      ICONIQ · 2025-09-03
      · 274d
    

ICONIQ Enterprise Five: Key Performance Indicators for Software Companies in 2025

ICONIQ presents the Enterprise Five framework—five core metrics for evaluating software company performance in an AI-transformed landscape. The analysis reveals that AI-native companies are scaling faster and more efficiently than traditional SaaS peers, while foundational metrics like ARR growth, net dollar retention, Rule of 40, net magic number, and ARR per FTE remain critical indicators of long-term success.

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Metrics in this report

AI Product Pricing Model Change Consideration

37%

planning rate

Companies building AI products considering pricing model changes within one year

Hybrid Pricing Model Adoption

38%

adoption rate

Software companies blending subscription and outcome-oriented pricing

Net Dollar Retention

110-120%

median

Software industry in 2025

Rule of 40 Target

40%

minimum

Combined YoY ARR Growth + FCF Margin for software companies

YoY ARR Growth - Top Quartile ($1-$10M ARR)

515%

p75

Early-stage software companies in 2025 (increased from 485% in 2024)