New ServiceTitan Research: 63% of Residential Services Businesses Are Experiencing Consistent Growth

Rhea-AI Summary

ServiceTitan (TTAN) has released its second annual Residential Services Report, revealing that 63% of residential service contractors are experiencing growth. The study, covering over 1,000 contractors across HVAC, electrical, plumbing, and roofing sectors, shows most businesses report revenue between $1-$19 million.

Key findings indicate that thriving businesses are focusing on modernizing homeowner experience, technology investment, and equipment expansion. The report highlights that 54% of successful contractors offer three-tiered estimates (Good, Better, Best), while struggling businesses provide such options in less than 10% of jobs.

Communication trends show 64% of contractors rely on phone calls, with thriving businesses also utilizing online booking (10%) and text messaging (7%). Notable revenue generation comes from estimate follow-ups, with 47% of contractors earning 11-15% of income through this practice. Main challenges include labor costs, skilled worker shortage, and rising material prices.

Positive

• 63% of residential service contractors are experiencing growth
• Most businesses report revenue between $1-$19 million
• No ServiceTitan users reported their businesses as struggling
• 47% of larger contractors ($10M+) generate 11-15% additional revenue from estimate follow-ups

Negative

• 19% of businesses are merely surviving
• 18% of businesses are struggling
• Labor and overhead costs increasing
• Ongoing shortage of skilled workers
• Rising material prices impacting operations

Thriving Businesses Are Focusing on Modernizing the Homeowner Experience, Investing in Additional Technology, and Purchasing More Tools & Trucks to Drive Growth

LOS ANGELES, March 25, 2025 (GLOBE NEWSWIRE) -- ServiceTitan (Nasdaq: TTAN), the software platform that powers the trades, today released its second annual Residential Services Report, providing valuable insights into the current state of the industry. The report, based on a study of over 1,000 residential service contractors across the US in HVAC, electrical, plumbing, roofing, and other sectors, indicates that the majority of the industry (63%) is thriving or experiencing consistent growth and is positioned for continued success. ServiceTitan users are more likely to report their businesses thriving compared to those using competing platforms, with, notably, no ServiceTitan users reporting their businesses as struggling.

"Residential contractors benefit from an exceptionally resilient market. When critical home components break down, they often become a top priority in household budgets," said Chris Petros, General Manager of Residential Construction at ServiceTitan. "That said, great business leaders excel in two key areas during challenging times. First, they refine their sales funnel, ensuring marketing spend is optimized, call centers maintain strong performance, and individual team members operate at peak efficiency. Additionally, they leverage technology to implement business practice changes quickly and at scale. For example, if a company decides to slightly reduce prices and offer financing, those adjustments can be implemented and reflected in the field within minutes."

Despite challenges, residential service businesses stay profitable
Despite an evolving economic landscape, the industry shows vigor, with a majority of businesses reporting revenue between $1-$19 million. Only 19% of the respondents revealed they were “surviving,” and 18% reported their business was “struggling.” With this in mind, residential contractors across all surveyed businesses named growing revenue and retaining existing customers as their top two business goals for 2025, and acquiring new customers and improving their cash flow evenly matched for their third priority.

Comparatively, thriving contractors are setting themselves apart from the competition by focusing on modernizing the homeowner experience, investing in additional technology, and purchasing more tools and trucks. Labor and overhead costs, the shortage of skilled workers, and rising material prices are the largest risks to meeting goals in 2025.

Customers prefer a range of choices
Homeowners appreciate choices and thoughtful guidance that puts them in the driver's seat. Over half (54%) of thriving contractors offer three estimates to at least half of their jobs: Good, Better, and Best. These options weigh different factors, including price, so customers can make more informed decisions for their home and wallet. Unlike thriving organizations, struggling businesses provide three estimates on less than 10% of jobs. This suggests that struggling businesses could benefit from adopting a multi-choice approach to proposals, and they might optimize their process to improve customer satisfaction and drive new business opportunities.

Businesses prioritize digital channels and follow-ups to boost revenue
To reach and engage with customers and prospects, 64% of contractors still rely on phone calls as the dominant form of communication. Still, in a year where revenue growth is paramount, thriving residential service businesses prioritize online booking forms (10%) and text messaging (7%). Creating seamless interactions with prompt response times can influence a homeowner's choice to do business and build rapport.

Another tactic that residential services businesses are utilizing to generate revenue is actively following up on unsold estimates. Nearly half (47%) of contractors with annual revenue of $10 million or more said that following up on estimates results in 11-15% of their income. If they follow up on unsold estimates, 39% of thriving businesses generate 1-15% of additional revenue, while 42% of surviving businesses and 23% of struggling businesses generate 1-15% of additional revenue. Attentive follow-up shows the customer from the beginning that they are a priority.

Review the full findings and key takeaways from ServiceTitan’s Residential Services Report here.

About the research
This research was conducted by Thrive Analytics on behalf of ServiceTitan, polling more than 1,000 residential contractors representing a variety of geographical regions, business growth stages, and revenue levels. This research is for informational purposes only, and ServiceTitan provides no assurances (express or implied) regarding the accuracy of the survey data.

About ServiceTitan
ServiceTitan 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.

© 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).

Press Contact
Sarah Cantu
ServiceTitan, Inc.
Press@servicetitan.com

FAQ

What percentage of residential service businesses are growing according to ServiceTitan's (TTAN) 2025 report?

According to ServiceTitan's report, 63% of residential service businesses are thriving or experiencing consistent growth.

How much revenue do most residential service contractors generate according to TTAN's study?

Most residential service businesses report revenue between $1-$19 million.

What percentage of thriving contractors offer three-tiered estimates according to ServiceTitan's 2025 report?

54% of thriving contractors offer three estimates (Good, Better, Best) on at least half of their jobs.

How much additional revenue do top contractors generate from following up on unsold estimates?

47% of contractors with annual revenue of $10 million or more generate 11-15% of their income from following up on estimates.

What are the main business risks identified in TTAN's 2025 residential services report?

The main risks are labor and overhead costs, shortage of skilled workers, and rising material prices.