nCino Lifts Outlook on AI Growth

nCino (NASDAQ:NCNO) reported Q2 FY2026 results on August 26, 2025, reporting total non-GAAP revenue of $148.8 million (up 12% year-over-year) and non-GAAP subscription revenue of $130.8 million (up 15% year-over-year, 10% organically), both exceeding guidance. The company highlighted rapid adoption of its AI Banking Adviser, major enterprise wins, and raised its FY2026 non-GAAP revenue and profitability guidance while confirming its progress toward the Rule of 40 by fiscal 2027. Key insights below address platform pricing progress, AI differentiation, and acceleration across international and vertical markets.

Platform pricing transition drives recurring uplift at nCino

nCino has transitioned approximately 21% of annualized contract value (ACV) to its new platform pricing. The company is aiming for an approximately 10% price uplift at renewal. The largest cohort of renewals is set for Q4 FY2026, with early renewals already occurring as customers seek immediate access to new AI functionality.

"We've told folks that, you know, we'd like to target around a 10% uplift just on an apples-to-apples basis, so no additional product, just switching from, you know, on renewal to the new model. You know, ultimately, the biggest cohort of migrations or renewals this year is gonna be in the fourth quarter. So, you know, we wanna work through that before we kinda come out with what we see through that because, again, gonna be a largest cohort for this year. But it's going well, going in accordance with our expectations."
-- Greg Orenstein, Chief Financial Officer

This transition increases recurring revenue visibility, with pricing power supported by differentiated capabilities and growing customer demand for embedded AI.

AI Banking Adviser adoption expands, deepening nCino's moat

Banking Adviser, nCino's purpose-built AI interface for financial institutions, now has over 80 customers, up from fewer than 20 at the start of the fiscal year. Management emphasized that AI is influencing renewals, cross-sells, and accelerating platform selection, though revenue impact is expected to materialize in FY2027 as the focus shifts from adoption to monetization.

"Banking Adviser represents an AI-powered interface designed exclusively for financial institutions. Unlike generic AI solutions, Banking Adviser is deeply integrated into nCino workflows and understands financial products, process workflows, regulatory nuances, and day-to-day banking realities. Banking Adviser is evolving to become the primary interface through which our customers will experience increasingly sophisticated AI capabilities and fully agentic workflows, which we plan to start rolling out to the market next quarter."
-- Sean Desmond, Chief Executive Officer

Rapid customer adoption and plans for next-generation agentic workflows position nCino as a central AI partner for financial services, solidifying competitive differentiation and a foundation for future upsell.

International and vertical expansion fuel broad-based ACV growth

Q2 saw significant wins, including Continental Europe's first Spanish bank, a strategic go-live at ABN AMRO in The Netherlands, along with six new credit union logos and 35 cross-sell deals. Non-U.S. non-GAAP subscription revenue grew 30% year-over-year (27% in constant currency), with management highlighting robust credit union, mortgage, and onboarding momentum.

"In the mid-market, we saw an almost 7-figure ACV commitment from a net new $10 billion asset bank for commercial lending. We also saw positive traction with our growth initiatives for fiscal 2026, which, as a reminder, are expanding our focus in EMEA, activating the credit union market, realizing the onboarding opportunity, cross-selling mortgage, and embedding AI, data, and analytics across our unified platform."
-- Sean Desmond, Chief Executive Officer

Diversified international, vertical, and segment growth supports sustained ACV and booking momentum.

Looking Ahead

Management raised full-year FY2026 non-GAAP revenue guidance to $585 million to $589 million (up from $578.5 million to $582.5 million), non-GAAP subscription revenue guidance to $513.5 million to $517.5 million (up from $507 million to $511 million), and non-GAAP operating income guidance to $117.5 million to $121.5 million (up from $112 million to $116 million). The ACV outlook for FY2026 increased to $564 million to $567 million, with expected 10% year-over-year growth at the midpoint. There was no specific fiscal 2027 guidance beyond reaffirmation of the Rule of 40 target and continued pipeline strength; no explicit net interest income (NII) or CET1 disclosures were made.

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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends nCino. The Motley Fool has a disclosure policy.