We follow 81 publicly traded SaaS companies, of which 35 have had their Q4 earnings calls. We went through those calls and pulled all the quotes and comments regarding company performance to understand how healthy these SaaS companies are. Below are the key themes, and yes we absolutely dumped those quotes into Claude for this analysis.
Healthy, but bifurcated. There is a bifurcation between companies riding structural tailwinds like AI adoption, cloud migration, and upmarket expansion versus those managing slower-growth, mature businesses where profitability discipline has become the primary value-creation lever. The aggregate picture is one of an industry that has largely found its footing after the post-pandemic correction, with many companies reporting acceleration, record bookings, and improving margins simultaneously. That combination of growth and profitability together is the real story of Q4 2025.
Growth reflects the bifurcation. Growth rates across the cohort ranged dramatically, from the extraordinary to the merely solid. Palantir for instance had 70% year-over-year revenue growth in Q4, its highest-ever reported growth rate, while Atlassian crossed the $6 billion annual run rate threshold and delivered its first-ever $1 billion cloud revenue quarter. At the other end of the spectrum, companies like ZoomInfo (3% revenue growth), RingCentral (under 5%), and SimilarWeb (11%) reflected the reality that not every category of software is surging. The divergence is not a sign of sector weakness so much as sector maturation: high-growth platforms with strong AI narratives are being rewarded with premium multiples and customer enthusiasm, while steady-state businesses are competing on profitability, cash generation, and retention.
The cloud is still a thing. Cloud momentum was a consistent bright spot. Atlassian’s cloud revenue grew 26% year-over-year, and JFrog’s cloud revenue expanded 45% for the full year. DataDog posted 29% revenue growth with record bookings of $1.63 billion, up 37% year-over-year. Dynatrace, meanwhile, stabilized ARR growth at 16% and is on track for $2 billion in ARR by 2026. Across the cohort, cloud migration continues to be a reliable growth catalyst, and companies that have transitioned their revenue bases to cloud-native or cloud-delivered models are consistently outgrowing their on-premise or hybrid peers.
Moving upmarket. Selling larger deals to larger enterprises was perhaps the most consistent theme across earnings calls. Atlassian nearly doubled its million-dollar-plus ACV deals year-over-year. Procore grew its $1 million-plus ARR customer count by 34% and its $100K-plus cohort by 20%. JFrog’s greater-than-$1 million customers grew 42% year-over-year. Twilio saw large deals of $500K or more increase 36% year-over-year. Monday.com reported that customers with more than $50,000 in ARR now represent 41% of total ARR. The pattern is unmistakable: software companies are increasingly treating enterprise expansion as the primary growth engine, and the data suggests it is working. These are not companies struggling to grow. They are companies deliberately migrating their revenue mix toward stickier, larger, more strategic relationships.
Retention is stable at ~109% on average. Net revenue retention rates across the cohort paint a reassuring picture of customer health. Atlassian exceeded 120% NRR with three consecutive quarters of sequential improvement. Waystar delivered 112% NRR with 97% gross revenue retention. Doximity posted 112% NRR on a trailing twelve-month basis. Workiva’s gross retention hit 97%, exceeding its own 96% target. These are not the metrics of an industry losing customers to churn or budget cuts. They are the metrics of platforms that have become embedded in their customers’ workflows. Paylocity’s client retention rate has stayed above 92% for more than a decade, a figure that speaks as much to product quality as to switching costs. In a market where customer acquisition costs remain elevated, retention is the quiet engine of sustainable growth.
Where is AI? AI is finally showing up in current revenue. Five9 announced its enterprise AI annual run rate surpassed $100 million in Q4. Unity’s Vector product, its AI-powered advertising solution, grew 53% in its first three quarters and is on track for a $1 billion-plus annual run rate by end of 2026. Palantir’s extraordinary growth is almost entirely an AI story. Atlassian’s Jira Service Management reported enterprise growth over 60% year-over-year, accelerated in part by AI-driven workflow automation. Workiva and ServiceNow both cited AI-driven platform stickiness as a driver of upsell. ZoomInfo, in a telling data point about the competitive landscape, highlighted migrating a $30 billion global IT company to its Copilot product, consolidating fragmented contracts into a single enterprise agreement. The AI monetization debate that dominated 2024 earnings calls has given way to actual numbers in 2025.
Profitability is happening. The Rule of 40 was cited or achieved by multiple companies. Blackbaud hit the milestone two years ahead of schedule. ZoomInfo returned to Rule of 40 performance. Qualys delivered a 47% adjusted EBITDA margin for the full year. Doximity posted a 60% adjusted EBITDA margin in Q3. Twilio’s stock-based compensation as a percentage of revenue fell to 11.8%, down 200 basis points year-over-year and 10 full percentage points since 2021, a signal of some financial maturity. Procore grew free cash flow 69% year-over-year to $215 million for the full year. The market’s post-2022 repricing around profitability has clearly reshaped management incentives, and the results are coming through in the financial statements.
The bad. Not every story was straightforward. SimilarWeb missed revenue guidance due to the timing of two large LLM data training contracts that did not close by quarter-end, a reminder that AI-driven demand, while real, can be lumpy and unpredictable in its timing. Unity is managing a meaningful business mix shift, with its legacy ironSource ad network declining toward 6% of revenue as it bets heavily on Vector. RingCentral’s 5% subscription revenue growth is reflects a highly saturated market. Blackline’s 7.5% revenue growth illustrates the ceiling that some mature financial software categories face, even as the company delivers admirable free cash flow margins. These divergences are worth watching. They are early indicators of which platforms will define the next cycle and which will be consolidation targets.
What was Claude’s conclusion? “The overall verdict on Q4 2025 software earnings is cautiously enthusiastic. The industry navigated a complex macro environment between currency headwinds, enterprise budget scrutiny, and competitive intensity from AI-native entrants and emerged with its fundamental growth story intact. The companies that are winning are doing so by moving upmarket, embedding AI into their core products, converting customers to cloud, and demonstrating genuine profitability alongside growth. Guidance for 2026 across the cohort reflects continued confidence: ServiceNow expects 19.5%-20% subscription revenue growth; Procore is guiding for 13% growth with meaningful margin expansion; Shopify had its first-ever $3 billion revenue quarter and generated $2 billion in full-year free cash flow. The software sector is not without its pockets of pressure, but the leading indicators like RPO growth, NRR, enterprise deal velocity, and AI revenue conversion suggest the best companies are entering 2026 with genuine momentum.”
We will update this post as more companies report their earnings and do their quarterly calls.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com.