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Banking & Finance

NCino Reports Financial Information From First Public Quarter

By Jenny Callison, posted Sep 10, 2020
nCino marked its first quarter as a public company with reports of increased year-over-year revenues but also saw its operating losses increase. Because nCino’s IPO took place in mid-July of this year, its first quarter on the Nasdaq is the second quarter of 2020, ending July 31.

Revenues for the Wilmington-based banking software company during the quarter ended July 31 were $48.8 million, a 52% increase from $32 million in the second quarter of the previous year, according to the company’s report, released Wednesday. Subscription revenues for this year’s Q2 were nearly $39.5 million, up from just over $23 million a year ago. The nCino Bank Operating System is sold to financial institutions on a subscription basis for a specific term, typically 3-5 years.

The GAAP loss from operations in the second quarter was $15.7 million, almost twice the loss of $7.9 million of the previous year’s second quarter. GAAP net loss attributable to nCino was 17 cents per share compared to 11 cents per share in the second quarter of last year.

Non-GAAP operating loss, however, was considerably less, year-over-year: $1.6 million for the quarter ended July 31, 2020, compared with $5.3 million for the second quarter last year.

nCino’s cash and cash equivalents were $388 million as of the quarter’s end.

“We couldn't be more proud of where nCino is today, with over 1,100 financial institution customers worldwide ranging in assets from $30 million to more than $2 trillion, including institutions such as Bank of America, Barclays, Santander, Truist, ConnectOne Bank and Navy Federal Credit Union,” nCino CEO Pierre Naudé said in the earnings call Wednesday afternoon.
 
Officials pointed to several major accomplishments during the quarter, including signing an agreement with a $1.9 trillion global bank to expand that bank’s use of nCino’s onboarding system and enrolling a $450 billion global bank as a customer for its collateral management system.

nCino also successfully implemented its commercial lending product for a $145 billion U.S. agricultural lender.

nCino worked actively with banks navigating the Paycheck Protection Program (PPP), CFO David Rudow said during the earnings call.

“PPP forced banks to have a digital channel in a very short order to get up and running,” Rudow said, adding that the requirements of the COVID-19 loan program did what several years of sales efforts had not in terms of moving financial institutions to cloud-based digital systems. “And now everybody is a believer. So now it's about where do you deploy first, what business line do you get, et cetera.

"So it's not a matter of should we do it anymore, it's now a matter of when do we do this and [what] is the IT budget.”

Since April, nCino has helped financial institutions in the U.S. fund more than $50 billion in PPP loans under the CARES Act, Naudé noted. In Q2, the company expanded its efforts to help lenders manage the forgiveness portion of the loans they had made.

Internationally, nCino worked with banks in the United Kingdom to support that country’s Coronavirus Business Interruption Loan Scheme (CBILS).

“We believe the pandemic has dramatically demonstrated for financial institution executives that moving through a cloud environment can't just be part of their future roadmap: It's an immediate imperative,” Naudé said in the earnings call. “The size and prominence of the global financial institutions that are engaging with us today confirm that digital transformation in banking is happening and is accelerating. The strength of our pipeline is further evidence of this fact.”

nCino debuted on the Nasdaq exchange July 14 with its share price closing at about $92. Since then, the per-share price has fluctuated between about $70 to nearly $100. As of press time Thursday, it was trading at about $84.
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