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Cloud banking solutions provider nCino Inc. surprised investors with a sneak peek at its upcoming earnings report Tuesday, revealing that revenue and income exceeded the cautious guidance it provided last month.
Shares in nCino hit an all-time low on April 2, the day after the company reported an $18.6 million fourth quarter net loss despite growing revenue by 14 percent from a year ago, to $141.4 million.
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Company executives issued guidance for Q1 last month predicting:
- Total revenue of between $138.75 million and $140.75 million.
- Subscription revenue of between $121.75 million and $123.75 million.
- “Non-GAAP” operating income between $22.5 million and $24.5 million.
Preliminary financial results for the first quarter ended April 30, 2025, “exceed the top end of previously disclosed financial guidance ranges for total revenues, subscription revenues, and non-GAAP operating income,” the company announced Tuesday, without providing further details.
Ncino will report first quarter results after the market closes on May 28. Shares in nCino, which in the last 12 months have traded for as little as $18.75 and as much as $43.20, gained 4 percent Tuesday to close at $25.81.
Non-GAAP financial measures exclude factors like acquisition-related expenses and stock-based compensation. The company also provides GAAP measures that follow Generally Accepted Accounting Principles (GAAP) as required by securities regulators.
In a May 9 annual report to security holders, nCino said the company’s unrecognized compensation expenses related to non-vested stock-based compensation totaled $145.7 million as of Jan. 31. Those costs are expected to be recognized over the next three years, as shares granted to executives and employees vest.
In notifying shareholders of the company’s upcoming annual meeting on June 18, nCino detailed past compensation of top executives including former CEO Pierre Naudé, and Chief Product Officer Sean Desmond, who succeeded Naudé as CEO on Feb. 1.
Stock awards to top executives
Compensation of top nCino executives during the fiscal year ending Jan. 31, 2025. Source: nCino regulatory filing.
The company’s five top executives — Naudé, Desmond, Chief Financial Officer Greg Orenstein, Chief Legal Officer April Rieger and former president Josh Glover — have been granted $49.8 million in restricted stock awards over the last three years.
Naudé’s compensation has included $21.6 million in stock awards during that period, including $7.47 million in fiscal year 2025, which ended on Jan. 31.
Although Naudé, 66, is no longer CEO, he is still employed by the company as executive board chair. His son, Pierre W. Naudé, and daughter, Petra Sheaffer, are also nCino executives.
As senior manager, product management, the younger Naudé earned $360,000 last year, including restricted stock grants valued at $154,000.
Sheaffer was paid $506,000, including $299,000 in restricted stock grants, for her role as associate director, technical partner relationship manager.
Excluding the senior Naudé, the median annual compensation of all 1,832 nCino employees as of Jan. 31 was $112,179, meaning the CEO was paid 76 times as much, the company disclosed.
Ncino offers an employee stock purchase plan that lets rank-and-file workers buy shares in the company for 85 percent of their fair market value.
At launch in 2020, the program authorized the company to issue a total of up to 1.8 million shares for sale to participating employees, a number that automatically increases each year. As of Jan. 31, 5.48 million shares of nCino common stock remained available for employees to purchase.
NCino, which raised $268.4 million in a July 2020 initial public offering, on April 1 announced plans to repurchase up to $100 million of the company’s outstanding common stock.
Growing revenue in search of profits
Ncino revenue and net losses, fiscal years 2021-2025 ending Jan. 31. Source: NCino regulatory filing.
Since launching in 2011, Wilmington, North Carolina-based nCino has racked up $385.3 million in cumulative losses.
The company, whose clients include independent mortgage banks Synergy One Lending and Fairway Independent Mortgage Corp., has grown revenue in part through strategic acquisitions of SimpleNexus, DocFox, FullCircl, Integrated Lending Technologies (ILT), Visible Equity and FinSuite.
In some cases, nCino will issue restricted stock to key employees of companies that it acquires in an effort to incentivize them to stay.
Last year the company paid $74.3 million in cash to acquire DocFox. But it also issued 198,505 restricted stock units in nCino to certain DocFox employees valued at $6.1 million. The stock grants, which will vest over four years if the employees continue to work for nCino, were recorded as stock-based compensation after the acquisition.
On nCino’s April 1 earnings call, Desmond said 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.
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