Introduction

SaaS revenue is climbing again as AI adoption fuels growth. Both B2B and B2C show strong rebounds after a shaky start to the year.

What's the problem it solves?

After a year of weak growth and market uncertainty, SaaS companies needed a clear sign of recovery. This report shows how AI integration, lower churn, and stable sales are driving that rebound - and what businesses can do to ride the wave.

Quick Summary

The Q2 2025 ProfitWell SaaS Market Report reveals a major turnaround for the industry. B2B SaaS hit record recurring revenue, with CAGR stabilizing at 10% for ten straight weeks - the highest since mid-2024. This was powered by strong new sales, reduced churn, and fewer downgrades. Tariff concerns eased, and early AI product wins began boosting both revenue and retention. If trends hold, B2B could reach new highs by year-end.

B2C SaaS also bounced back, reaching an all-time revenue peak despite the usual summer slowdown. Sales held steady early in the quarter before dipping, churn improved, and downgrades fell. The seasonal drop in consumer software spend was smaller than expected, suggesting AI-driven products are cushioning the decline.

The report highlights that both sectors are benefiting from AI not only in products but also in operations. Businesses adopting AI for internal processes, automation, and customer engagement are seeing early efficiency gains. With interest rate cuts likely and AI adoption accelerating, the second half of 2025 could deliver strong growth across the SaaS landscape.

Key Takeaways

• B2B CAGR stabilized at 10% for 10 weeks - best growth in a year
• Record B2B revenue driven by strong sales, lower churn, and fewer downgrades
• B2C hit all-time high MRR despite summer slowdown, drop smaller than usual
• AI integration is boosting both sales and retention across sectors
• Tariff fears eased, restoring market confidence
• Internal AI use cases (automation, onboarding, support) are gaining traction
• Interest rate cuts in Q3 could further boost SaaS growth

What to do

• Double down on AI product development and ensure sales teams can position it effectively
• Explore AI for internal operations to reduce costs and improve efficiency
• Monitor churn closely and invest in retention programs as growth accelerates
• Adjust sales strategies for seasonal patterns, especially in consumer markets
• For consumer apps, consider web checkout strategies to bypass high app store fees
• Partner with a Merchant of Record to simplify global payment compliance
• Track macroeconomic shifts (tariffs, interest rates) to time growth investments

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