Financial Data and Key Metrics Changes - Total revenue for fiscal year 2025 reached 209.3 million, up 29% year-over-year, driven by a gross transaction volume (GTV) of 6.9 million, leading to an operating margin of 3.3%, an improvement of 200 basis points year-over-year [22] - Free cash flow for Q4 was 2.2 million in the prior year [22] Business Line Data and Key Metrics Changes - Subscription revenue in Q4 was 43.4 million, up 26% year-over-year [20] - Professional services revenue in Q4 was 1.5 trillion annually on trades services [9] - The company exited fiscal year 2025 with approximately 9,500 total active customers, an 18% increase year-over-year [22] Company Strategy and Development Direction - The company aims to be synonymous with the trades by expanding its enterprise capabilities, increasing pro product adoption, and deepening its presence in commercial and roofing sectors [13][15] - The focus is on creating value for customers through high ROI solutions, which in turn drives growth for the company [7][12] - The company is committed to becoming the operating system for the trades, leveraging partnerships and technology to enhance customer success [11][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance in existing customer segments and the potential for new product adoption [19][63] - The management acknowledged the impact of macroeconomic conditions but noted that historical performance has shown resilience in job growth despite economic cycles [60] - The company is monitoring external variables closely, including weather patterns and macroeconomic shifts, to inform its guidance and operational strategies [64][97] Other Important Information - The company achieved free cash flow positivity for the first time in fiscal year 2025, marking a significant milestone [8] - The management highlighted the importance of customer success metrics, shifting focus to include expansion as a core KPI starting in fiscal year 2026 [24] Q&A Session Summary Question: What contributed to better linearity of new business in Q4? - Management attributed the unusual linearity to momentum from the Pantheon event and excitement surrounding the IPO, leading to more deals closing earlier in the quarter than usual [29][30] Question: What are the new opportunities available with the new products? - Management indicated that while new products take time to mature, they expect them to be significant growth drivers in fiscal year 2027 and beyond [31] Question: How does the company view its position in heavy construction? - Management clarified that they focus on specialty trade subcontractors rather than general contractors, seeing opportunities for coexistence rather than direct competition with firms like Procore [44][45] Question: How does the company plan to drive expansion through customer success managers (CSMs)? - The strategy involves CSMs helping customers better utilize products, which is expected to lead to revenue growth and margin improvement [51] Question: How does inflation impact the company's performance? - Management noted that while inflation could affect average ticket sizes, they have not yet observed a significant impact on jobs performed or average ticket [60][78] Question: What is the outlook for free cash flow in fiscal year 2026? - Management indicated that free cash flow should align closely with non-GAAP operating income, with seasonal dynamics considered [71] Question: How does the company view the impact of AI on its products? - Management highlighted that AI is expected to enhance existing pro products and drive monetization opportunities, with current AI products already showing strong customer adoption [100]
ServiceTitan, Inc.(TTAN) - 2025 Q4 - Earnings Call Transcript