ServiceTitan’s Q2 FY26 (May 1 – July 31, 2025) performance demonstrates solid top-line growth and expanding profitability, driven by strong core retention, increased adoption of high-margin add-on products, and favorable operational leverage. Total revenue for the quarter reached $242 million (a 25% year-over-year increase) with Gross Transaction Volume (GTV) expanding to $23 billion. The company continues to deepen its penetration across its $650 billion Serviceable Addressable Market (SAM) through targeted go-to-market strategies, AI-driven platform features, and market tailwinds like private equity consolidation in the trades sector. While the professional services segment continues to operate at a loss due to necessary customer onboarding investments, Non-GAAP operating margin expanded substantially to 12.1%, putting ServiceTitan on a clear trajectory toward its long-term operating margin target of ~25%.

Key Financial Highlights (Q2 FY26)

  • Total Revenue: $242 Million, representing 25% YoY growth.

  • Platform Revenue: 26% YoY growth; Platform revenue continues to represent 95%+ of total revenue.

  • Gross Transaction Volume (GTV): $23 Billion, growing 19% YoY.

  • Net Dollar Retention Rate: >110%.

  • Gross Margins:

    • Non-GAAP Platform Gross Margin: 80.7% (up from 79.7% in Q1 FY26).

    • Total Non-GAAP Gross Margin: 74% (up from 71.1% in Q2 FY25).

  • Operating Profitability:

    • Non-GAAP Operating Margin: 12.1% (expanded from 7.0% in Q2 FY25 and 7.5% in Q1 FY26).

    • Non-GAAP Operating Income: $29.2 Million.

  • Customer Scale (As of FY25):

    • ~9,500 active customers.

    • >1,000 customers generating >$100K in Annualized Billings.

    • Customers generating >$100K in Annualized Billings represent >50% of total annualized billings.

Strategic Initiatives and Market Performance

  • Market Opportunity & TAM/SAM:

    • Total Addressable Market (TAM): ~$1.5 Trillion total trades spend (GTV), representing a $30Bn+ revenue opportunity with full platform deployment.

    • Serviceable Addressable Market (SAM): ~$650 Billion trades spend, representing a ~$13 Billion revenue opportunity.

  • Product Ecosystem & Attach Rates:

    • Comprehensive end-to-end platform spanning CRM, FSM, FinTech, ERP, and HCM workflows.

    • Suite of 10 specialized Pro Products (e.g., Marketing Pro, Dispatch Pro, Scheduling Pro, Fleet Pro, PropertyIntel, Sales Pro, Convex) designed to drive customer ROI and ticket size.

  • Titan Intelligence (AI Capabilities):

    • Embedded AI automation that leverages proprietary customer data to optimize real-time dispatching, technician routing, scheduling availability, and marketing ad spend.

  • Industry Tailwinds & Go-to-Market Engine:

    • Capitalizing on Private Equity consolidation within the trades, driving standardized software adoption across larger contractor networks.

    • Efficient acquisition strategy maintaining a 20-month Customer Acquisition Cost (CAC) payback period.

Challenges

  • Professional Services Margins:

    • Non-GAAP Professional Services and Other Gross Margin stood at -81.8% in Q2 FY26 due to the essential upfront investments in customer onboarding, implementation, and training required to drive long-term platform adoption.

  • GTV Seasonality:

    • Gross Transaction Volume and usage-based FinTech revenue experience seasonal peaks in Q2 during warm-weather service months, creating sequential variations in later quarters.

  • CAC Payback Horizon:

    • The 20-month CAC payback period requires disciplined upfront capital deployment before the full multi-product expansion benefits are realized.

Outlook

  • Long-Term Non-GAAP Target Operating Model:

    • Non-GAAP Gross Margin: Target of ~77% (up from 74% in Q2 FY26).

    • Sales & Marketing Expense: Target of 20%–22% of revenue (down from 23% in Q2 FY26).

    • Research & Development Expense: Target of 20%–22% of revenue (down from 25% in Q2 FY26).

    • General & Administrative Expense: Target of ~10% of revenue (down from 14% in Q2 FY26).

    • Non-GAAP Operating Margin: Target of ~25% (expanded from 12.1% in Q2 FY26).