nCino delivered a major profitability improvement in the second quarter of fiscal 2027 as revenue growth, subscription expansion and operating leverage pushed the banking software company from a GAAP operating loss to positive operating income.
Total revenue increased 8% year-over-year to $161 million, while subscription revenue rose 10% to $143.5 million. Subscription revenue represented roughly 89% of quarterly revenue, reinforcing the recurring nature of nCino’s business model.
The largest change came in profitability. GAAP operating income reached $13.6 million compared with a $9.3 million operating loss a year earlier. GAAP operating margin reached 8%, representing an improvement of approximately 1,500 basis points. Non-GAAP operating income increased 36% to $40.8 million, while non-GAAP operating margin expanded 500 basis points to 25%.
Cash generation improved even faster. Second-quarter free cash flow increased 170% to $34 million from $12.6 million. For fiscal 2027, nCino expects free cash flow of $137 million to $142 million, alongside total revenue of $644 million to $647 million and subscription revenue of $573.5 million to $576.5 million.
The company is also putting substantial capital behind its shares. nCino repurchased approximately $65 million of stock in open-market transactions during the quarter and finalized a previously announced $100 million accelerated share repurchase. Its board then authorized another $100 million repurchase program.
nCino said four large U.S. enterprise customers representing more than $900 billion in assets renewed multi-year agreements ahead of schedule and expanded commitments to use its AI tools and functionality. The company is positioning its platform around agentic AI for regulated financial institutions.
KEY QUOTES:
“We delivered an exceptional second quarter of fiscal 2027, once again exceeding all financial guidance. We are seeing many of our largest customers consolidating more of their most critical operations on nCino and expanding their commitments to include our market leading AI capabilities.”
Sean Desmond, CEO of nCino
