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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