nCino, Inc. Discusses AI-Driven Banking Solutions and Growth Strategy at Baird Global Consumer, Technology & Services Conference 2025

Key Takeaways

TL;DR: nCino is leveraging its leadership in cloud banking to drive next-gen growth through an integrated AI strategy, solidifying market share across commercial, consumer, and mortgage lending. With a unique, data-driven platform and strategic acquisitions powering its AI initiatives, mgmt. expects robust margin and rev. expansion, positioning the co. to hit Rule of 40 by Q4 next year.

• Investment Case & Market Positioning
  • Global Leader & Platform Play: nCino's platform unifies onboarding, account opening, loan origination, and portfolio monitoring across commercial, consumer, and mortgage lines. CEO Sean Desmond emphasized the co.’s mission to transform financial svcs. and lead banks into the AI era.
  • Deep Data Advantage: With 2,700 global customers and the "world's richest data set in fintech," nCino leverages its process-centric data to drive efficiency and target vertical AI oppt'ys, distinguishing it from purely horizontal tech vendors.
• AI Strategy & Innovation
  • Three-Fold AI Approach:
    • Banking Adviser Skills: Already 18 live skills in GA aimed at automating daily roles (loan officers, credit analysts, underwriters).
    • Agentic AI: Wrapping AI agents around existing workflows to move from multi-human involvement (e.g., 10 humans) to a near “path to one” scenario in tasks like commercial loan origination.
    • Data Backbone Expansion: The acquisition of Sandbox Banking enables seamless integration of third-party data, exponentially enhancing value from the existing dataset.
  • Monetization Model: Transitioning from traditional per-seat fees to an outcome-based pricing model tied to "intelligence units." This model links delivered efficiency (e.g., a 0.25% improvement in profitability) directly to fees, supporting sustainment and upside potential.
• Financial Outlook & Execution
  • Bookings & Revenue Momentum: CFO Greg Orenstein noted an ACV bookings midpoint guidance increase of $3M over last year. The Q1 results beat guidance (by $1.8M overall, w/ $800K from mortgage) and suggest vigorous deal closure.
  • Expense Discipline & Efficiency: Continued focus on cost mgmt. and operational efficiency supports growth and margin expansion as the co. executes its bookings plan.
  • Rule of 40 Target: The firm targets achieving Rule of 40 by Q4 next year, supported by recent restructuring decisions that help streamline operations and drive profitability.
• Sector & Product-Specific Growth
  • Diverse Lending Segments:
    • Commercial: Roughly 50% of total rev.; steady adoption w/ traction among top-tier banks (15 of the top 30 U.S. banks).
    • Consumer: Increasing momentum w/ a recent lighthouse customer causing cascading industry interest, plus consistent growth w/ regional and community banks.
    • Mortgage: Transitioned successfully from IMB to larger banks post-SimpleNexus acquisition, achieving stable and even share-gaining high SD growth despite challenging rate environments.
  • Pricing Evolution: The move from a seat-based model to a platform fee w/ volume thresholds supports rev. acceleration when customers exceed base loan numbers, ensuring rev. overages as volumes recover.
• Acquisition Integration & Future M&A
  • Strategic Acquisitions: Recent integrations (DocFox, FullCircl, Allegro for credit unions, Sandbox Banking) have expanded the addressable market and enriched product capabilities for core and AI strategies.
  • "Digestion Mode": Mgmt. highlighted that while M&A activity may slow, current acquisitions are still being integrated into the broader platform to further drive growth without solely relying on additional deals.
• Customer & Market Adoption Insights
  • End-to-End Digital Experience: The SimpleNexus acquisition established a unified front-end experience, reinforcing customer retention by replacing multiple legacy systems.
  • Global Penetration: nCino’s customer base spans top banks in the U.S., U.K., Ireland, Asia-Pac (notably Tokyo), and emerging oppt'ys in EMEA and credit unions – underscoring a significant growth runway beyond the initial 30% penetration seen in select markets.

In summary, nCino’s dual focus on robust AI integration and maintaining a strong, scalable platform across multiple lending segments positions the co. for significant rev. acceleration, margin expansion, and enhanced market share globally. The mgmt.'s clear articulation of near-term execution and long-term strategic initiatives provides a compelling case for sustained growth and further investment appeal to stakeholders.

Call Q&A

• Unknown Analyst: How do you take your background in product and customer success and apply it to your goals as CEO?
  • Sean Desmond: I focus on delivering on promises to customers, removing friction, and ensuring streamlined implementations. My experience in consulting and past inflection points helps drive change, esp. w/ AI.
• Unknown Analyst: How are you thinking about budgeting and outlook for this year?
  • Gregory D. Orenstein: Our customer base is healthy, and we see increasing pipeline activity. We're focused on executing our bookings plan and managing expenses efficiently to build momentum throughout the year.
• Unknown Analyst: Is nCino a Rule of 40 biz or Rule of 50?
  • Gregory D. Orenstein: We aim to be a Rule of 40 by the fourth quarter of next year. We took restructuring actions to help meet this target.
• Unknown Analyst: How do you see the AI oppt'y in banking?
  • Sean Desmond: The oppt'y is massive, esp. in a regulated environment. We've been capturing data since 2013, driving efficiency into banks, and now we're enhancing this w/ AI through banking adviser skills, Generative AI, and a data backbone.
• Unknown Analyst: How do you monetize AI elements like banking adviser skills and Generative AI?
  • Sean Desmond: We shift from per user pricing to outcome-based pricing. Banking adviser has a base price, and as outcomes are delivered, fees increase based on intelligence units used.