nCino Reports First Quarter Fiscal Year 2024 Financial Results

Written by Customer Service on May 31, 2023. Posted in Earnings Releases And Operating Results.

• Total Revenues of $113.7M, up 21% year-over-year
• Subscription Revenues of $97.3M, up 23% year-over-year
• Cash from Operating Activities of $31.3M and GAAP Loss from Operations of $(8.6)M
• Company Achieves Record Free Cash Flow of $29.7M and Record Non-GAAP Operating Income of $10.9M

WILMINGTON, N.C., May 31, 2023 (GLOBE NEWSWIRE) — nCino, Inc. (NASDAQ: NCNO), a pioneer in cloud banking for the global financial services industry, today announced financial results for the first quarter of fiscal year 2024, ended April 30, 2023.

“We are pleased to begin the year reporting a strong quarter with record operating income and free cash flow,” said Pierre Naudé, Chairman and Chief Executive Officer of nCino. “I’m incredibly proud of how our teams continue to deliver for our customers around the globe. The record number of attendees earlier this month at our annual user conference, nSight, is a testament to the ongoing demand for nCino’s single end-to-end cloud banking platform and the value of our ecosystem. We remain confident in our future trajectory while navigating current market conditions and believe we are well positioned for long-term profitable growth.”

Financial Highlights

Revenues: Total revenues for the first quarter of fiscal 2024 were $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%.
Income (Loss) from Operations: GAAP loss from operations in the first quarter of fiscal 2024 was $(8.6) million compared to $(27.2) million in the same quarter of fiscal 2023. Non-GAAP operating income (loss) in the first quarter was $10.9 million compared to $(3.7) million in the first quarter of fiscal 2023.
Net Income (Loss) Attributable to nCino: GAAP net loss attributable to nCino in the first quarter of fiscal 2024 was $(11.2) million compared to $(30.7) million in the first quarter of fiscal 2023. Non-GAAP net income attributable to nCino in the first quarter was $8.0 million compared to a $(6.1) million net loss in the first quarter of fiscal 2023.
Net Income (Loss) Attributable to nCino per Share: GAAP net loss attributable to nCino in the first quarter of fiscal 2024 was $(0.10) per basic and diluted share compared to $(0.28) per basic and diluted share in the first quarter of fiscal 2023. Non-GAAP net income attributable to nCino in the first quarter was $0.07 per diluted share compared to a net loss of $(0.06) per basic and diluted share in the first quarter of fiscal 2023.
Remaining Performance Obligation: Total Remaining Performance Obligation (RPO) as of April 30, 2023, was $914.0 million, an increase of 1% from April 30, 2022. RPO expected to be recognized in the next 24 months was $622.6 million, an increase of 10% from April 30, 2022.
Cash: Cash, cash equivalents, and restricted cash were $103.5 million as of April 30, 2023.

Recent Business Highlights

Selected by a top-15 U.K. Mortgage Lender: Signed a top-15 U.K. mortgage lender for property lending on the nCino Bank Operating System, and renewed, extended, and expanded our relationship with a top-4 U.K. bank.
Small Business Go-Live with a Top-4 U.S. Bank: One of the largest U.S. banks has gone live with nCino for Small Business lending following successful initial deployments within commercial lending, with additional business line deployments are underway.
Signed Expansion Deals with two Top-25 U.S. Banks: Expanded relationships with two Top-25 U.S. banks to add customer portal and additional treasury onboarding users, respectively.
Hosted nSight 2023 with Record Attendance: Welcomed over 1,700 attendees to a sold-out user conference in Charlotte, N.C., representing 15 countries, over 320 financial institutions, and 29 sponsoring partners.

Financial Outlook
nCino is providing guidance for its second quarter ending July 31, 2023 as follows:

Total revenues between $114.0 million and $115.5 million.
Subscription revenues between $97.5 million and $98.5 million.
Non-GAAP operating income between $8.0 million and $9.5 million.
Non-GAAP net income attributable to nCino per share of $0.06 and $0.08.

nCino is providing guidance for its fiscal year 2024 ending January 31, 2024 as follows:

Total revenues between $474.0 million and $478.5 million.
Subscription revenues between $405.0 million and $409.0 million.
Non-GAAP operating income between $48.0 million and $52.5 million.
Non-GAAP net income attributable to nCino per share of $0.37 to $0.40.

Conference Call
nCino will host a conference call at 4:30 p.m. ET today to discuss its financial results and outlook. The conference call will be available via live webcast and replay at the Investor Relations section of nCino’s website: https://investor.ncino.com/news-events/events-and-presentations.

About nCino
nCino (NASDAQ: NCNO) is the worldwide leader in cloud banking. Through its single software-as-a-service (SaaS) platform, nCino helps financial institutions serving corporate and commercial, small business, consumer, and mortgage customers modernize and more effectively onboard clients, make loans, manage the loan lifecycle, and open accounts. Transforming how financial institutions operate through innovation, reputation and speed, nCino is partnered with more than 1,850 financial services providers globally. For more information, visit www.ncino.com.

Forward-Looking Statements:
This press release contains forward-looking statements about nCino’s financial and operating results, which include statements regarding nCino’s future performance, outlook, guidance, the assumptions underlying those statements, the benefits from the use of nCino’s solutions, our strategies, and general business conditions. Forward-looking statements generally include actions, events, results, strategies and expectations and are often identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans,” “seeks,” “estimates,” “projects,” “may,” “will,” “could,” “might,” or “continues” or similar expressions and the negatives thereof. Any forward-looking statements contained in this press release are based upon nCino’s historical performance and its current plans, estimates, and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent nCino’s expectations as of the date of this press release. Subsequent events may cause these expectations to change and, except as may be required by law, nCino does not undertake any obligation to update or revise these forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially including, but not limited to risks associated with (i) adverse changes in the financial services industry, including as a result of customer consolidation or bank failures; (ii) adverse changes in economic, regulatory, or market conditions, including as a direct or indirect consequence of higher interest rates; (iii) risks associated with the acquisition of SimpleNexus, (iv) breaches in our security measures or unauthorized access to our customers’ or their clients’ data; (v) the accuracy of management’s assumptions and estimates; (vi) our ability to attract new customers and succeed in having current customers expand their use of our solution; (vii) competitive factors, including pricing pressures, consolidation among competitors, entry of new competitors, the launch of new products and marketing initiatives by our competitors, and difficulty securing rights to access or integrate with third party products or data used by our customers; (viii) the rate of adoption of our newer solutions and the results of our efforts to sustain or expand the use and adoption of our more established solutions; (ix) fluctuation of our results of operations, which may make period-to-period comparisons less meaningful; (x) our ability to manage our growth effectively including expanding outside of the United States; (xi) adverse changes in our relationship with Salesforce; (xii) our ability to successfully acquire new companies and/or integrate acquisitions into our existing organization, including SimpleNexus; (xiii) the loss of one or more customers, particularly any of our larger customers, or a reduction in the number of users our customers purchase access and use rights for; (xiv) system unavailability, system performance problems, or loss of data due to disruptions or other problems with our computing infrastructure or the infrastructure we rely on that is operated by third parties; (xv) our ability to maintain our corporate culture and attract and retain highly skilled employees; and (xvi) the outcome and impact of legal proceedings and related fees and expenses.

Additional risks and uncertainties that could affect nCino’s business and financial results are included in our reports filed with the U.S. Securities and Exchange Commission (available on our web site at www.ncino.com or the SEC’s web site at www.sec.gov). Further information on potential risks that could affect actual results will be included in other filings nCino makes with the SEC from time to time.


nCino, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)

	January 31, 2023			April 30, 2023
Assets
Current assets
Cash and cash equivalents	$	82,036		$	98,136
Accounts receivable, net		99,497			81,229
Costs capitalized to obtain revenue contracts, current portion, net		9,386			9,370
Prepaid expenses and other current assets		16,274			22,899
Total current assets		207,193			211,634
Property and equipment, net		84,442			83,482
Operating lease right-of-use assets, net		10,508			9,426
Costs capitalized to obtain revenue contracts, noncurrent, net		18,229			16,792
Goodwill		839,440			838,924
Intangible assets, net		152,825			145,696
Investments		6,531			6,531
Other long-term assets		8,101			1,979
Total assets	$	1,327,269		$	1,314,464
Liabilities, redeemable non-controlling interest, and stockholders’ equity
Current liabilities
Accounts payable	$	11,878		$	11,082
Accrued compensation and benefits		22,623			10,500
Accrued expenses and other current liabilities		10,897			9,735
Deferred revenue, current portion		154,871			171,660
Revolving credit facility, current portion		—			15,000
Financing obligations, current portion		1,015			1,340
Operating lease liabilities, current portion		3,874			3,742
Total current liabilities		205,158			223,059
Operating lease liabilities, noncurrent		7,282			6,528
Deferred income taxes, noncurrent		2,797			2,478
Revolving credit facility, noncurrent		30,000			—
Financing obligations, noncurrent		54,365			53,796
Total liabilities		299,602			285,861
Commitments and contingencies
Redeemable non-controlling interest		3,589			3,184
Stockholders’ equity
Common stock		56			56
Additional paid-in capital		1,333,669			1,346,250
Accumulated other comprehensive income		694			818
Accumulated deficit		(310,341	)		(321,705	)
Total stockholders’ equity		1,024,078			1,025,419
Total liabilities, redeemable non-controlling interest, and stockholders’ equity	$	1,327,269		$	1,314,464


nCino, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited)

	Three Months Ended April 30,
		2022			2023
Revenues
Subscription	$	79,189		$	97,340
Professional services and other		15,022			16,332
Total revenues		94,211			113,672
Cost of revenues
Subscription		25,510			29,157
Professional services and other		14,792			17,031
Total cost of revenues		40,302			46,188
Gross profit		53,909			67,484
Gross margin %		57	%		59	%
Operating expenses
Sales and marketing		29,339			29,941
Research and development		29,115			28,195
General and administrative		22,686			17,975
Total operating expenses		81,140			76,111
Loss from operations		(27,231	)		(8,627	)
Non-operating income (expense)
Interest income		2			537
Interest expense		(638	)		(1,379	)
Other expense, net		(1,573	)		(782	)
Loss before income taxes		(29,440	)		(10,251	)
Income tax provision		563			1,393
Net loss		(30,003	)		(11,644	)
Net loss attributable to redeemable non-controlling interest		(344	)		(280	)
Adjustment attributable to redeemable non-controlling interest		1,029			(121	)
Net loss attributable to nCino, Inc.	$	(30,688	)	$	(11,243	)
Net loss per share attributable to nCino, Inc.:
Basic and diluted	$	(0.28	)	$	(0.10	)
Weighted average number of common shares outstanding:
Basic and diluted		109,998,637			112,032,536


nCino, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

	Three Months Ended April 30,
		2022			2023
Cash flows from operating activities
Net loss attributable to nCino, Inc.	$	(30,688	)	$	(11,243	)
Net loss and adjustment attributable to redeemable non-controlling interest		685			(401	)
Net loss		(30,003	)		(11,644	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		8,460			9,131
Non-cash operating lease costs		1,160			1,189
Amortization of costs capitalized to obtain revenue contracts		2,010			2,439
Amortization of debt issuance costs		40			46
Stock-based compensation		13,300			10,865
Deferred income taxes		210			332
Provision for bad debt		16			298
Net foreign currency losses		1,582			363
Change in operating assets and liabilities:
Accounts receivable		529			18,278
Costs capitalized to obtain revenue contracts		(2,161	)		(1,035	)
Prepaid expenses and other assets		(2,004	)		(1,238	)
Accounts payable		(2,317	)		(259	)
Accrued expenses and other current liabilities		(10,827	)		(13,227	)
Deferred revenue		22,444			16,755
Operating lease liabilities		(1,191	)		(990	)
Net cash provided by operating activities		1,248			31,303
Cash flows from investing activities
Acquisition of assets		—			(356	)
Purchases of property and equipment		(4,694	)		(1,605	)
Net cash used in investing activities		(4,694	)		(1,961	)
Cash flows from financing activities
Proceeds from borrowings on revolving credit facility		20,000			—
Payments on revolving credit facility		(20,000	)		(15,000	)
Payments of debt issuance costs		(364	)		—
Exercise of stock options		772			1,388
Principal payments on financing obligations		(150	)		(244	)
Net cash provided by (used in) financing activities		258			(13,856	)
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash		(1,142	)		593
Net increase (decrease) in cash, cash equivalents, and restricted cash		(4,330	)		16,079
Cash, cash equivalents, and restricted cash, beginning of period		88,399			87,418
Cash, cash equivalents, and restricted cash, end of period	$	84,069		$	103,497

Reconciliation of cash, cash equivalents, and restricted cash, end of period:
Cash and cash equivalents	$	78,684		$	98,136
Restricted cash included in prepaid expenses and other current assets		—			5,160
Restricted cash included in other long-term assets		5,385			201
Total cash, cash equivalents, and restricted cash, end of period	$	84,069		$	103,497

Non-GAAP Financial Measures
In nCino’s public disclosures, nCino has provided non-GAAP measures, which are measurements of financial performance that have not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. In addition to its GAAP measures, nCino uses these non-GAAP financial measures internally for budgeting and resource allocation purposes and in analyzing our financial results. For the reasons set forth below, nCino believes that excluding the following items provides information that is helpful in understanding our operating results, evaluating our future prospects, comparing our financial results across accounting periods, and comparing our financial results to our peers, many of which provide similar non-GAAP financial measures.

Amortization of Purchased Intangibles. nCino incurs amortization expense for purchased intangible assets in connection with certain mergers and acquisitions. Because these costs have already been incurred, cannot be recovered, are non-cash, and are affected by the inherent subjective nature of purchase price allocations, nCino excludes these expenses for our internal management reporting processes. nCino’s management also finds it useful to exclude these charges when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. Although nCino excludes amortization expense for purchased intangibles from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.
Stock-Based Compensation Expenses. nCino excludes stock-based compensation expenses primarily because they are non-cash expenses that nCino excludes from our internal management reporting processes. nCino’s management also finds it useful to exclude these expenses when they assess the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use, nCino believes excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies.
Acquisition-Related Expenses. nCino excludes expenses related to acquisitions as they limit comparability of operating results with prior periods. We believe these costs are non-recurring in nature and outside the ordinary course of business.
Litigation Expenses. nCino excludes fees and expenses related to litigation expenses incurred from legal matters outside the ordinary course of our business as we believe their exclusion from non-GAAP operating expenses will facilitate a more meaningful explanation of operating results and comparisons with prior period results.
Restructuring Costs. nCino excludes costs incurred related to bespoke restructuring plans and other one-time costs that are fundamentally different in strategic nature and frequency from ongoing initiatives. We believe excluding these costs facilitates a more consistent comparison of operating performance over time.
Income Tax Effect on Non-GAAP Adjustments. The income tax effects are related to the imputed tax impact on the difference between GAAP and non-GAAP costs and expenses.
Adjustment to Redeemable Non-Controlling Interest. nCino adjusts the value of redeemable non-controlling interest of its joint venture nCino K.K. in accordance with the operating agreement for that entity. nCino believes investors benefit from an understanding of the company’s operating results absent the effect of this adjustment, and for comparability, has reconciled this adjustment for previously reported non-GAAP results.

There are limitations to using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures provided by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by nCino’s management about which items are adjusted to calculate its non-GAAP financial measures. nCino compensates for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in its public disclosures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. nCino encourages investors and others to review our financial information in its entirety, not to rely on any single financial measure to evaluate our business, and to view our non-GAAP financial measures in conjunction with the most directly comparable GAAP financial measures. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables below.


nCino, Inc. RECONCILIATION OF GAAP TO NON-GAAP MEASURES (In thousands, except share and per share data) (Unaudited)

	Three Months Ended April 30,
		2022			2023
GAAP total revenues	$	94,211		$	113,672

GAAP cost of subscription revenues	$	25,510		$	29,157
Amortization expense – developed technology		(4,262	)		(4,251	)
Stock-based compensation		(376	)		(314	)
Restructuring charges		—			(18	)
Non-GAAP cost of subscription revenues	$	20,872		$	24,574

GAAP cost of professional services and other revenues	$	14,792		$	17,031
Amortization expense – other		—			(82	)
Stock-based compensation		(1,871	)		(1,629	)
Restructuring charges		—			(46	)
Non-GAAP cost of professional services and other revenues	$	12,921		$	15,274

GAAP gross profit	$	53,909		$	67,484
Amortization expense – developed technology		4,262			4,251
Amortization expense – other		—			82
Stock-based compensation		2,247			1,943
Restructuring charges		—			64
Non-GAAP gross profit	$	60,418		$	73,824

The following table sets forth reconciling items as a percentage of total revenue for the periods presented.¹
GAAP gross margin %		57	%		59	%
Amortization expense – developed technology		5			4
Amortization expense – other		—			—
Stock-based compensation		2			2
Restructuring charges		—			—
Non-GAAP gross margin %		64	%		65	%

GAAP sales & marketing expense	$	29,339		$	29,941
Amortization expense – customer relationships		(2,167	)		(2,168	)
Amortization expense – trade name		(604	)		(604	)
Stock-based compensation		(3,371	)		(3,211	)
Restructuring charges		—			(38	)
Non-GAAP sales & marketing expense	$	23,197		$	23,920

GAAP research & development expense	$	29,115		$	28,195
Stock-based compensation		(2,832	)		(3,000	)
Restructuring charges		—			(134	)
Non-GAAP research & development expense	$	26,283		$	25,061

GAAP general & administrative expense	$	22,686		$	17,975
Stock-based compensation		(4,850	)		(2,711	)
Acquisition-related expenses		(1,497	)		(211	)
Litigation expenses		(1,732	)		(1,145	)
Restructuring charges		—			(3	)
Non-GAAP general & administrative expense	$	14,607		$	13,905

GAAP loss from operations	$	(27,231	)	$	(8,627	)
Amortization of intangible assets		7,033			7,105
Stock-based compensation		13,300			10,865
Acquisition-related expenses		1,497			211
Litigation expenses		1,732			1,145
Restructuring charges		—			239
Non-GAAP operating income (loss)	$	(3,669	)	$	10,938

The following table sets forth reconciling items as a percentage of total revenue for the periods presented.¹
GAAP operating margin %		(29	)%		(8	)%
Amortization of intangible assets		7			6
Stock-based compensation		14			10
Acquisition-related expenses		2			—
Litigation expenses		2			1
Restructuring charges		—			—
Non-GAAP operating margin %		(4	)%		10	%

GAAP net loss attributable to nCino	$	(30,688	)	$	(11,243	)
Amortization of intangible assets		7,033			7,105
Stock-based compensation		13,300			10,865
Acquisition-related expenses		1,497			211
Litigation expenses		1,732			1,145
Restructuring charges		—			239
Income tax effect on non-GAAP adjustments		(3	)		(154	)
Adjustment attributable to redeemable non-controlling interest		1,029			(121	)
Non-GAAP net loss attributable to nCino	$	(6,100	)	$	8,047

Basic and diluted GAAP net loss attributable to nCino, Inc. per share	$	(0.28	)	$	(0.10	)
Weighted-average shares used to compute basic and diluted GAAP net income (loss) attributable to nCino, Inc. per share		109,998,637			112,032,536
Basic non-GAAP net income (loss) attributable to nCino, Inc. per share	$	(0.06	)	$	0.07
Weighted-average shares used to compute basic non-GAAP net income (loss) attributable to nCino, Inc. per share		109,998,637			112,032,536
Diluted non-GAAP net income (loss) attributable to nCino, Inc. per share	$	(0.06	)	$	0.07
Weighted-average shares used to compute diluted non-GAAP net income (loss) attributable to nCino, Inc. per share		109,998,637			114,027,584

Free cash flow
Net cash provided by operating activities	$	1,248		$	31,303
Purchases of property and equipment		(4,694	)		(1,605	)
Free cash flow	$	(3,446	)	$	29,698
Principal payments on financing obligations²		(150	)		(244	)
Free cash flow less principal payments on financing obligations	$	(3,596	)	$	29,454

¹Columns may not foot due to rounding.
²These amounts represent the non-interest component of payments towards financing obligations for facilities.

CONTACTS

INVESTOR CONTACT
Harrison Masters
nCino
+1 910.734.7743
Harrison.masters@ncino.com

MEDIA CONTACT
Kathryn Cook
nCino
+1 919.691.4206
Kathryn.cook@ncino.com

nCino Reports First Quarter Fiscal Year 2024 Financial Results

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