DJ Hynes

DJ Hynes asked about the average ratio of technicians to back-office staff across ServiceTitan's customer base, its potential evolution, and the efficiency unlock for ServiceTitan. He also questioned the Q4 guidance being sequentially down compared to last year's flat/up guidance, asking if it indicates increased caution.

Answer

CEO Ara Mahdessian noted that the technician-to-back-office ratio varies by trade and size, with automation driving increased profitability and revenue. CFO Dave Sherry clarified that the strong Q3 allowed for a raised full-year forecast, and typical GTV and usage moderation from Q3 to Q4, along with one fewer business day, explains the sequential Q4 guidance, with no unusual caution.

DJ Hynes asked about the implications of the ticking down CAC Payback period and outperforming incremental margin targets on ServiceTitan's sales and marketing investment strategy.

Answer

CFO Dave Sherry confirmed strong performance, particularly in usage revenue, and stated that ServiceTitan continues to deploy capital towards a 25% incremental margin target, primarily investing in R&D. He noted they are behind in hiring but expect to catch up, with Q3 seeing a step-up in sales and marketing due to user conferences.

DJ Hynes (Canaccord) inquired about the potential turning point in end market demand, particularly focusing on the owner segment, and later asked about the implications of net new ARR growth outpacing revenue growth.

Answer

Tooey Courtemanche, Founder, CEO, and President, noted that the macro environment remains consistent with previous quarters, with no significant change in headwinds, but expects the owner segment to eventually signal a tailwind. Matt Puljiz, SVP of Finance, confirmed strong net new ARR growth, reinforcing confidence in the company's base case growth trajectory.

DJ Hynes asked about the owner segment as a signal for end market demand and the implications of net new ARR growth notably faster than revenue growth for future acceleration.

Answer

Tooey Courtemanche, Founder, CEO, and President, Procore Technologies, stated that the macro environment remains consistent with prior quarters, still facing headwinds, but owners are a good indicator for project initiation. He noted that while a tailwind is expected, it takes time to impact revenue. Matt Puljiz, Senior Vice President of Finance, Procore Technologies, reiterated confidence in Procore's strong performance and base case growth, indicating high optimism.

Luke on for DJ Hynes inquired about the key operational 'dials' management is adjusting to drive performance and asked for Zeta's perspective on Amazon's advertising business as a partner or competitor.

Answer

CFO Chris Greiner highlighted improved sales productivity and a higher direct revenue mix (75%) as key dials driving strong margin performance and efficiency. CEO David Steinberg added that they partner with Amazon in numerous ways, particularly in Connected TV, and view them as an expanding channel and partner, not a competitor.