Executive Summary
nCino reported Q2 2025 total revenues of $132.4 million, up 13% year over year, with non-GAAP gross margin at 66% and non-GAAP operating income of $19.3 million (15% non-GAAP operating margin). While GAAP operating income remained negative at about $(7.9) million and net income under GAAP was $(11.0) million, the company generated meaningful operating cash flow and free cash flow on a quarterly basis, underscoring the shift toward a platform-based revenue model and disciplined cost management. Management articulated a multi-year strategy to transition to platform pricing across the remainder of the business, a broadening product set (including Banking Advisor, DocFox, Allegro, SimpleNexus enhancements), and international expansion, with a stated objective of 50% YoY growth in net bookings for the year. The quarter featured rapid Banking Advisor adoption (8 deals in Q2 and the first live customer) and continued progress integrating DocFox and Allegro, while mortgage headwinds persisted but are expected to abate with anticipated rate cuts. The guidance implies continued topline momentum and a path to higher contribution from platform pricing in 2026 and beyond, albeit with ongoing Mortgage-related and international lumpiness risks.
Key Performance Indicators
QoQ: -607.45% | YoY:46.56%
QoQ: -270.97% | YoY:30.50%
QoQ: -267.05% | YoY:32.21%
Key Insights
Revenue: Q2 2025 total revenue of $132.4M, up 13% YoY; Subscription revenue $113.9M, up 14% YoY (86% of total). Non-US revenue $27.5M, up 25% YoY. Gross profit (non-GAAP) $86.7M, non-GAAP gross margin 66% vs 65% prior year. Non-GAAP operating income $19.3M, non-GAAP operating margin 15% vs 10% YoY. Non-GAAP net income $15.8M, non-GAAP earnings per diluted share $0.14. GAAP operating income $(7.9)M; GAAP net income $(11.0)M; EPS (GAAP) $(0.10); Weighted average diluted shares ~115.18M. RPO $1.04B...
Financial Highlights
Revenue: Q2 2025 total revenue of $132.4M, up 13% YoY; Subscription revenue $113.9M, up 14% YoY (86% of total). Non-US revenue $27.5M, up 25% YoY. Gross profit (non-GAAP) $86.7M, non-GAAP gross margin 66% vs 65% prior year. Non-GAAP operating income $19.3M, non-GAAP operating margin 15% vs 10% YoY. Non-GAAP net income $15.8M, non-GAAP earnings per diluted share $0.14. GAAP operating income $(7.9)M; GAAP net income $(11.0)M; EPS (GAAP) $(0.10); Weighted average diluted shares ~115.18M. RPO $1.04B as of July 31, 2024, up 12% YoY, with $698M in the sub-24 month bucket. Cash and equivalents $126.8M; net cash provided by operating activities $5.0M; free cash flow $4.6M. Cash flow dynamics were affected by unbilled AR increase (~$4.8M) tied to platform pricing arrangements. For Q3 2025, total revenues guided to $136-138M; subscription revenues $117-119M. Full-year 2025 guidance: total revenues $538.5-544.5M; subscription revenues $463-469M. Non-GAAP operating income guidance: $87-90M; non-GAAP net income per share guidance: $0.66-0.69. Churn target remains around $20.5M for the year; Mortgage-driven revenue remains a drag in 2025 with expected uplift in Q4 as rates potentially cut.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
132.40M |
12.94% |
3.37% |
| Gross Profit |
78.47M |
13.42% |
7.09% |
| Operating Income |
-7.91M |
46.56% |
-607.45% |
| Net Income |
-11.04M |
30.50% |
-270.97% |
| EPS |
-0.10 |
32.21% |
-267.05% |
Key Financial Ratios
operatingProfitMargin
-5.97%
operatingCashFlowPerShare
$0.04
freeCashFlowPerShare
$0.04
priceEarningsRatio
-85.45
Management Commentary
Key themes from management commentary on the earnings call: 1) Platform pricing and multi-product strategy: Management emphasized that platform pricing is a core strategic driver to scale revenue; Banking Advisor launched generally in Q2 with 8 deals and a live customer, and they expect greater contribution to revenues next year as usage scales. Pierre Naude stated, “we are not dependent on that pricing structure change to make the numbers” and highlighted the significance of platform deals that “move the needle.” 2) Mortgage headwinds and near-term recovery: Pierre noted mortgage revenues would be dilutive this fiscal year, but anticipated rate cuts to catalyze a rebound in Q4 and into 2026; governance around Mortgage pricing has already shifted 40-45% logos and 45% of revenues to the new pricing model, positioning NCNO to benefit from mortgage volume if rates ease. 3) International and enterprise pipeline: Management highlighted lumpiness in international markets but growing pipeline in Japan, Europe, Australia, New Zealand; the U.S. enterprise pipeline remains healthy, with over 50% of gross bookings toward annual goals in Q2; management sees 4Q as a meaningful contributor due to year-end budgeting cycles. 4) M&A impact and integration progress: DocFox and Allegro integrations are progressing and adding value to onboarding and account opening within a single platform; there is active exploration of accelerating these integrations internationally. 5) Operational efficiency and capital strategy: The team is targeting lower overall platform deployment costs, tighter implementation timelines, and stronger post-go-live efficiencies, combined with a plan to deleverage the revolver while continuing to invest in growth initiatives.
“Banking Advisor only became generally available in the second quarter, we signed eight Banking Advisor deals in the quarter... and have taken our first customer live with it.”
— Pierre Naude
“We maintain our view that US mortgage revenues will be dilutive to overall growth for nCino this fiscal year, but we expect interest rate cuts to be a catalyst for reaccelerated growth in this business starting in the fourth quarter.”
— Pierre Naude
Forward Guidance
Assessment of the forward-looking trajectory based on management guidance and industry dynamics: 1) Revenue trajectory and mix: NCNO maintains full-year revenue guidance at $538.5-544.5M with subscription revenue of $463-469M, reflecting continued mix shift toward higher-margin subscription and platform-enabled revenue. The Q3 guide implies continued modest QoQ growth; the substantial quarterly progress in Q2 supports a constructive near-term path. 2) Platform pricing as a catalyst: Management reiterated commitment to platform pricing across core product lines (consumer lending, deposit account opening, US mortgage) with Banking Advisor included in every new deal going forward; this should support higher long-term gross margins and more predictable revenue. 3) Mortgage cycle sensitivity: Mortgage revenues are expected to be a drag in 2025 but may improve with a rate cut, potentially accelerating in Q4 and into 2026 as origination volumes recover. 4) International expansion: The company remains optimistic on international large enterprise opportunities but acknowledges longer cycle times and higher lumpiness; execution in markets like the UK, Canada, Spain, New Zealand, and Japan will be critical. 5) Monitoring factors for investors: Net bookings growth target of 50% YoY remains a central metric; RPO evolution, unbilled AR dynamics, and the speed of platform pricing adoption will be important indicators of revenue visibility and monetization. Overall, the outlook suggests a steadier, platform-driven growth trajectory with meaningful optionality from mortgage stabilization and international expansion, but investors should monitor mortgage cycle receipts, churn, and execution of platform pricing roll-out across the remainder of 2025 and into 2026.