Good day, and thank you for standing by. Welcome to nCino second quarter fiscal year 2023 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Harrison Masters, Investor Relations. Please go ahead. Good afternoon, and welcome to nCino's second quarter fiscal 2023 earnings call. With me on today's call are Pierre Naudé, nCino's Chairman and Chief Executive Officer, David Rudow, Chief Financial Officer, and Josh Glover, President and Chief Revenue Officer. During the course of this conference call, we will make forward-looking statements regarding trends, strategies, and the anticipated performance of our business, including without limitation the acquisition and integration of SimpleNexus. These forward-looking statements are based on management's current views and expectations, entail certain assumptions made as of today's date and are subject to various risks and uncertainties described in our SEC filings and other publicly available documents, the financial services industry, and global economic conditions. nCino disclaims any obligation to update or revise any forward-looking statements. Further, on today's call we will also discuss certain non-GAAP metrics that we believe aid in the understanding of our financial results. A reconciliation to comparable GAAP metrics can be found in today's earnings release, which is available on our website and as an exhibit to the Form 8-K furnished with the SEC just before this call. With that, I will now turn the call over to Pierre. Thank you, Harrison, and thank you all for joining us today to discuss our second quarter fiscal 2023 results. Our team executed extremely well in the second quarter, highlighted by our strong top-line performance of $99.6 million in total revenues, a 50% increase over the second quarter of fiscal 2022, which includes SimpleNexus revenues. Excluding SimpleNexus, we grew subscription revenues by 29% organically. During the second quarter, we saw continued global demand for our platform, including strong growth across our newer product solutions. As illustrated by the Rabobank announcement we issued shortly before this call. Rabobank selected our nIQ Automated Spreading solution to transform their financial spreading capabilities within Australia and New Zealand. This partnership represents a multi-currency, cross-country commitment and is our largest Automated Spreading deal to date. We all know we're in a challenging mortgage market, but despite that, our SimpleNexus teammates had another strong quarter, growing subscription revenues 73% year-over-year or 47% organically. You will hear more about SimpleNexus from Josh shortly, but we believe the strength in the quarter further highlights the unique quality of this business, including its mobile-first cloud-based homeownership platform and superior subscription-based business model, which is fueling continued growth and market share gains in a difficult mortgage market. The uncertainty in the economy isn't just tied to the mortgage market, so let me spend a minute on the macro outlook as it is top of mind for all of us right now. Overall, I would characterize the global market as having become more complex, with different dynamics in different geographies. On the plus side, higher interest rates are generally a positive for financial institutions, and the demand we see in our sales pipeline for our products has never been stronger, reflecting the ongoing need for financial institutions to digitally transform in order to stay relevant and competitive. Specifically, we are seeing strength in the U.S., Canada, and Asia Pacific markets. However, we are seeing some weakness in Europe, highlighted by longer deal cycles. We continue to closely monitor how the macro environment is impacting the market. In the meantime, I am pleased that we are once again increasing our full year revenue guidance. David will provide more details later on in the call on how we view the second half of the year. I would like to highlight the progress we made in the second quarter towards profitability and reinforce that we remain committed to achieving non-GAAP profitability next year, even as we continue to invest in the business. In fact, we are improving our non-GAAP operating loss guidance by $12 million for the full year from our guidance last quarter. The key focus for us has been a more measured approach to hiring. We believe we have plenty of opportunity within our existing employee base to support future growth while driving incremental operating leverage. That said, we will continue to responsibly invest in growth, which remains our top priority, and we will make additional strategic hires where needed to drive growth and revenue expansion. We are in the early innings of growing a global business and capturing a $16 billion serviceable addressable market, and we see the current environment as a time to invest with discipline to extend our market leadership. The executive appointments announced recently prove this point. I am sure you also saw our announcement last month of Matthew Hansen's appointment as nCino's Chief Product Officer. After conducting an extensive external search, it became evident that we had the strongest candidate right here in the nCino family. Matt, founder of SimpleNexus, is now overseeing all of nCino's product development and engineering organization globally. We also appointed Ben Miller, co-founder of SimpleNexus, as its CEO, taking over for Cathleen Schreiner Gates, who is staying on with us in an advisory capacity. We announced two other appointments to our executive leadership team during the quarter, including Jaime Punishill as our Chief Market Officer, and Chris Ainsworth as our first Chief People Officer. I am excited about the deep domain expertise and diverse perspectives each of these individuals brings to nCino. These additions to our leadership team will enable us to further scale, maximize market share, and drive profitable growth while continuing to attract and retain top talent and deliver the best products in the industry. With that, I'll turn the call over to Josh to go through more business highlights from the quarter. Josh? Thanks, Pierre. We had a solid second quarter with a strong mix of go lives, renewals, up-sells, and new logos across our portfolio of products, asset classes, and geographies. As Pierre addressed earlier, the Rabobank win is a great example of the increased interest in our nCino solutions, as well as our momentum across APAC. Earlier in the quarter, we announced that ASB, one of New Zealand's leading commercial banks, went live on the nCino Bank Operating System following a primarily remote implementation during COVID. With nCino, ASB sought to replace and consolidate 16 existing legacy systems and tools, focusing on one platform to streamline the lending process for their bankers and to reduce overall complexity for the bank. Additionally, in APAC, our team added a new logo in Japan, marking our fourth customer in that country. We also expanded our international footprint with new customers in the Netherlands and South Africa during this quarter. We had a number of nCino cross sales within our existing customer base in the quarter, including an Automated Spreading deal with a $7 billion US bank and a Commercial Pricing and Profitability up-sell with a $2 billion community bank. The number of Bank Operating System customers using our nCino solutions, including Portfolio Analytics, Automated Spreading, and Commercial Pricing and Profitability increased 119% year-over-year, reflecting the growing demand we see for these solutions. For example, during the quarter, we announced that nbkc bank, a $1.1 billion community bank in Kansas City, went live on both Automated Spreading and Commercial Pricing and Profitability, as well as our commercial, small business, and retail lending solutions. nbkc eliminated numerous systems and manual processes in favor of the nCino platform to drive efficiency, transparency, and real-time data insights across their entire lending originations journey. nSight, our annual user conference, was a huge event for us during the second quarter, and it was wonderful to be together again with over 1,400 of our customers, partners, and nCino teammates from around the globe. We were honored to have many customers on stage with us sharing their nCino journey, including Kevin Nielsen, Director of Product Management at nbkc, as well as Shane Loper, Chief Operating Officer of Hancock Whitney. You may recall last quarter I spoke about our retail go live at $36 billion Hancock Whitney, which is nCino's largest upmarket retail lending deployment to date. I'm pleased to share that the bank is live not only on retail, but is also now live on commercial lending. We are deeply appreciative of the Hancock Whitney's team's continued partnership. Our single platform vision continued to resonate with the market in the second quarter, with five new customers selecting nCino for both our commercial and retail solutions. Our team with SimpleNexus had another strong quarter. In a tough mortgage market, we continued to win new deals, grow revenue and take market share. During the second quarter, SimpleNexus signed 26 new customers across banks, credit unions, and IMBs. Of these, four were nCino cross sales, including one with an over $30 billion asset regional bank and six were competitive replacements. To highlight our strong competitive position, SimpleNexus had more competitive replacements in the second quarter than in all of the prior fiscal year. SimpleNexus continues to be a critical part of our consumer retail strategy, which is one of our four key pillars for growth, along with nCino, maintaining our commercial market leadership and our international expansion. Looking at the third quarter, we're excited to spend more time in person with customers across the globe. Many of us were in Dallas this week with a large group of our customers from the Farm Credit System, and there was so much energy and enthusiasm from everyone in the room. Over the next several months, we will be hosting customer events and executive forums from Wellington to London to Sydney to Toronto, and I'm excited to show these customers how nCino can deliver digital transformation to financial institutions of all sizes all around the world. With that, I'll turn the call over to David. Thank you, Josh, and thanks everyone for joining us this afternoon to review our second quarter fiscal 2023 financial results. Please note that all numbers referenced in my remarks are on a non-GAAP basis unless otherwise stated. A reconciliation of comparable GAAP metrics can be found in today's earnings release, which is available on our website as an exhibit to the Form 8-K furnished with the SEC just before this call. We are pleased with the second quarter results and in particular, our progress towards achieving non-GAAP profitability in fiscal 2024. Total revenues for the second quarter of fiscal 2023 increased 50% to $99.6 million, which included a -$1.5 million impact from FX. Subscription revenues for the second quarter were $84.4 million, an increase of 57% year-over-year, representing 85% of total revenues. Organic subscription revenues, excluding SimpleNexus, were $69.4 million, representing 29% year-over-year growth. SimpleNexus subscription revenues increased approximately 73%, including LBA Ware revenues or about 47% organically. SimpleNexus again exceeded our internal expectations despite the difficult mortgage market. Professional services revenues were $15.2 million in the quarter, growing 21% year-over-year. Non-U.S. revenues were $14.9 million or 15% of total revenues in the second quarter, up 38% year-over-year, or approximately 52% in constant currency. International revenues continue to see strong subscription growth, while professional services growth lags as we engage our partner ecosystem more frequently in new deployments. Non-GAAP gross profit for the second quarter of fiscal 2023 was $64.9 million, an increase of 55% year-over-year. Non-GAAP gross margin was 65% compared to 63% in the second quarter of fiscal 2022. Our gross margins continued to improve largely from subscription product mix as enterprise and international customers comprise more of our revenues. The increasing adoption of nCino products along with the growth of subscription as a percentage of total revenues. Non-GAAP operating loss for the second quarter of fiscal 2023 was -$2.8 million, compared with -$1.8 million in the second quarter of fiscal 2022. Our non-GAAP operating margin for the second quarter was negative 3%, flat with negative 3% in the second quarter of fiscal 2022. Non-GAAP net loss attributable to nCino for the second quarter of fiscal 2023 was -$4.9 million, or - $0.04 per share, compared with -$2.5 million or negative $0.03 per share in the second quarter of fiscal 2022. Non-GAAP net loss attributable to nCino included approximately $1 million of non-cash unrealized loss on intercompany loans due to the strengthening dollar. Our remaining performance obligation, or RPO, increased to $907 million as of July 31, 2022, up 28% from $707 million as of July 31, 2021, with $589 million in the less than 24-month category, up 45% from $406 million as of July 31, 2021. Organic RPO increased 19% year-over-year, with $528 million in the less than 24-month category, up 30% from July 31, 2021. As a reminder, the second quarter of fiscal 2022 saw a significant increase in total RPO from several large enterprise deals signed in the quarter. The stronger dollar also had approximately - $2 million impact on total RPO. As we've discussed, the business can be lumpy from quarter to quarter. Turning to cash. We ended the quarter with cash and cash equivalents of $91.5 million, including restricted cash. Net cash provided by operating activities was $9.5 million, compared to $13.3 million in the second quarter of fiscal 2022. Capital expenditures were $4.6 million in the quarter, resulting in free cash flow of $4.9 million. As a reminder, we also have an untapped $50 million line of credit that we signed earlier this year. Overall, we had a good first half of fiscal 2023, with strong revenue growth, focused investments for future growth, and significant momentum towards achieving non-GAAP profitability. Let me echo Pierre's comments. We are keenly aware that we are addressing a big market and are strategically building a business for the long term. We'll continue to invest, optimizing our spend in the areas of greatest opportunity while working toward being non-GAAP profitable and cash flow positive next year. In providing Q3 guidance and updating our full year outlook, we are taking a few factors into account. First, longer sales cycles in Europe. Second, a measured outlook for SimpleNexus in light of the challenging mortgage market. And finally, a 1%-2% negative revenue impact from FX. That said, for the third quarter, we expect total revenues of $103 million-$104 million, with subscription revenues of $87 million-$88 million. This guidance assumes year-over-year subscription growth of 53% at the midpoint of the range, with approximately 27% organic subscription growth for the third quarter. Non-GAAP operating loss is expected to be approximately -$750,000 to -$1.75 million, and non-GAAP net loss attributable to nCino per share to be -$0.02-$0.03 per share for the third quarter. This is based on a weighted average of approximately 111 million basic shares outstanding. Turning to guidance for the full year. We are now increasing our revenue outlook. For full fiscal year 2023, we now expect total revenues of $401.5 million-$403.5 million. With subscription revenues of $341.5 million to $343.5 million. This full year guidance assumes year-over-year subscription revenue growth of 52% at the midpoint of a range with approximately 28% organic subscription growth. We are also improving our non-GAAP operating loss guidance for fiscal 2023 to -$12 million to -$14 million. Non-GAAP net loss attributable to nCino per share is expected to be -$0. 17 to -$0. 19 based on a weighted average of approximately 110.5 million basic shares outstanding. The second quarter was another strong one, thanks to the hard work of the nCino team around the world. Your dedication to the success of our customers is what makes nCino the global leader in cloud banking. With that, we will now open the line for your questions. As a reminder, to ask a question, you'll need to press star one one on your telephone. Please stand by while we compile the Q&A roster. All right, our first question is from James Faucette with Morgan Stanley. Please proceed with your question. Great. Thank you so much, and really great performance here. You mentioned a little bit of slowing in early sales cycles in Europe, and that you'd taken that into account in the outlook for the second half of the year, et cetera. I'm wondering if you can talk to us about how we should expect those to progress or beyond just the delays, are you seeing reassessment of scope or of scale, et cetera? What's your sense as to actual timing to close, and the like in that market? Yeah. Thanks a lot for the question. You know, we are fortunate to have a global footprint, including Japan, Asia-Pacific, Australia, New Zealand, South Africa, of course, Europe, UK, Ireland, Canada, and the US. What I've seen over the history of the company since 2017 when we expanded on a global basis is that these markets take a long time to develop. There are macro influences. Sometimes it's just by country that they're slower or more conservative. Fortunately for us, it's always that one market pops ahead of another one, et cetera. Just like our solutions, you know, some are more mature than others, and then we lean on the more mature ones to carry us through. What I'm seeing on a global basis is very exciting stuff out of Canada as well as Australia and New Zealand. We've got a good presence in South Africa right now. I see good momentum in Japan. The European thing is really a macro influence where we do see an impact with the energy crisis as well as the Ukraine war, whether it's psychological or not. On the other hand, we see a great opportunity with the ESG. What we're doing is we've got the right team in place there. We are tracking the deals on a per country basis. We clearly saw that there was less of an aggression on adopting this in the short term. In the long term, those markets have no choice but to actually move to cloud-based flexible solutions. We are maintaining our investment and I'm bullish on it, but we just realize that in the short term, there's macro influences. Josh, do you have anything to add? No, we've not seen a change in the conviction of our customers that they need to continue to digitize and modernize. That commitment is very clear for us despite lots of uncertainty. We see them continuing to evaluate the timing of those investments. Got it. I'm wondering if you can help us nuance a little bit what's happening with SimpleNexus. Obviously, really strong growth that they're seeing, but at the same time, it sounds like you're a little bit aware of obviously the way that the market is developing as you formulate your outlook. We have started to see headlines, at least from some mortgage originators, that they're planning to cut back heads, et cetera. How are you thinking about like what's reasonable for SimpleNexus, and what the work is that they need to do to kinda assure that they do as well as they possibly can in the current environment? You know, we've included a very conservative forecast for them, and it's reflected in our guidance. I would like to emphasize six competitive takeaways. How many new logos? 26 new logos the past quarter. Realize even though they're cutting back heads and our estimation, it typically is middle back office when these mortgage volumes go down. Also, remember that market is shifting to a purchase market versus a refi market, and we are very strong on the purchase side. If you look at the competitive landscape and the financial strength of different companies, I think we are a standout there. We can continue to invest, and that's why you're seeing a shift in market share to us. I'm very optimistic. Our technology is superior, the experience is superior for the loan officer as well as the ecosystem around them, versus purely a mortgage application. We think we got this asset at the right time. In difficult times like this is when good companies actually take market share and land logos that will expand rapidly when this market turns around. Josh, do you want to add to that? I think you also have to think about the opportunity that we have to continue cross-selling SimpleNexus into the bank customer base. We're proud of what we did this quarter. It's hard to draw it as a proxy, but I think you need to understand how we go to market. When you say 119% year-over-year increase of Bank Operating System customers who have adopted nIQ, that is a well-defined cross-selling motion. The team is executing well on that. When you look at SimpleNexus, as we continue to bring these teams together, we look to continue driving that cross-sell further into the Bank Operating System customer base. We cross-sold SimpleNexus into a $30+ billion base this last quarter. Excuse me. $30+ billion bank this last quarter. Sophisticated institution, great validation point for us, and we have a fantastic customer base that needs this software. James, on the numbers for SimpleNexus, we had anticipated $60 million for the year. We did have a little better performance than we anticipated in the quarter, and we're gonna maintain that $60 million for SimpleNexus for the year, accounting for a little bit higher churn that we're seeing. There was some M&A, one or two deal went against us in the quarter. We do anticipate within our guidance an elevated level of churn too. On top of that, we expect to also grow revenue sequentially in Q3 and Q4 from where they ended in the second quarter. That's great nuance and color, gentlemen. Thank you. Thank you. One moment while we go for our next question. All right, our next question is from the line of Bradley Sills with BofA Securities. Your line is open. Wonderful. Thanks. Thanks, guys. Congratulations on a nice quarter here in a tough environment. My question's on SimpleNexus. Obviously, you're seeing traction here with cross-sell into the base. Is there a point in which we might see this drive more new deals in retail now that you've got this more complete solution across, you know, mortgage, credit card, auto, personal? You've got the full suite now. Could this be a, you know, a situation where SimpleNexus starts to lend to new deals coming in in that in the retail segment? Yep. You saw our comments on the five platform wins that we had of people who purchased commercial plus a retail solution. I absolutely think that these validation points of our single platform strategy are gonna help us across the board. I would hope it helps us with all of our solutions because as banks look to digitize, they just don't want more point solutions. From our perspective, it's our job to tell that story, but I think you have to look at all of these as continue to strengthen that strategic message. Yes. The other thing I want to emphasize is, remember, in the community bank space, we sell a full platform story, and we can deploy that in one fell swoop. When you start going to very large banks, top 25, et cetera, they buy more piecemeal because they cannot absorb the whole thing. So we would sell commercial, we would sell small business. You may sell into the mortgage division. That gives us a foothold. We get to know the senior people in that retail division, and we sell retail products, okay? We've done this across the base for a long time. We feel very good about that strategy. SimpleNexus is just one more arrow for us to get into retail, get a foothold, get to know the people, become influential, and penetrate deeper. So I feel very good about that penetration point. Great to hear, guys. Thanks. If I could ask one on the macro. You called out earlier, Pierre, that you know, rising interest rate is a positive for banks. We all understand that. Yet the risk of recession is coming in more, and recession's obviously not a positive for banks. In the US in particular, what are you hearing from CIOs with regard to their willingness to take on these new digital transformation projects for loan origination? Thank you. Yeah. You know what's great for us is we actually sell to the business. I just spent a day on Monday with the head of a top 25 bank on the commercial side, listened to their book of business, what is their credit quality, how do they feel about it. Josh comes back from trips in the field, and we talk to them all the time. Not to technology people, we do talk to them as well, but we talk to the heads of business and begin to understand how do they manage credit? What are they seeing? A weakening of the book, et cetera. I can tell you, everyone says it must be the other guy because none have ever told me that their book is looking weakened. They're beginning to worry about it, which is to me extraordinary. Our banks are moving full speed ahead on transformation. They see it as a competitive advantage, and they keep on spending. We also saw a global survey around IT spend for banks, and for next year it's going up by 5%. We believe the momentum will continue, and with our reputation and our installed base, I feel good about it. Great to hear. Thanks so much. Our next question comes from the line of Terry Tillman with Truist Securities. Hey, Pierre, Josh, and David. Thanks for taking my questions. David, great perspective in all the color you're providing. It's really helpful, particularly even with the SimpleNexus and giving us the update for the full year. Thanks for all the color and transparency. My first question is just related to with like nIQ and like Rabobank, was that the entry point you all expected to get in there? I'm kind of curious about nIQ in terms of in the environment we're in where people are trying to like control costs and efficiencies. Is nIQ potentially kind of tip of the spear and something that could actually even get you into some of the other kind of top 25 banks you're not into in the US? Just a little bit more color on how you got nIQ in the door at Rabobank, and then I had a follow-up for David. Look, we're proud of that press release. That was our entry point. It's the largest Automated Spreading deal that we've done in history. I think, sometimes these things are viewed as cross sales or upsells. The fact that it's an entry point, and we're gonna execute really well there is something that we're quite excited about. Terry, I would say we should think about continuing this template and using these nCino solutions as an entry point. Okay, got it. I guess, David, you know, going into this quarter, I mean, you gave us a heads up we were gonna have a tough comp for like RPO and total RPO, so 24 months and then total RPO because of the enterprise transactions, last year. You definitely were ahead of what I was expecting, so it's good to see that. As we think about the second half of the year, are there any call-outs in terms of like anniversary and tough comps in the second half of the year? Then also kind of, you know, not trying to pin you down on RPO guidance, but given the puts and takes we have, any more color you can share about how we should be thinking about RPO in the second half? Thank you. Yeah. For the second half RPO, we don't guide RPO. I think it's a metric that I think is important. The issue with it is it's lumpy from quarter to quarter, as you saw. Last year, we closed Wells Fargo and a couple other large enterprise deals. We had some FX impact as well that affected it. I think the thing to note with the current quarter, second quarter, is that we didn't have any big deals or any large renewals in the quarter that were longer duration. I would expect to see kind of continued balance renewals versus new bookings for the balance of the year. I think that's the update on RPO. All right. Thanks. Our next question comes from the line of Saket Kalia with Barclays. Your line is open. Okay, great. Hey, guys. Thanks for taking my questions here. Hey, maybe a question for Pierre and Josh to maybe tag team. Can we just talk a little bit about just the broader retail opportunity? You know, the five platform customers, Josh, great to hear. Just I guess zeroing in on retail specifically, there's been some nice traction. Hancock Whitney, right, was a great win. What are customers saying broadly about their willingness to explore a replacement to that legacy retail solution with something like an nCino? Look, if you look at the community retail base, so let's make that Hancock Whitney is a $36 billion bank. Let's go up to that level. There, we see some consolidation happening in the banking space, and they need to standardize on platform technologies. When you put two of those size banks together, they cannot continue on with point solutions that's not attached to the customer full 360 CRM records, et cetera. We see great traction on the platform story and banks up to that size. When you go above that, you start selling more into certain divisions for certain product types to solve a problem they've got today. That's why SimpleNexus is important for us. We get in there, we're on the mortgage side, okay? You can, for instance, sell a HELOC on its own into that market because that's what somebody wants to automate and do it on a cell phone and so on. We see good traction. Internationally, we also see good traction interest on the retail side. Back to the platform story. They want to see a consolidation of their customer records into their fulfillment supply chains. Customers cannot run anymore, be competitive when it's point solutions. We're actually beginning to see traction on a wider basis with retail, and the investment to us is gonna pay off. Got it. That's very helpful. David, maybe for you. Maybe a metric that we haven't talked about as much but was great to see was the subscription gross margin, I think about 74% or 75%. non-GAAP. Can you just talk about sort of what's helped with that expansion, as we've looked over the last few quarters? How sustainable this level might be as we think about, again, that path to profitability for next year? Yeah. Thanks, Saket. Yeah, it's really from the product mix. We're selling more enterprise and international, which has a higher margin than we see on the community regional side. At the lower end of the market, we are able to sell Salesforce at $5 billion and below, a premium seat, which comes at a lower gross margin. We're selling more enterprise and international. We get the natural lift. Then also you look at the nCino products, those are based on AWS, and those have a much higher gross margin. The mix of that allows us to elevate the gross margins over time. In terms of outlook on gross margins, I'd say that 74%-75% range still holds true as you look out to build your model. Very helpful, guys. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Brent Bracelin with Piper Sandler. Your line is open. Thank you. Good afternoon. I wanted to basically drill down a little bit into the current environment, for Pierre and Josh. Clearly understand, you know, larger deals will take longer given just the complexity out there in this space, but a little surprised to see the momentum around SimpleNexus, the number of competitive takeaways, momentum around nCino. Obviously we know labor costs, you know, are going up here in a meaningful way. I think a 40%, a 40-year high in growth in labor costs. How much is automation and software automation helping you win some business? Is that resonating with end users? I'd love to get your view on kinda what is resonating across either nCino or SimpleNexus, at a high level. Is automation and the benefits of the platform the reason why you're winning here or not? Love to drill down a little bit into that. Thanks. Let me take the whole automation and intelligence first, and then Josh will take SimpleNexus for you. Okay? The first thing we have to remember is how do you use in a bank AI, machine learning, analytics, et cetera, unless you have a platform to deliver the insights to the people on the front line. That's been the age-old problem. You know, the people on the thirty-sixth floor of a bank, they've got all the people around them with all the answers, but you have to get that out to 24,000 people working in your branches, et cetera. What we've established is a workflow platform that everybody touches from the moment they step into the office that morning, whether that be at home or in the office, until they leave for the day. Now everybody works in exactly the same system all the way from the first touch point with a customer through the loan origination or account opening, the underwriting, the closing, et cetera. Since you've got everybody in the same system, you can start developing systems like an integrated Commercial Pricing and Profitability system that now gives you an experience end to end that can be influenced by anyone on the line. Because you have to think of this as a production line. Okay. That level of intelligence is now beginning to become much more of a differentiator. Think about this. You have to adopt nCino, get your processes in place, and then you drive intelligence, insights, integrations, and data into that platform. There's nobody else in the market that has done this at this level of sophistication. You start with your nIQ products, and you become a lot more sticky and more differentiating as you go forward. That's why we have the market share we've got, and we continue to penetrate these markets overseas. They can see that our vision and execution is aligned, and they actually see the outcomes of banks who's using nCino. Can you imagine competing with a bank in a territory if you don't have nCino, you don't have these automated processes? That's how we've driven this. nIQ becomes a penetration point as well as a differentiating point when we sell the platform. Josh can now comment a bit on SimpleNexus. I will add one more point on the automation aspect. One change I've seen in the last 12 months or so as I've talked to business leaders is that this talent market is causing them to think about software investments, not just how do I run my organization more efficiently, but how do I actually compete for talent? Something like spreading that takes 85% of the effort out of taking an unstructured financial statement or a tax return and getting that into a spread tool helps them compete for the best talent out of university. It's been really fascinating to see how that message continues to resonate. On SimpleNexus, what I will say is their strength in the purchase market, particularly as they digitize that home buying journey and the MBA outlook for sustained interest in the purchase market, is something that differentiates them. The refi shops are having a hard time, but if you do a lot of purchase, there's no one better than SimpleNexus. The other thing I think that I've seen from engaging with that market is that you have a lot of business leaders in the mortgage space today who've seen this before, and they understand that facing a competitive market, facing market challenges is the time to actually invest, not to cut back. We do believe that's driving a lot of their continued momentum. When you look at the number of new logos added this quarter, it feels that they're leaning into the opportunity to differentiate in a tough market. Yeah, we also see with banks, you know, traditionally, banks tends to be a bit more stable. With our focus on banking, bringing that solution over to banks in the purchase market, we feel pretty optimistic about that business. That's a very helpful color there. I guess last follow-up here for David. I'd be remiss not to take a look at that guide on narrowing the operating loss here in the second half of the year. Is that tied to a slowdown in hiring, or is that tied to just greater leverage as you think about the momentum of the business? Trying to think through the levers and how you're narrowing losses here in the second half of the year. Thanks. Yeah. It's really in the second quarter, we paused hiring, and then we reevaluated with the entire team around the headcount adds for the balance of the year. It really is around optimizing each and every team and increasing productivity. We've done that work. The plan's in place. We're still hiring for the balance of the year as well, just at a more measured pace. You'll see those cost savings kick in this year, but then really it will benefit us next year in achieving our profitability and cash flow positive status. Good to hear. Thank you. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by. Our next question comes from the line of Brian Peterson with Raymond James. Your line is open. Hi, gentlemen. Thanks for taking the question. David, one for you. I'm coming up with a 19% implied organic growth outlook for subscription revenue for the fourth quarter. I realize you guys aren't guiding to next year at this point, but is that something that investors should use maybe as a reasonable starting point for next year? I know there's some potentially larger seat ramp deals that are coming in, but you know, any context that you could add there would be helpful. Yeah, that's not. We guided for the year at 28%, and 27% for Q3. That 19% is not correct. It should be. You can, I mean, it's higher than that, and you should run the numbers. It's just solve for Q4, and it will end up being in the 27%-28% range. 19% is not correct. I mean, it's higher than that, and you should run the numbers. It's just solve for Q4, and it will end up being in the 27%-28% range for Q4, I believe. Understood. All right, apologies. I messed up the M&A math. One, on some of the sales cycles or kind of following up on some of those questions. I mean, is that really differentiated by the size of any of your customers? I just kept looking to double-click on that a little bit. And as we think about maybe the linearity of some of the slowdowns that you guys have mentioned, did that change throughout the quarter? Just would love to get some perspective there. Thanks, guys. I would say the macroeconomic sentiment is pretty standard across the customer base. The difference I would give you is when you look outside of the US, you have just a more enterprise-heavy market. They don't have as many small institutions as we do here. That's the only difference I would see, but that's more of a market composition question, not really a sentiment question. Yeah. On the quarter, you talk about linearity in the quarter. I'd say linearity was normal. I think we had some deals early in the quarter that were closed earlier than we expected in May, which part of the reason why we saw upside in subscription revenue. Linearity was more normal, but I would say more heavily weighted to the beginning of the quarter. Understood. Thanks, gentlemen. Sure. Our next question comes to the line of Robert Napoli with William Blair. Your line's open. Thank you. Good afternoon. Nick, and just anything you can give on the sizing of nIQ or gross margins in which products? I mean, Automated Spreading obviously is on fire, but how is loan pricing? Mortgage Portfolio Analytics, is that becoming more important? Yep. We're really proud of what we did with Automated Spreading. Today, within my Bank Operating System customer base, I have 26% of those customers have at least one nIQ solution, which is exciting progress, but that means we still have a very long runway there, to get them hopefully to adopt all of those. Pricing and profitability, we included in our notes here. We saw momentum in a $7 billion bank signing, a $2 billion bank signing. I'm frankly pleased with the upmarket momentum that we have and the way that's being received, both in the U.S. and internationally. We feel like we have good proof points, the products coming along, and we're gonna continue trying to drive that into the customer base, 'cause they all need it. Bob, did you have a question on growth? The first part of your question didn't come through. Did you have a- Yeah. Another part? Yeah, just yeah, David, if you could give any color on the sizing of nIQ today, given the growth it has and the gross margins. I mean, your gross margin momentum and, you know, has been pretty impressive. I guess, is nIQ contributing to that? Yeah. In terms of total revenues, it's about 5%. Remember, we added SimpleNexus, which is about 15% of revenue, so that percentage has come down at mix. On the gross margin side, we do use AWS, so I would view those gross margins similar to what you see with other SaaS companies in that range. Okay. Then, last quarter, you had announced you added a trillion-dollar bank, I think in the U.K. You know, are there elongated onboarding cycles as well in that market? I mean, that's, I think that was for commercial and automated spreading. Now, when does that customer onboard? Yeah. We're not seeing an impact to project duration. I think we've seen the industry has figured out how to work either remotely or hybrid. One proof point that we gave from our press release was ASB going live. That was a program that we kind of kicked off right into the teeth of COVID, and they're live with us, and they're out there publicly with us. No impact on that program's timeline. Relative to onboarding, that's in line with our typical expectations for a program of that size. Yeah. It's a normal enterprise-type seed activation schedule that you would see with that as well. Thank you. Appreciate it. Our next question comes to the line of Fred Havemeyer with Macquarie. Your line's open. Hey. Thank you very much for the question here, and congratulations on a strong quarter despite the macro environment. Really great to see the narrowing in the non-GAAP operating loss guidance of the year. I wanted to ask about just generally. So a little bit of additional context in what you're describing in terms of doing more with your existing headcount. In terms of R&D initiatives, are you just finding that, you know, the headcount that you have in place is sufficient for the product innovation and your product roadmap that you have, or have you had decided on any changes to your cadence of product delivery? Yeah. If you look at the breadth of the portfolio, you know, we used to be mostly commercial, a little bit of small business. You started building these different teams out, commercial lending, small business lending, retail lending, Deposit Account Opening, Treasury Management, onboarding, okay? You add SimpleNexus in. We started adding customer-facing technologies for each of those solutions. We had to build a foundational infrastructure in place. You go to international, and all of a sudden London, new team to put in place for integrations, et cetera. We acquired a company in Australia, FinSuite, that became the Automated Spreading thing. If you put that whole footprint in place and you onboard, you know, 100-200 people per year like that. It takes a lot of management time as well as effort by the teams to bring them in. We're very fortunate. We always had a fairly much lower than the industry churn rate of people or a turnover rate. What we recognized is the percentage of revenue that we spent on R&D was always traditionally quite high. It was 27%, I believe, up to last month. That if we stabilize that organization, keep the headcount more flat, we're actually still adding, but a much slower growth rate. We have all of these teams populated and let them focus on bringing out new product, do quality improvements, et cetera. That stabilization effect could have quite a big boost for productivity and focusing on processes and optimization of software development and time to value, where we actually write code and get it quicker to the customer. Those industries, it's a great little breather for a company like us, just for 10 years, just went go, go, and add more heads, okay? I would say that if you look at growth companies like us, the answer later on becomes, "I need more heads." I think what we've done now is change that mentality to looking at optimization methods, improving our processes, and so on. I'm seeing great progress, and I'm pleased with my teams. I think it's a good thing, and it's good, corporate hygiene to do this. I'm satisfied that each of these teams are populated to the extent needed, for their solutions. I'll say big congrats to the teams that have been working. The auto-spreading always impresses when I see that. I wanted to also ask about generally your channel ecosystem and how that is also shaping up as you're continuing to scale, as you're going more globally. Just generally, how do you see the maturity of your channel ecosystem and global systems integrators shaping up around nCino? How do you think that could impact professional services as a mix of your total revenue over time? Thank you. Yeah, we appreciate you calling that out because we do believe that's a differentiator for us and has allowed us to execute as we've executed this global strategy. We see about 2,800 partner practitioners to date that are certified to implement nCino. A lot of that increase since we last spoke was driven by international interest, which is a great thing that we're proud of. When the earlier question about you signed a large account in the UK are they implementing well, it's because we have that partner ecosystem and a proven model. From our perspective, that is going to continue to be how we go to market globally and how we can put our reputation behind these strategic accounts. I'll let David just speak to the revenue side of that. Yeah, on the revenue side for total services, it's 15%, kinda what we see for the year. The partner channel, they deploy the majority of our, if not all of our large solutions, and so they have their own revenue stream for that. We would expect as we continue to expand onshore onto the continent in Europe, that those partners will get up-trained and running and deploying the solutions on the continent as well, as we've seen with the initial projects that we've had. You know, there is a demand for our services because we are the specialists, and I don't have a problem coexisting in the ecosystem with services between 15%-20% of total revenue. We are very careful to complement our partnerships and not compete with them. Sometimes customers just ask for our people because it's closely related to the engineering teams, et cetera. So it's a nice equilibrium, but we'll continue to grow services as well. Great. Thank you very much. Great. Our next question comes to the line of Joe Vruwink with Baird. Your line's open. Hi. Great. Hi, everyone. I wanted to go back to the hiring topic, and Pierre, you touched on it a little bit a few answers ago. You know, one thought is maybe recalibrating to a new trajectory of demand can enable a moderation in hiring. Productivity has come up a few times in this discussion. Are you seeing something from an efficiency standpoint where you actually feel a certain rate of growth can maybe be sustained at this point and a different headcount gets you there? Our priorities for growth is as follows, or actually headcount. The very first thing we do every year when we start the year is to plan to make sure we've got enough salespeople, backfilling salespeople on the field to cover the quota and the sales goals for that year. There is no restriction on that. If Josh tells me the pipeline supports a certain amount of sales, we will make sure that we've got that team on the field to accomplish that. That's your very first thing. The second one then is to complement that with a support team to support the existing customers and the professional services team to implement. Those three things go lockstep, and we don't cut back on them. We don't hold back. We plan that first. Once that's in place, we look at PD&E for product, and then finally a G&A. Because we're a large global organization, we have complex tax structures, we have people to support accounting, finance, entity involvement or entity creation, okay, as we go around the globe. All those infrastructures are in place because we always had a plan to build this global company. I feel we're gonna get leverage on the G&A side. We're getting leverage on our global infrastructure because they've been in place, the management structure is in place, and the people you add now is more from a capacity standpoint to maintain the growth rates, okay? As I explained before. The product organization has got all the necessary teams as well as structures in place to continue building out each of our portfolio elements. I think we're just reaching a level of maturity where you can scale and drive growth without having to add overhead. To summarize, we're making measured business decisions in an uncertain environment, and that's the real driver. By the way, if you bring me a great idea and I can make a lot of money quickly, we'll invest. I think I have a lot of ideas, but maybe the make a lot of money aspect, I'll work on that. You know, on the international side of things, revenues, I think they have grown close to 60% the last few quarters. Where did that stand in the second quarter, and how might you be thinking about international growth, just given we seem to be having this divergence now between APAC and Europe? Yeah, international growth in total grew at 30%-38%. The majority of the growth, though, is coming on the subscription side. We have seen a slowdown in the services growth because we are pushing more of our projects to our partners. Also FX. We had a big FX hit in the quarter, on the international side, which I believe constant currency was at 52%. Okay. Thank you very much. Our next question comes in line of Charles Nabhan with Stephens. Your line is open. Hi, good afternoon, and thank you for taking my question. We're about a year and a half removed from the Wells Fargo win and had a pretty significant pat on the back in September. Just wanted to get a quick update on how that's going in terms of the integration and the impact that can have on HDB expansion going forward. Yeah, we were really proud to do both of those press releases, not only on the broad commercial deal, but also the expansion into small business. I won't comment on the details of their program, but there's been no change in the landscape there. Got it. it. Do you have a quick- Hey, Charles. On the seat activations, we've talked about that in the past. It's a normal larger deal, probably a little longer in duration to activate those seats. Those are ongoing. Those are all contracted by date, and so no update there either. Got it. If I go back to the conference in the fall, in the spring, I thought the Commercial Pricing and Profitability tool was one of the more interesting, you know, product shows. I was hoping to get an update on that and any traction you're getting on that front and reception you're getting from your customer base. You were a little bit broken. Just to read that back, you're asking for an update on how pricing and profitability is progressing? Yes, that's right. I apologize. We commented we brought on a $7 billion bank, a $2 billion bank. We're also really proud to do a press release with nbkc, who went live. That's a great replacement sale, and we're proud to have them live. We're continuing to take that to market in the accounts that we can serve, within the customer base, and I'm quite excited by the momentum in accounts of the size that I referenced and also in some of our larger accounts, both in the US and globally. You know, I will tell you what surprised me about that product is because I thought we will focus for an extended period on the community regional space, then eventually get to the enterprise. We are beginning to see serious interest in the enterprise business, even internationally, which tells me that the integrated experience that we've built and the complexity of the models we included there, as well as the flexibility, is actually resonating. I'm very positive around how that product is coming about and the proof points we're seeing from these customers evaluating it. I feel very good about what we've done there. Much of the initial value prop with those customers was the opportunity to connect the front and the middle back office end-to-end on one platform. You look at the way we price these loans is so central to the connection of the front office and the risk function of the institution, the overall profitability. That message has really resonated nicely. Yeah, my view is, you know, in the end, every commercial customer should get pricing profitability and should get automated spreading from us as these next solutions roll out. There's a significant upside penetrating the existing base. Thank you. I appreciate the call. Our next question comes in line of Ken Suchoski with Autonomous Research. Your line is open. Hi, everyone. Good afternoon, and thanks for taking the questions. I wanted to ask about the ability to pass on higher expenses and higher inflation that we're seeing in today's environment. My understanding is that nCino, the contracts don't have annual inflation escalators. Could you just talk about your interest and your ability to add those into your contracts, or is the plan to kinda wait until the end of the contract to put through some of that pricing? Thank you. Yeah. When we sell a deal, we have, whether it's a 3 or 5 or 5-plus year deal, we have an activation schedule built into that for customers as we deploy the product. By contract, we are allowed to increase pricing upon renewal. What we normally try to do, though, is go in and sell them additional products or lines of business or additional seats to expand the relationship with the customer. The idea is to grab as many seats as possible with the customer. Then in the future, you would have the ability to raise prices. Our idea now is to grab as much share as we can, and then Hopefully, as we service our customers and make them happy, we have the ability to maintain them as customers and increase prices at inflation or whatever the number is in the future. Mm-hmm. Okay. That makes a lot of sense, David. Just as my follow-up, I wanted to ask about SimpleNexus. I think you mentioned the new logos, the competitive takeaways. Could you just talk about what you're seeing across your customer base and I guess the industry more broadly from a seat and employment perspective? I mean, are you seeing layoffs or are you seeing seat growth at your existing customers? Thank you. We hear some of that, but historically what you'll see is into a challenging market, the mortgage industry will look to cut the middle and back office first because those are salary employees. They wanna keep their good loan officers because they're more commission-based, and they drive the revenue. I think David spoke about some of our moderated approach to ensuring that we're buffering for some churn there, but no change to that. David, do you wanna elaborate? No, no, I think you summarized it well. Okay. Thank you. Our next question comes from the line of Maddie Schrage with KeyBanc Capital Markets. Your line is open. Hey, guys. Congrats on the quarter, and thanks for taking my question. My first question for you is I'm wondering if you could provide some color on the competitive landscape. Wondering if you're seeing any changes in pricing, mainly from your competitors and then internationally, if there's any new entrants or anything like that. Yes. If you look at our competitors, you have to look at it by segment because they vary by product type and segment. Okay? Let's start with the community regional space. When you look at commercial there, we do have at the lower end of the banking space some competitor. We respect them. They come with a different approach, a much more packaged approach. We're competing well, but we see competition there that wasn't there a few years ago. Okay? If you look at the enterprise market, it typically is still they can build it themselves if they wanna do it, which, you know, for the life of me, I wouldn't know why you wanna do it, but every now and then, you'll still see a bank in the enterprise or even in the national space to try and do that. Pegasystems is a platform provider we see more active in Europe where people may contemplate that. The landscape since we went public hasn't really changed on that front. When you look at the mortgage markets, as a matter of fact, that landscape has changed. You know, some of our competitors are public companies. You can clearly see that their business models are different than ours and the resultant outcomes of that. We see that as a big opportunity for us to be more aggressive and grab logos and do a land grab in that space. In the consolidation, that market's gonna help us as well because we're a very stable financial company with growth aspirations, and we invest in our products. I feel optimistic that in turbulent times, companies like us with a very stable management team and a strategy that's been proven over time will actually expand and take market share. Awesome. Just a follow-up for you guys. Have you guys been reevaluating your M&A standpoint with the current macro uncertainty? Thanks. You know, there's some nice assets out there, and obviously prices came down, but right now we're focused on execution. Our customers are looking at us critically to see that we focus on their needs and the integration of SimpleNexus. As you could see from the appointment of Matt and Ben and the integration into my executive team, those two teams are coming together very well. We had a whole team of SimpleNexus people today here in the office, training on cross-selling and cross-pollination of people. I can tell you the excitement in the room is infectious. We're focused on execution, get through the rest of the year as always, beat and raise, make our numbers, and then we'll evaluate as the market develops. Thank you. Always appreciate it. I am showing no further questions at this time. I would now like to turn the conference back to Pierre Naudé for closing remarks. Thank you, Operator, and thank you all again for joining us today. We look forward to talking with you next quarter and seeing many of you at upcoming con- This concludes today's conference call. Thank you for participating. You may now disconnect.