TTAN
Servicetitan, INC
NASDAQ
S-1/A: ServiceTitan Files for IPO, Aiming to Modernize the Trades Industry
Sentiment:
S-1/A Filing
10 December 2024 6:12 AM
ServiceTitan, a cloud-based software platform for trades businesses, has filed for an initial public offering, seeking to capitalize on the underserved technology needs of the industry.
Worse than expected
The company's loss from operations increased by approximately 20% to 26% for the three months ended October 31, 2024 compared to the three months ended October 31, 2023.
Capital raise
ServiceTitan is conducting an initial public offering of its Class A common stock.
The company intends to use approximately $310.6 million of the net proceeds from this offering to redeem all outstanding shares of its non-convertible preferred stock.
The remaining net proceeds will be used for general corporate purposes, including working capital, operating expenses, and capital expenditures.
The company may also use a portion of the net proceeds to acquire or invest in businesses, products, services, or technologies.
Summary
- ServiceTitan, a company providing a cloud-based software platform for trades businesses, has filed for an initial public offering (IPO).
- The company aims to modernize the trades industry, which includes plumbers, roofers, landscapers, and HVAC technicians.
- ServiceTitan estimates that end customers spend approximately $1.5 trillion annually on trades services in the United States and Canada.
- The platform offers end-to-end capabilities to manage workflows, connect stakeholders, and provide industry best practices.
- Key features include CRM, FSM, ERP, HCM, and FinTech solutions.
- ServiceTitan reports a gross dollar retention rate of over 95% for each of the last ten fiscal quarters.
- The company processed $62.0 billion of Gross Transaction Volume (GTV) for the 12 months ended July 31, 2024.
- ServiceTitan's revenue grew from $179.2 million in fiscal 2021 to $614.3 million in fiscal 2024, representing a compound annual growth rate of 51%.
- The company incurred a net loss of $195.1 million in fiscal 2024.
- ServiceTitan estimates a serviceable market opportunity of approximately $13 billion.
Sentiment
Score: 6
Explanation: The document presents a mixed picture. While the company shows strong growth and customer retention, it also has significant losses and faces various risks. The sentiment is cautiously optimistic, reflecting the potential of the business but also acknowledging the challenges ahead.
Positives
- ServiceTitan has a strong gross dollar retention rate of over 95% for the last ten fiscal quarters, indicating high customer satisfaction and loyalty.
- The company has experienced significant revenue growth, with a compound annual growth rate of 51% from fiscal 2021 to fiscal 2024.
- ServiceTitan's platform is comprehensive, covering key workflows in trades businesses, including CRM, FSM, ERP, HCM, and FinTech.
- The company has a large serviceable market opportunity estimated at $13 billion.
- ServiceTitan has a high net dollar retention rate of over 110% for each of the last ten fiscal quarters, indicating strong customer growth and success on the platform.
- The company has a growing number of customers with annualized billings exceeding $100,000, demonstrating its ability to scale with its customers.
Negatives
- ServiceTitan has a history of losses and incurred a net loss of $195.1 million in fiscal 2024.
- The company's net dollar retention rate has gradually declined by seven percentage points over the last ten fiscal quarters.
- The company's loss from operations increased by approximately 20% to 26% for the three months ended October 31, 2024 compared to the three months ended October 31, 2023.
Risks
- The company's rapid growth may not be indicative of future growth.
- ServiceTitan may not be able to achieve or sustain profitability in the future.
- Failure to manage growth effectively could adversely affect the company's brand and reputation.
- The company may not be able to effectively develop and commercialize new products or respond to changes in the trades industry.
- The company's operations can be seasonal, and results may vary from quarter to quarter.
- Factors affecting the trades industry, such as consolidation and labor shortages, could adversely affect demand for the platform.
- The company faces competition from both established and new companies.
- Cybersecurity breaches or other incidents could adversely affect the company's reputation and business.
- The multi-class structure of the company's common stock will concentrate voting power with the Co-Founders.
- The company is an emerging growth company, which may make its Class A common stock less attractive to investors.
Future Outlook
The company expects to continue to make investments in the development and expansion of its business, which may not result in increased revenue. The company also expects its revenue growth rate to continue to fluctuate over the short term, and even if its revenue continues to increase, its revenue growth rate may decline in future periods as the size of its business grows and it achieves higher market adoption rates.
Management Comments
- Ken Haines, CEO Wrench Group: 'Compared to anyone else, I dont think theres even a close second in terms of what ServiceTitan can provide their customers.'
- Carrie Kelsch, Owner A Plus Garage Doors: 'Before ServiceTitan, I had limited visibility into our operations. ServiceTitan has changed all of that.'
- Lincoln Walpole, CFO Any Hour Services: 'ServiceTitan is essential to our scalability. To be the best, we believe weve got to partner with the best, and thats ServiceTitan.'
- Chris Hoffmann, CEO Hoffmann Brothers: 'As we started to grow, ServiceTitan became a necessity. It wasnt a matter of if wed transition to ServiceTitan, it was just a matter of when.'
- Kirsta Holliman, CFO Interstate AC: 'I realized ServiceTitan is the only software that has all the facets that we need to handle both commercial service and commercial construction.'
- Allen Sweeney, Owner APHIX: 'I dont know how you can make good decisions quickly without having everything rolled into one system.'
Industry Context
This IPO filing reflects a broader trend of technology companies seeking to address the needs of traditionally underserved industries. ServiceTitan's focus on the trades industry aligns with the increasing demand for digital solutions in sectors that have historically relied on manual processes. The company's emphasis on end-to-end solutions also reflects a move away from fragmented point solutions towards more integrated platforms.
Comparison to Industry Standards
- ServiceTitan's focus on the trades industry is unique compared to broader CRM and ERP providers like Salesforce and SAP, which are not purpose-built for the trades.
- The company's high gross dollar retention rate of over 95% for the last ten fiscal quarters is a strong indicator of customer satisfaction and platform stickiness, which is a key metric for SaaS companies.
- ServiceTitan's net dollar retention rate of over 110% for the last ten fiscal quarters is also a strong indicator of customer growth and success on the platform, which is a key metric for SaaS companies.
- The company's revenue growth rate of 51% CAGR from fiscal 2021 to fiscal 2024 is impressive compared to many other SaaS companies, but the company's net losses are also significant.
- The company's focus on end-to-end solutions is a differentiator compared to point solutions offered by companies like FieldEdge, Workwave, and HouseCall Pro.
Stakeholder Impact
- Shareholders will be impacted by the multi-class structure of the common stock, which concentrates voting power with the Co-Founders.
- Employees may benefit from the company's growth and potential for future equity awards.
- Customers may benefit from the company's continued investment in its platform and new product development.
- Suppliers and creditors may be impacted by the company's financial performance and ability to meet its obligations.
Next Steps
- The company intends to use approximately $310.6 million of the net proceeds from this offering to redeem all outstanding shares of its non-convertible preferred stock.
- The remaining net proceeds will be used for general corporate purposes, including working capital, operating expenses and capital expenditures.
- The company may use a portion of the net proceeds to acquire or invest in businesses, products, services or technologies.
Related Party Transactions
- The document discloses several transactions with related parties, including purchases of preferred stock by entities affiliated with Battery Ventures, Bessemer Venture Partners, and ICONIQ Growth, as well as a loan agreement with an affiliate of Goldman Sachs & Co. LLC and Vahe Kuzoyan.
- The document also discloses that the sister of Ara Mahdessian and the brother of Vahe Kuzoyan are employed by the company.
Key Dates
- 2007: ServiceTitan, Inc. was incorporated as LinxLogic, Inc.
- 2012: ServiceTitan first launched its platform.
- 2014: LinxLogic, Inc. changed its name to ServiceTitan, Inc.
- February 24, 2022: Russia invaded Ukraine, leading to disruptions in ServiceTitan's development activities.
- October 2022: ServiceTitan issued non-convertible preferred stock and warrants.
- January 23, 2023: ServiceTitan entered into a credit agreement with Wells Fargo Bank, N.A.
- July 7, 2023: ServiceTitan completed its fiscal 2024 tender offer.
- July 27, 2023: ServiceTitan entered into an Amended and Restated Investors Rights Agreement.
- April 2024: ServiceTitan acquired Convex Labs Inc.
- October 1, 2024: ServiceTitan amended its credit agreement with Wells Fargo Bank, N.A.
- October 21, 2024: ServiceTitan's board of directors approved the one-time grant of performance-based RSUs to the Co-Founders.
- December 2, 2024: ServiceTitan entered into an exchange agreement with its Co-Founders.
- December 10, 2024: ServiceTitan filed its S-1/A registration statement.
Keywords
trades, software, SaaS, IPO, cloud platform, CRM, FSM, ERP, HCM, FinTech, GTV, construction, plumbing, electrical, HVAC, field service management
TTAN
Servicetitan, INC
NASDAQ
Sector: TBD
Filings with Classifications
Worse than expected
1 July 2025 5:42 PM
Insider Trading Report
- A 10% owner and director, Bessemer Venture Partners, sold a substantial number of shares (225,277 shares) of ServiceTitan Class A Common Stock.
- Insider selling, especially by a significant holder, is generally perceived as a negative signal by the market, suggesting that the insider may believe the stock is fully valued or that better investment opportunities exist elsewhere.
Worse than expected
1 July 2025 5:36 PM
Insider Transaction Report
- Funds affiliated with a Director and 10% Owner, Byron B. Deeter, divested a substantial number of shares (225,277 shares) of ServiceTitan Class A Common Stock across two transactions. While the sales were by the funds and not directly by the individual, such significant sales by an affiliated entity of a major shareholder can be interpreted as a negative signal by the market.
Worse than expected
27 June 2025 7:08 PM
Insider Trading Report
- The document details significant insider selling by Bessemer Venture Partners, a 10% owner and director of ServiceTitan, Inc. Insider selling is generally perceived as a negative signal by the market, suggesting that a key stakeholder is reducing their exposure to the company's stock.
Worse than expected
27 June 2025 7:05 PM
Insider Transaction Report
- The sale of 137,543 shares by entities affiliated with a director and 10% owner is generally viewed as a negative signal by investors, suggesting a potential lack of confidence or a move to realize gains, which can put downward pressure on the stock price.
Worse than expected
12 June 2025 7:56 PM
Insider Transaction Report
- A significant sale of 500,000 shares by a 10% owner and director, Bessemer Venture Partners, could signal a lack of confidence or a strategic portfolio rebalancing, potentially leading to negative market perception.
Capital raise
12 June 2025 4:49 PM
Quarterly Report
- The company states, "We may be required to seek additional equity or debt financing."
- It notes that future capital requirements will depend on various factors, including business challenges, product enhancements, infrastructure improvements, and potential acquisitions.
- The company evaluates financing opportunities and acknowledges that obtaining additional financing on acceptable terms may not always be possible.
Better than expected
12 June 2025 4:49 PM
Quarterly Report
- Revenue growth of 27% significantly outpaced the prior year's comparable period.
- Net loss decreased by $9.7 million, indicating improved financial performance.
- Gross profit increased by 40%, and gross margins improved across the board, reflecting operational efficiencies.
- Net cash used in operating activities decreased, and non-GAAP free cash flow improved, showing better cash management.
- Gross Transaction Volume (GTV) increased by $3.2 billion, and the net dollar retention rate remained strong at over 110%, indicating robust customer adoption and expansion.
Better than expected
5 June 2025 4:07 PM
Quarterly Financial Results
- Total revenue grew 27% year-over-year to $215.7 million, exceeding the prior year's growth rate.
- Non-GAAP income from operations significantly increased to $16.2 million from $3.3 million in the prior year, indicating substantial improvement in core profitability.
- Non-GAAP operating margin improved to 7.5% from 1.9% year-over-year, reflecting enhanced operational efficiency.
- GAAP loss from operations decreased to $(49.5) million from $(53.4) million, showing a reduction in overall losses.
- Net cash used in operating activities improved to $(14.6) million from $(19.2) million, indicating a reduced cash burn.
Worse than expected
1 April 2025 9:28 PM
Annual Results
- The company's net loss increased from $195.1 million in fiscal year 2024 to $239.1 million in fiscal year 2025.
Better than expected
13 March 2025 4:06 PM
Earnings Release
- The company's revenue growth exceeded expectations, with a 29% increase in Q4 and a 26% increase for the full year.
- Non-GAAP profitability improved significantly, with a shift from a loss to income from operations for both Q4 and the full year.
- Net dollar retention remained high, indicating strong customer satisfaction and upselling opportunities.
Worse than expected
14 January 2025 5:10 PM
Quarterly Report
- The net loss increased from $39.7 million to $46.5 million year-over-year.
Better than expected
13 January 2025 4:05 PM
Earnings Release
- The company's non-GAAP income from operations turned positive, indicating improved profitability.
- Net cash generated from operating activities significantly increased, showcasing better cash management.
- Non-GAAP free cash flow improved, reflecting stronger financial health.
Capital raise
10 December 2024 6:12 AM
S-1/A Filing
- ServiceTitan is conducting an initial public offering of its Class A common stock.
- The company intends to use approximately $310.6 million of the net proceeds from this offering to redeem all outstanding shares of its non-convertible preferred stock.
- The remaining net proceeds will be used for general corporate purposes, including working capital, operating expenses, and capital expenditures.
- The company may also use a portion of the net proceeds to acquire or invest in businesses, products, services, or technologies.
Worse than expected
10 December 2024 6:12 AM
S-1/A Filing
- The company's loss from operations increased by approximately 20% to 26% for the three months ended October 31, 2024 compared to the three months ended October 31, 2023.
Worse than expected
3 December 2024 6:06 AM
S-1/A Filing
- The company has a history of losses and may not be able to achieve or sustain profitability in the future.
Capital raise
3 December 2024 6:06 AM
S-1/A Filing
- The company is conducting an initial public offering of shares of its Class A common stock.
- The company plans to use approximately $310.6 million of the net proceeds from this offering to redeem all outstanding shares of its non-convertible preferred stock.
- The remaining net proceeds will be used for general corporate purposes, including working capital, operating expenses and capital expenditures.
- The company may also use a portion of the net proceeds to acquire or invest in businesses, products, services or technologies.
Capital raise
18 November 2024 11:01 AM
S-1 Filing
- ServiceTitan has filed an S-1 registration statement for its initial public offering.
- The company intends to use approximately $ million of the net proceeds from this offering to redeem all outstanding shares of its non-convertible preferred stock.
- The remaining net proceeds will be used for general corporate purposes, including working capital, operating expenses and capital expenditures.
- The company may also use a portion of the net proceeds to acquire or invest in businesses, products, services or technologies.
Worse than expected
18 November 2024 11:01 AM
S-1 Filing
- The company experienced a net loss of $195.1 million for fiscal year 2024, which is worse than expected for a company of this size.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.