ServiceTitan (TTAN, Financial) announced impressive first-quarter 2026 results, continuing its trend of strong performance since going public in December 2024. The cloud software provider for trades businesses reported revenue guidance for Q2 at $228–$230 million and raised its full-year 2026 revenue outlook to $910–$920 million, up from the previous $895-$905 million. Operating income is projected at $54–$59 million.
Despite the positive report, TTAN's stock is trading lower due to its high valuation, with a P/S ratio over 13x, much higher than its software industry peers. This raises concerns about the sustainability of its post-IPO gains, especially amid rising macroeconomic challenges. Additionally, Q2 revenue variability, influenced by weather patterns, adds uncertainty, as last year’s hot weather may not recur, affecting expectations.
- TTAN's gross transaction volume (GTV) increased by 22% year-over-year to $17.7 billion, driven by strong adoption among residential and commercial trades customers, including HVAC, plumbing, and electrical services. Key growth factors include an expanding customer base and increased platform usage, with a net dollar retention rate over 110%, indicating significant spending growth from existing customers.
- The retention strength is supported by TTAN’s software suite, which enhances job management, payments, and field operations. Recent integrations like EagleView add to its value proposition. The company targets a $650 billion addressable market within the $1.5 trillion trades industry, highlighting its growth potential.
- Profitability metrics improved notably, with non-GAAP operating income rising to $16.2 million in Q1 from $3.3 million a year earlier, expanding the non-GAAP operating margin to 7.5% from 1.9%. This improvement is attributed to a 200-basis-point increase in platform gross margins and efficiencies in sales, marketing, and R&D expenses relative to revenue.
Despite TTAN’s strong quarterly performance and optimistic revenue guidance, the stock selloff reflects investor caution over its high valuation and ongoing GAAP losses, which amounted to $(49.5) million this quarter, in a volatile market. Nevertheless, the company's 27% revenue growth, 22% GTV increase, and improving margins highlight its strong fundamentals and market position.
