Shares of cloud banking software provider nCino (NASDAQ:NCNO) jumped more than 11% in premarket trading Wednesday after the company posted stronger-than-expected second-quarter results and raised its guidance for the full year.
The Wilmington, N.C.-based company reported adjusted earnings of $0.22 per share, surpassing analyst estimates by $0.08. Revenue rose 12% year-over-year to $148.8 million, topping the $143.18 million consensus.
Subscription revenue, a critical metric for recurring business, increased 15% to $130.8 million, fueled by rising demand across the company’s lending and compliance products. Adjusted operating income reached $30 million, a 56% year-over-year increase, reflecting improved operational efficiency.
“We are pleased to report financial results that again exceeded quarterly guidance for total and subscription revenues, as well as non-GAAP operating income,” said CEO Sean Desmond. “We saw customer demand continue to strengthen in the second quarter, including for newer solutions and across our target markets, reinforcing our confidence in our strategy and in our improved financial outlook.”
On a GAAP basis, the company reported a second-quarter net loss of $15.3 million, up from $11 million a year earlier, due to increased investment in product innovation and marketing. On an adjusted basis, net income surged 64% to $25.7 million, highlighting the strength of nCino’s subscription model and growing customer base.
“NCNO reported better Q2 revenue driven by mortgage volumes for customers that are on platform pricing, which now represents ~21% of the total base,” Barclays analysts noted.
Following the upbeat quarter, nCino raised its full-year guidance, now projecting total revenue between $585 million and $589 million and adjusted EPS of $0.77 to $0.80. These estimates compare favorably with consensus expectations of $581.5 million in revenue and $0.71 in EPS, indicating continued growth despite broader economic uncertainty.
Annual contract value (ACV) guidance for the year remains unchanged at 9–10%.
“Transition back towards a clean beat and raise story continues,” Morgan Stanley analysts wrote in a post-earnings note. “We see upside to the ACV outlook this year and think the stock can run to mid-$30s near-term.”
nCino’s guidance for the third quarter also exceeded Street expectations, with revenue forecast between $146 million and $148 million and adjusted EPS of $0.20 to $0.21, compared to estimates of $145.1 million and $0.19. Non-GAAP operating income is expected to rise to $33.5 million in Q3, reflecting ongoing margin improvements.
Recent wins included expanded partnerships with two top-50 U.S. banks and a major Canadian institution, as well as the onboarding of its first Spanish customer. The company also integrated the lending division of a top-25 U.S. homebuilder, further diversifying its client base beyond traditional financial institutions.
“Our vision of being the leader in AI-banking is rapidly coming into focus through continuous innovation and relentless pursuit of the substantial opportunity we are uniquely positioned for,” Desmond added. Backed by $123.2 million in cash and a robust pipeline of deals, nCino is well-positioned to benefit from ongoing digital transformation trends across the financial sector.
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