KeyBanc Capital Markets Inc., the corporate and investment banking unit of KeyCorp (NYSE:KEY), released results from its 17th annual AI x Software Benchmark on November 13, 2026, expanding its formerly named SaaS Survey to examine how artificial intelligence is reshaping product strategy, monetization, unit economics, and operating models across the private software industry.

Key Highlights

  • AI-native growth leads peers: Companies selling AI as their primary product reported median ARR growth of 34% in 2025, compared with 22% for embedded AI companies and 9% for companies still developing customer-facing AI.
  • Profitability gap: Core AI product companies reported a median EBITDA margin of (12%) in 2025, versus (1%) for embedded AI companies.
  • AI revenue projected to surge: AI-driven ARR is projected to grow 128% in 2026, up from 74% in 2025, yet is expected to represent only 12% of total ARR.
  • AI spend over budget: 44% of respondents report AI spend over budget year to date, with roughly 24% over by more than 20%; higher-than-expected token usage was the most cited driver.
  • Gross margin impact: Companies spending more than 5% of revenue on AI reported a median gross margin of 66% in 2025, compared with 78% for those spending less than 2%.
  • Development cycle compression: 92% of respondents report that AI is shortening product development cycles, and 91% deploy AI internally in engineering.
  • Workforce impact still limited but expected to grow: 65% of participants report no AI-related headcount reduction or reallocation in 2025, but that figure falls to 34% over the next 12 to 24 months.

KeyBanc AI x Software Benchmark: Detailed 2026 Survey Results

According to the filing, KeyBanc Capital Markets released the 17th edition of its annual benchmark on November 13, 2026, rebranded from the "SaaS Survey" to the "AI x Software Benchmark" to reflect the industry's growing focus on artificial intelligence. The benchmark measures financial and operating performance across private software companies, and this year's edition expanded its scope to cover AI product strategy, monetization trends, and workforce dynamics.

The filing reports that companies charging separately for AI products posted median ARR growth of 27% in 2025, versus 17% for those that do not, though the report notes that "growth advantage has not yet translated into higher net retention." Embedded AI companies led on productivity, with ARR per FTE reported at $201K, compared with $117K for core AI product companies. Overall median ARR growth was 24% in 2025 and is projected at 23% in 2026, with participants planning for a broad-based acceleration to 40% in 2027. Overall median EBITDA margin is expected to improve from (3%) in 2025 to 1% in 2026, according to the filing.

On workforce changes, the benchmark found that R&D (45%) and customer service (37%) are the functions most likely to be affected by AI-related headcount changes over the next 12 to 24 months. The filing also notes that 57% of respondents say their customers are building alternative products using AI coding tools, and only 20% of participants currently offer fully autonomous agents to their customers. The 2026 AI x Software Benchmark is described as available for download at key.com.

What Was Disclosed

KeyBanc Capital Markets released its 17th annual AI x Software Benchmark on November 13, 2026, covering AI-driven growth, profitability, spending, productivity, and workforce trends across private software companies, with data spanning 2025 actuals and 2026-2027 projections.