ServiceTitan, Inc.

Q1 gross transaction volume was $21.7 billion, up 23% year over year, helped by an extra business day and weather-related tailwinds. Total revenue was $268.8 million, up 25% year over year; subscription revenue was $202 million, usage revenue was $58.5 million, fintech revenue was included within usage, and professional services revenue was $8.3 million. Net dollar retention was greater than 110%. Platform gross margin was 81.3%, up 160 basis points year over year; total gross margin was 75.3%, up 170 basis points. Operating income was $40.8 million and operating margin was 15.2%, up 770 basis points year over year. Free cash flow was negative $9.6 million versus negative $22.3 million a year ago. For Q2, guidance is total revenue of $284 million-$286 million and operating income of $38 million-$39 million. For full-year FY2027, guidance is total revenue of $1.13 billion-$1.14 billion and operating income of $142 million-$147 million. Management also said full-year incremental operating margins should be higher than the initial target of 25%, and usage revenue is expected to grow faster than GTV in FY2027.

Ara Mahdessian framed the quarter as evidence that ServiceTitan is delivering its 'agentic operating system for the trades' and said the company is focused on customer ROI, operational efficiency, and building Max. He highlighted E.D.S. Air Conditioning & Plumbing as an example of Max driving better booking rates, close rates, ticket size, and revenue per technician with minimal incremental overhead. His tone was upbeat and visionary, with repeated emphasis that ServiceTitan is becoming the execution, orchestration, and interaction layer for contractors.

Dave Sherry emphasized a strong start to the year and walked through the quarter’s hard numbers, including $268.8 million of revenue, 81.3% platform gross margin, 75.3% total gross margin, and $40.8 million of operating income. He said Q1 outperformance came from stronger-than-expected GTV and lower costs, though some expense timing helped, and noted the company will reinvest behind strength while still expecting full-year incremental operating margins above the initial 25% target. He also said free cash flow was negative $9.6 million, annual bonuses weigh on Q1 cash flow, and annual free cash flow should roughly approximate annual non-GAAP operating income; he added that the long-term non-GAAP tax rate will be 18% for FY2027 through FY2030.

Analysts focused heavily on Max rollout, asking about deployment consistency, scalability, whether Max could become a front door for new customers, and whether AI usage could pressure gross margins. Management said Max is more than a bundle of Pro products, with 25 agentic capabilities and only about 7 previously available as Pro products, and stressed that the current phase is about proving ROI and improving implementation scalability before pushing wider rollout. On margins, Dave Sherry said AI usage is not especially token-intensive on the customer side and that Max and virtual agents are additive to gross profit dollars, with their combined margins so far roughly consistent with total gross margins at scale.