nCino Q2 Earnings Call Highlights

nCino’s second-quarter revenue rose 8% year over year to $161 million, while subscription revenue increased 10% to $143.5 million. Non-GAAP operating income climbed 36% to $40.8 million and free cash flow surged 170% to $34 million. Platform pricing accounted for 48% of total annual contract value, up from 40% the prior quarter, and more than 230 customers had purchased AI Intelligence Units. Four major U.S. enterprise customers renewed at average annual contract value increases above 10%. nCino lifted its fiscal 2027 operating-income and free-cash-flow guidance, but reduced U.S. mortgage revenue forecasts as elevated rates continue to pressure independent mortgage banks. The company also repurchased $65 million of shares and authorized a new $100 million buyback program.

nCino NASDAQ: NCNO reported second-quarter fiscal 2027 revenue growth and raised portions of its full-year outlook, as the company highlighted demand for its banking software platform and growing customer adoption of its AI capabilities. Total revenue for the quarter was $161 million, up 8% from a year earlier, while subscription revenue increased 10% to $143.5 million, Chief Financial Officer Greg Orenstein said. Subscription revenue excluding U.S. mortgage rose 12% year over year, including on a constant-currency basis.

Non-GAAP operating income increased 36% year over year to $40.8 million, representing 25% of total revenue. Free cash flow rose 170% to $34 million. Professional services revenue declined 3% to $17.5 million, though professional services gross margin improved to 3% from negative 3% a year earlier as the company prioritized profitability over services revenue growth.

Chief Executive Officer Sean Desmond said nCino continued to see customer interest in consolidating banking workflows—including lending, onboarding, account opening and portfolio monitoring—on its unified platform. The company is emphasizing AI-enabled functions through its Banking Advisor products and its platform-pricing model. During the quarter, nCino signed early multiyear renewals with four of its 20 largest U.S. enterprise customers by annual contract value, or ACV. The four customers represented more than $900 billion in assets and renewed with average ACV increases of more than 10%, according to Desmond. As of the end of the quarter, 12 of nCino’s top 20 U.S. enterprise customers by ACV had transitioned to the company’s platform-pricing model under multiyear contract extensions. About 48% of total ACV was on platform pricing, compared with 40% in the prior quarter. More than 230 customers had purchased AI Intelligence Units by quarter-end, Desmond said. The company has begun selling additional units to some customers that reached the limits of their initial bundles, though it does not expect that monetization to materially affect fiscal 2027 results. Management said its current priority is building long-term adoption rather than maximizing near-term subscription revenue from the units. Desmond pointed to Continuous Credit Monitoring, a Banking Advisor capability, as a potential medium-term driver of Intelligence Unit consumption. The feature can assess more than 40 credit and operational indicators daily, identify loans requiring attention and help create documentation for review. He said the product combines natural-language capabilities with nCino’s proprietary deterministic models and algorithms, which are intended to support tracea.