nCino, Inc.

Thank you for standing by and welcome to Encino's third quarter fiscal year 2023 financial results conference call. At this time, all participants are in listen-only mode. After this feature's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Harrison Masters, Investor Relations. Please go ahead, sir.

Good afternoon and welcome to Encino's third quarter fiscal 2023 earnings call. With me on today's call are Pierre Naudet, Encino's Chairman and Chief Executive Officer, David Rudeau, Chief Financial Officer, and Josh Glover, President and Chief Revenue Officer. During the course of this conference call, we will make forward-looking statements regarding trends, strategies, and the anticipated performance of our business, including without limitation, the acquisition and integration of SimpleMexis. 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, the financial services industry, and global economic conditions. Encino disclaims any obligation to update or revise any forward-looking statements. Further, on today's call, we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP 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. With that, I will now turn the call over to Pierre.

Thanks, Harrison, and thank you all for joining us today. I'm extremely proud of our team's execution in the third quarter as we once again exceeded top and bottom line expectations. We generated $105.3 million in total revenues, including Simple Nexus, a 50% increase over the third quarter of fiscal 22. Subscription revenues were $88.3 million, an increase of 55% year over year. Excluding Simple Nexus, subscription revenues grew 28% organically. This quarter marked our first quarter with over $100 million in total revenues, and also our first profitable quarter on a non-GAAP operating income basis. For the past two earnings calls, we have emphasized our commitment to profitability in fiscal 24, and I'm very happy with the progress we have made to date. We plan to significantly increase our non-GAAP operating income next year and I will touch upon that shortly. On the customer front, we were pleased to issue a press release shortly before this call announcing that the Bank of New Zealand has selected the Encino Bank operating system as a foundational technology platform, making the Bank of New Zealand one of our largest customers globally. With over 55 billion US dollars in assets, Bank of New Zealand is one of the country's largest financial institutions. We couldn't be prouder to be in business with them and greatly appreciate the opportunity to showcase the value our solutions can bring to financial institutions around the globe. I'm also pleased that following the announcement last month of a successful go-live with Kiriboshi Bank in Tokyo, we had two additional go-lives in Japan, in the quarter including SMBC Trust Bank. We are excited to see good momentum and traction in the market representing an estimated $1 billion opportunity. Among numerous other go-lives in the third quarter, our first customer in Germany is now live. Hamburg Commercial Bank, or H-Corp, was recently recognized by Euromoney as the world's best bank transformation for 2022. We are honored to be their partner as they continue optimizing systems and processes to maintain their market leadership position. As I mentioned before, getting customers live and reputable is what we truly celebrate at Encino, and this is of particular importance in our newer markets. I also would like to highlight the performance of SimpleNexus business, which had another strong quarter under difficult market conditions. SimpleNexus grew total revenues 38% organically year over year, and had six competitive takeaways and five cross-sells to Encino customers. Despite the current headwinds in the U.S. mortgage market, we believe the quality of this business, including its people, technology, and recurring subscription-based revenue model, positions us to continue to take market share and emerge on the other side of this rising interest rate environment as the clear leader in this space. Obviously, the macro environment remains top of mind. We have spoken with numerous customers and prospects about market conditions, and their feedback has generally been positive, with banks and credit unions sharing that they are well capitalized, realizing improved net interest margins, and that credit risks are in check. This bodes well for Encino over the long term. Financial institutions remain focused on the need to digitally transform in order to be competitive and to better serve their clients. And as a result, our sales pipeline remains healthy and continues to grow nicely. That said, we are not tone deaf to external conditions and the bottom line expectations of the market, which have changed materially over the past year. Against the backdrop of macroeconomic and geopolitical uncertainty, we are seeing a more measured buying environment and increased executive scrutiny on purchasing decisions. particularly in Europe, which extends sales cycles and the time required to close deals. Additionally, FX headwinds and a challenging US mortgage market persisted through the third quarter. So what does this mean for our business? Well, we actually view this more challenging macro environment as an opportunity to aggressively evolve from a best-in-class growth SaaS company into a best-in-class profitable growth SaaS company. With the investments we have already made in sales, products, customer support, professional services, and geographies, we are very well positioned to grow market share and continue leading the digital transformation of financial institutions around the world. On the bottom line, you have seen a significant improvement in our performance during the course of this fiscal year. And we expect that trend to continue next year and beyond as we further optimize our cost structure and drive more meaningful leverage on the expense side of the P&L. We have been able to accomplish this improved bottom line performance without changing our strategy or investment priorities, but instead through a more conservative approach to managing headcount and disciplined investment decision making with an even more relentless focus on ROI. We have also been able to realize cost synergies from the simple Nexus acquisition as the two businesses work more closely together and our integration activities accelerate. On the top line, the fourth quarter has typically been our strongest sales period, and we still have two months left in the fiscal year, so we will wait until our Q4 earnings call to provide specific financial guidance for fiscal 24. However, we think it is important in uncertain times to provide even greater visibility into our current thinking. As we factor in the impact of the three headwinds I mentioned earlier and the overall macro environment, we are currently planning for Encino to be a rule of 30 company next fiscal year with a mix between total revenue growth and non-gap operating income margins. trending towards 20% and 10% respectively. We will accomplish this without changing our investment priorities, which remain, making sure we have the right sales coverage for our addressable markets, that our support and professional services organizations provide the best customer experience in the industry, and that we continue investing in our product portfolio to extend our track record of innovation. With that, I'll turn the call over to Josh to go through more business highlights from the quarter. Josh?