Q4 2024 Earnings Summary
Reported on Feb 18, 2025 (After Market Close)
Pre-Earnings Price$30.18Last close (Mar 26, 2024)
Post-Earnings Price$34.50Open (Mar 27, 2024)
Price Change
$4.32(+14.31%)
- nCino expects to achieve at least 15% subscription revenue growth in FY2026, driven by launching new products with quicker installation cycles, full integration of the DocFox acquisition, and significant upside from the recovery in the mortgage market.
- The company has multiple growth levers including new products, AI capabilities, consumer lending products, and a new omnichannel platform. These initiatives, along with the maturing of their products and go-to-market strategy, position nCino to drive growth over the next several years and reach its long-term target of the Rule of 50.
- Enterprise customers are returning to strategic investments, with larger banks beginning to look at larger transformations. nCino's ability to cross-sell into its existing customer base, coupled with the accretive impact of the DocFox acquisition, is providing significant growth opportunities.
- Elevated Churn Rates May Persist: The company acknowledges that it still expects elevated churn levels in fiscal '25, projecting churn to decrease but remain higher than historical norms of around 3%, particularly due to volatility in the Independent Mortgage Bank (IMB) segment. This ongoing higher churn could negatively impact revenue growth.
- Mortgage Segment Will Be Dilutive to Growth in Fiscal '25: The U.S. mortgage business is expected to be dilutive to the company's overall subscription revenue growth rate for full year fiscal '25, due to continued challenges in the mortgage market and elevated churn in this segment. They anticipate minimal improvement in the U.S. mortgage market until the fourth quarter of fiscal '25.
- Reliance on Improvement in Macroeconomic Conditions: The company's optimistic outlook for fiscal '25 relies on assumptions of a normalizing sales environment and resumption of customer demand. If the expected improvement in macroeconomic conditions does not materialize, it could adversely affect the company's bookings and growth targets.