Sourcehut Q1 2020 Financial report

In summary, SourceHut is financially healthy.

Before we get into the stuffy business stuff, let’s get the inevitable out of the way. I hope that your family and friends are safe as you read this. I’m sure that many people reading today’s financial report are facing uncertain financial times for themselves. If this is the case for you, don’t hesitate to cancel your SourceHut subscription. We will be alright — take care of yourself and your loved ones first. On the other hand, if you are secure and want to help, we would appreciate it if you bought a paid subscription.

Eventually, payment to SourceHut will become mandatory. This was expected to occur when the alpha graduated to the beta. However, if we find ourselves amend a continued global crisis as the software matures to beta, we will postpone making payments mandatory. And, as always, anyone with extenuating circumstances is not expected to pay, even when it becomes “mandatory”.

Stay safe, and thank you for your continued support.

Revenue sources

Sourcehut receives revenue from paid user subscriptions. During Q1, we processed 1,673 invoices. The invoices paid break down as:

823     $2  (paid monthly)
382     $5  (paid monthly)
135     $10 (paid monthly)
228     $2  (paid yearly)
71      $5  (paid yearly)
34      $10 (paid yearly)

The total gross revenue during this period was $16,486.00, which after transaction fees comes out to $15,108.98. This is a 30% decrease from last quarter, and a 163% increase compared to Q1 last year. This is accounted for by our annual subscriptions - our yearly invoices due each quarter in 2020 break down as follows:

Q1  194
Q2   50
Q3  151
Q4  608

Yearly payments have an outsized effect on the total cash flow, and this accounts for the reduction in income for Q4 2019 → Q1 2020. These figures are in line with our expectations for Q1. 1,377 new users registered accounts in Q1, of which 156 (11%) have paid for their account. As of the end of Q1, there were 13,418 registered users in total, of which 1,553 (12%) have paid subscriptions.

At time of writing (2 weeks into Q2 2020), the breakdown of subscription types is as follows:

 $2 monthly  282 users
 $2 yearly   751 users
 $5 yearly   254 users
 $5 monthly  136 users
$10 monthly   45 users
$10 yearly    98 users

The monthly revenue from these subscriptions (with annual subscriptions realized over 12 months) is approximately $4,649, after transaction fees. This is a $534 increase in monthly revenue compared to Q4.

Sourcehut has $13,792 in the bank at the time of writing (2020-04-13).

Expenses

Breakdown of Q4 expenses:

$3303    New server equipment (git.sr.ht)
$1950    Philadelphia datacenter lease (inc. network, power, etc)
$ 981    San Francisco datacenter lease (inc. network, power, etc)
$ 490    Misc. hardware
$ 334    Travel (FOSDEM)

Note that we paid the 2020 lease for the San Francisco datacenter in full in Q1, as opposed to our typical quarterly payments.

Payroll:

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

Going into Q2, our monthly expenses are expected to be:

$3500/mo    Payroll (approximate)
$640.00/mo  Philadelphia datacenter lease

We have postponed our plans to hire another engineer. Our financial projections have not yet predicted a downturn in SourceHut’s economic viability, but we are a risk-averse business. We are moving onto a more conservative financial footing in preparation for whatever economic consequences of the COVID-19 pandemic may come to pass.