On September 8, ServiceTitan, Inc. (NASDAQ:TTAN) reported its fiscal second-quarter financial results, which showed impressive growth. The company’s revenue increased 21% year-over-year to $292.8 million and non-GAAP free cash flow reached a record $50.5 million. The company’s non-GAAP operating margin also improved to 15.2%.
A key highlight of the quarter was the growing adoption of ServiceTitan, Inc.’s AI-powered Max package. The company exceeded its target as the number of Max locations more than doubled during the quarter. It now expects to reach more than 700 Max locations by the end of the fiscal year.
The company also said that it is currently focusing on Max and AI, as these represent the highest return on investment. However, this also means that the company is deferring expansion into new commercial trades.
GTV Growth Slows Despite Strong Results
While overall results were solid, ServiceTitan, Inc. saw some moderation in gross transaction volume (GTV) growth. GTV increased 17% year-over-year in the fiscal second quarter, down from the 23% growth seen in the first quarter. The company attributed the slower growth mainly to lower lead volumes among customers, particularly in the HVAC market.
The company’s focus on Max is also expected to create some near-term pressure on revenue. ServiceTitan, Inc. said it expects the change in revenue mix to result in a $2 million to $3 million subscription revenue headwind for the remainder of the fiscal year because of differences in revenue recognition timing. Core subscriptions are recognized ratably, while upsells such as Max are recognized as billed.
The company is also not charging onboarding fees for the transition to Max, which is expected to lower professional services revenue by approximately another $2 million. Together, these factors could create a $4 million to $5 million near-term revenue headwind for ServiceTitan, Inc.. However, management pointed out that the shift is intended to position the company for stronger growth in fiscal 2028.
Hedge Fund Interest
Hedge fund interest in ServiceTitan, Inc. has declined slightly. According to Insider Monkey‘s database, 38 hedge funds held positions in the stock in the second quarter of 2026, down from 44 in the first quarter.
Analysts remain largely positive on the stock. Of the 17 analysts tracking ServiceTitan, Inc., 88% rate it a Buy and 12% rate it a Hold. The median 12-month price target of $103 set by analysts also implies substantial upside from current levels.
However, the stock also carries a relatively high level of short interest. As of August 14, short interest stood at 15.34% of the company’s float.
Overall, ServiceTitan, Inc. delivered strong revenue growth and impressive adoption of its Max offering. However, slower GTV growth, near-term revenue headwinds from the company’s focus on Max, and a high valuation remain key risks for investors.
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