January 13, 2020 by Drew DeVault

Sourcehut Q4 2019 Financial report

In summary, Sourcehut is financially healthy. We have a reduced services profit from Q3 - we are currently breaking even - but this is due to a planned increase in expenses and is offset by revenue from our new consultancy. Growth has continued at a similar pace to Q3. Through the recent formalization of the SourceHut free software consultancy, we have also raised a significant amount of capital, which increases our runway substantially, and allows us to consider more hires, new hardware provisioning, and so on. 2019 was a great year for SourceHut, and I summarized our accomplishments and goals in this earlier article.

Thank you for your support in the alpha. I'm looking forward to continuing to serve you in 2020.

Disclaimer: this report is a summarized approximation of Sourcehut's financials, and is not used for tax purposes.

Revenue sources

Sourcehut receives revenue from paid user subscriptions. During Q4, we processed 1,824 invoices. The invoices paid break down as:

803     $2  (paid monthly)
372     $5  (paid monthly)
102     $10 (paid monthly)
373     $2  (paid yearly)
128     $5  (paid yearly)
45      $10 (paid yearly)

The total gross revenue during this period was $22,856.00, which after transaction fees comes out to $21,530.35. Because of differences in the volume of yearly invoices processed during Q4, this number is not easily compared with Q3. It's better to compare it with Q4 2018 — when compared to this, we've shown ~185% growth.

In Q4, 1,876 new users registered accounts, of which 267 (14%) have paid for their account. As of the end of Q4, there were 12,289 registered users in total, of which 1,410 (11.4%) have paid subscriptions.

At time of writing (2 weeks into Q1 2020), the breakdown of subscription types is as follows:

279     $2  (paid monthly)
126     $5  (paid monthly)
38      $10 (paid monthly)
660     $2  (paid yearly)
228     $5  (paid yearly)
79      $10 (paid yearly)

The monthly revenue from these subscriptions (with annual subscriptions realized over 12 months) is approximately $4,115, after transaction fees. This is a $808 increase in monthly revenue compared to Q3.

Sourcehut has $25,442 in the bank at the time of writing (2020-01-13).

Breakdown of Q4 expenses:

$4504    New server equipment (git.sr.ht)
$1950    Philadelphia datacenter lease (inc. network, power, etc)
$ 812    Travel (FOSDEM)
$ 548    Insurance renewal
$ 129    San Francisco datacenter lease (inc. network, power, etc)
$  38    Misc. equipment


 $5,500.00   Payroll
+$  179.07   Employer taxes & processing fees

Going into Q4, our monthly expenses are expected to be:

$3500/mo    Payroll (approximate)
$640.00/mo  Philadelphia datacenter lease
$129/qtr    San Francisco datacenter lease

At the end of Q3, we were preparing to learn how we would be impacted by the first round of annual subscription renewals, unsure of how many users would cancel. We did not see any unusual number of subscription cancellations in Q4, and it does not impact our financial planning.

At some point in early 2020, we are planning on hiring an additional engineer. We also expect to spend a bit more on FOSDEM before it's over.


This is the first quarter during which our free-software consultancy has factored into our finances. Our core mission is to elevate the free software community, and part of our long-term plans have been to hire free software developers to work full-time on self-directed projects. The consultancy helps us meet this goal — 100% of the work is free software, on projects relevant to our engineers, chosen at their discretion. Additionally, we pass most of the hourly rate onto the engineer, which offsets our industry substandard salary. The profits are also reinvested into free software, helping us hire additional engineers.

However, reporting on our consulting work is not as straightforward as our other financial reporting. The income of the consultancy is not consistent and predictable like our paid services are. In terms of financial planning, the profits are treated as additional runway or capital. Runway is how we measure the longevity of the business in rainy day scenarios, and capital is sums of money we pull from to finance new hardware, new hires, and so on.

Because most of the revenue is directly passed onto the individual engineers, sharing it in too much detail raises privacy concerns. We're working on figuring out how to be more transparent with this side of the business, but it will likely not be possible until we have more engineers on board to help anonymise the numbers.