00:00 Speaker A
We have some fundamentals and what we know, we can, you know, some stuff we can grasp on to. How important is a Starling business to SpaceX and why is it that, you know, why is it Elon’s so focused on it?
00:09 Pras
You know, I think with SpaceX, everyone wants to talk about the reusable rockets and the and the launches that just are so dramatic and
00:23 Speaker A
The cool stuff, yeah.
00:23 Pras
The cool stuff, then working with NASA. I mean government contracts a big part of that. But Starlink is sort of this big money generator that sort of sits underneath the surface there, right? So it’s
00:30 Speaker A
And you need that revenue.
00:31 Pras
Yeah, right, right. especially when you’re building that book for for the for the IPO, so to to
00:36 Speaker A
Yeah, they want to see the cash flow there for their investment.
00:39 Pras
Exactly. Exactly. So, as of uh pitch book reports that as of right now, um Starlink has 9.2 million subs, nothing crazy, but that’s numbers been doubling year over year the last two years. They have 9600 operational satellites. Uh they have the potential capacity to make 15,000 Starling kits a day. The things that, you know, consumers and businesses buy to set up their connections. Um and guess and get this right, the business for generated according to Star to pitchbook, 10.6 billion in revenue in 19 in 2025.
01:04 Pras
That’s 67% of SpaceX total revenue of almost $16 billion. Uh, EBITDA $5.8 billion dollars. Uh and that’s 54% EBITDA margin. So those are really good numbers, right?
01:13 Speaker A
That’s a good margin, right.
01:13 Pras
And you keep doubling that. and think about this, right? Your upfront costs are so huge, but every incremental user is like zero extra cost, right? Cuz you’ve already launched the satellites. they can probably handle millions of of users. They’re launching something like 75 uh satellites uh a week.
01:28 Speaker A
That’s stunning.
01:29 Pras
Something crazy like that. So, it’s so it’s a great business to have and I think that’s going to fuel the sort of the the the fire for people that are interested in this business because it’s not just the rockets, it’s this part too. Now, the little one little drawback is that XAI thing we mentioned.
01:47 Speaker A
Sure.
01:47 Pras
And the information reported today that um SpaceX lost $5 billion dollars last year, mostly because of the CAPEX for XAI. So, that’s the one little drawback that’s sort of maybe I think a little red flag there for people that are really bullish on SpaceX is you have this AI company that’s just burning cash, right? So that’s
2:07 Speaker A
That’s what they do.
2:08 Pras
Yeah, that’s what they do. Yeah, yeah.
2:09 Speaker A
All right Pras, thank you so much for that.
