nCino, Inc.

Thank you for standing by. Welcome to Encino's first quarter fiscal year 2026 financial results conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Harrison Masters, Director of Investor Relations. Please go ahead, sir.

Good afternoon, and welcome to Encino's first quarter fiscal 2026 earnings call. With me on today's call are Sean Desmond, Encino's Chief Executive Officer, and Greg Ornstein, Encino'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, 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. 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, as well as the earnings presentation on our investor relations website at investor.ensino.com. With that, I will turn the call over to Sean.

Good afternoon everyone and thank you for joining us to discuss Encino's first quarter fiscal 2026 results. Before I get into the details of the quarter, I want to take a moment to remind you of the core problem we're solving and why Encino exists. Across the globe, financial institutions continue to wrestle with inefficiencies caused by legacy infrastructure. Too many are constrained by fragmented technology stacks and siloed data. which slow down decision-making, limit the ability to leverage data and analytics to make more informed and real-time decisions, limit the ability to leverage AI to further automate tasks across the institution, and inhibit growth and the ability to reduce expenses. These operational roadblocks are precisely what Encino is designed to eliminate. We are reimagining these processes and delivering world-class experiences across the customer lifecycle. Encino is the only cloud-based SaaS provider that enables financial institutions to seamlessly manage lending, onboarding, account opening, and portfolio management across all major lines of business connected on a unified, scalable platform powered by AI. Because we are the system of record for so many of our customers' most critical operations, And because our solutions are deployed in over 20 countries across a broad and diverse customer base of banks, credit unions, and IMVs of all sizes, we believe we've built a competitive moat that is both wide and deep. Turning to Q1 results. This was a strong start to the year and an important first step in turning Encino from a great company into a great long-term business. that executes with precision and capitalizes on the sizable opportunities ahead. We delivered total revenues ahead of guidance, driven by strength in our subscription revenues line. We are pleased with the demand we see building in the market, which was confirmed by the reception to the AI capabilities and omni-channel experiences we showed last week at our annual Insight Customer Conference. I'm also pleased to report that our non-GAAP operating income also came in ahead of expectations. It's early in the year, but I'm extremely encouraged, not just by the financial results we're reporting today, but by the internal KPIs we track closely to run the business. Bookings of new annual contract value are progressing well. Of course, there is work to do, but we remain confident in the full-year ACV plan we outlined last quarter. As you know, ACV is the leading indicator of future subscription revenues growth, and we believe we are on track. At Insight last week, we showcased the culmination of a large multi-year and multi-product body of development work that delivered significant enhancements to our onboarding capabilities, created enhanced omnichannel digital experiences for our customers' clients, reinforced the scalability of our mortgage solution, and embedded intelligence across our workflows. Having fulfilled these commitments to our customers, we see incremental growth initiatives available as extensions of the core opportunity we have been pursuing for over a decade. AI is central to our long-term differentiation and our approach which we believe leverages the largest process-centric data set in FinTech, is uniquely powerful. At our Insight Conference, we released 16 new Banking Advisor capabilities, building on the two that were already generally available. These new capabilities are designed to help customers save time, lower costs, and improve productivity. And because Banking Advisor drives incremental usage of the Encino platform, We see these enhancements as key drivers of future subscription revenues growth. One of the initiatives I highlighted at Investor Day is the mortgage cross-sell opportunity. In the first quarter, a $25 billion regional bank doubled their annual commitment to Encino through the adoption of our mortgage and our consumer lending solutions, accompanying a five-year renewal. This institution will be able to provide a consistent experience for their clients across all consumer loan products, including mortgage. We expect this differentiated experience will be a true competitive advantage for them in the marketplace. Another growth initiative I discussed is the credit union market, where we see a $1 billion of SAM opportunity that has been unlocked through the readiness of our solutions for that market. In Q1, an $800 million credit union who had an existing relationship with Encino through our portfolio analytics solution chose to also adopt our consumer lending, including indirect auto, commercial lending, and account opening solutions. The Encino platform was truly the differentiator here, as the credit union was looking to consolidate vendors and streamline operations on a unified platform across their institutions. And finally, we saw good progress on the international front, with a significant add-on deal at a top Canadian bank and a new logo in Japan. International expansion is core to our strategy, which goes beyond the EMEA growth initiatives I spoke of at Investor Day. The global opportunity for Encino is large, and we evaluate it with a broad lens. We are excited by the progress so far this year in Europe and in Japan and look forward to updating you on wins later this year as opportunities get over the finish line. Before turning it over to Greg, I want to offer a brief perspective on the macro environment. We are, of course, sensitive to what's happening out there. It's a fluid situation that continues to evolve. That said, our financial institution customers remain well-positioned. Many of them have healthy balance sheets and are projecting growth in both loan portfolios and earnings. We're also seeing encouraging signs of stability in the mortgage market, even while some interest rate volatility persists. Because we planned conservatively in this part of the business, that stability contributed to our outperformance in Q1. And finally, our US customers are telling us that potential deregulation could free up capital streamline decision-making, and open the door to further adoption of best-in-class technology platforms like ours. Taken together, these are solid early positive signals that reinforce the confidence we have in our strategy, our product portfolio, our team, and our ability to execute. You may have seen that we filed an 8K yesterday disclosing a restructuring event that affected approximately 7% of our global workforce. We do not take these actions lightly, and it does not diminish our appreciation for the contributions of these employees. As a result of reexamining our processes and organizational structure, including the ways we build and deliver software, which I had the opportunity to see up close during my tenure as the company's chief product officer, we identified opportunities to streamline our operations, including by leveraging AI tools. This restructuring event is indicative of our belief that we can reduce bureaucracy and be more efficient, including by bringing new product functionality to market even faster, while also delivering durable, accelerating growth with the ultimate aim of maximizing shareholder value, which is our primary mandate. In closing, I'm very encouraged by the start to the year we've had and by the feedback we're receiving on both our existing and our new products. The conversations we're having with customers are more focused, more strategic, and more forward-leaning than they were just a few months ago. I'm more excited about what lies ahead, and I look forward to updating you on our progress again on our second quarter earnings call.