nCino (NasdaqGS:NCNO) Q4 2026 Earnings call March 31, 2026 04:30 PM ET Company ParticipantsAdam Hotchkiss - VP of Emerging Software Equity ResearchAlex Sklar - Director of Application Software ResearchGreg Orenstein - CFOHarrison Masters - VP of Investor RelationsSean Desmond - CEOTerry Tillman - Managing Director of Application Software Equity ResearchConference Call ParticipantsAaron Kimson - VP and Technology Software AnalystCharles Nabhan - Managing Director and FinTech Research AnalystChris Kennedy - F ...

nCino (NasdaqGS:NCNO) Q4 2026 Earnings call March 31, 2026 04:30 PM ET Speaker13I would now like to hand the conference over to your speaker today, Harrison Masters, Vice President in Investor Relations.Speaker8Good afternoon, and welcome to nCino's fourth quarter and fiscal year 2026 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 ...

Financial Data and Key Metrics Changes - Total revenues in Q3 were $152.2 million, up 10% year over year [18] - Subscription revenues were $133.4 million, up 11% year over year on a reported basis and 7% organically [18] - Non-GAAP operating income was $39.9 million, or 26% of total revenues, representing 600 basis points of operating margin expansion year over year and quarter over quarter [21] - Non-GAAP net income attributable to nCino in Q3 was $35.8 million, or $0.31 per diluted share [22] - Free cash flow generation is expected to be seasonally lower in the second half of the year, with a meaningful influx of cash anticipated in Q1 of fiscal 2027 [23] Business Line Data and Key Metrics Changes - U.S. mortgage subscription revenues were $21.1 million, up 2% year over year [20] - Professional services revenues were $18.8 million, a decrease of 1% year over year [20] - Non-U.S. total revenues were $33.6 million, up 13% as reported and in constant currency [21] - Non-U.S. subscription revenues were $27.9 million, up 21% as reported and in constant currency [21] Market Data and Key Metrics Changes - The company saw strong sales traction in the U.S. community market, with a $5.5 billion bank expanding its relationship with nCino [16] - In Japan, a major regional bank signed with nCino for mortgage lending, reinforcing opportunities in that market [17] - In EMEA, the Integration Gateway API Infrastructure solution was included in renewals with a $90 billion bank in the Czech Republic and a $9 billion credit union, resulting in ACV uplifts of 13% and 48% respectively [17] Company Strategy and Development Direction - nCino aims to leverage AI and automation to enhance operational efficiency and user experience for financial institutions [5][10] - The company is transitioning to platform pricing, with approximately 27% of ACV converted to this model, up from 21% last quarter [24] - The focus remains on driving adoption of AI capabilities and ensuring customers are comfortable with the technology [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sales and financial goals for fiscal 2026, citing strong demand across market segments [7][8] - The macro environment is seen as favorable, with banks increasing IT budgets and focusing on efficiency and modernization [46] - Management anticipates a spike in AI adoption as banks shift from understanding AI to deploying it quickly [85] Other Important Information - The company repurchased approximately 1.4 million shares at an average price of $27.71 per share, completing a $100 million buyback authorization [23] - The fiscal 2026 outlook for total revenues is now expected to be $591.9-$593.4 million, representing growth of approximately 10% at the midpoint [29] Q&A Session Summary Question: On margins and AI efficiencies - Management noted that they continue to see opportunities for further efficiency and are confident in hitting their Rule of 40 target [33][34] Question: Visibility into future subscription revenue - Management refrained from discussing next year's guidance but expressed confidence in the current sales activity and pipeline [37][39] Question: Demand from big customers and international markets - Management highlighted aggressive tech investments by banks, with a focus on efficiency and modernization driving demand [46] Question: Early renewals and their impact - Management indicated that early renewals are not surprising given the continuous innovation and value provided to customers [50] Question: Mortgage business outperformance - Management noted expansion in top 100 banks into mortgage and traction in the IMB space, contributing to outperformance [81][82]

Financial Data and Key Metrics Changes - Total revenues in Q3 were $152.2 million, up 10% year-over-year [18] - Subscription revenues were $133.4 million, up 11% year-over-year on a reported basis and 7% organically [18] - Non-GAAP operating income was $39.9 million, or 26% of total revenues, representing 600 basis points of operating margin expansion both year-over-year and quarter-over-quarter [21] - Non-GAAP net income attributable to the company in Q3 was $35.8 million, or $0.31 per diluted share [22] - Free cash flow generation is expected to be seasonally lower in the second half of the year, with a meaningful influx of cash anticipated in Q1 of fiscal 2027 [23] Business Line Data and Key Metrics Changes - U.S. mortgage subscription revenues were $21.1 million, up 2% year-over-year [20] - Professional services revenues were $18.8 million, a decrease of 1% year-over-year [20] - Non-U.S. total revenues were $33.6 million, up 13% as reported and in constant currency [21] - Non-U.S. subscription revenues were $27.9 million, up 21% as reported and in constant currency [21] Market Data and Key Metrics Changes - The company saw strong sales traction in the U.S. community market, with a $5.5 billion bank expanding its relationship with nCino [16] - In Japan, a major regional bank signed with nCino for mortgage lending, reinforcing opportunities in that market [17] - In EMEA, the Integration Gateway API Infrastructure solution was included in renewals with a $90 billion bank in the Czech Republic and a $9 billion credit union, resulting in ACV uplifts of 13% and 48% respectively [17] Company Strategy and Development Direction - The company focuses on leveraging AI and automation to enhance operational efficiency and user experience for financial institutions [5][10] - nCino aims to be a trusted AI partner for banks, emphasizing the need for a deep understanding of banking and the ability to drive industry-wide change [10] - The company is transitioning to platform pricing, with approximately 27% of ACV converted to this model, up from 21% last quarter [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sales and financial goals for fiscal 2026, citing strong demand across market segments and geographies [7][8] - The macro environment is seen as favorable, with banks increasing IT budgets and focusing on efficiency and modernization [46] - Management anticipates a spike in AI adoption as banks shift from understanding AI to deploying it quickly [86] Other Important Information - The company repurchased approximately 1.4 million shares at an average price of $27.71 per share, completing a $100 million buyback authorization [23] - The company expects total revenues for fiscal 2026 to be $591.9-$593.4 million, representing growth of approximately 10% at the midpoint [29] Q&A Session Summary Question: On margins and AI efficiencies - Management noted that they see opportunities for further efficiency and are confident in hitting their Rule of 40 target around Q4 of next year [33][34] Question: Visibility into future subscription revenue - Management refrained from discussing next year but expressed confidence in the current sales activity and pipeline [37][39] Question: Demand from big customers and international markets - Management highlighted aggressive tech investments by banks, with a focus on efficiency and modernization driving demand [46][48] Question: Impact of customer M&A on nCino - Management indicated that bank M&A has historically been a tailwind for nCino, with a high percentage of customers continuing to use nCino post-M&A [58][60] Question: Drivers of mortgage business outperformance - Management pointed to expansion in top 100 banks and traction in the IMB space as key drivers of mortgage business growth [82][83]

Financial Data and Key Metrics Changes - Total revenues in Q3 were $152.2 million, up 10% year over year [18] - Subscription revenues were $133.4 million, up 11% year over year on a reported basis and 7% organically [18] - Non-GAAP operating income was $39.9 million, or 26% of total revenues, representing 600 basis points of operating margin expansion both year over year and quarter over quarter [20] - Non-GAAP net income attributable to nCino in Q3 was $35.8 million, or $0.31 per diluted share [21] - Free cash flow generation is expected to be seasonally lower in the second half of the year, with a meaningful influx of cash anticipated in Q1 of fiscal 2027 [22] Business Line Data and Key Metrics Changes - U.S. mortgage subscription revenues were $21.1 million, up 2% year over year [19] - Professional services revenues were $18.8 million, a decrease of 1% year over year [19] - Non-U.S. total revenues were $33.6 million, up 13% as reported and in constant currency [20] - Non-U.S. subscription revenues were $27.9 million, up 21% as reported and in constant currency [20] Market Data and Key Metrics Changes - The company saw strong sales traction in the U.S. community market, with a $5.5 billion bank expanding its relationship with nCino [16] - In Japan, a major regional bank signed with nCino for mortgage lending, reinforcing opportunities in that market [17] - In EMEA, the Integration Gateway API Infrastructure solution was included in renewals with a $90 billion bank and a $9 billion credit union, resulting in ACV uplifts of 13% and 48% respectively [17] Company Strategy and Development Direction - nCino aims to leverage AI and automation to enhance operational efficiency and user experiences for financial institutions [6][9] - The company is transitioning to platform pricing, with approximately 27% of ACV converted to this model, up from 21% last quarter [23] - The focus remains on driving adoption of AI capabilities while ensuring customers are comfortable with the technology [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sales and financial goals for fiscal 2026, citing strong demand across market segments [5] - The company is witnessing a shift in banks' technology investments towards efficiency and modernization, driven by AI [38] - Management anticipates a spike in AI adoption as banks move from understanding AI to deploying it quickly [57] Other Important Information - The company repurchased approximately 1.4 million shares at an average price of $27.71 per share, completing a $100 million buyback authorization [22] - The fiscal 2026 outlook for total revenues is now expected to be $591.9-$593.4 million, representing growth of approximately 10% at the midpoint [27] Q&A Session Summary Question: On margins and AI efficiencies - Management noted that they continue to see opportunities for further efficiency and are confident in delivering on medium-term free cash flow and operating margins targets [31][32] Question: Visibility into NTM subscription revenue - Management refrained from discussing next year but expressed confidence in the current sales activity and pipeline [34][35] Question: Drivers of mortgage business outperformance - The outperformance is attributed to expansion in top 100 banks and traction in the IMB space, with normalized revenue growth in line with industry volumes [54][55] Question: Update on DocFox and onboarding experience - The onboarding experience has seen a year-over-year pipeline increase, with expectations for ACV conversion next year [59]

Core Insights - nCino, Inc. reported strong financial results for Q3 of fiscal year 2026, with total revenues of $152.2 million, representing a 10% year-over-year increase [5][6] - The company emphasized its leadership in AI and the momentum across various customer segments and geographies, reinforcing confidence in its fiscal 2026 goals [2] Financial Highlights - Total revenues reached $152.2 million, up from $138.8 million in Q3 of fiscal 2025, marking a 10% increase [5][6] - Subscription revenues were $133.4 million, an 11% increase from $119.9 million in the same quarter last year [5][6] - GAAP operating margin improved to 8%, up over 800 basis points year-over-year, while non-GAAP operating margin reached 26%, up 600 basis points [5][6] - GAAP net income attributable to nCino was $6.5 million, compared to a loss of $5.3 million in Q3 of fiscal 2025 [6] - Non-GAAP net income attributable to nCino was $35.8 million, a 49% increase from $24.1 million in the same quarter last year [6] Recent Business Highlights - nCino signed a regional bank in Japan with over $80 billion in assets for mortgage lending [6] - The company demonstrated global applicability with its Integration Gateway through an expansion agreement with a $90 billion bank in the Czech Republic [6] - Two top-50 U.S. banks, each with over $50 billion in assets, expanded their commercial lending commitments by more than 30% and 60% respectively [6] - A leading home builder's lending division selected nCino Mortgage to enhance the mortgage lending experience for homebuyers [6] - nCino launched Digital Partners, introducing role-based AI agents trained on extensive financial services data [6] - The company completed its $100 million stock repurchase program, having repurchased approximately 4.0 million shares at an average price of $25.02 per share [6] Financial Outlook - nCino provided guidance for Q4 of fiscal year 2026, projecting total revenues between $146.75 million and $148.25 million, with subscription revenues between $130.75 million and $132.25 million [11] - For the full fiscal year 2026, total revenues are expected to be between $591.9 million and $593.4 million, with subscription revenues between $520.5 million and $522.0 million [11]

Core Insights - nCino, Inc. has launched "Digital Partners," a new feature within its platform aimed at enhancing human-centric AI capabilities for financial institutions, focusing on domain-specific intelligence to meet the unique needs of banking operations [1][2]. Group 1: Digital Partners Overview - Digital Partners are designed to support various roles within financial institutions, from C-suite executives to relationship managers, by providing contextually relevant assistance and operating alongside staff to create a "dual workforce" [2][6]. - The Digital Partners utilize a multi-layer architecture that combines foundational tools, specialized sub-agents, and orchestrated workflows, enabling role-specific intelligence through natural conversation [3][5]. Group 2: Role-Specific Digital Partners - Five specific Digital Partners have been introduced: - **Executive Digital Partner**: Provides strategic intelligence for C-suite decision-making, including market insights and personalized data science expertise [6]. - **Analyst Digital Partner**: Accelerates risk assessment and complex financial analysis for underwriters and credit analysts, utilizing peer-benchmarked intelligence [6]. - **Service Digital Partner**: Enhances customer relationship management, helping relationship managers identify cross-sell opportunities [6]. - **Processor Digital Partner**: Eliminates workflow bottlenecks by coordinating documentation and validating compliance [6]. - **Client Digital Partner**: Offers AI-enhanced self-service digital banking experiences directly to customers [7]. Group 3: Strategic Vision and Future Development - The introduction of Digital Partners reflects the next phase of nCino's AI strategy, building on the previously established Banking Advisor as a unified conversational experience [8]. - nCino aims to continuously evolve its technology and capabilities, allowing financial institutions to redirect talent towards higher-value work as the tools become more robust over time [8][9].

Core Insights - nCino, Inc. has launched "Digital Partners" within its platform to enhance banking operations by providing role-based AI agents that support decision-making and relationship building [1][2] Group 1: Digital Partners Overview - The Digital Partners are designed to address specific workflows and pain points for various users, including C-suite executives and relationship managers, by delivering contextually relevant assistance [2][3] - These agents operate alongside staff, creating a "dual workforce" that amplifies human capabilities rather than replacing them [2][3] - The Digital Partners are built on a multi-layer architecture that includes foundational tools and role-specific intelligence, accessible through nCino's conversational AI interface, Banking Advisor [3][4] Group 2: Specific Digital Partners - The five Digital Partners include: - Executive Digital Partner: Provides strategic intelligence for C-suite decision-making [4] - Analyst Digital Partner: Accelerates risk assessment and financial analysis for underwriters [4] - Service Digital Partner: Enhances relationship management for identifying cross-sell opportunities [4] - Processor Digital Partner: Eliminates workflow bottlenecks by coordinating documentation and compliance [4] - Client Digital Partner: Offers AI-enhanced self-service banking experiences directly to customers [3][4] Group 3: Future Developments - The deployment of Digital Partners will occur over the coming year, starting with the Analyst Digital Partner in November 2025 [5] - nCino aims to continuously evolve its technology and capabilities, allowing financial institutions to redirect talent toward higher-value work [3][5]