SpaceX’s Financial Projections

spacex

By Spencer Mann,
Money and Investing Writer

In the era of the internet, any information could find itself in the public realm. That was the fate of SpaceX, as the high-profile company led by Elon Musk found its financial documents leaked to the world this past week. The ambitious startup only had its reputation sustained when the contents of the company secrets were analyzed.

In 2015, SpaceX made the news after one of its rockets, the Falcon 9, exploded. According to The Wall Street Journal, that incident cost the company $260 million.

The general theme from the leaked financial results from 2011 to 2015 were small operating margins and lofty revenue goals. Because the company’s largest customer is NASA, the company’s success has great implications for The United States’ future in space exploration.

After WSJ had leaked the countless company secrets, it reminded the public of the company’s goal of having humans in space within three years of 2011. Those plans never came to fruition.

Despite revenue growth in 2013 and 2014, mostly from signing on large clients like NASA, the company saw a downswing in 2015, with rocket explosion being a catalyst to their fall in revenue. The company has previously stated that it still has over $1 billion of cash on hand, with massive contracts guaranteeing a certain level of revenue in the coming years.

With the current goal of having humans on Mars by 2024, Elon Musk has to find a way to fund SpaceX’s development and technological advancement.

According to the leaked documents, which held future internal projections for the company, it plans to expand revenue by launching a satellite division. The satellites will provide new internet services at allegedly higher speeds than the current system of wired internet on Earth.

The leaked information shows that the company projects the service to carry in over $30 billion in revenue with over 40 million subscribers. As pointed out by The Verge, Comcast only raked in $12 billion in revenue in 2015.

The concern around these projections is that the company operates without much room for error. Financially, the company gained such valuable accounts from advertising costs lower than its competitors. However, that comes with a price.

Despite the company’s apparent liquidity, almost none of the revenue needed to complete its Mars missions has been generated to date. When things go awry, those precious differentials disappear, and the company may have to delay its plans once again.

While a few years may not seem like much for such an important project, larger economics are also at play. Rumors about the company’s plans to go public have differed.

While it appeared that the company did not intend to turn public into its first successful Mars mission in 2024, some figures question of the company will jump ahead and hit the market as early as this year. The speculation stems from the idea that President Trump will favor private space contractors, according to Profit Confidential.

Being the first of its kind, and sort of projection on SpaceX’s success or failure is more speculation than foretelling. However, many in the business world will closely follow the company as its actions have an impact on much of the world, not just the space industry.

A version of this article appeared in the Tuesday, January 24th print edition.

Contact Spencer at
spencer.mann@student.shu.edu

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