ServiceTitan, Inc. Q2 FY2026 earnings call

• Ara Mahdessian emphasized the growth formula of delivering real ROI to customers, leading to subscription and usage revenue growth. He shared the example of Gulfshore air conditioning and heating using ServiceTitan's AI to achieve full automation of business processes.
• Vahe Kuzoyan discussed key areas of focus: enterprise with the partnership with Roto-Rooter, pro products with customers leveraging AI for automation, commercial with overperformance across customer tiers and progress in construction project management, and roofing with maturing go-to-market motion and product/ecosystem priorities.

In the fiscal second quarter of 2026, ServiceTitan reported a gross transaction volume (GTV) of $22.9 billion, representing a 19% year-over-year growth. Total revenue was $242.1 million, with subscription revenue at $174.8 million (27% year-over-year growth) and usage revenue at $58 million (23% year-over-year growth). Platform gross margin was 80.7%, an improvement of 280 basis points year-over-year. Total gross margin was 74.4%, up 330 basis points year-over-year. Operating income was $29.2 million, resulting in a record operating margin of 12.1%, an improvement of 510 basis points year-over-year. Q2 free cash flow was $34.3 million, up from $18.7 million in the prior year's second quarter.

• For the third quarter, ServiceTitan expects total revenue in the range of $237 million to $239 million and operating income in the range of $14 million to $15 million.
• For the full fiscal year 2026, it expects total revenue in the range of $935 million to $940 million and operating income in the range of $74 million to $76 million. The company is well ahead of expected incremental margins due to year-to-date strength in operating income.

No specific operational failures discussed, but the transcript notes forward-looking statements involve risks, uncertainties, and assumptions, and actual results could differ from guidance based on factors discussed in SEC filings.

Q: Kash Rangan asked about Roto-Rooter's business objective and how ServiceTitan won the deal.

A: Ara Mahdessian said Roto-Rooter values revenue growth, lead generation, conversion, and automation, and ServiceTitan's trade-specific workflows and enterprise capabilities aligned with their needs.

Q: Josh Baer inquired about the mix of customers with hybrid residential and commercial businesses.

A: Vahe Kuzoyan stated most customers have some degree of both, and ServiceTitan's ability to excel in both is a competitive advantage.

Q: Michael Turrin asked about the investment in commercial and its impact on TAM.

A: Vahe Kuzoyan said they've invested in commercial for 3 years, and progress in construction is driving traction in the commercial side with more products to come.

Q: Jason Celino asked about lead generation changes with AI.

A: Vahe Kuzoyan said organic search performs well, but they use a balanced go-to-market approach with various channels.

Q: Terry Tillman asked about Roto-Rooter using Contact Center Pro and uptake.

A: Dave Sherry said customers start with core and adopt Pro products, and Roto-Rooter will go live early next fiscal.

Q: Yun Suk Kim asked about GTV growth drivers and AI's impact on platform gross margin.

A: Dave Sherry said GTV growth was driven by job and ticket growth, and AI is early in driving efficiency but early days for full impact.

Q: Peter Griffith asked about displacements on the commercial side.

A: Vahe Kuzoyan said quality of product and successful large enterprise live implementations are key to winning commercial deals.

Q: Andrew Sherman asked about GTV growth breakdown and HVAC performance.

A: Dave Sherry said GTV growth was from job and ticket growth, and HVAC was impacted by a tough comp from weather patterns compared to the prior year.