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nCino, Inc. (NCNO)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY2026 revenue was $144.1M (+13% YoY) with subscription revenue $125.6M (+14% YoY); non-GAAP operating income $24.8M and non-GAAP diluted EPS $0.16; the company cited better-than-expected U.S. mortgage and steady international strength as drivers .
  • FY2026 guidance was raised across revenue ($578.5–$582.5M), subscription revenue ($507.0–$511.0M), non-GAAP operating income ($112–$116M), and non-GAAP EPS ($0.69–$0.72); ACV maintained ($564–$567M) .
  • Management disclosed a ~7% workforce restructuring, targeting ~$24M gross annualized expense savings (with $7.5–$9M one-time costs in Q2) and flowing ~$5M into FY2026 non-GAAP operating income guidance; emphasis on AI-driven efficiencies in R&D, PSO and support .
  • Consensus comparison: Q1 FY26 revenue beat ($144.1M vs $140.1M*), Primary EPS was roughly in line ($0.16 vs $0.157*), while EBITDA was below consensus ($18.7M* actual vs $25.3M*); FYQ2 guidance brackets consensus and sets catalysts around AI launches, implementation speed, and mortgage stabilization . Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Subscription strength and international mix: subscription revenue up 14% YoY to $125.6M; non-U.S. subscription revenue up 31% YoY ($25.9M), with non-U.S. total revenue $31.6M (+22% YoY) .
  • AI momentum and platform breadth: “We’re accelerating our AI strategy … embedding intelligence across the entire nCino Platform” and released 16 new Banking Advisor capabilities; omnichannel upgrades delivered without incremental cost for upgrades, aiding adoption .
  • Guidance raise and capital returns: FY2026 revenue, subscription revenue, non-GAAP OI and EPS guidance raised; repurchased ~1.8M shares at $22.17 for $40.6M in Q1, reinforcing capital allocation discipline .

What Went Wrong

  • EBITDA below consensus and PS margin drag: professional services gross margin remains a focus; CFO noted pricing/cost pressure at community banks and efficiency initiatives underway, including AI and redesigned products to reduce implementation hours . Values retrieved from S&P Global.*
  • GAAP operating loss persists (Q1: $(1.5)M) and higher interest expense ($4.45M in Q1) reflects revolver usage ($208.5M outstanding), tightening GAAP profitability .
  • Restructuring costs to weigh on FCF in FY2026: one-time restructuring costs of $7.5–$9M (mostly Q2) excluded from non-GAAP OI but expected to impact full-year free cash flow .

Financial Results

Multi-period summary (oldest → newest)

MetricQ3 FY2025Q4 FY2025Q1 FY2026
Total Revenue ($USD Millions)$138.8 $141.4 $144.1
Subscription Revenue ($USD Millions)$119.9 $125.0 $125.6
Professional Services & Other ($USD Millions)$18.9 $16.4 $18.5
Gross Margin % (GAAP)61% 60% 60%
Gross Margin % (Non-GAAP)67% 66% 66%
Operating Margin % (GAAP)(1)% (4)% (1)%
Operating Margin % (Non-GAAP)20% 17% 17%
Diluted EPS (GAAP, $)$(0.05) $(0.16) $0.05
Diluted EPS (Non-GAAP, $)$0.21 $0.12 $0.16

Q1 FY2026 actual vs consensus

MetricActualConsensusSurprise
Total Revenue ($USD Millions)$144.1 $140.1*+$4.0M*
Primary EPS ($)$0.16 $0.157*+$0.003*
EBITDA ($USD Millions)$18.7*$25.3*−$6.6M*

Values retrieved from S&P Global.*

KPIs

KPI (Q1 FY2026)Value
Free Cash Flow ($USD Millions)$52.6
Cash, Cash Equivalents & Restricted Cash ($USD Millions)$133.6
Revolving Credit Facility Outstanding ($USD Millions)$208.5
Non-U.S. Total Revenue ($USD Millions)$31.6
Non-U.S. Subscription Revenue ($USD Millions)$25.9
Share Repurchases (shares; $; avg price)~1.8M; $40.6M; $22.17

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)FY2026$574.5–$578.5 $578.5–$582.5 Raised
Subscription Revenue ($USD Millions)FY2026$503.0–$507.0 $507.0–$511.0 Raised
Non-GAAP Operating Income ($USD Millions)FY2026$107.0–$111.0 $112.0–$116.0 Raised
Non-GAAP EPS ($)FY2026$0.66–$0.69 $0.69–$0.72 Raised
ACV ($USD Millions)FY2026$564.0–$567.0 $564.0–$567.0 Maintained
Total Revenue ($USD Millions)Q2 FY2026n/a$142.0–$144.0 New
Subscription Revenue ($USD Millions)Q2 FY2026n/a$124.5–$126.5 New
Non-GAAP Operating Income ($USD Millions)Q2 FY2026n/a$23.5–$24.5 New
Non-GAAP EPS ($)Q2 FY2026n/a$0.13–$0.14 New
Interest Expense ($USD Millions)Q2 FY2026n/a~$4 New
Interest Expense ($USD Millions)FY2026n/a~$15 New
Weighted Avg Diluted Shares (Millions)Q2/FY2026n/a~119 (Q2/FY guide basis) New
Flow-through of Q1 mortgage overperformanceFY2026n/aExcluded ~$0.8M mortgage outperformance from FY guide Policy reiterated

Earnings Call Themes & Trends

TopicQ3 FY2025 (Prev Mentions)Q4 FY2025 (Prev Mentions)Q1 FY2026 (Current)Trend
AI/Technology initiativesBanking Advisor wins in Australia; FullCircl EMEA data onboarding AI embedded across onboarding/account opening/lending; Sandbox Banking acquisition 16 new Banking Advisor capabilities; AI central to differentiation; Sandbox underpins data/agents Accelerating product velocity and AI scope
Implementation efficiency (PS margins)——Redesign products to implement quicker; AI tools to improve PS margins; 200-hour goal to compress timelines Improving; benefits expected over coming quarters
MortgageLargest U.S. home builder live on Mortgage Stabilization focus; Q4 FX headwinds in non-GAAP Q1 overachievement ~$0.8M mortgage; churn improved vs Q4 Stabilizing; cautious guide philosophy
Credit unions——$1B SAM unlocked; indirect auto (Allegra) key; dedicated CU go-to-market; 800+ CU analytics footprint Renewed focus; expanding
InternationalNorway/UK/Japan expansion; FullCircl EMEA First Czech Republic deal (CSOB) International revenue +22% YoY; Japan and continent focus; first Spanish customer in Q2 Strengthening
Restructuring/cost actions—Prior restructurings referenced in non-GAAP ~7% workforce reduction; ~$24M gross annualized savings; $7.5–$9M one-time costs Margin tailwind in 2H
Sales capacity——Sales capacity up ~14% YoY; unchanged by restructuring Capacity-supported growth
Macro/regulatory——Potential deregulation could free capital; banks well-positioned; mortgage stability Constructive signals

Management Commentary

  • “Strong execution drove financial results above guidance, underscoring our ability to deliver value for shareholders and customers.” — CEO Sean Desmond .
  • “AI is central to our long-term differentiation … we released 16 new Banking Advisor capabilities designed to help customers save time, lower costs, and improve productivity.” — CEO .
  • “Non-GAAP operating income came in ahead of expectations… Subscription revenues overperformance contributed, offset in part by ~$500,000 severance expenses.” — CFO Greg Orenstein .
  • “We expect ~$24M of gross annualized expense savings… flowing ~$5M through to FY2026 non-GAAP operating income, primarily benefiting the second half.” — CFO .
  • “Omnichannel upgrades deliver consistent banker and client experiences; upgrades to current versions carry no incremental cost.” — CEO .

Q&A Highlights

  • Demand and budgets: steady willingness to invest; pipeline activity strengthening across onboarding, account opening, loan origination and portfolio monitoring .
  • Professional services margins: cost pressure at community banks; product redesign and AI to improve margins; expect gradual benefits as legacy projects wind down .
  • Restructuring: office right-sizing completed; workforce changes aim to boost product velocity via AI and modernized build processes, without reducing sales capacity .
  • Consumer lending and credit unions: strong momentum; CU go-to-market activation adds upside; first-quarter mix across commercial/consumer/mortgage balanced .
  • Mortgage churn: Q1 churn lower than Q4, contributing to seasonal overperformance; guide remains cautious, evaluated quarter by quarter .
  • Implementation timeline: bold goal to reduce projects to ~200 hours, moving from months/years to days; subscription revenue recognition not impacted by faster delivery .

Estimates Context

  • Q1 FY2026 actuals vs consensus: revenue beat ($144.1M vs $140.1M*), Primary EPS in line/slight beat ($0.16 vs $0.157*), EBITDA miss ($18.7M* vs $25.3M*). Mix and PS revenue reclassification contributed to PS outperformance; severance costs impacted non-GAAP OI, consistent with CFO commentary . Values retrieved from S&P Global.*
  • Near-term estimates likely adjust for raised FY2026 revenue/subscription revenue/OI/EPS guidance and restructuring savings cadence (benefiting 2H), while maintaining conservative mortgage assumptions and embedding higher interest expense .

Key Takeaways for Investors

  • Revenue quality improving with subscription strength and international growth; FY guide raised across key metrics—supportive for multiple expansion if execution persists .
  • AI product velocity (Banking Advisor, Sandbox data layer) and omnichannel upgrades can catalyze upsell/cross-sell and shorten implementation cycles, aiding PS margin improvement over time .
  • Mortgage stabilization (lower churn) and cautious guide policy reduce volatility; watch quarterly flow-through decisions to gauge management’s conservatism .
  • Restructuring provides a tangible margin tailwind (~$24M gross savings) with ~$5M flowed into FY guide; expect 2H OI outperformance if reinvestment discipline holds .
  • Capital allocation remains shareholder-friendly (buybacks); revolver usage and interest expense assumptions warrant monitoring in rate-sensitive scenarios .
  • Sales capacity +14% YoY and focused CU/EMEA/Japan go-to-market are levers for ACV growth; ACV guide maintained, implying subscription acceleration into FY2027 .
  • Trading implications: near-term catalysts include Q2 delivery on guidance, evidence of faster implementations, PS margin trajectory, and incremental AI commercialization updates .

Financial Appendix

Detailed Q1 FY2026 results and non-GAAP reconciliations

  • GAAP loss from operations $(1.5)M; non-GAAP operating income $24.8M; GAAP diluted EPS $0.05; non-GAAP diluted EPS $0.16; free cash flow $52.6M .
  • Beginning Q1 FY2026, non-GAAP excludes intercompany FX remeasurement gains/losses on intercompany loans; prior periods recast .
  • PS revenue exceeded expectations due to revenue recognition adjustments between subscription and services lines per SSP evaluation .

Prior quarter context

  • Q4 FY2025: revenue $141.4M; subscription $125.0M; non-GAAP OI $24.4M; non-GAAP diluted EPS $0.12; FY2026 initial guide set lower than updated Q1 guide .
  • Q3 FY2025: revenue $138.8M; subscription $119.9M; non-GAAP OI $28.0M; non-GAAP diluted EPS $0.21; international expansion and Banking Advisor wins highlighted .

Values retrieved from S&P Global where noted with an asterisk.*