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NCino Beats Analyst Expectations, Reflects On NSight Conference

By Audrey Elsberry, posted May 30, 2024
nCino announced its first quarter earnings Wednesday, which was followed by a call with investors where CEO Pierre Naudé spoke about subscription growth and nSight. (File photo)
nCino issued its first quarterly earnings report of its 2025 fiscal year Wednesday afternoon, beating analysts’ expectations in both revenue and earnings-per-share.
 
The Wilmington-headquartered cloud-based banking software company reported $128 million in total revenues, about $1.5 million more than Zacks Investment Research’s predicted revenue based on its analyst poll. The same goes for nCino’s 19-cent earnings-per-share, which beat analysts’ predictions by about 5 cents for for the first quarter, the three-month period ending April 30.
 
Wednesday’s earnings call, featuring nCino CEO Pierre Naudé and CFO Greg Orenstein, covered subscription growth, results from nCino’s annual investor conference and financial institutions’ AI adoption. 
 
First-quarter subscription revenues were $110.4 million, up 13% year-over-year and representing 86% of total revenues, Naudé said during the call. He also noted that the company had the highest first-quarter gross sales in its history. Existing customers signed on for additional nCino products, he said, particularly customers in the U.S.

The company’s nSight conference was a big sales generator, Naudé said. nCino’s recent $75 million acquisition of DocFox, its commercial onboarding and deposit account opening solution, generated 100 sales leads at its conference booth alone.
 
nSight took place at the Charlotte Convention Center two weeks ago, attracting 1,600 attendees, Naudé said. Orenstein added that officials expect the conference to yield about $2 million in incremental sales and marketing expenses next quarter.
 
nCino’s recent acquisitions drew lots of attendee attention throughout nSight. Besides DocFox’s sales generation, Allegro, a $20 million all-cash “tuck-in technology purchase” nCino officials announced in April, also proved to be a topic of note.
 
Allegro is a consumer lending solution that nCino officials purchased from TruStage, a mutual insurance company.
 
“In evaluating the build, partner, buy decision to solve for indirect lending, we decided the most efficient way to accelerate development for the specialized vertical was to acquire the technology from a valued partner in the credit union space, TruStage Financial Group,” Naudé said about the purchase.
 
nCino’s Banking Advisor products, which use generative AI to automate deal and credit memos, interpret policies, organize documents and analyze PDFs, generated some hubbub from nSight attendees, Naudé said.
 
“Our customers are so excited by this breakthrough technology that we actually got reprimanded by the fire marshal for overcrowding at the nSight Banking Advisor booth,” he said.
 
Automation was one of the company priorities officials outlined in last quarter’s earnings call. nCino’s ability to help modernize the operations of financial institutions is key to its success in the market, Naudé said.
 
In an internal poll, Naudé said 72% of executives reported an increase in IT budgets. Now that financial institution officials are feeling stabilization in the market, they are more likely to seek out ways to remain competitive and win business, which is manifesting in more technology spending, he said.
 
The woes of a higher-for-longer rate environment are still affecting nCino’s independent mortgage bank customers, according to company officials. Naudé said the mortgage market has been difficult for the past few years. Mortgage lenders are looking to use technology to gain profitability, creating an opportunity for nCino’s products. But interest rates will affect mortgage volumes, he said, and it is difficult to determine when the next cut will be and how that cut will affect volumes.
 
The company’s revenue growth rate, 13% year-over-year, was impacted by an increase in churn last year. The revolving customer base is particularly notable in the independent mortgage bank customer segment, Orenstein said. However, he added the churn moderated in the first quarter.
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