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 - 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]