nCino (NCNO, Financial) is enjoying a notable surge, up 17%, reaching one-year highs following its impressive Q4 (Jan) earnings report. Despite exceeding adjusted EPS expectations more significantly than in Q3 (Oct), its revenue slightly missed the mark. Additionally, the company's revenue outlook for Q1 (Apr) and FY25 didn't meet analyst predictions, highlighting some ongoing economic challenges.
Investors are reacting positively, buoyed by several positive updates from management. Notably, nCino experienced robust growth across all U.S. customer segments, with international demand far exceeding total revenue growth. The Q4 performance signals a shift back to normal purchasing patterns, especially among U.S. enterprise customers previously impacted by last year's regional banking crisis.
Highlights from nCino's Q4 include a significant earnings beat, with revenue up 13.3% year-over-year to $123.69 million. Key points of interest were:
- International revenue, which accounts for 20% of total revenue, soared by 48% year-over-year, underscoring nCino's successful global expansion efforts.
- The company is seeing significant traction with its AI products, marking major deals in both Auto Spreading and Portfolio Analytics outside the U.S.
- Despite economic uncertainties, stabilizing interest rates have led to a more positive customer outlook, with many ready to finalize pending deals, bolstering nCino's prospects for FY25.
- While nCino's FY25 revenue guidance was below expectations, partly due to a $31 million subscription revenue hit from increased churn, the company anticipates a return to normal churn levels as the mortgage market stabilizes.
nCino has navigated through various challenges within the financial services sector, from a liquidity crisis in March 2023 to record-high mortgage rates in October. With the landscape improving and AI opportunities expanding, nCino is poised for further growth.
