Shares of ServiceTitan (TTAN) jumped 16% to $86.45 on Friday after the company reported stronger-than-expected financial results for the first quarter of fiscal 2027. The rally helped reverse some of the stock’s losses, as ServiceTitan had fallen about 30% since the start of 2026.
The company posted adjusted earnings of $0.37 per share, beating analysts’ expectations of $0.28 per share. Revenue rose 25% year-over-year to $268.8 million, also exceeding forecasts of $257.4 million.
ServiceTitan’s gross transaction volume reached $21.7 billion during the quarter, up 23% from a year earlier. The company also maintained strong customer retention, with net dollar retention remaining above 110%. Meanwhile, its non-GAAP operating margin improved significantly to 15.2%.
Subscription revenue increased 24% to $202 million, while usage-based revenue climbed 29% to $58.5 million. The company’s gross margin expanded to 81.3%, reflecting improved operational efficiency.
Although ServiceTitan reported negative free cash flow of $9.6 million, the figure showed a major improvement compared to the negative $22.3 million recorded in the same period last year.
Company Raises Full-Year Outlook
Following the strong quarter, ServiceTitan raised its financial guidance for fiscal 2027. The company now expects full-year revenue between $1.13 billion and $1.14 billion, higher than its previous forecast of $1.11 billion to $1.12 billion.
The company also increased its operating income outlook to between $142 million and $147 million, representing a $14 million increase from prior guidance.
For the second quarter, ServiceTitan expects revenue of $284 million to $286 million and non-GAAP operating income of $38 million to $39 million.
Management said operating margins are now expected to exceed the company’s original target for the year.
AI Product Drives Investor Optimism
A key highlight of the quarter was ServiceTitan’s artificial intelligence platform, Max. Company executives said the number of locations using Max more than doubled during the first quarter and is expected to double again in the second quarter.
Customers that have fully adopted Max are seeing automation rates above 10% for job-related tasks. The platform includes 25 AI-powered tools that help with appointment scheduling, customer communication, service conversions, call handling, text messaging, and advertising optimization.
One customer, E·D·S Air Conditioning & Plumbing, reported that call booking rates increased by 16 percentage points after implementing Max. The company also saw average revenue per technician rise by more than 50%.
ServiceTitan also surpassed 2,000 customers generating more than $100,000 in annual billings. These larger customers now contribute more than 60% of the company’s total annualized billings.
Wall Street Raises Price Targets
The strong results prompted several Wall Street firms to raise their price targets on the stock.
KeyBanc Capital Markets maintained its Overweight rating and set a price target of $120, describing the quarter as exceptionally strong. BTIG raised its target to $110 from $90 while keeping a Buy rating. Meanwhile, Morgan Stanley increased its target price to $124 from $118 and continued to list ServiceTitan as one of its top investment picks.
Chief Financial Officer Dave Sherry noted that first-quarter performance received a modest boost from one additional business day and favorable weather conditions. However, he emphasized that the company’s outlook for the rest of the year does not assume similar weather-related benefits.
