Many financial indicators of nCino’s operations have been up, according to the company’s fourth-quarter and year-end earnings report Tuesday. Those indicators include expenses as well as income.

“We are pleased that in Q4, we once again exceeded expectations,” nCino’s chairman and CEO Pierre Naudé said during the earnings call Tuesday afternoon. “Total revenues grew 46%, and we posted another profitable quarter on a non-GAAP basis, $5 million better than the midpoint of our non-GAAP operating income guidance.

Total revenues were $109.2 million in the fourth quarter, an increase of 46% year-over-year and $408.3 million for fiscal year 2023 as a whole, an increase of 49% year-over-year.

nCino reported fourth-quarter revenue from subscriptions – users of the Wilmington-based financial technology company’s Bank Operating System – increased year-over-year by 48%, from $62.8 million as of Jan. 31, 2022, to $92.8 as of Jan. 31: the end of nCino’s FY 2023. Yearly subscription income rose about 53%: from about $224.9 million at the end of FY 2022 to nearly $344.8 million at the end of FY 2023. Organic subscription revenues were $77 million for the fourth quarter and $285 million for the full year, representing 30% and 29% growth year-over-year, respectively.

Revenue from professional services and other sources also increased when compared to the previous year’s fourth quarter and year as a whole. Those increases were roughly 35% and 30%, respectively.

Using non-GAAP measures, nCino's Q4 represented a second successive quarter of positive operating income, another step on its way to profitability.

Naudé expressed optimism about the company’s ability to steer away from more dangerous shoals, especially considering the global impact on banks from high inflation and a slump in mortgage activity. During FY 2023 nCino acquired and integrated the online mortgage platform SimpleNexus.

“We improved our full-year loss by $32 million compared to the midpoint of the guidance we provided at the beginning of the year,” Naudé said. “I'm proud of the team's successful execution toward accelerating our path to profitability, which we first committed to during the second quarter last year.”

One Q4 expense was the severance packages for the nearly 120 employees nCino let go in January. Company spokeswoman Kathryn Cook said at the time that the packages were generous.

“Every departing employee had a minimum three-month [wage] severance, with health coverage for three months and accelerated vesting until August,” she said.

The difficult mortgage market made SimpleNexus’ fourth-quarter performance especially impressive, Naudé said Tuesday.

“The team had its largest sales quarter ever, including signing three of the largest initial deals in its history,” he said. “We again increased market share, which will be particularly valuable as mortgage demand rebounds.”

Naudé prefaced his earnings remarks by addressing the most recent banking turmoil after the failures of Silicon Valley Bank and Signature Bank, both of which were nCino customers.  

“These financial institutions collectively represented less than 2% of the company's total revenues in the third quarter of fiscal year 2023,” Naudé said. “That was true for the fourth quarter as well.”

With the holdings of both banks currently in the hands of bridge banks and with buyers lined up to acquire them, any payments due to nCino are assured, he continued. However, neither of the acquiring banks – First Citizens Bank and New York Community Bank – is an nCino customer.

Over much of the fiscal year, nCino’s bottom line was affected by what the company termed “macro uncertainty” – first in Europe and then in Q4 in North America as well. That uncertainty led to slower sales cycles and greater scrutiny of transactions.

“The good news is that we saw some deals that were delayed in Europe last year get signed in Q4,” Naudé said. “The reality is that banks need to digitally transform. That was true when we started nCino and it's even more relevant today. In order to thrive, financial decisions must provide the personalized customer experience and ease of use of a fintech while benefiting from a bank's lower cost of capital. The health of our pipeline only reinforces that banks are embracing this view.”

Clarification: This version updates the story to state that nCino experienced two successive quarters of positive cash flow, its entry into profitable operations.