If there was any question about just how profitable an open source business can be, Red Hat (RHT) answered it this week by releasing financial reports that show it has become the first open source company to cross the $2B revenue threshold.

The company's latest financial report, released March 22, shows revenue of $544M for the last quarter and $2.05B for fiscal year 2016 overall. That's up from $1.79B in annual revenue for FY 2015.

The increase is not at all a bad showing for a period during which the global economy remained sluggish and American companies like Red Hat faced a tough international market due to the strong dollar.

Red Hat said the growth reflected the success of its open source hybrid cloud products in particular. "Enterprises increasingly adopting hybrid cloud infrastructures and open source technologies drove our strong results," said Jim Whitehurst, the company's CEO. "Customers are demanding technologies that modernize the development, deployment and life-cycle management of applications across hybrid cloud environments. Many are relying on Red Hat to provide both the infrastructure and the application development platforms to run their enterprise applications consistently and reliably across physical, virtual, private cloud and public cloud environments."

Going forward, Red Hat projects revenue of between $2.380B and $2.420B for the coming fiscal year.

It's no secret that businesses can succeed by selling software whose source code is given away for free, or services related to it. Companies like Cygnus Solutions (which later merged with Red Hat) were profiting from free software as early as the 1980s. But Red Hat's crossing of the $2B threshold is a new milestone for the open source ecosystem.

The figure might not be significant for larger vendors that don't focus exclusively on open source, but for a company that has invested everything in open source, it's a big deal. It's also good news for the open source sector of the channel as a whole, which can continue to count on strong performance at companies like Red Hat, which funds a great deal of open source development, to keep open source projects well-heeled.