Financial Data and Key Metrics Changes - Q3 gross transaction volume (GTV) was $21.7 billion, representing a 22% year-over-year growth [18] - Total revenue for Q3 was $249.2 million, growing 25% year-over-year [19] - Subscription revenue reached $182.8 million, a 26% year-over-year increase [19] - Usage revenue grew 24% year-over-year to $56.8 million, exceeding expectations [19] - Q3 platform gross margin was 80.2%, an improvement of 310 basis points year-over-year [19] - Free cash flow for Q3 was a record $38 million, up from $11 million in the prior year [20] Business Line Data and Key Metrics Changes - Pro products continued to be the largest driver of subscription revenue growth [12] - The introduction of Field Pro and virtual agents across the pro portfolio contributed to growth [13] - The commercial segment saw strong results with the introduction of commercial CRM and construction management capabilities [14] Market Data and Key Metrics Changes - GTV growth was led by the commercial sector, with consistent growth in HVAC and other trades within residential [18] - The customer base is diverse, with GTV insulated from supplier inventory cycles due to its focus on break/fix services [18][71] Company Strategy and Development Direction - The company aims to build the operating system for the trades, focusing on delivering real ROI to customers [5][27] - The MAX program is a key initiative aimed at automating workflows and optimizing revenue for customers [28] - The strategy includes leveraging AI to enhance customer operations and improve profitability [10][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory and the opportunity to democratize AI for the trades [6] - The company is focused on delivering sustainable high ROI to customers in resilient trades [21] - Management noted that the current economic environment remains stable, with job growth and average ticket sizes consistent [50] Other Important Information - The company paid approximately $20 million in cash for the acquisition of Conduit, which is expected to enhance cross-sell opportunities [20] - The company is experiencing strong momentum from private equity customers, who are significant adopters of pro products [36] Q&A Session Summary Question: What are the plans for achieving multi-billion-dollar revenue? - Management emphasized the importance of building the operating system for the trades and leveraging AI as a critical opportunity for growth [27] Question: How is the MAX program progressing? - The MAX program is in early stages, with a focus on ensuring success for initial participants before broader rollout [35] Question: What is the current technician to back office staff ratio? - The ratio varies by trade, with some contractors achieving over two technicians per back office staff [40] Question: Why is GTV in residential HVAC insulated from OEM volume declines? - GTV is driven by break/fix services rather than new home construction, making it less susceptible to OEM cycles [71] Question: What are the learnings from the commercial side? - There is a trend towards consolidation in the commercial space, with a focus on providing capabilities that allow for synergies similar to the residential side [60] Question: How does the company view the impact of AI on product strategy? - The rise of AI presents opportunities for new products and services, with a focus on ensuring the best market solutions for customers [90]
ServiceTitan, Inc.(TTAN) - 2026 Q3 - Earnings Call Transcript