If you’ve ever watched a plumber, electrician, or landscaper deal with nonstop phone calls and piles of random paperwork, you get why the trades industry was begging for a tech shake-up. That’s where ServiceTitan steps in: a cloud-based management platform tailor-made for contractors of all stripes—plumbers, electricians, HVAC pros, landscapers, you name it. It helps them handle scheduling, payments, invoicing, customer management, marketing, and even inventory, all from one central hub.

So how’d ServiceTitan get off the ground? It’s got one of those classic origin stories: founders Ara Mahdessian and Vahe Kuzoyan saw their dads wrestling with outdated systems in their own contracting businesses. What started as a simple summer project to help their fathers has turned into a powerful platform used by over 100,000 tradespeople. The timing was perfect. The home services market is enormous at around 800B in North America alone, and it’s notorious for being slow on the tech front. In the U.S., the home services space was valued at roughly 657B in 2022 and might hit 893B by 2031, climbing at almost 20% annually. Even with that growth, a surprising number of businesses still rely on pen, paper, and Excel spreadsheets.

Within that huge pie, ServiceTitan’s current offerings directly target about 650B in trades-related spending. Convert that into software dollars, and you get around a 30B TAM for providers like ServiceTitan, of which they can realistically chase about 13B right now. Even better, about 75% of that work is essential, non-discretionary stuff like busted AC units, leaky faucets, or electrical failures that can’t be put off. That’s not going anywhere anytime soon.

ServiceTitan’s growth story has been impressive. Officially launching in 2012, they quickly expanded beyond plumbing into landscaping, pest control, garage door repair, roofing…the list goes on. Financially, last year ServiceTitan pulled in about 772M in revenue (up 26% YoY), and Q4 FY2025 revenue popped 29% to 209.3M. Their ARR is also around 772M, with an outstanding NDR above 110%, showing they keep wringing more revenue from their existing customers over time. Strategically, ServiceTitan’s not afraid to play offense. They’ve snapped up several companies to expand their product lineup and push into new markets, including Aspire Software (landscaping), ServicePro and FieldRoutes (pest control), Schedule Engine (online booking), and Convex (commercial services). Each deal brings them fresh capabilities and a foothold in another corner of the trades world.

Of course, there’s competition. Platforms like Jobber and Housecall Pro offer simpler, often cheaper solutions, especially for smaller outfits. For example, Jobber serves over 3,300 companies and logs around 150M in revenue. But ServiceTitan’s edge is the depth of its industry-specific features. It’s not the cheapest, but it is the most comprehensive option for mid-sized players looking to scale. In December of last year ServiceTitan went public under the ticker TTAN 0.00%↑ pricing shares at 71 and raising about 625M. The stock soared 42% on day one, clearly investors were hungry to own a piece of this story.

Looking Forward: Why ServiceTitan Still Has a Long Runway

What's potentially exciting about ServiceTitan isn't just where they are today, it's the huge potential runway ahead. Several key drivers support this growth trajectory: First, the natural growth of the company's existing client base. With net dollar retention exceeding 110%, current customers are steadily increasing their usage and spend on the platform. Second, there's significant potential to increase penetration of additional product offerings. Today, ServiceTitan captures about 1% of their customers' transaction volume, but that could double if customers adopt the full suite of solutions offered by ServiceTitan. Third, the company has ample room for new customer acquisition within existing verticals. Despite their clear leadership, current market penetration still sits below 10%, meaning there's plenty of opportunity left to onboard new businesses currently relying on pen, paper, or outdated legacy systems. And finally, ServiceTitan can continue expanding into new adjacent trades and geographical markets, significantly increasing their overall addressable market beyond the $13 billion currently serviceable.

The real story to watch is margin expansion. Right now, they’re around breakeven in terms of operating margin (non-GAAP), but leadership thinks they can eventually push that above 25%. As they grow more profitable, operating leverage will kick in and free cash flow should take off, giving them more options for future reinvestments or acquisitions. Bottom line: It’s a high-quality business in a massive, traditionally tech-averse market, with loyal customers, a big growth runway, and a path to larger margins. ServiceTitan has locked itself in as the go-to software backbone for contractors, and they might just be getting warmed up.

Valuation

ServiceTitan’s hovering around a $9B market cap, with revenue projected to top $900M in calendar year 2025. I actually think it’ll come in a bit higher, which puts their current P/S ratio at around 9.3. Gross margins are 74%, so if you look at price-to-gross-profit, they’re at about 13x right now. But I’m betting that gross margin’s going to keep climbing, given their incremental margins are reportedly over 80%. Profitability, on the other hand, isn’t much to write home about yet. Operating cash flow margins jumped from -6.5% to 4.8% last year, but most of that improvement came from rising SBC, which went from 17% of revenue to over 21%. So the quality of that cash flow is questionable. They do funnel their investments through the P&L, so capex stays super light and most of OCF turns into free cash flow. Consensus says revenue grows 18% in 2025 and 14% in 2026, but given how thin the profits are, those numbers might be too low to drive margins higher in a meaningful way. They’ll probably need faster top-line growth or a really long growth runway to let operating leverage do its thing and push profitability and free cash flow higher.

Using a reverse DCF, the market’s basically pricing in around 14% annual revenue growth over the next decade, hitting $2.7B by 2035. They also assume free cash flow margins rise from under 5% now to 28% by then, and the share count grows about 2% a year (from 90M to around 105M). With a 10% discount rate, those assumptions imply the company would have to trade at roughly 30x FCF in 2035 to justify today’s valuation. That’s not impossible and one could argue revenue might actually grow in the 18–20% range and FCF margins might hit 30%, which could yield a 15% annual return from here. But I’m not totally sold yet.

Personally, I don’t have enough conviction at this price. I need to see them consistently boost the top line while scaling profit. It felt more reasonable when it dropped to $80 recently, though even then, it wasn’t exactly cheap. So for now, I’m on the sidelines, waiting to see if there’s a better entry point. I’d be happy to jump in at the right price, but right now, it’s a too hard pile for me.