2025 Transparency Report

Why We Started and Our Pricing Philosophy

When we launched Kinetic Hosting back in 2020, we came into the hosting industry because we weren't satisfied with the service or prices that hosts were offering at the time. You've probably heard this story before—someone starts a host because they think they can do it better and cheaper. Although we still believe many large hosts are overcharging, we now have a deeper understanding of how costly it is to run a reliable hosting company.

Let's break down our costs and pricing. For clarity, we'll use our most popular location, Washington D.C., as an example.

System Specifications (NODE 1)

Our servers in Washington D.C. come with:

Ryzen 7950X CPU
192 GB DDR5 Memory
1 TB NVMe storage

How Much Does NODE 1 Generate?

Let's use our popular 8GB Performance package as an example. NODE 1 can host 24 of these servers, generating around $527.76/month at full price (without discounts or affiliate commissions).

Operating Costs

Monthly Hardware Costs

Our average monthly hardware cost per server node is around $170/month.

This leaves us $357.76/month initially.

Discounts and Affiliate Payouts

About 80% of all orders come through affiliate links or discount codes. Typically, this involves a 15% discount and a 20% affiliate payout, meaning about 35% of our potential revenue is lost to these discounts and commissions. Although this may seem high, it helps us reach more customers and support content creators who help grow the community.

VAT and Sales Tax

Every country and region we operate in charges VAT or sales tax, which we absorb to keep our pricing straightforward and fair for everyone. Rates range from 5% in some U.S. states to about 20% in the EU and UK. To simplify things, we average this out to approximately 12%.

Backup and Additional Services

Unlike some hosts who cut corners, we provide offsite backups as a standard part of our service. This ensures your data is protected from hardware failures or software issues. While this might seem expensive, backups actually only cost around $1/month per node.

Client backups, database servers, and download servers add about another $5/month per node, totaling $6/month for these essential services.

Payment Processing Fees

Every payment processed via PayPal or Stripe incurs a fee, typically between 1.50% and 1.60% per transaction.

Detailed Monthly Cost Breakdown

From the initial $357.76/month:

Discounts and affiliate payouts: ~35%
Sales tax/VAT: ~12%
Payment gateway fees: ~1.55%

After these deductions (totaling roughly 48.55%), we have about $184.02 left. Deducting the additional $6/month for backups and services, we're left with $178.02/month per node.

Additional Costs of Running a Company

Operating over 300 server nodes might initially sound very profitable, but there are many more costs to consider.

Spare Servers

We maintain additional servers on standby to quickly handle spikes in demand and prevent out-of-stock situations. Although we briefly reduced spare capacity last year, this led to shortages last month, so we’ve now increased our reserve inventory to ensure availability.

Staff Costs

Kinetic Hosting has a small, dedicated team of four, including myself and the other founding director. Staff costs account for about 40% of monthly revenue. Keeping our team small yet effective allows us to pay fair wages while keeping prices low for our customers. Despite our client base quadrupling in the last year, we've actually reduced the number of support tickets by continually improving our systems and making our panel easy to use.

Other companies our size often operate with larger teams, but our efficiency helps keep our costs competitive.

Development and Software

Almost everything at Kinetic Hosting is custom-built in-house, except for our billing panel and status pages. Our website, knowledgebase, Discord bot, and heavily customized game panel (originally based on the open-source Pterodactyl platform) are all maintained internally. Overall, we run around 20 pieces of custom software behind the scenes. While this keeps costs down overall, running development servers, beta tests, and licenses for essential software tools like JetBrains IDEs still account for about 5% of our monthly income.

External Contractors

We use specialized external experts for critical tasks like:

Accounting (ensuring VAT and tax compliance globally)
Artwork (supporting talented artists such as the amazing Alphalilly: https://www.artstation.com/alphalilly. We always use real artists, never AI-generated artwork, to support talent.)
SEO services (to improve our visibility online)
Security audits (to maintain robust security standards)

External contractor fees typically account for 15%-25% of our monthly income, depending on our needs each month.

Service Fees

We use premium third-party services, including Trustpilot, which charges hundreds of dollars per month to integrate their rating widgets on our website. We also utilize independent status pages and collaboration tools like Slack and Google Workspace, ensuring reliability and effective communication both internally and externally. These essential tools typically cost around 10% of our monthly income.

Market Research

Knowing what’s happening in the hosting and gaming industry is vital. Market research involves testing new games, evaluating competitors, and searching for better data center partnerships. While it’s a smaller cost, it’s essential for our continued growth and innovation, typically accounting for about 5% of our monthly revenue.

Other Miscellaneous Costs

This includes monthly fees for our current billing panel, handling chargebacks, donations to open-source projects (such as Pterodactyl), and providing free servers to partners. Combined, these smaller yet essential costs represent around 10% of our income each month.

Profit Tax

As a UK-based company, we pay around 20% corporation tax on annual profits, plus fees for company filings and other regulatory requirements.

Hosting Isn't Cheap

I hope this breakdown provides a clear insight into the costs involved with operating Kinetic. When we say we’ve pushed our prices down as low as possible, we genuinely mean it. Whenever there’s room for savings, we pass them directly to you—just as we did a few months ago—to ensure you’re getting the best deal possible.

We aim to keep server hosting affordable for everyone. While we’re not the cheapest provider, we believe we offer the greatest value through our service.

Currently, Kinetic Hosting has no debt and no external investors. Staying debt-free helps us remain stable and protects us from financial pressures. Even if half our client base packed up and left tomorrow, we could scale down and continue operating. Avoiding debt makes that flexibility possible.

Future Plans

Fully Custom Billing Panel

As everything is worked on in-house, there’s monthly staff time and wages going into it. But we’re working on a fully custom billing panel. This will combine with our game panel to give you one unified account, allowing you to see billing information and your servers all in one place. We’re adding features like community pots, allowing people to donate to your server funds, better insights into billing, an all-new affiliate dashboard, and so much more we’ll talk about soon.

Planned Relase: Later in 2025

Panel 6

Alongside the billing panel update, we’re also working on a huge update to our game panel. This includes an all-new frontend and UI, modpack importer, new player manager, new mod and plugin installer, and a built-in crash report solver. This is a full rework of the frontend of our panel and our biggest update yet. Join our feedback team to track its progress.

Planned Relase: Later in 2025

Mobile App

While we don’t expect this to come out this year, we are starting research on an iOS app. We’ve also worked to acquire the tools needed to develop something like this, as you need a Mac to develop for iOS. An Android app will come out later, but our main goal is iOS first.

Planned Relase: 2026

More Owned Hardware

We’re also working on getting more owned locations and hardware. While there’s a big upfront cost, it offers savings down the line, which we can pass onto you.

Expanding Our Team

While our goal is always to keep our team small, I don't want our team to be overworked. With our client base now over double what it was in January, we're looking for 3 more team members. Please see our jobs page to apply.

Any Questions?

Feel free to reach out with any questions or suggestions. We look forward to updating you again next year in our 2026 transparency report.

Thank you for your ongoing support,

Chris
CEO @ Kinetic Hosting