NCNO Q2 Deep Dive: AI Integration and International Expansion Drive Upside

August 28, 2025 at 09:40 AM EDT

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Banking software provider nCino (NASDAQ: NCNO) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 12.4% year on year to $148.8 million. Guidance for next quarter’s revenue was better than expected at $147 million at the midpoint, 0.8% above analysts’ estimates. Its non-GAAP profit of $0.22 per share was 58.1% above analysts’ consensus estimates.

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nCino (NCNO) Q2 CY2025 Highlights:

Revenue: $148.8 million vs analyst estimates of $143.2 million (12.4% year-on-year growth, 3.9% beat)
Adjusted EPS: $0.22 vs analyst estimates of $0.14 (58.1% beat)
Adjusted Operating Income: $30.01 million vs analyst estimates of $24.12 million (20.2% margin, 24.4% beat)
The company lifted its revenue guidance for the full year to $587 million at the midpoint from $580.5 million, a 1.1% increase
Management raised its full-year Adjusted EPS guidance to $0.79 at the midpoint, a 11.3% increase
Operating Margin: -6.2%, in line with the same quarter last year
Billings: $139.9 million at quarter end, up 12.4% year on year
Market Capitalization: $3.79 billion

StockStory’s Take

nCino’s second quarter results received a strong positive reaction from the market, reflecting the company's ability to outperform Wall Street’s expectations. Management attributed this performance to robust deal activity, particularly in North America, and meaningful momentum in the mortgage and credit union segments. CEO Sean Desmond highlighted the significance of successful expansion agreements with large banks and the early adoption of nCino’s AI-powered Banking Adviser by more than 80 customers as key contributors to the growth observed during the quarter.

Looking ahead, management expects sustained growth, citing expanding adoption of the Banking Adviser platform, continued progress in EMEA (Europe, Middle East, and Africa), and further cross-selling within the credit union market. Desmond noted, “AI is coming up in virtually every customer conversation,” underscoring the company’s focus on integrating advanced technologies into its offerings. Management remains focused on executing current growth initiatives while monitoring customer adoption rates and the evolving competitive landscape.

Key Insights from Management’s Remarks

Management credited the quarter’s results to expansion within key customer segments, successful international wins, and early traction with AI-enabled products.

AI-Driven Product Momentum: The Banking Adviser platform has seen rapid uptake, with over 80 customers purchasing the solution. Management emphasized its integration into core workflows and the potential to transform operational processes for financial institutions.
Enterprise and Credit Union Expansion: nCino secured significant expansion agreements with two top 50 U.S. banks, a top five Canadian bank, and achieved six new credit union logos, resulting in substantial cross-sell activity and increased annual commitments from these institutions.
Mortgage Segment Activity: Despite industry headwinds, nCino experienced notable expansion from over 50 mortgage customers, including volume growth among independent mortgage banks and homebuilders. Management attributed this to earlier investments and the platform pricing shift, which positioned the company to benefit as the market recovers.
International Market Penetration: Entry into new EMEA markets, including the first customer in Spain and a successful go-live with ABN AMRO in the Netherlands, validated nCino’s value proposition and are expected to drive further growth across Continental Europe.
Platform Pricing Transition: The company continued to transition customers to a platform-based pricing model, achieving around 21% of annual contract value (ACV) on the new model. Management indicated that price uplifts were consistent with expectations, supported by early renewals driven by interest in AI capabilities.

Drivers of Future Performance

Management expects continued growth, focusing on AI adoption, expanded cross-selling, and further international market development as key drivers.

AI Adoption and Integration: The rollout of advanced AI features, including agentic workflows within the Banking Adviser, is anticipated to drive deeper customer engagement and serve as a catalyst for new deals. Management views AI as a differentiator in the competitive banking software landscape.
International Expansion: Progress in Continental Europe and other EMEA regions is expected to accelerate, with leadership highlighting recent wins and ongoing investments in local teams and product localization. The company sees significant opportunity in these under-penetrated markets.
Platform Pricing and Renewals: The ongoing transition to a platform pricing model is projected to yield price uplifts and facilitate earlier customer renewals, especially as advanced AI functionality becomes central to customer value propositions. Management also highlighted that the largest cohort of renewals for the year is expected in the fourth quarter, which could influence near-term results.

Catalysts in Upcoming Quarters

Looking forward, our analyst team will be monitoring (1) the rate of AI-driven Banking Adviser adoption and its impact on customer renewals, (2) new customer acquisitions and deal activity in Continental Europe and broader EMEA regions, and (3) the pace and profitability of the ongoing platform pricing transition, especially during the fourth quarter renewal cycle. Continued integration of acquired products and traction in cross-selling to existing clients will also be important metrics to track.

nCino currently trades at $33.04, up from $28.67 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

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