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Image source: The Motley Fool. Tuesday, Aug. 25, 2026 at 4:30 p.m. ET Vice President, Investor Relations - Harrison Masters Chief Executive Officer - Sean Desmond Chief Financial Officer - Greg Orenstein Operator: Thank you for standing by, and welcome to nCino's Second Quarter Fiscal Year 2027 Financial Results Conference Call. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Harrison Masters. Vice President, Investor Relations. Please go ahead, sir. Harrison Masters: Good afternoon, and welcome to nCino's Second Quarter Fiscal 2027 Earnings Call. With me on today's call are Sean Desmond, nCino's Chief Executive Officer; and Greg Orenstein, nCino's Chief Financial Officer. During the course of this conference call, we will make forward-looking statements regarding trends, strategies and the anticipated performance of our business. These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date, and are subject to various risks and uncertainties described in our SEC filings and other publicly available documents, the financial services industry and global economic conditions. nCino disclaims any obligation to update or revise any forward-looking statements. Further, on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the Form 8-K furnished with the SEC just before this call as well as the earnings presentation on our Investor Relations website at investor.ncino.com. With that, I will turn the call over to Sean. Sean Desmond: Thank you, Harrison, and welcome to nCino's Second Quarter Fiscal 2027 Earnings Call. I'm very proud of the team's consistent focus and execution this past quarter. We continue to deliver on our commitments, once again outperforming all financial guidance metrics and find ourselves very well positioned for the second half of this fiscal year and beyond. Over the last several months, my time on the road with customers, prospects and partners has continued to validate our strategy. Each interaction, whether in Charlotte, Oklahoma City, New York, Tokyo, Amsterdam or Jackson, Mississippi, has reinforced how uniquely positioned nCino is to be the trusted global leader in AI-powered banking. With the rapid evolution in technology and market dynamics, financial institutions of all sizes the world over are looking for a trusted partner rather than more vendors. And nCino is increasingly recognized as that partner. We are the partner the market can count on to innovate and bring the right technology to solve banking-specific operational, risk management and regulatory compliance challenges. Our solutions for lending, onboarding, account opening and portfolio monitoring run on a unified AI-powered platform, allowing customers to consolidate and streamline operations with one vendor and gain efficiencies other technology companies simply can't match. During the second quarter, we signed multiyear renewals with 4 of our 20 largest U.S. enterprise customers by ACV, representing over $900 billion in assets. All 4 renewed ahead of schedule with an average ACV increase of more than 10% because they wanted access to nCino's rapidly expanding suite of AI tools and functionality. These customers are some of the largest financial institutions in the country and have the financial and technical resources to build internally if they chose to, but they're proactively doubling down on nCino because we've spent nearly 15 years building the trusted global system of record for critical banking processes. We've done the heavy lifting of building the data foundation, workflows, governance, security infrastructure and regulatory compliance capabilities of the nCino Platform and embedded AI and intelligence throughout. That work is difficult, risky, costly, distracting and time consuming and exactly why so many internal build initiatives at some of the world's largest financial institutions have historically failed. This is also why so many of our customers are telling us they have no desire to attempt to rebuild an incredibly complex Tier 1 mission-critical enterprise application themselves, simply because AI has made coding easy. nCino has the product functionality, data, workflow, context, customer relationships and regulatory knowledge and credibility to turn AI into accountable actions and to drive significantly better outcomes for customers. We believe those advantages have become even more evident to the market since our last earnings call as more customers use our banking adviser capabilities in production and realize meaningful outcomes for their organizations. nCino enables financial institutions to drive the specific banking outcomes they want backed by 15 years of data, governance, regulatory tracking, compliance and the domain-specific context they require. As of the end of the second quarter, 12 of our top 20 U.S. enterprise customers by ACV have already transitioned to our new pricing model under multiyear contract extensions and approximately 48% of our total ACV is now on platform pricing, up from just 40% last quarter. New customer wins like Hachijuni Nagano Bank in Japan, who selected nCino for consumer lending, and a growth-focused development finance institution in Germany that selected nCino for commercial lending are the latest proof points that our unified platform and AI capabilities are resonating on a global basis. nCino's deep banking domain expertise and market-leading product innovation and AI capabilities were clear differentiators against local market competitors, horizontal workflow vendors and potential internal build options in these recent international sales cycles. These attributes have also been clear differentiators for other customers around the world that are reinforcing their commitment to the nCino Platform in the form of expanded and renewed commitments for the next phase of technology and operational transformation. The breadth and depth of our unique platform gives us the confidence to land with any solution and expand across our full suite as our customers' needs grow. This is especially true in the community and regional bank and credit union markets, where centralized decision-making frequently allows us to sell multiple solutions for the entire platform to a single buyer. The second quarter was no exception in demonstrating this point. A regional bank with over $15 billion in assets expanded its adoption of nCino from commercial lending and treasury management to now include consumer lending. A Seattle-based credit union and portfolio analytics customer since 2014 expanded their commitment to the nCino platform in a major way by adding commercial and small business lending plus commercial account opening. The community bank in the Northeast expanded their nCino adoption from commercial and consumer lending and account opening to also include mortgage. And a credit union with almost $5 billion in assets became a 7-figure ACV customer through an expansion of their existing mortgage deployment to support their strategic growth objectives. Despite these mortgage wins with depository financial institutions, the higher-for-longer mortgage rate environment is pressuring the independent mortgage bank market and driving incremental M&A. While the rate environment remains a headwind to the U.S. mortgage industry, we continue to focus on expanding our market share by adding logos with a market-leading AI-powered experience. To that end, we were pleased to welcome back an IMB customer that left in August 2024 for a less expensive solution. Reliability issues and a cumbersome borrower experience with that solution along with pushback from their own sales team about losing potential borrowers brought them back to nCino. Customers and prospects recognize that nCino has been investing in AI, rapidly evolving and advancing our business model, and leading the industry by aggressively incorporating intelligent and AI capabilities into our solutions with measurable results. As an example, 1 of our U.S. enterprise customers estimates they can save 160,000 hours annually by utilizing our Locate and File functionality, which is just 1 of our banking advisory capabilities. When extrapolated by about $35 per hour to approximate median loan officer compensation according to the Bureau of Labor Statistics, that yields annual savings of over $5.5 million. Again, that level of savings is from using just one banking adviser capability. Proof points like this are motivating customers to transition our platform pricing model to gain access to nCino's agentic solutions and other AI initiatives. At the end of the second quarter, over 230 customers have already purchased AI intelligence units. We are no longer trying to convince prospective customers that we can lead the transition to agentic-AI-powered banking. We're doing it. And the energy and momentum we are seeing in customer and prospect conversations around the globe reflects that conviction. I mentioned during our first quarter earnings call that some customers were beginning to reach the limits of their initial intelligence unit bundles. We have recently begun monetizing the sale of additional intelligence units as clients come back for more, which is really exciting to see and a strong signal of engagement with our banking adviser capabilities. Our focus for the foreseeable future will remain on driving long-term sustainable AI adoption over near-term subscription revenues growth, so we do not expect this early additional monetization to materially impact our financial results in fiscal '27. However, the adoption trends and consumption trajectory we're seeing give us increasing confidence that intelligence consumption through the adoption of our AI capabilities will be a material driver of subscription revenues growth for years to come. You may recall us referencing Continuous Credit Monitoring, or CCM for short, which is one of our banking adviser capabilities currently driving a meaningful amount of intelligence unit consumption. CCM is a great example of how nCino leverages LLMs where they excel and add value, in this case, powering a natural language chat experience paired with our own proprietary predictive models, algorithms and data. Rather than having credit teams manually review a commercial portfolio on a quarterly, semiannual or annual basis, nCino's Continuous Credit Monitoring can assess more than 40 credit and operational indicators on a daily basis and can identify the loans that warrant attention, create the necessary documentation to review and help guide the next appropriate actions. This functionality gives relationship managers and credit teams the ability to focus their time on issues requiring careful judgment while giving senior leaders a current portfolio level view of risk and the ability to drill into underlying exposures in detail. What's important to understand here is that this is not simply an LLM layered onto a bank or credit union's data. Banking requires reliable, traceable, auditable and governed outcomes. While we use LLMs to summarize and understand intent across multiple data sources, the core of our Continuous Credit Monitoring's functionality is guided by nCino's internally developed, purpose-built, deterministic models and algorithms. We use these to consistently apply the same defined rules because the financial institution must be able to reproduce, explain and defend how every single credit decision was made and how every process was executed. We believe the Continuous Credit Monitoring functionality will be a meaningful medium-term driver of intelligence unit consumption. That's because this isn't just a simple chat interaction. It is performing ongoing, highly complex multistep processes across critical banking activities. This is software that is actually doing the work of a bank or credit union employee, not just helping that employee do the work. The combination of our unique operational data, deep banking expertise, and tested governance and security infrastructure is what enables nCino to deliver this kind of outcome to our customers in a way that simply cannot be replicated by adding nondeterministic LLM on top of core banking data. I have yet to hear a C-level executive at a financial institution express a desire to automate their business processes on public cloud data. Conversely, they are as excited about offerings like CCM as we are, and I look forward to updating you on its progress over the coming quarters. Based on the conversations we are having with customers and prospects, we believe financial institutions of all sizes around the world are gaining a better and more clear understanding and appreciation of the uniqueness, value and differentiation nCino's AI technology provides, which we believe has been a significant driver of the sales momentum we have seen over the past year and continue to see in our sales pipeline today. The pace of product innovation nCino is realizing today would not have been possible a few years ago. Through our own initiatives and our internal teams' use of AI, we are seeing tighter alignment across product development, engineering and professional services, allowing us to learn from FDE engagements and customer deployments and incorporate those lessons back into the platform more quickly. It's also great to see that we are attracting extremely strong technical and banking talent that wants to join nCino to help define, build and deploy the next generation of financial services technology. Attracting and retaining talent is a strategic and stated top priority for the company. We remain laser focused on execution and continue to make strong progress against the strategy and growth levers we've highlighted over the past 1.5 years. We continue to focus on what we can control and are energized by the accelerated subscription revenues growth we are seeing in the business outside of U.S. mortgage. In summary, our business is strong and continues to gain momentum. We continue to see customers up and down the asset size spectrum, renew early and expand their use of our AI technology. And our sales pipelines are healthy and diversified across segments, solutions and geographies. With that, I'll turn the call over to Greg. Gregory D. Orenstein: Thank you, Sean, and thanks, everyone, for joining us this afternoon to review our second quarter fiscal 2027 financial results. Please note that all numbers referenced in my remarks are on a non-GAAP basis unless otherwise stated. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the Form 8-K furnished with the SEC just before this call. We are again pleased with our financial results. Total revenues for the second quarter of fiscal '27 were $161 million, an increase of 8% year-over-year. Subscription revenues for the second quarter were $143.5 million, up 10% year-over-year and also 10% in constant currency. U.S. mortgage subscription revenues were $20.6 million in the second quarter, down 1% year-over-year, contributing $100,000 of overperformance in the quarter against our guidance as noted on Slide 14 of our earnings presentation. Excluding U.S. mortgage, subscription revenues in the second quarter increased 12% year-over-year and also 12% in constant currency, reflecting strong sales execution, which helped deliver approximately $1.3 million of upside to our subscription revenues guidance for the quarter. Professional services revenues were $17.5 million in the quarter, down 3% year-over-year. Professional services gross profit margin was 3% in the second quarter, up 600 basis points over negative 3% in the second quarter of fiscal '26. We continue to prioritize improving the profitability of our professional services practice over growth in professional services revenues. Non-U.S. total revenues in the second quarter were $36.4 million, up 9% year-over-year and also 9% in constant currency. Non-U.S. subscription revenues were $30.9 million, up 13% year-over-year and also 13% in constant currency. Non-U.S. subscription revenues were negatively impacted by a slight FX headwind of approximately $200,000 in the second quarter. Non-GAAP operating income in the second quarter was $40.8 million or 25% of total revenues, an increase of 36% year-over-year. As noted on Slide 14 of our earnings presentation, of the $3.3 million in non-GAAP operating income overperformance in the second quarter, approximately $900,000 was from incremental gross profit derived from subscription revenues overperformance, and the remaining $2.4 million was driven by disciplined expense management across the organization with teams executing effectively against plan. As expected, our annual customer conference hosted in May drove the sequential increase in second quarter sales and marketing expenses. Free cash flow was $34 million in the second quarter, up 170% year-over-year. Turning to an update on our share repurchase programs. In the second quarter, we repurchased approximately 4.2 million shares of the company's outstanding common stock in open market purchases at an average price of $15.41 per share for total consideration of approximately $65 million. Additionally, in the second quarter, we finalized the accelerated share repurchase program we announced on March 31, 2026. Under that program, we repurchased approximately 6 million shares of our outstanding common stock at an average price of $16.57 per share for a total consideration of $100 million. Since April 2025, the company has repurchased approximately 15.8 million shares of our outstanding common stock at an average price of $18.99 per share for total consideration of $300 million. Having effectively exhausted all prior repurchase authorizations, our Board of Directors has authorized another $100 million share repurchase program. We continue to view opportunistic repurchases of our common stock as a compelling use of capital as available free cash flow permits, in light of the momentum we see in the business and the sizable global opportunity we have in front of us. Turning to guidance. For the third quarter of fiscal '27, we expect total revenues of $161.25 million to $163.25 million, with subscription revenues of $143.25 million to $145.25 million, an increase of 7% and 8%, respectively, at the midpoint of the ranges. Excluding U.S. mortgage, our third quarter guidance assumes subscription revenues growth of 11% at the midpoint of the range. Non-GAAP operating income in the third quarter of fiscal '27 is expected to be approximately $42 million to $44 million, an increase of approximately 8% year-over-year at the midpoint of the range. For fiscal year '27, we now expect total revenues of $644 million to $647 million, with subscription revenues of $573.5 million to $576.5 million, an increase of 9% and 10%, respectively, at the midpoint of the ranges. Excluding U.S. mortgage, our updated full year guidance assumes subscription revenues growth of 12% at the midpoint of the range. As noted on Slide 15 of our earnings presentation, we are extrapolating the second quarter execution-based overperformance and subscription revenues of approximately $1.3 million to both the third and fourth quarters. This is offset in part by an adjustment to our U.S. mortgage outlook, which we believe is prudent to do at this time to account for additional IMB churn resulting from mortgage rates remaining higher for longer. We are now forecasting U.S. mortgage subscription revenues of approximately $20 million in the third quarter and approximately $18.5 million in the fourth quarter, the sequential quarterly variance reflecting normal fourth quarter market seasonality. This update represents a reduction in our prior U.S. mortgage subscription revenues forecast of approximately $700,000 in the third quarter and approximately $1.2 million in the fourth quarter. Please note that our overall company churn expectations for fiscal '27 remain unchanged, but our churn forecast now includes a slightly higher mix of IMB churn, offset by less churn across the rest of the business, with earlier timing assumed that negatively impacts subscription revenues in the second half of the year. We continue to expect international subscription revenues to remain accretive to overall subscription revenues growth in each of the third and fourth quarters of fiscal '27, notwithstanding that we now assume FX headwinds of approximately $200,000 in each of the third and fourth quarters. Excluding U.S. mortgage, our full year guidance implies fourth quarter subscription revenues growth of 12% at the midpoint of the range, representing year-over-year growth acceleration of 400 basis points, which we largely attribute to sales momentum emerging from the excitement around our AI strategy and product innovation and continued strong sales execution. We are very proud of the progress we have made reaccelerating subscription revenues growth outside of U.S. mortgage and are excited for the potential to further accelerate total subscription revenues growth in a better mortgage market, as we believe the reaccelerated growth we are achieving this year in the rest of the business is durable. We now expect non-GAAP operating income for fiscal '27 to be $171 million to $174 million, up from our prior range of $166 million to $171 million. Our updated guidance represents an increase in non-GAAP operating income of approximately 33% year-over-year at the midpoint of the range and non-GAAP operating income margin expansion of approximately 500 basis points. We expect to continue delivering non-GAAP operating margin expansion in the ordinary course beyond this fiscal year as the business continues to scale while balancing the opportunity to optimize subscription revenues growth, which remains our focus and priority. We are quite pleased with the progress we have made in the first half of the year and feel really good about the business right now as a result of the AI and product innovation being delivered by our R&D organization, the execution of our sales teams and the demand environment and the sales activity we see reflected in our global sales pipelines. For fiscal '27, we continue to expect net additions to ACV of $60 million to $65 million on a constant currency basis, representing cumulative ACV of $662.5 million to $667.5 million, up 10% over fiscal '26 in the ACV at the midpoint of the range. For full year fiscal '27, we are again raising our free cash flow guidance to now be $137 million to $142 million, up from our prior range of $135 million to $140 million, representing year-over-year growth of 69% at the midpoint of the range. With that, we will open the line for questions. Operator: And our first question for today comes from the line of Saket Kalia from Barclays. Saket Kalia: Okay. Great. Sean, maybe for you. I was wondering if we could dig into the mortgage business just a little bit more. And maybe specifically, I'd love to hit on maybe how your competitive win rates have looked and if there are more opportunities to gain share to maybe help offset some of this market headwind. You had a great example of a win back. I'm curious how you think about sort of win rates and that opportunity for continued market share gains. Sean Desmond: Yes. Thank you, Saket. Appreciate it, the question and where you're coming from. We actually highlighted 2 wins there, 1 in the community bank, 1 in a credit union in the script. And more broadly in the market, while we do see the higher-for-longer rate environment has been a headwind as called out, we think this is a really good business for us. And we think the IMB market is very important, but at the same time, as we talk about these wins in the community bank and credit union landscape, we think continued wins in the core banking sector where there's less volatility and more stability are ready for the taking, both down and potentially upmarket. So we're excited there. It remains adjacent to every conversation as we talk about the power of the platform. In the environment that we operate in, the motions that we run across commercial, consumer and mortgage give us a diversified portfolio and is absolutely accretive to not only our pipeline growth but the first half of year momentum we have, and we're really excited about the second half. Saket Kalia: Got it. Got it. That's super interesting. Greg, maybe for my follow-up for you. You noted the revised outlook for mortgage, which makes a ton of sense given the rate environment that we're in. Can you just recap for us how you're thinking about sort of the non-mortgage part of the business in terms of growth here this year? And maybe just as importantly, what could be the biggest drivers of upside to that non-mortgage part of the business? Does that make sense? Gregory D. Orenstein: It does, Saket. Appreciate the question and your time today. Look, excluding U.S. mortgage, our third quarter guidance assumes subscription revenues growth of 11% at the Q3 midpoint and 12% at the midpoint, it implies for Q4, right, which is an overall growth acceleration year-over-year 400 basis points. And so we did want to make clear in terms of mortgage, which, as you know, is the higher-for-longer market that we're going through. Make sure you guys appreciate that and not have that overshadow the rest of the business, which is performing quite well. In terms of drivers for growth, look, we feel really good about our product portfolio overall. Our flagship commercial product continues to have strong demand across the globe. And ultimately, I'd remind you of the 5 growth initiatives that we laid out last year, which are AI, international credit unions, cross-selling mortgage to banks and credit unions, as Sean just touched upon, as well as onboarding. And so to me, the exciting thing to highlight is that while we feel really good about the progress we're making with each one of those initiatives, it's still early. And the accelerated growth we are driving really is not with those fully contributing as we expect they will be able to next year and beyond. And so we feel like we've planted the seeds for growth. We feel like we've got multiple growth levers to add on to the growth that we're already seeing from a reacceleration standpoint. And we're really excited where we are. We'll continue to control what we can control. And as we talked about in our prepared remarks and as Sean noted, we'll continue to aggressively try to take logos down in the mortgage business, which is what we were successfully able to do. If you go back a couple of years ago in the, I'll call it, more darker days of mortgage, we were able to add a lot of logos and ultimately outpace the churn that we experienced in that, which was, from my perspective, a much more difficult market than it is today, even though we do have headwinds today. Operator: Our next question comes from the line of Alex Sklar from Raymond James. Alexander Sklar: Sean, first one for you on banking adviser and some of the agentics launches. Nearly 50% of the base now on the new platform model. What have you seen on the usage side of things in the last 3 months? You talked about CCM. But any clear-cut skills or use cases where you've been able to replicate the case studies across multiple users -- multiple different customers that you've really been able to arm the sales force to kind of go back to base on? Sean Desmond: Yes. Alex, the first thing that comes to mind is we have more and more customers by the day going into production with banking adviser and our digital partner and agentic capabilities. In fact, year-to-date, more than -- we've more than doubled the customers going into production, which is exciting. And of the core customers that we've named that are on our new pricing model and have adopted our AI capabilities, 1/3 of those are in production today. So all of that trends really well, as you know, in traditional sort of environments where you test in sandbox and then move to production once you gain confidence and then you see measurable outcomes that you can drive to the bottom line of your business and directly to your balance sheet. Those start to get the attention of the executives and C suites that sign the checks in the first place. And that's what we're looking for, right, is to directly correlate those outcomes in production to what we're delivering. And so while, in some cases, it still takes longer than we would like to get to production because we have to go through governance and security reviews and all the things that need to be contemplated in the AI world, we're seeing really good momentum there. So we call out in the script some of our Continuous Credit Monitoring capabilities. We call out in the script Locate and File. If you think about Locate and File, for me, really being the floor, not the ceiling, right? We talked about 160,000 hours annually for 1 particular niche use case in a single workflow. And remember, Alex, we're delivering workflows across all the motions that we run onboarding account opening, loan origination and portfolio monitoring across commercial, consumer and mortgage. So if you extrapolate that Locate and File potential and capability across all the workflows that we have in production environments over time, hopefully, you can tell I'm pretty fired up about that. Gregory D. Orenstein: Yes. And just to add to that, Sean, as we talk about 1/3 of those customers being in production, I think 1 of the things that's really exciting is we've got a nice queue all lined up, right, as we take customers from signing to implementation to get through testing and then ultimately into production. And so we see that queue lined up, and I think that's something that's exciting and bodes well. And to that point, the $160,000 client savings that Sean referenced, right now, they're still in sandbox. We're working with them to get through security, which we will. But that's a great example of just the process that you need to go through with our customer base, which is highly regulated, right, conservative market before they'll actually go into production and start seeing it live, the outcomes that we're able to produce. And so to Sean's point, we are pretty excited about what we see happening right now. Alexander Sklar: Okay. I appreciate that color from both of you there. Greg, maybe a follow-up for you just on the ACV outlook. I think it's clear that your intention is not to update that as the year progresses. But as we sit here today at the halfway point, any change in terms of where you are coverage-wise of that outlook relative to last year? Or how is seasonality shaping up versus expectations? And maybe any change in terms of international composition of that mix versus prior years? Gregory D. Orenstein: Yes. Thanks, Alex. And just to clarify, I said $160,000. I was referring to 160,000 hours that our enterprise customer estimates they'll be able to save with the Locate and File capability. But no, as you heard in my prepared remarks, we feel really good about where we are in the progress in the first half of the year. Pipelines look good. Market demand looks good. And so as we go into the second half of the year, we're pretty energized here. And just to that point, we can note that just last week, we signed what we expect to be our largest deal of the year with an international customer. It's a Q3 deal. So we'll talk about it more on the next call. But certainly this early in the second half of the year, getting that out of the way bodes well. Obviously, we've got 5 months left, so we've got work to do. But again, we're feeling pretty good right now. Operator: And our next question comes from the line of Ryan Tomasello from KBW. Ryan Tomasello: Wanted to ask about the Rule of 50 framework that you provided a few years ago and confirm whether or not you still view that as a North Star for outcomes you're looking to achieve and in particular, if the implied 15% subscription revenue growth component of that target was still intact. And on that same topic, in terms of intelligence units, do you view that as being a necessary contributor to that 15% or potentially additive to that framework depending on how things play out? Sean Desmond: Yes. So in terms of long term, we have stated aggressively this year, we would hit the Rule of 40 commitment, and we're excited, we feel like we're hitting that early with expense discipline and with growth reacceleration year-over-year, quarter-over-quarter. So as we think long term, we expect to remain at that pace, and we expect growth to continue to accelerate and make up a larger portion of our overall delivery mechanism. But as far as this year, when we're talking about Q2, we're excited about the trajectory to the Rule of 40 and once we tackle that and read that back, we'll set our sights on what growth looks like between now and the path to beyond 40. Gregory D. Orenstein: Yes, Ryan, I think if you go back to our Earnings Day or Analyst Day last year, we focused on the rule of -- but really more in that 35% non-GAAP operating margin, which again, hopefully everyone has seen the progress that we've continued to make towards that. We do continue to err on the side of growth. I noted when I was on stage during that Analyst Day that we believe that framework is intact. We've not said anything since that around the top line. But again, I think we're doing the right things in order to continue to accelerate growth at the company and get back to what we think is a more reasonable level of growth for a company of this quality with the market opportunity we have in front of us. Sean Desmond: We're very focused on the growth. When we sit here midyear and we beat our aggregate annual operating plan halfway through the year when we are in a position that we signed our largest deal of the year early in the third quarter, it is about growth, and we talk about our growth initiatives and how they're maturing and how we think about them contributing over time, we'll continue to focus on that growth. But we've exercised very good discipline on the expense side as well. Ryan Tomasello: Appreciate that. And then in terms of the ACV bookings targets for this year, can you say what mix of renewals and upsells versus new logos that contemplates? And how does that compare to what you achieved last year? And if you could also just remind us how that mix in terms of renewals versus net new logos changes the math around the level of conversion that you would expect to see on this year's bookings into next year's subscription revenue? Gregory D. Orenstein: Yes, Ryan, I think you can assume at this point, it's fairly comparable. Again, as we get more and more momentum outside of the United States, those are generally going to be leaning towards more new logos just because of the white space we have outside of the U.S. But again, we've got a great customer base globally but particularly here in the U.S., and we have a lot of product to sell them. And again, I think one of the things we feel really good about is the output from our R&D organization. the acceleration of product. And again, I think that we don't distinguish cross-selling to a current customer or landing a net new logo. For us, it's all ACV. And again, with the breadth and depth of product portfolio we have, we feel like they're both opportunities for us. Operator: And our next question comes from the line of Michael Infante from Morgan Stanley. Our next question in that case comes from the line of Aaron Kimson from Citizens. Aaron Kimson: Great. Sean, you talked about the symbiosis you're seeing between your product development and implementation teams. As we think about the pace at which you're rolling out new product and the pace at which your heavily regulated customer base is willing and able to adopt those new products, do you feel like the bottleneck for incremental growth today is more on the customer and implementation side or the product development side? Sean Desmond: Yes. I know you can hear the excitement with the pace of innovation that we're putting out into the market. I have never seen more product delivered in a 6-month period than I did the first half of this year. I reviewed that with our product team last week, and we presented that to our Board. And that pace, I expect to continue. And as we've talked about both in my comments as well as Greg's here, yes, we're in a highly regulated industry. There's compliance. There's regulation. There are security reviews. And to a certain degree, that's just part of the business that we're in, right? And I do expect that there will be more pent-up demand to adopt those features, and we will outpace what we're delivering into the market. And I expect the product development pace to run ahead of how our customers can actually consume that. And we're seeing that at every segment of the market, right, not just enterprise, but in the community and regional spaces as well. And that's okay, right? That's just part of doing business. I think you're starting to see some of the narrative overall in the landscape shift around what AI is going to be. You're hearing about the gap between adoption and outcomes, and we have always been focused on the outcomes. We've never taken our eye off the ball on what truly matters, and that's driving efficiency into the bottom line for our customers through increased loan cycle times, greater production by role. And that, for us, remains just a core principle at nCino. Aaron Kimson: Got it. And then to build on that, consumers, about 2/3 of the SAM revenues, roughly the inverse. A lot of focus on energy has gone into building out the consumer side of the business going back to the announcement of the SimpleNexus acquisition in '21. Given that frontier models continue to improve and the amount of unstructured data that goes into commercial lending that you can now utilize, do you feel it makes sense to focus relatively more development resources and energy on the commercial opportunities this time? Sean Desmond: Listen, we talk about the platform wins, right? And we talk about a balanced portfolio across commercial, consumer and mortgage. Our flagship and core business is very strong, right? We're very excited that the commercial business in the domestic U.S. market from community up to enterprise is very strong. At the same time, we've called out in the script consumer deals at regional banks. We called out international deals, the largest this year outside of the U.S. So to me, that's the power not only of the platform but being a global company is a diverse portfolio. And we invest accordingly to keep up that pace. We probably have more breadth overall in our commercial pace, and we're making sure we balance the functionality across all lines of business that we serve. Operator: And our next question comes from the line of Cris Kennedy from William Blair. Cristopher Kennedy: It's clear it's not going to materially impact fiscal 2027 results. But is there a way to frame the opportunity with intelligence unit consumption? Sean Desmond: Yes. We understand where you're coming from with the question. And everybody's got their model out there. I'm not in the business of trying to provide the exact inputs not knowing those models. But in our business model, we have been very clear that we're confident in our posture this year. We're excited about the growth that we've got both in the first and second quarter, and we're excited about the momentum in the business. We don't expect to reframe anything for the back half of the year based on intelligence units alone. But over time, as those queues that Greg referred to move from development into production as customers get through security reviews, as customers take on more of our agentic capabilities and digital partner experiences, that will show up over time. But for fiscal '27, we're excited about the business, and we're not changing any of the sort of inputs that you're looking for necessarily. Gregory D. Orenstein: Yes, Chris, as we've been highlighting for us, it's all about adoption this year. We believe that will lead to material help, our drivers from a top line acceleration perspective, top line growth perspective. We've got a lot of models here. One gets you more excited than the next. We do have discussions in terms of KPIs and things, but I think the most prudent thing to do is not get ahead of ourselves and continue to focus on adoption. And as we get more and more data points from our customers, more and more outcomes where our customers are realizing the value like that 160,000 hour example Sean said, I think we'll be able to come to you with more clarity and definitiveness in terms of the model. But we understand the question. And again, we'll continue to work towards providing that clarity. Cristopher Kennedy: Got it. And then just real quick as a follow-up. Can you just remind us of the churn that you expect in fiscal 2027. You mentioned it in your prepared remarks. Just give us a clear update on that. Gregory D. Orenstein: Yes. As I said in my prepared remarks, our churn forecast hasn't changed for the year from an aggregate basis, which is about $25 million of churn for the year. Again, it tilted a little bit more towards mortgage, specifically driven by IMBs and less towards the rest of the business. But overall, it stayed consistent with where our forecast has been from the beginning of the year. Okay. And just to drill down 1 more point, mortgage is about 1/3 of that $25 million, which would be consistent with last year. Operator: And our next question comes from the line of Joe Vruwink from Baird. Joseph Vruwink: Your largest customers, I think, spend over $5 million on nCino, so hearing about double-digit increases in ACV with those renewal examples is impressive. I was wondering, can you maybe compare how ACV increases are comparing again at renewal more broadly across your customer base? You shared maybe some enterprise examples, but the experience at small regional or maybe even U.S. international, I'm wondering if there are certain segments of your customer base that are leaning in more to what nCino can offer. Sean Desmond: Yes. Thanks, Joe. We did call out specifically some of those enterprise metrics. But the reality is, when we think about ACV increase and growth, both in new business and balanced across the portfolio community and regional up to enterprise bank and across the credit unions as well. So again, that speaks to the power of the platform and a diversified growth strategy. Joseph Vruwink: Great. And then a question on just kind of price discovery around your AI capabilities. When you sit down with customers and you start walking through what's possible and you hear customers say there's millions in potential savings that could come from this, how do you think about then broaching the topic of nCino sharing in the savings? Is it a 50-50 split, 25-75? Is this a way to maybe further the conversation beyond just the implication of intelligent unit credits and what those are worth and kind of your broader role for that account? Sean Desmond: Yes. I'll point back to our focus on outcomes has always been clear and we're serving up agentic solutions and delivering an AI [indiscernible]. But as far as numbers, metrics with calculations, what we look at is a business case, right, with every customer, always have. Before AI and after AIs, what does that business case look like? If we can extrapolate those 160,000 hours we're talking about across multiple workflows and that's going to save a customer, we're excited about that, right? We don't think that fundamentally changes the pricing dynamics. We went through a pretty extensive exercise on the pricing transformation that we rolled out at the beginning of last year. And what we want to do, again, is just deliver efficiency to the bottom line of our customers as much as we possibly can. Operator: And our next question comes from the line of Andrew Schmidt from KeyBanc. Andrew Schmidt: I wanted to ask about the enterprise renewals. Good data points there. I guess when we think about contract duration broadly in enterprise, I typically think about those 3 to 5 years. I'm curious if there's any deviation in recent renewals, they're shorter or longer. And then when we think about sort of the 10% ACV uplift, obviously, the flip to the platform pricing is 1 component. Access to AI modules is another. Then I think another big part of it is probably sort of additional modules and capabilities you're delivering. I'm just curious kind of what's the uptake on the additional sort of modules signed just beyond sort of the platform and AI component involved here? Sean Desmond: In the first part of your question, I mean, terms are generally steady. We don't see a material swing or change in the terms of our contracts in enterprise due to the current time that we're in with the pricing transformation as well as the agentic solutions that we're delivering. So that's holding firm. As far -- can you restate the second part of the question with additional modules? I just want to make sure I understood, Andrew. Andrew Schmidt: Yes. It was kind of the attribution to like there's a 10% ACV uplift and obviously a part of that is the flip to platform-based pricing, access to AI modules. But I would imagine another piece is just delivering more value, additional modules to enterprise customers if that's part of the equation as well as I'm just curious if there's just additional uptake there to consider when you think about just these new renewals, enterprise deals beyond sort of the AI modules that enterprise customers are getting access to. Gregory D. Orenstein: Absolutely. There is, Andrew. The 10% is really -- think about it apples for apples in terms of them buying no new product but getting the first bundle or the initial bundle of intelligence units. For each one of our renewals, I mean, our focal point is going to the customer, working with them to see where else we can expand in the financial institution, right, which is, again, one of the unique things about nCino and our platform story and all the product that we have to sell them, as I referenced earlier. And so there is much upside as we go into being able to sell them more but again, just on an apples-to-apples basis with the only difference being initial bundle of intelligence units. We laid out that 10% target last year. After Q4, we confirmed that we exceeded it. And again, we're continuing to see that as we go through this year. Andrew Schmidt: Got it. Appreciate this comment. It's very helpful. And then if you think about professional services, Greg, I get the comment about sort of seeking profitability versus revenue makes sense and PS margins continue to be profitable, which is great. I guess just trying to think about the trajectory from here on the PS side. It seems like some of this efficiency continues. But then I think on the revenue side, as you get more efficient, is there an offset in terms of lower hours required? Obviously, the North Star is efficiency and profitability but just trying to understand how that works through the model. Gregory D. Orenstein: Yes, I think the PS organization continues to do a good job of making our implementations more efficient. And so we'll continue to focus on, again, driving margin, and again, we'll get at the expense of revenue and get the overall total cost of ownership for our customers down. And so that's a win for all of us. As we do free up capacity, we are turning those folks in to support our FDE engagements as we continue to have high demand for that part of our organization. And so again, that's something we're excited about and gain, that we expect will fuel more accelerated adoption of intelligence units as we deploy our FDEs on a global basis. Sean Desmond: And remember, I talked about the pace and all that's been delivered in the first half of this year. So the more output and productivity that we see coming from the R&D organization, the more things we have to deploy. And the same thing I would tell you is as we gain efficiencies in our release management and how we actually push out new technologies, we continue to rotate managed services capacity toward the Forward Deployed Engineering group, so we can keep pace and avoid the bottlenecks that were referred to earlier in the call. Andrew Schmidt: That makes sense. It sounds like a throughput is really ramping. Congrats, guys. Sean Desmond: Appreciate the questions. Operator: And our next question comes from the line of Terry Tillman from Truist Securities. Terrell Tillman: I'll make them really quick, which is rare for me. But in terms of the 4 enterprise renewals early, that's great to see. And I think you said you're now, if I'm not mistaken, 12 of 20 of your top customers in the new platform pricing. I'm curious, could you see a situation that some folks that would have been FY '28s or calendar '27s actually move into the second half of this year? Is there anything contemplated around that? Or it could happen, but you're just not going to kind of bank that in that net ACV? And then I had a follow-up. Sean Desmond: Listen, we're out there with an aggressive posture every day, trying to expand the functionality we have in the customer base that we have. So anything is possible. We have a team that's motivated, that's hungry and has really strong trust, credibility and relationships in our customer base. And if we have alignment with the outcomes our customers are looking and our posture then -- then why not? We're anchoring to our core actual conservative estimates for this year, always looking to accelerate. Gregory D. Orenstein: Yes. And Terry, we've been pretty consistent over the last few quarters about these accelerated renewals, and from a demand perspective, we haven't seen that weighing. And so some of it is just timing and just working through some of these procurement processes. But in terms of the excitement with what we're doing, the capabilities that our R&D organization are producing and ultimately, as Sean continues to note as we focus on the organization, the outcomes we're producing for our customers, we expect that to continue to drive some accelerated renewals over the coming quarters. Terrell Tillman: That's great. And just maybe real quick on international. Greg, it was great to hear about an early 3Q deal. That's awesome. And Sean, I know you all have been working on kind of leadership changes in the past and then starting to build the pipeline. Are you pretty much all done with all that work and now it's just harvesting? Or is there still some low-hanging fruit areas ahead? Just trying to understand if that international could keep kind of outpacing the rest of the business from growth. Sean Desmond: Sure. Thanks for the question. The platform value proposition is proving to resonate internationally as well as it is domestically. We're excited about the momentum, the outcomes that we're delivering for our customers as we talk about the excitement from EMEA to Asia Pac is real. So I don't think it's dependent on any single individual, again, the power of the platform and a global team and a machine here where we can ebb and flow. I mean, you're constantly going to have changes in your personnel, and a sustainable and long-term viable business model should be able to withstand this. So I don't spend a lot of time right now worrying about do we have the team on the field. I'm excited about the outcomes we're delivering and really proud of it. Operator: And our next question comes from the line of Nick Altmann from U.S. Bancorp. Nicholas Altmann: Awesome. I actually wanted to follow up on Terry's first question but maybe ask it a little bit differently. If 48% of your base is on the new pricing, what are your expectations for that, where that should land at the end of the year? And I guess, how are those expectations different versus when you entered the year? Sean Desmond: I think we'll continue at the pace that we've been on. And we don't necessarily call out being dependent on a percentage of the customer base being on the new model to meet our fiscal commitments. We continue to execute and do what we said we were going to do with respect to our core financial targets. Certainly, it will be north of 48%. And I think that growth will correlate as it has over the past -- last several quarters. Gregory D. Orenstein: Yes. Nick, I think the good news is it continues to go well ahead of schedule for us. Sales team is doing a great job of working with our customers through these renewals. And again, I think the momentum that we're seeing, we do expect to continue without putting a specific target on it. And also know it's good to hear the U.S. Bank reference. So Nick, congrats on that. Operator: And our next question comes from the line of Ella Smith from JPMorgan. And our next question comes from the line of Ken Suchoski from Autonomous Research. Kenneth Suchoski: Maybe just one on the churn. I think, Greg, you mentioned slightly higher mix of IMB churn offset by less churn on the rest of the business. So maybe just talk about what's driving the improvement on the non-mortgage churn and just which segment does that show up in. Gregory D. Orenstein: Thanks, Ken. Yes. I think just as we kind of separate the businesses, as we've done for this call, again, to make sure you guys appreciate, ultimately, there's not one specific place. Again, it's slightly higher on the IMB side, I said, and slightly lower in the rest of the business just based on our forecast at the beginning of the year. As we go into each year, we've got some identified churn based on whatever circumstances, and then we also have some unidentified churn that we do for forecasting purposes. And as stuff comes up, our teams do a great job of figuring out what's going on, and there's some way that we can mitigate a potential churn risk. So I'd say nothing worthy from a churn perspective, again, other than obviously on the IMB side with the higher-for-longer rates. And again, we see that driving a little bit higher churn. But I think overall, as I noted, no update in terms of where we started the year from an aggregate basis. Kenneth Suchoski: Okay. Great. And just the one comment on the banking adviser capabilities, I think you guys called out $5.5 million of savings. I mean it sounds like a lot of savings, call it, 40 hours a week and 50 weeks a year that replaces -- it's like 80 loan officers basically. And so how should we think about the size of this particular opportunity versus some of the other ways customers are leveraging banking advisers? Is this like an extraordinarily large opportunity? Or will these multimillion dollar per feature, per customer charges be the norm? Sean Desmond: Yes. I'll kind of reiterate the comment I made earlier about this being sort of the floor base case, not the ceiling, in my opinion, right? This is a particular example of a single skill within a workflow and a line of business, right? And if we extrapolate that across the platform, across the solution portfolio, across lines of business and across the globe as customers take cohorts into production, you can imagine that while we're not putting a number on it, it's nothing but upside in our opinion. Gregory D. Orenstein: And Ken, I think the other thing to note is what's really exciting is kind of the funnel of additional capabilities that the team has out. A lot of them are in sandbox and being tested. But again, on upcoming calls, I think you'll -- you should look forward to hearing us talk about more similar type capabilities that we think can drive significant value to our customers, and we're excited about that. Operator: Our next question comes from the line of Michael Infante from Morgan Stanley. Michael Infante: Can you hear me now? Operator: Yes. Michael Infante: Great. Sorry about that earlier. I just wanted to clarify because I think it got glossed over earlier in the call. But when I run the math on organic subscription revenue, excluding mortgage and some of the onetimers that you've previously called out, it looks like it accelerated sequentially, grew anywhere between 13% and 14% in the quarter, even with pretty minimal contribution from banking adviser. I think that's basically the fastest growth rate in close to 2 years. To the extent that I'm in the right ZIP code on that math, like why wouldn't the underlying growth rate accelerate in the back half of the, year just given you have easier comps in the second half on onetimers and presumably more contribution from banking adviser as we progress throughout the next couple of quarters? Gregory D. Orenstein: Thanks, Michael. Yes, I don't think we would correct your assessment in terms of growth, which, again, hopefully, you guys are hearing our excitement about, and we're really proud of the team and the focus and the execution. In the back half of the year, again, we tried to be incredibly transparent with breaking out mortgage, so you guys could see the impact of that to the back half of the year. And also highlighting again the growth that we -- that's implied in Q4 exiting without mortgage. Obviously, we'll take some mortgage, less headwinds for mortgage as they come along. But again, I think as you look at the rest of the business, we're feeling good about the trajectory. And our focus is just on continuing to execute and make sure, again, as you've heard me say before, Michael, make sure we close the deals we say we're going to close and close them when we say we're going to close them. Operator: And our next question comes from the line of Billy Fitzsimmons from Piper Sandler. William Fitzsimmons: You guys highlighted how 230 customers are purchasing intelligence units today and increasing consumption. And for those first customers, you also highlighted how some of the first customers are purchasing additional units. Can we just take a step back here and talk about the progression from an initial AI adoption to production deployment to broader budget expansion? It sounds like one of the things you guys talked about in the prepared remarks is that there's been a little bit of a shift in customer behavior where you're not necessarily needing to go to them and convince them to take action. Many of them are taking action right now. And then as we think ahead, just help us think about how the intelligence unit sales kind of materialize into future subscription revenue stream. So what's that bridge? Sean Desmond: Yes. And you've heard us -- appreciate it. I heard most of that. It was kind of in and out in the middle, but I think you're talking about what does the trajectory look like for the intelligence unit consumption. And we will remain very steadfast in that a big update here for this call is the movement into production with customers who have been using our AI solutions in sandbox and development prior. And as those cohorts move in and we have 1/3 of the customers and twice as many customers in production now as we did at the beginning of the year, then we can actually read back the outcomes, right? And we read back outcomes. That puts folks in a position where they say, okay, if I move from one to more banking adviser skills, digital partners, what's that going to look like for my outcomes, and we'll actually be able to read back to them that gap that is the major narrative in the macro environment right now is the difference between adoption and actually value we're deriving from the outcomes. And as we get into production, that's the place where it shows up. William Fitzsimmons: Perfect. And then hopefully, I'm coming through clear now. I apologize for that. That was the gist of what I was asking. And if I could sneak in another one, you guys recently released the mortgage MCP. How do we think about kind of the opening up of the platform and integrations with third-party tools? Sean Desmond: Yes. This is a big milestone for the company. As you can imagine, a large part of our growth story over the years has been our partnerships and the system integration -- system integrator ecosystem going to market with nCino across all segments and across banks as well as credit unions and IMBs. And so when we think about giving access to our solution to these partners, to go ahead and develop on top of the platform, that becomes a force multiplier for nCino. We have 1,600 employees today. We've talked about rotating the capacity toward our Forward Deployed Engineering groups. If we can really put a multiplier in the SI ecosystem through access from our MCP layer, that really just gives us a proliferation of growth that's hard to put a ceiling on. Operator: This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Sean for any further remarks. Sean Desmond: Yes. Thank you all for your time this evening. I really hope you can hear our excitement in the business, proud of our teams, energized by the momentum, and we look forward to continuing to update you all throughout the year. Have a good night. Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. Before you buy stock in nCino, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and nCino wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $437,097!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,355,077!* That performance is why people listen. 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The Motley Fool has a disclosure policy. nCino (NCNO) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

nCino (NCNO) just reported Q2 results that exceeded analyst forecasts on both revenue and earnings, raised its full year outlook, and unveiled a new share repurchase program that management links to confidence in the business. nCino’s latest update comes after a sharp rebound in the stock, with a 30 day share price return of 21.87% and a 90 day share price return of 35.71%. However, the year to date share price return is still down 12.74%, and the 1 year total shareholder return has fallen 34.20%, so recent earnings beats, guidance and the new buyback are being viewed against a longer period of weak performance. Compare nCino’s rebound and buyback story with other software stocks showing similar momentum using the curated 51 high quality undervalued stocks, which is built to highlight quality and valuation in one place. After a 36% 90 day rebound, nCino still trades below the average analyst price target and at a larger discount to some intrinsic value estimates. Is the recent move closing the gap or leaving meaningful upside on the table for valuation work next? Based on the most followed narrative, nCino’s fair value estimate of $23.08 sits above the last close at $21.51. This frames the recent rebound as a partial catch up move rather than a completed rerating. Read the complete narrative. Curious what sits behind that fair value for nCino. The narrative leans heavily on compounding earnings, steadier margins, and a future valuation multiple that assumes the market gives the company more credit than it does today. Result: Fair Value of $23.08 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, the nCino narrative still faces real tests, particularly if AI execution stumbles or if international expansion proves slower and more costly than current assumptions imply. Find out about the key risks to this nCino narrative. The popular narrative frames nCino as about 6.8% undervalued at $23.08, which sits close to the current $21.51 share price. A different lens tells a tougher story. On a P/E of 67.7x against a fair ratio of 42x, the stock screens as expensive versus both industry and peers. How much valuation risk are you comfortable taking for this AI banking story? See what the numbers say about this price in our valuation breakdown, including that fair ratio and how nCino compares to other US software stocks, in the See what the numbers say about this price — find out in our valuation breakdown. Given the mixed sentiment around nCino, with both risks and rewards in focus, it makes sense to review the full risk reward breakdown and decide where you stand with the 3 key rewards and 2 important warning signs. If nCino has your attention, now can be a reasonable time to broaden your watchlist with other potential opportunities before the next wave of ideas gets crowded. Target reliable cash generators by scanning companies with stronger balance sheets and fundamentals using the list of solid balance sheet and fundamentals (51 results). Spot potential mispriced opportunities early by reviewing a curated 20 high quality undiscovered gems before they attract wider attention. Prioritize resilience in uncertain markets and focus on 75 resilient stocks with low risk scores that aim to keep volatility in check. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NCNO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Total Revenue: $161 million, an increase of 8% year-over-year. Subscription Revenue: $143.5 million, up 10% year-over-year and 10% in constant currency. US Mortgage Subscription Revenue: $20.6 million, down 1% year-over-year. Subscription Revenue Excluding US Mortgage: Increased 12% year-over-year and 12% in constant currency. Professional Services Revenue: $17.5 million, down 3% year-over-year. Professional Services Gross Profit Margin: 3%, up 600 basis points from negative 3% in the prior year quarter. Non-US Total Revenue: $36.4 million, up 9% year-over-year and 9% in constant currency. Non-US Subscription Revenue: $30.9 million, up 13% year-over-year and 13% in constant currency. Non-GAAP Operating Income: $40.8 million, or 25% of total revenues, an increase of 36% year-over-year. Free Cash Flow: $34 million, up 170% year-over-year. Share Repurchases: Repurchased approximately 4.2 million shares at an average price of $15.41 per share for total consideration of approximately $65 million. Accelerated Share Repurchase Program: Finalized, repurchasing approximately 6 million shares at an average price of $16.57 per share for total consideration of $100 million. Total Shares Repurchased Since April 2025: Approximately 15.8 million shares at an average price of $18.99 per share for total consideration of $300 million. Third Quarter Fiscal 2027 Guidance: Total revenues of $161.25 million to $163.25 million; subscription revenues of $143.25 million to $145.25 million; non-GAAP operating income of approximately $42 million to $44 million. Full Year Fiscal 2027 Guidance: Total revenues of $644 million to $647 million; subscription revenues of $573.5 million to $576.5 million; non-GAAP operating income of $171 million to $174 million; free cash flow of $137 million to $142 million. Net Additions to ACV: Expected to be $60 million to $65 million on a constant currency basis, representing cumulative ACV of $662.5 million to $667.5 million. Warning! GuruFocus has detected 7 Warning Signs with NCNO. Is NCNO fairly valued? Test your thesis with our free DCF calculator. Release Date: August 25, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Outperformed all financial guidance metrics in Q2 fiscal 2027, with total revenues of $161 million (up 8% YoY) and subscription revenues of $143.5 million (up 10% YoY). Strong customer retention and expansion: signed multiyear renewals with four of the top 20 US enterprise customers, averaging over 10% ACV increase, and 12 of top 20 have transitioned to the new platform pricing model. AI adoption momentum: over 230 customers have purchased AI intelligence units, with early signs of additional unit sales, and customers are moving into production, doubling the number in production year-to-date. International growth remains robust: non-US subscription revenues grew 13% YoY in constant currency, and the company signed its largest deal of the year with an international customer early in Q3. Improved profitability and free cash flow: non-GAAP operating income rose 36% YoY to $40.8 million (25% margin), and free cash flow surged 170% YoY to $34 million, leading to raised full-year guidance. Excluding US mortgage, subscription revenue growth accelerated to 12% YoY, with Q4 guidance implying 12% growth, a 400 basis point acceleration, driven by AI and product innovation. Strong balance sheet and shareholder returns: repurchased $65 million in shares during Q2 and authorized an additional $100 million buyback program. Product innovation pace is high, with new capabilities like continuous credit monitoring and locate and file, which customers estimate can save 160,000 hours annually, translating to over $5 million in savings. Professional services gross margin improved significantly to 3% (up 600 basis points YoY), reflecting better efficiency and cost management. Healthy sales pipeline and diversified growth levers (AI, international, credit unions, cross-selling mortgage, onboarding) provide confidence in sustaining growth. US mortgage subscription revenues declined 1% YoY to $20.6 million, and the company reduced its full-year mortgage outlook due to higher-for-longer interest rates and increased IMB churn. Higher-for-longer mortgage rate environment continues to pressure the independent mortgage bank (IMB) market, driving incremental M&A and churn, with Q4 mortgage revenues expected to drop to $18.5 million. Professional services revenues decreased 3% YoY to $17.5 million, reflecting a deliberate focus on profitability over growth. Foreign exchange headwinds negatively impacted non-US subscription revenues by approximately $200,000 in Q2, with similar headwinds expected in Q3 and Q4. The company does not expect early additional intelligence unit monetization to materially impact fiscal 2027 results, indicating that AI revenue contribution is still nascent. Customer adoption of AI capabilities is slower than desired due to governance, security reviews, and regulatory compliance, creating a bottleneck to faster growth. The company's guidance implies a sequential decline in US mortgage subscription revenues from Q3 to Q4, reflecting normal seasonality and ongoing market challenges. Despite overall churn expectations unchanged, the mix has shifted to higher IMB churn, which could signal continued vulnerability in the mortgage segment. The company remains conservative in its guidance, extrapolating only $1.3 million of Q2 overperformance to future quarters, suggesting limited visibility or caution. While growth is reaccelerating, total subscription revenue growth is still only 10% YoY, which may be below investor expectations for a high-growth SaaS company. Q: Can you provide an update on the adoption and usage of Banking Advisor and Agentic AI capabilities, and are there specific use cases that are being replicated across multiple customers?A: Sean Desmond (CEO): We are seeing more customers move into production with Banking Advisor and digital partner capabilities, with the number of customers in production more than doubling year-to-date. One-third of our core customers on the new pricing model are now in production. A key example is our "locate and file" capability, where one US enterprise customer estimates savings of 160,000 hours annually, translating to over $5 million in savings. This is just one skill in one workflow, and we see this as the floor, not the ceiling, as we extrapolate these outcomes across all our workflows in commercial, consumer, and mortgage lending. Q: How should we think about the opportunity and financial impact of intelligence unit consumption, and can you frame the potential for this revenue stream?A: Greg Orenstein (CFO): For fiscal 2027, we are not changing our guidance based on intelligence unit sales, as our focus is on driving long-term adoption. However, we are seeing early signs of additional monetization as customers come back to purchase more units. We believe this consumption will be a material driver of subscription revenue growth in the coming years. We are focused on adoption and gathering data points from customers to provide more clarity on the model in the future, rather than getting ahead of ourselves with specific KPIs. Q: Can you discuss the drivers behind the strong performance in the non-mortgage business and the outlook for growth in the second half of the fiscal year?A: Greg Orenstein (CFO): Excluding US mortgage, our Q3 guidance implies 11% subscription revenue growth, and Q4 implies 12% growth, representing a 400-basis-point acceleration year-over-year. This growth is driven by strong demand for our flagship commercial product and the five growth initiatives we laid out last year: AI, international, credit unions, cross-selling mortgage to banks and credit unions, and onboarding. We feel these initiatives are still early in their contribution, and we have multiple levers to add to the reacceleration we are already seeing. Q: What is the current status of the transition to the new platform pricing model, and what are the expectations for the remainder of the year?A: Sean Desmond (CEO): We are ahead of schedule, with 48% of total ACV now on platform pricing, up from 40% last quarter. We expect this to continue to grow north of 48% as we execute on renewals. The transition is not a dependency for meeting our fiscal commitments, but the momentum is strong. Greg Orenstein (CFO): The sales team is doing a great job working with customers through these renewals, and we expect the momentum to continue without putting a specific target on it. Q: Can you provide more detail on the churn expectations for fiscal 2027, particularly the mix between mortgage and non-mortgage churn?A: Greg Orenstein (CFO): Our aggregate churn forecast remains unchanged at approximately $25 million for the year. However, the mix has shifted slightly, with higher churn from independent mortgage banks (IMBs) due to the higher-for-longer rate environment, offset by lower churn in the rest of the business. Mortgage churn is about one-third of the total, consistent with last year. The improvement in non-mortgage churn is not driven by any one specific factor but reflects our teams' efforts to mitigate churn risks across the business. Q: How are you thinking about the balance between product development pace and the ability of your regulated customer base to adopt new products?A: Sean Desmond (CEO): The pace of product innovation is unprecedented, with more product delivered in the first half of this year than any previous six-month period. While our customers are in a highly regulated industry with compliance and security reviews, we expect the product development pace to run ahead of customer consumption. This is okay, as it's part of doing business. We are focused on outcomes, driving efficiency into our customers' bottom lines through increased loan cycle times and greater production by role. Q: Can you discuss the recent enterprise renewals and the factors driving the ACV increases, and how this compares to the broader customer base?A: Sean Desmond (CEO): We signed multiyear renewals with four of our top 20 US enterprise customers, representing over $900 billion in assets. All four renewed ahead of schedule with an average ACV increase of more than 10%. This increase is driven by access to our AI tools and functionality. Greg Orenstein (CFO): The 10% increase is on an apples-to-apples basis, with the only difference being the initial bundle of intelligence units. Beyond that, we are focused on expanding within each financial institution, selling them more of our platform. This trend is consistent across the broader customer base, from community and regional banks to credit unions. Q: What is the outlook for the US mortgage business, and how are you addressing the headwinds from the higher-for-longer rate environment?A: Sean Desmond (CEO): While the rate environment remains a headwind, we are focused on gaining market share by adding logos with our AI-powered experience. We highlighted wins in community banks and credit unions, which are more stable markets. We also welcomed back an IMB customer that left for a less expensive solution but returned due to reliability issues and a cumbersome borrower experience. Greg Orenstein (CFO): We have adjusted our US mortgage outlook, forecasting approximately $20 million in Q3 and $18.5 million in Q4 subscription revenues, reflecting normal seasonality and additional IMB churn. This is a reduction of $700,000 in Q3 and $1.2 million in Q4 from our prior forecast. Q: Can you provide an update on the international business and the recent leadership changes, and is the growth sustainable?A: Sean Desmond (CEO): The platform value proposition is resonating internationally, with momentum across EMEA and Asia-Pacific. We signed what we expect to be our largest deal of the year with an international customer in Q3. The growth is not dependent on any single individual; it's driven by the power of the platform and a global team. We are excited about the outcomes we are delivering and are confident in the sustainability of international growth. Q: How are you thinking about the professional services business, and what is the strategy for balancing profitability and revenue growth?< For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved 12% subscription revenue growth excluding U.S. mortgage, driven by strong sales execution and global demand for unified banking platforms. Transitioned 48% of total ACV to the new platform pricing model, up from 40% last quarter, as customers seek access to expanding AI capabilities. Renewed 4 of the top 20 U.S. enterprise customers ahead of schedule with average ACV increases exceeding 10%, validating the 'buy vs. build' rationale for complex banking systems. Demonstrated tangible AI outcomes, such as a customer estimating 160,000 annual hours saved via 'Locate and File' functionality, translating to approximately $5.5 million in potential savings. Leveraged a 'deterministic' AI approach for Continuous Credit Monitoring, combining LLMs for natural language with proprietary algorithms to ensure auditable and reproducible credit decisions. Expanded international footprint with key wins in Japan and Germany, utilizing deep banking domain expertise to differentiate against local and horizontal competitors. Maintained disciplined expense management and professional services optimization, resulting in a 36% year-over-year increase in non-GAAP operating income. Anticipate Q4 subscription revenue growth acceleration of 400 basis points (excluding mortgage), supported by healthy global sales pipelines and AI-driven momentum. Prioritizing long-term sustainable AI adoption over near-term revenue; while additional intelligence unit sales have begun, material financial impact is expected in future years rather than fiscal 2027. Updated U.S. mortgage outlook to account for 'higher-for-longer' interest rates, forecasting a sequential decline in Q4 due to independent mortgage bank churn and seasonality. Raised full-year free cash flow guidance to $137 million - $142 million, reflecting confidence in operational efficiency and the Rule of 40 trajectory. Authorized a new $100 million share repurchase program following the completion of previous authorizations, viewing opportunistic buybacks as a compelling use of capital. U.S. mortgage subscription revenue declined 1% year-over-year, pressured by consolidation and liquidity constraints in the independent mortgage bank (IMB) sector. Maintained aggregate annual churn forecast of approximately $25 million, though the mix has shifted toward higher IMB churn offset by better retention in core banking. Professional services revenue decreased 3% year-over-year as the company intentionally prioritizes practice profitability and implementation efficiency over top-line volume. Foreign exchange headwinds impacted non-U.S. subscription revenues by approximately $200,000 in Q2, with similar impacts projected for Q3 and Q4. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management reported that 1/3 of customers on the new pricing model who have adopted AI capabilities are now in production, doubling the count since the start of the year. The transition from sandbox to production is gated by rigorous governance, security, and regulatory reviews inherent to the financial services industry. The 10% uplift is characterized as an 'apples-to-apples' baseline for customers moving to platform pricing with an initial AI bundle. Management sees further upside beyond this 10% through cross-selling additional modules and the eventual consumption of extra intelligence units. nCino successfully won back an IMB customer that had previously left for a cheaper competitor, citing reliability issues and poor borrower experience with the alternative. The company is focusing on selling mortgage solutions to stable depository institutions (banks and credit unions) to offset volatility in the independent mortgage market. The MCP layer acts as a 'force multiplier' by allowing system integrator partners to develop on top of the nCino platform. This openness is intended to accelerate adoption and innovation without being limited by nCino's internal engineering capacity.

Total Revenues of $161.0M, up 8% year-over-year Subscription Revenues of $143.5M, up 10% year-over-year GAAP Operating Margin of 8%, up 1,500 basis points year-over-year Non-GAAP Operating Margin of 25%, up 500 basis points year-over-year nCino announces new $100 million stock repurchase authorization WILMINGTON, N.C., Aug. 25, 2026 (GLOBE NEWSWIRE) -- nCino, Inc. (NASDAQ: NCNO), the platform for agentic AI banking, today announced financial results for the second quarter of fiscal year 2027, ended July 31, 2026, and that its Board of Directors has authorized a Stock Repurchase Program under which the Company may repurchase up to an additional $100 million of the Company's outstanding common stock. "We delivered an exceptional second quarter of fiscal 2027, once again exceeding all financial guidance. We are seeing many of our largest customers consolidating more of their most critical operations on nCino and expanding their commitments to include our market leading AI capabilities. The confidence behind those commitments reflects a simple reality: deploying AI in financial services demands deep domain context and expertise, and nCino is uniquely positioned to deliver it at scale globally," said Sean Desmond, CEO at nCino. "Following our execution of $300 million in stock repurchases since April 2025, nCino’s Board of Directors has authorized an additional $100 million stock repurchase program to provide continued flexibility to create stockholder value through repurchases of our common stock. This new authorization reflects continued confidence in our AI innovation and product strategy, market position, operational execution, and trajectory of free cash flow,” said Greg Orenstein, CFO at nCino. Financial Highlights Revenues: Total revenues for the second quarter of fiscal 2027 were $161.0 million, an 8% increase from $148.8 million in the second quarter of fiscal 2026. Subscription revenues for the second quarter of fiscal 2027 were $143.5 million, an increase of 10% from $130.8 million in the second quarter of fiscal 2026. Income (Loss) from Operations: GAAP income (loss) from operations in the second quarter of fiscal 2027 was $13.6 million compared to $(9.3) million in the second quarter of fiscal 2026. Non-GAAP operating income in the second quarter of fiscal 2027 was $40.8 million compared to $30.0 million in the second quarter of fiscal 2026, an increase of 36%. Cash: Cash, cash equivalents, and restricted cash were $83.6 million as of July 31, 2026, and $275.4 million was outstanding under the Company's credit facility. Free cash flow in the second quarter of fiscal 2027 was $34.0 million compared to $12.6 million in the second quarter of fiscal 2026, an increase of 170%. Recent Business Highlights Renewed and Expanded with Four U.S. Enterprise Accounts: Completed multi-year renewals with four U.S. Enterprise customers collectively representing over $900 billion in assets. All four customers renewed ahead of schedule with expanded commitments to utilize nCino’s AI tools and functionality. Signed a Development Finance Institution in Germany: Building on recently established momentum in the DACH region, signed a growth-focused development finance institution in Germany. Expanded with Consumer Lending: Expanded a decade-long relationship with a U.S. regional bank customer to include Consumer Lending. Landed with Commercial Onboarding and Account Opening: Signed a community bank in Iowa as a net-new customer for nCino's Commercial Onboarding and Account Opening solution. Signed Hachijuni Nagano Bank: A leading Japanese regional bank selected the nCino Platform to consolidate its consumer lending operations and integrate its proprietary AI credit-scoring engine – advancing the bank’s AI-driven lending strategy. Expanded with Mortgage in Credit Unions: An Indiana-based credit union became our largest credit union customer for mortgage with an expanded commitment to continue efficiently scaling their mortgage business. Stock Repurchase Programs In the second quarter ended July 31, 2026, nCino repurchased approximately 4.2 million shares of the Company's outstanding common stock in open market purchases, at an average price of $15.41 per share, for total consideration of approximately $65 million. Additionally, in the second quarter, the Company finalized the accelerated share repurchase program announced on March 31, 2026. Under that program, nCino repurchased approximately 6.0 million shares of the Company's outstanding common stock, at an average price of $16.57 per share, for total consideration of $100 million. nCino's Board of Directors has authorized an additional $100 million share repurchase program. Under the repurchase program, the Company may make repurchases, from time to time, through open market purchases, block trades, in privately negotiated transactions, accelerated stock repurchase transactions, or by other means. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases under this authorization. The volume, price, timing, and manner of any repurchases will be determined at the Company’s discretion, subject to general market conditions, as well as the Company’s management of capital, general business conditions, other investment opportunities, regulatory requirements and other factors. The repurchase program does not obligate the Company to repurchase any specific amount of common stock, has no time limit, and may be modified, suspended, or discontinued at any time without notice at the discretion of nCino’s Board of Directors. The Company currently expects to fund the repurchase program from existing cash and cash equivalents, credit facility capacity and/or future cash flows. Financial Outlook nCino is providing guidance for its third quarter ending October 31, 2026, as follows: Total revenues between $161.25 million and $163.25 million. Subscription revenues between $143.25 million and $145.25 million. Non-GAAP operating income between $42.0 million and $44.0 million. nCino is providing guidance for its fiscal year 2027 ending January 31, 2027, as follows: Total revenues between $644.0 million and $647.0 million. Subscription revenues between $573.5 million and $576.5 million. Non-GAAP operating income between $171.0 million and $174.0 million. Free Cash Flow between $137.0 million and $142.0 million. Annual Contract Value (ACV) at period end between $662.5 million and $667.5 million. Conference CallnCino will host a conference call at 4:30 p.m. ET today to discuss its financial results and outlook. The conference call will be available via live webcast and replay at the Investor Relations section of nCino’s website: https://investor.ncino.com/news-events/events-and-presentations. About nCinonCino (NASDAQ: NCNO) is the platform for agentic banking. With over 2,700 customers worldwide - including community banks, credit unions, independent mortgage banks, and the largest financial entities globally - nCino offers a trusted agentic platform purpose-built for financial services and regulated industries. By deploying AI agents alongside human teams, nCino's dual workforce enables institutions to eliminate inefficiencies, sharpen decision-making and deliver better outcomes for the customers they serve. For more information, visit www.ncino.com..INVESTOR CONTACT [email protected] MEDIA CONTACT [email protected] Forward-Looking Statements: This press release contains forward-looking statements about nCino's financial and operating results, which include statements regarding nCino’s future performance, outlook, guidance, the benefits from the use of nCino’s solutions, our strategies, and general business conditions. Forward-looking statements generally include actions, events, results, strategies and expectations and are often identifiable by use of the words “aim,” “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “goal,” “intends,” “may,” “might,” “plans,”, “potential,” “predicts,” “projects,” “seeks,” “should,” “strive,” “will,” or “would” or similar expressions and the negatives thereof. Any forward-looking statements contained in this press release are based upon nCino’s historical performance and its current plans, estimates, and expectations and are not representations that such plans, estimates, or expectations will be achieved. These forward-looking statements represent nCino’s expectations as of the date of this press release. Subsequent events may cause these expectations to change and, except as may be required by law, nCino does not undertake any obligation to update or revise these forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such statements, including, but not limited to risks associated with (i) variations between our actual operating results compared to our prior guidance and the expectations of securities analysts, investors and the financial community; (ii) adverse changes in the financial services industry, including as a result of customer consolidation or bank failures; (iii) adverse changes in economic, regulatory, or market conditions, including as a direct or indirect consequence of higher interest rates; (iv) our ability to successfully develop, offer and drive customer acceptance of AI-driven solutions for the banking industry; (v) breaches in our security measures or unauthorized access to our customers’ or their clients' data; (vi) the accuracy of management’s assumptions and estimates; (vii) our ability to attract new customers and succeed in having current customers expand their use of our solutions, including in connection with our migration to an asset-based pricing model; (viii) competitive factors, including pricing pressures and migration to asset-based pricing, consolidation among competitors, entry of new competitors, the launch of new products and marketing initiatives by our competitors, and difficulty securing rights to access or integrate with third party products or data used by our customers; (ix) the rate of adoption of our newer solutions and the results of our efforts to sustain or expand the use and adoption of our more established solutions; (x) fluctuation of our results of operations, which may make period-to-period comparisons less meaningful; (xi) our ability to manage our growth effectively including expanding outside of the United States; (xii) adverse changes in our relationship with Salesforce; (xiii) repurchases of our common stock under our stock repurchase programs or the decision to terminate or suspend any repurchases; (xiv) risks associated with the acquisitions we have completed or may undertake; (xv) the loss of one or more customers, particularly any of our larger customers, or a reduction in the scope of our customers' commitments, including the number of users for which they purchase access and use rights and the assets or activity on which their subscriptions are based number of users our customers purchase access and use rights for; (xvi) system unavailability, system performance problems, or loss of data due to disruptions or other problems with our computing infrastructure or the infrastructure we rely on that is operated by third parties; and (xvii) our ability to maintain our corporate culture and attract and retain highly skilled employees.; (xviii) our level of indebtedness, our ability to service or refinance amounts outstanding under our credit facility, restrictions imposed by the terms of that facility, and our ability to fund repurchases of our common stock from existing cash, credit facility capacity, or future cash flows; (xix) evolving laws, regulations, and supervisory expectations applicable to artificial intelligence, and our dependence on third-party artificial intelligence models, infrastructure, and data, including the accuracy, reliability, and explainability of AI-generated output relied upon by our customers in regulated activities; (xx) fluctuations in foreign currency exchange rates. Additional information concerning these and other risks and uncertainties is contained in the "Risk Factors" section of nCino's most recent Annual Report on Form 10-K and in its subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission, which are available at www.sec.gov and on nCino's investor relations website. Non-GAAP Financial MeasuresIn nCino’s public disclosures, nCino has provided non-GAAP measures, which are measurements of financial performance that have not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. In addition to its GAAP measures, nCino uses these non-GAAP financial measures internally for budgeting and resource allocation purposes and in analyzing our financial results. For the reasons set forth below, nCino believes that excluding the following items provides information that is helpful in understanding our operating results, 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. Amortization of Purchased Intangibles. nCino incurs amortization expense for purchased intangible assets in connection with certain mergers and acquisitions. Because these costs have already been incurred, cannot be recovered, are non-cash, and are affected by the inherent subjective nature of purchase price allocations, nCino excludes these expenses for our internal management reporting processes. nCino’s management also finds it useful to exclude these charges when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. Although nCino excludes amortization expense for purchased intangibles from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Stock-Based Compensation Expenses. nCino excludes stock-based compensation expenses primarily because they are non-cash expenses that nCino excludes from our internal management reporting processes. nCino’s management also finds it useful to exclude these expenses when they assess the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use, nCino believes excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies. Transaction-Related Expenses. nCino excludes expenses related to mergers and acquisitions or divestitures as they limit comparability of operating results with prior periods. Transaction-related expenses include but are not limited to, costs incurred from third-party professional services firms, change in fair value of contingent consideration, and one-time integration activities. We believe these costs are non-recurring in nature and outside the ordinary course of business. Litigation Expenses. nCino excludes fees and expenses related to litigation expenses incurred from legal matters outside the ordinary course of our business as we believe their exclusion from non-GAAP operating expenses will facilitate a more meaningful explanation of operating results and comparisons with prior period results. Restructuring Costs. nCino excludes costs incurred related to bespoke restructuring plans and other one-time costs, if any, that are fundamentally different in strategic nature and frequency from ongoing initiatives. We believe excluding these costs facilitates a more consistent comparison of operating performance over time. There are limitations to using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures provided by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by nCino’s management about which items are adjusted to calculate its non-GAAP financial measures. nCino compensates for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in its public disclosures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. nCino encourages investors and others to review our financial information in its entirety, not to rely on any single financial measure to evaluate our business, and to view our non-GAAP financial measures in conjunction with the most directly comparable GAAP financial measures. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables below. 1Columns may not foot due to rounding.2These amounts represent the non-interest component of payments towards financing obligations for facilities.

Interested in nCino Inc.? Here are five stocks we like better. Strong financial performance: nCino’s second-quarter revenue rose 8% year over year to $161 million, while subscription revenue increased 10% to $143.5 million. Non-GAAP operating income climbed 36% to $40.8 million and free cash flow surged 170% to $34 million. Growing platform and AI adoption: Platform pricing accounted for 48% of total annual contract value, up from 40% the prior quarter, and more than 230 customers had purchased AI Intelligence Units. Four major U.S. enterprise customers renewed at average annual contract value increases above 10%. Outlook raised despite mortgage weakness: nCino lifted its fiscal 2027 operating-income and free-cash-flow guidance, but reduced U.S. mortgage revenue forecasts as elevated rates continue to pressure independent mortgage banks. The company also repurchased $65 million of shares and authorized a new $100 million buyback program. Why Q2 Holdings Stock Could Be Your Next Big Buy nCino (NASDAQ:NCNO) reported second-quarter fiscal 2027 revenue growth and raised portions of its full-year outlook, as the company highlighted demand for its banking software platform and growing customer adoption of its AI capabilities. Total revenue for the quarter was $161 million, up 8% from a year earlier, while subscription revenue increased 10% to $143.5 million, Chief Financial Officer Greg Orenstein said. Subscription revenue excluding U.S. mortgage rose 12% year over year, including on a constant-currency basis. → Rocket Lab's Sell-Off Is Fading—Is It Finally Safe to Buy? nCino's path to profits: Niche fintech with strong prospects Non-GAAP operating income increased 36% year over year to $40.8 million, representing 25% of total revenue. Free cash flow rose 170% to $34 million. Professional services revenue declined 3% to $17.5 million, though professional services gross margin improved to 3% from negative 3% a year earlier as the company prioritized profitability over services revenue growth. Chief Executive Officer Sean Desmond said nCino continued to see customer interest in consolidating banking workflows—including lending, onboarding, account opening and portfolio monitoring—on its unified platform. The company is emphasizing AI-enabled functions through its Banking Advisor products and its platform-pricing model. → Travel + Leisure Goes Big—Is It Ready to Rally? During the quarter, nCino signed early multiyear renewals with four of its 20 largest U.S. enterprise customers by annual contract value, or ACV. The four customers represented more than $900 billion in assets and renewed with average ACV increases of more than 10%, according to Desmond. As of the end of the quarter, 12 of nCino’s top 20 U.S. enterprise customers by ACV had transitioned to the company’s platform-pricing model under multiyear contract extensions. About 48% of total ACV was on platform pricing, compared with 40% in the prior quarter. → What Rising Delivery Forecasts Say About Rivian's Stock Prospects More than 230 customers had purchased AI Intelligence Units by quarter-end, Desmond said. The company has begun selling additional units to some customers that reached the limits of their initial bundles, though it does not expect that monetization to materially affect fiscal 2027 results. Management said its current priority is building long-term adoption rather than maximizing near-term subscription revenue from the units. Desmond pointed to Continuous Credit Monitoring, a Banking Advisor capability, as a potential medium-term driver of Intelligence Unit consumption. The feature can assess more than 40 credit and operational indicators daily, identify loans requiring attention and help create documentation for review. He said the product combines natural-language capabilities with nCino’s proprietary deterministic models and algorithms, which are intended to support traceable and auditable banking processes. One U.S. enterprise customer estimated that nCino’s “locate and file” capability could save 160,000 hours annually. Using an estimated $35 hourly loan officer compensation figure, Desmond said that would equate to more than $5.5 million in annual savings. The customer was still in a sandbox environment while working through security reviews, Orenstein said. nCino cited new international customer wins, including Hachijuni Nagano Bank in Japan for consumer lending and a growth-focused development finance institution in Germany for commercial lending. Non-U.S. revenue grew 9% to $36.4 million, while international subscription revenue rose 13% to $30.9 million. The company also described several expansion deals in the U.S. A regional bank with more than $15 billion in assets expanded from commercial lending and treasury management into consumer lending. A Seattle-based credit union added commercial and small-business lending as well as commercial account opening, while a Northeast community bank expanded into mortgage capabilities. Orenstein said nCino signed what it expects to be its largest deal of the fiscal year with an international customer early in the third quarter. The company plans to discuss that transaction in more detail on its next earnings call. U.S. mortgage subscription revenue was $20.6 million in the second quarter, down 1% year over year. Management said higher mortgage rates continue to pressure the independent mortgage bank, or IMB, market and contribute to industry consolidation. Desmond said nCino is pursuing market-share opportunities among banks, credit unions and IMBs, including an IMB customer that returned after leaving in August 2024 for a lower-cost competitor. The customer came back after experiencing reliability issues and a cumbersome borrower experience with the alternative product, he said. For the full year, nCino kept its aggregate churn expectation at about $25 million, but said the forecast now includes a somewhat higher mix of IMB churn and less churn elsewhere in the business. Desmond said mortgage represents about one-third of the expected annual churn. For the third quarter, nCino forecast total revenue of $161.25 million to $163.25 million and subscription revenue of $143.25 million to $145.25 million. At the midpoint, the guidance implies 7% total revenue growth and 8% subscription revenue growth. Excluding U.S. mortgage, third-quarter subscription revenue is expected to grow 11%. For fiscal 2027, the company now expects total revenue of $644 million to $647 million and subscription revenue of $573.5 million to $576.5 million. The midpoint represents 9% total revenue growth and 10% subscription revenue growth, with subscription growth excluding U.S. mortgage expected to be 12%. The company reduced its U.S. mortgage subscription revenue forecast to approximately $20 million for the third quarter and $18.5 million for the fourth quarter, reflecting expected IMB churn amid the higher-for-longer rate environment. It raised its full-year non-GAAP operating income outlook to $171 million to $174 million, from a prior range of $166 million to $171 million, and lifted free-cash-flow guidance to $137 million to $142 million. nCino also repurchased approximately 4.2 million shares during the second quarter for about $65 million, at an average price of $15.41 per share. The company completed a previously announced $100 million accelerated share repurchase program and received authorization from its board for a new $100 million repurchase program. nCino, Inc provides a cloud-based banking operating system designed to modernize and streamline processes for financial institutions. Built on a software-as-a-service (SaaS) model, the nCino Bank Operating System integrates key banking functions into a unified platform, enabling banks and credit unions to enhance efficiency, reduce risk and improve customer experiences. Founded in 2012 as a spinoff from Live Oak Bank, nCino launched its flagship offering to address the needs of commercial and retail lenders seeking to replace legacy systems. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "nCino Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

nCino (NCNO) came out with quarterly earnings of $0.3 per share, beating the Zacks Consensus Estimate of $0.28 per share. This compares to earnings of $0.22 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +7.14%. A quarter ago, it was expected that this company would post earnings of $0.28 per share when it actually produced earnings of $0.33, delivering a surprise of +17.86%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. nCino, which belongs to the Zacks Internet - Software industry, posted revenues of $161 million for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 1.27%. This compares to year-ago revenues of $148.82 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. nCino shares have lost about 18.3% since the beginning of the year versus the S&P 500's gain of 11.8%. While nCino has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for nCino was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.34 on $162.21 million in revenues for the coming quarter and $1.33 on $643.91 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Autodesk (ADSK), is yet to report results for the quarter ended July 2026. The results are expected to be released on August 27. This design software company is expected to post quarterly earnings of $3.12 per share in its upcoming report, which represents a year-over-year change of +19.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Autodesk's revenues are expected to be $2.01 billion, up 14% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report nCino Inc. (NCNO) : Free Stock Analysis Report Autodesk, Inc. (ADSK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

nCino has had an impressive run over the past six months as its shares have beaten the S&P 500 by 7.4%. The stock now trades at $19.16, marking a 20.9% gain. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move. Is there a buying opportunity in nCino, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free. Despite the momentum, we don’t have much confidence in nCino. Here are three reasons why NCNO doesn’t excite us, plus one stock we’d rather own. Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract. nCino’s billings came in at $173.8 million in Q1, and over the last four quarters, its year-on-year growth averaged 9.5%. This performance was underwhelming and suggests that increasing competition is causing challenges in acquiring/retaining customers. Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite. Over the next 12 months, sell-side analysts expect nCino’s revenue to rise by 7.6%, a deceleration versus its 22.4% annualized growth for the past five years. This projection doesn’t excite us and suggests its products and services will see some demand headwinds. For software companies like nCino, gross profit tells us how much money remains after paying for the base cost of products and services (typically servers, licenses, and certain personnel). These costs are usually low as a percentage of revenue, explaining why software is more lucrative than other sectors. nCino’s gross margin is substantially worse than most software businesses, signaling it has relatively high infrastructure costs compared to asset-lite businesses like ServiceNow. As you can see below, it averaged a 61.6% gross margin over the last year. Said differently, nCino had to pay a chunky $38.39 to its service providers for every $100 in revenue. The market not only cares about gross margin levels but also how they change over time because expansion creates firepower for profitability and free cash generation. nCino has seen gross margins improve by 1.6 percentage points over the last 2 years, which is solid in the software space. nCino isn’t a terrible business, but it isn’t one of our picks. With its shares beating the market recently, the stock trades at 3.2× forward price-to-sales (or $19.16 per share). This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We’re pretty confident there are more exciting stocks to buy at the moment. Let us point you toward a fast-growing restaurant franchise with an A+ ranch dressing sauce. ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.