Earning Date, Transcript Summary & Report

Revenue and Subscription Growth: ServiceTitan achieved $772 million in total revenue for fiscal year 2025, representing a 26% year-over-year growth, with subscription revenue growing by 28%.

Operating Margin Improvement: The company delivered 27% incremental operating margins, showing over 600 basis points of improvement, and was free cash flow positive for the first time.

Gross Transaction Volume Growth: ServiceTitan's gross transaction volume (GTV) for Q4 was $17 billion, up 26% year-over-year, indicating strong performance particularly among existing residential customers.

Q4 Revenue Surge: Total revenue for Q4 was $209.3 million, a 29% increase year-over-year, driven by a 31% growth in subscription revenue and a 26% increase in usage revenue.

Customer Retention Success: Net dollar retention exceeded 110% for the quarter, and gross dollar retention was greater than 95% for fiscal year 2025, indicating strong customer loyalty and expansion.

Customer Base Expansion: The company ended Q4 with approximately 9,500 active customers, an 18% increase year-over-year, reflecting successful customer acquisition strategies.

Gross Margin Improvement: ServiceTitan's platform gross margin improved to 76.7%, and total gross margin increased to 70.2%, showcasing operational efficiency and profitability.

New Product Launch Success: The launch of new products like Sales Pro and Contact Center Pro has shown early success, contributing positively to the overall growth strategy.

Enterprise Expansion Strategy: The company is focused on expanding its enterprise capabilities and pro product adoption, which are expected to drive future growth and customer value.

Strategic Industry Partnerships: ServiceTitan's partnership with major players in the roofing industry, such as GAF, is expected to enhance its market position and drive further growth in that segment.

Business Day Impact on Growth: Q1 of FY 2026 will have one fewer business day compared to Q1 of FY 2025, which is expected to be a 150 basis points headwind to reported year over year GTV and usage revenue growth.

Prudent Guidance Outlook: The company is early in its journey as a public company and is being prudent in its guidance, indicating that the strong performance in Q4 may not be sustainable going forward.

Q4 Performance Influenced by Tailwinds: The CFO noted that while Q4 showed strong performance, it was influenced by several tailwinds that may not continue, including weather impacts and excitement from the IPO.

Job Impact Monitoring: The company has not yet observed an impact on jobs performed or average ticket due to macroeconomic conditions, but they are monitoring the situation closely.

Future Volatility Expected: The CFO indicated that the success seen in Q4 new deals is not expected to lead to a new norm going forward, suggesting potential volatility in future quarters.

Cautious Future Outlook: The company is cautious about extrapolating Q4's performance into the future, indicating that they are prepared for potential fluctuations in GTV due to external factors.

Cautious Growth Expectations: The CFO mentioned that while they are excited about new products, they are not expected to be significant drivers of revenue in the near term, indicating a cautious approach to growth expectations from these products.