LOS ANGELES, Sept. 24, 2025 (GLOBE NEWSWIRE) -- ServiceTitan (Nasdaq: TTAN), the software platform that powers the trades, unveiled a series of new product announcements last week at Pantheon 2025 designed to help contractors deliver better outcomes for their businesses and their customers. The new capabilities span automation, AI, financial tools, innovations in commercial service, improvements in construction management, and the launch of a brand new CRM experience, reflecting ServiceTitan’s continued inv ...

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

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 - 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 Data and Key Metrics Changes - Q1 gross transaction volume (GTV) was $17.7 billion, up 22% year over year [23] - Q1 total revenue was $215.7 million, up 27% year over year, driven by subscription revenue of $162.7 million, which grew 29% year over year [24] - Q1 platform gross margin was 79.7%, an improvement of over 300 basis points year over year [24] - Q1 operating income was $16.2 million, leading to a record operating margin of 7.5%, an improvement of 560 basis points year over year [25] - Q1 free cash flow was negative $22.3 million, an improvement from negative $24.6 million in the prior year [26] Business Line Data and Key Metrics Changes - Subscription revenue growth was 29% year over year, while usage revenue grew 22% year over year [24] - Professional service revenue for Q1 was $7.7 million [24] - Net dollar retention was greater than 110% for the quarter [24] Market Data and Key Metrics Changes - The company reported healthy growth from both residential and commercial customers [23] - The focus on enterprise customers is increasingly driving growth, with significant interest in standardizing operations around AI and automation [16][17] Company Strategy and Development Direction - The company aims to deliver real ROI to customers, which drives subscription and usage revenue growth [6] - Four primary areas of focus for FY 2026 include expanding enterprise capabilities, pro product adoption, deeper engagement in commercial, and growth in roofing [15] - The company is leveraging partnerships and technology to enhance its offerings, particularly in the commercial and roofing sectors [21][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainty and highlighted the resilience of customers [32] - The company is managing for long-term growth and margin expansion, with a target of achieving a 25% non-GAAP operating margin [27] - Management is cautious about external factors such as tariffs and their potential impact on customer growth and supply chain inflation [32] Other Important Information - The company is focused on delivering transformative customer outcomes and building trade-specific workflows [11][14] - The introduction of new AI-native products is expected to enhance operational efficiency for customers [18] Q&A Session Summary Question: Impact of tariffs on the business - Management acknowledged potential positive and negative impacts of tariffs, emphasizing customer resilience and the ability to pass through rising costs [32] Question: Stacking S curve strategy for growth - The company is focused on enterprise, commercial, pro, and roofing as primary areas of attention for growth [35] Question: Seasonal perspective on GTV and pro product attach - GTV is expected to be stronger in Q2 due to seasonal factors, with pro products being a significant growth driver [40][43] Question: Update on commercial bookings and product capabilities - Commercial bookings and go-lives are performing well, with ongoing development of a dedicated commercial CRM and project management capabilities [46][48] Question: Opportunities in new trades - The company is open to exploring new trades but focuses primarily on established priorities to ensure resource allocation [52] Question: Average ticket sizes and macro impacts - Average ticket sizes remained stable, with Q2 guidance factoring in weather variability and macroeconomic conditions [56] Question: Visibility from customer go-lives - Customer go-lives provide high visibility into subscription revenue, with a focus on delivering ROI to encourage upselling of pro products [76][78]

Financial Data and Key Metrics Changes - Q1 gross transaction volume (GTV) was $17.7 billion, up 22% year over year [20] - Q1 total revenue was $215.7 million, up 27% year over year, driven by subscription revenue of $162.7 million, which grew 29% year over year [21] - Q1 platform gross margin was 79.7%, an improvement of over 300 basis points year over year [21] - Q1 operating income was $16.2 million, leading to a record operating margin of 7.5%, an improvement of 560 basis points year over year [22] - Q1 free cash flow was negative $22.3 million, an improvement from negative $24.6 million in the prior year [23] Business Line Data and Key Metrics Changes - Subscription revenue growth was 29% year over year, while usage revenue grew 22% year over year [21] - Professional service revenue for Q1 was $7.7 million [21] - Net dollar retention was greater than 110% for the quarter [21] Market Data and Key Metrics Changes - The company reported healthy growth from both residential and commercial customers [20] - The focus on enterprise customers is increasingly driving growth, with significant interest in standardizing operations around AI and automation [14] Company Strategy and Development Direction - The company aims to expand enterprise capabilities, increase pro product adoption, deepen commercial focus, and grow in roofing [12] - The strategy includes building trade-specific workflows to attract new industries to the platform [9] - The company is focused on becoming the operating system for the trades, with a long-term target of achieving a 25% non-GAAP operating margin [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainty and emphasized the resilience of customers [30] - The company is managing for long-term growth rather than short-term gains, with a focus on durable compounding growth over many years [24] - Management acknowledged the potential impact of tariffs and supply chain inflation but emphasized the importance of prudent forecasting [30] Other Important Information - The company highlighted successful customer stories that demonstrate the value of its platform, including significant revenue growth for customers using its services [7][10] - The company is actively pursuing partnerships and consolidations in the commercial space, which is seen as a key growth area [65] Q&A Session Summary Question: Impact of tariffs on the business - Management noted that while tariffs could lead to supply chain inflation, customers have historically managed to pass through rising costs [30] Question: Stacking S curve strategy - The company is focused on enterprise, commercial, pro products, and roofing as primary areas of attention for growth [32] Question: Seasonal perspective on GTV - GTV is expected to be stronger in Q2 due to seasonal factors, particularly in trades like HVAC and landscaping [37] Question: Commercial bookings and product roadmap - Commercial bookings are performing well, with significant go-lives and a focus on enhancing product capabilities for construction use cases [44] Question: Average ticket sizes and macro impacts - Average ticket sizes remained stable, with Q2 guidance factoring in weather variability and macroeconomic conditions [55] Question: Visibility from customer go-lives - Customer go-lives provide high visibility into subscription revenue, with a focus on delivering ROI to encourage upselling of pro products [78]

Financial Data and Key Metrics Changes - Total revenue for fiscal year 2025 reached $772 million, representing a 26% year-over-year growth, with subscription revenue growing by 28% year-over-year [8][19] - Q4 total revenue was $209.3 million, up 29% year-over-year, driven by a gross transaction volume (GTV) of $17 billion, which also grew by 26% year-over-year [19][20] - Q4 operating income was $6.9 million, leading to an operating margin of 3.3%, an improvement of 200 basis points year-over-year [22] - Free cash flow for Q4 was $10.8 million, a significant increase from negative $2.2 million in the prior year [22] Business Line Data and Key Metrics Changes - Subscription revenue in Q4 was $156.7 million, up 31% year-over-year, while usage revenue was $43.4 million, up 26% year-over-year [20] - Professional services revenue in Q4 was $9.2 million, contributing to the overall revenue growth [21] - Net dollar retention exceeded 110% for the quarter, indicating strong customer expansion [21] Market Data and Key Metrics Changes - The company serves a large and durable market, with North American customers spending approximately $1.5 trillion annually on trades services [9] - The company exited fiscal year 2025 with approximately 9,500 total active customers, an 18% increase year-over-year [22] Company Strategy and Development Direction - The company aims to be synonymous with the trades by expanding its enterprise capabilities, increasing pro product adoption, and deepening its presence in commercial and roofing sectors [13][15] - The focus is on creating value for customers through high ROI solutions, which in turn drives growth for the company [7][12] - The company is committed to becoming the operating system for the trades, leveraging partnerships and technology to enhance customer success [11][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance in existing customer segments and the potential for new product adoption [19][63] - The management acknowledged the impact of macroeconomic conditions but noted that historical performance has shown resilience in job growth despite economic cycles [60] - The company is monitoring external variables closely, including weather patterns and macroeconomic shifts, to inform its guidance and operational strategies [64][97] Other Important Information - The company achieved free cash flow positivity for the first time in fiscal year 2025, marking a significant milestone [8] - The management highlighted the importance of customer success metrics, shifting focus to include expansion as a core KPI starting in fiscal year 2026 [24] Q&A Session Summary Question: What contributed to better linearity of new business in Q4? - Management attributed the unusual linearity to momentum from the Pantheon event and excitement surrounding the IPO, leading to more deals closing earlier in the quarter than usual [29][30] Question: What are the new opportunities available with the new products? - Management indicated that while new products take time to mature, they expect them to be significant growth drivers in fiscal year 2027 and beyond [31] Question: How does the company view its position in heavy construction? - Management clarified that they focus on specialty trade subcontractors rather than general contractors, seeing opportunities for coexistence rather than direct competition with firms like Procore [44][45] Question: How does the company plan to drive expansion through customer success managers (CSMs)? - The strategy involves CSMs helping customers better utilize products, which is expected to lead to revenue growth and margin improvement [51] Question: How does inflation impact the company's performance? - Management noted that while inflation could affect average ticket sizes, they have not yet observed a significant impact on jobs performed or average ticket [60][78] Question: What is the outlook for free cash flow in fiscal year 2026? - Management indicated that free cash flow should align closely with non-GAAP operating income, with seasonal dynamics considered [71] Question: How does the company view the impact of AI on its products? - Management highlighted that AI is expected to enhance existing pro products and drive monetization opportunities, with current AI products already showing strong customer adoption [100]