nCino, Inc. (NCNO) Earnings Call Transcript & Summary

Good morning. My name is Greg Orenstein, I'm the Chief Financial Officer at nCino. And on behalf of all of our employees, we want to welcome you nCino's inaugural Investor Day, both those of you who are here in person as well as those of you online. We have a great day for you today. Packed talking about our strategy, our products and ultimately, our financials. And with that, we want to go ahead and get started. I'm going to turn it over to Pierre Naude, our Chairman and CEO.

Thank you, Greg. All right. Good morning, everyone. Is that a good, can you all hear me fine? All right. Thanks a lot. I'll make sure if it's too loud we can turn it down in the back there, okay? I do realize we do have an online audience. So I want to make sure I stay close to the mic so that they can follow us, okay? But firstly, a cautionary note, I've read many of your notes, so I want to make sure you get this. And before we just dive into all of this, 11 years ago, we had this vision about the worldwide internet cloud banking because we literally introduced banks to the cloud. And I went to many places where I spoke in front of bankers and they said, "small banks may do it because they kind of outsource stuff, but they will never go -- the big banks will never go to the cloud." And then they told me "they won't do small business". And then they told us "they won't do consumer eventually or account opening because they build the stuff themselves." And over the past 11 years, we've built a market-leading company providing software to banks on a global basis. And today, we're going to provide you with some facts and data that actually will help you understand why we're so excited and so positive, not only about the marketplace, but about our prospects in that marketplace. Through the years, we've seen many imposters, people trying to copy us, et cetera. We believe the platform is a major differentiator. And Greg mentioned the topics we're going to address. But there's one thing I want to talk about before we even get there. For the people in the room that came here, hopefully last night and this morning, you get a little sense of the culture. And if you go over to headquarters, later on, there's a lunch today, take the time. We'll make sure security will let you in. And you'll start things like -- start seeing things like alligator heads and little things like that around. And that's because, we have a team second to none that's motivated to take market share, that actually is passionate and engaged, come to the office 5 days a week and love being here. We have a slow turnaround of people or churn. And we love that because we truly ascribe to the notion that culture will eat strategy for breakfast. The strategy of this company has been clear from day 1. We're going to be global. The Salesforce platform allows us to do that. We're going to go from the smallest bank to the biggest bank. We've proven we can do that. We've delivered projects in Germany, France, the U.K., Ireland, Australia, South Africa, New Zealand and Japan. And we've proven we can do that. So now the question is, how do we weather the macro environments that we get every now and then? And many people get really scared when these things come. If you're about my age and experience, you'll realize that '08 was there. And it becomes an opportunity. We started the company in late '11, beginning '12. You'll realize that the liquidity crisis may be a short-term bump, but actually creates a lot of demand for people like us that is focused on IT transformation I believe digital transformation is kind of getting old now. It's almost like online banking in the '90s. It was hot for a while. Today, we're going to talk to you about these topics for you. I'm going to spend 20 minutes with you just giving the vision and how we're performing. And then Josh will come up and tell you how we're going to make it happen actually in the field where we focus on what we do. Then we've got a PD&E leadership team here with Matt and his team, and you hopefully will share my excitement of their vision for the different products, what we're building. Because building a platform like this is complex. You have to coordinate, you have to make sure people work together, et cetera. We'll have a small break because by that time, you'll have information overload. And then we're going to have a customer fireside chat, and I want to thank John Sullivan for coming and telling it like it is. Because you're going to find with nCino a tremendous amount of focus and passion for the customer. We realize that banking is a massive market, but it's a very small marketplace. Because the same people move between banks and they talk to each other and they talk about vendors. And we get frequent feedback that nCino is one of the best software companies and vendors they've ever seen in the market. For one reason only, apart from the quality of the product is our people's dedication to the bank's success. And we measure it for them and we give them feedback on that success. And then Greg will come up and do a financial overview and tell you why this company should actually be a premium asset and why you should believe in the long-term viability and great success. And then we'll open up for questions. Okay. So today, as we look at the landscape. And this last week, I was in Paris. I was in Frankfurt, Germany. A few weeks before that, I went to some regional banks in the U.S. I was out in the West Coast speaking to bankers and customers in the room. We realize it now more than ever. The luxury of tolerating your old IT infrastructure is slowly drifting away for banks. They have to simplify that layers and layers of complex technology. And in our typical deployment, we replace between 15 and 20 different systems. You can imagine the complexity of actually administering, maintaining paying royalties, et cetera, for all those different systems and the skill sets you need. And we provide them the opportunity to standardize all of that on a single platform and provide a far superior client experience. But as you all know, AI is now the big talk. We've been doing that for over 4 years with our nIQ offerings. But here's the key to all of this going forward, the consolidation of data to make it useful for machine learning, AI and analytics. To begin to understand how do you shift the costs in a banking operation for your more simplistic products to self-service as opposed to people touch. And that is going to be fundamental for the banking industry going forward is high tech and low touch. We love great relationships, but I would ask any of you on a Wednesday morning, do you feel like just going to chatting with your banker, no. Just like how many of you actually wake up in the morning and think, "Man, I wish I can call American Airlines and get a ticket." Will it be a freaking nightmare, okay? You'll set on hold. They'll tell you the prices went up. So what I'm telling you is we're all conditioned for self-service, ease of use and elegant user interfaces. And then see now bringing all of the above to very complex banking processes. Our mission is to transform financial services through innovation, reputation and speed. But I will tell you that every time I speak to a banker, they expect two things: continuous innovation and fantastic customer service. That's what they want. That's why doesn't help me to create a great product and then you can't afford the services or you offshore it. And we're very proud that we do our development right here and we have development centers around the world for localization where people can actually build these things close to the markets and understand what's going on. As such, we've got a team in London. We've got a team in Toronto. They are looking at the mortgage product there. We've got a team down in Australia to gain localization for Australia, New Zealand, and we've got a small team in Japan. And these people fully understand closer to the customer, what that local market needs. Ten years ago before nCino or 11 years ago, speed wasn't even a word used in banking because it's all about the risk, compliance and credit quality. Today, the clients just expect that, a new incomers are disrupting the banking market and as such bankers have to pay attention. And we are leading that charge. So here's the great thing. For everyone who gets slightly nervous every time there's a bump either by the Fed or in the marketplace or liquidity crisis or the rates go up or the rates go down or you've got the financial crisis, et cetera. nCino was founded in December of 2011. And through that period, we have managed through high regulation administrations, the Obama administration, then we got to the Trump administration that says, "Go, go, go with all cost, no regulations, the bankers will manage themselves." And then of course, we get the Biden administration swinging back the pendulum slightly more to the other side. That's a reality for bankers. They have to look for that. What they need to weather the storms of regulation is actually the ability to have the flexibility to look at growth on one point, and you'll find that your regional and smaller banks are always growth-oriented, and your very large banks is more about efficiency and cost. And then senior answered that well on both fronts. And then finally, it's like when you drove here from the airport, following the rules of the road is not the luxury. It's just what you have to do. And nCino brings a tremendous amount of risk management and compliance along with the platform. I can tell you that on the one hand, it's a massive burden building these systems because of the compliance and the doc prep and what you have to disclose and you read frequent banks being fine because of it. On the other hand, every problem we see is an opportunity to build a moat as big as the water way down by the beach. And therefore, you don't see many companies anymore trying to do what we do at the scale with we do it. So we see all of these obstacles or all of these lemons as opportunities to make lemonade and actually take market share. So if you look at a few examples I'm just going to share with you on increasing of revenue by Community Bank in the U.S., a 67% increase in loan. Nobody wants a message about if you put nCino [indiscernible] your people. But they all love the story. You can double your assets without adding people. I mean that's a tremendous bank, okay? And as they grow and they can do it without adding people apart from revenue-generating people, but the middle back office can say stable. That is a tremendous driver of increased revenue, and it translates in the end into efficiency as well as compliance. A 70% decrease in approval process time. And by the way, we do the benchmarks when we start with nCino at the bank. We study the bank's performance. And then over time, the project itself can get them about 50% there. And then over time, we can tweak and give them the visibility. We give them feedback. We've got a group called CSMs or customer success managers, and we show them how they're doing. And we push them because we compare them to their peers. And you'll be amazed if you unleash that little bit of competitive nature and people in these banks amongst their peers, how that changes the culture of measurement and more of a manufacturing mindset in these institutions. When it comes to reduced cost, in this case, an international bank in the U.K. consolidated 9 systems into a single platform, 52% reduction of paper-based processing. And by the way, these numbers are endorsed by the banks. And 63% faster originations. That makes a tremendous difference to their competitive advantage in their markets, and the banks truly believe that the nCino platform is becoming a differentiator. Improving efficiency, 11 in-house systems and 26 checklist deprecated by an enterprise and a community bank in the U.S., 5x improvement in time to close small business loans, eliminated the rekey 37 times. Can you just imagine, you come out of college, we give you a job here at nCino, and your job is to enter the same data 37x. What a fantastic life experience. You'll remember it forever. One day time for approval decisions to be delivered. There's an old moniker on banking. All loans go to die in credit. That is not true. A credit officer will tell you all loans come here, have filled out, not all the information, I can't make a decision, send it back to the front line. It's like shunting railway cars. With nCino, you can do things concurrently, you can actually understand exactly where the gaps on information gathering and you can reduce the times as we demonstrate and illustrate here. And then finally, risk and compliance. This is across multiple banks, 126,000 documents uploaded to document manager in 1 year. Do remember, we are a client-centric or an entity-centric system. In other words, that document comes up, it gets attached to the client of the entity and can be reused for multiple purposes, whether it's loans, deposits, onboarding, et cetera. Compare that with most banks that doesn't have nCino, which is system or line of business centric. So every system needs you to upload the same document, you come for your next experience. And the front line says, I can't find a document because it's sits in a different division. And just ask for the same thing over and over. And each 1 reduction in data rekeying from application to booking and 32 hours per month saved on auditing. These things become real, especially when you see net interest margins being compressed in the market. And because of these successes over the past 11 years, nCino has earned the right to have a clear viewpoint. And in today's world -- in the old days, we had to explain to them why to do it and then how to get there. In today's world, we can enter the market with a gold standard and out of the box offerings that even drives more efficiency in the implementation phases and get the culture change in these banks to a much faster extent. This is the Holy Grail. And it may look simple on this picture, but it is the client-centric relationship banking model with our core platform components around it. And you're going to hear more about this later from the product team. And then around that, you can see the solutions we've built over the years. And yes, many of you got impatient since our public days about when is more coming, et cetera. Last quarter, we shared with you that for the first time in the history of the company, that the pipelines are now more than 50% noncommercial products. And I can see that trend accelerating because of the current economic conditions and profitability of banks. However, the future is a lot more exciting. Intelligence will drive everything. We believe there's tremendous opportunity for Nick and the automation and AI as we come. And we're going to share some of those and demo later on for you some of those solutions. But you have to look through -- at this through a very specific lens because you cannot just co-mingle intelligence, experience and automation. The banks cannot absorb all of that in one take. It's a massive cultural change, okay? You have to realize, I sometimes speak to bank Boards of Directors. I'm not kidding you. I'll spot a flip phone every now and then. And yes, it's not the new ones. Okay. So we are moving the culture and the level of automation in these institutions over time to actually drive a level of adoption and automation. You can imagine the skepticism around AI and data sharing. And we're going to share with you today why we're excited and believe that we actually have the bulk of the data because we have all the loan origination, all the documentation, all the bank's financials everything about the customer, right at our fingertips. As we stand here today, 97% of our banks agreed that we can actually share their usage data. So we can see exactly in the system where is the bottlenecks, where they go back and forth, et cetera, to even enhance that experience. And we're now working on the analytics side of that, and there's more details to come. While you read that, and that is my final slide. I would like to remind you that nCino was built from day 1 to be an independent low-standing company that will change banking through our culture and our people and our unique positioning in the market. That value system of innovation, reputation and speed is alive and well today. Over the past 2 days, we had 120 of our top leaders in the company in a meeting downtown. It's midyear. You'll ask why do it this time of year. So that we're undisturbed by beginning of the year kick off and new financial targets, et cetera, and really get feedback. How does it look in the field, what is going on, how are people feeling? What feedback are we getting? And I'll remind you in January, we all came back to the office because we believe in our young people, we believe in the collaboration, the mentoring and training that need to be effective as fast as we can. I'm a firm believer that companies who's got the will and the courage to do that will outperform the rest of the market in space. And we are seeing it right now in our readiness go to market, and the feedback I'm getting actually from our 120 leaders we had here. They were enthusiastic about the future. And really, you could feel the electricity as we went on there. And what fuel and drivers is that passion to make customers successful. And yes, the markets will go up and down, and there's nothing I can do about that. But I will tell you, we will pursue with great dedication and passion to make our customers more successful and change the view that the outside world head of banking away from a stage old culture to a nimble, fast-moving and flexible industry that can actually change with the times. My final little story for you is last week, I was in Paris on an ESG panel. We've got a fantastic solution coming up in Europe because ESG is a much more prominent there. And the excitement we saw from the banks in the audience. On the same day, I had a quick visit in Frankfurt, Germany, where we had about 50 people in the room talking about this. I took a bet with my people beforehand. I will get at least 4 Smiles out of the Germans and I got more than that. Because I challenged them. I look at the financial of your banking industry. I look at your culture and your people. You are supposed to be the excellent manufacturing team. And here we are, and let's get going and help you to make the bank operate like a manufacturing team. So I'm telling you wherever I go in the world, whether it's Japan, Australia, New Zealand, South Africa, the U.K., Ireland or Germany or the Dutch, they need this. It's coming. We've got a global platform, and we're excited. We've got the background and the proof point that we can do this. So I'm very excited not only about the future, but about the culture and direction of this company. And if you are today online and you're not in the room here, I would urge you to speak to somebody who was here. So you come here down the line, you're always welcome. To actually feel the culture and understand why we believe that's a differentiator for us. And that's why we had this meeting in Wilmington as opposed to New York City. I'll always meet you wherever you are in the world. But I do think there's a unique experience to meet our people, to see the products and actually get a feel for Wilmington. Thank you so much for coming, and thanks for your time. Enjoy the day. We'll be here for question and answers at a later stage. Thank you so much.

Thank you for joining us today, both in person and online. We are going to spend some time talking about how we go to market. And there's a few key points that I'd like you to understand as you understand how we think about the growth of the company. First of all, I believe we have a culture of excellence. If we're going to go into a market if we're going to build a solution, we expect to get significant market share. This is hard work that takes time, right? It's an effort to get these sales cycles going, but when you execute well, the rest tend to come. So that culture of excellence is an incredibly important part of our organization and is going to show in the results that we talk about today. Secondly, banking DNA really matters. We run to complexity. So if you're going to sell transformation in a commercial bank, in a retail bank, if you're going to sell intelligence and talk to bankers about using their customers' data to drive intelligence, you have to have a team that can speak their language and that runs to that complexity. That's a big piece of what we do, and it's why we've been. Secondly, we have an unprecedented global ecosystem, both of consulting partners and SI partners and also tech partners. That allows us to distribute the product. It allows us, most importantly, to deliver customer success, allows us to put innovation on our customer screens. Also, we really engage customers and ask them to join a community and we believe it's a community of outperformers. When we started the company, we began signing enterprise banks. We started talking about starting an enterprise advisory group, where we bring together our enterprise accounts and talk about how we could better serve them and help them better grow with the platform. And people from the old world of software said, we are crazy to do that because those banks compete and they have overlapping footprint and they would never get in the same room. We have almost 100% attendance from the customers when we have an advisory group like that now because the world has evolved. Banks have realized that you're not going to differentiate by hiding in a corner, trying to build something better on your own in the world of packaged software. And that community is a big piece of who we are and how we grow. We're very proud of our customer base. We treat our -- where we can with always, obviously, respecting the confidentiality of our clients. We're happy to tell our customer stories because we're proud of the work that we do and the reputation of the company. And finally, we show up with a point of view. When we started the company back in 2012, we showed up to evangelized multi-tenant cloud, and that was an effort with banks to get them to understand that they could think differently about using technology. Now with a lot of hard work and a lot of lessons learned along the way, we can help them see how they can leverage that technology. And as we embark on a new chapter of helping banks think about how to leverage intelligence, the DNA that helped evangelize multi-tenant cloud, get banks comfortable with that progression on technology. This team is very well prepared to help them get ready to leverage intelligence, I think differently about how they run their banks in the new age. We have a few focus areas and go to market that we'll discuss today. First of all, even as we shifted to profitability, Greg will get into details on that. We remain committed and hopefully, you've heard from us that we're going to make sure we cover the global SAM. So we are very pleased with the evolving nature of that, SAM, and how it grows, we'll get in some detail there. We're very focused on landing and expanding with a single platform. And there's some nuance in the words and evolution in how we talk about this. When you started covering us, you probably heard us talk about cross-selling to the customer base that was typically commercial. I don't want to talk about cross-selling to commercial anymore because if we have a solution, our expectation is we're going to build a winning solution that is a valid entry point. And it's a very different way of thinking. It's a very different bar for our product leaders that you're going to hear from because I don't want my retail lending solution to be something I'm going to show up and cross-sell. No bank is going to subjugate the needs of the retail customers for a cross-sell quality product. They want to pick a market-leading, best-in-class entry point. And so that's what our team is building, and I couldn't be proud -- more proud of the progress that they're making. We're also focusing on the evolution of our marketing organization that's helping us build pipe, that's helping us grow faster. And we'll spend some time talking about where we're focusing there. And then we're going to leverage our global ecosystem. So when we went public, and you first heard from us, we talked about a $10 billion global SAM, it's important to know as we talk about market sizing. This leadership team will talk to you about SAM. We believe SAM is a more accurate way for us to make business decisions. It's a much more realistic depiction of the market opportunity. So you'll hear from us about SAM. And when we went public, this $10 billion was based on addressable seats based on an assumed per seat price, we extrapolated that across the markets that we served, and that SAM did not include any intelligence offerings. So $10 billion is what you heard from us. We see an expanding SAM, and now we see an $18.7 billion global SAM. The change there, we talked about $4 billion added when we acquired SimpleNexus. We have $900 million of SAM that we can now address via our partner ecosystem. In our last earnings, you heard us speak about entering to the Middle East SI relationship. We now have $3.5 billion of nIQ SAM that we'll address. We've also evolved our methodology to something that we believe is more accurate. When we talk about SAM now, the ACV that we assume for a solution in a market that we serve, is based on actual ACV that we've contracted. So we're not using hypothetical addressable seats now. We've actually driven these solutions to market. Customers have made an economic commitment, and we believe that's a much more accurate foundation for us to understand the market opportunity and for you as investors, also understand how we're thinking about the opportunity. Important to note here, the SAM that we are talking about today does not include the generative AI opportunity that we will be showing to you. And I think when you see that and you leave the room, you're going to understand why we're quite excited about that. But no numbers we will show you about what we believe is the market opportunity now include that, SAM. And that is the SAM that is still significantly underpenetrated. And we sliced it two ways here. On the left, that is our geographic SAM. The bar to the left is the Americas, that's slightly over $10 billion. Largest opportunity there is commercial. Next, we have EMEA, which is slightly over $6 billion. And then we have nIQ -- then we have APAC, which is just over two. And then if you look to the right, you can see that slice by solutions. The commercial bar includes commercial, small business, treasury. It includes our ESG solution and then the commercial LOS that you know and love that we've talked about for a long time. So that essentially think about that as how a bank serves its business customers. The consumer bar is, by far, our largest SAM that we're addressing. That is retail lending, that's our mortgage LOS that we sell internationally, that's our mortgage POS that we acquired with SimpleNexus, that's deposited account opening solutions. And then nIQ is only our existing offerings. So that's commercial pricing and profitability is auto spreading, portfolio analytics and mortgage analytics. And again, no generative AI included. Lending and spending with a single platform. We have a broad and diverse customer base that we've worked hard to build. And if you look at the penetration that we see in the U.S. where we have 25 of the top 50 accounts and Canada, where we have the 5 of the top 7, I would ask you to think about that as a proxy for what we look to do as we expand other geographies. And you can see arrows kind of with no numbers beside them. Those are new markets where we have established beachhead accounts, that's South Africa, that's the Middle East, that's the continent in Europe. And our goal is to land that beachhead account, make them successful and use that to drive other market share similar to what we've done. The question I always get when I showed this slide from the investor community, Josh, are you worried about your market share. And it's a valid question when you look at this, and I get it a lot. To use your language sacked, I view it on the other side of the balance sheet, okay? I don't think that's a liability. It's actually an asset. It's an asset because banks want to be progressive, very few want to be first. So when they look around and they see their peers going on one route, it helps them get confident in picking that as a basis for their modernization. Secondly is the data opportunity becomes more exciting. Banks are realizing that when they see what is truly the envy of the industry and our data set, if they want to leverage predictive and generative AI, they're going to be better off leveraging a market leader that has the data set that we have. This is important to understand if you want to understand nCino. On the right, in yellow is our existing ACV and our customer base, largest block being commercial then consumer then nIQ. And on the left is the existing opportunity that we have in our customer base today. So you can see there's a lot of runway there. We believe we can double our commercial business more than double it in our existing customer base. We believe we can 10x our consumer business, and we can 10x our nIQ business and the customer base today. Now we'll still keep chasing the greenfields, right, because that's our job. But as you think about the customer base, I think this is a good way to depict the asset that is the nCino customer base. When you combine that with the reputation that we have, the relationships that we maintain, this is how we think about the future. It's been very important for us in the go-to-market organization to prove that we're not just a commercial LOS sales organization because that's the question that I hear from investors all the time, hey, are you guys going to be commercial? Can you do other things? The graph at the top shows the share of platform customers using more than one product, and that's a 4-year compare at the end of the second quarter. So you can see since IPO, we have more than doubled the number of platform customers who are using more than one solution, including nIQ. At the bottom, we can see specific platform solution adoption. You can see to the left, retail lending has more than doubled since IPO. Deposit account opening has more than doubled since IPO and the number of platform customers using nIQ has increased 17x. We're quite proud of that. Tom, I need one more international mortgage to have doubled international mortgage since IPO, you're making my math harder, okay? But we've gone from 5 to 9 with international mortgage. That's an area of focus for us now, and we believe you'll see that penetration grow. As we think about how we enter accounts, this is a depiction of a few ways that we can enter account. That's the left is a lot of fun. That is a $6 billion account that purchased multiple solutions and the Kitchen Sink on day one. Not all institutions are ready to tackle all that at once, but it does illustrate the opportunity. Second from the left is an account that started with retail lending in DAO, and then we tripled our ACV with them when they purchased our U.S. mortgage solution. Again, understanding nCino, just a commercial company, they started with retail lending and DAO, and they tripled their ACV with us with a mortgage solution. We believe that opportunity is real. Next, we have an enterprise account that started with commercial. Added pricing and profitability grew by $700,000 ACV. And to the right, we have an EMEA customer started with commercial, added auto spreading, which increased the account more than 25%. So we're pleased with the ability to go from treating these other solutions as cross-sell tools. And you can see the opportunities that we have to make entry with these other solutions. And I think you'll get even more confidence in that when you hear from our solution and product people here shortly. There's lots of reasons why we win. You've heard this from us, but to recap, the presence of our platform and multi-tenant cloud and on sales force really matters, and it matters internationally. If you look at some of the international logos that we've announced without Salesforce's ongoing international expansion, without their Hyperforce initiative, it would have been very hard to get customers comfortable with that. You have the front, middle and back office on one platform as a platform for modernization, right? Most of these institutions have not had that before, even in 2023. And then getting the front, middle, back office on one platform gives them the ability to inject intelligence at the point of execution. We have fully integrated CRM with the world's leading CRM platform, Salesforce, and this depicts why we win across our global footprint. As we think about customer success, I'd point you the stat at the bottom. In the last quarter, we had an NPS of 74%. We see a software industry average of about 27% and nCino's all-time average is about 51%. So that's the culmination of customer success team that shows up to take care of these accounts, a sales team that's brought them into the family the right way and the system integrator ecosystem that implements the majority of our ACV, that is prepared for success and enable to help these customers succeed. We do have a global support organization. We're able to follow the Sun and ensure that our customers have round-the-clock support. And despite our efforts to go profitable, we have maintained onshore support where people have a by name support rep, they have a by name customer success manager who helped show them success and that increasingly in this market is a differentiator for nCino. We're quite proud of how we take care of them. We do have customer success managers who help people adopt what they bought. That also helps them prepare to leverage new innovation, to adopt new features and hopefully prepare them for cross-sale of other value-added solutions. We have a professional services organization that down market up to the lower regional bank market. PRIMEs implementations and they will actually be the implementation arm. And those proven resources also support our global system integrators and large accounts. What that allows us to do is maintain connectivity with our product organization with the rest of our organization to ensure that we take good care of them. Let's talk about marketing. We spent a lot of effort focusing on modernizing our martech stack. You can see a stat at the top left. One of our solutions helped us add in the first quarter after we deployed it. $2.6 million of ACV to the pipe. That's just one example, but it shows how we measure the success that we're seeing. We launched a new website in the first quarter. We saw an 86% increase quarter-over-quarter in web traffic. And that culminated in a record-breaking demand generation. Focusing on our partner ecosystem. I would think about that from two aspects. First of all, our partners are system integrators that help our customers succeed. They're also our tech partners. You can see the growth of our system integrators at the top right, now have 3,200 certified practitioners. And you can see our tech partners also at the bottom. Now we'll transition to Matt Hansen, nCino's Chief Product Officer and his team.

Well, thanks, Josh. Thanks all for let me come and speak to you here. So I want to talk a little bit about the innovation, the reputation, the speed, which are qualities nCino has long pushed hard for. But more specifically, I want to talk about the reputation. So when nCino bought SimpleNexus, part of that vision was bringing the products together to create a single platform that we can give to the bankers, so they can do mortgages, they can do commercial, they can do treasury, small business, retail and bring this to where the bankers have the ability to have a single experience, not only the bankers, but their customers can have a single experience. we're delivering on that. And I want to bring that up and how important that is for the reputation that we do what we say we'll do. So later this year, we'll have customers who run early access program from retail. You'll hear more about that from Law Helie coming up a little bit later here. We intend to launch that publicly in spring of next year. And what is the single platform? Well, it's a single experience for banks and for the bankers. It's single experience for their borrowers. It's also bringing the data together so that we can have a single place where all of their data is located. So they can take advantage of that in this new world, where it's -- we've got this excitement around AI, but it's really it's the models -- or I'm sorry, it's the data that's special. So when we talk international, we found that commercial converts quite easily. We can move from country to country with very fast localization. We've got an incredible process for that. You'll hear more about that from Tom Byrne later here. And he'll also speak a little bit about mortgage. And there's more that we have to do for a mortgage or for retail in order to convert those for localization, but we've got a great path for that and feel very confident around there. And lastly, I want to talk a little bit about expanding the moat with nIQ. And I think moat actually is a really good word here because I think why is nCino special? nCino is special because nCino is able to collect all the data from mortgage, from credit unions, from larger banks and financial institutions. And again, look, the AI models that are out there that we keep hearing about, they're great, but they're a dime a dozen. I mean, they're coming out like mad. What they don't have is they don't have access to the financial data. So we're in a very special position because that's what we do have. We can swap models out, and we've been doing a lot of experimenting with those right, to make sure that we're delivering on the highest value based on the use case within the products, whether it's predictive analytics or generative AI, we're able to do things that other companies aren't able to do. And there's nobody that's even close. And so we're very excited about that, what that means for the future of nCino and when we're headed there. When we talk just efficiency, something that's been a major focus for me this year is making sure that we're able to release more frequently. We're able to get feedback from our customers faster. So we're releasing code at 6x more frequently than we were a year ago. We're reducing our bottlenecks by reducing team dependencies as much as possible, enabling teams to get things out to the customers while not taking shortcuts, making sure that we're delivering the top quality as well as the quantity and getting the right outcomes with our customers. We're releasing code 45% more faster. So code is being built and delivered to our customers. in a much more efficient manner than it was in the past. So very excited about what that means. And these are things that's not -- this isn't -- I mean, it's very exciting to take a look at. So lastly, I just want to touch on and remind you of what Pierre and Josh have spoken with us about, about the single platform, how we bring that together. We'll talk a little bit more about that today. We'll have some product leaders come up and speak from different areas of the business, get into more specifics around what we're doing with the retail/consumer area, what we're doing with mortgage, international, commercial. And more specifically, you'll hear in commercial, you'll hear some details around and see some previews of what we're building within nCino in regards to some of the new AI chatbots and things, and how they can -- how we can speed up the work that the bankers are doing. So with that, I'll give you Ben Miller, who leads the mortgage efforts.

Thank you. I'm really excited to be with you guys today. We've had a lot of challenges in the industry and the environment, and we've been able to perform really well in that. When you combine a great team, a strong, profitable growth company, a reputation of doing what you say you're going to do. That is the secret sauce when things get really hard. Warren Buffet talks about when the tide goes out, you can see who's not swimming with a swimming suit, right? When an industry contracts, like it contracted on us, you're able to see what's a great company, who is the great company and who's the company that doesn't have that resiliency? And the result is the industry flocks to those who are strong, who can help them weather the storm. And those who are strong take market share. And in turn, are uniquely positioned to benefit as that industry turns. And that's happening, and we're very excited about that. So just a reminder, we had $4.5 trillion of originations a couple of years ago. That nearly got cut in half and then dropped again to where this year, we're projected to have $1.5 billion to $1.8 trillion in originations, that's massive pullback, right? You would think someone that sells mortgage technology would, in turn, experience the same 60% pullback in their revenues or their market share. Well, that did not happen with nCino and SimpleNexus. And we're extremely proud and excited because why it didn't happen and what does that mean about the future? For us, in SimpleNexus and part of nCino or the U.S. -- nCino or U.S. mortgage product, we were able to grow our market share, now approaching an industry-leading nearly 30% share. And that's lenders that are using either a point-of-sale product or compensation products, more flagship products. That's very important because we have four actual main product lines in our point of sale or compensation management but also our business analytics and our e-closing products. So it gives us tremendous land and expand opportunities even though they were taking large chunks of the market share. That doesn't mean we're done or that doesn't mean we're nearing a run rate of what we can extract value from in this industry because we can expand with all of those clients. We've had nearly or actually over 2 dozen competitive takeaways in the last 1.5 years. And that's been fueling also our market share growth. Again, going back to the notion of those who are not positioned to weather a storm of a pullback, lost market share. And those who did the hard work to make sure they had a physically responsible, strong, innovative company with excellent culture are out there gaining market share. And that's particularly important because we've also seen in the data that we reached a low point in mortgage activity in January of this year. And then the applications and deal velocity has been steadily growing since then. In the news, you see all about how it's a terrible mortgage market, it's terrible inventory and whatnot. But if you dig into the data, you're able to see that we're better off now than we were in January. And the Mortgage Bankers Association has projected that will continue to grow nearly 20% next year and 10% to 15% thereafter. So couple that with the 30% market share, and we're uniquely positioned to take advantage of that. So that's a tremendous tailwind that's going to be pushing our U.S. mortgage operation forward. Also, during this time, we've been able to innovate and create more value for our customers. And with that, they shared that value in turn with us by helping us capture more revenue per unit funding or our average sales price or contract value per customer has grown nearly 24% year-over-year. And that's another tailwind that will help us and then you can couple that with the mortgage -- projected mortgage industry growth to see how we're excited about what the business you can do in the future. All right. So why is it that we win? I want to go through three major points here: one being something that's relatively new to us, driving data insights for our mortgage customers. We have a data insight product that's out of the box, a plug-and-play for the mortgage industry. We're coupling that with ingesting the general ledger data from a lender to be able to give real-time profitability for a branch or a loan officer. In this time when margins are so compressed, the unit or the mortgage company needs to know who is actually making money for the business and who is hurting the business. As crazy as it may sound, you may have a lender that has an -- a loan officer that's producing 20 units a month, but they may not realize until after they close that month and sometimes weeks later, that those loans actually lost the company money because of concessions or pricing results. Now we're giving more real-time data to that lender to be able to make decisions on the fly of how they should treat concessions to get loan volume in and realize that I may not want that loan in this environment. Maybe we need to slow down some and stop hurting our company, right? And that is essential because only the stronger surviving in this market. Next, I want to talk about continuous innovation. Again, in a challenging environment, when the market is pulling back, we're seeing our competitors reduce the amount of innovation and spend on R&D. That is resulting in a slowing down of their ability to deliver product to their customer base. We are proud that we've done the opposite of that. Over that same 2- or 3-year trend, we've greatly increased the amount of spend in R&D. And we're able to deliver innovations such as dual AUS within a point of sale, soft credit pools for mortgage lenders that helps them be more efficient as they originate loans, a better prequal and pre-approval workflow. And most recently, we've launched our native EVault that helps continue to solidify our position as a leader in electronic closings that helps the industry save money and be more efficient. And then finally, what Matt had mentioned before and what Law is going to talk about more is our ability to bring the nCino platform and the SimpleNexus platform together in a native integration where it truly feels like one experience. And I want to talk about that now as the next piece. This is another major tailwind that's helping project us forward in the U.S. mortgage market, in particular, into the nCino base. We're still just scratching the surface of the cross-sell opportunity. But now that we're launching a native integration between the platforms, when we go into a banker, a credit union, they can see a demo, and it's a natural flow between what the mortgage looks like and then what consumer banking looks like and progressing eventually all the way into small business or commercial. That looks like a single product, and they want to buy it as a joint and single product. It's not in a separation or afterthought saying, okay, here's what we do at nCino and here's what we do at SimpleNexus. So not only does that have that integrated look and feel, more importantly, it will have the integrated data in the back end. And so a mortgage opportunity can flow into a small business opportunity or vice versa. You no longer have to be a small business customer and then reintroduce yourself to the mortgage arm of a bank. Everything can be pre-populated for you and it can accelerate the origination of that loan and deliver a much better customer experience, something that the bank is proud of and help them with that cross-sell opportunity. So in summary, we have and are delivering this modern home buying journey, the modern mortgage experience. We own the notion of a single platform of going from looking for a home, applying for a loan, going through that manufacturing process. and even signing your disclosures and closing. And we're doing that overlaid with mortgage analytics all throughout that helps the company make better business decisions on how they can be more profitable. And we're calculating the compensation in real time for that lender. And we're combining that with these three major tailwinds of projected market growth overall from a macro standpoint, of 20% next year, 10% to 15% a year after, also taking market share and increasing our innovation and the value we create per loan for that customer. And then finally, with the synergy and the native integration of nCino that helps us sell a unified experience and brings the data and experience and workflow together for those FIs. And again, we're just scratching the surface today of what we can sell into the existing nCino base. And so there's captive audience there that we can cross-sell into and we can be able to expand the product offerings that we have in our existing customer base. So very excited about where it's going and happy to be here. Now I want to introduce a good buddy, Law Helie to talk about Consumer Banking.

Thanks, Ben. Cool. So hey, good morning, everyone. Good to see you all here today. I hope you guys had a good night last night. So we're going to talk to you today a little bit about consumer banking. Consumer banking is something that for me personally is a little near and dear to my heart. For those of you who don't know me, I spent a period of time running branches for banks. And certainly something that is important, and we understand the importance to the financial institutions of not only just the banker experience, but the customer experience as well. So when we talk about consumer banking here at nCino, what we're talking about is the lending to consumers, individuals such as yourselves as well as deposit account opening through portfolio mortgage. Just so we're clear. I had a couple of questions about that last night. I just wanted to clear that up for you. So let's start with our vision a little bit. I know this isn't something we've talked a whole lot about in the past. So as we look at the consumer banking vision, really what we're doing is looking to replicate the success that we've had with commercial and to be a global leader in consumer banking. So for us, really what we're looking to do is enable financial institutions of all sizes, right, in all spectrums, credit unions, banks, community, regional to help lower their operating costs, drive sustainable growth and to continue to provide seamless experiences. And the experience is really key. You've heard Ben and Matt talk about this a little bit. But presenting the consolidated experience across the board for bankers and consumers is something that is highly desirable and a topic that we often talk about with our customers, both existing and prospects. And to do that, we use a lot of what you guys see on the right-hand side here. And there is a lot there. So you guys can kind of take a look at it, I'm reading. There's a lot there that's very important to institutions, especially in today's marketplace. The ability to automate things, have better decisioning, a more consolidated KYC process is super critical. And it's something that the power of the nCino platform allows them to do across multiple lines of business. And you've heard us talk a lot about the platform already, and I know you all have been hearing it for some time. And this slide is something that we've been talking more recently to customers about, at least I have specifically and for how we visualize the platform. And it's a little bit new. So I'll walk you guys through it a little bit, okay? So on the left-hand side, you've got really the consumer. And when you look at that, that's really more very customer focused, you're very focused on the customer. what their needs are. And then as you move sort of left to right, you get into your bank or your CIB, our large asset finance at the end. And that's obviously much more on the institution to get that work done. And the left-hand side there in the middle of your digital self-service is really where we see a lot of the front end, the online banking, the need to open up accounts online and be able to do some service them online and heavily relationship focused on the other hand. The mortgage banking, consumer banking and mortgage there is very heavily consumer, obviously, stretches across the top. But with these top 2 sort of boxes, 3 boxes show you, is just the platform in toto and how everything relates upon one another. So then nCino have the ability to leverage all these modules on the same platform. And where this really resonates with financial institutions and you heard Pierre talk about it a little bit is the amount of systems that banks are able to deprecate when they come on to nCino. What that helps them do is save money, increase efficiency, have better reporting, decrease administrative overhead and be able to simplify their tech stack, which are all things that we've heard a lot about. I've spent a lot of time over the last few months out talking to customers. And one of the major things that I've heard from several large institutions is one of their desires with IT transformations or business transformations is to be able to simplify their tech stack, to be able to sunset systems and in one instance, we had a customer tell us that if any system that they were evaluating going forward didn't fit into the nCino ecosystem, they weren't even going to bother evaluating it. It just provides that much power to them. The other major benefit here is if we look down at the bottom where it is Customer 360, and you heard Ben talk about this a little bit, is the ability for a financial institution to look at that customer in toto, and say, well, you're an owner of this business. You might be a signer on this other business. We have your deposit accounts, we have your lending or we don't have any of those things, but we want to cross-sell them to you. You have a full picture of that customer and the data on the platform to back that up. Data is a very powerful tool, as you all know, in the banking industry and to be able to sit there and say, here's my customer base. Here's what I have. Here's what I want to sell into them. This is going to help me market, it's going to help me cross-sell. It's going to help me further increase sticky relationships and keep better wallet share of that customer is extremely powerful. And when we think about what we layer on top of this is as you've heard us say, this experience, intelligence and automation, specifically in consumer banking from an experience standpoint, you heard Ben and Matt say, we're working on aligning the SimpleNexus web experience to the nCino web experience using AWS, which is new for us. And we're working to have our EA customers on that customer-facing front end and where that work is ongoing now. Feedback has been fantastic. It's an excellent experience from customers, super happy about where it's headed. When we think about intelligence, you've heard us talk about nIQ, what does this mean in the consumer space. So in the consumer space, we're looking at things like intelligent cross-sell, better product recommendations, the ability to generate offers via propensity score so you have some market level of confidence that what you're offering the customer is something that they actually want to purchase, and we'll continue to move forward for. And when we think about automation, that is just further in the power of the platform and continuing to remove friction, whether it's from the banker or from the customer and automating those former manual processes that are really just waste of time or duplicative an effort. You heard Pierre talk about the 37 -- was at 37 rekeys of information? I mean, that's nuts, right? So to be able to automate anything within, obviously, compliant bounds is exactly where we want to be. And there we go -- going too far, going too far. Hold-on, sorry, let me catch up the slides here. This one froze. Okay. So we talk about experience again. the institutions that we talk to, the customers at the center of everything that they do. So in this image here, you've got the customer in the center and what financial institutions want to be able to do is meet the customer where they are. So this means they have to have the ability to bank online. They have to have the ability to come into the branch, and they also have to have the ability to leverage a call center, that's an avenue that the institutions choose to use. nCino gives those institutions the ability to meet the customer wherever they want to bank. And also providing a self-service experience for those who want to do it. The ability to have a low touch, very simple experience and then ultimately a no-touch experience where there's no banker involved. A lot of what we've heard from institutions is the more that you can get the banker out of the process for those more simplistic loans when they meet policy very straightforward, that would be ideal. And to continue with experience here. So for those of you who are at nSight. I know a few of you were because I talked to some of you, you saw a demo of us talking about the new front end built on AWS. So the future of our customer-facing will present a consolidated experience between SimpleNexus, we think about the start of the mortgage application now, nCino Mortgage and the new customer-facing front end, starting with consumer and then rolling out to other lines of business. So this is going to allow customers to come into a new channel that has the same look and feel across multiple products is going to allow for better cross-sell multiproduct origination sort of that shopping card experience that we've talked about. And this is also going to help us with our APIs. So we're going to have a solid API strategy coming out of this for those enterprise customers. who are really interested in being able to control the front-end experience and then leverage those APIs to run nCino in a headless fashion, it's going to facilitate the creation of those APIs to do so. That's going to help with international expansion. It's also going to give us another avenue to monetize with those API costs and just the communication back and forth between the two. So we're super excited about this. The team has put a lot of work and it looks fantastic. We gave the exacts and update a week or so ago, very well received, and we look forward to continuing to work on this. So thank you all for the time. I'm now going to bring up inimitable, Mr. Tom Byrne, and he's going to talk to you guys in a nice accent.

Thanks, Law. I don't know about accent, maybe it is just different, we'll try to. It's great to be here. I also want to say to the out of town, I was also as curious as probably you all are when Pierre talks about the alligator heads. I had no idea what that was all about. But I think you'll learn to love it as much as I have over time. So Tom Byrne, I'm responsible for our international mortgage product. And when we talk about international mortgage, the initial markets that we're talking about are the United Kingdom, Australia and Canada. Not only are they obviously already very mature markets for nCino, but we see a lot of similarities in the market and the way that the product is there between the commonwealth countries. If you can tell already by the accent, I'm going to deep dive today on the largest of those markets where we're seeing some great momentum in the United Kingdom. So just to contextualize when we talk about mortgages because I think it can be spoken about in many different terms, it means many different things. I sort of wanted to bring it back and ship it back to what we're talking about from a bank product perspective and what is the actual services they're selling to their customers because I think it helps us contextualize why this was such a big opportunity that we wanted to go after. You can see sort of the scale there that we've got everything from sort of consumer residential mortgages. So owner-occupied, when you buy your first property, many of us in the room will have those types of products. all the way up to sort of corporate real estate and sort of all the variances that we see in between. Given sort of our commercial heritage, we've been delivering those four products to the right-hand side where we're delivering businesses pretty much since we started. We have many institutions doing this type of lending. What we saw when we looked at the U.K. market and some of the other markets that we spoke about is that there was a whole suave of the market that we could unlock if we just added these other two journeys from the consumer side of the house. So we have mortgage lenders and over 100 of them in the U.K. and now I'll speak to some of the examples there, where all we needed to do was be able to bring in consumer residential, consumer buy-to-let journeys, and we was able to unlock the whole portfolio for them. When we talk about that and when we look at these types of journeys, let me just give you a little bit of a flavor of the work that we had to do and enable to be able to go after this market that we're now starting to see great momentum in. Some stuff that you'll notice about sort of the U.K. market and the Commonwealth markets are slightly different to the U.S. is if we look at it, 80% of our lending is driven by brokers. So we needed to go out there and preconfigure and have a best-in-class broker experience for that persona that we haven't seen before. And we're proud to have done that and deliver that at multiple customers and seeing market-leading feedback in that area. Along with that, what we also needed to do is in Europe, all of sort of the regulatory framework is set at a European level. The way that we calculate pricing, the disclosures that we offer to customers, the way that we do affordability assessments, I'm pleased to say that or functionality that's now in the system and it's now live of our customers that allows us to really attack this market in a way that we feel really excited about. That's sort of the product story and why it was such a compelling proposition for us to go after. But I think just as important as sort of the product side of the house is what's happening in the market. What are the trends that we're seeing in the market? I heard Ben speak a little bit about that to you earlier. And there's a lot of similarities throughout the Western world that we're seeing in terms of the way that interest rates are being managed in terms of demand for mortgages that are happening. But I want to share a little bit of insight to what we're seeing in the market there. Just like the U.S., the U.K., when COVID happened, we saw our property boom, we saw government stimulus happening in this. What that did for consumers and what that did for mortgage lenders in the U.K. is it completely overwhelmed them, like we started to see in the news, we started to see in the politics, lenders were just completely unable to keep up with the demand of what they had there. And you may have thought that, that was probably the time that they started to look for new platform technologies, and they wanted to jump headfirst into projects. What we actually saw was the inverse for a little while. What they started to do is they started to shrink away, starting to try and just deal with that and get the sticky tape over. What we started to see there, and you can see it in the that's on the screen, is 72% of lenders still feel held back by their legacy tech, but that was a really big watershed moment for sort of the market and what's happening in the U.K. because there's a recognition now that they can never go through that again. If you start to couple that with sort of a rising interest rate environment, these lenders are now making more money probably than they ever have before and you start to look at the profits that are being reported in the press that are starting to come through in their annual accounts. You've sort of got a great period for nCino where they've realized that they need to change and they've now got the capital and the head space to be able to think about it. And we're starting to see great momentum and need within the market to start to move, to start to scale to some of the challenges. And of course, we all know sort of the nCino platform is really well set up to deal with those challenges and be able to scale it. The sort of final one that sort of underlines this and sort of just gives it that final impetus is when we talk about U.K. mortgages, we're not talking about 25-year, 30 mortgages that are fairly static, but gets securitized and come off the books. What we're talking about a very dynamic loans. They're typically 2 years, 3 years, 5 years. So even when applications and new house prices aren't happening, the amount of transactions and the amount of refinance activities that need to happen mean that you need to be able to understand customer demand. You need to be able to scale to meet that demand even when new applications might be there. You couple that again with some of the news that Ben was saying and the economy is predicting sort of 18, 24 months from now. That we're going to start to be seeing house prices stabilize. We're going to start seeing that return to the market. We're seeing a lot of demand in the market right now, as now being the opportune time for them to be able to move, and we're seeing that reflected in all of our sales cycles and engagements. Just final one for me. We talked about sort of what's happening from a product perspective. We spoke about sort of the market forces that are driving this to be a really compelling opportunity. But I think the final one that sort of underscores why we're so excited about this opportunity, why we're seeing the momentum that we are. It's just the footprint of lenders and what this looks like in the U.K. When you look at sort of outside the U.S. and this translates over into Australia and to a certain extent, Canada as well, it's extremely enterprise heavy in terms of the value share that you have. The big boys really do start to gobble up a lot of the value chain and of course, the associated value that comes with those size of books and those types of transactions. What's great for nCino, Pierre, Josh both spoke about it being on the platform that we're on as we've proven time and time again that we can operate at that scale. That isn't something that exists in the market at the moment. There isn't many opportunities for these types of lenders to purchase SaaS offerings in this area which is why we've seen so much demand. And when we talk about the single platform, when you're in the United Kingdom, the first thing that they ask you to do is start to extend into mortgage. It's their most profitable line of business. So it's where they need to drive the digital transformation. When you underline that, we obviously already have relationships with three of the top six as well as relationships within that Tier 2 space, and that remains a big, big part of our strategy in order to be able to drive that, in order to be able to be the market leader, and we're excited about the products that we're bringing to market to be able to underline that investment and be able to realize the opportunity. That's me. Hopefully, I've given you guys a little bit of a flavor of why we're so excited about this. And I have no doubt that I'm going to be making the math very difficult for Josh in all the right ways as we start to capture the opportunity. With that, I'd like to bring up Garrett Adams, a good friend of mine to talk about all the great work that's happening within small business.

All right. Thanks, Tom. If you thought his accent was entertaining. Maybe that's what I'm missing, a nice pair of glasses, a nice English accent. I'll work on that for next time. I'm not going to attempt it today. Thank you all for being here. Again, Garrett Adams, I have the privilege to lead both our small business and treasury management practices here at nCino. So what I'd love to do for the next few minutes is spend some time talking about what we're doing in each of these solutions where we see tremendous opportunity. But I think it's first important to start with the fact that small business, that is our newest solution team here at nCino. We started this group about 2 years ago. And for those of you who will kind of rewind the tape back about 3 years ago, there was this little thing called the Paycheck Protection Program, or PPP. If you will recall that. And it was an interesting moment in our industry because we had an opportunity to stop and think and really see what was happening in the market. and notice some of the transformation as a catalyst that it created for the realm of small business. It really showed financial institutions that there is a better way to think about small business and a better way to position their customers for success and service the needs of those customers. And that's exactly what we're positioning to market with, with our new small business solution. We launched this about a year ago, not quite a year ago. But just to kind of highlight for you all, who may be unfamiliar with where we kind of reside in the grand scheme of things. You saw a slide very similar to this from all a few minutes ago. So the world of small business lives just beyond that consumer banking type experience, which, as he mentioned, is highly digitally focused and is very much driven towards the customer experience and how they interact with their institution. We run that through the gamut of micro SME and traditional SME lending all up into the mid-market right before things start to get a little bit more complex and ultimately become the world of commercial lending. And so as you're probably well aware, all of the GMs who are presenting here today, we all come from the industry. We're all former bankers. I was a banker for 10 years before coming to nCino. So very much live this world in the old days when small business or commercial customer came into a financial institution. The first question we typically asked was can I get 3 years of tax returns. We then ran that through often a multi-day potentially multi-week process to get the answer back to that customer. And they're simply put, over the last few years, the expectation the market has shifted to a solution that's much more focused on the three key areas you see highlighted down below. And so kind of taking those left to right, and knowing that small business in the world of commercial was no longer a one-size-fits-all. Our new solution prioritizes the speed and efficiency that both the customer of the financial institution and our bank customers and financial institution customers have come to expect, right? So maintaining that efficiency and speed is going to do a variety of things for them and helps them ensure that they're returning a faster response to their customers or to their prospects. It also helps maintain or drive greater efficiencies and operating efficiency within the institution as well as increasing their margin opportunity, right? This isn't a scenario where we can continue to throw bodies at the problem. Fewer hands in the process is what's needed as well as focusing on a digital strategy, which means bringing the customer closer to that scenario or that situation through the likes of a digital engagement channel, right? Very much the theme in the commercial lending space holds true in small business, where we're leveraging online portals, online application capabilities to allow that customer to self-service the experience as much as possible. And that's going to do a variety of things for them, right? It creates greater visibility and transparency for them to understand where that deal resides in the cycle. And it speeds up what really matters to them, which is time to yes and time to money, right? Because at the end of the day, the customer doesn't care really about the internal processes. They have a need and they're looking for how quickly they can get a response and get the money to fill that need and keep their business operation moving forward. The last piece you see on the right side. And as others have mentioned this morning, compliance is a nonnegotiable, right? That is a fundamental part of our platform. And so regulation touches everything that we do. And nCino, it's a fact of life. It's something our customers have to deal with on a day-to-day basis. We don't take a stance as far as what the regulation itself means. We aim to ensure that they can comply with confidence. And that's what really matters. If you look at our track record, we have a very good track record from the standpoint of our compliance functionality historically. If you look at what we've done on the HMDA front, on the CRA front, CECL. This is extremely prevalent for small business now because of the upcoming Dodd-Frank 1071 Regulation, if you're familiar with that. You might have seen something in the news. But for those of you who don't follow the wild world of U.S. bank regulation, here's what you need to know about Dodd-Frank 1071. So this is a new regulation that will require financial institutions of a certain size to start reporting on and maintaining application data for small business applicants. And you see there right now on the nCino platform, we have over 300 customers who are originating these types of small business applications, and they have that same expectation as our HMDA and our CRA and our CECL customers to ensure that our technology can ensure their compliance and their efficiency in this process. But this is really just the beginning, right? They are estimated to be north of 5,000 financial institutions in the U.S. who will have to comply with this regulation. Impact is imminent as well. You see there a little bit of the time line underneath for the Tier 1 financial institutions. Those are the biggest institutions that originate the most volume. This becomes real for them in about a year. October of next year, they have to begin collecting this data. And then in 25 reporting on it, there is a rollout time line through 2027 for the Tier 2, Tier 3 folks. And we view this as a key differentiator for us. We just launched our 1071 solution with the fall release. We're the first ones to market with a full solution, and we've got a variety of enhancements we're going to continue to work on in collaboration with our customers. And I think it's important to note here that why we view this as a competitive advantage is because this isn't a situation where customers can wait until next spring or next fall to start getting their ducks in a row to comply with 1071. Customers are trying to do this now, and we're excited to have a solution in place that customers can take today and start ensuring that they're compliant once 1071 becomes real for them. So just to kind of sum things up here, what we're really seeing is there's a better way to do small business and our solution allows our customers to do that. whether that be through that online experience, through the digital channel, bringing that customer closer to that scenario and letting them kind of control their own destiny a little bit more. But also through that in branch experience, we recognize as things move into the mid-market, that at some point, a banker has to get engaged in that situation as it moves into the world of commercial, which Chris is going to talk about momentarily. We're enabling our customers to facilitate a new experience that drives that beat and efficiency that they've come to expect as have their customers through the major milestones in the process here, and we're doing that. through the lens of the intelligent enterprise, and we're making that a reality. We leverage a fantastic partner ecosystem to make this a reality. You see a number of those logos highlighted on the screen there, whether that be the likes of alloy for know your customer, know your business, identity verification functionality, the big three credit providers. We're leveraging all that great data and feeding that into our nIQ suite of products. to drive greater intelligence where it matters most in this process, and we will continue to do that to drive greater efficiency on the path to greater automation in this space as well. And we're doing that all on the foundation that ensures compliance with Dodd-Frank 1071 and making sure that when this data goes over the Consumer Financial Protection Bureau, the CFPV, that our customers are achieving full value from the platform. So really quickly, I want to pivot over to treasury in the last minute here and just mention that, as you saw on the slide earlier, it's not just about lending. We have the ability to capture and originate the deposit portion of the relationship as well. as well as extend treasury services to our customers, treasury management is at a tried and true solution set for us that we've had for a number of years, where we've largely been focused over the last few releases is making the critical modules within the treasury experience more cohesive across the bank operating system that is nCino. And so why this is really important right now, if you look at what's happened in the liquidity crisis over the last 6 months, there's been a real war on winning deposit relationships and seeing liquidity shift between institutions. Winning that type of relationship for small businesses and commercial customers means having the treasury services that go along with it because those customers rely on and need that capability as well, and we've seen tremendous uptick and increase in the pipeline with the opportunity to help our customers capture more noninterest income through our treasury capabilities, and that's really exciting for us. Just another way to ensure stickiness and continue to grow the single platform vision for our customers. So that's a lot of information really quickly. I'm out of time. So I'm going to now hand the mic over to Chris Gufford, who leads our commercial team is going to come talk to us about that as well as our nIQ enhancements in the intelligent enterprise.

Thanks, Garrett. I appreciate everyone being here, both online and in person today. I get the distinct privilege of talking about what the teams here at nCino are creating from a business value perspective for our commercial customers and what we're looking at the business value potential of what AI might mean to that customer base as well. So really excited to get to share what the folks that are setting not 100 yards from us and the other folks around the world are doing to commercial lending. So as we start to do that, I want to take maybe a really quick step back, provide nCino's point of view on commercial banking. And I've been in this business about 20 years, give or take. And as long as I've been in commercial lending, whether that's as a practitioner, underwriting credit or creating a DFAST stress testing model once upon a time or on the technical side, talking about how we go tackle those same problems for institutions as a solution provider, it's always been about a certain set of fundamentals. There's this tried and true set of practices and principles that surround commercial lending. And those practices and principles are underwriting concepts. They're -- the way we set up loan operations, they're the way that we manage compliance and a number of other things. But there is this commercial relationship life cycle or customer relationship life cycle that spans this sort of notion of grow, originate and manage that has been very consistent over that amount of time as well before that. But I think what's really interesting is we've taken a step back and we've all marched forward over the last 10 or 11 years. There's been a significant modernization effort. And it is about now modernizing those fundamentals. How do we get to the point where we have the degree of automation across that particular customer relationship life cycle or commercial relationship life cycle as well as a degree of augmentation of the folks that are involved in that to supercharge that life cycle, supercharge that process, empower the employees and frankly, the customer to create experiences that are vastly different than what they're used to. So let's take a really quick trip, slightly deeper dive into that relationship life cycle as it spans grow, originate and manage. And for us, and when I take a step back, as I think about what we've done for commercial transformation here at nCino, it really has been about driving efficiency throughout that process. And that has come really in three fairly distinct forms with a number of sub context, as you can see below those. But what's really important there is it is about digital innovation. It is about operational transformation, and it is about being able to manage and monitor a portfolio after you get those things on the books. I get asked a lot about the market potential in commercial lending. As we look at it being a leading solution in that particular market, what else can we go do? How do we grow that particular solution. And I want to talk about four distinct areas where I think it's really important for us to focus. First is the global market. You heard a number of folks this morning talk about the applicability of the platform at a global scale. That is certainly true in commercial. It doesn't matter where we're at around the globe. Commercial lending is fairly consistent in its approach, both operationally and from a process and a people perspective. The experience, the intelligence and the automation application is quite similar and gives us a lot of runway there to go look at. In addition to that, I'd like to talk about market segment depth. When we think about -- and I'll give the U.S. as an example, the community and regional space in the U.S., we've got a number of clients in that space today. But that space is actually really, really large in the United States. So we still got a lot of runway there, I think, as well. And then when we think about the global market, it is selling nCino commercial. It is selling the nCino platform and then also applying nIQ to that. And we'll get to what we mean in the lower right-hand corner of that here in just a second. Many of you, I think, probably know commercial lending for -- we've got to go get a commercial real estate property and a loan for that. Or we're going to lend money for a piece of equipment or I need a working capital loan to help manage inventory and receivables. But there are a number of vertical specializations within commercial lending that we also see white space in. Whether that's participations and syndications and helping banks better manage that process, whether that's asset-based lending, you heard us talk about Corporate Investment Banking or CIB this morning, leasing and asset finance. Third, efficiency is still in play. We help serve one of the highest regulated industries in the world. There might be a few others that see the same sorts of regulation, but we certainly serve one of the highest regulated industries in the world. And as such, there's a lot of implication related to that just in that case, but there's also a lot of customer expectation that comes along with the expediency that they need, right, the service level that is expected. Whether that's the front office, whether that's the middle office or the back office that we talked about a little bit already, making folks as efficient as possible, making data as available as possible at the point of execution to create that efficiency. It's key in commercial lending. It is absolutely key, and that will be the differentiator for those folks that are using nCino and using nCino for commercial, has been and will continue to do so. Last, I want to talk a little bit about nIQ. From the onset in 2019, and yes, we have been in the nIQ business. We've been in the AI business since 2019. The sole three purposes of that in my mind and in our mind was to deliver data-driven insights, create intelligent automation and deliver on industry benchmarks. And Josh mentioned commercial pricing and profitability today as we look at data-driven insights and the ability to surface to someone, a lender, a relationship manager in the middle of a negotiation, the appropriate pricing and the appropriate return to the institution of that lending decision, of that product decision, of that deal decision is incredibly valuable. When we think about how we can help drive profitability throughout an organization. And when we apply the machine learning and OCR technology to automated spreading, I was a former credit analyst. Some of you have probably heard me talk about this I used to spend hours keying in financial statements into financial spreading. And with the machine learning and OCR technology, we have an automated spread, and we take that down to a few minutes. And if someone would have told my 20-some-odd year old self that when I was doing that, I would have full on not believed a word you said. I would be standing up here saying that is a possibility, and that is where we're at right now. But we're not done yet. So I'm going to let the video speak for itself as I click over to it here, and then we'll talk a little bit about where we're going with nIQ, the application of AI across the entire platform. [Presentation]

Hopefully, that got me so excited. I pushed it twice. So really, our customer base, particularly in commercial, but I think across the entire platform, when I rewind and think about our story here at nCino, our customers trusted us to bring them into the cloud. And we're -- we've leveraged AI across automated spreading, as I mentioned, but we're seeing a really distinct moment upon us now where AI has become an incredibly powerful tool. We have a data set that we can leverage to bring that to life to provide an unprecedented, I think, degree of efficiency into a process that we've already revolutionized. And I think there's three key words on this slide, it's trust, security and explainability. And as we think about how our customers have trusted us to scale their business, they've put their security in us to help them scale that business. And we've been able to explain and move people into the future already. We fully expect to be able to do that again. So let's talk a little bit about how we think about AI and the potential, and I think the value stream, the real tangible business value that we can see across banking, as we unlock the power of the data and deliver it with AI. Not surprising, hopefully, not surprising to most of us. This is centered on efficiency and productivity, maximizing profitability, managing credit risk at a different level of granularity, looking at compliance in a whole new way and creating experiences that far exceed those that we could have even imagined. I think the implications are massive. And I think these four cover them quite well in broad generality. When you think about enterprise data management and the need to unlock the power of that data, a number of folks this morning have already talked about, we've aggregated that data across the breadth of the customer set, whether that's mortgage, whether that's consumer and mortgage, whether that's small business and then certainly in commercial. Explainability is key. And I think a number of folks, when we talk about AI, we instantly jumped to -- and Josh brought up generative AI and the key to making sure that it's explainable. But it's also in the predictive AI arena and how we make those decisions and how those decisions are made by the AI and creating a transparent, understandable model that delivers a very, very strong degree of understanding in where it derived its answer from. And I do think that it's all about optimizing and evolving to the next level of experience, the next level of solution. And certainly, we are the vendor that they trust. We are the vendor that they rely on from a cloud banking perspective, and I think we can also deliver on that same exact vision from an AI perspective. The benefits for the customer, for the banking industry efficiency and cost, experience, risk and compliance and a competitive advantage from a growth perspective that I think is quite unparalleled. But some of the things that I think we're most known for, where we're going to focus first with AI is certainly in the realm of cost and efficiency and the experience. I think it's really important that we focus on those use cases that derive maximum efficiency, maximum cost reduction for our clients as well as what sorts of experiences are we after. So I think the question that I hope you're sort of asking yourself at the moment is how do we help financial institutions adapt and unlock the power of the data that they have and the power of the data that the industry has given the notion of AI. With that, I'd kind of like to just show you as opposed to talk about it anymore, all right? So before I do that, I think the real answer is, as I described relationship banking and relationship banking in the context of commercial, we are the trusted source for actionable insights, intelligence and decisions in banking. So we'll take that same trusted source concept, and we'll apply it through nIQ to create additional data-driven insights, intelligent automation and impactful benchmarks. And I want to maybe pause for just a second because I do want to show you. Well, let's talk a little bit about nIQ on the left-hand side here. Today, through analytics, we deliver really deep business value of commercial pricing and profitability. Stay with predictive AI, we deliver really deep business value with automated spreading. But as we all know, generative AI last 6 to 9 months has certainly created some waves, right? Everyone's talking about that. We've been talking about that. We've been, as Matt alluded to, working on what are the appropriate things to go tackle with that? How do we drive efficiency with the notion of generative AI? Let's see it in action. [Presentation]

Excellent. So one thing that I want to emphasize is we all sort of digest what we just saw there is when I think about the business of banking, I like to talk about it in really, really simple terms because it sort of lets me to still down what to do next quite often and how to add value in a way that is simple and straightforward and creative. And when you think about the business of banking, it's this simple. It's how do I grow a portfolio while I manage risk and reward. And for a number of you guys I hope that resonates, right? That's a fairly straightforward concept for most of us. But in the business of banking, banking adviser has the ability to be a force multiplier for every role in the institution. And what you saw there was an impact to relationship managers, to loan operations teams, to credit teams, a number of the folks that span that entire commercial relationship life cycle that I already talked about. Those folks might exist in risk as well and being able to surface risk in a new and unique experience at a speed that people just aren't used to. And then ultimately, being able to drive reward at the point of conversation with a customer. So when we think about commercial pricing and profitability, and maybe couple that with this sort of concept and being able to deliver that in a really new and unique way becomes really exciting for folks as we talk about enhancing our relationship manager's day and conversation with a client. That being said, across what is a little bit more detail to what that customer relationship life cycle looks like, particularly in commercial banking adviser will unleash a number of skills to make that data work for the user as opposed to them working for the data. To start with, we're expecting over the next few months, to work on some informed skills, some create skills and some edit or update skills. Straightforward efficiency gains across the platform applicable to every role. As we move through that phase over the next few months and interact with a small handful of clients on that sort of concept, and we transition ourselves over the next 6 to 9 months, we expect to start to look at the analysis skills and go deeper in the other skill sets as well to drive more efficiency and create additional business value for the customer. And when we start to think about that in the context of the predictive AI concepts like we talked about with automated spreading and some of the other things that we can do with the power of the platform and the power of the data that exists on that platform and the power of the data that exists in the industry and the banking community, this becomes really powerful, all underpinned by the AI and data platform at nIQ. I'd be completely remiss if I didn't introduce four more words before I get close to wrapping up here. We talked about trust, security and explainability. But I think in the context of AI and particularly generative AI, these four words are really, really important for all of us to remember as we start to think about that business value journey and delivery with artificial intelligence. It should always be helpful. And what I mean by that is we're not here to deliver novelty with generative AI. We're here to deliver business utility. I think almost anyone can create novelty with it. lots of folks are out there. Matt mentioned, there's a new model out every other day. Everyone is enhancing what it can do. We're not here to do that. We're here to narrow it to a business and a banking focus and create real help. It should be harmless, right? AI has a lot of potential. But as we narrow what it can do, we also narrow its ability to create inefficiencies to create inappropriate decisions, we manage to that very, very carefully. It should be honest, right? And then ultimately -- and I think most importantly, this is a key point, the bottom one, there should always be a human in the loop, particularly in generative AI. Because I think what a lot of folks see and what they hear when we talk about this is full automation. And I think what we're actually talking about is full augmentation. We're delivering data to people in a very different way that makes their data that much more seamless, that much easier to do. And not ask the AI to actually execute on the decision, actually execute on the analysis. We're having the human do that. So last couple of things for me as I wrap up, our customers are in a really unique position with nCino. They have the platform. We've talked about that this morning. they get to leverage the data model, they get to leverage the workflow. They get to leverage that data and AI infrastructure that we just walked through. But most importantly, they have their own data and they have a community of peers. And that community of peers and that data when we start to combine them creates a really, really unique advantage to unlock the power of AI for us and for the client. Rather than being their singular institution with a singular stack of disparate data, they enter the nCino community, they enter the nCino platform across the breadth of their lines of business. And they can take advantage of not only their data but an entire community of data as they look to drive the entire industry forward, not just their own business. It's a very different and new and unique way for everyone to get to look at and leverage the power of the data. So with that, I want to turn it back over to Greg. I think he's going to facilitate some Q&A for us.

That's right. Thanks, Guff. Appreciate it. The product folks, if you guys want to come up, we've got about 10 or 15 minutes for any Q&A for what you guys heard over the last hour and 15 minutes. If you have a question, just please raise your hand and come and hand you a mic.

We all get stand in the box.

Michael?

Michael Infante, Morgan Stanley. I just wanted to ask on some of the SAM math. Obviously, a little bit of a methodology change just in terms of how it's presented, but on an apples-to-apples basis, like if you were to have done it on the old methodology, like how much growth are you seeing just given the incremental nIQ attach and sort of the incremental logos that you've landed internationally?

Ultimately, I think what we're presenting is just a new way that we're approaching it. So in terms of redoing the old math under the new model, that's not something that we have for you today. I think the important thing is to understand that with the platform, with the maturing of the products, with the expansion with our partners, right, taking us to new geographies like the Middle East that we talked about last quarter as well as with nIQ, the SAM is expanding. And as we have more nIQ products, as you just saw from Chris, that SAM, we expect to continue to expand. Again, Josh was very clear that when we defined the SAM for nIQ products. It's what we have today and our road map. So we would expect that to continue to go up over time. And again, a lot of that being driven from nIQ and all the stuff that we're going to be able to do with the data that we have in the platform. Saket.

Please Adam Hotchkiss, Goldman Sachs. When it comes to AI and particularly gen AI, could you just talk a little bit about what the most important factors are to get customers comfortable with the outputs that the models are generating, particularly given sensitivities in financial services? How much of a lift to you and your partners are things like prompt engineering, answer validation to improve accuracy, you're talking to customers, how important is that to them?

I can start if you want. Great question. Appreciate it. So I think there's maybe a couple of three facets to it. One, yes, customers ask about that. And I think there's certainly some thought process around how we maximize the use of it, but in -- only in that context. And for us, as we look at tackling that and the true real answer is that we're going to narrow it to an incredibly narrow business focus. And we're going to go attack skills that mitigate the -- what I always term very black and white things that we can create efficiency with and directed at APIs. And yes, prompt engineering is really important. And one of the things I hope maybe some folks picked up is, it's not just about making sure that -- because users will ask things in a really creative way sometimes. But what we've shown up there is some very commonly asked things we have as buttons. And they're prompt engineered in the background to just those things to happen, right? So when we talk about create, inform and update skills, those are interacting with very specific field sets and those sorts of things that we know we can control and control quite well to mitigate some of the things that you just mentioned. And then as we advance into some of the heavier analysis things, I think that's where the questions tend to come up. And I think we are patiently evolving as well with them. So maximize the efficiency gains we can get in those particular productivity areas that we know we can create super narrow focus and mitigate and manage those concepts. And as we transition, we expect the technology to transition as well.

The only other thing I would say is the ability for us to really show business value that they can get from it, right, because we do sell to the business, right? This is a C-suite sale. If you call a bank and say, "can I have your data", like they're probably going to say no, right? Because these are highly regulated institutions. But we can say, look, I can help you get this better pricing on a loan, I can hope you save this much time for your people. It can help you better compete for talent. That's incredibly important now. They're much more likely to come on the journey with you at that point. Does that make sense?

Okay. Awesome. Everybody, Saket Kalia of Barclays. Thanks a ton for today's session. Super helpful. Great to be get down in Wilmington. So the message of a broader platform is definitely coming through, right? And I think I want to zero on maybe just on Simple Nexus a little bit because I think that's a pretty decent chunk of the $10 billion in TAM, right? Particularly in the U.S. And so maybe this is a 2-part question for Josh and Ben and anyone else that wants to chime in, right? So first, since the pricing here is based on seats, and clearly, the mortgage market is improving next year from a volume perspective. How long after that recovery in volume do you think seed starts to grow? Like is there a lag? Or is it going to happen more real time? That's the first question. The second one is, how do you sort of think about market share for SimpleNexus over the next 3 years, let's say?

I'll take the second question first, if you are okay with that. Look, if you think about the market share slide that we showed earlier, we have five of the top seven accounts in Canada. We still have people in the field second and we're still selling, and you saw our perspective on the opportunity. So we don't give market share percentages that we want to get, but I would just look at the behaviors and where we're investing. We believe we can continue establishing market leadership there. And then do you want to speak about the lag?

Yes. I think in my presentation, actually, I'm going to talk a little bit about pricing and what we're doing with SimpleNexus to make sure as the market rebounds, right, we capture that rebound. And so say hang and I'll touch base on that.

He's trying to give you a reason to come back after the break, is that right?

Nick?

Can you hear me? There we go. Awesome Nick Altmann from Scotiabank. Quick clarification question. Is banking adviser going to be a separate SKU.

Yes. So when you look at the nIQ products, I think there's two things that we're going to be doing. One is some will be just additive to the platform. right? And we ultimately expect to generate value by the pricing that we have in terms of the value that we're giving to our customers, right? You go back to the statistics that Pierre showed and that Josh showed, right, when you're able to show those results. right? Ultimately, I think that allows us to price. And as we make our platform even more efficient by leveraging AI, we'll be able to see that value there. Separately, we will have additional SKUs. Commercial pricing and profitability is a perfect example as is auto spreading right, where we charge those separately. And so some will be on the separate SKU side of the ledger. So that's how we're going to get value. We expect to get values on both sides of the ledger.

Okay. And then just as a follow-up, can you maybe talk about plans of when that can go GA? And how you guys are kind of thinking about pricing? And then just as you sort of think about that in the context of generative AI. How do you think about the user TAM from a personnel perspective, right? There's a lot of debates across different industries, if there are going to be more developers, less developers, more contact center agents, less contact center agents, et cetera. So how do you guys think about it impacting the user TAM as well.

Yes. Maybe I'll start and then hand over to Guff. In terms of pricing, again, the way that we always go to market, right, we work very closely with our customers. we do early adopters. We work with them, we talk with them. And I think as Chris mentioned, that's where we are now with that product, right? So we're going through that now. And ultimately, over the coming quarters, we'll be able to give you guys more feedback in terms of what we're seeing in the market, what the market is willing to pay right? And ultimately, from a pricing standpoint, what makes the most sense to get this out into the market and as quickly as possible, enable our customers to realize the value of what we're doing here. So again, it's early stages. Those are the interactions that we have now, and that's what we always go through with our early adopter program, and we're right in that right now.

Maybe to address some of the user comments that you made. I would go back to what I said, and I do truly believe that particularly in banking is this is about augmentation, not automation. I think when you hear it from a call center perspective, oftentimes, they're talking about full at near full automation using a tool like that. I think in commercial lending, but I wouldn't speak for my colleagues, but I think they would echo this across their value chain as well. This is about augmentation. So being able to grow a portfolio, as Josh talked about, with the same number of folks, that's what the play will be here. I believe, for a good long while, as opposed to the full automation of those sorts of rules.

I think the key to that question is actually what's going to happen to revenue and user counts, et cetera. We've got a vision that consumer banking go down to 0 people. And I don't mean that literally from a banking perspective, but I mean it from an interaction perspective. There will be a field in the back office doing some stuff. We are fully aware of that. We are driving that automation. And I want to make sure that Greg will share with you later on some pricing strategies that we're going to come out with and how we think about revenue. But one thing you can know about this team is as we help the bank to be more competitive and more efficient, we're going to get paid for that. So if you're concerned about user counts going down, et cetera, I would rest assured that we will get more money for how we help the banks to be successful. And I think that's the right balance because if you're a vendor that gets well paid, you've got the money to invest and keep on driving your innovation cycle and the banks are seeing the benefit of that. And so Greg will share more pricing strategies and how we're looking at going to market in the future because there will be a shift. And we've known for a long time, this is coming. The user accounting worked very well for a while like this. And eventually, we will change over to new strategies.

Hello. Thanks all for the time here. Just on the consumer side, like what -- in which flavor of consumer loan do you guys feel like you've had the most traction in so far to date?

Yes. So like on the consumer side, the most traction has really been around consumer or the non-real estate secured into the HELOCs and HELOANs. So with last release, we really were able to more effectively dive into the portfolio first purchase trade loans. So that -- and we've seen a tremendous uptake in that lightly.

That's super helpful. And then I guess from a product perspective, do you feel -- I mean, I guess, just to clarify, like still pushing for like auto or like personal or consumer.

Yes. So when I say nonreal estate secured, that's consumer unsecured loans line, credit cards, automobiles, RVs, boats, toys, trailers, that whole litany of things, anything that doesn't have to do with the house and then HELOCs, HELOANs on top of that and then more recently, first purchase consumer credit policy.

Are there any pieces? Or are there any types of loans where you feel like you need a fair amount more product work to address well today.

No.

Or do you kind of there. It's just -- awesome. Super helpful. And then one last one, if you don't mind. On the front end, I know you were talking about that digital front end for consumer. Just to make sure I have that right. That's disparate than the SimpleNexus [indiscernible]?

So it's the same platform, right? So it's launched in AWS. And the idea there is to provide a similar experience for your consumer. So that way, if you do have a consumer that comes in to your financial institution via SimpleNexus. And then comes back because of the great experience they had to get a credit card or open up a deposit account, it's not a dissimilar experience and vice versa.

Just a follow-up. I recommend thinking about the consumer opportunity kind of in two ways. First of all, is there is a modernization opportunity where you have an institution that may have a legacy system and its hold, they just want to get on new technology, and we can do that, as Law said, and we're confident with all of our products. There's also an opportunity for banks to stand up a new channel, attack a new market, provide consumer loans out of footprint and be a more digital approach. And that's also an exciting opportunity. We'll spend some more time on that later, but they need to be thinking about both, and we're pleased now that we can do both.

If I can just add to that just a little bit. So in conjunction with building the new front end and adding that on to consumer, we'll be adding it on to the other lines of business as time goes on, international, et cetera. something that this was also a strong catalyst for was actually creating API set experiences that customers can use or partners can use for customers, let's say, you've got your large banks who they've got -- they're spending billions a year on their own development. They want to build their own at front ends, right? So this also facilitates that approach so that they can tie into the nCino back end and centralize all of that data.

This is Alex Sklar with Raymond James. Josh, I think you made a great comment around the land with any concept. And you gave the stat this past quarter around kind of pipeline being 50% outside of commercial now. When you look at kind of the pipeline for new customers, are you seeing a similar mix now where a good chunk of it is coming from out of commercial? Or is most of that 50% coming from kind of the installed base expansion.

We're seeing an increase in pipeline for greenfield accounts where we're leading with solutions that are not commercial. We're confident in that the product's matured and been hardened and we're able to lead with that. So I don't have the breakdown pipe-wise, but I would say the marketing machine, the sales machine customers are validating that those are great entry points. Does that answer your question?

Yes.

Maybe one more.

Alex Neumann with Stephens. Just a follow-up on the front-end question with end consumer. Why was that platform built on AWS instead of Salesforce? And then does that impact the relationship with Salesforce at all?

So that's what's been native with SimpleNexus in the back end. It's quite flexible. And so it was something weren't made a lot of sense for us to transition and extend that. Our partnership with Salesforce is extremely strong. This is just a component where we feel like this is the best approach to serve our customers. So that's the background of it.

We've had components here in AWS for more than 4 years. And that's just part of us making the best decision we can for what makes sense for our customers and for nCino. But as Matt said, we still have a lot on Salesforce.

Thanks, everyone, for your time this morning. We're going to break until 11:25, at which point we'll come back and we'll have a customer fireside chat and then ultimately get into the financials. So we'll break until 11:25. Thank you. [Break]

Okay. Welcome back. This is Josh Glover again, and I'm really excited today to spend some time and give you an opportunity to hear from an nCino customer. Who's adopted multiple solutions and has achieved some good outcomes. John Sullivan is the EVP and Chief Information Officer at BankNewport. BankNewport is a bank in the U.S. actually 204 years old. So John is driving modernization in a 204-year-old, it's a pleasure your heart.

Thank you.

But you're doing really good stuff, and we appreciate the partnership that you have with us. So thanks for joining us. John, if you don't mind just starting, if you could give some context in what is the nCino landscape at your institution? What are the solutions you've adopted? Just how has that journey been?

Sure. Thank you, Josh, and thanks for the opportunity today. So we started talking with nCino in earnest back in July of 2021 after considering commercial lending platforms for quite a while. And after we had engaged in discussions with nCino and saw the different product offerings, we initially signed up for 3 products. We've signed up for commercial lending, we signed up for a small business, and we signed up for digital account opening. And then within about 2 months after we signed the contract in October '21, relatively quick painless process in the grand scheme of things, we ended up signing up for a consumer product geared towards marine lending, in addition to nIQ. And it's been a great experience up to this point. But we went all in looking at this for that platform experience, what you had referenced and what have been referenced earlier in the day. It is to have something where the customer and the employee has a repeatable experience that's efficient and it's modern. And to date, we're in the process of still implementing digital account opening as well as small business. Those will go live by the beginning of next year. The commercial and the consumer product geared towards marine and nIQ are already live. So it was a relatively quick turnaround time as well.

And to clarify a little bit, so your marine leading use case is a digital consumer use case?

Yes. It is. And we saw a rare opportunity. We inherited a marine lending business approximately 5 years ago, very outdated processes, good group of people, but we saw an opportunity to really digitize that from end to end. And we jumped at the opportunity with nCino and worked with nCino to develop that approach.

So that's a digital channel, and you can actually get outside your footprint with that essentially.

That was the attraction to it. So it was really to have something that we can use in these contiguous 48 states. And to have the portal experience has been a game changer as far as making that process easier.

So you've obviously done a lot of due diligence as a good CIO would. You looked at the landscape, you picked in nCino. Do you mind sharing some perspective on why you picked nCino as you evaluated the other familiar names in the space?

Absolutely. The primary reason behind it was, of course, the technology, but also the people and the recruiting capability of it. What I mean by that is to have a tool like nCino was appealing to us to attract talent to the bank as well to have the right tool set. They can get people excited about commercial lending and small business lending, the retail side of the house and certainly the marine side of the house. So going back to marine, one of the things that we do is we work with contractors throughout the country, and we wanted to have the right tool set for what's really been a paper-based industry.

So you've taken a real platform approach, and we spoke about consumer, small business, commercial, you're doing network. For you, as a CIO, how is that platform approach change? How do you think about your modernization agenda and how you scale?

It's -- we're poised for growth with nCino. So the primary reason we did this, we have an aggressive growth plan. We want to make sure that we've got the right tools that make life easier on the employees and the customer and to have a single source of truth, which is what we really see with these offerings. It's made like more efficient for the IT side of the house and certainly the back office, but also for the customer. And we're very geared towards digitization. This is the right partnership to accomplish that.

So I see lots of institutions with actual Board and mandates to simplify vendor landscape inside the bank. And when you talk about making things simpler for IT, just expand on that a little bit?

Sure. So we had some of the processes we were able to do away with as a result of nCino. There are a few legacy systems that we did away with. So in total, there will be 5 when this is all done. But the checklist and the processes that we had that were just outdated and not sustainable. I couldn't even give you a count on how many we've done away with already. The Board -- we have a very supportive Board. They're very tech focused, which has been great. And it's not always the case with a lot of organizations, but having that, nCino came and presented to the Board, and the Board walked away pretty impressed with what they saw. But again, the efficiencies that we were able to get out of this and the mandate of process improvement and efficiency, it's not just that, it's the risk management aspect as well. So being better able to control risk and again, having the right channels to fuel growth.

So as you think about your modernization efforts, obviously, getting rid of old systems, simplifying IT is good, but ultimately, we're here to help you execute your business strategy. How are you thinking about your exact thinking about executing that business strategy with nCino as you continue modernizing BankNewport?

Yes. Great question. We're looking at this from the vantage point of we have to offer great technology. It's a nonnegotiable. So we look at ourselves as a technology service provider in the financial world and not just the brick-and-mortar bank. So that is to have the experience, not just for an external applicant, but also in branch. So a lot of the things that we're doing are related to what that in-branch experience is as we shift more so from a transactional experience in the branch to a sales discussion. So when you look at the ability to even do digital account opening for somebody that walks into a branch, then to have the conversation with them after an account has been open and say on the business side to then talk about a small business loan, it's just -- you start right there with a really good discussion to have a sticky customer right out of the getgo. So again, we're looking at what we can do go forward to grow our footprint. So on the marine side, I just mentioned the 48 contiguous, but also to go outside, we're traditionally a Rhode Island Bank, but this will give us the ability to go beyond our borders as well.

And to do so efficiently.

Absolutely.

We really like to measure what we accomplish. It helps us make sure we're deploying our capital well. It's the right thing to do because you place a big bet on us. Any perspective you could give us on measurable outcomes that you've seen. I love the deprecating 5 systems stat. What about the business side?

The business side, probably the best example of that, we went live on the marine side back in May of 2022. And again, that was with an old legacy system that was about 30 years old, Access, Excel, PDFs, Word documents, things of that nature. So now you've got the single source of truth. The back office alone just in the marine world started cutting down their application time by one hour per loan. Then you expand that to the loan servicing area. And what we're seeing there is they used to take PDFs that were sent by e-mail, translate those and book them under our core application. That would take 25 minutes to 45 minutes per loan, and that is now autobooked. So with an API, we were able to just upload it. They'll review it possibly afterwards. But that data entry is gone. Back to the marine side, it used to be 9 points of manual entry for the same data in the old application. Now we're down to one that's primarily done by the applicant. So again, the efficiency gains are certainly there. As far as the percentage, I can't quantify that, but it's been very well received by the back office and by the customers. So we do surveys after we've completed an application or you go online for any of our products, and the marine feedback, in particular, because they're using the customer portal, has been very positive, very high marks for what the experience has been.

Really proud of what we've done there together. We spend a lot of time talking to banks like BankNewport. And it's pretty consistent. Every bank I talk to says they want to take care of their customer, give them a good experience. And what matters is the action that you take, the business decisions that you make, how have you prioritized your client experience as you thought about your modernization agenda?

So we really embrace the idea of you have to offer great technology and exceptional in-person experience, all in one. So you can't have a drop off when a customer walks into a branch and they still have to have some involvement with technology that should be just as good as that external experience. So you look at what we're dealing with organizationally, you look at what we're dealing with culturally, in a world with Google and Apple and Facebook and Instagram. I'm an old school person, so I'm a Facebook person, but when you look at the tools that we have now or even ChatGPT, your last great experience is your newest expectation. So if we don't offer those types of solutions. We're going to lose market share as we're trying to grow or we're going to be in an uphill battle with the larger banks. We look at a tool like this or the modules that we have with nCino as an equalizer to keep us competitive.

So we do not think about modernizing particularly in 204-year-old institutions in Newport, we don't think about modernizing as a one-and-done thing, right? We don't install new tech and then we're out. We typically see that installing new tech actually, for the first time. We will give institutions the ability where they can iterate quickly. And for the first time, institutions will end up in a position where their technology can actually be adapted more quickly than they can even drive people change. So how are you thinking about continuous optimization? I would love some perspective. We're proud of our team and the nCino people that are working with you. Have you partnered with nCino to keep taking what you've done and making it better?

It's been a partnership. It's truly been a partnership. So it is not the typical IT project. So it's not an IT project at all. This is business transformation, which is an adjustment. There's an acclimation to that. When you look at the implementation of a typical project, and I've been in this business for the better part of 25 years. You do your due diligence, you get an RFP, you find a vendor. Hopefully, they have the right solution, you implement that, you get to go live and you pay for the best sometimes with some of the solutions with the support that you get. This has been different. So what I mean by that is from the get-go, it is a matter of a sound process. I have a project management background. One of the things when we were vetting vendors, I want to make sure there was a good delivery approach that was going to be implemented. The gold standard with nCino has been great. The projects we've done, so I've been on all 5 of the projects. I'm one of the only people at the bank that's been on all 5, but it's consistent. And it's about change management and true embracing of change management and preparing the client for what those changes would be. But it's also an open mindedness of working with the team and making sure that if we have something we'd like to see that doesn't exist today, there is a discussion on it. And if there's a way to do it, nCino will do it. One of the other things that we signed up for to help us along that journey, we are engaged with the admin plus function that nCino offers. So we'll have additional bench strength that helps us out for the internal administrators that we have at our bank. And it's worked out really well. And again, marine was relatively new. So that is something we really had to work towards. And there is a lot of discovery that took place, but there's a lot of compromise as well. And it's been consistent on each of the projects that we've done.

And admin plus essentially allows you to reach into our customer success organization, take experts who know the product, they understand the platform and they can help you without you having to bear a full-time resource essentially in the bank.

Correct. Correct. And what -- we don't know, we don't know, being relatively new to this. So there's a lot of guidance and discussion that takes place to make us understood, comprehended, whatever you want to call it, to have them help out. And the team, be it the project manager, the sales side of the house or the admin plus team, they've always been very supportive from the get go. And like I said, it's a partnership. When we look at the experience that we have, there are a lot of vendors that you'll say their name and people cringe, and nCino is not one of them. So a very solid business part. And I feel as if they're an extension of BankNewport.

When you bought nCino, you didn't just buy a product. You tally became part of a community. And we spoke a little bit yesterday about your location in Newport, but the nCino community giving you the ability to reach into a community of outperformers. Any perspective you could give on that now is helpful.

It is different. It's the culture was talked about earlier today, that is palpable, and we feel that from a customer perspective as well, whether it's talking to other nCino clients or being down here at something like nSight. I came by myself 2 years ago to my first nSight, the first year that we were with them nCino, I didn't know what to expect. I brought 4 colleagues of mine back this past year. Two were executives that were with us. One was an administrator, one was a support person from the commercial side of the house. They were all very impressed with what they saw. They felt like they were part of something. That sounds like a cliche or [indiscernible], but it is real. So there is something different about this. I feel as if we're with somebody who's leading, and it's nice to be on a winning team, and that's the general consensus from the organization.

We're glad to have you part of it. So you earlier saw our newest stuff from our smartest people. As you think about the product road map, where nCino's investing, the things we've showed you today, but the things you've seen as part of the community, what gets you excited for the future of this partnership?

It's nIQ. It's data analytics. So for us, we're not underutilizing it. We're using it right now for CECL. I'd like to see us expand utilization of it. It's -- I don't think enough community banks understand the impact of data analytics and the importance of that, but also the AI component that was discussed earlier today as well. There aren't many people in my position that are an expert, and it's still the Wild, Wild West with AI. But to be with somebody that you trust that can help you get involved in it or dip your toe in the water, if you will, and see where it goes is very exciting. And I want to get to the point where. When we're looking at data, we're not just looking at in a reactive fashion, helps us mature how we're analyzing data to give us a competitive advantage and see those opportunities and trends that we might not see otherwise.

What's interesting is to see the connection between the reality that you need to modernize, you need to get a digital process that's optimal. Because if you don't, there's really no way to get that intelligence in front of your bankers. Otherwise, you're going to have something in the back closet and the quarter will end a muscle in and people will say, look, we did some bad things, right? I would rather put it on your banker screen and do some good things, right? Unless you have that point of execution and you're preparing that by transforming your business and getting on nCino, it's really hard to actually put those analytics tools to work. Any other perspective on that?

It is. I think everybody says data, data, data. I want data, I want data analytics. They don't necessarily know what to do with that. So to have a tool that makes it easier. It is certainly something that we find desirable. But it's, again, getting to that place where you can do something with the data. And now even with the products that we purchased from nCino, we have more data that we can do things with. So it's, again, taking full advantage of to optimize that.

Well, you can expect a point of view from us. We were part of the build the credibility and reputation. We're confident getting one, and we will. We saw some of that today. We have a few minutes here. We can take a couple of questions before Greg's session. Saket in the front row.

Awesome. Thanks, John, so much for presenting. Very helpful context. I was wondering if you could dig into the 5 systems that you were able to replace, right? Some of them were clearly, I think you said Access and Excel and very manual processes. Who were some of the digital vendors that you were able to replace through this? Like are they coming from the core providers? Are they smaller vendors? Who kind of got consolidated through the move to nCino?

So without naming it specifically, they will come from the core provider, a couple of them, so particularly on the digital account opening side. So we went all in. It was for the consumer experience as well as the business experience, and we really think the business online account opening will be a differentiator. And that is hard to come by. So I think a lot of the cores are trying to figure that out still, but we have something today. We're able to do consumer online account opening. It's relatively quick. It will be faster with nCino. And then the in-branch experience will change dramatically. So we're going from a process of about 40 minutes to open an account down to -- I mean, I would think it's, at worst, probably about 15 to 20 for the business account side. So that's going to be a game changer for us. And there really isn't anything out there. When you look at the numbers, I think it's something along the lines of maybe 5% of the banks in the country offer business online account opening. So again, we look to do these things now to get the competitive advantage. As the markets turn and interest rates change and so on and we get back to where we want to be, we, again, feel as if we're very well positioned to take advantage of this because of the work we've been doing over the last 2 years.

Thank you.

Welcome. I will take one more.

Thank you much. John, thank you for the time you spent to come here. We really appreciate the perspective. Incredibly helpful for us to tell the story together. More importantly, thanks for trusting us. We'll keep trying to learn that every day. And once you adopt more nIQ solution, we'll bring you back.

That sounds good. No, seriously, thank you very much. We've appreciated the time and effort that the nCino team has done from soup to nuts in helping us get to where we are. And we're 204 years old, but I think our best days are in front of us. So nCino is a big part of that. So thank you again.

We're 12, and we agree. So thank you.

John, to echo Joshua's comments, thank you for being here and for sharing your nCino experience. We're very grateful for the partnership. And thanks again, everyone, for being here with us today for the inaugural Investor Day for nCino. For everyone in the room, thank you. And for all of those online, we appreciate it. The first thing I want to do is touch upon a few accomplishments we've achieved since we went public in July of 2020. Crazy to think it's already over 3 years ago. First, on revenues. We continue to focus on driving top line growth, as highlighted by a 42% subscription revenues and a 38% total revenue CAGR since we went public. As we consistently communicate, while we appreciate that the market is demanding a healthy balance of growth and profitability, we continue to prioritize growth here at nCino as a management team. As we've also reinforced, we remain focused on driving growth in subscription revenues not professional services revenues. As Josh highlighted, we have a unique asset in the space with the SI ecosystem that we've built, and we will continue to look to push professional services to our SI partners. Continuing on the growth theme, we wanted to highlight the expanding customer wallet share we've seen over the last couple of years. Note on the chart on the left, the average platform customer, ACV chart is only for the bank operating system and does not include SimpleNexus as that would not be an apples-to-apples comparison. As you can see, with an 11% CAGR, we have significantly increased the ACV per platform customer since fiscal '21. This increase is also reflected in the chart on the right, which does include SimpleNexus customers. As of the end of the second quarter, we had 492 customers with trailing 12-month subscription revenues over $100,000 and 82 with over $1 million. We had 465 customers in the greater-than-$100,000 category and 73 in the greater-than-$1-million category as of the end of fiscal '23. So notwithstanding the sales challenges in the first quarter due to the liquidity crisis, in the first half of fiscal '24, we added 27 customers to the over-$100,000 category and 9 customers to the over-$1 million category. For comparison purposes, in the year prior to the SimpleNexus acquisition, we added 47 customers to the over-$100,000 category and 11 to the over-$1 million category. So you can see the traction that we have in the market with larger and larger opportunities. Another data point for you, at the time of the IPO, we had no customers with over $10 million of ACV. We now have 5, with 2 of those being multinational FIs and 3 of the 5 already using multiple solutions. We also have 15 customers between $5 million and $10 million in ACV, up from 8 at the IPO. Moving on to ARPU. You'll see we've been increasing the average ACV per platform user with a 7% CAGR since fiscal '21. nIQ has been very helpful in driving this as is higher prices for new users and for renewals. We've also been experimenting with monetizing APIs with reseller and referral agreements with -- also with B2C touch points such as portals. And as we release additional nIQ products, just as Chris touched upon in his presentation, we expect this average to continue to increase. As we move on to discuss the bottom line, I wanted to note how proud I am of the company's execution against our profitability targets. On the gross margin line, we already achieved our IPO target of 75% subscription gross margins, and I'll give you an updated long-term subscription gross margin target shortly. On the operating margin line, when we provided our financial outlook for fiscal '23, which was in March of 2022, we guided to a non-GAAP operating loss between $33.5 million and $35.5 million. We ended fiscal '23 with a non-GAAP operating loss of $2.1 million. On our second quarter earnings call, we provided non-GAAP operating income guidance for fiscal '24 of $51 million to $54 million. Using the $52.5 million midpoint of that guidance and the midpoint of our original fiscal '23 guidance, we expect to have an $87 million swing in profitability in 2 years. By our calculation, nCino's 1,300 bps flip to profitability is in the 90th percentile compared to packaged software companies with revenues over $200 million that made the transition to profitability over the last 2 years. And I want to thank all of nCino's employees for embracing the company's transition to profitability. Drilling down into some expense details on this slide. We have seen leverage across all expense lines. From a margin standpoint, we continue to benefit from the SI ecosystem Josh highlighted which has allowed us to continue to focus on subscription revenues. We've also benefited from SimpleNexus and nIQ products being on AWS as well as the sales mix of the bank operating system to larger and international FIs where we do not resell Salesforce's CRM solution. On the operating expense lines, you heard Josh describe the investments we have made in marketing technology and in sales infrastructure. We believe we are still in the early stages of getting benefits from these investments, and we expect continued leverage on the sales and marketing line. As you heard from Matt, we've seen increased efficiency in our R&D organization from various initiatives, including the positive impact of increasing the frequency of product releases. We expect to gain additional efficiencies in R&D as the company continues to scale and if some of these initiatives continue to take hold and mature. On the G&A line, we obviously invested to build the infrastructure necessary to be a public company. As we sit here today, we feel very comfortable with the G&A infrastructure we have in place, including very experienced and proficient G&A teams, and we also expect to get further leverage on the G&A line as the company continues to scale. In sum, we expect to continue to get leverage across all of our expense lines. This slide is just another view of what I just walked through. As noted, we've made significant progress in these areas in fiscal '23 as we embrace the evolving market sentiment and focused on achieving efficiencies, which have come from various places, including those realized by returning to the office and those from the integration of the SimpleNexus acquisition. Moving on from our performance over the past 3 years. One of the things we want to make sure is appreciated, right, is the geographic and product diversification we have as a company. Over the past several years, we have made significant investments in expanding both our geographic and product footprint. As a reminder, there is no other multi-tenant, SaaS-based, single-platform company out there that covers commercial, small business, consumer, including mortgage, account opening and onboarding that spans small community banks all the way to Bank of America and Wells Fargo here in the U.S. and that travels globally. There's none. Think about that. Most, if not all of the competitors you're familiar with out there -- that you're familiar with out there and that you cover, right, are point solution providers in the community banking space in the United States. Not only do they not address the regional enterprise banks in the U.S., they do not have a global footprint or a global product offering. Only nCino does. To that point, as you look at this slide, you'll note that our international revenues have generated a CAGR of 63% since fiscal '21. You'll also see the size of the international financial institutions we've been able to attract to date, including 5 of the top 9 in UKI and 5 of the top 7 in Canada. This is another view of our international growth. You can see that we've almost doubled our percentage of international revenues over the past 3 years. You can also see that the majority of our SAM is actually -- it sits outside of the United States. So as you think about growth opportunities and growth levers for this business, international will continue to be a focus area for us. And we're very excited about the progress that we've made, the investments that we've made, the infrastructure that we have, the customer references that we have as we make further headway into this market. Moving on to product diversification. We are a product innovation company, and we've invested over the years to build a unique single platform product offering. Our customers make generational buying decisions when they purchase our software, and it is essential that they are confident in our continuing commitment to product investment and innovation as I'm sure John would reinforce. As you heard from Matt earlier, we've gained efficiencies in the way we build and release software, allowing us to control spend year-over-year without compromising the level of innovation. We still plan to spend over $100 million in R&D this year, continuing to drive innovation and even further differentiating ourselves from the rest of the market, particularly as others are scaling back investments in light of the more difficult macro environment. On our second quarter earnings call, we noted that our noncommercial pipeline was bigger than our commercial pipeline. This slide shows how we've been diversifying outside of commercial over the past 3 years and where the SAM sits. As you can see, we have a tremendous opportunity to drive long-term growth with our consumer and nIQ offerings in addition to continuing growing our market-leading commercial solutions. With the investments we have made in our consumer product offering, as you heard from Law, we believe we are uniquely positioned to transform the consumer lending market as we have the commercial lending market. Saket, ultimately, this gets back to your question. So the next topic I want to focus on as we transition from some financial results is our pricing model. As we've discussed over the years, we have always been focused on maintaining pricing in light of the multiproduct single platform offering that we have as well as the long-term nature of our customer relationships. Specifically, maximizing exit pricing, which is the price at the end of a contract, right, has always been top of mind for us as we negotiate contract renewals. It was with this goal in mind that we adopted the seat activation model you've become familiar with. While this model is unique compared to most other SaaS companies, it was helpful in building visibility to top line growth especially as a smaller company trying to disrupt a market. This visibility provided us the confidence in customer backing and customer support, right, to invest in building out our single platform vision over the years. That said, we have, from time to time, over the years, experimented with different pricing models. For example, SimpleNexus, right, which has historically had a predominantly seat-based model, which has served them very well over the years, particularly in a difficult market and particularly as compared to their transaction-based competitors, right? However, in light of the current state of the mortgage market, as we've discussed over the past few quarters, we've touched upon this, and -- seat pricing, we are structuring some U.S. mortgage contracts with a minimum platform fee that takes into account current volumes but also allows for additional revenue growth as mortgage volumes rebound, right? We want to capture that volume as it grows when the mortgage market settles down and ultimately turns around. Another example is with the bank operating system, where we've included increased or stepped up pricing in certain contracts where seat prices increased during the contract term. This can, for example, be helpful in working with a customer that may have short-term budget constraints. It can also be helpful in certain sales cycles as customers are used to buying SaaS software this way versus our historic activation model. As we think about the value and efficiency gains our customers are realizing from the use of our software, as highlighted earlier by Pierre and Josh and as you heard from John, we are conscious that the more efficient our customers get from using our software, the less seats they may need over time. A great example of this is on the consumer lending side of the business, right, as you go back to the chart that Law had. We believe our technology can make consumer lending a low- to completely no-touch human experience if a bank actually wanted to go that far. We do not believe that applying a seat-based pricing model to that use case makes sense over the long term. We also want to make sure that we share in the value and efficiency gains our customers are getting. Accordingly, we plan to evolve to a platform fee pricing model based on an FI's assets with minimums, starting with our consumer lending product offering. This change will take place over time so no need to rush out and update your models just yet. But do know that the seat activation model going back to our IPO is becoming less and less relevant to our business model. We will provide you additional information over the coming quarters as we move forward with implementing this pricing model to make sure you appreciate how this is going to roll out and ultimately impact our P&L. I do want to note that FIs are very used to buying from their software vendors based on their asset size. And in discussing this pricing model and testing the orders with it with our customers, we believe it will be very well received and, frankly, be easier to sell than the legacy activation approach, which always requires some education on our part as we went through the sales cycle. Turning to your models. We continue to discuss the best metrics to help -- to provide to help you better understand our business. Hopefully, you've noticed over -- the additional disclosures we've been giving you over the last couple of quarters, including having 95% visibility at the beginning of the year and to the top end of our subscription revenues guidance as well as the 22% year-over-year increase in gross bookings that we disclosed in our second quarter earnings call. While giving you these additional metrics, we have continued to impress upon you that we do not manage our business to RPO and that we do not believe RPO is a good indicator of future performance for our business. This slide helps reinforce that point, and I'll keep it up for a few minutes so that you have time to process it. Providing another onetime data point, you'll see our ending second quarter ACV of $440 million and a year-over-year ending ACV growth rate of 14% to continue reinforcing the positive trends we're seeing in our business. Keep in mind that these numbers reflect the challenging sales quarter we had in Q1 as a result of the liquidity crisis. While today, we're considering this as a onetime disclosure, we expect cumulative ACV growth to accelerate if we continue executing in accordance with our plan this year. Particularly as we have 2 quarters left to report as well as bookings next year that will convert to revenue during the year. So we get asked why the dislocation between these metrics and RPO? Let me just give you a couple of reasons. First, not unlike other companies, total RPO and CRPO, which for us is less than 24 months, are large numbers. And growth rates are proving to be inversely related to relative size of the number, as illustrated by the underlying metrics on the right-hand chart compared to their respective growth rates. Second, RPO and CRPO growth rates from fourth quarter fiscal '22 to third quarter fiscal '23 were positively impacted by the acquisition of SimpleNexus. And we are now just lapping those difficult compares. Third, as we frequently discussed, the timing, size and duration of renewals can significantly skew RPO growth rates, particularly with some of the size contracts that we have and some of the large customers that we have. So hopefully, just these couple of data points help you appreciate while we do not think RPO or CRPO is a great indicator of future growth. Ultimately, like most SaaS companies, future growth is really all about sales performance and we try to keep you apprised of that on our earnings calls and in other public forums. I know some of you are concerned or had questions about our growth prospects for next year in light of the impact of the liquidity crisis in our business. We believe the disclosures today a 14% year-over-year growth in ending ACV as well as the cumulative ACV number of $440 million as of the end of the second quarter should go a long way in providing you confidence that fiscal '25 should be another year of strong growth for the company, particularly as those numbers reflect very slow sales activities in the first quarter. And obviously, those sales metrics -- or those metrics do not include sales for the second half of the year, which is historically our strongest half of the year nor does it take into account, obviously, sales that we'll do next fiscal year that will convert to revenue during the year. Also, as you think about fiscal '25 growth, I want to highlight the Silicon Valley Bank Bankruptcy Court filing on September 8. In case you did not see this, you will note the reference to Silicon Valley Bank assuming its contract with nCino and assigning it to First Citizens or a designated affiliate thereof. We're also aware that many of you look at CRPO bookings or the change in CRPO plus subscription revenues for the period as a growth indicator as well. In the second quarter of fiscal '24, it understates sales achievement as compared to the 22% gross booking metric we provided you on our earnings call. As you look at this chart, just as you did not see a 69% subscription revenue growth following the fourth quarter of fiscal '22, we certainly do not expect negative subscription revenue growth on the horizon. Another point we've been trying to highlight that we want to reinforce today is the continued acceleration of the timing of bookings to revenues. Here we see the relative contribution from new and existing customers, as described in the MD&A in our public filings. Note this analysis excludes inorganic comparisons from acquisitions. As you can see, the contribution from new customers is up substantially in the 6 months ended July 31, 2023, relative to the prior year. This is indicative of faster conversion to revenue versus what we were accustomed to historically. Note that incremental revenues from existing customers, while not specifically called out in this analysis, would include add-on sales and upsell that is actually activating even quicker than that of net new customers. We expect this trend to continue, giving us further confidence into our plan for fiscal '25 and beyond. Finally, we wanted to give you an update on our long-term operating model. On the growth side, just a reminder of our growth pillars. We are focused on executing our single platform vision. And while we continue to lead the market in commercial, our goal is to replicate that success with all of our solutions across our single platform. Today, you've heard from the GMs of those products, and hopefully, you have a better understanding of the market -- the market opportunity in front of us and why we are so excited about the future of this business. On the international front, we are focused on running the playbook we have successfully executed numerous times to date, identify a beachhead account, get them live and referenceable, and then aggressively take market share. You have seen the substantial growth we have achieved internationally, and we believe we are in the early days of transforming the international FI landscape. On nIQ, again, Chris referenced the fact that we launched our AI data analytics intelligence offering 4 years ago. This is not something new to us, right? It's not something new. And we've already made a significant investment in this area. Keep in mind also, again, echoing Chris' comments, that AI is only effective as the data that you have. And we are uniquely positioned to lead the financial services industry through the AI journey, just as we led them to the cloud journey. With that, let me show you our updated long-term target operating model. First, I want to start again with the progress we've made on the targets we set out at our IPO. On gross margins for subscription revenues, we have already achieved our 75% target over the past couple of quarters and are now raising that target. For total gross margins, we increased from 60% at the IPO to 65% in the second quarter and are now raising that target as well. We plan to achieve these targets -- or this target based on the expected mix of subscription to professional services revenues as we continue to leverage the SI partner ecosystem we have built. As I detailed earlier in my presentation, we expect continued leverage across all OpEx lines. For sales and marketing, we were at 25% of revenues at the IPO, are now at 21%, and are improving the target range to 14% to 17%. R&D was at 25% of revenues at the IPO, 22% in the second quarter, and we now have a target range of 13% to 14%. Finally, for G&A, we were at 13.5% of revenues at the IPO, we were 12% in the second quarter, and we have updated our target range to 6% to 9%. We expect all of these factors to contribute to a new target of approximately 35% operating margins. We are also providing a new target metric for free cash flow, which we expect will approximate operating margins. We're providing another new target metric for stock-based compensation as we appreciate how top of mind that is for investors these days, which is 6% to 8% of revenues, which compares very favorably with other SaaS companies. So finally, to sum it up, you'll see that we are targeting a Rule of 50, up from our Rule of 30 target this fiscal year, and we expect to make progress on that target along the way. Before I finish up, I've got one housekeeping item related to Q3, and that's again off of the model, but just while we're all together. As we transition the SimpleNexus brand to the U.S. mortgage suite, we do expect to incur a noncash charge for accelerated depreciation as a result of this of approximately $10.7 million in the third quarter. So just while we're here, we wanted to give you a heads up on that as we make that transition. In closing, thank you for your time and interest in our presentation today. We believe nCino is a very special and unique company, and we hope you've gained a greater appreciation of that along with our products, our competitive positioning, our people and the opportunity we have to lead the transformation of the global banking industry for years to come. With that, we'll be happy to take questions from our guests in the room.

Since there's no questions -- thanks for coming. I was going to joke and not give my presentation to thank you all for coming and you'll and it will be funny.

So Saket again at Barclays. Just very helpful presentation all around, Greg, maybe for you, 2 questions. First, just to make sure it's asked, how do you define long term, right? Is it a 5-year goal? Is it a 7-year goal? Anything you want to say on that? That's the first question.

When I think of long-term plans, I generally think of 5-ish years. So 4- to 6-ish type of a thing. Obviously, some things may happen a little bit sooner, some could take a little bit longer. But to me, when I think of a long-term plan, it's in that 5-ish year time frame.

Got it. That's helpful. And the second question is, I thought the pricing evolution section was really interesting. And so maybe the question is, with that idea of sort of a platform fee with minimums and then sort of maybe more of a volume-based fee right on top of that, is that -- do you sort of foresee a time when that's going to be largely for the consumer side of the business and the commercial side will still stay kind of on a seat activation basis? Like is that -- will that pricing evolution mostly be on the consumer side is really the question.

That's certainly where we're going to start. And again, as we're driving efficiencies. If you think about commercial, and I'll defer to Josh much more of a high-touch relationship, right, than the consumer side of things. So start on consumer and ultimately, we'll go from there. But Josh, maybe you want to add to that?

Yes. We see a model with that, Saket, that really aligns us to the value we're providing for customers. We also see ongoing evolution of customer expectations. In late 2019, one of my customers told me, no self-respecting business would ever borrow money online. And then a few months later, they are [ fussing ] at me that their PPP portal wasn't fast enough, right? So the world has evolved, and we see customer expectations for good digital experiences. We also see customers who want a more open approach with APIs because they may just have a different digital experience they want to have. So we think that applies to everything that we do. And so for us, it's important for you as you understand how we're thinking to come back or presentation about experience automation and intelligence. This model aligns us to provide value across those 3 major pillars as we continue investing.

Really helpful. Michael, Morgan Stanley. I just wanted to clarify. On the ending ACV disclosure in fiscal 2Q. What was the 14% number that you guys shared? I just wanted to clarify that.

Year-over-year growth.

In the second quarter?

No, no. Year-over-year growth. It's grown 14% on a cumulative basis over the prior year.

Okay. Got it. And then secondly, I think you mentioned something about SVB and First Citizens. Just wanted to clarify you won that transition? And then anything else to share on the other banks that were going through similar processes?

Yes, no new updates on the other banks. No new news there, but yes, just highlighting what was filed publicly in terms of that contract being assumed and then assigned for Citizens. So from that perspective, as we always talk about M&A, we look at it as an opportunity to reinforce the relationship or expand the relationship, and we'll continue to focus on that in those 3 situations.

Great. Adam Hotchkiss, Goldman Sachs. Just wondering, Greg, what's assumed from the Salesforce partnership and the impact on margins in the new target operating model? Any changes in the way you're thinking about those costs flowing through the model?

No, nothing specific to note. As you've heard earlier, we have a great relationship with Salesforce. We worked with them for years. We continue to work with them both on the product side and the field side. We announced a 7-year deal with them as we were going public, right? So we're 3 years now into that. But we continue to work with them in terms of helping to drive efficiencies for our joint customers specifically. And so nothing new to update there. As you talk about the impact on margins, a lot of it is with mix. If you think about where we started as a company, it was in the community banking space here in the U.S., and we resold a lot of Salesforce CRM there, right? As we've gone upmarket, we don't resell it and gone internationally, that's changed the mix, change the margin profile, and that's helped drive some of those increased margins as we moved away from that really focusing on the resale and the community banking space, which was really the only market we ran at the time.

Awesome. Nick Altmann from Scotiabank here. Just 2 quick questions. One on the consumer pricing model, was the prior pricing model ever sort of a governor for adoption? And do you guys expect kind of some of the demand there to get sort of flushed out with the pricing model change? And then can you also talk about that as it relates to commercial side of the business?

I wouldn't necessarily say that software pricing was a governor. I would also like to pull back a little bit, and it's not just about how we price the software. Ultimately, we're packaging a solution. That's a very different way to think about this. So we have bundled solutions where we can now show up with the point of view and say to a community bank customer, with this package professional services deployment, this license spend, I can have you up in months, not years. And so we're working on that as well to ensure that as we learn these lessons and the products evolve to have a really nicely packaged, holistic offering show them a path to success. We do think this is something that is easier for customers to digest. They'd much rather say, look, here's a solution I'm going to get. Here's my business case. Here's my cost. Here's how it helps my business than run around and count bankers. I mean, I've had to do that for other vendors. And I just don't want to spend my time counting how many sales people I have, et cetera, right? I'd rather just understand the value I'm going to get and make sure we have the right value exchange with our partners. So I wouldn't say it's been a roadblock, but I do think it will make things easier in the future, and it will also align us to the value that we're providing as automation continues to enhance.

And then just on the second question, earlier, you guys had kind of showed a chart that showed the growth in the number of SIs and partners that you're working with. You spoke to how pushing more of the implementation side of the business is going to help sort of get some leverage on the margin side of the equation. Can you maybe just talk about today, like what percentage of bookings or revenues sort of derived from the channel? And as it pertains to the long-term model, how do you kind of see the mix shifting if you've kind of thought about what it could be in terms of a more mature long-term model?

It varies year-to-year, I would say, probably 60% to 80% of our ACV is led by an SI with nCino resources supporting them typically.

From an implementation standpoint.

Yes, from an implementation perspective.

Yes, I want to make sure that they don't sell the solution. They may influence the market and there's a great relationship. But overall, we always sell it on our paper. There is no channel, so to speak. But we've created an ecosystem where it's in their interest to work with us to influence the marketplace. And we see tremendous value in that.

Yes. And so we're now -- last quarter, we're at 85% subscription. We would expect that to continue to increase. And ultimately, that professional services, again, consciously is going to be dilutive to our overall growth. But again, we think that's the right thing to do as we focus on product innovation and let our SI partners work on the professional services side, particularly upmarket and particularly as we expand internationally.

This is Adib Choudhury from William Blair. So just going back to the topic of mortgage, could you kind of frame how you're thinking about the long-term growth of SimpleNexus in U.S. mortgage? And then the international mortgage opportunity seems pretty compelling. And I guess, framing that versus the U.S. mortgage opportunity?

So we see a very near-term opportunity in taking SimpleNexus into the depositories, the banks, the credit unions. If you look at the focus of these 2 entrepreneurial companies over the last 12 years, they heavily focused on the IMB space. They had a really nice presence in banks. That was enough for us to get very comfortable that the product would work there. But most of their revenue, most of their clients sat on the IMB side. And then while they were doing that, we were very focused on banks. We have a brand there. We have relationships, banks like BankNewport that you heard from earlier. So we have a really nice opportunity from a connected single platform. If you think about John's narrative earlier, IT teams don't want to manage more systems than they have to. People don't want to bifurcate customer experience more than they have to. And so it's pretty logical that these institutions, again, we've doubled the number of institutions on the platform that have more than one solution since IPO. That's indicative of their desire to really run their institution of one platform. With time, they're absolutely going to want to get the mortgage there as well because that's so personal for our customers. It's literally their home, and it's literally their net worth that's being underwritten. So we see a great opportunity there. We'll continue running at the IMB space. Their position has strengthened in this market due to the competitive landscape and due to the corporate strength of nCino and the way we've continued to execute. Outside of the U.S., the mortgage space is very different. They don't securitize these loans. The banks actually hold on to the exposure. So they have a different relationship with their client. They're not going to do a loan and sell it to another bank. They're actually horrified when we tell them we do that in the U.S. because it's just so counterintuitive for an institution because it is such a close relationship. So by linking the small business loan to that personal loan, we have cross collateralization across those different products. There's a really nice opportunity. And when we went international, we were very focused on the lending money to business use case because that's where the company was. But we kept seeing this international mortgage opportunity. We believe there's a good long run opportunity there for us. Does that answer your question?

Adam Hotchkiss, Goldman Sachs. Just a quick follow-up. So on the Rule of 50 target, it seems to imply that you came out with a roughly 15% growth rate at the time of that long-term model. Can you just talk a little bit about the algorithm? What got you comfortable there, sort of the breakdown between subscription personal services, anything you'd be willing to share on that 15%?

Yes. I mean, again, as you get to the 50, you see the 35%. No, I mean I think as you look at the market, as you look at the opportunities, as you look at our competitive positioning, as you look at the relationships that we've been able to build, as Josh highlighted, we view our customer base as an asset and not a liability. As you think about the white space that we have and you think about the investments that we make, we think we've positioned this business for long-term strong growth, while we're able to generate increasing bottom line performance as well. And so that's just from a market from what we see. And again, we're being pulled into places. We always want our customers and prospects to buy quicker. Sometimes you do have, as Pierre talked about, a liquidity crisis. Something happens in the market, there's a war in Europe last year that you have to navigate through. But what hopefully you've heard, and again, I think as John touched upon in his comments as well, the need for banks to transform is more important than ever, and it's needed more than ever. And again, while we have, as I touched upon, point solution competitors, mainly down market in the U.S., there's no one doing what we're doing. There's no one who has the breadth of product, the depth of product and the geographic reach that we have. And so as we factor all that in and we think about where we've been and where we're going, it gets us pretty excited about our ability to continue to grow the business. Obviously, we have to focus on executing, right, and make sure we continue to execute. I think we have a great track record of doing that. But ultimately, again, we see the opportunity out there in a massive market as we now have an updated $18.7 billion SAM.

This is Alex Sklar with Raymond James. I want to follow up on some of the earlier questions on the pricing model changes. So can you just go into a little bit more detail, I realize it's going to play out over multiple years on how this will play out for existing customers? Is it on renewals? And then is the thought process like moving this way insulates you from some of the automation and efficiencies that you're driving at some of your customers? Or is there actually some upside like-for-like pricing versus how you were doing at seat base today?

We're not going into the time line today. We wanted to take the time to give you a perspective on that. And as we get that plan in place, we'll communicate that.

Yes. But I think from a value standpoint, again, what you've heard is we believe we're bringing more and more value to the customer. And right, not all of it, you can just isolate in a seat. And we want to make sure we capture that value and the increasing value. And again, as we bring efficiencies to our customers, we want to benefit from that, right? So we see it as an opportunity, right? I think this is a good thing. I think it shows. Again, the breadth, as I just talked about to Adam, the breadth of what we've built, the trust that we have with our customers and ultimately, the value that they're seeing and to be able to quantify the value that they're seeing has been critical. Frequently, when we get in, particularly in the earlier days of the company, to start a project, we'd go in and just ask for simple metrics. How long does it take you to do a loan, right? They didn't really know. Depends who and what. And so just being able to get those benchmarks, right, actually took time. And so again, from a value creation standpoint, we think it's the right evolution. It's not necessarily to insulate us, although it does. But again, I think it's really to account for that upside that we're bringing in that additional value that we're going to continue to bring as a company to our customers.

So just following up on the conversation around nIQ and obviously, the AI use case that you guys presented. How do you guys think about ROI specific to these AI modules for your customers and measuring that over time?

Yes. We'll absolutely measure the ROI and the adoption and the usage of each solution. We already do that today. So what our customer success managers and account teams will do is sit with a customer, pick out key benchmarks that are important for them, measure that with time on a quarterly basis if the customer would like to. So for us, the good news is, as you look at what was related to you about our nIQ solutions today, with the banking adviser, we can add specific skills, specific activity and know on a pretty discrete basis what we've had to invest to build that as well. So we're excited about it. It should be extremely measurable in line with how we think about shipping and expanding product.

And just, you hear Pierre always talk about the manufacturing plan, right? Everything should be measured, right? And that's what we focus on doing and focus on helping our customers do, right? And so that will continue to be part of the DNA as we roll out new products to make sure we can -- getting back to the last question, we can highlight the value that we're bringing and make sure we're being appropriately compensated for it.

Michael?

Yes. Just another quick one. So on the profitability curve, obviously, 75% to 80% gross margins, 35% OCF margins, sort of implies like mid- to high 30s incrementals. Is that, in general, how you're thinking about the right steady state to run the business, just what you need to do from an R&D perspective to sort of maintain your existing edge?

Yes, I think that would be consistent. Again, as you look at that, we've been continuing to increase -- making sure I understood the question correct. We continue to increase our R&D spend, right, as we've been doing. But ultimately, again, I think we've been focusing on getting efficiencies out of R&D. But we're always going to be on the side of growth, as I mentioned. We're always going to err on the side of innovation, as I mentioned. And for us, that has been and continues to be a competitive differentiator. And so yes, as we think about the model and ultimately, the algorithms that you guys will run. We think that we are able to make steady progress towards reaching those numbers over again, a time frame, as I mentioned to Saket earlier, recognizing that we may make more progress sooner with some, and others may fall on the other side of kind of that target time line. Does that answer the question?

And just to underscore that, hopefully, you heard from us a high level of conviction, the long run opportunity and the size of the market that we see. We're a growth company. So we're not going to sacrifice long-term growth based on that. We feel like it is achievable to pursue the opportunity to give justice to it and also take care of our customers who bet on us, while also expanding our margins.

I think one thing we shouldn't be missing is people always look at the Salesforce relationship as a cost issue. There's a tremendous amount of cooperation and investment that Salesforce put into the platform, and we get the benefit from that over time. We just had an experience a few weeks ago where we will sit with a combined group of customers with Salesforce talking about combined innovation. How do we integrate the platforms better? How do we take a single value prop to a client? And those conversations and discussions is not only well received by the customers, but actually help us to guide where we build or what we actually use from Salesforce as it comes out of the box. And I will tell you that, that relationship, over the number of years, as nCino got bigger with bigger influence in the banking markets, has literally matured to the point where I say it's probably the best I've seen it forever. Because when you're small, you just do a little math and you're a fly on the wall and you try to make as best as you can. Today, nCino truly has a global presence, and we're working with Salesforce to maximize this relationship. And that bodes well for both companies.

Yes. And just one other thing to add. You may have heard Harrison in the background. We get a lot of questions about our margins with Salesforce. And what I try to constantly reinforce, I don't know if folks appreciate, as Pierre was talking about the value that we get from the platform, whether it's multicurrency, multi-language. Obviously, some of the relationships that they have, if we think about Japan, for example, which is a priority country for us. I think that's their second largest country outside -- I mean outside of the U.S. that is the largest country and largest implementation. And so we get tremendous value out of that. But if we didn't have that platform under the gross margin line in our OpEx, we would have a lot more cost, right? And so from a bottom line perspective, we continue to believe that, that relationship bodes well for us and serves us well financially as well as from a market standpoint. And so again, I know everyone focuses on the gross margin, but I want to make sure we're all together that we reinforce that point. We're actually saving quite a bit of cost on the OpEx line by having that relationship that would have otherwise impacted our true bottom line.

Maybe just one follow-up question. A topic that we haven't touched on, but maybe it comes to mind with the 35% free cash flow margin. We're going to be generating a lot of cash over the years, right, which is great. I just want to make sure the question on capital allocation is asked. How do you think about M&A? How do you think about just uses of cash, just since we're all together.

Our view is that we approach our clients with an architectural mindset. I don't like to buy revenue. We look at both partner or buy. And we evaluate every solution that comes in front of us that makes natural sense for us to address with those 3 mindsets. If we can build it in a quick enough fashion and be in market the right place, we'll do that. That's always the first choice. The second one is very easy. It's to partner with somebody and just go do it, like we do it with 3 doc prep providers. We pull credit reports on the markets. So there's lots of examples where we actually partner. And then finally, when we see something very specific, where we believe we've got a shortcoming, we will go and acquire it. I think we've proven now that we can do it successfully. Again, it's great skepticism. The SimpleNexus acquisition is working out fantastic. That is a unique and a specialized skill to build apps and front-end solutions that is consumer based. And you may have seen if you track this market at all, how many years the cores are starting to build online banking? That's why Q2 and the [ Alcami ] is in existence, okay? That is a unique skill. We acquired that skill by getting SimpleNexus plus getting the marketplace. And now we're going to expand that to a consumer front end across our solutions, okay, which I think will show the value of that as time goes on. So our view is we are open to M&A. We always look at the markets. We will look at them in a geographical fashion. Does it help me to get into a new market faster and accelerate that? Does it help me architecturally to expand my solution? But we don't take it lightly. We're not here to buy revenue and just carry on and gobble up. I don't want to be FIS at all or Fiserv or Jack Henry which is actually more of a bag of tools and toys. That's not well integrated. We love the unified integrated platform. And as you can see with AI and data and analytics, this is going to be a massive differentiator going forward for us. Because how do you disseminate these insights if you don't have the data and you don't have a unified platform. So now you're going to pump out the commercials one thing and then the consumers get a different answer, and the customer is somewhere in the middle, okay? So we'll hold to our architectural views.

The great thing from my seat is that it provides options, right? And so again, having that cash flow, I think, bodes well for making sure we have options to continue to focus on maximizing stockholder value.

We love cash. And we specifically did not load up on debt. When everybody is falling for those jokes about converts and everything, I can tell you right now as an old farm boy, I said, just stay with the cash, let's see when the rain comes. And we like the position we're in. I think it's made this company stronger.

From, I guess, both maybe starting on the product side and then on the go-to-market side. I know you had kind of talked about the value of having local product teams. Would you want to do the same in Continental Europe? Or do you feel like you cover that from a local product team out of your U.K. or?

Right now, we see the U.K. is covering it. I would never say never. But right now, the U.K. will cover it. And the U.K. is such a diverse team of people. We literally -- if you go to our U.K. office, it looks like United Nations. They're from all over. Now Brexit has changed that somewhat, but I can tell you the talent pool there is deep, very diversified. And we see right now that, that works well for us. But remember, we've got the SI ecosystem in Europe that can do local stuff for us.

The fact is when we went public, we had no geographically dispersed product. It was all coming out of here. So it was all out of Wilmington. Now we have localized product in 3 markets. As Pierre said, we do really good things out of Europe, but we're always willing to think differently to make sure we can capture the opportunity and ensure our customers a path to success.

Yes. A good example is Canada. We're putting people as we speak in Canada to do localizations, work on Canadian mortgage. You take the core U.K. mortgage product, which is very similar, but then you take it and you localize it for integrations, et cetera, for the Canadian market.

I think the big lift was proving to ourselves that we could do it and figuring out how to make the operating model makes sense to have one single platform on a managed package but then have people across oceans building. We've proven we can do that, right? And so our product team has executed really well, and we'll see where the future takes us.

Super helpful. And I guess like the analog on the go-to-market, any incremental offices you'd want to open in Europe? Or is it just a matter of like optimizing staffing levels and adding heads as you bring on more customers there?

We feel good about where we are, but the same thing. I think we -- lots of companies have seen software companies from the U.S. come try to put their toe in the pool, and they want to know you're committed. So local presence, local leadership makes a difference, right? We try to get into Canada for a while. The tables turn when we put people in market. So we feel good about where we are now. But again, we're highly convicted in the long-term opportunity. This SI ecosystem is allowing us to shake out new markets and see if they make sense. And then once you sign a logo or 2, you have a decision. Do I continue serving them via the ecosystem? Or maybe do I put a local presence? And we'll make the right business decision at that time.

Cool. Thank you. Above the targets.

Any other questions? So thanks, everyone, again for joining us, folks here, folks online. We really appreciate it. Again, to the extent you have follow-up questions, as I noted that we're in an open period until mid-October. So please feel free to reach out to us. I think everyone knows Harrison. He does a fantastic job for us, and we're lucky to have him on the team. And ultimately, for the folks here, we've got lunch around the corner. So we'll take you all there and we can continue the conversation. And again, thank you very much for your interest in nCino.

Thank you, team. Thanks for coming here.