Cloud banking solutions provider nCino (NCNO) reported mixed financial results for Q4 FY2024. While the company met revenue expectations with a 14.3% year-over-year increase to $141.4 million, earnings missed expectations by 35.1%, and guidance for the next quarter fell short of analyst predictions, signaling current volatility in the financial markets and macro headwinds. Despite this, nCino’s strategic acquisition of Sandbox Banking for $52 million aims to enhance its data integration capabilities. The company anticipates slowing growth in specific market segments in the near term, but it remains optimistic about potential acceleration in the fiscal year 2027. Analyst opinions are mixed, with some maintaining an “Outperform” rating despite adjusting price targets downwards, as they anticipate nCino’s capability to revert to growth mode.
Digital Banking Transformation
nCino is a cloud-based software provider specializing in digital transformation solutions tailored for financial institutions. The company’s primary offering, the nCino Bank Operating System, is an integrated platform that connects with existing core banking systems to enhance various banking activities. Its key capabilities include facilitating loan origination, streamlining deposit account openings, and enhancing compliance management efficiency. By enhancing these processes, nCino aims to improve customer engagement and operational efficiency for banks and financial services organizations.
The company has recently acquired Sandbox Banking, a fintech company, for $52 million in cash, with a potential additional earn-out of up to $10 million. This move aims to enhance nCino’s Integration Platform as a Service (iPaaS) offerings, improving data connectivity and operational efficiency for banks and credit unions. By integrating Sandbox Banking’s technology, nCino plans to create an integration hub that streamlines the development of connections necessary for new products, services, and systems, thereby eliminating redundancies and achieving seamless data alignment across various banking platforms.
For the fourth quarter of fiscal year 2025, nCino reported total revenue of $141.4 million, representing a 14% increase from the previous year, with subscription revenues rising 16% to $125.0 million. Despite a GAAP operating loss of $5.7 million, the company reported a non-GAAP operating income of $24.4 million, representing a 26% year-over-year increase. However, nCino reported a GAAP net loss of $18.6 million, contrasting with a GAAP net income of $1.2 million from the previous year, which was attributed in part to a $10.3 million impact from non-operating, non-cash foreign currency fluctuations on intercompany loans. Non-GAAP EPS of $0.12 missed analyst expectations by $0.07.
Looking ahead, nCino has provided guidance for the fiscal year 2026, forecasting total revenues between $574.5 million and $578.5 million and non-GAAP net income per diluted share of $0.66 to $0.69, alongside a stock repurchase program of up to $100 million.
Analysts Revise Short-Term Outlook
Analysts following the company have remained constructive about its long-term prospects while adjusting their expectations downward for the near term. For instance, Keefe Bruyette, Scotiabank, and Raymond James have all adjusted their price targets for nCino while maintaining “Outperform” ratings on the stock. Keefe Bruyette has downgraded its price target to $40 from $44 following a downturn in nCino’s Q4 organic subscription revenue guidance, which has hindered the company’s ability to meet its 15% growth target for the fiscal year 2026. Despite this, Keefe highlights an attractive risk/reward balance at current share valuations.
Scotiabank has lowered its target to $35 from $42 but still sees potential for margin improvement, with a primary focus on nCino’s growth reacceleration. Similarly, Raymond James reduced its target to $42 from $44, anticipating that nCino will soon stabilize its organic growth and potentially benefit from multiple expansions, particularly if the mortgage market recovers.
nCino is rated a Moderate Buy overall, based on the recent recommendations of 10 analysts. The average price target for NCNO stock is $40.75, representing a potential upside of 44.91% from current levels.
