nCino Inc. reported fiscal second-quarter 2027 results on August 25, 2026, showing an 8% year-over-year increase in total revenues to $161.0 million. Subscription revenue, which accounted for 89% of total revenue, grew 10% to $143.5 million, driven by a 12% rise in core subscription revenue excluding U.S. mortgage services.
The company’s U.S. mortgage subscription revenue declined 1% to $20.6 million, while international subscription revenue rose 13% to $30.9 million, representing 22% of total subscription revenue. Annual contract value reached $602.4 million in fiscal 2026, up 17% year-over-year, with a net retention rate of 112%.
Profitability improved significantly, with non-GAAP operating income increasing 36% to $40.8 million. Non-GAAP operating margin expanded by 500 basis points to 25%, supported by lower expense ratios across sales and marketing, research and development, and general and administrative categories. Free cash flow surged 170% to $34.0 million, translating to a free cash flow margin of 21%, up from 8% in the prior-year period.
For the third quarter ending October 31, 2026, nCino guided total revenues between $161.25 million and $163.25 million, with subscription revenue projected at $143.25 million to $145.25 million. Non-GAAP operating income is expected in a range of $42.0 million to $44.0 million.
The company also raised its full-year fiscal 2027 guidance, projecting total revenues of $644.0 million to $647.0 million and subscription revenue of $573.5 million to $576.5 million. Non-GAAP operating income guidance was increased to a range of $171.0 million to $174.0 million, with the midpoint raised by $4.0 million to $172.5 million.
Gross margins remained stable at 68% overall and 76% for subscriptions, while expense ratios declined across key categories. Management highlighted progress in AI integration, stating that the company is now actively deploying agentic AI-powered solutions in banking rather than solely advocating for the transition.
