ServiceTitan’s Q2 FY27 (May 1 to July 31, 2026) performance demonstrates continued top-line scale, expanding platform gross margins, and strong cash flow generation. The company generated $293 million in total revenue (up 21% year-over-year) and processed $26.8 billion in Gross Transaction Volume (GTV). ServiceTitan is accelerating its strategic shift toward full business automation via its “Max” Agentic OS and AI consumption ecosystem, expanding its presence across a $650 billion Serviceable Addressable Market (SAM). While GTV growth moderated due to macro lead softness in certain residential trades and implementation onboarding costs continue to weigh on professional services, Non-GAAP operating margin expanded to 15.2% and Free Cash Flow reached a record $50.5 million.
Key Financial Highlights (Q2 FY27)
Total Revenue: $293 Million, representing 21% YoY growth.
Platform Revenue: 22% YoY growth; constitutes 95%+ of total revenue.
Gross Transaction Volume (GTV): $26.8 Billion, reflecting 17% YoY growth.
Retention Metrics:
Net Dollar Retention Rate: >110%.
Gross Margins:
Non-GAAP Platform Gross Margin: 81.1% (up from 80.7% in Q2 FY26).
Total Non-GAAP Gross Margin: 74.6% (up from 74.4% in Q2 FY26).
Operating Profitability & Cash Flow:
Non-GAAP Operating Margin: 15.2% (expanded from 12.1% in Q2 FY26).
Non-GAAP Operating Income: $44.4 Million (up from $29.2 Million in Q2 FY26).
Non-GAAP Free Cash Flow: $50.5 Million (up 47% YoY).
Customer Base:
~10,800 active customers.
>2,000 enterprise customers generating >$100K in Annualized Billings.
Customers generating >$100K represent >60% of total annualized billings.
Strategic Initiatives and Market Performance
Addressable Market Opportunities:
Total Addressable Market (TAM): ~$1.5 Trillion in total trades spend (GTV), representing a $30Bn+ potential revenue opportunity under full platform deployment.
Serviceable Addressable Market (SAM): ~$650 Billion in trades spend, representing a ~$13 Billion revenue opportunity.
Evolution Toward Full Business Automation (“Max”):
Transitioning from modular Pro Products toward Max, an integrated Agentic OS (Atlas) designed to orchestrate demand generation, field excellence, and back-office efficiency.
FinTech & AI Consumption Ecosystem:
Expanding usage revenues through credit card, ACH, third-party consumer financing, and AI consumption modules.
Industry Tailwinds & Go-to-Market Engine:
Capitalizing on Private Equity consolidation within the trades, driving standardized platform software across multi-location franchisee networks.
Efficient GTM execution maintaining a 24-month target Customer Acquisition Cost (CAC) payback period.
Challenges
Professional Services Unit Economics:
Non-GAAP Professional Services and Other Gross Margin was -147.4% in Q2 FY27 due to essential upfront investments in customer onboarding and implementation.
GTV Growth Moderation:
Gross Transaction Volume growth moderated to 17% YoY due to macro lead volume softness in certain residential trades (particularly HVAC) during early summer months.
Transition Headwinds:
Strategic pivot toward Max enrollment creates near-term subscription revenue timing adjustments as customers adopt full-platform automation packages.
Outlook
Long-Term Non-GAAP Target Operating Model:
Non-GAAP Gross Margin: Target of ~77% (up from 75% in Q2 FY27).
Sales & Marketing Expense: Target of 20%–22% of revenue (down from 22% in Q2 FY27).
Research & Development Expense: Target of 20%–22% of revenue (down from 26% in Q2 FY27).
General & Administrative Expense: Target of ~10% of revenue (down from 11% in Q2 FY27).
Non-GAAP Operating Margin: Target of ~25% (expanded from 15.2% in Q2 FY27).
Capital Discipline & Free Cash Flow:
Operating model configured to deliver >25% annual incremental operating margins alongside durable revenue expansion.
Targeted Free Cash Flow (FCF) conversion rate of >90% relative to Non-GAAP Operating Income.
