엔시노(NCNO) 2027 회계연도 2분기 실적 발표 컨퍼런스 콜: 구독 성장과 AI 도입

핵심 요약

• 2027 회계연도 2분기 매출은 전년 동기 대비 8% 증가한 1억 6,100만 달러를 기록했습니다. 구독 매출은 10% 증가한 1억 4,350만 달러를 기록했으며, 미국 모기지 부문을 제외하면 12% 성장했습니다.
• Non-GAAP 영업이익은 36% 증가한 4,080만 달러로 25%의 영업이익률을 기록했습니다. 잉여현금흐름은 170% 증가한 3,400만 달러를 기록했습니다.
• AI 도입이 지속적으로 확대되었습니다. 230개 이상의 고객사가 인텔리전스 유닛을 구매했으며, 전체 연간계약가치(ACV) 중 플랫폼 요금제 비중은 전 분기 40%에서 48%로 상승했습니다.
• nCino의 미국 20대 대형 엔터프라이즈 고객사 중 4곳이 다년 계약으로 조기 갱신했습니다. 이들 고객사의 평균 ACV 증가율은 10%를 상회했으며, 분기 말 기준 상위 20개 고객사 중 12곳이 새로운 요금 모델로 전환했습니다.
• 경영진은 2027 회계연도 Non-GAAP 영업이익 및 잉여현금흐름 가이던스를 상향 조정했습니다. 다만 독립 모기지 은행의 추가 이탈로 인해 미국 모기지 구독 매출 전망은 하향 조정했습니다.
• nCino는 2027 회계연도 고정환율 기준 순 ACV 추가 목표치인 6,000만~6,500만 달러를 유지했으며, 이는 누적 ACV가 6억 6,250만~6억 6,750만 달러에 달함을 의미합니다.

핵심 재무 실적

경영진은 회사 가이던스를 330만 달러 상회한 Non-GAAP 영업이익 중 약 90만 달러는 구독 매출총이익 증가 덕분이며, 나머지 240만 달러는 비용 관리를 통해 달성했다고 설명했습니다.

사업 및 운영 성과

AI 도입 및 플랫폼 요금제

분기 말 기준 230개 이상의 고객사가 AI 인텔리전스 유닛을 구매했습니다. 일부 초기 고객은 초기 번들 한도에 도달한 후 추가 유닛을 구매하기 시작했으나, 경영진은 이러한 수익화가 2027 회계연도 실적에 실질적인 영향을 미치지는 않을 것으로 보고 있습니다.

플랫폼 요금제 기준 전체 ACV 비중은 전 분기 40%에서 약 48%에 달했습니다. 경영진은 도입 속도가 일정보다 빠르게 진행되고 있다고 밝혔으나, 회계연도 말 목표치는 제시하지 않았습니다.

상용 배포도 증가하고 있습니다. 뱅킹 어드바이저 및 디지털 파트너 기능을 상용 환경에 도입한 고객 수가 연초 대비 두 배 이상 늘었습니다. 새로운 요금 모델과 AI 기능을 모두 도입한 해당 고객 중 약 3분의 1이 상용 운용 중이었습니다.

한 미국 엔터프라이즈 고객사는 nCino의 '검색 및 파일링(locate-and-file)' 기능을 통해 연간 16만 시간을 절감할 수 있을 것으로 추정했습니다. 대출 담당자 보수 대리치로 시간당 약 35달러를 적용해 경영진은 연간 500만 달러 이상의 잠재적 절감 효과를 산출했습니다. 해당 고객사는 아직 샌드박스 환경에서 보안 검토를 진행 중이었습니다.

지속적인 신용 모니터링은 인텔리전스 유닛 소비를 늘릴 중기적인 잠재 동인으로 강조되었습니다. 이 제품은 매일 40개 이상의 신용 및 운영 지표를 평가하며, 거대언어모델(LLM)과 nCino 자체의 결정론적 모델 및 알고리즘을 결합합니다.

엔터프라이즈 갱신 및 교차 판매

ACV 기준 nCino의 미국 20대 대형 엔터프라이즈 고객사 중 4곳이 다년 계약으로 조기 갱신했습니다. 이들 금융기관의 자산 규모는 총 9,000억 달러 이상이며, 평균 ACV 증가율은 10%를 상회했습니다.

경영진은 약 10%의 갱신 실적 상승이 초기 인텔리전스 유닛 번들을 제외한 추가 제품 없이 동일 조건 기준으로 측정된 것이라고 설명했습니다. 추가 제품 교차 판매가 이루어지면 추가적인 상승 여력이 될 수 있습니다.

교차 판매 활동에는 지방 은행, 커뮤니티 은행, 신용조합 전반에 걸친 소매 대출, 소상공인 대출, 기업 계좌 개설 및 모기지 분야로의 확장이 포함되었습니다. 엔터프라이즈 계약 기간은 전반적으로 안정적인 수준을 유지했습니다.

해외 시장 성장

미국 외 지역 구독 매출은 13% 증가한 3,090만 달러를 기록했습니다. 신규 수주로는 일본 하치주니 은행 및 나가노 은행의 소매 대출 건과 독일 개발금융기관의 기업 대출 건이 포함되었습니다.

또한 경영진은 분기 종료 직후 해외 고객사와 이번 회계연도 최대 규모가 될 것으로 예상되는 계약을 체결했다고 밝혔습니다. 이 거래는 3분기 실적으로 기록될 예정입니다.

모기지 및 자본 배분

미국 모기지 구독 매출은 1% 감소한 2,060만 달러를 기록했습니다. 경영진은 지속적인 고금리 모기지 환경, 독립 모기지 은행이 받는 압박, 지속적인 업계 재편을 그 원인으로 꼽았습니다. nCino는 독립 모기지 은행 부문보다 변동성이 적다고 평가되는 일반 은행 및 신용조합에 대한 교차 판매를 강화하는 동시에 추가적인 모기지 고객 확보를 추진할 계획입니다.

2분기 동안 nCino는 평균 주가 15.41달러에 약 420만 주를 약 6,500만 달러에 자사주 매입했습니다. 또한 앞서 발표한 1억 달러 규모의 가속 자사주 매입(ASR) 프로그램을 완료하여 평균 주가 16.57달러에 약 600만 주를 매입했습니다. 이사회는 1억 달러 규모의 자사주 추가 매입 프로그램을 승인했습니다.

경영진 가이던스

경영진은 2027 회계연도 Non-GAAP 영업이익 가이던스를 기존 1억 6,600만~1억 7,100만 달러에서 상향 조정했습니다. 수정된 전망치는 중간값 기준 약 33%의 성장과 약 500bp의 영업이익률 확대를 의미합니다.

잉여현금흐름 가이던스는 기존 1억 3,500만~1억 4,000만 달러에서 1억 3,700만~1억 4,200만 달러로 상향되었으며, 이는 중간값 기준 전년 대비 69% 성장을 의미합니다.

회사는 3분기 미국 모기지 구독 매출을 약 2,000만 달러, 4분기에는 1,850만 달러로 예상하고 있습니다. 이는 이전 전망치보다 각각 약 70만 달러, 120만 달러 하향 조정된 수치입니다.

경영진은 분기당 약 20만 달러의 환율 부정적 영향 가정에도 불구하고, 3분기와 4분기 모두 해외 구독 매출이 전체 구독 성장세를 지속적으로 견인할 것으로 예상합니다.

리스크 및 주시 사항

• 지속적인 고금리 모기지 환경이 독립 모기지 은행에 대한 압박을 가중시키며 추가적인 이탈 리스크를 유발하고 있습니다.
• 2027 회계연도 총 이탈 예상 규모는 약 2,500만 달러 수준을 유지하고 있습니다. 이 중 약 3분의 1은 모기지 부문에서 발생할 것으로 예상되며, 비중은 독립 모기지 은행 쪽으로 약간 이동하고 있습니다.
• 보안, 거버넌스, 컴플라이언스 및 규제 검토로 인해 AI 기능의 샌드박스 테스트에서 상용 환경으로의 전환이 지연될 수 있습니다.
• 경영진이 단기적 수익화보다 AI 도입 가속화를 우선시하고 있으므로, 추가적인 인텔리전스 유닛 구매가 2027 회계연도 매출에 실질적인 영향을 미치지는 않을 것으로 예상됩니다.
• 환율 영향으로 인해 3분기와 4분기 각각 해외 구독 매출이 약 20만 달러 감소할 것으로 예상됩니다.

애널리스트 Q&A 하이라이트

• 기초 성장세: 경영진은 모기지 및 이전에 논의된 항목을 제외한 구독 매출 성장이 가속화되었다는 점에 동의했습니다. 단기적인 추가 상승 가능성을 가정하기보다는 지속적인 실행력을 강조했습니다.
• AI 매출 기회: 경영진은 장기적인 인텔리전스 유닛 기회를 수치화하지 않았습니다. 현재 최우선 과제는 고객의 상용 전환을 지원하고 성과를 문서화하며 더 많은 뱅킹 어드바이저 기능 전반으로 도입을 확대하는 것입니다.
• 모기지 시장 점유율: nCino는 독립 모기지 은행 고객 확보를 계속 추진하는 한편 커뮤니티 은행, 지방 은행 및 신용조합을 대상으로 모기지 교차 판매를 확대할 계획입니다.
• ACV 파이프라인: 경영진은 수요 및 파이프라인 커버리지가 견조하게 유지되고 있다고 밝혔습니다. 3분기 초에 올해 최대 규모로 예상되는 계약을 체결한 점이 긍정적 지표로 꼽혔으나, 여전히 5개월의 실행 기간이 남아 있음을 언급했습니다.
• 전문 서비스: nCino는 전문 서비스 매출 성장보다 구축 효율성과 수익성을 우선시하고 있습니다. 확보된 리소스는 상용 배포 및 전진 배치 엔지니어링 작업으로 전환되고 있습니다.
• 장기 성장 프레임워크: 경영진은 장기 매출 구성에 대한 새로운 정량적 수치를 약속하는 것은 피하면서, 성장 재가속화 및 비용 통제에 계속 집중할 것임을 재확인했습니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Thank you for standing by, and welcome to nCino Second Quarter Fiscal Year 2027 Financial Results Conference Call. [Operator Instructions].

As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Harrison Masters. Vice President, Investor Relations. Please go ahead, sir.

Harrison Masters

Good afternoon, and welcome to nCino's Second Quarter Fiscal 2027 Earnings Call. With me on today's call are Sean Desmond, nCino's Chief Executive Officer; and Greg Orenstein, nCino's Chief Financial Officer.

During the course of this conference call, we will make forward-looking statements regarding trends, strategies and the anticipated performance of our business. These forward-looking statements are based on management's current views and expectations entail certain assumptions made as of today's date and are subject to various risks and uncertainties described in our SEC filings, and other publicly available documents, the financial services industry and global economic conditions. 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 as well as the earnings presentation on our Investor Relations website at investor.ncino.com.

With that, I will turn the call over to Sean.

Sean Desmond

Thank you, Harrison, and welcome to nCino's Second Quarter Fiscal 2027 Earnings Call. I'm very proud of the team's consistent focus and execution this past quarter. We continue to deliver on our commitments once again outperforming all financial guidance metrics and find ourselves very well positioned for the second half of this fiscal year and beyond.

Over the last several months, my time on the road with customers, prospects and partners has continued to validate our strategy. each interaction, whether in Charlotte, Oklahoma City, New York, Tokyo, Amsterdam or Jackson, Mississippi, has reinforced how uniquely positioned nCino is to be the trusted global leader in AI-powered banking. With the rapid evolution in technology and market dynamics, financial institutions of all sizes, the world over are looking for a trusted partner rather than more vendors. And nCino is increasingly recognized as that quarter.

We are the partner the market can count on to innovate and bring the right technology to solve banking-specific operational risk management and regulatory compliance challenges. Our solutions for lending, onboarding, account opening and portfolio monitoring run on a unified AI-powered platform, allowing customers to consolidate and streamline operations with 1 vendor and gain efficiencies other technology companies simply can't match.

During the second quarter, we signed multiyear renewals with 4 of our 20 largest U.S. enterprise customers by ACB representing over $900 billion in assets. All 4 renewed ahead of schedule with an average ACV increase of more than 10% and because they wanted access to Encino's rapidly expanding suite of AI tools and functionality. These customers are some of the largest financial institutions in the country and have the financial and technical resources to build internally if they chose to, but they're proactively doubling down on nCino because we've spent nearly 15 years building the trusted global system of record for critical banking processes. We've done the heavy lifting of building the data foundation, workflows, governance, security infrastructure and regulatory compliance capabilities of the nCino platform and embedded AI and intelligence throughout. That work is difficult, risky costly, distracting and time consuming and exactly by so many internal build initiatives at some of the world's largest financial institutions have historically failed.

This is also why so many of our customers are telling us they have no desire to attempt to rebuild an incredibly complex Tier 1 mission-critical enterprise application themselves, simply because AI has made coding easy. Encino has the product functionality, data, workflow, context, customer relationships and regulatory knowledge and credibility to turn AI into accountable actions and to drive significantly better outcomes for customers. We believe those advantages have become even more evident to the market since our last earnings call as more customers use our banking adviser capabilities in production and realize meaningful outcomes for their organizations.

nCino enables financial institutions to drive the specific banking outcomes they want backed by 15 years of data, governance, regulatory tracking compliance and the domain-specific context they require. As of the end of the second quarter, 12 of our top 20 U.S. enterprise customers by ACV have already transitioned to our new pricing model under multiyear contract extensions and approximately 48% of our total ACV is now on platform pricing, up from just 40% last quarter.

New customer wins like Hachijuni, Nagano Bank in Japan, who selected nCino for consumer lending and a growth-focused development finance institution in Germany that selected nCino for commercial lending are the latest proof points that our unified platform and AI capabilities are resonating on a global basis. nCino's deep banking domain expertise and market-leading product innovation and AI capabilities were clear differentiators against local market competitors, horizontal workflow vendors and potential internal build options in these recent international sales cycles.

These attributes have also been clear differentiators for other customers around the world that are reinforcing their commitment to the nCino platform in the form of expanded and renewed commitments for the next phase of technology and operational transformation. The breadth and depth of our unique platform gives us the confidence to land with any solution and expand across our full suite as our customers' needs grow. This is especially true in the community and regional bank and credit union markets, where centralized decision-making frequently allows us to sell multiple solutions for the entire platform to a single buyer.

The second quarter was no exception in demonstrating this point. A regional bank with over $15 billion in assets expanded its adoption of nCino from commercial lending and treasury management to now include consumer line. A Seattle-based credit union and portfolio analytics customers since 2014 expanded their commitment to the Encino platform in a major way by adding commercial and small business lending plus commercial account opening. The community bank in the Northeast expanded their nCino adoption from commercial and consumer lending and account opening to also include mortgage. And a credit union with almost $5 billion in assets became a 7-figure ACV customer through an expansion of their existing mortgage deployment to support their strategic growth objectives.

Despite these mortgage wins with depository financial institutions, the higher for longer mortgage rate environment is pressuring the independent mortgage bank market and driving incremental M&A. While the rate environment remains a headwind to the U.S. mortgage industry, we continue to focus on expanding our market share by adding logos with a market-leading AI powered experience.

To that end, we were pleased to welcome back an IMB customer that left in August 2024 for a less expensive solution. reliability issues and a cumbersome borrower experience with that solution along with pushback from their own sales team about losing potential borrowers brought them back to nCino.

Customers and prospects recognize that nCino has been investing in AI and rapidly evolving and advancing our business model and leading the industry by aggressively incorporating intelligent and AI capabilities into our solutions with measurable results. As an example, one of our U.S. enterprise customers estimates they can save 160,000 hours annually by utilizing our located file functionality, which is just one of our banking advisory capabilities. When extrapolated by about $35 per hour to approximate median loan officer compensation according to the Bureau of Labor Statistics, that yields annual savings of over $5 million. Again, that level of savings is from using just one banking advisor capability.

Proof points like this are motivating customers to transition our platform pricing model to gain access to nCino's genic solutions and other AI initiatives. At the end of the second quarter, over 230 customers have already purchased AI intelligence units. We are no longer trying to convince prospective customers that we can lead the transition to Agentic-AI-powered banking, we're doing it. And the energy and momentum we are seeing in customer and prospect conversations around the globe reflects that conviction. I mentioned during our first quarter earnings call, but some customers were beginning to reach the limits of their initial intelligence unit bundles.

We have recently begun monetizing the sale of additional intelligence units as clients come back for more. which is really exciting to see and a strong signal of engagement with our banking adviser capabilities. Our focus for the foreseeable future will remain on driving long-term sustainable AI adoption over near-term subscription revenues growth. So we do not expect this early additional monetization to materially impact our financial results in fiscal '27.

However, the adoption trends and consumption trajectory we're seeing give us increasing confidence that intelligence consumption through the adoption of our AI capabilities will be a material driver of subscription revenues growth for years to come. You may recall us referencing continuous credit monitoring or CCM for short which is one of our banking adviser capabilities currently driving a meaningful amount of intelligence into consumption. CCM is a great example of how nCino leverages LLMs where they excel and add value. In this case, powering a natural language chat experience, paired with our own proprietary predictive models, algorithms and data.

Rather than having credit teams manually review a commercial portfolio on a quarterly semiannual or annual basis, and nCino's continuous credit monitoring can assess more than 40 credit and operational indicators on a daily basis and can identify the loans that warrant attention create the necessary documentation to review and help guide the next appropriate actions. This functionality gives relationship managers and credit teams the ability to focus their time on issues requiring careful judgment while giving senior leaders a current portfolio level view of risk and the ability to drill into underlying exposures in detail.

What's important to understand here is that this is not simply an LLM layered onto a bank or credit union's data. Banking requires reliable, traceable, auditable and governed outcomes. While we use LLM to summarize and understand intent across multiple data sources, the core of our continuous credit monitoring functionality is guided by nCino's internally developed purpose-built, deterministic models and algorithms. We use these to consistently apply the same defined rules because the financial institution must be able to reproduce, explain and defend how every single credit decision was made and how every process was executed.

We believe the continuous credit monitoring functionality will be a meaningful medium-term driver of intelligence unit consumption. That's because this isn't just a simple chat interaction. It is performing ongoing, highly complex multistep processes across critical banking activities. This is software that is actually doing the work of a bank or credit union employee, not just helping that employee do the work. The combination of our unique operational data, deep banking expertise and tested governance and security infrastructure is what enables nCino to deliver this kind of outcome to our customers in a way that simply cannot be replicated by adding nondeterministic LLM on top of core banking data.

I had yet to hear a C-level executive at a financial institution to express a desire to automate their business processes on public cloud data. Conversely, they are as excited about offerings like CCM as we are, and I look forward to updating you on its progress over the coming quarters. Based on the conversations we are having with customers and prospects, we believe financial institutions of all sizes around the world are gaining a better and more clear understanding and appreciation of the uniqueness value and differentiation in seniors AI technology provides, which we believe has been a significant driver of the sales momentum we have seen over the past year and continue to see in our sales pipeline today. The pace of product innovation nCino is realizing today would not have been possible a few years ago.

Through our own initiatives and our internal teams use of AI we are seeing tighter alignment across product development, engineering and professional services, allowing us to learn from FDE engagements and customer deployments and incorporate those lessons back into the platform more quickly. It's also great to see that we are tracking extremely strong technical and banking talent that wants to join nCino to help define, build and deploy the next generation of financial services technology.

Attracting and retaining talent is a strategic and stated top priority for the company. We remain laser-focused on execution and continue to make strong progress against the strategy and growth levers we've highlighted over the past 1.5 years. We continue to focus on what we can control and are energized by the accelerated subscription revenue growth we are seeing in the business outside of U.S. mortgage. In summary, our business is strong and continues to gain momentum. We continue to see customers up and down the asset size spectrum, renew early and expand their use of our AI technology. and our sales pipelines are healthy and diversified across segments, solutions and geographies.

With that, I'll turn the call over to Greg.

Gregory D. Orenstein

Thank you, Sean, and thanks, everyone, for joining us this afternoon to review our second quarter fiscal 2027 financial results. Please note that all numbers referenced in my remarks are on a non-GAAP basis, unless otherwise stated. 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. We are again pleased with our financial results.

Total revenues for the second quarter of fiscal '27 were $161 million, an increase of 8% year-over-year. Subscription revenues for the second quarter were $143.5 million, up 10% year-over-year and also 10% in constant currency. U.S. mortgage subscription revenues were $20.6 million in the second quarter, down 1% year-over-year, contributing $100,000 of overperformance in the quarter against our guidance as noted on Slide 14 of our earnings presentation.

Excluding U.S. mortgage, subscription revenues in the second quarter increased 12% year-over-year and also 12% in constant currency, reflecting strong sales execution, which helped deliver approximately $1.3 million of upside to our subscription revenue guidance for the quarter. Professional services revenues were $17.5 million in the quarter, down 3% year-over-year. Professional services gross profit margins 3% in the second quarter up 600 basis points over negative 3% in the second quarter of fiscal '26. We continue to prioritize improving the profitability of our professional services practice over growth in professional services revenues.

Non-U.S. total revenues in the second quarter were $36.4 million, up 9% year-over-year and also 9% in constant currency. Non-U.S. subscription revenues were $30.9 million, up 13% year-over-year and also 13% in constant currency. Non-U.S. subscription revenues were negatively impacted by a slight FX headwind of approximately $200,000 in the second quarter. Non-GAAP operating income in the second quarter was $40.8 million, or 25% of total revenues, an increase of 36% year-over-year.

As noted on Slide 14 of our earnings presentation, of the $3.3 million in non-GAAP operating income overperformance in the second quarter. Approximately $900,000 was from incremental gross profit derived from subscription revenues over performance and the remaining $2.4 million was driven by disciplined expense management across the organization with teams executing effectively against plan. As expected, our annual customer conference hosted in May drove the sequential increase in second quarter sales and marketing expenses. Free cash flow was $34 million in the second quarter up 170% year-over-year.

Turning to an update on our share repurchase programs. In the second quarter, we repurchased approximately 4.2 million shares of the company's outstanding common stock in open market purchases at an average price of $15.41 per share for total consideration of approximately $65 million. Additionally, in the second quarter, we finalized the accelerated share repurchase program we announced on March 31, 2026, under that program, we repurchased approximately 6 million shares of our outstanding common stock at an average price of $16.57 per share for a total consideration of $100 million. Since April 2025, the company has repurchased approximately 15.8 million shares of our outstanding common stock at an average price of $18.99 per share for total consideration of $300 million.

Having effectively exhausted all prior repurchase authorizations, our Board of Directors has authorized another $100 million share repurchase program. We continue to view opportunistic repurchases of our common stock as a compelling use of capital as available free cash flow permits. In light of the momentum we see in the business and the sizable global opportunity we have in front of us.

Turning to guidance. For the third quarter of fiscal '27, we expect total revenues of $161.25 million to $163.25 million, with subscription revenues of $143.25 million to $145.25 million, an increase of 7% and 8%, respectively, at the midpoint of the ranges. Excluding U.S. mortgage, our third quarter guidance assumes subscription revenues growth of 11% at the midpoint of the range. Non-GAAP operating income in the third quarter of fiscal '27 is expected to be approximately $42 million to $44 million, an increase of approximately 8% year-over-year at the midpoint of the range.

For fiscal year '27, we now expect total revenues of $644 million to $647 million, with subscription revenues of $573.5 million to $576.5 million, an increase of 9% and 10%, respectively, at the midpoint of the ranges. Excluding U.S. mortgage, our updated full year guidance assumes subscription revenues growth of 12% at the midpoint of the range.

As noted on Slide 15 of our earnings presentation, we are extrapolating the second quarter execution-based overperformance and subscription revenues of approximately $1.3 million to both the third and fourth quarters. This is offset in part by an adjustment to our U.S. mortgage outlook, which we believe is prudent to do at this time to account for additional IMB churn resulting from mortgage rates remaining higher for longer. We are now forecasting U.S. mortgage subscription revenues of approximately $20 million in the third quarter and approximately $18.5 million in the fourth quarter the sequential quarterly variance reflecting normal fourth quarter market seasonality. This update represents a reduction in our prior U.S. mortgage subscription revenues forecast of approximately $700,000 in the third quarter and approximately $1.2 million in the fourth quarter.

Please note that our overall company churn expectations for fiscal '27 remain unchanged. And but our churn forecast now includes a slightly higher mix of IMB churn, offset by less churn across the rest of the business, with earlier timing assumed that negatively impact subscription revenues in the second half of the year. We continue to expect international subscription revenues to remain accretive to overall subscription revenues growth in each of the third and fourth quarters of fiscal '27, notwithstanding that we now assume FX headwinds of approximately $200,000 in each of the third and fourth quarters.

Excluding U.S. mortgage, our full year guidance implies fourth quarter subscription revenues growth of 12% at the midpoint of the range, representing year-over-year growth acceleration of 400 basis points. which we largely attribute to sales momentum emerging from the excitement around our AI strategy and product innovation and continued strong sales execution. We are very proud of the progress we have made reaccelerating subscription revenues growth outside of U.S. mortgage and are excited for the potential to further accelerate total subscription revenues growth in a better mortgage market. as we believe the reaccelerated growth we are achieving this year in the rest of the business is durable.

We now expect non-GAAP operating income for fiscal '27 to be $171 million to $174 million up from our prior range of $166 million to $171 million. Our updated guidance represents an increase in non-GAAP operating income of approximately 33% year-over-year at the midpoint of the range and non-GAAP operating income margin expansion of approximately 500 basis points. We expect to continue delivering non-GAAP operating margin expansion in the ordinary course beyond this fiscal year as the business continues to scale while balancing the opportunity to optimize subscription revenues growth, which remains our focus and priority.

We are quite pleased with the progress we have made in the first half of the year and feel really good about the business right now as a result of the AI and product innovation being delivered by our R&D organization, the execution of our sales teams and the demand environment and the sales activity we see reflected in our global sales pipelines. For fiscal '27, we continue to expect net additions to ACV of $60 million to $65 million on a constant currency basis, representing cumulative ACV of $662.5 million to $667.5 million, up 10% over fiscal '26 in the ACV at the midpoint of the range. For full year fiscal '27, we are again raising our free cash flow guidance to now be $137 million to $142 million up from our prior range of $135 million to $140 million, representing year-over-year growth of 69% at the midpoint of the range.

With that, we will open the line for questions.

Operator

Certainly. And our first question for today comes from the line of Saket Kalia from Barclays.

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Saket Kalia

Okay. Great. here. Sean, maybe for you. I was wondering if we could dig into the mortgage business just a little bit more. And maybe specifically, I'd love to hit on maybe how your competitive win rates have looked and if there are more opportunities to gain share to maybe help offset some of this market headwind? You had a great example of a win back. I'm curious how you think about sort of win rates and that opportunity for continued market share gains.

Sean Desmond

Yes. Thank you, Saket. Appreciate it, the question and where you're coming from. We actually highlighted 2 wins there, one in the community bank, one in a credit union in the script and more broadly in the market, while we do see the higher for longer rate environment has been a headwind as called out, we think this is a really good business for us. And we think the IMB market is very important. But at the same time, as we talk about these wins in the community bank and credit union landscape, we think continued wins in the core banking sector where there's less volatility. And more stability are ready for the taking, both down and potentially upmarket. So we're excited there. It remains adjacent to every conversation as we talk about the power of the platform. in the environment that we operate in, the motions that we run across commercial, consumer and mortgage give us a diversified portfolio and is absolutely accretive to not only our pipeline growth. but the first half of year momentum we have, and we're really excited about the second half.

Saket Kalia

Got it. Got it. That's super interesting. Greg, maybe for my follow-up for you. You noted the revised outlook for mortgage, which makes a ton of sense given the rate environment that we're in. Can you just recap for us how you're thinking about the -- on mortgage part of the business in terms of growth here this year. And maybe just as importantly, what could be the biggest drivers of upside to that non-mortgage part of the business. Does that make sense?

Gregory D. Orenstein

It does, Saket. I appreciate the question and your time today. look, excluding U.S. mortgage, our third quarter guidance assumes subscription revenues growth of 11% at the Q3 midpoint and 12% at the midpoint, it implies for Q4. right, which is an overall growth acceleration year-over-year 400 basis points. And so we did want to make clear in terms of mortgage, which, as you know, is the higher for longer market that we're going through. Make sure you guys appreciate that and not have that overshadow the rest of the business, which is performing quite well.

In terms of drivers for growth, look, we feel really good about our product portfolio overall, our flagship commercial product continues to have strong demand across the globe. And ultimately, I'd remind you of the 5 growth initiatives that we laid out last year, which are AI international credit unions, cross-selling mortgage to banks and credit unions, as Sean just touched upon as well as onboarding. And so to me, the exciting thing to highlight is that why we feel really good about the progress we're making with each one of those initiatives, it's still early. And the accelerated growth we are driving really is not with those fully contributing as we expect they will be able to next year and beyond. And so we feel like we've planted the seeds for growth. We feel like we've got multiple growth levers to add on to the growth that we're already seeing from a reacceleration standpoint. And we're really excited where we are. We'll continue to control what we can control. And as we talked about in our prepared remarks and as Sean noted, we'll continue to aggressively try to take logos down in the mortgage business. which is what we were successfully able to do if you go back a couple of years ago in the, I'll call it, more darker days of mortgage, we were able to add a lot of logos and ultimately outpace the churn that we experienced in that, which was, from my perspective, a much more difficult market than it is today, even though we do have headwinds today.

Operator

Our next question comes from the line of Alexander Sklar from Raymond James.

Alexander Sklar

Sean, first one for you on banking adviser and some nearly 50% of the base now on the new platform model. What have you seen on the usage side of things in the last 3 months? You talked about CCM, but any clear-cut skills or use cases where you've been able to replicate the case studies across multiple users, multiple different customers that you've really been able to arm the sales force to kind of go back to base one?

Sean Desmond

Yes. Alex, the first thing that comes to mind is we have more and more customers by the day going into production with banking adviser and our digital partner and get capabilities. In fact, year-to-date, more than -- we've more than doubled the customers going into production, which is exciting. And of the core customers that we've named that are on our new pricing model and have adopted our AI capabilities, 1/3 of those are in production today. So all of that trends really well, as you know, in traditional sort of environments where you test in Sandbox and then move to production once you gain confidence and then you see measurable outcomes that you can drive to the bottom line of your business and directly to your balance sheet, those start to get the attention of the executives and seat suites that signed the checks in the first place.

And that's what we're looking for, right, is to directly correlate those outcomes in production to what we're delivering. And so while in some cases, it still takes longer than we would like to get to production because we have to go through governance and security reviews and all the things that need to be contemplated in the AI world. we're seeing really good momentum there. So we call out in the script, some of our continuous credit monitoring capabilities, we call out in the script, locate and file.

If you think about locate and file for me, really being the floor, not the ceiling, right? We talked about 160,000 hours annually for one particular niche use case in a single workflow. And remember, Alex, we're delivering workflows across all the motions that we run onboarding account opening, loan origination and portfolio monitoring across commercial, consumer and mortgage. So if you extrapolate that locate and file potential and capability, across all the workflows that we have in production environments over time. Hopefully, you can tell them pretty prior up about that.

Gregory D. Orenstein

Yes. And just to add to that, Sean, as we talk about 1/3 of those customers being in production, I think one of the things that's really exciting is we've got a nice queue all lined up, right, as we take customers from signing to implementation to get through testing and then ultimately into production. And so we see that queue lined up. And I think that's something that's exciting and bodes well. And to that point, the $160,000 client savings that Sean referenced. Right now, they're still in Sandbox. We're working with them to get through security, which we will. But that's a great example of just the process that you need to go through with our customer base, which is highly regulated, right? -- conservative market before they'll actually go into production and start seeing it live the outcomes that we're able to produce. And so to Sean's point, we are pretty excited about what we see happening right now.

Alexander Sklar

Okay. I appreciate that color from both of you there. Greg, maybe a follow-up for you just on the ACV outlook. I think it's clear that your intention is not to update that as the year progresses. But as we sit here today at the halfway point, any change in terms of where you are coverage-wise of that outlook relative to last year? Or how is seasonality shaping up versus expectations? And maybe any change in terms of international composition of that mix versus prior years?

Gregory D. Orenstein

Yes. Thanks, Alex. And just to clarify, I said $160,000, I was referring to 160,000 hours that our enterprise customer estimates they'll be able to say with the locate and file capability. But now, as you heard in my prepared remarks, we feel really good about where we are in the progress in the first half of the year. Pipelines look good. market demand looks good. And so as we go into the second half of the year, we're pretty energized here. And just to that point, we can note that just last week, we signed what we expect to be our largest deal of the year with an international customer. It's a Q3 deal. So we'll talk about it more on the next call. But certainly this early in the second half of the year getting that out of the way, bodes well. Obviously, we've got 5 months left. So we've got work to do. But again, we're feeling pretty good right now.

Operator

And our next question comes from the line of Ryan Tomasello from KBW.

Ryan Tomasello

Wanted to ask about the rule of 50 framework that you provided a few years ago and confirm whether or not you still view that as a north star for outcomes you're looking to achieve. And in particular, if the implied 15% subscription revenue growth component of that target was still intact. And on that same topic, in terms of intelligence units, do you view that as being a necessary contributor to that 15% or potentially additive to that framework depending on how things play out.

Sean Desmond

Yes. So in terms of long term, we have stated aggressively this year, we would hit the Rule of 40 commitment, and we're excited, we feel like we're hitting that early with expense discipline and with growth reacceleration year-over-year quarter-over-quarter. So as we think long term, we expect to remain at that pace, and we expect growth to continue to accelerate and make up a larger portion of our overall delivery mechanism. But as far as this year, when we're talking about Q2, we're excited about the trajectory to the Rule of 40 and once we tackle that and read that back, we'll set our sights on what growth looks like between now and the path to beyond 40.

Gregory D. Orenstein

Yes, Ryan, I think if you go back to our earnings Day or Analyst Day last year, we focused on the rule of but really more in that 35% non-GAAP operating margin, which hopefully everyone has seen the progress that we've continued to make towards that. We do continue to err on the side of growth. I noted when I was on stage during that Analyst Day that we believe that framework is intact. We've not said anything since that around the top line. But again, I think we're doing the right things in order to continue to accelerate growth at the company and get back to what we think is a more reasonable level of growth for a company of this quality with the market opportunity we have in front of us.

Sean Desmond

We're very focused on the growth. When we sit here midyear and we beat our aggregate annual operating plan halfway through the year when we are in a position that we signed our largest deal of the year early in the third quarter. it is about growth, and we talk about our growth initiatives and how they're maturing and how we think about them contributing over time, we'll continue to focus on that growth. But we've exercised very good discipline on the expense side as well.

Ryan Tomasello

Appreciate that. And then in terms of the ACV bookings targets for this year, can you say what mix of renewals and upsells versus new logos that contemplates and how does that compare to what you achieved last year? And if you could also just remind us how that mix in terms of renewals versus net new logos, changes the math around the level of conversion that you would expect to see on this year's bookings into next year's subscription revenue?

Gregory D. Orenstein

Yes, Ryan, I think you can assume at this point, it's fairly comparable. Again, as we get more and more momentum outside of the United States, those are generally going to be leaning towards more new logos just because of the white space we have outside of the U.S. But again, we've got a great customer base globally, but particularly here in the U.S., and we have a lot of product to sell them.

And again, I think one of the things we feel really good about is the output from our R&D organization. the acceleration of product. And again, I think that we don't distinguish cross-selling to a current customer or a landing a net new logo for us, it's all ACV. And again, with the breadth and depth of product portfolio we have, we feel like they're both opportunities for us.

Operator

Thank you and our next question comes from the line of Michael Infante from Morgan Stanley.

[Operator Instructions]. Our next question in that case comes from the line of Aaron Kimson from Citizens.

Aaron Kimson

Great. Sean, you talked about the symbiosis you're seeing between your product development and implementation teams. As we think about the pace at which you're rolling out new products and the pace at which your heavily regulated customer base is willing and able to tap those new products, do you feel like the bottleneck of incremental growth today is more on the customer and implementation side or the product development side?

Sean Desmond

Yes. I know you can hear the excitement with the pace of innovation that we're putting out. into the market. I have never seen more product delivered in a 6-month period than I did the first half of this year. I reviewed that with our product team last week, and we presented that to our Board. And that pace, I expect to continue.

And as we've talked about both in my comments as well as Greg's here, yes, we're in a highly regulated industry. There's compliance, there's regulation, there are security reviews. And to a certain degree, that's just part of the business that we're in, right? And I do expect that there will be more pent-up demand to adopt those features, and we will outpace what we're delivering into the market. And I expect the product development pace to run ahead of how our customers can actually consume that. And we're seeing that at every segment of the market, right, not just enterprise, but in the community and regional spaces as well. And that's okay, right? That's just part of doing business. I think you're starting to see some of the narrative overall in the landscape shift around what AI is going to be. You're hearing about the gap between adoption and outcomes, and we have always been focused on the outcomes. We've never taken our eye off the ball on what truly matters, and that's driving efficiency into the bottom line for our customers through increased loan cycle times, greater production by role. And that, for us, remains just a core principle at nCino.

Aaron Kimson

Got it. And then to build on that, consumers about 2/3 of the SAM revenues roughly the inverse. A lot of focus on energy has gone into building out the consumer side of the business, going back to the announcement of the Simple Nexus acquisition in 1 given that Frontier models continue to improve and the amount of unstructured data that goes into commercial lending that you can now utilize, do you feel it makes sense to focus relatively more development resources and energy on the commercial opportunities this time.

Sean Desmond

Listen, we talk about the platform wins, right? And we talk about a balanced portfolio across commercial, consumer and mortgage, our flagship and core business is very strong, right? We're very excited that the commercial business in the domestic U.S. market from community up to enterprise is very strong at the same time. We've called out in the script, consumer deals at regional banks. We called out international deals, the largest this year outside of the U.S. So to me, that's the power not only of the platform, but being a global company is a diverse portfolio. And we invest accordingly to keep up that pace. We probably have more breadth overall in our commercial pay, and we're making sure we balance the functionality across all lines of business that we serve.

Operator

And our next question comes from the line of Chris Kennedy from William Blair.

Cristopher Kennedy

It's clear it's not going to materially impact fiscal 2027 results, but is there a way to frame the opportunity with intelligence unit consumption?

Sean Desmond

Yes. We understand where you're coming from with the question. And everybody's got their model out there. I'm not in the business of trying to provide the exact inputs, not knowing those models. But in our business model, we have been very clear that we're confident in our posture this year. We're excited about the growth that we've got both in the first and second quarter, and we're excited about the momentum in the business. We don't expect to reframe anything for the back half of the year based on intelligence units alone. But over time, as those queues that Greg referred to move from development into production as customers get through security reviews as customers take on more of our agentic capabilities and digital partner experiences, that will show up over time. But for fiscal '27, we're excited about the business, and we're not changing any of the sort of inputs that you're looking for necessarily.

Gregory D. Orenstein

Yes, Chris, as we've been highlighting for us, it's all about adoption this year. We believe that will lead to material help our drivers from a top line acceleration perspective, top line growth perspective. We've got a lot of models here. One gets you more excited than the next. We do have discussions in terms of KPIs and things. But I think the most prudent thing to do is not get ahead of ourselves and continue to focus on adoption. And as we get more and more data points from our customers more and more outcomes where our customers are realizing the value like that 160,000 hour example, Sean said, I think we'll be able to come to you with more clarity and definitiveness in terms of the model. But we understand the question. And again, we'll continue to work towards providing that clarity.

Cristopher Kennedy

Got it. And then just real quick as a follow-up. Can you just remind us of the churn that you expect in fiscal 2027, you mentioned it in your prepared remarks. Just give us a clear update on that.

Gregory D. Orenstein

Yes. As I said in my prepared remarks, our churn forecast hasn't changed for the year from an aggregate basis, which is about $25 million. of churn for the year. Again, it tilted a little bit more towards mortgage, specifically driven by IMBs and less towards the rest of the business. But overall, it stayed consistent with where our forecast has been from the beginning of the year.

Okay. And just to drill down one more point, mortgage is about 1/3 of that $25 million, which would be consistent -- as last year.

Operator

And our next question comes from the line of Joe Berwick from Baird.

Joseph Vruwink

Your largest customers, I think, spend over $5 million on nCino. So hearing about double-digit increases in ACV with those renewal examples is impressive. I was wondering, can you maybe compare how ACV increases are comparing at renewal more broadly across your customer base, you share maybe some enterprise examples, but the experience at small regional or maybe even U.S. International, I'm wondering if there are certain segments of your customer base that are leaning in more to what nCino can offer?

Sean Desmond

Yes. Thanks, Joe. We did call out specifically some of those enter metrics. But the reality is, when we think about ACV increase in growth, both in new business and balance across the pool community and regional up to enterprise band and across the credit unions as well. So again, that speaks to the power of the platform and a diversified growth strategy.

Joseph Vruwink

Great. And then A question on just kind of price discovery around your AI capabilities when you sit down with customers and you start walking through what's possible and you hear customers say there's millions and potential savings that could come from this. How do you think about then broaching the topic of nCino sharing in the savings? Is it a 50-50 split, 25-75, is this a way to maybe further the conversation beyond just the implication of intelligent unit credits and what those are worth and kind of your broader role for that account?

Sean Desmond

Yes. I'll point back to our focus on outcomes has always been clear we're serving up a genetic solutions and delivering an AI. But as far as numbers, metrics with calculations, what we look at is a business case, right, with every customer always have. before AI and FRAs, what does that business case look like? If we can extrapolate those 160,000 hours we're talking about across multiple workflows and that's going to save a customer, we're excited about that, right? We don't think that fundamentally changes the pricing dynamics we went through a pretty extensive exercise on the pricing transformation that we rolled out at the beginning of last year. And what we want to do, again, is just deliver efficiency to the bottom line of our customers as much as we possibly can.

Operator

And our next question comes from the line of Andrew Schmitt from KeyBanc.

Andrew Schmidt

I wanted to ask about the enterprise renewals, good data points there. I guess when we think about contract duration broadly in enterprise, I typically think about those 3 to 5 years. I'm curious if there's any deviation in recent renewal they're shorter or longer. And then when we think about sort of the ACV uplift. Obviously, the flip to the platform pricing is one component access to AI modules is another. Then I think another big part of it is probably sort of additional modules and capabilities you're delivering. I'm just curious kind of what's the uptake on the additional sort of module signed just beyond sort of the platform and AI component involved here?

Sean Desmond

In the first part of your question, I mean, terms are generally steady. We don't see a material swing or change in the terms of our contracts and enterprise due to the current time that we're in with the pricing transformation as well as the agent solutions that we're delivering. So that's holding firm. As far -- can you restate the second part of the question with additional modules? I just want to make sure I understand.

Andrew Schmidt

Yes. It was kind of the attribution to like there's a 10% ACV uplift and obviously a part of that is the flip to platform-based pricing access to AI modules. But I would imagine another piece is just delivering more value additional modules to enterprise customers, if that's part of the equation as well, I'm just curious if there's just additional uptake there to consider when you think about just these new renewals, enterprise deals beyond sort of the modules that enterprise customers are getting access to? .

Gregory D. Orenstein

Absolutely. There is, Andrew. The 10% is really think about it apples-for-apples in terms of no new product getting the first bundle or the initial bundle of intelligence units. For each one of our renewals, I mean, our local point is going to the customer, working with them to see where else we can expand in the financial institution, right, which is, again, one of the unique things about nCino and our platform story and all the product that we have to sell them, as I referenced earlier.

And so there is much upside as we go into being able to sell them more. But again, just on an apples-to-apples basis with the only difference being initial bundle of intelligence units. We laid out that 10% target last year. After Q4, we confirmed that we exceeded it. And again, we're continuing to see that as we go through this year.

Andrew Schmidt

Got it. Appreciate this comment. It's very helpful. And then if you think about professional services, Greg, I get the comment about sort of seeking profitability versus revenue makes sense and PS margins continue to be profitable, which is great. I guess just trying to think about the treasury from here on the PS side. It seems like some of this efficiency continues. But then I think on the revenue side, as you get more efficient. Is there an offset in terms of lower hours required? Obviously, the North Star is efficiency and profitability. But just trying to understand how that works through the model.

Gregory D. Orenstein

Yes, I think the PS organization continues to do a good job of making our implementations more efficient. And so we'll continue to focus on, again, driving margin. And again, we'll get at the expense of revenue and get the overall total cost to ship for our customers down, and so that's a win for all of us. As we do free up capacity, we are turning those folks in to support our engagements as we continue to have high demand for that part of our organization. And so again, that's something we're excited about and gain that we expect will fuel more accelerated adoption of intelligence units as we deploy RFDs on a global basis.

Sean Desmond

And remember, I talked about the pace and all that's been delivered in the first half of this year. So the more output and productivity that we see coming from the R&D organization, the more things we have to deploy. And the same thing I would tell you is as we gain efficiencies in our release management, and how we actually push out new technologies. We continue to rotate managed services capacity toward for deploying engineering group, so we can keep as and avoid the bottlenecks that were referred to earlier in the call.

Alexander Sklar

That makes sense. It sounds like a throughput is really ramping. Appreciate the questions.

Operator

And our next question comes from the line of Terry Tillman from Truist Securities.

Terrell Tillman

I'll make them really quick which is rare for me. But in terms of the 4 enterprise renewals early, that's great to see. And I think you said you're now -- if I'm not mistaken, 12 or 20 of your top customers in the new platform pricing. I'm curious, could you see a situation that some folks that would have been FY '28 or calendar 27s actually move into the second half of this year. Is there anything contemplated around that? Or it could happen, but you're just not going to kind of bank that in that net ACV. And then I have a follow-up.

Sean Desmond

Listen, we're out there with an aggressive posture every day, trying to expand the functionality we have in the customer base that we have. So anything is possible. We have a team that's innovated, that's hungry and has really strong trust, credibility and relationships in our customer base. And if we have alignment with the outcomes our customers are looking and our posture then the -- we're anchoring to our core actual conservative estimates for this year, always looking to accelerate.

Gregory D. Orenstein

Yes. And Terry, we've been pretty consistent over the last few quarters about these accelerated renewals. And from a demand perspective, we haven't seen that weigh. And so some of it is just timing and working through some of these procurement processes. But in terms of the excitement with what we're doing and the capabilities that our R&D organization are producing and ultimately, as shown continues to note as we focus on the organization, the outcomes we're producing for our customers, we expect that to continue to drive some accelerated renewals over the coming quarters.

Terrell Tillman

That's great. And just maybe real quick on international. Greg, it was great to hear about an early 3Q deal. That's awesome. And Sean, I know you all have been working on kind of leadership changes in the past and then starting to build the pipeline. Are you pretty much all done with all that work and now it's just harvesting? Or is there still some low-hanging fruit areas ahead? Just trying to understand if that international could keep kind of outpacing the rest of the business from growth.

Sean Desmond

Sure. Thanks for the question. The platform value proposition is proving to resonate internationally as well as it is domestically. We're excited about the momentum, the outcomes that we're delivering for our customers as we talk about the excitement from EMEA to Asia Pac is real. So I don't think it's dependent on any single individual. Again, the power of the platform and a global team and a machine here where we can ebb and flow. I mean, you're constantly going to have changes in your personnel in a sustainable and long-term viable business model should be able to withstand this. So I don't spend a lot of time right now worrying about, do we have the team on the field. I'm excited about the outcomes we're delivering and really proud of it.

Operator

And our next question comes from the line of Nick Atlmann from U.S. Bancorp.

Nicholas Altmann

Awesome. SP673331458 I actually wanted to follow up on Terry's first question. But maybe ask it a little bit differently. If 48% of your base is on the new pricing, what are your expectations for that, where that should land at the end of the year? And I guess, how are those expectations different versus when you entered the year?

Sean Desmond

I think we'll continue at the pace that we've been on. And we don't necessarily call out being dependent on a percentage of the customer base being on the new model to meet our fiscal commitments. We continue to execute and do what we said we were going to do with respect to our core financial targets. Certainly, it will be north of 48%. And I think that growth will correlate as it has over the past last several quarters.

Gregory D. Orenstein

Yes. Nick, I think the good news is it continues to go well ahead of schedule for us. sales team is doing a great job of working with our customers through these renewals. And again, I think the momentum that we're seeing, we do expect to continue without putting a specific target on it. And I'll also know it's good to hear the U.S. Bank reference. So man, congrats on that.

Operator

And our next question comes from the line Novella Smith from JPMorgan.

And our next question comes from the line of Ken Suchoski from Autonomous Research.

Kenneth Suchoski

Maybe just one on the churn. I think, Greg, you mentioned slightly higher mix of IMB churn offset by less churn on the rest of the business. So maybe just talk about what's driving the improvement on the non-mortgage churn? And just which segment does that show up in?

Gregory D. Orenstein

Yes. I think just as we kind of separate the businesses, as we've done for this call again to make sure you guys appreciate Ultimately, there's not one specific place. Again, it's slightly higher on the I&D side, I said, and slightly lower than the rest of the business just based on our forecast at the beginning of the year. as we go into each year, we've got some identified churn based on whatever circumstances and then we also have some unidentified churn that we do for forecasting purposes.

And as stuff comes up, our teams do a great job of figuring out what's going on. and there's some way that we can mitigate a potential churn risk. So I'd say nothing worthy from a churn perspective, again, other than obviously on the I&D side, with the higher for longer rates. And again, we see that driving a little bit higher churn. But I think overall, as I noted, no update in terms of where we started the year from an aggregate basis.

Kenneth Suchoski

Okay. Great. And just the one comment on the banking adviser capabilities. I think you guys called out $5.5 million of savings. I mean it sounds like a lot of savings, call it, 40 hours a week and 50 weeks a year that replaces its 80 loan officers basically. And so how should we think about the size of this particular opportunity versus some of the other ways customers are leveraging banking advisers. Is this like an extraordinarily large opportunity? Or will these multimillion dollar per feature per customer charges be the norm?

Sean Desmond

Yes. I'll kind of reiterate the comment I made earlier about this being sort of the floor base case, not the ceiling, in my opinion, right? This is a particular example of a single skill within a workflow and a line of business, right? And if we extrapolate that across the platform, across the solution portfolio across lines of business and across the globe as customers take cohorts into production, you can imagine that while we're not putting a number on it, it's nothing but upside in our opinion. .

Gregory D. Orenstein

And Ken, I think the other thing to note is what's really exciting is kind of the funnel of additional capabilities that the team has out. A lot of them are in Sandbox and being tested. But again, on upcoming calls, I think you'll -- you should look forward to hearing us talk about more similar type capabilities that we think can drive significant value to our customers, and we're excited about that.

Operator

Our next question comes from the line of Michael Infante from Morgan Stanley. .

Michael Infante

Great. Sorry about that earlier. I just wanted to clarify because I think it got glossed over earlier in the call. But when I run the math on organic subscription revenue, excluding mortgage and some of the one-timers that you previously called out, it looks like it accelerated sequentially, grew anywhere between 13% and 14% in the quarter. even with pretty minimal contribution from banking advisor. I think that's basically the fastest growth rate in close to 2 years. To the extent that I'm in the right ZIP code on that math, like why wouldn't the underlying growth rate accelerate in the back half of the year, just given you have easier comps in the second half on one-timers? And presumably more contribution from banking adviser as we progress throughout the next couple of quarters?

Gregory D. Orenstein

Yes, I don't think we would correct your assessment in terms of growth, which, again, hopefully, you guys are hearing our excitement about it, and we're really proud of the team. and the focus and the execution in the back half of the year, again, we try to be incredibly transparent with breaking out mortgage, so you guys could see the impact of that to the back half of the year. And also highlighting again the growth that we -- that's implied in exiting without mortgage. Obviously, we'll take some mortgage less headwinds for mortgage as they come along. But again, I think as you look at the rest of the business, we're feeling good about the trajectory. And our focus is just on continuing to execute and make sure, again, as you've heard me say before, Michael, make sure we close the deals, we say we're going to close and close them and we say we're going to close them.

Operator

And our next question comes from the line of Billy Fitzsimmons from Piper Sandler.

Unknown Analyst

You guys highlighted how 230 customers are purchasing intent today increasing consumption. And for those first customers, you also have how some of the first customers are purchasing additional units. Can we just take a step back here and talk about the progression from an initial to production deployment, it's a broader budget expansion. It sounds like one of the things you guys talked about in the prepared remarks is that there's been a little bit of a shift in customer behavior where you're not necessarily needing to get spend to take action. Many of them are taking action right now. And then as we think ahead, just help us think about how the intelligence unit sales kind of materialize into future subscription revenue stream. So what's that bridge?

Sean Desmond

Yes. And you've heard us appreciate it. I heard most of that. It was kind of in out in the middle, but I think you're talking about what does the trajectory look like for the intelligence unit consumption. And we will remain very steadfast and that a big update here for this call is the movement into production with customers who have been using our AI solutions in Sandbox and development. prior. And as those cohorts move in, and we have 1/3 of the customers and twice as many customers in production now as we did at the beginning of the year, then we can actually read back the outcomes, right? And we read back outcomes. That puts folks in a position where they say, okay, if I move from one to more banking adviser skills, digital partners, what's that going to look like for my outcomes, and we'll actually be able to read back to them. that gap that is the major narrative in the macro environment right now is the difference between adoption and actually value we're deriving from the outcomes. And as we get into production, that's the place where it shows up.

Unknown Analyst

Perfect. And then hopefully, I'm coming through clear now. I apologize for that. That was the gist of what I was asking. And if I could sneak in another one. You guys recently released the mortgage How do we think about kind of the opening up of the platform and integrations with third-party tools?

Sean Desmond

Yes. This is a big milestone for the company. As you can imagine, a large part of our growth story over the years has been our partnerships and the system integration system integrator ecosystem going to market with in no across all segments and across banks as well as credit unions and IMBs. And so when we think about giving access to our solution to these partners, to go ahead and develop on top of the platform that becomes a force multiplier for nCino. We have 1,600 employees today. We've talked about rotating the capacity toward our forward deployed engineering groups. If we can really put a multiplier in the SI ecosystem through access from our MCP layer that really just gives us a proliferation of growth that's hard to put a ceiling on.

Operator

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Sean for any further remarks.

Sean Desmond

Yes. Thank you all for your time this evening. I really hope you can hear our excitement in the business, proud of our teams, energized by the momentum, and we look forward to continuing to update you all throughout the year. Have a good night.

Operator

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.