Banking software provider nCino (NASDAQ: NCNO) reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 8.2% year on year to $161 million. The company expects next quarter’s revenue to be around $162.3 million, close to analysts’ estimates. Its GAAP profit of $0.05 per share was $0.02 above analysts’ consensus estimates.

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"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. The confidence behind those commitments reflects a simple reality: deploying AI in financial services demands deep domain context and expertise, and nCino is uniquely positioned to deliver it at scale globally," said Sean Desmond, CEO at nCino.

Company Overview

Born from the internal technology needs of a community bank in 2011, nCino (NASDAQ: NCNO) provides cloud-based software that helps financial institutions streamline client onboarding, loan origination, and account opening processes.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, nCino’s sales grew at a decent 21% compounded annual growth rate over the last five years. Its growth was slightly above the average software company and shows its offerings resonate with customers.

Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. nCino’s recent performance shows its demand has slowed as its annualized revenue growth of 10.9% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

This quarter, nCino reported year-on-year revenue growth of 8.2%, and its $161 million of revenue exceeded Wall Street’s estimates by 1.3%. Company management is currently guiding for a 6.6% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 7.8% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges.

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Billings

Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

nCino’s billings came in at $158.1 million in Q2, and over the last four quarters, its growth was underwhelming as it averaged 9.6% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers.

Customer Acquisition Efficiency

The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.

nCino is very efficient at acquiring new customers, and its CAC payback period checked in at 26.4 months this quarter. The company’s rapid recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments.

Key Takeaways from nCino’s Q2 Results

We were impressed by how significantly nCino blew past analysts’ billings expectations this quarter. We were also excited its adjusted operating income outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue guidance for next quarter was in line. Overall, we think this was a decent quarter with some key metrics above expectations. Investors were likely hoping for more, and shares traded down 3.6% to $19.19 immediately following the results.

So should you invest in nCino right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).