AI-powered apps struggle with long-term retention, new report shows
With the top app stores flooded with AI apps, developers may think the best way to turn a profit is to integrate artificial intelligence technology into their own products. However, a new study focused on the ecosystem of subscription apps across iOS, Android, and the web calls this assumption into question.
IncomeCata company that offers subscription management tools used by more than 75,000 app developers, says in its report Subscription Status Apps Report 2026 that AI integration does not guarantee long-term retention. Instead, AI-powered apps struggle to retain subscribers, with people canceling their annual subscriptions – a metric known as churn – 30% faster than non-AI apps, according to the report.
The report is based on an analysis of the subscription app providers that use RevenueCat’s tools to manage their more than 1 billion in-app transactions, helping developers generate more than $11 billion in revenue annually. As one of the more popular tools in this field, the data represents a healthy sample in terms of trend analysis.
Among many interesting findings, the report noted that most apps using the company’s platform are not yet AI-powered. AI-powered apps account for 27.1% of apps across all categories, compared to 72.9% for non-AI apps. Still, it’s a growing category, with about one in four apps now powered by AI.
(To be clear, the AI-powered apps category includes the popular AI chatbots, such as ChatGPT and Gemini, as well as any app that markets itself as being AI-powered.)
Photo and video apps have the largest share (61.4%) of AI-powered apps, while gaming has the smallest share at 6.2%. Travel (12.3%) and business travel (19.1%) are also low AI segments.
The more surprising numbers concern the ability of AI apps to retain their paying customers. AI apps perform worse in terms of retention, both on a monthly and annual basis, according to RevenueCat data.
Annual retention, a metric focused on the app’s ability to retain subscribers after twelve months, was 21.1% for AI apps, compared to a higher 30.7% for non-AI apps. Monthly, AI apps had a retention rate of 6.1% versus 9.5% for non-AIs – a difference of 3.4 percentage points.
The only area where AI led in retention was on the weekly front, where AI apps achieved a 2.5% retention rate, compared to 1.7% for non-AI apps. It’s worth noting that weekly subscriptions aren’t the most popular option for AI apps.
These statistics may be affected by the rapidly changing state of AI technology, which can leave users jumping between different AI apps more quickly as they try to find the app that has the most up-to-date technology under the hood.
As customers experiment with a growing number of AI apps, it’s also more likely that some won’t meet their needs. The report notes that AI apps have 20% higher refund rates (4.2% vs. 3.5% at median) than non-AI apps.
The upper limit of reimbursement rates for AI apps is also higher (15.6% vs. 12.5%), suggesting there is “greater volatility in realized revenue and deeper issues in long-term user value, experience and quality,” the report said.
There are some benefits to joining the cohort of AI-powered apps, the data shows.
RevenueCat found that AI apps convert trial users to paid customers 52% better than non-AI apps (8.5% vs. 5.6% at median), and AI apps generate approximately 20% more revenue from their downloads than non-AI apps (2.4% to 2% at median).
AI apps also generate a monthly realized lifetime value (RLTV) of 39% or more, a metric that measures the true net worth of an average paying user over time. The median of AI apps on this metric is $18.92 per month, compared to $13.59 for non-AI apps. AI apps also have an annualized RLTV of 41% or higher, at $30.16 versus $21.37, also at the median.
The overall takeaway from the report’s findings is that AI can generate strong early revenue, but these apps struggle to maintain their value with customers over time.
