Ncino Inc (NCNO) Reports Notable Revenue Growth and Improved Margins in Q3 FY2024

• Total Revenues reached $121.9M, marking a 16% increase year-over-year.

• Subscription Revenues grew by 19% to $104.8M compared to the same quarter last year.

• GAAP Operating Margin improved by 700 basis points; Non-GAAP Operating Margin increased by 1,400 basis points year-over-year.

• Guidance for Q4 includes Total Revenues between $123.5M and $125.5M and Subscription Revenues between $105.5M and $107.5M.

On November 29, 2023, Ncino Inc (NASDAQ:NCNO) released its 8-K filing, announcing financial results for the third quarter of fiscal year 2024, which ended on October 31, 2023. The company, a leader in cloud banking, reported a robust increase in total revenues, which rose to $121.9 million, up 16% from the previous year's third quarter. Subscription revenues were a highlight, increasing by 19% to $104.8 million.

Financial Performance and Highlights

Ncino Inc (NASDAQ:NCNO) saw a significant improvement in its operating margins. The GAAP Operating Margin stood at (11)%, up 700 basis points from the previous year, while the Non-GAAP Operating Margin soared to 17%, marking an increase of 1,400 basis points year-over-year. The company's GAAP net loss attributable to Ncino was reduced to $(16.4) million from $(23.6) million in the third quarter of the previous fiscal year. Non-GAAP net income attributable to Ncino was reported at $16.2 million, a substantial improvement from a net loss of $(1.4) million in the same quarter last year.

Chairman and CEO Pierre Naude commented on the company's performance, stating,

We posted another solid quarter in Q3, with revenues and profitability again exceeding?expectations."

He also highlighted the addition of key new customers and the company's confidence in driving sustainable and profitable growth.

Balance Sheet and Cash Flow Statement Summary

The balance sheet of Ncino Inc (NASDAQ:NCNO) showed cash and cash equivalents of $100.5 million as of October 31, 2023. Total assets were reported at $1.27 billion, while total liabilities stood at $235.7 million. The company's cash flow from operations was positive, providing $49.1 million over the nine months ended October 31, 2023, and free cash flow for the third quarter was reported at $5.25 million.

Outlook and Business Highlights

Looking ahead, Ncino Inc (NASDAQ:NCNO) provided guidance for the fourth quarter ending January 31, 2024, with total revenues expected to be between $123.5 million and $125.5 million, and subscription revenues projected between $105.5 million and $107.5 million. The company also anticipates Non-GAAP operating income to be between $15.0 million and $16.0 million for the quarter.

Recent business highlights include the signing of a first enterprise bank for Consumer lending, an expansion agreement with a regional bank for Mortgage Point-of-Sale, and the addition of the largest customer in Japan for mortgage lending. These achievements underscore Ncino Inc (NASDAQ:NCNO)'s continued expansion and penetration into key markets.

Conclusion

Ncino Inc (NASDAQ:NCNO)'s third-quarter results demonstrate a company on the rise, with significant growth in subscription revenue and improved operating margins. The company's strategic customer acquisitions and positive financial outlook suggest a strong position for continued growth in the cloud banking sector. Investors and stakeholders can anticipate Ncino Inc (NASDAQ:NCNO) to leverage its financial strength and market leadership to drive further success in the coming quarters.

For a more detailed analysis of Ncino Inc (NASDAQ:NCNO)'s financial results, including the full income statement and balance sheet, please refer to the company's 8-K filing.

Explore the complete 8-K earnings release (here) from Ncino Inc for further details.

This article first appeared on GuruFocus.