Ncino, Inc. ((NCNO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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nCino’s recent Q2 earnings call painted a picture of robust growth and strategic advancements, with the company reporting strong revenue and profitability performance. The sentiment was largely positive, with significant growth in North America and international markets, particularly in AI and mortgage initiatives. Despite some challenges in professional services revenue and change management, the overall highlights of the call significantly outweighed the lowlights.
Outperformance in Revenue and Profitability
In the second quarter, nCino exceeded its guidance ranges for both revenue and profitability metrics. The company reported total revenues of $148.8 million, marking a 12% increase year-over-year. Subscription revenues also saw a notable rise, reaching $130.8 million, up 15% from the previous year. This strong financial performance underscores nCino’s effective strategic execution and market positioning.
Strong North American and International Expansion
The earnings call highlighted nCino’s significant expansion efforts in North America and internationally. The company secured major agreements with two top 50 U.S. banks and a top five Canadian bank. In the EMEA region, nCino signed its first customer in Spain, tapping into a $4 billion market opportunity, showcasing its growing global footprint.
AI and Platform Pricing Progress
A key highlight was the progress in AI and platform pricing. Over 80 customers have adopted nCino’s Banking Adviser technology, reflecting the company’s leadership in AI banking transformation. Additionally, nCino has successfully converted approximately 21% of its Annual Contract Value (ACV) to platform pricing, aiming for a 10% price uplift on renewals.
Mortgage Business Momentum
The mortgage business segment demonstrated strong momentum, with subscription revenues reaching $20.9 million, a 22% increase year-over-year. This growth led nCino to revise its full-year guidance for U.S. mortgage subscription revenues growth from flat to 5%, indicating a positive outlook for this segment.
Credit Union Market Activation
In the credit union market, nCino added six new logos and 35 cross-sells in the second quarter. A notable expansion deal involved a $12 billion asset credit union, highlighting the company’s successful penetration and growth in this sector.
Professional Services Revenue Decline
While nCino’s overall performance was strong, the professional services segment saw a slight decline, with revenues at $18.1 million, down 2% year-over-year. The company remains focused on gross profit growth rather than revenue growth in this area, indicating a strategic shift in priorities.
Challenges with Change Management
The adoption of new AI solutions and platform pricing models presents change management challenges for customers. These challenges can impact the speed of uptake, requiring nCino to navigate these hurdles carefully to maintain momentum.
Forward-Looking Guidance
Looking ahead, nCino has revised its full-year revenue guidance for fiscal 2026 to a range of $585 million to $589 million. This reflects the company’s solid performance and commitment to executing growth strategies globally. The company remains optimistic about its market validation and expansion efforts, particularly in the EMEA region and the credit union market.
In conclusion, nCino’s Q2 earnings call highlighted a period of strong growth and strategic advancements, with positive sentiment surrounding its financial performance and market expansion. While challenges remain, particularly in professional services and change management, the company’s forward-looking guidance and strategic initiatives position it well for continued success.