Challenge

Warp.dev is an agentic development environment that empowers developers to ship better software more quickly. Founded in 2020, the New York City-based company integrated Stripe Payments and Stripe Billing to manage payments and subscription billing. In 2024, the company began layering AI into its business model to deploy agents in production codebases to prompt, edit, review, and ship code. However, its subscription model only gave developers access to the specific number of AI requests allocated for the tier they had chosen—with no way to add credits mid-billing cycle.

“We used to have dozens and dozens of people email us and say, ‘Hey, I’m at my limit. How do I pay you more money for more requests?’ And our answer was basically, ‘You can’t,’” said Jeff Lloyd, technical lead of the revenue team at Warp. “That is a terrible, terrible spot for a business to be in.”

As the company prepared to grow, Warp needed the ability to automate usage tracking and billing—including overages—for thousands of users. “We wanted to make sure the incentives between Warp and the customer align,” said Lloyd. “When a user is deepening their AI usage, we need to collect revenue for the experience we’re providing, because we have to pay our model providers no matter what.”

The company needed a usage-based billing solution that was simple to integrate, so its 30-person engineering team could continue innovating in the core product. As Warp expanded globally, it also required a smooth checkout process—with payment methods that would appeal to developers worldwide—as well as support for global tax compliance.

Solution

To solve these challenges, Warp adopted a hybrid pricing strategy: users can now subscribe to base plans with included credits, and if they exceed those limits, overage billing kicks in automatically. Warp manages this process through Stripe’s usage-based billing tools, which allow the company to meter users’ AI model requests, then charge them accordingly.

The technical implementation was made easier by Warp’s existing Stripe integration. Now, users who hit the limit of their base plan can enable overages directly within the Warp application. This triggers webhooks and API calls to Stripe that automatically set up overage billing based on AI usage, allowing developers to get back to work immediately.

Warp has adopted Stripe’s Optimized Checkout Suite, which combines prebuilt payment UIs such as Stripe Checkout, easy access to 125 payment methods, and Link—a wallet built by Stripe. Warp turned on payment methods, including Apple Pay, Google Pay, ACH, and Link, as well as Link’s Instant Bank Payments. Warp also laid the groundwork for further global growth by adopting Adaptive Pricing, which lets customers pay in their local currency while Stripe automatically calculates the localized price and handles all currency conversion.

As Warp scales internationally, Stripe Tax also automatically manages tax obligations across jurisdictions in 13 states. The team receives automated notifications when the company acquires enough users in a country to prompt new tax obligations.

Results

Overages now represent 20% of total revenue

After implementing usage-based billing, Warp has seen significant growth in billing for overages, which now represent 20% of its total business. With the usage-based model, Warp’s revenue automatically grows as developers increase their AI usage—without requiring manual intervention or plan upgrades.

“I remember being shocked when overages were around 8% of our business,” said Lloyd. “People are really willing to pay for overages when they want more Warp. We’ve only seen that share of our revenue increase.”

Warp launches a seamless usage-based billing experience in three weeks with two engineers

Warp’s small but agile technical team successfully implemented usage-based billing in just three weeks—handling complex requirements, including dual subscription management and real-time usage metering. The rollout was completed quickly, despite intricate backend integrations to manage subscription states and user permissions.

Now, developers can sign up for standard subscription plans through Checkout, and when they hit their AI request limits, overages are billed as metered. The automated overage system eliminates the need for developers to ration credits or pause work. On Warp’s side, precise tracking ensures the company can charge based on actual value delivered. Not only does this set up a smoother expansion path for users, but it also brings revenue growth and value alignment, while completely covering underlying AI model costs.

The Optimized Checkout Suite drives payment acceptance, and 50% of payment volume goes through Link

Nearly all (98%) of Warp’s transactions flow through Checkout’s frictionless payment experience, and approximately 50% of transactions are processed through Link—removing barriers to conversion.

Warp grew revenue 150% over a few months

After Warp adopted usage-based billing, the company achieved significant growth, experiencing a 150% increase in revenue from June 2024 to August 2024.

“Working with Stripe lets us adopt new solutions as our needs change. And it has scalability built in. We’ve grown more than we could have hoped over the last six months,” said Olivia Johnston, senior product marketing manager at Warp.