TSP Weekly Tech Stock Update—March 15, 2025
This Week: Rubrik delivers strong results, TTAN is one to watch, ServiceNow makes a big acquisition, MSFT upgraded at Davidson, HUBS upgraded at Barclays, JMP likes Unity, Apple's Siri delay & more.
Hello from Rob…
—One to Watch: Shares of ServiceTitan (TTAN, $93) this week hit a new post-IPO low of $79.81 just ahead of the release of the company’s FQ4 (Jan.) earnings report.
ServiceTitan—a provider of a cloud-based platform for the residential and commercial building trades that connects and manages an array of business workflows— went public in mid-December at $77 a share, with an opening price of $101.
On Friday, the stock jumped 12.9% after ServiceTitan’s latest results and guidance beat expectations. Total revenue in FQ4 of $209.2 million topped the consensus by 4.5%, gaining 29%, an acceleration from +24% in FQ3.
The company’s total active customer base of ~9,500 was up 18% year over year. Gross Transaction Volume (GTV) advanced 26% to $17.0 billion.
For FY’26 (Jan.), ServiceTitan has four primary goals:
1-Further expand its enterprise capabilities
2-Further expand Pro product adoption (about a 1/4 of the GTV has adopted 4 or more Pro and FinTech products versus just 5% three years ago)
3-Go deeper in the commercial segment
4-Continue to expand in the roofing sector
On the FQ4 call, ServiceTitan CEO and co-founder Ara Mahdessian said there is a lot of overlap between playbooks in different end markets, but also unique differences:
For example, in something like, let's say, HVAC, the playbook very much centers on the residential side on optimizing the sales and marketing funnel, how you market to generate more phone calls, how you make sure all the phone calls are booked into an appointment, make sure none of those appointments get canceled, make sure the technicians have high close rates in the field. Nearly all of that applies in roofing.
However, within roofing, certain workflows are meaningfully different: how measurements are taken of the home and the roof, how that turns into an estimate. And then once the job is sold, how that translates into procurement for all the materials is meaningfully different than other industries. And so that part of the playbook, we had to both work on from a product perspective as well as, of course, from a services perspective in how we enable our customers.
ServiceTitan’s initial FY’26 total revenue outlook of $895 million to $905 million, while above the consensus of $884.2 million, looks overly conservative (growth of 16.6% at the midpoint) after the company reported FY’25 growth of 26%.
On the FQ4 call, CFO Dave Sherry said ServiceTitan is “early in the journey of being a public company,” so it wants “to be prudent in our guidance with you to have confidence we’re going to hit the numbers we say.”
*Inside This Issue: 2 Beaten-Up AI Stocks Trying To Rebound
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