TRENDING: This Industry Is Flashing Gargantuan Market-Size Estimates Old-school skilled trade businesses are a big part of the U.S. economy. Software maker ServiceTitan's (TTAN) digital toolbox equips them for the future. ServiceTitan stock is on the rise as more air conditioning and heating firms (HVAC), plumbers and electricians sign on as the software company's customers. It's also expanding into new areas, including roofing, pest control, garage doors and… Related news ServiceTitan Cl A Getting Closer T ...

Core Points - The company aims to build a generational company that serves as the operating system for the trades [2] - The current investor session is focused on education rather than financial metrics, emphasizing the fundamentals of the business [2] - The event is the first investor session since becoming a public company, highlighting the importance of clarity on business drivers [2] Company Overview - The company is in the early stages of its public life and is prioritizing educating investors about its mission and operations [2] - The leadership team is committed to providing a deeper appreciation for the company's objectives and strategies [2]

Core Insights - ServiceTitan has announced a definitive agreement to acquire Conduit Tech, an HVAC design and sales platform utilizing LiDAR technology to enhance customer engagement and streamline building permit processes [1][5] - The acquisition aims to integrate Conduit's sales proposal tools with ServiceTitan's AI automation products, providing contractors with efficient measurement tools and improved customer experiences [1][2] Company Overview - ServiceTitan is a cloud-based software platform designed to support trades businesses, offering tools for business management and customer experience enhancement [6] - Conduit Tech, founded in 2022, specializes in providing HVAC contractors with a LiDAR-powered platform for quick and profitable design, sales, and installation of high-efficiency HVAC systems [3][7] Technology and Efficiency - Conduit's platform allows HVAC technicians to create 3D models and perform load calculations on-site in minutes, significantly increasing operational efficiency [2][7] - The technology enables contractors to serve more clients daily, present optimal options, and enhance revenue potential without the need for additional staff [2][7] Strategic Goals - The acquisition is expected to modernize the HVAC industry by equipping contractors with advanced tools to build trust and drive revenue [4] - Both companies share a commitment to empowering contractors with technology that enhances service delivery and operational efficiency [4][6]

Summary of ServiceTitan Investor Session Company Overview - **Company**: ServiceTitan - **Event**: First investor session as a public company, named "Pantheon" [2][3] Core Industry and Business Model - **Industry**: Trades and service management software - **Business Model**: Aims to be the operating system for trades, focusing on education about business fundamentals rather than immediate financial metrics [3][4] Key Investment Thesis - **Five Pillars of Business**: ServiceTitan emphasizes its leadership in a durable vertical market, deepening competitive moat, multiple growth opportunities, and an efficient operating model [4] - **Investment Priorities for FY26**: Focus on AI integration, product introductions, and enhancing customer relationships [5] Market Position and Trends - **Enterprise Market**: ServiceTitan has established a strong presence in the enterprise B2B market, particularly with businesses managing 40 or more technicians [9][10] - **Professionalization of the Industry**: Notable shift in CIO roles from technology experts to traditional B2B CIOs, enhancing IT infrastructure and scalability [12][13] - **Private Equity Trends**: Increased focus on extensibility and growth potential in private equity-backed businesses, leading to more opportunities for ServiceTitan [13][14] Customer Engagement and Retention - **Customer Acquisition**: ServiceTitan has successfully regained customers who initially chose larger horizontal players due to their reputation [11] - **M&A Support**: ServiceTitan provides integration support for private equity-backed businesses, enhancing their operational efficiency post-acquisition [18][19] Product Innovations - **AI Integration**: Introduction of fully automated AI workflows to streamline operations, from lead management to job completion [33][34] - **Automation Benefits**: Automation allows for faster job completion with fewer resources, enhancing profitability for contractors [35][36] - **Future Product Development**: Plans to evolve products into an AI-first ecosystem, enhancing functionality and user experience [44][48] Commercial and Construction Focus - **Commercial Services**: ServiceTitan targets commercial properties, emphasizing the need for maintenance and service contracts [54][55] - **Construction Management**: Focus on providing solutions for complex construction projects, including project management and financial tracking [67][70] Performance Metrics - **Customer Value Measurement**: ServiceTitan measures success through revenue growth, productivity, and cash conversion cycles, aiming to improve customers' bottom lines [63][64] Conclusion - **Strategic Vision**: ServiceTitan is committed to helping contractors manage the full lifecycle of properties, from initial construction to ongoing service agreements, thereby driving long-term growth and customer retention [64][65]

Market Opportunity and Growth Strategy - The company addresses a massive market with a served addressable Gross Transaction Value (GTV) of $650 billion[9] - The company aims for durable and profitable growth through platform leadership and expanding its competitive advantages[8, 9] - The company's FY26 priorities include expanding enterprise capabilities, broadening Pro product adoption, accelerating commercial progress, and expanding in roofing and exterior trades[10, 12] Enterprise Focus - The company is organized to capture opportunities in corporate, enterprise, residential, and commercial sectors through dedicated sales and customer success teams[23, 24] - Private Equity (PE)-backed customers exhibit greater than 25% higher TitanAdvisor ("TAD") Score, greater than 50% faster GTV growth rate, and over 2x higher ServiceTitan Net Promoter Score (NPS) compared to non-sponsored customers[31] Pro Products and AI Innovation - The company's Pro Products historically delivered functional automation with AI infusion across various business functions[40, 41] - The company is introducing new Pro Products with AI-driven automation for marketing, scheduling, and dispatch, including virtual agents and AI diagnosis[51] Commercial Strategy - The company is targeting "specialty" or "sub" contractors in the commercial sector, focusing on complex agreements, equipment, and projects[64, 65] - Commercial customers have realized significant Return on Investment (ROI), including a 15% average revenue increase in year 2, 8% more projects delivered on time, and 12+ days faster to collect payment[72] - The company estimates the commercial construction market at approximately $100 billion and the commercial service & replace market at approximately $260 billion[86] Exteriors and Roofing - The company is expanding into exterior trades, including roofing, gutters, and siding, leveraging its existing residential value proposition[90, 91]

Core Insights - ServiceTitan is launching a suite of AI-powered tools, including Atlas, to automate contractors' back office operations from initial contact to final invoicing [1][6] - Atlas is designed to function as a highly capable assistant, allowing contractors to interact using natural language for various tasks such as running reports and dispatching technicians [2][3] - The introduction of Atlas aims to transform the operational dynamics of the trades industry, enabling contractors to focus on their core tasks while the AI manages other business functions [3][6] AI-Powered Features - Atlas can autonomously manage marketing spend and trigger campaigns based on demand fluctuations, enhancing profitability and decision-making speed for contractors [5] - The AI tools will facilitate automation in office workflows, including invoice reviews, scheduling, and customer interactions, leading to improved operational efficiency [8] - Key insights will be surfaced by the AI, such as booking rate dips and profitability recommendations, allowing for smarter business decisions [8] Industry Impact - The trades industry is characterized as resilient, with AI expected to significantly change operational methods rather than replace contractors [6] - ServiceTitan's new Max Program is introduced to accelerate AI automation for contractors, ensuring they fully leverage the platform's capabilities for optimal ROI [6] - The company emphasizes the importance of adapting to AI advancements for contractors to thrive in a competitive landscape [6]

Core Insights - Aspire Software and FieldRoutes launched their annual user conference, Ignite 2025, focusing on software innovations and best practices for field service businesses [1] - The conference emphasizes the importance of community engagement among customers, partners, and the Aspire team, showcasing advancements in AI and predictive analytics [2] - FieldRoutes announced updates aimed at modernizing pest control operations, enhancing mobile experiences, routing, and new product offerings [3][4] Company Developments - Aspire Software, a ServiceTitan company, provides cloud-based SaaS solutions for landscape maintenance and construction, aiming to improve service delivery and operational efficiency [6] - FieldRoutes, also a ServiceTitan product, offers a comprehensive SaaS platform that automates field service operations, focusing on data-driven insights for revenue growth [7] Product Innovations - Upcoming features include Site Audits 2.0 for better documentation, PropertyIntel's Map Metadata for enhanced job history tracking, and AI-powered KnowledgeBase 2.0 for user support [8] - FieldRoutes Mobile enhancements will improve offline functionality and payment integration, while new scheduling and routing optimization features will streamline operations [8] - Sales Pro will utilize AI for sales coaching, analyzing field conversations to identify successful strategies for repeatable sales success [8]

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section highlights forward-looking statements, subject to substantial risks and uncertainties, and covered by safe harbor provisions [Summary](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements_Summary) This section highlights forward-looking statements, subject to substantial risks and uncertainties, cautioning against undue reliance on them - Forward-looking statements cover future financial performance, liquidity, demand for the platform, customer acquisition/retention, product development, competition, regulatory impacts, acquisitions, market penetration, GTV recognition, intellectual property, industry trends, AI integration, growth management, key personnel, litigation, and public company expenses[8](index=8&type=chunk) - Readers should not rely on forward-looking statements as predictions and should consider risks detailed in "Management's Discussion and Analysis" and "Risk Factors"[10](index=10&type=chunk) [Summary of Risk Factors](index=6&type=section&id=Summary%20of%20Risk%20Factors) This section provides a high-level overview of numerous risks and uncertainties that could materially impact the company's business and stock price [Overview](index=6&type=section&id=Summary%20of%20Risk%20Factors_Overview) This section provides a high-level overview of numerous risks and uncertainties that could materially impact the company's business and stock price - The company faces risks related to managing rapid growth, achieving and sustaining profitability, and effectively developing new products and platform enhancements[16](index=16&type=chunk) - Operational risks include seasonality, adverse factors affecting the trades industry (consolidation, supply chain, labor shortages), economic conditions impacting consumer spending, and competition from established and new companies[16](index=16&type=chunk) - The integration of AI, machine learning, and GenAI into products presents operational and reputational risks, potential liability, and harm to the business[16](index=16&type=chunk) - Material weaknesses in internal control over financial reporting were remediated in fiscal 2024, but future effectiveness is not guaranteed[17](index=17&type=chunk) [PART I. FINANCIAL INFORMATION](index=9&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=9&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the company's unaudited condensed consolidated balance sheets, statements of operations, equity, and cash flows, along with explanatory notes [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show the company's financial position, with total assets, liabilities, and equity changes as of July 31, 2025 | Metric | July 31, 2025 (in thousands) | January 31, 2025 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | :-------------------- | | Total Assets | $1,783,881 | $1,768,648 | +$15,233 | | Total Liabilities | $294,467 | $314,064 | -$19,597 | | Total Stockholders' Equity | $1,489,414 | $1,454,584 | +$34,830 | | Cash and cash equivalents | $471,485 | $441,802 | +$29,683 | | Accounts receivable, net | $51,894 | $44,469 | +$7,425 | | Accrued personnel related expenses | $57,379 | $80,160 | -$22,781 | | Intangible assets, net | $192,188 | $214,952 | -$22,764 | | Goodwill | $845,836 | $845,836 | $0 | [Condensed Consolidated Statements of Operations](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations show net losses for both periods, with significant revenue growth offset by increased operating expenses | Metric (Three Months Ended July 31,) | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Total Revenue | $242,123 | $192,994 | +$49,129 | +25% | | Total Cost of Revenue | $70,774 | $66,168 | +$4,606 | +7% | | Gross Profit | $171,349 | $126,826 | +$44,523 | +35% | | Total Operating Expenses | $206,121 | $159,436 | +$46,685 | +29% | | Loss from Operations | $(34,772) | $(32,610) | -$2,162 | +7% | | Net Loss | $(32,225) | $(35,652) | +$3,427 | -10% | | Net Loss per Share (Basic & Diluted) | $(0.35) | $(1.43) | +$1.08 | -75.5% | | Metric (Six Months Ended July 31,) | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Total Revenue | $457,815 | $363,322 | +$94,493 | +26% | | Total Cost of Revenue | $138,070 | $130,516 | +$7,554 | +6% | | Gross Profit | $319,745 | $232,806 | +$86,939 | +37% | | Total Operating Expenses | $404,053 | $318,844 | +$85,209 | +27% | | Loss from Operations | $(84,308) | $(86,038) | +$1,730 | -2% | | Net Loss | $(78,589) | $(91,691) | +$13,102 | -14% | | Net Loss per Share (Basic & Diluted) | $(0.86) | $(3.44) | +$2.58 | -75% | [Condensed Consolidated Statements of Non-Convertible Preferred Stock, Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Non-Convertible%20Preferred%20Stock%2C%20Redeemable%20Convertible%20Preferred%20Stock%20and%20Stockholders%27%20Equity%20(Deficit)) This statement details changes in equity components, including common stock, additional paid-in capital, and accumulated deficit due to net losses - As of July 31, 2025, Class A common stock shares outstanding increased to **79.47 million** from **76.64 million** as of January 31, 2025[28](index=28&type=chunk) - Additional paid-in capital increased by **$113.4 million** for the six months ended July 31, 2025, primarily due to stock-based compensation and exercise of stock options[28](index=28&type=chunk) - The accumulated deficit grew to **$(1.18) billion** as of July 31, 2025, reflecting ongoing net losses[28](index=28&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statement shows increased net cash from operating activities and a shift to net cash provided by financing activities | Metric (Six Months Ended July 31,) | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | | :--------------------------------- | :------------------ | :------------------ | :-------------------- | | Net cash provided by operating activities | $25,770 | $6,092 | +$19,678 | | Net cash used in investing activities | $(13,804) | $(13,185) | -$619 | | Net cash provided by (used in) financing activities | $17,300 | $(12,394) | +$29,694 | | Net change in cash, cash equivalents, and restricted cash | $29,266 | $(19,487) | +$48,753 | | Cash, cash equivalents, and restricted cash (End of period) | $472,112 | $129,376 | +$342,736 | - The increase in net cash from operating activities in 2025 was driven by non-cash charges offsetting net loss, despite significant cash outflows from changes in operating assets and liabilities[197](index=197&type=chunk) - Financing activities in 2025 were positively impacted by **$18.4 million** from stock option exercises, contrasting with 2024 which saw significant cash used for share repurchases for tax withholdings on RSUs[201](index=201&type=chunk)[202](index=202&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's significant accounting policies and the composition of various financial statement components [1. Description of Business](index=15&type=section&id=1.%20Description%20of%20Business) ServiceTitan provides an end-to-end technology platform for contractors in the 'trades' industry, completing its IPO in December 2024 - ServiceTitan offers an end-to-end cloud-based software platform for contractors in the "trades" industry, covering workflows like advertising, scheduling, dispatching, invoicing, and payment processing[35](index=35&type=chunk)[118](index=118&type=chunk) - The company completed its Initial Public Offering (IPO) in December 2024, receiving **$674.1 million** in proceeds, net of underwriting costs and offering expenses[37](index=37&type=chunk)[412](index=412&type=chunk) [2. Summary of Significant Accounting Policies](index=15&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) The financial statements adhere to GAAP and SEC regulations, with the company operating as a single segment and adopting recent accounting pronouncements - The company operates as a single operating and reportable segment, with the CEO evaluating financial performance and allocating resources at the consolidated level[46](index=46&type=chunk)[47](index=47&type=chunk) - Receivables from a third-party processor accounted for **24%** and **22%** of accounts receivable as of July 31, 2025, and January 31, 2025, respectively, and fees from this processor represented approximately **14%** of total revenue for both periods[44](index=44&type=chunk) - The company adopted ASU 2023-07 (Segment Reporting) for fiscal 2025 and ASU 2020-06 (Debt with Conversion and Other Options) as of February 1, 2024, using the modified retrospective method[49](index=49&type=chunk)[50](index=50&type=chunk) [3. Revenue Recognition](index=18&type=section&id=3.%20Revenue%20Recognition) Revenue primarily from platform services (subscription and usage-based) and professional services, with significant remaining performance obligations | Revenue Type | Three Months Ended July 31, 2025 (in thousands) | Three Months Ended July 31, 2024 (in thousands) | Six Months Ended July 31, 2025 (in thousands) | Six Months Ended July 31, 2024 (in thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Subscription | $174,753 | $137,697 | $337,470 | $263,731 | | Usage | $57,973 | $47,300 | $103,238 | $84,491 | | Platform revenue | $232,726 | $184,997 | $440,708 | $348,222 | | Professional services and other | $9,397 | $7,997 | $17,107 | $15,100 | | Total revenue | $242,123 | $192,994 | $457,815 | $363,322 | - As of July 31, 2025, remaining performance obligations were **$404.1 million**, with approximately **53%** expected to be recognized as revenue in the next 12 months[56](index=56&type=chunk) - Substantially all revenue is concentrated in the United States, with less than **5%** from outside the U.S[58](index=58&type=chunk) [4. Fair Value Measurements](index=20&type=section&id=4.%20Fair%20Value%20Measurements) Financial assets measured at fair value are primarily Level 1 money market funds, with nonrecurring fair value measurements for impaired long-lived assets | Asset Type | As of July 31, 2025 (in thousands) | As of January 31, 2025 (in thousands) | | :----------------------- | :----------------------------- | :------------------------------ | | Money market funds | $456,001 | $427,792 | - Impairment losses on long-lived assets were recorded for the three months ended July 31, 2024 (**$10.1 million**) and six months ended July 31, 2025 (**$8.0 million**) and 2024 (**$30.2 million**), using Level 3 fair value measurements[66](index=66&type=chunk) [5. Balance Sheet Components](index=21&type=section&id=5.%20Balance%20Sheet%20Components) This section details prepaid expenses, internal-use software, and property and equipment, showing increases in prepaid and software, and decreases in property | Prepaid Expense Category | July 31, 2025 (in thousands) | January 31, 2025 (in thousands) | | :----------------------- | :----------------------------- | :------------------------------ | | Prepaid software and subscriptions | $14,512 | $14,742 | | Prepaid user conference costs | $4,091 | $236 | | Prepaid cloud hosting costs | $6,215 | $2,650 | | Total prepaid expenses | $31,980 | $24,791 | - Internal-use software, net, increased to **$37.98 million** as of July 31, 2025, from **$35.78 million** as of January 31, 2025. Capitalized costs for internal-use software were **$12.3 million** for the six months ended July 31, 2025[68](index=68&type=chunk) - Property and equipment, net, decreased to **$45.64 million** as of July 31, 2025, from **$56.67 million** as of January 31, 2025, partly due to **$8.0 million** in impairment losses for the six months ended July 31, 2025, related to ceased-use office space[71](index=71&type=chunk)[72](index=72&type=chunk) [6. Business Combination](index=24&type=section&id=6.%20Business%20Combination) ServiceTitan acquired Convex Labs Inc. for $25.8 million in April 2024 to enhance data-driven solutions, resulting in $14.96 million in goodwill - ServiceTitan acquired Convex Labs Inc. in April 2024 for **$25.8 million** to modernize the commercial services industry with data-driven solutions[78](index=78&type=chunk) | Acquired Asset/Liability | Amount (in thousands) | Estimated Useful Lives (years) | | :----------------------- | :-------------------- | :----------------------------- | | Total identifiable net assets | $10,803 | | | Goodwill | $14,964 | | | Total purchase consideration | $25,767 | | | Trade name | $130 | 1.5 | | Customer relationship | $4,800 | 9 | | Developed technology | $4,600 | 5 | [7. Intangible Assets and Goodwill](index=25&type=section&id=7.%20Intangible%20Assets%20and%20Goodwill) Net intangible assets decreased due to amortization, while goodwill remained unchanged with no impairment recorded during the period | Intangible Asset | Net Book Value (July 31, 2025, in thousands) | Net Book Value (January 31, 2025, in thousands) | Weighted Average Remaining Useful Life (years) | | :--------------------- | :--------------------------------------- | :---------------------------------------- | :-------------------------------------------- | | Customer relationships | $121,587 | $131,985 | 7.4 | | Developed technology | $70,057 | $81,791 | 3.4 | | Trade names | $544 | $1,176 | 0.7 | | Total | $192,188 | $214,952 | | - Amortization expense for intangible assets was **$11.38 million** for the three months ended July 31, 2025, and **$22.76 million** for the six months ended July 31, 2025[83](index=83&type=chunk) - Goodwill remained at **$845.8 million** as of July 31, 2025, with no impairment recorded during the six months ended July 31, 2025 and 2024[84](index=84&type=chunk)[85](index=85&type=chunk) [8. Debt Arrangements](index=26&type=section&id=8.%20Debt%20Arrangements) Debt arrangements include a Term Loan and Revolver Facility, with $106.5 million outstanding on the Term Loan and compliance with all covenants - The company's Credit Agreement includes a Term Loan of **$107.3 million** and a Revolver Facility of **$140.0 million**, maturing in January 2028[86](index=86&type=chunk)[87](index=87&type=chunk) - As of July 31, 2025, the principal Term Loan balance outstanding was **$106.5 million**, with no outstanding borrowings on the Revolver Facility[90](index=90&type=chunk)[86](index=86&type=chunk) - The effective interest rate on the Term Loan Facility was **7.88%** as of July 31, 2025[87](index=87&type=chunk) [9. Commitments and Contingencies](index=28&type=section&id=9.%20Commitments%20and%20Contingencies) The company has $108.36 million in long-term noncancellable commitments, with no material pending legal matters as of July 31, 2025 | Fiscal Year | Estimated Payments (in thousands) | | :---------- | :-------------------------------- | | 2026 (remainder) | $21,573 | | 2027 | $60,359 | | 2028 | $25,301 | | 2029 | $1,126 | | Total | $108,359 | - As of July 31, 2025, the company was not subject to any currently pending legal matters or claims that could have a material adverse effect on its financial position, results of operations, or cash flows[93](index=93&type=chunk) [10. Equity Incentive Plans](index=29&type=section&id=10.%20Equity%20Incentive%20Plans) ServiceTitan operates equity incentive plans with 16.8 million shares available, and stock-based compensation significantly increased due to RSU grants - As of July 31, 2025, **16.80 million** shares of common stock were available for future issuance under the 2024 Incentive Award Plan[96](index=96&type=chunk) - Total stock-based compensation expense for the three months ended July 31, 2025, was **$49.31 million**, up from **$23.69 million** in 2024, and for the six months ended July 31, 2025, was **$93.06 million**, up from **$43.62 million** in 2024[99](index=99&type=chunk)[100](index=100&type=chunk) - Co-Founders were granted **3.24 million** performance-based RSUs in October 2024, with an estimated grant date fair value of **$263.6 million**, leading to **$13.5 million** and **$26.6 million** in stock-based compensation expense for the three and six months ended July 31, 2025, respectively[110](index=110&type=chunk) [11. Income Taxes](index=34&type=section&id=11.%20Income%20Taxes) Interim income tax expense is based on an estimated annual effective rate, with recent tax law changes not materially impacting financial statements - The provision for income taxes decreased by **$0.1 million** (**20%**) for the three months ended July 31, 2025, and by **$0.3 million** (**31%**) for the six months ended July 31, 2025, primarily due to variability in foreign subsidiary income/loss and a decrease in certain state taxes[159](index=159&type=chunk)[170](index=170&type=chunk) - U.S. H.R. 1 (119th Congress), signed into law in July 2025, did not have a material impact on the condensed consolidated financial statements for the six months ended July 31, 2025, due to the company's current year loss and valuation allowance[148](index=148&type=chunk) [12. Net Loss Per Share](index=34&type=section&id=12.%20Net%20Loss%20Per%20Share) The company reported improved net loss per share for both periods, with potentially dilutive securities excluded due to anti-dilutive effects | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------------------------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders (in thousands) | $(32,225) | $(49,621) | $(78,589) | $(118,647) | | Weighted-average shares outstanding (basic and diluted) | 91,687,907 | 34,789,424 | 91,041,726 | 34,485,622 | | Net loss per share, basic and diluted | $(0.35) | $(1.43) | $(0.86) | $(3.44) | - Potentially dilutive securities, including redeemable convertible preferred stock, stock options, and RSUs, were excluded from diluted EPS calculations because their inclusion would have been anti-dilutive due to the net loss[114](index=114&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses the company's financial condition, results of operations, key business factors, seasonality, and non-GAAP financial measures [Overview](index=35&type=section&id=Overview) ServiceTitan provides an end-to-end cloud-based platform for the 'trades' industry, managing workflows and increasing Gross Transaction Volume (GTV) for customers - ServiceTitan's platform is an operating system for the trades, offering integrated solutions across CRM, FSM, ERP, HCM, and FinTech to manage business workflows[116](index=116&type=chunk)[118](index=118&type=chunk) - The platform helps customers accelerate revenue, drive operational efficiency, and improve experiences, leading to increased GTV and adoption of add-on products[120](index=120&type=chunk) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GTV Processed | $22.9 billion | $19.2 billion | $40.7 billion | $33.7 billion | [Key Factors Affecting Our Business Performance](index=35&type=section&id=Key%20Factors%20Affecting%20Our%20Business%20Performance) Growth depends on increasing GTV by expanding with existing customers, serving new markets, and continuously innovating the platform to retain customers - Key growth drivers include increasing GTV by supporting customer growth, expanding into new customers in existing trades, and entering new trade verticals and markets[122](index=122&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk) - Customer retention and expansion are critical, evidenced by a net dollar retention rate of over **110%** for the three months ended July 31, 2025[126](index=126&type=chunk) - The company continuously invests in R&D to improve existing products and build new Pro and FinTech products to extend its platform and increase share of customers' GTV[130](index=130&type=chunk)[131](index=131&type=chunk) [Seasonality and Other Fluctuations](index=38&type=section&id=Seasonality%20and%20Other%20Fluctuations) Operations are seasonal, with strongest revenue growth in Q2, higher cash outflows in Q1, and increased sales and marketing expenses in Q3 - Demand for customer services and sequential revenue growth are typically strongest in the second fiscal quarter due to summer weather, impacting usage-based revenue[132](index=132&type=chunk) - Higher operating cash outflows occur in the first fiscal quarter due to annual corporate bonuses[133](index=133&type=chunk) - Sales and marketing expenses typically increase in the third fiscal quarter due to annual user conferences (Ignite and Pantheon)[133](index=133&type=chunk) [Components of Results of Operations](index=38&type=section&id=Components%20of%20Results%20of%20Operations) Revenue includes platform and professional services, while cost of revenue and operating expenses are primarily driven by personnel-related costs and third-party fees - Platform revenue is generated from subscriptions (Core and Pro products) and usage-based fees (FinTech solutions and certain Pro products), with pricing based on users, product mix, end customers, and GTV[134](index=134&type=chunk)[135](index=135&type=chunk) - Professional services and other revenue primarily comes from onboarding, training, ongoing professional services, live voice/chat, and ancillary hardware products[138](index=138&type=chunk) - Cost of platform revenue includes personnel, third-party service provider fees, infrastructure, and amortization of internal-use software and acquired intangibles. Cost of professional services and other revenue includes personnel for onboarding/implementation and amortization of acquired intangibles[139](index=139&type=chunk)[141](index=141&type=chunk) - Operating expenses (Sales & Marketing, R&D, G&A) are primarily driven by personnel-related costs, including salary, benefits, bonuses, and stock-based compensation[142](index=142&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing results for the three and six months ended July 31, 2025 and 2024 [Comparison of the Three Months Ended July 31, 2025 and 2024](index=42&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20July%2031%2C%202025%20and%202024) Total revenue increased by 25%, gross profit by 35%, and operating expenses by 29%, leading to a 10% decrease in net loss for the quarter | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :----------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Platform Revenue | $232,726 | $184,997 | $47,729 | 26% | | Professional Services and Other Revenue | $9,397 | $7,997 | $1,400 | 18% | | Total Revenue | $242,123 | $192,994 | $49,129 | 25% | | Platform Cost of Revenue | $51,991 | $49,236 | $2,755 | 6% | | Professional Services Cost of Revenue | $18,783 | $16,932 | $1,851 | 11% | | Total Cost of Revenue | $70,774 | $66,168 | $4,606 | 7% | | Gross Profit | $171,349 | $126,826 | $44,523 | 35% | | Sales and Marketing Expense | $69,544 | $58,218 | $11,326 | 19% | | Research and Development Expense | $73,065 | $62,449 | $10,616 | 17% | | General and Administrative Expense | $63,512 | $38,769 | $24,743 | 64% | | Loss from Operations | $(34,772) | $(32,610) | $(2,162) | 7% | | Net Loss | $(32,225) | $(35,652) | $3,427 | -10% | - Platform gross margin improved to **77.7%** (from **73.4%**) due to a shift of customer success costs to sales and marketing, reduced impairment losses, and improved platform delivery efficiencies[153](index=153&type=chunk) - General and administrative expense increased significantly (**64%**) due to a **$24.5 million** increase in personnel-related costs, including **$20.5 million** in stock-based compensation, with **$13.5 million** related to Co-Founders' performance-based RSUs[157](index=157&type=chunk) [Comparison of the Six Months Ended July 31, 2025 and 2024](index=46&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20July%2031%2C%202025%20and%202024) Total revenue grew by 26%, gross profit by 37%, and operating expenses by 27%, resulting in a 14% decrease in net loss for the six-month period | Metric | 2025 (in thousands) | 2024 (in thousands) | Change ($) | Change (%) | | :----------------------------------- | :------------------ | :------------------ | :--------- | :--------- | | Platform Revenue | $440,708 | $348,222 | $92,486 | 27% | | Professional Services and Other Revenue | $17,107 | $15,100 | $2,007 | 13% | | Total Revenue | $457,815 | $363,322 | $94,493 | 26% | | Platform Cost of Revenue | $102,028 | $96,993 | $5,035 | 5% | | Professional Services Cost of Revenue | $36,042 | $33,523 | $2,519 | 8% | | Total Cost of Revenue | $138,070 | $130,516 | $7,554 | 6% | | Gross Profit | $319,745 | $232,806 | $86,939 | 37% | | Sales and Marketing Expense | $138,767 | $115,819 | $22,948 | 20% | | Research and Development Expense | $142,205 | $121,062 | $21,143 | 17% | | General and Administrative Expense | $123,081 | $81,963 | $41,118 | 50% | | Loss from Operations | $(84,308) | $(86,038) | $1,730 | -2% | | Net Loss | $(78,589) | $(91,691) | $13,102 | -14% | - General and administrative expense increased by **50%**, driven by a **$45.5 million** increase in personnel-related costs, including **$38.5 million** in stock-based compensation, with **$26.6 million** related to Co-Founders' performance-based RSUs[168](index=168&type=chunk) - Other income, net, improved by **$11.1 million**, primarily due to a **$6.4 million** increase in interest income from a higher cash balance and a **$4.3 million** decrease in interest expense due to lower debt[169](index=169&type=chunk) [Non-GAAP Financial Measures](index=48&type=section&id=Non-GAAP%20Financial%20Measures) This section presents and reconciles non-GAAP financial measures, providing alternative insights into the company's core operating performance [Overview](index=48&type=section&id=Non-GAAP%20Financial%20Measures_Overview) Non-GAAP measures exclude non-core items like stock-based compensation and amortization to provide a clearer view of core operating performance - Non-GAAP measures exclude stock-based compensation, amortization of acquired intangibles, restructuring charges, loss on operating lease assets, and acquisition-related items to provide a clearer view of core operating performance[174](index=174&type=chunk) - These non-GAAP measures are used internally for management reporting, assessing performance, budgeting, planning, and forecasting[174](index=174&type=chunk) [Non-GAAP Gross Profit and Non-GAAP Gross Margin](index=50&type=section&id=Non-GAAP%20Gross%20Profit%20and%20Non-GAAP%20Gross%20Margin) Non-GAAP gross profit and margin, excluding specific adjustments, showed increases for both the three and six months ended July 31, 2025 | Metric | 3 Months Ended July 31, 2025 (in thousands) | 3 Months Ended July 31, 2024 (in thousands) | 6 Months Ended July 31, 2025 (in thousands) | 6 Months Ended July 31, 2024 (in thousands) | | :------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | GAAP Gross Profit | $171,349 | $126,826 | $319,745 | $232,806 | | Non-GAAP Gross Profit | $180,064 | $137,263 | $338,820 | $256,002 | | GAAP Total Gross Margin | 70.8% | 65.7% | 69.8% | 64.1% | | Non-GAAP Total Gross Margin | 74.4% | 71.1% | 74.0% | 70.5% | [Non-GAAP Sales and Marketing Expense](index=51&type=section&id=Non-GAAP%20Sales%20and%20Marketing%20Expense) Non-GAAP sales and marketing expense, excluding specific adjustments, increased for both the three and six months ended July 31, 2025 | Metric | 3 Months Ended July 31, 2025 (in thousands) | 3 Months Ended July 31, 2024 (in thousands) | 6 Months Ended July 31, 2025 (in thousands) | 6 Months Ended July 31, 2024 (in thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | GAAP Sales and Marketing Expense | $69,544 | $58,218 | $138,767 | $115,819 | | Non-GAAP Sales and Marketing Expense | $56,335 | $46,759 | $112,710 | $91,394 | [Non-GAAP Research and Development Expense](index=51&type=section&id=Non-GAAP%20Research%20and%20Development%20Expense) Non-GAAP R&D expense, excluding specific adjustments, increased for both the three and six months ended July 31, 2025 | Metric | 3 Months Ended July 31, 2025 (in thousands) | 3 Months Ended July 31, 2024 (in thousands) | 6 Months Ended July 31, 2025 (in thousands) | 6 Months Ended July 31, 2024 (in thousands) | | :----------------------------------- | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | GAAP Research and Development Expense | $73,065 | $62,449 | $142,205 | $121,062 | | Non-GAAP Research and Development Expense | $60,362 | $50,583 | $115,560 | $96,969 | [Non-GAAP General and Administrative Expense](index=51&type=section&id=Non-GAAP%20General%20and%20Administrative%20Expense) Non-GAAP G&A expense, excluding specific adjustments including Co-Founders' RSUs, increased for both periods ended July 31, 2025 | Metric | 3 Months Ended July 31, 2025 (in thousands) | 3 Months Ended July 31, 2024 (in thousands) | 6 Months Ended July 31, 2025 (in thousands) | 6 Months Ended July 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | GAAP General and Administrative Expense | $63,512 | $38,769 | $123,081 | $81,963 | | Non-GAAP General and Administrative Expense | $34,164 | $26,442 | $65,138 | $50,848 | [Non-GAAP Income from Operations and Non-GAAP Operating Margin](index=52&type=section&id=Non-GAAP%20Income%20from%20Operations%20and%20Non-GAAP%20Operating%20Margin) Non-GAAP income from operations and operating margin, excluding specific adjustments, significantly improved for both periods ended July 31, 2025 | Metric | 3 Months Ended July 31, 2025 (in thousands) | 3 Months Ended July 31, 2024 (in thousands) | 6 Months Ended July 31, 2025 (in thousands) | 6 Months Ended July 31, 2024 (in thousands) | | :---------------------------------------- | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | GAAP Loss from Operations | $(34,772) | $(32,610) | $(84,308) | $(86,038) | | Non-GAAP Income from Operations | $29,203 | $13,479 | $45,412 | $16,791 | | GAAP Operating Margin | (14.4)% | (16.9)% | (18.4)% | (23.7)% | | Non-GAAP Operating Margin | 12.1% | 7.0% | 9.9% | 4.6% | [Non-GAAP Net Income](index=52&type=section&id=Non-GAAP%20Net%20Income) Non-GAAP net income, adjusting GAAP net loss by excluding specific items, showed substantial increases for both periods ended July 31, 2025 | Metric | 3 Months Ended July 31, 2025 (in thousands) | 3 Months Ended July 31, 2024 (in thousands) | 6 Months Ended July 31, 2025 (in thousands) | 6 Months Ended July 31, 2024 (in thousands) | | :------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | GAAP Net Loss | $(32,225) | $(35,652) | $(78,589) | $(91,691) | | Non-GAAP Net Income | $32,845 | $10,017 | $50,742 | $10,229 | [Free Cash Flow](index=53&type=section&id=Free%20Cash%20Flow) Free cash flow, a non-GAAP measure, significantly improved to $11.97 million for the six months ended July 31, 2025, indicating stronger liquidity | Metric | 3 Months Ended July 31, 2025 (in thousands) | 3 Months Ended July 31, 2024 (in thousands) | 6 Months Ended July 31, 2025 (in thousands) | 6 Months Ended July 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | :------------------------------------ | | GAAP Net Cash Provided by Operating Activities | $40,340 | $25,316 | $25,770 | $6,092 | | Capitalized internal-use software | $(4,930) | $(5,415) | $(11,402) | $(10,200) | | Purchase of property and equipment | $(1,110) | $(1,173) | $(2,402) | $(1,801) | | Non-GAAP Free Cash Flow | $34,300 | $18,728 | $11,966 | $(5,909) | [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company has $471.5 million in cash and $140.0 million credit available, sufficient for 12 months, but future needs may require additional financing - As of July 31, 2025, the company had **$471.5 million** in cash and cash equivalents and **$140.0 million** available under its Credit Agreement[189](index=189&type=chunk) - Management believes existing cash, credit, and revenue will cover working capital, operating lease payments, and capital expenditures for at least the next 12 months[190](index=190&type=chunk) - Future capital needs may require additional equity or debt financing, which could dilute existing stockholders or impose restrictive covenants[190](index=190&type=chunk)[105](index=105&type=chunk) [JOBS Act Accounting Election](index=56&type=section&id=JOBS%20Act%20Accounting%20Election) As an 'emerging growth company,' ServiceTitan uses an extended transition period for accounting standards, benefiting from reduced disclosure requirements - ServiceTitan is an "emerging growth company" and uses the extended transition period for new accounting standards, potentially making its financial statements non-comparable to other public companies[203](index=203&type=chunk) - The company benefits from reduced disclosure obligations, including an exemption from auditor attestation on internal control over financial reporting and reduced executive compensation disclosures[203](index=203&type=chunk)[405](index=405&type=chunk) [Recently Adopted Accounting Pronouncements](index=56&type=section&id=Recently%20Adopted%20Accounting%20Pronouncements) This section refers to Note 2 for details on recently adopted and not-yet-adopted accounting pronouncements - Refer to Note 2 for details on recently adopted accounting pronouncements (ASU 2023-07, ASU 2020-06) and those not yet adopted (ASU 2023-09, ASU 2024-03, ASU 2025-05)[204](index=204&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [Critical Accounting Policies and Estimates](index=56&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management's discussion relies on critical accounting policies and estimates, with no material changes reported since the fiscal year 2025 Annual Report - Key accounting policies involving judgment and estimates include revenue recognition, fair value of stock-based compensation, and fair value of assets/liabilities in business combinations[41](index=41&type=chunk)[42](index=42&type=chunk)[205](index=205&type=chunk)[366](index=366&type=chunk) - Estimates are based on historical data and assumptions, which are subject to inherent uncertainty and may differ from actual results[41](index=41&type=chunk)[366](index=366&type=chunk) - No material changes to critical accounting policies and estimates were reported since the fiscal year 2025 Annual Report on Form 10-K[205](index=205&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) ServiceTitan is exposed to interest rate and foreign currency risks, with inflation not materially affecting the business to date - A hypothetical 100 basis point increase in floating interest rates on the Credit Agreement would increase annual interest expense by approximately **$1.1 million**[209](index=209&type=chunk) - Foreign currency risk is not material, with less than **5%** of revenue from outside the U.S., and the company does not currently use derivative or hedging transactions[58](index=58&type=chunk)[210](index=210&type=chunk) - Inflation has not materially affected the business, but significant inflationary pressures on personnel-related costs could adversely impact financial results if not offset by price increases[211](index=211&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of July 31, 2025, with no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of July 31, 2025[213](index=213&type=chunk) - No material changes in internal control over financial reporting were identified during the quarter ended July 31, 2025[214](index=214&type=chunk) - The effectiveness of internal controls is subject to inherent limitations, including judgment, misconduct, collusion, and management override, meaning absolute assurance cannot be provided[215](index=215&type=chunk) [PART II. OTHER INFORMATION](index=59&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes disclosures on legal proceedings, comprehensive risk factors, and other required regulatory information [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company was not subject to any material pending legal matters or claims as of July 31, 2025, as detailed in Note 9 - The company was not subject to any currently pending legal matters or claims that could have a material adverse effect on its financial position, results of operations, or cash flows as of July 31, 2025[93](index=93&type=chunk)[218](index=218&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) This section details various risks that could materially and adversely affect the company's business, financial condition, and results of operations [Risks Related to Our Business and Industry](index=59&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) The company faces risks from rapid growth, profitability challenges, product development, seasonality, industry factors, and intense market competition - Rapid growth may not be indicative of future performance, and failure to manage growth effectively could adversely affect the business[221](index=221&type=chunk)[222](index=222&type=chunk) - The company has a history of losses and may not achieve or sustain profitability due to significant investments in product development, infrastructure, sales, marketing, and acquisitions[225](index=225&type=chunk)[226](index=226&type=chunk) - Factors like industry consolidation, supply chain issues, labor shortages, and economic conditions (e.g., consumer spending) can adversely affect demand for the platform[238](index=238&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk)[249](index=249&type=chunk) - The market for software serving the trades is evolving, and the company faces intense competition from both established and new companies, including those developing proprietary solutions[254](index=254&type=chunk)[256](index=256&type=chunk) [Risks Related to Our Customers and Revenue Model](index=76&type=section&id=Risks%20Related%20to%20Our%20Customers%20and%20Revenue%20Model) Success depends on high-quality customer support and expanding sales, with a majority SMB customer base increasing vulnerability to economic fluctuations - Failure to offer high-quality customer support, particularly during implementation, could harm customer relationships and business[278](index=278&type=chunk)[279](index=279&type=chunk) - Increasing the customer base and market acceptance depends on expanding sales and marketing capabilities, which is resource-intensive and has a high cost of customer acquisition[280](index=280&type=chunk)[281](index=281&type=chunk) - A majority of customers are SMBs, which are harder and costlier to retain and more vulnerable to economic downturns, increasing business risk[283](index=283&type=chunk) [Risks Related to Reliance on Third Parties](index=80&type=section&id=Risks%20Related%20to%20Reliance%20on%20Third%20Parties) Reliance on third-party software, services, and data centers poses risks of defects, disruptions, increased costs, and payment processing liabilities - Reliance on third-party software and services means defects or loss of these could increase costs and adversely affect service quality[285](index=285&type=chunk) - The company's platform relies on third-party data centers (primarily Microsoft Azure), making it vulnerable to service disruptions, failures, or increased costs from these providers[287](index=287&type=chunk)[289](index=289&type=chunk) - The company is subject to payment processing risks, including reliance on third-party processors, compliance with PCI DSS, and potential liability for non-compliance or breaches[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) [Risks Related to Data Privacy, Data Protection, Cybersecurity and Technology](index=84&type=section&id=Risks%20Related%20to%20Data%20Privacy%2C%20Data%20Protection%2C%20Cybersecurity%20and%20Technology) Cybersecurity risks, AI integration challenges, platform defects, and evolving data privacy laws could lead to reputational damage and significant liabilities - Cybersecurity breaches or incidents, affecting the company or its third-party providers, could lead to unauthorized access to sensitive information, reputational damage, regulatory investigations, litigation, and significant financial costs[297](index=297&type=chunk)[302](index=302&type=chunk)[304](index=304&type=chunk) - The integration of AI, machine learning, and GenAI (especially LLMs) into products presents risks such as inaccurate or misleading content, intellectual property infringement, data misuse, and challenges in complying with evolving AI regulations[258](index=258&type=chunk)[264](index=264&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk) - Real or perceived defects, errors, or vulnerabilities in the platform's software could harm reputation, lead to customer loss, and require significant resources to resolve[306](index=306&type=chunk) - The collection, processing, storage, use, and disclosure of personal information are governed by a rapidly evolving framework of privacy, data protection, and cybersecurity laws, increasing compliance costs and legal risks[310](index=310&type=chunk)[313](index=313&type=chunk)[315](index=315&type=chunk) [Risks Related to Our Intellectual Property](index=94&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Inadequate IP protection, infringement claims, and open-source software use pose risks of substantial damages, costly litigation, and resource diversion - Inadequate protection of intellectual property (trademarks, trade secrets, copyrights, patents) could materially adversely affect the business due to high costs of development, maintenance, defense, and enforcement[324](index=324&type=chunk) - The company faces risks of intellectual property infringement or misappropriation assertions by third parties, which could result in substantial damages, costly litigation, and diversion of resources[327](index=327&type=chunk)[329](index=329&type=chunk) - The use of third-party open-source software components in the platform carries risks, including potential requirements to disclose proprietary source code under "copyleft" licenses or face infringement claims[330](index=330&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk) [Risks Related to Legal and Regulatory Environment](index=98&type=section&id=Risks%20Related%20to%20Legal%20and%20Regulatory%20Environment) The company faces legal and regulatory risks from claims, evolving government regulations, and international operations, potentially leading to penalties and disruptions - The company may become involved in claims, lawsuits, and government investigations (e.g., intellectual property, wiretapping, consumer protection) that could be costly, time-consuming, and divert management attention[335](index=335&type=chunk) - Extensive and evolving government regulations (taxation, privacy, marketing, labor) apply to the business, and non-compliance could lead to significant penalties and increased operating costs[336](index=336&type=chunk)[339](index=339&type=chunk) - International operations, particularly in Armenia, Macedonia, and Poland, expose the company to geopolitical events, sanctions, and complex international laws (employment, data protection, anti-corruption), which could disrupt operations and increase costs[229](index=229&type=chunk)[341](index=341&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk)[345](index=345&type=chunk)[348](index=348&type=chunk)[351](index=351&type=chunk) [Risks Related to Financial, Tax and Accounting Matters](index=103&type=section&id=Risks%20Related%20to%20Financial%2C%20Tax%20and%20Accounting%20Matters) Financial risks include debt service, NOL limitations, tax impacts, public company costs, and inaccuracies in critical accounting estimates and key metrics - The company's ability to service its debt obligations depends on sufficient cash flow, and failure to comply with financial covenants could lead to acceleration of debt or foreclosure[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk) - The ability to use net operating losses (NOLs) to offset future taxable income may be limited by ownership changes or changes in tax laws, potentially increasing future tax liabilities[370](index=370&type=chunk)[372](index=372&type=chunk)[373](index=373&type=chunk) - Operating as a public company incurs substantial legal, accounting, and compliance costs, and requires significant management attention, potentially diverting resources from day-to-day business[368](index=368&type=chunk)[369](index=369&type=chunk) - Inaccuracies in key metrics (e.g., Active Customers, GTV) due to internal system limitations, methodological changes, or errors could harm the company's reputation and business[367](index=367&type=chunk) [Risks Related to Ownership of Our Class A Common Stock and Governance](index=110&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock%20and%20Governance) The multi-class stock structure concentrates voting power with Co-Founders, potentially affecting stock price and limiting other stockholders' influence - The multi-class stock structure concentrates voting power with the Co-Founders (**63%** as of July 31, 2025, potentially **74%** with equity awards), limiting other stockholders' influence on corporate decisions[382](index=382&type=chunk) - The multi-class structure may result in a lower or more volatile market price for Class A common stock, as it could be excluded from certain stock indices and criticized by stockholder advisory firms[387](index=387&type=chunk)[388](index=388&type=chunk) - The trading price of Class A common stock may be volatile due to market fluctuations, company performance, analyst coverage, and potential sales of large numbers of shares by insiders[390](index=390&type=chunk)[393](index=393&type=chunk) - Delaware law and company bylaws include anti-takeover provisions that could discourage, delay, or prevent a change in control, potentially limiting stockholders' opportunity to receive a premium for their shares[397](index=397&type=chunk)[399](index=399&type=chunk)[400](index=400&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=120&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales occurred; $674.1 million net IPO proceeds were received in December 2024, with no material change in their expected use - The company received **$674.1 million** in net proceeds from its IPO in December 2024, with no material change in the expected use of these proceeds[412](index=412&type=chunk) - No unregistered sales of equity securities or issuer purchases of equity securities occurred during the period[411](index=411&type=chunk)[413](index=413&type=chunk) [Item 3. Defaults Upon Senior Securities](index=120&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities were reported[414](index=414&type=chunk) [Item 4. Mine Safety Disclosures](index=120&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is not applicable[415](index=415&type=chunk) [Item 5. Other Information](index=120&type=section&id=Item%205.%20Other%20Information) This section reports no material changes or disclosures regarding equity sales, board nominations, or insider trading arrangements - No disclosures in lieu of Form 8-K, material changes to board nominee procedures, or insider trading arrangements were reported[416](index=416&type=chunk) [Item 6. Exhibits](index=121&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report, including corporate documents and certifications from executive officers - The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[418](index=418&type=chunk) - The certifications under 18 U.S.C. Section 1350 (Exhibits 32.1 and 32.2) are furnished, not "filed," and not incorporated by reference into other SEC filings[419](index=419&type=chunk) [Signatures](index=122&type=section&id=Signatures) This section formally attests to the accuracy and completeness of the report by authorized company personnel [Details](index=122&type=section&id=Signatures_Details) The report was duly signed on behalf of ServiceTitan, Inc. by Dave Sherry, Chief Financial Officer, on September 10, 2025 - The report was signed by Dave Sherry, Chief Financial Officer, on September 10, 2025[423](index=423&type=chunk)

Group 1 - The article discusses the increasing nervousness among investors regarding the stock market's status as it declines from recent all-time highs following the Q2 earnings season [1] - Gary Alexander, with extensive experience in technology companies and startups, provides insights into the themes shaping the industry today [1] Group 2 - The article highlights that Gary Alexander has been a contributor on Seeking Alpha since 2017 and has been quoted in various web publications [1]

Core Insights - ServiceTitan Inc. reported revenue of $242.12 million for the quarter ended July 2025, showing no change compared to the same period last year, with an EPS of $0.33 compared to $0 in the year-ago quarter [1] - The reported revenue exceeded the Zacks Consensus Estimate of $229.41 million by +5.54%, and the EPS surpassed the consensus estimate of $0.18 by +83.33% [1] Financial Performance Metrics - Gross Transaction Volume reached $22.90 billion, exceeding the average estimate of $21.89 billion from three analysts [4] - Revenue from the Platform segment was $232.73 million, surpassing the five-analyst average estimate of $221.22 million [4] - Revenue from Professional Services and Other was $9.4 million, exceeding the five-analyst average estimate of $8.23 million [4] - Subscription revenue from the Platform was $174.75 million, compared to the four-analyst average estimate of $166.77 million [4] - Usage revenue from the Platform was $57.97 million, exceeding the average estimate of $54.35 million based on four analysts [4] - Non-GAAP gross profit for Professional Services and Other was -$7.69 million, better than the average estimate of -$8.03 million from six analysts [4] - Non-GAAP gross profit for the Platform was $187.75 million, exceeding the average estimate of $175.81 million from six analysts [4] Stock Performance - Over the past month, shares of ServiceTitan Inc. have returned -9%, while the Zacks S&P 500 composite has changed by +3.6% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance against the broader market in the near term [3]