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Shares in cloud banking solutions provider nCino Inc. briefly fell to an all-time low Wednesday after the company reported its fourth quarter net loss widened to $18.6 million despite having grown revenue by 14 percent from a year ago.
Tuesday’s earnings report — and the company’s guidance that revenue from its main business is expected to decline by as much as 7 percent this year — sent nCino’s share price plummeting 33 percent when markets opened Wednesday.
Shares in nCino, which in the past 12 months had changed hands for as much as $43.20 and as little as $27.29, bottomed out at $18.75 Wednesday morning before rebounding above $23 in the afternoon — but not before surpassing the previous all-time intraday low of $19.58 seen in March 2023.
The $37.9 million net loss for the year ending Jan. 31 was an improvement from $42.3 million and $102.7 million losses in 2023 and 2022. But NCino — whose clients include independent mortgage banks Synergy One Lending and Fairway Independent Mortgage Corp. — has racked up $385.3 million in cumulative losses since launching in 2011.
NCino, which raised $268.4 million in a July 2020 initial public offering, attempted to reassure shareholders in a separate announcement Tuesday that it plans to repurchase up to $100 million of the company’s outstanding common stock.
On his first earnings call since succeeding Pierre Naudé as CEO in February, nCino President and CEO Sean Desmond said he’s excited about the potential for the company’s investment in AI to drive future growth but acknowledged that the company’s bottom line has suffered as its customers were “significantly impacted by macroeconomic headwinds” beyond the company’s control.
“This is an extraordinary time for nCino and with the vertical AI opportunity, there has never been more excitement in this intersection of technology and banking,” Desmond said.
But Desmond said nCino took longer than it had hoped to bring a consumer lending product to market and to integrate intellectual property acquired from DocFox last year into its platform.
Sean Desmond
“Since our IPO in 2020, we have delivered strong revenue growth, significantly increased our operating margin, expanded our customer base, extended our geographic presence, and built out the breadth and depth of our solutions,” Desmond told investment analysts. “But while our scale has increased, I don’t believe our execution has kept pace with the full extent of the market opportunity.”
Originally founded within a bank to improve the company’s operations and client service, Wilmington, North Carolina-based nCino has grown through strategic acquisitions of SimpleNexus, DocFox, FullCircl, Integrated Lending Technologies (ILT), Visible Equity and FinSuite.
But Desmond suggested that nCino’s most recent acquisition — of Boston, Massachusetts-based integration technology provider Sandbox Banking for $52.5 million in February — is likely to be its last for now.
“Sandbox Banking is a highly strategic acquisition that reaches far beyond core integration capabilities,” Desmond said. “NCino customers will quickly realize the benefit of customer data alignment and system operability with a unified API layer and integration hub for the platform. I am also energized by the AI-first culture and DNA of the talent that accompanies these acquisitions.”
While nCino will continue to be alert to potential future and acquisitions, the focus in the year ahead “will be on realizing the planned synergies and expected investment returns from these completed transactions as opposed to pursuing any additional M&A,” Desmond said.
NCino, whose more than 1,800 employees provide cloud-based “software-as-a-service” (SaaS) solutions and professional services to more than 2,700 companies worldwide, brought in $141.4 million in revenue for the quarter ending Jan. 31, compared to $123.7 million during the same quarter a year ago. Although the company brought in less revenue a year ago, it was able to post a rare $1.2 million profit for the quarter ending Jan. 31, 2024.
Company executives issued guidance Tuesday that revenue is expected to decline during the current quarter, to between $138.7 million and $140.7 million.
After growing revenue for the year ending Jan. 31 by 13 percent, to $540.7 million, nCino said it expects revenue to grow by no more than 7 percent in the year ahead, to between $574.5 million and $578.5 million. Revenue from the company’s biggest business — cloud-based banking and mortgage software as a service — is projected to decline.
Mortgage subscription revenue flat
Source: April 1, 2025, nCino investor presentation.
Almost 90 percent of nCino’s revenue comes from subscriptions to its cloud-based services, which totaled $124 million in the quarter ending Jan. 31 and $541 million for the year.
NCino said it expected subscription revenue of between $121.75 million and $123.75 million for the current quarter (which ends April 30), and that full-year subscription revenue for the year ending Jan. 31, 2026, will decline to between $503 million and $507 million.
While subscription revenue for services other than mortgage has consistently posted double-digit gains, nCino’s business with U.S. mortgage lenders shrank from $21 million in Q3 to $18 million in Q4 — about where it was a year ago.
Greg Orenstein
“In light of the uncertainty around the path of mortgage rates in the U.S., our guidance for fiscal ’26 assumes no year-over-year increase in U.S. mortgage subscription revenues,” nCino Chief Financial Officer Greg Orenstein told investor analysts Tuesday. “Any growth in this business, including growth in loan volume overages, would be upside to our numbers.”
Asked if Rocket Companies’ plans to acquire real estate brokerage Redfin and loan servicing giant Mr. Cooper will impact nCino’s business, Desmond said those deals could be a sign of better things to come.
“We understand they’ve been busy on the acquisition front and there may be some consolidation in that space, indicating that people are preparing for good news on the rate side over time,” Desmond said. “But we believe that we’re firmly entrenched in the IMB [independent mortgage bank] space, serving that market, and very focused with our mortgage solution and don’t see that as an impediment to our market share.”
Looking beyond the company’s guidance for the year ahead, Orenstein said that based on the company’s current trajectory, nCino executives are confident that they are on track to achieve the “Rule of 40” — a metric used to gauge the performance of SaaS companies — during the quarter ending Jan. 31, 2027.
“We believe the returns on our investments in sales and marketing and the product innovation we are bringing to market this year, coupled with the cost efficiencies we expect to achieve in our R&D organization by leveraging AI and through other organizational efficiency initiatives, will be instrumental in achieving this,” Orenstein said. “While the exact timing may vary by a quarter or two based on market conditions and investment opportunities, you should be confident that we are laser-focused on ensuring that we achieve the Rule of 40 in a sustainable and disciplined manner.”
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