KeyBanc Capital Markets, the corporate and investment banking unit of KeyCorp in the United States, and Sapphire Ventures, a global software venture capital firm, released findings from their 16th annual Private Company SaaS Survey. The report benchmarks financial and operational performance across private SaaS companies and highlights trends in growth, profitability, and operational efficiency.

The survey shows that private SaaS companies are accelerating annual recurring revenue (ARR) growth, with projections rising from 15% in 2024 to 20% in 2025. Gross retention is expected to approach 90% following a decline to 86% in 2023, while net retention has remained above 100%, reflecting strong customer retention and recurring revenue stability.

AI adoption has emerged as a central factor, with the majority of companies increasing AI budgets, over 50% planning increases of more than 21%, and two-thirds already monetising AI, primarily through subscription-based models. Companies identify new products and services as the primary growth area for AI application, while workforce reductions are viewed as a minor factor.

Profitability metrics continue to improve, with EBITDA margins rising since 2022 and projected to breach the profitability threshold in 2026. Private SaaS companies are balancing growth acceleration with operational efficiency, shifting priorities from growth-at-all-costs strategies to disciplined profitability management.

The report highlights that AI implementation is moving from experimentation to execution, enabling companies to improve operational performance, revenue generation, and efficiency across financial and operational processes.

The survey findings provide benchmarks for operational performance and highlight AI as a significant driver of growth and efficiency in the private SaaS sector.

Access the full report on the Private Company SaaS Survey to review detailed performance metrics and AI adoption trends.