TTAN 10-K & 10-Q changes, risk factors and insider trading

Certain factors may have a material adverse effect on our business, financial condition, and results of operations. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this Annual Report. Our business, financial condition, results of operations or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of the risks actually occur, our business, financial condition, results of operations and prospects could be adversely affected. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment.

continue to improve the functionality of and develop new productsproducts, including AI-powered products, for our platform for the trades we serve;

enhance our platform with new features and functionality, including AI-powered ones, and develop new products and serve trades businesses in trades we do not yet serve;

In addition, we plan to continue to manage our business towards the achievement of long-term growth that we believe will positively impact long-term stockholder value, and we have expended, and expect to continue to expend, substantial financial and other resources on product development, including new and innovative core and AI functionality, products and services to address our customers’ evolving business needs, new products for adjacent markets and additional trade verticals, and improved customer experience across our targeted trade verticals; our technology infrastructure, including systems architecture, management tools, scalability, availability, performance and security, as well as disaster recovery measures; our sales, marketing and customer success organizations; our onboarding and support organizations; acquisitions or strategic investments; expansion efforts, including geographic, market and new industry expansion; and general administration, including legal and accounting expenses as well as the increased operating expenses due to being a public company. These efforts may be more costly than we expect, may not result in increased revenue or growth in our business, and may cause significant fluctuations in our results of operations from period to period. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could negatively impact our gross margins and prevent us from achieving or maintaining profitability or positive cash flows on a consistent basis. If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition and results of operations could be adversely affected. Moreover, although we believe our investments in our business are consistent with our strategic objective to achieve long-term growth, these decisions may not be consistent with the short-term expectations of some investors, and if we are ultimately unable to achieve profitability at the level anticipated by industry or financial analysts and our stockholders, the trading price of our Class A common stock could decline.

We have experienced strong growth in our employee headcount, our revenue, our reach across trades, the number of customers we serve and the number of transactions we process on our platform, and we expect to continue to experience growth in the future. For example, our full-time employee headcount increased from 840 as of January 31, 2020 to 3,0493,414 as of January 31, 2025,2026, andwith weemployees added employeesover that period both at our headquarters in Glendale, California and in a number of locations across the United States and internationally. Further, our revenue has increased fromsignificantly $179.2over million forprior fiscal 2021 to $771.9 million for fiscal 2025.periods. In addition, we have and may continue to pursue acquisitions to expand our business and operations. This rapid growth and organizational change have placed, and may continue to place, significant demands on our management and our operational and financial resources and could challenge our ability to develop and improve our operational, financial and management controls; enhance our reporting systems and procedures; recruit, train and retain highly skilled personnel; and maintain customer satisfaction.

general economic conditions,conditions and unrest due to geopolitical conflicts, in both domesticallydomestic and in foreign markets;

changes in spending on home and commercial services, including as a result of economic trends, natural or man-made catastrophes and COVID-19 and pandemics generally;

whether the industry for software for the tradestrades, developsor our customers’ adoption of AI, develop more slowly than we expect;

the amount and timing of operating costs and capital expenditures related to the expansion of our business, or incorporating AI solutions into our business operations;

Any new product or platform enhancements we develop or acquire might not be introduced in a timely or cost-effective manner and might not achieve the broad market acceptance necessary to generate significant revenue. If any of our competitors implement new technologies before we are able to implement them, those competitors may be able to provide more effective products and services than ours at lower prices. Competitors may also develop and introduce new products or entirely new technologies to replace our existing platform, which could make our platform obsolete or adversely affect our business. New products or platform enhancements may initially suffer from performance and quality issues that may negatively impact our ability to market and sell such products to new and existing customers. Additionally, we may experience difficulties with software development, design or marketing that could delay or prevent our development, introduction or implementation of new products, features or capabilities. Furthermore, as we incorporate AI functionality into our platform and products, our customers may be reluctant to adopt AI-powered solutions, especially agentic workflows, or adopt them more slowly than we expect. We have in the past experienced delays in our internally planned release dates of new products, features and capabilities, and there can be no assurance that new products, features or capabilities will be released according to schedule. If our research and development investments do not accurately anticipate customer demand, if we fail to realize the benefits of these investments by not achieving market acceptance, or our new products or platform enhancements suffer from performance or quality issues or are delayed, our business, financial condition and results of operations could be adversely affected.

Consolidation of trades businesses into larger industry participants within the trades has accelerated in recent years, and this trend could continue. We have in the past suffered, and may continue to suffer, reductions in subscriptions or non-renewal of customer subscriptions due to industry consolidation. We may not be able to expand sales of our subscriptions, Pro and FinTech products to existing or new customers enough to counteract any negative impact of industry consolidation on our business. From time to time, we form beneficial relationships with industry participants who have or are intending to consolidate trade businesses. However, we may not always be able to form such relationships, and such participants may compete with us. New companies that result from such consolidation may decide to develop their own internal solutions or work with alternative providers. As these companies consolidate, competition to provide solutions and services will become more intense and establishing relationships with large industry participants will become more important. Additionally, these industry participants may also try to use their market power to negotiate price reductions for our products. If consolidation of our larger customers occurs, these consolidated companies may represent a larger percentage of business for us and, as a result, we are likely to rely more significantly on revenue from such consolidated companies to continue to achieve growth.

Trades businesses are also experiencing supply chain challenges, including shortages of equipment, manufactured goods and supplies, which negatively affect their ability to accept and perform certain jobs. Additionally, sharply rising prices of gasoline and other fleet management costs may affect the profitability of routes for technicians in the field, especially those involving large amounts of driving. Tariffs or other trade protection measures, includingand thoseuncertainty recentlyrelating announced,to such tariffs and trade protection measures, may also negatively impact trades businesses. In particular, the U.S. government has in the past and may in the future impose, reimpose, increase, or pause tariffs, and countries subject to such tariffs have and, in the future may, impose reciprocal tariffs or impose other protectionist or retaliatory trade measures in response. Such trade protection measures could increase the cost of raw materials, manufactured goods and supplies used in various trade verticals, or render these supplies increasingly difficult or impossible to procure, which may adversely affect the profitability of trades businesses. When such supply chain shortages and issues arise, or when costs increase due to tariffs or other trade protection measures, our customers may reduce their spending, which could result in decreased demand for our platform, as well as a decrease in the number or volume of transactions processed on our platform.

We have rapidly grown our business. For example, we first launched our platform in 2012, and our revenue grew from $120.7 million in fiscal 2020 to $771.9$961.0 million in fiscal 2025.2026. We haveare started to expandexpanding our sales focus to include large businesses, commercial services and construction customers, and expect to continue to explore new trades. We have also substantially increased our headcount, invested in expanding our direct sales force and customer support teams and otherwise enhanced and developed new solutions. Accordingly, we have a limited history of operations at our current scale, and our ability to forecast our future results of operations and to plan for future growth is more limited than that of companies with longer operating histories and subject to a number of uncertainties. These risks and uncertainties include our ability to:

We engage our team members in various ways, including direct hires, through professional employer organizations and as independent contractors. As a result of these methods of engagement, we face certain challenges and risks that can affect our business, operatingresults results,of operations, and financial condition.

In the locations where we directly hire our employees, we must ensure we are compliantcompliance with the applicable local laws governing team members in those jurisdictions, including local employment and tax laws. In the locations where we utilize professional employer organizations (“PEOs”), we contract with the PEO for it to serve as “Employer of Record” for those team members engaged through the PEO in each applicable location. Under this model, team members are employed by the PEO but provide services to ServiceTitan. We also engage team members through a PEO self-employed model in certain jurisdictions where we contract with the PEO, which in turn contracts with individual team members as independent contractors. In all locations where we utilize PEOs, we rely on those PEOs to comply with local employment laws and regulations and to ensure our ownership of the intellectual property developed by the team members. We also issue equity to a substantial portion of our team members, including team members engaged through PEOs and to independent contractors, and must ensure we remain compliant with securities laws of the applicable jurisdiction where such team members are located.

Additionally, inIn some cases, we utilize independent contractors. When we utilize a PEO or independent contractors, we mayface notrisks berelated operating in strictto compliance with local laws and regulations. Additionally, the agreements executed between PEOs and our team members or between us and team members engaged under the independent contractor model, may not be enforceable depending on the local laws because of the indirect relationship created through these engagement models. Accordingly, if any element of our engagement of team members through PEOs, or of our relationship with independent contractors, failsis found not to comply with laws or regulations, our business, financial condition and results of operations could be materially and adversely affected. Furthermore, litigation related to our model of engaging team members, if instituted against us, could result in substantial costs and divert our management’s attention and resources from our business.

The trades are impacted by economic slowdowns, tightening of economic policies, tariffs or other trade protection measures that increase the cost of or decrease the availability of imported goods, including trade disputes, fluctuations in interest rates, which can increase borrowing costs, and other actions that affect material and equipment pricing and availability, such as higher inflation. Unfavorable or deteriorating market conditions, reductions in maintenance spend by commercial property owners or residential customers, the unavailability or increased cost of specific materials or supplies, reductions in the availability of business financing, government action which prevents or hinders the rendering of on-premise services or similar circumstances could have an adverse impact on our business. Our revenue may decrease because trades businesses may generally choose to delay or decide against purchases of software or information systems in times of unfavorable economic conditions, because workforce challenges or governmental policies prevent sufficient labor or impact the cost of labor required to meet demanddemand, or because fewer transactions are processed on our platform, resulting in reduced fees to us. Furthermore, if the trades industry experiences a decrease in overall economic activity, the amount our customers are willing to pay for our productsproducts, or our ability to collect payments from our customers, could be reduced. Contractors may also work on fewer jobs, which would result in a reduction in transactions processed over our platform. To the extent we do not effectively address these risks and challenges, our business, financial condition and results of operations could be adversely affected.

Pandemics, natural disasters, political crises and other unexpected events could also have a direct negative impact on our own operations. Our corporate headquarters are located in California, a region known for seismic activity and that has recently experienced severe fires, and our insurance coverage may not compensate us for losses that may occur in the event of an earthquake or other significant natural disaster, such as a fire, mudslide, flood or significant power outage. In addition, depending on the geographic location of the event, a natural disaster, or a series of smaller weather events caused by climate change, could cause performance problems with our technology infrastructure and operations, which could adversely affect our business, financial condition and results of operations.

Although we maintain incident management and disaster response plans, in the event of a major disruption caused by a natural disaster or man-made problem, or outbreaks of pandemic diseases, we may be unable to continue our operations and may experience system interruptions, which could impede our ability to serve technicians when they are needed most. Acts of terrorism and other geo-politicalgeopolitical unrest, including in or near Armenia, Macedonia and Poland, where certain of our employees and engineering contractors are located, could also cause disruptions in our business or the business of our contractors, partners, vendors, or the economy as a whole. All of the aforementioned risks may be further increased if our disaster recovery plans prove to be inadequate, and could generally adversely affect our brand, reputation, business, financial condition and results of operations.

ease of adoption and use of our platformplatform, including AI-powered features and agentic workflows;

Our industry is highly competitive, and as we expand to serve additional industries and trades, we will compete against a growing number of companies and solutions specific to those industries and trades. We compete either directly or indirectly with software vendors offering point-specific tools for specific elements of trade workflows, horizontal solutions for generic functionalities, legacy on-premise field service management applications, and narrow bundled solutions for down-market trades businesses. Examples of these software vendors include Salesforce, SAP, FieldEdge, Workwave, ServiceTrade, AccuLynx, BuildOps, HouseCall Pro, JobNimbus and Jobber. The larger enterprises with whom we currently compete, or with whom we may compete in the future, have significant financial, technical, marketing and other resources, and they are able to devote meaningful resources to the development, promotion, sale and support of their solutions and services. Additionally, our competitors may make substantial investments in AI capabilities that may allow them to replicate key aspects of our platform more quickly and cost-effectively than previously possible. Some existing solutions also have extensive installed customer bases and broad customer relationships, together with longer operating histories and greater name recognition than we have. Moreover, certain trade verticals we explore may already be served by well-established companies, presenting a potential challenge in establishing a foothold within those markets.

As a result, theseThese competitors may be better able to undertake more extensive marketing campaigns and/or offer their solutions and services at a discount to ours. Their increased deployment of AI technologies may also enable them to reduce costs while improving service quality and other capabilities. To the extent any of our competitors have existing relationships with potential customers, customers may be unwilling or unable to purchase our subscriptions because of those existing relationships and this may limit our ability to successfully compete in certain markets or trades. Additionally, new entrants to the market are focused on fast and automated implementation of their solutions, and while their products do not have our complete product sets, they provide minimum functionality that small businesses may believe to be sufficient, especially if such businesses are willing to sacrifice functionality for speed of deployment. Furthermore, advancements in, and the broad availability of, AI canhave expeditelowered barriers to entry and accelerated the development and speed to market of new or competing products. If we are unable to compete with these existing or potential competitors and/or their products, particularly as they enhance their offerings through AI, the demand for our platform, our customer counts, and the revenue we generate could decline, and our business, financial condition and results of operations could be adversely affected.

We have incorporated and are incorporating traditional AI, machine learning and GenAI into some of our products.platform. This technology is new and developing and may present operational and reputational risks or result in liability or harm to our reputation, business, results of operations or customers.

We have incorporated a number of AI features into our productsplatform and believe that providing AI tools and insights will become increasingly important to the value that our solutions and services deliver to our customers. As with many developing technologies, LLMs in particular are a new and emerging technology that is in its early stages of commercial use and presents a number of inherent risks and challenges that could affect further development, adoption, and use, and therefore our business. Due to the evolving nature of the algorithms and technology underpinning LLMs, there is a risk that our AI solutions could produce inaccurate or misleading content or other discriminatory or unexpected results or behaviors (e.g., LLM hallucinatory behavior that can generate irrelevant, nonsensical or factually incorrect results). Further, the content, analyses or recommendations generated by our LLMs could produce information or other content that infringes, misappropriates or violates the intellectual property rights of others. As we integrate agentic workflows into our platform, the actions that are taken by AI-powered agents could be incorrect or unintended, resulting in negative impacts for both us and our customers. In addition, increasing use of AI creates opportunities for the potential loss or misuse of personalPersonal Information and other data that forms part of any data set, including any of our proprietary data assets derived from our customers’ use of our platform, that was collected, used, stored, or transferred to build our AI solutions. If our access to such data sets were materially impaired, we may also be unable to further build, train and offer our AI solutions. The occurrence of any of the foregoing could harm our reputation, business or customers and could result in additional lawsuits and regulatory investigations.

In addition, the use of AI involves significant technical complexity and requires specialized expertise. This specialized expertise can be difficult and costly to obtain given the increasing industry focus on AI development and competition for talent. As a result, it could be expensive for us to maintain and advance our AI developments. We may not apply AI advancements quickly or well enough to our solutions or services to serve our customers, or we may not be able to extract the efficiencies for which AI presents an opportunity. While the use of AI presents opportunities, our failure to adequately leverage such opportunities may erode our competitive advantage, and harm our business and results of operations. Further, our AI solutions rely on third-party proprietary machine learning algorithms and LLMs provided by third parties, such as Microsoft and OpenAI. If we are unable to continue to use such third-party assets, or if such third-party assets become expensive, burdensome, or inefficient for us to use, we may be unable to continue to provide our AI solutions which could harm our business and results of operations. We also face significant competition from other companies with respect to utilizing AI technologies. To the extent AI technology development and utilization from our competitors proves to be successful, or more successful than our approach, demand for our platform, and thus our business, could be adversely affected. If we cannot develop, offer, or deploy new AI technologies as effectively or quickly as our competitors, or if we cannot access the infrastructure needed to continue our development, our results of operations, relationships with customers and partners, and growth could be materially and adversely affected.

Additionally, any content created by using LLMs may not be subject to copyright protection, which may adversely affect our intellectual property rights in, or ability to commercialize or use, the content. In the United States, a number of civil lawsuits have been initiated related to the foregoing and other concerns, the outcome of any one of which may, amongstamong other things, require us to limit the ways in which we use AI in our business and may affect our ability to develop our AI solutions and features. While AI-related lawsuits to date have generally focused on the AI service providers themselves, our use of any output produced by a LLM may expose us to claims, increasing our risks of liability. For example, the output produced by LLMs may include information subject to certain rights of publicity or privacy laws or constitute an unauthorized derivative work of the copyrighted material used in training the underlying AI model, any of which could also create a risk of liability for us, or adversely affect our customers and our business or operations. To the extent that we do not have sufficient rights to use the data or other material or content used in or produced by the GenAI tools used in our business, or if we experience cybersecurity incidents in connection with our use of AI, it could adversely affect our reputation and expose us to legal liability or regulatory risk, including with respect to third-party intellectual property, privacy, publicity, contractual or other rights.

Moreover, as the regulatory framework for AI (and machine learning technology) evolves,is rapidly evolving, and it is possible that new laws and regulations will be adopted in the United States and in non-U.S. jurisdictions, or that existing laws and regulations may be amended or interpreted in ways that would affect the operation of our business, including the way in which we use AI and machine learning technology. The scope and direction of orders, policies, rules and regulations related to AI and machine learning at the federal level in the United States in the near future is uncertain. In January 2025, President Trump issued an Executive Order that, among other things, requires certain agencies to develop and submit to the President action plans to “sustain and enhance America’s global AI dominance,” and to specifically review all rulemaking taken pursuant to rescinded executive orders issued under prior administrations and, if possible, rescind any such rulemaking to the extent it is inconsistent with, or presents a barrier to, the Trump Administration’s new executive order. Thus, the Trump Administration may continue to rescind other existing federal orders and/or administrative policies relating to AI technologies or may implement new executive orders and/or other rulemaking relating to AI technologies in the future. Any such changes at the federal level could require us to expend significant resources to modify our platform, products, services, or operations to ensure compliance or remain competitive. Meanwhile, various U.S. states have enacted laws that regulate the use of AI, including seventeenseveral laws enacted in California in 2024 and 2025 that provide consumers with certain protections around companies’ use of AI, such as by requiring companies to disclose certain uses of GenAI, Colorado’s Artificial Intelligence Act, which will require developers and deployers of “high-risk” AI systems to implement certain safeguards against algorithmic discrimination, and Utah’s Artificial Intelligence Policy Act, which establishes disclosure requirements and accountability measures for the use of GenAI in certain consumer interactions. OurThe abilityCalifornia Privacy Protection Agency also recently finalized regulations under the California Consumer Privacy Act, as amended by the California Privacy Rights Act of 2018 (collectively, the “CCPA”), regarding the use of automated decision-making and providing disclosures to provideconsumers AI-drivenregarding insightssuch use. Implementation standards and productsenforcement practice are likely to remain uncertain for the foreseeable future, and we cannot determine the impact future laws, regulations, standards, or perception of their requirements may alsohave beon constrainedour byplatform currentand orour futurebusiness. regulatoryIn requirementsaddition, on May 21, 2024, the European Union approved the EU Artificial Intelligence Act (the “EU AI Act”), which establishes a comprehensive, risk-based governance framework for AI in the UnitedEU Statesmarket. orAlthough we are not currently subject to the EU AI Act, we may become subject to it in non-U.S.the jurisdictionsfuture, thatwhich couldmay restrictaffect orour imposeuse burdensomeof AI technologies and costly requirements on our ability to leverageprovide, data in innovative ways. Further, the cost to comply with such lawsimprove or regulations could be significant and could increasecommercialize our operatingplatform, expenses, whichand could adversely affect our business, financial conditionoperations and resultsfinancial of operations.condition.

We have estimated the size of our addressable market opportunity based on data published by third parties and on internally generated data and assumptions. While we believe our market size information is generally reliable, such information is inherently imprecise, and relies on our and third parties’ projections, assumptions and estimates within our target market, which are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in this Annual Report. If such third-party or internally generated data proves to be inaccurate or we make errors in our projections, assumptions or estimates based on that data, including how current customer data and trends may apply to potential future customers and the number and type of potential customers, our addressable market opportunity or our future growth rate may be less than we currently estimate. In addition, these inaccuracies or errors may cause us to divert resources from more valuable alternative projects and harm our business. The variables that go into the calculation of our market opportunity are subject to change over time, including the amount of customer GTV that we can recognize as revenue, and there is no guarantee that any particular number or percentage of addressable end customers or companies covered by our addressable target market opportunity estimates will purchase our platform at all or generate any particular level of revenue for us. Any expansion in our market depends on a number of factors, including the cost, performance and perceived value associated with our platform and those of our competitors. Even if our addressable market meets our size estimates, our business could fail to grow at similar rates, if at all, or we could capture a percentage of customer GTV as revenue that is less than we currently expect. Accordingly, the information regarding the size of our addressable market opportunity included in our Registration Statement on Form S-1, or any of the other documents we file or furnish with the Securities and Exchange Commission (the “SEC”), should not be taken as indicative of our future growth.

We may be unsuccessful in making, integrating and maintaining acquisitions, jointincluding venturespast and strategic investments.acquisitions.

Our future success is substantially dependent on our ability to attract, retain and motivate the members of our management team and other key personnel throughout our organization. In particular, we are highly dependent on the services of Ara Mahdessian, our co-founder and Chief Executive Officer, and Vahe Kuzoyan, our co-founder and President (together, the “Co-Founders”), each of whom is critical to our ability to achieve our vision and strategic priorities. We rely on our management team in the areas of operations, security, research and development, sales and marketing, support and general and administrative functions. Our employees, including our executive officers, work for us on an “at-will” basis, which means they may terminate their employment with us at any time. If Mr. Mahdessian or Mr. Kuzoyan or one or more of our key personnel or members of our management team resigns or otherwise ceases to provide us with their services, this could impair our ability to execute our growth strategy, have a negative impact on our business, financial condition and results of operations, and cause employee morale problems and the loss of key personnel or members of our management or clients.

We believe our current corporate culture fosters innovation, teamwork, passion and focus on execution and has contributed to our success. As we grow and develop our infrastructure, including as a public company, and expand our operations both geographically and across the trades, we may find it difficult to maintain our corporate culture and/or successfully adapt our corporate culture to appropriately adapt to ongoing changes. Any failure to preserve our culture and/or successfully adapt our culture to changing conditions could harm our future success, including our ability to recruit and retain qualified personnel, innovate and operate effectively, and execute on our business strategies. If we experience any of these risks in connection with future growth, it could impair our ability to attract new customers and retain existing customers and expand their use of our platform, all of which could adversely affect our business, financial condition and results of operations.

We also dedicate significant resources to marketing programs, including telemarketing, branded events and digital advertising through services such as Google AdWords. The effectiveness and cost of our online advertising has varied over time, and may vary in the future, due to competition for key search terms, changes in search engine use, changes in the search algorithms used by major search engines and laws, regulations and other obligations relating to privacy or data protection that affect online advertising. These efforts will require us to invest significant financial and other resources. We rely on a variety of direct marketing techniques, including telemarketing, email marketing and direct mail. Our marketing activities, and the marketing activities of our customers, are regulated under laws such as the Telephone Consumer Protection Act, the Telemarketing Sales Rule, and any state equivalents, and various other federal and state laws regarding marketing and solicitation, as well as general data protection laws, including the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (the “CAN-SPAM”), and various state privacy laws, including the California Consumer Privacy Act (the “CCPA”),CCPA, and other recently passed state laws, that govern these activities and impose significant restrictions on us and our customers. Any violations or perceptions of violations of these laws and regulations may harm our business, financial condition and results of operations. Additionally, any changes to the above-mentioned laws, or any applicable privacy, data protection and cybersecurity laws, their interpretation, or enforcement of such laws by the government or private parties that further restrict the way we interact with our potential customers or generate leads could adversely affect our ability to attract customers and could harm our business, reputation and brand, financial condition and results of operations. For additional information, see “—Risks Related to Data Privacy, Data Protection, Cybersecurity and Technology—The collection, processing, storage, use, disclosure and other processingdisclosure of personal information are governed by a rapidly evolving framework of privacy, data protection, cybersecurity, data transfers or other laws or regulations worldwide mayand limit the use and adoption of our services and adversely affect our business.”

ADue in part to industry consolidation, our largest customers are growing rapidly. However, a majority of our customers are small- and medium-sized businesses (“SMBs”), and we expect they will continue to comprise a large portion of our customer base for the foreseeable future. We define SMBs in the context of our customer base as customers that have fewer than 1,000 employees. Selling to and retaining SMBs can be more difficult than retaining large businesses, as SMBs often have higher rates of business failure and more limited resources. SMBs may not have sufficient office resources or may be constrained by other factors, such as seasonality, which makes it difficult for them to dedicate resources to the implementation, onboarding and training necessary to obtain the full benefits of our platform. SMBs are also typically more susceptible to the adverse effects of economic fluctuations. Adverse changes in the economic environment, or business failures of our SMB customers, may have a greater impact on us than on our competitors who do not focus on SMBs to the extent that we do.

We rely upon certain partners, vendors and other service providers to provide software employed by our platform or customers using our platform, including to enable cloud-based phones and GPS, payments, and manage customer payroll, and it is possible that such third-party software or services may not be reliable or easy to replace. WeDisruptions to the services and functionality provided by the partners and vendors upon which we rely to provide our platform and related services could cause service interruptions, and widespread outages could disrupt our services to our customers, which could adversely affect our business. Furthermore, we may in the future have disputes with certain of our partners, vendors and other service providers. If, in connection with such a dispute, a partner, vendor or service provider terminates its relationship with us or otherwise limits the provision of their software, services or data to us, the availability or usage of our platform could be disrupted. If the partners, vendors and other service providers we rely upon cease to provide access to the software, services or data that we and our customers and consumers use, whether in connection with disputes or otherwise, do not provide access to such software and/or data on terms that we believe to be attractive or reasonable, or do not provide us with the most current version of such software, we may be required to seek comparable software and/or data from other sources, which may be more expensive or inferior, or may not be available at all, or may disrupt our services to our customers, any of which could adversely affect our business.

If the amount of one or more operations-related claims were to exceed our applicable aggregate coverage limits, we would bear the excess, in addition to amounts already incurred in connection with deductibles.deductibles or self-insured retentions. Insurance providers have raised premiums and deductibles for many businesses and may do so in the future. As a result, our insurance and claims expense could increase, or we may decide to raise our deductibles or self-insured retentions when our policies are renewed or replaced. Our business, financial condition and results of operations could be adversely affected if (i) the cost per claim, premiums or the number of claims significantly exceeds our historical experience and coverage limits, (ii) we experience a claim in excess of our coverage limits, (iii) our insurance providers fail to pay on our insurance claims, (iv) we experience a claim for which coverage is not provided or (v) the number of claims under our deductibles or self-insured retentions differs from historical averages.

While we do not process any payments for our customers'customers’ end customers, we do have complex relationships with third-party processors where we generate revenue through referral agreements and as an independent sales organization (“ISO”) through our FinTech offerings to customers. A significant portion of payments by the end customers are made by credit card or debit card using these third-party payment services to which our customers have a direct contractual relationship. If one of these third- party processors terminates its relationship with us or refuses to renew its partnership with us on commercially reasonable terms, or the software and services provided by our payment processors does not meet our customer’s expectations, we may be required to find an alternative payment processor or consider offering new payment options and products ourselves that may be subject to additional regulations and risks. None of our agreements with payment processors are exclusive,exclusive; however, our agreements with certain payment processors limit our ability to induce existing customers to migrate to alternative payment processors, which could potentially impact our customers’ experience or satisfaction with our services. We are also subject to a number of other laws and regulations relating to the financial solutions we offer, including with respect to money laundering, privacy and cybersecurity. If we fail to, or are alleged to fail to, comply with applicable regulations, we may be subject to claims and litigation, regulatory investigations and proceedings, civil or criminal penalties, fines or higher transaction fees and may lose the ability to offer financial solutions to customers, which could make our platform less convenient and attractive to trades businesses. We also rely on data provided by third parties for financial statement reporting, and there could be inaccuracies and other errors in such data. If any of these events were to occur, our business, financial condition and results of operations could be adversely affected.

We rely on our own, and our third-party service providers’, platforms, computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT Systems”). We own and manage some of these IT Systems but also rely on third parties for a range of IT Systems and related products and services, including but not limited to cloud computing services. Because we make extensive use of third-party suppliers and service providers, such as cloud services that support our internal and customer-facing operations, disruptions to or unauthorized access to third-party IT Systems can materially impact our operations and financial results. If we experience difficulties in implementing new or upgraded information systems or experience significant system failures, or if we are unable to successfully modify our information systems to respond to changes in our business needs, our ability to run our business could be adversely affected. It is also possible that our competitors could develop better platforms than ours, which could adversely affect obtaining and retaining our customers. Any of these or other systems relatedsystems-related problems could, in turn, adversely affect our business, reputation and brand, results of operations and financial condition.

We may rely on third parties when deploying, servicing or otherwise operating our IT Systems, and in doing so, expose them and therefore us to security risks outside of our direct control. Specifically, certain third parties who create applications that integrate with our platform may receive, store or otherwise process our and our customers’ information, including confidential, sensitive, personal information and other information about individuals, our customers, employees, contractors and business partners, including email addresses, physical addresses, phone numbers, Social Security numbers, credit card data and personally identifiable information, as well as trade secrets and other proprietary business information (collectively, “Sensitive Information”). Our third- party service providers may fail to adequately secure their or our IT Systems or our Sensitive Information. Our third-party service providers’ IT Systems have been, and may in the future be, breached or contain exploitable defects or “bugs” that could result in a breach of or disruption to our or our third-party service providers’ IT Systems and other cybersecurity risks discussed below. Our ability to monitor our service providers’ security is limited, and, in any event, third parties may be able to circumvent those security measures. Moreover, techniques used to obtain unauthorized access to systems and networks, as discussed in more detail below, change frequently and may not be known until launched against us or our third-party service providers. These risks also are heightened when service providers work remotely. Moreover, we have acquired and may continue to acquire companies with cybersecurity vulnerabilities and/or unsophisticated security measures, which exposes us to cybersecurity, operational, and financial risks, some of which may be significant.

In connection with running our business, we receive, store, use and otherwise process information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws (collectively, “Personal Information”). We receive, store, process and use a large volume of personalPersonal informationInformation and other customer information from a wide range of sources, including customers, potential customers, vendors and employees. There are numerous federal, state, local and international laws and regulations regarding privacy, data protection, cybersecurity, marketing and telemarketing activities and the storing, sharing, use, processing, transfer, disclosure and protection of personalPersonal informationInformation and other information, the scope of which are changing, subject to differing interpretations, and may be inconsistent among jurisdictions, or conflict with other rules or other actual or asserted obligations. We also post privacy policies, which we are legally obligated to comply with and are subject to contractual obligations to third parties related to privacy, data protection and cybersecurity. As a result, we are subject to federal, state, local and international laws regarding data protection, privacy, cybersecurity, and the storing, sharing, use, disclosure and protection of personalPersonal information.Information. The regulatory framework for data protection, privacy and cybersecurity worldwide is, and is likely to remain, uncertain for the foreseeable future, and it is possible that these or other actual or alleged obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or obligations or our practices.

Regulation of data protection, privacy and cybersecurity in the United States hasis increased,rapidly growing, particularly at the state level. Several states in which we operate or may in the future operate have begun enacting new data privacy laws. For example, California’s Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (collectively, the “CCPA”), introduced new rights for California residents and obligations for covered businesses collecting, using, disclosing and processing personalPersonal information.Information, including obligations to: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their Personal Information, (ii) receive and respond to requests from California residents to access, delete, and correct their Personal Information, or to opt out of certain disclosures of their Personal Information, and (iii) enter into specific contractual provisions with service providers that process Personal Information of California residents on the business’s behalf. The enactment of the CCPA has prompted a wave of similar legislative developmentdevelopment, in numerous U.S. states. For example, since the CCPA went into effect,and general data privacy statutes that share similarities with the CCPA are now in effect and enforceable in Virginia,numerous Colorado, Connecticut, Utah, Texas, Montana, Oregon, Delaware, Iowa, New Hampshire, Nebraska, and New Jersey and will soon be enforceable in several other states as well.states. These new laws, and others that will be effective in the coming years could further complicate compliance efforts and increase legal risk and compliance costs for us, the third parties upon whom we rely, and our customers. In addition, the development of numerous U.S. state laws creates the potential for a patchwork of overlapping but different and potentially conflicting state law requirements.requirements, which could make compliance challenging. For example, in order to comply with the varying state laws around breaches involving information, we must maintain adequate security measures, which require significant investments in resources and ongoing attention.

Additionally, certain of our products record or transcribe phone and other conversations on behalf of our customers for coaching and other quality assurance purposes, and we also may record phone calls with our customers. With respect to the use of personalPersonal informationInformation for direct marketing purposes–both via telephone calls and email and text-based messaging–laws, regulations, and standards covering marketing, advertising, and other activities conducted by telephone, email, mobile devices, and the internet may be or become applicable to our business, such as the Federal Communications Act, the Federal Wiretap Act, the Electronic Communications Privacy Act, the Telephone Consumer Protection Act, the CAN-SPAM, and use of personalPersonal informationInformation in relation to other state consumer protection and communication privacy laws, such as California’s Invasion of Privacy Act. In particular, the Telephone Consumer Protection Act, the Telemarketing Sales Rule as interpreted and implemented by the Federal Communications Commission (“FCC”), and U.S. courts (collectively, the “TCPA”), impose significant restrictions on the use of telephone calls and text messages to residential and mobile telephone numbers as a means of communication when prior consent of the person being contacted has not been obtained. Additionally, the CAN-SPAM establishes specific requirements for commercial email messages and specifies penalties for the transmission of commercial email messages that are intended to deceive the recipient as to source or content, and obligates, among other things, the sender of commercial emails to provide recipients with the ability to opt out of receiving future commercial emails from the sender. While we strive to ensure that our marketing communications comply with the requirements set forth in the CAN-SPAM Act, any violations could result in the FTC seeking civil penalties against us. In addition, there is a risk if our customers or end customers use our platform in a manner that does not comply with applicable law or our policies. For additional information, see “—Risks Related to Data Privacy, Data Protection, Cybersecurity and Technology—Our customers’ and end customers’ violation of our policies or other misuse of our platform to transmit unauthorized, offensive or illegal messages, spam, phishing scams and website links to harmful applicationsapplications, record calls without consent, or for other fraudulent or illegal activity could damage our reputation and brand, and we may face a risk of litigation and liability for illegal activities on our platform and unauthorized, inaccurate or fraudulent information distributed via our platform.” Our and our customers’ activities must comply with the above-mentioned laws.

In addition, we attempt to protect our intellectual property, proprietary technology and confidential information by requiring our employees and consultants who contribute to the development of intellectual property on our behalf to enter into confidentiality and invention assignment agreements, and our vendors, customers, business partners and other third parties we share information with to enter into nondisclosure agreements. These agreements may not effectively assign all intellectual property rights to us or prevent unauthorized use or disclosure of our confidential information, trade secrets, intellectual property or proprietary technology and may not provide an adequate remedy in the event of unauthorized use, misappropriation or disclosure of our confidential information, trade secrets or proprietary technology, or infringement or misappropriation of our intellectual property. Additionally, any such agreement with respect to the assignment of intellectual property rights may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. Despite our efforts to protect our proprietary rights, unauthorized parties may copy aspects of our platform or other software, technology and functionality or obtain and use information that we consider proprietary. In addition, unauthorized parties may also attempt, or successfully endeavor, to obtain our proprietary technology, confidential information and trade secrets through various methods, including through cybersecurity attacks,attacks and reverse engineeringengineering, and legal or other methods of protecting this data may be inadequate.

Further, we cannot predict whether assertions of third-party intellectual property rights or claims arising from such assertions would substantially adversely affect our business, financial condition and results of operations. The defense of these claims and any future infringement or misappropriation claims, whether they are with or without merit or are determined in our favor, may result in costly litigation and diversion of technical and management personnel. In addition, we may be unable to meet our obligations to customers under our customer contracts or to compete effectively, and our revenue and results of operations could be adversely impacted. We might also be obligated to indemnify our customers or other companies in connection with any such litigation and to obtain licenses, modify our platform or refund fees, which could harm our financial results. Further, an adverse outcome of a dispute may require us to pay damages, potentially including treble damages and attorneys’ fees if we are found to have willfully infringed a party’s patent or copyright rights, cease making, licensing or using products that are alleged to incorporate or infringe the intellectual property of others, expend additional development resources to redesign our offerings, and enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies. Royalty or licensing agreements, if required, may be unavailable on terms favorable to us, or at all. In any event, we may need to license intellectual property from third parties which may require us to pay royalties or make one-time payments. Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, the time and resources necessary to resolve them could adversely affect our business, reputation, financial condition,condition and results of operations and reputation.operations.

Our platform, including our purpose-built AI solutions such as Titan Intelligence,Atlas, contains third-party open-source software components, and failure to comply with the terms of the underlying open-source software licenses could compromise the proprietary nature of our platform or could require disclosure of affected proprietary software source code.

Our platform, including our purpose-built AI solutions such as TitanIntelligence,Atlas, contains software modules licensed to us by third-party authors under “open-source” licenses.

Moreover, we cannot assure you that our processes for controlling our use of open-source software in our products will be effective. Although we have certain procedures in place to monitor our use of open-source software that are designed to ensure that none is used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of an open-source license, such use could inadvertently occur, or could be claimed to have occurred, in part because open-source license terms are often ambiguous. In addition, the terms of many open-source licenses have not been interpreted by U.S. or foreign courts, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to provide or distribute our platform. From time to time, there have been claims against companies that incorporate open-source software into their solutions, challenging such companies’ rights to use the open-source software against companies that incorporate open-source software into their solutions.open-source. As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open-source software and alleging that we do not have the rights to use, incorporate, distribute, or modify such software. Additionally, if we are held to have breached or failed to fully comply with all the terms and conditions of an open-source software license, we could face infringement or other liability, or be required to seek costly licenses from third parties to continue providing our platform on terms that are not economically feasible,feasible to continue providing our platform, to re-engineer our platform, to discontinue or delay the provision of our platform if re-engineering could not be accomplished on a timely basis, or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, financial condition and results of operations.

From time to time, we have been, and may in the future become, involved in various investigations or legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, product liability, employment, class action, whistleblower, wiretapping and other litigation and claims and governmental and other regulatory investigations and proceedings. For example, plaintiffs have sought to apply federal wiretap laws, such as the Federal Wiretap Act, and similar U.S. state laws, such as California’s Invasion of Privacy Act, to certain advertising online tracking, and voice recording practices. We have received one or more claims of violation of California’s Invasion orof Privacy Act,Act. thoughNone nonehave resultingresulted in significant liability or expense.expense; however, similar claims may in the future. Such laws include private causes of action, and could result in significant monetary liability to address, including settlement costs, even if these causes of action are meritless. The number and significance of these potential claims and disputes may increase as our business expands. Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability or require us to change our business practices. In addition, the expense of litigation and the timing of this expense from period to period are difficult to estimate, subject to change and may harm our financial condition and results of operations. Because of the potential risks, expenses and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Any of the foregoing may harm our business, financial condition and results of operations.

We are subject to a number of laws and regulations that apply generally to businesses, including laws and regulations governing the internet and the marketing, sale and delivery of services over the internet. These laws and regulations, which continue to evolve, cover, among other things, taxation, tariffs, privacy and data protection, cybersecurity, pricing, content, copyrights, distribution, mobile and telecommunications, advertising practices, electronic contracts, sales procedures, automatic subscription renewals, credit card processing procedures, consumer and business financial products, insurance products, consumer protection, the provision of online payment services, payroll compliance, the design and operation of websites and the characteristics and quality of products that are offered online. WeThe cannotapplication guaranteeand thatinterpretation weof have been or will in the future be fully compliant with suchthese laws and regulations inmay everybe jurisdiction,uncertain asor may change over time, and it ismay not entirelybe clear in every jurisdiction how existing laws and regulations governing such areas apply to our business or will be enforced. If we fail, or are alleged to have failed, to comply with applicable laws and regulations, we could be subject to investigations, claims, regulatory proceedings, fines, penalties or reputational harm, which could materially and adversely affect our business, financial condition and results of operations. Moreover, as the regulatory landscape continues to evolve, increasing regulation and enforcement efforts by federal, state and foreign authorities, and the prospects for private litigation claims, become more likely. In addition, the adoption of new laws or regulations, or the imposition of other legal requirements, that adversely affect our ability to market or sell our platform could harm our ability to offer, or negatively affect contractor demand for, our platform, which could impact our revenue, impair our ability to expand our platform and service offerings, and make us more vulnerable to competition. Future regulations, or changes in laws and regulations or their existing interpretations or applications, could also require us to change our business practices and raise compliance costs or other costs of doing business.

While we currently operate primarily in the United States and Canada, a significant portion of our workforce is comprised ofcomprises engineering contractorsservice providers distributed internationally, including, but not limited to, persons in Armenia, Macedonia, and Poland, and our international contract workforce has grown as a result of our acquisitionsacquisitions. ofWe ServiceProhave and FieldRoutes.may Wecontinue mayto expand our international operations, which may include opening offices in new jurisdictions and providing our platform in additional countries.

We have a significant number of personnel, including both employees and contractors, in Armenia as well as Poland and other European countries, and we had engineering contractors in Russia prior to U.S. sanctions against Russia. In late February 2022, Russian military forces launched significant military action against Ukraine, which has and could continue to cause sustained conflict and disruption in nearby countries like Armenia, Macedonia, and Poland.

As a result of the situation in Ukraine, new and stricter sanctions have been imposed by the United States, Canada, the United Kingdom, the European Union and other countries and organizations against officials, individuals, regions and industries in Russia. Soon after the Russian military action began, in response to U.S. sanctions, we restricted our Russian engineering contractors’ access to our software and arranged to move approximately 50 contractors out of Russia for the purpose of continuing to perform engineering services for us. Prolonged unrest, intensifiedIntensified military activities or the implementation of more extensive sanctions impacting the region could also adversely affect our operations and the productivity of our employees in Armenia, Macedonia, and Poland and other European countries.

The material weaknesses in ourOur internal control over financial reporting,reporting which we first identified in fiscal 2019, were remediated as of the end of fiscal 2024. While we remediated these material weaknesses, such remediation doesmay not guarantee that our remediated controls will continue to be effective or thatand we will notmay experience other material weaknesses in the future, which could affect the reliability of our financial statements and have other adverse consequences.

ServiceTitan was born in the trades and built for the trades. Our founders, Ara Mahdessian and Vahe Kuzoyan (our “Co-Founders”), are the sons of trades business owners and founded ServiceTitan to provide tradespeople, like their parents, with technology that is purpose built to help trades businesses thrive.

Our software provides an end-to-end, cloud-based software platform that connectsconnects, manages and managesautomates a wide array of business workflows such as advertising, job scheduling and management, dispatching, generating estimates and invoices, payment processing and more. Tradespeople spend their days interfacing with the ServiceTitan platform across what we believe to be the five most business-critical functions, or the “core centers of gravity,” inside a trades business: CRM (customer relationship management, including sales enablement, marketing automation and customer service), FSM (field service management, including scheduling and dispatching), ERP (enterprise resource planning, including inventory), HCM (human capital management, including compensation and payroll integration) and FinTech (including payments and third-party consumer financing). By offering interoperable capabilities in all five centers of gravity, we continuously capture comprehensive data insights across key workflows in a trades business.

Our platform is differentiated by our close customer proximity and deep connection with the trades industry, which enables us to make real-time, evidence-based recommendations to our customers, augmented by the vast amounts of data that we synthesize into best practices. Our platform enables impactful outcomes for our customers, including accelerating revenue and driving operational efficiency, all while improving the experience for both end customers and contractors. As customers experience the significant business acceleration benefits of our platform, we have often observed our customers hire more technicians, increase gross transaction volume (“GTV”), representing total dollars invoiced by our customers to end customers through our platform, and adopt more add-on products. Increased customer adoption of our platform leads to further data and insights, allowing us to build more differentiated features and address opportunities in new trades, use cases and customer subsegments. All of this allows us to drive more growth and efficiency for customers, delivering outsizedconsiderable return on investment (“ROI”), in our products. In fiscal 20252026 and fiscal 2024,2025, we processed $68.5$82.1 billion and $55.7$68.5 billion of GTV, respectively.

Increase GTV By Serving Additional Customers in Existing Trades and Markets. OurIncreasing ability to increaseour GTV also depends on our ability to serve additional customers in existing trades and markets. As our platform has deepened and expanded in features, we have been able to serve larger customers. The trades industry is also experiencing an influx of professional operators, including private equity owners, who are investing in and consolidating thetrades trades,businesses, in many cases on our platform. Because of these dynamics, we focus on increasing the GTV on our platform, rather than new customer count. We believe our market opportunity is substantial, and we expect to continue to make significant investments across all aspects of our business to continue to increase the GTV on our platform.

We designed our platform to address key workflows within a trades business. In contrast, existing solutions are difficult to adopt and resource-intensive to stitch together in a manner that would address multiple workflows and generate return on investment for trades businesses. This gives us a substantial opportunity to continue to invest in our platform and in our sales and marketing efforts to add more customers in, or help existing customers expand into, the expansive set of trade verticals we have penetrated so far. We also believe that there is further potential to expand our customer base by productizing additional capabilities for these trade verticals.verticals, particularly AI-powered capabilities.

Build and Bundle New Products to Extend Our Platform. We have a culture of significant innovation evidenced by the extension of our platform’s capabilities over time, producing new workflows across trades. We intend to continue to judiciously invest in research and development to expand the functionality of our platform, to develop and bundle new add-on products and to broaden our capabilities to address new market opportunities across trades. Powering key workflows of our customers through our Core product positions us to deliver value-added ProPro, FinTech and FinTechother AI-powered products that complement our Core product. We build Pro and FinTech products as an integrated add-on to our expansive Core product offering to deliver our customers business outcomes in a way that we believe no individual, standalone point solution can. As we continue to innovate and execute on our product roadmap, we believe customers will continue to find our new products additive and therefore continue to adopt them. We believe that there is further potential to expand our market opportunity by building new productsproducts, particularly those powered by AI, to earn an even greater potential share of our customers’ GTV in the future. While our engrained industry position and exposure to the trades facilitate efficient product development opportunities, innovating new products will continue to require substantial time and research and development resources.

We offer tiered subscription plans for our Core and Pro products with varying contract lengths. Pursuant to these subscription contracts our customers do not have the ability to take possession of our proprietary software. For new customers, we primarily enter into either annual or multi-year subscription agreements with contract terms typically ranging from 12 to 36 months; however, certain Pro product and legacy customers are on month-to-month contracts. In nearly all cases, these contracts (monthly, annual, or multi-year) are renewed automatically unless cancelled in advance. We generally bill our customers on a monthly basis in advance of services, regardless of contract term. In some cases for certain products, the customer is billed in arrears. Pricing for these subscriptions are driven by the features included in the package and are linked to the size of the customer’s business, generally based on the number of field technicians at the customer but in some cases directly tied to the number of end customers or the customer’s revenue. In this way, our success is linked to the growth of our customers, which we measure through our net dollar retention rate. Our net dollar retention raterate2 was over 110% for each of the fiscal years ended January 31, 2025,2026, 20242025 and 2023.1 When subscription fees are received in advance of providing the related services, we record deferred revenue on our consolidated balance sheet and recognize the revenue ratably over the related subscription period. We recognize a contract asset when revenue has been recognized but our right to consideration from the customer is conditional upon our future performance. Contract assets are transferred to accounts receivable when our right to the consideration becomes unconditional.2024.

1Our2 Our net dollar retention rate measures the increase in annualized billings across our existing customer base by comparing the annualized billings from the same set of customers across comparable periods. To calculate our net dollar retention rate as of a given quarter, we first calculate annualized billings from the cohort of all customers billed in the same quarter in the prior year (the “prior period annualized billings”). We then calculate annualized billings from these same customers as of the current quarter (the “current period annualized billings”). Current period annualized billings includes the effect of any expansion, contraction or churn over the trailing 12 months. We divide (a) current period annualized billings by (b) prior period annualized billings to arrive at the net dollar retention rate. When calculating net dollar retention rate, we do not include the billings from any customers that were acquired as the result of our acquisition of a business until the completion of the first full quarter following the one-year anniversary of the acquisition.

Usage-based services primarily consist of payment processing where we connect to third-party processors to allow our customers to accept payments, primarily credit and debit cards, and also includes end-customer financing solutions and other forms of payment. The third-party processor determines the eligibility of the end customer to participate in the programs, provides the payment settlement and financing options to the end customer and is responsible for the provision of the payment or financing services. We receive a fee from the third-party processors, depending on the size and type of the transaction, which we recognize net of interchange and other direct expenses which are passed onto the customer. Revenue from financing and processing payments is recognized at the time of the transaction. In addition to payment processing revenue, we have a number of Pro products that generate revenue depending on the level of usage, which we recognize monthly in arrears based on consumption. Usage revenue also includes fees we earn from third-party partners based on transactions or customer activity facilitated through our platform, which we recognize in the period in which the underlying activity occurs. In addition, usage-based revenue also include revenue from our Virtual Agents, which is consumption-based and recognized in the period in which the underlying usage occurs.

Sales and marketing expense consists primarily of personnel-related costs, consulting costs and other costs incurred in connection with our sales and marketing and certain customer success efforts. Personnel-related costs primarily include salary, commissions, employee benefits, bonuses and stock-based compensation for our outbound sales personnel that focus on new customer acquisition and for our customer success personnel that focus on expanding adoption of our products at existing customers. Sales and marketing expense also includes marketing and advertising expenses, such as our annual customer conferences, Pantheon and Ignite, and travel and trade show expenses, amortization of acquired customer intangible assets and allocated overhead. Our annual customer conferences are significant sales and marketing events, so we therefore expect an increase in sales and marketing expense during the fiscal third quarter when they occur. We expect that sales and marketing expense will increase on an absolute dollar basis as we invest to grow our business. We plan to continue to expand sales and marketing efforts to attract new customers, retain existing customers and increase revenue from both new and existing customers by adding outbound sales personnel.

General and administrative expense consists primarily of personnel-related costs for our executive, finance, legal, information systems, operations and human resource teams. Personnel-related costs primarily include salary, employee benefits, bonuses and stock-based compensation. General and administrative expense also includes professional fees, other outside consulting expenses, acquisition-related expenses and allocated overhead. We expect that general and administrative expense will increase on an absolute dollar basis, but over time decrease as a percentage of total revenue, as we focus on the efficiency of our processes and systems that will enable our internal support functions to scale with the growth of our business. We expect increases to general and administrative expense to support our growth and as we continue to incur the costs of compliance associated with being a public company, including increased accounting and legal expenses.

Other Expense,Income (Expense), Net

Other expense,income (expense), net, consists primarily of interest expense related to our debt arrangements with financial institutions, interest income earned on our cash and cash equivalents, gains or losses on foreign currency transactions and miscellaneous other income.

For a discussion of our consolidated statement of operations data for the fiscal 20242025 compared to fiscal 2023,2024, refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our ProspectusAnnual Report on Form 10-K for the fiscal year ended January 31, 2025 filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, on DecemberApril 11,2, 2024.2025, which is incorporated by reference herein.

Platform revenue increased by $157.7$185.9 million, or 27%,25%, for fiscal 2025,2026, compared to fiscal 2024.2025. This increase was primarily driven by subscription revenue, which increased by $124.2$146.6 million, or 28%,26%, for fiscal 2025,2026, compared to fiscal 2024.2025. In addition, revenue from our usage-based products increased by $33.5$39.3 million, or 24%,23%, for fiscal 2025,2026, compared to fiscal 2024.2025. This increase was primarily driven by increases in bothgross thetransaction volume and valuea ofhigher paymentearn transactionsrate processedgenerated usingon ourthat FinTech offerings.volume.

Professional services and other revenue decreasedincreased by $0.2$3.2 million, or 1%,10%, for fiscal 2025,2026, compared to fiscal 2024.2025. This decreaseincrease was primarily driven by the disposal of certain marketing solutions in the fourth quarter of fiscal 2024, which contributed $4.7 million in revenue for fiscal 2024. The decrease was partially offset by increased revenue from a higher volume of professional services performed in fiscal 2025.performed.

Platform cost of revenue increased by $33.2$10.6 million, or 20%,5%, for fiscal 2025,2026, compared to fiscal 2024.2025. This increase was primarily due to a $13.7$16.4 million increase in the costs related to the provisioning of our platform services productsproducts. andThis $10.4increase was partially offset by a $6.0 million increasedecrease in personnel-related costs, primarily due to anthe increaseshift in headcount. In addition, amortization of capitalized internally developed software increased by $4.8 million and we also recorded a $4.7 million increase in impairment losses on operating lease assets and related property and equipment for the portionroles of our headquarterscustomer thatsuccess we ceasedfunction to use.sales Theseand increasesmarketing wereactivities partiallyat offsetthe by a decreasebeginning of $0.8 million of restructuring costs related to our reductions in workforce. Platform gross margin increased to 73% for fiscal 2025, compared to 71% for fiscal 2024, primarily due to improved efficiencies in delivering our platform at scale.2026.

Sales and marketing expense increased by $33.4$37.5 million, or 15%, for fiscal 2025,2026, compared to fiscal 2024.2025. The increase in sales and marketing expense was primarily driven by an increase of $25.6$28.9 million in personnel-related costscosts, relatedwhich toincluded an increase inincreased headcount, including an increase of $4.2$5.3 million in commissionssales commissions, and an increase of $3.5$1.1 million in stock-based compensation. WeThere alsowas recordedan additional increase of $6.5 million in marketing and advertising costs and an increase of $5.5 million in employee benefit expenses primarily related to health insurance. These increases were partially offset by a $6.0decrease of $4.6 million increase in impairment losses on operating lease assets and related property and equipment for aoffice portion of our headquarters spacespaces that we ceased to use during fiscal 2025 compared to fiscal 2024. Additionally, marketing and advertising costs increased $3.3 million. These were partially offset by a decrease of $1.4 million of restructuring costs related to our reductions in workforce.use.

Research and development expense increased by $59.5$39.5 million, or 29%,15%, for fiscal 2025,2026, compared to fiscal 2024.2025. The increase in research and development expense was primarily driven by an increase of $48.0$35.7 million in personnel-related costscosts, relatedwhich toincluded an increase in headcount,headcount includingand an increase of $12.8$6.7 million in stock-based compensation. TheThere was also an increase inof stock-based compensation included $8.7$4.9 million in expenseemployee recordedbenefit forexpenses performanceprimarily awards where vesting was triggered duerelated to ourhealth IPO.insurance Additionally,and an increase of $4.4 million in infrastructure and server costscosts. andThese softwareincreases subscriptionwere feespartially relatedoffset to our ongoing product development efforts increased $4.3 million related to our ongoing product development efforts. We also recordedby a $5.8decrease of $4.6 million increase in impairment losses on operating lease assets and related property and equipment for aoffice portion of our headquarters spacespaces that we ceased to use. These increases were partially offset by a decrease of $1.0 million in third-party development resources as we leveraged more internal development resources in fiscal 2025.

General and administrative expense increased by $78.5$35.0 million, or 58%,16%, for fiscal 2025,2026, compared to fiscal 2024.2025. The increase in general and administrative expense was primarily driven by an increase of $57.4$31.7 million in personnel-related costscosts, relatedwhich toincluded an increase in headcount,headcount includingand an increase of $44.8$24.5 million in stock-based compensation. TheIn increasefiscal in2026, stock-based compensation alsoincludes included $52.2 million in expense recorded for performance awards where vesting was triggered due to our IPO, of which $15.0$53.6 million related to performance-based RSUs granted to our Co-Founders,Co-Founders whichin October 2024. Additionally, there was an increase of $7.1 million in third-party consulting costs related to legal, consulting and audit services, an increase of $5.6 million in our allowance for credit losses as we further integrated acquired businesses, and an increase of $2.5 million in employee benefit expenses primarily related to health insurance. These increases were partially offset by a $6.2decrease of $13.2 million expense in fiscal 2024 related to the 2024 Tender Offer. We also recorded a $15.5 million increase in impairment losses on operating lease assets and related property and equipment for aoffice portion of our headquarters spacespaces that we ceased to use. Additionally, consulting and professional fees increased $2.7 million primarily related to preparation activities for our IPO in fiscal 2025 and acquisition related expenses increased $1.6 million related to our acquisition of Convex Labs Inc. (“Convex”) in fiscal 2025.

Other Expense,Income (Expense), Net

Other expense,income (expense), net, decreasedincreased by $1.3$18.9 million, or 16%,million for fiscal 2025,2026, compared to fiscal 2024,2025, primarily due to an increase of $1.7$10.5 million in interest income related to our higher cash balance and a decrease of $0.9$8.3 million in interest expense due to the restructuring of our debt and repayment of our Revolver Facility that occurred in fiscal 2025. These were partially offset by $1.0 million of government grants related to our operations in Armenia in fiscal 2024.

Our provision for income taxes decreasedincreased by $1.8$0.4 million, or 44%,18%, for fiscal 2025,2026, compared to fiscal 2024.2025. The change is primarily driven by incomethe earneddeferred bytax ourexpense foreignfrom subsidiaries.the amortization of indefinite-lived tax amortizable goodwill. For additional detail, see Note 14 to our consolidated financial statements included in this Annual Report.

Loss on operating lease assets. In fiscal 20242024, fiscal 2025 and fiscal 2025,2026, we incurred impairments on certain right-of-use assets and other long-lived assets. See Note 4 of our audited consolidated financial statements included in this Annual Report. We believe that it is useful to exclude these charges when assessing the level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. In addition, we believe excluding such costs enhances the comparability between periods.

Non-GAAP Income (Loss) from Operations and Non-GAAP Operating Margin

Non-GAAP Net Income (Loss)

This amount represents adjustments for the current and deferred income tax effects on non-GAAP net income (loss) for the impact of the non-GAAP adjustments above.

As of January 31, 2025,2026, we had cash and cash equivalents of $441.8$428.8 million, which excludes restricted cash of $1.0$0.6 million, and $140.0$250.0 million available under the Amended Credit Agreement, as defined below. Cash and cash equivalents consisted of checking accounts and money market funds with maturities less than 90 days from the date of purchase. Our liquidity is subject to various risks including the risks set forth in the section titled “Risk Factors” and the market risks identified in the section titled “Quantitative and Qualitative Disclosures about Market Risk.”

We believe that our existing cash and cash equivalents, cash available under our Amended Credit Agreement, and cash receipts from our revenue arrangements will be sufficient to support working capital, operating lease payments and capital expenditure requirements for at least 12 months from the date of this Annual Report. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section titled “Risk Factors.” Further, in the future we may enter into arrangements to acquire or invest in businesses, products, services and technologies. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we cannot be sure that any additional financing will be available to us on acceptable terms if at all. If we are unable to raise additional capital when desired, our business, results of operations and financial condition could be adversely affected.

Net cash provided by operating activities was $37.1$110.1 million for fiscal 2025.2026. This primarily related to our non-cash charges of $306.2$324.9 million, adjusted for our net loss of $239.1$159.9 million and net cash outflows of 30.0$54.9 million from changes in our operating assets and liabilities. The primary drivers of the changes in our operating assets and liabilities related to an increase in deferred contract costs of $15.8 million and contract assets of $6.6$22.4 million, an increase in accounts receivable of $17.7$20.8 million due to the increase in revenue, a decrease in accounts payable and other accrued expenses of $9.0 million due to the payment of deferred offering costs related to our IPO, and a decrease ofoperating lease liabilities of $9.4$12.0 million, and an increase in contract assets of $11.9 million. These were partially offset by an increase in accounts payable and accrued expenses of $12.1 million and an increase in accrued personnel related expenses of $23.2 million due to an increase in headcount and bonus achievement, an increase in deferred revenue of $3.3 million, and an increase in other liabilities of $2.1$2.7 million.

Net cash usedprovided inby operating activities was $39.7$37.1 million infor fiscal 2024.2025. This primarily related to our netnon-cash losscharges of $195.1$306.2 million, adjusted for non-cashour chargesnet loss of $208.2$239.1 million and net cash outflows of $52.7$30.0 million forfrom changes in our operating assets and liabilities. The primary drivers of the changes in our operating assets and liabilities relaterelated to an increase in deferred contract costs of $12.6$15.8 million,million an increase inand contract assets of $11.8 million, a decrease in lease liability of $9.2$6.6 million, an increase in accounts receivable of $7.8$17.7 million,million due to the increase in revenue, a decrease in accounts payable and other accrued expenses of $9.0 million due to the payment of deferred offering costs related to our IPO, and a decrease of operating expenses, accrued personnel-related expenses and otherlease liabilities of $6.4$9.4 million. These were partially offset by an increase in accrued personnel related expenses of $23.2 million due to an increase in headcount and bonus achievement, an increase in deferred revenue of $3.3 million, and an increase in prepaid and other assetsliabilities of $5.2$2.1 million. The changes in our operating assets and liabilities are primarily due to the growth of our business, timing of cash receipts from customers, timing of cash payments to our vendors and timing of payroll.

Critical Accounting Policies and Estimates

Our auditedmanagement’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements and the related notes theretothereto, included elsewhere in this Annual Reportwhich are prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.circumstances at the time the estimate is made. Actual results could differ significantly from our estimates.

WeThe believesignificant thataccounting policies and methods used in the preparation of our consolidated financial statements are discussed in Note 2 to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. The accounting policies described below include accounting estimates that may involve a significant degree of judgment and complexity.complexity, Accordingly,and accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information of the below critical accounting policies and estimates and our other significant accounting policies, see Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report.

Revenue recognition represents an important accounting policy to the understanding of our financial condition and results of operations. Our revenue recognition may require the use of significant judgment in determining whether services are considered distinct performance obligations that should be accounted for separately and determining estimated standalone selling prices for the purposespurpose of allocating the transaction price to distinct performance obligations. For information regarding our revenue recognition accounting policy, see Note 2 to our audited consolidated financial statements included elsewhere in this Annual Report.

sell our suite of value-added products, including our Pro and Max product offerings, to our existing customers or earn referral fees from our payment processing and consumer financing partners as part of our FinTech offerings;

In addition, we plan to continue to manage our business towards the achievement of long-term growth that we believe will positively impact long-term stockholder value, and we have expended, and expect to continue to expend, substantial financial and other resources on product development, including new and innovative core and AI functionality, products and services to address our customers’ evolving business needs, new products for adjacent markets and additional trade verticals, and improved customer experience across our targeted trade verticalsverticals, and new and improved internal systems and processes designed to take advantage of AI functionality and accelerate our product development; our technology infrastructure, including systems architecture, management tools, scalability, availability, performance and security, as well as disaster recovery measures; our sales, marketing and customer success organizations; our onboarding and support organizations; acquisitions or strategic investments; expansion efforts, including geographic, market and new industry expansion; and general administration, including legal and accounting expenses as well as the increased operating expenses due to being a public company. These efforts may be more costly than we expect, may not result in increased revenue or growth in our business, and may cause significant fluctuations in our results of operations from period to period. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could negatively impact our gross margins and prevent us from achieving or maintaining profitability or positive cash flows on a consistent basis. If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition and results of operations could be adversely affected. Moreover, although we believe our investments in our business are consistent with our strategic objective to achieve long-term growth, these decisions may not be consistent with the short-term expectations of some investors, and if we are ultimately unable to achieve profitability at the level anticipated by industry or financial analysts and our stockholders, the trading price of our Class A common stock could decline.

As we serve a growing number of customers and facilitate a growing number of transactions on our platform, we must continue to improve and expand our IT and financial infrastructure, operating and administrative systems and relationships with various partners and other third parties. We have established research and development hubs and we rely on engineering contractors in international markets, and we may open additional offices in the future both in the United States and abroad. Because we employ personnel internationally, we are subject to additional risks customarily associated with foreign operations, such as labor and employment related risks, export compliance risks, risks related to political or regional instability and national security risks. These disruptions, and the outbreak of war in the area generally, from time to time have adversely affected, and could in the future affect, our business, financial condition and results of operations.

the amount and timing of operating expenses and capital expenditures related to maintaining and expanding our business, operations and infrastructure, including acquiring new and maintaining existing customers and incorporating AI solutions into our business operations;

changes in spending on home and commercial services, including as a result of economic trends, natural or man-made catastrophes and pandemics generally;

Our ability to grow our customer base and increase revenue from customers will depend heavily on our ability to develop new products and enhance and improve our platform in order to meet the increasing needs of trades businesses across the trades we serve and intend to serve, respond to changes in customer demands and preferences, adapt to changes in trade industry practices, processes and technology and interoperate across an increasing range of devices, operating systems and third-party applications. Our customers may demand products and capabilities that our current platform does not have, or that our current platform cannot support, and we may need to invest significantly in research and development to build these products and capabilities. In addition, theThe trades businesses we serve experience their own rapid technological changes and evolving industry practices, and we may not be able to successfully adapt to those changes and practices. We may also expand our platform to include consumer-facing capabilities, which may require us to develop expertise, infrastructure and compliance programs in areas in which we have limited operating history.

Any new product or platform enhancements or expansions we develop or acquire might not be introduced in a timely or cost-effective manner and might not achieve the broad market acceptance necessary to generate significant revenue. If any of our competitors implement new technologies before we are able to implement them, those competitors may be able to provide more effective products and services than ours at lower prices. Competitors may also develop and introduce new products or entirely new technologies to replace our existing platform, which could make our platform obsolete or adversely affect our business. If we expand our platform to include consumer-facing capabilities, we may face new competition from established consumer-facing marketplaces and lead-generation platforms that have significant brand recognition, large existing user bases and established relationships with consumers. New products or platform enhancements or expansions may initially suffer from performance and quality issues that may negatively impact our ability to market and sell such products to new and existing customers. Additionally, we may experience difficulties with software development, designdesign, marketing or marketingthird-party partnerships that could delay or prevent our development, introduction or implementation of new products, featuresfeatures, capabilities or capabilities.platform expansions. Furthermore, as we incorporate AI functionality into our platform and products, our customers may be reluctant to adopt AI-powered solutions, especially agentic workflows, or adopt them more slowly than we expect. We have in the past experienced delays in our internally planned release dates of new products, features and capabilities, and there can be no assurance that new products, featuresfeatures, capabilities or capabilitiesplatform expansions will be released according to schedule. If our research and development investments do not accurately anticipate customer demand, if we fail to realize the benefits of these investments by not achieving market acceptance, or our new products or platform enhancements or expansions suffer from performance or quality issues or are delayed, our business, financial condition and results of operations could be adversely affected.

Our financial results and cash needs may vary greatly from quarter to quarter and year to year depending on, among other things, the business performance of our customers, the seasonality inherent in some of our customers’ businesses (e.g., air conditioning demand generally peaking in summer months), extreme weather patterns (e.g., cold spikes causing increased demand for furnace and other home repairs), general economic conditions and the timing of holidays and other seasonal events.

Factors that adversely affect the trades industry, including industry consolidation, the increased prevalence of marketplaces for contractors, supply chain issues, tariffs on imported goodsgoods, and labor shortages, could also adversely affect the demand for our platform and, as a result, our business, financial condition and results of operations.

Consolidation of trades businesses into larger industry participants within the trades has accelerated in recent years, and this trend could continue. We have in the past suffered, and may continue to suffer, reductions in subscriptions or non-renewal of customer subscriptions due to industry consolidation. We may not be able to expand sales of our subscriptions, ProPro, Max, and FinTech products to existing or new customers enough to counteract any negative impact of industry consolidation on our business. From time to time, we form beneficial relationships with industry participants who have or are intending to consolidate trade businesses. However, we may not always be able to form such relationships, and such participants may compete with us. New companies that result from such consolidation may decide to develop their own internal solutions or work with alternative providers. As these companies consolidate, competition to provide solutions and services will become more intense and establishing relationships with large industry participants will become more important. Additionally, these industry participants may also try to use their market power to negotiate price reductions for our products. If consolidation of our larger customers occurs, these consolidated companies may represent a larger percentage of business for us and, as a result, we are likely to rely more significantly on revenue from such consolidated companies to continue to achieve growth.

We have rapidly grown our business. For example, we first launched our platform in 2012, and our revenue grew from $120.7 million in fiscal 2020 to $961.0 million in fiscal 2026. We are expanding our sales focus to include large businesses, commercial services and construction customers, and expect to continue to explore new trades.trades in the long-term. We have also substantially increased our headcount, invested in expanding our direct sales force and customer support teams and otherwise enhanced and developed new solutions. More recently, in response to the evolving technology landscape we have also started to incorporate AI-based solutions into our platform and internal operations. The future costs and potential benefits of those solutions remains uncertain, and the timing of when we incur those costs and when we might see the potential benefits (if any) may be subject to more fluctuation than we have historically experienced. Accordingly, we have a limited history of operations at our current scale, and our ability to forecast our future results of operations and to plan for future growth is more limited than that of companies with longer operating histories and subject to a number of uncertainties. These risks and uncertainties include our ability to:

continue to partner with third-party financial servicesservices, technology and technologyecosystem providers that are reliable and meet the needs of the trades that we serve or intend to serve;

successfully compete with other companies that currently offer, or may in the future offer, software and solutions to trades businesses in the trades;

We engage our team members in various ways, including direct hires, through professional employer organizations and as independent contractors. As a result of these methods of engagement, we face certain challenges and risks that can affect our business, results of operations,operations and financial condition.

Negative global and regional economic conditions, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, inflation, rising interest rates, bank failures, international trade relations, geopolitical instability and uncertainty, the outbreak of armed conflict, and resulting heightened risk of cyberattacks, intellectual property theft, and a reduction in information technology spending regardless of macroeconomic conditions could have adverse impacts on our business, results of operations and financial condition, including longer sales cycles, lower prices for our products and services, reduced sales and slower or declining growth.

The trades are impacted by economic slowdowns, tightening of economic policies, tariffs or other trade protection measures that increase the cost of or decrease the availability of imported goods, including trade disputes, fluctuations in interest rates, which can increase borrowing costs, higher or uncertain fuel prices, and other actions that affect material and equipment pricing and availability, such as higher inflation. Unfavorable or deteriorating market conditions, reductions in maintenance spend by commercial property owners or residential customers, the unavailability or increased cost of specific materials or supplies, reductions in the availability of business financing, government action which prevents or hinders the rendering of on-premise services or similar circumstances could have an adverse impact on our business. Our revenue may decrease because trades businesses may generally choose to delay or decide against purchases of software or information systems in times of unfavorable economic conditions, because workforce challenges or governmental policies prevent sufficient labor or impact the cost of labor required to meet demand, or because fewer transactions are processed on our platform, resulting in reduced fees to us. Furthermore, if the trades industry experiences a decrease in overall economic activity, the amount our customers are willing to pay for our products, or our ability to collect payments from our customers, could be reduced. Contractors may also work on fewer jobs, which would result in a reduction in transactions processed over our platform. To the extent we do not effectively address these risks and challenges, our business, financial condition and results of operations could be adversely affected.

In addition, a general economic downturn or sudden disruption in business conditions could adversely impact consumer and small business confidence, spending levels, and access to credit and desirable interest rates, which could result in consumers delaying or foregoing purchasing primary or vacation residences, or purchasing smaller homes that may require lower-value home services, businesses foregoing investment or businesses or consumers delaying, foregoing or changing the scope of potential home or business projects. Decreased spend on home and commercial services could result in fewer transactions being processed over our platform, which could cause our revenue to decrease, and could also result in less income for our customers, hampering their ability to pay for our platform. These effects could adversely affect our business, financial condition and results of operations.

In addition, the use of AI involves significant technical complexity and requires specialized expertise. This specialized expertise can be difficult and costly to obtain given the increasing industry focus on AI development and competition for talent. As a result, it has been and could continue to be expensive for us to maintain and advance our AI developments. We may not apply AI advancements quickly or well enough to our solutions or services to serve our customers, or we may not be able to extract the efficiencies for which AI presents an opportunity. While the use of AI presents opportunities, our failure to adequately leverage such opportunities may erode our competitive advantage, and harm our business and results of operations. Further, our AI solutions rely on third-party proprietary machine learning algorithms and LLMs provided by third parties, such as Microsoft and OpenAI. If we are unable to continue to use such third-party assets, or if such third-party assets become expensive, burdensome, or inefficient for us to use, we may be unable to continue to provide our AI solutions which could harm our business and results of operations. We also face significant competition from other companies with respect to utilizing AI technologies. To the extent AI technology development and utilization from our competitors proves to be successful, or more successful than our approach, demand for our platform, and thus our business, could be adversely affected. If we cannot develop, offer, or deploy new AI technologies as effectively, cost-efficiently, or quickly as our competitors, or if we cannot access the infrastructure needed to continue our development, our results of operations, relationships with customers and partners, and growth could be materially and adversely affected.

Moreover, the regulatory framework for AI (and machine learning technology) is rapidly evolving. Already, certain existing legal regimes (e.g., relating to data privacy) regulate certain aspects of AI technologies, and many federal, state and foreign governments have enacted or are currently considering additional laws and regulations governing AI. In addition, existing laws and regulations may be amended, enjoined, interpreted or enforced in ways that would affect the operation of our business, including the way in which we use AI and machine learning technology. The scope and direction of orders, policies, rules and regulations related to AI and machine learning in the United States faces significant uncertainty. At the federal level, Congress has yet to enact significant AI legislation. Instead, federal policy on AI has been shaped by a series of executive orders that have shifted priorities and requirements substantially depending on the administration. Any such changes at the federal level could require us to expend significant resources to modify our platform, products, services, or operations to ensure compliance or remain competitive. In the absence of federal AI legislation, various U.S. states have enacted laws that regulate AI, including several laws enacted in California related to safety protocols, reporting and transparency, among other AI-related topics. In addition, Colorado’s Artificial Intelligence Act will require developers and deployers of “high-risk”certain AI systems to implement certain safeguards againstwith algorithmicrespect discrimination,to automated decision-making technology, Utah’s Artificial Intelligence Policy Act establishes disclosure requirements and accountability measures for the use of GenAI in certain consumer interactions, and the Texas Responsible Artificial Intelligence Governance Act prohibits the development and deployment of AI systems for certain purposes. Moreover, state AI laws and various state privacy laws, including the California Consumer Privacy Act (the “CCPA”), regulate the use of automated decision-making technology, and provide rights to consumers regarding such use. Furthermore, both federal and state regulators have recently scrutinized, and initiated enforcement actions regarding, the potential anticompetitive impacts of algorithmic models. Implementation standards and enforcement practice are likely to remain uncertain for the foreseeable future, and we cannot determine the impact future laws, regulations, or standards, or the market perception of their requirements, may have on our platform and our business. In addition, on May 21, 2024, the European Union approved the EU Artificial Intelligence Act (the “EU AI Act”), which establishes a comprehensive, risk-based governance framework for AI in the EU market. Although we are not currently subject to the EU AI Act, we may become subject to it in the future, which may affect our use of AI technologies and our ability to provide, improve or commercialize our platform, and could adversely affect our business, operations and financial condition.

Our customers depend on our customer experience teams to provide implementation, training and support services. We have previously experienced declines in our net promoter score and if we do not provide effective onboarding services or ongoing support, customers may not receive the full benefits of our platform, may delay or forgo future expansion of their use of our platform or may seek to terminate their agreements with us. Our reputation with prospective or current customers or the trades industry could also be damaged. The number of our customers has grown significantly and due to the complexity of our product, they often heavily rely on our customer success and our customer experience teams, even for routine matters, which has put additional pressure on our customer success teams. If we experience increased customer demand for support, we may face increased costs that may harm our results of operations. As a result, if we are unable to provide efficient, high-quality customer support services, if we need to hire additional support resources, or if there is a market perception that we do not maintain high- qualityhigh-quality customer support, our business, financial condition and results of operations could be adversely affected.

Sales of subscriptions to access our platform will depend to a significant extent on our ability to expand our sales and marketing capabilities, including adapting to new trades verticals such as commercial services and specialty trades subcontractors. It is difficult to predict customer demand, customer retention, the size and growth rate of the trades industry, the entry of competitive products or the success of existing competitive products. Our sales efforts involve educating prospective customers about the uses and benefits of our Core and add-on products. We expect that we will continue to need intensive sales efforts to educate prospective customers about the uses and benefits of our platform, and we may have difficulty convincing prospective customers of the value of adopting our platform. Identifying, recruiting and training qualified sales representatives is time-consuming and resource- intensive,resource-intensive, and they may not be fully-trained and productive for a significant amount of time following their hiring, if ever. In addition, the cost to acquire customers is high due to these considerable sales and marketing efforts.

We also dedicate significant resources to marketing programs, including telemarketing, branded events and digital advertising through services such as Google AdWords. The effectiveness and cost of our online advertising has varied over time, and may vary in the future, due to competition for key search terms, changes in search engine use, including changes resulting from AI use, changes in the search algorithms used by major search engines and laws, regulations and other obligations relating to privacy or data protection that affect online advertising. These efforts will require us to invest significant financial and other resources. We rely on a variety of direct marketing techniques, including telemarketing, email marketing and direct mail. Our marketing activities, and the marketing activities of our customers, are regulated under laws such as the Telephone Consumer Protection Act, the Telemarketing Sales Rule, and any state equivalents, and various other federal and state laws regarding marketing and solicitation, as well as general data protection laws, including the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (the “CAN-SPAM”), and various state privacy laws, including the CCPA, and other recently passed state laws, that govern these activities and impose significant restrictions on us and our customers. Any violations or perceptions of violations of these laws and regulations may harm our business, financial condition and results of operations. Additionally, any changes to the above-mentioned laws, or any applicable privacy, data protection and cybersecurity laws, their interpretation, or enforcement of such laws by the government or private parties that further restrict the way we interact with our potential customers or generate leads could adversely affect our ability to attract customers and could harm our business, reputation and brand, financial condition and results of operations. For additional information, see “—Risks Related to Data Privacy, Data Protection, Cybersecurity and Technology—The collection, processing, storage, use, and disclosure of personal information are governed by a rapidly evolving framework of privacy, data protection, cybersecurity, data transfers or other laws or regulations worldwide that may limit the use and adoption of our products and services and adversely affect our business.”

An important feature of our platform is its broad interoperability with a range of devices, web browsers, operating systems and third-party applications. We have integrations with a variety of vendors. As part of our integrations with certain vendors, we have had to make concessions limiting our ability to engage with such vendor’s competitors, which could potentially impact our customer experience and our ability to interoperate with other third-party applications. Our Application Programming Interfaces (“APIs”), enable customers to connect other third-party software, applications, partner services and data to our platform. Accordingly, we are dependent on the accessibility of our platform across web browsers, operating systems and the third-party applications that we often do not control. Third-party applications, products and services are constantly evolving, and we may not be able to maintain or modify our platform to ensure its compatibility with third-party offerings following development changes. In addition, some of our competitors may be able to disrupt the operations or compatibility of our platform with their applications that some of our customers may rely upon. If our platform has integration or operability failures with these operating systems or third-party applications, customers may not adopt our platform or our APIs and related functionality may not be useful to customers, which could adversely affect our business, financial conditions, or results of operations. Additionally, as our platform evolves,evolves and expands, we expect the types and levels of competition we face to increase. Should any of our competitors or third-party services on our platform modify their technologies, standards or terms of use in a manner that degrades the functionality or performance of our platform or is otherwise unsatisfactory to us or gives preferential treatment to our competitors’ products or services, our platform, business, financial condition and results of operations could be adversely affected.

The collection, processing, storage, use and disclosure of personal information are governed by a rapidly evolving framework of privacy, data protection, cybersecurity, data transfer or other laws or regulations worldwide that may limit the use and adoption of our products and services and adversely affect our business.

In connection with running our business, we receive, store, use and otherwise process information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws (collectively, “Personal Information”). We receive, store, process and use a large volume of Personal Information and other customer information from a wide range of sources, including customers, potential customers, vendors and employees. There are numerous federal, state, local and international laws, regulations, industry standards and other requirements regarding privacy, data protection, cybersecurity, marketing and telemarketing activities and the storing, sharing, use, processing, transfer, disclosure and protection of Personal Information and other information, the scope and application of which are constantly changing, subject to amendment and differing interpretations, and may be inconsistent among jurisdictions, or conflict with other rules or other actual or asserted obligations. We also post privacy policies, which we are legally obligated to comply with and are subject to contractual obligations to third parties related to privacy, data protection and cybersecurity. As a result, we are subject to federal, state, local and international laws regarding data protection, privacy, cybersecurity, and the storing, sharing, use, disclosure and protection of Personal Information. The regulatory framework for data protection, privacy and cybersecurity worldwide is, and is likely to remain, uncertain for the foreseeable future, and it is possible that new laws, regulations and other requirements, or existing actual or alleged requirements and obligations, may be adopted, interpreted or applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or obligations or our practices. In addition, any expansion of our platform to include consumer-facing features could increase the volume and types of Personal Information we collect and process, potentially subjecting us to additional consumer protection, privacy and data protection obligations, including requirements related to consumer consent, data minimization and direct marketing.

Such illegal use of our platform could damage our reputation and brand and we could face claims for damages, regulatory enforcement, copyright or trademark infringement, defamation, negligence or fraud. Moreover, our customers’ and end customers’ promotion of their products and services through our platform might not comply with federal, state and foreign laws. We rely on contractual representations made to us by our customers that their use of our platform will comply with our policies and applicable law. Although we retain the right to verify that customers and end customers are abiding by our policies, our customers and end customers are ultimately responsible for compliance with our policies, and we do not systematically audit our customers or end customers to confirm compliance with our policies. AlthoughIf we introduce features that facilitate direct interaction between our customers and their end customers through our platform, we may face increased exposure to claims related to the accuracy, quality or legality of content displayed on our platform, including our customers’ representations about their services, credentials or pricing. Our ability to rely on Section 230 of the Communications Decency Act or similar protections may depend on the nature and extent of our involvement in curating or presenting such content. Moreover, although Section 230 of the Communications Decency Act currently limits liability for third-party content posted on internet platforms, we cannot predict whether that protection will remain in effect.

We are subject to the Foreign Corrupt Practices Act (the “FCPA”), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, and other anti-corruption and anti-bribery laws, U.S. anti-money laundering laws, and similar laws in countries where we conduct activities. Anti-corruption and anti-bribery laws have historically been enforced aggressively in recent years and are interpreted broadly and prohibit companies, their employees, agents, representatives, business partners and third-party intermediaries from promising, authorizing, making, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector, including anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business, or otherwise obtaining favorable treatment. Anti-money laundering laws generally prohibit persons from engaging in transactions where the proceeds at issue derive from, or are intended to facilitate or conceal, illegal activity, or where a party to the transaction is “willfully blind” to the illegal sources of the proceeds. If and when we increase our international sales and operations, our risks under these laws may increase.

As of AprilJuly 30,31, 2026, we did not have any outstanding indebtedness. However, we may incur indebtedness in the future, including under our Amended Credit Agreement. Our ability to make payments on or to refinance future debt obligations, including under our Amended Credit Agreement, depends on our financial condition and results of operations, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal or interest on any future indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay strategic acquisitions and partnerships, capital expenditures and payments on account of other obligations, seek additional capital, restructure or refinance our indebtedness or sell assets. These alternative measures may not be successful and may not permit us to meet future debt service obligations. Our ability to restructure or refinance future debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of debt could be at higher interest rates and could require us to comply with more onerous covenants, which could further restrict our business operations. In addition, we cannot assure you that we will be able to refinance any future indebtedness on commercially reasonable terms, or at all.

As a public company, we incur substantial legal, accounting and other expenses that we did not incur as a private company. For example, we are subject to the reporting requirements of the Exchange Act, the applicable requirements of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules and regulations of the SEC and the listing standards of Nasdaq. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business, financial condition and results of operations. Compliance with these rules and regulations has increased and is expected to continue to increase our legal and financial compliance costs, and increase demand on our systems, particularly since, as of January 31, 2026, we are no longer an Emerging Growth Company and are now a large accelerated filer. As a result of disclosure of information in filings we make with the SEC and other public-facing communications we make from time to time, our business, financial condition and results of operations are more visible, which may result in threatened or actual litigation, and may benefit our competitors to our detriment. In addition, as a public company, we may be subject to stockholder activism, which can lead to additional substantial costs, distract management and impact the manner in which we operate our business in ways we cannot currently anticipate. As a result of disclosure of information in this Quarterly Reportanticipate, and in filings required of a public company, our business, financial condition and results of operations are more visible, which may resultnegatively affect our ability to run our business in threatenedaccordance orwith actualmanagement’s litigation,current includingstrategic by competitors.objectives.

We expect that compliance with theThe requirements of being a large accelerated filer willhave increaseincreased our legal, accounting and financial compliance costs and costs associated with investor relations activities, and we expect such increases to continue. Such requirements also cause management and other personnel to divert attention from operational and other business matters to devote substantial time to public company reporting requirements. In addition, if we are not able to comply with changingpublic requirementscompany reporting requirements, including in a timely manner, we could lose investor confidence in the accuracy and completeness of our reporting, the market price of our stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, or litigation, any of which would require additional financial and management resources.

Certain members of our management team have limited experience managing a publicly traded company, and certain members joined us more recently. As such, our management team may not successfully or efficiently manage our status as a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These public company obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which may harm our business, financial condition and results of operations.

Our Class A common stock has one vote per share, our Class B common stock has 10 votes per share and our Class C common stock has no votes per share, except as otherwise required by law. Our Co-Founders and their respective affiliates together hold all of the issued and outstanding shares of our Class B common stock. Accordingly, as of AprilJuly 30,31, 2026, the shares held by our Co-Founders (including shares over which they have voting or administrative control) represented approximately 61%60% of the voting power of our outstanding capital stock, which voting power may increase over time as our Co-Founders exercise or vest in equity awards over time. If all such equity awards held by our Co-Founders (including the shares of our Class B common stock subject to performance-based RSUs that were granted to our Co-Founders in October 2024 and that vest upon the satisfaction of a service condition and achievement of certain stock price hurdles) had been exercised or vested and settled in shares of our Class B common stock as of AprilJuly 30,31, 2026, the shares held by our Co-Founders (including shares over which they have voting or administrative control) represented approximately 73%72% of the voting power of our outstanding capital stock. As a result, our Co-Founders, along with our other principal stockholders, will be able to significantly influence or control any action requiring the approval of our stockholders, including the election of our board of directors, the adoption of amendments to our amended and restated certificate of incorporation and amended and restated bylaws and the approval of any merger, consolidation, sale of all or substantially all of our assets or other major corporate transaction. Our Co-Founders may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentrated control or significant influence may have the effect of delaying, preventing or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company and might ultimately affect the market price of our Class A common stock. Further, the separation between voting power and economic interests could cause conflicts of interest between our Co-Founders and our other stockholders, which may result in our Co- Founders undertaking, or causing us to undertake, actions that would be desirable for our Co-Founders but would not be desirable for our other stockholders.

We have no shares of our Class C common stock, which entitle the holder to no votes per share (except as otherwise required by law), issued and outstanding, and we have no current plans to issue shares of Class C common stock. These shares are available to be used in the future for various uses including to further strategic initiatives, such as financings or acquisitions, or issue future equity awards to our service providers. Over time, the issuance of shares of Class A common stock will result in voting dilution to all of our stockholders and this dilution could eventually result in our Co-Founders holding less than a majority of our total outstanding voting power. Once our Co-Founders own less than a majority of our total outstanding voting power, our Co- Founders will no longer have the unilateral ability to elect all of our directors and to significantly influence or control the outcome of any matter submitted for a vote of our stockholders. Because the shares of Class C common stock have no voting rights (except as required by law), the issuance of such shares will not result in further voting dilution, which will prolong the voting power of our Co-Founders. As a result, the issuance of shares of Class C common stock could prolong the duration of our Co-Founders’ control of our voting power and their ability to elect all of our directors and to significantly influence or control the outcome of most matters submitted to a vote of our stockholders. In addition, we could issue shares of Class C common stock to our Co-Founders and, in that event, they would be able to sell such shares of Class C common stock and achieve liquidity in their holdings without diminishing their voting power. Any future issuances of shares of Class C common stock will not be subject to approval by our stockholders except as required by Nasdaq listing standards. For additional information about our multi-class structure, refer to the “Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934,” filed as Exhibit 4.1 hereto.to our Annual Report on Form 10-K for the year ended January 31, 2026.

The trading price of our Class A common stock could decline as a result of sales of a large number of shares of our Class A common stock in the public market, particularly sales by our directors, officers, and principal stockholders, and the perception that these sales could occur may also depress the trading price of our Class A common stock. As of AprilJuly 30,31, 2026, we had 82,736,96783,857,202 shares of our Class A common stock, 12,651,15412,605,018 shares of our Class B common stock and no shares of our Class C common stock outstanding. While shares held by directors, executive officers, and other affiliates are subject to volume limitations under Rule 144 under the Securities Act, we are unable to predict the timing of or the effect that such sales may have on the prevailing trading price of our Class A common stock.

Our software provides an end-to-end, AI-powered cloud-based software platform that connects, manages, and automates a wide array of business workflows such as advertising, job scheduling and management, dispatching, generating estimates and invoices, payment processing and more. Tradespeople spend their days interfacing with the ServiceTitan platform across what we believe to be the five most business-critical functions, or the “core centers of gravity,” inside a trades business: CRM (customer relationship management, including sales enablement, marketing automation and customer service), FSM (field service management, including scheduling and dispatching), ERP (enterprise resource planning, including inventory), HCM (human capital management, including compensation and payroll integration) and FinTech (including payments and third-party consumer financing). By offering interoperable capabilities in all five centers of gravity, we continuously capture comprehensive data insights across key workflows in a trades business.

Our close customer proximity and deep connection with the industry enable us to make evidence-based recommendations that can improve our customers’ business outcomes by identifying and replicating what works and fixing what does not. Our insights are augmented by the vast amounts of structured and unstructured data that we synthesize into best practices. These insights are then delivered across automated workflows, many of which we enhance with artificial intelligence (“AI”), to address the distinct vertical-specific needs of the trades. In addition, in fiscal 2026, we began a pilot ofintroduced Max, which packages our most advanced functionality and AI features with expert guidance to unlock end-to-end AI automation.

Our platform enables impactful outcomes for our customers, including accelerating revenue and driving operational efficiency, all while improving the experience for both end customers and contractors. As customers experience the significant business acceleration benefits of our platform, we have often observed our customers hire more technicians, increase gross transaction volume (“GTV”), representing total dollars invoiced by our customers through our platform, and adopt more add-on products.products, including Max. Increased customer adoption of our platform leads to further data and insights, allowing us to build more differentiated features and address opportunities in new trades, use cases and customer subsegments. All of this allows us to drive more growth and efficiency for customers, delivering considerable return on investment (“ROI”), in our products. For the three and six months ended AprilJuly 30,31, 20262026, we processed $26.8 billion and $48.5 billion of GTV, respectively, and for the three and six months ended July 31, 2025, we processed $21.7$22.9 billion and $17.7$40.7 billion of GTV, respectively.

We serve customers ranging from family-owned businesses with a few employees to large enterprises with a national footprint, some of which are an aggregation of multiple customers through a franchise network or other common buying partners. We define a customer as a parent organization, which may have multiple locations, brands or subsidiaries, that has been billed in the prior three months, and of those customers we define “Active Customers” as customers with over $10,000 of annualized billings. As of January 31, 2026, we had approximately 10,800 Active Customers representing over 97% of our annualized billings for fiscal 2026. As ofIn April 30, 2026, we have surpassed 2,000 total customers with annualized billings greater than $100,000, which representsrepresented more than 60% of our total annualized billings as of April 30, 2026.

Increase GTV By Entering New Trades and Markets. ServiceTitan began by serving a single trade—plumbing—and focusing on residential homes, and we now serve many trades that serve all sites: homes, businesses and even new construction. As we have penetrated new trades over time, we have significantly expanded our potential customer reach, unlocking new markets to drive future customer growth. We plan to continue to innovate and expand into new trade verticals in the long-term through our playbook of harnessing common features of the trades industry, while also identifying and building features specific to each new trade vertical. It takes significant timetime, management attention, and research and development to identify new trade verticals to enter and build out functionalities on top of our common products, as well as investment in sales and marketing resources, to ensure we can successfully go to market with an end-to-end offering in such new verticals. With the introduction of AI technology generally and our Max offering specifically, we believe we have an opportunity to drive significant additional value for our customers. As a result, to enable increased investments in and attention on Max, during the quarter ended July 31, 2026, we elected to tighten our focus on existing commercial trades — like mechanical, electrical, plumbing and landscaping — and residential roofing, rather than the planned expansion of our offering to new trades within commercial or broader residential exteriors categories. We expect this focus on existing trades to allow us to execute on existing investments while also accelerating our shift towards Max and internal AI, addressing what we believe to be our most important opportunities today. We also believe that there is a significant opportunity to strategically expand the usage of our platform outside of the United States and Canada over time based on the current needs of different regions.

Drive More Value to Our Customers through Adoption of Add-on Products and Max. As we demonstrate the high ROI of our products to our customers, and as our customers grow and further professionalize, we are able to sell more add-on products to them and increase our share of wallet, which we measure as the portion of our customers’ GTV that we are able to earn. We efficiently expand our customer relationships over time to serve their additional needs and automate more workflows through our platform. We believe that the more our customers use our platform to power their workflows, the more value we deliver to them, and the higher revenue we can earn from them. As a result, we continue to invest in research and development to improve the functionality of our existing Core and add-on products, including our FinTech and Proupsell products. We also believe that the power of new AI solutions paired with the existing end-to-end nature of our platform further expands our opportunity to drive significant additional value for our customers, and increase our share of wallet, through adoption of Max. Our ability to increase adoption of our add-on products and Max will depend on customer satisfaction with our platform, competition, pricing and our ability to continuously demonstrate the value proposition of our add-on products and Max. We plan to continue investing in sales and marketing, thought leadership, industry resources and evolving our professional services and customer success teams to focus on the adoption of Max and driving additional expanded value to customers on our platform.

Build New Products to Extend Our Platform. We have a culture of significant innovation evidenced by the extension of our platform’s capabilities over time, producing new workflows across trades. We intend to continue to judiciously invest in research and development to expand the functionality of our platform, to develop and bundle new add-on products and to broaden our capabilities to address new market opportunities across trades. Powering key workflows of our customers through our Core product positions us to deliver value-added upsell (including Pro, Max, and FinTech) and other AI-powered products that complement our Core product. We build Pro and FinTechupsell products as an integrated add-onadd-ons to our expansive Core product offering to deliver our customers business outcomes in a way that we believe no individual, standalone point solution can. As we continue to innovate and execute on our product roadmap, we believe customers will continue to find our new products additive and therefore continue to adopt them. We believe that there is further potential to expand our market opportunity by building new products, particularly those powered by AI, to earn an even greater potential share of our customers’ GTV in the future. While our ingrained industry position and exposure to the trades facilitate efficient product development opportunities, innovating new productsproducts, particularly those powered by AI, will continue to require substantial time and research and development resources.

We principally generate platform revenue through (i) subscription revenue generated from access to and use of our platform, including subscriptions to our Core and certain Proupsell products, and (ii) usage-based revenue generated from the transactions using our FinTech solutions and usage of certain Proupsell products and other usage-based services. Our customer contracts are generally based on the number of users, mix of products, number of end customers and the amount of GTV.

We offer tiered subscription plans for our Core and Proupsell products with varying contract lengths. Pursuant to these subscription contracts our customers do not have the ability to take possession of our proprietary software. For new customers, we primarily enter into either annual or multi-year subscription agreements with contract terms typically ranging from 12 to 36 months; however, certain Proupsell product and legacy customers are on month-to-month contracts. In nearly all cases, these contracts (monthly, annual, or multi-year) are renewed automatically unless cancelled in advance. We generally bill our customers on a monthly basis in advance of services, regardless of contract term. In some cases for certain usage-based products, the customer is billed in arrears. Pricing for these subscriptions are driven by the features included in the package and are linked to the size of the customer’s business, generally based on the number of field technicians at the customer but in some cases directly tied to the number of end customers or the customer’s revenue. In this way, our success is linked to the growth of our customers, which we measure through our net dollar retention rate. Our net dollar retention rate1 was over 110% for the three months ended AprilJuly 30,31, 2026.

Usage-based services primarily consist of payment processing where we connect to third-party processors to allow our customers to accept payments, primarily credit and debit cards, and also includes end-customer financing solutions and other forms of payment. The third-party processor determines the eligibility of the end customer to participate in the programs, provides the payment settlement and financing options to the end customer and is responsible for the provision of the payment or financing services. We receive a fee from the third-party processors, depending on the size and type of the transaction, which we recognize net of interchange and other direct expenses which are passed onto the customer. Revenue from financing and processing payments is recognized at the time of the transaction. In addition to payment processing revenue, we have a number of Proupsell products that generate revenue depending on the level of usage, which we recognize monthly in arrears based on consumption. Usage revenue also includes fees we earn from third-party partners based on transactions or customer activity facilitated through our platform, which we recognize in the period in which the underlying activity occurs. In addition, usage-based revenue also includes revenue from our Virtual Agents, which is consumption-based and recognized in the period in which the underlying usage occurs.

Cost of platform revenue consists of personnel-related costs and costs related to the provisioning of our platform services. Personnel-related costs primarily include salary, employee benefits, bonuses and stock-based compensation related to our customer support team and certain customer success personnel. Costs related to the provisioning of our platform services are primarily comprised of fees paid to third-party service providers associated with delivery of Proupsell and FinTech products, platform infrastructure and server costs, call tracking fees, and payment processing fees. In addition, cost of platform revenue includes amortization of certain acquired intangible assets, amortization of capitalized internal-use software costs directly related to our cloud-based software solution and allocated overhead, which we define as costs such as depreciation, rent, utilities, and other facilities-related costs that are allocated across our expense categories based on headcount.

1Our1 Our net dollar retention rate measures the increase in annualized billings across our existing customer base by comparing the annualized billings from the same set of customers across comparable periods. To calculate our net dollar retention rate as of a given quarter, we first calculate annualized billings from the cohort of all customers billed in the same quarter in the prior year (the “prior period annualized billings”). We then calculate annualized billings from these same customers as of the current quarter (the “current period annualized billings”). Current period annualized billings includes the effect of any expansion, contraction or churn over the trailing 12 months. We divide (a) current period annualized billings by (b) prior period annualized billings to arrive at the net dollar retention rate. When calculating net dollar retention rate, we do not include the billings from any customers that were acquired as the result of our acquisition of a business until the completion of the first full quarter following the one-year anniversary of the acquisition.

We define annualized billings for a given quarter as the annualized value of the quarterly amount invoiced for our Core and Proupsell products, net of reserves, and the quarterly revenue recognized for our FinTechusage-based products. Contracts for our platform solutions range from monthly to multi-year. While monthly subscribers as a group have historically maintained or increased their subscriptions over time, there is no guarantee that any particular customer on a monthly subscription will renew its subscription in any given month, and therefore the calculation of annualized billings for these monthly subscriptions may not accurately reflect revenue to be received over a 12-month period from such customers. There may be seasonal fluctuations in annualized billings as a result of heightened demand for our customers during peak times. Annualized billings should be viewed independently of, and not as a replacement for, revenue and does not represent our revenue on an annualized basis.

Professional services and other cost of revenue consists primarily of personnel-related costs in connection with providing customer onboarding and customer implementation, live voice and chat services. Personnel-related costs primarily include salary, employee benefits, bonuses and stock-based compensation. Professional services and other cost of revenue also includes amortization of certain acquired intangible assets, allocated overhead, and the cost of other ancillary hardware products and services sold to customers. Professional services and other cost of revenue historically has exceeded professional services and other revenue as we invest in providing customers with implementation and onboarding services to enhance customer success. We expect our cost of professional services and other revenue to increase in absolute dollars as the adoption of our product offerings for both new and existing customers increases.increases, including the investment in our customers transition to Max.

Comparison of the Three Months Ended AprilJuly 30,31, 2026 and 2025

Platform revenue increased by $52.6$51.8 million, or 25%,22%, for the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025. This increase was primarily driven by subscription revenue, which increased by $39.3$37.6 million, or 24%,22%, for the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025. In addition, revenue from our usage-based products increased by $13.3$14.2 million, or 29%,24%, for the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025. This increase was primarily driven by increases in gross transaction volume and higher earn rate generated on that volume.

Professional services and other revenue increaseddecreased by $0.6$1.1 million, or 7%,12%, for the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025. This increasedecrease was primarily driven by a higherlower volume of billable services performed.

Platform cost of revenue increased by $5.5$8.5 million, or 11%,16%, for the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025. This increase was primarily due to a $2.8$6.3 million increase in the costs related to the provisioning of our platform services products and an increase of $2.3$1.2 million in personnel-related costs, driven by an increase in headcount. Platform gross margin increased to 78.7% for the three months ended AprilJuly 30,31, 2026, compared to 75.9%77.7% for the three months ended AprilJuly 30,31, 2025, primarily due to improved efficiencies in delivering our platform at scale.

Professional services and other cost of revenue increased by $2.3$4.4 million, or 13%,23%, for the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025. TheThis increase was primarily due to an increase of $2.4$4.0 million in personnel-related costscosts, which was driven by anheadcount growth and annual salary increases, and a $1.1 million increase in headcount.stock-based compensation expense.

Sales and marketing expense increased by $3.8$7.4 million, or 6%,11%, for the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025. The increase in sales and marketing expense was primarily driven by an increase of $5.2$5.8 million in personnel-related costs, which included an increase of $3.3$3.1 million driven by anheadcount increasegrowth, $1.8 million in headcount,sales $1.1commissions, and $1.0 million in stock-based compensation expense,expense. andThere $0.6was an additional increase of $1.0 million in sales commissions. These increases were partially offset by a decrease of $1.8 million of impairment losses on operating lease assetsmarketing and relatedadvertising property and equipment for office spaces that we ceased to use.costs.

Research and development expense increased by $18.9$27.6 million, or 27%,38%, for the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025. The increase in research and development expense was primarily driven by an increase of $16.7$21.2 million in personnel-related costs due to increased headcount,costs, including increases of $12.1 million in stock-based compensation expense and $6.7 million in employee salaries. These increases are associated with annual salary increases and headcount growth, including the hiring of senior levelsenior-level personnel to lead and support the engineering function as we continue to scale our team. The increase in personnel-related costs also includes an $8.4 million increase in stock-based compensation expense associated with the increased headcount. There was an additional increase of $2.5$3.7 million in technology spend as a result of our continued investment in AI.and These increases were partially offset by a decreaseleverage of $1.7 million of impairment losses on operating lease assets and related property and equipment for office spaces that we ceased to use.AI.

General and administrative expense decreased by $1.1$4.5 million, or 2%,7%, for the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025. The decrease in general and administrative expense was primarily driven by a decrease of $2.9 million of impairment losses on operating lease assets and related property and equipment for office spaces that we ceased to use. This decrease was offset by an increase of $1.6$4.0 million in third-partypersonnel-related consultingcosts, costsresulting relatedfrom tolower legal,stock-based andcompensation otherexpense consultingassociated services.with award forfeitures from employee terminations.

Other income, net, was $3.9$4.0 million for the three months ended AprilJuly 30,31, 2026, compared to other income, net, of $3.4$2.9 million for the three months ended AprilJuly 30,31, 2025. The increase was primarily due to a $1.9 million decline in interest expense resulting from the repayment, in full, of our term loan in fiscal 2026, partially offset by a $1.2$0.9 million decrease in interest income.

Our provision for income taxes increased by $0.7$1.0 million for the three months ended AprilJuly 30,31, 2026, compared to the three months ended AprilJuly 30,31, 2025. The change is primarily driven by the variability in the jurisdictional mix of our income (loss) before income taxestaxes, as well as the impacts of our foreignU.S. subsidiariesvaluation and their related tax effectsallowance for the three months ended AprilJuly 30,31, 2026.

Amortization of acquired intangible assets. We incur amortization expense for acquired intangible assets in connection with acquisitions of certain businesses and technologies. Amortization of acquired intangible assets is a non-cash expense that is significantly affected by the timing and size of acquisitions, and the inherent subjective nature of purchase price allocations. Because these costs have already been incurred, we exclude the amortization expense from our internal management reporting processes. We exclude these charges when assessing our actual performance and when budgeting, planning, and forecasting future periods. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well.

Acquisition-related items. WeFrom time to time, we have incurredand may continue to incur costs related to acquisitions, including legal, third-party valuation and due diligence, insurance costs, and one-time retention bonuses for employees of acquired companies. In addition, we periodically record the change to the fair value of contingent consideration related to past acquisitions. WeWhen applicable, we exclude these items when assessing our actual performance and when budgeting, planning and forecasting future periods. We believe excluding these items allows investors to make meaningful comparisons between our core results of operations and those of other peer companies.

We define non-GAAP research and development expense as GAAP research and development expense excluding stock-based compensation expense and related employer payroll taxes, acquisition-related items, if applicable, and loss on operating lease assets.

We define non-GAAP general and administrative expense as GAAP general and administrative expense excluding stock-based compensation expense and related employer payroll taxes, acquisition-related items, if applicable, and loss on operating lease assets.

We define non-GAAP income from operations and non-GAAP operating margin as GAAP loss from operations and GAAP operating margin, respectively, excluding stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, acquisition-related items, if applicable, and loss on operating lease assets. Non-GAAP operating margin represents non-GAAP income from operations as a percentage of total revenue.

We define non-GAAP net income (loss) as GAAP net loss, excluding stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, acquisition-related items, if applicable, and loss on operating lease assets, adjusted for the income tax effects on the difference between GAAP and non-GAAP expenses.

We define free cash flow, a non-GAAP measure, as GAAP net cash provided by operating activities less cash used for investing activities for capitalized internal use software and less cash paid for purchases of, and deposits for, property and equipment. We believe that free cash flow is a meaningful indicator of our sources of liquidity and capital requirements that provides information to management and investors that is useful in evaluating the cash flow trends of our business. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. Free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Other companies may calculate free cash flow or similarly titled non-GAAP measures differently, which could reduce the usefulness of free cash flow as a tool for comparison. In addition, free cash flow does not reflect mandatory debt service and other non-discretionary expenditures that are required to be made under contractual commitments and does not represent the total increase or decrease in our cash balance for any given period.

As of AprilJuly 30,31, 2026, we had cash and cash equivalents of $421.5$479.5 million, which excludes restricted cash of $0.4 million, and $250.0 million available under the Amended Credit Agreement, as defined below. Cash and cash equivalents consisted of checking accounts and money market funds with maturities less than 90 days from the date of purchase.

In addition, the Second Amendment (i) modified pricing and unused commitment fees payable under the Amended Credit Agreement to be based on total net leverage rather than recurring revenue, (ii) replaced the recurring revenue and liquidity financial covenants in the Original Credit Agreement with a total net leverage financial covenant, and (iii) modified certain negative covenants, including liens, indebtedness, investments, dispositions, restricted payments and restricted debt payments, to provide us with more flexibility thereunder. Prior to entering into the Second Amendment we voluntarily repaid, in full, the approximately $107.0 million term loan that was outstanding under the Original Credit Agreement. As of AprilJuly 30,31, 2026, no loans were outstanding under the Amended Credit Agreement.

The following table summarizes our cashflowscash flows for the periods indicated:

Net cash usedprovided inby operating activities was $1.6$56.4 million for the threesix months ended AprilJuly 30,31, 2026. This primarily related to our non-cash charges of $82.2$171.0 million, adjusted for our net loss of $22.8$47.7 million and net cash outflows of $61.0$66.8 million from changes in our operating assets and liabilities. The primary drivers of the changes in our operating assets and liabilities related to a decrease in accrued personnel relatedpersonnel-related expenses of $38.9$29.3 million as annual corporate bonuses are paid in the first fiscal quarter, an increase of $9.1$17.1 million in accounts receivable, an increase of $6.8$10.5 million in contract assets, a decrease of lease liabilities of $4.2$7.5 million, and an increase of $3.8$6.8 million in deferred contract costs.costs, and an increase in prepaid expenses and other current assets of $4.2 million. These were partially offset by andan increase of $3.4$8.3 million in accounts payables and other accrued expenses.liabilities.

Net cash usedprovided inby operating activities was $14.6$25.8 million for the threesix months ended AprilJuly 30,31, 2025. This primarily related to our net loss of $46.4$78.6 million and net cash outflows of $49.1$53.5 million from changes in our operating assets and liabilities. These were partially offset by non-cash charges of $80.9$157.8 million. The primary drivers of the changes in our operating assets and liabilities related to a decrease in accrued personnel relatedpersonnel-related expenses of $40.6$21.7 million as annual corporate bonuses are paid in the first fiscal quarter,million, an increase in deferred contract costs and contract assets of $7.1$13.7 million, an increase of $5.3$12.7 million in accounts receivable, an increase in prepaid expenses and other current assets of $8.5 million, and a decrease of lease liabilities of $3.2$6.2 million. These were partially offset by an increase in other liabilities of $4.0$5.2 million and an increase of $2.9 million in accounts payable and other accrued expenses, a decrease in prepaid expenses and other assets of $2.2 million and an increase in other liabilities of $1.2 million.expenses.

Net cash used in investing activities was $8.0$15.5 million for the threesix months ended AprilJuly 30,31, 2026. This primarily consisted of $6.7$11.4 million for the investments in capitalized internal-use software, $0.8$2.4 million in deposits for property and equipment, and $0.6$1.7 million for the purchase of property and equipment.