ServiceTitan Fiscal Q2 Earnings: Revenue Rises 21% as Cash Flow Expands

ServiceTitan (NASDAQ: TTAN) reported fiscal Q2 2027 revenue of $292.8 million, up 21% year over year, while its GAAP diluted loss per share narrowed to $0.26 from $0.35. For the quarter ended July 31, 2026, non-GAAP operating income increased to $44.4 million and non-GAAP free cash flow reached $50.5 million, although the company remained unprofitable under GAAP.

Core Earnings Data

Platform revenue remained the primary growth driver, rising 22%, while total GAAP gross margin edged up to 71.4%. Operating expenses increased about 15% to $236.6 million—slower than revenue growth—helping narrow the GAAP operating loss and improve operating margin by 5 percentage points.

The adjusted results showed a wider improvement, with non-GAAP operating income rising approximately 52% and diluted non-GAAP EPS increasing to $0.40.

Business and Platform Performance

Platform revenue increased faster than total revenue, supported by growth in both subscription and usage revenue. Usage revenue grew approximately 24%, while gross transaction volume, or GTV, increased 17% to $26.8 billion. ServiceTitan defines GTV as the total dollars invoiced by customers through its platform, making it a proxy for customer transaction activity.

The principal weakness was professional services and other revenue. It declined approximately 12%, while the segment’s gross loss widened because its $23.2 million cost of revenue substantially exceeded its $8.3 million of revenue.

Platform economics improved, but the growing loss in professional services limited the expansion in ServiceTitan’s consolidated gross margin.

Stock Compensation Widens the Gap Between GAAP and Adjusted Profit

ServiceTitan reported a $27.6 million GAAP operating loss but $44.4 million of non-GAAP operating income, a gap of approximately $72.0 million. The reconciliation excluded $48.6 million of stock-based compensation and related employer payroll taxes, $13.5 million tied to the co-founders’ performance-based restricted stock units, and $9.9 million of acquired intangible asset amortization.

Research and development was the largest GAAP operating expense, increasing approximately 38% to $100.6 million, faster than revenue growth. The related non-GAAP expense was $76.2 million after excluding $24.5 million of stock-based compensation and related payroll taxes. In contrast, GAAP general and administrative expense declined to $59.0 million from $63.5 million.

Positive cash generation provided a counterpoint to the GAAP loss. The cash flow statement included $60.6 million of stock-based compensation as a non-cash adjustment, while free cash flow reflected deductions for internal-use software, property and equipment, and related deposits. Cash and cash equivalents increased to $479.5 million at July 31, 2026, from $428.8 million at January 31, 2026.

Earnings Guidance

ServiceTitan issued quantitative guidance for fiscal Q3 and the full fiscal year 2027. The source did not provide prior guidance ranges, so no comparison with an earlier outlook is available.

The company did not provide a GAAP operating-loss outlook or a reconciliation from projected non-GAAP operating income, citing difficulty estimating excluded items such as future stock-based compensation charges.

Management Commentary

Co-founder and CEO Ara Mahdessian linked the quarter’s revenue and free-cash-flow growth to ServiceTitan’s deployment of its agentic operating system for trade businesses. Management also said investments in artificial intelligence were improving organizational execution.

Co-founder and President Vahe Kuzoyan said ServiceTitan exceeded its Q2 goal of doubling Max locations. Based on execution with existing customers and progress with selected new customers, the company now expects to finish fiscal 2027 with more than 700 enrolled Max locations.

Recent Insider Transactions

The supplied insider summary shows 418,816 shares purchased across 15 transactions and 1,740,966 shares sold across 25 transactions during the past six months, resulting in net sales of 1,322,150 shares. Eight of the latest 10 reported entries were identified as sales; two entries without a clear transaction direction are omitted below.

These disclosures establish the direction and reported value of the transactions but do not, by themselves, explain the insiders’ motivations or their views of ServiceTitan’s outlook.

Risks Investors Should Monitor

• GAAP profitability remains negative. The improvement in adjusted operating income depends on excluding sizable stock-based compensation, related payroll taxes, and intangible asset amortization.
• Professional services economics deteriorated. Revenue declined while the segment’s gross loss and negative gross margin increased, offsetting some of the platform’s margin improvement.
• Reported growth rates moderated. Fiscal Q2 revenue growth was 21%, compared with the 25% rate shown for the prior-year quarter; platform growth moderated from 26% to 22%, and GTV growth moved from 19% to 17%.
• R&D spending is growing faster than revenue. Continued expense growth without a corresponding increase in platform adoption could weigh on GAAP operating results.
• GAAP guidance visibility is limited. ServiceTitan provided only non-GAAP operating-income guidance and could not estimate the GAAP impact of excluded expenses.

Summary

ServiceTitan’s fiscal Q2 2027 results combined 21% revenue growth with narrower GAAP losses, higher adjusted operating profitability, and improved free cash flow. Platform subscription and usage revenue drove the expansion, while professional services remained a drag on gross margin. The next points to monitor are execution against the fiscal 2027 outlook, adoption of Max, the pace of spending on AI and product development, and whether ServiceTitan can continue closing the gap between GAAP and adjusted profitability.