ServiceTitan (TTAN 13.64%), a leading cloud software platform built for the trades industry, reported its financial results for Q2 FY2026 on September 4, 2025. The company posted $242.1 million in GAAP revenue in Q2 FY2026, marking a 25% increase from the prior year and beating its own GAAP guidance range by about $13 million. Non-GAAP income from operations reached $29.2 million in Q2 FY2026, more than doubling the result from the year-ago quarter. Gross Transaction Volume (GTV), the sum of all transactions flowing through its platform, reached $22.9 billion in Q2 FY2026, up 19% from the prior year--though this was a slower pace than in previous quarters. The quarter featured strong free cash flow, expanding margins, and execution in key areas, but also included a widened GAAP operating loss and a jump in stock-based compensation compared to the prior year. Overall, it was a period of robust revenue and margin expansion on a non-GAAP basis, though investors are watching for signs of growth deceleration and ongoing pressure on GAAP profitability.
| Metric | Q2 2026(Three Months Ended July 31, 2025) | Q2 2025(Three Months Ended July 31, 2024) | Y/Y Change |
|---|---|---|---|
| EPS (Non-GAAP) | $0.33 | – | N/A |
| Revenue | $242.1 million | $193.0 million | 25.5 % |
| Gross Transaction Volume | $22.9 billion | $19.2 billion | 19.3 % |
| Non-GAAP Income from Operations | $29.2 million | $13.5 million | 116.3 % |
| Non-GAAP Operating Margin | 12.1 % | 7.0 % | 5.1 pp |
| Non-GAAP Free Cash Flow | $34.3 million | $18.7 million | 83.4 % |
About ServiceTitan: Business Model and Strategic Focus
ServiceTitan provides cloud-based software designed to help contractors in industries like HVAC, plumbing, electrical, and home services to manage their businesses. Its platform combines scheduling, invoicing, payments, analytics, and customer relationship management.
The company’s success depends on boosting customer adoption of its core and add-on products, expanding into new end markets, and leveraging proprietary workflow data for automation. Recent priorities include winning large enterprise and commercial clients, increasing product attach rates, and integrating AI-driven features through its Titan Intelligence offering.
Quarter in Review: Revenue Growth, Margins, and Strategic Execution
During Q2 FY2026, total GAAP revenue climbed 25% year over year, surpassing management's prior GAAP forecast by $13.1 million at the midpoint. Subscription revenue—fees for ongoing software usage—rose 29% in Q2 FY2026, while usage revenue—based on features used or transaction volume—advanced 22% year over year in Q2 FY2026. Revenue from professional services and other sources grew 17.5% year over year, though this segment remains unprofitable.
Gross Transaction Volume (GTV), which tracks all processed customer business through the platform, increased to $22.9 billion in Q2 FY2026, but the pace eased from the 23 % growth recorded in the comparable period last year.
Non-GAAP income from operations more than doubled in Q2 FY2026, Non-GAAP operating margin expanded by 5.1 percentage points, reaching 12.1% in Q2 FY2026 compared to Q2 FY2025. Free cash flow (non-GAAP), a measure of the cash remaining after operating expenses and capital spending, climbed to $34.3 million in Q2 FY2026, an 83.4% increase compared to Q2 FY2025.
Stock-based compensation expense (GAAP) increased sharply to $49.3 million in Q2 FY2026, up from $23.7 million in Q2 FY2025. A new expense for Co-Founder performance-based restricted stock units (RSUs) contributed $13.5 million to that total in Q2 FY2026.
Customer retention remained high, with net dollar retention above 110% in Q2 FY2026, indicating that existing customers increased their spending on the platform. The company did not disclose specific attach rates for Titan Intelligence, its artificial intelligence suite, but it highlighted ongoing integration of data-driven automation features. Management also noted that enterprise, or "large commercial," customer segments are seeing increased traction, referencing the results of "multi-year investments" finally starting to show.
While ServiceTitan improved both margin and cash flow, the professional services segment continues to lose money each quarter. Professional services typically involve onboarding, training, and custom solutions for customers adopting the platform. Management made no new announcements about changes in this area during the period.
Management Guidance and Looking Ahead
ServiceTitan updated its full-year guidance, raising FY2026 total revenue expectations to $935 to $940 million, compared to its previous forecast of $910 to $920 million for FY2026. For Q3 FY2026, management guided to revenue of $237 to $239 million and non-GAAP operating income of $14 to $15 million. This sequential decline is attributed to normal seasonality.
Management did not offer specific guidance for GAAP profit or loss, citing the unpredictable impact of variable items like stock-based compensation. In the quarters ahead, investors are likely to focus on transaction growth trends, the pace of enterprise and commercial account wins, the profitability trajectory (especially on a GAAP basis).
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
