Banking software provider nCino (NASDAQ: NCNO) reported Q1 CY2026 results topping the market’s revenue expectations, with sales up 10.6% year on year to $159.4 million. The company expects next quarter’s revenue to be around $158.8 million, close to analysts’ estimates. Its GAAP profit of $0.12 per share was significantly above analysts’ consensus estimates.
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nCino (NCNO) Q1 CY2026 Highlights:
- Revenue: $159.4 million vs analyst estimates of $155.7 million (10.6% year-on-year growth, 2.4% beat)
- EPS (GAAP): $0.12 vs analyst estimates of $0.05 (significant beat)
- Adjusted Operating Income: $44.51 million vs analyst estimates of $39.08 million (27.9% margin, 13.9% beat)
- The company slightly lifted its revenue guidance for the full year to $644 million at the midpoint from $641 million
- Operating Margin: 13.2%, up from -1% in the same quarter last year
- Billings: $174.3 million at quarter end, up 11.3% year on year
- Market Capitalization: $1.65 billion
StockStory’s Take
nCino’s first quarter results were driven by continued adoption of its AI-enabled platform, with strong execution across its core banking software products. Management pointed to broad-based growth in both subscription and international revenues, while efficiency improvements in professional services also contributed to higher operating margins. CEO Sean Desmond highlighted that over 40% of annual contract value has now moved to nCino’s new platform pricing, which aligns incentives around customer outcomes and the use of AI features. The company credited its deliberate approach to packaging AI capabilities as a driver of customer experimentation and uptake, stating that “consumption of intelligence units has continued to inflect higher month over month.”
Looking ahead, nCino’s outlook is shaped by its focus on scaling AI adoption and expanding the agentic operating system across its customer base. Management emphasized that the company is investing in new AI agents, integration capabilities, and shorter product development cycles to sustain subscription growth. Desmond noted, “Our strong point of view is that by taking this deliberate approach, rather than prioritizing near-term revenue opportunities, customers will be able to more quickly and easily realize the value of our AI technology.” The company also anticipates further expansion of its asset-based pricing model, with increasing intelligence unit consumption expected to support subscription revenue growth over the medium and long term.
Key Insights from Management’s Remarks
Management attributed outperformance in the quarter to accelerating AI adoption, improved operational efficiency, and strong international momentum, while highlighting the role of new pricing models and professional services optimization.
- AI-driven platform adoption: Uptake of nCino’s AI-powered Banking Advisor and digital agents is broadening, with over 200 customers purchasing initial bundles of intelligence units. Early adopters are already consuming their first bundles and renewing as usage expands, positioning AI consumption as a future revenue growth lever.
- Efficiency gains in professional services: The company’s use of AI tooling and new methodologies reduced professional services project hours by more than 40%, directly improving segment gross margins and shortening implementation timelines for customers.
- Asset-based pricing transition: Over 40% of annual contract value has shifted to the platform's new asset-based pricing model, which ties nCino’s revenue more closely to customer outcomes and AI feature usage, supporting recurring revenue resilience.
- International expansion: nCino reported strong growth in Continental Europe and Japan, with new leadership and expanded data partnerships driving adoption. The company highlighted an uptick in large financial institutions engaging in full client lifecycle management projects.
- Partner ecosystem leverage: System integrators and technology partners are increasingly involved in deploying AI agents across onboarding, loan origination, and portfolio monitoring workflows, which is expected to boost scalability and pipeline conversion rates in the coming quarters.
Drivers of Future Performance
nCino’s guidance is underpinned by continued AI adoption, strategic investments in product development, and an expanding international footprint.
- AI adoption and monetization: Management expects increasing customer reliance on AI agents and intelligence units to drive subscription revenue growth, particularly as clients move beyond initial experimentation to broader deployment within banking operations. Renewals and expansion of AI usage are anticipated to support longer-term top-line gains.
- International pipeline momentum: The company is prioritizing sales and product investments in Continental Europe, Japan, and Southeast Asia, where new leadership and tailored go-to-market strategies are contributing to accelerated adoption and a robust sales pipeline.
- Margin discipline and scalability: Ongoing professional services efficiencies and a mix shift toward higher-margin subscription revenue are expected to support continued operating margin expansion, though management cautioned that near-term margin improvements may moderate as marketing and development expenses ramp later in the year.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will monitor (1) the pace at which customers expand AI agent and intelligence unit usage beyond initial bundles, (2) continued progress in transitioning the customer base to asset-based pricing tied to AI adoption, and (3) international sales activity, especially in Japan and Continental Europe. Execution on professional services efficiency and partner-led deployments will also be important indicators of nCino’s ability to scale its platform.
nCino currently trades at $17.31, up from $15.19 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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