nCino, Inc. Q4 FY2025 earnings call

• Sean emphasizes nCino's evolution to AI banking, leveraging data, analytics, and AI for vertical opportunities. He discusses past challenges like macroeconomic headwinds, execution issues in certain markets, and product rollout delays. - Actions taken include leadership changes in EMEA (hiring Joaquín de Valenzuela as EMEA GM), launching best-in-breed Consumer Lending product, releasing fully integrated onboarding solution in Q2, and key acquisitions (DocFox, FullCircl, Allegro, Sandbox Banking) that expand SAM and provide cross-selling opportunities. - Focus on AI-driven Banking Advisor capabilities, which reduce complex banking processes, and plans to launch new capabilities at nSight user conference in May. - Reinforces nCino's competitive position with global reach, broad product capabilities, and reputation in Commercial Banking, with over 70% of SAM outside commercial lending and over half of fiscal '25 bookings from non-commercial solutions.

Total revenues in the fourth quarter were $141.4 million, an increase of 14% year-over-year, and $540.7 million for fiscal '25, up 13% over fiscal '24. Subscription revenues were $125 million in Q4, up 16% y/y, and $469.2 million for the full year, up 15% y/y. Organic subscription revenues were $118.3 million in Q4, up 10%, and $456.9 million for fiscal '25, up 12% y/y. Professional services revenue was $16.4 million in Q4, up 1% y/y, and $71.5 million for the full year, up 7% y/y. Non-U.S. total revenues were $33.3 million in Q4, up 34% y/y or 38% in constant currency, and $116.2 million for fiscal '25, up 30% y/y and 30% in constant currency. FullCircl contributed ~$4.3 million to Q4 and full-year non-U.S. total revenues. Non-GAAP operating income in Q4 was $24.4 million (17% of total revenues) vs. $19.3 million (16%) in Q4 '24. Fiscal '25 non-GAAP operating income was $96.2 million (18% of total revenues) vs. $61.8 million (13%) in fiscal '24. Non-GAAP net income attributable to nCino in Q4 '25 was $13.9 million ($0.12 per diluted share) vs. $23.8 million ($0.21) in Q4 '24. Fiscal '25 non-GAAP net income was $76.1 million ($0.66 per diluted share) vs. $58 million ($0.51) in fiscal '24. Free cash flow was negative $10.4 million in Q4 '25 vs. $7.7 million in Q4 '24. Fiscal '25 free cash flow was $53.4 million vs. $53.8 million in fiscal '24. Remaining performance obligation (RPO) was $1.2 billion as of Jan 31, 2025, up 15% from $1 billion in Jan 31, 2024, with $797 million expected in next 24 months, up 18% from $675 million in Jan 31, 2024. ACV as of Jan 31, 2025, was $516.4 million, up 13% y/y (8% organic), with ACV net retention rate at 106% in fiscal '25 vs. 102% in prior year.

• Fiscal '26 guidance: Total revenues expected $574.5M to $578.5M, subscription revenues $503M to $507M. Q1 '26 total revenues expected $138.75M to $140.75M, subscription revenues $121.75M to $123.75M. - ACV expected to add $48M to $51M on constant currency basis in fiscal '26, including ~$4.5M from Sandbox acquisition. - Operating margin expected to expand, with second half of fiscal '26 yielding ~200 basis points of expansion. - Non-GAAP net income attributable to nCino per share expected $0.66 to $0.69, excluding currency impact. - Factors impacting guidance: 1% currency headwind, mortgage market uncertainty, onetime revenues from prior year, and back-end weighted bookings modeling.

• Macroeconomic headwinds affecting customer spending on technology investments. - Execution challenges in certain international markets (e.g., Europe) where sales momentum was not as crisp. - Product rollout delays impacting bookings and revenue growth, such as slower-than-expected integration of DocFox acquisition. - Higher churn in some segments, including one customer deciding not to move forward with implementation.

Q: What are customers saying about their willingness to invest in 2025?

A: Sean says customers acknowledge market volatility but their balance sheets are healthy, expecting growth in loan portfolios, deposits, and EPS, which aligns with nCino's value proposition.

Q: Difference between ACV and revenue growth in fiscal '26?

A: Greg explains revenue is a lagging indicator of bookings. Factors include FX headwind, mortgage business impact, onetime revenues from prior year, and back-end weighted bookings modeling.

Q: Go-to-market investments and sales capacity?

A: Sean notes intentional moves in sales leadership, product, marketing, and CS, with Joaquín de Valenzuela hired for EMEA. Greg mentions market opportunity easing and customer base health as reasons for investments.

Q: ACV growth outlook and puts and takes?

A: Sean and Greg state revenue is lagging bookings, but there are upside opportunities with solution maturity, onboarding solution hardening, and acquisitions. Factors include revenue lag, personnel changes, and international momentum.

Q: U.S. mortgage competitive positioning?

A: Gregory says nCino feels good about mortgage positioning, having added 24 new IMB customers last year, and continues to win market share in logos despite competition.

Q: Evolution of Consumer Lending product?

A: Sean attributes success to solution maturity, customer feedback iteration, robust integration set, and targeting credit union market, with momentum seen in recent customer additions.

Q: SAM concerns on commercial side?

A: Sean and Gregory assert nCino is committed to delivering on platform value proposition across commercial, consumer, etc., with significant opportunity in global commercial lending and cross-selling into existing commercial customer base.

Q: AI experimentation by customers?

A: Sean says customers prefer nCino as their trusted partner to help with AI journey, encouraging development of Banking Advisor capabilities and unified API layer via Sandbox acquisition.

Q: Headcount additions and ramp time?

A: Gregory states quota-carrying reps have a ~6-month ramp time to productivity.