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Banking & Finance

NCino Reports Strong Q1 Revenues, Raises Its Earnings Projections

By Jenny Callison, posted Jun 2, 2022
With better than 50% year-over-year increases in both total revenues and in subscription revenues, nCino officials remain firmly convinced the company will become revenue-positive in 2024.
 
Speaking at the company’s first-quarter of fiscal year 2023 earnings call Wednesday, nCino CEO Pierre Naudé said the company had experienced a “solid start to the year and a strong quarter,” based on which trends the company was raising its revenue outlook for this fiscal year, which will end Jan. 31, 2023.

Officials reported total revenues for the first quarter of $94.2 million, compared with $62.4 million in the first quarter of fiscal 2022, a 51% year-over-year increase. Subscription revenues for the first quarter were $79.2 million, up from $51 million one year ago, an increase of 55%. Subscription revenues come from fees clients pay to use nCino’s Bank Operating System (BOS).

These revenues include the results of SimpleNexus in the first quarter of fiscal 2023, as the acquisition was completed at the end of fiscal 2022. Organic subscription revenues, which exclude the revenues of SimpleNexus, were $65.6 million, a 29% increase from the first quarter of fiscal 2022.

“We are in a market-leading position with our software and we continue to see strong demand,” Naudé said. “We’re aware of business headwinds but most banks around the world are well-capitalized. They are seeing the value of our technology. We’re in a good position to grow and keep investing in our technology.”
 
First-quarter results showed positive results from nCino’s acquisition of SimpleNexus, with its cloud-based, mortgage lending software. SimpleNexus serves more than 300 independent mortgage banks (IMBs), more than 80 banks and credit unions, and more than 41,000 loan originators nationwide, according to the company.
 
Net new customers added during Q1 2023 for all SimpleNexus solutions increased 80% from the same quarter of fiscal 2022, according to nCino’s earnings release, which stated, “New customers added included top independent mortgage banks, such as AnnieMac Home Mortgage, as well as a growing mix of community banks.”
 
nCino’s operating losses increased year-over-year as the company continued to invest in the expansion of its BOS and in SimpleNexus. Generally accepted accounting principles (GAAP) loss from operations in the first quarter of fiscal 2023 was $27.2 million compared to $15.5 million in the same quarter of fiscal 2022. Nevertheless, based on trends they are seeing, officials are projecting higher revenues for the second quarter and for this fiscal year.
 
The second-quarter forecast is for total revenues of between $97 million and $98 million and subscription revenues of between $81.5 million and $82.5 million. For the entire fiscal year, officials are eyeing total revenues of between $401 million and $403 million, up from originally forecast revenues of between $398 million and $400 million.

Similarly, officials now envision subscription revenues for the year of between $341 million and $343 million, slightly higher than the earlier forecast of between $340 million and $342 million.

“Now, more than ever, financial institutions are looking for technology solutions that deliver meaningful [return on investment], increased efficiency and transparency, streamlined operations and faster turnaround times," Naudé said in the Q1 earnings news release. "We continue to see strong interest in both nCino’s and SimpleNexus’ cloud-based solutions for exactly these reasons."
 
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