Summary
nCino reported third quarter fiscal 2023 results for the period ended October 31, 2022. Total revenues were $105.3 million, up 50.3% from the prior-year quarter. Gross margin was 59.0%, down 2.1 percentage points from the prior-year quarter. Remaining performance obligations were $919.2 million. Deferred revenue, current portion, was $117.28 million.
GAAP loss from operations was $18.4 million, compared with a loss of $12.7 million in the prior-year quarter. GAAP net loss attributable to nCino was $23.6 million, compared with a loss of $13.6 million. Diluted EPS was negative $0.21, compared with negative $0.14. Operating margin was negative 17.5%, up 0.7 percentage points from the prior-year quarter. On a non-GAAP basis, operating income was $2.5 million, the first quarter of non-GAAP operating income as a public company, compared with a non-GAAP operating loss of $3.2 million in the prior-year quarter. Non-GAAP net loss was $1.4 million, and non-GAAP EPS was negative $0.01. Operating cash flow was negative $4.08 million in the quarter, an improvement from negative $19.08 million. Capital expenditures were $4.59 million, up 93.7% from the prior-year quarter. For the nine months, total revenues were $299.1 million, up 50.4%. Net loss attributable to nCino was $81.5 million. Operating cash flow was $6.64 million, up 264.2%. Capital expenditures were $13.89 million, up 281.6%. Gross margin for the nine months was 58.3%, down 1.4 percentage points. Operating margin for the nine months was negative 23.6%, down 2.8 percentage points.
The quarter included several customer wins and go-lives. nCino signed Bank of New Zealand, a top-four New Zealand bank by asset size. Kiraboshi Bank, a $48-billion-asset regional bank in Tokyo, went live on the nCino Bank Operating System. Hamburg Commercial Bank became the first German customer live on the platform. Existing customers expanded use cases. A Big-4 U.K. bank signed for a new use case. A $7-billion-asset Colorado bank added Deposit Account Opening and Treasury Sales Onboarding. Another $7-billion-asset bank in Hawaii added Retail Lending and Deposit Account Opening. One of the world's largest credit unions added Portfolio Analytics. SimpleNexus had six competitive takeaways and five cross-sells into the nCino customer base. International markets accounted for 15.1% of total revenues. The MD&A notes headcount growth: sales and marketing headcount grew by 123, research and development headcount grew by 182, and general and administrative headcount grew by 47 from October 31, 2021 to October 31, 2022. As of October 31, 2022, nCino had 275 sales and sales support personnel in the United States and 75 outside the United States.
Guidance for the fourth quarter ending January 31, 2023 includes a non-GAAP operating loss between $3.0 million and $4.0 million and a non-GAAP net loss attributable to nCino per share between $0.04 and $0.05. For the full fiscal year 2023 ending January 31, 2023, guidance includes a non-GAAP operating loss between $7.0 million and $8.0 million and a non-GAAP net loss attributable to nCino per share between $0.15 and $0.17. The company also provides total revenue and subscription revenue guidance for both periods. Risks include the rising interest rate environment. The MD&A states that higher interest rates have reduced demand for mortgages and mortgage-related products, which has hurt the SimpleNexus business. Other risks include a challenging macro environment, lengthy sales cycles, competition, dependence on the Salesforce relationship, integration of SimpleNexus, and the Antitrust Matters. The company also adopted Internal Revenue Code Section 174, which could reduce operating cash flows in future periods through cash remittances of U.S. federal and state income taxes.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2023 | Q2 FY2023 | QoQ | Q3 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $105.3M | $99.6M | +5.7% | — | — |
| Gross profit | $62.1M | $58.4M | +6.4% | — | — |
| Gross margin | 59.0% | 58.6% | +0.4 pp | — | — |
| Research & development | $29.5M | $29.7M | -0.8% | — | — |
| Sales & marketing | $32.4M | $32.5M | -0.3% | — | — |
| General & administrative | $18.7M | $21.2M | -11.8% | — | — |
| Total operating expenses | $80.6M | $83.4M | -3.4% | — | — |
| Operating income (loss) | -$18.4M | -$25.0M | +26.2% | — | — |
| Operating margin | -17.5% | -25.1% | +7.6 pp | — | — |
| Net income (loss) | -$22.6M | -$27.4M | +17.4% | — | — |
| Net margin | -21.5% | -27.5% | +6.0 pp | — | — |
| Diluted EPS | -$0.21 | -$0.25 | +$0.04 | — | — |
Risks
Rising U.S. interest rates and Federal Reserve rate increases have reduced demand for mortgages and mortgage-related products and services, which has had a negative impact on the SimpleNexus business. The company continues to monitor the impact of future rate increases.
New customer sales cycles are lengthy, generally ranging from six to nine months for smaller financial institutions to 12 to 18 months or more for larger financial institutions. Growth depends on replacing legacy systems and taking existing customers live so they become referenceable accounts.
Net loss attributable to nCino, Inc. was $23.6 million for the three months ended October 31, 2022 compared with $13.6 million for the three months ended October 31, 2021, and the company expects to continue incurring operating losses for the foreseeable future. As of October 31, 2022, accumulated deficit was $288.8 million.
Emergency purchases of the PPP solution and COVID-19 disruption may have moderated revenue growth rates in fiscal 2022. Revenue growth rates and subscription revenue retention rates may be adversely affected when PPP access and use rights expire if those rights are not repurposed for other applications.
Growing the customer base requires increasingly penetrating markets outside the United States, which accounted for 15.1% of total revenues for the three and nine months ended October 31, 2022. International sales efforts are organized by geography and face execution challenges.
The company has incurred fees and expenses related to the government antitrust investigation and related civil action disclosed in Note 14. Third party professional fees decreased partly due to lower Antitrust Matters expenses in the three and nine months ended October 31, 2022.
Beginning with the nine months ended October 31, 2022, the company adopted Internal Revenue Code Section 174, requiring U.S. research and development expenditures to be capitalized and amortized over five or fifteen years. This could reduce operating cash flows in future periods through cash remittances of U.S. federal and state income tax.
The company supplemented liquidity with a $50.0 million Credit Facility, borrowed $30.0 million during the three months ended October 31, 2022, and had $30.0 million outstanding as of October 31, 2022. Future capital needs may require equity or debt financing that could be dilutive or impose debt service and operational covenants.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Operating Margin
Non-GAAP Operating Income
Remaining Performance Obligation (RPO)
Organic RPO
Summary, forecast, risks and KPIs are extracted from nCino, Inc.'s SEC filings for Q3 FY2023 (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.