Users cancel annual subscriptions for AI-powered apps 30% faster than for non-AI apps
AI-powered mobile applications are growing rapidly, but a new industry report suggests they may face significant challenges in keeping users subscribed over time.
The findings come from the 2026 State of Subscription Apps report published by subscription management company RevenueCat, which analyzed more than 1 billion in-app transactions across iOS, Android, and web platforms.
The company’s tools are used by more than 75,000 developers and generate more than $11 billion in annual revenue for app makers.
According to the report, AI features can help apps attract paying customers, but they don’t necessarily guarantee long-term loyalty.
At the median level, users cancel annual subscriptions for AI-powered apps 30% faster than for non-AI apps.
According to data from RevenueCat, the annual retention rate (percentage of users who remain subscribed after one year) was 21.1% for AI apps, compared to 30.7% for apps without AI features. This gap also appears in short-term numbers. AI apps had a monthly retention rate of 6.1%, while non-AI apps had a monthly retention rate of 9.5%.
The only category where AI apps performed better was weekly retention, at 2.5% compared to 1.7% for non-AI apps. However, weekly subscription plans are relatively common among AI services.
Researchers say the rapid pace of AI development may partially explain this trend.
As new AI models and features emerge, users are likely to try out different apps, which the report suggests can lead to customers frequently switching between services in search of the latest features.
The report also found that AI-powered apps have higher refund rates than other subscription apps. At the median level, refunds accounted for 4.2% of purchases for AI apps compared to 3.5% for non-AI apps.
Strong early monetization
Despite these challenges, AI-powered apps appear to be particularly effective at converting new users into paying customers.
Trial users of AI apps converted to paid subscriptions 52% more often than users with non-AI apps.
Additionally, the average lifetime value for AI apps was $18.92 per paid user per month, compared to $13.59 for non-AI apps.
Overall, AI apps monetized downloads about 20% more effectively than traditional apps.
Despite the growing interest in AI, the majority of subscription apps are still not AI-driven. RevenueCat found that 27.1% of apps on the platform say they leverage AI, compared to 72.9% that don’t.
Recruitment status varies greatly by category. Among AI-powered services, photo and video apps have the highest share at 61.4%, while gaming apps have the lowest share at 6.2%.
Travel and business apps also show relatively low levels of AI integration.
The gap between the top apps and the rest is widening
The report also highlights the growing gap between the most successful subscription apps and the broader market.
A record number of new apps were released in 2025, thanks in part to AI-assisted development tools that lower barriers to entry.
The top 25% of apps increased their monthly recurring revenue by 80% year-over-year, while the top 10% increased it by 306%. Meanwhile, the proportion of new apps that reach $1,000 per month in recurring revenue declined from 19% in 2024 to 17% in 2025.
The proportion of households earning more than $10,000 per month also decreased from 5.3% to 4.6%.
Among the categories, photo and video apps are most likely to reach the $1,000 per month threshold, and gaming apps are most likely to exceed $10,000.
In contrast, developers face a tougher situation in areas such as education, productivity, travel, shopping, and business, where fewer new apps are economically successful.
