The Mozilla Foundation today announced its 2020 financial report, which disclosed its 2020 revenue of US$496 million. The foundation earned US$828 million in 2019, but the US$338 million came from a legal dispute with the former search engine provider Yahoo. If you ignore the one-time payment of US$338 million, your 2020 revenue will increase by about US$6 million.
Subscription revenue is on the rise
It can be seen that the income from royalties is still the majority of Mozilla’s income. But it dropped from about 451 million US dollars to 4.41 US dollars, and it includes all search engine transactions. Mozilla has invested heavily in subscription-based products, and revenue from subscriptions has risen from US$14 million in 2019 to US$24 million in 2020.
However, its proportion of overall income is still very low. In addition, Mozilla has launched new products-including Firefox Relay Premium or Mozilla VPN, which will bring additional revenue. Mozilla VPN was launched in several countries in mid-2020, but now the service has been launched in more regions, which will definitely be reflected in 2021 revenue. According to a Mozilla report, the Pocket reading service is still the main revenue driver.
Lower The Cost
In 2020, Mozilla has succeeded in significantly reducing overall expenditures. The foundation spent 495 million U.S. dollars in 2019 and managed to reduce it to 439 million U.S. dollars in 2020. Software development spending will drop from US$303 million in 2019 to US$242 million in 2020. Other project service expenditures and brand and marketing expenditures will also decrease in 2020. However, general and administrative expenses rose to 137 million U.S. dollars from 124 million U.S. dollars in the previous year.
In 2020, Mozilla laid off 320 employees, which reduced its total number of employees from more than 1,000 to less than 800. In addition, Mozilla managed to increase its assets from US$787 million in 2019 to US$843 million in 2020.
Outlook For 2021
Mozilla renewed its search engine agreement with Google in 2020 for a period of three years. Neither party disclosed the content of the new agreement, and it remains to be seen how the new agreement will affect Mozilla’s revenue in 2021 and beyond.
Compared with 2020, revenue based on subscription services may be higher in 2021, but it seems unlikely to reduce Mozilla’s dependence on search engine transactions in the next few years. Mozilla needs these revenues more than ever, and it will be interesting to see if and how its agreement with Google changes.
Concluding Remarks
Mozilla’s financial situation in 2020 is good, but it is still too early to judge whether 2021 will be the company’s equally profitable year. This largely depends on the success of its new agreement with Google and the new subscription-based service.