiment here at all.
- LargeTomato 3y agoI read an analysis by Morgan Stanley that it costs $40B to launch the entire constellation. That doesn't include the cost of the satellite, just the launches. According to SpaceX their satellites last 5 years. That means Starlink must make, at minimum, $8B/year to maintain the constellation. `$8B/yr / ($200/mo * 12 mo) = 3.33 Million users` 3.3 million users paying $200/mo in order to break even. The starshield contract probably covers a good amount, too.
- danpalmer 3y agoThis is break-even on just one cost aspect though. If you add satellites, bandwidth/internet connectivity (a significant portion of the cost to service a user for traditional ISPs), renting/maintaining ground stations, marketing, and eventually R&D/offices/etc, that all rapidly increases. Additionally, $200/m is not price competitive compared to traditional ISPs in most of the world, $20-50 is more typical for many areas, less in Africa/Asia. Yes Starlink has a USP over traditional services, but that USP won't benefit users who are already well served by traditional ISPs, so to expand outside the remote market they will need to drop prices to compete. The maths could easily end up being $12bn/year / ($30/mo * 12m) = 33.3 million users. Is that a reasonable goal? That's a lot of paying users. That's a 4% market share in Europe and the US where there are highly developed telcos with decades of experience in this. That's a hard one, particular to achieve it in the near term (~5 years or one replacement cycle).
- LargeTomato 3y agoI should have been more clear. I agree with you 100%.
- i67vw3 3y agoAlso, the business roaming plans used on airplanes, cargo ships are quite costly, I think around $2000/month.
- montenegrohugo 3y agoThat's a number wrong by an order of magnitude - there's been 118 starlink launches (with many of those being rideshares). Falcon 9 costs 67 million for external customers, for internal use the cost will likely be lower. Let's say 50. 50 * 118 gives us a HIGH estimate of 5.6 billion, but i'd expect it to be much closer to 3-4 b. Satellites are relatively cheap. Total cost below 10b, certainly not 40b
- MangoCoffee 3y ago"Elon Musk has repeatedly stated his intention to offer an initial public offering (IPO) for Starlink once its revenue is growing predictably enough to attract investors" I'll buy some shares if Starlink go IPO. this break even cash flow might bring the IPO one step closer. https://www.nasdaq.com/articles/spacex-wins-a-$70-million-space-force-contract.-what-does-this-mean-for-the-starlink-ipo https://www.nasdaq.com/articles/spacex-wins-a-$70-million-sp...
- scottyah 3y agoIt'll be interesting to see how they break up SpaceX employees if they IPO Starlink. SpaceX is still supposed to only IPO when they hit mars
- ortusdux 3y agoQuick math puts the total mass of all currently orbiting starlink satellites at 1582 metric tons, which is about 3.5 x the mass of the ISS. Unless I'm mistaken, this should make them responsible for the most mass in orbit.
- technojamin 3y agoHere's a great video by Ordinary Things that talks about the development and proliferation of satellites over the past century, space debris, and how things could play out in the near future: https://www.youtube.com/watch?v=90N6IZnV85c https://www.youtube.com/watch?v=90N6IZnV85c Especially relevant because Starlink has been causing numerous near-collisions over the past few years.
- inemesitaffia 3y agoNo near collisions
- bparsons 3y agoSeems highly credible!
- slowhadoken 3y agoCongratulations.
- jauntywundrkind 3y agoWhomever and whatever is what % of constituents in the user-base: it was charging governments and large operators lots of money that was going to fill the coffers.
- mannyv 3y agoWhatever you think of Musk personally, he's one of the few people trying to move the needle. According to Wikipedia design started in 2015, which means it's taken them more than 8 years to get to cash-flow break even. This is why you need billions of dollars to get started. And that doesn't include the fact that they had to build a rocket company to launch their birds. Looks like they picked the right 60 engineers. They presumably also had to build all the ground stations and infrastructure to manage all those devices...unless they're using AWS Ground Control, which would be hilarious.
- good8675309 3y agoSorry, you make good points but rocket man makes mean tweets so none of that matters. Jokes aside, I really wish we could just discuss the article instead of it turning into a flame war but this happens everytime someone posts anything that has anything to do with Musk.
- seattle_spring 3y ago> make good points but rocket man makes mean tweets so none of that matters Surely you're aware that this sort of comment is exactly what sparks and fans the flames of said flame wars?
- senectus1 3y agoIf this is true then its a tipping point. Starlink is going to start making obscene amounts of money
- bbatchelder 3y agoI personally think that Musk is kind of a dipshit when it comes to his political views, that he is a bit of a charlatan (FSD this year, I swear), that Tesla jumped the shark tank about 2-3 years ago, and I laugh every time I see more bad news about X/Twitter... BUT I am really rooting for SpaceX and Starlink. Honestly I hope the shiny toy that is X/Twitter keeps his attention for a while and he leaves those orgs to run as they have been.