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Banking & Finance

NCino Reports Increased Earnings, Higher Than Analyst Expectations

By Jenny Callison, posted Jun 1, 2023
Wilmington-based software firm nCino earned revenues of nearly $114 million during the first quarter of its fiscal year. (Photo courtesy of Trask Land)
nCino continued its path to profitability in the first quarter of its 2024 fiscal year. During the quarter, which ended April 30, nCino earned revenues of $113.7 million, a 21% increase from $94.2 million in the first quarter of fiscal 2023. Subscription revenues for the first quarter were $97.3 million, up from $79.2 million one year ago, an increase of 23%.

The quarterly earnings report was released Wednesday.

The Wilmington-based financial software company also pointed to its record free cash flow amount of $29.7 million, indicating that it has plenty of money to spend. And that will help support investments in new and improved products, CEO Pierre Naudé said in the earnings call Wednesday.

“Even as we focus on achieving our commitments around profitability and cash flow, we still expect to invest over $100 million in R&D this fiscal year. Innovation is at the heart of nCino's DNA,” he said.

Using Generally Accepted Accounting Principles (GAAP), nCino’s loss from operations in Q1 of fiscal 2024 was $8.6 million, a smaller loss compared to that of $27.2 million in the same quarter of fiscal 2023. Using non-GAAP calculations, which do not include non-recurring or non-cash expenditures, nCino’s operating income in Q1 of FY 2024 was on the positive side: $10.9 million as compared with a non-GAAP loss of $3.7 million in Q1 of fiscal 2023.
Likewise, the company said it had a loss of $.10 cents per share, calculated using GAAP. Non-GAAP calculations, adjusted for one-time gains and costs, showed positive earnings of $.07 per share.

nCino usually reports in non-GAAP terms but always, as required of public companies, reconciles its non-GAAP figures with corresponding GAAP indicators as part of its quarterly and annual reports.

Regardless, the company’s earnings beat analysts’ expectations, according to a summary from The Washington Post. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 5 cents per share. Revenues also exceeded analysts’ forecasts, which averaged about $112.5 million.

During the earnings call, Naudé gave a high-level review of nCino’s market share in the U.S. and Canada.

“Today, nCino's unique customer base represents over 50% of C&I [commercial and industrial] lending assets in the U.S., over 86% of all U.S. farm credit association assets, around 38% of all Canadian bank assets and 25% of all U.S. mortgage loans originated last year,” he said. “Our product roadmap is unique in that it can leverage the large data set afforded by our broad and diverse customer base to deliver an ever-increasing level of intelligence such as automated reviews and renewals, early warnings, automated credit decisions and pricing for even more loan products as we expand upon our nIQ offerings.”
 
The inroads nCino has made into the U.S. mortgage lending industry result from its acquisition of digital mortgage platform Simple Nexus in early 2022.
 
For its second quarter of fiscal 2024, nCino projects total revenues of between $114 and $115.5 million, subscription revenues of between $97.5 million and $98.5 million, and non-GAAP operating income of between $8 million and $9.5 million. Using non-GAAP measures, that would equal net income per share of between $.06 and $.08.
 
For the entire fiscal year, which ends Jan. 31, 2024, officials predict that revenues will total between $474 million and $478.5 million, with subscription revenues between $405 million and $409 million. It projects non-GAAP operating income of somewhere between $48 million and $52.5 million with non-GAAP per-share income of between $.37 and $.40.
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