ServiceTitan Hits $840M ARR: Key Growth Insights
ServiceTitan, the leading operating system for the trades, continues its impressive growth trajectory. The company reported $772 million in FY25 revenue and surpassed $800 million in annual recurring revenue (ARR), with a clear path to $1 billion ARR. This remarkable growth showcases the power of vertical SaaS.
- $840M ARR
- 29% YoY growth
- Near non-GAAP break-even (3% non-GAAP margins)
- 110% Net Revenue Retention (NRR)
- 95% Gross Revenue Retention (GRR)
- $10.5B market cap (12x ARR)
ServiceTitan exemplifies a successful 12x ARR vertical B2B SaaS leader.
Key Learnings from ServiceTitan's Success
1. High Retention: The Power of a True Operating System
ServiceTitan's NRR consistently exceeds 110%, even with a significant SMB customer base. This impressive retention stems from their comprehensive operating system for the trades, managing everything from CRM and payments to field service. This integrated approach minimizes churn.
Lesson for SaaS Founders: Strive to become the central operating system within your niche. Owning more workflows increases customer stickiness. However, this requires substantial investment in product breadth and depth.
2. FinTech Integration as a Revenue Driver
ServiceTitan processes over $60 billion in payments annually. While software remains the primary revenue source, FinTech solutions like credit card processing and consumer financing are crucial growth vectors. These offerings enhance revenue and deepen customer integration.
Lesson for SaaS Founders: Integrating FinTech capabilities can unlock significant revenue potential in vertical SaaS. Consider how companies like Toast and Shopify leverage FinTech for growth.
3. Strategic Upmarket Movement
ServiceTitan has successfully transitioned upmarket. Now, 50% of their revenue comes from customers with annual billings exceeding $100,000. This strategic shift has been instrumental in scaling beyond $500M ARR.
Lesson for SaaS Founders: While SMBs are a good starting point, consider moving upmarket to achieve substantial scale. Larger customers offer higher contract values and better retention.
4. Efficient Growth with a 21-Month CAC Payback
ServiceTitan maintains a 21-month customer acquisition cost (CAC) payback period, demonstrating efficient growth. This is achieved through inbound marketing, community engagement, and strategic partnerships.
Lesson for SaaS Founders: Prioritize efficient growth by optimizing your go-to-market strategy and focusing on rapid value delivery.
5. Expanding TAM Through Product Innovation
ServiceTitan's total addressable market (TAM) is a massive $1.5 trillion. They strategically expand their serviceable available market (SAM) by introducing new products like Fleet Pro and Dispatch Pro, increasing their revenue potential within existing customer bases.
Lesson for SaaS Founders: TAM expansion involves increasing share of wallet with existing customers through complementary products and services.
ServiceTitan's success story provides invaluable lessons for SaaS founders. By focusing on a strong product offering, strategic upmarket movement, and efficient growth strategies, SaaS businesses can achieve similar success.
