Q3 2025 Earnings Summary
- nCino is expected to benefit from increased M&A activity in the banking sector, as acquiring banks look to streamline their middle and back office operations. Pierre Naude expressed optimism that this trend will continue into next year, potentially leading to increased demand for nCino's platform. ,
- The company's focus on AI and data analytics, particularly through its Banking Advisor product, positions it uniquely in the market. nCino has signed an additional 11 Banking Advisor deals in the quarter and plans to include Banking Advisor in every new deal and renewal. With consents obtained from 4 of their 10 largest customers to use their data, nCino is well-placed to leverage AI for product innovation and growth.
- Strong sales execution with both community and regional and enterprise businesses having strong quarters and being on track to exceed their targets for the year. This indicates robust sales momentum and continued market demand for nCino's solutions.
- Management succession uncertainty: CEO Pierre Naudé acknowledged the possibility of his retirement and the ongoing search for his successor, stating, "There will come a day where obviously somebody will step up into my role...we have to find the right person to really take this thing on and accelerate what we built here". This uncertainty around leadership transition could impact the company's strategic direction and investor confidence.
- Slowing organic growth: CFO Gregory Orenstein indicated that excluding recent M&A activity, the company's growth rate in Q4 would be in the low double digits, stating, "It would be low double digits in Q4 from a growth rate perspective. If you exclude the M&A that we did this fiscal year". This suggests a deceleration in organic growth momentum.
- Increased churn in mortgage segment: The company faced higher churn due to M&A activity in the Independent Mortgage Bank (IMB) sector, raising expected mortgage churn to approximately $10 million for the full year, up from a prior expectation of $8 million. Elevated churn levels could negatively affect subscription revenue and overall financial performance.
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
AI and Data Analytics Innovation | Discussed across Q1, Q2, and Q4 2024 with emphasis on Banking Advisor’s generative AI capabilities, auto spreading improvements with AI vision, and early open API initiatives | Q3 2025 continued to stress early traction of Banking Advisor and further enhancements in AI vision, with integration into a new pricing framework; open API was not specifically detailed | Consistent focus on innovation, with stronger product traction and expanded AI functionality |
Mortgage Segment Performance | Q1 highlighted almost double-digit growth despite dilution, Q2 described modest growth tempered by churn and M&A risks, and Q4 2024 detailed challenges with rising churn and dilutive impact | Q3 2025 reported 16% YoY revenue growth, 11 new logos, and higher average contract values but also noted rising churn due to M&A and limited mortgage rate decreases | Persistent growth potential but increasing concerns over churn, largely driven by M&A dynamics |
International Expansion and Market Strategy | Earlier periods (Q1, Q2, Q4 2024) emphasized strong performance in the Nordics, Japan, and other high-opportunity markets while de‐emphasizing Germany (and implied challenges in France) | Q3 2025 highlighted solid gains in the Nordics, Japan, South Africa, and added mentions of Luxembourg and Spain, with continued challenges in continental Europe | Stable emphasis on high-growth regions with strategic de‐emphasis on less penetrable markets |
Strong Sales Execution and Robust Net Bookings | Q1, Q2, and Q4 2024 underscored record bookings, solid customer expansion, and strong pipeline across multiple segments | Q3 2025 showcased improved global sales momentum, over 30 multi‐solution deals, and robust new customer net bookings, despite some M&A‐related churn | Consistently robust sales performance, reinforcing bullish sentiment despite external headwinds |
Pricing Model Transition Challenges and Revenue Recognition Discrepancies | Q2 and Q4 2024 discussed the challenges of shifting from seat-based to platform pricing and noted increased timing differences in revenue recognition, including higher unbilled AR | Q3 2025 featured positive feedback on the Intelligent Solution Framework with continuing issues such as rising unbilled accounts receivable | Ongoing transition with managed positive reception, though revenue recognition timing remains a short-term challenge |
M&A Activity Impact | Previous calls (Q1, Q2, Q4 2024) detailed M&A as a growth lever—as new customers are introduced via acquisitions—but also as a key source of churn risk in the mortgage segment | Q3 2025 reiterated M&A’s dual role, noting its benefit in driving customer adoption while also generating unpredictable mortgage churn | Steady dual impact with M&A continuing to drive growth while simultaneously posing risks for mortgage churn |
Management Succession Uncertainty and Leadership Transition Risks | Q4 2024 featured active leadership transitions (e.g. departures of key executives, promotions) while earlier quarters had little discussion on this topic | Q3 2025 had CEO Pierre Naude directly address succession planning and governance, reducing uncertainty about future leadership | Reduced uncertainty as leadership transitions are actively managed and clearly communicated |
Shift away from earlier focal points | Q1, Q2, and Q4 2024 emphasized strategic focus on DocFox acquisition integration, omnichannel platform development, and consumer lending product innovations | Q3 2025 did not indicate any major shift away from these priorities, with continued integration and strategic emphasis on these solutions | Maintained focus with continuity in strategic initiatives rather than a pivot away |
Concerns Over Slowing Organic Growth | Q1 mentioned that the mortgage segment was dilutive due to slower organic growth; Q2 and Q4 did not explicitly emphasize this concern | Q3 2025 brought up a cautious outlook with organic growth guidance in the low double digits, highlighting external factors such as persistent mortgage market volatility | Emerging as a nuanced concern, with organic growth pressures increasingly noted amid macro and market-specific headwinds |
- Q4 Guidance and Organic Growth
Q: What are the factors contributing to the Q4 guidance reduction on an organic subscription basis, excluding FullCircl?
A: The two main factors affecting our Q4 guidance are increased churn, particularly in the mortgage sector, and the fact that despite the Fed funds rate reduction, we haven't seen mortgage rates come down. Consequently, we're being prudent and cautious in our outlook for the fourth quarter.
- Mortgage Churn Outlook
Q: When do you expect mortgage churn to stabilize, and is the worst behind us?
A: Mortgage churn has shifted from lenders shutting down to M&A activity, indicating a more stable market. While we can't predict exactly when churn will stabilize, the fact that lenders are becoming profitable again suggests that the worst may be behind us.
- CEO Succession Planning
Q: Are there any plans for you to retire soon, and what's the perspective on succession planning?
A: While I have no immediate plans to retire and am passionate about my role, we're committed to diligent succession planning. Our focus is on finding the right person to ensure a smooth transition when the time comes.
- Cross-Sell Potential and Product Integration
Q: When will the newly acquired products be fully integrated, and when can we expect to see material cross-sell impact?
A: Cross-sell is already happening, with over 50% of bookings from non-commercial products last quarter. Integration of acquisitions like DocFox and FullCircl typically leads to a surge in sales once completed. We expect commercial onboarding to become as significant as our commercial loan origination business.
- Impact of FullCircl Acquisition
Q: Can you provide more details on the FullCircl acquisition and its financial contribution?
A: FullCircl enhances our client onboarding and compliance monitoring. It contributed $4 million in subscription revenue this quarter. We're integrating it to offer an unparalleled onboarding experience, which we believe will drive significant cross-sell opportunities.
- Banking Advisor Adoption and AI Integration
Q: How is the adoption of Banking Advisor progressing, and is AI integration affecting sales cycles?
A: We've added 11 new Banking Advisor customers this quarter, and it's now included in every new deal and renewal. Banking Advisor is viewed positively by customers, with no elongation in sales cycles. The incorporation of AI features is enhancing our offerings without causing delays.
- International Market Performance
Q: How is the international business performing, and what factors are influencing it?
A: Our performance varies by region. The U.K. and Ireland are strong markets for us. We've seen positive developments in the Nordics and Japan due to our focused territory approach. We're optimistic about future growth in Spain and considering strategic moves in Germany.
- Optimism Around Deregulation
Q: Is the optimism around deregulation influencing customer demand for larger-scale tech deployments?
A: Yes, there's a positive outlook among bankers regarding potential deregulation, which reduces regulatory burdens. This optimism is driving strategic initiatives, including M&A and increased investment in technology solutions like ours.
- Remaining Performance Obligations (RPO) Growth
Q: What is driving the strength in RPO growth this quarter?
A: The RPO growth is due to solid execution, a healthy mix of net new business and renewals, and strong performance across our community, regional, and enterprise businesses. There were no unusual factors influencing this growth.
- Mortgage Volume Impact on Revenue
Q: At what level of mortgage volume increase would customers exceed contract minimums to impact revenue?
A: It's difficult to specify exact volume levels, as minimums vary by customer. Many minimums were set low due to challenging market conditions. We need to see a sustained increase in volumes across customers before providing more clarity on revenue impacts.