Business 4 min read By Alice Ashford
nCino shares fall after Q2 profit miss despite revenue growth
nCino shares dropped after the company reported a Q2 2026 profit miss, though revenue grew year over year. The cloud banking software firm cited higher operating expenses and continued investment in product development as factors weighing on earnings.
Shares in nCino fell after the cloud banking software company reported a second-quarter profit miss, even as revenue continued to grow. The company, which provides digital banking solutions to financial institutions, posted earnings that came in below analyst expectations, prompting a negative market reaction in after-hours trading.
nCino reported revenue of $141.9 million for the quarter, up from $128.1 million in the same period last year, representing growth of roughly 11 percent. Despite the top-line expansion, the company's bottom line disappointed. Adjusted earnings per share came in at $0.12, missing the consensus estimate of $0.15. Net loss widened to $19.8 million, compared with a net loss of $15.6 million in the prior-year quarter.
The miss was driven largely by higher operating expenses, including increased spending on sales and marketing, research and development, and general administrative costs. Management noted that the company continues to invest heavily in product innovation and international expansion, particularly in the areas of artificial intelligence and data analytics, which are expected to strengthen its competitive position over the longer term.
Subscription revenue, which forms the bulk of nCino's income, rose to $123.5 million, up from $111.2 million a year earlier. The company also reported a slight improvement in its dollar-based net retention rate, a key metric for software-as-a-service businesses that measures revenue expansion from existing customers. However, the rate remained below the levels seen in earlier quarters, reflecting a cautious spending environment among banks and credit unions.
Chief Executive Officer Pierre Naudé said on the earnings call that the company remains confident in its strategy, pointing to strong demand for its platform among mid-tier and community financial institutions. He acknowledged that the macroeconomic environment has made some customers more deliberate in their purchasing decisions, but argued that the long-term shift toward digital banking remains intact.
nCino's guidance for the full fiscal year was also adjusted. The company now expects adjusted earnings per share in the range of $0.55 to $0.60, down from its previous forecast of $0.63 to $0.68. Revenue guidance was maintained at approximately $575 million to $585 million, suggesting that management sees the profit pressure as a cost-side issue rather than a demand problem.
Analysts reacted with mixed views. Some noted that the revenue performance was solid and that the profit miss was largely a function of deliberate investment choices. Others expressed concern that the elevated expense base could persist for several quarters, particularly if the sales cycle for new banking software contracts continues to lengthen.
The company's stock, which had gained roughly 15 percent over the past six months heading into the report, gave back a portion of those gains in after-hours trading. nCino, which went public in 2020 and is headquartered in Wilmington, North Carolina, counts more than 1,800 financial institutions as customers across the United States, Europe, and the Asia-Pacific region.
Management reiterated its commitment to achieving non-GAAP operating profitability in the near term while continuing to invest in areas that differentiate its platform. The company said it expects to provide a more detailed update on its cost structure and efficiency initiatives in the coming quarters.
