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TTAN
Earnings call · Jul 2026 (Q2 FY27)

ServiceTitan Q2 FY27 earnings call TTAN

Sep 8, 2026 Source

Executive summary

ServiceTitan Q2 FY27 — Strong Max Momentum Drives Revenue Growth and Record Free Cash Flow

ServiceTitan delivered strong Q2 FY27 results, driven by 21% revenue growth and record free cash flow, despite a moderation in GTV growth. The company is strategically prioritizing investments in its Agentic operating system, Max, and the software factory, leading to a temporary revenue headwind but positioning for higher long-term growth. Max is showing compelling customer outcomes and rapid adoption, with new product packages planned to broaden its reach.

Highlights

5

  • Revenue grew 21% year-over-year to $292.8 million.

  • Record free cash flow of $50.5 million, up 47% year-over-year.

  • Max locations doubled in Q2, exceeding goal, with over 700 expected by fiscal year-end.

  • Virtual agent revenue and call volume more than doubled sequentially in Q2.

  • Non-GAAP operating margin improved by 310 basis points year-over-year to 15.2%.

Concerns

4

  • Q2 Gross Transaction Volume (GTV) growth was 17% year-over-year, about 200 basis points below recent quarters, primarily due to lower job growth by existing customers.

  • Lower lead volume, particularly in HVAC, during May and June, stabilizing in July.

  • Mix shift to Max expected to create a $2M-$3M subscription revenue headwind and an additional $2M professional services revenue headwind over the remainder of FY27.

  • Decision to tighten focus on existing commercial trades and residential roofing, deferring expansion into new trades.

Guidance & targets

CategoryTargetConfidence
Total Revenue
$285 million to $287 million
high materiality
High
Operating Income
$29 million to $30 million
medium materiality
High
Total Revenue
$1.139 billion to $1.144 billion
high materiality
High
Operating Income
$152 million to $154 million
medium materiality
High
Incremental Margins
33%
medium materiality
High
Incremental Margins
25%
medium materiality
High

TTAN operating KPIs by quarter

TTAN operating KPIs stated on its earnings calls, by fiscal quarter
KPI Jan 2026 Q4 FY26 Apr 2026 Q1 FY27This call Jul 2026 Q2 FY27Change vs prior quarter
Gross transaction volume (GTV)
$19.8B Q4 gross transaction volume, or GTV, was $19.8 billion, representing 16% year-over-year growth. Source transcript
$21.7B Q1 gross transaction volume or GTV was $21.7 billion, representing 23% year-over-year growth. Source transcript
$26.8B Q2 gross transaction volume, or GTV, was $26.8 billion, up 17% year-over-year. Source transcript
+23.5%

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Gross Transaction Volume (GTV) $26.8B Q2 FY27

up 17% year-over-year

Normalized for business days and weather, growth was also 17%. About 200 basis points below recent quarters due to lower job growth by existing customers.

Max Locations Enrolled >100 Q1 FY27 end

Doubled during Q1 FY27.

Max Locations Enrolled doubled Q2 FY27

sequential

Exceeded goal during Q2.

Max Locations Enrolled >700 FY27 end (expected)

Expected to end the fiscal year with this number.

Product announcements

ProductTypeDetails
Ampion Eventmilestone
Virtual Agent Voice and SMS Featureslaunch

Risks & headwinds

Lower job growth and lead volumes from existing customers Q2 FY27, impacting H2 FY27 forecast

Q2 GTV growth of 17% year-over-year, about 200 basis points below recent quarters. Lead volume more moderate in May and June, particularly in HVAC.

Mitigation:Adjusted second-half forecast to reflect Q2 GTV trends; focusing on Max to improve demand generation for customers.

Near-term revenue headwinds from Max mix shift Remainder of FY27

$2M-$3M subscription revenue headwind and an additional $2M professional services revenue headwind over the remainder of FY27.

Mitigation:Strategic prioritization of Max for long-term value; increased operating leverage of the business moving forward.

What to watch in Q3 FY27

Max locations enrolled

Next quarter (Q3 FY27)
Current Doubled in Q2 FY27 (from >100 in Q1 FY27)
Target Progress towards >700 by FY27 end

Why it matters

Indicates adoption and scaling of the key strategic initiative, Max, which is central to the company's future growth.

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.

Q&A highlights

Given lead volumes stabilized in July after softer growth in May and June, what gives confidence that Q2 represented a temporary moderation versus a new GTV run rate?

Dave Sherry explained that while lead volume stabilized in July, the company rolled forward the aggregate Q2 GTV trend into the forecast for the rest of the year due to uncertainty in consumer behavior, rather than assuming a bounce-back. He also clarified that business day and weather impacts largely offset each other in Q2.

“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 in our forecast for the rest of the year rather than assume what we saw in July was the bounce back going forward.”

asked by DJ Hynes · answered by Dave Sherry

2 min read 6 chapters

Detailed narrative

Strategic Prioritization of Max and Software Factory

ServiceTitan is broadening its investments in the Agentic operating system, Max, and the software factory, leveraging AI to enhance organizational velocity. This strategic focus is expected to unlock the full potential of the business and drive long-term value, even with near-term trade-offs in revenue recognition timing and professional services revenue. The company believes concentrating incremental resources on these two profound opportunities will win the next era of software and meaningfully expand its long-term market opportunity.

Max Customer Outcomes and Adoption

Max customers are experiencing significant improvements, with one example, Delponte, seeing revenue growth of over 35% in Q1 2026 and over 45% in Q2 2026. Max has improved their technician-to-admin ratio from 2:1 in 2025 to 3:1 in 2026, materially improving profitability. Max now includes over 30 agentic capabilities, driving enhanced lead generation, higher booking rates, and increased average ticket sizes, leading to strong demand and higher customer lifetime value.

Virtual Agent Expansion and Performance

The company initiated full go-to-market efforts for virtual agents in May, resulting in revenue and call volume more than doubling sequentially in Q2. New voice and SMS features, including speed-to-lead and technician notifications, are natively integrated into the AI-powered demand generation platform. Virtual agents are proving effective for handling call overflows and after-hours inquiries, with customers increasingly opting to let VAs handle more volume due to their performance and ability to book appointments effectively.

GTV Moderation and Outlook

Gross Transaction Volume (GTV) grew 17% year-over-year in Q2, which was approximately 200 basis points below recent quarters. This moderation was primarily attributed to lower job growth and lead volumes from existing customers, particularly affecting HVAC-focused businesses during May and June, though lead volumes stabilized in July. ServiceTitan has adjusted its second-half forecast to reflect this more moderate GTV growth, also accounting for one fewer business day in Q3.

Max's P&L Impact and Future Packages

Max is currently available primarily for residential in-home customers. Full Max deployment is expected to roughly double subscription revenue relative to prior spend, achieving an average platform earn rate just over 2%. The company plans to launch new Max packages over time, which are anticipated to provide meaningful subscription revenue uplift. However, the current mix shift towards Max is expected to create a near-term headwind of $2M-$3M in subscription revenue and an additional $2M in professional services revenue for the remainder of FY27 due to revenue recognition timing and waived onboarding fees.

Sales Leadership Transition

Ross Biestman is transitioning from his operating role as CRO after nine years, during which he scaled ServiceTitan from less than $30 million to over $1 billion in annual normalized run rate revenue. Rikus Pretorius, who has served as SVP of Worldwide Sales and Ross's right hand for over seven years, will assume the CRO role beginning in Q4, ensuring a smooth leadership transition.

AI-generated summary of the company's earnings call. Not investment advice.