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NCNO
Earnings call · Jul 2026 (Q2 FY27)

nCino Q2 FY27 earnings call NCNO

Aug 25, 2026 Source

Executive summary

nCino Q2 FY27 — AI Adoption Drives Growth and Strong Financial Performance

nCino delivered strong Q2 FY27 results, outperforming guidance with accelerated subscription revenue growth outside of U.S. mortgage, driven by increasing AI-powered platform adoption. The company continues to expand its customer base globally and deepen existing relationships through multiyear renewals and cross-selling, while prudently managing headwinds in the U.S. mortgage market and maintaining disciplined expense management.

Highlights

5

  • Outperformed all financial guidance metrics, with total revenues of $161 million, an 8% increase year-over-year.

  • Subscription revenues, excluding U.S. mortgage, increased 12% year-over-year and 12% in constant currency.

  • Non-GAAP operating income rose 36% year-over-year to $40.8 million, representing 25% of total revenues.

  • Free cash flow surged 170% year-over-year to $34 million.

  • Secured multiyear renewals with 4 of the top 20 U.S. enterprise customers, with an average ACV increase of over 10%, and 48% of total ACV is now on platform pricing.

Concerns

4

  • U.S. mortgage subscription revenues decreased 1% year-over-year to $20.6 million.

  • Full-year U.S. mortgage subscription revenue forecast reduced by approximately $700,000 in Q3 and $1.2 million in Q4 due to IMB churn from higher-for-longer rates.

  • Professional services revenues declined 3% year-over-year to $17.5 million.

  • Experienced a slight FX headwind of approximately $200,000 in Q2, with similar headwinds expected in Q3 and Q4.

Guidance & targets

CategoryTargetConfidence
Total Revenues
$161.25M-$163.25M
high materiality
High
Subscription Revenues
$143.25M-$145.25M
high materiality
High
Subscription Revenues (ex-U.S. mortgage)
11% growth
high materiality
High
Non-GAAP Operating Income
$42M-$44M
high materiality
High
Total Revenues
$644M-$647M
high materiality
High
Subscription Revenues
$573.5M-$576.5M
high materiality
High
Subscription Revenues (ex-U.S. mortgage)
12% growth
high materiality
High
Non-GAAP Operating Income
$171M-$174M
high materiality
High
Free Cash Flow
$137M-$142M
high materiality
High
Net Additions to ACV (constant currency)
$60M-$65M
medium materiality
High
Cumulative ACV (constant currency)
$662.5M-$667.5M
medium materiality
High
U.S. Mortgage Subscription Revenues
~$20M
medium materiality
Medium
U.S. Mortgage Subscription Revenues
~$18.5M
medium materiality
Medium
FX Headwind
~$200k
low materiality
High
FX Headwind
~$200k
low materiality
High
Non-GAAP Operating Margin Expansion
~500 bps
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Non-U.S.
Total revenues increased 9% year-over-year and 9% in constant currency.
$36.4M9%——
Non-U.S. Subscription
Subscription revenues increased 13% year-over-year and 13% in constant currency, despite a slight FX headwind of approximately $200,000.
$30.9M13%——
U.S. Mortgage Subscription
Subscription revenues declined year-over-year, contributing $100,000 of overperformance against guidance.
$20.6M-1%——

Orderbook & backlog

Net additions to ACV $60M-$65M FY27 target

On a constant currency basis.

Cumulative ACV $662.5M-$667.5M FY27 target

up 10% over FY26

On a constant currency basis, at the midpoint of the range.

Largest deal of the year Not quantified Q3 FY27

Signed with an international customer early in Q3 FY27.

Product announcements

ProductTypeDetails
Mortgage Open Platformupdate

Deals & partnerships

4 of top 20 U.S. enterprise customers Multiyear renewals for access to nCino's rapidly expanding suite of AI tools and functionality. multiyear

These customers represent over $900 billion in assets and renewed ahead of schedule.

Hachijuni, Nagano Bank (Japan) Selected nCino for consumer lending.

Latest proof point that nCino's unified platform and AI capabilities resonate globally.

Growth-focused development finance institution (Germany) Selected nCino for commercial lending.

Latest proof point that nCino's unified platform and AI capabilities resonate globally.

Regional bank (over $15 billion in assets) Expanded adoption of nCino from commercial lending and treasury management to include consumer lending.

Demonstrates the breadth and depth of the nCino platform for expansion.

Seattle-based credit union Expanded commitment by adding commercial and small business lending plus commercial account opening.

Portfolio analytics customer since 2014, demonstrating significant expansion of commitment.

Community bank (Northeast) Expanded nCino adoption from commercial and consumer lending and account opening to also include mortgage.

Demonstrates cross-selling capabilities across different lending types.

Credit union (almost $5 billion in assets) Expansion of existing mortgage deployment to support strategic growth objectives.

Demonstrates significant expansion and value for existing customers.

IMB customer Returned to nCino after leaving in August 2024 for a less expensive solution.

Returned due to reliability issues and a cumbersome borrower experience with the alternative solution, along with sales team pushback.

Risks & headwinds

Higher for longer mortgage rate environment Ongoing, impacting Q3 and Q4 FY27

U.S. mortgage subscription revenues down 1% YoY; Q3 forecast reduced by ~$700k, Q4 by ~$1.2M.

Mitigation:Focus on expanding market share in core banking sector (community banks, credit unions) and winning back IMB customers.

FX headwinds Q2, Q3, Q4 FY27

~$200k negative impact in Q2, expected ~$200k in Q3 and Q4.

Mitigation:Company continues to grow internationally, offsetting some impact.

IMB churn FY27

Slightly higher mix of IMB churn in FY27 forecast, offset by less churn elsewhere. Overall FY27 churn forecast unchanged at ~$25M, with mortgage being ~1/3.

Mitigation:Aggressively trying to take logos in mortgage business, focusing on less volatile core banking segments.

What to watch in Q3 FY27

Non-mortgage subscription revenue growth acceleration

Q3 FY27, Q4 FY27
Current 12% YoY cc in Q2 FY27
Target Continued acceleration, implied 12% in Q4 FY27

Why it matters

Indicates the success of growth initiatives and AI strategy, crucial for overall revenue trajectory.

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.

Q&A highlights

How are competitive win rates in the mortgage business, and are there opportunities to gain share to offset market headwinds, especially given the example of a win-back?

Sean Desmond highlighted wins in community banks and credit unions, noting less volatility in these segments. He emphasized the diversified portfolio across commercial, consumer, and mortgage as accretive to pipeline growth and overall momentum, viewing the mortgage business as important despite headwinds.

“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.”

asked by Saket Kalia · answered by Sean Desmond

2 min read 6 chapters

Detailed narrative

AI-Powered Banking Platform

nCino positions itself as the trusted global leader in AI-powered banking, offering a unified platform for lending, onboarding, account opening, and portfolio monitoring. The platform leverages 15 years of data, governance, security, and regulatory compliance, embedding AI for accountable actions and better outcomes. This approach allows customers to consolidate operations with one vendor, gaining efficiencies that other technology companies cannot match.

Customer Adoption of AI

Over 230 customers have purchased AI intelligence units, with some already buying additional units after reaching initial bundle limits, indicating strong engagement. The company's focus is on driving long-term sustainable AI adoption, with the consumption trajectory expected to be a material driver of subscription revenue growth in future years. Year-to-date, the number of customers in production with Banking Adviser and Digital Partner capabilities has more than doubled, including one-third of core customers on the new platform pricing model.

Continuous Credit Monitoring (CCM)

CCM is highlighted as a key AI capability driving intelligence unit consumption, performing ongoing, complex multi-step processes across critical banking activities. It assesses over 40 credit and operational indicators daily, identifying loans needing attention and guiding actions, saving significant manual hours. While using LLMs for natural language chat, CCM relies on nCino's proprietary deterministic models for reliable, traceable, and auditable outcomes, crucial for the highly regulated financial industry.

Mortgage Business Dynamics

The higher-for-longer mortgage rate environment continues to be a headwind, particularly for the independent mortgage bank (IMB) market, driving M&A and some churn. Despite this, nCino is gaining market share by adding logos in the core banking sector (community banks, credit unions) and successfully winning back an IMB customer who had left for a less expensive solution due to reliability issues.

Product Innovation & Efficiency

nCino is experiencing rapid product innovation, delivering more product in the first half of FY27 than ever before, a pace expected to continue. Internal teams leverage AI to achieve tighter alignment across product development, engineering, and professional services, leading to faster incorporation of lessons learned and deployment of new technologies. This accelerated pace of innovation is currently outstripping the rate at which highly regulated customers can adopt new features, creating pent-up demand.

Capital Allocation

The company continues its share repurchase program, having repurchased approximately 15.8 million shares for $300 million since April 2025. The Board of Directors has authorized another $100 million share repurchase program, viewing opportunistic repurchases as a compelling use of capital, alongside investments in growth initiatives.

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