- Revenue Growth: Q3 FY2026 total revenue rose 10% YoY to $152.2M, with subscription revenue up 11% to $133.4M.
- Non-GAAP Operating Margin: Achieved 26% non-GAAP operating margin ($39.9M) in Q3, driven by AI efficiency and cost discipline.
- AI Adoption Momentum: 110+ customers purchased Banking Advisor AI units, with incremental AOI margins hitting 90% in Q3 and 130% in Q4 guidance.
- Share Repurchase Completion: Executed $100M share buyback program, repurchasing 1.4M shares in Q3, signaling confidence in valuation.
- ACV Conversion Progress: 27% of ACV now converted to platform pricing, with 10% like-for-like revenue lift under new pricing model.
Operational Highlights and AI Strategy
nCino's AI strategy is driving demand, with over 110 customers purchasing Banking Advisor intelligence units. The company's incremental AOI margins in the quarter were close to 90%, and 130% for fiscal 4Q, attributed to AI, cost discipline, and a healthy gross margin. The management team highlighted that customers remain aggressive on tech investments, with AI driving the narrative, and most have an increase in their IT budgets this year.
Guidance and Outlook
nCino expects total revenues of $591.9 million to $593.4 million for fiscal '26, up 10% at the midpoint, and subscription revenues of $520.5 million to $522 million, up 11% at the midpoint. Non-GAAP operating income is expected to be $127.2 million to $128.2 million, up 33% over fiscal '25. The company also expects its fiscal '26 outlook for ACV to remain $564 million to $567 million, representing growth of 10% in constant currency.
Valuation and Growth Prospects
With a P/S Ratio of 4.62 and EV/EBITDA of 76.13, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 9.7%. The company's focus on expanding deals, making every customer a platform customer, and driving adoption of its AI and digital solutions positions it well for future growth. The international opportunity, particularly in EMEA, is expected to outpace overall company growth.
Key Drivers and Future Initiatives
The company's growth vectors driving ACV growth include serving credit unions, mortgage and onboarding products, AI offerings, and traction in EMEA. nCino is focused on creating value and improving outcomes for customers across the platform, which drives productive discussions during renewals. The company is also focused on holding customers closely and being side-by-side with them on the journey, driving agent adoption, and making it a change management problem rather than a technology problem.