ServiceTitan hits $1B ARR growing 25%, fintech up 29%

Key Takeaways

• ServiceTitan reached $1.08B annualized revenue, growing 25% at scale with 110%+ net dollar retention
• Usage revenue from payments grew 29% vs 24% for subscriptions, now 22% of platform revenue
• Operating margins doubled from 7.5% to 15.2% while R&D spending increased to 33% of revenue

ServiceTitan just crossed $1 billion in annualized revenue, growing 25% year over year. That's not a typo. A vertical SaaS company selling to plumbers, HVAC contractors, and electricians is now bigger than most horizontal software players, and it's accelerating into fintech faster than its core subscriptions.

The company reported $268.8 million in quarterly revenue for fiscal Q1 2027, putting it at roughly a $1.08 billion run rate. Net dollar retention sits above 110%. Non-GAAP operating margin hit 15.2%, more than double the 7.5% from a year ago. For a vertical software company, these numbers look like a horizontal giant.

How does a trades software company hit $1B ARR?

ServiceTitan sells an end-to-end operating system for service contractors. Scheduling, dispatch, invoicing, customer management, and now payments. The company was founded in 2012 by Ara and Vahe Kuzoyan, sons of tradespeople who saw how badly the HVAC and plumbing industries needed modern software. They went public in December 2024.

The playbook is simple in theory, brutal in execution. Go deep into one vertical. Own the system of record. Then expand into adjacent revenue streams. ServiceTitan did this by becoming the default operating system for tens of thousands of trades businesses.

The market is pricing this at about 6x to 7x forward revenue. At $78 per share, ServiceTitan carries a market cap near $7.5 billion, down more than 40% from its 52-week high of $120. For a company growing 25% with margins doubling, that's a fairly ordinary multiple. Public markets want accelerating growth right now. Consistent isn't enough.

Fintech is growing faster than subscriptions

This is the number that matters most. ServiceTitan processes payments through its platform and takes a cut on the volume. Gross Transaction Volume hit $21.7 billion in the quarter, up 23% year over year. That annualizes to roughly $87 billion flowing through the system.

The revenue tied to that volume is outpacing subscriptions. Usage revenue grew 29% to $58.5 million. Subscription revenue grew 24% to $202 million. Usage now represents about 22% of platform revenue, and the gap is widening.

This is the vertical software plus fintech playbook that Toast, Shopify, and Bill made famous. Own the system of record, then monetize the money movement on top. Once you're the platform a contractor runs their entire business on, payments attach almost for free. The take rate scales with your customers' success instead of their seat count.

“ServiceTitan has somewhat quietly become one of the most important vertical software stories of the past decade.”

— Jason Lemkin, Founder & CEO, SaaStr

Why did margins double in one year?

Non-GAAP operating margin jumped from 7.5% to 15.2%. Operating income more than doubled, from $16.2 million to $40.8 million. The driver is sales and marketing efficiency.

Revenue grew 25%, adding $53 million. GAAP sales and marketing spend grew just 5.6%, adding under $4 million. When your revenue grows five times faster than your sales spend, margins expand almost automatically.

GAAP operating margin improved from negative 23% to negative 9.6%. The company is closing the gap to real profitability while still investing heavily. That's the balance every growth-stage board is asking for right now.

R&D spending is going up, not down

ServiceTitan isn't banking the efficiency gains. It's reinvesting them. R&D spend grew 27% to $88 million, now about 33% of revenue. Management is explicit about where it's going: an "Agentic Operating System for the Trades" and a product called Max.

The adoption signal is real. ServiceTitan more than doubled the number of locations on Max in Q1 and guided to doubling again in Q2. Doubling a product's footprint two quarters in a row while it's still early is the kind of curve that turns into a new revenue engine.

For a company that owns the system of record for tens of thousands of trades businesses, layering AI agents on top of proprietary operational data is a defensible move. Nobody else has the workflow data on how a plumbing business actually runs.

What does Rule of 40 look like at $1B?

Pair 25% growth with 15.2% operating margin and you land above a Rule of 40 score of 40. That's healthy. But growth decelerated slightly from 27% a year ago. At a billion-dollar run rate, the base gets harder to move.

ServiceTitan guided to $1.13 billion to $1.14 billion for full-year FY27. The consistency is impressive. Most vertical SaaS companies slow to 15% to 20% growth at this scale. ServiceTitan is holding 25%.

Frequently Asked Questions

What is ServiceTitan's current ARR?

ServiceTitan reported $268.8 million in Q1 FY2027 revenue, putting it at approximately $1.08 billion in annualized recurring revenue.

How fast is ServiceTitan growing?

ServiceTitan grew 25% year over year in Q1 FY2027, with usage revenue from payments growing even faster at 29%.

What is ServiceTitan's net dollar retention?

ServiceTitan maintains net dollar retention above 110%, meaning existing customers increase their spending by more than 10% annually.

What industries does ServiceTitan serve?

ServiceTitan provides software for trades contractors including HVAC, plumbing, electrical, roofing, and garage door businesses.

What is ServiceTitan's valuation multiple?

At a $7.5 billion market cap, ServiceTitan trades at roughly 6x to 7x forward revenue, down 40% from its 52-week high.

Source: SaaStrAI