• Total Revenue: $141.4 million in Q4, up 14% year-over-year; $540.7 million for fiscal '25, up 13% year-over-year.
• Subscription Revenue: $125 million in Q4, up 16% year-over-year; $469.2 million for fiscal '25, up 15% year-over-year.
• Organic Subscription Revenue: $118.3 million in Q4, up 10%; $456.9 million for fiscal '25, up 12% year-over-year.
• Professional Services Revenue: $16.4 million in Q4, up 1% year-over-year; $71.5 million for fiscal '25, up 7% year-over-year.
• Non-US Total Revenue: $33.3 million in Q4, up 34% year-over-year; $116.2 million for fiscal '25, up 30% year-over-year.
• Non-GAAP Operating Income: $24.4 million in Q4, 17% of total revenues; $96.2 million for fiscal '25, 18% of total revenues.
• Non-GAAP Net Income: $13.9 million in Q4, $0.12 per diluted share; $76.1 million for fiscal '25, $0.66 per diluted share.
• Free Cash Flow: Negative $10.4 million in Q4; $53.4 million for fiscal '25.
• Remaining Performance Obligation (RPO): $1.2 billion as of January 31, 2025, up 15% year-over-year.
• Annual Contract Value (ACV): $516.4 million as of January 31, 2025, up 13% year-over-year.
• ACV Net Retention Rate: 106% in fiscal '25, up from 102% in the prior year.
• Subscription Revenue Net Retention Rate: 110% in fiscal '25, down from 116% in fiscal '24.
• Total Churn: $26 million in fiscal '25, down from $31 million in fiscal '24.

• Warning! GuruFocus has detected 3 Warning Sign with NCNO.

Release Date: April 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ncino Inc (NASDAQ:NCNO) reported a 14% year-over-year increase in total revenues for the fourth quarter, reaching $141.4 million.
• Subscription revenues grew by 16% year-over-year in the fourth quarter, indicating strong demand for Ncino's offerings.
• The company has made strategic acquisitions, such as Sandbox Banking, which are expected to deliver accretive subscription revenue growth and reduce implementation timelines.
• Ncino Inc (NASDAQ:NCNO) is focusing on AI-driven solutions, which have already shown significant efficiency gains for customers, such as reducing complex banking processes from days to seconds.
• The company has a broad and diverse customer base across more than 20 countries, providing a competitive moat that is difficult for competitors to match.

Negative Points

• Ncino Inc (NASDAQ:NCNO) faced challenges with sales execution and sense of urgency in certain international markets, particularly Europe.
• The company's fiscal '26 revenue outlook is below expectations due to compounding headwinds and challenges in new bookings momentum.
• There were delays in the integration of acquired technologies, such as the DocFox acquisition, which impacted customer onboarding decisions.
• The company experienced higher churn in fiscal '25, with total churn amounting to $26 million of annualized subscription revenues.
• Ncino Inc (NASDAQ:NCNO) has faced macroeconomic headwinds, such as the rapid rise in interest rates and liquidity crises, which have dampened sales momentum and new bookings growth.

Q & A Highlights

Q: Sean, what are you hearing from customers about their willingness to invest in 2025, especially considering the implied organic growth for fiscal '26? A: Sean Desmond, CEO: Customers acknowledge current market volatility but are optimistic as they move past previous headwinds like the liquidity crisis and inverted yield curve. They report healthy balance sheets and expect growth in loan portfolios, deposits, and EPS, aligning well with nCino's value proposition for efficiency improvements.

Q: Greg, can you explain the difference between ACV and revenue growth rates for fiscal '26? A: Gregory Orenstein, CFO: Revenue growth is a lagging indicator, while ACV growth is a leading indicator. The ACV accelerated by 8% on a constant currency basis in fiscal '25. Revenue growth is impacted by factors like FX headwinds, conservative mortgage business guidance, and a change in guidance philosophy to be more conservative.

Q: What is driving the increased go-to-market investments, and does this indicate a lack of sales capacity? A: Sean Desmond, CEO: The investments are to solidify the internal team across sales, product, marketing, and customer success. New leadership in EMEA, a dedicated credit union team, and strengthened mortgage leadership are part of the strategy to reaccelerate growth. The market opportunity and easing headwinds justify these investments.

Q: Can you discuss the ACV growth outlook and why it isn't higher than the 9% constant currency growth seen in FY25? A: Sean Desmond, CEO: Revenue is a lagging indicator of bookings. The maturity of solutions, integration of acquisitions like DocFox and FullCircl, and consumer lending opportunities provide upside potential. Personnel changes and international opportunities are expected to drive bookings growth.

Q: How do you view the competitive positioning in the US mortgage market, and what are your win rates? A: Gregory Orenstein, CFO: nCino feels confident in its competitive positioning, especially with recent investments to target upmarket opportunities. The company continues to win market share and added 24 new IMB customers last year, indicating strong positioning despite a challenging market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.