Fiscal Second Quarter 2027
Filed Sep 8, 2026ServiceTitan reported 21% year-over-year total revenue growth, expanded non-GAAP operating margin to 15.2%, and generated $50.5 million of non-GAAP free cash flow in fiscal second quarter 2027.
Total revenue grew 21% year over year, platform revenue grew 22%, GAAP operating loss narrowed, non-GAAP operating income and margin increased, and operating cash flow and free cash flow grew year over year. The company also issued fiscal third-quarter and full-year revenue and non-GAAP income from operations outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Gross transaction volume (“GTV”)other | $26.8 billion | – | 17% |
| Total revenueGAAP | $292.8 million | – | 21% |
| Platform revenueGAAP | $284.5 million | – | 22% |
| Professional services and other revenueGAAP | $8,260 (in thousands) | – | – |
| Subscription revenueGAAP | $212,373 (in thousands) | – | – |
| Usage revenueGAAP | $72,123 (in thousands) | – | – |
| Total cost of revenueGAAP | $83,687 (in thousands) | – | – |
| Gross profitGAAP | $209,069 (in thousands) | – | – |
| Gross marginGAAP | 71.4% | – | – |
| Platform gross profitGAAP | $223,975 (in thousands) | – | – |
| Platform gross marginGAAP | 78.7% | – | – |
| Professional services and other gross profitGAAP | $(14,906) (in thousands) | – | – |
| Professional services and other gross marginGAAP | (180.5)% | – | – |
| Non-GAAP gross profitnon-GAAP | $218,445 (in thousands) | – | – |
| Non-GAAP gross marginnon-GAAP | 74.6% | – | – |
| Sales and marketing expenseGAAP | $76,973 (in thousands) | – | – |
| Research and development expenseGAAP | $100,630 (in thousands) | – | – |
| General and administrative expenseGAAP | $59,018 (in thousands) | – | – |
| Total operating expensesGAAP | $236,621 (in thousands) | – | – |
| Non-GAAP sales and marketing expensenon-GAAP | $64,334 (in thousands) | – | – |
| Non-GAAP research and development expensenon-GAAP | $76,169 (in thousands) | – | – |
| Non-GAAP general and administrative expensenon-GAAP | $33,518 (in thousands) | – | – |
| Loss from operationsGAAP | $(27.6) million | – | – |
| Operating marginGAAP | (9.4)% | – | – |
| Income from operationsnon-GAAP | $44.4 million | – | – |
| Operating marginnon-GAAP | 15.2% | – | – |
| Interest expenseGAAP | $(188) (in thousands) | – | – |
| Interest incomeGAAP | $3,924 (in thousands) | – | – |
| Loss before income taxesGAAP | $(23,533) (in thousands) | – | – |
| Provision for income taxesGAAP | $1,388 (in thousands) | – | – |
| Net lossGAAP | $(24,921) (in thousands) | – | – |
| Net loss per share, basic and dilutedGAAP | $(0.26) | – | – |
| Non-GAAP net incomenon-GAAP | $39,724 (in thousands) | – | – |
| Non-GAAP net income per share, basicnon-GAAP | $0.41 | – | – |
| Non-GAAP net income per share, dilutednon-GAAP | $0.40 | – | – |
| Net cash provided by operating activitiesGAAP | $58.0 million | – | – |
| Free cash flownon-GAAP | $50.5 million | – | – |
| Net dollar retentionother | > 110% | – | – |
| Stock-based compensation expenseGAAP | $60,575 (in thousands) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| PlatformPlatform revenue consisted of subscription revenue and usage revenue. | $284.5 million | – | 22% |
| SubscriptionNot separately disclosed. | $212,373 (in thousands) | – | – |
| UsageNot separately disclosed. | $72,123 (in thousands) | – | – |
| Professional services and otherNot separately disclosed. | $8,260 (in thousands) | – | – |
Fiscal Third Quarter 2027 and Full Fiscal Year 2027 outlook
- RevenueFiscal Third Quarter 2027: $285 - $287; Full Fiscal Year 2027: $1,139 - $1,144
- NoteNon-GAAP income from operations, Fiscal Third Quarter 2027: $29 - $30
- NoteNon-GAAP income from operations, Full Fiscal Year 2027: $152 - $154
- NoteThe company expects to end fiscal year 2027 with over 700 enrolled Max locations.
- NoteServiceTitan is not able 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 fiscal third quarter 2027 or full fiscal year 2027.
What drove it
- Management attributed 21% year-over-year revenue growth and more than $50 million of non-GAAP free cash flow to momentum delivering the Agentic Operating System to the Trades.
- Management said investments in AI are delivering and organizational velocity is improving.
- The company exceeded its goal of doubling Max locations during Q2 and cited strong execution with existing customers and progress with select new customers.
- Net dollar retention was reported as greater than 110%.
Concerns
- ServiceTitan remained unprofitable on a GAAP basis, reporting a GAAP loss from operations of $(27.6) million and GAAP net loss of $(24,921) (in thousands).
- Professional services and other reported GAAP gross profit of $(14,906) (in thousands) and GAAP gross margin of (180.5)%.
- GAAP research and development expense was $100,630 (in thousands), compared with $73,065 (in thousands).
- Stock-based compensation expense was $60,575 (in thousands), compared with $49,307 (in thousands).
- The company did not provide GAAP loss from operations outlook or a reconciliation of expected non-GAAP income from operations to GAAP loss from operations.
What to watch
- Fiscal third-quarter 2027 total revenue outlook of $285 - $287 and non-GAAP income from operations outlook of $29 - $30.
- Full fiscal year 2027 total revenue outlook of $1,139 - $1,144 and non-GAAP income from operations outlook of $152 - $154.
- Progress toward ending fiscal year 2027 with over 700 enrolled Max locations.
- Whether professional services and other gross profit and gross margin improve from $(14,906) (in thousands) and (180.5)%.
- The trajectory of GAAP operating losses, research and development expense, and stock-based compensation expense.
Balance sheet and cash flow
- Cash and cash equivalents as of July 31, 2026: $479,538 (in thousands).
- Cash, cash equivalents, and restricted cash as of July 31, 2026: $479,954 (in thousands).
- Total assets as of July 31, 2026: $1,804,176 (in thousands).
- Total liabilities as of July 31, 2026: $198,480 (in thousands).
- Total stockholders' equity as of July 31, 2026: $1,605,696 (in thousands).
- Net cash used in investing activities: $(7,534) (in thousands), compared with $(6,040) (in thousands).
- Net cash provided by financing activities: $7,552 (in thousands), compared with $16,920 (in thousands).
- Net change in cash, cash equivalents, and restricted cash: $58,007 (in thousands), compared with $51,220 (in thousands).
Analysis
ServiceTitan delivered a strong fiscal second quarter, with total revenue of $292.8 million, up 21% year over year, and platform revenue of $284.5 million, up 22%. GTV was $26.8 billion, up 17%, while net dollar retention remained greater than 110%. Subscription revenue was $212,373 (in thousands) and usage revenue was $72,123 (in thousands). Professional services and other revenue was $8,260 (in thousands), below $9,397 (in thousands) in the prior-year period.
Profitability improved on both a GAAP and non-GAAP basis. GAAP loss from operations narrowed to $(27.6) million from $(34.8) million, and GAAP operating margin improved to (9.4)% from (14.4)%. Non-GAAP income from operations increased to $44.4 million from $29.2 million, lifting non-GAAP operating margin to 15.2% from 12.1%. Total GAAP gross margin was 71.4%, compared with 70.8%, and non-GAAP gross margin was 74.6%, compared with 74.4%.
The expense mix remains important. GAAP research and development expense increased to $100,630 (in thousands) from $73,065 (in thousands), while sales and marketing expense rose to $76,973 (in thousands). General and administrative expense declined to $59,018 (in thousands). Stock-based compensation expense was $60,575 (in thousands), and the reconciliation also includes $13,515 (in thousands) of stock-based compensation expense related to Co-Founders performance based RSUs. Professional services and other remained materially negative at a GAAP gross margin of (180.5)%.
Cash generation strengthened. GAAP net cash provided by operating activities was $58.0 million, compared with $40.3 million, and non-GAAP free cash flow was $50.5 million, compared with $34.3 million. Cash and cash equivalents were $479,538 (in thousands) as of July 31, 2026. No share repurchases or dividends were reported in the filing.
The outlook calls for fiscal third-quarter 2027 revenue of $285 - $287 and non-GAAP income from operations of $29 - $30. Full fiscal year 2027 outlook calls for revenue of $1,139 - $1,144 and non-GAAP income from operations of $152 - $154. Operationally, management said it exceeded its goal of doubling Max locations during Q2 and now expects to end the fiscal year with over 700 enrolled Max locations. The filing does not provide GAAP operating-loss guidance or a reconciliation from guided non-GAAP income from operations to GAAP loss from operations.
Management, verbatim
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.
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.
Ara Mahdessian, Co-Founder and CEO
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.
Vahe Kuzoyan, Co-Founder and President
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore, comparison of actual results with prior guidance is unavailable.
- Prior-quarter figures and quarter-over-quarter changes for reported metrics were not provided.
- GAAP and non-GAAP effective tax rates for the fiscal second quarter 2027 were not provided.
- Forward guidance for gross margin, operating expenses, tax rate, GAAP loss from operations, GAAP EPS, non-GAAP EPS, operating cash flow, and free cash flow was not provided.
- Debt balance was not provided as a separate balance-sheet line item.
- Share repurchases and dividends were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.