nCino’s FY25 Q4 Report: Mixed Results Lead to 18% Stock Drop
nCino
nCino, a leader in cloud banking solutions, released its FY25 Q4 and full-year financial results, showcasing both strengths and challenges. The report, covering the period ending January 31, 2025, has led to an 18% decline in its stock price today as investors weigh the mixed performance.
Key Highlights:
- Revenue Growth: Total revenues for FY25 reached $540.7 million, up 13% year-over-year, with subscription revenues climbing 15% to $469.2 million, driven by strong demand outside the U.S. mortgage sector.
- Profitability Surge: Non-GAAP operating income soared 56% to $96.2 million, boosting the operating margin to 18%, a 500 basis point improvement, reflecting disciplined cost management.
- Global Expansion: International subscription revenues grew 47% in Q4 FY25 to $68.4 million, highlighting nCino’s successful push into over 20 countries.
Key Negative Points:
- U.S. Mortgage Weakness: Organic subscription growth in the U.S. mortgage segment was only 8% in FY25, with flat growth projected for FY26, signaling persistent softness in this key market.
- Free Cash Flow Dip: Free cash flow slightly declined 1% to $53.4 million, and Q4 saw a negative $10.4 million, raising concerns about cash generation consistency.
- Cautious FY26 Outlook: Subscription revenue growth is expected to slow to ~8% in FY26, with organic growth at just ~4%, tempered by one-time revenue headwinds and FX challenges.
While nCino’s global footprint and profitability shine, the sluggish U.S. mortgage segment and conservative guidance have spooked investors, driving today’s sharp sell-off.
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