nCino Inc Q3 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Infante - Morgan Stanley - Analyst : Hey guys, thanks for taking my question. Greg, I just wanted to ask on margins. If I look at the incremental AOI margins in the quarter, I think they were close to 90%. If I look at fiscal 4Q, at least as it relates to the high end, it's closer to about $130 million. That would basically put your full year incremental AOI margins around 60%. Like how should you -- how should we be thinking about the leverage you're driving in the business this year? And whether or not some of those AI efficiencies give you some incremental confidence in terms of delivering on your medium-term free cash flow and operating margin targets even faster.

Question: Michael Infante - Morgan Stanley - Analyst : That's helpful. And then just for my follow-up. Obviously, you made the comment just in terms of having conviction in your ability to deliver on the full year ACV target. But as we think about both fiscal 4Q and beyond, like how are you thinking about your level of visibility into, call it, NTM subscription revenue just based on what you see either already contractually committed and the associated sort of backlog conversion to subs revenue. I'm just thinking about not only fiscal 4Q, but beyond and how you think about your level of visibility at least relative to what you've characterized as your historic visibility into forward subscription revenue.

Question: Saket Kalia - Barclays Services Corp - Analyst : Okay great hey guys, thanks for taking my questions here, Sean, maybe just to start with you. I want to dig into Greg's comments a little bit about feeling good about the ACV guide for the year, which is great to hear, right? So you clearly feel good about underlying demand. I was wondering if you could just add some color to that. Is that coming from big customers around commercial lending, is it international? You gave some great examples of Japanese banks in there? Is it consumer banking? Clearly, we don't need to talk about the guidance and the numbers as much, but just some color contours around what you're hearing from customers, what's the health of the underlying base? Because I know you spend a lot of time with customers.

Question: Saket Kalia - Barclays Services Corp - Analyst : Got it. Got it. That's super helpful. And maybe on banking device, it's a good segue Greg, for my follow-up for you. I think this is the second quarter that we've talked about customers renewing early, which is great. But I'm curious, does it surprise you just given the uplift in spending that would correspond to that? And maybe relatedly, is there anything from -- it's a deliberately an open-ended question, are there any modeling impacts that we should think about that we should keep in mind with those early renewals as we go into next year?

Question: Saket Kalia - Barclays Services Corp - Analyst : Very helpful guys, thank you.

Question: Alex Sklar - Raymond James - Analyst : Great, thank you. Sean or Greg, just first on the 2 top 50 bank commercial expansions, both really significant increases, could you elaborate a bit more on what those banks were using nCino before within the commercial loan space and what they're doing now with the expansion? And how much white space you still still see within kind of the core enterprise commercial lending within your US installed base?

Question: Alex Sklar - Raymond James - Analyst : Okay. Great. And then maybe, Greg, a follow-up for you. Just on customer M&A. So the end market dealmaking has obviously picked up here in the last six months. Can you just talk about how it's going to impact nCino over the next one to two years as some of those deals start to close.

Question: Joe Vruwink - Robert W. Baird & Co Inc - Analyst : Great. Thanks. Thanks very much. I wanted to ask on the execution-based upside in 3Q, $1.4 million, I guess that's $5.6 million if we give credit for four quarters, so almost a point of growth. Can you maybe contextualize where that's coming from? I would imagine the deals in your pipeline are very visible. So are the deal sizes coming through bigger where the conversion rate is higher than you budgeted. And then just related to this execution factor, why doesn't it all flow through fully the 3Q magnitude becoming a 4Q magnitude?

Question: Joe Vruwink - Robert W. Baird & Co Inc - Analyst : Yeah. No doubt about that. I wanted to ask, you shared a lot of good stats about banks that are on nCino, end up doing better financially and now you're taking that experience and making it the foundation of understanding that powers your AI and digital partners I mean the 110 customers, are those primarily some of your larger customers? Is there really no issue with scaling even down to the smallest customer? And does there come a point where if you're not part of the 110 and you're part of the other thousands that are out there, you kind of look over and start paying attention that you're maybe being left behind by not adopting or early renewals going to become kind of an increasingly important factor here. if you are delivering kind of the ROI best possible? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 03, 2025 / 9:30PM, NCNO.OQ - Q3 2026 nCino Inc Earnings Call

Question: Charles Nabhan - Stephens Inc - Analyst : Hi, good afternoon and thank you for taking my question. I wanted to unpack the mortgage business outperformance this quarter a little bit. Clearly, consistently outperformed expectations through the year. And I know some of that is a bit of conservatism built in, but could you talk about some of the drivers of that outperformance, whether that's coming from new logos, same-store sales within your existing customer base? And -- any -- I know there's a bank component to that customer base, a nonbank component. You moved into the homebuilders as well. Any areas of strength or weaknesses conversely that you could call out? Just looking for some color around that business.

Question: Charles Nabhan - Stephens Inc - Analyst : Got it. And as a follow-up, I just had a high-level question on AI adoption in the bank space. Clearly, we're still in the very early stages, and we're a little further ahead than we were last quarter. But as we think about the path ahead, do you envision sort of a slow adoption curve? Or as we think about '26 -- calendar year '26 calendar year '27, do you see adoption of AI ramping up more rapidly in the bank space? Just curious how you think about the curve going forward.

Question: Charles Nabhan - Stephens Inc - Analyst : Got it. Appreciate all that caller. Thank you.

Question: Ryan Tomasello - KBW - Analyst : Hi everyone, thanks for taking the questions. I wanted to ask about DocFox. If you can provide an update on the pipeline there, and when you might start seeing that on should be more meaningfully to ACV? And then on implementation and the sales cycles, how long are those typically for DocFox, and I think relative to some past numbers you've given for the typical ACV uplift, if there's any update on what that could look like as DocFox rolls out.

Question: Ryan Tomasello - KBW - Analyst : Great. And then also on the new credit union sales force. If you can just provide an update what you're seeing there? And then I think last quarter, you called out the number of wins and cross-sells in that space. So if there's any way to give us an update on that category.

Question: Adam Hotchkiss - Goldman Sachs Group Inc - Analyst : Great, thanks so much for taking the questions, Sean, I wanted to go back to your comments around the intelligence units and the 110 financial institutions now purchasing. Could you just maybe take a step back and give us the common playbook that you've observed from testing the functionality and test environments to actually going out and deploying and buying intelligence units. What's the time frame that you've seen that take place in for maybe some of your earliest cohort customers? And then any commonality around the skills that are resonating most would be helpful.

Question: Adam Hotchkiss - Goldman Sachs Group Inc - Analyst : Great. Thank you very much.

Question: Ella Smith - JPMorgan Chase & Co - Analyst : Good evening. Thank you for taking my question. So you alluded to this earlier, but perhaps we can go a little deeper. If you parse out your various growth vectors, whether it's serving credit unions, your mortgage or onboarding products, AI offerings or continued traction in EMEA. Are there certain areas that are particularly driving ACV growth?

Question: Ella Smith - JPMorgan Chase & Co - Analyst : That's very helpful. And for a quick follow-up regarding your rule of 40, do you expect your path to Rule of 40 to be linear throughout next year?

Question: Chris Kennedy - William Blair - Analyst : Yeah, good afternoon. Thanks for taking the question for all the detail. Can you just give us an update on your consumer business, kind of how the bookings are tracking relative to your initial plans?

Question: Chris Kennedy - William Blair - Analyst : Understood. And then just as a follow-up, regarding the Rule of 40 target. Have the components kind of evolved, whether it's revenue growth or margin, has that kind of evolved your thinking about reaching that target?

Question: Chris Kennedy - William Blair - Analyst : Understood. Thank you.

Question: Ken Suchoski - Autonomous Research - Analyst : Hey, good afternoon. Thanks for taking the question, Greg, you talked about converting 27% of the company's ACV to platform pricing. I think you said in the past that fiscal Q4 is going to be the biggest cohort this year. So maybe talk about how you're feeling about shifting this cohort of customers to the new pricing model, especially in the context of the demand for AI solutions. And then I guess on the lift that

Question: Ken Suchoski - Autonomous Research - Analyst : No, absolutely. And then I guess as a as a follow-up, just on the organic FX-neutral international subscription growth, I mean, it seems to be tracking in the sort of low single digit to mid-single digit growth range. I think it used to grow well into the double digits. And you guys obviously just announced some new wins. So congrats on that. I know you had some personnel changes in Europe, but maybe talk about your ability to reaccelerate growth in this business, what drives the acceleration? And any details on when we might do that.

Question: Ken Suchoski - Autonomous Research - Analyst : Thank you, Sean. Thanks, Greg.

Question: Koji Ikeda - Bank of America - Analyst : Yeah, hey guys, thanks for fitting me in here. Just one for me, and I wanted to follow up on the expand deal commentary and kind of the questions here. And so I understand that M&A and kinding is likely a factor with the expand deals this quarter. So thinking a little bit more LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 03, 2025 / 9:30PM, NCNO.OQ - Q3 2026 nCino Inc Earnings Call high level, what might need to happen that can drive a real shift in mindset from existing customers that could result in even better expansion activity over the next several years?

Question: Terry Tillman - Truist - Analyst : Good evening. Conor Passarella on for Terry. Just on Banking Advisor really quickly, just as you think about the focus being getting customers to adopt in the early days, what kind of internal KPIs or metrics are you using to evaluate the success of that product so far within the base?