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    NCNO
    Earnings call· Apr 2026(Q1 FY27)

    nCino Q1 FY27 earnings call NCNO

    May 27, 2026 Source

    Executive summary

    nCino, Inc. Q1 FY27 — Strong Subscription Revenue Growth and Rule of 40 Achievement

    nCino delivered a strong first quarter, exceeding guidance across key metrics, driven by accelerating subscription revenue growth and improved non-GAAP operating margin, achieving the Rule of 40. The company is strategically positioned as an AI beneficiary in financial services, leveraging its deep domain expertise and data to drive AI-powered banking solutions. Management is focused on maximizing AI adoption, with early signs of intelligence unit consumption and efficiency gains across the business.

    Highlights

    5

    • Subscription revenues grew 12% year-over-year, accelerating from prior periods.

    • Non-GAAP operating margin improved to 28%, achieving the Rule of 40.

    • Free cash flow increased 54% year-over-year to $80.8 million.

    • Non-GAAP professional services gross margin improved meaningfully to 10%, up 1,100 basis points year-over-year.

    • Banking Adviser usage increased over 38x from October to May, with first customers reaching intelligence unit bundle limits.

    Concerns

    2

    • Second quarter U.S. mortgage subscription revenues are forecasted to decline 2% year-over-year due to elevated mortgage rates.

    • Second quarter non-GAAP operating income is expected to be impacted by a $3 million sequential increase in sales and marketing expenses.

    Guidance & targets

    13
    CategoryTargetConfidence
    Total Revenues
    $157.75M to $159.75M
    high materiality
    High
    Subscription Revenues
    $140.25M to $142.25M
    high materiality
    High
    Subscription Revenues (ex-U.S. mortgage)
    9% to 11% constant currency growth
    medium materiality
    High
    U.S. Mortgage Subscription Revenues
    negative 2% year-over-year growth
    medium materiality
    High
    Non-GAAP Operating Income
    $35.5M to $37.5M
    high materiality
    High
    Net Additions to ACV
    $60M to $65M
    high materiality
    High
    Cumulative ACV
    $662.5M to $667.5M
    high materiality
    High
    Total Revenues
    $642M to $646M
    high materiality
    High
    Subscription Revenues
    $571.5M to $575.5M
    high materiality
    High
    U.S. Mortgage Subscription Revenues Growth
    approximately 1%
    medium materiality
    High
    Subscription Revenues Growth (ex-U.S. mortgage)
    11% to 12% year-over-year
    medium materiality
    High
    Non-GAAP Operating Income
    $166M to $171M
    high materiality
    High
    Free Cash Flow
    $135M to $140M
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    U.S. Mortgage
    Subscription revenues for the first quarter.
    		$19.7M4%——
    Non-U.S. Total Revenues
    Total revenues for the first quarter.
    Constant currency growth: 11%
    		$36.4M15%——
    Non-U.S. Subscription Revenues
    Subscription revenues for the first quarter.
    Constant currency growth: 16%
    		$31.3M21%——

    Operational metrics

    6
    Non-GAAP Operating Income
    $44.5M79% year-over-year
    Q1 FY27

    Contributed approximately $1 million from professional services gross margin improvement and $1.7 million from delayed timing of expenses.

    Non-GAAP Professional Services Gross Margin
    10%1,100 basis points year-over-year
    Q1 FY27

    Improved meaningfully, contributing to operating income overperformance.

    Share Repurchases
    $93.1M
    Q1 FY27

    Includes 5.5 million shares received upfront as part of the $100 million ASR program; remaining shares expected in Q2.

    Remaining Share Repurchase Authorization
    $65M
    Q1 FY27

    Available under the December 2025 stock repurchase program.

    Professional Services Hours per Engagement Reduction
    over 40%
    Q1 FY27

    Compressing professional services hours per engagement.

    Product Development Efficiency Improvement
    34%
    past year

    Teams operating more efficiently, compressing development cycles.

    Industry KPIs

    9
    MetricValueDetails
    Revenue growth$159.4MUSD
    Arr net new arr$60M to $65MUSD
    Bookings billingsrecord
    Pricing model mixOver 40%%
    Customer account countOver 200customers
    Large deal new logo metricslargest new logo win
    Operating FCF margin rule of 4028%%
    Ai product adoption monetizationOver 200customers
    Headcount internal ai productivityover 40%%

    Orderbook & backlog

    2
    Net Additions to ACV$60M to $65MFY27 guidance

    On a constant currency basis.

    Cumulative ACV$662.5M to $667.5MFY27 guidance

    10% over FY26 ending ACV at midpoint

    Product announcements

    3
    ProductTypeDetails
    Banking Adviserlaunch
    Agentic Operating System (AOS)milestone
    Digital Partnerslaunch

    Deals & partnerships

    1
    ConnectOne BankCustomer contract / AI adoption

    A $14 billion institution and nCino customer since 2017. Contracted for their first bundle of intelligence units and began Banking Adviser rollout in Q4 FY26. Engaged nCino's forward deploy engineers in March for a quick win engagement to assess benchmarks and address friction points with Banking Adviser.

    Risks & headwinds

    2
    U.S. Mortgage Business HeadwindsQ2 FY27

    Negative 2% year-over-year subscription revenues growth for Q2 FY27

    Mitigation: Prudent guidance philosophy, hoping to surprise on the upside.

    Timing of ExpensesQ1 FY27 (delay), Q2 FY27 (increase)

    Approximately $1.7 million of Q1 non-GAAP operating income overperformance from delayed timing of expenses; approximately $3 million sequential increase to sales and marketing expenses in Q2 FY27.

    Mitigation: Maintaining operating flexibility at this early point in the fiscal year; expenses expected to incur later in the year.

    Q&A highlights

    8

    How is nCino achieving over 40% reduction in engagement costs per hour in Professional Services so quickly with AI, and what are the drivers?

    The efficiencies are driven by a long-term journey to increase deployment velocity, with forward deployment engineering teams working closely with product development to optimize the entire software lifecycle. This allows for quicker deployment of solutions like Banking Adviser and translates to bottom-line improvements.

    “we are really looking at the entire life cycle from how we build our software to how we deploy our software and get it into our customers' hands quickly so they can receive outcomes.”

    asked by Adam Hotchkiss · answered by Sean Desmond

    2 min read5 chapters

    Detailed Narrative

    01

    AI Strategy and Banking Adviser Adoption

    nCino's Banking Adviser, the first expression of its Agentic operating system, was unveiled at the annual Insight conference. This platform is designed to embed nCino intelligence into every workflow, moving beyond a single chatbot to orchestrate AI across banking operations. The company monetizes this through platform fees and AI token bundles, called intelligence units. Over 40% of nCino's ACV has already transitioned to this new pricing model, demonstrating market urgency for AI technology, with over 200 customers having initial intelligence unit bundles.

    02

    Intelligence Unit Consumption and Monetization

    Initial intelligence unit bundles are strategically sized to encourage customer experimentation and reliance on AI features. Consumption of intelligence units has significantly increased, with Banking Adviser usage up over 38x from October to May. The company has seen its first customers reach their bundle limits, leading to active conversations about re-upping units. This indicates successful value delivery and is expected to drive future subscription revenue growth, especially as more compute-intensive Agentic capabilities are adopted.

    03

    Efficiency Gains in Professional Services and Product Development

    Investments in the professional services organization have yielded significant returns, with AI tooling and methodologies compressing professional services hours per engagement by over 40%. This not only improves gross margins but also materially shortens implementation times and lowers program costs for customers. On the product development front, AI has enabled development cycles to compress from over a year to under 90 days, with teams operating approximately 34% more efficiently. The percentage of code written with AI assistance increased from 21% in Q1 FY26 to 57% in Q1 FY27.

    04

    International Market Strength and Credit Union Growth

    nCino is experiencing strong international growth, particularly in Continental Europe and Japan, with emerging opportunities in Southeast Asia. This growth is attributed to new leadership, re-energized teams, and expanding data partnerships focused on onboarding and client lifecycle management. The credit union market also shows robust demand and expansion, with a dedicated go-to-market team driving new logo wins and leveraging the integration of portfolio analytics into the broader platform to deliver new products and services.

    05

    Strategic Positioning as an AI Beneficiary

    nCino believes its mission-critical workflows, deeply embedded customer relationships, and ability to navigate regulatory complexity uniquely position it as an AI beneficiary. The company's AI capabilities are shaped by nearly 15 years of operational banking data across diverse financial institutions, ensuring domain-specific intelligence, regulatory trust, and workflow integration. This combination is difficult for general-purpose AI providers or new entrants to replicate, reinforcing nCino's confidence in leading AI-powered banking.

    AI-generated summary of the company’s earnings call. Not investment advice.