A：The impact of AI on Encino's business is reflected in the agent economy expanding the addressable market, outperformance against financial guidance, acceleration of ACV bookings, reacceleration of subscription revenue growth, and improvement in retention KPIs.

A：Keith Kittel has been hired as the new Chief Revenue Officer at Encino. He brings deep financial services, enterprise sales, large global company, and scaling expertise to the company.

A：The financial results for the fourth quarter and fiscal year 26 include total revenues of $149.7 million and $594.8 million, subscription revenues of $133.4 million and $523.1 million, and non-GAAP operating income of $34.7 million or 23% of total revenues, with non-GAAP net income attributable to Encino of $42.8 million or 37 cents per diluted share.

A：International total revenues were $32.9 million in the fourth quarter, down 1% year over year, and $131.5 million in fiscal 26, up 13% year over year. International subscription revenues were $28.4 million in the fourth quarter, down 4% in constant currency, and $109.5 million in fiscal 26, up 19% year over year and 5% organically.

A：For the first quarter of fiscal 27, the expectations include total revenues of $154.5 million to $156.5 million, subscription revenues of $137 million to $139 million, non-GAAP operating income of approximately $48 million to $50 million, and a free cash flow of $132 million to $137 million.

A：ACV is a leading indicator of future subscription revenue growth and showed an increase of 13% year over year in fiscal 26. The subscription revenue retention rate was 110% or 106% on an organic constant currency basis, reflecting growing demand for the company's products and solutions among customers and success in implementing an asset-based pricing framework.

A：For fiscal year 27, the forecasted results include net additions of $60 million to $65 million in constant currency and organic basis, ending ACV at $662.5 million to $667.5 million, total revenues of $639 million to $643 million, and subscription revenues of $569 million to $573 million. This represents growth of 8% and 9% respectively at the midpoint of the ranges, with the comparison showing year-over-year improvement from fiscal year 26.

A：The expectations for the fourth quarter include a revenue mix that suggests a Rule of 40 with around 10% subscription revenues growth, alongside growth in 30% non-operating income.

A：The company's renewed focus on execution discipline in pipeline growth and prioritization around demand generation and the marketing machine led to a larger pipeline and maintained healthy conversion rates, which continued into the new year.

A：The company's strategy is to maintain a balanced approach between different geographies, and there is significant momentum in the international business as highlighted in the call.

A：The greatest usage is across the credit reviews, which falls under the banking advisor's digital partner umbrella, with particular traction noted in credit monitoring and auto-suggest functionality. It is not specified how many customers are nearing the upper limit of their purchase credit allotment.

A：The adoption of banking advisor and genetic solutions is a company focus, with the executive leadership team prioritizing customer adoption by providing large enough blocks of intelligence units to help customers navigate the adoption curve and realize benefits.

A：AI integration is a key part of the strategy, and the company acknowledges the need for an architecture that supports AI capabilities without losing differentiation. The goal is to provide a unique differentiated experience through an agentic operating system.

A：AI has led to significant efficiency gains and cost savings, which are reflected in improved credit processes with speed improvements from days to minutes. The company plans to highlight these gains at an upcoming event and points out a direct correlation between AI units consumed and outcomes achieved by customers.

A：The new pricing model has exceeded internal plans and targets, and the company is proud of customer feedback and renewals. Strategies to retain customers include ancillary product attach and banking advisor usage, among others.

A：The consumption of incremental credits is expected to be gross margin accretive, improving margin efficiency for customers by enabling faster decision-making and allowing employees to focus on high-value activities, which in turn will flow through to the company's own gross margins.

A：The credit union initiative is a focus area with a dedicated team building relationships, understanding the credit union market's problems, and tailoring the company's value proposition to resonate with this space. There is good momentum, a growing pipeline, and plans to sell the entire platform to credit union customers.

A：The drivers of subscription growth outside of the mortgage category include a healthy sales momentum in the market, a balance and healthy credit union balance sheets, increased lending activity, and the contribution of AI technology to the company's products and services.

A：The expected organic growth rate for the upcoming quarter is 9% to 11% versus 9% to 10% for the full year. This suggests a deceleration in the growth rate compared to the full year forecast, which may reconcile with previous comments about the acceleration in subs growth tapering off.

A：When modeling mortgage revenue for the second and third quarters, one should take into account that mortgage comps will be tougher, which impacts the trajectory of growth.

A：Now is the right time to bring key things around sales because the sales team is executing phenomenally well, and the appointment of a global chief revenue officer is imminent to scale operations. The top priority for fiscal 27 is the appointment and integration of the new global chief revenue officer, Paul Clarkson, who will consolidate the global organization and work in partnership across North America, EMEA, and Asia PAC.

A：Keith is taking over from Paul Clarkson, who is stepping aside for personal reasons. Keith has a lot of experience in the areas of global operations and has been someone known to the network for a long time, both at Salesforce and at Alloy. He has a strong relationship with the customer base, deep knowledge of the vertical, and is a great cultural fit for the company.

A：Progress in mortgage sales cycles and market penetration includes learning from experiences as the company's mortgage solution expanded to some of the largest banks globally, with the top quartiles in the US using the platform. This naturally attracts peer attention and has led to inbound calls and forums at a higher level. The company has also gained traction in the community and regional bank space, as well as the credit union space.

A：The impact of platform pricing on ACV has been positive, with the transition underway for about three years. The company has learned something new from every deal, and the pricing transition started internally with customer testing. The largest customer by ACV has already renewed for a five-year deal on the new platform pricing model. The execution has exceeded expectations, and the company is pleased with the results.

A：The rule of 40 is achievable based on the ACV booked in fiscal 26, but it does depend on some new bookings. The company has a solid foundation from last year's bookings, which provides visibility, but new work has to be done in the current year. The company feels good about the plan and the excitement around AI entering this year.

A：The acquisitions have become foundational to the company's integration gateway, the MCP layer, and are shaping the company's strategy to become the 'agency operating system' for banks. The focus is now on commercial onboarding, which is expected to grow the company's offering in a strategic way. The integration work from the past fiscal year is now translating into opportunities for cross-selling to an expanding pipeline.

A：Bank CIOs are leaning into AI and Encino's platform across various financial institution sizes. There is a stronger appetite for pre-packaged solutions among smaller to midsize banks, while larger banks are engaging in experimentation with building their own agents. The company is seeing curiosity and experimentation within enterprises, with some banks asking to co-develop these agents. Encino's platform supports both approaches and offers a credit monitoring experience that is particularly popular.

A：Early renewals contributed positively to the strong ACD in the fourth quarter. The revenue impact of early renewals on the in-year ACV target was reflected in the renewal trajectory and momentum, which showed a constant currency organic growth from 102 to 112. Early renewals tend to consume more banking adviser or skills, and they double-click more on early renewal activity. The company views early renewal trends as a reflection of customer relationships and product breadth, which opens opportunities for discussions around AI and value addition.

A：When reconciling ACV performance, the following factors need to be taken into account: a portion of the ACV contributed to subscription revenue (sub revs) last year, the straight line requirement for increased pricing during a contract, churn experienced last year from the older fee-based pricing model, and the alignment of ACV and subscription revenue under the historic model. Additionally, mortgage overages do not fall into ACV, which is a significant delta to consider.

A：The time it takes to implement a large new customer varies, but with efforts to reduce implementation times, they are able to get customers live within time frames exceeding expectations. Specifically for large Japanese deployments, there is significant upfront preparation work and coordination required before deployment, which can elongate the time before an announcement can be made. Revenue recognition for platform pricing starts a month or two after contract signing based on the contract terms.

A：For fiscal 27, it is expected that the renewal mix for ACV base will be similar to the performance in fiscal 26. This expectation is based on historical contract lengths and accelerated renewal trends. The renewal cohort is expected to perform similarly, but it will not show a one-time step up in revenue as was seen in the previous year. This is due to the fact that the performance in fiscal 26 was the first year of this step up.

A：Encino works with regulators through hundreds of bankers who come from a banking background and have often sat side by side with regulators before software. This unique vantage point and understanding of regulatory requirements are critical when embedding AI within existing business processes, particularly in the banking vertical. Encino's data advantage, which has been accumulated over 14 years, provides an unparalleled view of capital flows through workflows in financial institutions, making it difficult for competitors to catch up. This data advantage is considered a significant competitive moat that could help prevent new companies from encroaching on Encino's market space.