Quarterly Report for Quarter Ending July 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties and our actual results, events or circumstances could differ materially from those described in forward-looking statements. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled "Risk Factors" and other parts of this Quarterly Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. The last day of our fiscal year is January 31, and our fiscal quarters end on April 30, July 31, October 31 and January 31. Our fiscal year ended January 31, 2026 is referred to herein as fiscal 2026. Unless the context otherwise requires, all references in this Quarterly Report to "we," "us," "our," "our company," and "ServiceTitan" refer to ServiceTitan, Inc. and its consolidated subsidiaries, and references to our "common stock" include our Class A common stock, Class B common stock and Class C common stock.

Overview

ServiceTitan is the operating system that powers the trades.

We are modernizing a large and technologically underserved industry-an industry commonly referred to as the "trades." The trades consist of the collection of field service activities required to install, maintain, and service the infrastructure and systems of residences and commercial buildings.

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, 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 introduced 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, 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 July 31, 2026, 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 $22.9 billion and $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. In April 2026, we surpassed 2,000 total customers with annualized billings greater than $100,000, which represented more than 60% of our total annualized billings as of April 30, 2026.

Key Factors Affecting Our Business Performance

We believe that the growth and future success of our business is dependent upon many factors, including those described below.

Increase GTV on Our Platform

Grow with Our Customers. Our long-term revenue growth is correlated with the success of customers on our platform, and we strive to support the growth of their businesses. We can improve outcomes for our customers across every stage of the go-to-market funnel, from determining which end customers to target, marketing to those end customers effectively and converting and retaining end customers. We empower technicians with the tools and training necessary to drive better end-customer outcomes that, in turn, can generate higher ticket sizes and more repeatable work orders. As our customers grow on our platform and expand into additional locations, generating more sales, hiring more technicians and automating more workflows, they can also significantly increase GTV, and, in turn, drive our growth and financial success.

Increase GTV By Serving Additional Customers in Existing Trades and Markets. Increasing our 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 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, particularly AI-powered capabilities.

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 time, 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.

Retain and Expand Our Existing Customer Relationships

Our ability to retain and increase the revenue we earn from existing customers is a key driver of our future business performance and depends on our customers renewing their subscriptions to our platform, expanding their number of users, increasing their usage of existing solutions and adopting additional products, driven by the three key strategies described below. We have observed that as customers experience the significant business acceleration benefits of our platform, they typically not only remain on our platform but also often hire more technicians and adopt more of our products.

Retain Our Customers. Our customer relationship begins with a thorough onboarding process. Then, our customers deploy our platform end-to-end across their entire organization, meaning the ServiceTitan platform powers their workflows and is the primary interface used by their employees. As a result, we become deeply embedded as the operating system that powers our customers' businesses. Over time, our Customer Success Management teams work closely with our customers to assist them in fully utilizing our platform.

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 upsell products. We also believe that the power of 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 upsell products as integrated add-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 products, particularly those powered by AI, will continue to require substantial time and research and development resources.

Seasonality and Other Fluctuations

Generally, demand for our customers' services tends to increase during the second quarter of our fiscal year, as hot weather in the summer months typically results in higher demand for trades businesses. Given that our revenue model allows our customers to scale as needed (processing more GTV through our platform and adding technicians), our sequential revenue growth has historically been strongest in the second quarter of each fiscal year. This is especially true for our usage-based revenue, which is directly tied to the amount of GTV processed through our platform. Our historical growth-including through the acquisition of new customers and the launch of new products, particularly subscription-based products that are less seasonally impacted than our usage-based products-may have made it more difficult to evaluate the impact of seasonality on our business by masking the full impact of the heightened quarter-over-quarter growth we have generally experienced in the second quarter of each fiscal year. Going forward, we believe seasonality may continue to impact our quarterly results, potentially becoming more pronounced, or evolving to reveal novel seasonal trends.

Certain recurring operational events that occur through our fiscal year have also historically impacted our financial performance. Specifically, we typically experience higher operating cash outflows during our first fiscal quarter due to payment of annual corporate bonuses. Additionally, our third fiscal quarter performance typically reflects increased sales and marketing expense related to our annual user conferences, Ignite and Pantheon.

Components of Results of Operations

Revenue

We have two general categories of revenue as set forth below:

Platform Revenue

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 upsell products, and (ii) usage-based revenue generated from the transactions using our FinTech solutions and usage of certain upsell 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 upsell 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 upsell 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 July 31, 2026.

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.

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 upsell 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.

Professional Services and Other Revenue

Professional services and other revenue is primarily derived from services we provide to our customers, principally onboarding, training, and some ongoing professional services. Professional services and other revenue also includes revenue generated from our live voice and chat services and certain other ancillary hardware products and services sold to customers. Fees for these professional services are generally invoiced separately at the commencement of the contract or as ordered by the customer. Revenue is recognized for professional services as the services are performed or products are delivered.

Max Revenue Impact

We have seen, and expect to continue to see, a higher proportion of our new deal volume coming from upsell-based Max deals. Unlike our Core subscription revenue, which is recognized ratably over the term of the contract, upsell Max-related subscription revenue is recognized as it is billed. Because Max requires substantial change management, we typically do not bill subscription fees for the first quarter of an upsell Max contract, and we have also elected not to charge existing customers an onboarding fee when transitioning to Max. As a result of these factors, we expect both our platform revenue and professional services revenue to grow at a slower pace for the remainder of fiscal 2027.

Cost of Revenue

Platform

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 upsell 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.

We expect our cost of platform revenue to increase in absolute dollars as the adoption and usage of our platform and product offerings increase.

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1 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 upsell products, net of reserves, and the quarterly revenue recognized for our usage-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

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, including the investment in our customers transition to Max.

Operating Expenses

Operating expenses consist of sales and marketing, research and development and general and administrative expenses.

Sales and Marketing Expense

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 sales personnel.

Research and Development Expense

Research and development expense consists primarily of personnel-related and other costs incurred in connection with product management and development efforts. Personnel-related costs primarily include salary, employee benefits, bonuses and stock-based compensation. Research and development expense also includes fees to third-party product development resources, infrastructure and server costs, inference costs, and allocated overhead costs. We expect that research and development expense will increase on an absolute dollar basis as we invest to build, enhance, maintain and scale our products.

General and Administrative Expense

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 Income (Expense), Net

Other 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.

Provision For Income Taxes

Our income tax provision consists of U.S. federal, state, and foreign income taxes. We maintain a full valuation allowance for our U.S. federal and state deferred tax assets, including net operating loss carryforwards, that are unable to be offset by our U.S. federal and state deferred tax liabilities, as we have concluded that it is not more likely than not that the U.S. deferred tax assets will be realized.

Results of Operations

The following table sets forth our condensed consolidated statements of operations data for the periods indicated:

Comparison of the Three Months Ended July 31, 2026 and 2025

Revenue

Platform revenue increased by $51.8 million, or 22%, for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. This increase was primarily driven by subscription revenue, which increased by $37.6 million, or 22%, for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. In addition, revenue from our usage-based products increased by $14.2 million, or 24%, for the three months ended July 31, 2026, compared to the three months ended July 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 decreased by $1.1 million, or 12%, for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. This decrease was primarily driven by a lower volume of billable services performed.

Cost of Revenue

Platform cost of revenue increased by $8.5 million, or 16%, for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. This increase was primarily due to a $6.3 million increase in the costs related to the provisioning of our platform services products and an increase of $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 July 31, 2026, compared to 77.7% for the three months ended July 31, 2025, primarily due to improved efficiencies in delivering our platform at scale.

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

Operating Expenses

Sales and Marketing Expense

Sales and marketing expense increased by $7.4 million, or 11%, for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. The increase in sales and marketing expense was primarily driven by an increase of $5.8 million in personnel-related costs, which included an increase of $3.1 million driven by headcount growth, $1.8 million in sales commissions, and $1.0 million in stock-based compensation expense. There was an additional increase of $1.0 million in marketing and advertising costs.

Research and Development Expense

Research and development expense increased by $27.6 million, or 38%, for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. The increase in research and development expense was primarily driven by an increase of $21.2 million in personnel-related 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-level personnel to lead and support the engineering function as we continue to scale our team. There was an additional increase of $3.7 million in technology spend as a result of our continued investment in and leverage of AI.

General and Administrative Expense

General and administrative expense decreased by $4.5 million, or 7%, for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. The decrease in general and administrative expense was primarily driven by a decrease of $4.0 million in personnel-related costs, resulting from lower stock-based compensation expense associated with award forfeitures from employee terminations.

Other Income, Net

Other income, net, was $4.0 million for the three months ended July 31, 2026, compared to other income, net, of $2.9 million for the three months ended July 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 $0.9 million decrease in interest income.

Provision for Income Taxes

Our provision for income taxes increased by $1.0 million for the three months ended July 31, 2026, compared to the three months ended July 31, 2025. The change is primarily driven by the variability in the jurisdictional mix of our income (loss) before income taxes, as well as the impacts of our U.S. valuation allowance for the three months ended July 31, 2026.

Comparison of the Six Months Ended July 31, 2026 and 2025

Revenue

Platform revenue increased by $104.4 million, or 24%, for the six months ended July 31, 2026, compared to the six months ended July 31, 2025. This increase was primarily driven by subscription revenue, which increased by $76.9 million, or 23%, for the six months ended July 31, 2026, compared to the six months ended July 31, 2025. In addition, revenue from our usage-based products increased by $27.4 million, or 27%, for the six months ended July 31, 2026, compared to the six months ended July 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 decreased by $0.6 million, or 3%, for the six months ended July 31, 2026, compared to the six months ended July 31, 2025. This decrease was primarily driven by a lower volume of billable services performed.

Cost of Revenue

Platform cost of revenue increased by $14.0 million, or 14%, for the six months ended July 31, 2026, compared to the six months ended July 31, 2025. This increase was primarily due to a $9.2 million increase in the costs related to the provisioning of our platform services products and an increase of $3.5 million in personnel-related costs, driven by headcount growth and salary increases. Platform gross margin increased to 78.7% for the six months ended July 31, 2026, compared to 76.8% for the six months ended July 31, 2025 primarily due to improved efficiencies in delivering our platform at scale.

Professional services and other cost of revenue increased by $6.6 million, or 18%, for the six months ended July 31, 2026, compared to the six months ended July 31, 2025. The increase was primarily due to an increase of $6.4 million in personnel-related costs driven by headcount growth and annual salary increases, and $1.4 million in stock-based compensation expense.

Operating Expenses

Sales and Marketing Expense

Sales and marketing expense increased by $11.3 million, or 8%, for the six months ended July 31, 2026, compared to the six months ended July 31, 2025. The increase in sales and marketing expense was primarily driven by an increase of $11.0 million in personnel-related costs, which included an increase of $6.4 million driven by headcount growth and annual salary increases, $2.4 million in sales commissions, and $2.2 million in stock-based compensation expense.

Research and Development Expense

Research and development expense increased by $46.5 million, or 33%, for the six months ended July 31, 2026, compared to the six months ended July 31, 2025. The increase in research and development expense was primarily driven by an increase of $37.9 million in personnel-related costs due to annual salary increases and headcount growth, including hiring of senior level personnel to support the engineering function as we continue to scale our team. The increase in personnel-related costs also includes a $20.4 million increase in stock-based compensation expense associated with the increased headcount. There was an additional increase of $6.2 million in technology spend as a result of our continued investment in and leverage of AI.

General and Administrative Expense

General and administrative expense decreased by $5.6 million, or 5%, for the six months ended July 31, 2026, compared to the six months ended July 31, 2025. The decrease in general and administrative expense was primarily driven by a decrease of $3.0 million in personnel-related costs resulting from lower stock-based compensation expense associated with award forfeitures resulting from employee terminations. There was also a decrease of $2.9 million in impairment losses on operating lease assets and related property and equipment for office spaces that we ceased to use in fiscal 2025.

Other Income, Net

Other income, net, was $7.9 million for the six months ended July 31, 2026, compared to other income, net, of $6.3 million for the six months ended July 31, 2025. The increase was primarily due to a $3.7 million decline in interest expense resulting from the repayment, in full, of our term loan in fiscal 2026, partially offset by a $2.1 million decrease in interest income.

Provision for Income Taxes

Our provision for income taxes increased by $1.7 million for the six months ended July 31, 2026, compared to the six months ended July 31, 2025. The change is primarily driven by the variability in the jurisdictional mix of our income (loss) before income taxes, as well as the impacts of our U.S. valuation allowance for the six months ended July 31, 2026.

Non-GAAP Financial Measures

In 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 from operations, non-GAAP operating margin, and non-GAAP net income are useful in evaluating our operating performance.

For the reasons set forth below, we believe that excluding the following items provides information that is helpful in understanding our results of operations, evaluating our future prospects, comparing our financial results across accounting periods, and comparing our financial results to our peers, many of which provide similar non-GAAP financial measures.

These measures, however, have certain limitations in that they reflect the exercise of judgment by our management about which expenses are excluded or included and do not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, our financial results determined in accordance with GAAP. We caution investors that amounts presented in accordance with our definition of non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP income from operations, non-GAAP operating margin, and non-GAAP net income may not be comparable to similar measures disclosed by other companies because not all companies and analysts calculate these non-GAAP financial measures in the same manner.

Non-GAAP Gross Profit and Non-GAAP Gross Margin

We define non-GAAP gross profit and non-GAAP gross margin as GAAP gross profit and GAAP gross margin, respectively, excluding stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, and loss on operating lease assets. Total non-GAAP gross margin represents total non-GAAP gross profit as a percentage of total revenue. Non-GAAP platform gross margin represents non-GAAP platform gross profit as a percentage of platform revenue and non-GAAP professional services and other gross margin represents non-GAAP professional services and other gross profit as a percentage of professional services and other revenue.

The following table reflects the reconciliation of GAAP gross profit to non-GAAP gross profit and GAAP gross margin to non-GAAP gross margin for the periods presented:

* Totals may not foot due to rounding.

* Totals may not foot due to rounding.

Non-GAAP Sales and Marketing Expense

We define non-GAAP sales and marketing expense as GAAP sales and marketing expense excluding stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, and loss on operating lease assets.

The following table reflects the reconciliation of GAAP sales and marketing expense to non-GAAP sales and marketing expense for the periods presented:

Non-GAAP Research and Development Expense

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.

The following table reflects the reconciliation of GAAP research and development expense to non-GAAP research and development expense for the periods presented:

Non-GAAP General and Administrative Expense

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.

The following table reflects the reconciliation of GAAP general and administrative expense to non-GAAP general and administrative expense for the periods presented:

Non-GAAP Income from Operations and Non-GAAP Operating Margin

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.

The following table reflects the reconciliation of GAAP loss from operations to non-GAAP income from operations and GAAP operating margin to non-GAAP operating margin for the periods presented:

* Totals may not foot due to rounding.

Non-GAAP Net Income (Loss)

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.

(1) Effective February 1, 2026, we adopted a fixed long-term projected non-GAAP tax rate of 18%, which reflects currently available information as well as other factors and assumptions that may change over time.

Free Cash Flow

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.

Liquidity and Capital Resources

As of July 31, 2026, we had cash and cash equivalents of $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.

Our primary cash needs are for personnel-related expenses, costs related to the provisioning of our platform services, and sales and marketing expenses. The first quarter of our fiscal year is typically the largest operating cash outflow quarter due to the payout of our annual bonuses.

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 the next 12 months from the date of this Quarterly 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.

Credit Agreement

In January 2023, we entered into a secured credit agreement (the "Original Credit Agreement") with Wells Fargo Bank N.A., as administrative agent and collateral agent, and certain lenders. In September 2024, we amended the Original Credit Agreement (the "First Amendment") to, among other things, convert our existing term loan to a new term loan balance and a revolving credit facility. On

January 30, 2026, we entered into a second amendment (the "Second Amendment") to the Original Credit Agreement (as amended by the First Amendment and the Second Amendment, the "Amended Credit Agreement") that increased the total borrowing capacity of the revolving credit facility made available under the Amended Credit Agreement from $140.0 million to $250.0 million and extended the term of the Amended Credit Agreement through January 30, 2031.

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 July 31, 2026, no loans were outstanding under the Amended Credit Agreement.

Cash Flows

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

Operating Activities

Net cash provided by operating activities was $56.4 million for the six months ended July 31, 2026. This primarily related to our non-cash charges of $171.0 million, adjusted for our net loss of $47.7 million and net cash outflows of $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-related expenses of $29.3 million as annual corporate bonuses are paid in the first fiscal quarter, an increase of $17.1 million in accounts receivable, an increase of $10.5 million in contract assets, a decrease of lease liabilities of $7.5 million, an increase of $6.8 million in deferred contract costs, and an increase in prepaid expenses and other current assets of $4.2 million. These were partially offset by an increase of $8.3 million in other liabilities.

Net cash provided by operating activities was $25.8 million for the six months ended July 31, 2025. This primarily related to our net loss of $78.6 million and net cash outflows of $53.5 million from changes in our operating assets and liabilities. These were partially offset by non-cash charges of $157.8 million. The primary drivers of the changes in our operating assets and liabilities related to a decrease in accrued personnel-related expenses of $21.7 million, an increase in deferred contract costs and contract assets of $13.7 million, an increase of $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 $6.2 million. These were partially offset by an increase in other liabilities of $5.2 million and an increase of $2.9 million in accounts payable and other accrued expenses.

Investing Activities

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

Net cash used in investing activities was $13.8 million for the six months ended July 31, 2025. This consisted of cash outflows of $11.4 million for the investments in capitalized internal-use software and $2.4 million for the purchase of property and equipment.

Financing Activities

Net cash provided by financing activities was $9.7 million for the six months ended July 31, 2026. This consisted entirely of the proceeds from the exercise of stock options.

Net cash provided by financing activities was $17.3 million for the six months ended July 31, 2025. This consisted primarily of proceeds from the exercise of stock options of $18.4 million. This was partially offset by payments related to IPO costs of $0.6 million and the repayment of debt of $0.5 million.

Recently Adopted Accounting Pronouncements

Refer to Note 2 to our condensed consolidated financial statements included elsewhere in this Quarterly Report for recently adopted accounting pronouncements and new accounting pronouncements not yet adopted as of the date of this report.

Critical Accounting Policies and Estimates

Management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements and the related notes thereto, which have been prepared in accordance with GAAP. In preparing the condensed financial statements, we apply accounting policies and estimates that affect the reported amounts and related disclosures. Inherent in such policies are certain key assumptions and estimates made by management, which we believe best reflect our underlying business and economic conditions. Our estimates are based on historical experience and various other factors and assumptions that we believe are reasonable under the circumstances. We regularly re-evaluate our estimates used in the preparation of the consolidated financial statements based on our latest assessment of the current and projected business and economic environment. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and actual results could differ materially from the amounts reported based on these estimates. There have been no material changes to our critical accounting policies and estimates as described in our Annual Report on Form 10-K for the fiscal year 2026.