ServiceTitan, Inc.

Thank you for standing by and welcome to Service Titan's fourth quarter fiscal year 2026 earnings conference call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 in your telephone. To remove yourself from the queue, you may press star 1 1 again. I would now like to hand the call over to Jason Reckle, Investor Relations. Please go ahead.

Thank you, Operator. Welcome, everyone, to Service Titan's Fiscal Fourth Quarter 2026 Earnings Conference Call. With me are Service Titan's co-founder and CEO, Aram Adessian, co-founder and president, Vahe Kazoyan, and CFO, Dave Sherry. During today's call, we'll review our Fiscal Fourth Quarter and full-year Fiscal 2026 results. We'll also discuss our guidance for the first fiscal quarter and full fiscal year 2027. Before we get started, we want to draw your attention to the safe harbor statement included in today's press release and emphasize that information discussed on this call, including our guidance, is based on information as of today and contains forward-looking statements that involve risks, uncertainties, and assumptions. All statements other than statements of historical fact could be deemed to be forward-looking. Forward-looking statements reflect our views as of today only and except as required by law, we undertake no obligation to update or revise these forward-looking statements. Please take a look at our filings with the SEC for a discussion of the factors that could cause our actual results to differ. We also want to point out that we present non-GAAP measures in addition to and not as a substitute for financial measures prepared in accordance with generally accepted accounting principles. Definitions of these non-GAAP financial measures, along with reconciliations to our GAAP financial measures, are included in our earnings release which we have furnished with the SEC and is available on our website at investors.servicetitan.com. Unless otherwise stated, all references on this call to platform gross margin, total gross margin, operating income, operating margin, free cash flow, and related growth rates are on a non-GAAP basis. Finally, we've posted an updated investor presentation that can be found on the investor relations website at investors.servicetitan.com, along with a replay of this call. And with that, let me turn the call over to Ara.

Ara? Thank you, Jason, and thank you for joining us. This quarter, we celebrated the one-year anniversary of our IPO and surpassed a billion dollars of the annualized revenue run rate. In fiscal year 2026, we delivered $961 million in total revenue, growing 24% year-over-year, led by 26% year-over-year subscription revenue growth. We achieved these results by delivering 36% incremental operating margins and a meaningful change in free cash flow. When Vahe and I founded Service Titan, our vision was to transform the lives of hardworking contractors by helping them grow revenue and margins through automation. From day one, we imagined the world where technicians focused on serving customers in the field owners focused on business outcomes, and service titan increasingly handled the operational complexity in between. Running a trades business is like optimizing a multi-stage funnel. Contractors must generate demand, book appointments, dispatch the right tech, diagnose issues, present solutions, follow up on unsold opportunities, manage inventory, process payroll, and constantly analyze performance to improve profitability. So we built a singular end-to-end operating system spanning every major workflow in the trades, from demand generation to call booking, dispatch, quoting, payments, inventory, payroll, and supplier integrations. And we embedded best practices that drive revenue and profitability directly into the software, including marketing ROI tools to double down on the highest performing campaigns, call analytics to improve appointment booking rates, good, better, best proposal systems to increase average tickets, pipeline tracking and outbound dialing to recover unsold estimates, and more. And contractors who leverage these capabilities consistently drove significant revenue and profit expansion. But two constraints limited how far we could take them. First, utilization. Customers still had to manually execute many of these best practices. And second, deterministic software could only automate what was rules-based. Much of the work still happened in Service Titan, but it remained manual because it required judgment. AI removes both of these constraints. Because Service Titan is already where the work happens and where decisions are made, We are naturally the context layer and the orchestration layer, which allows us to automate work directly inside our platform with AI. And because for more than a decade, nearly every meaningful workflow in the trades has run inside Service Titan, we have amassed the deepest end-to-end proprietary data set in the industry, including marketing campaign performance tied directly to revenue and margin, call booking rates by call type and process, productivity, close rates, and average ticket by job type and quotes generated, dispatch decisions linked to outcomes, and more. This is structured transactional outcome level data across millions of jobs and over 80 billion in transaction volume over the past 12 months alone. Our execution layer puts this uniquely proprietary data into action and every additional job improves that intelligence, creating a flywheel where the system continuously learns and gets smarter, allowing us to deliver differentiated customer outcomes. What used to require a group of people manually coordinating across an operation can now be orchestrated by the system itself. with humans and AI agents working together seamlessly, where each player does what they do best. An AI agent that detects available capacity and automatically modulates demand generation to fill the board. Virtual agents that answer inbound calls and book appointments, with a human call center manager ready to step in with full context exactly when a customer demands it. A human tech who walks into a home, looks a homeowner in the eye and diagnoses the problem armed with an agent that automatically generates the right votes. The work gets done faster, smarter and more reliably, not just because you can get AI to do some of the work through point solutions, but because data from adjacent workflows makes each decision smarter and every handoff between players in the workflow is seamless. on a singular platform. This is what an operating system for the trades looks like in this new world of AI, the agentic operating system. First announced as a pilot program at Pantheon last fall, Max is the initial deployment of our agentic operating system, bringing together the power of our core product, our existing pro products and the new AI capabilities. all orchestrated together. And the results from our first set of customers speak to the potential of Max. A customer in Southern California, Team Reuter, told me that instead of pockets of automation with pro products, Max delivered an integrated end-to-end automation engine. In three months since migrating to Max, Team Reuter has experienced a 50% increase in average ticket size. leading to an acceleration in total revenue growth, record revenue in December, and greater than 50% year-over-year revenue growth in January. Best of all, Team Reuter told me that they expect further improvements as they reach full utilization of MAGS. A separate residential plumbing customer told me that only months after going live with MAGS, EBITDA margins improved from 18% to 30%. the automated marketing call booking dispatching and capacity planning allow them to reduce office staff from seven to two for 19 texts in the field all while increasing technician salaries eliminating weekend work and even reducing end customer pricing these powerful results are possible because we're now automating and orchestrating the work already being done in service type On average, customers on Max will about double their monthly subscription revenue when fully ramped, and it is behind the power of these collective outcomes that we plan to meaningfully expand Max throughout the year, starting with the doubling of capacity in Q1. In addition to Max, we are seeing healthy ongoing growth of our existing AI Native Pro products and early promising signs from our recently launched virtual agents. We're leveraging our massive proprietary data sets, entrenched and expanding ecosystem, brand leadership, and distribution across more than 10,000 high-performing contractors to capitalize on our largest opportunity yet and bring this reality to life for the best operators. And our internal leverage of AI tooling is allowing us to accelerate development velocity to create more value faster than ever before. This is a landmark value creation opportunity. Bringing all of this to the year ahead, we have three core goals for FY27. To continue executing on our multi-year growth factors, to bring our vision to life with the agentic operating system for the trades, and to make a step function change in the velocity at which we execute for our customers. Vahe and I have made Service Titan our life's work. With the benefits of AI, our vision is now unfolding faster than we could have ever imagined. I am inspired by the performance of our customers and by watching Titans execute on the agentic operating system for the trades. Let's hear about this execution from my co-founder, Vahe.