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ServiceTitan, Inc. (TTAN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY25 revenue was $199.3M (+24% YoY), platform revenue $191.2M (+26% YoY), with non-GAAP operating income turning positive at $1.6M and total non-GAAP gross margin at ~70% .
  • Results were above the midpoint of preliminary (“flash”) ranges, driven by steady subscription growth and early traction in new Pro products (Sales Pro, Contact Center Pro) .
  • KPIs: Net Dollar Retention >110% and GTV $17.8B (+20% YoY) underline durable customer expansion on the platform .
  • Q4 FY25 guidance: revenue $199.0–$201.0M and non-GAAP operating income $3.0–$4.0M; FY25 guidance: revenue $761.6–$763.6M and non-GAAP operating income $21.4–$22.4M .
  • Balance sheet and cash generation improved: operating cash flow $15.5M, free cash flow $10.6M; cash and equivalents $133.8M at quarter-end. IPO proceeds and preferred stock retirement subsequently strengthened liquidity and capital structure .

What Went Well and What Went Wrong

What Went Well

  • Non-GAAP operating profit turned positive ($1.6M) with ~350 bps YoY operating margin expansion to ~1% and non-GAAP gross margin at ~70% .
  • Strong customer metrics: Net Dollar Retention >110% and GTV $17.8B (+20% YoY), evidencing healthy expansion across the installed base .
  • New product traction: “Our customers are expanding well and we are pleased with strong early adoption of our new Sales Pro and Contact Center Pro products.” – Vahe Kuzoyan ; Ara added tangible AI product value across Dispatch Pro, Ads Optimizer, and Sales Pro .

What Went Wrong

  • GAAP losses widened: loss from operations ($44.0M) vs ($36.1M) YoY; GAAP net loss ($46.5M) vs ($39.7M) YoY; GAAP EPS ($1.74) vs ($1.53) YoY .
  • Professional services remained a drag: non-GAAP professional services gross margin at approximately -86% in Q3, consistent with investments to ensure customer success during onboarding .
  • Limited near-term R&D leverage by design: management guided to “minimal R&D leverage over the next several years” to prioritize product S-curves; near-term G&A will carry higher incremental costs from public company transition .

Financial Results

Headline Metrics vs Prior Year and Prior Quarter

MetricQ3 FY24Q2 FY25Q3 FY25
Total Revenue ($USD Millions)$160.084 $192.994 $199.275
GAAP EPS ($USD)$(1.53) $(1.43) $(1.74)
Non-GAAP Operating Margin (%)(3%) 7% 1%
Total Non-GAAP Gross Margin (%)69% 71% 70%

Segment and Revenue Mix

MetricQ3 FY24Q2 FY25Q3 FY25
Platform Revenue ($USD Millions)$151.655 $184.997 $191.190
Professional Services & Other ($USD Millions)$8.429 $7.997 $8.085
Subscription ($USD Millions)$114.311 $137.697 $145.282
Usage ($USD Millions)$37.344 $47.300 $45.908

KPIs

KPIQ3 FY24Q2 FY25Q3 FY25
GTV ($USD Billions)$14.8 $19.2 $17.8
Net Dollar Retention (%)N/AN/A>110%
Non-GAAP Platform Gross Margin (%)77% 78% 77%
Free Cash Flow ($USD Millions)$(6.206) N/A$10.571

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)Q4 FY25N/A$199.0–$201.0 New
Non-GAAP Operating Income ($USD Millions)Q4 FY25N/A$3.0–$4.0 New
Total Revenue ($USD Millions)FY25N/A$761.6–$763.6 New
Non-GAAP Operating Income ($USD Millions)FY25N/A$21.4–$22.4 New

Note: Company does not provide GAAP operating outlook reconciling to non-GAAP due to variability in stock-based compensation and other items .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2 and Q‑1)Current Period (Q3 FY25)Trend
AI/Technology initiativesConsistent subscription growth 26–27% YoY across recent quarters, reflecting product value Three AI products (Dispatch Pro, Ads Optimizer, Sales Pro) delivering ROI; early traction for Sales Pro and Contact Center Pro Expanding product-led monetization
Commercial market pushN/AFocus on closing construction workflow gaps to become market standard; commercial leadership with goal to standardize attach and take rate Building toward standardization
Tariffs/Macro/PolicyN/ATrades demand largely nondiscretionary; no material risk from administration changes reported by customers Resilient macro backdrop
Consolidation/PE roll-upsN/AConsolidators provide strong fit: low churn, higher Pro attach, accelerated onboarding; lighthouse customers aiding entry into roofing Positive customer mix tailwind
R&D execution and leverageN/AIntentional minimal near-term R&D leverage to support product S-curves; expect eventual G&A leverage after public-company transition costs Investing for durable growth

Management Commentary

  • “Healthy fiscal third quarter business performance is further evidence that our strategy is working.” – Ara Mahdessian .
  • “We are pleased to deliver fiscal third quarter financial performance ahead of the midpoint of our flash results.” – Vahe Kuzoyan .
  • “Our goal is to durably compound revenue growth over many years and expand margins at the same time… we will manage the business to deliver 25% non-GAAP incremental margins.” – CFO Dave Sherry .
  • “Sales Pro and Contact Center Pro… are pacing well relative to other Pro products at this stage, but it’s still quite early.” – Ara Mahdessian .

Q&A Highlights

  • Commercial progress: Execution focus on construction workflows to reach market standard; multi-phase priorities spanning presales, cash collection, project workflows, and Pro attach .
  • Consolidation trends: PE-backed rollups standardizing on ServiceTitan drive licensing and GTV growth, higher Pro attach, and entry into new trades (e.g., roofing) .
  • Take/earn rate dynamics: Take rates rise with segment maturity via higher Pro and FinTech attach and pricing; emphasis on becoming “market standard” in each segment .
  • Free cash flow cadence: Q4 expected FCF positive, roughly in line or slightly above operating income guidance; Q3 benefited from working capital favorability (bonuses timing) .
  • Net dollar retention: Target ~110% range beyond first two-year cohorts, anchored by gross dollar retention north of 95% pre-IPO .

Estimates Context

  • S&P Global consensus for Q3 FY25 revenue and EPS was unavailable at time of this report due to data access limits, so formal beat/miss vs Street cannot be determined. Management noted results above the midpoint of preliminary “flash” ranges, indicating positive intra-quarter performance vs preliminaries .
  • We will update estimate comparisons upon availability of SPGI data.

Key Takeaways for Investors

  • Durable topline growth with improving non-GAAP profitability: Positive non-GAAP operating income and ~70% non-GAAP gross margin underscore operating discipline while scaling .
  • Product-led expansion: Early traction in Sales Pro and Contact Center Pro, plus proven AI modules (Dispatch Pro, Ads Optimizer, Sales Pro) should support subscription acceleration and higher monetization (Pro/FinTech attach) .
  • Healthy customer economics: NDR >110% and GTV growth (+20% YoY) reflect strong expansion across cohorts; consolidators remain a favorable mix tailwind .
  • Near-term investment posture: Expect limited R&D leverage as product S-curves stack; watch for G&A normalization after public-company cost absorption .
  • Guidance sets a steady cadence: Q4 FY25 revenue $199–$201M and non-GAAP op income $3–$4M; FY25 revenue $761.6–$763.6M and non-GAAP op income $21.4–$22.4M provide visibility into execution pace .
  • Cash generation and balance sheet strength: Positive operating cash flow and FCF in Q3, with subsequent IPO proceeds and preferred stock retirement positioning ServiceTitan with greater financial flexibility .
  • Trading implications: In the absence of Street consensus, focus on sustained subscription growth, Pro product uptake, and sequential non-GAAP margin expansion as catalysts; monitor commercial workflow milestones and attach rates as medium-term thesis drivers .

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