ServiceTitan Stock Rallies 13% Following Impressive Q3 Financial Results and Revenue Acceleration

ServiceTitan (TTAN) has emerged as a market winner this week, with shares climbing 13% following the release of third-quarter fiscal 2026 earnings on Thursday. The strong rally reflects investor confidence in the company’s ability to deliver both profitability and top-line expansion simultaneously.

The earnings report unveiled a compelling narrative of operational excellence. The company reported earnings of 24 cents per share, crushing expectations by 60% and marking a dramatic turnaround from the prior-year loss of 45 cents. Revenue reached $249.2 million, representing a robust 25% year-over-year increase that also exceeded consensus projections by 4.5%. This dual beat on both profitability and revenue demonstrates the company’s improving operational leverage and market positioning.

What’s Driving ServiceTitan’s Momentum

The standout performer behind these results has been the company’s platform business, which continues to gain traction among both new customer acquisitions and expansion within existing accounts. Platform gross transaction volume climbed to $21.7 billion, up 22% compared to the same quarter last year. More impressively, net dollar retention exceeded 110%, signaling strong pricing power and deepening customer engagement across the user base.

Revenue quality has improved notably, with usage-based revenues providing a tailwind to overall growth. This recurring revenue stream reflects healthy customer adoption patterns and underscores the sticky nature of ServiceTitan’s software-as-a-service model.

Financial Metrics Show Expanding Profitability

The company’s margin profile is strengthening meaningfully. Adjusted gross profit came in at 74.3%, an expansion of 390 basis points year-over-year, while platform gross margin surged 310 basis points to reach 80.2%. These impressive margin improvements indicate the company is successfully scaling while maintaining pricing discipline.

Operating expenses increased 17.9% to $163.6 million during the quarter, driven by strategic investments in research and development (up 17.8%), sales and marketing efforts (up 16.6%), and administrative functions (up 20.5%). Despite these elevated spending levels, non-GAAP operating income jumped to $21.5 million from just $1.6 million in the prior-year quarter, showcasing the business’s transition toward sustainable profitability.

Balance Sheet Strength Provides Strategic Optionality

As of October 31, 2025, ServiceTitan maintained a solid financial foundation with $493.2 million in cash and equivalents. Free cash flow generation accelerated to $37.7 million in Q3 compared with $10.6 million a year ago. This cash generation capability provides the company with flexibility to invest in growth initiatives while maintaining financial stability.

Looking Ahead: Guidance Sets Realistic Expectations

For the fourth quarter of fiscal 2026, management guided for revenues between $244 million and $246 million, with operating income expected in the $16 million to $17 million range. Full-year fiscal 2026 revenue guidance sits at $951 million to $953 million, with operating income projected between $83 million and $84 million.

These forward-looking targets reflect the company’s confidence in sustained momentum, though they imply a moderating growth trajectory in the final quarter—a natural consequence of tough comparisons as the company scales.

ServiceTitan’s ability to navigate the challenging path toward profitable growth while maintaining platform momentum has resonated with investors. The 13% post-earnings surge validates management’s execution strategy and positions the company favorably within the software infrastructure landscape.