July 17, 2020 by Drew DeVault

Sourcehut Q2 2020 Financial report

In summary, SourceHut is financially healthy. Our revenue continues to grow and we are profitable and becoming more so. We have also been able to re-invest some of our profits into the broader free software and free culture community.

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

Revenue sources

Sourcehut receives revenue from paid user subscriptions. During Q1, we processed 1,855 invoices. The invoices paid break down as:

930     $2  (paid monthly)
433     $5  (paid monthly)
148     $10 (paid monthly)
246     $2  (paid yearly)
74      $5  (paid yearly)
24      $10 (paid yearly)

The total gross revenue during Q2 was $16,335, which after transaction fees is $15,204. This is basically identical to the revenue from Q1, however, the breakdown in revenue sources has changed. We saw growing subscriptions in almost every category — except for $10/year, which shrunk by 30%. This was unexpected, but we are not especially concerned, as it was made up for with growth in other areas and is unlikely to indicate a long-term trend. In any case, this is a 289% increase from Q2 2019, which does continue to support a trend of strong YoY growth.

In Q2 2,551 users registered for an account, of which 302 have paid (11.8%). This matches closely with our overall conversion rate of 11.7% (1,888 of 16,140 users at the time of writing). As of July 2020, the breakdown in subscription levels is the following:

342   $2  (paid monthly)
156   $5  (paid monthly)
 53   $10 (paid monthly)
916   $2  (paid yearly)
307   $5  (paid yearly)
114   $10 (paid yearly)

The monthly revenue from these subscriptions (with annual payments amortized) is approximately $5,544 after transaction fees, an increase in $895 over Q1. This is consistent with our historical rate of growth.

At the end of Q2, SourceHut had $17,383 in the bank.


Breakdown of Q2 expenses:

$5000    Set aside for PeerTube initiative
$1950    Philadelphia datacenter lease (inc. network, power, etc)
€1000    Donation to Framasoft
$1253    Misc. server equipment
$600     LWN advertisement
$300     GitHub sponsorship of pygit2
$80      Domain name registrations and renewals

Our expenses were unusually high during this period, as we decided to re-invest in the community in several respects. The PeerTube bootstrap fund is a clear outlier, and we also donated to the PeerTube developers. Additionally, we’ve set up a recurring donation with the maintainer of pygit2, an important library that we depend on to provide git.sr.ht service. We may be interested in sponsorships for other projects in our dependency tree; please reach out if you are interested.

As an experiment, we also spent $600 on an LWN advertisement campaign during this quarter. The following advertisement was shown on LWN.net:

An advertisement which reads as follows: “sourcehut.org: git & hg repos, mailing lists, fast CI for Linux & BSD; no JavaScript required; 100% free software. Paid Advertisement”

We received 50,000 impressions and 113 click-throughs (0.22%). This is considered fairly typical for this kind of advertisement. The results were not strong enough to consider a second campaign for the time being; our other marketing approaches are more effective.

In Q3, we plan on spending around $4K-$5K on the installation of a new server to handle hg.sr.ht growth, as well as filling a few other roles, mainly for high availability. Otherwise we have no unusual expenses planned.