10,000 subscribers in early 2021. 145,000 subscribers in early 2022.  500,000 subscribers half a year later.  

And now -- better sit down for this -- we learn that Elon Musk's SpaceX has topped a staggering 1.5 million customers for its Starlink satellite internet service. That's 150-fold growth in just 2 1/2 years. And so investors must wonder: Is it time for Starlink to IPO? Let's take a closer look.

Elon Musk's promise

Back when Starlink was first rolling out in 2021, SpaceX CEO Elon Musk told his followers on Twitter that he expected to wait "at least a few years" before IPO'ing Starlink. His reasoning being that he wanted to make sure that Starlink's revenue stream was "reasonably predictable" so that investors would know what they were buying. Well, I think we may have reached that point today.

Consider that according to a recent SpaceX email to Starlink customers, "most locations" in the U.S. can now subscribe to Starlink for $120 per month (plus either $599 or $2,500 for Starlink equipment in either of two configurations). Granted, pricing varies widely, with different prices charged in different countries around the world and even in the U.S., with rates ranging from:

  • As low as $90 per month (for a household in a "high-availability," low demand location).
  • To $150 or $200 per month for mobile users (operating out of an RV, for example).
  • To $250, $500, or even $1,500 per month (for businesses consuming one, two, or six terabytes of data per month).
  • To as high as $5,000 per month for such singular instances as a maritime business operating off a ship globally, and consuming as much as five terabytes of data monthly.

But let's take $120 as a baseline -- 1.5 million Starlink users times $120 per month times 12 months in a year means that, at present, Starlink must generate at least $2.2 billion in annual revenue. If one assumes as few as 10% of Starlink users are in fact businesses consuming a couple terabytes per month, then that $2.2 billion quickly approaches $3 billion.

Throw in a few cruise ships and airplanes providing global Starlink services -- not to mention all the hardware revenue generated by 1.5 million users -- and it's probably safe to say that Starlink has now left the $3 billion mark far behind. According to data from S&P Global Market Intelligence, that's even more revenue than SpaceX's core launch services business generates.    

Stylized depiction of a satellite internet network around Earth.

Image source: Getty Images.

$3 billion to $30 billion

Admittedly, Elon Musk originally anticipated that Starlink would hit the $3 billion mark in 2020, and be producing 80% of all SpaceX revenue by 2023.

Starlink isn't quite there yet (which reinforces the CEO's desire to reach "reasonably predictable" revenue before IPO'ing). Starlink still has a long way to go before reaching its eventual goal of generating $30 billion in annual revenue in 2025, and given the delayed start, it may take a few more years than originally planned for that to happen.

But after growing 150-fold in 2 1/2 years, I do believe that at this point Starlink has its growth chart plotted out for it and is on the right course.

What it means for investors

I admit, in the past I've had my doubts about whether Starlink could grow as big as Musk wanted it to, or had the bandwidth to support all the traffic that Musk originally wanted to turn into revenue.

But the arrival of new Gen2 Starlink satellites offering 10 times more bandwidth per satellite than the company's original-recipe Starlinks appears to have put capacity concerns to bed. And with subscribers growing by leaps and bounds, Musk's original goals for Starlink now look entirely feasible.

So what does this mean for investors?

Not to put too fine a point on it, but it means that Starlink is still charting a course toward the $30 billion in annual revenue, and 60% operating profit margins on that revenue -- $18 billion in annual profits, in other words -- that its internal documents show is SpaceX's original goal for Starlink.

Granted, it remains uncertain precisely how far we are away from this goal. It's also anyone's guess whether these numbers fit Elon Musk's definition of how "reasonably predictable" this future is. But once he decides we've reached that point, an IPO for Starlink should naturally follow.

Assuming the price isn't too ridiculous, I'll be planning to buy it.