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01/11 11:28
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company has shown strong financial performance with increased revenue guidance and non-GAAP operating income, indicating robust growth. Product development is promising with AI rollout and strategic expansions in key markets. Market strategy is sound, with significant opportunities in existing and new markets. Shareholder returns are supported by improved guidance. The Q&A section highlights positive analyst sentiment and confidence in the company's growth trajectory, particularly in AI and international markets. Overall, these factors suggest a positive stock price movement, likely in the 2% to 8% range.
Total revenues $152.2 million, up 10% year-over-year. Reasons for change: Increased sales momentum and demand across market segments, geographies, and products.
Subscription revenues $133.4 million, up 11% year-over-year on a reported basis and 7% organically. Reasons for change: Growth in U.S. mortgage business and early renewals driven by demand for AI capabilities.
Professional services revenues $18.8 million, a decrease of 1% year-over-year. Reasons for change: Focus on gross profit growth rather than revenue growth, and internal efforts to incorporate AI tooling.
Non-U.S. total revenues $33.6 million, up 13% as reported and in constant currency. Reasons for change: Expansion in international markets, including new customer wins and renewals.
Non-U.S. subscription revenues $27.9 million, up 21% as reported and in constant currency and 3% organically. Reasons for change: Growth in international markets and adoption of AI capabilities.
Non-GAAP operating income $39.9 million, representing 26% of total revenues and a 600 basis points expansion year-over-year. Reasons for change: Increased subscription revenues, cost discipline, and leveraging AI tools.
Non-GAAP net income $35.8 million or $0.31 per diluted share. Reasons for change: Improved operating income and cost management.
Cash and restricted cash $87.9 million. Reasons for change: Seasonal cash flow patterns and share repurchases.
Outstanding line of credit $203.5 million. Reasons for change: Ongoing capital allocation strategy.
Share repurchases Approximately 1.4 million shares repurchased at an average price of $27.71 per share, totaling $39.7 million. Reasons for change: Completion of $100 million authorization for share buybacks.
AI-powered intelligent automation: nCino's platform integrates AI-powered intelligent automation for lending, onboarding, account opening, and portfolio management across financial institutions globally.
Banking Advisor intelligence units: Over 110 customers have adopted Banking Advisor intelligence units, with increasing adoption and early renewals due to demand for AI features.
Operational analytics functionality: nCino Operations Analytics provides banking-specific analytics, enabling customers to uncover bottlenecks, analyze key metrics, and compare performance against industry peers.
Role-based AI agents: nCino introduced role-based AI agents, referred to as Digital Partners, trained on usage data to enhance loan processing speed and consistency.
Expansion in Japan: nCino signed a new customer, one of the largest regional banks in Japan, for mortgage lending, along with three expansion deals with existing Japanese customers.
Integration Gateway API in EMEA: Integration Gateway API was included in renewals with a $90 billion bank in the Czech Republic and a $9 billion credit union, marking its first deal outside the U.S.
Efficiency improvements: Examples include a $5 billion U.S. bank eliminating 86% of duplicate data entry and a $5.2 billion institution reducing underwriting time from 23 days to 2 days.
AI-driven operational enhancements: AI tools and initiatives contributed to cost discipline and efficiency, with a focus on professional services gross margin improvement.
AI strategy and innovation: nCino is embedding AI across its platform, with plans to expand Banking Advisor capabilities to 100 by fiscal year-end, emphasizing AI as a competitive differentiator.
Platform pricing transition: Approximately 27% of ACV has transitioned to platform pricing, driven by demand for AI capabilities and strategy.
Legacy fragmented systems: Financial institutions struggle with legacy fragmented systems that limit growth, hinder financial performance, and create poor user experiences.
Execution risks: The company needs to execute at a high level to reflect its market position and ambitions, which poses a challenge.
Highly regulated environments: Customers operate in highly regulated environments, requiring careful consideration of credit policy and risk tolerance levels.
Customer adoption of AI: The pace of AI adoption by customers is slower than the pace of innovation, requiring a clear and steady roadmap for adoption.
Bank M&A impact: Bank mergers and acquisitions can negatively impact the company, as seen with a contract buyout in the quarter.
Professional services revenue decline: Professional services revenues decreased by 1% year-over-year, indicating challenges in this segment.
Seasonal cash flow challenges: Free cash flow generation is seasonally lower in the second half of the year, impacting financial flexibility.
U.S. mortgage subscription revenue seasonality: U.S. mortgage subscription revenues are expected to decline sequentially in the fourth quarter due to historical seasonality.
Revenue Guidance for Q4 Fiscal 2026: Total revenues expected to be $146.75 million to $148.25 million, with subscription revenues of $130.75 million to $132.25 million, representing year-over-year growth of 4% and 5%, respectively, at the midpoint.
Full-Year Fiscal 2026 Revenue Guidance: Total revenues projected to be $591.9 million to $593.4 million, representing approximately 10% growth at the midpoint. Subscription revenues expected to be $520.5 million to $522 million, representing 11% growth at the midpoint or 7% organically.
U.S. Mortgage Subscription Revenue Growth: Full-year U.S. mortgage subscription revenues growth revised to approximately 7%, up from prior guidance of 5%.
Non-GAAP Operating Income Guidance: For Q4 Fiscal 2026, non-GAAP operating income expected to be $32.5 million to $33.5 million. For full-year Fiscal 2026, non-GAAP operating income projected to be $127.2 million to $128.2 million, representing approximately 33% growth over Fiscal 2025.
ACV (Annual Contract Value) Guidance: Fiscal 2026 ACV expected to be $564 million to $567 million, representing 10% growth in constant currency at the midpoint.
AI and Product Development Outlook: nCino plans to expand AI capabilities, with approximately 100 Banking Advisor capabilities expected by the end of Fiscal 2026. The company is focusing on embedding AI across its platform and introducing role-based AI agents over the next year.
Platform Pricing Transition: Approximately 27% of ACV has transitioned to platform pricing, with continued early renewals driven by demand for AI capabilities.
Share Repurchase Program: We repurchased approximately 1.4 million shares of our common stock in the third quarter at an average price of $27.71 per share for total consideration of approximately $39.7 million. When added to the stock we repurchased since announcing the buyback in April, we have completed the $100 million authorization, repurchasing approximately 4 million shares at an average price of $25.02 per share.
The company has shown strong financial performance with increased revenue guidance and non-GAAP operating income, indicating robust growth. Product development is promising with AI rollout and strategic expansions in key markets. Market strategy is sound, with significant opportunities in existing and new markets. Shareholder returns are supported by improved guidance. The Q&A section highlights positive analyst sentiment and confidence in the company's growth trajectory, particularly in AI and international markets. Overall, these factors suggest a positive stock price movement, likely in the 2% to 8% range.
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