Operator: Thank you. Our next question comes from Kyle Peterson with Needham & Company. Your line is open.
Kyle Peterson: Kyle Peterson on from Mayank Tandon. Just wanted to touch a little bit on some of the commentary with the sales cycles kind of getting pushed a little bit and then obviously, some of the recent uncertainty in the last few weeks. It seems like that’s at least kind of baked into the guide. But I just want to see how much more kind of malaise or uncertainty in deal cycles is kind of built into the guide this year? And I guess what I’m kind of getting at is, if this continues for in the couple of months or a couple of weeks or whatever. Are you guys still confident that in the guide you’ve laid out this year? Or is there some downside risk of some of this uncertainty and stability continues here?
Pierre Naude: Look, so firstly, all known factors today in the market has been accounted for in our guidance. So we assess the market. We speak to our salespeople, we speak to our clients, our prospects, and all of those factors were considered in this guidance. Secondly, if you look at the end of Q4, end of January, there were no liquidity crisis and banking at the end of January. It came very sudden about two to three weeks ago. So those things can pop up. So I cannot forecast exactly what this, as you call it, delays or a downtrend in sentiment will be in banking. What I’ve seen in the past is that the bankers react immediately to actually make sure they can survive, which in this case is make sure their balance sheets out of place where they have the necessary liquidity, not only from compliance and regulatory perspective, but also from a survival and a healthy bank deposit base perspective.
The moment they threw with that and they take their breath, they actually start focusing a lot more on the strategic future of the bank because they have to understand what they’re going to do next. And it’s not only about loan making. It’s about managing those portfolios effectively and properly. And that’s where nCino comes in. Over 80% of the work that’s being done in our systems are typically around portfolio management, renewals, covenants, collateral make sure it all is in place. And only about 20% of the amount of work is on loan origination. The same with our deposit account opening systems, et cetera. So I feel very good that you’re going to see the short-term level and then all of a sudden, the sales cycles will start moving forward again.
You cannot push these deals forever. We haven’t seen losses. What we’re seeing is just slower decision-making.
Greg Orenstein: Yes. And Kyle, I’ll just point you to that 95% visibility that I highlighted in my prepared remarks, again, to address your question in terms of how we approached giving that guidance.
Kyle Peterson: That’s helpful. And then I guess just maybe kind of a higher-level question on your client mix here could you give us at least kind of qualitatively or kind of in terms of where some of your exposure in the client base is highest between if you consider kind of enterprise or money center banks versus some of the larger regionals for maybe community and more credit union, credit-focused banks, just so we have a bit of a sense, at least kind of in aggregate where you guys kind of play the most significantly within the client mix?
Josh Glover: In the U.S., it is spread pretty evenly across the enterprise, the middle market or the regional and community in regionals. Outside of the U.S., you don’t really see that robust middle market. So it’s a little bit more top heavy or weighted towards the enterprise. Then outside of the U.S., we see more de novos or challenger banks. So just slightly different, I think, because the industry looks different in different countries, but that’s generally how our revenue is laid down across the globe.
Operator: Thank you. Our next question comes from Alex Sklar with Raymond James. Your line is open.
Alex Sklar: Pierre, I want to follow up on your answer to Kyle’s question just a second ago. In terms of bankers figuring out how they’re going to survive first. Can you just talk about in your conversations, what bogeys are out there in terms of when banks and bankers are going to get confident that they’re going to get to that survival period? Is there any sort of commonality like a June 30 kind of review period? Or what are you hearing from banks in terms of time lines?
Pierre Naude: No. What I would say is there was this immediate deposit flow that obviously shocked in the banking environment, okay? When SVB had that run on the bank and there was a ripple effect they were analysis done. And you heard certain names come up. You heard Signature and you have certain other names in the news where people were concerned about liquidity. Fortunately, some of the big banks step in, make sure there was adequate liquidity, that whole notion is now settled down. When you speak when you actually look at the average deposit account balance across the market, it sits around $1,300. So if you look at that the majority of bank sits around that mark or lower, which means that the exposure for a few big accounts moving is a lot less.
And the moment people understood that and started understanding how that ties into liquidity and the raising of capital, that whole notion has settled down. There’s a lot of aftermath and second guessing going on now. As you saw today, there was big meetings in Congress on the Hill around what happened to SVB, et cetera. But that was a unique case with a very high account balance per account in that bank and similar to Signature Bank. So I would say the CEOs are settling down. I’ve spoken to a number of them. they realize now they have to look at their loan book once the balance sheet is in place. Look at your loan book, the loan book is healthy. They feel good about that. And now they tend to ease out of this mode into what do we do with this bank strategically, and that’s where we’re coming.
So I feel good that there’s always a short-term shock factor, but it’s actually moving beyond that.
