nCino (NCNO) Stock Drops 5% Despite Strong Q2 Earnings Beat

Key Takeaways

• Q2 revenue reached $161 million, representing 8.2% year-over-year growth and surpassing the $158.9 million consensus
• Earnings per share of $0.05 exceeded analyst projections of $0.03
• Adjusted operating income totaled $40.83 million, outperforming forecasts by more than 10%
• Annual revenue outlook increased modestly to a $645.5 million midpoint
• Company unveiled a $100 million share buyback program; shares declined approximately 5% to $19.70

Shares of nCino tumbled roughly 5% to $19.70 during Wednesday’s premarket session following the release of second-quarter fiscal 2027 earnings, even though the banking software provider exceeded Wall Street expectations across key metrics.

nCino, Inc., NCNO

The company posted quarterly revenue of $161 million for the period ending in July, marking an 8.2% increase from the previous year. This figure surpassed analyst projections of $158.9 million by 1.3%.

Subscription-based revenue, which forms the foundation of nCino’s business operations, reached $143.5 million, exceeding the anticipated $141.5 million.

On a GAAP basis, earnings per share registered at $0.05, surpassing the Street’s $0.03 forecast by two cents.

The company’s adjusted operating income totaled $40.83 million, outperforming estimates of $36.91 million by over 10%. This translates to an operating margin of 25.4%.

Billings climbed to $158.1 million, showing 13% year-over-year expansion. Across the trailing four quarters, billings have grown at an average annual rate of 9.6%.

Chief Executive Sean Desmond highlighted that major clients are broadening their adoption of nCino’s platform, particularly its artificial intelligence features. “Deploying AI in financial services demands deep domain context and expertise, and nCino is uniquely positioned to deliver it at scale globally,” Desmond stated.

Conservative Outlook Projected

Looking ahead to the third quarter, nCino projected revenue between $161.25 million and $163.25 million, with subscription revenue ranging from $143.25 million to $145.25 million. The Q3 midpoint stands at approximately $162.3 million, aligning with analyst forecasts.

The full-year revenue projection received a modest upward revision to $644 million through $647 million, establishing a midpoint of $645.5 million—a slight increase from the previous $644 million midpoint.

Wall Street analysts tracking the company anticipate revenue expansion of 7.8% during the coming 12 months. This represents a deceleration from the 10.9% annualized growth rate recorded over the preceding two years.

Share Repurchase Program and Financial Metrics

nCino’s board of directors greenlit a fresh $100 million stock repurchase authorization. The company has already executed $300 million in buybacks since April 2025.

Free cash flow margin registered at 21.1% during the quarter, representing a decline from the previous quarter’s 50.7%.

Operating margin showed improvement, reaching 8.5% compared to negative 6.2% during the corresponding period last year.

Year-to-date in 2026, NCNO shares have declined 19%. The stock currently commands a market capitalization of roughly $2.30 billion.

The company’s customer acquisition cost payback period stood at 26.4 months, a metric that research analysts at one firm characterized as efficient for a software enterprise of nCino’s scale.

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