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]

Financial Data and Key Metrics Changes - In Q2 FY2026, gross transaction volume (GTV) reached $22.9 billion, reflecting a 19% year-over-year growth, driven primarily by commercial customers and non-HVAC residential trades [19] - Total revenue for Q2 was $242.1 million, a 25% increase year-over-year, with subscription revenue growing 27% to $174.8 million [19][20] - Platform gross margin improved to 80.7%, an increase of 280 basis points year-over-year, while total gross margin rose to 74.4%, up 330 basis points [20][21] - Operating income for Q2 was $29.2 million, resulting in a record operating margin of 12.1%, an improvement of 510 basis points year-over-year [21] - Free cash flow for Q2 was $34.3 million, up from $18.7 million in the prior year [21] Business Line Data and Key Metrics Changes - Subscription revenue growth was led by faster-than-expected growth from new customers and healthy expansion trends [20] - Usage revenue grew 23% year-over-year to $58 million, driven by higher GTV and a greater mix of on-platform payment solutions [20] - Professional services revenue for Q2 was $9.4 million, with net dollar retention exceeding 110% [20] Market Data and Key Metrics Changes - The commercial customer segment outperformed expectations, contributing significantly to GTV growth [19] - Non-HVAC residential trades showed a pickup in job growth, contributing positively to GTV [78] Company Strategy and Development Direction - The company aims to deliver automation to the trades, leveraging AI capabilities to enhance customer operations and drive revenue growth [14][15] - A partnership with Roto-Rooter was announced, expected to enhance the company's presence in the commercial market [13][14] - The focus remains on becoming the operating system for the trades, with an emphasis on product development and market expansion [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong results, citing the resilience of customers and the effectiveness of their platform [12][19] - The company anticipates continued growth in subscription and usage revenue, with a commitment to achieving long-term margin targets [22] - Management acknowledged challenges in the HVAC segment due to difficult year-over-year comparisons but noted overall strong performance [74][89] Other Important Information - The introduction of AI, specifically Titan Intelligence, has enabled significant automation for customers, exemplified by the Gulf Shore case study [6][10] - The company is focused on enhancing its product offerings in the commercial sector, particularly in project management capabilities [15][16] Q&A Session Summary Question: What was the business objective for Roto-Rooter in choosing ServiceTitan? - Management highlighted that Roto-Rooter seeks revenue growth through lead generation, lower customer acquisition costs, and back-office automation [26][27] Question: What percentage of the customer base is hybrid, spanning across residential and commercial? - Management noted that most customers have a mix of both residential and commercial services, which provides a competitive advantage [32][33] Question: Is there anything underperforming that the company is working on? - Management acknowledged the desire for continuous improvement across all areas, including product delivery and service levels [35] Question: How long has the company been investing in the commercial side? - The company has been investing in the commercial market for about three years, focusing on construction capabilities [39] Question: What is the impact of AI on gross margins? - Management indicated that AI is expected to drive efficiencies, but it is still early in the AI journey for both internal operations and customer operations [78] Question: What products are being used by Gulf Shore? - Gulf Shore utilizes several Pro products, including Scheduling Pro, Dispatch Pro, and Marketing Pro, which enhance automation and ROI [57] Question: What is the expected impact of the Roto-Rooter partnership? - The partnership is expected to enhance the company's capabilities in both residential and commercial sectors, aligning well with ServiceTitan's strengths [26][72]

Financial Data and Key Metrics Changes - Q2 gross transaction volume (GTV) was $22.9 billion, representing a 19% year-over-year growth, led by commercial customers and non-HVAC residential trades [19] - Total revenue for Q2 was $242.1 million, growing 25% year-over-year, with subscription revenue at $174.8 million, up 27% year-over-year [19][20] - Q2 platform gross margin improved to 80.7%, an increase of 280 basis points year-over-year, while total gross margin was 74.4%, up 330 basis points year-over-year [20][21] - Operating income for Q2 was $29.2 million, resulting in a record operating margin of 12.1%, an improvement of 510 basis points year-over-year [21] - Free cash flow for Q2 was $34.3 million, up from $18.7 million in the prior year's second quarter [21] Business Line Data and Key Metrics Changes - Subscription revenue growth was driven by faster-than-expected growth from new customers and healthy expansion trends [20] - Usage revenue grew 23% year-over-year to $58 million, outpacing prior guidance due to higher GTV and a greater mix of on-platform payment solutions [20] - Professional services revenue for Q2 was $9.4 million, with net dollar retention exceeding 110% for the quarter [20] Market Data and Key Metrics Changes - Residential HVAC growth was slower than in prior periods due to challenging comparisons from last year, but overall, residential HVAC customers continued to grow well in Q2 [19][21] - Non-HVAC residential trades saw a pickup across the board, primarily driven by job growth [77] Company Strategy and Development Direction - The company aims to deliver real ROI to customers, helping them grow their businesses, which in turn drives higher subscription and usage revenue [6] - The introduction of AI, specifically Titan Intelligence, is enabling customers to automate their operations, leading to significant efficiency gains [7][10] - The company is focusing on becoming the operating system for the trades, with a commitment to delivering high ROI solutions and expanding its ecosystem [12][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to transform the lives of contractors through automation and AI [6][12] - The partnership with Roto-Rooter is expected to enhance the company's market position and drive further growth [14][26] - Management acknowledged the need for continuous improvement in product delivery and customer service [35] Other Important Information - The company expects total revenue for Q3 to be in the range of $237 to $239 million and for the full fiscal year 2026 to be between $935 to $940 million [22] - The company is committed to maintaining a long-term growth target of 25% [22] Q&A Session Summary Question: What was the business objective for Roto-Rooter in choosing ServiceTitan? - Management highlighted that Roto-Rooter seeks revenue growth through generating more leads, converting leads into booked appointments, and increasing close rates, which aligns with ServiceTitan's strengths [26][27] Question: What percentage of the customer base is hybrid, spanning both residential and commercial? - Management noted that most customers have some degree of both residential and commercial operations, with a focus on becoming world-class for both segments [32][33] Question: Is there anything underperforming that the company is working on? - Management expressed satisfaction with progress but emphasized the desire for continuous improvement across all areas [35] Question: How long has the company been investing in the commercial side? - The company has been investing in the commercial side for about three years, with recent traction attributed to delivering on construction capabilities [39] Question: How is the company leveraging AI to drive efficiency? - Management indicated that AI is being used to improve customer experience and streamline operations, with ongoing efforts to enhance these capabilities [78] Question: What is the expected impact of Pro products on gross margins? - The impact of Pro products on gross margins will depend on the specific products, with some expected to contribute positively to the top line [80]

Financial Data and Key Metrics Changes - In Q2 FY2026, total revenue reached $242.1 million, reflecting a 25% year-over-year growth [18] - Subscription revenue grew by 27% year-over-year to $174.8 million, driven by faster growth from new customers [19] - Gross transaction volume (GTV) was $22.9 billion, representing a 19% year-over-year increase [18] - Platform gross margin improved to 80.7%, an increase of 280 basis points year-over-year [19] - Operating income was $29.2 million, resulting in a record operating margin of 12.1%, an improvement of 510 basis points year-over-year [20] - Free cash flow for Q2 was $34.3 million, up from $18.7 million in the prior year [20] Business Line Data and Key Metrics Changes - The company reported strong performance across its pro products, which are the fastest-growing area of the business [13] - Professional services revenue for Q2 was $9.4 million, contributing to overall revenue growth [19] - The introduction of AI capabilities has allowed customers to automate workflows, leading to increased efficiency and revenue growth [10][14] Market Data and Key Metrics Changes - Commercial customers and non-HVAC residential trades led the overperformance in GTV growth [18] - Residential HVAC growth was slower compared to previous periods due to challenging year-over-year comparisons [19][75] - The partnership with Roto-Rooter is expected to enhance the company's presence in both residential and commercial markets [12][13] Company Strategy and Development Direction - The company aims to become the operating system for the trades, focusing on delivering automation and AI solutions to enhance customer operations [11][12] - There is a strong emphasis on expanding capabilities in the commercial sector, particularly in construction project management [15][39] - The company is committed to improving product offerings and customer service to maintain competitive advantages [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong ROI to customers, which in turn drives growth [4][5] - The management team highlighted the importance of automation and AI in transforming the trades industry [10][14] - Future growth is expected to be driven by continued investment in R&D and capital deployment towards high ROI opportunities [22][48] Other Important Information - The company has posted an updated investor presentation and earnings release on its website [3] - The management team is focused on executing their strategy with a long-term view of sustainable growth and margin improvement [22] Q&A Session Summary Question: What was the business objective for Roto-Rooter in choosing ServiceTitan? - Management highlighted that Roto-Rooter seeks revenue growth through lead generation, lower customer acquisition costs, and back-office automation [25][26] Question: What percentage of the customer base is hybrid, spanning across residential and commercial? - Management noted that most customers have both residential and commercial operations, which provides a competitive advantage [32][33] Question: Is there anything underperforming that the company is working on? - Management acknowledged the desire for continuous improvement across all areas, including product delivery and service levels [35] Question: How long has the company been investing in the commercial side? - The company has been investing in the commercial side for about three years, focusing on construction capabilities [39] Question: How is the company leveraging AI for efficiency? - Management indicated that AI is being used to improve customer experience and operational efficiency, with ongoing developments in this area [79] Question: What is the expected impact of Pro products on gross margins? - The impact on gross margins will depend on the specific Pro products, with some expected to contribute positively [80]

Financial Highlights - Q2'FY26总交易额(GTV)达230亿美元[7] - Q2'FY26总收入为2.42亿美元[7] - Q2'FY26非美国通用会计准则(Non-GAAP)运营利润率为12.1%[7] - Q2'FY26平台毛利率为80.7%[7] - Q2'FY26收入同比增长25%[7] - Q2'FY26平台收入同比增长26%[7] - Q2FY26净留存率超过110%[7] Market Opportunity - 公司服务的行业市场规模约为6500亿美元[18] - 所有潜在行业和市场规模约为1.5万亿美元[19] - 公司当前客户产生的收入机会为130亿美元[22] Customer Base - 公司拥有约9500个活跃客户[39] - 超过1000个客户的年度账单超过10万美元[39] - 来自年度账单超过10万美元的客户的总年度账单占比超过50%[39]

Company Overview and Executive Summary [Introduction and Management Commentary](index=1&type=section&id=1.1%20Introduction%20and%20Management%20Commentary) ServiceTitan announced its fiscal second quarter 2026 financial results, with management highlighting strong performance in the seasonally strongest quarter for the trades and progress in the large enterprise Commercial market due to multi-year investments - CEO Ara Mahdessian expressed gratitude for the team's empowerment of customers and emphasized the opportunity to transform the lives of contractors[2](index=2&type=chunk) - President Vahe Kuzoyan noted progress on company goals, particularly a positive change in the large enterprise Commercial market where multi-year investments are yielding results[2](index=2&type=chunk) [About ServiceTitan](index=2&type=section&id=1.2%20About%20ServiceTitan) ServiceTitan is a software platform providing cloud-based, end-to-end solutions for trades businesses, enabling contractors to manage and grow their operations, handle back-office functions, and enhance customer experience - ServiceTitan offers a cloud-based, end-to-end SaaS platform that powers trades businesses[8](index=8&type=chunk) - The platform provides contractors with tools to run and grow their business, manage back-office, and deliver a stellar customer experience[8](index=8&type=chunk) - The company aims to equip tradespeople with technology in an industry historically underserved by technology[8](index=8&type=chunk) Financial Performance and Outlook [Fiscal Second Quarter 2026 Financial and Operational Highlights](index=1&type=section&id=2.1%20Fiscal%20Second%20Quarter%202026%20Financial%20and%20Operational%20Highlights) ServiceTitan reported strong fiscal Q2 2026 results, with significant year-over-year growth in Gross Transaction Volume (GTV), total revenue, and platform revenue. Non-GAAP income from operations and operating margin also saw substantial improvements Fiscal Second Quarter 2026 Financial and Operational Highlights | Metric | FY26 Q2 (Millions) | FY25 Q2 (Millions) | YOY GTV Growth (FY26 Q2) | YOY GTV Growth (FY25 Q2) | | :-------------------------------- | :----------------- | :----------------- | :----------------------- | :----------------------- | | Gross Transaction Volume ("GTV") (in billions) | $22.9 | $19.2 | 19% | 23% | | Total revenue | $242.1 | $193.0 | 25% | 24% | | Platform revenue | $232.7 | $185.0 | 26% | 25% | | GAAP loss from operations | $(34.8) | $(32.6) | - | - | | Non-GAAP income from operations | $29.2 | $13.5 | - | - | | Non-GAAP operating margin | 12.1% | 7.0% | - | - | | GAAP net cash provided by operating activities | $40.3 | $25.3 | - | - | | Non-GAAP free cash flow | $34.3 | $18.7 | - | - | | Net dollar retention | > 110% | > 110% | - | - | [Fiscal Third Quarter and Fiscal Year 2026 Financial Outlook](index=1&type=section&id=2.2%20Fiscal%20Third%20Quarter%20and%20Fiscal%20Year%202026%20Financial%20Outlook) ServiceTitan provided financial guidance for fiscal Q3 2026 and the full fiscal year 2026, projecting continued revenue growth and non-GAAP income from operations Fiscal Third Quarter and Fiscal Year 2026 Financial Outlook | Metric | Fiscal Third Quarter 2026 (Millions) | Full Fiscal Year 2026 (Millions) | | :-------------------------------- | :--------------------------------- | :------------------------------- | | Total revenue | $237 - $239 | $935 - $940 | | Non-GAAP income from operations | $14 - $15 | $74 - $76 | - The company is unable to provide a GAAP loss from operations outlook or reconciliation due to the difficulty of estimating certain excluded items like stock-based compensation expense[4](index=4&type=chunk) Condensed Consolidated Financial Statements (GAAP) [Condensed Consolidated Statements of Operations](index=4&type=section&id=3.1%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended July 31, 2025, ServiceTitan reported a total revenue of $242.1 million, an increase from $193.0 million in the prior year, but still incurred a net loss of $32.2 million Condensed Consolidated Statements of Operations (Three Months Ended July 31) | Metric | 2025 (Thousands) | 2024 (Thousands) | | :-------------------------------- | :--------------- | :--------------- | | Total revenue | $242,123 | $192,994 | | Gross profit | $171,349 | $126,826 | | Loss from operations | $(34,772) | $(32,610) | | Net loss | $(32,225) | $(35,652) | | Net loss per share, basic and diluted | $(0.35) | $(1.43) | - For the six months ended July 31, 2025, total revenue was **$457.8 million**, with a net loss of **$78.6 million**[14](index=14&type=chunk) [Disaggregated Revenue](index=4&type=section&id=3.1.1%20Disaggregated%20Revenue) Platform revenue, comprising subscription and usage fees, continues to be the primary revenue driver, showing strong growth for both the three and six months ended July 31, 2025 Disaggregated Revenue (Three Months Ended July 31) | Revenue Type | 2025 (Thousands) | 2024 (Thousands) | | :-------------------------- | :--------------- | :--------------- | | Subscription | $174,753 | $137,697 | | Usage | $57,973 | $47,300 | | Platform revenue | $232,726 | $184,997 | | Professional services and other | $9,397 | $7,997 | | Total revenue | $242,123 | $192,994 | - For the six months ended July 31, 2025, subscription revenue was **$337.5 million** and usage revenue was **$103.2 million**[15](index=15&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=3.2%20Condensed%20Consolidated%20Balance%20Sheets) As of July 31, 2025, ServiceTitan maintained a strong financial position with total assets of $1.78 billion, a slight increase from January 31, 2025, and a decrease in total liabilities Condensed Consolidated Balance Sheets (As of) | Metric | July 31, 2025 (Thousands) | January 31, 2025 (Thousands) | | :-------------------------------- | :------------------------ | :------------------------- | | Total assets | $1,783,881 | $1,768,648 | | Total liabilities | $294,467 | $314,064 | | Total stockholders' equity | $1,489,414 | $1,454,584 | | Cash and cash equivalents | $471,485 | $441,802 | - Current assets increased to **$622.9 million** from **$572.8 million**, primarily driven by an increase in cash and cash equivalents and accounts receivable[17](index=17&type=chunk) - Total liabilities decreased by approximately **$19.6 million**, mainly due to a reduction in accrued personnel related expenses[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=3.3%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) ServiceTitan generated significant cash from operating activities in fiscal Q2 2026, with net cash provided by operating activities increasing to $40.3 million from $25.3 million in the prior year quarter Condensed Consolidated Statements of Cash Flows (Three Months Ended July 31) | Metric | 2025 (Thousands) | 2024 (Thousands) | | :-------------------------------- | :--------------- | :--------------- | | Net cash provided by operating activities | $40,340 | $25,316 | | Net cash used in investing activities | $(6,040) | $(6,588) | | Net cash provided by (used in) financing activities | $16,920 | $(7,286) | | Net change in cash, cash equivalents, and restricted cash | $51,220 | $11,442 | - For the six months ended July 31, 2025, net cash provided by operating activities was **$25.8 million**, a substantial increase from **$6.1 million** in the prior year period[19](index=19&type=chunk) - Proceeds from the exercise of stock options significantly contributed to financing activities in 2025[19](index=19&type=chunk) Non-GAAP Financial Measures and Reconciliations [Statement Regarding Use of Non-GAAP Financial Measures](index=7&type=section&id=4.1%20Statement%20Regarding%20Use%20of%20Non-GAAP%20Financial%20Measures) ServiceTitan uses non-GAAP financial measures to provide additional insights into its operating performance, believing these measures are useful for evaluating results, future prospects, and comparisons, despite their inherent limitations - Non-GAAP measures are used to adjust GAAP financial measures for the impact of various items, offering a supplementary view of operating performance[20](index=20&type=chunk) - Management acknowledges that non-GAAP measures have limitations and should not be considered substitutes for GAAP results, as they involve judgment and may not be comparable across companies[21](index=21&type=chunk) - The company excludes items like stock-based compensation, amortization of acquired intangibles, restructuring charges, loss on operating lease assets, and acquisition-related items to facilitate meaningful comparisons and internal performance assessment[22](index=22&type=chunk)[23](index=23&type=chunk) [Non-GAAP Definitions](index=8&type=section&id=4.2%20Non-GAAP%20Definitions) This section defines the methodologies for calculating Non-GAAP EPS and Free Cash Flow, emphasizing their purpose in providing a clearer view of the company's core operational and liquidity performance [Non-GAAP EPS Definition](index=8&type=section&id=4.2.1%20Non-GAAP%20EPS%20Definition) Non-GAAP EPS is calculated by dividing non-GAAP net income by weighted-average shares outstanding, with diluted EPS accounting for potentially dilutive common stock equivalents using the treasury method - Non-GAAP basic EPS is non-GAAP net income divided by basic weighted-average shares outstanding[24](index=24&type=chunk) - Non-GAAP diluted EPS includes the dilutive effect of stock options, restricted stock units, and acquisition indemnity shares withheld using the treasury method[24](index=24&type=chunk) [Free Cash Flow Definition](index=8&type=section&id=4.2.2%20Free%20Cash%20Flow%20Definition) Free cash flow is defined as GAAP net cash provided by (used in) operating activities, adjusted for cash used in investing activities related to capitalized internal-use software and property/equipment purchases, serving as an indicator of liquidity - Free cash flow is calculated as GAAP net cash from operating activities minus capitalized internal-use software and purchases of property and equipment[25](index=25&type=chunk) - It is considered a meaningful indicator of liquidity and capital requirements, useful for evaluating cash flow trends and investment in future growth[25](index=25&type=chunk) - Limitations include not reflecting mandatory debt service and potential incomparability with other companies' similarly titled measures[25](index=25&type=chunk) [GAAP to Non-GAAP Reconciliations](index=9&type=section&id=4.3%20GAAP%20to%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations from GAAP to non-GAAP financial measures for various income statement line items, illustrating the impact of adjustments such as stock-based compensation, amortization of acquired intangibles, and other non-recurring charges [Non-GAAP Gross Profit and Gross Margin](index=9&type=section&id=4.3.1%20Non-GAAP%20Gross%20Profit%20and%20Gross%20Margin) Non-GAAP gross profit and gross margin show improvements over GAAP figures, primarily by excluding stock-based compensation, amortization of acquired intangibles, and loss on operating lease assets Non-GAAP Gross Profit and Gross Margin (Three Months Ended July 31) | Metric | 2025 (Thousands) | 2024 (Thousands) | | :-------------------------- | :--------------- | :--------------- | | GAAP gross profit | $171,349 | $126,826 | | Non-GAAP gross profit | $180,064 | $137,263 | | GAAP gross margin | 70.8% | 65.7% | | Non-GAAP gross margin | 74.4% | 71.1% | - Adjustments for Q2 2025 included **$2.8 million** for stock-based compensation and **$5.9 million** for amortization of acquired intangibles[27](index=27&type=chunk) - For the six months ended July 31, 2025, Non-GAAP gross profit was **$338.8 million** (GAAP: **$319.7 million**) and Non-GAAP gross margin was **74.0%** (GAAP: **69.8%**)[28](index=28&type=chunk)[29](index=29&type=chunk) [Non-GAAP Sales and Marketing Expense](index=10&type=section&id=4.3.2%20Non-GAAP%20Sales%20and%20Marketing%20Expense) Non-GAAP sales and marketing expense is significantly lower than GAAP, reflecting the exclusion of non-cash and non-recurring items like stock-based compensation and amortization of acquired intangibles Non-GAAP Sales and Marketing Expense (Three Months Ended July 31) | Metric | 2025 (Thousands) | 2024 (Thousands) | | :-------------------------------- | :--------------- | :--------------- | | GAAP sales and marketing expense | $69,544 | $58,218 | | Non-GAAP sales and marketing expense | $56,335 | $46,759 | - Adjustments for Q2 2025 included **$(7.7) million** for stock-based compensation and **$(5.5) million** for amortization of acquired intangibles[30](index=30&type=chunk) [Non-GAAP Research and Development Expense](index=10&type=section&id=4.3.3%20Non-GAAP%20Research%20and%20Development%20Expense) Non-GAAP research and development expense is presented after excluding stock-based compensation, acquisition-related items, restructuring charges, and loss on operating lease assets, providing a clearer view of core R&D investment Non-GAAP Research and Development Expense (Three Months Ended July 31) | Metric | 2025 (Thousands) | 2024 (Thousands) | | :-------------------------------- | :--------------- | :--------------- | | GAAP research and development expense | $73,065 | $62,449 | | Non-GAAP research and development expense | $60,362 | $50,583 | - Adjustments for Q2 2025 primarily included **$(12.7) million** for stock-based compensation[31](index=31&type=chunk) [Non-GAAP General and Administrative Expense](index=11&type=section&id=4.3.4%20Non-GAAP%20General%20and%20Administrative%20Expense) Non-GAAP general and administrative expense significantly reduces the GAAP figure by excluding stock-based compensation (including Co-Founders' performance-based RSUs), acquisition-related items, restructuring charges, and loss on operating lease assets Non-GAAP General and Administrative Expense (Three Months Ended July 31) | Metric | 2025 (Thousands) | 2024 (Thousands) | | :-------------------------------- | :--------------- | :--------------- | | GAAP general and administrative expense | $63,512 | $38,769 | | Non-GAAP general and administrative expense | $34,164 | $26,442 | - Adjustments for Q2 2025 included **$(15.8) million** for stock-based compensation and **$(13.5) million** for Co-Founders performance-based RSUs[32](index=32&type=chunk) [Non-GAAP Income from Operations and Operating Margin](index=11&type=section&id=4.3.5%20Non-GAAP%20Income%20from%20Operations%20and%20Operating%20Margin) ServiceTitan achieved positive non-GAAP income from operations and a significantly improved non-GAAP operating margin in fiscal Q2 2026, contrasting with GAAP operating losses, due to the exclusion of various non-cash and non-recurring expenses Non-GAAP Income from Operations and Operating Margin (Three Months Ended July 31) | Metric | 2025 (Thousands) | 2024 (Thousands) | | :-------------------------------- | :--------------- | :--------------- | | GAAP loss from operations | $(34,772) | $(32,610) | | Non-GAAP income from operations | $29,203 | $13,479 | | GAAP operating margin | (14.4)% | (16.9)% | | Non-GAAP operating margin | 12.1% | 7.0% | - Key adjustments for Q2 2025 included **$39.1 million** for stock-based compensation and related payroll taxes, and **$13.5 million** for Co-Founders performance-based RSUs[33](index=33&type=chunk) - For the six months ended July 31, 2025, Non-GAAP income from operations was **$45.4 million** (GAAP loss: **$84.3 million**) and Non-GAAP operating margin was **9.9%** (GAAP: **(18.4)%**)[33](index=33&type=chunk) [Non-GAAP Net Income](index=12&type=section&id=4.3.6%20Non-GAAP%20Net%20Income) ServiceTitan reported positive non-GAAP net income for fiscal Q2 2026, a significant improvement from the GAAP net loss, after adjusting for non-cash and non-recurring items and their tax effects Non-GAAP Net Income (Three Months Ended July 31) | Metric | 2025 (Thousands) | 2024 (Thousands) | | :-------------------------------- | :--------------- | :--------------- | | GAAP net loss | $(32,225) | $(35,652) | | Non-GAAP net income | $32,845 | $10,017 | - Adjustments for Q2 2025 included **$39.1 million** for stock-based compensation, **$13.5 million** for Co-Founders performance-based RSUs, and **$11.4 million** for amortization of acquired intangibles[34](index=34&type=chunk) - For the six months ended July 31, 2025, Non-GAAP net income was **$50.7 million** (GAAP net loss: **$78.6 million**)[34](index=34&type=chunk) [Non-GAAP EPS](index=12&type=section&id=4.3.7%20Non-GAAP%20EPS) ServiceTitan achieved positive non-GAAP diluted EPS of $0.33 in fiscal Q2 2026, reflecting the positive non-GAAP net income and the impact of dilutive securities Non-GAAP EPS (Three Months Ended July 31, 2025) | Metric | 2025 (Thousands, except per share) | | :-------------------------------- | :-------------------------------- | | Non-GAAP net income | $32,845 | | Weighted-average shares (basic) | 91,687,907 | | Weighted-average shares (diluted) | 99,387,647 | | GAAP net loss per share, basic and diluted | $(0.35) | | Non-GAAP net income per share, basic | $0.36 | | Non-GAAP net income per share, diluted | $0.33 | - For the six months ended July 31, 2025, Non-GAAP diluted EPS was **$0.51**[35](index=35&type=chunk) - Prior year non-GAAP EPS is not provided due to the redeemable convertible preferred stock outstanding before the IPO, which would not offer meaningful trend information[35](index=35&type=chunk) [Free Cash Flow](index=12&type=section&id=4.3.8%20Free%20Cash%20Flow) ServiceTitan generated strong non-GAAP free cash flow of $34.3 million in fiscal Q2 2026, a significant increase from the prior year, indicating robust liquidity Free Cash Flow (Three Months Ended July 31) | Metric | 2025 (Thousands) | 2024 (Thousands) | | :-------------------------------- | :--------------- | :--------------- | | GAAP net cash provided by operating activities | $40,340 | $25,316 | | Non-GAAP free cash flow | $34,300 | $18,728 | - For the six months ended July 31, 2025, Non-GAAP free cash flow was **$12.0 million**, a substantial improvement from a negative free cash flow of **$(5.9) million** in the prior year period[36](index=36&type=chunk) Additional Information [Conference Call Information](index=2&type=section&id=5.1%20Conference%20Call%20Information) ServiceTitan scheduled a conference call and webcast for September 4, 2025, to discuss the financial results and business highlights, with replay available online - A conference call and webcast were scheduled for September 4, 2025, at 2:00 p.m. Pacific Time[6](index=6&type=chunk) - The live webcast and replay are accessible via ServiceTitan's investor relations website[6](index=6&type=chunk)[7](index=7&type=chunk) [Forward Looking Statements](index=2&type=section&id=5.2%20Forward%20Looking%20Statements) This section contains standard forward-looking statements regarding ServiceTitan's financial outlook, cautioning that actual results may differ materially due to various risks and uncertainties detailed in SEC filings - The press release includes forward-looking statements concerning financial outlook for fiscal Q3 2026 and full fiscal year 2026[9](index=9&type=chunk) - Actual results may differ materially from projections due to risks and uncertainties, as described in the company's Form 10-Q filings[9](index=9&type=chunk) - ServiceTitan undertakes no obligation to update forward-looking statements, except as required by law[9](index=9&type=chunk) [Press and Investor Contacts](index=3&type=section&id=5.3%20Press%20and%20Investor%20Contacts) Contact information for ServiceTitan's press and investor relations teams is provided for inquiries - Press inquiries can be directed to Max Wertheimer at press@servicetitan.com[11](index=11&type=chunk) - Investor inquiries can be directed to Jason Rechel at investors@servicetitan.com[11](index=11&type=chunk)

Core Insights - ServiceTitan has announced a strategic partnership with Roto-Rooter, enhancing Roto-Rooter's operations with ServiceTitan's technology to drive growth and profitability [1][2] - The partnership aims to unlock new revenue opportunities and improve operational efficiency across Roto-Rooter's extensive network [2][3] - Roto-Rooter, a leader in plumbing and water cleanup services, operates in 121 company-owned territories and over 345 franchise territories in the U.S. and Canada [6] Company Overview - ServiceTitan is a cloud-based software platform designed to support trades businesses, providing tools for business management and customer experience enhancement [5] - Roto-Rooter, founded in 1935, is the largest provider of plumbing, drain cleaning, and water cleanup services in North America, with a strong commitment to technological innovation [6][3] Partnership Impact - The partnership will leverage ServiceTitan's technology across Roto-Rooter's national call centers and branch locations, aiming to set a new standard for service excellence in the industry [4][3] - Roto-Rooter's field employees and office staff will benefit from increased efficiency and automation, allowing them to focus more on customer service [3][2]