State of usage-based pricing
Introduction
SaaS pricing models are often purposely opaque, making it difficult for businesses to understand how to price their own products and benchmark themselves against the broader industry. Companies frequently struggle to determine how pervasive new pricing models are and how the most innovative companies are pricing. There’s a lot of talk in the market about usage-based pricing (UBP), but who is actually implementing it? And why?
Together with our investor, Greyhound Capital, we surveyed 100 SaaS companies to get a deeper understanding of both if and why businesses are implementing usage-based pricing. We combined the results with market data and our own internal data to give you a snapshot of what’s actually happening with usage-based pricing and why the momentum continues to build.
By the numbers
of surveyed software companies have adopted UBP*
*Data from a January, 2025, survey conducted by Metronome and Greyhound Capital of 100 SaaS companies.
of the largest software companies have some level of UBP
of Forbes’ next billion-dollar startups offer UBP
Who is using usage-based pricing?
Usage-based pricing isn’t exclusive to market leaders with large enterprise customers—it’s being adopted across the board, from large, established businesses to the nimblest startups, driven by the need for more dynamic pricing that reflects and aligns to customer value.
Our survey found that 85% of respondents either already had UBP. Their businesses were in all categories of SaaS (application, vertical, infrastructure) and across businesses ranging in size from <$20M ARR to >$100M ARR.
Large companies shift toward UBP
Established software leaders have broadly adopted UBP. This trend highlights a strategic pivot by enterprises to align revenue growth directly with customer value. With 77% of the largest software companies incorporating consumption-based pricing into their revenue models, UBP is no longer an emerging strategy, but a mainstream business model validated by enterprise companies.
Flexible UBP models align customer spending with actual value received.
UBP unlocks expansion within existing accounts and increases recurring revenue.
Tying pricing to usage helps optimize internal resources and improve profitability by scaling costs with customer consumption
Startups embrace a usage-first approach
Early- and growth-stage startups are also rapidly adopting UBP, with 64% of Forbes’ Next Billion-Dollar Startups leveraging this model. For these companies, UBP is a critical growth lever, offering both flexibility and scalability as they capture market share. By adopting consumption-based pricing, startups can attract a broader range of customers through low entry barriers and can later scale revenue as customers grow and consume more.
Many of the startups leading this charge are in AI, fintech, and infrastructure—sectors where demand and product consumption can be highly dynamic. For these startups, adopting usage-based models isn’t just about pricing—it’s a strategic choice that supports product-led growth and fosters long-term customer relationships.
No - 36%
Yes - 64%
Market acceleration
Usage-based pricing continues to rise—our survey reported that 78% of companies with UBP adopted it within the last five years.
What's behind the rapid adoption? Historically, the seats-based pricing model dominated SaaS, but a few key industry shifts have accelerated UBP adoption.
The cloud era: The move to the cloud in the early-to-mid 2000s laid the groundwork for dynamic consumption models.
The rise of AI: AI and AI-powered products have intensified the need for flexible pricing models to match variable usage patterns and underlying infrastructure and computational costs.
Recent momentum: Nearly 50% of companies that adopted UBP did so in the last two years, indicating a snowball effect as the model proves its value.
Has your company used a UBP model since its inception?
When did your company first adopt a UBP model?
“We have per-user products which are for humans. And we have consumption products, they are for agents and robots.”
Marc Benoiff | CEO, Salesforce
“Given the new costs associated with generative AI content creation, we are making pricing updates.”
Shantanu Narayen | CEO, Adobe
Benefits and complexities
While adoption is increasing, adding UBP is something to tackle with eyes wide open. There are clear upsides to introducing consumption-based pricing, and those benefits come with complexities that need to be thoughtfully considered.
Usage-based pricing has a positive impact on companies growth, retention & profitibility
Key benefits
Revenue growth: Customers only pay for what they use, increasing satisfaction and trust.
Upsell opportunities: Usage naturally grows as customers see more value, leading to higher revenue per account.
Customer acquisition: Lower initial costs for customers help attract more users.
Top three challenges in implementing a UBP model
Key challenges
Real-time tracking: Accurate monitoring of usage in real time is critical, but operationally challenging.
Complexity in billing processes: Ensuring timely billing and managing downstream accounting workflows can strain internal teams without proper systems in place.
Pricing optimization: Determining the right metrics and pricing tiers requires deep product and customer knowledge.
Usage-based pricing creates a ton of top-line opportunities both for acquiring new customers and expanding existing accounts; however, that doesn’t mean it’s without drawbacks. It can be challenging to determine the right prices for products, track how much customers are using the product in real time, and bill customers accurately. Implementing UBP successfully is no small feat.
Conclusion
At Metronome, we help the fastest-growing and largest companies manage their billing, enabling them to launch products and iterate pricing faster, give customers better control over spending, and drive strategic decisions with real-time insights. We’ve processed billions in revenue for our customers and saw an 8x YoY increase in revenue processed in 2024 alone, highlighting the continued growth and adoption of usage-based pricing in SaaS.
Usage-based billings processed in 2024
Webinar
Sam Lee
VP of Pricing Strategy and Product Operation | HubSpot
Transitioning to usage-based pricing
Curious to learn more? We’re hosting a live webinar on March 27th at 10am PT. Join Sam Lee, VP of Pricing Strategy at HubSpot and former pricing leader at Snowflake, as he shares insights on when and how to adopt usage-based pricing. Learn how to navigate pricing transitions, balance hybrid models, and evolve your pricing strategy.