Bank software company nCino (NASDAQ: NCNO) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 12.5% year on year to $144.1 million. The company expects next quarter’s revenue to be around $143 million, close to analysts’ estimates. Its non-GAAP profit of $0.16 per share was in line with analysts’ consensus estimates.
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nCino (NCNO) Q1 CY2025 Highlights:
- Revenue: $144.1 million vs analyst estimates of $140.3 million (12.5% year-on-year growth, 2.7% beat)
- Adjusted EPS: $0.16 vs analyst estimates of $0.16 (in line)
- Adjusted Operating Income: $24.83 million vs analyst estimates of $24.08 million (17.2% margin, 3.1% beat)
- The company slightly lifted its revenue guidance for the full year to $580.5 million at the midpoint from $576.5 million
- Management raised its full-year Adjusted EPS guidance to $0.71 at the midpoint, a 4.4% increase
- Operating Margin: -1%, up from -2.9% in the same quarter last year
- Free Cash Flow was $52.6 million, up from -$10.37 million in the previous quarter
- Market Capitalization: $3.11 billion
"Strong execution drove financial results above guidance, underscoring our ability to deliver value for shareholders and customers," said Sean Desmond, CEO at nCino.
Company Overview
Founded in 2011 in North Carolina, nCino (NASDAQ: NCNO) makes cloud-based operating systems for banks and provides that software-as-a-service.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, nCino’s sales grew at a decent 22.1% compounded annual growth rate over the last three years. Its growth was slightly above the average software company and shows its offerings resonate with customers.
This quarter, nCino reported year-on-year revenue growth of 12.5%, and its $144.1 million of revenue exceeded Wall Street’s estimates by 2.7%. Company management is currently guiding for a 8% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 5.4% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products and services will face some demand challenges.
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Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
nCino does a decent job acquiring new customers, and its CAC payback period checked in at 44.1 months this quarter. The company’s relatively fast recovery of its customer acquisition costs gives it the option to accelerate growth by increasing its sales and marketing investments. 
Key Takeaways from nCino’s Q1 Results
It was great to see nCino raise its full-year revenue and EPS guidance. We were also happy this quarter's revenue and adjusted operating income outperformed Wall Street’s estimates. Overall, this was a solid print. The stock remained flat at $26.85 immediately after reporting.
Is nCino an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.
