Q4 2025 Earnings Summary
- Positive Booking Momentum and Anticipated Revenue Growth Reacceleration: nCino is experiencing bookings momentum and growth, particularly in consumer lending and international markets. The company expects this momentum to translate into revenue growth reacceleration in fiscal year 2027 due to investments in product development, leadership changes, and go-to-market strategies. Notably, they are launching a fully integrated onboarding solution and have made key leadership appointments in EMEA to enhance execution.
- Strong Customer Demand and Healthy Financial Institutions: Customers are indicating a willingness to invest, citing healthy balance sheets and expectations of growth in loan portfolios, deposits, and earnings per share. This positive customer sentiment, coupled with easing market headwinds, is driving demand for nCino's efficiency-enhancing solutions, including their AI-powered offerings. Customers prefer partnering with nCino for AI implementations due to their trusted relationship and integrated platform.
- Unique Competitive Position and Expansion Opportunities: nCino maintains a strong competitive moat with opportunities to expand within its existing commercial customer base and into new segments like consumer lending and credit unions. With over 70% of their total addressable market outside of commercial lending, they are leveraging their reputation to drive growth in these areas. Additionally, the shift to platform-based pricing has been positively received by customers, aligning pricing with the value delivered.
- Underperformance in gross bookings, particularly in international and mortgage businesses, led to lower subscription revenue growth and required increased go-to-market investments, which may strain profitability if growth doesn't materialize as expected.
- Subscription revenue growth is expected to decelerate in the second half of fiscal '26 due to factors like higher churn, headwinds in international markets, and one-time revenue items in the prior year, indicating challenges in sustaining growth momentum.
- The company's plans for growth reacceleration depend on anticipated improvements in execution and bookings, posing a risk if these improvements do not occur as planned, potentially delaying growth and impacting financial targets like achieving the Rule of 40.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | 14% increase (from $123.69M to $141.41M) | Total revenue growth was driven by continued strength in core subscription sales and possibly geographic expansion, mirroring earlier periods where subscription growth (e.g., Q3 FY 2024 and Q3 FY 2025) was a major driver. However, the increase may also reflect accelerated customer adoption compared to Q4 2024. |
Subscription Revenues | 16% increase (from $107.5M to $124.99M) | Subscription revenue growth outpaced overall revenue growth, underpinned by both expansion from existing customers and wins from new customers as seen in previous quarters. The 16% increase further emphasizes the company’s successful shift towards recurring revenue models, similar to trends observed in earlier periods. |
Professional Services & Other Revenues | ~1% increase (from $16.29M to $16.43M) | Professional services revenues remained nearly flat, reflecting a steady performance. This minimal increase is consistent with prior periods where the focus remained on high-margin subscription revenues rather than driving significant growth in professional services. |
Loss from Operations | Widened from $(3,185)K to $(5,738)K | Despite revenue growth, loss from operations worsened substantially. This deterioration indicates that rising costs—potentially linked to higher expense allocations such as increased employee, amortization, or marketing expenses—outpaced revenue gains relative to Q4 2024, diverging from previous trends of improving operational margins. |
Net Loss attributable to nCino, Inc. | Deepened from $(1,160)K to $(18,610)K | The dramatic net loss expansion suggests that significant non-operating expenses, additional amortization, and possibly one-off charges (such as increased stock-based compensation or reallocation of costs) have heavily impacted the bottom line compared to Q4 2024, a departure from prior periods where improvements in operating performance helped narrow losses. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total Revenues | Q1 2026 | $139.5M to $141.5M | $138.75M to $140.75M | lowered |
Subscription Revenues | Q1 2026 | Approximately $122.5M to $124.5M | $121.75M to $123.75M | lowered |
Non-GAAP Operating Income | Q1 2026 | $23.25M to $24.25M | $22.5M to $24.5M | lowered |
Non-GAAP Net Income Per Share | Q1 2026 | $0.18 to $0.19 | $0.15 to $0.16 | lowered |
Interest Expense | Q1 2026 | no prior guidance | Approximately $3.5M | no prior guidance |
Weighted Average Shares Outstanding | Q1 2026 | no prior guidance | Approximately 119 diluted shares | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Booking Momentum and Revenue Growth Reacceleration | Q1–Q3 calls consistently reported robust booking momentum with record sales, multi‐solution deals, and strong pipeline growth ( ) | Q4 highlighted integration of acquisitions (e.g., DocFox), strengthened EMEA leadership, and clear expectations of revenue reacceleration in fiscal ’27 ( ) | Consistently strong, evolving from broad momentum to more strategic integration driving delayed revenue benefits. |
Subscription Revenue Deceleration and Execution Risks | Q2 mentioned mortgage dilution and FX headwinds while Q3 provided limited details; Q1 did not explicitly mention deceleration ( ) | Q4 provided a detailed discussion of deceleration factors – integration delays, currency headwinds, one‐time revenue impacts – and outlined execution risks across international markets and pricing transitions ( ) | A new emphasis on caution, with increased focus on potential slowdown and execution challenges emerging in Q4. |
Mortgage Business Performance and Churn Concerns | Earlier periods (Q1–Q3) reported strong mortgage growth, record new logo wins, and noted churn partly driven by M&A, with generally positive momentum ( ) | Q4 noted a moderated 8% growth, flat year‐over‐year guidance for mortgage subscriptions in fiscal ’26, and improved but still critical churn metrics amid market uncertainty ( ) | A steady topic with incremental improvements in churn, though market uncertainties persist. |
AI-Driven Product Innovation and Integration | From Q1 through Q3, AI innovations (Banking Advisor, auto-spreading, DocFox/FullCircl integrations) were highlighted with strong early adoption and customer excitement ( ) | Q4 deepened focus on AI integration with expanded Banking Advisor capabilities and a roadmap for fully integrated onboarding solutions expected in Q2 2026 ( ) | Consistently positive and maturing, with expanded applications and clearer integration paths emerging. |
International Expansion and Non-Commercial Pipeline Growth | Q1–Q3 indicated steady international growth across regions (U.K., Japan, EMEA) with growing non-commercial pipeline and new logo wins ( ) | Q4 emphasized new leadership in EMEA, robust non-U.S. revenue growth, and targeted pipeline improvements driving a broader non-commercial and mortgage mix ( ) | Ongoing strong expansion with increasing geographic focus and pipeline scaling. |
Platform Pricing Transition and Revenue Recognition Challenges | Q1 introduced early market testing, Q2 detailed adoption metrics and AR challenges, and Q3 discussed customer adoption of the new Intelligent Framework ( ) | Q4 offered detailed illustrations of revenue recognition adjustments, clearer estimates on AR, and expectations for a subscription growth benefit from the platform transition ( ) | A maturing process with a clearer roadmap and enhanced financial transparency as the transition progresses. |
Management Succession and Leadership Transition Uncertainty | Q3 included discussions around potential succession with Chairman/CEO Pierre Naude noting no set timeline; Q1 and Q2 did not address this explicitly ( ) | Q4 featured CEO Sean Desmond expressing excitement, outlining deep operational expertise, and instilling confidence in sustainable leadership ( ) | A shift from earlier succession uncertainty to a stable, clearly articulated leadership transition and renewed confidence. |
M&A Activity Impact on Growth and Market Consolidation | Q1–Q3 mentioned M&A as a mixed factor—with risks like increased churn in the mortgage segment and cautious outlooks on market consolidation ( ) | Q4 focused on integration efforts (e.g., Sandbox Banking, FullCircl) with an emphasis on planned synergies and viewing market consolidation as an indicator of improving industry conditions ( ) | A recurring topic now evolving towards proactive integration and synergy realization, with a more positive take on consolidation. |
Customer Demand Dynamics and Commercial Base Saturation | Across Q1–Q3, strong customer demand was reported with record sales, robust cross-selling, and healthy pipeline dynamics despite traditional commercial saturation concerns ( ) | Q4 highlighted improved balance sheets, a diversified SAM (70% outside commercial), and clear momentum in cross-selling to both commercial and noncommercial segments ( ) | Steady, with improved demand dynamics and diversification easing saturation concerns in the traditional commercial base. |
Competitive Positioning and New Market Segment Expansion (Consumer Lending, Credit Unions) | Earlier periods (Q1–Q3) described initial moves into consumer lending and credit unions via new product capabilities and early adoption of acquisitions, laying the groundwork for expansion ( ) | Q4 showcased accelerated wins in consumer lending and credit unions with significant deals and product enhancements reinforcing market leadership ( ) | An ascending trend with more aggressive expansion strategies and bolstered competitive positioning in new market segments. |
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Revenue Growth Guidance
Q: Why is revenue growth slower than ACV growth in fiscal '26?
A: Management explained that revenue growth lags behind ACV growth due to several factors, including a conservative guidance philosophy, back-end weighted bookings, FX headwinds, lower gross bookings in international and mortgage, and higher churn. They aim to "derisk" guidance and expect momentum to build throughout the year. -
Customers' Willingness to Invest
Q: Are customers ready to invest in 2025?
A: Customers acknowledge market volatility but report healthy balance sheets and expect growth in loan portfolios, deposits, and EPS. They are focusing on improving efficiency, which aligns with nCino's value proposition. -
Pricing Impact on Revenue
Q: How will pricing changes affect revenue in fiscal '26?
A: nCino expects a 1% uplift in revenue this year from new platform pricing deals. They anticipate greater benefits in subsequent years as they migrate the remaining 85% of customers to new pricing. -
International Challenges
Q: What's causing the international revenue impact?
A: International, specifically EMEA, contributed to a 6% impact on subscription revenue growth due to slower bookings and higher churn. Leadership changes have been made, with new leadership based in Madrid focusing on growth opportunities in Europe. -
Investments in Growth
Q: Why increase sales and marketing investments now?
A: With the market improving, nCino is investing $10 million in sales capacity and digital marketing to capitalize on growth opportunities, including credit unions and emerging geographies. These are specific investments reflecting market opportunities, not part of a multiyear plan. -
Retention Rates Outlook
Q: What's the expected retention rate for the business?
A: Management expects ACV net retention rate to improve and views it as a key metric. While retention faced headwinds in prior years, they believe ACV growth is a good indicator of performance. -
Competition in Mortgage and AI
Q: How is nCino positioned against competitors in mortgage and AI?
A: nCino feels confident in its competitive positioning, continuing to win market share and adding 24 new IMB customers last year. In AI, customers prefer to work with trusted partners like nCino for integrated solutions rather than custom workflows. -
Reacceleration in Fiscal '27
Q: What if growth remains constrained into fiscal '27?
A: Management focuses on achieving the Rule of 40 by the fourth quarter of next year, suggesting that profitability improvements may offset growth constraints. They believe investments and efficiency gains will drive sustainable growth. -
Business Mix Evolution
Q: How will your business mix evolve over the next 3-5 years?
A: With 70% of SAM outside commercial lending and over half of fiscal '25 bookings from other solutions, nCino expects significant growth in consumer, small business, and mortgage segments, leveraging existing customer relationships. -
Exposure to Community Banks
Q: What's your exposure to small and community banks?
A: About two-thirds of nCino's business is in the community and regional market in the U.S. The community bank market remains a major portfolio, and potential deregulation could benefit these customers, increasing demand for nCino's solutions.