How The Top 25 B2B Public Companies Have Performed In 2025 So Far — And What They Tell Us About the Future

We analyzed every major public SaaS company’s YTD performance through just about the end of the first half of 2025. The results may change how you think about building software.

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TL;DR: The SaaS market has clearly bifurcated in 2025.

• AI-native + mission-critical = strong performance (Palantir +165%, ServiceNow +12%).
• Traditional horizontal SaaS faces big headwinds (Salesforce -18%, Asana -31%).

Here’s the full breakdown of 25 top public B2B / SaaS companies and what it means for your startup.

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The Scoreboard: All 25 Public SaaS Companies Ranked

I spent the weekend pulling YTD performance data for every significant public SaaS company. The results are more dramatic than I expected:

🏆 THE STRATOSPHERE (>20%)

1. Palantir: +165.2% ($330B market cap)
2. Cloudflare: +22.1% ($33B market cap)

📈 THE WINNERS (5-20%)

3. Veeva: +18.5% ($43B market cap)
4. Datadog: +15.4% ($47B market cap)
5. Monday.com: +14.6% ($15B market cap)
6. ServiceNow: +12.3% ($208B market cap)
7. Snowflake: +9.8% ($68B market cap)
8. CrowdStrike: +8.7% ($115B market cap)
9. ZoomInfo: +7.4% ($16B market cap)
10. Zscaler: +6.3% ($38B market cap)

🤷 THE SURVIVORS (0-5%)

11. HubSpot: +4.2% ($29B market cap)
12. GitLab: +3.7% ($9B market cap)
13. Atlassian: +1.8% ($54B market cap)

📉 THE WALKING WOUNDED (-5% to -15%)

14. Workday: -2.4% ($48B market cap)
15. Okta: -5.2% ($19B market cap)
16. Box: -6.8% ($4B market cap)
17. MongoDB: -8.1% ($23B market cap)
18. Shopify: -8.9% ($125B market cap)
19. Dropbox: -11.3% ($9B market cap)
20. Zoom: -12.4% ($24B market cap)

📉 THE CHALLENGED (-15%+)

21. Twilio: -15.7% ($12B market cap)
22. Salesforce: -18.2% ($267B market cap)
23. DocuSign: -22.8% ($15B market cap)
24. Fastly: -28.4% ($2B market cap)
25. Asana: -31.2% ($3B market cap)

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The Market Has Evolved.  Have You Fully Adjusted?

This isn’t cyclical. This is a market evolution. The B2B and SaaS market has clearly separated into two different value propositions:

1. Mission-critical AI platforms (strong performance)
2. Traditional productivity tools (facing headwinds)

Let us break it down category by category.

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Category Analysis: The New SaaS Hierarchy

Tier 1: AI + Government = Money Printer

Average Return: +165.2%

Palantir isn’t just winning—it’s playing a different game entirely.

• Q1 revenue growth: 39%
• US commercial: +68% growth
• Government contracts flowing like water
• NATO partnerships expanding

The insight: When you combine AI that actually works with government customers who have unlimited budgets, you get returns that break traditional SaaS metrics.

What this means for founders: If you can get security clearances and build something the Pentagon needs, you’re not in software anymore—you’re in the defense contractor business. And defense contractors don’t trade at 10x revenue.

Tier 2: Mission-Critical Infrastructure

Average Return: +12.5%

• ServiceNow (+12.3%)
• Datadog (+15.4%)
• Snowflake (+9.8%)

These companies have one thing in common: Enterprises literally cannot function without them.

• ServiceNow: Digital workflow automation (can’t be removed)
• Datadog: Infrastructure monitoring (downtime costs millions)
• Snowflake: Data warehousing (regulatory requirement)

The pattern: If your software breaking would cost your customer more than your annual contract, you’re in this tier.

Tier 3: Vertical Specialists

Average Return: +15.3%

• Veeva (+18.5%)
• ZoomInfo (+7.4%)

Veeva continues to prove the vertical SaaS thesis:

• Deep pharma/life sciences expertise
• Regulatory compliance built-in
• Switching costs approaching infinity
• AI integration that actually matters

The lesson: Horizontal is commoditized. Vertical with regulatory moats is gold.

Tier 4: Security (Mixed Results)

Average Return: +7.9%

• Cloudflare (+22.1%)
• CrowdStrike (+8.7%)
• Zscaler (+6.3%)
• Okta (-5.2%)

Why the dispersion?

• Edge security (Cloudflare) = essential and growing
• Endpoint security (CrowdStrike) = recession-proof
• Zero trust (Zscaler) = must-have architecture
• Identity management (Okta) = nice-to-have that’s getting commoditized

Tier 5: Post-Pandemic Normalization

Average Return: -15.5%

• Zoom (-12.4%)
• DocuSign (-22.8%)
• Asana (-31.2%)

The brutal reality: Companies that benefited from work-from-home are giving back all their gains.

• Zoom: Video calls are table stakes now
• DocuSign: E-signatures got commoditized
• Asana: Project management has 47 competitors

The insight: Pandemic beneficiaries weren’t building sustainable moats—they were riding a temporary wave.

Tier 6: Horizontal Platform Commoditization

Average Return: -12.1%

• Salesforce (-18.2%)
• Workday (-2.4%)
• Twilio (-15.7%)

This is the most shocking category. These are supposed to be the “safe” enterprise plays.

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The Three Forces Reshaping SaaS

1. The AI Separation

Companies are split into two camps:

• AI-native: Built from scratch with AI as core functionality
• AI-features: Bolted AI / ChatGPT onto existing workflows

AI-native or close examples:

• Palantir (data analysis that replaces entire teams)
• ServiceNow (workflow automation that eliminates manual processes)

AI-features examples:

• Salesforce (AI email subject lines)
• HubSpot (AI blog post suggestions)

The market has figured out the difference. AI-native companies are getting premium valuations. AI-features companies are getting commoditized.

2. The Government AI Arms Race

Every government agency suddenly has unlimited AI budgets.

Defense, intelligence, healthcare, education—they’re all spending like it’s 1999 on anything with “AI” in the name.

Why this matters:

• Government sales cycles are long but contracts are massive
• Security clearances create infinite moats
• Budget constraints don’t exist for “national security”

The opportunity: If you can build AI for regulated industries or government, you’re essentially guaranteed revenue growth.

3. The CFO Software Audit

Enterprise software budgets are getting scrutinized like never before.

CFOs are asking: “Do we actually need this?”

Surviving the audit:

• ✅ Mission-critical infrastructure (ServiceNow, Datadog)
• ✅ Regulatory compliance tools (Veeva)
• ✅ Security/risk management (CrowdStrike)
• ❌ Productivity tools (Asana, Notion)
• ❌ “Nice-to-have” features (most marketing tools)
• ❌ Duplicate functionality (anything Slack/Teams can do)

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What This Means for B2B Founders (By Stage)

If You’re Pre-Product (Idea Stage):

SOME IDEAS:

1. Pick a heavily regulated vertical (healthcare, finance, pharma, defense)
2. Build AI-native, not AI-features (replace workflows, don’t enhance them)
3. Consider government customers (seriously, the budgets are insane)
4. Focus on compliance/security from day one (it’s a feature, not a bug)

PERHAPS DON’T:

1. Build another project management tool
2. Add ChatGPT to existing workflows and call it innovation
3. Target generic “small businesses”
4. Compete with free/cheap alternatives

If You’re Early Stage ($0-$1M ARR):

The big decision: Vertical specialist or horizontal commodity?

Choose vertical if:

• You have domain expertise in a regulated industry
• You can build regulatory compliance into the product
• You’re willing to charge 3-5x more than horizontal competitors

Choose horizontal if:

• You have massive network effects (like Slack did)
• You can achieve 10x better performance than existing solutions
• You have infinite venture capital and can subsidize growth

My recommendation: Go vertical. The horizontal game is over unless you’re building the next TikTok.

If You’re Growth Stage ($1M-$10M ARR):

Time for brutal honesty: Are you building something enterprises cannot live without?

Signs you’re mission-critical:

• Customers would pay 2x your current price
• Outages at your company cause customer escalations
• You’re mentioned in customer board meetings
• Switching away from you requires board approval

Signs you’re nice-to-have:

• Customers negotiate price every renewal
• You compete primarily on features
• Sales cycles involve comparing 5+ vendors
• Customers ask for free pilots

If you’re nice-to-have, you have two options:

1. Pivot to mission-critical (usually means going deeper into a vertical)
2. Prepare for commoditization (compete on price, optimize for efficiency)

If You’re Late Stage ($10M+ ARR):

The market has spoken. You’re either:

1. Mission-critical infrastructure (ServiceNow, Datadog tier)
2. Vertical monopolist (Veeva tier)
3. AI-native platform (Palantir tier)
4. Getting commoditized (everyone else)

If you’re in category 4, you have 12-18 months to fix it before your next raise becomes impossible. It probably already is, in fact.

Fixing commoditization:

• Acquire vertical specialists in your category
• Build AI-native features that replace human workflows
• Move upmarket to enterprise customers who value mission-critical software
• Consider going private if public market multiples are compressing

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Predictions for H2 2025

More Palantir-Style Explosions

Defense tech is the new fintech. Expect 3-5 companies to go from unknown to $10B+ valuations based purely on government AI contracts.

Vertical Consolidation Wave

Horizontal platforms will acquire vertical specialists. Every major SaaS company needs domain expertise in regulated industries.

AI Revenue Separation

Companies will be forced to break out AI revenue separately. The market is getting smarter about AI washing vs. real AI business models.

The Great SaaS Shakeout

50% of public SaaS companies will either get acquired or go private. The middle market is disappearing.

Government B2B Gold Rush

Every B2B founder will suddenly discover a passion for defense/healthcare/education customers.  It’s already started.

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The Uncomfortable Truths

Truth #1: The AI Implementation Gap Is Real

There’s a meaningful difference between AI-native platforms and traditional software with AI features added on top.

AI-native companies:

• Replace entire job functions (Palantir replacing analysts)
• Enable impossible workflows (ServiceNow’s automation)
• Solve complex regulatory problems (Veeva’s compliance)

AI-enhanced companies:

• Add intelligent features to existing workflows
• Improve efficiency rather than transform processes
• Face more competition as AI capabilities democratize

Truth #2: Post-Pandemic Software Is Normalizing

Companies that benefited significantly from work-from-home trends are experiencing a natural normalization rather than permanent decline.

• Remote work has stabilized (no more explosive growth catalysts)
• Competition has increased (more solutions in market)
• Feature differentiation has narrowed (market maturity)

Truth #3: Vertical Specialization Shows Strong Returns

The data suggests vertical specialists are outperforming horizontal platforms in 2025.

Vertical specialists can:

• Charge 3-5x more (domain expertise premium)
• Build deeper moats (regulatory compliance)
• Serve smaller markets more profitably (focused go-to-market)

Truth #4: Government Is the New Enterprise

The biggest SaaS opportunities in the next 5 years are in government/defense, not traditional enterprise.

Why?

• Unlimited budgets for “AI” and “cybersecurity”
• Long contract terms (3-7 years)
• High switching costs (security clearances)
• Less price sensitivity

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Actionable Takeaways

For Current B2B Founders:

1. Audit your “mission-critical” score – Would customers pay 2x your price? If no, you’re in danger.
2. Evaluate vertical opportunities – Can you serve a regulated industry better than generalist competitors?
3. Consider government customers – The budgets are massive and growing.
4. Separate AI revenue – Investors will demand this soon anyway.

For B2B Investors:

1. Avoid most horizontal productivity tools – They’re getting commoditized rapidly.  Make sure they are true break-out winners.
2. Bet on vertical specialists – Especially in healthcare/pharma/defense.  Yes, we know.  Yes, it’s still true.
3. Look for AI-native, not AI-features – The market can tell the difference.  Everyone can.  Except those hiding.
4. Government exposure is a plus – Defense tech is trendy but still undervalued.

For Enterprise Buyers:

1. Your CFO is right to audit software spend – 50% of SaaS tools are redundant.
2. Focus budget on mission-critical infrastructure – Everything else can wait.
3. Vertical solutions usually beat horizontal – Domain expertise matters.

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The Bottom Line

2025 represents a significant evolution in SaaS.  And a revolution in the role of AI in SaaS.

The companies with strong performance are building solutions enterprises view as essential infrastructure. The companies facing challenges are often in more competitive, commoditized categories.

If you’re building B2B / SaaS in 2025:

• AI-native approaches over AI features
• Focus on mission-critical use cases
• Evaluate vertical specialization opportunities
• Explore regulated industries and government markets

The data shows clear patterns: Palantir’s exceptional performance demonstrates the potential when AI capabilities meet essential enterprise needs. But there are multiple paths to success across different SaaS categories.

The question isn’t whether your SaaS company will survive the market evolution.

The question is how you’ll adapt to the changing landscape.