NCNO - Earnings call 3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by, and welcome to nCino's Third Quarter Fiscal Year 2024 Financial Results Conference Call. [Operator Instructions] Please be advised that today's call is being recorded. I would now like to turn the call over to your host, Mr. Harrison Master, Investor Relations. Please go ahead.

Harrison Masters

to Quarter welcome Call. XXXX and afternoon, nCino's Fiscal Third Earnings Good and and me Pierre Gregory Executive Officer; are today's Orenstein, Glover, nCino's Financial With call Chief Naude, on Revenue Chief Officer. Chairman and Chief Josh President Officer;

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

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

Pierre Naude

review Once revenues specifically quarter we $XXX.X afternoon margin again, non-GAAP of continue total posting guidance high operating Thank as invest year-over-year. fiscal We business, income the . for in solid our up you, we XX% revenue you in to Harrison, We a another $XXX.X our XX% profitability, continued the despite million, innovation. of with third and quarter up XX% revenues product year-over-year, to unsettled significantly even the increased thank of us this joining performance. had macroeconomic end exceeded subscription and XXXX environment. million,

the excited the are In positive quarter significant particular, product billion view across of very $XXX reflects with to over our an lending States, first the number consumer announce bank wins an platform. deal Our United in of institution. signing we a enterprise

several for the made Over of momentum quarters, as our customer lending maturing view this consumer past of the as have we well been validation product, lending strategy. single progress and our landing that overall another platform as have we we consumer highlighting product

continued We in our also to mortgage U.S. business. strike

by U.S. Our mortgage despite revenue Even uptick volumes financial mortgage rates. an lower and double-digit driven reflect of generationally growth. results in IMB originations high churn,

unions, of differentiation of demonstrate model. into and the results we our technology, installed banks cross-selling believe mortgage the of the our and These benefit base durability credit of business our

A cross-sell pivotal U.S. in and our lending. quarter been business using first the win that to with a both mortgage for came U.S. commercial has the in nCino for regional bank consumer our

an transaction. ability enhances once wins the SimpleNexus available experiences to further mortgage having the consumer on platform, enhanced technology our are a technology Our wallet result the share to spring, single technology. further These value for the an customer excited market-leading experience omnichannel our account the acquired we a we are in lending grow products leveraging and deliver integrated of of in our in

for products. As our spectrum empower to point-of-sale journey will customers this deliver our generally broad lending we the experience consumer lending mortgage, first of point-of-sale beyond consumer offering offer exceptional across available mortgage a

our solutions. consumer offering and this mortgage accelerate lending sales to expect We further both for

data expertise. I'm by and platform, capabilities innovate continue of to expand banking adviser, the which capabilities leverages introduced through the also our we AI the being As excited

positioned Today, data, our valuable are including years, deep mortgage data we we and integrated working base past with into strategy. Access consumer this enabler is well single our the to our a expertise create to to is our X and customer our of domain platform. have and across commercial informing and from actionable insights been a data AI aggregated customers large pool powerful data. provide Over differentiated banking

notice in year, usher September. adviser as at our single wave type available loan delivered the expertise platform for taken and in When early has who webinar industry help decision of banking evidenced on any The this the will intelligent a for originating by over critical next AI people next product of initial points. automation. X,XXX account registered any opening

In the occupies experience in to to to Yamaguchi mortgage Japan efficiency business. offer an our through our international we saw customer business. which spot date and they Financial the banking processes their Group, market sizable in of beginning customers opportunity digital transformation, by user the with nCino to regional a added Turning improve signing largest top their QX, Japanese YMFG, with their

business. large we about are over accomplishments, opportunities bearing market environment of the in investments see to few We are parts our years this pleased past see and challenged in there Despite the Japanese the certain remain the selling excited list QX fruit. of does our

the particular, slower environment the third customers quarter, and evaluate of we see unlike business. their deals. interest get impact the these be signing deals their evolving of second few potential out on in continue banks, as budgets pushed to And Enterprise further a rate quarter did an

opportunity align proposition Over our energized value the away platform with and see traveled innovate weeks, single so past nCino's product our prospects strategy. to their built continue and few of these across closely North about the come and to incredibly from this needs company America technology. I Europe. as We and customers have I've conversations

a can efficiently best So the institutions platform. single more world's on operations run their financial

leveraging provide risk savings are environment, businesses. into security insights to and cost customers' this our reduction nCino efficiency proving and paramount, unique was while greater In and data

better environment for settles profitability, will and positioned leveraging share and gains, success be institutions longevity. senior the down, market backhoe the As

are which on the have with reinforces we right Our we this sales opportunities. remains notwithstanding lumpiness sales pipeline, enterprise path, some healthy, year seen

further excited are year next close and for to year nCino QX, strong a positioning the We beyond. with growth

operational highlights let of QX. the to of call additional over Now me the some to details provide turn Josh on

Joshua Glover

Thank you, Pierre.

the with and quarter pleased are momentum see results in we our We third business. continued the

signed this all of and a States. their the U.S. in signing strategic segments, sales with our extremely consumer digital $XXX across customer business approach. nCino to key This solutions. consumer billion our even branch the product a wins new to of bank lending added . We're both consumer geographies quarter, modernize we lending for work have the will the in customer to largest last United proud of go-to-market in market best-of-breed date solution lines We leverage across On workflows for front, enable their largest the banks teams and done in

bank an point selection in with into Also the over we consumer commercial for regional existing customer mortgage point This of lending all single sale, quarter, customers. expansion agreement this and bringing with X mortgage sophisticated the for a for billion our an most of technology, passed of exciting signed of process platform our an $XX is bank. proof having scalability a rigorous point sale, mortgage

go time to to a quick live with value in expect quarter. deliver fourth We exceptional the

Our X mortgage resonate the to proving mortgage quarter thesis is in new of logos financial out, customer half would signed that point-of-sale a in bank the offering with our legacy base third institutions. belonging

the the versus base a at Our logo now basis XX% is mortgage financial institutions of acquisition SimpleNexus. of XX% time on customer

financial pipeline a dollar comprised institutions. mortgage basis on of our XX% now And is

this in As industry, of the interest cross-selling the long markets. downturn customers we are underpenetrated rate union IMBs banking working consolidation tail into we aggressively continue pressures but the drive of credit them and to existing with are to through see

our by of with this see competitive to market continue the X mortgage We differentiation takeaways competitive proven quarter. additional out

commercial analytics success portfolio billion selected bank auto spreading. and seeing nCino lending, a bank consumer new and continue well quarter, and that We including with as multi-solution for in that community as commercial nCino deals lending the for net a picked $X auto spreading

more to see gain operations. consolidation efficient the current critical in a way tech A even streamlined resonating efficiencies stack across and as as environment, banks vendor is their

for as half the pipeline develop, commercial continues lending Our to making beyond of pipeline quarter solutions total of up end.

drove real trend another reporting. the key value commercial business in for stress solutions of and estate testing, largest deal our our analysis bank is concentrated Risk proposition to that signed date We quarter. portfolio analytics third management risk new

CECL. We analytics our quarter also largest portfolio for deal credit union ever signed this

markets. Turning international to

Japan, date XX in use Japan. opportunity Yamaguchi can process. homebuyers apply Group, this prospective is a signed Pierre by making case mortgage As traditional deal day, replacing a for team record USD hours a a asset in online, entirely noted, bank, which our This our to customer paper XXX billion Financial with largest a

path single clear see expansion business consumer a a lines both realize products of across corporate of from to Jointly, all originating goal we platform. and help YMFG loan a

market, seeing We account win with a SAM at receptivity billion. the still are size critical still Japanese nCino. underpenetrated lighthouse we opportunity, market USD This and relatively new for another and the represents in is X.X pleased we're

banking, This -- existing an first banking, ESG X-figure and medium XXXX. small expansion that pricing Lastly, origination. we opportunity profitability, corporate The fiscal with completed year signed and commercial ACV was and a mortgage enterprise UKI institutional in customer for and end-to-end deal

also these newer X nCino offerings, their for another with embracing years. While bank this commitment extended

Our in customer continues growth gross customer customers XX% value XX% by our of With and bookings overstate ACV in X to customers, from environment. be complex existing an broad platform of quarter particularly the of NIC in and the our strategic a asset, now customers. product adoption year-over-year base diverse Approximately than relationships. XX% cannot macro platform using I came long-term more

Greg, pipeline a well quarter, positioned seasonally fourth and remain for fourth we sales are confident us performance. in high ability financials? the you can take through the to our quarter Looking to ample execute with coverage

Gregory D. Orenstein

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

third Total for Subscription and of were year-over-year. of results. quarter revenues $XXX.X $XX.X growth bill year-over-year. Professional by Pierre perspective increase an billable for pressure growing was services revenues $XXX.X hours quarter of our XX% year-over-year. million, on XX% in increase fiscal impacted representing services of year-over-year, total quarter from even revenue pleased revenues. a million I with echo quarter, third as financial rates the were million, the third were XX% utilization 'XX X% Josh, To Professional the an am revenues improved

extensive our Subscription ecosystem focus XX% in leveraging comments, services New United prioritize revenues particular our coming States year-over-year. As we the $XX.X I to from up revenues total Zealand customers of Australia and professional noted third growth Day during to were services provide outside Investor our revenues. quarter, operations. respective with to revenues professional the subscription growth strength or SI million XX% total revenues over outpaced continue will Non-U.S. on and my

and gross XX% the for of was increase of in 'XX quarter XX% due X.X of The quarter improvement -- versus profit XX% to an ratings realized support efficiencies fiscal the organization XX% gross compared or year-over-year. respondents customer margin third was Xx with 'XX. ago to of about million, year Non-GAAP fiscal third quarter. gross Non-GAAP our documented while the maintaining the $XX.X satisfaction customer was margin in

quarter $XX.X XX% model. million and for fiscal operational of of business This quarter fiscal 'XX third bottom The our reflects was discipline third third margin the operating in of impressive fiscal continued performance the Non-GAAP the from Our was X% line quarter operating with 'XX. leverage in non-GAAP compared quarter $X.X compared -- with the income million for third 'XX.

or of Non-GAAP per employee diluted also benefits million quarter quarter 'XX in and Our sales of approximately third or negative for $X.XX $X.X diluted non-GAAP income share the within million quarter compared $X.X 'XX. tax equalization was share third to and certain basic $X.XX organization. nCino million accrual per results reversals and of marketing attributable fiscal $XX.X the across to the fiscal for negative this for net include

a noted third Mortgage, We the we SimpleNexus Day, trade solution to the during our the name in -- to As change quarter, Investor rebranded nCino during useful life. I resulting

$X.XX intangible this third increase result, trade amortization has we amortize recorded of non-GAAP asset. marketing, or sales an our diluted expense basic a and change the results. quarter excluded in million in effect accelerated of remaining for impact The As amortization $XX.X to this share. and The the per fully was been accelerated estimate name amortization from of expense

cash million, in $X.X to We 'XX. approximately third ended including cash Capital $XXX.X of $XXX,XXX $X.X the quarter equivalents million third million the expenditures quarter fiscal quarter, fiscal was flow Net $X.X resulting restricted operating cash provided compared with in free by and cash. quarter the million the negative of of of were activities for 'XX. in cash

in investment this decisioning helps on $X.X related lending You disclosures platform decisions make of will investments our quarter note and DataCo, of million efficiently flows and and cash incremental spend leading safely. balance the AI Rich line high-quality a banks for that Australia-based sheet statement an

of and our with We and tighter to investment enable in our RDC arrangement reseller with announced a even February organizations. cement year are this between partnership X to relationship proud this collaboration

$XXX.X Our from XXXX. $XXX.X and RPO, million or obligation, of $XXX.X as category XX, October XX XX, million less XXXX, XX, million remaining performance as October million $XXX.X October was -- XXXX, X% the with in of of up than with as compared months

from a great the first the continue to second half half quarter, in Josh, As solutions than better previously the in quarter segments, quarter. as second to you expect lower third we of saw bookings heard Pierre of year the of and the but in gross year communicated. products the the Gross and market were we our in across bookings geographies validation in third be

in in rates million in subscription October XX approximately highest of over IMB struggled U.S. annualized churn revenues exceeded our some did see churn about as elevated from million. third business mortgage mortgage internal level with quarter forecast $X.X of years. to churn of We by in IMBs our level the This $X their peaking

performance to with are for growth mortgage as pressure despite for long come. take reported and the to way production a share a bankers volumes seeing in and the the latest line has interest performing for our report. is industry come pressure, we well Fortunately, business quarterly originators very rate believe elevated top we positioned business years continuing earn despite top current and MBA churn, mortgage rightsizing towards profit market revenues The the positive this healthy grow U.S. rate mortgage

the in our elevated outlook expectation full rest we end X% has high about IMB of outlook are to expectations down prior adjusting rate X%. in for revenues for the Churn of of the our we subscription But And up by the light our year line low in quarter from fourth for increasing revenues, tempered subscription -- revenues were been churn, for sell Although both churn, heightened and this business the churn year third of the are with full the year and quarter. guidance.

churn relationship customers X impact negative scheduled had of with contract their acquired $XXX,XXX. expiration deferred Please be revenue X our which includes impact X% of that note heightened liquidity of XXXX. of this ending was also months about of X was in during to the that a the crisis, of rate approximately on event the the before May This

of X Positively, to expanded have into we expect already that maintain the fact, X other customers were acquiring banks. acquired and, relationship in the our

guidance. to Turning

subscription the we For of revenues $XXX.X growth $XXX.X at the total assumes of revenues of million. range. year-over-year to quarter, This million, million XX% $XXX.X with subscription midpoint fourth $XXX.X revenues our guidance of to expect million

of $X.XX per upon XXX.X shares approximately outstanding. to $XX be loss million to $X.XX Non-GAAP average between operating fourth income expected be non-GAAP approximately diluted weighted is is to to million attributable nCino $XX and based This a for to share quarter. the million

million the This to revenues year XX% assumes revenues our of guidance $XXX.X expect $XXX.X the fiscal 'XX, full $XXX.X subscription million, growth of to subscription $XXX.X million million. range. of at full year revenues midpoint with For of total we year-over-year

to XXX We $X.XX are $XX.X to of a full be based per million income expected of nCino shares million. to range non-GAAP share guidance between weighted again the outstanding. year operating to increasing Non-GAAP average attributable our $X.XX $XX.X is to net income upon approximately million diluted

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

Operator

question of [Operator Hotchkiss Instructions] Goldman Adam Our the from first comes of line Sachs

Adam Hotchkiss

of responding recent evolving next color for get in a be would start, to to bit customers rate the in rate it of banks more environment, the on the independent expectations particular, movement how year. great are little outside guess some I mortgage to

seeing changes Just any wondering as are budgets? decision-makers if about you're to initial prioritization or how thinking product

whether comment as you And then relation reflects level, on scrutiny if incremental your 'XX to well? relation that's indications enterprise something budgets QX at the or that's early think in of

Pierre Naude

seeing our it preparing in see question. We your the like solutions the moment more for with everybody see market Thanks banks. we come that market in pipeline, stabilize aggressive to is actually in the ours. conversations rates and we're it Yes. to What the the is to

the The rate seeing they the in is that uncertainty be forward still tentative of persona the environment. realized see banks for buying stability we're transformation of moving today as And as the nature of the soon because the projects actually to need competitive.

People you. stabilization the enterprise, show In some run, We're still seeing as around tentative deal we lumpiness will market. we're very decision-making like the seeing and that short the again, a hand, in to see retail good in some see. that the the we beginning it's the pipeline pipeline what great bit movement that we're would slower stuff it. more in other on In But healthy that a final market. about to is bit is -- than feel

Adam Hotchkiss

great. That's more bit this sales on helpful. Greg, could It looked then, and both particular. in in you And marketing and a R&D it Really the if was quarter. like wondering leverage just comment

the in seeing lowest for you're where for of wondering 'XX. and you're hanging discipline fruit looking Just what investment terms

Gregory D. Orenstein

Again, growth. continues from well noted, really Thanks, years to execute to shift an the organization just growth I Adam. has prior team as embraced the in Yes. pure profitable as and

And across lines. our we And focus have of continue that. we'll seen to on so all . OpEx leverage nice

and As make for next opportunities sure we capture year we think prioritize are to want and say to to consistently, investments aligned this, we our about again, we're those. see as growth. And we'll to growth, that reinforce we going continue

continue leadership the we We across sure again, market think entire for unique and still make Again, to invest that platform. days we position, leadership us. want we've a it's a large position, very opportunity got of we to that in in the think early

validation platform referenced consumer and Josh do basis. our software of another and can for our comments banks ultimately, referenced, global deal, lending in their Pierre on a what again, again, . that And

Operator

Kalia Our question line the of next comes Barclays. from of Saket

Saket Kalia

is Great. for Okay. Pierre, question maybe Josh, this you.

the is consumer when who lending to just certainly bank. speak Maybe these $XXX lending billion enterprise is congrats maybe all, of the nCino you on First very folks big in consumer replacing question is, typically a deals? could

And what considering sense? Does do be juncture? is that make a think catalyst you replacement banks these this the for at sort of to

Joshua Glover

at back Sure, with a scale serving to continue Yes, lot. grown a architectures scale, they that. they and that's will a they have realize to Saket. consumer take pull them. When that, I want continue they bank sure bank like segment grows that's that can and make the

A more here digital of focus big piece was the pushing to channel.

hard system If working legacy pretty legacy institution efficient an it's to won't operation system It size. have with that's a keep business that's an with that. on It's the you're Then channel evolve to with top bank as dated, It's hard the of this change that up rules. that to hard with of can products. inflexible in-house business. digital add that just size was, your you -- if of the run throw you

they So with be will way served digital X for customer today. project the that or channel get along expect the $XXX lot replace X to billion and efficient, and customers the base in-branch a systems that they realized that be needed to to way probably them allow an they'll nCino serve bank, more

be well driver driver to positioned there. is So as on there. Better economy the compete. efficiency a recovers is a project side quick a of very going the other They're consolidation to

Pierre Naude

would Saket. add, I

the the drive is renewed through the move is X notice . deposit it to on crisis. fluctuations. top consumer the X as towards a flow balance don't you liquidity talk rate They below much average issue every to deposit you'll bank because consumer new the And we a of interest was for lower. deposits an what focus banks, think I big

to will have diversified consumers what that stable you'll forward. reverse in see on deposit this the the and whole focus X. banking broader have think they trend much be future a a I the to big there a base of across that to going And deposit sector. you'll flow find So is

Saket Kalia

I maybe by super Greg, saying you RPO. don't I'll we interesting. know follow-up. business to for the for That's Yes. my manage preface

can it's or Just in drivers others, educate that many duration since whether mix there and us right, on. are metric, that so you different

just asked. RPO question think how -- speak just you But maybe you about can make the quarter? sequential just that this sure -- change moving those but that parts? in to Can And we you of to saw is some

Gregory D. Orenstein

Yes. way for tried And the we've We that. make Saket, of to manage to thanks sure our that. go don't folks that we business noting out to RPO. understand appreciate

we as you think RPO impact particularly the the in you moving with about when over an enterprise, some you lumpiness of When about number. think mentioned being one. duration Obviously, noted, Pierre XX-month different that parts, mentioned that's well. churn the the to

those months the know, RPO you you generally the lumpiness years macro customers this to that contracts the see been X the so experiencing year As some with XX that's environment. throughout given the of light we've are larger than the in we of that longer and where

is just the of And we Josh -- align to lot existing be add-on then in gross Generally, comments, business in agreement the customers that thing add-on with is terms the our I'd approximately other co-term of ACV probably the bookings that's will in business. place. note to in of quarter XX% came his mentioned going A from

so And shorter generally duration as well. bucket would that in be those

those And parts. be moving of of some kind so the would

that think terms, example, expect mortgage grows about structuring our some for things into that talked as growth how market that metric. recently ultimately as of take in not in RPO On upside account we of either about contracts, we're stabilizes other the of opportunities we've the that's again, and outside that specific side, to captured we right,

of are you. that kind So to the things those highlight I would

Terrell Tillman

Super . clear.

Operator

Our the Truist Tillman next Securities. from of of question Terryl comes line

Terrell Tillman

consumer I Josh, I retail the like for really is does guess don't win. lighthouse and or forgot first -- it But this Greg seem Pierre, is a know Josh question, this if if -- Pierre important lending or the and side, I I almost Josh. you. don't and Harrison. sorry, know on

of rapidity we then get I from we the of hopefully. them this What a had to seasonally need and I'm down Domino's is retail large they in here in them the customer. in running do you is like consumer wins curious offing Or referenceable spot, in bookings kind there, stronger could lending near XQ about see follow-up. put term? wins? up on of And or knocking start become I'm other to kind then and the But And large enterprise quarter, can terms more trying . a you not

Joshua Glover

Josh. through is lending and go long a Look, we Terry, you the Obviously, goal proof pretty to as go sign billion $XXX point. for to consumer a can detailed have fantastic as bank our to solution quickly if evaluation process. That's

So we've both if this financial for out you us look multiple at small the put in consumer. business call, community -- institutions regional even other announcements picking and commercial

for That's we'll try a to to take trigger a of environment. that the It's $XXX market. It frankly, a in point. on deal shows a conviction. lot great validation bank to this a the pull lending great proof billion consumer And point

So we're excited.

that So up question as scrutiny that we've shows because as up. to stood ultimately, can. to we to we the answer directly, can quickly . your go we're going scale

Terrell Tillman

follow-up is, the guess all you a a content. terms in of helpful a I And it. lot of Analyst question -- Day great content, Got of lot recently hosted

moving balance of picked a you up of ending was IMB part a of the the year-over-year, have here XQ, of in One that some I the a terms bit we of little is things I the from up kind know we ending all XX% idea churn. think ACV

anything kind XXXX of as can the the risk or revenue kind about bit a of floor But is do what's subscription in there the of -- share move that's floor Is low we feel you into still you there's calendar watermark? kind the higher? like

Gregory D. Orenstein

quarter I around year. this commentary the around quarter give half to, did some think well next half year hold first looking the the addressing Terry, we're year. some as commentary second we're . Yes. We of how at the going back bookings again, -- last you versus versus on on of as

at was, think we'll on there. kind point, point Investor And would an basis that's in as quarterly probably it something said annual I basis. of more data leave that, time. a look point in Again, think we we I So Day, that really this versus at a to revisit that on the a noting

points helpful in the of have But are ultimately and the the how pipeline ample ending the thinking to are -- the year second data terms those of hopefully, half we coverage and over we're terms of first strong. in helpful commentary year about that QX around

Terrell Tillman

one just quick Greg, that. XQ, business. But on follow-up signed Yes. you

dated activation the products, shorter strong schedules finish, of be of can 'XX. accurate? this up So least that half/ though, some you correct? calendar could if Is have the in do of that show Some second a some in meaningfully At

Gregory D. Orenstein

XX%. That quicker And with of with in to of year seeing first revenue. signing we've the turn talked was that again, the we're addressed, and Investor as XX%, from half of to It's around year, compare at upwards Yes. XX% Day, about the prior I of think seeing it we a mix is accurate. business the pricing some we're the evolution that

trend again, year revenue more in in in be getting, forward, and we from expect deals that than so have go we continue in-quarter quarter that so as in-year to we'll we And and we past. the signed or

Operator

comes William Bob the next question line Our of Blair. Napoli of from

Adib Choudhury

for on Choudhury Bob. Adib

the talk of about how if kind all? terms in integrators were, you of system . could critical just significant question, first So Japan, at

you broadly, banking seeing kind of cloud using strategy your in Now SI are peers . some [indiscernible] market? a more core similar of international

Joshua Glover

to is of into system literally of cloud. part This local presidents the the institutions from play. these understand that They culture. integrators The paper straight taking We're Josh. have are Absolutely. some

you doing commercial, single that are the where with starting banks those really some way the expand local not to the having these institution platform And are whole with are want up proof mortgage, internationally, we pleased the it nCino. of change SIs, particularly team thinking as about scalabilities just about helps. on they and banks they're we're expertise lens from have that point, about management the initial the starting all get So but also but

Adib Choudhury

guide. And so long-term guess current it. [indiscernible] Thinking Greg. operating Day, XX%, the the compares year during implied or fiscal the from Got you one to that about the I targets for full and margin laid Investor out guys

think around you annual of loaded? or . margin about we and kind be cadence? that the evenly more of what's back-end have As front kind attributed And expansion? Should visibility expansion that

Gregory D. Orenstein

going the any we We'll set years. Yes. But look giving at to beyond happy to rule see err because we opportunities side time that on a the off it that, Again, that on I we're growth all frame And extent as with And is margin very of target, think we hold that. . this as target little to X growth. I again, guidance march ultimately the depends XX, our the that market. higher of year. out bit towards is of be X lower we'd a the

think we'll see across that organization. OpEx we in opportunities margin of as making, the Again, update our that terms but we as on progress the I lines. made again, progress leverage move we've for we're to you you see on along well So in our lines continue as

a said And job has team great that organization great the I done job, embracing a in. done earlier, has been the operating environment the we've

Operator

line Bergere Bank question Our America. the comes of next of Adam from of

Adam Bergere

deals which Is much impacted have to a deals there results? some those on color give on roughly those the lastly, that that any you into more are between tracking And depth QX? sort pushed. thinking any way how mentalize how now or deals there that Is quantify may in you commonality month QX could them. Can of you're in

Joshua Glover

at sometimes are that. another pipeline. wanted to Those dropped Ultimately, look may they that board deals have the Absolutely. get out not of

they on. They as eye They're want year margin interest environment, to this also on continued see they keen their a with quality. this keep rate to continue their credit P&L may thinking about Sometimes deal in are the compression. how

as measured see transformation. investment We about more need they of lines not a think see So we do new lack conviction institution. on the the of for investment do for

Pierre Naude

Yes.

more a is pipeline think Also, as let's of This as we've timing cycle and And any lost need. of solidified, those versus deals it's of see budget for case movements to those we'll in banks that soon our forward. are we the a move I not well. competitors. as matter revisit more in

very coming we're going . those of see we're optimistic So that through. some to

Adam Bergere

taking are don't assumption new I than the a have Got it. sort these quick And expected guide? as longer a little into QX embedded follow-up, of you of, that know,

Pierre Naude

Yes.

churn that we QX understand the -- very the on both Our market, assuming is in well now IMBs. expectations guide it's

and So that view, the provided. into that a conservative we've taken built guidance we we

Operator

comes question Alex line James of of from next Sklar Our the . Raymond

Alexander Sklar

that sales million accrual Was quarter? called marketing it else there onetime impacting anything operating out and of that Greg, quarter. the outside Great this $X you income this

the kind investment the quarter sequential earlier then to of questions, driving being fourth And answer or a margin of hiring factored to couple unrelated decline? just about kind Can about growth, relative what's preferring talk perspective an you a of third quarter from in your

Gregory D. Orenstein

Yes.

was was So from onetime thing. it million. That the really $X.X

in the we other I'd annual quarter, conference. second insight, thing The is note had our our user

And heavier a so spend. that's

well. basis, at note I on So as would a you sequential as that look it

When obviously, we taking ultimately you look we the that sometimes into at holidays fourth in provided account, quarter. quarter, seasonality it's the fourth that guide see

know that So there's I if the deduct think delta that you that's there, you the down comes from at a to. it total we really I that's onetime noted I what gave, is but guide guide what little look small the and impacting the

Alexander Sklar

Okay. Perfect.

bound of kind year-end major no kind and incremental operating? in normal above So of hiring the

Gregory D. Orenstein

No.

for us, business usual. as I it's think

have between As end on the we and and a fourth execution big of Josh quarter, we Pierre's focus now look comments, as we're a perspective, echoing closing on into just pipeline ample coverage see sales year. fiscal from the so noted, in business, -- the we obviously, focused

Alexander Sklar

sales Great in And It just growth again you. Okay. good color. one that for XX% seems heard I Josh, like NIC adoption.

sizes that NIC seeing recently you're flagged though, deal as think I higher you well.

meaningfully So NIC, figure? it XX% frame kind any can that is from the revenue way of above you growth

Joshua Glover

stat for see XX% platform. of to in quoted That who've date. platform the to customers the brings X NIC we us solutions, portfolio quarter, union. in NIC had with with done ever the adoption done . Also we've we analytics, we on growth was and biggest ever adopted of great bank the credit NIC And XX% year-over-year deal our deal that we've Yes. biggest the the the

that speak to about with revenue? momentum. through you how pleased we're flows So do want that Greg,

Gregory D. Orenstein

Yes. ultimately, about turns talk into our I revenue. mean, NIC quicker as solutions, again, with we that

impacting quickly the more mix evolution our model. that see that's again, as look exciting and we of our so we of And P&L, pricing the at business

Operator

Our Stanley. James Instructions] Faucette question next of from [Operator Morgan comes

James Faucette

what to that rate that you're is are sales the when Is I environment what the cycle. consistent? . ahead And of to past, the about want also interest kind Great. talking alluded you that for you've you've And say moving think, quickly. of that in inertia kind right customers is dig in Or waiting to that now? got Pierre, of stabilize making before seeing in some and kind I you're decisions?

Pierre Naude

as as down where by we've banks announced institutions. is year-over-year, XX% Look, public got profitability as much Yes.

when is cutting, future. that of environment, a debate, have of so of they all going Fed have there's to And is well banking. imagine still looking on can cetera. as more, as the now, but you impacts both the massive once psychology you And results et going these right stability to it the rates start they're actual raise And for the kind

what setting waiting wait becoming down. to start optimistic, don't think are for I that is coming to And rates people in. cautiously this we the so is seeing see but stabilized necessarily are environment they

will in bankers They think And to is make general, stabilization place. point. certain I the stabilize believe that are moment it more ready in set investments. the

you're to according it is they this. need needed banks, the This seeing and need need go. is is they They efficiency, deposit that's over it they our IT moment the where for our do the of level the for They what pipelines platform for simplification, modernization. for kind with This And consumer This wants. uncertainty compliance. of is have gathering. to and they conversations just that have to

man, my Europe I So, they do me, and is to expected. ears. a than look, basis. all them frequent a music But more is was know we said X customer we where And to which, with what difficult you do just the of in that bit course, else on meet project

So I feel very good optimistic in place. strategic that we're a

time. effort off. in is this the noncommercial willing wins going pay is architecture show platform to phenomenal is whole Our are that And -- put we is maturing and to at this right

James Faucette

churn, you just of then, try it. I in understand know but Got trying a And that it. understand in previous at would make the we to Greg, at how has you terms want the Got to it. an churn or quarter if I sure Got been How of we remained churn just impact kind of factors? guide to in have this change stable have different fourth ways, couple on assumption? other -- of much versus level impact of all? that make sure changing your your I'm . touched

Gregory D. Orenstein

a overperformance you guidance QX our in our It the into saw part. some upping ultimately mean, but terms thing. rolled of not in of whole we was big QX I

some that so October. the peaked saw was really And I rates interest think certainly ultimately, just mean what enough. and impact. was we the IMBs,I enough And said just an of just mortgage engines, was rates specifically were

from churn. unique the really job of expect. really are been tracking so is team somewhat spike our this do plus. with we've in first was that As expectations that really we for with churn the a good what were. tracking obviously, in quarter, I at done last we something line level circumstances set of what increased The October things think it the just a more of looked the month year this far, has And

James Faucette

it. . Greg. it. Appreciate it. Got it. Got Got . Thanks

Operator

Our of of from line the Altmann comes Scotiabank. . Nick next question

Nicholas Altmann

banking sounds lot Awesome. of around excitement like a It there's advisers.

of the a the adviser Or it, a one banking the exclusive? being, foster is installed activity kind couple of around sort . And are those the as monetization is then is questions think about we about as the with those opportunity nCino NIC? the should IQ? base think that And cross-sell what more best into with really should follow-up, I kind way to really to of there I then any customer update ask who just there. from So first feedback wanted on initial guess there? testing strategy just beta mutually of

Joshua Glover

We've not customers by and a customer are. Josh. the but solve is help good pleased problems really them The about helping efficiency employee today this. with think, asking where to helping and of with effectiveness done, are excitement meeting they they been really also We've is I engagement. job This our surprised us employee

they rather where in think rather So cases risk of and a knowledge because banking the seasonal generative et narratives than credit a memo AI look, use we'll memo, the their we them they base can a the out at ability that, can credit a that for have than risk, offer they where use if fingertips have initial a hurricane sitting to to doing intelligent of cetera. tourism, Florida, PDF navigating adviser banker tell risk can have hotel XXX-page where you have about have loan typing of where we

little are it attract to thumb though policy. things more is need to does graduating a of bit are bank their they a continue credit efficient and them market frankly, make even those kid will that employer-friendly, kind labor through memo or going the So employees banks, help not because becoming that the a more XXX-page lot employees sit want smartest the university credit to today help evolving go and

NIC use basis, we've adviser But of something ongoing to growth we cases monetization. nCino's you've that expect would to to that see things pricing I as those the And relative stand-alone investment to which a analytics in is on heard and aspect contribute Banking inject intelligence of also continue have kind is of that a the from the our the be So growth. and seen will customers. every monetized are we'll validation portfolio with use tools profitability. from continued get with we us these that application, to

Nicholas Altmann

And then Great. quick just a follow-up.

et XQ. quarter XX% ACV just in guys new at how seasonally base given software, came installed a pipeline, strong for cetera? there's you terms earlier, of net versus flush that the from You QX bookings kind does it's existing mentioned spending of the budget look of gross dynamics, in When look

Joshua Glover

Yes.

to deliver the and buying that on about good made the fourth for our We're tough. we've feel macro relative also being to ability quarter. realizing on pipe the we is not toned the that commitments to So environment not the

coverage from ample have XX% as our tough, market we when on us existing continue to that more, confident quarter gets the focus customers feel we in seen need we and customers So them. we've

to of benefits customers. the a years. existing changed having fantastic customers for partnered deals of has we of one such happy that's customer not that relative with And new or base Composition

the pipe time of fall out they just not seeing for a we're more greenfield how line earlier, logos we're said we buy. As thoughtful seeing

Nicholas Altmann

Very helpful.

Operator

next comes KBCM. Our of the Alex question Markgraff line from

Alexander Markgraff

the prior I maybe bit actually wanted question, differently. it on a to expand ask

more when of, in that normalized of more about a ACV the Just you products. or expansions are normalized bookings noncommercial in that thinking product the you mix environment and consider lead say, a particularly enterprise some with on demand, helping gross basis pent-up

mean, the kind mix that I this curious, Just of around from, range and good considering couple XX% the last other about is product for from of environment years? say, what of existing the in macro changes on such couple last side versus just think quarters for of to the new existing, challenging the more

Pierre Naude

Historically cross-sell saw value. about these or XX-XX you good because you more products, -- into is your run base, build add which -- we you you

you've You because upgrade as gives lower where continuous them, cross-selling innovation. new bit and that of . you to power then logos can start got pricing well penetration, you to of And XX% them a again.

much higher will market in edges the ran It existing what XX-XX. cross-selling that was What We ratio. future, come through of environment, it to XX%. we back we believe destabilized that in the it more base see when up a destabilized. this XX-XX to historically, at So COVID to customers. to saw was And liquidity a you went percentage

Alexander Markgraff

did Great. And apologize as metric I you last but you all did or quarter this, not. missed provide if the for I then quarter growth sales the

Gregory D. Orenstein

lower QX not. did the be perspective. expect confirming being than to than did QX, QX first bookings be QX. the but commentary sales half half we bookings greater the from an We internal expect of just the second a provided year that of we still lower year around perspective, from We gross to . And the than

just we playing note about So as that I'll out.. year the think

Operator

the Macquarie Capital. Our of Robert of line question comes from Trout next

Robert Trout

here. questions. as I nice my a call analyst just first have If earnings the team ask X could to covering with And

And response the of then from financial services employment more but financial mentioned, a the the service revenue. on you early the now. that what market think, model. question migration, seeing Terry's you're I -- indications you a employer-friendly quicker evolution right to is, Greg, first while the employment is, to that path as know mentioned, in The pricing -- I'm I bit wondering generally

model the does from that that, relative to new Going does the [indiscernible] the job changes pricing in the in benefit state of how forward, financial services benefit -- and or the model? growth market, from pricing not how old

Pierre Naude

Yes.

a get banking. an me to consumer pass I printed for you've reservation, of simple and you're call use the got to through airport okay? e-mail. take the a your make explain use ticket, we ago, boarding lucky, to and if -- airline, a And airlines, ticket out instance, I'll used go paper years example X back the case, So let if you and in with printer a you, all

book ticket, Today, your telephone your that and app basically your you system, okay? passes in the sounds into go laughable, boarding phone, the are and go. boom in you you the you And trust

stuff and proof in next total submit that move behind. you employment, XX, happen documentation, some end-to-end can we license, case lot come We the believe that that customer-friendly that's fully cetera. to a There's still to is XX that a experience highly use has X driver's show of years in consumer literally automated. years of digital brands, et Banking

move much from between interactions you use banker and with consumer in and back employment to extent, away means will people banking personal If mode. that the in to take self-service middle exercise that the the that it office case more shift a

and And on and growing to [indiscernible] solution that we're banks okay? can therefore, that drive their people, to that cost they into value going are us going are have from platform understand pricing a the a side. we As redeploy more all massive provide because bank will these model the they're banking, going is to based.

be center going back just help doesn't some on get it airline office still do. call their own, to like who or an consumers will done activities on There

platform models pricing it our that two, So consumer the that that enabling value table, end-to-end. to number the one; and number reflect a we will truly bring go to is is

to banker XX% there be from of fully If involved. will business, it more go XX% automated, you a small

involvement, highly automated commercial, you If to okay? be will banker XXX% more but go processes, it

the yes, industry. become platform-based how to that that's going will and at pricing we're . across. But And solution-based look norm our in

Robert Trout

sort about ask . And consumer strategy. sales question very to That's helpful. I of wanted on the just broader side. Okay. just a

win. gets wonderful And quarter. landing, you that. during that of I this energy spent the alluded had amount on and You time to that the like Congratulations think something

you of spending the how the to As metrics they perhaps and this a of way way way kind also how they're portion of evaluate as train the What about approach the you them key who to your time? the do international them. changing you prospect? both think and how force, consumer the becomes should resource terms evaluate sales becomes in bigger their -- your and are you pie, consumer them

Joshua Glover

stakeholders single that can a we within these to we executive expect focus tell that as And This have who robust who institutions relationship. of account a platform drives the us with C-suite continue these as across C-suite the experts the that and relationship. who set to the differentiated with a institution. in our solutions in to maintains they help are Our we multiple support take core them core covering them various story sale to accounts those stakeholders is

relationship single This bank. they consumer driven account mortgage example, to They that's of was going competition. our were lending. core a for For a going lending and commercial a platform deliver you $XX heard to billion already speak last ahead executive. quarter by put using purchase us solution. That us them They're their about

had the customers. in thing specialist the driving for opportunity consumer But mortgage best while help That's our a in past, to driving quarter, the in the them. while they opportunity this

get market, banks CFO, in operating going through example, does a leverage period are for For my in with time. U.S., this consolidation. where he the because some of

launch a need specialists support solutions to I linearly drive but solution, I the they other with to grow don't have that I can thoughtfully new force, When my sales in. them those

So question? your does that answer

Robert Trout

Very helpful. absolutely. . Yes,

Pierre Naude

to want which IT. cetera. can to assist owners. sell see I involved. et just management, owners add something is, business IT and to necessarily They project business remember, But to not integrations business in us that, heavily value. Yes, we is those

at part And have that on how to bring. what make actually businesses will we will in or our salespeople the and value what's seen look this they inception, return put understand its was investment trained that to investment, since understand fact

about case look at talked earlier, use that place first is because use consumer which a in Japanese that's very mortgage Japan. like we you case. case If a exciting a that's

ROI win So across are do case based people the then to the the business and it actually and business help get an with trained IT on our equipped model a board, installed. solid of and

Robert Trout

great That's point. a

Operator

Saket question line Kalia comes the next Our Barclays. from of of

Saket Kalia

here. sorry times couple the a on I'm retail the to business. lengthen think been Awesome. a just call question of the here mentioned pricing call. But has I pricing was around And earlier in there

kind ask a the how volume business now X-part of is priced versus I mortgage on is much seats, one So guess the I being of first right? based right? to want question,

here about how on And volume great to win, pricing talk you mostly pricing is on retail and just it second disclose Was retail deal? the for for anything I just there guess the mortgage Was that deal. to a works Anything question that loop is could for in it? can the component structure seat-based? you decent that there

Pierre Naude

business. as Saket, That's you from to that said want why volume know, it never be SimpleNexus. pure a we like X. day we We

a a seed-based That's include component we've that. is we So Even platform a we in contract, had and we pricing, that that to always done always when fixed. there component that. like the -- minimum is

you update because cost them lower to we schedule the and pricing the come back volume. skittish is about soft unit incentivizing commitment. they But it, In volumes the account, penetrate minimum with in market, how basis on commitment making a on are massive of top when went lower that's mortgage to platforms then get a

for lower then upside And cost price. in, we yes, incentivizing actually So will commitment, to a cost market volume. some and minimum, parties a that that they built they there's triggers for back. because if bigger will then when both comes get lower see us a a that lower higher, they get where volume is And good behavior unit we pay unit commit

Does it much that in contracts . make how sense? to again that's minimums back. we're higher So up the comes going when that a market edge to

Saket Kalia

deal helpful. out as you on super call That's that that does. And . well? that would retail Yes, anything

Gregory D. Orenstein

lending platform Yes, deal Saket, fee. that include consumer pricing I'll a note that, did

Investor with the highlighted, we're sale So institution -- you very moving digital, and to that in-branch that as the able it, employee and to a where again, and with element comments starting the in again, I and a seat-based that we digital seats, particularly away Josh and that's business Day sale. on structured that's value for as evolving much got how what from made do a it's consistent versus consumer follow-up the we're an where, the to or with

we talked about so And think as sales cycle in are with nicely that structure. comfortable we standpoint, a prospects that our worked signing I from customers previously, think and business

in that's helpful we So the sales cycle think well. as

Saket Kalia

Very helpful. .

Operator

I'm showing at the questions time. you. turn to Thank Pierre closing no call this any like Naude for I'd remarks. back over to further

Pierre Naude

call and insightful and everyone, thank operator, for today, you, your you, attending thank Thank for our questions. you

We've excited got the are a We about with coverage. good great pipeline business.

can give well as set in customer in We clients. current relations strategy are you hopefully, as confidence And we considering customer for see future. our from and market as the get you our guidance our all factors the we our our

next much very you thank day. great a time. Have until So

Operator

Thank you this does all conference. Thank Ladies you. today's participating. conclude for gentlemen, and

may a now disconnect. day. You great Have

nCino (NCNO) 29 Nov 232024 Q3 Earnings call transcript