ServiceTitan Inc (TTAN) Q1 2026 Earnings Call Highlights: Record Revenue Growth and Strategic ...

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Gross Transaction Volume (GTV): $17.7 billion, up 22% year over year.
Total Revenue: $215.7 million, up 27% year over year.
Subscription Revenue: $162.7 million, up 29% year over year.
Usage Revenue: $45.3 million, up 22% year over year.
Platform Revenue: $208 million, up 27% year over year.
Professional Service Revenue: $7.7 million.
Net Dollar Retention: Greater than 110% for the quarter.
Platform Gross Margin: 79.7%, an improvement of over 300 basis points year over year.
Total Gross Margin: 73.6%, up 390 basis points year over year.
Operating Income: $16.2 million, with a record operating margin of 7.5%, an improvement of 560 basis points year over year.
Free Cash Flow: Negative $22.3 million, better than negative $24.6 million for the prior-year first quarter.
Q2 Revenue Guidance: $228 million to $230 million.
Q2 Operating Income Guidance: $17 million to $18 million.
Full Year 2026 Revenue Guidance: $910 million to $920 million.
Full Year 2026 Operating Income Guidance: $54 million to $59 million.
Release Date: June 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
ServiceTitan Inc (NASDAQ:TTAN) reported a 29% year-over-year growth in subscription revenue and a 27% increase in total revenue.
The company achieved record operating margins, improving by 560 basis points year-over-year.
ServiceTitan Inc (NASDAQ:TTAN) successfully launched several large strategic accounts, both residential and commercial, during the quarter.
The company is seeing strong adoption of its Pro products, which are contributing significantly to subscription revenue growth.
ServiceTitan Inc (NASDAQ:TTAN) is making significant progress in expanding its enterprise capabilities and entering new markets, such as commercial and roofing.
ServiceTitan Inc (NASDAQ:TTAN) reported a negative free cash flow of $22.3 million for the quarter.
The company faces potential risks from economic uncertainties, including tariffs and supply chain inflation, which could impact customer growth.
There is a dependency on weather patterns for Q2 performance, which introduces variability in revenue outcomes.
ServiceTitan Inc (NASDAQ:TTAN) is still in the early stages of penetrating the commercial market, indicating a long path to full market capture.
The company has to manage the timing of expenses carefully, as Q1 expenses were more favorable than in prior years, which may not be sustainable.
Q: How might tariffs impact ServiceTitan's business, particularly in terms of equipment servicing opportunities and transaction volumes? A: Ara Mahdessian, CEO, explained that while tariffs could lead to supply chain inflation, ServiceTitan's customers have historically managed to pass through rising costs. The company remains prudent in forecasting Gross Transaction Volume (GTV) due to macroeconomic uncertainties.
Q: Can you elaborate on the stacking S-curve strategy and its role in driving growth? A: Vahe Kuzoyan, President, emphasized the company's focus on enterprise, commercial, Pro products, and roofing as the primary areas of growth. While there are additional opportunities, the current focus remains on these key areas to drive durable growth.
Q: What seasonal trends does ServiceTitan typically observe in the first half of the year, and how do Pro products contribute to growth? A: Dave Sherry, CFO, noted that Q2 is seasonally strong due to trades like HVAC and landscaping, making it sensitive to weather. Pro products are the fastest-growing segment, significantly contributing to subscription revenue growth.
Q: What progress has ServiceTitan made in the commercial sector, and what is the current penetration rate? A: Ara Mahdessian highlighted successful commercial go-lives and ongoing development of project management capabilities. Vahe Kuzoyan added that the company is still in the early stages of penetrating the commercial market, with significant opportunities ahead.
Q: How does ServiceTitan approach entering new trades, and are there opportunities beyond the current focus areas? A: Vahe Kuzoyan stated that while there are broader verticals that could use ServiceTitan, the company prioritizes focused areas like enterprise and commercial. Opportunistic deals are considered if there's a high degree of conviction in their success.
Q: How does ServiceTitan plan to leverage AI and digital agents to drive efficiencies for customers? A: Vahe Kuzoyan explained that AI is integrated across the platform to automate tasks and enhance productivity, particularly in back-office operations and fieldwork, providing a competitive advantage.
Q: What impact do home equity loan applications have on ServiceTitan's business, and is there potential for larger projects? A: Vahe Kuzoyan noted that increased home equity loan applications could drive more home projects, but the magnitude of impact is uncertain at this point.
Q: What factors contributed to the strong gross margin performance in Q1, and what can be expected going forward? A: Dave Sherry attributed the gross margin improvement to scale and product selection, with a significant portion due to customer success management reclassification. Margins are expected to remain stable throughout the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.