SpaceX’s finance projections are galactically optimistic

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SpaceX lost money in 2015 because of a rocket explosion, according to internal documents obtained by The Wall Street Journal. The documents also show financial details of the satellite internet business SpaceX hopes to launch to fund its Mars mission.

The Journal reviewed SpaceX financial results and forecasts, which aren’t publicly available, from 2011 to 2015. In general, the documents show that the company has huge goals, but isn’t very close to living up to them. For example, an exploding Falcon 9 in June 2015 cost it $260 million that year, after two years of operating profit. That’s because SpaceX is operating with a razor-thin margin, in order to undercut competitors’ costs.

Elon Musk is used to dreaming big, and that’s part of what makes SpaceX such an interesting company. But though Musk has managed to stoke everyone’s imagination, he hasn’t always delivered on his promises. He doesn’t want to take his company public until the Mars mission is successful, which is supposed to happen by 2024. Then again, Musk promised in 2011 that he would put humans in space in three years; it is currently 2017 and no human being has yet flown on a SpaceX rocket. The money woes paint a picture of an increasingly tenuous business, one that’s been disrupted by rocket malfunctions.

Contracts from both private companies and NASA helped revenue grow to $1 billion from $680 million from 2013 to 2014. But the 2015 explosion, along with various delays since, caused revenue to fall by 6 percent and created an annual loss of a quarter-billion dollars. Though the company still had $1.3 billion in cash at the end of 2015, it was generating less cash than was being invested in it.

The documents also give more insight into SpaceX’s big plans for profitability: a satellite internet business the company projects will bring in more than $30 billion in revenue — and over 40 million subscribers — by 2025. Again, these projections seem optimistic; Comcast, for instance, made only $12 billion on its high-speed internet service in 2015.

The goal for the satellite project is to launch 4,000 communications satellites for global internet access. According to SpaceX projections, revenue from this business should overtake SpaceX’s core launch division by 2020. By 2025, it’s supposed to generate an operating profit between $15 billion and $20 billion. As of now, though, the business is still in planning stages and doesn’t have a factory yet. The first phase was projected to go online by 2018.

For 2016, the company forecast that it would have $1.8 billion in revenue and $55 million in operating profit. Those numbers are based on 20 successful rocket launches; SpaceX had only eight last year, so it’s unlikely the company met its financial goals. For 2017, the company plans to launch 27 missions; by 2019, SpaceX’s goal is to launch a rocket each week. So far, the record for the highest number of annual SpaceX launches is eight rockets.

Finance isn’t the only place where SpaceX isn’t living up to its own expectations. SpaceX suffers from serious deadline dysfunction. It was supposed to work with NASA to ferry astronauts to the ISS by 2017, but then those plans got pushed back to late 2018. There have been delays of its Falcon Heavy mission, and the company lost a satellite launch order due to schedule delays.

SpaceX is an ambitious, exciting company. But the financials seem to confirm what we’ve been seeing from the outside: its goals might be a little too optimistic. SpaceX does seem to do what it says it does — just later than they first claimed.

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