Good day, and thank you for standing by. Welcome to the nCino Fourth Quarter Fiscal 2021 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to Greg Orenstein, Chief Corporate Development and Legal Officer. Please go ahead.

Thank you, and good afternoon, and welcome to nCino's fiscal 2021 earnings call for the fourth quarter and year ended January 31, 2021. With me on today's call are Pierre Naude, nCino's President and Chief Executive Officer; and David Rudow, our Chief Financial Officer. During the course of this conference call, we may 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 and are subject to various risks and uncertainties, including those related to the impact of COVID-19 on our business, the financial services industry and global economic conditions. Our actual results may differ materially. Please refer to the risk factors included in our filings with the Securities and Exchange Commission, which are available on the company's website at ncino.com under the Investor Relations section and on the SEC's website at sec.gov. Forward-looking statements made during the call are being made as of today, March 31, 2021, based on the facts available to us today and nCino disclaims any obligation to update or revise any forward-looking statements. The guidance we will provide today is in part based on our assumptions as to the macroeconomic environment in which we will be operating in the future, including the timing and pace of recovery from any negative effects caused by COVID-19. Such matters that are beyond our control and our assumptions may not be correct. On today's call, we will also discuss certain non-GAAP measures 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, thank you for joining us, and I'll turn it over to Pierre.

Thanks, Greg, and good afternoon, and thank you, everyone, for joining us to review our fourth quarter and FY 2021 results. I couldn't be more pleased with the end of the year. Despite the uncertainty in the market, we closed a record amount of business in the fourth quarter through expansion deals with some of our largest banks in the U.S. by adding new logos for our commercial lending solution and cross-selling our retail and nIQ solutions into our existing customer base. Wins in the fourth quarter also included key deals outside the U.S. For example, we closed a large expansion deal with our first enterprise customer in Continental Europe, a $500-billion bank in the Netherlands that we initially signed in the second quarter, and also added a new logo in Continental Europe with one of the largest banks in the Baltics. Even with the sales success in the fourth quarter, we ended the year with one of the largest pipelines in the company's history. Equally important is the quality of the pipeline. We are seeing interest in the nCino Bank operating system from financial institutions around the world. In fact, over 50% of the pipeline is comprised of non-U.S. financial institutions. We also achieved a record number of go-lives for our retail banking solutions, up 100% over the fourth quarter last year. Customers who went live on retail included a $30-billion U.S. bank, the U.S. arm of a $50-billion bank and a $12-billion Canadian credit union, our first retail banking customer in Canada. We were also excited by the continued positive reception to the new products and our nIQ analytics platform, including automated spreading and portfolio analytics. Automated spreading, in particular, has been enthusiastically received by our early adopter commercial lending customers, where we saw strong interest and closed…

Thank you, Pierre, and thank you all for joining us to review our fourth quarter and fiscal year 2021 earnings. To echo Pierre's comments, I am very pleased to have ended the year with such a solid quarter. Please note that all numbers referenced in my remarks are on a non-GAAP basis, unless otherwise stated. Our non-GAAP financial information excludes the impact of stock-based compensation and the amortization of intangible assets. 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 our 8-K furnished with the SEC. Total revenues for the fourth quarter of fiscal 2021 were $56.6 million compared with $38.5 million in the fourth quarter of fiscal 2020, an increase of 47% year-over-year. Full fiscal year revenues were $204.3 million compared to $138.2 million in fiscal 2020, up 48% year-over-year. Subscription revenues for this quarter were $45 million, an increase of 43% year-over-year, representing 79% of total revenues in the fourth quarter. Full fiscal year subscription revenues were $162.4 million, an increase of 57% year-over-year, representing 80% of total revenues. In the quarter, PPP contributed $4.5 million to subscription revenues. For the full year, PPP subscription revenues were approximately $13.5 million. The team is hard at work helping customers redeploy the PPP seats to other areas of their institution which can help mitigate the risk of PPP churn, and we are pleased with their success to date. Even with attrition factored into our guidance, we expect this $13.5 million to grow in fiscal '22 as we benefit from a full year of PPP revenues. However, as these seats are redeployed, they will move into commercial or retail or another bucket, making them difficult to track. As such, we do not plan on further calling…

Thank you, David. The fourth quarter was an awesome end to a milestone year for nCino. The record amount of business closed in Q4 and the strong pipeline already have us off to a fast start on what we expect to be another outstanding year. We ended fiscal 2021 with 24 of the top 50 U.S. banks as customers, with lots of existing runway inside each of those banks to expand within and across business lines. The international opportunity is even more significant as we are earlier in the journey. Globally, we believe we have only captured approximately 1% to 2% of the opportunity. I couldn't be more excited about the year ahead. We have the right product. The nCino Bank Operating System is a unique end-to-end platform, with the road map in place to continuously increase its functionality, including expanding the nIQ product set, providing actionable insights and data to the bank operating system users. We have a sound reputation with our customers. This is truly one of our most valuable assets and something we work hard every day to earn. And perhaps, most importantly, nCino has an outstanding team around the globe, ready to take this past year's progress and turn it into this year's success. As always, we value the confidence and support of our stockholders, and we look forward to sharing our progress with you as the year continues. We are now happy to take your questions.

[Operator Instructions] Our first question comes from Terry Tillman with Truist Securities.

Pierre, David and Greg, hope you're doing well and congrats on the bookings and also the cash flow. Maybe the first question, Pierre, is for you in terms of -- it's nice to hear about the retail traction. What I'm curious about is, could we get like an update on how many customers have some sort of footprint of the retail banking platform? And how you're feeling about what kind of signals you're getting from either the global banks or the enterprise banks as we look into FY '22 in terms of their willingness to move to this? And then I had a follow-up for David.

Yes. Hey, great to talk to you, and thanks for being on today. So what we're seeing is that across the market, there's interest in our retail offering. And let me remind you, remember, retail is mortgage on the international front. It is account opening in the U.S. and Canada and its retail lending across the spectrum, okay? And so what we're seeing is that's a nice, healthy pipeline. The go-lives we announced was actually a great testimonial to the fact that the software can scale. You saw the sizes of the banks, okay? Initially, we thought we're going to have a lot of smaller banks doing this. And for us to go live with that size bank shows that we not only can scale from a volume perspective but also a breadth of offering. So we're seeing a nice pipeline. We're seeing great interest in our international mortgage product across the spectrum from Canada and the U.K. So I feel good about that. And from a customer number, because it's somewhat relevant because we've got a large number of deposit account opening accounts and retail lending in place already. As I mentioned last time, we signed in very quick order of 6 Canadian mortgage customers. And now we have to make that product settle and make sure we can go successful live, because that's where the proof in the pudding is. But I see an increasingly interest in retail as well as the fact that retail is growing faster than commercial, which is important to us. All our growth initiatives has to grow faster than commercial, and we're seeing that.

That's great. And I guess, David, just my second and last question. And they're always usually multipart, that's just the way I roll. But I'm curious on the international side. I mean it's a journey with your customers, so there's the landing and then you expand over time. But what is the landings like so far with the international business from what you've seen? And is there any kind of different implications on the activation schedules for seats in international deals versus U.S. or North America deals?

Yes. On the international front, it's similar to what we see in the U.S. Obviously, internationally, we need to land in each country and build reference accounts. And that's what we're doing right now. So very similar, we land wherever we can to help a customer. If you look at the deal we did on the continent, we landed a very small deal portion of a deal in the third quarter, second quarter, I believe it was. And then we followed up and did a follow-on closing of a deal in the fourth quarter. So very quickly to upsell them. So that's the idea. We just land, prove ourselves. We're good at what we do. We can make customers successful, and then we follow on and sell them more. And the turn to activation schedule, it's very similar to what you see in the U.S. So no real change there from what we talked about in the past.

Our next question comes from Brent Bracelin with Piper Sandler.

I apologize if the question was asked, I got kicked off earlier. But Pierre, I wanted to start with you on the retail side. A little surprised to see just the early success -- cross-sell success on retail this quarter. If you look at the 300 banker-less customers that you have today, help us understand how many of those customers do you think could use both the retail and the commercial LOS here over the next 5 to 8 years. Is this the opportunity where if you have good -- continued good success here, you could get half of those customers, or all of those customers up for grabs? Help us kind of frame the 5-year plus opportunity around retail, given some of the momentum you saw in Q4 here?

Yes. Thanks. That's a great question. As I look at that market, firstly, these go-lives we just mentioned with you, one of those big banks actually we landed with retail. So they had no commercial beforehand. So that was a nice one for us, okay, a while back, and that's why they could go live now. Apart from that, if you look at from a planning perspective, I exclude top 10, top 20 banks today and pursuing that for retail. I believe we will become more -- in the U.S. for retail lending and account openings, we should become more mature with that product, but they're such a big market. If you take the top 20 out. And most of our customers, that 300-plus you mentioned is below that top 20, okay, from a customer account perspective. So I'm fine there. What I'm seeing with international mortgage, with spot the retail profile, is actually we're seeing interest with our largest customers. So there's no reason that all of our international customers cannot have an interest in the mortgage product and actually use us for that. I see the same with unsecured lending in Europe and Canada, where there's a willingness to look at this solution like nCino to actually look at that. It's a very different mix of consumer business in Europe we're seeing, so I'm optimistic that we can win some business there. So as you look then at the big picture, to come back to your question, I think a large number of our logos will actually embrace the platform. We're seeing that all the time. You see my net retention rate of 155%. The only way you get there is by cross-selling, okay? So I'm optimistic. And the movement and the interest we see in retail is that -- 3 years ago, people tell me, well, retailers kind of settled and build out. Well, here we are, we are taking some fairly large banks live. So I think the cloud's time has come for retail as well.

Great. Super encouraging. And then just as a quick follow-up, David, on RPO, just want to make sure I get that number right. I know last quarter, I think it was $453 million. Did you say it was $500 million or $600 million this quarter? I just want to make sure I get that right.

Yes. This quarter, the total was $600.9 million. And then the less than 24-month bucket was $360.5 million.

Got it. And so I mean, that's a just a monster kind of new bookings quarter, $148 million sequential increase. Walk me through what drove such a monster kind of quarter here on the backlog build side. Are these some customers that might not necessarily go live this year but next year? Do you have some new renewals? That looks just like a monster quarter there. I'm just trying to understand what drove RPO up so much sequentially here in just 1 quarter.

Yes. No, thank you. The fourth quarter was very strong. We saw deals -- balance deals across enterprise, community, regional come in. And it was just a record quarter from a business closing perspective. There's really -- I don't think the average contract length changed. And the seed activation schedule is just, as we talked about, as we were going public with the team. So no change to that, those revenues will flow over the next -- up to 24 months as they activate. Yes, we're very pleased with the activity that we saw in the fourth quarter.

I do think there was pent-up demand because the first 6 months of the year, banks were preoccupied with PPP, so that pent-up demand came through in fourth quarter. But on top of that, as we mentioned, we ended the year with one of the largest pipelines in the history of the company. So not only could we turn that business into contract or that prospect, we still sit on a big pipeline that bodes well for this year.

Our next question comes from Josh Beck with KeyBanc.

I just wanted to follow up on some of those comments, Pierre, that you had made. So when you think about maybe some of this pent-up demand coming through, obviously, the world and the environment has changed a lot in the last year. So do you feel like with your bank conversations now that maybe they're worked through the PPP and the forgiveness and they're maybe starting to look at modernizing commercial or retail more seriously? Just curious how those conversations have maybe tenured throughout the last year and how you describe the current state of the environment.

Yes. It's very interesting. The first 6 months, the market clearly was distracted by PPP industry activity and the people working from home. Indeed, it was just a state of mind that we all had to get used to. In the second half, we started seeing the acceleration back to strategic initiatives. I've spoken to a number of CEOs over the past few weeks. It's very interesting. In banking, there's a new administration, so you clearly can sense that they get ready for more regulation. And nCino was tremendously helpful there. Number one, they look at competitive pressures in the market. They fully understand -- and you get the Googles and the AWSes -- Amazons, I mean, looking at financial service as an opportunity. And so they have to wonder, do we partner? Do we compete and how do we address that? And the way if you step back then, if you're a banker, you look at your infrastructure and your API infrastructure, and how do you engage with these players if you want to partner with them? And that's where nCino comes in. We can optimize, we can drive a fintech experience, but then we provide APIs into those third parties to actually do what's called embedded banking, okay? And that's a theme that you're going to hear more over the next year as banks look strategically at their IT infrastructure. So we truly believe we can help them to prepare for the future to not only survive but to thrive by looking at modern infrastructures for their bank.

Really helpful. And then maybe a follow-up for you, David. I think you had mentioned net revenue retention actually improved to $155 million. So if we were to back out maybe the PPP contribution from existing customers, is that maybe a better year-over-year change to think about the moderation that we should see in this metric over time? Just curious on how we should maybe try to triangulate some of those data points.

Yes. Now the -- so if you take out PPP, its impact for fiscal '21, our net revenue retention number came in at 143% for the year, and that's versus the 147% we ended fiscal '20 at.

Our next question comes from Mayank Tandon with Needham & Company.

Congrats, Pierre and David on the strong set of numbers. I wanted to first start with the SI partnership. I think, David, you mentioned that, that's helping you scale internationally. Could you just talk about just who are you working with? How does that work in terms of partnering with these on the larger bank side? I imagine that's where you're really leveraging SI partnerships. And maybe we can start with that, and then I have a few follow-ups.

Yes, that sounds good. Thank you. Yes. So on the SI side, we're seeing a lot more activity. We -- at the time of IPO, we signed a number of 1,500 SI partners trained on nCino, and that grew to 2,000 at year-end. So we're really seeing good traction with them. As you see, our professional services growth is lower because of that. We're engaging more partners to deploy work. And especially internationally, we don't want to build a massive services team, as we've said in the past. This is exactly what we said we're going to do, and we're just following through with that. So we're very pleased with the activity we're seeing, especially in the new countries that we're entering into. And we're getting them up to speed and running. And then over time, we expect them to be able to help us win additional deals in the future.

Yes. And then if you look at the names, it's Deloitte, PwC, Accenture. It's the same names. It's global companies. It's companies who knows us well, who is helping us to get into these markets.

Great. And then I just wanted to follow up, maybe, Pierre, in terms of international. Could you talk about what the specific markets that you're targeting? And then should we think about more organic or M&A? And then tied to that is how much is local expertise required to really win internationally?

Yes. Yes. So we've -- fortunately, I have experience of previous international businesses. So we established a product team in London to help us with integrations and localization. We have product managers as well as strategic thinkers there. And so we literally look at every market segment, because you've got the European or EMEA-wide regulatory framework, and then each country still have their own little dynamics and changes that you have to make. And that's why we take in with commercial first because it's less regulated. It's a broad platform and we can do tremendous business there. But we are looking at your typical Western Europe, Nordics, I guess you've got Germany, France, Spain, Italy, U.K., Ireland. U.K., Ireland far being the strongest for us right now, that's really landed at first. We now have people in Germany, France, Spain, et cetera, in the Nordics. And so that's beginning to help. As you know, from 0 to 1 is always the toughest. Once you get that reference account, the rest will come like dominoes. Then we've got a nice team in Australia, and we've got a joint venture in Japan, where Salesforce has got a strong foothold, and we feel that their brand recognition will help us, and we see that. As we mentioned, we had a conference there with virtual 1,100 people attending, which is tremendous. So I feel optimistic. Although that market is a tough one to crack.

Our next question comes from Saket Kalia with Barclays.

Okay, great. Pierre, maybe just to start with you. A lot of great traction in international, and it feels like it's just the beginning. So maybe just to think about this top down. Pierre, can you just maybe talk about the competitive backdrop in some of your larger international markets? And how that sort of compares and contrast to the U.S.?

Yes. It's interesting. We see different players. International, I would say, Pega is more of an interest that we see in trends in these banks, where they have done, kind of, a Pega framework in both to compete with us. We see a little bit -- FIS acquired a company a long time back. There we see there in the commercial origination where they try in the underwriting space, okay? But not that active. It's the same pattern as here where the legacy players are in each country, and there's some homegrown systems, so it's a patchwork. And then once you get into the bank, you realize, but then you have 10, 15 systems do the same job we do with 1 platform, okay? And then it's a question of getting them over the hump with a cloud and it's a new company, where the IPO was tremendous helping us with brand recognition and so on. We've cracked the U.K. and Ireland. We're well entrenched. We're well known. Every bank you walk into will know about us. When you get into Germany, it's a bit less common. We are -- obviously, we've got people on the ground now. And so you tackle every country like that. And there's 1,500 plus banks in Germany. Then you go to Spain, and there's 4, 5 big ones. So you just have to get to know them. There were people and feet on the ground, that is helpful.

Got it. Got it. David, for my follow-up for you. Understanding, we're not going to be talking about PPP as sort of a cohort in fiscal '22. And I think you said it's about $13.5 million in revenue here in fiscal '21. Can you just kind of give us a sense for what kind of assumption is embedded in '22? I mean it's going to be a full year impact, but any assumptions around churn or maybe even cross-sell that we should sort of be thinking about, as we kind of think about that blending in with the rest of the total?

Yes. No, that sounds great. Nice talking to you Saket. So we ended the fourth quarter with $4.5 million in PPP revenues. That's the run rate looking out into the new -- in fiscal '22. And now as we exit out the year, we'll start seeing some of those fees being redeployed elsewhere within the bank. And that $4.5 million also includes any level of churn that we assume for the year. So it's not -- it doesn't end. It's not a cliff. Our PPP revenues continue into next year and gives us the opportunity to spin those seeds elsewhere and place in the bank to use them in some of the other segments.

We've already seen customers recontracting some of those seats, redeployed them. It's a great opportunity for them to actually drive efficiency in the broader small business lending market or use it for commercial as I see fit. So we're actually pleasantly surprised by how that is going.

Our next question comes from Brad Sills with Bank of America.

Great. And congrats on a nice bookings quarter. The backlog looked real nice. Wanted to ask, one of the comments you made, Pierre, was -- that stood out is 50% of the pipeline is international now. U.K. and Ireland is where you've been strong in the past. And you mentioned Germany, France or areas of Japan where you're investing. Should we take that to mean that those countries are contributing more to the pipeline at this point? Are they coming in? How challenging is it to build feet on the street? You mentioned that you're a bit behind on hiring there. But that pipeline suggest that perhaps you're efficient there with the feet on the street that you have. So just any comments, if you could follow-up on the hiring effort, how difficult it is to kind of address these new countries and at that makeup of 50%, how much of that is in these new countries?

Yes. So we've been very fortunate. We've now got feet on the ground, okay, in these countries. And it makes a difference. Because when a German living in Stuttgart calling on Germans or in Hamburg, it just -- it's different than me calling from London, okay? So we're beginning to see the impact of that, and that's in the pipeline. It's well-qualified deals. I've been personally on calls with some of these German customers. So that plus the IPA has been tremendously helpful. I've challenged the team to look at the reference account in each of these markets as we go forward in this year. And my team typically responds pretty well to these kind of challenges with just the competitive ones. So what I'm seeing is the pipeline growing, well-qualified deals, and we're overcoming the cloud resistance and people are going to believe. And so our goal is to see if we can get reference accounts in each of these markets.

That's great. And with the strong RPO backlog, could you help us unpack the land versus expand. How much of that growth is coming from land versus expand? Were you surprised to the upside on either? It sounds like both were strong. But just any color on that. And any color you can make on just the initial lands. Are you finding customers committing larger initial deal sizes, given the efforts you guys have made in broadening the footprint with nIQ and retail? Any comment on that would be great.

Yes. What I would say is fourth quarter characterized a return to the normal business pattern, which means the contract and activation schedules is coming back to normal. PPP, as we all know, was a distortion in first half of FY '21. And so what we're seeing now is it's normal contracts. As I mentioned earlier, the big banks could focus on strategic initiatives, and that's why we signed a larger number of those. So if you take those 2 factors and now the smaller banks are coming back, I'm seeing it after the year-end. But as you take those factors, those contracts were larger. They are thinking strategic, and that added to that RPO. Anything to add there, David?

No. That's, as you said, things are returning back to normal. I mean our plan is to -- our goal is to get into a customer and help them in any way we can, because we know we can upsell them once we get in. So those trends continue. And we did see a good level of activity from new customers in the fourth quarter as well.

Our next question comes from Fred Havemeyer with Macquarie.

I think -- I'd like to touch on something that you discussed in part already. But I'd like to ask about how to think about your post-pandemic pipeline? So between recent PPP demand or rather beyond that, could you roughly bucket the reasons that banks are looking at your platform between, say, improving business resiliency, better in customer experience, gaining efficiencies with software? Or generally, any other categories you would highlight is driving this demand.

I would say the biggest thing is probably digital transformation. There is now a heightened urgency for banks to understand that the current mode of operation will not make them competitive in the future, that they truly have realized that strategically, you cannot go on like today. And so many of these banks look at the different business segments, and they look at the competition out there, they look at the renewal efforts of software infrastructure and they say, what is coming down the pike? And it varies, then you look at these massive fintech players or the Amazons of the world and et cetera, coming to the market, okay? And they realize that the customer expectation because of COVID have just changed. The way they're going to interact is different. And so what we've convinced them effectively is that, look, if you want to participate in this future banking environment, connecting to third parties, driving efficiency, be much more customer friendly, et cetera, and have a more fintech experience for your end customer, all of that combined is driving an urgency in the banking community to understand. If you want to survive, you're going to operate different. And that's what I'm seeing in every conversation I talked to. And we even -- we talk about -- to CEOs of banks about this whole concept of embedded banking, which, by the way, it's not that strange. If you buy a car today, you rarely go to the bank to get a loan before you buy the car. You go to the car dealership. And you get your loan right there. That's embedded banking. That happens in mortgages. There's a whole ecosystem of mortgage brokers out there, okay? These companies we partner with that. We'll do that in the construction environment now, like both. So there's a number of these players that's out there that's connecting to us, and us creating an ecosystem where the banking services get pushed out there into third parties. And the bankers understand that's how consumers consume financial services, and they have to get the infrastructure in place to do that.

And then if I can get one follow-up question here as well. You've already called out a very strong new business quarter and it also looks like we had a very strong collections quarter as well between positive free cash flow and also deferred revenue growing about 51% year-over-year, it looks like. So I'd like to ask, what is driving this? And how do you see this growth reflecting in the underlying dynamics of your business?

Yes. So as we've talked about in the past, our strongest billing quarters are the Q4 and Q1. So our cash flows will trail in the third and fourth quarters. And really, we had a very strong cash flow year because of PPP, we had cost savings in travel and conferences. So that -- very pleased with the cash flows for the year. But we will continue to spend next year. And as mentioned in the prepared remarks, we plan on burning some cash in the coming year around those investments.

Our next question comes from Brian Peterson with Raymond James.

Congrats on the really strong RPO number in the fourth quarter results for the year. So 2 questions for me. So first, Pierre, I know you don't manage to the SAM per se. And I know we can segment it by geo or by product. But I'm curious, the $2 billion incremental SAM, that's a pretty big number. So as we're thinking about the cadence of new products that you're adding to the platform, how should we think about that? Is that organic? Is that through M&A? What do you think this SAM could be 5 to 10 years from now?

Yes. So look, to me, the holy grail of this whole thing was to both an architecture and infrastructure, of something that is client-centric and fits together. And I've got many competitors who's actually a Frankenstein, bought a bunch of companies and put them in a bucket and tell you, you can buy all this from me, okay? So we were very focused forever and even now in taking that approach. That's why we're building all these different product lines of retail, account opening, commercial, et cetera, small business. As I mentioned before, we always look at the market. We look at great companies that we feel we can plug-in specifically in the nIQ arena and some we built. So if you look at Portfolio Analytics, that's a company we acquire. They have great domain expertise that applies to the global market. And then we build automated spreading from that, okay? Then the second one in nIQ is the whole analytics platform, which is we built a company in Salt Lake City, or we bought one. And now we're taking that platform, and we're building it out and we've got Portfolio Analytics going on there. And then we decided based on those 2 pieces of infrastructure, we can actually build our own commercial pricing platform, okay? And if you take those 3, we've looked at what the upsell capability in our bank is and what the market will price at. And that's how we got -- if you look at the total global market and you apply that upsell, we have realized now, we feel pretty good about a $2 billion. And so then as we mature those products and we decide to either acquire a product to put in there or to build it organically, that will actually add to the SAM. So if you ask me, there's a tremendous opportunity to expand the SAM. But what I've learned in my life with software business is, I don't want to be too soon and too wide. I would rather be a market leader in all my segments I address because business just comes easier your way that way. If you become the safe choice, you become the place that people just buy from because it works. It's well known. I've got people moving around between banks, and they say, nCino is a great company to work with. So I'm not so hellbent on continuing to grow that SAM in the short-term because I want to capture more of the SAM. And then as we get to a point where we believe there's an opportunity, we can expand it again.

Right. Understood. Okay. Great, Pierre. And so David, I just want to clarify, there were some mentions on the call of adding some more specialized sales reps. I'm curious, how should we think about the impact of that? Is that more on upsell? We'd see that more purchasing more in the platform or would see that in bigger lands? I don't know the size of that investment, but just curious how we should be thinking about the impact there.

Yes. So we're adding specialized people to help us on retail and nIQ in the Americas. And really because the retail is such a big product, and it is different than commercial. We need specialists to go out and help talk to our customers how they talk on retail. And the same thing with nIQ. It's specialized analytics, spreading and commercial pricing. So we have to be able to go in and talk to customers and be the expert to help them make the decision on whether to buy us or not. It's a good size investment, and it just adds to the sales team and helps the sales team. But most of that specialization is in the U.S.

We talk many times about we compete with point solutions or specialized companies. So you have to realize that's the only thing they do, and they focus on that one thing. My head of sales at the front line, my account manager now has to go in and talk about a whole platform with a suite of products. And you can't expect that person to be a specialist on commercial, small business, retail lending, account opening, [indiscernible], trip, et cetera, all these regulations. So what you do is you have a layered sales approach. There's an account manager to fund only account relationship and actually understand the full extent of the account. And then we've got a layer behind them, which is self-support people. When they're on a specific opportunity, we bring the experts through the table and explain why we believe not only we have the best product, but we have the best platform. Because it's client-centric, and you can go across the enterprise with that solution.

We have time for one more question, and that question comes from Joe Vruwink with Baird.

Maybe pressing my luck with this question, but I was hoping to maybe get some rough guidepost on a midterm framework in thinking about subscription growth. So when I think about guidance for '22 being near 30% at the high end, obviously, we -- you saw a big step-up in the midterm RPO, and you have great visibility on activation schedules. So it doesn't seem like a big deceleration is imminent, particularly given the low levels of penetration within some of your existing accounts. But just any thoughts you might have on, perhaps, the 2- or 3-year kind of outlook for subscription growth?

Yes. Joe, we're not giving guidance beyond FY '22. However, I have challenged my team that when it comes to subscription revenue, and I want to emphasize subscription revenue, that we, as a team, should target to grow at 30% or exceed that. We can do it. The market is there. We've got the wherewithal. We've got the products. So as an internal challenge to my team, we should maintain or exceed that in the longer term. And that's where we stand as a management team and we agreed upon that.

I would now like to turn the call back over to Pierre Naude for closing remarks.

Well, thank you so much for all of you joining us today. We really appreciate this. As you can hear, we're excited about the business. We see a tremendous pipeline. We see an opportunity as the markets are opening up and we can start traveling. I think you're seeing that in our expense line. We plan to travel. There's nothing better than to go see a customer in person and actually convince them of your value proposition, especially on the international front. So we are excited, and we have -- appreciate your attention today.

This concludes today's conference call. Thank you for participating. You may now disconnect.