Executive Summary
ServiceTitan reported an encouraging start to FY2026 (QQ1 2026), delivering solid top-line growth and expanding margins while continuing to invest in AI-native capabilities and trade-specific workflows. Total revenue reached $215.7 million, up 27% year over year, driven primarily by a 29% increase in subscription revenue to $162.7 million and a 22% rise in usage revenue to $45.3 million, with total platform revenue (subscription + usage) up 27% YoY to about $208 million. GTV rose 22% YoY to $17.7 billion, underscoring healthy adoption across residential and commercial customers, and net dollar retention exceeded 110% in the quarter, signaling durable core expansion. Platform gross margin expanded roughly 300 basis points YoY to 79.7%, while total gross margin rose about 390 basis points to 73.6%, aided by a reallocation of certain customer success expenses and ongoing platform efficiency gains. Despite the revenue strength, GAAP net income was negative (approximately -$46.3 million) driven by higher other income/expense items; management framed the period as a âmarathonâ with a longer-term path to profitability, emphasizing non-GAAP operating margin advancement toward a 25% target. Operating income reached $49.5 million with an operating margin of about 22.97% per reported numbers, but management highlighted a strong quarterly margin trajectory and cited favorable spend timing in Q1. Management reaffirmed FY26 guidance: Q2 revenue of $228â$230 million and full-year revenue of $910â$920 million, with operating income of $54â$59 million, foreseeing seasonality (Q2 typically stronger due to weather and usage mix). The company remains focused on four growth pillarsâenterprise, Pro, commercial, and roofingâand is accelerating AI-native products (Field Assist, Contact Center Pro) and operational automation to sustain long-term margin expansion and durable growth. The cash position remains robust (net cash position after debt) with ~-$15.9M free cash flow in QQ1, setting a foundation for continued investment in product and go-to-market initiatives. Investors should monitor GTV trends, Pro product adoption, commercial bookings and go-lives, AI product monetization and the seasonality-driven cadence of revenues and margins through FY26 and beyond.
Key Performance Indicators
Key Insights
Revenue: $215.7M in QQ1 2026, +27% YoY; Subscription revenue: $162.7M, +29% YoY; Usage/revenue: $45.3M, +22% YoY; Platform revenue (subscription + usage): $208.0M, +27% YoY; Gross margin (total): 73.6%, +390 bps YoY; Platform gross margin: 79.7%, +300 bps YoY; Operating income: $49.5M, OI margin 22.97% (reported); Net income: -$46.36M; EPS (GAAP): -$0.51; Weighted avg shares: 90.33M; Free cash flow: -$22.3M; Operating cash flow: -$14.57M; Capex (cash): -$1.29M; Cash and equivalents: ~$420.3M; Ne...
Financial Highlights
Revenue: $215.7M in QQ1 2026, +27% YoY; Subscription revenue: $162.7M, +29% YoY; Usage/revenue: $45.3M, +22% YoY; Platform revenue (subscription + usage): $208.0M, +27% YoY; Gross margin (total): 73.6%, +390 bps YoY; Platform gross margin: 79.7%, +300 bps YoY; Operating income: $49.5M, OI margin 22.97% (reported); Net income: -$46.36M; EPS (GAAP): -$0.51; Weighted avg shares: 90.33M; Free cash flow: -$22.3M; Operating cash flow: -$14.57M; Capex (cash): -$1.29M; Cash and equivalents: ~$420.3M; Net debt: -$258.6M (net cash position); Q2 guidance: Revenue $228â$230M; Q2 operating income: $17â$18M; FY26 guidance: Revenue $910â$920M; FY26 operating income: $54â$59M; Net dollar retention: >110%; GTV: $17.7B, +22% YoY; 4 commercial go-lives in Q1; ARR with new commercial wins highlighted by âARR in 28 hoursâ commentary.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
215.69M |
N/A |
3.06% |
| Gross Profit |
148.40M |
N/A |
7.40% |
| Operating Income |
49.54M |
N/A |
149.60% |
| Net Income |
-46.36M |
N/A |
54.07% |
| EPS |
-0.51 |
N/A |
85.83% |
Management Commentary
Key management takeaways from the QQ1 2026 earnings call include: (1) Strategy and growth framework: four focus areasâenterprise, Pro, commercial, roofingâare proving productive, with AI-native products ramping well and multi-trade expansions underway. Ara emphasized that the growth formula centers on delivering ROI and expanding customer value, which drives higher subscription and usage revenue and fuels Pro adoption. (2) Customer momentum and real-world outcomes: Management highlighted major live deployments and customer success stories (e.g., A1 Garage Door, Guild Garage) as proof points of ROI and scale, with Guildâs growth toward $250M in 2025 and rapid ARR expansion cited as validation of the platformâs ability to standardize and scale across portfolios. (3) AI and automation trajectory: Vahe discussed the broad AI strategyâfrom conversational agents to Titan Intelligence and Field Assistâlaunches in Q1 and a new Contact Center Pro in April, signaling an increasingly automation-forward product roadmap and the potential for incremental monetization via AI-enabled capabilities. (4) Commercial momentum and partnerships: The company called out four major commercial go-lives in April and highlighted partnerships with Alpine/Cobalt and EagleView as validation of the commercial playbook and ecosystem strategy, with private equity-backed consolidators serving as critical accelerants in commercial expansion. (5) Financial posture and guidance: Dave outlined robust YoY growth in subscription revenue and platform revenue, strong gross margins, and an emphasis on long-run margin expansion toward 25% non-GAAP operating margin, while acknowledging seasonality in Q2 and macro-related variability in GTV. Notable quotes include: âYear-over-year, we delivered 29% subscription revenue growth, 27% total revenue growth and record operating margins, which improved 560 basis points.â (Ara Mahdessian) and âThe Pro products are the fastest-growing portion of our business, which is what you're seeing in the subscription growth performance versus prior yearâ (Dave Sherry).
"ServiceTitan has been a game-changing partner in our success"
â Tommy Mello (A1 Garage Door)
"The decision to use ServiceTitan products across the entire platform was a no-brainer. ServiceTitan has been our secret weapon since day 1"
â Guild Garage team
Forward Guidance
Management maintains a prudently optimistic view for FY26, anchored by seasonality and a path to durable margin expansion. Near-term: Q2 revenue guidance of $228â$230M and Q2 operating income of $17â$18M, reflecting a stronger usage mix in the quarter. Full-year guidance implies revenue of $910â$920M and operating income of $54â$59M, with an emphasis on balancing incremental margin gains against ongoing investments in AI-native capabilities and product roadmaps. The company continues to target a long-run non-GAAP operating margin of 25%, supported by platform scale, improved gross margins, and higher Pro- and AI-enabled monetization. Key factors investors should monitor: (1) GTV growth and weather-driven volatility that influences Q2 revenue mix; (2) Pro product attach rates and pricing models (including consumption-based pricing on AI offerings); (3) enterprise/commercial bookings velocity and ARR build from large go-lives; (4) retention and expansion metrics (net dollar retention >110%); (5) progression of AI initiatives into monetizable features (Contact Center Pro, Titan Intelligence, Field Assist) and their impact on usage and subscription growth; (6) free cash flow trajectory as operating scale increases and public company costs normalize. Overall, the outlook is favorable if the company sustains strong ARR expansion, advances AI monetization, and mitigates macro-driven GTV variability through disciplined execution and pricing discipline.