ServiceTitan (NASDAQ:TTAN) executives used the company’s fiscal fourth-quarter 2026 earnings call to highlight a milestone year as a newly public company, point to accelerating product momentum around artificial intelligence, and provide revenue and profit guidance for fiscal 2027.
Fiscal 2026 results and Q4 performance
Co-founder and CEO Ara Mahdessian said ServiceTitan celebrated the one-year anniversary of its IPO during the quarter and surpassed $1 billion of annualized revenue run rate. For fiscal 2026, the company delivered $961 million in total revenue, up 24% year-over-year, led by 26% subscription revenue growth. Mahdessian also pointed to 36% incremental operating margins and “a meaningful change” in free cash flow.
Fourth-quarter total revenue was $254 million, up 21% year-over-year. Subscription revenue totaled $192 million, up 23%, which Sherry attributed to strong growth in Pro, commercial, and new trades. Usage revenue rose 22% to $53 million as fintech utilization stayed strong, the company benefited from partner ecosystem monetization, and it saw early growth in virtual agents revenue.
Platform revenue (subscription plus usage) grew 23% to $245 million, while professional services revenue was $8.9 million. Sherry said net dollar retention was greater than 110% for the quarter, gross dollar retention was greater than 95% for the full year, and ServiceTitan exited fiscal 2026 with approximately 10,800 active customers, up 14% year-over-year.
Margins, cash flow, and balance sheet actions
Sherry said fourth-quarter platform gross margin was 80%, improving 330 basis points year-over-year, while total gross margin was 73.8%, up 360 basis points. He noted roughly 200 basis points of the platform gross margin improvement came from allocating certain customer success expenses to sales and marketing.
Operating income in the quarter was $27.1 million, producing operating margin of 10.7%, an improvement of 740 basis points year-over-year. Sherry said fiscal 2026 incremental margins exceeded the company’s target due to the timing of hiring and usage revenue outperformance.
Free cash flow was $35 million for the quarter versus $11 million in the year-ago period. Full-year fiscal 2026 free cash flow was $85 million, up from $15 million the prior year. Sherry said ServiceTitan paid down the approximately $107 million term loan outstanding during the quarter and amended its revolving credit facility to “retain and improve financial flexibility.” He also reminded investors that annual cash bonuses are paid in Q1, which typically leads to negative free cash flow in that period.
AI strategy and “Max” pilot outcomes
Much of management’s commentary centered on ServiceTitan’s push toward what Mahdessian called an “agentic operating system for the trades,” enabled by the company’s position as an end-to-end system of record and its proprietary dataset. Mahdessian said ServiceTitan’s platform spans workflows from demand generation and call booking through dispatch, quoting, payments, inventory, payroll, and supplier integrations. He argued that AI can remove constraints that historically limited automation, including the need for manual execution of best practices and the limits of rules-based software.
Mahdessian said ServiceTitan has amassed a large dataset tied to outcomes across “millions of jobs,” including marketing performance tied to revenue and margin, call booking rates, technician productivity, close rates and average ticket by job type, and dispatch decisions linked to outcomes. He said the platform processed more than $80 billion in transaction volume over the past 12 months.
ServiceTitan’s initial deployment of this strategy is Max, first announced as a pilot program at Pantheon last fall. Mahdessian shared anecdotal customer results from early adopters:
- Team Rooter, a Southern California customer, told him that after migrating to Max, it saw a 50% increase in average ticket size over three months, record revenue in December, and greater than 50% year-over-year revenue growth in January.
- A residential plumbing customer reported that “only months” after going live with Max, EBITDA margins improved from 18% to 30%. Mahdessian said automated marketing, call booking, dispatching, and capacity planning enabled the customer to reduce office staff from seven to two for 19 field technicians, while increasing technician salaries, eliminating weekend work, and reducing end-customer pricing.
Mahdessian said that, on average, customers on Max are expected to “about double their monthly subscription revenue when fully ramped,” and clarified later in Q&A that this expectation does not assume customers expand the number of technicians.
Executives said they plan to “meaningfully expand” Max during fiscal 2027, beginning with doubling capacity in Q1. In Q&A, Mahdessian described the rollout as a sequential process focused first on verifying product-market fit and ROI, then scaling. He cited onboarding efficiency and ensuring customer success as the main constraints, and said the company is “playing the long game” rather than optimizing for short-term results. Management also acknowledged the possibility that limited Max capacity could create trade-offs, including some customers potentially delaying purchases, but said validating ROI and repeatable execution is the priority.
Other growth initiatives: commercial, roofing, fintech, and virtual agents
Co-founder and President Vahe Kuzoyan said ServiceTitan made progress in fiscal 2026 across four major growth initiatives and provided updates on commercial and roofing. He said commercial capabilities introduced at Pantheon—specifically construction and commercial CRM—have been well received, laying a foundation for go-to-market execution in fiscal 2027 and entry into complementary trades.
In roofing, Kuzoyan said ServiceTitan has improved its implementation playbook and insurance and estimating workflows, and that its brand in roofing is maturing as the company builds toward “durable growth in exteriors.” He cited a partner, Vertex, and a “lighthouse customer” that Vertex said grew to over $600 million in revenue in less than three years since being founded.
The company also discussed virtual agents, which Mahdessian said handle inbound calls for customers during surges or after hours. He said each call can represent a significant revenue opportunity and noted that some customers are choosing not to replace call center headcount amid high turnover, leaning on virtual agents instead. Sherry said virtual agent sales are generally part of usage consumption and that “very little bit” is embedded in the current guidance given the early stage.
On fintech and back office, Kuzoyan said the company sees “more opportunities” in “money out” than “money in,” given the control needs when cash leaves the bank account. He said ServiceTitan is building an end-to-end suite in this area and expects to make “very exciting announcements” soon.
Guidance and key call themes
For fiscal 2027, Sherry said the company expects to return to its 25% incremental operating margin framework for the full year, though he cautioned that quarterly incrementals can vary and that expense mix may shift as ServiceTitan invests more aggressively in AI inference and internal tooling. The company also said it believes usage revenue could grow faster than GTV in fiscal 2027 due to partner monetization and virtual agents, which do not necessarily correlate directly with GTV.
Guidance provided on the call:
- Q1 revenue: $255 million to $257 million
- Q1 operating income: $27 million to $28 million
- FY 2027 revenue: $1.11 billion to $1.12 billion
- FY 2027 operating income: $128 million to $133 million
During Q&A, the company addressed weather impacts, noting the quarter was generally warm but included a large ice storm in the final week that kept technicians off the road; management said it assessed storm impact in part by results in early February as latent demand was met. Sherry also said fiscal 2026’s higher incremental margins were driven by usage outperformance and being behind in hiring, and he signaled fiscal 2027 would include what he described as the company’s largest R&D investment yet.
ServiceTitan also announced the hiring of a new Chief Technology and Product Officer, Abhishek Mathur, who joined from Figma, where Kuzoyan said he oversaw AI research and development efforts including Figma Make and Figma AI, and previously led teams at Meta and Microsoft. Management described internal AI adoption as a company-wide priority aimed at improving execution speed and customer ROI.
About ServiceTitan (NASDAQ:TTAN)
ServiceTitan, Inc (NASDAQ: TTAN) is a cloud-based software provider specializing in end-to-end business management solutions for residential and commercial trade contractors. The company’s platform integrates customer relationship management, scheduling and dispatch, mobile workforce management, invoicing, payments and reporting tools into a single suite. By automating key back-office processes, ServiceTitan helps field service businesses improve operational efficiency, enhance customer experience and drive revenue growth.
At the core of ServiceTitan’s offering is a mobile application that allows technicians to access job details, update work orders, capture signatures and process payments from the field.
