The Earnings Debate

ServiceTitan, Inc. reported its fiscal second quarter 2027 financial results.

For the quarter, the company reported that Q2 total revenue of $292.8 million grew 21% year-over-year.

Subscription revenue for the quarter was $212.4 million, growing 22% year-over-year, and usage revenue for the quarter grew 24% year-over-year to $72.1 million.

The company reported that Q2 operating income of $44.4 million resulted in operating margin of 15.2%, representing an improvement of 310 basis points year-over-year.

Free cash flow for the second quarter was $50.5 million, up 47% year-over-year, and year-to-date free cash flow was $40.9 million.

Additionally, net dollar retention was greater than 110% for the quarter, and gross transaction volume for the quarter was $26.8 billion, representing 17% year-over-year growth.In key business updates, management announced a significant executive transition.

Chief Revenue Officer Ross Biestman is stepping down from his operating role after helping scale the company from less than $30 million in annual recurring revenue to over $1 billion of annual normalized run rate revenue.

Rikus Pretorius, who has served as Senior Vice President of Worldwide Sales for over seven years, will step into the Chief Revenue Officer role in the fourth quarter.

Strategically, the company decided to narrow its trade expansion scope to focus on existing commercial trades and residential roofing rather than expanding into new trades.

This prioritization allows the company to focus resources on its Max program and its software factory initiative to optimize development speed and internal efficiency.

For product and technology updates, the company reported accelerating adoption of its Max platform, which now features over thirty native agentic capabilities.

The company doubled the number of locations enrolled in Max during the first quarter and exceeded its goals in the second quarter, now forecasting to end the fiscal year with over 700 enrolled Max locations.

The company also expanded its AI virtual agents product by launching new voice and SMS capabilities, including speed-to-lead technician notifications.

Consequently, virtual agent revenue and call volume each more than doubled sequentially quarter-over-quarter.

Management provided forward guidance for the third fiscal quarter and full fiscal year 2027.

For the third quarter, the company expects total revenue in the range of $285 million to $287 million and operating income in the range of $29 million to $30 million.

For the full fiscal year 2027, ServiceTitan expects total revenue in the range of $1.139 billion to $1.144 billion and operating income in the range of $152 million to $154 million.

Due to the company's strong margin performance, management noted that they now expect full-year incremental margins of 33% and believe a 25% incremental operating margin will represent a floor rather than a target moving forward.💡 What's next? Would you like to create a set of promotional social media posts or compile a detailed comparison chart of ServiceTitan's sequential financial performance across their fiscal 2026 and 2027 quarters?

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We turn quarterly earnings calls into a fast-paced financial comedic debate. Our AI hosts (one skeptic and one optimist) agree on almost nothing. We cut through jargon, pressure-test claims, and spotlight the questions that matter. Rigorous analysis. Actual laughs.
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