Summary
nCino reported total revenues of $161.0 million for the second quarter of fiscal 2027, up 8.2% year over year. Growth leaned on the installed base, where customers expanded their use of the platform, rather than on new logos. Subscription revenue, which supplies the bulk of the total, again outpaced professional services. For the first six months of fiscal 2027, total revenues were $320.4 million, up 9.4%.
Profitability swung hard. GAAP operating income was $13.6 million for the quarter, compared with a loss a year earlier, and operating margin reached 8.5%, up 14.7 percentage points. Net income attributable to nCino was $5.1 million, and diluted EPS was $0.05. Gross profit rose 14.4% to $100.8 million, lifting gross margin 3.4 percentage points to 62.6%. The improvement came from a lower cost base after the fiscal 2026 workforce reduction as much as from revenue growth. Non-GAAP operating income was $40.8 million, up 36% from $30.0 million, and non-GAAP operating margin was 25%, up 500 basis points.
Cash generation was the standout. Operating cash flow was $34.2 million for the quarter, up 92.8%, and $115.6 million for the six months, up 60.4%. Capital expenditures fell 96.2% to $0.2 million. Free cash flow, a non-GAAP measure, was $34.0 million against $12.6 million a year earlier, an increase of 170%. Cash, cash equivalents and restricted cash totaled $83.6 million at July 31, 2026, with $275.4 million outstanding under the credit facility. Deferred revenue, current portion, was $218.8 million, up 12.3%, and remaining performance obligations were $1.4 billion, up 16.7%.
Management highlighted four U.S. enterprise renewals covering institutions that collectively hold more than $900 billion in assets, all signed ahead of schedule with expanded commitments to AI tools. nCino also signed a development finance institution in Germany, landed an Iowa community bank for Commercial Onboarding and Account Opening, and added Hachijuni Nagano Bank in Japan. An Indiana credit union became its largest credit union customer for mortgage. The company bought back about 4.2 million shares during the quarter at an average price of $15.41 for roughly $65 million, and finalized a $100 million accelerated share repurchase at $16.57 per share. The board authorized another $100 million program. International made up 22.6% of total revenues in the quarter.
Guidance points to continued expansion. For the third quarter ending October 31, 2026, the company guides non-GAAP operating income to $42.0 million to $44.0 million. For the full fiscal year 2027, it guides non-GAAP operating income to $171.0 million to $174.0 million, free cash flow to $137.0 million to $142.0 million, and annual contract value at period end to $662.5 million to $667.5 million. Management framed the outlook around AI adoption and the migration to asset-based pricing rather than around any single quarter.
Risks are not trivial. nCino operates in a fluctuating interest rate environment that has weighed on U.S. mortgage demand. It carries an accumulated deficit of $355.7 million and $275.4 million of debt, and its 10-Q cites dependence on third-party AI models, evolving AI regulation, the Salesforce relationship, customer concentration, and the chance that buybacks get curtailed. A valuation allowance still applies to deferred tax assets in several jurisdictions, including the U.S. and the U.K., though management says a partial release is reasonably possible within the next 12 months.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2027 | Q1 FY2027 | QoQ | Q2 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $161.0M | $159.4M | +1.0% | $148.8M | +8.2% |
| Gross profit | $100.8M | $100.9M | -0.2% | $88.1M | +14.4% |
| Gross margin | 62.6% | 63.3% | -0.7 pp | 59.2% | +3.4 pp |
| Research & development | $31.0M | $28.9M | +7.5% | $34.7M | -10.5% |
| Sales & marketing | $36.9M | $33.7M | +9.6% | $37.3M | -0.9% |
| General & administrative | $19.2M | $17.2M | +11.3% | $25.5M | -24.8% |
| Total operating expenses | $87.2M | $79.8M | +9.2% | $97.4M | -10.5% |
| Operating income (loss) | $13.6M | $21.1M | -35.5% | -$9.3M | +246.5% |
| Operating margin | 8.5% | 13.3% | -4.8 pp | -6.3% | +14.7 pp |
| Net income (loss) | $6.4M | $15.0M | -57.3% | -$13.7M | +146.6% |
| Net margin | 4.0% | 9.4% | -5.4 pp | -9.2% | +13.2 pp |
| Diluted EPS | $0.05 | $0.12 | -$0.07 | -$0.13 | +$0.18 |
Risks
Management states the company is operating in a fluctuating interest rate environment with inflationary pressures, which has negatively impacted the U.S. real estate market and demand for mortgages and mortgage-related products, weighing on the U.S. mortgage business.
Landing new customers requires displacing legacy point solutions and internal software, with sales cycles generally running six to nine months for smaller FIs and 12 to 18 months or more for larger FIs; success also depends on implementing the asset-based pricing model begun in fiscal 2025.
Growth depends on implementing AI capabilities in ways customers perceive as adding value, and research and development allocated overhead rose partly from internal investments in AI technology, indicating competitive pressure in banking intelligence.
The platform is dependent on Salesforce infrastructure and CRM resale; cost of subscription revenues rose $2.1 million in the quarter and $4.2 million year to date on higher Salesforce user fees, while total subscription cost increased $1.9 million for the quarter and $5.1 million year to date.
Growth increasingly requires penetrating markets outside the U.S., which accounted for 22.6% of total revenues for the three months ended July 31, 2026 and 22.7% for the six months ended July 31, 2026, exposing results to execution and geographic concentration risks.
The March 2026 incremental $200.0 million term loan and revolver draw increased leverage, with interest expense up $0.8 million for both the three and six months ended July 31, 2026; accumulated deficit stood at $355.7 million as of July 31, 2026 and $78.5 million of borrowing capacity was used.
Professional services and other revenues decreased $0.5 million for the quarter and $0.6 million year to date, and that segment still generated negative gross margins of 15.8% and 9.7% for the three and six months ended July 31, 2026, so overall profitability depends on continued subscription mix shift.
Results reflect lower headcount following the second quarter fiscal 2026 workforce reduction, with research and development headcount down 9 from July 31, 2025 to July 31, 2026; the company continues to depend on personnel to deliver implementation, support, and product innovation.
Beginning in 2027 the company may redeem, or be required by holders to redeem, the non-controlling interest in nCino K.K. under a prescribed revenue-based formula; the redeemable non-controlling interest balance rose to $15.4 million as of July 31, 2026 from $12.7 million as of January 31, 2026.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
Non-GAAP Operating Income
Non-GAAP Gross Margin
Total customers
Summary, forecast, risks and KPIs are extracted from nCino, Inc.'s SEC filings for Q2 FY2027 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.