Q2 2025 nCino Inc Earnings Call

Good day, and thank you for standing by and welcome to the Enceano 2nd Quarter, fiscal year 2025 financial result conference call. At this time, our participants are in a listen-only mode. After this week's presentation, we will be a question and answer session. After the question during the session, you will need to press star 1-1 on your telepom.

Speaker Change: You will then hear an automated message advising your hand is raised. So we'll draw your question, please press star one one again. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to you speaker today, Harrison Masters, director and investor relations, please go ahead.

Speaker Change: Good afternoon and welcome to Insino's second quarter fiscal 2025 earnings call. With me on today's call, our Pierre Naude, Insino's Chairman and Chief Executive Officer, and Greg Orenstein, Insino's Chief Financial Officer.

Speaker Change: During the course of this conference call, we will make forward-looking statements regarding trends, strategies and the anticipated performance of our business.

Speaker Change: These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date, and are subject to various risks and uncertainties described in our SEC filings, and other publicly available documents that financial services industry and global economic conditions.

Speaker Change: and see no disclaims any obligation to update or revise any forward-looking statements.

Speaker Change: Further, on today's call, we will also discuss certain non-gap metrics that we believe aid in the understanding of our financial results.

Speaker Change: A reconciliation to comparable gap metrics can be found in today's earnings release.

Speaker Change: which is available on our website, and as an exhibit to the form 8K, first of the SCCC just before the fall, as well as the Earnings presentation on our investor relations website at investor.com. With that, I will turn the call over to Pierre.

Pierre Naude: Thank you, Harrison. Welcome, and thank you for joining us today. We are very pleased with our second quarter for national results. Once again, exceeding our guidance for both subscription and total revenues as well as for non-gap operating income.

Speaker Change: Before I turn the call over to Greg to provide you with additional financial details on the second quarter I would like to argue through what we are seeing in the market.

Unknown Executive: 2nd quarter, Fiscal Year 2025 Financial Results Conference call. At this time, I'll participate on a listen only mode. After I speak his presentation, there'll be a question and answer session. To ask the question during the session, you'll need to press star 1-1 on your telephone. You will have been here to automate a message advising your hand is raised. So would draw your question, please press star 1-1 again.

Speaker Change: In the United States, sentiment in the financial services industry has improved quite a bit from a year ago, with FI balance sheets generally healthy and net interest margin headwins a baby.

Speaker Change: Buying the heavier in the US enterprise and community and regional markets accelerated in the first half of fiscal 25 with gross bookings in the US up 36% over the first half of last year including mortgage.

Unknown Executive: Please be advised that today's conference is being recorded.

Unknown Executive: I would now like to hand the conference over to you.

Speaker Change: and up 67% without mortgage.

Harrison Masters: So do you speak or today, Harrison Masters, director, investor relations, investor relations, please go ahead. Good afternoon. Welcome to Ncino 2nd quarter, fiscal 2025 earnings call. With me on today's call, our Pierre Naude, Ncino's Chairman and Chief Executive Officer, and Greg Orenstein, Ncino's Chief Financial Officer. During the course of this conference call, we will make forward-looking statements regarding trends, strategies, and the anticipated performance of our business. These forward-looking statements are based on management's current views and expectations, entailed certain assumptions made as of today's date, and are subject to various risk and uncertainties described in our SEC filings and other publicly available documents, the financial services industry and global economic conditions. Ncino just claims any obligation to update or revise any forward-looking statements. Further, on today's call, we will also discuss certain non-gat metrics that we believe aid in the understanding of our financial results.

Speaker Change: This momentum has been driven primarily by expansion opportunities within our existing customer base as more and more customers embrace our single platform.

Speaker Change: As of the end of second quarter, their U.S. enterprise and community and regional businesses were both over 50% of their way to their total gross booking goals for the year.

Speaker Change: In our US mortgage business, we signed six new mortgage customers in the second quarter.

Speaker Change: Four of which were financial institutions.

Speaker Change: Lending volumes and market activity determine relatively suppressed in what would otherwise historically be a seasonally strong selling quarter.

Speaker Change: We may tell you our view that the US mortgage revenues will be diluted to over all grotes for in the world.

Harrison Masters: A reconciliation to comparable gap metrics can be found in today's earnings release, which is available on our website, and as an exhibit to the form 8K, first, the SEC just before the fall, as well as the earnings presentation on our investor relations website at investor.ncino.com.

Speaker Change: but we expect interest rate cuts to be a catalyst for re-accelerated growth in this business starting in the fourth quarter and as we look into next year, consistent with our previous comments.

Speaker Change: We are very pleased to have successfully navigated through the difficult mortgage market over the past couple of years.

Pierre Naude: With that, I will turn the call over to Pierre. Thank you, Harrison.

Speaker Change: and with approximately 40% of our U.S. mortgage logos.

Pierre Naude: Welcome and thank you for joining us today. We are very pleased with our second quarter financial results. Once again, exceeding our guidance for both subscription and total revenues, as well as for non-gap operating income.

Speaker Change: and 45% of our U.S. mortgage revenues now on the new pricing model. We believe we are very well situated to benefit from the expected increase in mortgage activity, including from one of the largest home builders in the United States.

Pierre Naude: Before I turn the call over to Greg to provide you with additional financial details on the second quarter, I would like to argue through what we are seeing in the market. In the United States, sentiment in the financial services industry has improved quite a bit from a year ago, with FI balance sheets generally healthy and net interest margin headwinds abating. Buying behavior in both the US enterprise and community and regional markets accelerated in the first half of fiscal 25, with gross bookings in the US up 36% over the first half of last year, including mortgage and up 67% without mortgage.

Speaker Change: which began the nationwide rollout of the Insino mortgage solution in July.

Speaker Change: Turning to our business outside of the US, our pipelines have grown nicely this time last year. But the international markets we operate in remain more challenged than in the US.

Speaker Change: As a reminder, our pipelines outside of the US are comprised primarily of new logo opportunities, which still inherently take longer to close in any business climate and can be much more lumpy in light of the large bank nature of this business.

Speaker Change: That said, we do expect our international operations to add a healthy number of new logos in the second half of the year.

Pierre Naude: This momentum has been driven primarily by expansion opportunities within our existing customer base as more and more customers embrace our single platform. As of the end of second quarter, the US enterprise and community and regional businesses were both over 50% of their way to their total gross bookings goals for the year.

Speaker Change: You'll recall on your fourth quarter of the earnings call I said having roughly around 40% of your total growth bookings in the first half of the year is a more normal picture for the year.

Speaker Change: Girls' bookings for the first six months were approximately 36% towards our annual goal. I lighted by overperformance in our legacy US business while our US mortgage and international businesses were more challenged.

Pierre Naude: In our US mortgage business, we signed six new mortgage customers in the second quarter. Four of which were financial institutions, lending volumes and market activity determined relatively suppressed in what would otherwise historically be a seasonally strong selling quarter. We maintain our view that US mortgage revenues will be dilutive to overall growth for Ncino the fiscal year. But we expect interest rate cuts to be a catalyst for reaccelerated growth in this business, starting in the fourth quarter.

Speaker Change: As we look at our sales pipelines, we believe we are on track to meet our gross bookings goal for the year.

Speaker Change: We are particularly encouraged to see an increasingly number of large enterprise opportunities in both our newer and established markets.

Speaker Change: On a net-booking space, we ended the first half of the year up approximately 17% year over year. And we believe we are on track to our goal of net-bookings being up 50% year over year.

Pierre Naude: And as we look into next year, consistent with our previous comments. We are very pleased to have successfully navigated through the difficult mortgage market over the past couple of years. And with approximately 40% of our US mortgage logos and 45% of our US mortgage revenues. Now on our new pricing model, we believe we are very well situated to benefit from the expected increase in mortgage activity, including from one of the largest home builders in the United States, which began their nationwide rollout of the Ncino mortgage solution in July.

Speaker Change: In the second quarter, over half of our total company bookings came from outside of commercial lending, including over half of new customer deals and we added a new consumer lending and five new deposit account opening customers.

Speaker Change: Two of which added buzz solutions.

Speaker Change: Legacy Systems and processes continue to bog down the middle and back office of financial institutions.

Speaker Change: and our digital channels and automation are bringing speed and efficiency they never felt possible.

Speaker Change: For example, a $2 billion bank in New England shared they have taken a 41-minute deposit account opening process down to just four minutes for business clients and removed the need for a banker to get involved.

Pierre Naude: Turning to our business outside of the US, our pipelines have grown nicely this time last year. But the international markets we operate in remain more challenge than in the US. As a reminder, our pipelines outside of the US are comprised primarily of new logo opportunities, which do inherently take longer to close in any business climate and can be much more lumpy in light of the large bank nature of this business. That said, we do expect our international operations to add a healthy number of new logos in the second half of the year.

Speaker Change: Another community bank in Tennessee produced approval times for consumer loans by 95%.

Speaker Change: In the consumer banking world, the speed with which a financial institution can full-fold requests for products and services as everything to do with client satisfaction.

Speaker Change: Well, I quickly, yes, Enfino Consumer Landing and the positive count opening customers are realizing a true competitive advantage.

Pierre Naude: You'll recall on our fourth quarter earnings call, I said having roughly around 40% of our total gross bookings in the first half of the year is a more normal picture for the year. Gross bookings for the first six months were approximately 36% towards our annual goal highlighted by overperformance in our legacy US business, while our US mortgage and international businesses were more challenged. As we look at our sales pipelines, we believe we are on track to meet our gross bookings goal for the year.

Speaker Change: and was more product-depth, we are delivering even more value to the line-through business already on your platform. For example, a 20 billion dollar bank became one of our largest portfolio and latest customers.

Speaker Change: expanding their adoption from commercial lending and deposit accounting to also include portfolio and ready for CR-E stress testing.

Speaker Change: By bringing back office what fully leveled risk analysis on to the same platform used for designations, this bank is enhancing the availability and suitability of data for risk management.

Pierre Naude: We are particularly encouraged to see an increasingly number of large enterprise opportunities in both our newer and established markets. On a net booking basis, we ended the first half of the year up approximately 17% year over year, and we believe we are on track to our goal of net bookings being up 50% year over year. In the second quarter, over half of our total company bookings came from outside of commercial lending, including over half of new customer deals, and we added eight new consumer lending and five new the project account opening customers, two of which added both solutions. Legacy systems and processes continue to bog down the middle and back office of financial institutions, and our digital channels and automation are bringing speed and efficiency, they never thought possible.

Speaker Change: A gain and gain, customers demonstrate that adopting multiple solutions on a single platform from Machino yields a consistent and more enjoyable client experience and more efficient operations within the institution.

Speaker Change: Ephraines Econtinues to be a core mandate for every financial institution, and we continue to make investments to reduce the cost of ownership by reducing implementation timelines.

Speaker Change: Hardening, Pluck and Play Fair Party decorations and streamlining ongoing administration.

Speaker Change: One of the largest banks in New Zealand when life was in Ceno during the second quarter. A key milestone in the program that will allow this FI to retire over 40 legacy systems.

Pierre Naude: For example, a $2 billion bank in New England shared they have taken a 41-minute deposit account opening process down to just four minutes for business clients and removed the need for a banker to get involved.

Speaker Change: We aim for that level of efficiency across every business line in the financial institution.

Speaker Change: Turning to Banking Advisor, we are quite pleased with the progress we have made bringing our unique data capabilities at AI to financial services to this product family.

Pierre Naude: Jeff. Another community bank in Tennessee reduced approval times for consumer loans by 95% In the consumer banking world, the speed with which the financial institution can fulfill requests for products and services has everything to do with client satisfaction. With a quicker yes, and Cino consumer lending in the positive account opening, customers are realizing a true competitive advantage.

Speaker Change: Even though backing advisor only became generally available in the second quarter.

Speaker Change: We signed eight banking advisor deals in the quarter across the community, regional and enterprise market segments in the U.S. and Canada. And I've taken our first customer live with it.

Speaker Change: and Neurotus drafting skills have strongly resonated with FIs across asset classes. But representing a diverse cross section of our customer base.

Pierre Naude: It was more product depth, we are delivering even more value to the lines of business already on your platform. For example, a 20 billion dollar bank became one of our largest portfolio and ladies customers, expanding their adoption from commercial lending and deposit account opening to also include portfolio and ladies for CRE stress testing. By bringing back office portfolio level risk analysis onto the same platform used for originations, this bank is enhancing the availability and suitability of data for risk management. Again and again, customers demonstrate that adopting multiple solutions on a single platform from Ncino yields a consistent and more enjoyable client experience and more efficient operations within the institution.

Speaker Change: Long-term, our banking advisor, roadmap is focused on opportunities to go even deeper with intelligence and automation. In able-buy our unique access to financial enthusiasts data, which the team has done a great job obtaining consent to use.

Speaker Change: On the M&A front, we are pleased with the progress we have made integrating both dark props and a legural. In particular, the market responds to the commercial onboarding and account opening functionality. We acquired with dark props as far exceeded our expectations.

Speaker Change: We are actively exploring opportunities to accelerate this integration along with the rollout of this product outside of the US.

Speaker Change: Especially as customers are looking to purchase this product as part of our single platform versus on a standalone basis.

Speaker Change: With that, I'll end it over to Greg to cover the Alpha Nationals.

Pierre Naude: Efficiency continues to be a core mandate for every financial institution and we continue to make investments to reduce the cost of ownership by reducing implementation timelines, hardening plug and play third party integrations and streamlining ongoing administration. One of the largest banks in New Zealand when live within Cino during the second quarter, a key milestone in the program that will allow this FI to retire over 40 legacy systems. We aim for that level of efficiency across every business line in the financial institution.

Greg Orenstein: Thank you, Pierre, and thanks everyone for joining us this afternoon to review our second quarter fiscal 2025 financial results.

Greg Orenstein: Please note that all members' reference to my remarks are only non-gap basis and let's otherwise stated.

Speaker Change: A reconciliation to comparable gap metrics can be found in today's earnings release, which is available on our website and as an exhibit to the Form 8K furnished with the SEC just before this call.

Speaker Change: and Pierre Naude, we are very pleased with our second quarter financial results.

Speaker Change: Total revenues for the second quarter of fiscal 25 will $132.4 million, an increase of 13% year over year.

Pierre Naude: Turning to banking advisor, we are quite pleased with the progress we have made bringing our unique data capabilities and AI to financial services to this product family. Even though banking advisor only became generally available in the second quarter, we signed eight banking advisor deals in the quarter across the community, regional and enterprise market segments in the US and Canada and have taken our first customer live with it. Our knowledge base and narratives drafting skills have strongly resonated with FIs across asset classes, representing a diverse cross section of our customer base.

Speaker Change: Subscription revenues for the second quarter were 113.9 million dollars, an increased up 14% year over year, representing 86% of total revenues, both ahead of the top end of our guidance.

Speaker Change: Mortgage subscription revenues were approximately $17 million, or 15% of subscription revenues in the quarter, representing year over year growth of 4%.

Speaker Change: Churn, including for mortgage, continue to moderate through the second quarter and remained in-line with our $20.5 million churn forecast for the year.

Pierre Naude: Long term, our banking advisor roadmap is focused on opportunities to go even deeper with intelligence and automation, enabled by our unique access to financial institutions data, which the team has done a great job obtaining consent to use.

Speaker Change: As we have discussed, Morgan's term peaked in October last year and total term peaked in the fourth quarter, which negatively impacts our growth rates this year.

Speaker Change: Professional Services revenues were $18.5 million in the quarter, growing 7% year over year.

Pierre Naude: On the M&A front, we are pleased with the progress we have made integrating both DocFox and Allegro. In particular, the market responds to the commercial onboarding and account opening functionality. We acquired with DocFox as far exceeded our expectations. We are actively exploring opportunities to accelerate this integration along with the rollout of this product outside of the US, especially as customers are looking to purchase this product as part of our single platform versus on a standalone basis.

Speaker Change: Our customers and prospects continue to exhibit a sensitivity to consulting rates, which we are addressing by more strongly recommending gold standard out-of-the-box deployments in order to reduce implementation timelines and administration costs post-go live.

Speaker Change: 9 US revenues were $27.5 million or 21% of total revenues in the second quarter of 25% year

Speaker Change: International revenues are more dependent on new customer sales given the smaller installed customer base and the fact some of our newer solutions are not yet available outside of the United States.

Greg Orenstein: With that, I'll end it over the Greg to cover our financials. Thank you, Pierre, and thanks everyone for joining us this afternoon to review our second quarter fiscal 2025 financial results. Please note that all numbers referenced in my remarks are on a non-gap basis unless otherwise stated. A reconciliation to comparable gap metrics can be found in today's earnings release, which is available on our website and as an exhibit to the form 8k furnished with the SEC just before this call.

Speaker Change: We expect further moderation of international revenue's growth, more in-line with overall companies revenue growth, until the new logo sales we plan to sign in a second half of this year impact revenues.

Speaker Change: Gap, gross profit for the second quarter of fiscal 25 was $86.7 million, an increase of 13% year over year.

Speaker Change: Gapgroge's margin with 66% compared to 65% in the second quarter of fiscal 24.

Greg Orenstein: As Pierre noted, we are very pleased with our second quarter financial results. Total revenues for the second quarter fiscal 25 were $132.4 million. An increase of 13% year over year. Subscription revenues for the second quarter were $113.9 million. An increase of 14% year over year. Representing 86% of total revenues both ahead of the top end of our guidance. Mortgage subscription revenues were approximately $17 million or 15% of subscription revenues in the quarter.

Speaker Change: Nongap Gross Margin benefited from our amended agreement with Salesforce and from the larger mix of subscription revenues.

Speaker Change: Non-gap operating income for the second quarter of fiscal 25 was $19.3 million, compared with $11.2 million in the second quarter of fiscal 24.

Speaker Change: Our non-gap operating margin for the second quarter was 15% compared with 10% in the second quarter of fiscal 24.

Speaker Change: Our annual insight user conference contributed approximately $2 million to a sequential increase in sales and marketing costs.

Greg Orenstein: Representing year over year growth of 4%. Churn, including for mortgage, continued to moderate through the second quarter and remained in line with our $20.5 million churn forecast for the year. As we have discussed, mortgage churn peaked in October last year and total churn peaked in the fourth quarter, which negatively impacts our growth rates this year. Professional services revenues were $18.5 million in the quarter growing 7% year over year. Our customers and prospects continue to exhibit a sensitivity to consulting rates, which we are addressing by more strongly recommending gold standard out of the box deployments in order to reduce implementation timelines and administration costs post go live.

Speaker Change: Additionally, the acquisition is completed in the first quarter contributed approximately $7 million of annualized costs to research and development.

Speaker Change: Non-gap net income attributable to in Sino for the second quarter of fiscal 25 was $15.8 million or 14 cents per diluted share compared to $10 million or 9 cents per diluted share in the second quarter of fiscal 24.

Speaker Change: Our remaining performance obligation, or RPO, was $1.04 billion as of July 31, 2024, up 12% over $929 million as of July 31, 2023.

Speaker Change: with $698 million in the less than 24 months category, up 10% from $636 million as of July 31, 2023.

Greg Orenstein: Nine U.S, revenues were $27.5 million or 21% of total revenues in the second quarter of 25% year over year. International revenues are more dependent on new customer sales given the smaller installed customer base and the fact some of our newer solutions are not yet available outside of the United States. We expect further moderation of international revenues growth more in line with overall companies revenue growth until the new logo sales we planned to sign in the second half of this year impact revenues.

Speaker Change: We ended the second quarter with cash and cash equivalents of $126.8 million, including restricted cash.

Speaker Change: NetCash provided by operating activities was $5 million, compared to $12 million in the second quarter of fiscal 24.

Speaker Change: Capital expenditures were $444,000 in the quarter, resulting in free cash flow of $4.6 million for the second quarter of fiscal 25.

Greg Orenstein: Non-GAP gross profit for the second quarter of fiscal 25 was $86.7 million an increase of 13% year over year. Non-GAP gross margin with 66% compared to 65% in the second quarter of fiscal 24. Non-GAP gross margin benefited from our amended agreement with sales force and from the larger mix of subscription revenues. Non-GAP operating income for the second quarter of fiscal 25 was $19.3 million compared with $11.2 million in the second quarter of fiscal 24.

Speaker Change: We repaid $15 million on our revolving credit facility in the second quarter, and plan to pay down the remaining $40 million of borrowed, principal during the rest of this fiscal year as we generate cash.

Speaker Change: Note that unbuild accounts receivable has increased by $4.8 million since January 31st of this year.

Speaker Change: Unbuild accounts receivable are recorded when revenues earned on a contract exceed what has been billed to date for that contract.

Speaker Change: For Insino, this typically occurs when fees increase during the contract term, including under platform pricing arrangements, and revenue recognition aligns to the satisfaction of performance obligation rather than to billings.

Greg Orenstein: Our non-gap operating margin for the second quarter was 15%, compared with 10% in the second quarter of fiscal 24. Our annual insight user conference contributed approximately $2 million to a sequential increase in sales and marketing costs. Additionally, the acquisitions completed in the first quarter contributed approximately $7 million of annualized costs to research and development. Non-gap net income attributable to Ncino for the second quarter of fiscal 25 was $15.8 million, or $14 per diluted share, compared to $10 million or $0.9 per diluted share in the second quarter of fiscal 24.

Speaker Change: These platform pricing arrangements are becoming more commonplace for us as we execute on our strategy to evolve to a platform pricing model.

Speaker Change: Accordingly, comparisons to previous quarters calculated buildings may not accurately reflect trends in our business, and deferred revenues are increasingly less predictive of the revenues that will be recognized in subsequent periods.

Speaker Change: Turning to guidance.

Speaker Change: For the third quarter, we expect total revenues of $136 million to $138 million. With subscription revenues of approximately $117 million to $119 million.

Greg Orenstein: Our remaining performance obligation, our RPO, was $1.04 billion as of July 31st, 2024, of 12% over 900,000. We ended the second quarter with cash and cash equivalence of $126.8 million, including restricted cash. Net cash provided by operating activities was $5 million, compared to $12 million in the last 24 months category, up 10% from $636 million as of July 31st, 2023. In the second quarter of fiscal 24, capital expenditures were $444,000 in the quarter, resulting in free cash flow of $4.6 million for the second quarter of fiscal 25.

Speaker Change: For full fiscal year 25, we continue to expect total revenues of $538.5 million to $544.5 million.

Speaker Change: with subscription revenues of $463 million to $469 million.

Speaker Change: As noted, our chairman expectations for fiscal 25 currently remain in line with the $20.5 million we discussed on our two previous earnings calls.

Speaker Change: Our financial outlook includes 5% subscription revenues growth for U.S. mortgage this fiscal year.

Speaker Change: with no year-over-year growth expected in the third quarter.

Speaker Change: Our guidance maintains our assumption that increased mortgage running volumes do not start to positively impact revenues until the fourth quarter.

Speaker Change: We continue to assume banking advisors contribution to subscription revenues this year will be de minimus as we are offering it at an attractive initial price point to garner adoption.

Greg Orenstein: We repaid $15 million in our revolving credit facility in the second quarter, and planned to pay down the remaining $40 million of borrowed principal during the rest of this fiscal year as we generate cash. Note that UnBuild accounts receivable has increased by $4.8 million since January 31st of this year. UnBuild accounts receivable are recorded when revenues earned on a contract exceed what has been billed to date for that contract. For Encino, this typically occurs when fees increased during the contract term, including under platform pricing arrangements and revenue recognition aligns to the satisfaction of performance obligation rather than to billings.

Speaker Change: Our efforts to transition the company's revenue model to platform pricing continue in earnest.

Speaker Change: Our new and expansion sales with consumer lending, deposit accounting, and U.S. mortgage solutions are on platform pricing. And we continue to refine solution bundles pursuant to which we will roll out platform pricing across the remainder of our business later this year.

Speaker Change: Beginning with this formal pricing change, we expect banking adviser to be part of every new deal. And we expect usage will drive a more meaningful contribution to revenues next year and beyond.

Greg Orenstein: These platform pricing arrangements are becoming more commonplace for us as we execute on our strategy to evolve to a platform pricing model. Accordingly, comparisons to previous quarters calculated billings may not accurately reflect trends in our business, and deferred revenues are increasingly less predictive of the revenues that will be recognized in subsequent periods.

Speaker Change: Non-gap operating income in the third quarter is expected to be approximately $21 million to $22 million. And non-gap net income attributable to in Sino-Preshare to be 15 to 16 cents.

Speaker Change: This was based upon a weighted average of approximately 118 million diluted shares outstanding.

Speaker Change: For the full year, in light of the out performance in the second quarter, we are increasing our non-gap operating income outlook, and now expect non-gap operating income for fiscal 25 to be $87 million to $90 million.

Greg Orenstein: Turning to guidance. For the third quarter, we expect total revenues of $136 million to $138 million, with subscription revenues of approximately $117 million to $119 million. For full fiscal year 25, we continue to expect total revenues of $538.5 million to $544.5 million. With subscription revenues of $463 million to $469 million. As noted, our term expectations for fiscal 25 currently remain in line with the $2.5 million we discussed on our previous earnings calls.

Speaker Change: for full fiscal year 25, non-gap net income attributable to in seno per share is expected to be 66 to 69 cents based upon a weighted average of approximately 117 million basic shares outstanding.

Speaker Change: With that, we'll open the line for questions.

Speaker Change: and thank you. As a reminder to ask a question, please press star 1-1 on your telephone and wait through your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by and we compile the Q&A roster and one moment for our first question.

Greg Orenstein: Our financial outlook includes 5% subscription revenues growth for U.S, mortgage this fiscal year, with no year-over-year growth expected in the third quarter. Our guidance maintains our assumption that increased mortgage-learning volumes do not start to positively impact revenues until the fourth quarter. We continue to assume banking advisors contribution to subscription revenues this year will be diminimous as we are offering it at an attractive initial price point to garner adoption. Our efforts to transition the company's revenue model to platform pricing continue in earnest.

Speaker Change: and our first question comes from Adam Hotskiss from Goldman Sachs, you line is now open.

Speaker Change: Great, thanks so much for taking the questions. I guess the start here would be great to just understand at the high level.

Speaker Change: Ware Financial Institutions, Broadly R on Willing that Dispend. I know you talked about this strength and Referenceability of your public legacy U.S. business.

Speaker Change: and maybe just talk a little bit about how you're building trust around some of these newer products like banking advice or dot box. I continue to write a monitoring how we should see those flow through the model.

Greg Orenstein: Our new and expansion sales of consumer lending deposit account opening and U.S, mortgage solutions are on platform pricing, and we continue to refine solution bundles pursuant to which we will roll out platform pricing across the remainder of our business later this year. Beginning with this formal pricing change, we expect banking advisor to be part of every new deal, and we expect usage will drive a more meaningful contribution to revenues next year and beyond.

Speaker Change: God, thanks for all that. I'm yes, I'll be cheap.

Speaker Change: In the U.S., it's a more of a volume business term. I don't see as many very large transformation projects like we've seen in the past.

Speaker Change: But it's good volume. People are continuously innovating and upgrading and tuning what they do in their systems and you could see that in results. So, they clearly return to normalcy in the market here. Look at these national markets.

Speaker Change: That's an enterprise market, so what you'll see is...

Greg Orenstein: Non-GAP operating income in the third quarter is expected to be approximately $21 million to $22 million, and non-GAP net income attributable to Ncino per share to be 15 to 16 cents. This is based upon a weighted average of approximately 118 million diluted shares outstanding. For the full year in light of the out performance in the second quarter, we are increasing our non-GAP operating income outlook and now expect non-GAP operating income for fiscal 25 to be $87 million to $90 million. For full fiscal year 25, non-GAP net income attributable to Ncino per share is expected to be 66 to 69 cents based upon a weighted average of approximately 117 million basic shares outstanding.

Speaker Change: It's more lumpy, it's big deals, but here's the good news.

Speaker Change: We are looking at the pipelines and I'm beginning to see these big transformation deals because if you look back at the history, there are somewhat behind the US and the cycle of...

Speaker Change: Cloud Adoption Automation Live in the Physiology. What I'm beginning to see is that in places like Japan, Australia, and in Europe, et cetera, I'm beginning to see on the pipeline some of these bigger transformation deals again, with votes very well for us.

Speaker Change: When it comes to neurotechnologies, there's always your hype cycle, people adopt it early, then they want to start seeing the benefits they want to start hearing, what's going on, is it accurate, how does it pass masterwurst. I'm a regulators etc.

Speaker Change: But I will tell you a very pleased, with that number of deals on banking advice so quickly.

Speaker Change: We've got a concerted effort to build out the skill set on that because that's going to drive revenue. So, you have to realize AI and banking advice that is going to be not only at the differentiator for us.

Unknown Executive: With that, we'll open the line for questions. And thank you.

Unknown Executive: As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker Change: but it's also going to be a revenue generator. So we're excited about that. So overall, more positive tone.

Speaker Change: It is just timing as the deals come up especially in international and of course the mortgage market is impacted by rates. So we're all awaiting for September which we believe will start changing the yield curve as well as that marketplace.

Unknown Executive: Please stand by, we'll compile the Q&A roster and one moment for our first question.

Adam Hotchkiss: And our first question comes from Adam Hotskis from Goldman Sachs, your line is now open. Great, thanks so much for taking the questions. I guess the start here, it'd be great to just understand at the high level where financial institutions broadly are unwilling to spend. I know you talked about the strength and reference ability of your, of the legacy us business, but maybe just talk a little bit about how you're building trust around some of these newer products like banking advisor dot box.

Adam Hotskiss: and Adam just had one other thing in terms of the lumpiness of the international markets. Pierre touched upon a couple of countries, but we see in Japan a Mia, Australian New Zealand, those pipes up 30% year over year, and again with some of those larger opportunities.

Speaker Change: We're encouraged by what we're seeing out there, not just in the U.S. but on a global basis, although of course it never comes as quickly as we'd like.

Adam Hotchkiss: I continue as credit monitoring how and how we should see those flow through the model. Thanks a lot Adam. Yes, we'll be see in the US. It's a more of a volume business though. I don't see as many very large transformation projects like we've seen in the past. But it's good volume. People are continuously innovating and upgrading and tuning what they do in their systems and you could see that in results.

Speaker Change: Okay, got it. Thanks. That's helpful. And then Greg, could you just maybe bridge us?

Greg Orenstein: between some of the positive commentary around U.S. demand and new products and the sequential step down in RPO, and then maybe just also remind us how some of that commentary generally flows through the model with things like RPO and what explains the step down there.

Adam Hotchkiss: So there's clearly a return to normalcy in the market here. Look at the actual markets. That's an enterprise market. So what you'll see is it's more lumpy. It's big deals, but here's the good news. We are looking at the pipelines and I'm beginning to see these big transformation deals because if you look back at history. They are somewhat behind the US US and the cycle of cloud adoption automation drive and efficiency.

Speaker Change: Yeah, from an RPO standpoint, you know, again, consistently we highlight the lumpiness of that and again, not using that as a great metric, you know, perfect example of this quarter Adam, we highlight in our press release that we renewed a relationship with our largest client in the UK.

Adam Hotskiss: and we bring you to for a three-year deal.

Adam Hotskiss: Right? Had that been a five-year deal, you know, that would have skewed RPO, you know, meaningfully.

Adam Hotchkiss: What I'm beginning to see is that in places like Japan, Australia, and in Europe, et cetera. I'm beginning to see on the pipeline some of these bigger transformation deals again with both very well for us. But it comes to newer technologies. There's always your hype cycle. People adopted early. Then they want to start seeing the benefits. They want to start hearing what's going on. Is it accurate? How does it pass master was a regulators, et cetera.

Adam Hotskiss: and so again we're always cautious in urging guys to be cautious as you look at that.

Adam Hotskiss: You know, from a renewal standpoint, this quarter, you know, nothing out of the ordinary, although it would call out from a duration standpoint, some of the mortgage renewals were a little lower than normal, and so that also would have impacted RPO.

Adam Hotskiss: But overall, getting back to kind of what we highlighted on our Q4 and Q1 call, you know, we like to be halfway through the year at around 40% of our total gross bookings for the year.

Adam Hotchkiss: But I will tell you I'm very pleased with that number of deals on banking advisors so quickly. We've got a concerted effort to both out the skill set on that because that's going to drive revenue. So you have to realize AI and banking advisor is going to be not only a differentiator for us, but it's also going to be a revenue generator. So we're excited about that. So overall, more positive tone.

Adam Hotskiss: and you know, we, we say ourselves within striking distance of that so I think as we said here from the first half of the year I think we're feeling we're feeling pretty good and we look at what we see ahead of us in the second half of the year.

Speaker Change: Okay, very helpful, thanks Pierre, thanks Greg.

Speaker Change: Thanks, Adam. And thank you and one moment for our next question.

Adam Hotchkiss: It is just timing as the deals come up, especially in international. And of course the mortgage market is impacted by rates. So we all are waiting for September, which we believe will start changing the yield curve as well as that marketplace. And Adam, just add one other thing, in terms of the lumpiness of the international markets, appeared to touch it upon a couple of countries, but we see in Japan, Amia, Australian New Zealand, those pipes up 30% year over year, and again with some of those larger opportunities and so, you know, we're encouraged by what we're seeing out there, not just in the US, but on a global basis, although of course it never comes as quickly as we'd like. Okay, got it. Thanks. That's helpful.

Speaker Change: and our next question come from Terry Tilman from two of Securities, your line is now open.

Terry Tilman: Yeah, thanks for taking my question. Hi, Pierre, Greg, Harrison, and Joanne. Just the first question is, because it wasn't in the prepared remarks, and I think you'll talk about it multiple times, but in terms of, I'm just trying to understand how important is platform deals.

Speaker Change: and platform pricing structure is going to be in terms of hitting a 50% net looking growth for this year.

Speaker Change: and kind of an insane vein. You know, as we look into next year, I think the idea is like, look, the business is coming back and potentially subrevenue could accelerate, leaving the year and the next year, how important is platform monetization into the next year as well, and then out of follow up for Greg?

Greg Orenstein: And then Greg, could you just maybe bring us between some of the positive commentary around US demand and new products and then the sequential step down in RPO, and then maybe just also remind us, you know, how some of that commentary, you know, generally flows through the model with things like RPO and fillings and, you know, what explains the step down there. Yeah, from an RPO standpoint, you know, again, consistently, we highlight the lumpiness of that, and again, not using that as a great metric, you know, perfect example, this quarter atom, we highlight in our press release that we renewed a relationship with our largest client in the UK.

Greg Orenstein: I would say, look, it's going to happen late in the year and we're going to start with

Greg Orenstein: Renewals in New Business, we haven't specified this specific date, we've as you have feel that an album and etc.

Speaker Change: We are not dependent on that pricing structure of chains to make the numbers. We've been running the company like this for 12 years.

Speaker Change: We never exactly how to do this.

Speaker Change: We're going to make sure the field is prepared and I would not say our numbers and how the years can perform is dependent on our chains to platform pricing, that's all. I would tell you that platform deals, which means they buy everything for us, that moves the needle and we love those, okay. But the pricing model is not going to necessarily.

Greg Orenstein: We renewed it for a three year deal, right? Had that been a five year deal, you know, that would have skewed RPO, you know, meaningfully, right? And so again, we're always cautious and you know, urge you guys to be cautious as you as you look at that. You know, from a renewal standpoint, this quarter, you know, nothing out of the ordinary, although I would call out from a duration standpoint, some of the mortgage renewals were a little lower than normal, and so that also would have impacted RPO.

Speaker Change: This year, the pendant on that. And also remember our every contact duration is about 3.84 years and therefore it's going to take us 3 to 4 years to get through this cycle as a new outcome of the change people over the platform pricing.

Greg Orenstein: But overall, again, getting back to kind of what we highlighted in our Q4 and Q1 call, you know, we like to be halfway through the year at around 40% of our total gross bookings for the year, and you know, we say ourselves within striking distance of that. So I think as we sit here from the first half of the year, I think we're feeling we're feeling pretty good when we look at what we see ahead of us in the second half of the year. Okay, very helpful. Thanks, Pierre. Thanks, Greg. Thanks, Adam.

Speaker Change: Thank you for that, and I guess Greg just follow up. In terms of cash flow and suit you, anything you could call out there related to timing or collections and for the full year, does anything change about how we should be thinking about free cash flow for the full year. Thank you.

Unknown Executive: And thank you in one moment for our next question.

Speaker Change: Thanks, Terry. You may have heard in my comments, you know, focusing you guys on the unbuild AR, which was up just under $5 million since the beginning of the year.

Speaker Change: and just to reiterate what I said, you know, unbuild ARs recorded when Revenue's earned on a contract exceed what's been billed. And that typically occurs when crisis increases.

Terry Tillman: And our next question comes from Terry Tillman from Chua Securities. Your line is now open. Yeah, thanks for taking my question. Pierre, Greg, Harrison, and Joanne. Just the first question is because it was in the prepared remarks, and I think you'll talk about it multiple times, but in terms of, I'm just trying to understand how important is platform deals? And platform pricing structure is going to be in terms of hitting this 50% net bookings growth for this year and kind of in that same vein.

Speaker Change: Preving so important for us because...

Speaker Change: We expect these customers to be around 10, 15, plus years and so we always want to have that be.

Speaker Change: the stepping off point when we go into a renewal discussion. And so we're seeing some of that as we transition and maybe even a little bit more of that as we transition to platform pricing and kind of navigate this. And so that's driving some of that differentiator in buildings.

Terry Tillman: You know, as we look into next year, I think the idea is like, look, the business is coming back and potentially sub revenue could accelerate leaving the year in the next year. How important is platform monetization into the next year as well?

Speaker Change: Ultimately, and again, this ultimately is a reflection of 606.

Speaker Change: where you straight line what you build over the term of an agreement, and again, you're building may not match up with what you're recognizing earlier in the contract. You're ultimately going to build more than revenue later in the contract, so over time it's a wash.

Pierre Naude: And then at a follow up for Greg. Yeah, I would say, look, it's going to happen late in the year, and we're going to start with renewals and new business. We haven't specified the specific date because you was filled in a moment, et cetera. But we are not dependent on that pricing structure of change to make the numbers. We've been running the company like this for 12 years. We never exactly how to do this.

Speaker Change: and it certainly doesn't change our long-term view of cash although there could be some impact in the short-term.

Speaker Change: Good. Okay. Responsive to the question, Jerry.

Jerry: Yeah, I mean, it is helpful. I mean, it sounds like there's just some mechanics in, like you said, you explained it.

Pierre Naude: We're going to make sure the field is prepared and I would not say our numbers and how the years can perform is dependent on our chains to platform pricing at all. I would tell you that platform deals, which means they buy everything for us, that moves the needle and we love those. But the pricing model is not going to necessarily this year dependent on that. And also remember our every contract duration is about 3.84 years. And therefore, it's going to take us three to four years to get through this cycle as renewals come up to change people over to platform price. Yeah, that's helpful to hear. Thanks for that.

Speaker Change: But in the second half of the year, I mean even with that in mind, I mean should we see some seasonal strength them? Like, just they bury you, you can just remind us on seasonal strength and pre-castle, notwithstanding the dynamics you've called out, thanks.

Speaker Change: Yeah, sure. Yeah, recall the first half of the year for us is more cash generation than the second half. So from a seasonality perspective, historically we have had lower cash generation in the second half. That's based on just timing of deals historically and when we ultimately build.

Carl: Carl, thank you.

Greg Orenstein: And I guess Greg just followed. In terms of cash flow into Q, anything you could call out there related to timing or collections and and for the full year does anything change about how how we should be thinking about free cash flow for the full year. Thank you. Yeah, thanks, Terry. You may have heard in my comments, you know, focusing you guys on the unbuilt AR, which was up by just under $5 million since the beginning of the year.

Carl: Thanks, Eric. And thank you and one moment for our next question.

Speaker Change: And our next question comes from Aaron Kimson, from Citizens of the JMP, if you want us now open.

Aaron Kimson: Hey, thank you guys for the questions. First on, what would you say are the one or two largest execution risks associated with the pricing transition on the commercial side? And will the pricing transition be accompanied by a lot of operational changes to sales management structure, top plans, new roles, or it's just going to be pricing?

Greg Orenstein: And just to reiterate what I said, you know, unbuilt ARs recorded when revenues are earned on a contract exceed what's been billed. And that typically occurs when price is increased. Preaving so important for us because we expect these customers to be around 10, 15 plus years. And so we always want to have that be the stepping off point when we go into a renewal discussion. And so we're seeing some of that as we transition and maybe even a little bit more of that as we transition to platform pricing and kind of navigate this.

Speaker Change: Yeah, you know, we've done extensive markets studies around this.

Speaker Change: and to no surprise, the customers actually preferred this new pricing model we're going to hold out for the simple reason.

Speaker Change: They are used to buying either on acid-sized or consumption models, and I want to make underbess in sure all of you understand that we are not moving to a pure consumption model. We are moving to a guaranteed foundation of pricing that will be based either on volume or...

Greg Orenstein: And so that's driving some of that differentiator and buildings ultimately. And again, this ultimately is a reflection of 606 where you straight line what you bill over the term of an agreement. And again, your billing may not match up with what you're recognizing earlier in the contract. In fact, you're ultimately going to bill more than revenue later in the contract. So over time, it's a wash. And it certainly doesn't change our long term view of cash, although there could be some impact in the short term.

Speaker Change: on the Asadfaisal of the Institution. And then when they exceed that, they pay a unit cost. It's higher than what's in the bundle guarantee pricing to actually...

Speaker Change: and motivated them to push their minimums up, okay? So there will be more play on volume variation, but it will be a smaller play in the financials of the company.

Speaker Change: Or I would start to show that people will much prefer that versus nickel and diamond, two seeds, 10 seeds, 15 seeds, if I used to seeds or not, okay?

Greg Orenstein: Is that okay? Responsive to your question, Jerry. Yeah. I mean, it's it is helpful. I mean, it sounds like there's just some mechanics. And like you said, you explained it. But in the second half of the year, I mean, even with that in mind, I mean, should we see some seasonal strengthen like just the baby, you can just remind us on seasonal strength and free cash flow, notwithstanding the dynamics you called out. Thanks.

Speaker Change: Second to that from a strategic perspective, we are helping back to be more efficient and more effective, but I think that will accelerate with the adoption of AI and the addiction machine learning. And as you do this and you purely, I see it based on this.

Speaker Change: Then essentially, when you make them successful they're going to pay you less and that's not a good business model.

Terry Tillman: Yeah, sure. Yeah, recall the first half of the year for us is more cash generation than the second half. So from a seasonality perspective, historically, we have had lower cash generation in the second half. That's based on just timing of deals historically and when we ultimately bill. Thank you. Thank you, Jerry. And thank you.

Speaker Change: So I don't see a lot of risk from a client back last perspective or a renewo perspective.

Speaker Change: The biggest thing for us is we do discipline execution internally. I am personally involved with our self leaders or marketing leaders of how we roll this out. And I can tell you I'm a very confident, this is going to be a very positive thing for the company.

Aaron Kimson: And one moment for our next question. And our next question comes from Aaron Kimson from Citizens JMP. The line is now open. Hey, thank you guys for the questions.

Speaker Change: Thank you, that's really helpful. And then just when we talk about, I think it was on the FQF4Q call, subscription revenue growth on track 6 to 15 percent in FY26.

Speaker Change: is that in part driven by an acceleration and, you know, mortgage, that you kind of talked about it kicking in in fiscal 42 of 25, continuing in the next year, do you have visibility that still happening just with the core promotional business and consumer X mortgage?

Pierre Naude: First one, what would you say are the one or two largest execution risks associated with the pricing transition on the commercial side? And will the pricing transition be accompanied by a lot of operational changes to sales management structure, top plans, new roles, or it's just going to be pricing? Yeah, you know, we've done extensive market studies around this. And to no surprise, the customers actually prefer this new pricing model we're going to wrote out for the simple reason they are used to buying either on asset size or consumption models.

Speaker Change: Yeah, we have not giving further or addressed FY26 yet in any way, shape or form. We are going to stick to your comments from earlier around that. And then we're going to focus on executing this year, because what we book from now on to the end of the year is largely going to contribute to next year's growth.

Pierre Naude: And I want to make 100% sure all of you understand that we are not moving to a pure consumption model. We are moving to a guaranteed foundation of pricing that will be based either on volume or on the asset size of the institution. And then when they exceed that, they pay or pay a unit cost that's higher than what's in the bundle guaranteed pricing to actually motivate them to push their minimums up.

Speaker Change: Street always.

Speaker Change: is really important for the team to focus on closing businesses, at least we can this year and actually set us up for next year for great success.

Speaker Change: and Aaron just to add to that again, if you look at what we've been doing from a breadth and depth of product perspective.

Aaron Kimson: You mentioned mortgage, we talk about Doc Fox, we talk about banking advisory, we talk about where we are on the consumer lending side.

Speaker Change: Talk about a leg row. We talk about the international opportunity, again, lumpiness.

Pierre Naude: Okay, so there will be more play on volume variation, but it will be a smaller play in the financials of the company. Or our studies show that people will must prefer that versus nickel and diamond, two seats, ten seats, fifteen seats, if I use the seats or not, okay? Second to that, from a strategic perspective, we are helping back to be more efficient and more effective, and I think that will accelerate with the adoption of AI analytics and machine learning.

Speaker Change: But we see a lot of opportunity there. I think that's one of the things that we're excited about as we put the last couple of years between the Quitterty Crisis, Interest Rates and COVID behind us.

Speaker Change: and all the investments that we've made in the levers that we have for meeting our long-term targets from a gross standpoint.

Speaker Change: and so to Pierre's point right now I think it's really just about keeping our heads down and executing and I think we believe that all of the ingredients are there for us to continue to track towards those targets.

Pierre Naude: And as you do this, and you're purely a seed based business, then essentially, when you make them successful, they're going to pay you less, and that's not a good business model. So I don't see a lot of risk from a client backlash perspective or a new perspective. The biggest thing for us is we do discipline execution internally. I am personally involved with our sales leaders or marketing leaders of how we roll this out. And I can tell you I'm highly confident this is going to be a very positive thing for the company. Thank you. That's really helpful.

Speaker Change: Thank you guys so much.

Speaker Change: and thank you and one moment for our next question.

Speaker Change: i

Speaker Change: and our next question comes from Ciccate, Calia from Barclays, Elon is now open.

Speaker Change: Okay, great. Hey guys, thanks for taking my questions here.

Speaker Change: Thanks for that, Pierre, hey Greg, hey Pierre, hey guys.

Speaker Change: Here, maybe just to start with you.

Pierre Naude: And then just when we talk about, I think it was on the FQ F4Q call subscription revenue growth on track to exceed 15% and FY26. Is that in part driven by an acceleration and an Ncino mortgage that you kind of talked about at kicking in and fiscal for two of 25, continuing into the next year. Do you have visibility? Does that still happening to slip the core commercial business and consumer X mortgage?

Speaker Change: You know, clearly a strong solid U.S. and a very strong pipeline internationally. Maybe just make sure the question is asked, can you just talk about about how sort of the competitive landscape internationally looks versus the U.S.

Speaker Change: are those roughly similar in terms of competitive landscape or is anything different that you're seeing as you get deeper and deeper into those markets.

Pierre Naude: Yeah, we have not giving further or addressed FY26 yet in any way shape or form. We are going to stick to our comments from earlier around that. And then we're going to focus on executing this year because what we book from now on to the end of the year is largely going to contribute to next year's growth. So it's always really important for the team to focus on closing businesses, at least we can this year and actually set us up for next year for great success.

Speaker Change: Yeah, no, so there's a number of differences. The first one is motivation to buy. If you look at the US, it's very shareholder, a profitability and efficiently focused. If you look at Europe and mostly the national, it's more compliant regulation focused. And these are not...

Speaker Change: Massive 0-200, but you go 45-55. That's how these balances come in. So, when you enter there, you have to understand the motivation is more towards.

Speaker Change: Compliance, Regulation, Government Regulations, etc. So that's one big difference. The second one we see is that...

Pierre Naude: And Aaron just to add to that again, if you look at what we've been doing from a breadth and depth of product perspective. You know, you mentioned mortgage. We talk about Doc Fox. We talk about banking advisor. We talk about where we are on the consumer lending side. Talk about Allegro. We talk about the international opportunity. Again, lumpiness. But, but we see a lot of opportunity there. You know, I think that's one of the things that we're excited about as we put the last, you know, couple of years between liquidity crisis interest rates and COVID behind us, you know, all the investments that we've made and the levers that we have for, you know, meeting our long term targets from a growth standpoint.

Speaker Change: and this came out of a lot of these pricing studies and market research with it. Is that in the U.S.

Speaker Change: We share more platform deals, which is, you commend you to read your space, or take everything we got, and they believe in the simplified IT infrastructure.

Speaker Change: When you go to the Enterprise, you could get the whole commercial bank or a date half of it in one shot. When you go to Europe.

Speaker Change: Those are a bit more a few or a far between, and people prefer to buy point solutions that they can slot into the IT infrastructure, so it's a bit smaller, a bit more focused.

Pierre Naude: And so to Pierce point right now, I think it's really just about keeping our heads down and executing. And, you know, I think we believe that all of the ingredients are there, you know, for us to continue to track towards those targets. Thank you guys so much. Thanks Aaron. And thank you.

Speaker Change: because the P&Ls are also sliced different to you, okay. So there's some of the nuances we see in the markets. We actually make sure that we price and we package and have the flexibly to address these markets as they want to buy as opposed to us.

Unknown Executive: And one moment for our next question.

Speaker Change: on the flip sack.

Speaker Change: It's the same phenomena here, it just behind the US.

Speaker Change: If you look at once you get into a market and that market really begins to understand what we do, then the dominoes fall. New Zealand's a great example of that, the UK's another good example of that, okay? And I'm seeing early signs and other markets like Australia and Japan, of that coming along as well.

Saket Kalia: And our next question comes from Sikit Kalea from Barclays.

Pierre Naude: Ilana is now open. Okay, great. Hey guys. Thanks for taking my questions here. Hey, Sackett. Hey, Greg. Hey, Pierre. Hey guys. Here, maybe just to maybe just to start with you, you know, clearly a strong solid US and a very strong pipeline internationally. Maybe just to make sure the question is asked, can you just talk about about how sort of the competitive landscape internationally looks versus the US? Are those roughly similar in terms of competitive landscape or is anything different that you're seeing as you get deeper and deeper into those markets?

Speaker Change: So I think it's a much smaller market, but we've now got a great presence with the Doc Fox acquisition, which is all now in Sino-Castemus, as well as our Director Bank market there.

Speaker Change: Donna, Donna, that's super helpful, Pierre

Speaker Change: Greg, maybe for my follow-up for you. I know we've talked a lot about platform pricing, but I want to just maybe focus the question a little bit. That was a really useful stat that you gave just on. I think it's 40 or 45% of the mortgage business, depending on revenue or logos. 40 or 45% of that business that's being priced on sort of a platform basis.

Pierre Naude: Markins. Yeah, no, so there's a number of differences. The first one is motivation to buy. If you look at the US, it's very shareholder and profitability and efficiently focused. If you look at Europe and mostly the national, it's more compliance regulation focused. And these are not massive, zero to 100, but if you go 45, 55, that's how these balances come in. So when you enter there, you have to understand the motivation is more towards compliance, compliance, regulation, government regulations, et cetera.

Pierre Naude: So that's one big difference. The second one we see is that, and this came out of a lot of these pricing studies and market research really, is that in the US, we sell more platform deals, which is, you're comedian, we just space, we'll take everything we got, and they believe in the simplified IT infrastructure. When you go to the enterprise, you could get the whole commercial bank or at least half of it in one shot.

Pierre Naude: When you go to Europe, those are a bit more fewer of our between and people prefer to buy point solutions that they can slot into the IT infrastructure, so it's a bit smaller, a bit more focused because the PN also also slides differently. So there's some of the nuances we see in the markets. We actually make sure that we price and we package and have the flexibility to address these markets as they want to buy as opposed to us on the flip side.

Speaker Change: Again, just focusing on the mortgage component, do you sort of see that getting to 100% at some point? And does that take three to four years to sort of go through that process, like Pierre mentioned earlier, or could that happen at a slightly different time frame?

Greg Orenstein: Thanks for the question, Zach. For mortgage, those contracts are a little bit shorter and duration on average. So that could happen quicker than the four years. You know, more I'd say probably in the two to three year range.

Speaker Change: and in terms of those discussions and receptivity, I think just like with the legacy and scene of business, I think very well received if you think about it, the seat-based pricing that we did.

Speaker Change: for Insino Legacy's business as well as for that mortgage business, right? And we acquired a simple Nexus Fantasy based business as well, but those were really the anomaly. And so we really have come around as we've evolved platform pricing.

Speaker Change: throughout the company. And it's more in line with what our buyers or our customers are buying and how they buy. So I think it's been very well received throughout the company, and we'll continue to execute on that strategy as we drive towards a hundred percent adoption over time.

Speaker Change: Second, just a few other things about mortgage, I think it's really important to realize. For simple access was mostly an IMB provider. That's where they focused and that's where they bought a good brand. When it came over to Enceano, we...

Pierre Naude: It's the same phenomenon yet, it's just behind the US. If you look at once you get into a market and that market really begin to understand what we do, then the dominoes fall. New Zealand's a great example of that, the UK is another good example of that. And I'm seeing early science in other markets like Australia and Japan, of that coming along as well. So I think it's a much smaller market, but we've now got a great presence with the dog fox acquisition, which is all now casino customers as well as our direct to bank market there. Got it, got it. That's super helpful here.

Speaker Change: Why didn't that whole scope would say, look, we've got a good Brandon, Banking will go there. We've got HomeVolus, which is another sector and then IMBs.

Speaker Change: The one sector that is still struggling today is the IMB sector. Although the great news is a few weeks ago we all read that the IMBs are now on average profitable.

Speaker Change: and then we all expect the right cut in September somewhere.

Speaker Change: So that size of that market is I think through the prof and they are going to start doing better. The industry is our whole, okay? Remember what? The home business we've done fantastic with that. They see the limitations we've done, they see the actual success we provide, some of the competitors.

Greg Orenstein: Greg, maybe for for my follow up for you, I know we've talked a lot about platform pricing, but I want to just maybe focus the question a little bit. I thought it was a really useful stat that you gave just on, I think it's 40 or 45% of the mortgage business, depending on revenue or logos, you know, 40 or 45% of that business that's being priced on sort of a platform basis.

Speaker Change: as well as the innovation and the investment we make into the product and then you come over to banking.

Speaker Change: Thank you, Mortgage, which was much lower priority with some well-nexious, we've now focused on the deployed teams. It's actually year over year, 46% up over last year.

Greg Orenstein: Again, just focusing on the mortgage, on the mortgage component, do you sort of see that getting to 100% at some point and, and does that take three to four years to sort of to sort of go through that process, like Pierre mentioned earlier, or could that happen at a slightly different timeframe? Thanks for the question, Sackett, for mortgage, those contracts are a little bit shorter in duration on average, and so that could happen quicker than the four years, you know, more I'd say probably in the two to three year range.

Speaker Change: So what we're doing with that business is, and banking is a lot less risky for the market's business, because once they've bought

Speaker Change: It stays there, okay?

Speaker Change: It's not like I'm being doing M&A all the time or try to shut down the business.

Speaker Change: So I believe that business for us is a lot more balanced now, it's more growth oriented and as soon as this rate cut comes in the volumes go up I'm actually highly optimistic that mortgage will start performing the different levels for us

Greg Orenstein: And in terms of those discussions and receptivity, I think just like with the legacy and casino business, I think very well received, if you think about it, the seat based pricing that we did. For, you know, the legacy business as well as for that mortgage business, right, and we acquired simple nexus, they had a seat based business as well, but those were really the anomaly. And so we really have come around as we've evolved platform pricing throughout the company.

Speaker Change: and just to add a sack at that 46% data point that Pierre Gaby was in ACB Booking Zero Rear for the FI space.

Speaker Change: Throughout the supernope of guys, thank you.

Speaker Change: Thanks for your second. And thank you and one moment for our next question.

Speaker Change: i

Greg Orenstein: And it's more in line with what our buyers or our customers are buying and how they buy. And so I think it's been very well received throughout the company, and we'll continue to execute on that strategy. As we drive towards 100% adoption over time. Saket, just a few other things about mortgage, I think it's important to realize. For simple access was mostly an IMB provider. That's where they focused, and that's where they bought a good brand.

Speaker Change: One moment for our next question. And our next question called Tom Tom Charles in the barn from Stevens, your line is not open.

Tom Charles: Good afternoon and thank you for taking my question. Pierre, could you talk about the mix of business you're driving domestically from new bookings, net new versus cross-sell? I guess what I'm getting at here is as you brought in the product set.

Speaker Change: Could we expect to see, you know, a shorter book on the bill, Michael, as you've crossed up for it's the existing base. And just trying to think about what that could mean for the 24-month portion of the RPO, as well as your revenue visibility over the next couple of years.

Greg Orenstein: When it came over to Ncino, we widened that whole scope and said, look, we've got a good brand and banking, we'll go there. We've got homebolas, which is another sector and then IMBs. The one sector that is still struggling today is the IMB sector, although the great news is a few weeks ago, we all read that the IMBs are now on average profitable, and then we all expect a rate cut in September somewhere.

Michael: Yeah, it's really interesting the first time of the year was 80-20 cross-cell, 80% cross-cell, 20% new logos.

Greg Orenstein: So that size of that market is, I think, through the prof, and they are going to start doing better. The industry as a whole, okay? Number what? The homebolas, we've done fantastic with that. They see the implementations we've done. They see the actual success we provide, some of their competitors, as well as the innovation and the investment we make into the product. Then you come over to banking. Banking mortgage, which was much lower priority with simple access, we've now focused on it, deployed the teams.

Speaker Change #100: Back up of the year, looks almost like the opposite. I cannot project exactly exactly what it's going to look like, but if I look at the pipelines in the balance of business, lot more new logo deals.

Speaker Change #100: vs. Cross-Cell. You know, we used to run at 50-50. We now have got so many cross-selling products. I think that 50-50 is going to move more than like a 60-40 VR as we just guessed here, because we're going to have...

Greg Orenstein: It's actually year over year, 46% up over last year. So what we're doing with that business is, and banking is not less risky for the mortgage business because once they bought, it stays there, okay? It's not like IMBs doing M&A all the time or tries to shut down the business. So I believe that business for us is a lot more balanced now. It's more growth oriented. And as soon as this rate cut comes in the volumes go up, I'm actually highly optimistic that mortgage will start performing at a different level for us.

Speaker Change #100: Commercial onboarding, you're going to have all your Nick products, you're going to have banking advisors, your AI product, you have little extra products, okay We've got consumer edge very new, we've got small business coming in, you've got the parts that count opening

Speaker Change #100: We, this last quarter, again, the non-commercial products was over 50% of bookings.

Speaker Change #100: So clearly the company is balanced to business.

Speaker Change #101: to a much different extent than what it used to be. So I would just tell you the back end of the office going to be the inverse of the first half, but yes, over time that 60-40 versus 50-50 is what I foresee on cross-self, 60 percent, new logos, 40 percent.

Greg Orenstein: Yeah, and just to add a socket, that 46% data point that Pierre Gavie was in ACV bookings year over year for the FI space. Got it. Super helpful guys. Thank you. Thanks. Thank you. Thank you, second.

Speaker Change #102: Got it. It is a follow-up. Could you talk about where you're investing internationally, perhaps from a geographic standpoint, as well as introducing greater product parity into some of your, your less mature markets?

Charles Nabhan: And thank you in one moment for our next question. One moment for our next question.

Charles Nabhan: And our next question comes from Charles Nabon from Stevens. Your line is not open. Good afternoon, and thank you for taking my question. Pierre, could you talk about the mix of business you're driving domestically from new bookings, net new versus cross cell? I guess what I'm getting at here is as you brought in the product set, could we expect to see a shorter book on the bill cycle as you process the existing base?

Speaker Change #103: Yeah, so you are currently in an asshole for business followers. We've got a great operation in Canada. Then the UK islands, the Hub for us, and then we focus on the Nordics, the Bannerlacks and Spain.

Speaker Change #103: We have decided to be at Versace Germany in France.

Speaker Change #103: They may be a day we go back in there, but for right now they're focus on Spain. It's got great massive international banks that sets us into Latin America as well as, you know, we've got a number of great logos outside of Spain, all those Spanish banks.

Speaker Change #103: and then you go down to New Zealand Australia, obviously we've got South Africa with the dark cross acquisition as well as we've had some customers there beforehand, so New Zealand and then Japan. And that's where we're going to focus right now. That is a massive time and same, these countries.

Charles Nabhan: And just trying to think about what that could mean for the 24 month portion of the RPO as well your revenue visibility over the next couple of years. Yeah, it's really interesting. The first time over the year was 80-20 cross cell, 80% cross cell, 20% new logos. Back half of the year looks almost like the opposite. I cannot project exactly what it's going to look like, but if I look at the pipelines in the balance of business, a lot more new logo deals versus cross cell.

Speaker Change #103: are teaching countries, English speaking, similar laws, similar banking structures, etc. and we have found success there, as well as we follow with Salesforce of that success and this data residency.

Speaker Change #103: I feel very good about that. I think what we have to do now is focus on these.

Charles Nabhan: You know, we used to run at 50-50. We now have got so many cross-selling products that I think that 50-50 is going to move more like a 60-40 if you ask me just to guess here. Because we're going to have commercial onboarding, you're going to have all your unique products, you're going to have banking advisors, your AI products, your analytics products. Okay, we've got consumer ads very new, we've got small business coming in.

Speaker Change #103: We're building new product, LVUK's Royal Australia for both onboarding as well as mortgage.

Speaker Change #103: We've had some Wednesdays. Those products are coming along nicely. So what I would say is you've got a very focused strategy in markets where we feel it's familiar and we can be successful.

Charles Nabhan: You've got the part of the We, this, this last quarter, again, the non-commercial products was over 50% of bookings. So clearly, the company is balanced the business to a much different extent than what it used to be. So I would just tell you, the back end of the half is going to be the inverse of the first half. But yes, over time, that 60, 40 versus 50, 50 is what I foresee on cross sell, 60% new logo is 40%. Got it.

Speaker Change #104: God, I appreciate the color, give me.

Speaker Change #104: Thanks.

Speaker Change #105: and thank you and one moment for our next question.

Speaker Change #106: And our next question comes from Alex Sklar from Raymond James, you line is not open.

Speaker Change #106: Jason terms of the confidence you've expressed around achieving a 50% net bookings year. I think the laughing of the mortgage headwinds part is clear. Just because you elaborate a little bit more on your pipeline comments, where are you sitting here most optimistic today in terms of reiterating that 50% outlook?

Pierre Naude: And as a follow up, could you talk about where you're investing internationally, perhaps from a geographic standpoint, as well as introducing greater product parity into some of your, your less mature markets. Yeah, so our current international focus is follows. We've got a great operation in Canada, then the UK islands, the hub for us, and then we focus on the Nordics, the Benelux and Spain. We have decided the emphasized Germany and France.

Speaker Change #107: and then a related question, but third quarter historically is not a big enterprise buying quarter. I know you talked about some tier 1 activity, enterprise activity back in the pipeline, both in the US and Europe. It's still a fair way to think about that segment though that it can be more back after the back fourth quarter of the year.

Speaker Change #108: Yeah, I believe we're gonna have a good third quarter.

Speaker Change #108: but then fourth quarter is going to be big for us.

Speaker Change #109: that is additionally how they have the quarters flow out.

Pierre Naude: There may be a day we go back in there, but for right now, it's focused on Spain. It's got great massive international banks. That's such as in two Latin America, as well as, you know, we've got a number of great logos outside of Spain, all those Spanish banks. And then you go down to New Zealand, Australia. Obviously, we've got South Africa with the dogfrogs acquisition as well as we have had some customers there beforehand.

Speaker Change #109: especially the Enterprise, many of these banks who are dear ants at Inson, October or September. So, they budget years of kicking. We've got great visibility into that. We understand their board dates. We know exactly when they make decisions. Many of the stuff is pre-approved. They just have to get for a final board approval.

Speaker Change #110: So, we do see a massive fourth quarter as well, but third quarter is not going to be negative. It's just a normal seasonality that you're going to see there. I want to make some comments on the community bank space. It's like a machine, it just rolls forward, okay?

Pierre Naude: So in New Zealand, and then Japan. And that's what we're going to focus right now. That is a massive time and Sam. These countries are tea drinking countries, English speaking, similar laws, similar banking structures, et cetera. And we have found success there, as well as we follow with self-force of that success and this data residency. I feel very good about that. I think what we have to do now is focus on these.

Speaker Change #111: That's why I love their business so much.

Speaker Change #112: I think the mortgage.

Speaker Change #113: and what we thought seeing a slide.

Speaker Change #113: Improvement as the rates come down in the IMBs becomes more profitable.

Pierre Naude: We're building new product out of the UK as well as Australia for both onboarding as well as mortgage. We've had some ones there. Those products are coming along nicely. So what I would say is you've got a very focused strategy in markets where we feel it's familiar and we can be successful. Got it. I appreciate the color. Thanks. And thank you in one moment for our next question. And our next question comes from Alex Sklar from Raymond James.

Speaker Change #114: and Enterprise in the U.S. is on a good footing. We mentioned that we're 30% of the bookings already exceeded this year so far. Then you're going to national.

Speaker Change #115: Little bit more lumpy, but I'm seeing all the right movement and all the right behavior. So we are feeling confident that those numbers we put on the table is not only makeable, it's worth in reach, there's always a case, a middle case.

Speaker Change #115: A low case and a great case, and we feel that we've struck the right balance to actually make those numbers.

Greg Orenstein: Okay, thanks for that color, Pierre. Greg, and this may be one for you. I appreciate all the color in your prepared remarks on comparability issues of the firm revenue. I know you've always talked about RPOs as a key metric.

Pierre Naude: Your line is now open. Great. Thank you. Pierre, just in terms of the confidence you expressed around around achieving that 50% and that bookings wrote this year. I think the laughing of the mortgage had went part as clear. I just could you elaborate a little bit more on your pipeline comments. Where are you sitting here most optimistic today in terms of reiterating that that 50% outlook. And then a related question, but third quarter historically is not a big enterprise buying quarter.

Speaker Change #116: In the past, you've given some color on ACV or ARR growth, just to combat that RPO. If there are anything you can tell us in terms of how ACV or ARR are, both things kind of fared in second quarter.

Pierre Naude: I know you talked about some tier one activity enterprise activity back in the pipeline, both in the US and Europe. Is that still fair way to think about that segment though that it can be more back after the back fourth quarter of the year. Thanks. Yeah, I believe we're going to have a good third quarter, but then fourth quarter is going to be big for us. That is additionally how the quarters flow out, especially the enterprise.

Greg Orenstein: Thanks Alex. Yeah, nothing beyond what we, what we noted in our prepared remarks.

Speaker Change #117: We did try to give you quite a bit of color in terms of some of the metrics that we had laid out and enabling you guys to track us in our progress towards those numbers. That was really our thought as we came into this call.

Speaker Change #118: Okay, great, thank you both.

Pierre Naude: Many of these banks have got year ends that ends in October or September. So they budget years kicking. We've got great visibility into that. We understand their board dates. We know exactly when they make decisions. Many of the stuff is pre-approved. They just have to get for a final board approval. Um. So we do see a massive fourth quarter as well, but third quarter is not going to be negative, it's just a normal seasonality that you're going to see there.

Speaker Change #118: Thanks Alex, and thank you.

Speaker Change #119: and one moment for our next question.

Speaker Change #120: and our next question comes from Michael and Fonte from Morgan Stanley, your line is now open.

Speaker Change #121: Great, thanks for taking our question. Pierre, the positive traction and retention has commanded.

Sheriff: Pretty outsized mind, Sheriff, for Bank Executive over the last 12-18 months.

Speaker Change #123: I'd be curious to get your perspective on a potential inflection, loan growth in counter year 25.

Pierre Naude: Now I want to make some comments on the community bank space. He's like a machine, he just rolls forward, okay, and that's why I love that business so much. I think the mortgage, what we start seeing a slight improvement as the rates come down and the IMBs become so profitable. Enterprise in the U.S, is on a good footing, we mentioned over 50% of the bookings already exceeded this year so far. Then you're going to NASDAW, a little bit more lumpy, but I'm seeing all the right movement and all right behavior.

Speaker Change #124: and whether or not that could be a catalyst for the U.S. market to get a bit more constructive on some of the larger scale transformations.

Speaker Change #125: That is a very good point because you know they buy whether they're intentions or they're attention Spanish and what they actually believe they have to solve. I do think they will be an inflection point in the low-nectivity, however, what we're seeing now is...

Speaker Change #126: You know, the market mature, the companies understand what they're doing, they understand what they see, you know, that's we're clearly the market leader. We're moving now towards portfolio management, which if you look at the workload of that book of business of the bank.

Pierre Naude: So we are feeling confident that those numbers we put on the table is not only makeable, it's within reach, there's always a case, a middle case, a low case. And a great case, and we feel that we've struck the right balance to actually make those numbers. Okay, thanks for that color, Pierre.

Speaker Change #126: Origination is important, it's a great cost driver and you can get the efficiency there. But now the big next thing is it's going to be that portfolio management in automation of...

Speaker Change #126: Calvating Your Risk and Exposure, and how can you project that and how can you impact the balance sheet? And so we're seeing great traction and interest in how we're going to do portfolio management and how the people actually use the systems we put in place more effective. That's not only...

Greg Orenstein: Greg, this maybe one for you. I appreciate all the color in your prepared remarks on comparability issues with the third revenue. I know you've always talked down RPO as a key metric. In the past, you've kind of given some color on ACV or ARR growth just to kind of combat that RPO. Is there anything you can tell us in terms of like how ACV or ARR booking is kind of fair in second quarter?

Speaker Change #126: Important, from an efficient perspective, but also from a differentiation for us. So I see that as a driver as well.

Speaker Change #126: as well as the loan demand that you're talking about.

Greg Orenstein: Thanks. Thanks, Alex. Yeah, nothing beyond what we what we note in our prepared remarks. We did try to give you quite a bit of color in terms of some of the metrics that we laid out and enabling you guys to track us in our progress towards those numbers. That was really our thought as we came into this call. Okay, great. Thank you both. Thanks, Alex. And thank you. And one moment for our next question.

Speaker Change #127: Understood, that's clear.

Speaker Change #127: May be Greg, a quick one for you, just on the mortgage business, I think I was looking at some of the MBA expectations for volume growth in 25 and looks like a pretty healthy snap back to call it 20% growth next year first.

Speaker Change #128: Closed to 40% declines in 24. Obviously, it's simple access to Katana Share this year. I'm just curious.

Speaker Change #129: You know, just in terms of a general framework for how to think about that. Is there any reason to think that the mortgage business wouldn't grow sort of in line with broader market growth or even out of premium to the overall market just given a level of share that you've taken this year?

Michael Infante: And our next question comes from Michael and Fonte. From Morgan Stanley, your line is now open. Great. Thanks for taking our question. Pierre, deposit attraction retention has commanded pretty outsized mine share for bank executives over the last 12 to 18 months. I'd be curious to get your perspective on a potential inflection loan growth in calendar year 25 and whether or not that could be a catalyst for the US market to get a bit more constructive on some of the larger scale transformations.

Speaker Change #130: Thanks for the question, Michael, and again as we talked about with these contracts where we have the guaranteed platform price, and then that comes what comes with that is a certain number of loans that they're entitled to.

Speaker Change #131: You know, what we still need more data on as volumes ultimately do start to increase is where those minimums were set versus the go-for business of each of our customers.

Michael Infante: That is a very good point because you know they buy whether intentions over their attention Spanish and what they actually believe they have to solve. I do think there will be an inflection point in loan activity. However, what we're seeing now is, you know, the markets have matured the companies understand what they're doing. They understand what it's you know that's we're clearly the market leader. We're moving now towards portfolio management, which if you look at the workload of that book of business of the bank.

Speaker Change #131: Right, and so we still need some more data points to understand when they're going to trip over, you know, the minimums.

Speaker Change #131: and ultimately that's going to be upside-revenant. We think we've positioned ourselves incredibly well to participate in that increase volume.

Speaker Change #131: But a little bit too soon, I think, to determine whether it's going to line with that 20%.

Speaker Change #132: Or a piece of mother number.

Speaker Change #133: But that was really one of the reasons we had such a focus on changing those contracts and that really being the first evolution of platform was to be able to benefit from and participate in that increased volume, which as you said, you know, I think folks are expecting, you know, next year to be a positive year and obviously a big change from what we've seen over the last two years.

Michael Infante: Regenation is important to great cost driver and you can get efficiency there. But now the big next thing is going to be that portfolio management in automation of calculating your risk and exposure and how can you project that and how can you impact the balance sheet. And so we're seeing great traction and interest in how we're going to do portfolio management and help the people actually use the systems we put in place more effective. That's not only important from a physical perspective, but also with differentiation for us. So I see that as a driver as well. As well as the lone demand that you're talking about.

Speaker Change #133: and the other thing, again, we talked about growth this year, but I think that mortgage businesses performed incredibly well over the last two years during our obviously incredibly difficult time period.

Speaker Change #133: and I think those logos that we've been able to take and the market share that we've been able to gain, again, puts us in a perfect spot to be able to benefit from that, without being able to specifically answer your questions. So I think we just need more data points and trends in order to do that.

Speaker Change #134: Understood, that's good color, thank you both.

Michael Infante: Understood, that's clear. Maybe Greg, a quick one for you just on the mortgage business. I think I was looking at some of the MBA expectations for volume growth in 25 and looks like a pretty healthy snapback to call it 20% growth next year versus close to 40% declines in 24. Obviously, simple nexus took a ton of share this year. I'm just curious, you know, just in terms of a general framework for how to think about that.

Speaker Change #135: Thanks, Michael. And thank you. And one moment for our next question.

Speaker Change #136: and our next question comes from Nick Altman from Scotia Bank, you line up now open.

Speaker Change #136: i

John Gomez: Hey guys, it's John Gomez on for Nick Altman, thanks for taking my question. Can you talk about the pipeline in terms of how it has changed when thinking about retail versus commercial, and any changes to the pipeline make up heading into the second half end where reps are leaning into.

Michael Infante: Is there any reason to think that the mortgage business wouldn't grow sort of in line with broader market growth, or even at a premium to the overall market, just given the level of share that you've taken this year. Thanks for the question, Michael. You know, again, as we talked about with these contracts, where we have the guaranteed platinum price, and then that comes or what comes with that as a certain number of loans that they're entitled to, you know, what we still need more data on as volumes ultimately do start to increase is where those minimums were set versus the go for business of each of our customers.

Speaker Change #138: From a pipeline perspective, John, what we're seeing now is more like 550-60 non-commercial.

Speaker Change #138: Um...

Speaker Change #139: And so again, that trend continues as some of those non-commercial products, mature.

Speaker Change #140: and ultimately we get more referenceability from them and so we're excited about that next.

Speaker Change #141: I mentioned earlier about Japan and Mia in Australia, New Zealand again, those pipes just being up 30% year over year on an aggregate basis. But as we think about commercial and non-commercial, it's kind of 40-60-ish as we look at the pipe right now, non-commercial being the higher number.

Michael Infante: Right. And so we still need some more data points to understand when they're going to trip over. You know, the minimums and ultimately that's going to be upside revenue. We think we position ourselves incredibly well to participate in that in that increased volume, but a little bit too soon, I think to determine whether it's going to align with that 20% or be some other number. But that was really one of the reasons we have such a focus on changing those contracts and that really being the first evolution of platform was to be able to benefit from and participate in that increased volume, which as you said, you know, I think folks are expecting, you know, next year to be a positive year.

Speaker Change #141: and it's, we see it maturing, we see it growing and ultimately, you know, we're just looking at our colleagues and team to focus on executing and get these deals over the lines.

Speaker Change #142: Got it, that's helpful, and as I follow up, with your comment on the pipeline mix, leaning more heavily to net you versus the first half.

Speaker Change #143: Are you seeing more multi product discussions up front for those many customers? Are you seeing more multi department or more geographical reach within those deals? Any color there would be helpful.

Michael Infante: And obviously a big change from what we've seen over the last two years. And the other thing again, you know, we talked about growth this year, but I think that mortgage businesses performed incredibly well over the last two years during obviously incredibly difficult time period. And I think those logos that we've been able to take in the market share that we've been able to gain again puts us in a perfect spot to be able to benefit from that without being able to specifically answer your questions. I think we just need more data points and trends in order to do that. Understood. That's good color. Thank you both. Thanks Michael. And thank you. And one moment for our next question.

Speaker Change #143: Yeah, I think it depends on the geo getting back to Pierre's comments earlier, you know, who you're selling to from a geographic perspective in the US? I'd say yes.

Speaker Change #144: Less so internationally and then again within the U.S. as you talk about community versus maybe enterprise bank.

Speaker Change #145: As we mentioned, that platform, multi-products sale, you know, we see continued traction there and again I think that's a reflection of the maturation of some of those new products like consumer lending. We talked about this.

Speaker Change #145: the eight new loom consumer lending deals that we got this quarter, the five DAO deals that we got this quarter. And so we're excited about that in that trend.

Nick Altmann: And our next question comes from Nick Altman from Scotia Bank. Your line is now open. Hey guys, it's John Goldman. It's on for Nick Altman. Thanks for taking my question. Can you talk about the pipeline in terms of how has changed when thinking about retail versus commercial and any changes to the pipeline make up heading into the second half and where reps are leaning into. From a pipeline perspective, John, what we're seeing now is more like high 50s to 60ish non commercial.

Speaker Change #145: i

Speaker Change #146: and thank you.

Speaker Change #147: and one moment for our next question.

Speaker Change #147: i

Speaker Change #147: And our next question comes from Joe Rowink, from Bayard, your line is now open.

Nick Altmann: And so again, that trend continues as some of those non commercial products, mature, and ultimately we get more reference ability from them. And so we're excited about that mix. I mentioned earlier about Japan and Mia and in Australia, New Zealand again, those pipes just being up 30% year over year on an aggregate basis. But as we think about commercial and non commercial, it's kind of 46ish. As we look at the pipe right now, non commercial being being the higher number.

Speaker Change #147: oh

Joe Rowink: Great, thanks for taking my questions. I think Pierre made the comment earlier that when he looked at the pipe line, he sees larger enterprises across both Newland established markets.

Joe Rowink: I guess is an imminent break cut enough to catalyze decisions for some of those big enterprises in the pipeline. Does it happen within the next two quarters or are you kind of going into this, expecting maybe a potential lag and this all ultimately just AZ outlook into the next fiscal year?

Speaker Change #149: No, I...

Speaker Change #150: I don't see that these people are sitting there waiting for a right cat to make his a teagig decision.

Nick Altmann: And it's, we see it maturing, we see it growing. And ultimately, you know, we're just looking at our colleagues and team to focus on executing and getting these deals over the line. Got it, that's helpful. And as a follow up, with your comment on the pipeline mix, leaning more heavily to NetEo versus the first half, are you seeing more multi-product discussions up front for those NetEo customers? You know, are you seeing more multi-department or more geographical reach within those deals?

Speaker Change #151: These deals that we're working on, you know, is the 9, 12, 16 months old, you have to prepare the full board, you prepare the management team and they look at actually the much bigger picturesque strategically where the bank is going to be 2, 3, 5 years from now. I would say the driver is more...

Speaker Change #152: How do you utilize intelligence of the future if you don't have an operating platform that allows you to standardize your methods, your procedures and how you people interact with data and their customers, okay? And then it's back to the old IT infrastructure issue. I mentioned my prepared remarks at...

Nick Altmann: Any killer there would be helpful. I think it depends on the geo, getting back to Pierre's comments earlier, you know, who you're selling to from a geographic perspective. In the U.S., I'd say yes, less so internationally. And then again, within the U.S., as you talk about community versus maybe enterprise bank, as we mentioned that platform, multi-product sale, you know, we see continued traction there. And again, I think that's a reflection of the maturation of some of those newer products like consumer lending.

Speaker Change #152: One bank is going live with a mood 40 systems.

Speaker Change #153: I mean, those are the issues they deal with. Well, the right cat's the upper little bit to not somebody forward, it may be, but in our conversations it's a lot more strategic around where they see the bank three and five years from now.

Speaker Change #153: and Joe and you look at the business really, the only, let's say, rate sensitivity that we really have is on the IMB side.

Speaker Change #153: of the business, or home builders, maybe as well. But when you look at the rest of the business,

Nick Altmann: We talked about the eight new loan consumer lending deals that we got this quarter, the five D.A.O.D, and so we're excited about that in that trend. And thank you, and one moment for our next question. And our next question comes from Joe Roinc, from Bayard, Guilana, now open. Great, thanks for taking my questions. I think Pierre made the comment earlier that when he looked at the pipeline, he sees larger enterprises across both new and established markets.

Speaker Change #154: Historically, it's not been very, very sensitive.

Speaker Change #154: Obviously, when you have what we went through over the last two years with...

Speaker Change #154: You know, this unprecedented rise in rates and the liquidity crisis, well that's unusual.

Speaker Change #154: and that did impact our customer base. But as we distance ourselves from that and get back to, you know, we'll maybe more of a normal operating environment. Again, really where the interest rate cut will be impactful with some of that INB part of our business on the mortgage side.

Speaker Change #155: Okay, that's so cool.

Speaker Change #155: and then I wanted to go back to the mortgage conversation, specifically thinking about those MBA forecasts, those are proven out.

Nick Altmann: I guess is an imminent break cut enough to catalyze decisions for some of those big enterprises and the pipeline. Does it happen within the next two quarters, or are you kind of going into this expecting maybe a potential ligand this all ultimately just as you have look into the next fiscal year. No, I don't see that these people are sitting there waiting for a right cut to make a strategic decision. These deals that we're working on, you know, is 9, 12, 16 months old, you have to prepare the full board, you prepare the management team and they look at actually the much bigger picture strategically where the bank is going to be.

Speaker Change #157: You know, purchase or donation is going to be quite good in 2025 and 2025 so it's not.

Speaker Change #158: back in the 80 of 2021, but also, you know, a more robust offering now, the pricing structure is going to be different and you certainly have a customer set that's consolidated.

Speaker Change #158: When you stack up all of that, and we obviously know how simple Nexus was growing out of pro-form of Aces.

Speaker Change #158: when you compare the next two years versus, you know, prior history.

Speaker Change #159: Can you relate those to it all in terms of what you would expect your growth rates in mortgage to settle out at in kind of an upturn, not historically robust, but a better environment in 25 and 26?

Nick Altmann: Two, three, five years from now, I would say the driver is more, how do you utilize intelligence of the future? If you don't have an operating platform that allows you to standardize your methods, your procedures, and how you people interact with data and their customers. And then it's back to the old IT infrastructure issue. I mentioned my prepared remarks that one bank is going live with removed 40 systems, I mean, those are the issues they deal with.

Speaker Change #160: I think you're going to see a difference in...

Speaker Change #161: Our performance, depending is at the bank, he said that IMB is the homeholder, okay? So you have to slice and dice the market firstly to understand how the contracts are structured as well as how the bank patterns and the type of contracts are these people like.

Speaker Change #162: Will a rate cut and increased volume help us absolutely and I've always been very conservative, didn't believe these things are going to come. Now I believe it's going to come September and then we have to see what that does to inflation. I'll be very frank with you, I'm so...

Nick Altmann: Well, the right cuts out a little bit to not somebody forward, it may be, but in our conversations, it's a lot more strategic around where they see the bank three and five years from now. Joe, when you look at the business, really the only let's say rate sensitivity that we really have is on the IMB side of the business or home builders, maybe as well, but when you look at the rest of the business.

Speaker Change #162: a little bit concerned that if you cut rates too soon too fast.

Speaker Change #163: Ed Weights in Fraser will get us and then boom, they stop the Weights Cardi, okay?

Speaker Change #164: So, we're not right now looking at the exterior number one, I'm going to see more evidence.

Nick Altmann: Historically, it's not been very rate sensitive. Obviously, when you have what we went through over the last two years with, you know, this unprecedented rise in rates and the liquidity crisis, well, that's unusual. And that did impact our customer base, but as we distance ourselves from that and get back to, you know, what may be more of a normal operating environment. Again, really where the interest rate cut will be impactful is on that IMB part of our business on the mortgage side.

Speaker Change #163: and number two, I want to slowly see how the U.S. economy reacts to a rate cut and what actually the activity is beyond that. The Mundial Employment Rights is as a result.

Speaker Change #165: Thank you.

Speaker Change #165: And our next question comes from Robert Trob from the Choir Cap Capital, your line is now open.

Nick Altmann: Okay, that's helpful. And then I wanted to go back to the mortgage conversation, you know, specifically thinking about those MBA forecasts, those are proven out, you know, purchase origination is going to be quite good in 2025 and 2026, not back to the heyday of 2021, but also, you know, you have a more robust offering now. The pricing structure is going to be different and you certainly have a customer set that's consolidated.

Robert Trob: Thank you. Good afternoon Peter Greg. Here's some thank you all for taking the question. I guess.

Robert Trob: If I could just start with how you think about striking the balance.

Speaker Change #167: in showing your customers the ROI initially.

Speaker Change #168: You mentioned it's striking a balance between adoption and, you know, demonstrable repetitive ROI.

Nick Altmann: When you stack up all of that and we obviously know kind of how simple Nexus was growing on a pro form of basis, when you compare the next two years versus, you know, prior history, can you relate those to it all in terms of what you would expect your growth rates in mortgage to settle out at in kind of a upturn, not, you know, historically robust, but a better environment in 25 and 26. I think you're going to see a difference in our performance, depending is it the bank, is it the IMB is the homeowner, okay.

Speaker Change #169: because you know, I think you've mentioned in your prepare the marks that thanking a advisor, you know, this year, was started at a pretty attractive introductory place to drive adoption, which of course makes sense.

Speaker Change #170: How did you cut him?

Speaker Change #171: is there a framework that you kind of use as you introduce these new products, particularly as you get deeper into portfolio management.

Speaker Change #172: You know, two, two.

Speaker Change #173: You know, not get something in ways, not not for free, but you know, in a way where people see what it's worth, but not in a place that scares them initially.

Nick Altmann: So you have to slice and dice the market firstly to understand how the contracts are structured as well as how the bank patterns and the type of contracts are these people like, will a rate cut and increased volume help us absolutely. And I've always been very conservative, didn't believe these things are going to come. Now I believe it's going to come September and then we have to see what that does to inflation.

Speaker Change #173: Robert Tanks, that's a very insightful question.

Speaker Change #174: The show.

Speaker Change #175: So, yes, what we do, we literally.

Speaker Change #176: and go into these banks.

Speaker Change #177: and based on usage analytics we've got currently in our systems, okay? So remember before when I go in with a new system, they've got no metrics, no understanding and we literally have to get...

Nick Altmann: I'll be very frank with you, I'm so a little bit concerned that if you cut rates too soon too fast, that rates inflation will get us and then boom, they stop the rate cutting, okay. So we're not right now looking at next year, number one, I want to see more evidence and number two, I want to slowly see how the US economy reacts to a rate cut and what actually the activity is beyond that.

Speaker Change #178: In a global measurement, and people will tell us, look, it takes us about this and it's guest emits and it's follow. We didn't see any more place in which an existing customer.

Nick Altmann: And what the unemployment rate is as a result. Thank you. One moment for our next question. And our next question comes from Robert Rob, from the choir cap capital. Your line is in now open. Thank you. Good afternoon, Pierre Greg. Thank you all for taking my question. I guess if I could just start with how do you how do you think about striking the balance in in showing your customers the ROI initially.

Speaker Change #178: We can literally measure your spending four minutes on this task, ten minutes on that task, etc. And then we show them back in by saying, this ten minute task is going to come down to two minutes.

Speaker Change #178: Just an example, okay? So people in midi they see.

Speaker Change #179: the value of what we're doing there. And then just like with all new products, you go in with a low platform pricing and you do a U-shits.

Speaker Change #179: Counting there, and the more they use it, the more they're going to play you, and then the more they use it and they play you, that unit crosses a bit more expensive than.

Speaker Change #179: The guaranteed one, and then they moved the money themselves, which keeps us guaranteed for cutting revenue.

Nick Altmann: You mentioned it's striking the balance between adoption and and you know demonstrable repetitive ROI. Because you know, I think you're mentioning your prepare the marks that banking advisor, you know, this year was started at a pretty attractive introductory price to drive adoption, which of course makes sense. How do you kind of is there a framework that you kind of use as you introduce these new products, particularly as you, you know, get deeper into portfolio management.

Speaker Change #179: So we're going to follow that same model in the early stage with wooding, just like we did with mortgage in the tough times to go even with a lower guaranteed number.

Speaker Change #179: in a higher upside for us as they started doubting and using it.

Speaker Change #180: If you see that product in action.

Speaker Change #181: It really is the closest thing to magic I've seen.

Speaker Change #181: So, I think what we're driving now is adoption and market penetration and then as the product mature, it'll settle down more to a...

Speaker Change #181: Enhancing the skills and broadening the skills to get a much wider adoption in the bank and actually drive what I would say is material revenue for us.

Speaker Change #181: It's very helpful, thank you, thank you, Pierre Thanks for watching, see you in the next video, bye bye

Speaker Change #182: and then if I just have a very quick follow-up.

Speaker Change #183: I know, uh...

Speaker Change #183: Morgan is in the studio, and basically he's already gone through their commission realignment, if you will, at the decade or so ago, more than that. But with the NAR, you know, sort of...

Nick Altmann: You know, to, to, you know, not get something away. Not, not for free, but, you know, in a way where people see what it's what it's worth, but not at a price that scares them. Yeah, Robert, thanks. That's a very insightful question. So, so here's what we do. We literally go into these banks and based on usage analytics, we have got currently in our systems, okay. So remember before when I go in with a new system, they've got no metrics, no understanding, and we literally have to get, you know, verbal measurements and people will tell us, look, it takes us about this and it's guestamets and it's far off.

Speaker Change #183: Alright.

Speaker Change #184: Stormcalfs and Confusion in the potential for dislocation in that market short run. Are you at all worried that particularly, it's certainly within the IND space, there might be some rip-overs still over into the mortgage market?

Speaker Change #184: Morty Orenstein, Walter Smith, the great news is that.

Speaker Change #185: We've got a product that we shelter our clients, we offer them with compensation and our distructure it. So in this new environment, we actually can help them to do that better. Number one, number two, regardless of how...

Nick Altmann: We're then seen in our place. If it's an existing customer, we can literally measure, you're spending four minutes on this task, 10 minutes on that task, et cetera. And then we show them, bagging advice and say, this 10 minutes task, going to come down to two minutes. Just an example, okay. So people immediately see the value of what we're doing there. And then just like with all new products, you go in with a low platform pricing and you do a usage of counting there.

Speaker Change #186: Morgan's brokers and real estate agents gonna get paid. People are still going to buy houses.

Speaker Change #186: And the moment the volume goes up, the transaction is going to come through us by far the best product in the market, we make them the investments. So I feel very optimistic that automation and what we do in that market is going to be actually the winner.

Nick Altmann: And the more they use it, the more they're going to pay you. And then the more they use it, and they pay you that unit crosses a bit more expensive than the guaranteed one. And then they move the maneuvers up, okay, which gives us guaranteed recurring revenue. So we're going to follow that same model in the early stage, we're voting just like we did with mortgage and tough times to going with a lower guaranteed number in a higher upside for us as they start adopting and using it.

Speaker Change #186: as opposed to manual processes and that market so relationship market, but the more we can take the friction out of that model, the better for the market and for us.

Speaker Change #186: Thanks for your time. Thank you.

Speaker Change #187: and thank you and one moment for our next question.

Nick Altmann: And if you see that product in action, it really is the closest thing to magic I've seen. And so I think what we're driving now is adoption and market penetration. And then as the product mature, it'll settle down more to a enhancing the skills and broadening the skills to get a much wider adoption in the bank and actually drive what I would say is material revenue for us. It's very healthy. Thank you, Pierre.

Speaker Change #187: and our next question comes from Ryan Thomasello from KBW, your line is now open.

Ryan Thomasello: Thank you. On the International Front here was hoping you could expand upon the product roadmap there.

Ryan Thomasello: You mentioned in your prepare remarks the opportunity for bringing dot fox in particular to international customers at some point. So, carry it out, you would rank order what different features of the platform still represent an opportunity to expand internationally as you kind of look across what you have in the U.S. product set.

Nick Altmann: And then if I did just ask very quick follow up. I know the mortgage industry, the IMB space has already gone through their commission realignment, if you will, at that decade or so ago, more than that. But with the NAR, you know, sort of storm of calves and confusion in a potential for dislocation in that market short term, are you at all, you know, worried that particularly suddenly within the IMB space, you know, there might be some reports still over into the mortgage market.

Speaker Change #189: I would say the biggest next opportunity is...

Speaker Change #190: Commercial onboarding. That is the universal problem and our marketing has shown that everybody is clamoring for a product like that in the commercial small business space. Okay, to really take that from a six-month process down to a weeks and months process. Okay.

Speaker Change #190: It literally is that difficult for them to open accounts. The second big product that we're working on there is a mortgage product that will span from Canada into the UK island down to Australian New Zealand. So those are the two, I would say, big.

Speaker Change #190: Workflow Automation type products. But then you have to realize all your Nick products as well as banking advisor are a global product coming out of the shoot. So every customer I've seen they will get the benefit of our intelligence and data initiatives as we go forward.

Nick Altmann: The great news is that we've got a product that we sell to our clients to help them with compensation and our destruction, so in this new environment, we actually can help them to do that better. Number one, number two, regardless of how mortgage brokers and real estate agents going to get paid. People are going to buy houses and the moment the volume goes up, the transactions is going to come through us by far the best product in the market, we're making the investments.

Speaker Change #190: and they don't need that specific customization for local environments.

Speaker Change #190: and then there's still a ton of commercial business that for us internationally. So we can go in on three fronts from major footprints and then you start automating that with your banking advice as Nick products. So I feel pretty good about the footprint we've got there.

Nick Altmann: So I feel very optimistic that automation and what we do in that market is going to be actually the winner as opposed to manual processes and that markets or relationship market, but the more we can take the friction out of that model, the better for the market and for us. Thanks for the point. Thank you. And thank you. And one moment for our next question. And our next question comes from Ryan Tomasello from KBW.

Speaker Change #190: Gray, and then follow up for Greg, maybe a two-part question here on U.S. mortgage.

Greg Orenstein: Greg, last quarter you talked about M&A, Driven Mortgage Turn, as well.

Greg Orenstein: A particular area that you're being more mindful of in terms of the guide. I guess as you look at the mix across the US customer base, mortgage customer base, are there any dynamics that make M&A something that's more likely to go against you over the intermediate term?

Nick Altmann: Your line is now open. Thank you. On the international front here was hoping you could expand upon the product roadmap there. You mentioned in your preparedness remarks, the opportunity for bringing dot Fox in particular international customers at some point. So carry it how you would rank order what different features of the platform still represent an opportunity to expand internationally as you kind of look across what you have in the US product set.

Speaker Change #191: and then as a follow-up on the turnties.

Speaker Change #192: If you can quantify where that came in in the first half of the year, and what your expectations are for the back half, you know, just trying to understand the waiting there in terms of whether or not turn could be a potential source of upside as we look at the second half of the year. Thanks.

Speaker Change #193: Thanks to the questions Ryan, you know on the M&A front, I don't think there's anything unique

Ryan Tomasello: I would say the biggest next opportunity is commercial onboarding that is the universal problem. And our market testing has shown that everybody is clamoring for a product like that in the commercial small business space. Okay, to really take that from a six months process down to a weeks and months process. Okay. It literally is that difficult for them to open accounts. The second big product that we're working on there is a mortgage product that will span from Canada into the UK island down to a study New Zealand.

Speaker Change #193: That would pose it as a specific risk. We've tried hard to align ourselves with the winners.

Speaker Change #193: in the INB space. And to that point, we've tried hard and worked hard to lend ourselves with some of the bigger players out there. And so, I'll be...

Speaker Change #194: M&A, it certainly can go against you. It's hard to predict, right? When you're forecasting, but to the extent that there is on the mortgage side, you know, we certainly would hope to be a beneficiary. Even when we've not been in the past.

Speaker Change #194: You know, some of the best salespeople are frankly the loan officers that use our product at a specific IMB and they go somewhere else.

Ryan Tomasello: So those are the two, I would say, big workflow automation type products. But then you have to realize all your Nick products as well as banking advisor are global products coming out of the shoot. So every customer of it senior will get the benefit of our intelligence and data initiatives as we go forward. And they don't need that specific customization for local environments. And then there's still a ton of commercial business that for us internationally.

Speaker Change #194: and they insist on simple access, you know, now in Sino Mortgage being part of their work life. And so that actually can be a benefit as well, even when a deal does go against us. But nothing unique to call out there. It's just really more reflection that we're seeing some stabilization in that space.

Speaker Change #195: I am being starting to make money again, which is great for the industry, and so as you think about churn, it's less about I and B's going out of business, which is what we experienced a majority of, you know, over the past two years and more around potential lemonade.

Speaker Change #195: to your second question around Schern, you know we forecast it out of the 20.5 million terms for this year, 8 million in the mortgage space.

Ryan Tomasello: So we can going on on three fronts from major footprints and then you start automating that with your banking advisor Nick products. So I feel pretty good about the footprint we've got there. Great. And then follow up for Greg maybe a two part question here on US mortgage. Greg last quarter you talked about M&A driven mortgage churn as a particular area that you're being more mindful of in terms of the guide.

Speaker Change #195: through the first half of the year, we're about 4.75 million, and so we think we're right on track. And again, expect the second half of the year to be more stable, and so I think we feel good about where we are today.

Ryan Tomasello: I guess if you look at the mix across the US customer base mortgage customer base. Are there any dynamics that make M&A something that's more likely to go against you over the intermediate term. And then as a follow up on the churn piece. If you can quantify where that came in in the first half of the year and what your expectations are for the back half. You know just trying to understand the waiting there in terms of whether or not churn could be a potential source of upside as we look at the second half of the year.

Speaker Change #196: Great, appreciate the color.

Speaker Change #197: and thanks for having me. And thank you and one moment for our next question.

Speaker Change #198: and our next question comes from Chris Kennedy from William and Blair, your line is now open.

Chris Kennedy: Great, thanks for taking the question.

Chris Kennedy: When you think about the new products that you have and your commentary about the pipeline, is there a way to think about how the ACD mix will evolve or in CNO as you think about the next three years or so.

Ryan Tomasello: Thanks. Thanks for the questions Ryan you know on the M&A front. I don't think there's anything unique. That would pose it as a as a specific risk. We've tried hard to align ourselves with the winners in the I and B space. And to that point we've tried hard and worked hard to align ourselves with some of the bigger players out there. And so M&A certainly can go against you. It's hard to predict right when you're forecasting, but to the extent that there is a mortgage side.

Speaker Change #200: I think you will see the current pattern holding where...

Speaker Change #200: It will be...

Speaker Change #201: Modern 50% non-comersion. I see that pattern continuing, because there's so much bigger market for us to left.

Speaker Change #201: In that thing, the second thing is I think you're going to see the 60-40 I talked about earlier about new business versus cross-sell, the cross-sell being 60 and 40. That's a second way to look at it.

Ryan Tomasello: You know we certainly would hope to be a beneficiary. Even when we've not been in the past. You know some of our best salespeople are frankly the loan officers that use our product at a specific I and B and they go somewhere else. And they insist on simple nexus you know now and see no mortgage being part of of of their work life. And so that actually can be a benefit as well.

Speaker Change #201: and then thirdly, if you look at the US.

Speaker Change #202: You know, we are looking at the market, you're continuously...

Speaker Change #202: I mentioned earlier in previous calls.

Speaker Change #202: We are going to focus on credit unions more and as you put that equation through those kind of markets.

Speaker Change #202: I think the US will outpace international in bookings for the next three years, just because of the sheer volume of institutions here and the breadth of the products had to be brought here. So that's how I look at the development of...

Ryan Tomasello: Even when a deal does go against us, but nothing unique to call out there. It's just really more reflection that we're seeing some stabilization in that space. I and B's are starting to make money again which is great for the industry. And so as you think about churn it's less about I and B's going out of business which is what we experienced a majority of you know over the past two years and more around potential M&A.

Speaker Change #202: Not only pipes, but ACV bookings and the transition into revenue of that.

Speaker Change #203: Great, thanks for taking the question.

Ryan Tomasello: To your second question around churn you know we forecast it out of the 20.5 million churn for this year. 8 million in the mortgage space through the first half of the year we're about 4.75 million. And so we think we're right on track and again expect the second half of the year to be to be more stable and so I think we feel good about where we are today. Great, appreciate the color.

Speaker Change #204: You're welcome.

Speaker Change #205: and thank you and I am showing you no further questions. I would not like to turn the call back over to Pierre Naude, Chief Executive Officer for closing remarks.

Pierre Naude: Thank you. I pray that thank you all of to be on the call today and with your insightful questions, etc.

Pierre Naude: Yes, my summary of what I'm seeing in the market. Great execution by the team.

Pierre Naude: Team is well positioned strategically, we are as well positioned as ever in this company.

Ryan Tomasello: And thank you and one moment for our next question. And our next question comes from Chris Kennedy from William & Blair. Your line is now open. Great, thanks for taking the question. When you think about the new products that you have and your commentary about the pipeline, is there a way to think about how the ACV next will evolve for Ncino as you think about the next three years or so? I think you will see that the current pattern holding where it will be more than 50% non commercial.

Pierre Naude: with Came Out Of.

Pierre Naude: Two years of COVID, then recorded the crisis.

Pierre Naude: and now we're going to start seeing a raid cuts. So I truly believe...

Pierre Naude: that this better macroeconomic environment is coming. At the same time, we kept our heads down, we kept on investing in products, etc. And all of that is going to culminate.

Pierre Naude: In a great positioning for this company, so I'm not only optimistic, I've actually feeling pretty good, but I'm seeing in the pipelines, the early signs there, so I appreciate your analysis and your insights into our business, and hopefully you can see the enthusiasm we have at this week or forward. Thank you very much. Talk to you all later.

Speaker Change #206: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Ryan Tomasello: I see that pattern continuing because there's so much bigger market for us left in that thing. The second thing is I think you're going to see. The 6040 I talked about earlier about new business versus cross cell, the cross cell being 60 and 40. That's the second way to look at it. And then thirdly, if you look at the US, you know, we are, we are looking at the market here continuously.

Ryan Tomasello: I mentioned earlier in previous calls, we are going to focus on credit unions more. And as you put the education to those kind of markets. I think the US will outpace international in bookings for the next three years just because of the sheer volume of institutions here and the breadth of the products that we've got here. So that's how I look at the development of not only pipes, but ACV bookings and the transition into revenue of that. Great. Thanks for taking the question. You're welcome. And thank you. And I am showing you no further questions.

Pierre Naude: I would now like to turn the call back over to Pierre Nade, Chief Executive Officer for closing remarks. Thank you, president. Thank you all to be on the call today and with your insightful questions, et cetera. Here's my summary of what I'm seeing in the market. Great execution by the team. Team is well positioned strategically. We are as well positioned as ever in this company. We've came out of two years of COVID, then liquidity crisis.

Speaker Change #206: [inaudible]

Pierre Naude: And now we're going to start seeing rate cuts. So I truly believe that there's better macro economic environments coming at the same time. We kept our heads down. We kept on investing in products, et cetera. And all of that is going to culminate in a great positioning for this company. So I'm not only optimistic. I'm actually feeling pretty good about what I'm seeing in the pipelines, the early signs there. So I appreciate your analysis and your insights into our business. And hopefully you can see the enthusiasm we have at as we go forward. Thank you very much. Talk to you all later. Thank you.

Speaker Change #206: John

Speaker Change #207: Good day, and thank you for standing by and welcome to the Enceano Second Quarter, for this year's 25 financial results conference call.

Speaker Change #208: At this time, I'll participants on a listen-only mode. After a speaker's presentation, they'll be a question and answer session. After a question during a session, you'll need to press star one-one on your telephone.

Speaker Change #208: You have been here in an automated, methods, advice in your hand is raised. So we'll draw your question, please press star one one again.

Speaker Change #208: Please be advised that today's conference is being recorded. I would now like to hand the conference over to you speaker today. Harrison Masters, Director of Mr. Relations. Mr. Relations. Please go ahead.

Speaker Change #209: Good afternoon and welcome to Insino's second quarter fiscal 2025 earnings call. With me on today's call are Pierre Naude, Insino's Chairman and Chief Executive Officer and Greg Orenstein, Insino's Chief Financial Officer.

Speaker Change #210: During the course of this conference call, we will make forward-looking statements regarding trends, strategies, and the anticipated performance of our business.

Speaker Change #210: These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date, and are subject to various risk and uncertainties described in our SEC filings and other publicly available documents.

Speaker Change #210: The Financial Services Industry and Global Economic Conditions.

Speaker Change #210: and see no disclaims any obligation to update or revise any forward-looking statements.

Speaker Change #210: Further, on today's call, we will also discuss certain non-gap metrics that we believe aid in the understanding of our financial results.

Speaker Change #210: A reconciliation to comparable gap metrics can be found in today's earnings release.

Speaker Change #210: which is available on our website and as an exhibit to the Form 8K, French, the SCC, just before the call. As well as the Earnings presentation on our Investor Relations website at Investor.incno.com. With that, I will turn the call over to Pierre.

Pierre Naude: Thank you, Harrison. Welcome and thank you for joining us today.

Pierre Naude: We are very pleased with our second quarter financial results. Once again, exceeding our guidance for both subscription and total revenues as well as for non-gap operating income.

Unknown Executive: This includes today's conference call. Thank you for participating. You may now disconnect. Thank you.

Pierre Naude: Before I turn the call over to Greg to provide you with additional financial details on the second quarter I would like to argue through what we are seeing in the market.

Unknown Executive: [inaudible] Joseph Vruwink, Joseph Vruwink, Joseph Vruwink[inaudible] Joseph Vruwink, Joseph Vruwink, Joseph Vruwink, Joseph Vruwink,[inaudible][inaudible] Faucette, James Faucette, James Faucette,[inaudible] .

Greg Orenstein: In the United States, sentiment in the financial services industry has improved quite a bit from a year ago, with FI balance sheets generally healthy and net interest margin headwins a baby.

Speaker Change #211: Buying the area in the US enterprise and community and regional markets accelerated in the first half of fiscal 25.

Speaker Change #211: with gross bookings in the US up 36% over the first half of last year, including mortgage and up 67% without mortgage.

Harrison Masters: Good day, and thank you for standing by and welcome to Ncino's second quarter, fiscal year 2025 financial results conference call. At this time, I'll participants are in a listen only mode. After I speak his presentation, there'll be a question and answer session. To ask the question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. So would draw your question, please press star 1-1 again. Please be advised that today's conference is being recorded.

Speaker Change #211: This momentum has been driven primarily by expansion opportunities within our existing customer base as more and more customers embrace our single platform.

Harrison Masters: I would now like to hand the conference over to you speaker today, Harrison Masters, Director of the Relations, please go ahead. Good afternoon and welcome to Ncino's second quarter, fiscal 2025 earnings call. With me on today's call, our Pierre Naude, Ncino's Chairman and Chief Executive Officer, and Greg Orenstein, Ncino's Chief Financial Officer. During the course of this conference call, we will make forward-looking statements regarding trends, strategies, and the anticipated performance of our business.

Speaker Change #212: As of the end of second quarter, their U.S. enterprise and community and regional businesses were both over 50% of their way to their total gross booking schools for the year.

Harrison Masters: These forward-looking statements are based on management's current views and expectations in tail certain assumptions made as of today's date. In our subject to various risk and uncertainties described in our SEC filings and other publicly available documents, the financial services industry and global economic conditions. Ncino disclaims any obligation to update or revise any forward-looking statements. Further, on today's call, we will also discuss certain non-gap metrics that we believe aid in the understanding of our financial results.

Speaker Change #212: In our U.S. mortgage business, we signed six new mortgage customers in the second quarter.

Speaker Change #212: Four of which were financial institutions.

Speaker Change #212: Lending volumes and market activity determines relatively suppressed in what would otherwise historically be a seasonally strong selling quarter.

Speaker Change #213: We may tell you our view that US mortgage revenues will be diluted to over all grotes for China, the fiscal year.

Harrison Masters: A reconciliation to comparable gap metrics can be found in today's earnings release, which is available on our website and as an exhibit to the form 8K, first of the SEC just before the fall. As well as the earnings presentation on our investor relations website at investor.ncino.com.

Speaker Change #213: but we expect interest rate cuts to be a catalyst for re-accelerated growth in this business, starting in the fourth quarter and as we look into next year, consistent with our previous comments.

Speaker Change #213: We are very pleased to have successfully navigated through the difficult mortgage market over the past couple of years.

Pierre Naude: With that, I will turn the call over to Pierre. Thank you, Harrison. Welcome and thank you for joining us today. We are very pleased with our second quarter financial results. Once again, exceeding our guidance for both subscription and total revenues as well as for non-gap operating income. Before I turn the call over to Greg to provide you with additional financial details on the second quarter, I would like to argue through what we are seeing in the market.

Speaker Change #213: and with approximately 40% of our U.S. mortgage logos and 45% of our U.S. mortgage revenues Now only our new pricing model.

Speaker Change #213: We believe we are very well situated to benefit from the expected increase in mortgage activity, including from one of the largest home builders in the United States, which began the nationwide rollout of the Insino mortgage solution in July.

Pierre Naude: In the United States, sentiment in the financial services industry has improved quite a bit from a year ago, with FI balance sheets generally healthy and net interest margin headwinds abating. Buying behavior in both the US enterprise and community and regional markets accelerated in the first half of fiscal 25 with gross bookings in the US up 36% over the first half of last year including mortgage and up 67% without mortgage. This momentum has been driven primarily by expansion opportunities within our existing customer base as more and more customers embrace our single platform.

Speaker Change #213: Turning to your business outside the U.S., our pipelines have grown nicely this time last year. But the international markets will be operated in a remain more challenged than in the U.S.

Speaker Change #213: As a reminder, our pipelines outside of the US are comprised primarily of new logo opportunities which do inherently take longer to close in any business climate and can be much more lumpy in light of the large bank nature of this business.

Speaker Change #213: That said, we do expect our international operations to add a healthy number of new logos in the second half of the year.

Speaker Change #214: You'll recall on your fourth quarter of the year, I said having roughly around 40% of our total growth bookings in the first half of the year is a more normal picture for the year.

Pierre Naude: As of the end of second quarter, our US enterprise and community and regional businesses were both over 50% of their way to their total gross bookings goals for the year. In our US mortgage business, we signed six new mortgage customers in the second quarter, four of which were financial institutions, lending volumes and market activity determined relatively suppressed in what would otherwise historically be a seasonally strong selling quarter. We maintain our view that US mortgage revenues will be dilutive to overall growth for Ncino the fiscal year, but we expect interest rate cuts to be a catalyst for re-accelerated growth in this business starting in the fourth quarter, and as we look into next year consistent with our previous comments.

Speaker Change #214: Girls' bookings for the first six months were approximately 36% towards our annual goal. I lighted by overperformance in our legacy US business while our US mortgage and international businesses were more challenged.

Speaker Change #214: As we look at our sales pipelines, we believe we are on track to meet our gross bookings goal for the year.

Speaker Change #214: We are particularly encouraged to see an increasingly number of large enterprise opportunities in both our newer and established markets.

Speaker Change #214: On a net-booking space, we ended the first half of the year up approximately 17% year over year and we believe we are on track to our goal of net-bookings being up 50% year over year.

Pierre Naude: We are very pleased to have successfully navigated through the difficult mortgage market over the past couple of years, and with approximately 40% of our US mortgage logos and 45% of our US mortgage revenues now only our new pricing model. We believe we are very well situated to benefit from the expected increase in mortgage activity, including from one of the largest home builders in the United States, which began their nationwide rollout of the Ncino mortgage solution in July.

Speaker Change #214: In the second quarter, over half of our total company bookings came from outside of commercial lending.

Speaker Change #214: including over half of new customer deals and we added a new consumer lending and five new deposit account opening customers, two of which added both solutions.

Speaker Change #214: Legacy Systems and Processes continue to bog down the middle and back office of financial institutions. And our digital channels and automation are bringing speed and efficiency they never felt possible.

Speaker Change #215: For example, a $2 billion bank in New England shared they have taken a 41 minute deposit account opening process down to just 4 minutes for business clients and removed the need for a banker to get involved.

Pierre Naude: Turning to our business outside of the US, our pipelines have grown nicely this time last year, but the international markets we operate in remain more challenged than in the US. As a reminder, our pipelines outside of the US are comprised primarily of new logo opportunities which still inherently take longer to close in any business climate and can be much more lumpy in light of the large bank nature of this business. That said, we do expect our international operations to add a healthy number of new logos in the second half of the year.

Speaker Change #215: Another Community Bank in Tennessee produced approval times for consumer loans by 95%.

Speaker Change #215: In the consumer banking world, the speed with which a financial institution can full-fold requests for products and services as everything to do with client satisfaction.

Speaker Change #216: With a quicker, yes, Enceano consumer learning and the positive count opening customers are realizing a true competitive advantage.

Pierre Naude: You'll recall on our fourth quarter earnings call I said having roughly around 40% of our total gross bookings in the first half of the year is a more normal picture for the year. Gross bookings for the first six months were approximately 36% towards our annual goal, highlighted by overperformance in our legacy US business while our US mortgage and international businesses were more challenged. As we look at our sales pipelines, we believe we are on track to meet our gross bookings goal for the year.

Speaker Change #217: and with more product depth we are delivering even more value to the line-through business or ready on your platform. For example, a $20 billion bank became one of our largest portfolio and latest customers.

Speaker Change #217: expanding their adoption from commercial lending and deposit account opening to also include portfolio and ready for CR-E stress testing.

Speaker Change #217: By bringing back office what fully-level risk analysis onto the same platform used for generations, this bank is enhancing the availability and suitability of data for risk management.

Pierre Naude: We are particularly encouraged to see an increasingly number of large enterprise opportunities in both our newer and established markets. On a net bookings basis, we ended the first half of the year up approximately 17% year over year and we believe we are on track to our goal of net bookings being up 50% year over year. In the second quarter, over half of our total company bookings came from outside of commercial lending, including over half of new customer deals and we added eight new consumer lending and five new deposit account opening customers to of which added both solutions.

Speaker Change #218: A gain and gain, customers demonstrate that adopting multiple solutions on a single platform from a casino yields a consistent and more enjoyable client experience and more efficient operations within the institution.

Speaker Change #219: Officially continues to be a core mandate for every financial institution. And we continue to make investments to reduce the cost of ownership by reducing implementation timelines.

Speaker Change #220: Hardening, Plug and Play Fair Party decorations and streamlining on-going administration.

Speaker Change #221: One of the largest banks in New Zealand when life was in Ceno during the second quarter. A key milestone in the program that will allow this FI to retire over 40 legacy systems.

Pierre Naude: Legacy systems and processes continue to bog down the middle and back office of financial institutions and our digital channels and automation are bringing speed and efficiency they never thought possible. For example, a $2 billion bank in New England shared they have taken a 41-minute deposit account opening process down to just four minutes for business clients and removed the need for a banker to get involved. [inaudible] West. Another community bank in Tennessee reduced approval times for consumer loans by 95%.

Speaker Change #221: We aim for that level of efficiency across every business line in the financial institution.

Speaker Change #222: Turning to Banking Advisor, we are quite pleased with the progress we have made bringing our unique data capabilities and AI to financial services to this product family.

Speaker Change #223: Even though banking advisor only became generally available in the second quarter, we signed eight banking advisor deals in the quarter across the community, regional and enterprise market segments in the US and Canada. And I've taken our first customer live with it.

Pierre Naude: In the consumer banking world, the speed with which the financial institution can fulfill requests for products and services as everything to do with client satisfaction. With a quicker yes, and Cino consumer lending and deposit account opening, customers are realizing a true competitive advantage. It was more product depth where delivering even more value to the lines of business already on your platform. For example, a $20 billion bank became one of our largest portfolio and ladies customers, expanding their adoption from commercial lending and deposit account opening to also include portfolio and ladies for CRE stress testing.

Speaker Change #223: [inaudible]

Speaker Change #223: Long-term, or banking advisor Roadmap is focused on opportunities to go even deeper with intelligence and automation. In able-buy our unique access to financial enthusiasts data, which the team has done a great job of planning consent to use.

Speaker Change #224: On the M&A Front, we are pleased with the progress we have made integrating both Doc Frucks and Allegro. In particular, the market responds to the commercial onboarding and account-opening functionality. We acquired with Doc Frucks as far exceeded our expectations.

Pierre Naude: By bringing back office portfolio level risk analysis onto the same platform used for originations, this bank is enhancing the availability and suitability of data for risk management. Again and again, customers demonstrate that adopting multiple solutions on a single platform from Ncino yields a consistent and more enjoyable client experience and more efficient operations within the institution. Efficiency continues to be a core mandate for every financial institution and we continue to make investments to reduce the cost of ownership by reducing implementation timelines.

Speaker Change #224: We are actively exploring opportunities to accelerate this integration along with the rollout of this product outside of the US.

Speaker Change #224: Especially as customers are looking to purchase this product as part of our single platform versus on a standalone basis.

Speaker Change #224: With that, I'll end it over to Greg to cover the Alpha Nationals.

Greg Orenstein: Thank you, Pierre, and thanks everyone for joining us this afternoon to review our second quarter fiscal 2025 financial results.

Pierre Naude: Hardening, plug and play third party integrations and streamlining ongoing administration. One of the largest banks in New Zealand went live within Cino during the second quarter, a key milestone in the program that will allow this FI to retire over 40 legacy systems. We aim for that level of efficiency across every business line in the financial institution. Turning to banking advisor, we are quite pleased with the progress we have made bringing our unique data capabilities and AI to financial services through this product family.

Greg Orenstein: Please note that all numbers referenced in my remarks are on a non-gap basis unless otherwise stated.

Greg Orenstein: A reconciliation to comparable gap metrics can be found in today's earnings release, which is available on our website and as an exhibit to the Form 8K furnished with the FEC just before this call.

Speaker Change #225: has Pierre noted, we are very pleased with our second quarter financial results.

Pierre Naude: Total revenues for the second quarter of fiscal 25, will $132.4 million, an increase of 13% year over year.

Pierre Naude: Subscription revenues for the second quarter were 113.9 million dollars, an increased of 14% year over year, representing 86% of total revenues, both ahead of the top end of our guidance.

Pierre Naude: Even though banking advisor only became generally available in the second quarter, we signed eight banking advisor deals in the quarter across the community, regional and enterprise market segments in the US and Canada and have taken our first customer live with it. Our knowledge base and narrative drafting skills have strongly resonated with FIs across asset classes, representing a diverse cross section of our customer base. Long term, our banking advisor roadmap is focused on opportunities to go even deeper with intelligence and automation, enabled by our unique access to financial institutions data, which the team has done a great job obtaining consent to use.

Pierre Naude: Mortgage subscription revenues were approximately $17 million, or 15% of subscription revenues in the quarter, representing year over year growth of 4%.

Pierre Naude: Churn, including for mortgage, continued to moderate through the second quarter and remained in-line with our $20.5 million churn forecast for the year.

Pierre Naude: As we have discussed, mortgage term peaked in October last year and total term peaked in the fourth quarter, which negatively impacts our growth rates this year.

Pierre Naude: Professional Services revenues were $18.5 million in the quarter, growing 7% year over year.

Pierre Naude: On the M&A front, we are pleased with the progress we have made integrating both DocFox and Allegro. In particular, the market responds to the commercial onboarding and account opening functionality we acquired with DocFox as far exceeded our expectations. We are actively exploring opportunities to accelerate this integration along with the rollout of this product outside of the US, especially as customers are looking to purchase this product as part of our single platform versus on a standalone basis.

Pierre Naude: Our customers and prospects continue to exhibit a sensitivity to consulting rates, which we are addressing by more strongly recommending gold standard out-of-the-box deployments in order to reduce implementation timelines and administration costs post-go live.

Speaker Change #226: News. 9 US revenues were $27.5 million or 21% of total revenues in the second quarter of 25% year over year.

Speaker Change #226: International revenues are more dependent on new customer sales given the smaller installed customer base and the fact some of our newer solutions are not yet available outside of the United States.

Greg Orenstein: With that, I'll end it over to Greg to cover our financials. Thank you, Pierre, and thanks everyone for joining us this afternoon to review our second quarter fiscal 2025 financial results. Please note that all numbers referenced in my remarks are on a non-gap basis unless otherwise stated. A reconciliation to comparable gap metrics can be found in today's earnings release, which is available on our website and as an exhibit to the form 8k furnished with the SEC just before this call.

Speaker Change #226: We expect further moderation of international revenue's growth, more in-line with overall companies revenue growth until the new logo sales we plan to sign in a second half of this year impact revenues.

Speaker Change #226: GROAS Profit for the second quarter of fiscal 25 was $86.7 million, an increase of 13% year over year.

Speaker Change #226: Gapgroge's margin with 66% compared to 65% in the second quarter of fiscal 24.

Greg Orenstein: As Pierre noted, we are very pleased with our second quarter financial results. Total revenues for the second quarter of fiscal 25 were $132.4 million, an increase of 13% year over year. Subscription revenues for the second quarter were $113.9 million, an increase of 14% year over year, representing 86% of total revenues both ahead of the top end of our guidance. Mortgage subscription revenues were approximately $17 million or 15% of subscription revenues in the quarter, representing year over year growth of 4%.

Speaker Change #226: Nongap Gross Margin benefited from our amended agreement with Salesforce and from the larger mix of subscription revenues.

Speaker Change #226: Non-gap operating income for the second quarter of fiscal 25 was $19.3 million, compared with $11.2 million in the second quarter of fiscal 24.

Speaker Change #226: are non-gap operating margins for the second quarter with 15% compared with 10% in the second quarter of fiscal 24.

Speaker Change #226: Our annual insight user conference contributed approximately $2 million to a sequential increase in sales and marketing costs.

Greg Orenstein: Turn, including for mortgage, continued to moderate through the second quarter and remained in line with our $20.5 million term forecast for the year. As we have discussed, mortgage term peaked in October last year and total term peaked in the fourth quarter, which negatively impacts our growth rates this year. Professional services revenues were $18.5 million in the quarter growing 7% year over year. Our customers and prospects continue to exhibit a sensitivity to consulting rates, which we are addressing by more strongly recommending gold standard out of the box deployments.

Speaker Change #226: Additionally, the acquisition's completed in the first quarter contributed approximately $7 million of annualized costs to research and development.

Speaker Change #227: Naude Gap, Net income attributable to Enceano for the second quarter of fiscal 25 was $15.8 million or $14 per diluted chair compared to $10 million or $9 per diluted chair in the second quarter of fiscal 24.

Greg Orenstein: In order to reduce implementation timelines and administration costs, post go live. Nine U.S, revenues were $27.5 million or 21% of total revenues in the second quarter of 25% year over year. International revenues are more dependent on new customer sales given the smaller installed customer base and the fact some of our newer solutions are not yet available outside of the United States. We expect further moderation of international revenues growth more in line with overall companies revenue growth until the new logo sales we planned to sign in the second half of this year impact revenues.

Greg Orenstein: Non-GAP gross profit for the second quarter of fiscal 25 was $86.7 million, an increase of 13% year over year. Non-GAP gross margin with 66% compared to 65% in the second quarter of fiscal 24. Non-GAP gross margin benefited from our amended agreement with sales force and from the larger mix of subscription revenues. Non-GAP operating income for the second quarter of fiscal 25 was $19.3 million compared with $11.2 million in the second quarter of fiscal 24.

Greg Orenstein: Our non-GAP operating margin for the second quarter was 15% compared with 10% in the second quarter of fiscal 24. Our annual insight user conference contributed approximately $2 million to a sequential increase in sales and marketing costs. Additionally, the acquisitions completed in the first quarter contributed approximately $7 million of annualized costs to research and development. Non-GAP net income attributable to Ncino for the second quarter of fiscal 25 was $15.8 million, or $14 per diluted share compared to $10 million or $0.9 per diluted share in the second quarter of fiscal 24.

Greg Orenstein: Our remaining performance obligation, our RPO, was $1.04 billion as of July 31st, 2024, up 12% over $929 million as of July 31st, 2023, with $698 million in the less than 24 months category, up 10% from $636 million as of July 31st, 2023. We ended the second quarter with cash and cash equivalence of $126.8 million, including restricted cash. Net cash provided by operating activities was $5 million compared to $12 million in the second quarter of fiscal 24.

Greg Orenstein: Capital expenditures were $444,000 in the quarter, resulting in free cash flow of $4.6 million for the second quarter of fiscal 25. We repaid $15 million in our revolving credit facility in the second quarter and planned to pay down the remaining $40 million of borrowed principal during the rest of this fiscal year as we generate cash. Note that unbuild accounts receivable has increased by $4.8 million since January 31st of this year. Unbuild accounts receivable are recorded when revenues earned on a contract exceed what has been billed to date for that contract.

Greg Orenstein: For Encino, this typically occurs when fees increase during the contract term, including under platform pricing arrangements, and revenue recognition aligns to the satisfaction of performance obligation rather than to billings. These platform pricing arrangements are becoming more commonplace for us as we execute on our strategy to evolve to a platform pricing model. Accordingly, comparisons to previous quarters calculated billings may not accurately reflect trends in our business, and deferred revenues are increasingly less predictive of the revenues that will be recognized in subsequent periods.

Greg Orenstein: Turning to guidance. For the third quarter, we expect total revenues of $136 million to $138 million with subscription revenues of approximately $117 million to $119 million. For full fiscal year 25, we continue to expect total revenues of $538.5 million to $544.5 million. With subscription revenues of $463 million to $469 million. As noted, our term expectations for fiscal 25 currently remain in line with the $20.5 million we discuss on our previous earnings calls.

Greg Orenstein: Our financial outlook includes 5% subscription revenues growth for US mortgage this fiscal year, with no year-over-year growth expected in the third quarter. Our guidance maintains our assumption that increased mortgage learning volumes do not start to positively impact revenues until the fourth quarter. We continue to assume banking advisors contribution to subscription revenues this year will be diminimous as we are offering it at an attractive initial price point. Our efforts to transition the company's revenue model to platform pricing continue in earnest.

Greg Orenstein: Our new and expansion sales of consumer lending deposit account opening and US mortgage solutions are on platform pricing and we continue to refine solution bundles pursuant to which we will roll out platform pricing across the remainder of our business later this year. Beginning with this formal pricing change we expect banking advisor to be part of every new deal and we expect usage will drive a more meaningful contribution to revenues next year and beyond.

Greg Orenstein: Non-GAP operating income in the third quarter is expected to be approximately $21 million to $22 million and non-GAP net income attributable to Ncino per share to be 15 to 16 cents. This is based upon a weighted average of approximately 118 million diluted shares outstanding. For the full year in light of the out performance in the second quarter we are increasing our non-GAP operating income outlook and now expect non-GAP operating income for fiscal 25 to be $87 million to $90 million. For full fiscal year 25 non-GAP net income attributable to Ncino per share is expected to be 66 to 69 cents based upon a weighted average of approximately 117 million basic shares outstanding.

Unknown Executive: With that we will open the line for questions. And thank you. As a reminder to ask a question please press star 11 on your telephone and wait for your name to be announced. To withdraw your question please press star 11 again. Please stand by we compile the Q&A roster and one moment for our first question.

Adam Hotchkiss: And our first question comes from Adam Hotskis from Goldman Sachs who line is now open. Great. Thanks so much for taking the questions. I guess the start here it'd be great to just understand at the high level where financial institutions broadly are unwilling to spend. I know you talked about the strength and reference ability of your you come to the legacy us business, but maybe just talk a little bit about how you're building trust around some of these newer products like banking advisor dot box.

Adam Hotchkiss: I've continuous credit monitoring how and how we should see those flow through the model. Thanks a lot Adam. Yes, we'll be see in the US. It's a more of a volume business though. I don't see as many very large transformation projects like we've seen in the past. But it's good volume with people are continuously innovating and upgrading and tuning what they do in their systems and you could see that in results.

Adam Hotchkiss: So there's clearly a return to normalcy in the market here. Look at the national markets. That's an enterprise market. So what you'll see is it's more lumpy. It's big deals, but here's the good news. We are looking at the pipelines and I'm beginning to see these big transformation deals because if you look back at history. They are somewhat behind the US US and the cycle of cloud adoption automation drive in efficiency.

Adam Hotchkiss: What I'm beginning to see is that in places like Japan, Australia, and in Europe, et cetera. I'm beginning to see on the pipeline some of these bigger transformation deals again with boats very well for us. When it comes to newer technologies, there's always your hype cycle. People adopted early, then they want to start seeing the benefits. They want to start hearing what's going on. Is it accurate? How does it pass master's words?

Adam Hotchkiss: I'm regulating this, et cetera. But I will tell you I'm very pleased with that number of deals on banking advisors so quickly. We've got a concerted effort to boat out the skill set on that because that's going to drive revenue. So you have to realize AI and banking advisor is going to be not only a differentiator for us, but it's also going to be a revenue generator. So we're excited about that.

Adam Hotchkiss: So overall, more positive tone. It is just timing as the deals come up, especially in international. And of course, the mortgage market is impacted by rates. So we're all waiting for September, which we believe will start changing the yield curve as well as that market play. And Adam just had one other thing in terms of the lumpiness of the international markets here to touch upon a couple of countries, but we see in Japan, Amia, Australian New Zealand, those pipes up 30% year over year, and again with some of those larger opportunities and so, you know, we're encouraged by what we're seeing out there, not just in the US, but on a global basis, although of course it never comes as quickly as we'd like.

Adam Hotchkiss: Okay, got it, thanks, that's helpful, and then Greg, could you just maybe bring us between some of the positive commentary around US demand and new products, and then the sequential step down in RPO, and then maybe just also remind us, you know, how some of that commentary, you know, generally flows through the model with things like RPO and feelings, and, you know, what explains the step down there. Yeah, from an RPO standpoint, you know, again, consistently, we highlight the lumpiness of that, and again not using that as a great metric, you know, perfect example, this quarter atom, we highlight in our press release that we renewed a relationship with our largest client in the UK, we renewed it for a three year deal, right, had that been a five year deal, you know, that would have skewed RPO, you know, meaningfully.

Adam Hotchkiss: Right, and so again, we're always cautious and you know, urge you guys to be cautious as you, as you look at that, you know, from a renewal standpoint, this quarter, you know, nothing out of the ordinary, although I would call out from a duration standpoint, some of the mortgage renewals were a little lower than normal, and so that also would have impacted RPO, but overall again, getting back to kind of what we highlighted in our Q4 and Q1 call, you know, we like to be halfway through the year at around 40% of our total gross bookings for the year. And, you know, we, we serve ourselves within striking distance of that, so I think as we sit here from the first half of the year, I think we're feeling, we're feeling pretty good when we look at what we see ahead of us in the second half of the year. Okay, very helpful. Thanks, Pierre. Thanks, Greg. Thanks, Adam.

Greg Orenstein: And thank you, and one moment for our next question. And our next question comes from Terry Tillman from Chua Securities. Your line is now open. Yeah, thanks for taking my questions. I, Pierre, Greg, Harrison, and Joanne. Just the first question is because it was in the prepared remarks, and I think you'll talk about it multiple times. But in terms of, I'm just trying to understand how important is platform deals and platform pricing structure is going to be in terms of hitting this 50% net bookings growth for this year, and kind of in that same vein.

Greg Orenstein: You know, as we look into next year, I think the idea is like, look, the business is coming back and potentially sub revenue could accelerate, leaving the year in the next year. How important is platform monetization into the next year as well, and then at a follow up for Greg. Yeah, I would say look, it's going to happen late in the year, and we're going to start with renewals and new business.

Greg Orenstein: We haven't specified a specific date to a visual field and a moment, et cetera. But we are not dependent on that pricing structure of change to make the numbers. We've been running the company like this for 12 years. We never exactly how to do this. We're going to make sure the field is prepared, and I would not say our numbers and how the years can perform is dependent on our chains to platform pricing at all.

Greg Orenstein: I would tell you that platform deals, which means they buy everything for us, that moves the needle, and we love those. But the pricing model is not going to necessarily this year dependent on that. And also remember, our average contract duration is about 3.84 years, and therefore it's going to take us 3 to 4 years to get through this cycle as renewals come up to change people over to platform pricing. Yeah, that's helpful to hear.

Greg Orenstein: Thanks for that. And I guess Greg just followed. In terms of cash flow into Q, anything you could call out there related to timing or collections and and for the full year, does anything change about how, how we should be thinking about free cash flow for the full year. Thank you. Yeah, thanks, Terry. You may have heard in my comments, you know, focusing you guys on the unbuilt AR, which was up by just under $5 million since the beginning of the year.

Greg Orenstein: And just to reiterate what I said, you know, unbuilt ARs recorded when revenues earned on a contract exceed what's been billed. And that typically occurs when prices increase. Preving so important for us because we expect these customers to be around 1015 plus years. And so we always want to have that be the stepping off point when we go into a renewal discussion. And so we're seeing some of that as we transition and maybe even a little bit more of that as we transition to platform pricing and kind of navigate this.

Greg Orenstein: And so that's driving some at differentiator and buildings ultimately. And again, this ultimately is a reflection of 606 where you straight line what you build over the term agreement. And again, you're building may not match up with what you're recognizing earlier in the contract. You're ultimately going to build more than revenue later in the contract. So over time, it's a wash. And it certainly doesn't change our long term view of cash, although there could be some impact in the short term.

Greg Orenstein: Is that okay? Responsive to your question, Jerry. Yeah, yeah, I mean, it's it is helpful. I mean, it sounds like there's just some mechanics. And like you said, you explained it. But but in the second half of the year, I mean, even with that in mind, I mean, should we see some seasonal strengthen like just the baby, you can just remind us on seasonal strength and precastle, notwithstanding the dynamics you called out.

Greg Orenstein: Thanks. Yeah, sure. Yeah, recall the first half of the year for us is more cash generation than the second half. So from a seasonality perspective, historically, we have had lower cash generation in the second half. That's based on just timing of deals historically and when we ultimately build. Got it. Thank you. Thank you, Jerry. And thank you.

Terry Tillman: And one moment for our next question. And our next question comes from Aaron Kimson, from citizens to JMP. Your line is now open. Hey, thank you guys for the questions. First one, what would you say are the one or two largest execution risks associated with the pricing transition on the commercial side. And will the pricing transition be accompanied by a lot of operational changes, the sales management structure, top plans, new roles, or it's just going to be pricing.

Terry Tillman: Yeah, you know, we've done extensive market studies around this. And to no surprise, the customers actually prefer this new pricing model. We're going to wrote out for the simple reason they are used to buying either on asset size or consumption models. And I want to make another sense for all of you understand that we are not moving to a pure consumption model. We are moving to a guaranteed foundation of pricing that will be based either on volume or on the asset size of the institution.

Terry Tillman: And then when they exceed that they pay or pay a unit cost that's higher than what's in the bundle guaranteed pricing to actually motivate them to push their minimums up. Okay, so there's more play on volume variation, but it'll be a smaller play in the financials of the company. Or our studies show that people will must prefer that versus nickel and diamond, two seats, ten seats, fifteen seats, if I use the seats or not, okay.

Terry Tillman: Second to that, from a strategic perspective, we are helping back to be more efficient and more effective. And I think that will accelerate with the adoption of AI analytics and machine learning. And as you do this, and you're purely a seed based business, then essentially, when you make them successful, they're going to pay you less. And that's not a good business model. So I don't see a lot of risk from a client backlash perspective or a new perspective.

Terry Tillman: The biggest thing for us is we do discipline execution internally. I am personally involved with our sales leaders or marketing leaders of how we roll this out. And I can tell you I'm highly confident this is going to be a very positive thing for the company. Thank you. That's really helpful. And then just when we talk about, I think it was on the FQ F4Q call subscription revenue growth on track to exceed 15% and FY 26.

Terry Tillman: Is that in part driven by an acceleration and an Ncino mortgage that you kind of talked about at kicking in and fiscal for two of 25. Continuing into next year, do you have visibility to that still happening just with the core commercial business and consumer X mortgage. Yeah, we have not giving further or addressed FY 26 yet in any way shape or form. We are going to stick to our comments from earlier around that.

Terry Tillman: And then we're going to focus on executing this year because what we book from now on to the end of the year is largely going to contribute to next year's growth. So it's always really important for the team to focus on closing businesses, at least we can this year and actually set us up for next year for great success. And Aaron just to add to that again, if you look at what we've been doing from a breadth and depth of product perspective.

Terry Tillman: You know, you mentioned mortgage. We talk about Doc Fox. We talk about banking advisor. We talk about where we are on the consumer lending side. Talk about a leg row. We talk about the international opportunity. Again, lumpiness. But but we see a lot of opportunity there. You know, I think that's one of the things that we're excited about as we put the last, you know, couple of years between liquidity crisis interest rates and COVID behind us.

Terry Tillman: You know, all the investments that we've made and the levers that we have for, you know, meeting our long term targets from a growth standpoint. And so to Pierce Point right now, I think it's really just about keeping our heads down and executing. And, you know, I think we believe that all of the ingredients are there, you know, for us to continue to track towards those targets. Thank you guys so much. Thanks Aaron.

Aaron Kimson: And thank you. And one moment for our next question. And our next question comes from Sikit, Kaliya from Barclays. Yulana is now open. Okay. Great. Hey guys. Thanks for taking my questions here. Hey, Sackett. Here. Hey, Greg. Hey, Pierre. Hey guys. Here, maybe just to maybe just to start with you, you know, clearly a strong solid US and a very strong pipeline internationally. Maybe just to make sure the question is asked, can you just talk about about how sort of the competitive landscape internationally looks versus the US?

Aaron Kimson: Are those roughly similar in terms of competitive landscape or is anything different that you're seeing as you get deeper and deeper into those markets? Markins. Yeah, no, so there's a number of differences. The first one is motivation to buy. If you look at the US, it's very shareholder and profitability and efficiently focused. If you look at Europe and mostly the national, it's more compliance regulation focused and these are not massive zero to 100, but if you go 45 55, that's how these balances coming.

Aaron Kimson: So when you enter there, you have to understand the motivation is more towards compliance, regulation, government regulations, et cetera. So that's one big difference. The second one we see is that, and this came out of a lot of these pricing studies and market research really is that in the US, we sell more platform deals, which is your committee and regional space will take everything we got and they believe in the simplified IT infrastructure.

Aaron Kimson: When you go to the enterprise, you could get the whole commercial bank or at least half of it in one state. When you go to Europe, those are a bit more of fewer of our between and people prefer to buy point solutions that they can slot into the IT infrastructure, so it's a bit smaller, a bit more focused because the P&Ls are also slightly different to you. So those are some of the nuances we see in the markets.

Aaron Kimson: We actually make sure that we price and we package and have the flexibility to address these markets as they want to buy as opposed to us on the flip side. It's the same phenomenon here, it's just behind the US. If you look at once you get into a market and that market really begin to understand what we do, then the dominoes fall. New Zealand's a great example of that, the UK is another good example of that.

Aaron Kimson: And I'm seeing early science and other markets like Australia and Japan, of that coming along as well. So I think it's a much smaller market, but we've now got a great presence with the dog fox acquisition, which is all now casino customers as well as our director bank market there. Donna, Donna, that's super helpful here. Greg, maybe for my follow up for you, I know we've talked a lot about platform pricing, but I want to just maybe focus the question a little bit.

Aaron Kimson: I thought it was a really useful stat that you gave just on, I think it's 40 or 45% of the mortgage business depending on revenue or logos. 40 or 45% of that business that's being priced on sort of a platform basis. Again, just focusing on the mortgage on the mortgage component, do you sort of see that getting to 100% at some point? And did that take three to four years to sort of to sort of go through that process like Pierre mentioned earlier, or could that happen at a slightly different timeframe?

Aaron Kimson: Thanks for the question, Sackett. For mortgage, those contracts are a little bit shorter in duration on average. And so that could happen quicker than the four years. You know, more I'd say probably in the two to three year range. And in terms of those discussions and receptivity, I think just like with the legacy and casino business, I think very well received if you think about it, the seat based pricing that we did.

Aaron Kimson: And for casino legacy business as well as for that mortgage business, right? And we acquired simple nexus. They had a seat based business as well. But those are really the anomaly. And so we really have come around as we've evolved platform pricing throughout the company. And it's more in line with what our buyers or our customers are buying and how they buy. And so I think it's been very well received throughout the company.

Aaron Kimson: And we'll continue to execute on that strategy as we drive towards 100% adoption over time. Saket, just a few other things about mortgage, I think it's important to realize. For simple access was mostly an IMB provider. That's where they focused, and that's where they bought a good brand. When it came over to Ncino, we widened that whole scope and said, look, we've got a good brand and banking, we'll go there. We've got homebillers, which is another sector and then IMBs.

Aaron Kimson: The one sector that is still struggling today is the IMB sector. Although the great news is a few weeks ago, we all read that the IMBs are now on average profitable and then we all expect a rate cut in September somewhere. So that size of that market is, I think, through the prof and they are going to start doing better. The industry as a whole, okay? Number one. The homebillers, we've done fantastic with that.

Aaron Kimson: They see the implementations we've done. They see the actual success we provide, some of their competitors, as well as the innovation and the investment we make into the product. And then you come over to banking. Banking mortgage, which was much lower priority with simple access, we've now focused on it, deployed the teams. It's actually year over year, 46% up over last year. So what we're doing with that business is, and banking is not less risky for the mortgage business because once they bought, it stays there, okay?

Aaron Kimson: It's not like IMBs doing M&A all the time or tries to shut down the business. So I believe that business for us is a lot more balanced now. It's more growth oriented. And as soon as this rate cut comes in the volumes go up, I'm actually highly optimistic that mortgage will start performing at a different level for us. Yeah, and just to add a socket, that 46% data point that Pierre Gavie was in ACB Bookings year over year for the FI space. Got it. Super helpful guys. Thank you. Thanks. Thank you, second.

Saket Kalia: And thank you in one moment for our next question. One moment for our next question. And our next question called, Tom from Charles Nabon from Stevens. Your line is not open. Good afternoon and thank you for taking my question. Pierre, could you talk about the mix of business you're driving domestically from new bookings, net new versus cross sell? I guess what I'm getting at here is, as you brought in the product set, could we expect to see a shorter book on the bill cycle as you cross up the existing base?

Saket Kalia: And just trying to think about what that could mean for the 24 month portion of the RPO as well your revenue visibility over the next couple of years. Yeah, it's very interesting. The first time I was here was 80 20 cross sell, 80% cross sell, 20% new logos. Back half of the year looks almost like the opposite. I cannot project exactly what it's going to look like, but if you look at the pipelines and the balance of business, a lot more new logo deals versus cross sell.

Saket Kalia: You know, we used to run at 50 50. We now got so many cross selling products that I think that 50 50 is going to move more like a 60 40 if you ask me just to guess here. Because we're going to have commercial onboarding, you're going to have all your unique products, you're going to have banking advisor, your AI product, you have knowledge products, okay. We've got consumer ads very new, we've got small business coming in.

Saket Kalia: You've got the parts that can't open. Co-opening. This last quarter, again, the non-commercial products was over 50% of bookings, so clearly the company has balanced the business to a much different extent than what it used to be. So I would just tell you the backend of the office is going to be the inverse of the first half, but yes, over time that 60, 40 versus 50, 50 is what I foresee on cross L 60% new logo is 40%.

Saket Kalia: Got it. And as a follow-up, could you talk about where you're investing internationally, perhaps from a geographic standpoint, as well as introducing greater product parity into some of your less mature markets? Yeah, we've got a great operation in Canada, then the UK islands, the hub for us, and then we focus on the Nordics, the Benelux, and Spain. We have decided to de-emphasize Germany and France. There may be a day we go back in there, but for right now, let's focus on Spain.

Saket Kalia: It's got great massive international banks that set us into Latin America, as well as, you know, we've got a number of great logos outside of Spain of those Spanish banks. And then you go down to New Zealand, Australia, obviously we've got Africa with the dogfrogs acquisition as well as we've had some customers there beforehand. So New Zealand and then Japan. And that's where we're going to focus right now. That is a massive time in Sam.

Saket Kalia: These countries, tea drinking countries, English speaking, similar laws, similar banking structures, et cetera. And we have found success there, as well as we follow we're so forced of that success and this data residency. I feel very good about that. I think what we have to do now is focus on these. We're building new product out of the UK as well as Australia for both onboarding as well as mortgage. We've had some wins there. Those products are coming along nicely. So what I would say is you've got a very focused strategy in markets where we feel it's familiar and we can be successful. I appreciate the color. Thanks.

Charles Nabhan: And thank you and one moment for our next question. And our next question comes from Alex Sklar from Raymond James. Your line is now open. Great. Thank you. Pierre, just in terms of the confidence you expressed around around achieving that 50% and that bookings you wrote this year, I think the laughing of the mortgage headwinds part is clear. Could you elaborate a little bit more on your pipeline comments? Where are you sitting here most optimistic today in terms of reiterating that that 50% outlook?

Charles Nabhan: And then a related question, but third quarter historically is not a big enterprise buying quarter. I know you talked about some tier one activity, enterprise activity back in the pipeline, both in the US and Europe. Is that still a fair way to think about that segment though that it can be more back after the back fourth quarter of the year? Thanks. Yeah, I believe we're going to have a good third quarter.

Charles Nabhan: But then fourth quarter is going to be big for us. That is additionally how the quarters flow out, especially the enterprise. Many of these banks is on year ends in October or September. So they budget years kicking. We've got great visibility into that. We understand their board dates. We know exactly when they make decisions. Many of this stuff is pre-approved. They just have to get for a final board approval. So we do see a massive fourth quarter as well, but third quarter is not going to be negative, it's just a normal seasonality that you're going to see there.

Charles Nabhan: Now I want to make some comments on the community bank space, it's like a machine, it just rolls forward, okay, and that's why I love that business so much. I think the mortgage, what we start seeing a slight improvement as the rates come down and the IMBs, the council are profitable, enterprise in the US is on a good footing, we mentioned over 50% of the bookings already exceeded this year so far, then you're going to the NASDAW, a little bit more lumpy, but I'm seeing all the right movement and all the right behavior, so we are feeling confident that those numbers we put on the table is not only makeable, it's within reach, there's always a case, a middle case, a low case, and a great case, and we feel that we've struck the right balance to actually make those numbers.

Charles Nabhan: Okay, thanks for that color Pierre, Greg, this maybe one for you, I appreciate all the color in your prepared remarks on comparability issues with the third revenue, I know you've always talked down RPO as a key metric. In the past, you've given some color on ACV or ARR growth, just to kind of combat that RPO, is there anything you can tell us in terms of how ACV or ARR boaking is kind of fared in second quarter?

Charles Nabhan: Thanks, Alex. Yeah, nothing beyond what we note in our prepared remarks. We did try to give you quite a bit of color in terms of some of the metrics that we laid out in enabling you guys to track us in our progress towards those numbers. That was really our thought as we came into this call. Okay, great, thank you both. Thanks, Alex. And thank you.

Michael Infante: And one moment for our next question. And our next question comes from Michael and Fonte. From Morgan Stanley, your line is now open. Great, thanks for taking our question. Pierre, deposit attraction retention has commanded pretty outsized mine share for bank executives over the last 12 to 18 months. I'd be curious to get your perspective on a potential inflection and loan growth in calendar year 25 and whether or not that could be a catalyst for the US market to get a bit more constructive on some of the larger scale transformations.

Michael Infante: That is a very good point because you know, they buy whether intentions over their attention Spanish and what they actually believe they have to solve. I do think they will be an inflection point and loan activity. However, what we're seeing now is, you know, the market is matured. The companies understand what they're doing. The understand what it's you know does was clearly the market leader. We're moving now towards portfolio management, which if you look at the workload of that book of business of the bank.

Michael Infante: Regenation is important to great cost driver and you can get efficiency there. But now the big next thing is going to be that portfolio management in automation of calculating your risk and exposure and how can you project that and how can you impact the balance sheet. And so we're seeing great traction and interest in how we're going to do portfolio management and help the people actually use the systems we put in place more effective.

Michael Infante: That's not only important from a physical perspective, but also with differentiation for us. So I see that as a driver as well, as well as the lone demand that you're talking about. Understood, that's clear. Maybe you grab a quick one for you just on the mortgage business. I think I was looking at some of the MBA expectations for volume growth in 25 and looks like a pretty healthy snapback to call it 20% growth next year versus close to 40% declines in 24.

Michael Infante: Obviously, simple nexus took a ton of share this year. I'm just curious, you know, just in terms of a general framework for how to think about that. Is there any reason to think that the mortgage business wouldn't grow sort of in line with broader market growth or even out of premium to the overall market just given the level of share that you've taken this year? Thanks for the question, Michael. You know, again, as we talked about with these contracts, where we have the guaranteed platform price and then that comes or what comes with that as a certain number of loans that they're entitled to, you know, what we still need more data on as volumes ultimately do start to increase is where those minimums were set versus the go-forward business of each of our customers, right?

Michael Infante: And so we still need some more data points to understand when they're going to trip over, you know, the minimums and ultimately that's going to be upside revenue. We think we've positioned ourselves incredibly well to participate in that in that increased volume. But a little bit too soon, I think to determine whether it's going to align with that 20% or be some other number. But that was really one of the reasons we have such a focus on changing those contracts and that really being the first evolution note platform was to be able to benefit from and participate in that increased volume, which as you said, you know, I think folks are expecting, you know, next year to be a positive year and obviously a big change from what we see in over the last two years.

Michael Infante: And the other thing again, you know, we talked about growth this year, but I think that mortgage business has performed incredibly well over the last two years during obviously incredibly difficult time period. And I think those logos that we've been able to take and the market share that we've been able to gain again puts us in a perfect spot to be able to benefit from that without being able to specifically answer your questions. I think we just need more data points and trends in order to do that. Understood. That's good to call our thank you both. Thanks Michael.

Ryan Tomasello: And thank you. And one moment for our next question. And our next question comes from Nick Altman from Scotia Bank. Your line is now open. Hey guys, it's John Goeman. It's on for Nick Altman. Thanks for taking my question. Can you talk about the pipeline in terms of how has changed when thinking about retail versus commercial and any changes to the pipeline make up heading into the second half and where reps are leaning into it?

Ryan Tomasello: From a pipeline perspective, John, what we're seeing now is more like high 50s to 60ish non-commercial. And so again, that trend continues as some of those non-commercial products, which are and ultimately we get more reference ability from them. And so we're excited about that mix. I mentioned earlier about Japan, Amia in Australia, New Zealand, and those pipes just being up 30% year over year on an aggregate basis. But as we think about commercial and non-commercial, it's kind of 46ish as we look at the pipe right now, non-commercial being being the higher number.

Ryan Tomasello: And it's we see it maturing and we see it growing. And ultimately, you know, we're just looking at our colleagues and team to focus on executing and get these deals over the line. Got it, that's helpful. And as a follow up, with your comment on the pipeline mix, leaning more heavily to NetU versus the first half, are you seeing more multi-product discussions up front for those net new customers? You know, are you seeing more multi-department or more geographical reach within those deals?

Ryan Tomasello: Any killer there would be helpful. I think it depends on the geo. Getting back to Pierre's comments earlier, you know, who you're selling to from a geographic perspective in the U.S. I'd say yes, less so internationally. And then again, within the U.S., as you talk about community versus maybe enterprise bank, as we mentioned that platform, multi-product sale, you know, we see continued traction there. And again, I think that's a reflection of the maturation of some of those newer products like consumer lending. We talked about the the eight new loan consumer lending deals that we got this quarter, the five D.A.O. And so we're excited about that in that trend. And thank you.

Joe Roink: And one moment for our next question. And our next question comes from Joe Roink from Bayard, Ulanis now open. Great. Thanks for taking my questions. I think Pierre made the comment earlier that when he looked at the pipeline, he sees larger enterprises across both new and established markets. I guess is an imminent break cut enough to catalyze decisions for some of those big enterprises in the pipeline. Does it happen within the next two quarters, or are you kind of going into this expecting maybe a potential ligand this all ultimately just as you look into the next fiscal year.

Joe Roink: No, I don't see that these people are sitting there waiting for a right to make a strategic decision. These deals that we're working on, you know, is nine, 12, 16 months old, you have to prepare the full board. You prepare the management team and they look at actually the much bigger picture strategically where the bank is going to be. Two, three, five years from now, I would say the driver is more, how do you utilize intelligence of the future.

Joe Roink: If you don't have an operating platform that allows you to standardize your methods, your procedures, and how you people interact with data and their customers, okay. And then it's back to the old IT infrastructure issue. I mentioned my prepared remarks that one bank is going live with removed 40 systems. I mean, those are the issues they deal with. Well, the right cuts out a little bit to not somebody forward. It may be, but in our conversations, it's a lot more strategic around where they see the bank three and five years from now.

Joe Roink: Joe, when you look at the business, really, the only, let's say, rate sensitivity that we really have is on the IMB side of the business or home builders, maybe as well. But when you look at the rest of the business, historically, it's not been very rate sensitive. Obviously, when you have what we went through over the last two years with, you know, this unprecedented rise in rates and in the liquidity crisis, well, that's unusual.

Joe Roink: And that did impact our customer base. But as we distance ourselves from that and get back to, you know, what may be more of a normal operating environment. Again, really where the interest rate cut will be impactful is on that IMB part of our business on the mortgage side. Okay, that's helpful. And then I wanted to go back to the mortgage conversation, you know, specifically thinking about those MBA forecasts, those are proven out, you know, purchase origination is going to be quite good in 2025 and 2026, not back to the heyday of 2021, but also, you know, you have a more robust offering.

Joe Roink: Now the pricing structure is going to be different and you certainly have a customer set that's consolidated. When you stack up all of that and we obviously know kind of how simple Nexus was growing on a pro form of basis, when you compare the next two years versus, you know, prior history, can you relate those to it all in terms of what you would expect your growth rates in mortgage to settle out at in kind of a upturn, not, you know, historically robust, but a better environment in 25 and 20.

Joe Roink: I think you're going to see a difference in our performance, the penning is at the bank is at the IMB is the homeowner, okay, so you have to slice and dice the market, firstly, to understand how the contracts are structured as well as how the bank patterns and the type of contracts are these people like, will a rate cut and increased volume help us absolutely and I've always been very conservative, didn't believe these things are going to come. Now I believe it's going to come September and then we have to see what that does to inflation.

Joe Roink: I'll be very frank with you, I'm so a little bit concerned that if you cut rates too soon too fast, that rates inflation will get us and then boom, they stop the rate cutting, okay, so we're not right now looking at next year, number one, I want to see more evidence and number two, I want to slowly see how the US economy reacts to a rate cut and what actually the activity is beyond that and what the unemployment rate is. As a result. Thank you.

Robert Rob: One moment for our next question. And our next question comes from Robert Rob from the choir cap capital. Your line isn't now open. Thank you. Good afternoon, Pierre Greg Harrison. Thank you all for taking my question. I guess if I could just start with how do you think about striking the balance in showing your customers the ROI initially. You mentioned it's striking the balance between adoption and you know demonstrable repetitive ROI because you know I think you're mentioning your prepare remarks that banking advisor this year was started at a pretty attractive introductory price to drive adoption, which of course makes sense.

Robert Rob: How do you kind of, is there a framework that you kind of use as you introduce these new products, particularly as you get deeper into portfolio management, you know, to, to, you know, not get something in ways, not for free, but, you know, in a way where people see what it's what it's worth, but not at a price that scares them. Yeah, Robert, thanks. That's a very insightful question. So here's what we do.

Robert Rob: We literally go into these banks and based on usage analytics, we have got currently in our systems, okay. So remember before when I go in with a new system, they've got no metrics, no understanding. And we literally have to get, you know, verbal measurements and people will tell us, look, it takes us about this and its estimates and its follow. We're then seen in our place, if it's an existing customer, we can literally measure you're spending four minutes on this task, 10 minutes on that task, et cetera.

Robert Rob: And then we show them back in bias and say, this 10 minutes task, going to come down to two minutes, just an example, okay. So people immediately see the value of what we're doing there. And then just like with all new products, you go in with a low platform pricing and you do a usage of counting there. And the more they use it, the better. The more they're going to pay you and then the more they use it, and they pay you that unit crosses a bit more expensive than the guaranteed one, and then they move the minimums up, okay, which gives us guaranteed recurring revenue.

Robert Rob: So we're going to follow that same model in the early stage, we're voting just like we did with mortgage and tough times to going with a lower guaranteed number in a higher upside for us as they started adopting and using it. If you see that product in action, it really is the closest thing to magic I've seen. And so I think what we're driving now is adoption and market penetration. And then as the product mature, it'll settle down more to enhancing the skills and broadening the skills to get a much wider adoption in the bank and actually drive what I would say is material revenue for us. It's very helpful. Thank you.

Robert Rob: And then if I did just ask a very quick follow up. I know the mortgage industry, the IMB space has already gone through their commission realignment, if you will, that decade or so ago, more than that. But with the NAR, you know, sort of, you know, storm calves and confusion in the potential for dislocation in that market short term. Are you at all worried that particularly with any IMB space, you know, there might be some ripples that still go into the mortgage market.

Robert Rob: The great news is that we've got a product that we sell to our clients to help them with compensation and our destruction. So in this new environment, we actually can help them to do that better. Number one, number two, regardless of how mortgage brokers and real estate agents going to get paid, people are going to buy houses. And the moment the volume goes up, the transactions is going to come through us by far the best product in the market, we're making the investments.

Robert Rob: So I feel very optimistic that automation and what we do in that market is going to be actually the winner as opposed to manual processes. And that markets are a relationship market, but the more we can take the friction out of that model, the better for the market and for us. Thanks for the point. Thank you.

Ryan Tomasello: And thank you. And one moment for our next question. And our next question comes from Ryan Tomasello, from KBW. Your line is now open. Thank you. On the international front here was hoping you could expand upon the product roadmap there. You mentioned in your prepared remarks, the opportunity for bringing dot Fox in particular international customers at some point. So carry it how you would rank order what different features of the platform still represent an opportunity to expand internationally as you kind of look across what you have in the US product set.

Ryan Tomasello: I would say the biggest next opportunity is commercial onboarding that is the universal problem. And our market testing has shown that everybody is clamoring for a product like that in the commercial small business space. Okay, to really take that from a six months process down to a weeks and months process. Okay. It literally is that difficult for them to open accounts. The second big product that we're working on there is a mortgage product that will span from Canada into the UK island down to a study in New Zealand.

Ryan Tomasello: So those are the two, I would say, big workflow automation type products. But then you have to realize all your Nick products, as well as banking advisor, our global products coming out of the shoot. So every customer of it senior will get the benefit of our intelligence and data initiatives as we go forward. And they don't need that specific customization for local environments. And then there's still a ton of commercial business left for us internationally. So we can going on on three fronts from major footprints and then you start automating that with your banking advisor Nick products. So I feel pretty good about the footprint we've got there. Great.

Ryan Tomasello: And then follow up for Greg, maybe a two part question here on US mortgage. Greg, last quarter you talked about M&A driven mortgage churn as a particular area that you're being more mindful of in terms of the guide. I guess as you look at the mix across the US customer base mortgage customer base, are there any dynamics that make M&A something that's more likely to go against you over the intermediate term.

Ryan Tomasello: And then as a follow up on the churn piece, if you can quantify where that came in in the first half of the year and what your expectations are for the back half, you know, just trying to understand the waiting there in terms of whether or not churn could be a potential source of upside as we look at the second half of the year. Thanks. Thanks for the questions, Ryan. You know on the M&A front, I don't think there's anything unique.

Ryan Tomasello: That would pose it as a as a specific risk. We've tried hard to align ourselves with the winners in the I and B space. And to that point, we've tried hard and worked hard to align ourselves with some of the bigger players out there. And so M&A certainly can go against you. It's hard to predict, right, when you're forecasting, but to the extent that there is on the mortgage side, you know, we certainly would hope to be a beneficiary.

Ryan Tomasello: Even when we've not been in the past, you know, some of our best salespeople are frankly the loan officers that use our product at a specific I and B and they go somewhere else. And they insist on simple Nexus, you know, now Encino mortgage being part of of their work like. And so that actually can be a benefit as well, even when a deal does go against us, but nothing unique to call out there.

Ryan Tomasello: It's just really more reflection that we're seeing some stabilization in that space. I and B's are starting to make money again, which is great for the industry. And so you as you think about churn, it's less about I and B's going out of business, which is what we experienced. A majority of, you know, over the past two years and more around potential M&A to your second question around churn, you know, we forecast it out of the 20.5 million churn for this year.

Ryan Tomasello: 8 million in the mortgage space through the first half of the year, we're about 4.75 million. And so we think we're we're right on track. And again, expect the second half of the year to be to be more stable. And so I think we feel good about where we are today. Great, appreciate the color.

Chris Kennedy: And thank you, and one moment for our next question. And our next question comes from Chris Kennedy, from William & Blair. Your line is now open. Great, thanks for taking the question. When you think about the new products that you have and your commentary about the pipeline, is there a way to think about how the ACV next will evolve for Ncino as you think about the next three years or so? I think you will see the current pattern holding where it will be more than 50% non commercial.

Chris Kennedy: I see that pattern continuing because there's so much bigger market for us left in that thing. The second thing is I think you're going to see. The 6040 I talked about earlier about new business versus cross sell, the cross sell being 60 and 40. That's a second way to look at it. And then thirdly, if you look at the US, you know, we are, we are looking at the market here continuously.

Chris Kennedy: I mentioned earlier in previous calls, we are going to focus on credit unions more. And as you put dedication to those kind of markets, I think the US will outpace international in bookings for the next three years, just because of the sheer volume of institutions here and the breadth of the products that we've got here. So that's how I look at the development of not only pipes, but ACV bookings and the transition into revenue of that. Great. Thanks for taking the question.

Unknown Executive: You're welcome. And thank you.

Pierre Naude: And I am showing no further questions. I would now like to turn the call back over to Pierre, not day chief executive officer for closing remarks. Thank you. I'll pray that and thank you all of to be on the call today and with your insightful questions, et cetera. Here's my summary of what I'm seeing in the market. Great execution by the team. Team is well positioned strategically. We are as well positioned as ever in this company.

Pierre Naude: We've came out of two years of COVID, then the quality crisis. And now we're going to start seeing rate cuts. So I truly believe that there's better macro economic environments coming at the same time. We kept our heads down. We kept on investing in products, et cetera. And all of that is going to culminate in a great position for this company. So I'm not only optimistic. I'm actually feeling pretty good about what I'm seeing in the pipelines, the early signs there. So I appreciate your analysis and your insights into our business. And hopefully you can see the enthusiasm we have at as we go forward. Thank you very much. Talk to you all later.

Unknown Executive: Thank you. This includes today's conference call. Thank you for participating. You may now.