ON24, Inc. (ONTF): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at ON24, Inc. (ONTF) right now, trying to map out whether its pivot to AI and enterprise focus is enough to win in this crowded B2B engagement space. Honestly, the competitive landscape is fierce; while the company is holding a solid expected gross margin of 76% to 77% for 2025, suggesting some supplier control, the threat from substitutes like Zoom and the leverage held by big enterprise customers-especially given the Q3 2025 ARR dip to $124.5 million-presents real near-term risk against that projected $139.2 million FY2025 revenue. Let's break down Porter's Five Forces to see exactly where the pressure points are for ON24, Inc. as we head into 2026.

ON24, Inc. (ONTF) - Porter's Five Forces: Bargaining power of suppliers

When you look at the bargaining power of suppliers for ON24, Inc. (ONTF), you're really looking at the cost structure of delivering a cloud-based intelligent engagement platform. Honestly, the high expected gross margin for 2025 suggests that, overall, ON24, Inc. (ONTF) has managed to keep its direct input costs in check, which naturally limits the leverage of most of its suppliers.

ON24's high expected gross margin of 76% to 77% for the full year 2025 is a key indicator here. This strong margin profile means that the cost of delivering the service-which includes infrastructure and other direct costs-is relatively low compared to the revenue it generates. For context, the Q3 2025 gross margin was reported at 76%, which is consistent with the full-year expectation.

The main inputs for ON24, Inc. (ONTF) are not highly specialized, proprietary components from a few niche vendors. Instead, the core operational inputs are commoditized cloud services and internal research and development (R&D) efforts, particularly around AI. This reliance on more standardized services generally keeps supplier power in check, though scale matters.

Core cloud infrastructure providers, which for a platform like ON24, Inc. (ONTF) would typically include giants like Amazon Web Services (AWS) or Microsoft Azure, definitely hold significant power due to their scale and essential nature. However, ON24, Inc. (ONTF) is diversified in its customer base and product offerings, which provides some insulation. Plus, the company is actively using internal efficiencies to offset rising operational costs.

Here's a quick look at the financial context that frames this dynamic:

The demand for specialized AI and software engineering talent is certainly a high-cost, high-demand input right now. You see this pressure across the tech sector. If ON24, Inc. (ONTF) had to rely heavily on external specialized consulting firms for core platform development, supplier power would be much higher. But, by focusing on internal R&D and leveraging AI to increase efficiency in other areas, like the reported $10 million quarterly reduction in Sales & Marketing expenses since 2022, they are managing that talent cost pressure indirectly. The fact that nearly one in five customers are already paying for AI offerings shows they are successfully building and monetizing this internal capability.

The key takeaway for you is that while the hyperscalers (cloud providers) have structural power, ON24, Inc. (ONTF)'s high gross margin and internal focus on efficiency-especially through AI adoption-means that the bargaining power of its other specialized suppliers is likely low to moderate. They are not overly dependent on a handful of niche component vendors for their core offering.

ON24, Inc. (ONTF) - Porter's Five Forces: Bargaining power of customers

You're analyzing ON24, Inc. (ONTF) and the customer side of the equation shows clear leverage points, especially with your largest clients. Large enterprise customers, particularly in regulated sectors, hold significant volume power. As of late 2025, ON24 reports serving 3 of the 6 largest global pharmaceutical companies. This concentration in high-value verticals means losing a major account hurts more than the pure revenue number suggests. To be fair, the life sciences vertical specifically saw 'softness in new growth bookings' during Q3 2025, which is a direct signal of customer negotiation pressure or churn risk in that segment.

The threat from alternatives is real, though perhaps not always a direct feature-for-feature replacement. While you see general mentions of platforms like Microsoft in the broader digital engagement landscape, the real pressure comes from the customer's existing technology stack. If a customer views ON24, Inc. (ONTF)'s offering as just one piece of a larger B2B marketing and sales ecosystem, they have more options to consolidate or switch to a more generalized tool. Still, the company is making strides to lock in its base; the percentage of its Total Annual Recurring Revenue (ARR) in multi-year contracts was the highest ever at the end of Q3 2025.

The financial data from the third quarter of 2025 definitely highlights near-term customer churn risk, even amidst operational improvements. The Total ARR for ON24, Inc. (ONTF) declined to $124.5 million as of September 30, 2025, missing analyst estimates of $126 million. This miss was attributed partly to deal slippage in Q3, though management noted many of those deals closed in Q4. That slippage is a direct indicator of customers exercising their power to delay commitments.

Here's a quick look at the key customer-related financial metrics from Q3 2025:

Switching costs are moderate once the platform is fully embedded into a B2B sales stack. The fact that the percentage of ARR in multi-year contracts was the highest ever at the end of Q3 suggests that when customers commit long-term, the friction to leave increases significantly. Also, the high adoption of multiple products-with nearly one in five customers now paying for AI offerings-creates internal dependencies. If a customer has integrated ON24, Inc. (ONTF) data feeds into their CRM or other systems, the non-monetary costs of retraining staff and disrupting data flow become substantial barriers to switching. What this estimate hides is the political risk a champion takes when advocating for a major platform change, which can be a bigger deterrent than the technical lift.

Finance: draft 13-week cash view by Friday.

ON24, Inc. (ONTF) - Porter's Five Forces: Competitive rivalry

You're looking at the competitive landscape for ON24, Inc. (ONTF) as of late 2025, and the rivalry force is definitely applying pressure. The market for digital engagement platforms isn't exactly wide open; it's crowded with specialized peers and large generalists vying for the same marketing and sales budget dollars.

The intensity of this rivalry is evident when you look at the revenue trajectory. The market feels mature, which pressures ON24's top line. The company raised its full-year 2025 revenue guidance to a range of $138.6 million to $139.2 million. To put that in context, the Q3 2025 total revenue was $34.6 million, representing a 4.7% decrease compared to the $36.3 million reported in Q3 2024.

Differentiation is key, but it requires heavy investment. ON24, Inc. is positioning itself as an AI-powered engagement platform, which means the R&D spend to keep up with innovations like AI-generated content-which saw audience engagement soar by more than 7X in 2024-is a growing fixed cost you need to factor in. This spend is happening while the company is still focused on turning around revenue growth; Total ARR stood at $124.5 million as of September 30, 2025.

Price competition is high because the basic webinar feature set has become commoditized. While ON24, Inc. offers deep engagement tools, it is noted as one of the pricier options. You see this contrast clearly when comparing it to large generalists like Zoom Events and Webinars, which are great for basic webinars but lack the same level of customization and engagement features.

Here's a quick look at the financial context surrounding this rivalry as of the latest reported figures:

The competitive set includes both specialized and broad-market players, forcing ON24, Inc. to constantly justify its premium positioning through advanced features and data. You need to track how effectively the AI investments translate into retention and new logo wins against these alternatives.

Key competitors driving this rivalry include:

• Specialized Peers: Kaltura, Communique Webinars, Goldcast.
• Large Generalists: Zoom Events and Webinars, Microsoft Teams Webinars.
• Other Major Platforms: Cvent, Adobe Connect, GoToWebinar.
• Browser-First Alternative: Livestorm.

Finance: draft the impact of a 5% price erosion on the $139.2 million revenue guidance by next Tuesday.

ON24, Inc. (ONTF) - Porter's Five Forces: Threat of substitutes

You're looking at the competitive landscape for ON24, Inc. (ONTF) as of late 2025, and the threat from substitutes is definitely real. These alternatives don't always look like direct competitors; sometimes they are just easier, cheaper ways for your customers to achieve a fraction of what ON24 offers. It's about the path of least resistance for a marketing budget.

Simple video conferencing tools like Zoom and Google Meet present an easy, low-cost substitute for basic events. While ON24, Inc. (ONTF) focuses on an intelligent engagement platform capturing deep first-party data, a basic webinar or meeting can often be run on a platform that already has wide adoption. The global video conferencing market generated $14.2 billion in revenue in 2024, with business platforms accounting for 61% of that total. To be fair, ON24, Inc. (ONTF) is fighting for the high-value engagement segment, but the sheer scale of these substitutes is a constant pressure point.

Here's a quick look at the market presence and cost structure of these common substitutes:

The return to in-person events post-pandemic remains a major market substitute, pulling budget and focus away from purely digital solutions. While the virtual events market is projected to hit $236.7 billion in 2025, the reality is that in-person gatherings still command the lion's share of event revenue. Data suggests that in-person events still account for 60% of total event revenue shares, compared to 35% for virtual events. Also, 83% of 2025 meetings are still expected to have an in-person component, showing that face-to-face interaction hasn't been fully replaced. If onboarding takes 14+ days, churn risk rises, but if a major industry conference goes back to being fully physical, that's budget lost for the year.

Social media and professional networking sites, like the new LinkedIn alliance, can bypass the dedicated platform. ON24, Inc. (ONTF) is actively addressing this by partnering with LinkedIn for frictionless registration and promotion, which is a smart move to integrate rather than ignore. Still, the ability for marketing teams to drive awareness and registration directly through established social channels reduces the perceived necessity of a standalone engagement hub for top-of-funnel activities. This is a battle for the initial click, not just the engagement quality.

Finally, in-house content management systems and marketing automation platforms can replace the engagement hub function, especially for organizations prioritizing platform consolidation. While ON24, Inc. (ONTF) is driving deep engagement metrics, some marketing departments might opt to build out rudimentary content experiences within their existing MarTech stack. The fact that nearly one in five ON24, Inc. (ONTF) customers are now paying for its AI offerings, a number increasing every quarter, suggests that the value proposition must be significantly more advanced than what a standard marketing automation platform can offer out-of-the-box to justify the spend over an internal build.

Finance: draft 13-week cash view by Friday.

ON24, Inc. (ONTF) - Porter's Five Forces: Threat of new entrants

You're looking at a market where the entry barrier isn't a single wall, but a series of increasingly high gates, especially if you aim for the high-value enterprise segment where ON24, Inc. thrives. The threat of new entrants is significantly moderated by the complexity and capital required to replicate ON24's current offering.

The barrier for basic webinar tools is low, but high for an enterprise-grade platform. While the global webinar software platform market is estimated at $2.5 billion in 2025, suggesting many players exist at the lower end, ON24's dominance in the top tier is clear. ON24, Inc. was ranked the #1 Enterprise Webinar Platform in the G2 Spring 2025 and Fall 2025 Reports. Achieving this required a 98 satisfaction score and a 96 market presence score in Spring 2025, which new entrants cannot achieve overnight. Simpler platforms often lack the necessary depth; for instance, some competitors are noted for lacking the deep customization and analytics that ON24, Inc. provides.

New entrants need significant capital to compete with ON24's AI-driven analytics and data moat. ON24 has successfully integrated advanced features, with nearly one in five customers now paying for its AI-powered solutions. Developing and maintaining this level of AI software is inherently expensive, as AI software is noted as being expensive to develop and maintain due to high computational needs. To build a comparable, full-fledged SaaS platform, a new company might spend more than $500,000 on initial development, with complex applications costing $220,000 to over $400,000. Competing against ON24, Inc.'s current $141M trailing twelve-month revenue and $229M market capitalization demands a massive, sustained capital outlay just to reach parity on technology.

ON24's focus on regulated industries creates a compliance barrier for newcomers. ON24, Inc. explicitly focuses on regulated sectors for new business, serving major players like 3 of the 5 largest global pharmaceutical companies. Operating in these spaces-such as financial services and healthcare-means adhering to stringent rules like HIPAA, AML, and KYC, which result in higher compliance expenses. A new entrant must immediately budget for complex legal and regulatory adherence, which can involve initial setup costs of $5,000-$20,000 for compliance tools alone, on top of the specialized staff needed to navigate these intricate frameworks.

Established distribution channels and enterprise sales cycles are difficult for new players to penetrate. ON24, Inc. has secured relationships with 4 of the 5 largest global software companies, indicating deep penetration into established enterprise procurement channels. Breaking into these accounts requires navigating long, high-touch sales processes. The general B2B sales cycle averages 2.1 months, but enterprise SaaS sales are characterized by a six month minimum cycle, sometimes extending up to 3-12 months. The Software industry average total sales cycle is 90 days. A newcomer must sustain operations and marketing efforts for this extended period before seeing revenue from a single large contract, a significant hurdle against an established player with seven consecutive quarters of positive free cash flow as of Q3 2025.

Finance: draft 13-week cash view by Friday.