nCino's AI-Driven Revolution: Unlocking Pricing Power and Subscription Growth in Banking Tech

The banking sector is undergoing a seismic shift, driven by the need for efficiency, real-time decision-making, and customer-centric solutions. Among the pioneers capitalizing on this transformation is nCino (NASDAQ: NCNO), a leader in cloud-based banking software. By embedding artificial intelligence into its platform, nCino is not only redefining operational excellence for financial institutions but also unlocking unprecedented pricing power and subscription revenue growth. For investors, this presents a rare opportunity to capitalize on a company poised to dominate a $150 billion+ global banking software market.

The AI-Driven Edge: How nCino is Redefining Banking

nCino's recent product launches—Continuous Credit Monitoring (CCM), Quick Quote with Banking Advisor, and AI-Driven Onboarding—are engineered to transform the core processes of banks. These tools are not incremental upgrades; they're game-changers:

• Continuous Credit Monitoring: Proactively identifies at-risk clients, reducing loan defaults and operational risks. One customer cut document processing time for commercial clients by 74%, compressing onboarding from months to days.
• Quick Quote: Enables bankers to generate auto loan and CD quotes in seconds, slashing client wait times.
• AI-Driven Mortgage Advisor: Cuts documentation completion time by 47% and reduces customer inquiries by 68%, accelerating loan approvals.

These innovations are sticky. Once embedded into a bank's workflow, they become indispensable. The result? Price insensitivity among customers. Banks can't afford to switch providers when nCino's tools are saving them millions in time and risk. This dynamic creates pricing power that few software companies can match.

Subscription Revenue Growth: A Flywheel of Sustained Momentum

The financials speak for themselves. In fiscal 2025 (ended Jan. 31, 2025), nCino's subscription revenue hit $469.2 million, up 15% year-over-year. Annual Contract Value (ACV) rose 13% to $516.4 million, reflecting deeper customer commitments.

The company's preliminary Q1 2026 results (ended April 30, 2025) revealed subscription revenue exceeded guidance, with metrics like 74% faster onboarding and 62% quicker loan decisions driving adoption. Even more compelling:
- A top-5 U.S. bank expanded its use of nCino's platform to include consumer lending and automated spreading.
- CSOB, a Czech Republic bank, became nCino's first customer in Eastern Europe, digitizing SME lending.

This global expansion and vertical integration into core banking functions are scaling nCino's TAM (total addressable market). With over 2,700 customers worldwide, the company is primed to capitalize on a $150 billion+ banking software market.

Why Now is the Inflection Point for NCNO

Three catalysts make this the ideal time to invest:

1. Pricing Power in Action:
2. As banks realize cost savings of up to 74% (per customer metrics), nCino can incrementally upsell premium features like predictive analytics or cross-selling tools without resistance.

3. Non-GAAP operating margin expanded 900 bps to 19% in Q1 2025, proving operational leverage.

4. The AI Flywheel:

5. The more banks use nCino's platform, the more data fuels AI refinement. This creates a self-reinforcing cycle where the software becomes smarter, stickier, and more defensible.

6. Strategic Moves with Tangible Payoffs:

7. The acquisition of Sandbox Banking in 2024 enhanced data connectivity, while the newly launched nCino Research Institute provides actionable economic insights to customers.
8. A $100 million stock buyback program signals confidence in the company's valuation.

Risks? Consider the Rewards

Critics might point to macroeconomic headwinds or competitive threats. But nCino's customer retention rate exceeds 95%, and its AI-driven moat is widening. Even in a downturn, banks will prioritize tools that reduce costs and improve compliance—nCino's core strengths.

The Bottom Line: Act Now or Miss the Takeoff

nCino is at a critical juncture. With subscription revenue growing at 15% annually, pricing power embedded in its AI solutions, and a $1.069 billion remaining performance obligation, this is a company set to outpace expectations.

Investors should note: The full Q1 2026 earnings report on May 28, 2025 will likely solidify this narrative. With shares trading at 2.2x sales—a discount to peers like Fiserv (FISV) at 3.5x—nCino offers both growth and valuation upside.

This is a buy now opportunity. The AI revolution in banking is here, and nCino is its clear leader. Don't miss the takeoff.