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Majority of Contractors Report Stable or Rising Revenue in ServiceTitan's 2025 Commercial Service Market Survey

1. 66% of commercial contractors reported stable or growing revenues in 2025. 2. Labor shortages and rising costs are significant challenges for the industry. 3. 73% of contractors expect increasing material costs, impacting profitability. 4. AI and CRM adoption are vital for contractor growth and customer retention. 5. Preventive maintenance agreements are creating additional revenue streams for contractors.

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FAQ

Why Bullish?

The positive revenue trends and growing optimism among contractors may indicate robust performance for TTAN. Companies with stable revenue visibility often see a favorable stock response, especially if they are positioned well in a resilient market.

How important is it?

The article emphasizes current challenges and positive trends affecting TTAN's core market. Given the majority's stable revenue and the role of technology in enhancing competitiveness, these insights are highly relevant.

Why Short Term?

Immediate adoption of technology solutions and increasing revenue from recurring clients reflect short-term growth potential. Additionally, any shifts in operational strategies may compel market reactions sooner rather than later.

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Commercial Business Continue to Succeed Despite Persistent Labor Shortages and Rising Costs July 14, 2025 09:00 ET  | Source: ServiceTitan LOS ANGELES, July 14, 2025 (GLOBE NEWSWIRE) -- ServiceTitan (Nasdaq: TTAN), the software platform that powers the trades, today released its third annual Commercial Service Market Report, which surveyed over 1,000 commercial owners and executives across the trades. The report reveals that 66% of commercial contractors said they entered 2025 with stable or growing revenues, even as they have faced persistent headwinds like a skilled labor shortage (52%), rising labor and overhead costs (45%), and longer material lead times (31%). More than half (53%) expressed optimism about the market. “At the heart of every commercial project is a skilled workforce,” said Alex Kablanian, Senior Vice President and GM of Commercial & Construction at ServiceTitan. “Rising material costs and product shortages are already tough enough, but the commercial industry is also feeling the squeeze from ongoing labor shortages. That’s been made worse by post-pandemic shifts, tighter regulations, and mounting compliance pressures. Contractors have a lot to juggle navigating these challenges, managing risk, and protecting their bottom line. Ultimately, it takes a combination of smart technology adoption and strong customer relationships to stay competitive and drive consistent growth.” Despite positive revenue trends, more than one-third of commercial contractors remain focused on increasing net profit margins (39%), optimizing existing processes (39%), followed by growing recurring revenue (37%) and retaining existing customers (33%), given the recent rise in costs. While many have an optimistic outlook, contractors are likely to still face challenges ahead. In addition to the skilled labor shortage, rising labor and overhead costs, and increasing material lead times, operational gaps in the field, like the lack of fast access to warranty and service agreement data (70%), issues with parts availability (57%), and struggles to retrieve service and repair history onsite (55%), could further limit contractors’ ability to meet their goals. According to the report, nearly three-quarters (73%) of contractors anticipate a rise in material costs. Longer material lead times also pose a significant risk (31%), with over half (54%) of contractors expecting an increase of 2 weeks or more. Equipment shows similar trends, with 56% expecting an increase in lead times. Of those surveyed, 59% of contractors are concerned these rising costs will significantly impact profitability. Smart AR and collections strategies safeguard cash flow Technology plays a pivotal role in safeguarding profits and reducing operational risk—especially by helping contractors issue invoices quickly. While they are swift with billing, averaging two days to send invoices, the real pressure point lies in the collection process: the average time to get paid is 28 days. The findings reveal that ACH (37%), checks (30%), and credit cards (14%) are the top methods contractors are utilizing to collect payments. The findings underscore a critical need for meticulous AR management and diversified payment collection strategies to protect cash flow. PMAs and strategic CRM adoption fuel growth Driving sales and nurturing client relationships are also critical to revenue growth. For commercial contractors, the findings indicate that repeat customers (65%) and word-of-mouth referrals (60%) remain the primary drivers of business volume. To effectively manage and scale these vital connections, 70% of commercial service contractors are already leveraging customer relationship management (CRM) systems, with nearly half of the remaining contractors (47%) considering implementing a CRM. Contractors ranked increasing customer retention (58%), lead conversions (58%), and close rate (57%) nearly equally as their top CRM goals. Current trends and market sentiment indicate that preventative maintenance agreements (PMAs) are effective tools for boosting recurring revenue. A significant 63% of contractors report that over half of their customer base is secured through PMAs. For customers on a PMA, 75% of contractors report they’re getting over 20% of additional revenue from pull-through work. Emerging AI and digital customer portals unlock value for customers As commercial service contractors invest in technology, artificial intelligence is transitioning from a conceptual tool to a tangible asset. A large segment of contractors (39%) recognize its moderate or emerging potential, indicating a growing readiness to adopt AI capabilities. While commercial service contractors are advancing internally with technology, an opportunity exists to enhance the external customer experience through digital platforms. The report indicates that almost half (44%) consider it extremely important to improve the customer experience through online portals. That said, 75% of contractors offer an online customer portal, but only a small fraction (26%) utilize it for direct communication. For customers, this presents an opportunity to embrace greater digitization for a more efficient, professional, and engaging journey. For businesses, it’s an opportunity to continue modernizing their offerings and better meet customer needs. To review the full findings and key takeaways, download ServiceTitan’s Commercial Service Market Report here. About the researchThis research was conducted by Thrive Analytics on behalf of ServiceTitan, polling more than 1,000 commercial owners and executives, primarily in mechanical, electrical and plumbing, who primarily perform work on commercial buildings. The survey was conducted from May 5 to May 23, 2025. This research is for informational purposes only and ServiceTitan provides no assurances (express or implied) with respect to the accuracy of the survey data. Forward-looking economic and industry outlooks represent the views of the survey respondents, and may not represent the view of ServiceTitan or its affiliates. About ServiceTitanServiceTitan is the software platform that powers trades businesses. The company’s cloud-based, end-to-end solution gives contractors the tools they need to run and grow their business, manage their back office, and provide a stellar customer experience. By bringing an integrated SaaS platform to an industry historically underserved by technology, ServiceTitan is equipping tradespeople with the technology they need to keep the world running. Press ContactMax WertheimerServiceTitan, Inc.Press@servicetitan.com © 2025 ServiceTitan. All rights reserved. ServiceTitan, the ServiceTitan logo, and all ServiceTitan product and service names mentioned herein are registered trademarks or unregistered trademarks of ServiceTitan, Inc. in the United States and other countries. Other brand names and marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s).

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