SpaceX's Starlink satellite internet division has 10.3 million consumer broadband customers, more than doubling over the past year, as the company prepares for the largest IPO on record targeting a $1.77 trillion market cap. The division is SpaceX's biggest by revenue and its only profitable segment, while the company's space and artificial intelligence segments generated a combined $1.4 billion in first-quarter revenue with operating losses totaling $3.1 billion. Starlink operates 9,600 satellites in low Earth orbit serving customers in 164 countries and territories, but faces significant expansion hurdles including declining average revenue per user, which fell to $66 per month in the first quarter from $86 a year earlier.
Starlink Revenue Per User Drops Despite Subscriber Growth
Average revenue per user decreased to $66 per month in the first quarter from $86 a year earlier, according to figures SpaceX disclosed. For all of last year, ARPU slid to $81 from $91 in 2024 and $99 in 2023. Even as the number of subscribers doubled in the first quarter, operating income increased only from $1.03 billion to $1.19 billion. Tim Farrar, president of satellite and telecom industry research firm TMF Associates, stated that extra customers have not been generating much incremental revenue. Starlink rolled out price increases last month.
SpaceX has accumulated a deficit of $41.3 billion since its founding in 2002 and recorded an operating loss of $1.9 billion in the first quarter, according to its IPO filings. The company has spent more than $15 billion developing Starship. SpaceX CFO Bret Johnsen said during the investor roadshow that 10 million customers can become hundreds of millions of customers around the world in time, and that SpaceX plans to bring 5G-equivalent service to consumer devices within two years.
SpaceX Faces Terminal Production Costs and Market Competition
The cost of producing Starlink terminals remains a challenge for SpaceX as the company scales. Farrar estimates that the devices are typically about three times more expensive to produce than modems for terrestrial internet. Starlink is now targeting more developed and urban markets, where it competes against traditional broadband providers. Farrar noted that people underestimate the ability of terrestrial competitors to respond with pricing and bundling, stating that defending existing fiber customers will not be difficult for telcos by cutting prices.
SpaceX is relying on its Starship rockets to deploy new V3 satellites to expand Starlink service. The rockets are still being tested and have mostly carried dummy satellites to space so far. The company's other route to boosting its constellation is through Falcon 9, its current rocket.
American Airlines Selects Starlink for Aircraft Wi-Fi
American Airlines announced plans last month to use Starlink for Wi-Fi service on more than 500 of its narrow-body aircraft. United, Southwest Airlines, and Alaska Airlines, which merged with Hawaiian Airlines in 2024, have also selected Starlink. Delta said in March it would use Amazon Leo starting in 2028. Amazon Leo still does not have a satellite internet product on the market, and the company started sending operational satellites into orbit in April 2025.
New Street Research Sets Price Target Above IPO Price
James Ratzer at New Street Research initiated coverage of SpaceX with a $165 price target, above the $135 planned IPO price. Ratzer wrote that when Starship and the new V3 satellites start working, capacity explodes for Starlink. He stated the satellites are 10 times more powerful than what SpaceX is using today, and that Starship plus V3 could make the service very competitive with terrestrial broadband. Ratzer noted that using Falcon 9 would be a viable route but less efficient, taking more time for available capacity to grow.
FAQ
How many Starlink subscribers does SpaceX have?
SpaceX has 10.3 million consumer broadband customers for Starlink, more than doubling over the past year. The service operates through 9,600 satellites in low Earth orbit serving customers in 164 countries and territories.
What is SpaceX's average revenue per Starlink user?
Starlink's average revenue per user dropped to $66 per month in the first quarter from $86 a year earlier. For all of last year, ARPU slid to $81 from $91 in 2024 and $99 in 2023.
Which airlines have selected Starlink for in-flight Wi-Fi?
American Airlines announced plans last month to use Starlink on more than 500 narrow-body aircraft. United, Southwest Airlines, and Alaska Airlines have also selected Starlink, while Delta said in March it would use Amazon Leo starting in 2028.
