16^th annual report from KeyBanc Capital Markets and Sapphire Ventures highlights growth acceleration and a continued focus on profitability

SAN FRANCISCO and MENLO PARK, Calif., Nov. 13, 2025 /PRNewswire/ -- KeyBanc Capital Markets (KBCM), the corporate and investment banking unit of KeyCorp, in partnership with Sapphire Ventures, a global software venture capital firm backing companies of consequence, released results from its 16^th annual Private Company SaaS Survey, the benchmarking report by which the software as a service (SaaS) industry measures financial and operating performance.

This year's survey reveals renewed growth acceleration, after two years of consistent declines, and a sustained focus on profitability for private SaaS companies-a defining theme throughout the report. The findings demonstrate that private SaaS companies have successfully balanced operational efficiency with renewed growth initiatives, with artificial intelligence (AI) adoption serving as a key catalyst for performance improvements and competitive differentiation.

"The past year has demonstrated that private SaaS companies have successfully navigated the transition from pure cost savings mode to balanced growth and profitability mode," says Scott Peterson, Managing Director, Software Investment Banking at KeyBanc Capital Markets. "AI adoption has emerged as a true differentiator, enabling companies to drive productivity gains while simultaneously pursuing ambitious growth targets. We're encouraged to see strong fundamentals across the sector going into the back half of 2025 and looking ahead to 2026."

"Private SaaS companies are proving that disciplined growth and innovation can coexist," said Steve Abbott, Partner at Sapphire Ventures. "AI is moving from experimentation to execution, driving measurable efficiency and revenue gains. The companies taking a pragmatic approach to AI adoption are best positioning themselves for sustained performance."

TOP TRENDS AND INSIGHTS:

Annual recurring revenue (ARR) growth shows resilience with strong retention metrics.

• YoY ARR growth is expected to accelerate from 15% in 2024 to 20% in 2025 for the first time in the last three years, a very positive sign for the industry as a whole.
• Gross Retention is expected to approach the 90% threshold in the near term after declining to 86% in 2023, while net retention has continued to remain above 100% through the same period and is expected to show some modest improvement in the near term.

Companies go all-in on AI: Universal budget increases, subscription models dominate.

• The vast majority of companies plan to increase their AI spend, with more than 50% planning to do so by more than 21%. None plan to decrease spend.
• More than two-thirds (67%) of companies are already monetizing AI, with companies tending to favor a subscription model over usage-based and hybrid models.
• New products and services (77%) are seen as the largest areas of opportunity in AI while, surprisingly, workforce reductions are viewed as the area of least opportunity.

Profitability improvements continue as companies seek efficiency and achieve operational maturity.

• Profitability metrics saw a significant improvement in 2023 and have steadily grown as companies continue to shift their priorities from a growth-at-all-costs strategy to one of balanced growth and profitability.
• EBITDA margins have continued to improve since 2022 and are expected to breach the threshold of profitability in 2026 as both executives and investors have view this as a key imperative over the past few years.

About KeyBanc Capital Markets
KeyBanc Capital Markets is a leading corporate and investment bank providing capital markets and advisory solutions to dynamic companies capitalizing on opportunities in changing industries. Our deep industry expertise, broad capabilities and unique ideas are seamlessly delivered to companies across the Consumer & Retail, Diversified Industries, Financial Services, Healthcare, Industrial, Oil & Gas, Real Estate, Utilities, Power & Renewables, and Technology verticals. With more than 800 professionals across a national platform, KeyBanc Capital Markets has raised more than $125 billion of capital over the last twelve months for its their clients and has an award-winning equity research team that provides coverage on over 500 publicly traded companies.

KeyBanc Capital Markets is a trade name under which the corporate and investment banking products and services of KeyCorp® and its subsidiaries, KeyBanc Capital Markets Inc., Member FINRA/SIPC ("KBCM"), and KeyBank National Association ("KeyBank N.A."), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives. Banking products and services are offered by KeyBank N.A. Securities products and services: Not FDIC Insured o No Bank Guarantee o May Lose Value

About KeyCorp
KeyCorp's (NYSE: KEY) roots trace back 200 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $187 billion at September 30, 2025. Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,200 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.

About Sapphire
Sapphire is a global software venture capital firm with over $11 billion in AUM⁽¹⁾ and team members across Austin, London, Menlo Park and San Francisco. For more than two decades, Sapphire has partnered with visionary management teams and venture funds to back companies of consequence. Since its founding, Sapphire has invested in more than 170⁽²⁾ companies globally resulting in more than 30 Public Listings and 50 acquisitions⁽³⁾. The firm's investment strategies - Sapphire Ventures and Sapphire Partners - are focused on scaling companies and venture funds, elevating them to become category leaders. Sapphire's Portfolio Growth team of experienced operators delivers a strategic blend of value-add services, tools and resources designed to support portfolio company leaders as they scale.

Notes: (1)AUM (Assets Under Management) represents Sapphire's Regulatory Assets Under Management as of 12/31/2025 per ADV filed March 2025 as well as any new commitments made to managed Funds through calendar year 2025; (2)Figures represent all Sapphire direct growth investments made since the firm's inception in January 2011 through September 2025.(3)Figures represent all Sapphire direct growth investments that have had an IPO or public listing from the firm's inception in January 2011 thru September 2025.

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SOURCE KeyCorp