When analysts and investors talk about a potential SpaceX ( SPAX.PVT ) IPO — possibly as soon as this summer — they’re talking, in large part, about Starlink.
Satellite Internet service has grown from an engineering project into a major revenue machine, supercharging the world’s most valuable private company.
Read more: SpaceX: How to buy before the IPO
Despite recent reports suggesting that SpaceX lost $5 billion last year, that loss was due to its heavy investment in xAI.
SpaceX’s core rocket launch business and, more importantly, its Starlink satellite service, earned about $6 billion before interest, taxes, depreciation, and amortization (EBITDA).
Examining Starlink, looking at its business model and how it wants to grow is critical to the SpaceX story. Add it all together, and it makes SpaceX the most anticipated offering of all time, its sheer size dwarfing all others at an estimated value of $2 trillion.
A Starlink satellite broadband antenna from SpaceX is on sale in the computer department of the Fnac store in the Victor Hugo shopping center on March 8, 2025 in Valence, France. (Nicolas Guyonnet/AFP via Getty Images) ·Nicolas Guyonnet via Getty Images
At its core, Starlink is a broadband Internet service delivered from space, a global service that reaches over 9 million customers in the residential, business and government sectors with plans to expand further.
Currently, the service is “a low-latency, broadband Internet system delivered through a constellation of thousands of LEO satellites” that “extends SpaceX’s advantage by vertically integrating the entire loop — design, construction, and operation — at an unprecedented level,” according to PitchBook and a recent landmark report about Starlink.
The result is a system unlike anything built before: global, fast, and almost entirely controlled end-to-end by a single private company.
Instead of relying on ground-based fiber or cell towers, Starlink uses a constellation of satellites in low Earth orbit (LEO) — just 340 to 750 miles above the surface — to beam high-speed Internet directly to small, self-installing dishes. Because LEO satellites are much closer to Earth than traditional geostationary satellites (which orbit at 22,000 miles), Starlink says signals travel much shorter distances, reducing latency to 25 milliseconds, comparable to many wired broadband connections.
The scale of the Starlink satellite constellation is huge. PitchBook noted that the constellation has more than 9,600 operational satellites, which is about two-thirds of the 14,300 active payload satellites worldwide.
Starlink’s new Gigabit V3 satellite is shown in comparison to its other satellites. ·SpaceX
SpaceX has built and launched more active satellites than every other space program and company combined — and it’s adding to the constellation at a rate of about 70 satellites per week.
“Scale is the point,” the Pitchbook analysts wrote, adding that building satellites at a rate more akin to industrial production than the “traditional aerospace cadence” is.
And that scale is also part of the customer hardware experience. SpaceX has said it plans to produce about 15,000 Starlink kits per day, with plans to expand production and bring more processes in-house.
“These numbers are important,” notes PitchBook, “because they support a fundamentally different cost curve: building volume accelerates learning, improves yield, and increases bargaining power.”
Starlink’s mobile app appears on the iPhone. ·Jake Conley/Yahoo Finance
Starlink’s product portfolio has expanded well beyond consumer broadband.
PitchBook categorizes the service into three key areas: commercial connectivity (residential, business, marine and aviation), Starshield (a “specialized government-focused product line leveraging Starlink technology for national security use cases, including secure communications and Earth observation”), and Direct to Cell – “provides text service to an emerging connectivity partner (T-Motors-Text). Coverage on unmodified LTE cell phones.”
To build its subscriber base – now more than 9 million customers worldwide, with 4.6 million added last year alone – Starlink is innovating with consumer deals.
Case in point: Starlink’s deal last week with prepaid carrier US Mobile, which offers the bundle to new and existing customers, including residential Starlink, for as little as $47 per month.
The deal with US Mobile is curious, as most carriers are loathe to deal with SpaceX because it could threaten their mobile business.
And that threat is evident in Starlink’s new direct-to-cell (DTC) service, which provides Internet access via satellites to regular, unmodified mobile phones. PitchBook reported that the DTC offering already serves “more than 6 million monthly subscribers and 12 million people connected at least once” — and that’s before a full commercial rollout.
How Starlink’s direct-to-cell (or device) service works. ·Pitchbook via SpaceX
Rather than displacing existing mobile carriers by partnering with them, Starlink adds a new revenue layer with potentially greater scale — effectively, each mobile customer represents a potential coverage-extension customer.
And this, of course, is a big part of the business case when evaluating a SpaceX IPO.
Because SpaceX is still private, investors and analysts need to look to external data sources to gauge how the business is performing.
Starlink generated an estimated $10.6 billion in revenue in 2025 — about 67% of SpaceX’s total of $15.8 billion — with EBITDA of $5.8 billion, representing a 54% EBITDA margin, per PitchBook.
The Information reported similar numbers. SpaceX’s core business (Starlink, rocket launches) generated about $6 billion in EBITDA last year, although total company revenue came in higher at $18.5 billion.
Starlink’s margins are closer to those of a software provider than a traditional tech hardware business and reflect the basic economics of the model: once Starlink is in orbit, each incremental customer adds high-margin recurring revenue with nearly zero marginal cost.
Customer growth is accelerating. Starlink aims to reach over 9 million subscribers in over 155 countries by the end of 2025, doubling its base for two consecutive years. Analysts and investors likely expect another big increase in subscribers, and Starlink’s recent deal with US Mobile could deliver that.
US Mobile’s Starlink bundle plans were released on Thursday. ·American Mobile
For IPO investors, this combination of recurring subscription revenue, expanding margins, multivertical growth, and the ability of its parent company to launch rockets cheaply is a huge cost advantage game.
As PitchBook puts it, Starlink “creates recurring internal demand that justifies large capital expenditures, and it forces SpaceX to treat itself as a high-volume manufacturer rather than a bespoke aerospace manufacturer.”
A SpaceX IPO would, in effect, be almost a Starlink IPO—an opportunity to invest in the world’s largest and fastest-growing satellite Internet business, backed by the only launch provider capable of replenishing and expanding a 9,600-satellite constellation on an industrial scale.
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Pras Subramaniam is the chief transportation reporter for Yahoo Finance. You can follow him X and in Instagram.
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