Mozilla's revenue increased in 2020 to $496 million

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The Mozilla Foundation published the financial report for the year 2020 today, revealing that it earned $496 million in 2020. The Foundation earned $828 million in 2019, but $338 million came from a legal dispute with former search engine provider Yahoo.

Revenue increased by about $6 million in 2020 as a consequence if you ignore the $338 million one-time payment.

Subscription revenue is on the riseIf you look at the revenue sources, you will notice that revenue from royalties is still making the bulk of Mozilla's revenue. It dropped from about $451 million to $441, and includes all search engine deals.

Mozilla invested heavily in subscription-based products, and revenue from subscriptions rose from $14 million in 2019 to $24 million in 2020. It is still a low percentage of the overall revenue. Mozilla launched new products, including Firefox Relay Premium or Mozilla VPN,  that will bring in additional revenue. Mozilla VPN launched in mid-2020 in a few countries, but the service is now available in additional regions, which will surely be reflected in the revenue for 2021. The reading service Pocket is still the main revenue driver according to Mozilla's report.

Cost reductionMozilla managed to reduce the overall expenses significantly in 2020. The foundation had expenses of $495 million in 2019 and managed to reduce the expenses to $439 million in 2020. Software development expenses dropped from $303 million in 2019 to $242 million in 2020. Other program services expenses, and branding and marketing expenses were reduced as well in 2020. General and administrative expenses rose to $137 million from $124 million the year before.

Mozilla fired 320 employees in 2020, reducing the total number of employees from over 1000 to less than 800.

Mozilla managed to increase its assets from $787 million in 2019 to $843 million in 2020.

Outlook for 2021

Mozilla renewed the search engine agreement with Google in 2020 for another three years. Both parties have not revealed the new agreement, and it remains to be seen how the new deal affects Mozilla's revenue in 2021 and the years that follow.

Revenue from subscription-based services will likely be higher in 2021 when compared to 2020, but it seems unlikely that it will reduce Mozilla's dependence on search engine deals in the coming years. Mozilla needs the revenue more than ever, and it will be interesting to see if (and how) the agreement with Google changed.

Closing Words

Mozilla did well financially in 2020, but it is too early to tell if 2021 will be an equally profitable year for the company. Much depends on the new agreement with Google and the success of the new subscription-based services.

Now You: what is your take on the report?
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