Key Highlights
- Second quarter revenue reached $161 million, representing an 8.2% year-over-year increase and surpassing Wall Street’s $158.9 million projection
- Earnings per share of $0.05 exceeded analyst consensus of $0.03
- Adjusted operating income totaled $40.83 million, exceeding forecasts by more than 10%
- Annual revenue outlook increased modestly to $645.5 million midpoint
- Board greenlit a $100 million share buyback program; shares declined approximately 5% to $19.70
Shares of nCino tumbled roughly 5% to $19.70 during premarket hours on Wednesday following the release of second quarter fiscal 2027 financial results, even though the cloud banking software provider exceeded Wall Street projections across multiple metrics.
The company posted total revenue of $161 million for the quarter that concluded in July, marking an 8.2% year-over-year improvement. This figure surpassed analyst expectations of $158.9 million by 1.3%.
Subscription-based revenue, which forms the foundation of nCino’s revenue model, totaled $143.5 million, outperforming the anticipated $141.5 million.
On a GAAP basis, earnings per share registered at $0.05, surpassing the Wall Street consensus of $0.03 by two cents.
The company’s adjusted operating income delivered $40.83 million, beating projections of $36.91 million by over 10%. This translates to a healthy 25.4% operating margin.
Billings climbed to $158.1 million, reflecting a 13% year-over-year expansion. Across the trailing four quarters, billings have grown at an average annual rate of 9.6%.
Chief Executive Officer Sean Desmond highlighted the expansion of nCino’s platform among major clients, particularly its artificial intelligence features. “Deploying AI in financial services demands deep domain context and expertise, and nCino is uniquely positioned to deliver it at scale globally,” Desmond stated.
Conservative Outlook Provided
Looking ahead to the third quarter, management projected revenue between $161.25 million and $163.25 million, with subscription revenue estimated at $143.25 million to $145.25 million. The Q3 midpoint of approximately $162.3 million aligns with Street expectations.
For the full fiscal year, revenue guidance received a modest uptick to a range of $644 million to $647 million, establishing a midpoint of $645.5 millionāup from the previous $644 million midpoint.
Wall Street analysts tracking the company anticipate revenue expansion of 7.8% over the coming twelve months. This represents a deceleration from the 10.9% annualized growth rate observed during the previous two years.
Capital Allocation and Financial Health
Management announced board approval for a fresh $100 million share repurchase authorization. The company has already executed $300 million in stock buybacks since April 2025.
Free cash flow margin registered at 21.1% for the quarter, representing a decline from the previous quarter’s 50.7%.
Operating margin showed significant improvement, reaching 8.5% compared to negative 6.2% in the year-ago period.
NCNO shares have declined 19% year-to-date in 2026. The stock currently commands a market capitalization of roughly $2.30 billion.
The customer acquisition cost payback period stood at 26.4 months, a metric that analysts at one research firm characterized as efficient for a software enterprise of nCino’s scale.
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