WSJ News Exclusive | A Rare Look Into the Finances of Musk’s Secretive SpaceX

Rocket company and satellite operator narrowed loss to $559 million in 2022; costs increased but revenues rose faster

By Micah Maidenberg , Corrie Driebusch and Berber Jin Aug. 17, 2023 2:05 pm ET

A SpaceX rocket blasted off from Cape Canaveral, Fla., earlier this month, carrying 22 Starlink satellites. Photo: Craig Bailey/Florida Today/Associated Press

SpaceX’s soaring revenue helped it eke out a small profit in the first three months of the year after two annual losses, according to documents that offer a rare view into the financials of Elon Musk’s rocket company.

The company generated $55 million in profit on $1.5 billion in revenue during the first quarter of 2023, according to results in documents viewed by The Wall Street Journal. The slim earnings came after two years of significant but narrowing losses at SpaceX, which is pouring money into a rocket that remains unproven and poses difficult technical challenges.

Founded by Elon Musk more than two decades ago, SpaceX has emerged as the dominant U.S. rocket launcher and has built a major satellite-internet business. NASA itself is dependent on the company—the agency doesn’t have a domestic alternative to SpaceX for flying astronauts to and from the International Space Station.

The Hawthorne, Calif.-based company has grown rapidly since its early days and was valued at roughly $150 billion during a recent employee stock sale, putting it on par with Intel or Disney.

Unlike those corporate giants, SpaceX is privately owned and keeps details about its finances under wraps, as do many other private companies. Some people with stakes in SpaceX have no idea how much money the company makes or loses. Many SpaceX investors view their holdings as a long-term bet and say they aren’t concerned about seeing results.

It is unusual to have a full look at some of the company’s recent results, as the Journal did, including costs and how SpaceX performed based on the traditional measure of profitability. The last public deep dive into its financials occurred more than six years ago in the Journal.

The documents viewed by the Journal described SpaceX’s first-quarter results as “preliminary.” The annual results indicate they are final.

Before SpaceX’s small quarterly profit at the start of this year, the company reported about $5.2 billion in total expenses for 2022, up from $3.3 billion the year earlier, the documents show. Revenue doubled to $4.6 billion, helping the company reduce its loss last year to $559 million from $968 million.

A SpaceX spokesman didn’t respond to a request for comment. Bret Johnsen, the company’s finance chief, couldn’t be reached.

SpaceX is part of a generation of venture-backed companies that have so far rejected public markets. That means it has been able to set its direction with less outside scrutiny. Ample capital from investors has helped the company stay private: It reported taking in around $2 billion in proceeds from issuing stock last year, up from $1.5 billion in 2021, according to the documents.

SpaceX’s approach resembles how other technology companies have invested huge sums of money into products and infrastructure to try to build advantages over rivals, at the expense of profits.

During 2021 and last year, the company spent a total of $5.4 billion on purchases on property and equipment and incurred significant research and development costs, the documents show. Some portion of that spending is tied to its program developing Starship, a powerful rocket that poses immense hurdles for SpaceX. Costs for Starship weren’t specified in the documents.

The company’s first Starship test flight in April ended when an onboard system destroyed the vehicle after about four minutes. SpaceX won’t be allowed to fly the rocket again until air-safety regulators sign off.

Rocks and debris flew after SpaceX’s uncrewed Starship rocket lifted off from a site near Brownsville, Texas in April, before the vehicle exploded over the Gulf of Mexico. Photo: JOE SKIPPER/REUTERS

It also has been putting money into Starlink, a satellite-powered internet service, including for a new factory near Austin, Texas.

Last year, SpaceX spent $3.1 billion on a group of costs that included employee salaries, materials and spacecraft depreciation. That was up from $1.6 billion in 2021, the documents show. The company reported $1.3 billion on research and development expenses for 2022, an increase of 11% year over year.

SpaceX’s results have likely been helped by price increases for its Falcon rocket missions as well as delays that have prevented competitors from debuting new vehicles. It boosted Starlink prices for U.S. residential subscribers in 2022, but adjusted them more recently, raising prices for some customers and lowering them for others.

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SpaceX’s Starship exploded minutes into its first flight into space, but the fiery ending wasn’t entirely unexpected. Here’s what led up to Starship’s inaugural flight, and what the explosion could mean for SpaceX going forward. Illustration: Jordan Kranse

The company has put its financial resources to work in other ways. It spent $153 million to buy SpaceX shares earlier this year during one of its liquidity events, where current and former employees can potentially cash out their stock in the company, according to the documents. SpaceX also said it paid $524 million, mostly in stock, in a rare deal to acquire a satellite-communications company called Swarm Technologies in 2021.

The documents also show SpaceX wrote down the value of bitcoin it owns by a total of $373 million last year and in 2021 and has sold the cryptocurrency. Tesla, the electric-car manufacturer Musk leads, has taken a similar approach with its bitcoin holdings. Musk has posted about cryptocurrencies frequently over the years.

Write to Micah Maidenberg at micah.maidenberg@wsj.com, Corrie Driebusch at corrie.driebusch@dowjones.com and Berber Jin at berber.jin@wsj.com

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