ServiceTitan, Inc.(TTAN) - 2026 Q1 - Quarterly Report

PART I Financial Statements (Unaudited) ServiceTitan reported $215.7 million revenue, a 27% increase, with a net loss of $46.4 million and $14.6 million net cash used in operations for the quarter Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | April 30, 2025 | January 31, 2025 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $420,265 | $441,802 | | Total current assets | $552,973 | $572,766 | | Goodwill | $845,836 | $845,836 | | Total assets | $1,727,396 | $1,768,648 | | Liabilities & Equity | | | | Total current liabilities | $114,834 | $153,116 | | Total liabilities | $273,467 | $314,064 | | Total stockholders' equity | $1,453,929 | $1,454,584 | | Total liabilities and stockholders' equity | $1,727,396 | $1,768,648 | Condensed Consolidated Statements of Operations Quarterly Statement of Operations (in thousands, except per share data) | Metric | Q1 FY2026 (ended Apr 30, 2025) | Q1 FY2025 (ended Apr 30, 2024) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $215,692 | $170,328 | 26.6% | | Platform Revenue | $207,982 | $163,225 | 27.4% | | Gross Profit | $148,396 | $105,980 | 40.0% | | Loss from Operations | $(49,536) | $(53,428) | (7.3%) | | Net Loss | $(46,364) | $(56,039) | (17.3%) | | Net Loss Per Share (basic and diluted) | $(0.51) | $(2.02) | (74.8%) | Condensed Consolidated Statements of Cash Flows Quarterly Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended April 30, 2025 | Three Months Ended April 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(14,570) | $(19,224) | | Net cash used in investing activities | $(7,764) | $(6,597) | | Net cash provided by (used in) financing activities | $380 | $(5,108) | | Net decrease in cash, cash equivalents, and restricted cash | $(21,954) | $(30,929) | Notes to Financial Statements Key notes detail the December 2024 IPO, revenue recognition, debt arrangements, and stock-based compensation - In December 2024, the company completed its IPO, receiving net proceeds of $674.1 million. A portion of the proceeds was used to redeem all outstanding non-convertible preferred stock[35] - As of April 30, 2025, the company had remaining performance obligations of $415.9 million, with approximately 50% expected to be recognized as revenue in the next 12 months[52] - Total stock-based compensation expense for the three months ended April 30, 2025 was $43.7 million, a significant increase from $19.9 million in the prior-year period, including $13.1 million for performance-based RSUs granted to the Co-Founders[92][105] - As of April 30, 2025, the company had a Term Loan with an outstanding principal balance of $106.8 million and an undrawn Revolver Facility of $140.0 million[79][82][183] Management's Discussion and Analysis (MD&A) Management attributes 27% revenue growth to subscription and FinTech adoption, with GTV at $17.7 billion and non-GAAP operating income of $16.2 million - The company's platform processed $17.7 billion of Gross Transaction Volume (GTV) in the three months ended April 30, 2025, up from $14.5 billion in the prior year period[115] - Net dollar retention rate was over 110% for the three months ended April 30, 2025, indicating strong customer retention and expansion[122] Revenue and Gross Margin Analysis (in thousands) | Metric | Q1 FY2026 (ended Apr 30, 2025) | Q1 FY2025 (ended Apr 30, 2024) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $215,692 | $170,328 | $45,364 | 27% | | Platform Revenue | $207,982 | $163,225 | $44,757 | 27% | | Professional Services Revenue | $7,710 | $7,103 | $607 | 9% | | Total Gross Margin | 68.8% | 62.2% | - | - | GAAP vs. Non-GAAP Operating Income (in thousands) | Metric | Q1 FY2026 (ended Apr 30, 2025) | Q1 FY2025 (ended Apr 30, 2024) | | :--- | :--- | :--- | | GAAP loss from operations | $(49,536) | $(53,428) | | Non-GAAP income from operations | $16,209 | $3,312 | Market Risk Disclosures The company's primary market risks are interest rate risk on floating-rate debt, with minor foreign currency and inflation exposures - The company is exposed to interest rate risk on its floating-rate debt; a 100 basis point increase in rates would increase annual interest expense by approximately $1.1 million[196] - Foreign currency risk is considered minimal as the vast majority of revenue is denominated in U.S. dollars, and the company does not currently use derivative hedging instruments[197] Controls and Procedures Management confirmed effective disclosure controls as of April 30, 2025, with no material changes to internal controls and prior weaknesses remediated - Management concluded that as of April 30, 2025, the company's disclosure controls and procedures were effective[200] - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[201] - Material weaknesses in internal control over financial reporting, first identified in fiscal 2019, were fully remediated as of January 31, 2024[17][343] PART II Risk Factors The company faces risks from profitability, growth, competition, industry reliance, multi-class stock, cybersecurity, and complex regulations - Business & Financial Risks: The company has a history of net losses and may not achieve or sustain profitability, with growth dependent on effective expansion, competition, and navigating economic conditions affecting the trades industry[212][214][244] - Governance Risk: The multi-class stock structure concentrates approximately 63% of voting power with the Co-Founders, limiting other stockholders' influence on major corporate decisions[364] - Technology & Cybersecurity Risks: The business relies on third-party data centers (primarily Microsoft Azure) and is exposed to cybersecurity breaches, with AI and open-source software introducing additional operational, reputational, and legal risks[276][287][315] - Regulatory & Legal Risks: The company is subject to a complex web of regulations, including data privacy laws (e.g., CCPA), marketing laws (e.g., TCPA), and anti-corruption laws, where non-compliance could result in significant penalties and reputational harm[298][306][337] Use of Proceeds and Equity Sales The company received net proceeds of $674.1 million from its December 2024 IPO, with no material change in the planned use of proceeds - The company received net proceeds of $674.1 million from its IPO in December 2024[392] Other Information CEO, President, and CFO adopted Rule 10b5-1 trading plans in April 2025 for potential stock sales through April 2026 - On April 15, 2025, the CEO, President, and CFO each adopted Rule 10b5-1 trading arrangements for the sale of company stock[396][397][398]