Earnings call transcript: Ncino Q2 2025 beats expectations with strong earnings

Ncino (NCNO) reported its second-quarter earnings for fiscal year 2026, surpassing analyst expectations with an earnings per share (EPS) of $0.22 compared to the forecasted $0.14, marking a 57.14% surprise. The company also reported revenues of $148.8 million, exceeding the anticipated $143.18 million. According to InvestingPro data, the company maintains a healthy 60% gross profit margin and has achieved a 13.4% year-over-year revenue growth. Despite the positive earnings report, the stock saw a slight decline of 0.63% in after-hours trading, closing at $28.19.

Key Takeaways

• Ncino’s EPS exceeded forecasts by 57.14%, reflecting strong financial performance.
• Total revenues increased by 12% year-over-year, driven by a 15% rise in subscription revenues.
• The company launched its Banking Advisor AI technology, gaining traction with over 80 customers.
• Despite strong earnings, the stock price dipped slightly in after-hours trading.
• Guidance for full-year subscription revenues remains optimistic, projecting a 10% growth.

Company Performance

Ncino demonstrated robust performance in the second quarter, with total revenues reaching $148.8 million, a 12% increase compared to the same period last year. The company’s subscription revenues grew by 15%, indicating strong demand for its cloud-native solutions. Additionally, international revenues rose by 22%, highlighting Ncino’s expanding global footprint.

Financial Highlights

• Revenue: $148.8 million, up 12% year-over-year
• Subscription Revenue: $130.8 million, up 15% year-over-year
• Non-GAAP Operating Income: $30 million, representing 20% of total revenues
• Cash Position: $123.2 million at quarter-end

Earnings vs. Forecast

Ncino reported an EPS of $0.22, significantly surpassing the forecasted $0.14, resulting in a 57.14% positive surprise. This marks a substantial improvement from previous quarters, indicating effective cost management and revenue growth strategies. Revenue also exceeded expectations, coming in at $148.8 million against the forecast of $143.18 million, a 3.93% surprise.

Market Reaction

Despite the earnings beat, Ncino’s stock experienced a slight decline of 0.63% in after-hours trading, closing at $28.19. This movement is within the stock’s 52-week range of $18.75 to $43.20. According to InvestingPro’s Fair Value analysis, NCNO appears slightly undervalued at current levels. The stock shows a moderate beta of 0.77, indicating lower volatility compared to the broader market. The decline may reflect cautious investor sentiment amid broader market conditions or profit-taking following the earnings announcement.

Outlook & Guidance

Ncino projects full-year subscription revenues between $513.5 million and $517.5 million, reflecting a 10% growth. Total revenues are expected to range from $585 million to $589 million. With a current market capitalization of $3.3 billion and analyst consensus indicating potential upside, the company remains focused on its strategic initiatives, including the expansion of its Banking Advisor AI technology and improving professional services margins. Discover detailed growth projections and comprehensive financial analysis in the exclusive Pro Research Report, available to InvestingPro subscribers.

Executive Commentary

CEO Sean Desmond highlighted the importance of AI in customer interactions, stating, "AI is coming up in virtually every customer conversation." He emphasized the company’s focus on the successful adoption of its Banking Advisor product. CFO Greg Orenstein reiterated the company’s growth-oriented strategy, saying, "We’re always going to err on the side of growth."

Risks and Challenges

• Macroeconomic pressures could impact customer spending and project timelines.
• Competition in the cloud-native banking technology sector remains intense.
• Execution risks associated with the rollout of new AI-driven products.
• Currency fluctuations might affect international revenue contributions.

Q&A

During the earnings call, analysts inquired about the company’s international pipeline and the impact of AI on renewal rates. Management noted strong pipeline activity across international markets and highlighted AI’s role in driving early renewals and pricing discussions. Additionally, the company’s mortgage segment performance was better than expected, contributing positively to the quarter’s results.

Full transcript - Ncino (NCNO) Q2 2026:

Conference Operator: Good day, and thank you for standing by. Welcome to the nCino Second Quarter Fiscal Year twenty twenty six Financial Results Conference Call. At this time, participants are in a listen only mode. Please be advised that today’s conference is being recorded. After the speakers’ presentation, there will be a question and answer session.

I would now like to hand the conference over to your speaker today, Harrison Masters, Vice President, Investor Relations.

Harrison Masters, Vice President, Investor Relations, nCino: Good afternoon, and welcome to nCino’s second quarter fiscal twenty twenty six 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. Encino 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 eight ks 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

Sean Desmond, Chief Executive Officer, nCino: the call over to Sean. Good afternoon and thank you for joining us to discuss nCino’s second quarter fiscal twenty twenty six results. Before jumping into the details from the quarter, I’d like to remind you of the fundamental challenge we address in nCino’s mission in the marketplace. Financial institutions around the globe face persistent challenges rooted in legacy and fragmented technology infrastructure that restricts their growth potential and bottom line performance and causes inefficient and frustrating user experiences for both their employees and customers. NCino alleviates critical pain points inflicted by disparate data sources, legacy technology and manual processes with intelligent automation delivered on a unified scalable platform powered by AI.

NCino stands as the singular cloud native SaaS platform that allows financial institutions of all sizes on a global basis to seamlessly manage lending, onboarding, account opening and portfolio management across all major lines of business. Because we are the system of record for so many of our customers’ most critical operations and because our solutions are deployed in over 20 countries across a broad and diverse customer base of banks, credit unions and INBs of all sizes, we believe we have built a competitive moat that is both wide and deep. Turning to our second quarter, we outperformed our guidance ranges for both our revenues and profitability metrics and the evolution of our product strategy continues to be validated in the marketplace. With our flagship commercial loan origination solution, we saw strong activity in the North American enterprise market, including significant expansion agreements with two top 50 U. S.

Banks and the top five Canadian bank. And in the mid market, we saw an almost 7 figure ACV commitment from a net new $10,000,000,000 asset bank for commercial lending. We also saw positive traction with our growth initiatives for fiscal twenty twenty six, which as a reminder are expanding our focus in EMEA, activating the credit union market, realizing the onboarding opportunity, cross selling mortgage and embedding AI, data and analytics across our unified platform. On Continental Europe, where we see an over $4,000,000,000 market opportunity, we signed our first customer in Spain. As we have seen over the history of the company, we expect success with the initial customer in a new geography to validate the nCino value proposition and fuel growth with other financial institutions in that geography.

Also in the quarter, Infosys, a strategic partner in the implementation of nCino at ABN AMRO Bank, one of the largest banks in The Netherlands issued a press release announcing a successful go live. This project strategically sought to transform ABN loan origination and collateral management process by consolidating multiple legacy systems into a single unified platform, enhancing ABN AMRO’s ability to serve its customers and streamline operations. We expect wins and more importantly go lives like these to precipitate more new business in our newer European markets throughout the second half of this year and beyond. In the credit union market, where we previously announced the dedicated focus this year, we signed an expansion deal that included business lending and account opening, commercial lending, commercial pricing and profitability and incentive compensation, which took a credit union with $12,000,000,000 in assets over the 7 figure mark for their annual commitment to Encina. Overall, our credit union team added six new logos and 35 cross sells in the second quarter.

Moving to onboarding. In the second quarter, an existing UK challenger bank customer increased their ACV with nCino over 80% by broadening their adoption to include onboarding, demonstrating the market demand for technology that helps financial institutions manage the end to end client relationship. From acquisition to ongoing interactions and due diligence monitoring, ensuring a compliant, smooth and personalized experience. Turning to mortgage. The market showed signs of momentum in the second quarter with expansion activity from over 50 nCino mortgage customers, about half of which were depository institutions, evidencing the demand in our customer base to leverage our best in class unified platform across lines of business within their institution.

Seeing this level of activity across both depositories and IMBs with our mortgage solution is a positive signal. And as Greg will touch upon in his remarks, the year over year subscription revenues growth we saw in mortgage this quarter demonstrates that the platform pricing shift we made with mortgage over the past couple of years will prove beneficial as the industry recovers. Finally, on the AI front, I’m very excited to share our progress and what we believe will be as transformative for financial services as our pioneering move to cloud banking was over a decade ago. Banking Advisor represents the first pillar of our AI strategy and over 80 customers have now purchased this technology. Banking Advisor represents an AI powered interface designed exclusively for financial institutions.

Unlike generic AI solutions, Banking Advisor is deeply integrated into nCino workflows and understands financial products, process workflows, regulatory nuances and day to day banking realities. Banking Advisor is evolving to become the primary interface through which our customers will experience increasingly sophisticated AI capabilities and fully agentic workflows, which we plan to start rolling out to the market next quarter. As our product development organization continues to deepen and widen our AI mode and as more and more financial institutions look to nCino to help them navigate their AI journey, we are laser focused on ensuring the successful adoption of Banking Advisor by the initial cohort of customers. Financial institutions don’t just need AI tools. They want a partner they trust who deeply understands banking, has a proven ability to drive industry wide change and possesses the data foundation necessary to build truly differentiated AI capabilities.

NCino has been that partner through our customers introduction to the cloud and we strongly believe no company is better positioned than Incino to lead the AI transformation of financial services. Specifically, nCino provides mission critical systems for our customers. We understand the regulatory complexities and nuances our customers must navigate and comply with on a global basis. We are a trusted data partner with a deep appreciation for the confidential nature of our customers’ information and the infrastructure required to protect it. And we understand the context in which AI tools are used because of our singular financial services vertical market focus across commercial, consumer and mortgage lines of business.

These factors along with our scale, global presence, reputation in the market and best of breed product portfolio make us uniquely positioned to be the worldwide leader in AI banking. AI is coming up in virtually every customer conversation and we are already seeing our AI first approach contributing as a differentiator that helps move deals over the finish line, including being a catalyst for customers to transition to our new pricing framework. With that, I’ll hand the call over to Greg to walk you through our financial results.

Greg Orenstein, Chief Financial Officer, nCino: Thanks, Sean, and thank you all for joining us today. 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 eight ks furnished with the SEC just before this call. In the second quarter, total revenues were $148,800,000 up 12% year over year. Subscription revenues were $130,800,000 up 15% year over year on a reported basis and 10% organically.

As noted on Slide 15 of our second quarter earnings presentation, of the approximately 4,300,000 over performance against the top end of our second quarter subscription revenues guidance, 900,000 was a result of solid execution against our plan, 1,700,000.0 was due to over performance from our U. S. Mortgage business, where we saw subscription revenues of $20,900,000 up 22% year over year and $1,600,000 was a result of favorable foreign exchange rates relative to plan. Professional services revenues were $18,100,000 a decrease of 2% year over year. As I addressed at our Investor Day in May, while it will take some time to see results, professional services gross profit growth will be the focal point of our internal operating plans versus driving additional professional services revenues growth.

And we remain focused on realizing quicker deployment timelines through the use of AI and SandBox banking and by taking a more prescriptive approach to projects. Non U. S. Total revenues were $33,500,000 up 22% or 19% in constant currency. Non U.

S. Subscription revenues were $27,400,000 up 30% or 27% in constant currency and 10% organically. Please note our discussion of constant currency excludes any currency impact on revenues from Full Circle. Non GAAP operating income was $30,000,000 or 20% of total revenues. Overperformance against our subscription revenues guidance contributed approximately 3,700,000 of non GAAP operating income and the balance of our overperformance against guidance came from solid execution on efficiency initiatives.

We ended the quarter with $123,200,000 in cash, including restricted cash and $203,500,000 outstanding on our line of credit. We repurchased approximately 750,000 shares of our common stock in the second quarter at an average price of $26.89 per share for total consideration of approximately $20,000,000 When added to the stock we acquired in the first quarter, we have repurchased approximately 2,600,000.0 shares at an average price of $23.53 per share for total consideration of approximately $60,600,000 against the $100,000,000 authorization. As we stated last quarter, our capital focus for the time being will be on realizing the benefits of the prior acquisitions we have made and on share repurchases. Our platform pricing transition continues to proceed according to our expectations, including price uplifts, and we have now converted approximately 21% of our ACV to platform pricing. Now turning to guidance.

For the 2026, we expect total revenues of $146,000,000 to $148,000,000 and subscription revenues of $127,500,000 to $129,500,000 an increase of 67% respectively at the midpoints of the ranges, including approximately $5,500,000 of inorganic subscription revenues from Full Circle and SandBox Banking. Non GAAP operating income in the third quarter is expected to be $31,500,000 to $33,500,000 and non GAAP net income attributable to nCino per share is expected to be $0.20 to $0.21 based upon 117,000,000 diluted shares outstanding. If you turn to Slide 16 of our second quarter earnings presentation, you’ll see for the full year, we are flowing through the $900,000 second quarter execution base beat and increasing our full year subscription revenues guidance by $2,700,000 We are also increasing our outlook for U. S. Mortgage subscription revenues growth for the full year by the approximately $1,700,000 over performance in the second quarter.

While we are planning for mortgage subscription revenues to be down both year over year and taking seasonality into account sequentially in the third quarter, we now expect U. S. Mortgage subscription revenues growth of approximately 5% for fiscal twenty twenty six, U. Up from our prior guidance of flat year over year. The accretive subscription revenues growth contributed by our mortgage business in the second quarter is the result of volume growth concentrated in some large I and B and homebuilder customers.

Our mortgage team did a tremendous job acquiring these customers in the lows of the mortgage cycle and we are quite encouraged by these results. However, in keeping with our new guidance philosophy, we are not extrapolating this over performance to the rest of the year at this time. With respect to FX, our prior subscription revenues guidance for fiscal twenty twenty six assumed a relatively strong U. S. Dollar, which weakened in the second quarter.

Our revised full year subscription revenues outlook includes adding approximately 2,100,000 of foreign currency benefit relative to our plan for the fiscal year, which includes approximately $1,600,000 realized in the second quarter with the $500,000 balance of the benefit expected in the fourth quarter when the U. S. Dollar was strongest last year. Full Circle and SandBox Banking have been contributing subscription revenues in accordance with plan. So our outlook for fiscal twenty twenty six inorganic subscription revenues of $17,500,000 remains unchanged.

For fiscal twenty twenty six, we now expect subscription revenues of $513,500,000 to $517,500,000 up from our prior guidance of $5.00 $7,000,000 to $511,000,000 representing 10% growth at the midpoint of the range and 9% in constant currency. As a reminder, our second half fiscal twenty twenty six year over year subscription revenues comparisons are negatively impacted by an approximately 3% headwind in both the third and fourth quarters as a result of one time subscription revenues that occurred in the 2025. We also continue to expect the fourth quarter to represent the lowest year over year subscription revenues growth for the year. For fiscal twenty twenty six, we now expect total revenues of $585,000,000 to $589,000,000 up from our prior guidance of $578,500,000 to 5 and $82,500,000 representing growth of approximately 9% at the midpoint of the range and 8% in constant currency. We now expect our fiscal twenty twenty six non GAAP operating income to be $117,500,000 to $121,500,000 up from our prior range of $112,000,000 to $116,000,000 representing an approximately 24% increase over fiscal twenty twenty five at the midpoint.

Non GAAP net income attributable to nCino per diluted share is now expected to be $0.77 to $0.80 based upon a weighted average of approximately 118,000,000 diluted shares outstanding, which does not factor in any additional share repurchases beyond those we have made to date. This guidance assumes interest expense incurred under our credit facility of approximately $15,000,000 for the fiscal year. Finally, our fiscal twenty twenty six outlook for ACV is $564,000,000 to $567,000,000 representing growth of 10% at the midpoint of the range, which reflects constant currency as unlike revenues, ACV is measured in rates at the end of the period. Our guidance represents net additions to ACV of $48,000,000 to $51,000,000 in the year, including $4,500,000 from the acquisition of SandBox Banking. Our confidence in meeting or exceeding this outlook is underscored by the net bookings we achieved in the first half of the year and the opportunities we see in the pipeline for the remainder of the year.

I’ll remind you that ACV bookings have historically been seasonally stronger in the second half of the year, hence the rationale for an annual cadence of our disclosure of this metric. In closing, we are quite pleased with the progress we have made in the first half of the year and are very excited about the deal activity and sales opportunities we are seeing in the market. We remain confident that we are on track to achieving Rule of 40 around the 2027 as stated on our fourth quarter fiscal twenty twenty five earnings call. With that, I will open the line for questions.

Conference Operator: Thank Our first question comes from Brent Bracelin with Piper Sandler. You may proceed.

Brent Bracelin, Analyst, Piper Sandler: Thank you. Good afternoon. Greg, it’s great to see the biggest revenue beat here since the lockdown days and the digital surge we first sought. Based on our estimates, it looks like organic growth reaccelerated for the first time in three years. Can you maybe frame the drivers behind the strength you’re seeing and whether those are sustainable or were there some one time things that helped you this quarter?

Thanks.

Greg Orenstein, Chief Financial Officer, nCino: Yes. Thanks, Brett. Yes, I think first and foremost, again, just solid execution from the team. And so appreciative of everyone’s efforts. Everyone is very focused on executing the plan.

I think taking a step back, I think the macro in general is more supportive than what we’ve seen getting back to your comments about kind of the pre COVID days. The headwinds that we’ve been navigating have generally subsided. And ultimately, as we talked about on the call from a deal activity standpoint and from a sales opportunity standpoint, we haven’t seen this level of activity in quite some time. And so we feel good about the business. And I think the team is very, very focused on just execution.

Brent Bracelin, Analyst, Piper Sandler: Helpful color there. And then Sean, maybe for you on AI. It sounds like you’re getting some nice early proof points that you have some differentiation. We’re seeing in other areas, Applied AI in these domain specific areas are also having success. Baking Advisor, it looks like you’re now at 80 customers.

I think you talked about maybe a little under 20 entering the year. What’s resonating there? And how important are these fully agentic workflows coming out next quarter in building on that momentum? Thanks.

Sean Desmond, Chief Executive Officer, nCino: Yes. I appreciate the question. Indeed, AI is coming up in every customer conversation we have in the field and it is contributing meaningfully to wins thus far the first half of the year. So we’re excited to build on that momentum. And it also pulls through the platform story.

Customers recognize that we have built up a decade of process centric data and a point of view on that data that informs decisions as well as recommendations we can make to help banks improve their efficiency. And that’s ultimately our overarching goal here at nCino. So we’re excited about that. The uptick on banking advisor, we do have to remember there is a change management journey there, right? As we roll out banking advisor skills, we are changing fundamentally the way people do their jobs.

And as they embrace that, there’s a learning curve. And so we’re busy investing in the adoption of that, helping people navigate that and that’s fun work to be doing because we’ve always aspired to just change the way people do their jobs in this industry. And then finally, it comes to AgenTic experiences, we believe we’re going to deliver them even earlier than we anticipated in this call last quarter. So we are seeing teams come to the table with agentic experiences reimagining existing nCino workflow that are going to show up before the end of this year. And that’s exciting.

That’s exactly the conversation our customers want to have. And they remind us that while they’re excited, they’re also going to be conservative in terms of how they adopt these. So we’re finding the right balance between getting excited about agentic workflows, but driving that out in a very realistic as well as mature sort of a way that we’re not compromising risk and compliance within the institution.

Brent Bracelin, Analyst, Piper Sandler: Helpful color there guys. Thank you.

Sean Desmond, Chief Executive Officer, nCino: Thanks, Our

Conference Operator: next question comes from Terry Tillman with Truist. You may proceed.

Terry Tillman, Analyst, Truist: Yes. Hi, Sean, Greg and Harrison. Maybe I should try this Buenos Tardes. Don’t laugh at me on my Spanish. Good to see the Spanish win, but I think there was a little laugh there.

But I first wanted to focus on platform pricing, and then I wanna follow-up with mortgage. So as you have these platform pricing conversations, and it sounded like you had some success with two top 50 banks and then a top five Canadian bank. Like what kind of uplift are you seeing? And then how important and how is that actually tracking in terms of your expectations you had on platform pricing? And how do you think about that into next year given probably there’s even a larger base of renewals?

And then I had a mortgage follow-up question. Thank you.

Greg Orenstein, Chief Financial Officer, nCino: Yes. Thanks for the question, Terry. A few things I think to unpack there. First and foremost, just in terms of the pricing transition, as we noted in the prepared remarks, so far I think it’s going well in accordance with our expectations. And so we’re really pleased with that.

The team’s invested a lot of time and energy and enablement to execute that. So far, we are seeing price uplifts consistent with our expectations. We’ve told folks that we like to target around a 10% uplift just on an apples to apples basis, so no additional product, just switching from on renewal to the new model. Ultimately, the biggest cohort of migrations or renewals this year is going to be in the fourth quarter. So we want to work through that before we kind of come out with what we see through that because again that’s going be the largest cohort for this year, but it’s going well going in accordance with our expectations.

And we see people embracing it particularly as Sean noted with the AI and the banking advisor skills that are part of that transition.

Terry Tillman, Analyst, Truist: That’s great. And just on the mortgage side, it’s impressive to hear about 5% versus flat. I think Sean, you were talking about it almost sounds like there’s some share gains. This isn’t a reliance on mortgage industry changing or getting better, but IMVs and then homebuilders. Is there more you can pull from them just winning in a tough market, whether it’s in 3Q or beyond?

Or how much do you have to start seeing the industry get better?

Sean Desmond, Chief Executive Officer, nCino: Yes. So we are excited about the momentum there. I think the convergence of churn settling down to our historic low norms there, in addition to the activity we see in the pipeline is resulting in a picture where we have more deal activity out there than we’ve had in quite some time. In fact, I had a number of the field mortgage employees in my office just yesterday talking about this activity and the excitement and the number of meetings I have just in the next month with some customers in that IMB space that you mentioned as well as depository institutions were energized by that. So I don’t think we need to rely on any announcements from the MBA.

We don’t need to rely on any correlations to interest rates. We simply need to execute and have the best tech in the marketplace. We have a relatively crowded space there with a lot of competitors that’s healthy, that keeps us sharp and I feel really good about our position competing in that space.

Harrison Masters, Vice President, Investor Relations, nCino: Thanks. Nice job.

Greg Orenstein, Chief Financial Officer, nCino: Thanks, Terry. Our

Conference Operator: next question comes from Ryan Tomasello with KBW. You may proceed.

Ryan Tomasello, Analyst, KBW: Hi, everyone. Thanks for taking the questions. I wanted to start on the credit union wins you called out, I think six net new logos in that category, which seems strong. Just any context around what drove those, if any of those were competitive takeaways? And regarding the broader activation of that new go to market team, do you feel like that sales force is now kind of fully hitting its stride in this pace of sales?

Or there’s still more ramp as pipelines build with that new go to market activation? Thanks.

Sean Desmond, Chief Executive Officer, nCino: Yes. I think the six deals are a validation of why we made the investment to activate this team. We have the technology. We have the solutions. We’re solving the same business problems, but we’re speaking the language of a segment of the market that we just had not been as focused on before.

As we talk about execution discipline and focus, that’s an area that we’re laser focused. And that team is enthused and energized by that opportunity. So I expect that we’ll continue that momentum there. We have opportunities in automated small business. We have opportunities in mortgage.

We have opportunities in commercial and consumer lending, all just core bread and butter things that we do here at nCino. And then we have an opportunity to cross sell the platform, right? We have a well established credit union customer base based on doing business there for over a decade. And we’re seeing opportunities to cross sell there with that team. So it’s a matter of focus and it’s exciting to see that one of our key growth initiatives is being validated at this point in the year.

Ryan Tomasello, Analyst, KBW: Great. And then now that you have several quarters of banking advisor usage data and I think you called out roughly 80 customers onboarded, Any color on sizing the type of uplift you’re seeing from those usage credits to ACVs? I understand that banking advisor doesn’t actually count towards ACV, but any way to size that in terms of the usage benefits would be helpful. Thanks.

Greg Orenstein, Chief Financial Officer, nCino: Yes. Ryan, for this year, it’s I think we’ve mentioned this, but just to reinforce, it’s not part of our fiscal twenty twenty six financial plan. Right now, the focus of the team is getting that technology in as many of our customers’ environments as we can. And as Sean said, it’s then taking them on that journey kind of cohort by cohort, enabling them to leverage the technology. And so that will take some time to work through.

And so that’s where our focus right now is very much on the adoption of the technology. And we’ll see how that plays out as the year progresses in anticipation of having that be part of our plan for next year. But again, we want to get a little bit more data and more data points from the evolution, but we are very pleased with what we’re seeing so far and the receptivity to people again looking to us and nCino to take them on this AI journey.

Ryan Tomasello, Analyst, KBW: Great. Thanks for taking the questions.

Greg Orenstein, Chief Financial Officer, nCino: Thanks, Ryan.

Conference Operator: Our next question comes from Michael Infante with Morgan Stanley. You may proceed.

Michael Infante, Analyst, Morgan Stanley: Hey, guys. Nice to help. Thanks for taking my question. Greg, you obviously called out your commentary just in terms of your ability to meet or exceed the full year ACV outlook. I just wanted to ask on the sort of two buckets you called out between performance in the quarter versus what you see in the pipe.

Like how would you sort of speak to your level of visibility and sort of how that has improved throughout the quarter? Thanks.

Greg Orenstein, Chief Financial Officer, nCino: Yes. Thanks for the question, Michael. Yes, again, I did note our confidence. Ultimately, we’ve got to go execute, right? We have to go get the business, but the business is out there.

And as I think we said, we feel good about it. We have not seen this level of deal activity and opportunities and as I said in quite some time. So that’s encouraging, team focused on execution. And yes, in terms of looking at the ACV guide, again, I think we feel good with really both components, what we did in the first half on a net bookings basis as well as the pipeline. So I think both of those are contributing again to our confidence.

And then like I said, it’s just about execution.

Michael Infante, Analyst, Morgan Stanley: Helpful. And then just a quick housekeeping follow-up on Ryan’s question. So just on the Banking Advisor, despite all of the success that you’re seeing on go lives and some of the positive usage trends, the assumptions on a revenue contribution basis for Banking Advisor specifically is that you’re still not going to see any revenue from that product this year. Is that correct?

Greg Orenstein, Chief Financial Officer, nCino: That’s correct. Certainly from an overage perspective, that’s right. And again, the focus is on adoption and helping, again, Sean said, help our customers transform the way that they do business with technology.

Michael Infante, Analyst, Morgan Stanley: Thanks, Greg.

Greg Orenstein, Chief Financial Officer, nCino: Thanks, Michael.

Conference Operator: Our next question comes from Adam Hotchkiss with Goldman Sachs. You may proceed.

Adam Hotchkiss, Analyst, Goldman Sachs: Great. Thanks so much for taking the question. I wanted to ask on Doc Fox and Full Circle, obviously, a number of months since those have been generally available. What are what was sort of the performance highlights there in the quarter? And then how are you feeling about the pipeline of those two products?

And maybe just the onboarding and account opening category more broadly into the back half of the year and into calendar 2026? Thanks.

Sean Desmond, Chief Executive Officer, nCino: Yes. With respect to the integration of Full Circle, we’re on track to revenue plan as noted in prepared remarks. And we’re really happy with the technical work that is ongoing there that we could deliver a full CLM solution, customer lifecycle management in the EMEA market. With respect to DocFox, consistent with the message we’ve been delivering this year, we have been doing the technical work that will set up sales cycles the back half of this year that we think will be accretive next year. So the lion’s share of that work has been completed.

The teams continue to get a fully end to end integrated onboarding straight through into origination and onboarding into account opening scenarios, and that’s exactly what our customers are asking for.

Greg Orenstein, Chief Financial Officer, nCino: Great. Just as a reminder, we released that at the May. And so to Sean’s point, we released that in Insight and so seeing this pipeline build, that’s what we’ve been focused on and we would expect to see results over the coming quarters.

Adam Hotchkiss, Analyst, Goldman Sachs: Okay. Thanks Greg and John. Really helpful. And then Greg, just on the comment you made around reiterating the fiscal twenty seven rule of 40 by the end of the year. With the revenue growth outperformance and then the sort of operating income outperformance that’s commensurate with that so far this year, any changes to the way you’re thinking about the relative contribution from revenue growth versus operating margin?

Or which one you’re prioritizing or thinking about versus the other maybe versus when you talked to us three months ago? Thank you.

Greg Orenstein, Chief Financial Officer, nCino: Yes, you bet. Look, our focus, as you know, has been on growth. And obviously, we’ve had some headwinds to navigate. And as I mentioned earlier, from a macro perspective, it is quite a bit more supportive and those headwinds have largely subsided. And so we’re always going to on the side of growth.

We think there’s a tremendous opportunity out there for us. We think we have an unparalleled product portfolio. We think we are leading the market in terms of AI. And so Adam, we’re always going to on the side of growth. But when we made that commitment around the fourth quarter of next year with Hula forty, we did not differentiate.

We just that was the commitment and obviously we want to see as much of that come from growth as we possibly can.

Adam Hotchkiss, Analyst, Goldman Sachs: Great. Thanks so much, Greg.

Greg Orenstein, Chief Financial Officer, nCino: Thanks, Adam.

Conference Operator: Our next question comes from Aaron Kimson with Citizens. You may proceed.

Aaron Kimson, Analyst, Citizens: Great. Thanks guys. Sean, are you finding today or do you anticipate in

Sean Desmond, Chief Executive Officer, nCino: the future that any of

Aaron Kimson, Analyst, Citizens: the newer vision around banking advisor or functionality like the updated NCNO mortgage is compelling enough to drive early renewals and thus bring forward pricing tailwind versus the tailwinds being spread out over a four year renewal cycle?

Sean Desmond, Chief Executive Officer, nCino: Yes. The answer is yes. We have been seeing that play out in some early renewal scenarios in the first half of this year. In some cases where we have customers that might not be up for renewal until next fiscal year and beyond, the interest in Banking Advisor is pulling forward conversations that we’re having in the field and having them run toward embracing the new pricing model that we have our customers on. And as you all know, on the one hand, the new pricing model is directly aligned with the outcomes that we want to deliver to our customers.

On the other hand, it is a change and change is hard. So I am really excited to hear that customers because of Banking Advisor as a proxy to drive renewal conversations are pulling those forward.

Adam Hotchkiss, Analyst, Goldman Sachs: That’s great to hear.

Aaron Kimson, Analyst, Citizens: And then as a follow-up, I just wanted to ask, given the noise around Circle’s IPO in June and then the community bank lobby playing a big role in the ultimate wording of the Genius Act in July, how do you think about the potential risks of stablecoins on the community banks that make up about a third or so of your U. S. Core revenue as the regulatory framework evolves in the future?

Sean Desmond, Chief Executive Officer, nCino: We’re watching carefully what’s going on in the market and we’re listening intently to our customers. And in the past three weeks, we’ve had a number of banks of all sizes visit us here in Wilmington and we’re close and in tune with the field. What I would tell you is that, that is a question that our customers And when we read that question back, they’re saying it’s not a big priority at the moment. So in terms of the problems we solve and what we do for our customers onboarding, account opening, loan origination and portfolio monitoring, as we ask, should we prioritize stablecoin solutioning within that context, they’re not pushing us hard right now.

But we’re listening carefully and we’ll be on the front foot when they’re ready. Thank you.

Greg Orenstein, Chief Financial Officer, nCino: Thanks, Aaron.

Conference Operator: Our next question comes from Chris Kennedy with William Blair. You may proceed.

Harrison Masters, Vice President, Investor Relations, nCino0: Good afternoon. Thanks for taking the question. Just wanted to follow-up on the fiscal twenty twenty seven commentary. Any way to think about kind of what this business can grow at in 2027?

Greg Orenstein, Chief Financial Officer, nCino: Yes, Chris, I think right now we’re just focused on executing 2026. And so I don’t want to get ahead of ourselves thinking about fiscal twenty twenty seven. But again, as we sit here today, from a deal activity standpoint, we feel good about where the business is. We feel good about the deal activity we see out there, the opportunities, the discussions we’re having on a global basis. And I think as I noted, it’s just really all about going and getting the business closed.

Obviously, the year progresses and as we get into next year, that will form our opinion about next year.

Harrison Masters, Vice President, Investor Relations, nCino0: Got it. Understood. Thank you for that. And then just broadly, there’s a pipeline of opportunities is really strong right now. What are you seeing out there in the market that’s driving that?

Clearly, you have more a better product side or more robust products. But what are you seeing out there in the market that’s driving that pipeline? Thanks for taking the questions.

Sean Desmond, Chief Executive Officer, nCino: Yes. You. Number one, I think the macro is supportive, reinforcing some of Greg comments earlier that some of the headwinds that we faced are behind us. I also think that the reality that we have this very unique inflection point, in the technology in AI that is available to drive outcomes is something that is driving customer conversations and pulling forward, as I mentioned, not only renewals, but just interest in how customers can get outcomes that we’ve always delivered, but now deliver even faster, right, and with better quality. So not only are the headwinds behind us and we have this inflection point, but back to controlling what we can control.

There’s an intense focus on the pipeline coverage and ratios that we have in all segments and in all businesses. So we look across commercial, consumer and mortgage and we look at our North American and EMEA and APAC business and every conversation starts and ends with what we’re doing to drive that pipeline and the activity in that pipeline. So execution always comes down to people and accountability. And I think the sense of urgency and accountability in those pipeline conversations is what’s driving some of the activity as well.

Harrison Masters, Vice President, Investor Relations, nCino0: Thank you.

Greg Orenstein, Chief Financial Officer, nCino: Thanks, Chris.

Conference Operator: Our next question comes from Alex Sklar with Raymond James. You may proceed.

Harrison Masters, Vice President, Investor Relations, nCino1: Great, thanks. Sean, maybe following up on your answer there, the last question, just in terms of international pipeline, you’ve got a new leadership team that’s been in place now for almost a year. You had a couple of wins in the prepared remarks. Any color on what you’re seeing from a contribution to bookings or pipeline growth relative to the 10% kind of organic subscription growth Are you seeing the kind of signs of reacceleration come through?

Sean Desmond, Chief Executive Officer, nCino: We are absolutely seeing signs of reacceleration in the pipeline activity, in terms of disclosing the ratios on bookings. We’re going to stick to our core ACV metrics and read those out, on an annual basis. But I’m really, really pleased with what Joaquin and his second line leadership team that he’s put in place since joining in November is driving. We have been very candid about our focus on Continental Europe beyond The UK and Ireland and that’s starting to play out in the pipeline and in the conversation, the activity in the field. And we’re tracking closely the size of deals as well.

And I’m excited about the volume that we have both upmarket and downmarket in EMEA. And then I’m excited about the integration of Full Circle and our ability to really lean into the CLM opportunity. So pipeline activity is strong. Joaquin is doing a nice job. I’m headed over there next month and excited about our EMEA Summit, where we have all our customers in a single place and to make some of the rounds in the field.

Harrison Masters, Vice President, Investor Relations, nCino1: Okay. Great color there. And then maybe a follow-up for you, Greg. Just in terms of the mortgage volume upside you saw in the first half of the year, I know you kind of said keeping with guidance philosophy, not embedding that. But what is embedded in the second half in terms of mortgage?

What is it kind of a thought that volumes were pulled forward or any other factor in terms of how you shook out on the mortgage outlook?

Michael Infante, Analyst, Morgan Stanley: Yes,

Greg Orenstein, Chief Financial Officer, nCino: Alex. I think as we look at the second quarter, again, not wanting to get ahead of ourselves, ultimately assuming maybe there’s some seasonality as well in terms of the second quarter. And so we flowed through obviously the beat, but again just lessons learned from last year. We’re going to stick with our guidance philosophy and not extrapolate in terms of what interest rates may do, what mortgage rates may do and what mortgage volumes may do. We’re trying to be very transparent in terms of giving you that detail, so you guys can have that information and see what we’re seeing.

And again, the year progresses and we get more data points, we’ll obviously be able to come back to you guys with updated thoughts around what we’re seeing in that market. Ultimately, again, I think very proud of the team, the work that was done during the very difficult days over the last couple of years to go out and gain market share, grab new logos and it’s encouraging with what we’re seeing from certainly some of those customers, particularly some of the larger I and B and homebuilder customers that we bought on over the last couple of years.

Harrison Masters, Vice President, Investor Relations, nCino1: All right, great. Thank you both.

Greg Orenstein, Chief Financial Officer, nCino: Thank you. Thank you.

Conference Operator: Our next question comes from Koji Ikeda with Bank of America. You may proceed.

Harrison Masters, Vice President, Investor Relations, nCino2: Hey guys. Thanks so much for taking the questions. Maybe a question for Sean. What do you think will be the stronger driver of growth over the next several years? And improving demand environment from presumably lower interest rate and looser regulatory environment for your vertical AI strategy?

Sean Desmond, Chief Executive Officer, nCino: So appreciate the question, and would love to provide prescriptive forecast and exactly where all the growth is coming from. But I would lead with the power of the platform and the diversified revenue streams that we do have here at nCino across the things we do in the lines of business where we do them. And we have always been a company that is going to bet on ourselves and the investments we’re making that align with where we think your growth is going to be in the ecosystem. Right now, do see a massive inflection point with AI. I don’t necessarily think AI by itself drives revenue growth.

I think outcomes that we deliver to our customers drive revenue growth. And AI will be the best proxy to deliver those outcomes, and we will capitalize on that and we’ll lead the industry. But we’re going to control what we can control. We can’t control interest rates. We can’t control the regulatory environment.

We can’t control what the Fed is going to announce tomorrow. So we’re going to stay focused on betting on ourselves with those growth initiatives.

Harrison Masters, Vice President, Investor Relations, nCino2: Got it. Thanks, Sean. And maybe a follow-up question here for Greg. When I go back to the Investor Day from earlier this year and then your comments today about focusing on Professional Services gross margin, how should we be thinking about the pace of gross margin Professional Services gross margin improvements from here? Will it be more gradual?

Or are there things that you’re working through that can really drive the step function improvement in gross margin?

Greg Orenstein, Chief Financial Officer, nCino: Think at this point we would expect it to be somewhat gradual. And first and foremost, we need to close off on some of the projects that we’ve been involved in, right, and ramp those down as those come to completion. And in parallel with things like we talked about at the Investor Day, Project 70 for example, which is one of the initiatives we have, those ramping up. And so we’re going to work through those as the year progresses.

But again, think that positions us well as we get into some point in next year, starting to see the benefits of those activities as we sit here today. That’s kind of how we’re thinking about it. So it’s again, it’s a ramp down and a ramp up in parallel, but it’s very much a focus of the team. We see the opportunity there to improve gross margins meaningfully from where we are. And again, it’s just all about executing to get there.

Harrison Masters, Vice President, Investor Relations, nCino2: Got it. Thank you.

Greg Orenstein, Chief Financial Officer, nCino: Thank you, Koji.

Conference Operator: Our next question comes from Joe Roone with Baird. You may proceed.

Harrison Masters, Vice President, Investor Relations, nCino3: Hi, great. Thanks for taking my question.

Harrison Masters, Vice President, Investor Relations, nCino2: I wanted to go back to

Harrison Masters, Vice President, Investor Relations, nCino3: the pricing model. So 21% of ACV switched over. I think the bulk of that is mortgage. When you hone in on the renewals with big commercial customers and the press release called out a few of these, Is that looking any different than the experience at large? And then maybe a second adjunct, when you think broadly across your customer base and starting this conversation, does the new pricing model provide an opportunity to widen the aperture of how customers think about using nCino?

So is aligning yourself with the idea of growing assets a more accommodating conversation than forcing banks to think about seats, for instance?

Sean Desmond, Chief Executive Officer, nCino: Yes, Joe, absolutely. The reality is on the one hand, the legacy seat model may have seen very, implicit for customers to understand and it wasn’t math, but it is hard especially for a large enterprise institution to understand exactly how many users three years from now are going to be on the platform when you’re talking about thousands of users in some cases. And the conversation that I’d much rather have and then I think our customers would much rather have is what outcomes are you going to deliver and what efficiency you’re going to drive into the institution. If we can identify where the friction is, whether that’s in closing time or underwriting time or loan cycle times and we can read that back to operations analytics and meaningfully reduce that friction and spend within the institution, and they’re much more willing to spend and scale within Incyno. So we like the way their early day pricing conversations are heading.

Although again, I will remind everybody that change is hard. And so when we introduce something new, there’s some initial education that needs to happen. Once people understand the outcome correlation, it plays really well.

Greg Orenstein, Chief Financial Officer, nCino: And Joe, just to give a little bit more clarity, out of the 21%, about a third of that platform pricing would be mortgage.

Harrison Masters, Vice President, Investor Relations, nCino3: Okay. That’s great. Thanks, Greg. Just on the updated forecast and what’s assumed for the second half and appreciate all the mortgage commentary. So maybe this question is outside of mortgage and just on the core subscription bookings.

I seem to recall that entering the year, you were not assuming much transacted during the first half and so therefore limited revenue contribution in this fiscal year. Can you maybe comment just on how your first half bookings compared to plan? Maybe not a number, but were they better? And then how does the second half bookings plan look like it’s shaping up? Because I think that will bear some influence on these fiscal twenty twenty seven questions and maybe how to think about your exit philosophy into next year’s number.

Greg Orenstein, Chief Financial Officer, nCino: Yes. Look, think and I noted on a net bookings basis from a first half standpoint, we were pleased with how the company executed and performed. And again, that gives us confidence as we think about meeting or exceeding our ACV guide for the year. And so as we go into the second half of year, like I said, we feel good about the business. The business is out there.

It’s just about executing. And that’s what the team is laser focused on. It’s great to see that focus. We And in our football season, right, it’s just we remind ourselves it’s a four quarter game and we want to finish all four quarters strong. That’s what we’re focused on doing.

Harrison Masters, Vice President, Investor Relations, nCino3: Great. Thank you very much.

Greg Orenstein, Chief Financial Officer, nCino: Thank you.

Conference Operator: Thank you. Our next question comes from Charles Nabin with Stephens. You may proceed.

Harrison Masters, Vice President, Investor Relations, nCino4: Hey, guys. Congrats on the results and thank you for taking my question. I wanted to focus on the inorganic piece of the business and just get a sense for how we should think about the growth rate of Full Circle and SandBox as they transition into organic over the next year or so? Are those businesses growing is the growth rate of those businesses accretive, neutral or dilutive to the overall growth rate?

Sean Desmond, Chief Executive Officer, nCino: Yes. For the question. Both Full Circle and SandBox are on track to revenue plan as noted in the prepared remarks. And moreover, I’m excited about the technical work that is progressing there. So they’re in line with our internal expectations.

And I would expect as we further integrate those solutions for instance full circle to have an end to end CLM reality in the EMEA marketplace. And we bring some of the SandBox use cases to market beyond some of the initial support of banking advisor that they’ll be more accretive next year. But right now, they’re on track. I would also just anecdotally add from an integration gateway opportunity point of view, the Sandbox banking team that we have ingested has become part of the nCino broader team right now is probably one of the most in demand teams at the company and have injected a great deal of not only integration, but as well as AI DNA here. So that’s energized us on a lot of fronts.

Harrison Masters, Vice President, Investor Relations, nCino4: Got it. And as a follow-up, and apologies in advance if you noted this already. How much of the mortgage book is on a volume or platform based pricing model? I know if you I know recently it was about half, but just curious where we stand today. And any color around the mix of bank credit union versus IMBs would be helpful as well.

Yes.

Greg Orenstein, Chief Financial Officer, nCino: Think there are two questions in there, Chuck. So I think the first part of the question was again about a third of that 21% that’s on platform pricing is mortgage. And again, that’s where we started this pricing platform pricing transition. So again, I think we feel real good about the at bets that we’ve had there and the execution of that. I think the second question was the breakdown between INBs and depositories.

I think from a logo perspective, historically been more weighted to INBs. I’m sorry, from logo perspective, it’s about balance. From a revenue perspective, it’s been more weighted towards, I’ll call it the IMBs and homebuilders, the non depositories. And again, a lot of that goes to some of those large customers that we referenced that some of them helped with the over performance in the second quarter.

Harrison Masters, Vice President, Investor Relations, nCino4: Got it. Appreciate all the color guys. Thank you.

Greg Orenstein, Chief Financial Officer, nCino: Thank you for the questions.

Conference Operator: Thank you. I would now like to turn the call back over to Sean Desmond for any closing remarks.

Sean Desmond, Chief Executive Officer, nCino: Yes. Thank you. We appreciate the time today. We appreciate the questions. I hope everybody enjoys the long weekend ahead of us as we look forward to speaking again next quarter and run toward the back half of the year.

Take care.

Conference Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

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