Insights from RevenueCat’s 2025 State of Subscription Apps Report

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Apr 3, 2025

Jacob Eiting, Founder and CEO of RevenueCat, discusses profound insights from the 2025 State of Subscription Apps Report. He highlights the plummeting costs of app development, presenting opportunities for niche markets amid increasing competition. Retention rates are declining, emphasizing the need for top-notch product quality. Eiting also addresses AI's transient impact on growth and the importance of improving user onboarding experiences. Lastly, he shares anecdotes from his entrepreneurial journey, showcasing the critical elements of differentiation and innovation.

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INSIGHT

Retention Importance

Subscriber retention is the most important metric for consumer subscription apps.
Retention rates decline as app stores become more crowded, driven by product quality.

ADVICE

Improving Retention

Focus on radical changes to improve retention instead of incremental gains if you are in the middle of the pack.
Prioritize product quality and core loop design for natural stickiness.

INSIGHT

AI App Sustainability

AI apps have higher initial revenue but face sustainability challenges as the "tourist effect" fades.
Building a brand and providing real value are key for long-term success.

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Jacob Eiting is the founder and CEO of RevenueCat, the world’s largest SaaS platform for subscription apps that need help powering in-app purchases, managing customer data, and growing revenue across iOS, Android, and the web. Prior to founding RevenueCat in 2017, Jacob was the CTO of Elevate Labs, a consumer subscription business offering both brain training and meditation apps, and a software developer at multiple other companies, including Apple.

Key Takeaways:

The cost of building apps is falling exponentially. This is opening up opportunities for products in niches that were not previously viable, but that can now support profitable businesses. However, it’s also dramatically increasing competition.
Subscriber retention is the most important metric for consumer subscription apps, but retention rates continue to decline as the app stores become increasingly crowded. While there are tactics companies can use to improve retention on the margins, this metric is hard to move and is ultimately driven by product quality.
The rise of AI has created a “tourist effect” that is driving organic growth through viral word of mouth, but this will slow down eventually. To win in the long run, AI companies need to develop sustainable and repeatable growth strategies.
Given that 80% of trials occur on the same day an app is installed, optimizing the new user onboarding experience is one of the highest-leverage opportunities consumer subscription apps have to accelerate growth.
Consumer subscription apps are at a disadvantage vs. B2B SaaS businesses because most of them only monetize users through a single subscription tier. Recently, a lot of apps have begun testing lifetime subscriptions and/or one-time purchases to capture more consumer surplus and increase ARPU.

Jacob Eiting:

RevenueCat Website: https://www.revenuecat.com
2025 SOSA Report: https://www.revenuecat.com/state-of-subscription-apps-2025/
LinkedIn: https://www.linkedin.com/in/jeiting/
X: https://x.com/jeiting

Phil Carter:

Podcast Production by Podders: https://podders.io