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SpaceX is the leading company in aviation and aerospace that designs, manufactures and launches advanced rockets and spacecrafts. Things are getting pretty hot in the space industry, and Elon Musk's SpaceX leads the USD380 billion aviation and aerospace industry.
SpaceX’s Meteoric Rise: 75x growth to US$150billion; Paving the Way for a $1 Trillion Space Industry
Against the backdrop of SpaceX’s progress on reusable spacecraft launches and its rapidly-growing Starlink LEO satellite communications business, the company has grown 75x over the past decade - reaching US$150 billion. This achievement paves the way for further growth in the space industry, which is anticipated to reach US$1 trillion in annual revenue by 2040 [19]. Morgan Stanley projects a US$200 billion bull-case valuation [20] for SpaceX— writing in its October 2021 report that SpaceX “is challenging any preconceived notion of what was possible and the time frame possible, in terms of rockets, launch vehicles and supporting infrastructure [21].
The space industry should reach $1 trillion in annual revenue by 2040, with launch costs dropping 95%, Citigroup analysts said in an extensive report published this month.
With SpaceX’s technology development in its reusable rockets and Starlink satellites, the company has created a “double flywheel” to accelerate its advancement in the space race. To date, SpaceX has raised >USD9 billion [22], from world-renowned investors including Fidelity and Alphabet [23].
Starlink: Bridging the Digital Divide
Starlink satellites continue to lead the race on several key fronts, forming a key component of SpaceX’s valuation. Starlink has achieved enhancements in its launch capacity and bandwidth, both in frequency and payload per flight, and cost of launch — improving the economics and path to scale of Starlink’s low-earth orbit (“LEO”) constellation [12].
Starlink has been actively enhancing its global reach by establishing strategic partnerships with various telecommunications providers worldwide. Shortly after securing a partnership in Japan back in October 2022, Starlink has continued its expansion into Asia, signing a deal with Data Lake in the Philippines [13][14]. Additionally, Starlink is collaborating with Australian telecommunications provider, Telstra, to offer its services in remote areas of the country [15]. Notably, working towards achieving internet coverage of 100% in populated areas,, Malaysia became the 60th country to be covered by Starlink’s services [16].
As of June 2023, Starlink missions have taken precedence in SpaceX's schedule, accounting for 22 out of the 41 Falcon 9 launches conducted this year. This has led to a notable increase in the total number of satellites in operational orbit, reaching 3,688, with an additional 590 satellites in the process of moving to their designated operational orbits [17]. In their most recent launch on 28th July, SpaceX successfully deployed 22 more satellites into orbit [18].
Multiple Engines For Revenue Growth
Today, SpaceX generates revenue through a variety of contracts, including space station resupply, commercial satellite launches, as well as science and national security missions for the US government. SpaceX is now 2nd on NASA's contractor list, receiving $2.04 billion in FY2022, surpassing Boeing's payment for the first time [7]. In Aug 2022, NASA awarded SpaceX 5 more astronaut missions worth US$1.4 billion. [8]
SpaceX's Starship
In August 2023, SpaceX tested its Starship booster, which ended after 2.74 seconds instead of the planned 5 seconds [9]. This ignition milestone is crucial for their upcoming launch of the deep-space Starship rocket system [10].
This trial comes months after the launch of their SpaceX Starship rocket in April 2023 — the most powerful launch vehicle ever constructed, which marked the first testing of several elements. Attempting to fire up 33 massive Raptor engines at the same time for a flight test had never been done before. Additionally, SpaceX's Starship uses methane fuel and is made of steel, distinguishing it from rockets that usually use lighter metals and carbon composites. SpaceX engineers poured over the data that was gathered on the flight [11], preparing for subsequent trials with an unwavering spirit to achieve success.
In April 2022, SpaceX bested Jeff Bezos’ Blue Origin and others in the contest to clinch a USD2.9b NASA contract to build a lunar lander spacecraft to carry NASA astronauts to the lunar surface for the first time since 1972.
SpaceX has been raking in a steady stream of critical contracts this year, from renowned Space Institutions like NASA (USD331.8m contract and USD178m contract), Space Development Agency (USD150.5m contract), and the U.S. Space Force (USD384m combined bookings with United Launch Alliance).
SpaceX has secured an agreement with both new and existing investors, allowing them to sell up to $750 million in stock from insiders at a share price of $81. This new share price represents an increase of approximately 5% from its previous sale at $77.
As one of the most valuable private companies globally, SpaceX has firmly established a near-monopoly on the U.S. satellite launch market. With its revolutionary Starlink project, the company has successfully launched nearly 5,000 satellites and has amassed an impressive subscriber base of over 1.5 million within just three years of its inception.
Riding from a positive cash flow in the last quarter, SpaceX’s momentum continues to flourish through its Starlink business arm, evident from its recent contract win with the Pentagon to provide Starlink services in Ukraine.
In July 2023, SpaceX accomplished a remarkable feat by successfully delivering and deploying the Jupiter-3 spacecraft, the heaviest commercial communications satellite in the world, developed by EchoStar. This achievement was made possible using SpaceX's most powerful operational rocket, the Falcon Heavy.
Tipping the scales at over nine metric tonnes and boasting a size comparable to that of a bus, the Jupiter-3 satellite's primary objective is to offer wireless internet coverage across North and South America. This momentous launch marked the seventh successful mission of the Falcon Heavy since its debut in 2018.
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SpaceX — the leading company in space aviation.
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[2] Retrieved from Reuters. https://www.reuters.com/lifestyle/science/spacex-capsule-with-worlds-first-all-civilian-orbital-crew-set-splashdown-2021-09-18/
[3] Retrieved from Space Flight Now. https://spaceflightnow.com/2022/12/17/falcon-9-starlink-4-37-launch/
[4] Retrieved from Space Explored. https://spaceexplored.com/2023/07/30/spacex-launches-2023/#:~:text=Keep%20track%20below%20of%20all,Falcon%20Heavies%2C%20and%20one%20Starship
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[6] Retrieved from X. https://twitter.com/elonmusk/status/1564994769826172929?s=20&t=vW4XeIl4VmwE14CZjHJXAA
[7]Retrieved from ARS Technica. https://arstechnica.com/science/2022/10/spacex-becomes-nasas-second-largest-vendor-surpassing-boeing/
[8] Retrieved from CNBC. https://www.cnbc.com/2022/08/31/nasa-awards-spacex-1point4-billion-in-contracts-for-5-more-astronaut-missions.html#:~:text=NASA%20on%20Wednesday%20announced%20it%20has%20awarded%20five%20more%20astronaut,from%20the%20International%20Space%20Station.
[9] Retrieved from Arstechnica. https://arstechnica.com/space/2023/08/spacex-conducts-a-mostly-successful-test-of-its-super-heavy-booster/
[10] Retrieved from Fortune. https://fortune.com/2023/08/06/spacex-starship-engines-water-deluge-system-elon-musk-rock-tornado/
[11] Retrieved from CNN.
https://edition.cnn.com/2023/04/21/world/spacex-starship-explosion-success-failure-scn/index.html
[12] Retrieved from CNBC. https://www.cnbc.com/2021/10/19/morgan-stanley-spacex-starship-may-transform-investor-expectations.html
[13] Retrieved from Nikkei Asia. https://asia.nikkei.com/Business/Telecommunication/Elon-Musk-s-Starlink-launches-satellite-internet-service-in-Japan
[14] Retrieved from Reuters https://www.reuters.com/business/aerospace-defense/elon-musks-spacex-partners-with-philippine-tycoon-satellite-service-2022-10-27/
[15] Retrieved from The Guardian. https://www.theguardian.com/business/2023/jul/05/telstra-signs-starlink-deal-agreement-elon-musk
[16] Retrieved from Mashable SEA. https://sea.mashable.com/tech/25313/elon-musks-starlink-is-set-to-gift-malaysia-100-internet-coverage
[17] Retrieved from NASA Space Flight. https://www.nasaspaceflight.com/2023/06/starlink-5-12-launch/
[18] Retrieved from Space. https://www.space.com/spacex-starlink-falcon-heavy-launch-doubleheader-july-2023
[19] Retrieved from CNBC. https://www.cnbc.com/2022/05/21/space-industry-is-on-its-way-to-1-trillion-in-revenue-by-2040-citi.html
[20] Retrieved from Forbes. https://www.forbes.com/sites/daviddawkins/2020/10/23/elon-musks-spacex-gets-bullish-100-billion-valuation-from-morgan-stanley-double-what-investors-said-it-was-worth-in-august/?sh=614ce1876e79
[21] Retrieved from CNBC. https://www.cnbc.com/2021/10/19/morgan-stanley-spacex-starship-may-transform-investor-expectations.html
[22] Retrieved from Crunchbase. https://www.crunchbase.com/organization/space-exploration-technologies
[23] Retrieved from Yahoo. https://finance.yahoo.com/news/buy-spacex-stock-151215951.html
[24] Information and figures cited have been provided by the Target Fund Manager
[25] Information and figures cited have been provided by the Target Fund Manager