2025
SaaS Benchmarks Report by High Alpha
Proprietary and Confidential ©2025 High Alpha, LLC. All rights reserved.
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Contents
Introduction
Growth & Efficiency
People
46 47 48 49 50 51 52
Over Half of Companies Confirm AI Spurred Headcount Reduction Engineering Tops the List of AI-Driven Headcount Reductions Teams Are Shrinking, But Departmental Breakdown Stays Consistent Early-Stage SaaS Companies Are Building AI Into Their Operational DNA Measurement of Internal AI Impact Still Qualitative Majority of Respondents Believe AI Is Measurably Improving Productivity Default In-Office Teams Continue To Grow Faster Than Remote
21 22 23 24 25 26 27 28 29 30 31 32 33 35 36 37 38 39 40 41 42 43 44
Complete Shift in Last 10 Years to AI Centricity Embedding AI Deeply in Product Drives Outsized Growth
4 5 6
The 2025 SaaS Benchmarks Report Thank You to All of Our Partners Operation AI: From Novelty to Necessity
Although Tradeoffs Exist, Growth Far Outweighs Lower Gross Margins Most Companies Have Launched AI Features, Fewer Have Monetized Them AI Monetization Experimentation Continues to Evolve Overall Pricing Model Has Outsized Impact on Growth and Retention Consumption & Outcome-Based Pricing Increases as Companies Scale ARR Per Employee Increases Significantly Above $20M ARR Upper Quartile ARR Per Employee Surges for Those Above $20M ARR
Executive Summary
8 9 10 11 12
Who Took the Survey This Year? Tips for Integrating Benchmarks Company Benchmark Definitions Financial & Operating Metrics by ARR for All Respondents Good vs. Great SaaS Metrics
Founder Insights
Later-Stage Companies Are Operating With Leaner Teams Efficiency Gains Drive Cash Burn Down In Larger Companies Median Companies Fall Short of the Rule of 40 Early-Stage Fundraising Consistent With Prior Years
54 55 56 57 58 59 60 61
Companies With Two Co-Founders Growing Fastest GTM Top Concern for Founders But AI Strategy Is Closing the Gap High Growth Correlates With High Stress (and Low Stress) Mentors and Mental Health Specialists Tied to Stronger Growth Performance and Innovation Define Leading Cultures Fundraising Success Rates Remain Strong
AI-Driven Market Rebound
14 15 16 17 18 19
IPO Window Reopening Public SaaS Companies Achieve Unprecedented Efficiency Venture Capital Deal Value Returns to 2021 Levels AI Investment Driving Venture Resurgence Upper Quartile Revenue Growth Rates Remain Steady Surprising Level of Consistency in Year-Over-Year Growth
SaaS Metrics & Trends
Near-Term Exit Expectations Muted Founder Optimism Continues to Rise
Gross Revenue Retention Maintains Stable Pattern Net Revenue Retention Stays in Tight Range Net and Gross Revenue Retention Strong Growth Predictors CAC Payback Maintains Same Pattern As Prior Year Efficient Growth Lives at the Intersection of Retention and CAC Expansion ARR Becomes the Growth Engine at Scale Mid-Range ACVs Deliver the Best Blend of Growth & Retention Direct Sales Is Most Prevalent Go-To-Market Channel IRL FTW: Events Lead the Way Smaller SaaS Companies See Gross Margin Pressure
Closing
63 64
Final Thoughts About High Alpha
2
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Introduction ! The 2025 SaaS Benchmarks Report ! Thank You to All of Our Partners ! Operation AI: From Novelty to Necessity
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
The 2025 SaaS Benchmarks Report
This year marks the ninth annual SaaS Benchmarks Report. Like last year, the 2025 report draws from the largest dataset in its history. We’re deeply grateful to every founder, CEO, and SaaS leader who contributed, and to the 40+ venture and platform partners who helped make it possible. Our goal remains simple: to provide an indispensable resource for the entire SaaS ecosystem. More than half of this year’s respondents identified as CEOs or founders, giving us a clear view into how the next generation of leaders is thinking about 2026 and beyond. Go-to-market execution still tops the list of challenges that keep founders up at night, but, as you might imagine, AI strategy is quickly moving up the list. Building with AI is no longer a differentiator — it’s the baseline. Every company founded in 2025 reported AI as core to its product,
underscoring that intelligence is now infrastructure. The new edge lies in execution: teams that operationalize AI to amplify productivity, precision, and performance. In the 2024 Benchmarks Report, we introduced the moniker Generation AI. In 2025, we’ve coined the term Operation AI — highlighting the shift in focus from invention to impact. Finally, while we continue to report on the metrics that define successful SaaS companies, we’re equally focused on the human side of building breakout companies. This year’s survey expands on founder insights, team structure, and company culture, because building early-stage startups is a craft (both art and science), and understanding both is essential to building enduring companies in an AI-powered world.
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Thank You to All of Our Partners
Presenting Partners
Venture & Platform Partners
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Operation AI: From Novelty to Necessity
The Five Pillars of Operation AI Make AI Core, Not Cosmetic. Companies with AI at the core of their products are growing materially faster (even when they carry modestly lower gross margins due to compute costs). Stand-alone AI features are a bridge, not a destination. Build end-to-end, AI-native workflows where the value is unmistakable. Shift from Pilots to Playbooks. Early-stage teams report deeper internal AI adoption than their more mature peers, yet most still measure impact qualitatively. Move beyond pilots — standardize AI-assisted processes across sales, support, success, and engineering, and tie them to clear KPIs so productivity gains translate directly into Rule of 40 performance. Monetize the Outcome. Pricing models are catching up to adoption. The leaders are experimenting with hybrid,
As you might imagine, AI is the plumb line running through this year’s SaaS Benchmarks Report. The survey responses were clear and confirmatory: AI has officially moved from novelty to necessity. The data reveals a decisive shift from experimentation to operationalization. Founders are no longer asking “Can we build with AI?” but “How do we scale, measure, and monetize it?” Operation AI is a clarion call for founders to professionalize what began as exploration, to systematize AI in the product, integrate it into core workflows, and build organizations that treat intelligence (both human and machine) as a managed, compounding asset. This is the operational era of AI, where the winners will not be those who experiment most creatively, but those who execute most effectively.
consumption, and outcome-based models that align price with realized value — and they’re growing faster (with better retention) as a result. Rewire for Leverage. ARR per employee climbs sharply with scale as teams get leaner and automation rises. Use AI to compress non-differentiated work, redeploy headcount toward customer impact, and protect margin while you grow. Efficiency isn’t a constraint; it’s the accelerator of durable growth. Expansion Is the Engine. Beyond roughly $20 million in ARR, expansion becomes the dominant growth engine. Use AI to drive multi-product adoption, proactive success, and precision upsell — then pair it with efficient acquisition and short CAC payback to sustain momentum and resilience.
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Executive Summary
! Who Took the Survey This Year? ! Tips for Integrating Benchmarks ! Company Benchmark Definitions
! Financial & Operating Metrics by ARR for All Respondents ! Good vs. Great SaaS Metrics
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Who Took the Survey This Year?
BENCHMARK PARTICIPANTS 800+ Respondents From Across the Globe
Geography
Role
50% 22% 6% 22%
CEO or Founder Head of Finance Head of Operations Other
69% 17% 4% 10%
US Europe Canada Asia, Australia, Israel, Other
ARR
ICP
23% 27% 31% 10% 9%
Less Than $1M ARR $1-5M ARR $5-20M ARR $20-50M ARR Greater Than $50M ARR
37% 35% 19%
Enterprise Mid-Market SMB Micro-Business Consumer
7% 2%
Source: 2025 SaaS Benchmarks Report by High Alpha
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Tips for Integrating Benchmarks
#
$
Benchmarks As a Guide, Not a Route Financial and operating benchmarks serve as a guide to understand where you stand among peers. Every company’s journey will look different — and that’s exactly how it should be.
Recognize the Tradeoffs Efficiency and growth directly impact one another. Larger investments in growth affect efficiency metrics and so on. A sound strategy will involve a series of tradeoffs.
!
"
Balance Obsession With Understanding Do the work to understand the type of company you're building and stay focused on executing. Come up for air to check the benchmarks annually or quarterly, not daily.
Use Benchmarks to Your Advantage Investors have varying appetites for risk and return. You can either tailor your performance to match ideal investors' benchmarks or define your scaling vision and seek those who align with it.
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Company Benchmark De fi nitions
Size & Growth
Financial
SaaS Value Drivers
Further Definitions for Understanding the Data Understanding quartiles provides important context for interpreting the benchmarks and comparisons throughout this report.
Employees: Number of full-time employees at the end of Q2 2025 Year-Over-Year Growth Rate: Change in ARR at the end of Q2 2025 vs. Q2 2024
Sales & Marketing Spend: Spending on sales and marketing, including headcount, as a percentage of ending ARR as of Q2 2025 R&D Spend: Spending on R&D, including headcount, as a percentage of ending ARR as of Q2 2025 Software Gross Margin: Subscription revenue less cost of goods sold divided by subscription revenue at the end of Q2 2025 Monthly Burn Rate: Net monthly operating cash burn rate at the end of Q2 2025 (total dollars lost each month, negative values equal cash flow positive)
CAC Payback: Months of subscription gross margin to recover the fully-loaded cost of acquiring a customer Gross Revenue Retention (GRR): Annual gross revenue retention (after churn, exclusive of upsells and expansion) seen in cohorts Net Revenue Retention (NRR): Annual net revenue retention (after churn, inclusive of upsells and expansion) seen in cohorts Rule of 40: Year-over-year ARR growth percentage plus last twelve months free cash flow margin or EBITDA margin
Upper Quartile Seventy-five percent of all data is below this point. Median The median marks the mid-point of all data.
Interquartile Range The middle 50% of all data falls within this range.
Lower Quartile Twenty-five percent of all data falls below this point.
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Financial & Operating Metrics by ARR for All Respondents
2025 SAAS BENCHMARKS DATA Company Performance Benchmarks Across Common Metrics
[-] Range [Lower Quartile – Upper Quartile]
" Median
!
Change From 2024
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
!
[-]
" !
[-]
" !
[-]
" !
[-]
" !
[-]
"
Size & Growth Employees
! 2
! 3
! 1
[100-223] ! 70 361
[263-729] ! 264
9
[5-12]
22 [15-35]
66 [48-92]
131
! 1% 30% [16-41%]
! 1%
Year-Over-Year Growth Rate
100% [29-300%]
-
50% [24-100%]
-
31% [15-72%]
-
16% [10-29%]
Financial
28% [20-50%] ! 4% 30% [20-50%] ! 4% 30% [22-53%] ! 5% 29% [24-34%] ! 11% 25% [20-40%] ! 14%
Sales & Marketing Spend
! 11% 38% [24-50%] ! 12% 31% [20-54%] ! 9% 32% [23-40%] ! 1% 30% [25-40%] -
R&D Spend
43% [23-76%]
74% [60-80%] ! 7% 77% [60-85%] ! 4% 80% [70-86%]
! 1% 79% [70-83%]
Software Gross Margin
-
78% [71-84%]
-
- $175k [$0-625k] ! $200k $50k [$0-625k] ! $575k $0K [$0-375k] -
Monthly Burn Rate
$50k [$50-175k]
-
$175k [$38-375k]
SaaS Value Drivers
! 1
! 3
CAC Payback (in Months) Gross Revenue Retention
5
[2-8]
- - -
8
[5-14]
-
14
[8-22]
-
20 [11-27]
17
[13-22]
! 3% 88% [82-95%] ! 2% 90% [85-95%] ! 4% 103% [95-115%] ! 2% 103% [98-110%]
88% [84-90%] ! 5% 101% [97-108%] ! 1%
92% [80-100%]
92% [83-95%]
- -
Net Revenue Retention
100% [78-116%]
104% [91-110%]
! 16% 33% [10-80%] ! 11% 20% [-3-35%] ! 2% 24% [11-41%]
! 1% 30% [15-38%] ! 6%
Rule of 40
46% [25-98%]
Source: 2025 SaaS Benchmarks Report by High Alpha
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Good vs. Great SaaS Metrics
2025 SAAS BENCHMARKS DATA “Good” Represents the Median, “Great” Represents the Upper Quartile
This guide is intended to help individuals assess where a company falls across five key SaaS metrics gathered in the 2025 SaaS Benchmarks Report. %
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
Good
Great
Good
Great
Good
Great
Good
Great
Good
Great
Growth
Year-Over-Year Growth Rate
100% 300% 50% 100% 31%
72% 30% 41%
16%
29%
Retention
Gross Revenue Retention
92% 100% 92% 95% 88% 95% 90% 95% 88% 90%
Net Revenue Retention
100% 116% 104% 110% 103% 115% 103% 110% 101% 108%
Efficiency
Software Gross Margin
74% 80% 77% 85% 80% 86% 78% 84% 79% 83%
ARR per Employee
$55,556 $100,000 $136,364 $200,000 $166,667 $220,588 $268,235 $350,000 $277,778 $396,635
Source: 2025 SaaS Benchmarks Report by High Alpha
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
AI-Driven Market Rebound ! IPO Window Reopening ! Public SaaS Companies Achieve Unprecedented Efficiency ! Venture Capital Deal Value Returns to 2021 Levels ! AI Investment Driving Venture Resurgence
! Upper Quartile Revenue Growth Rates Remain Steady ! Surprising Level of Consistency in Year-Over-Year Growth
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
IPO Window Reopening
US IPO ACTIVITY IPOs Continue to Grow With Q3 2025 Marking the Largest Quarter Since 2021
IPO Count Proceeds
Total Proceeds
Number of IPOs
Notable IPOs
$16B
70
! INSIGHTS
$14B
60
While companies are staying private longer than ever due to the massive amount of private capital available, Q3 2025 represented the largest IPO quarter since 2021. This is a promising development for the venture market overall as capital returned to limited partners could help fund the next wave of venture capital funds. Without this liquidity, it’s more difficult for venture capitalists to raise capital for additional funds.
$11B
50
$9B
40
$7B
30
$5B
20
$2B
10
Q3 Q4 Q1
Q2 Q3 Q4 Q1
Q2 Q3 Q4 Q1
Q2 Q3
2022
2023
2024
2025
Source: Renaissance Capital
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Public SaaS Companies Achieve Unprecedented E ffi ciency
PUBLIC SAAS ARR PER EMPLOYEE Top 20 Public SaaS Companies Generate Over $580k Per Employee
PUBLIC SAAS MEDIAN: $393K
! INSIGHTS
AppLovin Shopify Expensify Dropbox Palantir Twilio Paymentus Intuit Samsara The Trade Desk Adobe Waystar DigitalOcean Doximity Zoom Bill.com Axon DoubleVerify Palo Alto Networks RingCentral
$3,284,000
$1,323,000
Public SaaS leaders are delivering unprecedented productivity — median ARR per employee now exceeds $390k , up more than 10% year over year . The top 20 companies generate over $580k per employee , proof that efficiency isn’t a post-reset constraint but a competitive advantage. Founder Takeaway These public benchmarks redefine what “lean” looks like; for investors, they signal a new normal where durable growth and exceptional leverage coexist.
$1,244,000
$1,136,000
$964,000
$899,000
$820,000 $842,000 $842,000
$793,000
$760,000
$703,000 $723,000 $733,000
$631,000 $632,000 $652,000 $655,000 $657,000
$583,000
Source: Meritech
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Venture Capital Deal Value Returns to 2021 Levels
VC DEAL ACTIVITY Deal Count Has Remained Relatively Flat Despite Significant Increases to Deal Value
Deal Count (Actual) Deal Count (Actual + Estimated) Deal Value
Deal Value
Deal Count
$120B
6000
$100B
5000
$80B
4000
$60B
3000
! INSIGHTS
$40B
2000
Although venture deal value has significantly increased over the past four quarters, deal count has remained flat. This implies a different composition for deals over that period with a smaller number of mega deals driving an outsized share of the deal value.
$20B
1000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2018
2019
2020
2021
2022
2023
2024
2025
Source: Q3 2025 Pitchbook NVCA Venture Monitor
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
AI Investment Driving Venture Resurgence
AI VC DEAL ACTIVITY The Last Four Quarters Have Seen Outsized Investment in AI, Carrying the Venture Industry
AI Deal Count Total Deal Count Total Deal Value AI Deal Value
Deal Value
Deal Count
$120B
6000
$100B
5000
! INSIGHTS
AI continues to dominate venture capital activity, accounting for a disproportionate share of total deal value over the past year. Average deal sizes now exceed $40 million , illustrating the scale of conviction behind AI infrastructure, enablement, and application layers. This influx has lifted overall venture volumes. But beneath the surface, non-AI sectors are seeing flatter activity, underscoring how AI has become both the growth engine and gravitational center of venture markets.
$80B
4000
$60B
3000
2000
$40B
1000
$20B
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2018
2019
2020
2021
2022
2023
2024
2025
Source: Q3 2025 Pitchbook NVCA Venture Monitor
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2025 SaaS Benchmarks Report by High Alpha
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Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Upper Quartile Revenue Growth Rates Remain Steady
UPPER QUARTILE GROWTH RATES Excepting Growth Rates for Companies With Less Than $1M ARR, Which Have Completely Rebounded to 2021 Levels
Year-Over-Year Growth Rate
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
350%
300%
250%
143% Increase in revenue growth from 2023 for companies with less than $1 million ARR. Revenue growth the last three years for companies greater than $1 million ARR has settled into a tighter range, fluctuating 15% or less year-over- year.
200%
150%
100%
50%
Source: 2025 SaaS Benchmarks Report by High Alpha
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Surprising Level of Consistency in Year-Over-Year Growth
MEDIAN REVENUE GROWTH A Durable Baseline for SaaS Growth Rates Has Emerged
! INSIGHTS
Year-Over-Year Growth Rate
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
Median revenue growth held remarkably steady across all ARR bands in 2025. Early-stage companies maintained triple-digit growth, while mid- and later-stage growth stabilized in the low-30s and teens. After two years of recalibration, the data suggests SaaS has entered a “steady-state era” of disciplined yet durable growth.
120%
100%
80%
60%
40%
20%
Source: 2025 SaaS Benchmarks Report by High Alpha
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Growth & Efficiency ! Complete Shift in Last 10 Years to AI Centricity ! Embedding AI Deeply in Product Drives Outsized Growth ! Although Tradeoffs Exist, Growth Far Outweighs Lower Gross Margins ! Most Companies Have Launched AI Features, Fewer Have Monetized Them ! AI Monetization Experimentation Continues to Evolve ! Overall Pricing Model Has Outsized Impact on Growth and Retention ! Consumption & Outcome-Based Pricing Increases as Companies Scale
! ARR Per Employee Increases Significantly Above $20M ARR ! Upper Quartile ARR Per Employee Surges for Those Above $20M ARR ! Later-Stage Companies Are Operating With Leaner Teams ! Efficiency Gains Drive Cash Burn Down In Larger Companies ! Median Companies Fall Short of the Rule of 40 ! Early-Stage Fundraising Consistent With Prior Years
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Complete Shift in Last 10 Years to AI Centricity
AI PRODUCT INCORPORATION ChatGPT’s 2022 Launch Significantly Changed How Deeply Companies Incorporate AI in Their Products
AI Is a Supporting Feature AI Is Core to the Product
How Deeply AI Is Incorporated Into the Product
Percent of Respondents
100%
AI Is Core to the Product 36%
75%
! INSIGHTS
Of respondents whose companies were founded in 2016, none indicated that AI was core to their product. Fast forward ten years and that has completely flipped — AI is core to 100% of products for companies founded in 2025. The progression is clear and steady over the last decade towards an AI- driven product strategy.
50%
25%
64%
AI Is a Supporting Feature
Company Founding Year
Source: 2025 SaaS Benchmarks Report by High Alpha
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2025 SaaS Benchmarks Report by High Alpha
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Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Embedding AI Deeply in Product Drives Outsized Growth GROWTH RATE BASED ON HOW DEEPLY AI IS INCORPORATED INTO THE PRODUCT OFFERING SaaS Companies With AI at the Core of Their Products Are Growing Much Faster Than Those With AI as a Supporting Feature
AI Is a Supporting Feature AI Is Core to the Product
Year-Over-Year Growth Rate
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
! INSIGHTS
120%
SaaS companies with AI deeply incorporated into their products outperform peers across all ARR bands, growing twice as fast as those with AI as a supporting product feature. The performance gap is most significant in the $1-5 million ARR cohort, where AI differentiation drives 70% faster growth . The gap narrows with scale, but growth rates remain higher. Founder Takeaway Embedding AI deeply into your product isn’t just a technical choice, it’s a growth strategy.
100%
80%
60%
40%
20%
Source: 2025 SaaS Benchmarks Report by High Alpha
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Although Tradeo ff s Exist, Growth Far Outweighs Lower Gross Margins
PERFORMANCE WHEN AI IS CORE TO THE PRODUCT VS. SUPPORTING FEATURE Companies Where AI Is Core to the Product Are Scaling Rapidly, Signaling High Customer Demand Despite Heavier Infrastructure and Compute Costs
AI Is a Supporting Feature AI Is Core to the Product
Year-Over-Year Growth Rate
Software Gross Margin
Rule of 40
! INSIGHTS
300%
90%
60
Companies with AI at the core of their products are growing over three times faster than peers, but with roughly five points lower in median gross margin. The tradeoff highlights that AI-first products drive outsized growth and Rule of 40 performance, even as delivery costs rise. Surprisingly, median gross revenue retention and net revenue retention were identical between companies where AI is core to the product and those where AI is a supporting feature.
50
250%
85%
40
30
200%
80%
20
150%
75%
10
0
100%
70%
-10
-20
50%
65%
-30
Source: 2025 SaaS Benchmarks Report by High Alpha
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Most Companies Have Launched AI Features, Fewer Have Monetized Them
AI PRODUCT FEATURES AND MONETIZATION Majority of Companies Are Still Experimenting With How to Price AI Value
! INSIGHTS
Have launched AI features in their product 70%
AI Monetization
Developing AI features has become nearly universal among SaaS companies, but monetization remains early. While 70% have launched AI features , only 41% are generating revenue from them — and most are doing so through traditional subscription tiers. The next wave of SaaS differentiation will come from monetization innovation, as usage-based and hybrid models align price more closely with customer value. Founder Takeaway Founders who move fastest to connect AI outcomes to pricing
26% 33% 41%
Not Monetizing Testing Monetization Formally Monetizing
Have AI features on their product roadmap 22%
AI Pricing Method
53% 11% 31% 5%
Subscription Usage Based Hybrid (Subscription + Usage Based) Outcome Based
Not currently on roadmap or no plans to launch AI features 8%
could capture both margin expansion and market share.
Source: 2025 SaaS Benchmarks Report by High Alpha
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2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
AI Monetization Experimentation Continues to Evolve
AI PRICING MODELS There Are Now Myriad Pricing Options For AI Products With Companies Attempting to Tie Value Creation More Closely to Pricing
Chargeflow 25% per successful chargeback recovered
Salesforce $2 per conversation
OpenAI Per input/output token (GPT-5)
Casemark Per AI generated legal deliverable
OpenAI Pooled credit model for ChatGPT enterprise (New)
Salesforce Pay-per-action credit model (New)
AirHelp 35% success fee
Zapier Based on tasks automated
Flycode Only pay for revenue recovered above baseline
Intercom $0.99 per AI resolution (FinAI agent)
Clay Hybrid pricing with credits
Imagen Per AI photo edited
Decagon Option of per-resolution or per- conversation pricing
Unity Hybrid pricing with credits
Retool Based on AI agent hours
Aftershoot Unlimited photo edits
Relevance AI Hybrid pricing based on users and actions
DeepL Per user and number of characters translated
Sierra Per completed task
ElevenLabs Credit-based
Source: Growth Unhinged
25
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Overall Pricing Model Has Outsized Impact on Growth and Retention
PRIMARY PRICING MODEL BY PERFORMANCE METRICS Hybrid Pricing Models Are Delivering the Highest Retention While Outcome-Based Pricing Drives Strongest Growth
Year-Over-Year Growth Rate Net Revenue Retention
Year-Over-Year Growth Rate
Subscription Pricing
Consumption-Based Pricing
Outcome-Based Pricing
Hybrid Pricing (Subscription + Variable)
Net Revenue Retention
Variable Pricing Models
! INSIGHTS
70%
96% 97% 98% 99% 100% 101% 102% 103% 104% 105% 106%
Subscription pricing models have historically dominated SaaS pricing, but recently there’s been a shift to more variable pricing models like consumption and outcome-based pricing. These variable pricing models are helping drive faster growth among respondents. Hybrid pricing models show the strongest net revenue retention, likely because they provide the best combination of stability and stickiness in the subscription component while monetizing the value that comes from increased usage via the variable component.
60%
50%
40%
30%
20%
10%
Source: 2025 SaaS Benchmarks Report by High Alpha
26
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Consumption & Outcome-Based Pricing Increases as Companies Scale
COMPANIES INCLUDING CONSUMPTION & OUTCOME REVENUE IN ARR Larger Companies More Open to Pricing Based on Volume or Outcomes
Consumption & Outcome- Based Included in ARR Consumption & Outcome- Based NOT Included in ARR
Company Size by ARR
Percent of Companies Including Consumption and Outcome Revenue in Total ARR
Less Than $1M
27%
73%
! INSIGHTS
Larger SaaS companies are more likely to include consumption and outcome-based revenue in their ARR, with 40% of companies above $50 million ARR doing so, compared to just 20-27% of smaller peers. This reflects growing sophistication in pricing strategy and confidence in managing more dynamic revenue models. As companies scale, they are increasingly incorporating usage- based elements to better align value with customer outcomes — a trend signaling the continued evolution of SaaS monetization.
$1-5M
20%
80%
$5-20M
24%
76%
$20-50M
38%
62%
40%
60%
Greater Than $50M
Source: 2025 SaaS Benchmarks Report by High Alpha
27
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
ARR Per Employee Increases Signi fi cantly Above $20M ARR
ARR PER EMPLOYEE Median and Upper Quartile ARR Per Employee Improves Consistently as Companies Scale
! INSIGHTS
ARR Per Employee
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
As SaaS companies scale, operational leverage becomes a clear differentiator. Top-quartile performers above $50 million ARR generate nearly $400k per employee — almost double the efficiency of companies in the $5-20 million ARR range and on par with median public SaaS company efficiency. This reflects mature go-to-market models, optimized org structures, and automation that allows revenue to grow faster than headcount.
$400,000
$320,000
$240,000
$160,000
$80,000
Upper Quartile
$100,000 $55,556
$200,000 $136,364
$220,588 $166,667 $130,435
$350,000 $268,235 $157,362
$396,635 $277,778 $147,965
Median
Lower Quartile
$41,667
$85,714
Source: 2025 SaaS Benchmarks Report by High Alpha
28
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Upper Quartile ARR Per Employee Surges for Those Above $20M ARR
UPPER QUARTILE ARR PER EMPLOYEE Companies Less Than $20M ARR Show Substantial Improvement Over 2022, But Little Change Year Over Year
Upper quartile ARR per employee is nearly unchanged in bands less than $20 million ARR but later-stage businesses have improved efficiency dramatically year over year. ! INSIGHTS 50% Year-over-year increase in ARR per employee for companies with greater than $50 million ARR. Companies in the $20-50 million ARR band have improved ARR per employee by 42%.
ARR Per Employee
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
$50K $100K $150K $200K $250K $300K $350K $400K $450K
! 42%
Source: 2025 SaaS Benchmarks Report by High Alpha
29
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Later-Stage Companies Are Operating With Leaner Teams
MEDIAN EMPLOYEES BY ARR BAND After Years of Aggressive Hiring, Scaled SaaS Companies Are Proving Leaner Teams Are Sustainable
Companies beyond $5 million ARR have experienced a substantial decrease in employee count over the past four years. These changes make the businesses more resilient and efficient, requiring less outside capital to sustain operations. ! INSIGHTS
Median Employees
$5-20M ARR
Median Employees
$20-50M ARR
Median Employees
Greater Than $50M ARR
80 90 100
250
100 200 300 400 500 600 700 800 900 1,000
200
! 25%
! 42%
10 20 30 40 50 60 70
! 59%
150
100
50
Source: 2025 SaaS Benchmarks Report by High Alpha
30
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
E ffi ciency Gains Drive Cash Burn Down In Larger Companies
MONTHLY CASH BURN
Median Burn Has Fallen Sharply, With Later-Stage Companies Now Largely Break Even or Cash Flow Positive
! Change From 2024
Monthly Cash Burn
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
! INSIGHTS
Across all ARR bands, median burn has dropped to minimal or breakeven levels, especially beyond $20 million ARR, where most companies are now operating cash-neutral. This shift underscores a new phase of SaaS maturity: growth funded by operational efficiency rather than constant external capital. Founder Takeaway This marks a return to control — where efficiency, not fundraising cadence, determines longevity and optionality. Respondents provided a range for cash burn. Values are calculated based on the midpoint of reported ranges.
$700,000
$560,000
$420,000
$280,000
$140,000
$625,000 ! 50% $50,000 ! 92%
$375,000 ! 85%
$175,000 - $50,000 - $50,000 -
$375,000 - $175,000 -
$625,000 -
Upper Quartile
$175,000 ! 53%
Median
$0 - $0 -
$37,500 ! 25%
$0 ! 100%
Lower Quartile
$0 -
Source: 2025 SaaS Benchmarks Report by High Alpha
31
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Median Companies Fall Short of the Rule of 40
RULE OF 40 The Best Companies Continue to Operate Near the Rule of 40
! INSIGHTS
Rule of 40
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
Rule of 40 performance remained remarkably consistent with 2024, underscoring that the post-reset efficiency mindset has endured. Growth is still valued more highly than profitability, but each company should evaluate the tradeoffs to optimize its own mix between the two. For comparison, public SaaS companies have a median ARR growth of 15% and free cash flow of 18% for a 33% implied Rule of 40 .
-10 0 10 20 30 40 50 60 70 80 90
Upper Quartile
80 33
35 20
41
38 30
Rule of 40 calculated as year-over-year ARR growth plus last 12 months (LTM) free cash flow margin or EBITDA margin.
Median
24
Lower Quartile
10
-3
11
15
Source: 2025 SaaS Benchmarks Report by High Alpha
32
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Early-Stage Fundraising Consistent With Prior Years
TIMING OF MOST RECENT FUNDING ROUND Series C and Later Fundraises Show Material Shift as Two Thirds of Companies Have Not Raised Capital in Over Two Years
1-2 Years Ago Within the Last Year More Than 2 Years Ago
Investment Stage
Timing of Most Recent Funding Round
Seed
59%
25%
16%
Series A
44%
32%
25%
! INSIGHTS
Seed through Series B funding remained steady year over year, signaling a stable early-stage environment. In contrast, nearly 20% more Series C+ companies haven’t raised in more than two years — a 27% jump versus 2023 — as many approach cash-flow breakeven and choose to preserve optionality rather than raise new capital.
Series B
37%
24%
39%
Series C and Later
19%
16%
65%
Source: 2025 SaaS Benchmarks Report by High Alpha
33
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
SaaS Metrics & Trends ! Gross Revenue Retention Maintains Stable Pattern ! Net Revenue Retention Stays in Tight Range ! Net and Gross Revenue Retention Strong Growth Predictors ! CAC Payback Maintains Same Pattern As Prior Year ! Efficient Growth Lives at the Intersection of Retention and CAC
! Expansion ARR Becomes the Growth Engine at Scale ! Mid-Range ACVs Deliver the Best Blend of Growth & Retention ! Direct Sales Is Most Prevalent Go-To-Market Channel ! IRL FTW: Events Lead the Way ! Smaller SaaS Companies See Gross Margin Pressure
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Gross Revenue Retention Maintains Stable Pattern
MEDIAN GROSS REVENUE RETENTION Retaining 90% of Gross Revenue At Renewal Is the Norm Among All ARR Bands
! INSIGHTS
Gross Revenue Retention
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
Retention stability this year provides a clear target for companies at 90% across all ARR bands. Founder Takeaway Tactics to optimize gross revenue retention include: • Strengthen onboarding and early value delivery • Improve product adoption and engagement • Measure and manage customer health • Refine pricing and contract structure • Deepen relationships with decision-makers • Reduce product friction • Quantify and communicate ROI
78% 80% 82% 84% 86% 88% 90% 92% 94% 96%
Source: 2025 SaaS Benchmarks Report by High Alpha
35
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Net Revenue Retention Stays in Tight Range
NET REVENUE RETENTION The Strongest Companies Grow by 10%+ Year Over Year From Existing Customer Base
! INSIGHTS
Net Revenue Retention
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
Early-stage companies show the biggest spread (some breakouts, some churn) as they search for product market fit. Variability tightens after $1 million ARR as upsell and renewal strategies mature. Medians stay at or above 100% across all ARR bands. Founder Takeaway The best performers continue to pair strong gross retention with disciplined account expansion — often fueled by pricing strategy, multi- product adoption, and proactive customer success investments.
120%
110%
100%
90%
80%
70%
Upper Quartile
116% 100%
110% 104%
115% 103% 95%
110% 103% 98%
108% 101%
Median
Lower Quartile
78%
91%
97%
Source: 2025 SaaS Benchmarks Report by High Alpha
36
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
Net and Gross Revenue Retention Strong Growth Predictors
MEDIAN GROWTH RATE BY NRR & GRR High NRR and GRR Companies Grow Significantly Faster Than Low and Medium NRR and GRR Companies
! INSIGHTS
Median Growth Rate
Median Growth Rate
GRR Performance
NRR Performance
High gross revenue retention is likely a strong sign of product-market fit. Companies that have found product- market fit have extraordinarily sticky products, and strong growth follows. Low and medium net revenue retention and gross revenue retention are less predictive of strong growth rates as companies with medium GRR surprisingly have a lower median year-over-year growth rate than those with low GRR. 49% of companies with high gross revenue retention (GRR) also have high net revenue retention (NRR), and 47% of companies with high NRR also have high GRR, indicating a strong correlation between the two.
Low NRR (Less Than 98%)
Medium NRR (98%-106%)
High NRR (Greater Than 106%)
Low GRR (Less Than 85%)
Medium GRR (85%-93%)
High GRR (Greater Than 93%)
70%
70%
60%
60%
60%
54%
50%
50%
40%
40%
30%
30%
30%
30%
25%
20%
20%
20%
10%
10%
Source: 2025 SaaS Benchmarks Report by High Alpha
37
2025 SaaS Benchmarks Report by High Alpha
Contents
Introduction
Executive Summary
AI-Driven Market Rebound
Growth & Efficiency
SaaS Metrics & Trends
People
Founder Insights
Closing
CAC Payback Maintains Same Pattern As Prior Year
CAC PAYBACK PERIOD Companies in the $20-50M ARR Band Have Highest Payback Periods As Scaling Customer Acquisition Increases in Difficulty
! INSIGHTS
Payback Period in Months
Less Than $1M ARR
$1-5M ARR
$5-20M ARR
$20-50M ARR
Greater Than $50M ARR
The most efficient teams continue to recover CAC in 13 months or less across all ARR bands, proving that disciplined execution and strong retention can still drive sustainable growth despite rising acquisition costs.
31
26
21
16
11
As noted in prior years, early-stage companies are not always fully accounting for all expenses to acquire customers, which may artificially lower their CAC payback period. Examples of expenses frequently not allocated in early stages: founder salaries to sales and marketing efforts, support team costs in COGS, and customer success and onboarding costs.
6
Upper Quartile
8 5 2
14
22
27 20
22
Median
8 5
14
17 13
Lower Quartile
8
11
Source: 2025 SaaS Benchmarks Report by High Alpha
38
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