Space Sector Business Models
Launch, in-orbit connectivity and ground/data monetisation: why segment mix sets the metric screen, from backlog split to subscribers to recurring ACV.
Educational analysis for professional use. This guide is not investment advice or a recommendation to buy or sell any security, and it is not personalised.
Three Layers, Three Metric Sets
Space equities are not one business. The value chain splits into launch and space-systems manufacturing, in-orbit connectivity operators, and ground or data licensing. Each layer monetises differently, so the first step in any screen is naming which layer a company sits in. Only then do backlog, subscribers, ARPU, EV/sales or EBITDA become meaningful.
Rocket Lab spans launch and prime space systems. Iridium runs a profitable LEO constellation with 2.54M billable subscribers. Planet sells earth-observation data on a subscription model to 976 customers. Viasat and Globalstar sit in the operator bucket with different customer mixes; EchoStar blends Pay-TV, wireless and Hughes broadband. The peer table below is FY2025 filed data; fiscal year-ends differ by filer.
Layer 1: Launch and Space Systems
Launch providers sell mission capacity and, increasingly, prime contracts for satellite buses and payloads. Revenue is lumpy, so visibility comes from backlog rather than monthly ARPU.
| Metric | Rocket Lab FY2025 | Read |
|---|---|---|
| Revenue | $601.8M (+38% YoY) | Growth before margin |
| Total backlog | $1.85B | $475.6M launch; $1,371.7M space systems |
| Adjusted EBITDA | $(101.2)M loss | Pre-profit at EBITDA line |
| Subscribers / ARPU | N/A | Not a comms subscriber model |
| Government mix | ~28% of revenue | SDA $816M prime is the teaching contract |
That tilt toward space systems in the backlog split is the pivot equity research tracks: from selling launches toward owning prime programme economics. See the Rocket Lab profile for the SDA (Space Development Agency) anchor and OCF (operating cash flow) runway detail.
Layer 2: In-Orbit Connectivity Operators
Operators own orbital assets and sell capacity to retail, enterprise, IoT or government users. Once EBITDA turns positive, subscribers and margin matter as much as top-line growth.
| Company | FY2025 revenue | EBITDA / OEBITDA | Subscribers |
|---|---|---|---|
| Iridium | $871.7M (+5%) | $495.3M OEBITDA | 2.54M billable |
| Viasat | $4.52B (+6%; Mar-25 YE) | $1.55B adj. EBITDA (34.2%) | ~189K US fixed BB; ARPU $115/mo |
| Globalstar | $273M (+9%) | $136M adj. EBITDA (50%) | 791K MSS |
| EchoStar | $15.0B (-5.2%) | $1.49B adj. OIBDA | 7.0M Pay-TV; 7.51M wireless; 739K Hughes |
Iridium is the clean profitable LEO case: voice ARPU $47/mo, IoT $7.78, broadband $259. Government revenue was 29% of total ($257.0M), anchored by the EMSS (Enhanced Mobile Satellite Services) contract ($738.5M over seven years). The Iridium profile walks through EMSS and post-NEXT capex at ~11.5% of revenue.
Globalstar’s economics are wholesale, not retail: Apple capacity was 63% of FY2025 revenue with $869M deferred revenue from prepayments. That is an operator layer business funded like a constellation build; see constellation capex.
Layer 3: Ground and Data Licensing
Planet Labs sits in the data layer. It does not report consumer subscribers; it reports customers, recurring annual contract value and backlog.
| Metric | Planet FY2025 (Jan-25 YE) | Read |
|---|---|---|
| Revenue | $244.4M (+11%) | Subscription momentum |
| Backlog / RPO | $503.7M / $412.8M | 37% of RPO due within 12 months |
| Customers | 976; 97% recurring ACV | Enterprise/government data model |
| Adjusted EBITDA | $(10.6)M loss (Q4 +$2.4M) | Still short of breakeven |
| Capex / revenue | ~20% | Active fleet refresh band |
One customer was 19% of FY2025 revenue. Vertical revenue split is not filed, so the backlog and RPO (remaining performance obligations) figures above remain the cleanest visibility anchor. The Planet profile ties the NGA (National Geospatial-Intelligence Agency) contract ceiling to OCF-based runway.
Why the Layer Pick Changes Your Model
| If the name is… | Lead with… | Cross-check with… |
|---|---|---|
| Launch / systems (RKLB) | Backlog split, revenue growth | OCF runway, EV/sales screen |
| Profitable operator (IRDM) | OEBITDA, subscribers, ARPU by segment | EV/sales vs EV/EBITDA |
| EBITDA-positive / GAAP-loss operator (VSAT) | Adjusted EBITDA margin, OCF (+$908M FY2025) | Constellation capex ~22% of revenue |
| Wholesale operator (GSAT) | Customer concentration (Apple 63%), deferred revenue | Capex 201% prepayment-funded |
| Data subscription (PL) | Backlog, recurring ACV, customer count | EV/sales screen; OCF burn not net loss |
Government programme concentration sits in a separate screen: as a working convention we state rather than source, single programmes above 30% of revenue flag recompete risk. Iridium’s EMSS and Rocket Lab’s SDA prime are the filed teaching cases; definitions of backlog vs deferred revenue differ by filer. The government backlog guide covers EMSS, SDA, NGA Luno B and Viasat defence backlog ($984M of $3.55B firm).
Building the Screen
- Classify each name as launch/systems, in-orbit operator or ground/data before opening a valuation sheet.
- Pull the metric row that matches the layer (backlog split for RKLB; subscribers for IRDM; customers and ACV for PL).
- Note profitability stage: GAAP profit (IRDM), EBITDA-positive with GAAP loss (VSAT, GSAT), or pre-profit growth (RKLB, PL).
- Flag fiscal-calendar traps: Viasat Mar-25, Planet Jan-25, others Dec-25.
- Cross-link government anchors and capex intensity where the layer overlaps operator economics.
The sector fragments quickly once you stop treating “satellite stock” as a single peer group. Layer first, metric second, valuation band third.
Space & Satellites Sector Primer
Revenue ramp, margin and capex are the inputs. This primer takes both a pre-profit builder and a profitable operator to a discounted cash-flow value against an EV/sales screen.
The Excel model is the primer's two worked valuations live across 12 sheets: a ten-year free-cash-flow DCF for a profitable operator, and a pre-profit ramp builder that fades losses to a target margin, each with a cash-runway and capex bridge. Change the growth path, the exit multiple or the capex intensity and the value moves.
Frequently Asked Questions
- What are the three monetisation layers in the space sector?
- Launch providers sell rides and space-systems hardware (Rocket Lab: $475.6M launch backlog vs $1,371.7M space systems at 31 Dec 2025). In-orbit operators sell connectivity capacity on owned constellations (Iridium: 2.54M billable subscribers, OEBITDA $495.3M FY2025). Ground and data vendors sell imagery licences or analytics subscriptions (Planet: 976 customers, 97% recurring ACV, backlog $503.7M). The valuation screen shifts with the layer: backlog and EV/sales for pre-profit launch; subscribers and EBITDA for profitable operators; customer count and recurring ACV for data.
- Why does segment mix change which metrics matter?
- A launch name has no subscriber ARPU. Rocket Lab discloses N/A on subscribers because it sells launches and prime contracts rather than monthly connectivity. Iridium reports voice ARPU $47/mo, IoT $7.78 and broadband $259. Planet reports customers and recurring ACV instead of a consumer ARPU. Screening Rocket Lab on billable subscribers or Planet on IoT ARPU mis-specifies the business.
- How does Rocket Lab's backlog split illustrate the launch-to-systems pivot?
- Total backlog was $1.85B at 31 Dec 2025: $475.6M launch and $1,371.7M space systems (+73% YoY on the total). The space-systems share, including the $816M SDA Tracking Layer Tranche 3 prime for 18 satellites, shows revenue migrating from episodic launch tickets toward multi-year prime programmes. Government revenue was ~28% of FY2025 sales; backlog is not split gov/commercial in filings.
- How do profitable operators differ from pre-profit names in the same sector?
- Iridium is GAAP-profitable ($114.4M net income FY2025) with OEBITDA $495.3M and is screened on EBITDA and subscribers rather than on revenue multiples. Rocket Lab and Planet still trade on growth, backlog and runway: Rocket Lab screens on EV/sales, with adjusted EBITDA loss $(101.2)M; Planet backlog $503.7M with adjusted EBITDA loss $(10.6)M. The layer (launch vs operator vs data) sets the metric; profitability stage sets whether EV/EBITDA or EV/sales is the primary screen.