Quick Summary:
Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited) Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Cash flows provided by (used in) operating activities Net loss $(46,460) $(39,672) $(138,151) $(143,733)Adjustments to reconcile net loss to net cash provided by (used in) operating activities Depreciation and amortization expense 20,229 19,986 59,836 57,997 Amortization of deferred contract costs 2,971 2,433 8,364 6,865 Noncash operating lease expense 1,539 1,955 4,946 5,884 Stock-based compensation expense 25,426 19,462 69,050 72,037 Loss on impairment and disposal of assets 8,312 431 38,586 604 Change in valuation of contingent consideration — — (135) (900)Deferred income taxes 133 784 1,254 1,647 Amortization of debt issuance costs 87 39 214 93 Provision for credit losses 976 857 2,816 1,636 Changes in operating assets and liabilities, net of effect of business acquisition: Accounts receivable (2,480) 2,330 (13,563) (6,346)Prepaid expenses and other current assets 6,614 (164) 3,260 1,179 Deferred contract costs (4,802) (3,207) (10,511) (9,070)Contract assets (2,186) (3,959) (4,635) (9,277)Other assets (875) (564) (532) (686)Accounts payable and other accrued expenses (4,717) (2,893) (4,434) (3,475)Accrued personnel related expenses 12,505 2,534 9,119 (13,381)Operating lease liabilities (3,953) (2,010) (7,830) (6,062)Other liabilities 925 1,097 1,421 (1,567)Deferred revenue 1,290 979 2,551 991 Net cash provided by (used in) operating activities 15,534 418 21,626 (45,564)Cash flows used in investing activities Capitalized internal-use software (3,961) (3,784) (14,161) (12,831)Purchase of property and equipment (1,002) (2,786) (2,803) (23,401)Deposits for property and equipment — (54) — (344)Repayment of loan to employee — — — 1,529 Acquisition of business, net of cash acquired — — (1,184) — Net cash used in investing activities (4,963) (6,624) (18,148) (35,047)Cash flows provided by (used in) financing activities Payment of contingent consideration — (120) (300) (610)Proceeds from exercise of stock options 1,093 1,323 4,307 8,044 Proceeds from issuance of preferred stock — — — 34,000 Payment of preferred stock issuance costs — — — (409)Payment of debt arrangements (450) (450) (1,350) (900)Payment of deferred initial public offering costs (106) — (949) — Shares repurchased for tax withholding for the settlement of restricted stock units (5,398) (9,506) (18,963) (11,992)Net cash provided by (used in) financing activities (4,861) (8,753) (17,255) 28,133 Net increase (decrease) in cash, cash equivalents, and restricted cash 5,710 (14,959) (13,777) (52,478)Cash, cash equivalents, and restricted cash Beginning of period 129,376 167,124 148,863 204,643 End of period $135,086 $152,165 $135,086 $152,165 Non-GAAP Financial MeasuresIn addition to our results prepared in accordance with GAAP, we believe non-GAAP gross profit and non-GAAP gross margin in total and for platform and professional services and other, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP income (loss) from operations, non-GAAP operating margin, and non-GAAP net income (loss) are useful in evaluating our operating performance.
GAAP to Non-GAAP Reconciliations(unaudited) Non-GAAP Gross Profit and Non-GAAP Gross Margin Platform Professional Services and Other Total Three Months EndedOctober 31, Three Months EndedOctober 31, Three Months EndedOctober 31, 2024 2023 2024 2023 2024 2023 (in thousands) GAAP gross profit $138,986 $109,619 $(9,041) $(6,851) $129,945 $102,768 Stock-based compensation expense and related employer payroll taxes 1,634 1,399 1,159 1,102 2,793 2,501 Amortization of acquired intangible assets 5,533 5,502 334 484 5,867 5,986 Restructuring charges — — — — — — Loss on operating lease assets 1,189 — 563 — 1,752 — Non-GAAP gross profit $147,342 $116,520 $(6,985) $(5,265) $140,357 $111,255 Platform Professional Services and Other Total Three Months EndedOctober 31, Three Months EndedOctober 31, Three Months EndedOctober 31, 2024 2023 2024 2023 2024 2023 GAAP gross margin 73% 72% (112)% (81)% 65% 64%Stock-based compensation expense and related employer payroll taxes 1% 1% 14% 13% 1% 2%Amortization of acquired intangible assets 3% 4% 4% 6% 3% 4%Restructuring charges 0% 0% 0% 0% 0% 0%Loss on operating lease assets 1% 0% 7% 0% 1% 0%Non-GAAP gross margin 77% 77% (86)% (62)% 70% 69% Platform Professional Services and Other Total Nine Months EndedOctober 31, Nine Months EndedOctober 31, Nine Months EndedOctober 31, 2024 2023 2024 2023 2024 2023 (in thousands) GAAP gross profit $390,215 $301,850 $(27,464) $(25,432) $362,751 $276,418 Stock-based compensation expense and related employer payroll taxes 4,161 4,361 3,165 3,436 7,326 7,797 Amortization of acquired intangible assets 16,369 16,506 1,452 1,452 17,821 17,958 Restructuring charges 386 1,160 129 1,969 515 3,129 Loss on operating lease assets 5,390 — 2,556 — 7,946 — Non-GAAP gross profit $416,521 $323,877 $(20,162) $(18,575) $396,359 $305,302 Platform Professional Services and Other Total Nine Months EndedOctober 31, Nine Months EndedOctober 31, Nine Months EndedOctober 31, 2024 2023 2024 2023 2024 2023 GAAP gross margin 72% 71% (118)% (103)% 64% 61%Stock-based compensation expense and related employer payroll taxes 1% 1% 14% 14% 1% 2%Amortization of acquired intangible assets 3% 4% 6% 6% 3% 4%Restructuring charges 0% 0% 1% 8% 0% 1%Loss on operating lease assets 1% 0% 11% 0% 1% 0%Non-GAAP gross margin 77% 76% (87)% (75)% 70% 67% Non-GAAP Sales and Marketing Expense Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 (in thousands) GAAP sales and marketing expense $67,795 $60,097 $183,614 $163,305 Stock-based compensation expense and related employer payroll taxes (4,132) (4,419) (11,776) (14,305)Amortization of acquired intangible assets (5,606) (5,547) (16,662) (17,033)Restructuring charges — — (292) (1,647)Loss on operating lease assets (1,467) — (6,900) — Non-GAAP sales and marketing expense $56,590 $50,131 $147,984 $130,320 Non-GAAP Research and Development Expense Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 (in thousands) GAAP research and development expense $65,935 $49,094 $186,997 $149,114 Stock-based compensation expense and related employer payroll taxes (10,451) (7,621) (28,060) (25,023)Acquisition-related items — — (250) — Restructuring charges — — (991) (1,418)Loss on operating lease assets (1,468) — (6,711) — Non-GAAP research and development expense $54,016 $41,473 $150,985 $122,673 Non-GAAP General and Administrative Expense Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 (in thousands) GAAP general and administrative expense $40,263 $29,723 $122,226 $98,772 Stock-based compensation expense and related employer payroll taxes (8,408) (5,789) (23,600) (26,713)Acquisition-related items (6) 10 (1,933) 893 Restructuring charges — — (698) (1,449)Loss on operating lease assets (3,660) — (16,958) — Non-GAAP general and administrative expense $28,189 $23,944 $79,037 $71,503 Non-GAAP Income (Loss) from Operations and Non-GAAP Operating Margin Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 (in thousands) GAAP loss from operations $(44,048) $(36,146) $(130,086) $(134,773)Stock-based compensation expense and related employer payroll taxes 25,784 20,330 70,762 73,838 Amortization of acquired intangible assets 11,473 11,533 34,483 34,991 Restructuring charges — — 2,496 7,643 Acquisition-related items 6 (10) 2,183 (893)Loss on operating lease assets 8,347 — 38,515 — Non-GAAP income (loss) from operations $1,562 $(4,293) $18,353 $(19,194) Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 GAAP operating margin (22)% (23)% (23)% (30)%Stock-based compensation expense and related employer payroll taxes 13% 13% 13% 16%Amortization of acquired intangible assets 6% 7% 6% 8%Restructuring charges 0% 0% 0% 2%Acquisition-related items 0% (0)% 0% (0)%Loss on operating lease assets 4% 0% 7% 0%Non-GAAP operating margin 1% (3)% 3% (4)% Non-GAAP Net Income (Loss) Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 (in thousands) GAAP net loss $(46,460) $(39,672) $(138,151) $(143,733)Stock-based compensation expense and related employer payroll taxes 25,784 20,330 70,762 73,838 Amortization of acquired intangible assets 11,473 11,533 34,483 34,991 Restructuring charges — — 2,496 7,643 Acquisition-related items 6 (10) 2,183 (893)Loss on operating lease assets 8,347 — 38,515 — Income tax effects related to the above adjustments (1) (298) 632 (1,207) 1,508 Non-GAAP net income (loss) $(1,148) $(7,187) $9,081 $(26,646) (1) 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.
Condensed Consolidated Statements of Operations(in thousands, except share and per share data)(unaudited) Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Revenue: Platform $191,190 $151,655 $539,412 $427,789 Professional services and other 8,085 8,429 23,185 24,788 Total revenue 199,275 160,084 562,597 452,577 Cost of revenue: Platform 52,204 42,036 149,197 125,939 Professional services and other 17,126 15,280 50,649 50,220 Total cost of revenue 69,330 57,316 199,846 176,159 Gross profit 129,945 102,768 362,751 276,418 Operating expenses: Sales and marketing 67,795 60,097 183,614 163,305 Research and development 65,935 49,094 186,997 149,114 General and administrative 40,263 29,723 122,226 98,772 Total operating expenses 173,993 138,914 492,837 411,191 Loss from operations (44,048) (36,146) (130,086) (134,773)Other expense, net Interest expense (3,974) (4,216) (12,324) (12,203)Interest income 1,778 1,978 5,128 5,095 Other income (expense), net 185 (258) 395 1,091 Total other expense, net (2,011) (2,496) (6,801) (6,017)Loss before income taxes (46,059) (38,642) (136,887) (140,790)Provision for income taxes 401 1,030 1,264 2,943 Net loss (46,460) (39,672) (138,151) (143,733)Accretion of non-convertible preferred stock (14,652) (11,772) (41,608) (33,390)Net loss attributable to common stockholders $(61,112) $(51,444) $(179,759) $(177,123)Net loss per share, basic and diluted $(1.74) $(1.53) $(5.18) $(5.36)Weighted-average shares used in computing net loss per share, basic and diluted 35,094,547 33,588,617 34,690,079 33,043,071 Disaggregated Revenue Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Subscription $145,282 $114,311 $409,013 $322,086 Usage 45,908 37,344 130,399 105,703 Platform revenue 191,190 151,655 539,412 427,789 Professional services and other 8,085 8,429 23,185 24,788 Total revenue $199,275 $160,084 $562,597 $452,577 ServiceTitan, Inc.
