ServiceTitan, Inc. (TTAN) - Q2 2027 10-Q Summary
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the three and six months ended July 31, 2026. ServiceTitan, Inc. operates an end-to-end, AI-powered cloud-based software platform designed for the trades industry (plumbing, HVAC, electrical, etc.). The company provides tools for CRM, field service management, ERP, HCM, and FinTech. As of July 31, 2026, the company reported approximately 10,800 Active Customers (as of Jan 31, 2026) and processed $26.8 billion in Gross Transaction Volume (GTV) for the quarter.
Key Financial Metrics
| Metric | Three Months Ended July 31, 2026 | Six Months Ended July 31, 2026 |
|---|---|---|
| Total Revenue | $292.8 million | $561.6 million |
| Platform Revenue | $284.5 million | $545.1 million |
| Gross Profit | $209.1 million | $402.9 million |
| Gross Margin (Total) | 71.4% | 71.7% |
| Net Loss | $(24.9) million | $(47.7) million |
| Net Loss Per Share (Basic & Diluted) | $(0.26) | $(0.50) |
| Operating Cash Flow (6 months) | $56.4 million | |
| Cash and Cash Equivalents (as of July 31, 2026) | $479.5 million | |
| Debt Outstanding | $0 (Term loan repaid; $250M revolver available) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 21% year-over-year (YoY) for the quarter and 23% YoY for the six-month period. Platform revenue grew 22% (quarter) and 24% (six months), driven by a 22% increase in subscription revenue and a 24% increase in usage-based revenue.
- Expense Trends:
- R&D: Increased 38% YoY for the quarter ($100.6M) and 33% for six months ($188.7M), primarily due to headcount growth, salary increases, and significant investment in AI technology.
- Sales & Marketing: Increased 11% YoY for the quarter ($77.0M) and 8% for six months ($150.0M), driven by personnel costs and commissions.
- G&A: Decreased 7% YoY for the quarter ($59.0M) and 5% for six months ($117.5M), largely due to lower stock-based compensation from award forfeitures and the absence of impairment losses recorded in the prior year.
- Profitability: GAAP Net Loss improved to $(24.9) million for the quarter compared to $(32.2) million in the prior year. Non-GAAP Net Income was $39.7 million for the quarter and $76.4 million for the six months.
- Debt Repayment: The company voluntarily repaid its ~$107 million term loan in full in January 2026. As of July 31, 2026, no loans were outstanding under the Amended Credit Agreement, which now offers a $250 million revolving facility.
Guidance, Outlook, and Risks
- Strategic Focus: Management is tightening focus on existing commercial trades (mechanical, electrical, plumbing, landscaping) and residential roofing to accelerate the shift toward "Max," their advanced AI-powered offering. Expansion into new trades within commercial or broader residential exteriors has been paused to prioritize Max adoption.
- Revenue Recognition Impact: Due to the billing structure of Max deals (often no fee in the first quarter) and the transition of existing customers, management expects platform and professional services revenue to grow at a slower pace for the remainder of fiscal 2027.
- Key Risks:
- AI Integration: Risks associated with the adoption, accuracy, and regulatory compliance of AI and Generative AI (GenAI) solutions.
- Customer Concentration: A majority of customers are small- and medium-sized businesses (SMBs), which are more susceptible to economic fluctuations.
- Competition: Increasing competition from established software vendors and new entrants leveraging AI.
- Geopolitical: Operations in Armenia, Poland, and Macedonia expose the company to regional instability and sanctions risks.
- Liquidity: The company maintains strong liquidity with $479.5 million in cash and a $250 million undrawn credit facility, sufficient for at least the next 12 months.
Investor Verification Checklist
- Verify the sustainability of the 21-24% revenue growth rate given the stated expectation of slower growth in the remainder of fiscal 2027 due to Max transition billing cycles.
- Monitor the trajectory of R&D expenses, which rose 38% YoY, to ensure AI investments translate into measurable efficiency or revenue gains.
- Review the "Max" adoption metrics and the impact on Net Dollar Retention (reported as >110% for the quarter) to assess long-term customer value.
- Assess the impact of the term loan repayment on future interest expense and the utilization of the new $250M revolver.
- Confirm the status of the Conduit Tech acquisition integration and the associated stock-based compensation obligations.