nCino(US:NCNO)2024-08-28 04:14Financial Data and Key Metrics Changes - Total revenues for Q2 FY2025 were $132.4 million, an increase of 13% year-over-year [16] - Subscription revenues were $113.9 million, up 14% year-over-year, representing 86% of total revenues [16] - Non-GAAP operating income for Q2 FY2025 was $19.3 million, compared to $11.2 million in Q2 FY2024 [19] - Non-GAAP net income attributable to nCino was $15.8 million, or $0.14 per diluted share, compared to $10 million, or $0.09 per diluted share in Q2 FY2024 [19] Business Line Data and Key Metrics Changes - Mortgage subscription revenues were approximately $17 million, or 15% of subscription revenues, representing year-over-year growth of 4% [17] - Professional services revenues were $18.5 million, growing 7% year-over-year [17] - Non-US revenues were $27.5 million, or 21% of total revenues, up 25% year-over-year [18] Market Data and Key Metrics Changes - Gross bookings in the US were up 36% over the first half of last year, including mortgage, and up 67% without mortgage [6] - International markets remain more challenged than the US, but there is an expectation for healthy new logo additions in the second half of the year [9] Company Strategy and Development Direction - The company is transitioning to a platform pricing model, with new and expansion sales of consumer lending, deposit account opening, and US mortgage solutions on this model [23] - The focus is on enhancing efficiency and reducing costs for financial institutions through digital channels and automation [13] - The company is actively exploring opportunities to accelerate integration of acquired products like DocFox and Allegro [15] Management's Comments on Operating Environment and Future Outlook - Management noted improved sentiment in the financial services industry in the US, with healthy balance sheets and abating net interest margin headwinds [6] - There is an expectation that interest rate cuts will catalyze growth in the US mortgage business starting in Q4 FY2025 [7] - Management expressed confidence in achieving gross bookings goals for the year, particularly with large enterprise opportunities [10] Other Important Information - Remaining performance obligation (RPO) was $1.04 billion as of July 31, 2024, up 12% year-over-year [20] - The company ended Q2 with cash and cash equivalents of $126.8 million [20] - Guidance for Q3 FY2025 expects total revenues of $136 million to $138 million [22] Q&A Session Summary Question: General sentiment on financial institutions' willingness to spend - Management noted a return to normalcy in the US market, with a focus on volume business rather than large transformation projects [25] Question: Importance of platform deals and pricing structures - Management indicated that while platform deals are beneficial, the company is not dependent on the pricing structure change to meet financial targets [34] Question: Execution risks associated with pricing transition - Management expressed confidence in the new pricing model, highlighting customer preference for guaranteed pricing based on volume or asset size [41] Question: Outlook for mortgage business growth - Management anticipates that the mortgage business will perform better as the market stabilizes and interest rates potentially decrease [50] Question: Mix of new bookings versus cross-sell - The first half of the year saw 80% cross-sell and 20% new logos, with expectations for a shift in the second half towards more new logo deals [52]