TTAN

This article first appeared on GuruFocus. Revenue: Total revenue of $292.8 million, up 21% year-over-year. Subscription Revenue: $212.4 million, up 22% year-over-year. Usage Revenue: $72.1 million, up 24% year-over-year. Platform Revenue: $284.5 million, up 22% year-over-year. Professional Services and Other Revenue: $8.3 million. Gross Transaction Volume (GTV): $26.8 billion, up 17% year-over-year. Platform Gross Margin: 81.1%, up 40 basis points year-over-year. Total Gross Margin: 74.6%, up 20 basis points year-over-year. Operating Income: $44.4 million, resulting in an operating margin of 15.2%, an improvement of 310 basis points year-over-year. Free Cash Flow: $50.5 million, up 47% year-over-year. Net Dollar Retention: Greater than 110% for the quarter. Max Locations: Doubled to just over 100 in fiscal Q1, expected to double again in Q2, with a goal to end the fiscal year with over 700 enrolled locations. Warning! GuruFocus has detected 4 Warning Sign with BRZE. Is TTAN fairly valued? Test your thesis with our free DCF calculator. Release Date: September 08, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ServiceTitan Inc (NASDAQ:TTAN) delivered strong financial results with 21% year-over-year revenue growth and record free cash flow of $50.5 million in Q2, up 47% year-over-year. Max, the company's agentic operating system, is showing compelling customer outcomes, with early adopters like Del Ponte growing revenue over 45% year-over-year and improving technician-to-admin ratios from 2:1 to 3:1. The company exceeded its Max enrollment goals, doubling locations in Q1 and again in Q2, and now expects to end the fiscal year with over 700 enrolled Max locations. Virtual agents revenue and call volume each more than doubled sequentially in Q2, with new SMS capabilities and strong go-to-market execution driving adoption. Operating leverage is improving significantly, with Q2 operating margin up 310 basis points year-over-year to 15.2%, leading management to raise incremental margin expectations to 33% for FY27 and view 25% as a floor. The company is making strategic investments in its 'software factory' and AI capabilities, which are reducing feature delivery times from quarters to months and improving overall organizational velocity. GTV growth moderated to 17% year-over-year, about 200 basis points below recent quarters, primarily due to lower job growth and softer lead volumes from existing customers, particularly in HVAC. The shift in new deals towards Max creates a near-term revenue headwind of $4 million to $5 million due to timing differences in revenue recognition and lower professional services fees. The company is deferring expansion into new commercial trades and broader residential exterior categories to focus on Max, potentially delaying long-term market expansion opportunities. Consumer behavior impacting lead volumes remains unclear, and management has rolled forward the more moderate Q2 GTV trends into the second half forecast, suggesting uncertainty about a rebound. Max implementations require substantial change management and are currently resource-intensive, with no plans to meaningfully increase staffing, which could limit the pace of scaling. The company expects a $2 million to $3 million subscription revenue headwind over the remainder of the fiscal year due to the revenue recognition timing difference between core and upsell products like Max. Q: Can you provide more details on the decision to prioritize Max over expanding into new trades, and what gives you confidence this is the right decision for the long term?A: Ara Mahdessian (Co-founder and CEO) explained that the decision is driven by the profound opportunities unlocked by AI. Max, their agentic operating system, is showing compelling customer outcomes, with customers growing revenue faster and more profitably. The demand is strong, and customer lifetime value is expected to be higher. Additionally, the "software factory" initiative is increasing organizational velocity, allowing them to turn ideas into products faster. Dave Sherry (CFO) added that this is not a "forever decision" and that they expect to return to trade expansion over time, but the current focus on Max and AI represents the highest return on investment. Q: What drove the moderation in GTV growth during Q2, and what gives you confidence it's temporary rather than a new run rate?A: Dave Sherry (CFO) provided a detailed breakdown. The July 4th holiday fell on a Saturday, creating a headwind of ~150 bps, while weather was roughly consistent with last year. The early start of the cooling season in April pulled some Q2 GTV into Q1. The core challenge was lower lead volume for customers, particularly in HVAC, which stabilized in July. He noted that customers were not able to offset lower lead volume with higher average tickets. As a result, they rolled forward the aggregate Q2 trends into their forecast for the rest of the year rather than assuming a sharp bounce-back. Q: How should we think about the near-term financial headwinds from the shift to Max, and what is the expected impact on the P&L?A: Dave Sherry (CFO) outlined a few key impacts. First, the mix shift to Max creates a $2 million to $3 million subscription revenue headwind over the remainder of the fiscal year due to differences in revenue recognition timing (core is ratable, upsells like Max are as-built). Second, they are not charging onboarding fees for Max, which will lower professional services revenue by roughly an additional $2 million. Combined, this represents a $4 million to $5 million near-term headwind. However, he emphasized that this positions them for a strong FY28. Q: Can you elaborate on the new "on-ramp" packages for Max and how they will change the growth trajectory?A: Dave Sherry (CFO) explained that while there is a cohort of customers ready for full Max transformation, there are others who prefer a more "bite-sized" approach due to the natural diffusion of technology. They plan to launch packages focused on specific areas like demand orchestration or field operations, allowing customers to see results quickly before transforming other parts of their business. Ara Mahdessian (CEO) added that this is a two-step process: first achieving product-market fit, then scaling efficiently. He expects implementation times to decrease over time, similar to what happened with the core ServiceTitan product. Q: What is driving the strong growth in virtual agents, and is it coming from new adopters or displacing competitors?A: Dave Sherry (CFO) stated that the growth is "pretty balanced" between customers adopting virtual agents for the first time and those replacing existing solutions. Vahe Kuzoyan (Co-founder and President) added that voice and SMS are priced separately, resulting in higher revenue. The natively integrated platform, particularly with SMS capabilities alongside voice, is a key differentiator. Revenue and call volume for virtual agents more than doubled sequentially in Q2. Q: Does the company have the implementation capacity to handle the accelerated number of Max customers expected by year-end?A: Ara Mahdessian (CEO) stated they are not planning any meaningful increases in staffing. The assumption is that their ability to implement Max with significantly less effort and time, while maintaining quality, will enable them to hit their targets without scaling customer-facing teams. Dave Sherry (CFO) added that this will result in lower professional services revenue, which will flow through the gross margin. Q: Did you see divergence in performance between different trades, and did that inform the decision to narrow the focus on existing trades?A: Dave Sherry (CFO) noted that the lead volume issue was particularly notable in HVAC. Commercial continues to be a meaningful driver of GTV growth, though at a slightly lower rate in Q2 than Q1. Residential customers continue to grow nicely, but were impacted by lower lead volumes. Ara Mahdessian (CEO) clarified that the narrowing of focus is not about taking resources away from roofing or commercial/construction, which remain integral. It is entirely about not making incremental investments in new trades they are not currently in. Q: Can you explain the Q4 revenue guide, which implies acceleration versus Q3?A: Dave Sherry (CFO) explained that there are two drivers. First, there is a comp issue as Q3 has one fewer business day than the prior year. Second, they expect to see the beginning of Max revenue flowing through in Q4. The primary driver, however, is the comp issue. Q: How are you changing the go-to-market organization to lead with Max, and will you only lead with Max for targeted customers?A: Dave Sherry (CFO) stated they are seeing strong demand from new logos for Max from the very beginning. For customers not ready for it, they will still offer the traditional platform. Vahe Kuzoyan (Co-founder and President) emphasized that Max is the future of ServiceTitan, and if they were starting from scratch today, they would build the agentic operating system. Dave Sherry added that leading with Max creates massive efficiencies for both the customer and ServiceTitan, as the implementation and business transformation process is more streamlined. Q: Can you highlight the drivers of the Q2 revenue beat, given the GTV moderation?A: Dave Sherry (CFO) explained that the beat was driven by usage revenue, which is different from quarters where GTV outperformance was the primary driver. He noted that if GTV had been in their normal expected range, they would have seen roughly another $1.5 million to $2 million in FinTech revenue, which would have put performance exactly in line with their normal beat versus guidance. They have rolled forward the GTV trends into the back half of the year to ensure they can deliver on a consistent cadence. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is accelerating the transition to 'Max', an Agentic operating system, after observing that automated coordination allows contractors to improve technician-to-admin ratios from 2:1 to 3:1. Performance attribution for the quarter was impacted by a 200 basis point deceleration in GTV growth to 17%, primarily driven by lower lead volumes in the HVAC sector during May and June. The company is intentionally narrowing its strategic aperture, deferring expansion into new commercial and residential exterior trades to concentrate resources on AI monetization and the 'software factory' initiative. Operational velocity is being redefined through the software factory, which uses AI to reduce product development timelines from quarters to months while simultaneously lowering defect rates. The transition to Max is viewed as a fundamental shift in the business model, where routine coordination is handled by the system rather than manual office staff, driving higher average tickets and booking rates. Management noted that while lead volumes were softer, the stabilization observed in July suggests a return to more typical seasonal patterns, though they remain cautious on consumer behavior. Full-year revenue guidance reflects a $4 million to $5 million headwind due to the mix shift toward Max, which features a ramped billing structure and the elimination of onboarding fees for existing customers. The company has raised its incremental margin floor to 25% and expects 33% incremental margins for fiscal 2027, reflecting high conviction in the operating leverage of the AI-driven model. Second-half forecasts assume the more moderate GTV growth trends seen in Q2 will persist, rather than projecting a full recovery to previous growth rates. Management expects to end the fiscal year with over 700 Max locations, representing a significant acceleration from the 100 locations reported at the end of Q1. Future growth is dependent on the 'diffusion of technology' timeline, with management launching bite-sized 'on-ramp' packages to capture customers not yet ready for full business transformation. A leadership transition is underway as CRO Ross Biestman steps down, with SVP Rikus Pretorius set to assume the role in Q4 to maintain go-to-market continuity. Professional services revenue is expected to decline by approximately $2 million in the second half as the company waives onboarding fees to incentivize Max adoption. Subscription revenue recognition for Max differs from the core platform, as it is recognized as billed rather than ratably, creating a near-term $2 million to $3 million revenue headwind. Usage revenue, particularly from virtual agents, more than doubled sequentially, signaling that AI monetization is beginning to outpace underlying GTV growth. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified this is a prioritization of incremental resources rather than a withdrawal from existing commercial or roofing initiatives. The decision is driven by the high ROI of Max and the software factory, which are expected to compound value more effectively than entering new categories immediately. ServiceTitan plans to hit aggressive Max adoption targets without meaningful increases in staffing by using AI to automate the onboarding and business transformation process. The goal is to follow the historical trajectory of the core product, where implementation time was reduced to a fraction of its original duration through process efficiency. Growth in virtual agents is balanced between customers adopting the technology for the first time and those displacing existing third-party solutions. The native integration of SMS and voice agents is a key differentiator, allowing customers to handle overflow and after-hours calls that would otherwise be lost. The 17% GTV growth was impacted by an early cooling season pulling demand into Q1 and a holiday calendar shift that reduced business day benefits. Management rolled forward the weaker May/June lead volume trends into their guidance to ensure a high level of conviction in meeting stated targets.

Image source: The Motley Fool. Tuesday, Sept. 8, 2026 at 5 p.m. ET Vice President, Investor Relations - Jason Rechel Co-Founder and CEO - Ara Mahdessian Co-Founder and President - Vahe Kuzoyan CFO - Dave Sherry Operator: Thank you for standing by, and welcome to ServiceTitan's Second Quarter Fiscal Year 2027 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Jason Rechel, Vice President, Investor Relations. Please go ahead. Jason Rechel: Thank you, operator, and welcome, everyone, to ServiceTitan's Fiscal Second Quarter 2027 Earnings Conference Call. With me are ServiceTitan's Co-Founder and CEO, Ara Mahdessian; Co-Founder and President, Vahe Kuzoyan; and CFO, Dave Sherry. During today's call, we'll review our fiscal second quarter 2027 results. We will also discuss our guidance for the third fiscal quarter and full fiscal year 2027. Before we get started, we want to draw your attention to the safe harbor statement included in today's press release and emphasize that information discussed on this call, including our guidance, is based on information as of today only and contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact could be deemed to be forward-looking. Forward-looking statements reflect our views as of today only, and except as required by law, we undertake no obligation to update or revise these forward-looking statements. Please take a look at our filings with the SEC for a discussion of the factors that could cause our results to differ. We also want to point out that we present non-GAAP measures in addition to and not as a substitute for financial measures prepared in accordance with generally accepted accounting principles. Definitions of these non-GAAP financial measures, along with reconciliations to our GAAP financial measures are included in our earnings release, which we furnished with the SEC and is available on our website at investors.servicetitan.com. Unless otherwise stated, all references on this call to platform gross margin, total gross margin, operating income, operating margin, free cash flow and related growth rates are on a non-GAAP basis. Finally, we've posted an updated investor presentation that can be found on the Investor Relations website at investors.servicetitan.com, along with a replay of this call. And with that, let me turn the call over to Ara. Ara? Ara Mahdessian: Thank you, Jason, and thank you for joining us. I'm excited to share that our strong momentum delivering the Agentic operating system for the trades resulted in 21% year-over-year revenue growth and record free cash flow this quarter. Over the course of the year, it has become increasingly obvious that delivering this Agentic operating system to our customers and leveraging AI to further enhance our own organizational velocity are once-in-a-lifetime opportunities to execute against. As a result, we've broadened the scope of our investments in both Max and the software factory in absolute dollars and also relative to our expectations at the beginning of the year. We now believe that focusing on our existing trades and accelerating our shift towards Max will allow us to unlock the full potential of our business in the years ahead. Vahe will share more about our Max execution. Dave will discuss the financial implications of this mix shift, and I'm excited to lead with the outcomes that our customers are realizing with Max today. Our vision since founding ServiceTitan has been to transform the lives of hard-working contractors by helping them grow revenue and increase margins. From day 1, we imagined the world where technicians focused on serving customers in the field, leaders focused on business outcomes and ServiceTitan increasingly handle the operational complexity in between. The outcomes our customers are now seeing with Max and our organizational readiness to lean into this success gives me even more clarity into our forward trajectory. As many of you know, we introduced Max as a pilot program at Pantheon last September, where Stacy Anapol was sitting in the audience. Stacy, the Co-owner and President of Delponte Plumbing & Heating, saw immediate potential in Max. She saw an operating system with a singular company brain connected to every piece of context in her business and armed with the ability to take action on key workflows in our operation, one that could automate and optimize our business generated demand, booked appointments, sold work, managed payroll and inventory and more, allowing her team to handle far more volume with the same headcount. Delponte has been in business for nearly 50 years and first implemented ServiceTitan in 2023 when Stacy took over as President. The initial goal was straightforward to build a better company for their customers, their employees and the future of the business. I'm glad to share that Delponte's results have been extraordinary so far. Stacy's revenue grew more than 35% year-over-year during Q1 2026 and more than 45% year-over-year in the second quarter of 2026, accelerating as the quarter went on. With Max, Delponte generated more calls, booked more appointments and closed more sales with higher average tickets. But what impressed me most wasn't the revenue growth. It was what the operating model allowed them to do next. Delponte launched a new vertical entirely around recurring service. In just 3 months, they've already served 400 customers, all without adding a single back-office employee. Delponte's technician to admin ratio improved from 2:1 in 2025 to 3:1 in 2026, materially improving profitability. Whereas technicians often work long hours during peak season to serve every customer and the office is typically overextended, technicians averaged only 45 hours per week and office morale has never been stronger. As I said last quarter, the power that Max unlocks means work that used to require a group of people manually coordinating an operation is now orchestrated by the system itself with humans and AI agents working together, each doing what they do best. Delponte is proving something we believe from the beginning. When routine coordination is handled automatically, leaders spend less time coordinating work and more time coaching people, serving customers and growing the business. We see this as just the beginning and are excited to announce the next big wave of innovation at Pantheon in October. We are focused on leveraging the Max platform and our massive proprietary data set, expanding ecosystem, brand leadership and distribution across more than 10,000 high-performing contractors to bring the magic of end-to-end automation to life. Before I conclude, I want to take a moment to thank Ross Biestman for building ServiceTitan into the business we are today. We announced earlier that after leading us from less than $30 million in ARR to over $1 billion of annualized run rate revenue, Ross has decided to step away from an operating role, but not before closing through Pantheon in Q3 as our CRO and then serving as an adviser through the end of the fiscal year to ensure a smooth transition. Ross, I am grateful for your leadership and your friendship over the past 9 years. Being the leader that you are, you've also built a bench of exceptional leaders and a world-class go-to-market machine. Rikus Pretorius has served as our SVP of Worldwide Sales and Ross's right-hand for over 7 years. We have great confidence that we have the right sales leadership team to lead us forward as Rikus steps into the CRO role beginning in Q4. Now let's hear more from my co-Founder, Vahe. Vahe Kuzoyan: Thanks, Ara. Max has become the foundation for our future. And while I don't want to steal too much of our thunder for Pantheon next month, I'd like to dive right into the progress we made during the second quarter. Our North Star has always been to deliver transformational customer outcomes. Max customers continue to overperform their peers across key funnel metrics and are creating tangible business value. Max customers are generating more leads, converting those leads at a higher booking rate and completing work at a higher average ticket. They are doing this with improved operational ratios like what you heard from Delponte to deliver a faster and more efficient rate of growth relative to peers. We now have over 30 Agentic capabilities native within Max to power enhanced automation, including Q2 introductions like demand orchestration, advanced session SMS recovery, AI coaching and scorecards and live escalations. Due to the strength of these customer outcomes, we are growing Max more quickly than we had previously expected. We doubled the number of locations enrolled in Max during our fiscal Q1 to just over 100, and we expect it to again double that number during Q2. As a result of strong execution with existing customers and progress selling to select new customers for the first time, we exceeded our goal during Q2, and we now expect to end this fiscal year with over 700 enrolled Max locations. In addition to Max, we began to put our full go-to-market efforts behind another pillar of our AI monetization strategy, virtual agents in May. The differentiation of our natively integrated platform is proving out, particularly with our SMS agent capabilities now native alongside voice. During Q2, we launched voice and SMS features like speed to lead, technician notifications and both inbound and outbound capabilities, each converged within our AI-powered demand generation and capability optimization platform. While virtual agents remain early overall, during Q2, our revenue and call volume each more than doubled sequentially. And when it comes to our organizational velocity, our vision to build a software factory is increasingly taking shape. At its core, we envision that the software factory will be the growth engine behind our platform. It will touch everything we build and everything our customers experience, improving the platform, the pace of feature introductions and how we sell and market ServiceTitan. We're creating a self-reinforcing loop where software perpetually learns and improves based on actual customer behavior to build faster and more efficiently than we ever could have previously. As Ara mentioned, it is in concert with the results we see today that we are increasing the share of our investments on AI and software factory. We believe that increasing our focus on Max and AI will maximize the long-term value of ServiceTitan because we now have even greater resources to be invested in and running together towards the most important opportunity we have ahead of us. For example, we have advanced our investments in Max to include more agentic capabilities for field and office. Technicians are the backbone of the trade businesses, and we are continuing to make even larger investments in the capabilities we give to them from AI proposals to voice-based solutions. Our multiyear growth markets like commercial and roofing remain important initiatives for us as we work towards becoming the market standard over time. To enable increased investments in and attention on Max, during Q2, we elected to tighten our focus on existing commercial trades like mechanical, electrical, plumbing and landscaping and residential roofing rather than the planned expansion of our offering to new trades within commercial or broader residential exteriors categories. We expect this focus on existing trades to allow us to execute on existing investments while also accelerating our shift towards Max and internal AI, addressing what we believe to be our most important opportunity today. Dave will discuss the mix shift implications of this trade-off shortly. I am excited to speak to Pantheon about the compelling new outcomes that our customers will be able to achieve with AI. On to you, Dave. Dave Sherry: Thanks, Vahe. Today, I will run through our Q2 financial results and provide an update to our guidance for full fiscal year 2027. For more detailed financial results, please refer to our press release issued earlier today. Q2 gross transaction volume, or GTV, was $26.8 billion, up 17% year-over-year. Normalized for business days and weather, which were roughly offsetting, GTV growth of 17% was about 200 basis points below recent quarters, primarily due to lower job growth by existing customers. Our customers' lead volume grew at a more moderate seasonal pace during May and June compared to prior years before stabilizing July, which was consistent with HARDI data. This was evident across the broad set of trades in the markets that we serve, and it was particularly true for our HVAC-focused customers. Looking forward, we have adjusted our second half forecast to reflect the more moderate GTV growth we saw during Q2, of course, accounting for 1 fewer business day in Q3. Given the momentum and growing importance of Max, before getting into Q2 financials, I'd like to outline how we expect Max to impact our P&L over time. Specifically, I want to provide some color in 4 key areas. First, in terms of addressable customers, today, Max is primarily available for residential customers in the trades we call in-home, principally plumbing, HVAC, electrical and garage. As we said at this time last year, this grouping of customers represents our largest group of customers based on GTV, though not a majority. Second, in terms of subscription uplift we see from our customers that enroll in Max. As we've noted before, at full contract ramp, subscription revenue roughly doubles relative to prior spend, driving an average platform earn rate just north of 2%. Now we realize that not all of our residential in-home customers are ready to fully transform their businesses yet. We expect to launch packages that will be on-ramps to Max over time, which we expect to have meaningful uplift in subscription revenue run rate, though not quite at the same level as full Max deployment. We will provide more specifics as these packages launch. Third, we recognize revenue slightly differently for our core platform compared to our upsell products like Max and Pro. For the core subscription, we recognize revenue ratably over the term of the contract. For upsell, we recognize revenue as billed. Because Max requires such substantial change management, we typically do not bill for the first quarter of a contract and then ramp to full contract value through the first year or so. The momentum in Max as well as our decision to focus our investments here and in existing trades has led to a higher proportion of new deals coming from Max. We expect this change in composition and the timing difference of revenue recognition between core and upsell to be between a $2 million and $3 million subscription revenue headwind over the remainder of the fiscal year. Finally, given both the required process change and the expected customer lifetime value increase for Max, we have elected not to charge existing customers an onboarding fee for the transition to Max. We expect the mix shift to Max to lower professional services revenue by roughly an additional $2 million over the remainder of this fiscal year, which, of course, also flows through to professional services gross margin. Now shifting to Q2 financials. Q2 total revenue of $292.8 million grew 21% year-over-year. Subscription revenue of $212.4 million grew 22% year-over-year. Usage revenue grew 24% year-over-year to $72.1 million. Fintech revenue grew well, though slightly below recent periods due to more moderate GTV growth. Beyond Fintech, ecosystem and virtual agent revenue continue to perform well with virtual agent revenue more than doubling quarter-over-quarter. We continue to believe AI monetization will lead usage revenue to grow more quickly than GTV in FY '27. Total platform revenue for Q2, the sum of subscription and usage revenue grew 22% year-over-year to $284.5 million. Q2 professional services and other revenue was $8.3 million. Net dollar retention was greater than 110% for the quarter. Q2 platform gross margin was 81.1%, up 40 basis points year-over-year. Total gross margin for Q2 was 74.6%, up 20 basis points year-over-year. We continue to optimize for unit economics within our business. Q2 operating income of $44.4 million resulted in operating margin of 15.2%, an improvement of 310 basis points year-over-year. The fact that we can deliver such strong margins in a quarter with modest GTV growth gives us increased conviction in the higher operating leverage of the business moving forward. As such, we now expect that 25% incremental margins will represent a floor each year rather than a target moving forward. And in this fiscal year, FY '27, we now expect incremental margins of 33% Q2 free cash flow was $50.5 million, up 47% year-over-year. Year-to-date free cash flow of $40.9 million is up from $12 million over the same period a year ago. We remain focused on free cash flow conversion and expect that free cash flow conversion will remain consistently high again during this fiscal year as we saw last year. Now shifting to formal guidance. For the third quarter, we expect total revenue in the range of $285 million to $287 million. We expect to generate operating income in the range of $29 million to $30 million. For the full fiscal year 2027, we expect total revenue in the range of $1.139 billion to $1.144 billion. We expect to generate operating income in the range of $152 million to $154 million. We believe that our focused investments in existing growth markets and Max position ServiceTitan for even higher quality, more efficient long-term growth. We're very excited to talk about the future of the trades during Pantheon this quarter. We're hosting thousands of customers and partners. And while we're not hosting a formal investor event this year, we do hope to see many of you there. With that, I'll turn the call back to the operator for Q&A. Operator? Operator: [Operator Instructions] Our first question comes from the line of DJ Hynes of Canaccord. David Hynes: Dave, so you said lead volumes stabilized in July after softer growth in May and June. What have you seen since quarter end? And Q2 represented maybe a temporary moderation versus kind of a new GTV run rate? Dave Sherry: DJ, why don't I do a quick deep dive on the GTV overall and give you some clarity there. I think first, let me go to business days. Because July 4 fell on a Saturday this year, there was an observed holiday on Friday, July 3. In the past, observed holidays have performed like normal business days, which is what we expect to come in the quarter. Instead, July 3 was closer to a weekend day, creating less benefit than the 150 bps we had planned. Second, in terms of weather, it was a summer -- it was a warm summer, though roughly consistent with last year. And upon reviewing the results for the quarter, we do believe that the early start of the cooling season in April did pull a portion of Q2 GTV into Q1, creating a small headwind. Now these 2 factors more or less offset one another, which is why normalized and reported were the same 17%. Now -- coming to your question, beyond weather and business days, as I noted, consistent with HARDI data, we did see variance within the quarter as May and June were weaker, July was stronger. From what we could see, the core challenge our customers face was the lead volume, and we did see that stabilize in the month of July. And unlike in similar periods in the past, our customers did not pass up -- we're not able to offset this lower lead volume with higher average ticket. Now I don't have clarity on what's driving consumer behavior, particularly on lead volume. So what we did is we rolled forward the aggregate of Q2 into our forecast for the rest of the year rather than assume what we saw in July was a bounce back going forward. And in terms of the first month of the year, DJ, we don't -- I don't love getting the practice of talking about in-quarter forecast because there's so much variance within the quarter, but I think that helps to answer your question. David Hynes: Yes. No, that's helpful color, and I appreciate your comments on Q3. Ara, maybe a more strategic question. So you noted delaying expansion into new commercial trades and broader exteriors to kind of fund Max. How much future growth do you feel like you're deferring? And what are the milestones or signals that would cause you to begin broadening those investments again? Ara Mahdessian: Yes. Great question, DJ. I'll first say this, we are relentlessly focused on the 2 profound opportunities unlocked by AI that we believe will win the next era of software and meaningfully expand ServiceTitan's long-term opportunity. And so we are concentrating our incremental resources on them. First, of course, that's Max, our Agentic operating system. The customer outcomes are compelling. Max customers grow revenue faster and more profitably, demand is strong. CLTV is expected to be higher, and it's not just existing customers upgrading. We recently started leading with Max for new logos in residential in-home trades. And these results give us confidence that our Agentic capabilities are the best path to continued success across all of our segments over time. And then second is the software factory. We believe one of the most important competitive advantages in software will be how quickly and efficiently we can turn an idea into high-quality product in customers' hands. And in some areas, we have large features previously estimated to take quarters being delivered in months with escape defects meaningfully down and bugs identified and resolved automatically. But there is more work to be done to cover the entire ServiceTitan footprint. So we are putting capital and talent where the return is highest. And the magnitude of these 2 shifts is such that we believe nearly every incremental hour is best spent on them. And naturally, there are trade-offs like the revenue recognition timing and the professional services revenue that Dave outlined as well as this sequencing of trade expansion you noted. But we firmly believe this focus will compound value over quarters and years. Operator: Our next question comes from the line of Michael Turrin of Wells Fargo Securities. now. Michael Turrin: I just wanted to follow on to the prior point because I think this is an important point just in general on the call. So just across the team, would love to get more details on the decision to prioritize Max over some of the subsequent trade expansion that we've seen on the road map previously. Just walk us through the thought process, what you're seeing with Max, why now? And what gives you the confidence that's the right decision both today and over the longer term? Ara Mahdessian: Great question, Michael. There is a lot of excitement. What started maybe a year ago as the idea was an aggregation of the Agentic capabilities inside Pro products, and there were roughly 8 of them at the time, has grown into something far bigger than that. There are now 30-plus Agentic capabilities, all orchestrated together on the Max Agentic operating system, generating demand automatically for customers through things like e-mail marketing, Google Ads and Facebook ads, automation, speed to lead, automation of converting phone calls into booked appointments, whether through virtual agents or now SMS agents as well as improvements in close rates and average tickets in the field through things like automating the selection of the best technician for any job based on lead scoring as well as the automatic creation of good, better, best options in the field, automatic follow-up of unsold estimates. All these things are very meaningfully increasing revenue for our customers and meaningfully increasing profitability. The results have been very compelling, and it is the evidence of these results that increase our confidence and conviction that Max represents far greater value to customers. And then we see that in the increase in CLTV from customers. And we see it as an imperative to ultimately, over time, get Max into the hands of every hard-working customer so they can continue to thrive. Dave Sherry: And the only other thing I'd add, Michael, is that this is not a forever decision. We do expect to come back to trade expansion over time. We think the importance of Max now and the software factory, which increased velocity later allows us to attack more trades and more features with more gusto over time. It's just a prioritization decision at this moment. Michael Turrin: And if I may, just as a follow-up, Dave, the growth profile has held fairly durable. We're looking at the mid-teens guide for the back half. And I just was hoping you could help frame what's contemplated there, what the right way to think about the normalized medium-term growth rates for ServiceTitan would be? And if there are any indicators, if you plan to give Max on a quarterly basis or other indicators for us to look at to gauge progress, that's all helpful. Dave Sherry: Absolutely. As always, our guidance is driven by the best information we have right now. And what I'll say on our forward growth, there's a couple of things that are driving the difference from what we've seen before. First, we are rolling forward a more modest GTV forecast after the results we saw in Q2. Second, the new deal volume, as I highlighted in my prepared remarks, are shifting to Max. And that shift has approximately a $4 million to $5 million near-term headwind across both subscription revenue and professional services. It's these 2 factors that are creating a bit of a headwind in the back half of this year. We continue to believe the growth -- the growth and earnings potential of the business remains strong, and we're excited to put ourselves in a position to have strong FY '28. Operator: Our next question comes from the line of Dylan Becker of William Blair. Dylan Becker: Maybe one more crack at the apple here on kind of the strategic prioritization. Ara, maybe for you, is there a way we should think about, obviously, the value and ROI you're delivering through Max enabling you to kind of capture more of that lion's share earlier to date? And if that is the case, maybe how that kind of gives you guys incremental conviction in extending that value prop to adjacent trades over time, effectively making the value proposition more compelling similar to what you saw as the platform evolved on a pre-AI basis, if that makes sense? Ara Mahdessian: Yes. So what we're seeing is that for customers that are in the sales cycle now where we introduced Max early on, that the appetite to not just wait until after they're live with the core and then incrementally grow is actually pretty promising. And so our ability to then go through that process with customers is what we're in the process of validating and we're excited about in terms of launching full GA for Max in home trades. The exact implications in terms of the speed with which we're able to capture the full opportunity really depends on how much of the Max Apple they bite on that first one versus these subsequent packages around demand, field, back office and the sequence with which they go as well as the rev rec implications relative to what we had previously is unclear right now in terms of exactly what that acceleration looks like, what proportion and complexion is going to take on, which flavor. But the early signals are promising, and we're really excited about it. Dylan Becker: Perfect. And then maybe either sticking with you or for Dave as well, too, encouraging commentary on the virtual agents piece doubling, I believe, quarter-over-quarter. So just kind of any sense of how those customers continue to kind of deploy where they deploy virtual agents of the bat and how they're kind of scaling those use cases from those initial trials, maybe into more broad deployments across the portfolio? Dave Sherry: Yes, great question. So maybe a quick recap first. We built support for dozens of additional real-life production use cases through Q1. We began our more expanded go-to-market efforts late Q1, and then we saw strong success in Q2 behind the early efforts of our fuller go-to-market machine. Nearly all of our customers face situations where they have a sudden influx of calls that overwhelm their office staff as well as calls that come in after hours. And of course, when each call might represent thousands of dollars, it's very critical to book each and every one of them. So many customers start with overflow and after hours. But now we also have customers given the performance of these agents and how well they book, how human they sound and how well they handle escalations that opt to let VA handle incrementally more and more volume, especially as CSRs attrit from the business, which is one of the highest attrition roles in the contracting business. Operator: Our next question comes from the line of Billy Fitzsimmons of Piper Sandler. William Fitzsimmons: So you reported in the press release that ServiceTitan exceeded doubling Max locations in fiscal 2Q and now there's 700 Max locations target by fiscal year-end. Max is obviously early and seeing good momentum. It seems like it will become a more material revenue contributor in future years. I think the 2 biggest questions we get on Max is, one, it takes a few quarters for customers to get live, which you guys talked about in the prepared remarks. But could that come down over time? And two, implementations seem like kind of a white glove service right now to get customers live, and that's for a good reason. Is there a kind of upper limit or ceiling on the amount of Max customers you could add per quarter? Or could that come down over time as well? Like how do we think about scaling Max adds? Ara Mahdessian: Great question. So the way I think about it is it's fundamentally a 2-step process. Step one is about achieving product market fit, which for me means if you took it away from a customer, would they fight you for it? Independent of the cost to implement or the length of time it takes, can you just reach that point? Once you reach that point and only when you reach that point, you go to step 2 of scaling, of which the biggest unlock is the ability to implement efficiently, both in terms of time and effort while holding on to the quality. And so if you look at what it took to implement ServiceTitan as a whole, the core product, it went from taking several months for even the simplest use case to a fraction of that today for that same cohort. And we expect that over time, the amount of work it takes and the level of effort it takes to implement Max will follow a similar trajectory. Our confidence in more broadly releasing Max to our in-home trades fundamentally rests on this premise. And so while we still have wood to chop in terms of going through the same process, I don't see anything fundamentally different that will not follow a similar path, especially with the power that we get with AI. In terms of the second question, I believe the answer is largely the same. We believe that our ability to expand will be fundamentally gated by both achieving product market fit in the expanding segments and the ones that aren't served today and doing so with an efficient onboarding process that ultimately holds the quality and delivers the outcomes. And so it's just a matter of going through that process. And now we're focused for in-home trades on that scaling bit, and the product market fit will come with the other segments after that. Operator: Our next question comes from the line of Chris Quintero of Morgan Stanley. Christopher Quintero: You all mentioned that some of your customers are not ready to fully transform their businesses yet. So curious kind of why you think that is? And then secondly, as you think about these new on-ramp packages, are there any details you can provide as it relates to the capabilities or some of the additional details around some of those packages? Dave Sherry: Got it. So on the first one, we think that what we're witnessing is a natural progress of diffusion of technology that has played out how it always has, where there are certain groups that are early adopters and visionaries that look to take advantage of technology to give them a business advantage. And then there's everybody else looking from the sidelines. There is nobody who is not paying attention. And from where we're sitting, the process we're going through is either somebody is ready to jump on board and see the results and success or they're being closely watched by everybody else. That's why we're so maniacally focused on driving success to this initial cohort because we think that anybody else who's not ready to jump on today is a temporary phenomenon. The results are too big and too important to ignore. And so we think that the diffusion of AI, while it will happen faster than previous technology, is still going to take some time. And the readiness to jump on board is largely a function of seeing is believing. And we both see it and believe it and believe our customers will do as well soon. Operator: Our next question comes from the line of Scott Berg of Needham. Scott Berg: I have a follow-up kind of to Billy's question a moment ago around implementations. With the kind of accelerated number of customers and focus that you're looking to deploy here throughout the balance of the year, do you have the right capacity around the implementation teams to actually deliver on the strategic change in a short order? Or do you have to go through a pretty intense exercise in the near term to get to the right staffing levels and deliver on the increased demand? Ara Mahdessian: We're not planning on any meaningful increases in our staffing. We are banking and assuming that our ability to do the implementations at or above the quality that we've seen with significantly less effort and time on both our behalf and our customers' behalf is going to be the enabler of us being able to hit the numbers that we just talked about without having to scale our customer-facing teams in order to do so. Dave Sherry: And with that said, Scott, it's worth noting the teams will be where they are. The revenue on professional services will come in lower, as we noted in my prepared remarks, which will flow through to professional services and other gross margin. Operator: Our next question comes from the line of Tyler Radke of Citi. Tyler Radke: I wonder if we could just spend a little bit of time again on the dynamics that you saw in the quarter. And just curious if you saw divergence between different trades in terms of the order volumes and GTV performance? And is that perhaps informing any of your views on allocating resources away from expanding into additional trades? Dave Sherry: Thanks, Tyler. I'll say in terms of the decomposition of the GTV and how it performed relative to one another, this lead volume piece was particularly notable in HVAC. But broadly, commercial continues to be a meaningful driver of GTV growth. In this quarter and all quarters since we've been public. A slightly lower rate in Q2 than in Q1, but it continues to be a meaningful driver of our growth. Residential, our customers continue to grow nicely. But as I noted in my prepared remarks, we did see an impact on lead volumes and job growth, particularly around HVAC in the quarter. Operator: Our next question comes from the line of Nick Altmann of BTIG. Nicholas Altmann: I wanted to circle back to some of the new on-ramps for Max. It basically sounds like there's maybe more of an a la carte kind of way to purchase Max versus buying the entire suite. And my question is, how does that ultimately change the growth curve for Max? Because on the positive side, it does sound like it could lead to a greater volume of customers. I imagine they can implement and ramp faster and see that ASP uplift with the obvious trade-off being the ASP side of the equation. So just any commentary on how those new on-ramps ultimately kind of change the growth trajectory of Max in your perspective, if at all? Dave Sherry: Great question. So for the cohort of customers that are very excited and ready for the full transformation through all of Max, we have greater demand than we have the ability to implement right now. And hence, the focus on making the implementation much more efficient so we can scale more quickly. But we also recognize because of the traditional diffusion of technology that there will also be cohorts that would like a more bite-sized approach, where they have urgency around transforming demand generation. And hence, we want to have a demand orchestration version of Max that allows them to see incredible results quickly before later transforming field operations. And then there will be a cohort that has more urgency around transforming field operations and seeing the results before then also doing the same on demand orchestration. Ultimately, these bites are still quite very big bites. We are talking about a very material transformation of all of demand generation and orchestration as well as a very meaningful and significant transformation of field operations and how they sell in the field. Operator: Our next question comes from the line of Parker Lane of Stifel. J. Lane: Nice to see the virtual agent growth remains very solid here. When you get under the hood and look at that growth, how much of that has come as a result of customers moving into virtual agents for the first time, embracing that process through ServiceTitan versus actually going and displacing some of the competing features out there in the market? Dave Sherry: Great question. It's pretty balanced between customers that are adopting VA for the first time as well as customers that are replacing an existing solution. Operator: Our next question comes from the line of Jason Celino of KeyBanc Capital Markets. Jason Celino: I don't think it's been asked yet, but the Q4 revenue guide, it kind of implies that we see a little bit of acceleration versus Q3. Maybe, Dave, can you maybe speak to this a little bit? Is it just a comps issue? Or is it something more dynamic? Dave Sherry: Two things there. First, one, there's one fewer day in Q3 than there was in the prior year. So there's a comp driver. And the second is we do expect to see some beginning of Max flowing through into our numbers in Q4, but the primary driver is the comp issue on the biz days. Operator: Our next question comes from the line of Terry Tillman of Truist. Terrell Tillman: Most of my questions have been answered, but I've still got one. It's a 3-parter. I guess in terms of VA, how important or an increased unlock for new business or adoption is SMS Agentic? When customers buy voice and SMS, is that a higher price point? And then, Dave, do you think that the growth in VA could continue doubling for some period of time off the smaller base? Dave Sherry: You want to hit the VA piece, Vahe? Vahe Kuzoyan: Yes. Voice and SMS are priced separately. So they result in higher revenue to us. Dave Sherry: Yes. And they both flow through as consumption because they're charged either on a per call, per outcome or per text message basis. They flow into the usage revenue. I think that we feel pretty excited about the progress in VA, both in terms of the results we've seen, the attach to new customers or existing customers and importantly, the feedback we're getting on the product side. And so while I don't have a specific forecast to share today, I will say that the momentum feels solid from what we're seeing today. Operator: Our next question comes from the line of Joe Vruwink of Baird. Joseph Vruwink: Just going back to the focus on existing trades. When I think about some of the rooftops in a commercial practice, they tend to span into like an adjacency, maybe construction, where adding the new capabilities would help create kind of the comprehensive offering that helps you land at the beginning. Has the thinking about this changed at all? Or is the go-to-market just going to be much more targeted in commercial where maybe this dynamic doesn't matter as much? Ara Mahdessian: Yes. I think it's important that we clarify exactly what we mean by this narrowing of the aperture and what it is and what it isn't. It is not taking resource away from roofing or commercial and construction. And for us, as we've been discussing, construction is an absolutely integral part of winning in commercial. So that dynamic is not changing. We don't expect that investments in either of those to be reduced by any measure. The discussion here is entirely about the incremental investments that would have otherwise gone to new trades that we are not in. So everything about what we've said about commercial and construction in the past still holds. Operator: Our next question comes from the line of Andrew Sherman of TD Cowen. Andrew Sherman: Okay. Dave, I wanted to come back to the lead volumes impacts in Q2. Do you think there's some AI impact there as customers have moved searches to other platforms? Why was it more acute to HVAC? And can Max actually help to offset those impacts if that's -- if this is what's going on with the lead agents that are in Max? Dave Sherry: So we don't have super clarity on what's driving the lead volume. What we will say is that it's pretty broad-based when you look at the trades and our peers reporting the period. And so I don't think it's specific to us and our customers. So I will say it may be something there, but I don't think right now it's something specific to our customer base. In terms of Max, I'll let the founder speak to that in a second, but we do think there's an opportunity for our customers to be at the forefront of how consumers interact with AI. Ara Mahdessian: Indeed, I'll say one of the most important premises of Max is that it helps improve demand generation. And so our ambition, of course, is to get Max in the hands of every customer. And so every customer can thrive on demand generation, on demand conversion into booked deployments and then ultimately also in close rates and average ticket. And then second, Max being the Agentic operating system, of course, has these 30 Agentic capabilities built in that are completely turnkey. And of course, customers will be able to tailor them, but also is the ability not only for customers to build additional workflows and Agentic capabilities natively in Max. But lastly, for it to interact with ultimately consumer agents. And fundamentally, our job is to outperform the market with our customers. That is the core value proposition we deliver to them. Operator: Our next question comes from the line of Dan Jester of BMO. Daniel Jester: I wanted to go back to the comment about leading with Max. And so as you think about the go-to-market organization, besides some of the packaging items which you talked about, are you changing anything else with regards to that leadership with Max going forward? And as these packages get ramped and put out to the broader community, would you expect that you would only lead with Max with targeted customers? Or is that still maybe something further out into the future? Dave Sherry: I think we are seeing quite strong demand in these target segments from new logos for Max from the very beginning. Of course, for some population of that segment who might not be ready for it and who want more traditional software, of course, we will make the existing traditional platform available to them to get them started. But we're seeing pretty strong demand for new logos for Max. Vahe Kuzoyan: And we're talking about this earlier. And if Ara and I were just graduating from school and starting ServiceTitan today, we will be building Max and the Agentic operating system. This is not just some other ancillary product. We see this as the future of ServiceTitan. And so this is what we would be building today if we were starting from scratch. And that's why we think that leading within the sales process is the right way to go. Dave Sherry: And finally, to close out, I think for the customer and for us, there's massive efficiencies in leading with Max because the implementation and the business transformation that goes through onboarding already exists and to go straight to Max is more efficient for them and for us, which is why we're leading with it, why customers are excited about it. Operator: Our next question comes from the line of Yun Kim of Loop Capital Markets. Yun Suk Kim: Okay. Great. So there's a lot of information to digest here, obviously. But in light of a lot of the data that's presented and some of the shift in the focus here, but you guys did put out some upside. And if you can just talk about where -- highlight some of the drivers of the upside here beyond, obviously, the Max adoption, which isn't translating into revenue today? Any outperformance that you can highlight? Dave Sherry: Absolutely, Yun, thank you. This is a pretty important question. I want to take the opportunity to be a bit specific about it. So let me say a couple of things. First, as we think about our guidance, the first and foremost principle in this quarter and always is conviction in our ability to deliver on the numbers we put in front of you. Second, beyond ensuring we deliver what we say, if you step back and look at our track record, an average quarterly beat versus the midpoint of our guidance has been in sort of the $9 million to $10 million range with the primary source of variance coming from GTV and a bit from professional services. In this quarter -- in quarters where our beats have been larger, we've been pretty transparent that the usage revenue has been the primary driver, generally driven by GTV outperformance and that we expect there to be quarters where the inverse happens, which is exactly what happened in Q2. Finally, had Q2 GTV been in our normal expected range and had the business day benefit materialized as we expected, you'd have seen roughly another $1.5 million to $2 million or so in Fintech revenue, which would have put the performance exactly in line with our normal performance versus our guidance. We continue to prioritize the consistency of this track record, and we have rolled forward the GTV trends we saw in Q2 into the back half of the year. To ensure that we're able to deliver on a consistent cadence with you all. Operator: Thank you. I would now like to turn the conference back to Ara Mahdessian for closing remarks. Sir? Ara Mahdessian: Thank you, Luke, and thank you, everyone, for joining us today. I just want to close by thanking all the Titans around the world who show up every day to make our customers successful. Pantheon is our most exciting time of the year. We're excited to host thousands of customers, partners and hopefully, many of you for the future of the Agentic operating system for the trades. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Before you buy stock in ServiceTitan, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ServiceTitan wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends ServiceTitan. The Motley Fool has a disclosure policy. ServiceTitan (TTAN) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

ServiceTitan Inc. (TTAN) reported $292.76 million in revenue for the quarter ended July 2026, representing a year-over-year increase of 20.9%. EPS of $0.40 for the same period compares to $0.33 a year ago. The reported revenue represents a surprise of +2.67% over the Zacks Consensus Estimate of $285.14 million. With the consensus EPS estimate being $0.36, the EPS surprise was +11.11%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how ServiceTitan Inc. performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Gross Transaction Volume: $26.80 billion versus the four-analyst average estimate of $25.90 billion. Revenue- Platform: $284.5 million versus $275.71 million estimated by five analysts on average. Compared to the year-ago quarter, this number represents a +22.3% change. Revenue- Professional services and other: $8.26 million versus the five-analyst average estimate of $9.43 million. The reported number represents a year-over-year change of -12.1%. Revenue- Platform- Subscription: $212.37 million versus the three-analyst average estimate of $208.11 million. The reported number represents a year-over-year change of +21.5%. Revenue- Platform- Usage: $72.12 million compared to the $67.69 million average estimate based on three analysts. The reported number represents a change of +24.4% year over year. Non-GAAP gross profit- Professional Services & Other: $-12.18 million versus the five-analyst average estimate of $-9.51 million. Non-GAAP gross profit- Platform: $230.62 million versus $223.22 million estimated by five analysts on average. View all Key Company Metrics for ServiceTitan Inc. here>>> Shares of ServiceTitan Inc. have returned +1.2% over the past month versus the Zacks S&P 500 composite's -0.4% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ServiceTitan Inc. (TTAN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in ServiceTitan Inc.? Here are five stocks we like better. ServiceTitan’s fiscal Q2 revenue rose 21% year over year to $292.8 million, while free cash flow increased 47% to a record $50.5 million and operating margin expanded to 15.2%. Adoption of the AI-powered Max platform more than doubled during the quarter, and the company now expects more than 700 Max locations by fiscal year-end. ServiceTitan is prioritizing Max and its Software Factory by slowing expansion into additional trades. GTV growth moderated to 17% amid softer customer job and lead growth, though management maintained its fiscal 2027 outlook. Max’s billing ramp and free onboarding are expected to create a combined $4 million to $5 million revenue headwind for the rest of the year. Why AppLovin’s CEO Is Selling While Quantum Insiders Are Buying ServiceTitan (NASDAQ:TTAN) reported fiscal second-quarter 2027 revenue growth of 21% and record free cash flow, while outlining a broader investment push behind its AI-driven Max platform and internal “Software Factory” initiatives. Total revenue for the quarter was $292.8 million, up 21% year over year. Subscription revenue rose 22% to $212.4 million, while usage revenue increased 24% to $72.1 million. The company said total platform revenue, which combines subscription and usage revenue, grew 22% to $284.5 million. → 3 Under-the-Radar Defense Stocks With Record Backlogs 3 Hot New IPOs Defying the 2025 Market Slump Chief Executive Officer Ara Mahdessian said the company is concentrating more resources on Max, which ServiceTitan describes as an agentic operating system for trade businesses. The platform combines more than 30 AI-enabled capabilities intended to automate demand generation, appointment booking, field sales, payroll, inventory and other workflows. President Vahe Kuzoyan said ServiceTitan more than doubled its number of Max locations during the fiscal second quarter, surpassing its prior target. The company had slightly more than 100 enrolled locations after fiscal first-quarter growth and now expects to finish fiscal 2027 with more than 700 Max locations. → Morgan Stanley Eyes Good Things Ahead for Meta After $18 Billion Legal Settlement ServiceTitan Made Waves in Its IPO, But Is the Stock a Buy? ServiceTitan has begun selling Max to select new customers in addition to existing customers. Kuzoyan said early signals suggest some prospective customers are willing to adopt Max at the start of their relationship with ServiceTitan rather than first implementing the company’s traditional core platform. Management also plans to introduce smaller Max packages for customers that are not ready for a full business transformation. Mahdessian said those offerings could allow customers to adopt AI capabilities focused on demand generation or field operations before expanding their use of the broader platform. → Tesla’s Robotaxi Launch Wasn’t the Moment Investors Expected The company cited Delponte Plumbing & Heating as an example of Max adoption. According to Mahdessian, Delponte’s revenue rose more than 35% year over year in the first quarter of 2026 and more than 45% in the second quarter of 2026. The contractor also launched a recurring-service business that served 400 customers in three months without adding back-office staff, ServiceTitan said. ServiceTitan expects Max implementations to become more efficient over time. Kuzoyan said the company is not planning meaningful staffing increases for implementation teams, instead expecting AI and process improvements to reduce the time and effort required to onboard customers while maintaining implementation quality. To support increased spending on Max and the Software Factory, ServiceTitan is narrowing its near-term expansion plans. The company will focus on its existing commercial trades, including mechanical, electrical, plumbing and landscaping, as well as residential roofing, rather than pursuing planned expansion into new commercial trades or broader residential exterior categories. Management said the shift does not reduce investment in commercial, construction or roofing operations already underway. Kuzoyan said construction remains integral to ServiceTitan’s commercial strategy, while the change applies to incremental investments that otherwise would have targeted new trades. Mahdessian described the Software Factory as an effort to use AI to speed product development and improve how ServiceTitan builds, sells and markets software. He said some large features previously estimated to require quarters of development are now being delivered in months, with fewer escaped defects and more automated identification and resolution of bugs. Virtual Agents, another component of the company’s AI monetization strategy, also showed growth during the quarter. Revenue and call volume for Virtual Agents each more than doubled sequentially, according to Kuzoyan. The offering includes voice and SMS capabilities for functions such as after-hours calls, overflow calls, lead response and customer messaging. CFO Dave Sherry said Virtual Agent adoption was balanced between customers using the product for the first time and customers replacing existing solutions. Gross transaction volume was $26.8 billion, an increase of 17% from a year earlier. Sherry said growth was about 200 basis points below recent quarters after adjusting for business days and weather, primarily because existing customers experienced lower job growth. Lead volume growth was more moderate than seasonal patterns during May and June before stabilizing in July, the company said. The trend was broad-based across trades and markets, though it was particularly notable among HVAC-focused customers. ServiceTitan said it does not have clarity on the causes of the lead-volume trend and has incorporated the more moderate second-quarter GTV growth into its outlook for the remainder of the fiscal year. Platform gross margin was 81.1%, up 40 basis points year over year. Total gross margin was 74.6%, up 20 basis points. Operating income was $44.4 million, producing a 15.2% operating margin, up 310 basis points. Free cash flow was $50.5 million, up 47% year over year. Net dollar retention exceeded 110%. Sherry said the company now views 25% incremental margins as a floor rather than a target and expects fiscal 2027 incremental margins of 33%. For the fiscal third quarter, ServiceTitan forecast revenue of $285 million to $287 million and operating income of $29 million to $30 million. For fiscal 2027, it projected revenue of $1.139 billion to $1.144 billion and operating income of $152 million to $154 million. The company said its growing mix of Max sales will create a near-term revenue-recognition effect. Core subscription revenue is recognized ratably over contract terms, while upsell products such as Max are recognized as billed. Because Max customers typically receive an initial period without billing and ramp over the first year, ServiceTitan expects a $2 million to $3 million subscription-revenue headwind over the rest of fiscal 2027. ServiceTitan also expects approximately $2 million less professional-services revenue during the remainder of the year because it is not charging existing customers onboarding fees to transition to Max. Sherry said the combined near-term impact from Max mix shift across subscription and professional services is approximately $4 million to $5 million. Separately, the company announced that Chief Revenue Officer Ross Biestman will leave his operating role after the company’s Pantheon event in the fiscal third quarter and serve as an adviser through the end of the fiscal year. Rikus Pretorius, currently senior vice president of worldwide sales, will become CRO in the fourth quarter. ServiceTitan, Inc (NASDAQ: TTAN) is a cloud-based software provider specializing in end-to-end business management solutions for residential and commercial trade contractors. The company's platform integrates customer relationship management, scheduling and dispatch, mobile workforce management, invoicing, payments and reporting tools into a single suite. By automating key back-office processes, ServiceTitan helps field service businesses improve operational efficiency, enhance customer experience and drive revenue growth. At the core of ServiceTitan's offering is a mobile application that allows technicians to access job details, update work orders, capture signatures and process payments from the field. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "ServiceTitan Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

ServiceTitan Inc. (TTAN) came out with quarterly earnings of $0.4 per share, beating the Zacks Consensus Estimate of $0.36 per share. This compares to earnings of $0.33 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +11.11%. A quarter ago, it was expected that this company would post earnings of $0.28 per share when it actually produced earnings of $0.37, delivering a surprise of +32.14%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. ServiceTitan Inc., which belongs to the Zacks Internet - Software industry, posted revenues of $292.76 million for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 2.67%. This compares to year-ago revenues of $242.12 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. ServiceTitan Inc. shares have lost about 17.5% since the beginning of the year versus the S&P 500's gain of 12.8%. While ServiceTitan Inc. has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for ServiceTitan Inc. was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.27 on $287.34 million in revenues for the coming quarter and $1.34 on $1.14 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Paychex (PAYX), is yet to report results for the quarter ended August 2026. This payroll processor and human-resources services provider is expected to post quarterly earnings of $1.33 per share in its upcoming report, which represents a year-over-year change of +9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Paychex's revenues are expected to be $1.62 billion, up 5.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ServiceTitan Inc. (TTAN) : Free Stock Analysis Report Paychex, Inc. (PAYX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

LOS ANGELES, Sept. 08, 2026 (GLOBE NEWSWIRE) -- ServiceTitan (NASDAQ: TTAN), the software platform that powers the trades, today announced financial results for the fiscal second quarter ended July 31, 2026. “Our strong momentum delivering the Agentic Operating System to the Trades resulted in 21% year-over-year revenue growth and over $50 million of non-GAAP free cash flow this quarter,” said Ara Mahdessian, Co-Founder and CEO. “Delivering this Agentic Operating System to our customers and leveraging AI to further enhance our organizational velocity are once in a lifetime opportunities to execute against.”(1) “Our organizational velocity is improving and our investments in AI are delivering,” said Vahe Kuzoyan, Co-Founder and President, “We exceeded our goal of doubling Max locations during Q2. As a result of strong execution with existing customers and progress with select new customers, we now expect to end this fiscal year with over 700 enrolled Max locations.” Fiscal Second Quarter 2027 Financial and Operational Highlights: _________________________ (1) This press release uses non-GAAP financial measures that adjust GAAP financial measures for the impact of various items. See the section titled “Non-GAAP Financial Measures” and the tables entitled “GAAP to Non-GAAP Reconciliation” below for additional information.(2) Gross Transaction Volume (“GTV”) represents the sum of total dollars invoiced by our customers through the ServiceTitan platform in a given period, which is intended to be a proxy for the total revenue our customers generate. Fiscal Third Quarter and Fiscal Year 2027 Financial Outlook:For fiscal third quarter 2027 and for the full fiscal year 2027, the company currently expects: _________________________(3) ServiceTitan is not able, at this time, to provide an outlook for GAAP loss from operations or a reconciliation of expected non-GAAP income from operations to GAAP loss from operations for the fiscal third quarter 2027 or for the full fiscal year 2027 because of the difficulty of estimating certain items excluded from non-GAAP income from operations that cannot be reasonably calculated or predicted without unreasonable efforts. For example, charges related to stock-based compensation expense require additional inputs, such as the number and value of awards granted, that are not currently ascertainable. Conference Call Information:The financial results and business highlights will be discussed on a conference call and webcast scheduled at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Tuesday, September 8, 2026. Online registration for this conference call can be found here. The live webcast of the conference call can be accessed from ServiceTitan’s investor relations website at http://investors.servicetitan.com. Prepared remarks for the conference call have been made available on ServiceTitan’s investor relations website concurrently with this release. Following completion of the events, a webcast replay will also be available at http://investors.servicetitan.com for 12 months. About ServiceTitan ServiceTitan is AI for the trades — a purpose-built agentic operating system designed to automate the workflows that run a contracting business, from enterprise commercial construction to residential field service, exteriors and beyond. The company’s end-to-end solution gives contractors the tools they need to run and grow their business, while providing a stellar customer experience. Learn how ServiceTitan is equipping tradespeople with the AI technology they need to keep the world running at: www.servicetitan.com. Forward Looking Statements This press release contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release may be forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “target,” or “will,” or the negative of these words or other similar terms or expressions that concern ServiceTitan’s expectations, strategy, plans or intentions. Forward-looking statements in this release include, but are not limited to, statements regarding ServiceTitan’s financial outlook for total revenue and non-GAAP income from operations for fiscal third quarter 2027 ending October 31, 2026 and the full fiscal year ending January 31, 2027, and statements regarding our ability to fully capitalize on bringing AI, including Max, to the trades, our operating and organizational velocity, AI strategy, and plans for Max. ServiceTitan’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including those more fully described under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for fiscal first quarter 2027 ended April 30, 2026 as filed with the SEC on June 5, 2026, which should be read in conjunction with this press release and the financial results included herein. Additional information will be set forth in our Quarterly Report on Form 10-Q for the fiscal second quarter 2027 ended July 31, 2026. The forward-looking statements in this release are based on information available to ServiceTitan as of the date hereof, and ServiceTitan undertakes no obligation to update any forward-looking statements, except as required by law. Press ContactMax WertheimerServiceTitan, [email protected] Investor ContactJason RechelServiceTitan, [email protected] © 2026 ServiceTitan. All rights reserved. ServiceTitan, the ServiceTitan logo, and all ServiceTitan product and service names mentioned herein are registered trademarks or unregistered trademarks of ServiceTitan, Inc. in the United States and other countries. Other brand names and marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). Statement Regarding Use of Non-GAAP Financial Measures In addition to our results prepared in accordance with GAAP, we believe non-GAAP gross profit and non-GAAP gross margin, in total and for platform, and professional services and other, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP earnings per share (“EPS”) are useful in evaluating our operating performance. These measures, however, have certain limitations in that they reflect the exercise of judgment by our management about which expenses are excluded or included and do not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, our financial results determined in accordance with GAAP. We caution investors that amounts presented in accordance with our definition of non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP EPS may not be comparable to similar measures disclosed by other companies because not all companies and analysts calculate these measures in the same manner. For the reasons set forth below, we believe that excluding the following items provides information that is helpful in understanding our operating results, evaluating our future prospects, comparing our financial results across accounting periods, and comparing our financial results to our peers, many of which provide similar non-GAAP financial measures. Stock-based compensation expense and related employer payroll taxes. We exclude stock-based compensation expense, including the performance-based RSUs granted to our Co-Founders, and related employer payroll taxes to allow investors to make more meaningful comparisons of our performance between periods and to facilitate a comparison of our performance to those of other peer companies. Stock-based compensation may vary between periods due to various factors unrelated to our core performance, including as a result of the assumptions used in the valuation methodologies, timing and amount of grants and other factors. We exclude employer payroll taxes because the amounts vary based on timing and settlement or vesting of awards unrelated to our core operating performance. Moreover, stock-based compensation expense is a non-cash expense that we exclude from our internal management reporting processes and when assessing our actual performance, budgeting, planning, and forecasting future periods. Amortization of acquired intangible assets. We incur amortization expense for acquired intangible assets in connection with acquisitions of certain businesses and technologies. Amortization of acquired intangible assets is a non-cash expense that is significantly affected by the timing and size of acquisitions, and the inherent subjective nature of purchase price allocations. Because these costs have already been incurred, we exclude the amortization expense from our internal management reporting processes. We exclude these charges when assessing our actual performance and when budgeting, planning, and forecasting future periods. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Loss on operating lease assets. We have incurred impairments on certain right-of-use assets and other long-lived assets. We believe that it is useful to exclude these charges when assessing the level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. In addition, we believe excluding such costs enhances the comparability between periods. Acquisition-related items. From time to time, we may incur costs related to acquisitions, including legal, third-party valuation and due diligence, insurance costs, and one-time retention bonuses for employees of acquired companies. In addition, we periodically record the change to the fair value of contingent consideration related to past acquisitions. When applicable, we exclude these items when assessing our actual performance and when budgeting, planning and forecasting future periods. We believe excluding these items allows investors to make meaningful comparisons between our core results of operations and those of other peer companies. Change in Non-GAAP Income Tax Rate Presentation Effective February 1, 2026, the beginning of our first quarter of fiscal 2027, we adopted a fixed long-term projected non-GAAP tax rate in order to provide better consistency across interim reporting periods. When projecting the long-term non-GAAP tax rate, we utilize a financial projection that excludes the direct impact of the items excluded from GAAP income in calculating our non-GAAP income. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. For fiscal 2027, we determined the projected non-GAAP tax rate to be 18%, which reflects currently available information, as well as other factors and assumptions that may change over time. We will periodically re-evaluate this tax rate, as necessary, for significant events, relevant tax law changes, material changes in the forecasted geographic earnings mix, and any significant acquisitions. Non-GAAP EPS We define non-GAAP basic EPS as non-GAAP net income divided by weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic. We define non-GAAP diluted EPS as non-GAAP net income divided by weighted-average shares outstanding giving effect to the weighted average of all potentially dilutive common stock equivalents outstanding for the period including options to purchase common stock, restricted stock units, and acquisition indemnity shares withheld. The dilutive effect of outstanding awards is reflected in non-GAAP diluted earnings per share by application of the treasury method. Free Cash Flow We define free cash flow, a non-GAAP measure, as GAAP net cash provided by operating activities less cash used for investing activities for capitalized internal use software and less cash paid for purchases of, and deposits for, property and equipment. We believe that free cash flow is a meaningful indicator of our sources of liquidity and capital requirements and provides information to management and investors that is useful in evaluating the cash flow trends of our business. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. Free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Other companies may calculate free cash flow or similarly titled non-GAAP measures differently, which could reduce the usefulness of free cash flow as a tool for comparison. In addition, free cash flow does not reflect mandatory debt service and other non-discretionary expenditures that are required to be made under contractual commitments and does not represent the total increase or decrease in our cash balance for any given period. ServiceTitan, Inc.GAAP to Non-GAAP Reconciliations(unaudited) Non-GAAP Gross Profit and Non-GAAP Gross Margin * Totals may not foot due to rounding. * Totals may not foot due to rounding. Non-GAAP Sales and Marketing Expense Non-GAAP Research and Development Expense Non-GAAP General and Administrative Expense Non-GAAP Income from Operations and Non-GAAP Operating Margin * Totals may not foot due to rounding. Non-GAAP Net Income (4) Effective February 1, 2026, we adopted a fixed long-term projected non-GAAP tax rate of 18%, which reflects currently available information, as well as other factors and assumptions that may change over time. Non-GAAP EPS Free Cash Flow

Ciena (CIEN) came out with quarterly earnings of $2.11 per share, beating the Zacks Consensus Estimate of $1.74 per share. This compares to earnings of $0.67 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +21.26%. A quarter ago, it was expected that this developer of high-speed networking technology would post earnings of $1.46 per share when it actually produced earnings of $1.64, delivering a surprise of +12.33%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Ciena, which belongs to the Zacks Communication - Components industry, posted revenues of $1.67 billion for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 1.44%. This compares to year-ago revenues of $1.22 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Ciena shares have added about 51.4% since the beginning of the year versus the S&P 500's gain of 12%. While Ciena has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Ciena was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.83 on $1.7 billion in revenues for the coming quarter and $6.55 on $6.33 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Communication - Components is currently in the top 13% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the broader Zacks Computer and Technology sector, ServiceTitan Inc. (TTAN), has yet to report results for the quarter ended July 2026. The results are expected to be released on September 8. This company is expected to post quarterly earnings of $0.36 per share in its upcoming report, which represents a year-over-year change of +9.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. ServiceTitan Inc.'s revenues are expected to be $285.14 million, up 17.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ciena Corporation (CIEN) : Free Stock Analysis Report ServiceTitan Inc. (TTAN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research