Internal documents reveal aerospace company has thin bottom line vulnerable to accidents, hopes planned satellite-internet business will finance eventual Mars missions
One hundred and thirty nine seconds is all it took for an unmanned rocket to explode after blastoff and turn Elon Musk’s booming Space Exploration Technologies Corp. into a geyser of red ink.
That June 2015 disaster, followed by months of launch delays, contributed to a quarter-billion dollar annual loss and a 6% drop in revenue, after two years of surging sales and small profits.
The numbers are revealed for the first time in internal financial documents reviewed by The Wall Street Journal. The reports and interviews with former SpaceX employees depict robust growth in new rocket-launch contracts and a thin bottom line that is vulnerable when things go awry. They also show the company putting steep revenue expectations on a nascent satellite-internet business it hopes will eventually dwarf the rocket division and help finance its goal of manned missions to Mars.
A second explosion during testing on the launchpad in September grounded SpaceX again, adding to losses and causing a four-month delay. Its next launch is planned for Saturday, when it will seek to regain momentum in the face of depressed revenue, jittery customers and a ballooning backlog of delayed missions.
SpaceX, based in Hawthorne, Calif., transformed the aerospace industry with innovative rocket features and Silicon Valley-style software design principles mandated by Mr. Musk, its billionaire founder and chief executive. The 15-year-old company became the first American firm in years to compete for commercial launch contracts, and the first company to launch and return a spacecraft from orbit.
SpaceX declined to comment on details of its finances, but said it has a solid record of success and strong customer relationships. “We have more than 70 future launches on our manifest representing over $10 billion in contracts,” said SpaceX Chief Financial Officer Bret Johnson. “The company is in a financially strong position and is well positioned for future growth,” adding it has over $1 billion of cash and no debt.
The Journal reviewed SpaceX’s financial results from 2011 through the end of 2015 as well as forecasts through the next decade. As a private company, SpaceX isn’t obligated to publicly disclose the figures, and the information has never been widely shared....MUCH MORE