Summary
nCino reported second quarter fiscal 2024 revenue of $117.2 million, up 17.7% from the prior-year quarter. Gross profit rose 18.5% to $69.2 million, and gross margin was 59.0%, up 0.4 percentage points from a year earlier. The GAAP operating loss narrowed to $14.8 million, and operating margin improved to -12.6%, up 12.5 percentage points. Net loss attributable to nCino narrowed to $15.9 million. Diluted loss per share improved to $0.14.
The non-GAAP picture was positive. Non-GAAP operating income was $11.2 million, compared with a non-GAAP operating loss of $2.8 million in the prior-year quarter. Non-GAAP net income attributable to nCino was $9.9 million, compared with a non-GAAP net loss of $4.9 million a year earlier. Non-GAAP diluted net income per share was $0.09, compared with a non-GAAP loss of $0.04 per diluted share.
Operating cash flow was $12.0 million in the quarter, up 26.3%, and capital expenditures were $0.9 million, down 81.4%. Deferred revenue, current portion, was $169.3 million, up 11.7% from the prior-year quarter. Remaining performance obligations were $928.6 million, up 2.3%. For the six months ended July 31, 2023, operating cash flow was $43.3 million, up 303.6% from the prior-year period. Capital expenditures for the six months were $2.5 million, down 73.5%.
nCino signed several notable deals in the quarter. It signed its first customer in the Middle East, working with Accenture, as one of the largest banks in the UAE selected nCino for corporate, commercial, and private banking services. It added a greenfield top-10 bank in Australia for commercial lending and Commercial Pricing Profitability. It also signed a significant expansion deal with a top-10 U.S. mortgage lender, expanding its relationship with its largest mortgage point-of-sale customer. The company renewed and expanded a 5-year agreement with an enterprise bank in the Netherlands. As of July 31, 2023, nCino had 239 sales and sales support personnel in the U.S. and 71 outside the U.S. Its customer base exceeds 1,850 financial institutions. International revenue was 18.7% of total revenues for the quarter and 17.8% for the six months.
Guidance points to continued momentum. For the third quarter ending October 31, 2023, nCino guided non-GAAP operating income to $13.0 million to $15.0 million and non-GAAP net income per share to $0.10 to $0.12. For the full fiscal year 2024 ending January 31, 2024, the company guided non-GAAP operating income to $51.0 million to $54.0 million and non-GAAP net income per share to $0.38 to $0.41. nCino also issued revenue guidance for both the third quarter and the full fiscal year, though the release frames the outlook mainly around the non-GAAP profitability measures.
The macro environment remains a risk. Rising interest rates have hurt demand for mortgages and mortgage-related products, which has negatively affected the SimpleNexus business. Liquidity issues at certain U.S. financial institutions, including Silicon Valley Bank, Signature Bank, and First Republic Bank, created turmoil. These impacted institutions were customers and collectively represented less than 3% of total revenues for the year ended January 31, 2023. No individual customer represented more than 10% of revenue for the six months ended July 31, 2023. nCino also faces litigation, including the Antitrust Matters and a proposed settlement agreement. The company expects to continue to incur operating losses on a GAAP basis for the foreseeable future. A valuation allowance remains against deferred tax assets in most jurisdictions, including the U.S. Adoption of Code Section 174 may reduce operating cash flows in future periods. During the quarter, the company repaid amounts under its revolving credit facility and had no outstanding balance thereunder.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $117.2M | $113.7M | +3.1% | $99.6M | +17.7% |
| Gross profit | $69.2M | $67.5M | +2.5% | $58.4M | +18.5% |
| Gross margin | 59.0% | 59.4% | -0.3 pp | 58.6% | +0.4 pp |
| Research & development | $29.9M | $28.2M | +6.0% | $29.7M | +0.6% |
| Sales & marketing | $32.2M | $29.9M | +7.4% | $32.5M | -1.1% |
| General & administrative | $21.9M | $18.0M | +22.0% | $21.2M | +3.4% |
| Total operating expenses | $84.0M | $76.1M | +10.3% | $83.4M | +0.7% |
| Operating income (loss) | -$14.8M | -$8.6M | -71.5% | -$25.0M | +40.8% |
| Operating margin | -12.6% | -7.6% | -5.0 pp | -25.1% | +12.5 pp |
| Net income (loss) | -$16.1M | -$11.6M | -38.1% | -$27.4M | +41.4% |
| Net margin | -13.7% | -10.2% | -3.5 pp | -27.5% | +13.8 pp |
| Diluted EPS | -$0.14 | -$0.10 | -$0.04 | -$0.25 | +$0.11 |
Risks
The company operates in a rising interest rate environment as the U.S. Federal Reserve raises rates to manage inflation, which has hurt the U.S. real estate market and demand for mortgages and mortgage-related products, negatively impacting the SimpleNexus business.
The company faces a government antitrust investigation and related civil action (the Antitrust Matters) and a shareholder derivative lawsuit, and recorded an accrual of approximately $2.2 million for a proposed settlement agreement disclosed in Note 12 Commitments and Contingencies.
Liquidity issues at certain U.S. financial institutions, including Silicon Valley Bank, Signature Bank and First Republic Bank, have created turmoil and uncertainty in the financial services industry; these Impacted FIs are customers collectively representing less than 3% of total revenues for the year ended January 31, 2023.
New customer sales cycles are typically lengthy, generally ranging from six to nine months for smaller FIs to 12 to 18 months or more for larger FIs, and growth increasingly depends on penetrating markets outside the U.S., which accounted for 18.7% of total revenues for the three months ended July 31, 2023.
Professional services and other gross margin fell to (5.7)% for the three months ended July 31, 2023 from 0.7% for the three months ended July 31, 2022, and to (5.0)% for the six months ended July 31, 2023 from 1.1% for the six months ended July 31, 2022, primarily due to a decline in realized effective billing and utilization rates in the professional services teams.
The company had an accumulated deficit of $337.5 million as of July 31, 2023 and expects to continue to incur operating losses on a GAAP basis for the foreseeable future, despite GAAP loss from operations narrowing to $14.8 million in the quarter ended July 31, 2023 from $25.0 million in the prior-year quarter.
Adoption of Code Section 174 as amended by the Tax Cuts and Jobs Act of 2017 may reduce operating cash flows in future periods through cash remittances of U.S. federal and state income tax.
The company has undertaken a workforce reduction, with sales and marketing headcount down 75 and research and development headcount down 84 from July 31, 2022 to July 31, 2023, and incurred restructuring and related charges of $0.2 million in the quarter and $0.5 million for the six months ended July 31, 2023.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
Non-GAAP Operating Income
Remaining Performance Obligation (RPO)
Summary, forecast, risks and KPIs are extracted from nCino, Inc.'s SEC filings for Q2 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.