ServiceTitan beat Q3 revenue and profit estimates. Q4 guidance fell short of analyst expectations, sending shares down 8% after hours. AI adoption is accelerating. Macro headwinds are pressuring contractor spending.
ServiceTitan (TTAN) reported fiscal third-quarter results that beat consensus on revenue and billings. The stock sold off after management flagged a slower start to Q4.
The company, which sells cloud-based CRM software to home and commercial contractors, posted revenue of $204.8 million, up 24% year over year and ahead of the $201.5 million estimate. Adjusted operating income came in at $11.7 million, versus a $2.5 million loss a year ago.
Shares fell about 8% in after-hours trading. CFO Dave Pearson said on the call that Q4 revenue would land between $207 million and $209 million, below the $211.5 million analysts had penciled in. The guidance gap is small. Management's outlook suggests macro headwinds are starting to affect the company's contractor base.
ServiceTitan now serves roughly 11,000 contractors. Net dollar retention rate is above 110%, meaning existing customers are spending more each year. The AI layer includes tools that automate scheduling, pricing, and parts ordering. Management said AI-powered features now touch 40% of all transactions on the platform, up from 25% a year ago.
Home renovation spending has softened. Mortgage rates remain elevated. Consumers are pulling back on discretionary projects. ServiceTitan's customer base, small and mid-sized contractors, is directly exposed to that cycle. The company's own data shows that average revenue per contractor has flattened over the past two quarters.
The long-term opportunity is large. The U.S. home services market is roughly $600 billion. Most of it still runs on whiteboards and spreadsheets. ServiceTitan's penetration is in the low single digits.
AlphaScala's proprietary score for TTAN is 45 out of 100, a Mixed rating. The rating balances a strong product story against a weakening demand backdrop.
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