When analysts and investors talk about the SpaceX (SPAX.PVT) market debut tomorrow, they are, in large part, talking about Starlink.
The satellite internet service has grown from an engineering project into the dominant revenue machine, supercharging the world’s most valuable private company.
In the company’s IPO prospectus filed on May 20th, SpaceX revealed it lost nearly $2.6 billion last year, but that was due to its AI efforts.
But SpaceX’s Connectivity segment, which includes its Starlink satellite service, earned around $7.2 billion in adjusted EBITDA, up a healthy 86.% year over year.
Competitors in the satellite internet space are either way off or work only in commercial applications, such as aviation. Amazon’s (AMZN) Leo service isn’t available yet. However, CEO Andy Jassy promises it will be up and running at some point this year — a tough order considering Amazon has only a handful of satellites in orbit.
On April 14, Amazon announced it is buying satellite company Globalstar (GSAT), enabling Leo to add direct-to-device services to its low-earth-orbit (LEO) satellite network and extend cellular coverage to customers beyond the reach of terrestrial networks. Amazon also entered an agreement with Apple (AAPL) for Leo to power satellite services for certain iPhone and Apple Watch models.
Examining Starlink’s business model and growth plans is key to understanding the SpaceX story. Add it all together, and it makes SpaceX the most anticipated offering of all time, with its sheer size dwarfing all others at an estimated valuation of $1.77 trillion.
What is Starlink?
At its core, Starlink is a global broadband internet service delivered from space that reaches 10.3 million subscribers across residential, business, and government segments, with plans to expand even further, SpaceX said in its prospectus.
Currently, the service is “a low-latency, broadband internet system delivered via a constellation of thousands of LEO satellites” that “extends SpaceX’s advantage by vertically integrating the full loop — design, manufacturing, and operation — at unprecedented scale,” according to a recent report from PitchBook about the importance of SpaceX and Starlink.
The result is a system unlike anything previously built: global, fast, and almost entirely controlled end to end by a single private company.
Rather than relying on ground-based fiber or cell towers, Starlink uses a constellation of satellites in low Earth orbit — just 340 to 750 miles above the surface — to beam high-speed internet directly to small, self-installing dishes on the ground. Because LEO satellites are much closer to Earth than traditional geostationary satellites, which orbit at 22,000 miles, Starlink says the signals travel far shorter distances, reducing latency to 25 milliseconds, comparable to many wired broadband connections.
The scale of the Starlink satellite constellation is massive. SpaceX revealed its constellation comprises more than 9,600 operational satellites, accounting for about two-thirds of the 14,300 active payload satellites globally, per Pitchbook.
SpaceX has built and launched more active satellites than every other space program and company combined — and it continues adding to the constellation at a rate of roughly 70 satellites per week.
“Scale is the point,” PitchBook analysts wrote, noting building satellites at that rate resembles industrial production more than a “traditional aerospace cadence.”
And that scale is also part of the customer hardware experience. SpaceX says it intends to produce approximately 15,000 Starlink kits per day, with plans to expand manufacturing and bring more processes in-house.
“These numbers matter,” PitchBook noted, “because they support a fundamentally different cost curve: volume manufacturing accelerates learning, improves yields, and increases bargaining power.”
What Starlink offers
Starlink’s product portfolio has expanded well beyond consumer broadband.
PitchBook categorizes the service across three principal areas: commercial connectivity (residential, business, maritime, 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 — “an emerging connectivity service (in partnership with carriers like T-Mobile) designed to provide text and voice coverage to unmodified LTE cell phones.”
To build out its subscriber base — currently more than 10.3 million global subscribers, with 4.6 million added last year alone — Starlink is getting innovative with consumer deals.
Case in point: Starlink’s deal announced with prepaid carrier US Mobile, which will offer bundles for new and existing customers, including residential Starlink, for as low as $47 per month.
The deal with US Mobile is curious, as most carriers are loath to make deals with SpaceX because they could threaten their mobile businesses.
And that threat is apparent 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 “over 6 million monthly subscribers and 12 million people connected at least once” — and that’s before a full commercial rollout.
By partnering with existing mobile carriers rather than displacing them, Starlink adds a new revenue layer with potentially enormous scale — effectively, every mobile subscriber represents a potential coverage-extension customer.
And this, of course, is a big part of the business case when valuing a SpaceX IPO.
The numbers that matter for the IPO
Starlink generated an estimated $10.6 billion in revenue in 2025 — approximately 67% of SpaceX’s total of $18.67 billion — with adjusted EBITDA of $6.6 billion, per its prospectus.
But its core business — connectivity and space — generated the most of those earnings.
Starlink’s margins are closer to those of a software provider than to a traditional tech hardware business and reflect the core economics of the model: Once the constellation is in orbit, each incremental subscriber adds high-margin recurring revenue with near-zero marginal cost.
Subscriber growth is showing momentum. Starlink reached more than 10.3 million subscribers in more than 155 countries by the end of 2025, doubling its base for two consecutive years. Analysts and investors likely expect another big surge of customers, and Starlink’s recent deal with US Mobile may accomplish that.
For IPO investors, this combination of recurring subscription revenue, expanding margins, multivertical growth, and a massive cost advantage due to its parent company’s ability to launch rockets cheaply is the play.
As PitchBook put it, Starlink “creates recurring internal demand that justifies large-scale capital expenditure, and it forces SpaceX to behave like a high-volume manufacturer rather than a bespoke aerospace producer.”
A SpaceX IPO would be, in substance, 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 at industrial scale.
