ServiceTitan Q2 FY27 slides: 21% growth amid strategic AI pivot

ServiceTitan released its Q2 FY27 results on September 8, 2026, revealing a 21% increase in revenue and notable margin expansion. However, the company's shares dropped nearly 20% in after-hours trading following the earnings report and guidance. Despite strong overall performance, investors were focused on slower gross transaction volume growth of 17% and the company's strategic pivot towards its AI-powered Max product.

In Q2 FY27, ServiceTitan reported a total revenue of $293 million, representing a 21% growth year-over-year. The non-GAAP operating margin reached 15.2%. The company's gross transaction volume grew by 17% year-over-year, though this marked a 200 basis point deceleration from recent quarters. Net dollar retention remained above 110%, indicating that existing customers continue to utilize the ServiceTitan platform more extensively.

The company's gross margin and platform gross margin both saw improvements, with the former at 74.6% and the latter at 81.1%. ServiceTitan operates within the trades industry, providing a software platform for businesses in various trades such as HVAC, plumbing, electrical, pest control, roofing, and more. The company's total addressable market (TAM) is estimated at over $30 billion, with the current serviceable addressable market (SAM) valued at approximately $13 billion.

The presentation highlighted the company's growth potential within the trades industry, which is valued at around $650 billion. ServiceTitan serves both residential and commercial markets and serves over 10,800 customers, with more than 2,000 customers generating over $100,000 in annualized billings. The company's platform, known as the Agentic Operating System, aims to orchestrate entire trades businesses through AI-powered automation, with the Max product representing the culmination of this vision.

Management reported that Max enrollment had grown to over 700 locations by the end of fiscal 2027. However, the strategic focus on Max comes with near-term challenges, including a $2-3 million subscription revenue headwind and reduced professional services revenue due to resource shifts.