Earnings call transcript Q1 2024

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Operator

Good day, and thank you for standing by. Welcome to nCino First Quarter Fiscal Year 2024 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to introduce your host for today's call, Harrison Masters, Director of Investor Relations and Strategic Finance.

Harrison Masters

Good afternoon, and welcome to nCino's first quarter fiscal 2024 earnings call. Officer. call Greg Naude, and Orenstein, President Chief today's Chief Chairman Josh on and Officer; Executive Chief Revenue me are nCino's Pierre and Glover, With Financial Officer;

we other During expectations, assumptions will strategies the entails the of are obligation our publicly to subject various certain forward-looking and SEC are performance services made filings in and forward-looking business. anticipated nCino and this current based or course documents, conference on and and economic make statements management's date, regarding today's any of industry available uncertainties forward-looking risks financial trends, to the conditions. These statements described of our as revise call, statements. views global and disclaims update any

on also believe that non-GAAP release, our today's will discuss GAAP understanding to of in X-K at Further, certain the aid results. available on is the can well on we A our as reconciliation Investor metrics earnings financial exhibit comparable earnings as the an call, this as metrics before in website Relations found today's with which just be our we furnished the call, and Form investor.ncino.com. presentation, website, to SEC

turn over the will Pierre. to I that, With now call

Pierre Naude

us afternoon, you and you, Thank Good Harrison. all today. for thank joining

non-GAAP We XX% flow. our operating our the cash margin, continued $XX.X are pleased well of resulting details including free a to as of first focus growth, quarter, share and accomplishments in on million profitable as

in XX% grew exceeding top revenues Total guidance. quarter, of the end the our

institutions to globe sponsoring This their the the attendees latest nSight, to few attendees over record also moved X,XXX network practices, weeks at future conference, share nCino of from Carolina, XX conference best see around who the ago, North attendance with partners. innovations. financial and the XX discuss XXX experienced representing a we to the with banking our accommodate peers, Charlotte, user sold-out year, countries, We and came

expect profitability we and of DNA. our to centered in million on nCino's innovations commitments Intelligence. Innovation Automation, key cash R&D focus And and invest Even themes: year. we and recent Experience this heart our still $XXX nSight, as on the achieving and fiscal upcoming highlighted flow, investment at around we over at X product continued is

Automation started began we improved from delivery benefit process commercial to ago, community is the institutions product banks their US. systems. increased XX operations financial years and where and their nCino when With to in efficiency in lending automate regional customers, in the for automation, faster accuracy complex

lines, In investment. to processes and be more continue Automation get fundamental product this nCino's and out of classes of to all their of a platform continues driving era regions. customers allow strategy our to asset part more efficiency that across automate product and we productivity,

to nCino Experience, SimpleNexus integrates UI system, lending the we experience. were demonstrate operating a end which mobile-first Within front new of enhancing the further bank end front excited consumer to the consumer the

key Intelligence. third was theme The

a reminder, our suite products As X learning ago. machine analytics, AI of and utilizing data we years nIQ, launched

critical running data financial close recognize Our our customers on us with role institutions. helped plays early in successful the relationships

of analytics. financial growth platform. at user to single automated pricing and stage our to benefit profitability existing and The production every continued spreading, We've the across of portfolio intelligence our is every nIQ and been data encouraged by drive and provide the of another products, insights ability commercial institution

of originated C&I mortgage year. nCino's bank assets of assets loans farm lending all over represents the U.S. XX% of unique credit U.S. association base Today, of and all all last assets, XX% in customer U.S., Canadian XX% around over XX%

products ever-increasing pricing and map expand level to renewals, reviews Our as offerings. by as unique and and more credit upon early that deliver can such afforded it in data intelligence broad automated base warnings, loan diverse an our decisions product leverage of road automated is large we set the customer nIQ for our even

Turning our back results. to quarter first

call, shared slow last during to QX be quarter. sales we a our expected was As

healthy, our larger that sales and through representing some our and seeing directly different teams geographic received in However, from segments from we've remains at share the we with deals I are pipeline nSight, feedback move you and want the to regions. field market pipeline. attendees our

the While all segments QX modernization, differed in recognize segments. importance buying of these propensity between

with $XXX and seen Enterprise have unsecured concerns. to those For sales billion, U.S. slightly assets, larger by exposure most have It's particularly example, have those cycles, to Regional where we which more seen between concentrations as impact, above been billion assets we deposit banks, lengthening have with impact to billion which define sales segment, banks, the with relatively continued within liquidity $XXX the community $XX billion, appear without unaffected opportunities. those perform well. assets caused although below $XX

However, intelligence. to and the customers in modernization this belief investing our that hearing the and committed sizes from commentary are short-term prospects, opportunities automation and with Institutions situation. significant our all of we reinforces pipeline, are paired in a is

saw the pipeline. For in EMEA first qualified both and in example, bookings we quarter in solid growth

We also saw APAC. strong traction in

offset is in geographic asset, helping diversification an is the the U.S. weakness Our enterprise current to and market.

address Another segment mortgage. of financial is services we

remains the grow we in continue to While market takeouts competitive under market first the two more quarter. pressure, mortgage share US with

core with driving history, into Additionally, pipeline credit opportunities unions. including particularly and the banks integration the of larger the is of largest of some SimpleNexus benefiting nCino organization, aspects the SimpleNexus in team all

the accelerate integration integrations enhancements progress. mentioned across other as more The I the SimpleNexus front and consumer platform. of product including our the teams well, of nCino I be product future and their earlier end effort and helping couldn't development proud is

and many experienced Over periods market my I've career, economic volatile cycles.

control, focus market with CEO, given into we that knowing is what of QX and controlling execution regardless enterprise short-term sales, headwinds. to goal can be would specifically always went conditions. weak We on As customers, my the

we this the continued attendance reinforces growth firmly XX path rule customers Yet standpoint, our with on globe we remain financial and strategy. the 'XX. opportunities to the the right achieving for From a at executing nSight with of are fiscal conversations the record profitable and pipeline around in that committed with right the strategy

Now over details in additional the the to call quarter. me let Josh on turn progress for our

Josh Glover

recent an satisfied us for their customer and joining is prouder showcase Representatives makes from to us between opportunity market to nSight partnered about how nCino nothing about talk nCino they to decision segments clients journey. spoke deliver geographies with Pierre. Thanks, to us financial have and onstage reengineer than have institutions across production chair to with faster and streamlined less a swivel systems. processes success,

nCino $X.X Bank of and for XXXX growth they and has For loan book been X% trajectory. top December December journey XXXX, lending, to and from going billion how already their Frazier, and Officer November vendor, from decrease in XX% Chief Promoter XXXX, part with application critical Bank calls. Since bank's their first example, Judo Bank, in live Lisa medium to Judo small in increase Net on Judo completion grew deposits of a the enterprise a nCino Score shared Australian experienced Operating a customer of for has support rate, X-point an $X.X in nCino billion. increase retail started

technology decisions and operating demonstrated usage and and augment partnerships business live new for enhancements lending, demonstrations SimpleNexus including bank and mobile automated consumer underwriting, for the expand of consumer product intelligent integrations We features strategic being system. lending, credit and automation nCino improved for experiences new of small to used borrower

and portfolio commercial of fluctuations rate as monitoring throughout intelligence credit face real and by estate product interest them softening, Our the loan. the addresses such with life challenges enabling a financial automation today institutions cycle

portfolios, identify During automated and commercial relationship and based leverages entire credit within to we of data customers vacancy intelligence of the visualization customer provide nCino the nSight, tenancy default, estate real loans. how showed help price the offer loans decisions, review commercial commercial automate likelihood for on

The customers to innovating, We single lending easier capture requirements data more us recording also assist our monitoring. strategy analytics, nIQ and value to ESG, our mentioned fair regulatory and our evolving predictive opportunity view an DoD automation, environment to XXXX. an includes and product with around even efficiencies Pierre map more delivering allows customers continue data and throughout improved as compliance road platform. The adding

business a nCino's achieved for rollout with for top a their Live X several Turning profitability we U.S. completed discuss months. top a milestones we the Go to customers, the a completed achieved platform consumer for developed within commercial of let's helped we We replace X bank billion U.S. quarter, a $X commercial retail some customers. XX and tool and small TRID-compliant commercial lending pricing internally platform go-live a and implementations pricing solution, just we with successful bank bank,

presence strongest growth On the some sales the markets regions. front, our penetrated our of were diversified from non-U.S. we market as

property a another This fourth largest well was the adding quarter, Our of the lending strong lenders new positioned in lenders. validation had the top mortgage an property EMEA sale to the the customer had important team quarter, we point for they UK for market success on where U.K.'s in one lending. are customer as building help

X bank and an for grew an customer upsell The agreement support French EMEA extended renewed, South closed U.K. team signed round also to X target the Top To out our a automated ESG an with opportunity achievements bank Top team with with our across initiatives. geographies, and existing African spreading. relationship the

additional users billion gain continued lender two lending, traction well, over also customer XX expansion QX, In solutions asset with nIQ Top where portfolio treasury, and the commercial banks to for California-based U.S. we and analytics in spreading. U.S. automated closed for signed an portal we onboarding respectively. $X deals as

stickier deposit not provide revenue relationships fee likely corporate are operating only services create treasury less that shared as rate have flow also important to but Customers alone. on accounts

the our In channels. set customers even to it vision allows robust across can fact, provide in we effectively current multiple resonates a fulfill platform better product our as that they single believe environment

completion the We're in integrations U.S. also SimpleNexus our third-party enable largest we logos, sell LOS and the additional difficult despite customers more mortgage These again will financial revenues to work even business In to grow the yet cross-sell U.S. mortgage more acquire connect nearing to with environment. our from providers. products institutions on as win in continue industry, the in we aggressively mortgage competition us new integration

Our of to in been our industry pipeline. opportunity modernizing conviction and see and never and our success strength customer reflected demand service we is financial the stories the continue stronger, has the the

Greg, through results? can us take financial the you please

Greg Orenstein

which Josh, release, you, remarks quarter in my this X-K that thanks, Form and furnished referenced earnings as are for GAAP the to numbers joining is and metrics stated. review an A to just available in everyone, on call. our financial non-GAAP to first afternoon this reconciliation found Thank unless be the all SEC exhibit website basis, XXXX a Please results. us otherwise can with note our on today's before comparable fiscal

guidance are results. an with total despite of the XX% $XXX.X an revenues. with increase our Subscription for our enterprise mortgage of million, increase bank line in $XX.X markets. pleased the the year-over-year, revenues were Total in Subscription first were XX% representing top and revenues turbulence U.S. revenues million, quarter year-over-year. first XX% We quarter end of the of were

Professional million postponements revenues on services revenues commensurate liquidity delays by X% $XX.X in year-over-year. from see with by US professional the enterprise were margin. quarter, impact quarter in growing three and We distracted in servicefs the $XXX,XXX that banks impacted negatively a services approximately concerns project did the

postponements revenues We specific project Professional year. expect the approximately for million these full and will by Services negatively $X.XX impact delays

into We with which nCino to assigned for services to both gross continue largely mitigate appears Services Professional help to will by we success impact and our year. the projects market seeing the the community segment, unaffected of redeployed the been margin have deposit personnel expect flows, which managed the practice, impacted

year-over-year the The in XX% the Non-U.S. contributed doubled constant XX% revenues were more strong attributable subscription total million revenues growth than first and quarter, region XX% sequential currency. to increase up $XX.X with year-over-year, or primarily APAC or revenues. of in

primarily revenues on U.S. outside revenues expect the to to line. the from growth, to remain continue We Subscription accretive

quarter Non-GAAP year-over-year. to for 'XX million, the gross of was first in Non-GAAP fiscal of gross 'XX. was profit increase XX% XX% first of fiscal XX% $XX.X margin the quarter an compared

being gross improvement in to total the largely a in quarter year-over-year larger revenues. was and customer from due margin subscription support margins a improvement Our revenues to contributor

'XX. fiscal million of a compared the $XX.X the loss quarter of in Non-GAAP quarter with $X.X first operating 'XX fiscal was for first million of income

Our was of 'XX. quarter positive the with in margin the first quarter first negative X% for XX% non-GAAP operating compared fiscal

record We quarter efficiencies, leading continue profitable and balanced the to to outperformance focus against bottom a on line. expense and a growth on operating budgets

our market bottom mortgage longer although on share. refer we we Simple their expect are about to in to business our and we as independent increasingly that U.S. free operating the wanted take business, continues SimpleNexus, Additionally, you will and and hear which flow market, fiscal no impact Nexus, out 'XX. questions Despite income received SimpleNexus the cash non-GAAP note have to well perform us for the to ongoing line mortgage generate banks, positive contribute particularly mortgage challenges with breaking

or nCino was quarter and for $X.XX diluted 'XX. income or first $X million attributable the quarter to 'XX of share per of of a fiscal negative per share net million compared $X.X the first loss to Non-GAAP basic in diluted fiscal $X.XX

XX, obligation, XX XXXX. as remaining Our or $XXX.X as April of the year-over-year. performance X% $XXX.X XXXX, from XXXX, to April than headwind X.X% less months million of million was April category, RPO, RPO XX, million an of up million from in XX% XX, as $XXX.X up with approximately total FX contributed $XXX

Though, in US. RPO in the additions As in quarter's renewals, accounted of existing XX% bank and market, additions durations our RPO of RPO was do quarter closing last I delays the as for on deals first over in the in gross we in not the noted the based expected internal were as targets. the models. current decline sequential just the the light a including on issues reminder, call, in expected Contract healthy liquidity quarter or business and to RPO RPO for quarter. customers, we to drive such,

line year This bank impact and standpoint, but churn some a PPP year which out negatively of expectations, in million in independent second I call. anticipated, revenues will sooner timing some than related of independent to of our prior and overall the downsizing of churn as going was revenues. with the occurred on earnings Churn mortgage M&A quarter's business annualized amount banks full expiration was quarter referenced quarter subscription or the activity, subscription last $X.X of mortgage agreements, from

in We elevated expect with second line quarter the our for be in X% assumption rate to but full the remain churn still our year.

norms will to return We rates X% continue more of to to historical believe churn future that in years. X%

now activities of payment in was our the of We million, ended the fiscal compared Capital in on cash 'XX. fiscal the XXXX. $XX.X quarter $XX credit quarter, $X.X cash million million including $XX free provided the expenditures in million following Net for $XX.X million equivalents first of resulting million to restricted $X.X were which million $XXX.X of first quarter flow cash, operating outstanding. has and with cash the and record quarter in cash quarter a of line, by

Moving on to guidance.

includes be million. quarter. the approximately the expect be quarter, approximately million million we subscription to subscription revenues outstanding. the $X.X of revenues The to above. net to $X to $XXX.X shares revenues revenue diluted from expected is a $X.XX nCino For the and million, second average non-GAAP to X% second million $XXX approximately total with of is million million attributable income noted to based income per guidance $X.XX This $XX.X $XX.X XXX.X operating of churn weighted an upon headwind Non-GAAP share for to of impact

will hosted As in so our which impact negatively higher marketing performance. seasonally you quarter, Josh bottom will Pierre, May, from we the sales our heard user and and conference second expenses line be in

and to $XXX.X $X.XX revenue be expect million million. $XXX 'XX, takes million delays total occurs million The fiscal postponements assumes $XXX mentioned to fiscal full and million, account, guidance into from mortgage in revenues year, of to of the $XXX For with the first the churn year we the and half majority revenues previously year of I total project in subscription primarily the of independent 'XX banks. churn

year. in of revenue expect we assumption, this rates stabilize the second half the growth to Given

million net approximately $X.XX based for million per be a attributable outstanding. $X.XX fiscal income of million. operating diluted to shares nCino XXX $XX non-GAAP is expect to income upon weighted We 'XX $XX.X expected to Non-GAAP to average share to be

in the We leverage half see year. improve operating expect to of second to the continue

growth fiscal our opportunities us continuing on in Rule to the our achieving in focused on and target which includes 'XX. profitable front XX execute of year confident remain for strategy, of We

the that, line-up With I'll open for questions.

Operator

And comes Instructions] Charles Stephens. [Operator from our from first Nabhan question

Charles Nabhan

the next as around the I comments and to more you deals, wanted helpful point those would your root specifically for delayed some transpiring detail be some year get causes maybe a of them during those around expectations implementations or at [indiscernible] delays And little whether see year? the around well.

Pierre Naude

Yes.

for -- first me Let question. your thanks

projects Those or explained contracts, can give your not Greg modeling as in per assurance. first impact or for in way, Maybe, details before. Josh the on as schedules did activation of and give our delays have seats project shape more me form you any Let this we itself?

Greg Orenstein

Yes.

time equation place took by from work we the are here. that's time, those. customers QX. could were noted. again, not through appreciate are delayed. activation liquidity projects impacted part not so banks, to our uncommon, with That's you And Pierre connected as the in to issues general, of so that in not three enterprise completely These And Projects, dates

focus as hopefully the postponed And and we continue with ultimately, projects working their progresses. and to with to to they add they're we'll again, working on customers or And were that we those on, back prioritize them delayed were with them. the things as year able to on turn work reengage attention what

Charles Nabhan

Got just comments it. as to was mortgage hoping around I business. quick And the your get follow-up, a

within point, widely I environment? on of publicized. mortgage specifically sort with head of their of think you independent more But they've remaining among health this base, churn count structure -- the rightsized and the cost align hoping their your has customer comment in could of whether at terms was some I brokers been

Pierre Naude

and us that appears with and appears done resources That's have to on customer back like is that to to who interaction stage. cut or our decided from so. this the wanted at It it stabilized, close commentary clients what companies base down

can turmoil very current can. we're the is pursuing as in the is that market with a fantastic on are in imagine, deals can what you as as And now those seeing we're base. heavily banking and growing aggressive competitors, And business. we realize which as been the mortgage and versus quarter-over-quarter you opportunity, stable well, we're year-over-year, mortgage a doing focus optimistic feeling if has We our business more

Greg Orenstein

again, SimpleNexus more in I base success focus we Charles, expanding had just Yes. that from parallel, that of IMBs, as of number And we've grow year a I nCino we've in the a ultimately, in had end union to banking credit which dust up settles. on good the family. market with the think the think will part be well-capitalized smaller larger, and as

Operator

next from Scotiabank. Altmann Nick our from And Instructions] fOperator question comes

Nick Altmann

more being incremental about segment larger remain Awesome. you Pierre, but these quarter. the little of maybe weakness you little the and a some bit the intact, pipeline seeing of out a as bit how in deals also kind talked called in Enterprise challenged

my in sort guess is larger initiatives telling I propensity just, what telling just some are are Are any second So you about the these around telling question of interim? sort for shelved exactly financial kind first perspective? incremental you the institutions these what you buying wait are for getting of the of provide half? from can initiatives it enterprise-level the you larger us they a of Is sort Just of color customers line. across

Pierre Naude

Yes. pace to look that issues XX the Thanks. liquidity deposits it hours, the most the that Valley seats. to at their were happens, was system and I at drained, is in realize management shock a unknown currently that which you Silicon that if in Bank teams

and liquidity wanted make and needed. right balance looking right got allocations So own as at sheets started to and you sure that clearly effect, got the they've people this then shock their the

now, right us. That they are see with people is meeting shock early right would quarter, The elements. need strategic liquidity more can second again. the and they say, away that are to people attention Banks feel coming now. The we loose from largely so we back paying effect, down the pipelines with deals I in to that see moving proceed moving begin indications confident over to is levels that

as they're come They're you on to just and to know, travel us see inside, willing us. from see And willing site.

will third is in get. the that quarter behind us see then a and But that's a and we fourth feel slight we quarter. second So we and improvement in commentary worst the pickup

rest We more Europe. approach, is of so of on positive the buying a believe We year. of approach, also the in see optimistic that ahead Europe already I for the feel U.S.

Nick Altmann

and the to framework for of And revenue sort revenue understand and and growth book maybe model. comment, as there's you But but the can is when year, bookings recognize of it? guys just maybe deal you ramp a off dynamics that sort a provide have you not in then when just the you lag ramped, follow-up next understanding Great. going and guys a this of that

are XQ revenue the protect these into sort are of you the larger the in XQ, of year? sort growth sort what of necessarily in next interim? that sort or if as recognized some to remedies will deals be in revenue And the that's come of not If what next any dynamics year a think doing of this the guys and Just year thinking challenged? you are around some color you more that you're growth Is into have given revenue bit it ramps larger about upselling back of incremental for for little base? about deals the how nIQ? these Is year? it can sort give multiyear bookings next installed case, of

Pierre Naude

We're Yes. let the the year. comment work not see and specific mechanics want specifics how on on models for people to this call how about works Greg year, I'm and the and I next next then going going year. rev how but just remind the they to on to rec we comment

after right seeing of we making quick a a year, this now. that sure July year. have what fall that's we've some There year, should But exactly you us has happens that in of you're to some turn QX. and products into effect the see visibility What why slow the is this QX, this minimal revenue When credibility on. happening is what got that's you are

conversations looks at and the year, the schedule come you pipe, having works into what go why see? impact more little bit QX And don't Greg, a then that's QX. QX and going global pipe and deals in We're to that basis. actually and optimistic. That's what's into you feel great next in going As on the later We to a could look healthy. we how

GregOrenstein

back-end things to really an bit it, fiscal Nick. more It Pierre, 'XX. 'XX impact of being this hit as it a in I loaded versus Yes. relates is you to fiscal No, terms year, think little --

about we of how in think fiscal the out that we so And 'XX, that's helpful getting we and talk pipe for again, plays 'XX. we see, into the opportunities we fiscal year, without see that the as that that the think rest

the quicker activation Pierre which is do base we an think much of And I from noted, have in standpoint. a revenue meantime, also portion our

you think SimpleNexus when about quicker So those our our think system when activation bank and offering much about the schedule. than are turn-ons historic operating offerings, you nIQ

Operator

Instructions] [Operator And question Tillman Securities. from Truist Terry from next our comes

Q - Tillman Terry

is trying new it Maybe side. much rest customers? definitely follow-up. in and strength. just for half the to I the hang our Just the portfolio full through glass activations the holding rest Pierre the And existing seems of first from or just that's is of right of activity understand a There's can logos? year hat products of It confidence question then and on expanding the Josh is international Or a have situation with year? how international continuing now. like What's XQ just the on the it kind relative we there that of level

Josh Glover

to Good Terry, you, speak and Yes. for question. the thanks with

to how our lender, retail execute. us. ability team's obviously, about in the that quarter. a an team as story the Signing indication bright That first proud as the are We did really spot for is Europe We that. well was property there spoke of of

that make would a good If at you environment XX seen folks a to total trip validation. this you countries of as represented nSight, were have for in Terry,

there. we're as So with greenfield accounts referenced seeing momentum absolutely

quarter. auto this South You adopt account saw African spreading a

where and tell Things for ESG. us continuing to the story both new we're account had seeing in module the benefit. accounts are on existing we ESG accounts, like adopt our France the So an

They team proud done with story. keep their last seeing tough of but you progress. commentary, there pleased the shoots a if has We'll nice we're year, telling job. So our we're start That that. a and remember green had

Greg Orenstein

just add, that that And nCino. We're one thing opportunity lending for excited for Josh, to customer property new Yes. offering. was a the is more net

Terry Tillman - Q

guess event. It would quarter, and so a good know. particular talked nIQ, every It was of We you That's was I XX great all although have us. add these out, to it wish for in sales no. conferences a We over to exposure to stood one customers. great marketing. Yes.

the for thanks invitation So there.

follow-up of even question to half the one Greg, there's more year, operating relates The leverage. the just for second just optically, you,

little important, But in and a with starts XQ get and bit more into RPO it that, should also how that's something that's is XQ. So that could the the and the that help better that about of Just then half? to we RPO, second we us with and into get great. XX-month erode think kind

Greg Orenstein

to follow. Terrell I sure make

talking a are lost just leverage? I about Or expense you're talking about You're RPO? for second. you

Tillman Terry - Q

start with kind of optics Or second to half is that still sluggish the XQ? Yes, I had Are I half a then was What preamble. to year, the operating The kind the in relationship there great. XX-month RPO the just or and strength the near leverage second stronger RPO in term preamble in will in of in in challenged and of what the that the like operating improve could comparables first gets that be clear cut about quarter. even that's near term? mean it's in leverage?

Greg Orenstein

Yes, really on internal us. that call. so said improve I as RPO seasonally this slow. last sequentially this is since year got to progresses. line and we RPO my QX guides, in in prepared with And is We've being were do expect kind public, our the we I so remarks, as when our to down of you. And you. not preview it's actually had tried Yes. Xx Got again, unusual think we for

we out what expect that customers But March. we look to end we said the the as again, to as and pipes, at again, the with we And line improve. at activity, as of at back in conversations I look look with think our the that having you of we're nothing we, is

Operator

Stanley. from [Operator Morgan question Instructions] comes Faucette James And our from next

James Faucettev

the I to little just on might follow as some and timing things. closures, of up X% it in be potential uncertain. like being when But I couple a much look bank guess we like the quick is first of bit is taken as revenue Great. they're there wanted a way a that care headwind seems on there. the at of the

when So revenue you be? we about thinking how should mentioned that a of good be should had have idea you what should ultimate

Pierre Naude

We of who M&A them specific customer are laddering a on into of acquired forecast cannot our history risk got comment contracts is up success deals. the see know working guidance. built what companies all. or all And there. and our these, we teams our in in We that We've

to there. So we from want add? good I pretty see Josh, anything you feel about what

Josh Glover

Now all those situations are different.

we the also Our do. focus our is best best That's what right the to now. positions that's as is feel We accounts thing us It's can. future. where continue supporting focus to for those

James Faucettev

it. it. Got Got

That's accounts how receivable around and that. go-forward think line? helpful, dynamics we're on there the And want on I just atypical correctly the calibrating especially how term? the to something to make cash near shift sure And to happening real generally? you that then touch flow, wanted a should understand make a Is we flow that there. basis. quickly happened I maybe I ourselves I about Okay. want sure especially saw what's cash just commentary on incorporated

Greg Orenstein

commented more perspective, as It's been and our Yes. that you've see quarters, From seasonally a to you that year. quarter profitability, expect highest are seen again, cash the shift that we towards cash we way. year from But QX throughout us would QX as I think flow expect flow perspective, a we'd last

And flow we and next year think to perspective, progresses I the year. the of and opportunity the as generated. proud that there's build that income we from we're so into operating an additional non-GAAP And go operational cash

Operator

[Operator question our Instructions] with Robert Napoli William And Blair. from comes next

Robert Napoli

products color nIQ give some feel nIQ? I on can are opportunity kind really -- you the if update of a you there? was hoping is maybe perspective? long-term TAM or some get to rate which what the just revenue And growth And of nIQ, on resonating from for

Josh Glover

validation Absolutely. for point extremely We're for that us proud system there. spoke in XX with have adopted Those pricing discerning of in We a XX% it's bank a auto a account leveraging live African We're U.S. nIQ. about our really of what you get to operating to we're accounts Q&A proud accounts. doing profitability, sit and us. great on We that and size, South bank Top today earlier doing Once well. the about spreading. are

to what how of streamlining from you inject front, one of if on the middle, to out intelligence. landing getting office care by gives that they to But back us the customers, platform, customers, take pull chain end their back and of the we provide great taking value end, these process, back full come inefficiencies a space

the pricing evidenced with it's are by that's spreading, discussed So profitability. evidenced by that discussed on we've what customers auto and that we've

a other further that back go opportunities There are of to optimize process. myriad and

So we're with pleased that.

really us heard of have and and would you much the on the nSight, at hard at intelligence, and timely focus industry, there. you're continue theme it's that's need If going we'll

Robert Napoli

the potential Any of growth and the for on nIQ? size size additional the business, rate long-term that, metrics or of of

Pierre Naude

mature, products the of about as that there out. XX% we've building we've number expand Yes. two, lot TAM that a those opportunity that made we out got Obviously, public the time, opportunity current is we pricing lift one. Currently, a products. and on to believe over on add number base, to And start as there's

I we that use more data they industry us as have prepared around are that in can the banks and amount build cases is the with with share on my nIQ we where are products. Remember, remarks, working of willing us as mentioned well to tremendous,

that. very So I'm optimistic about

Robert Napoli

the had a So I Obviously, to do how great It's Then have But adjust how growth having sales and in to done -- appreciate profitability. that out, to how marketing sales flatten some challenge it rolling? have the the take year-over-year, flat investment in keep the year growth do years? you've for the growth able very and the quarter. you you been wins next you investment -- you on from looking -- see as but seems operating just several still the in is marketing engine to follow-up you the have that. to in nice obviously, momentum high next like and

Josh Glover

investments -- does cycle in navigate do and the the mature we compare where what given made that it structural markets, you sales include in of look that those some takes continue complexity optimize And that. Yes. and it, when to we to new at while bets a we it periods

we where with pleased sit. we're So

of the we helping. framework, we on market financial people But to into we throttle the SimpleNexus on I sacrificing large Look, profitable our term, that because market field delivered we've SimpleNexus, commitment is that growth coverage our it a not customer pipeline it. need as As and of of the the long coverage When that to XX we've story. of the are for base. institutions the to we of believe in put cross-sales tell continue we'll now, continue growth that at done nCino we look with total see shows

Greg Orenstein

versus, that We you impacted relatively the that the took to G&A. look and part flat. year-over-year, about And of marketing, Yes. actions the organization where sales talked we that if for example, point, some of again, was least

right sure so the investments we place. we have in And to make want

We can. we executing growth SAM from and that sure the are we as as a covered we making have are standpoint, well

Operator

comes And Instructions] from our Kenneth from Research. [Operator Suchoski next question Autonomous

Kenneth Suchoski

the I looks around the of the second a subscription XQ and it's math it half year. forecasting think you're like XX% do of, I If in revenue right, fiscal growth so or in

is guess, I next growth back kind to is XX% given the plus type just the expectation I So the where this handful growth the get moment? normal RPO is the guess, of quarters next that to of year? of for at new And

Greg Orenstein

in we'll we for on thanks really that Ken, ultimately, But from of tried We'll, second stabilizing was of comment churn make a the really revenue growth year. half the to standpoint noted the from That that Yes. quarter the a the terms QX. impacts standpoint, we QX. headwind the question. in specifically in the focus

as driven us first good the we're that the we point, so which low would year the in of the happened, churn view getting by the again, news year. significantly and really the progresses as it is And half that behind QX

that's So you as respond that how full question I we to year. think think the about

Kenneth Suchoski

Okay. up you're the then margins like non-GAAP and better guide right. kind implying, guide so margin guide And it versus operating and of the the Rule of Great. looks income slightly versus XX, old All is the and mentioned you prior.

we So this macro an your drift margin slowdown And side? bit a little to us where just of reinvest letting a is you kind of update could environment? the because are outperformance coming in give on just appetite the maybe from seeing versus the then higher margins on

Greg Orenstein

Yes. Again, lines. see operating you'll across our leverage of expense all

to continue and on remains we've as think that side our of so I growth, focus. stated, consistently the are we going

operating year continue the so focus remarks, the on the And we've We going again, business. an see been noted in from half to in expense second we're growth. standpoint, continued to leverage, my but as I of

to to we market. grow this see willing we are as in reinvest yes, so opportunities And

Pierre Naude

path Yes. extraordinary something I was culture to to the this the how want people, To just and that. together add employees of me, on it of profitable about pulling company the to teams, releases engineering we a available two of our annually from In moved much to monthly six it They every cadence take to have releases growth. that's more of have months. customers. are

the company, impact you value the you development embrace that, that the begin on pace to look versus was you how growth customers and see extraordinary. help past tells of that the pure could and to in if at they shift productivity And short that and people profitable improvements how to of growth that when the recognize we focus the now term your

which pure focus examples your we that driven So everywhere efficiency, on that, main the like we has your have not company, growth. was in look

our good line. prospects the about So continued very for we cost feel leverage on

Kenneth Suchoski

growth. impacting Without

Pierre Naude

Yes.

Operator

[ph] [Operator of Adam And Bank have we Instructions] America. from

Unidentified Analyst

one. clarifying quick A

So the million delayed that deals fiscal take implementations into kind next concretely that year? cost to this mean three of revenue lower we $X.XX for services have the year, been these can

Greg Orenstein

we purposes are what For that's of assuming. guidance,

customers with lines guidance priority to a back that's from that So on as their perspective. they are we'll assuming those in focus but items, time we're projects able versus what work on other

Unidentified Analyst

on on kind what to you market is helping share that to do great. tough product about environment? the get gains wanted commentary think SimpleNexus mortgage U.S. a the in of And drive And even the business, specifically I for guess, then I sounds your such thoughts

Josh Glover

proud has product I SimpleNexus we the SimpleNexus see of by are They really who an excited a base. was days. to built front live of that. that of early has successful, in of our and Look, got the operating a XX well received one of to make extremely been integration system. They've is customer end customer adopters fantastic at been the nSight

this that to and reason in we intuitive shines think their execution environment vendors. most for continued and who overall are their way focus with is first strong nCino's And The software they good attention the customers the market. have team through. is continuing corporate another to they they on paying the We that that market also believe share gain culture the and folks well-adopted solution point mortgage and stability are in

Pierre Naude

end conference, and look of saw at small platform. the other onto received was you front Yes. retail and that if products, single interest a our well expanding include Then lot business people customer their a us standardizing we very at in experience to very,

use opens the also up larger nCino integration our to we core going access that to our customers That that's APIs. back be the for to through front-end end, with platform and APIs to exposed those APIs, core because same SimpleNexus exactly from

driving then retail also development end they can been by over So mortgage some the do today. and they that SimpleNexus year, migrating of can positive, demand very as whole And functions that's see the can has for they start because well.

Operator

our next [Operator question MoffetNathanson. from SVB comes from And Jackson Instructions] Ader

Jackson Ader

Great.

the kind cycles is okay, you of is, out? this first shifting this in catch-up the a deal -- lengthening do will expect lead later thinking, Or to one So maybe are just things that XXXX? of you

Pierre Naude

No, two quarter there and accelerate and clearly a may it concentrate start up. that point is a where breath catching bookings in people catching their as or

then as begin and to the are acceleration and in see movement we those people is salespeople deals that as of as deals. So are what pipe so we sure pursuing as the get right what house we commentary their over That's a and order can. in well trying make in the banks, we from we an seeing are slowdown, now see is to temporary aggressive

Jackson Ader

rates business actually rate go that And just -- saying the there Great. go brokers factored are in if there any and hikes mortgage of the into and happens, brokers, pause so you we the fourth that say -- see maybe scale of see market? not SimpleNexus if up. third back then right. All independent out stabilization get or then I'm we Is on are Okay. come, -- in we others a have in more just it quarter, that quarter couple but independent let's a like mortgage more side

Pierre Naude

the further impact possibility rate hike and of a what We've -- considered have may sorry. that

outside well full forecast with have what as mortgage a I foresee in because of an U.S., we at international If the cannot crisis. that's as like happens, liquidity issues core incident our as truly . look in local marketplace, Obviously, as what those. I we Our the nCino all that forecast of today well banks. considered that's can

is commentary general all well as good. by feel seeing financial we and From as what I'm both markets have commentary, stabilized, the market that customers the our

can we our we at about and look whole you concentrating our feel business, if about also leave the the a that And space, feel so very vendors the of business And an we as feel -- actually good that there. mortgage the in opportunity. people is gone, market product stability, good the bigger now We in, to the on our have in our few see then who the wanted quality positioning speed this and we financial players. situation that implement

Operator

comes Mayank Tandon from And Needham question our next & Instructions] Company. from [Operator

Unidentified Analyst

actually Great. for This [indiscernible] on today. Mayank is

one me. for quick one Just

how guys little about a deeper that talk guys You into cross-selling quarter? then of the And you had in success terms SimpleNexus? this little maybe of past some cross-selling, bit but dive about spoke specifically was you could a

Josh Glover

absolutely. So

Africa, discussed, of account that we live. that profitability South we XX add-on an and solution pricing that spoke CPP about also we an was talked in the mix add-on that As about, or Top that went opportunity

take accounts. be or those to for mature Then like we retail lending nIQ into customers. So can go split also continuing SimpleNexus we're things the going where is those between and composition solutions to

the pleased So with progress.

SimpleNexus' see and a and a size the is credit that up able I stability leadership believe think XX% to proud been side. deal the SimpleNexus execution size good That's for mortgage market. market, has deal opening bank been we've to new also, bank the say why average part we of market up year-over-year. increase of union combination and of We're

Operator

our from from Instructions] question And Sklar next Raymond Alex comes [Operator James.

Unidentified Analyst

with have try just about how This for I [indiscernible] question. would talked customers, the Pierre, conference? are deeper, out a Alex. including means quick on preventing as [indiscernible] whole you leverage coming of and How one is of customer flights. deposit banks treasury relationships at nSight,

Pierre Naude

value product, okay, view platform focused. maturing Thank banks customer having can a Yes. value be and you. and drive as or the the XX logos single you, retail up XXX of is business our exceedingly okay? product year-over-year. them coming We our tell as our focused, a As And I got lending of products up, silo understanding total over to see treasury the to actually are now side we've XX% customers -- using that and and retail is opposed

the focused This the flee a whole that $X,XXX tools your platform banks, deposits retail can have with our deposit and is customer with customer, attention really notion have client that et that big you otherwise, resonating those and because in banks multiple get to accounts, nIQ, deposit profitability and to to the consumer, is for products because a can customer embrace are find you your $X,XXX goes center your and cetera, those actually to they flow the don't way rates. X they and to

this message appreciated they very and bankers that was so and received, didn't loan deposit me how interesting and connection the consumer make And insights. was it well many commented on fact the came that to those from

getting products and we're direction strategic is our it. about think banking good I building, feeling are we so And and sector the the

Josh Glover

the and further make organic question, broad I fulfill want want those is that that them to revisiting deposits, to add to very sticky, banks fulfill well just them of from nice really products. multiple a They then to maintain to to basics cross-sell think these set we've the seen, channels. the across a question what of really prior

solution, XX this thesis. one banks, one them you had portal. we when aligns to expansion look adding top our at of of It So this that deals quarter adding with treasury them environment, in even

Operator

KeyBanc. [Operator comes Instructions] Beck Josh And from question our from next

Josh Beck

enterprise bit about Yes. I you wanted some a the to of little banks. ask larger

of cited there with I three think were them delays. you

certainly about would double-click also how anything implementation? be on the of if kind out and they reengagement that great. Just certainly you just of color there gave, when thinking that's were the consistencies Just there set really some any they're of

Josh Glover

at the the market team. want to line. they focused more very they And have if may run out and resources closely see try the even not expense on with the on project, We are to a project lighter look totally taking they the

thoughtful spend those investments. So watching efficient and have and they the with new I as be where trying think all institutions are been to macro can

think be don't I've at the try had say reality. have we So, modernize. lines, about the CFOs high-level they to it's they need who don't that not digitize. to not theme. this expense macro that's But say had banks and banks thoughtful to important look too they I've

Greg Orenstein

standpoint, Josh, liquidity Yes. prioritization were them on I think term. would addressing those, focusing note, matters a played and a I that part timing And in elsewhere for going the again, think large I specifically near with the from

Josh Beck

then, probably of attitude curious, this enterprise towards tightening sense. the it's the also Makes a And similar of year. one from messages the the year, really just is calendar lot half as second yes, banks that I'm -- we those I think go certainly of category the into

curious, any like there that kind correlations just historically, observed I'm tightening So on banks? you've within of the are

there's opportunity garnering of if in banks terms anything maybe on bit a there this little little deposit just creates that well. focused as as related, Just more really some curious bit a highlight then of products, become your And something deposits? is to --

Pierre Naude

or if in rates these at enough senior crisis the to going positions unfortunately, your on Look, at raising was the none time. bank look of liquidity you managers was was the like Yes. in cycles, what actually the time 'XXs. But this early last understand

when So what as right company you behind. hit say cannot stop XXXX, you realized in the we fall would because market you modernizing the people I is look overall, started at because the time we

big to with struggle there's your lower investments. IT okay? have markets so the billions on of mid- budgets companies keep investing, to of end dollars technology in Some and And up they catch

think of this a don't long-term going I slowdown So is be to spend.

we're of on says that going studies As a banks there's out matter spending. keep to a says fact, no, of number

four clearly that across they focus on different and the is bank. systemic liquidity had issues than address very That to something the stumble saving just to across the three, two, that's had happen industry. to You

rate So In second towards this. Realize lowers spending it this. on lever actually The half margin actually what is operational continue interest banks That and only the left net these my environments, income. continue, efficiency. very do will view is of squeeze to will tight accelerate is the their the year, them. that will

at a much higher that So banks, you you could look look get what we at ratios, drives from if commentary that's our higher their ratio, need. efficiency and and from loans, they rate the close efficiency also on nCino to them back surveys our a

think come the and to continue always. just overall, just half will I So there. back It while the on takes year in get as we of second a

Operator

remarks. showing turn I call am Executive questions. would I for Chief Pierre and the to And no over back like Chairman now Naude, further to Officer, closing

Pierre Naude

to I and much. the forward joining for at their Well, innovation, shareholders later thank support us. for look to you you to our all our Thanks date. and for Thank speak so employees you a more

Operator

for This concludes call. participating. you Thank today's conference

You may disconnect. now

nCino (NCNO) 31 May 232024 Q1 Earnings call transcript