EPS of $-0.05 increased by 69.7% from previous year
Gross margin of 61.3%
Net income of -5.25M
"We are very pleased with our third quarter financial results, once again exceeding expectations for both revenues and non-GAAP operating income. Our sales momentum increased in the third quarter, with gross bookings accelerating quarter-over-quarter and year-over-year." - Pierre Naude
nCino Inc (NCNO) Q3 FY2025 Results – 14% Revenue Growth to $138.8M; AI-Enabled Intelligent Solution Framework Expands TAM via FullCircl, DocFox and Banking Advisor
Executive Summary
nCino reported solid Q3 FY2025 operating progress with revenue of $138.8 million, up 14% year-over-year, supported by stronger gross bookings and a higher mix of multi-solution deals. Non-GAAP operating income rose to $28.0 million (non-GAAP margin 20%), and non-GAAP net income reached $24.4 million ($0.21 per diluted share), underscoring a meaningful improvement in operating leverage despite ongoing investments in growth initiatives. Management highlighted continued momentum across geographies, including Japan and the Nordics, and accelerated cross-sell through the Intelligent Solution Framework (ISF), which aligns fees to assets and expands the total addressable market via Banking Advisor, DocFox and FullCircl acquisitions.
The quarter featured notable strategic events: the acquisition of FullCircl (closed November 5) to enhance onboarding and data aggregation capabilities, and ongoing expansion of the Banking Advisor module with 11 new customers in the quarter. nCino also underscored its pricing transition to ISF, signaling a more value-driven, portfolio-based monetization approach that should improve visibility and value creation in contract renewals. The company maintained a constructive guidance trajectory for Q4 and the full year 2025, including a $4 million contribution from FullCircl in Q4 and an expectation of $95–$96 million of annual non-GAAP operating income. While mortgage churn remained elevated due to IMB M&A activity, management expects mortgage churn to moderate in 4Q and the full year, with potential upside from mortgage volume tailwinds if rates trend lower.
Taken together, the results and commentary position nCino as a growth-focused, AI-enabled platform with a diversified revenue base, a clear cross-sell trajectory, and an improving profitability path, albeit with exposure to mortgage cycle dynamics and regulatory-driven onboarding timelines. Investors should monitor ISF adoption by renewals, the ramp of FullCircl’s data-aggregation capabilities, and the pace of international expansion, particularly in Japan and Europe, as key determinants of 2025–2026 performance.
Key Performance Indicators
Revenue
138.80M
QoQ: 4.83% | YoY:13.82%
Gross Profit
85.05M
61.28% margin
QoQ: 8.39% | YoY:15.06%
Operating Income
-824.00K
QoQ: 89.58% | YoY:93.62%
Net Income
-5.25M
QoQ: 52.43% | YoY:67.93%
EPS
-0.05
QoQ: 52.61% | YoY:69.73%
Revenue Trend
Margin Analysis
Key Insights
Total revenue: $138.797 million, up 14% YoY; QoQ growth ≈ 4.9% (Q2 2025 revenue: $132.403 million).
Subscription revenue: $119.9 million, up 14% YoY (86% of total revenues); Mortgage subscription revenue: $20.7 million, up 16% YoY (≈17% of subscription revenue).
Non-GAAP gross profit: $93.2 million, up 15% YoY; Non-GAAP gross margin: 67.2% ( vs. 66.5% in 3Q FY2024).
Non-GAAP operating income: $28.0 million, up 38% YoY; Non-GAAP operating margin: 20.0% (vs. 17.0% in 3Q FY2024).
Net income (non-GAAP): $24.4 million, or $0.21 per diluted share, up from $16.2 million ($0.14) in the year-ago quarter (YoY EPS up 69%; QoQ up 53%).
Financial Highlights
Revenue and profitability:
- Total revenue: $138.797 million, up 14% YoY; QoQ growth ≈ 4.9% (Q2 2025 revenue: $132.403 million).
- Subscription revenue: $119.9 million, up 14% YoY (86% of total revenues); Mortgage subscription revenue: $20.7 million, up 16% YoY (≈17% of subscription revenue).
- Non-GAAP gross profit: $93.2 million, up 15% YoY; Non-GAAP gross margin: 67.2% ( vs. 66.5% in 3Q FY2024).
- Non-GAAP operating income: $28.0 million, up 38% YoY; Non-GAAP operating margin: 20.0% (vs. 17.0% in 3Q FY2024).
- Net income (non-GAAP): $24.4 million, or $0.21 per diluted share, up from $16.2 million ($0.14) in the year-ago quarter (YoY EPS up 69%; QoQ up 53%).
- EBITDA: $9.003 million; EBITDA margin: 6.5% of revenue.
- RPO: $1.095 billion, up 19% YoY; less than 24 months RPO: $730 million, up 16% YoY.
Profitability and efficiency:
- Operating income: GAAP loss of $0.824 million; GAAP operating margin: -0.6% (non-GAAP margin materially higher at 20%), reflecting ongoing investments and acquisition-related amortization adjustments.
- Cash flow and liquidity:
- Net cash provided by operating activities: $5.78 million; free cash flow: $5.40 million.
- Cash and cash equivalents: $258.3 million; total debt: $235.9 million; net debt: approximately negative $21.998 million (net cash).
- End of period cash balance includes $129.7 million drawn for the FullCircl acquisition; revolver facility refinanced during the quarter.
Operational and product signals:
- On a quarterly basis, gross bookings accelerated QoQ and YoY; over 30 multi-solution deals in the quarter; 11 mortgage logos added in the U.S., with average mortgage ACV up 15% YoY.
- International expansion and partnerships: Japan’s Tokushima Taisho Bank designated as largest customer in Japan; Nordics expansion with Norway’s largest bank; Luxembourg entry; ongoing EMEA growth with a dedicated Managing Director for EMEA (Joaquín de Valenzuela).
- ISF and pricing transition: CEO Pierre Naude emphasized that new pricing and monetization under the Intelligent Solution Framework (ISF) should simplify discussions, align fees with assets, and drive value creation; mortgage revenue tied to minimum monthly volume commitments with upside beyond minimums.
Key takeaways by theme:
- Growth engine: 50%+ of bookings are non-commercial; ongoing cross-sell across Banking Advisor, DocFox, and FullCircl; international momentum in Japan and Nordics supports a broader TAM expansion.
- AI-driven differentiation: Banking Advisor and data-centric onboarding (FullCircl) are core to the platform’s moat, with management signaling broad adoption in renewals and new deals, and upgrades to skills (from 4 to 48+ in the onboarding workflow).
- Churn and risk: Mortgage churn remained elevated (~$3.0 million in Q3, with projected ~$2.0 million in Q4 and ~$10 million for the full year). Management notes that volume-based revenue upside is contingent on mortgage volumes and rates improving, with a 20% increase in mortgage lending potentially delivering ≈10% revenue uplift for those customers.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
138.80M
13.82%
4.83%
Gross Profit
85.05M
15.06%
8.39%
Operating Income
-824.00K
93.62%
89.58%
Net Income
-5.25M
67.93%
52.43%
EPS
-0.05
69.73%
52.61%
Key Financial Ratios
currentRatio
1.95
grossProfitMargin
61.3%
operatingProfitMargin
-0.59%
netProfitMargin
-3.78%
returnOnAssets
-0.35%
returnOnEquity
-0.48%
debtEquityRatio
0.22
operatingCashFlowPerShare
$0.05
freeCashFlowPerShare
$0.05
priceToBookRatio
3.96
priceEarningsRatio
-205.27
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Theme: Strategy and monetization — Pierre Naude underscored ISF as a framework to simplify pricing, tie revenues to asset bases, and increase value creation. He stated: 'We are transitioning to platform pricing where the fees we charge for commercial and consumer lending customers will be based on the assets of the financial institution... We expect these changes will be immediately beneficial to the subscription revenues we recognize from customers under these agreements.' Theme: Execution and growth — Naude highlighted robust quarterly sales momentum: 'gross bookings accelerating quarter-over-quarter and year-over-year' and 'signing over 30 multi-solution deals.' He also cited international progress, including Tokushima Taisho Bank in Japan and expansion with the largest bank in Norway. Theme: AI and cross-sell momentum — Greg Orenstein noted Banking Advisor as a focus for all new deals and renewals, with 11 new Banking Advisor customers in the quarter and plans to include Banking Advisor in every new deal and renewal. He added: 'We are increasing our non-GAAP operating income outlook... to $95 million to $96 million for fiscal 2025.' Theme: Acquisitions and onboarding — Pierre Naude described FullCircl as adding data aggregation to onboarding, with 10 mutual UK customers and a global SAM expansion estimate of $800 million from DocFox and FullCircl synergy. Quote from Pierre: 'FullCircl aggregates a premium data supply that our customers would otherwise be gathering from fragmented sources.' Theme: Safety, regulation, and governance — Naude emphasized regulatory considerations and the importance of an auditable AI framework and ongoing data consent from customers for AI-enabled features (e.g., Banking Advisor and ISF). Theme: Market outlook and M&A as catalysts — The transcript repeatedly references M&A as a growth catalyst; Pierre noted that acquiring banks tend to demand a mature middle-back-office, a dynamic that can drive demand for nCino’s platform.
We are very pleased with our third quarter financial results, once again exceeding expectations for both revenues and non-GAAP operating income. Our sales momentum increased in the third quarter, with gross bookings accelerating quarter-over-quarter and year-over-year.
— Pierre Naude
In light of the significant outperformance in the third quarter, we are increasing our non-GAAP operating income outlook and now expect non-GAAP operating income for fiscal 2025 to be $95 million to $96 million.
— Greg Orenstein
Forward Guidance
The company reaffirmed and refined its near-term and longer-term guidance around the Intelligent Solution Framework (ISF) adoption, cross-sell momentum, and acquisitions. Key quarterly and full-year targets include:
- Q4 FY2025 revenue: $139.5–$141.5 million; subscription revenue: $122.5–$124.5 million; Full Circl contribution expected to be approximately $4 million to both subscription and total revenues in Q4; non-GAAP operating income: $23.25–$24.25 million; non-GAAP net income per share: $0.18–$0.19 (assuming ~118 million diluted shares).
- Full-year FY2025 revenue: $539–$541 million with subscription revenue of $467–$469 million; non-GAAP operating income: $95–$96 million; non-GAAP net income per share: $0.75–$0.76 (assuming ~117 million diluted shares).
- Growth drivers include: (1) ISF-based monetization leading to higher subscription revenue visibility and simplification of renewals; (2) cross-sell expansion via Banking Advisor, DocFox, and FullCircl; (3) international expansion (Japan, Nordics, Luxembourg) and potential new markets (Spain, Germany with possible acquisitions); (4) AI-driven productivity and efficiency gains (e.g., onboarding, portfolio analytics) that improve customer lifecycle management and wallet share.
Assessment: The guidance reflects a conservative stance on mortgage volume sensitivity (mortgage churn implications) and assumes continued strength in non-mortgage bookings. The $4 million FullCircl contribution in Q4 helps offset a portion of mortgage churn headwinds. If mortgage volumes recover and ISF-driven renewals accelerate, the 2025 target of $95–$96 million non-GAAP operating income appears achievable. Investors should monitor four factors: (i) mortgage volume trajectory and price-volume sensitivity, (ii) pace of ISF adoption and Banking Advisor contribution to subscription revenue and renewal price, (iii) effectiveness and integration progress of FullCircl, and (iv) the sustainability of international momentum (Japan, Nordics) amid currency and regulatory dynamics.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
NCNO Focus
61.28%
-0.59%
-0.48%
-205.27%
CWAN
72.90%
6.34%
0.90%
380.96%
MLNK
65.60%
3.18%
-1.69%
-55.16%
ENV
98.40%
2.03%
-0.32%
-520.95%
MODN
57.20%
4.60%
2.72%
120.08%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
nCino’s Q3 FY2025 results demonstrate a disciplined balance between growth investment and profitability, underpinned by a diversified, high-margin subscription base and a clear path to monetization through the Intelligent Solution Framework. The integration of FullCircl and ongoing adoption of Banking Advisor bolster cross-sell and platform stickiness, while international momentum in Japan and the Nordics provides optionality beyond the U.S. market. The company’s guidance for FY2025 implies revenue growth in the mid-teens with a preserved non-GAAP operating margin in the 20% range, supported by a healthy cash position and a robust RPO. Risks center on mortgage-cycle sensitivity and churn, execution risk associated with integrating acquisitions, and regulatory considerations around AI-driven features. Overall, the investment thesis hinges on successful ISF monetization, accelerating cross-sell, and incremental contributions from FullCircl and international deals, all of which management has signaled they are actively pursuing and prioritizing.
Key Investment Factors
Growth Potential
Large addressable market expansion through ISF-driven platform pricing, heightened cross-sell from DocFox, FullCircl and Banking Advisor, plus international growth (Japan, Nordics, Luxembourg). Management projects a broader SAM uplift (approx. $800 million) from onboarding enhancements; 11 new Banking Advisor customers in Q3 signals early momentum. The expanded RPO and high net revenue retention potential from portfolio-level analytics and AI-enabled automation support durable growth.
Profitability Risk
Mortgage market sensitivity and churn, particularly given elevated churn in IMB/M&A activity; mortgage revenue upside is contingent on mortgage volumes and rate movements; execution risk around integrating FullCircl and expanding Banking Advisor into all new deals and renewals; regulatory and data-privacy considerations around AI and data consent; large-scale M&A cycles can introduce channel disruption or integration challenges; competition from other fintech/saaS vendors targeting financial institutions.
Financial Position
Strong liquidity with approximately $258.3 million in cash and equivalents and a net cash position (net debt ≈ -$22.0 million). Solid balance sheet supports ongoing investments in ISF, AI capabilities, and acquisitions (FullCircl). RPO stands at ~$1.10 billion, indicating sizable future revenue backlog and visibility; non-GAAP gross margin of 67.2% and non-GAAP operating margin of 20% in Q3 FY2025 reflect operating discipline alongside growth investments.
SWOT Analysis
Strengths
Large, growing installed base with a broad horizontal platform (lending, onboarding, analytics) across global financial institutions.
ISF-based platform pricing simplification supports higher visibility and renewals.
Strategic acquisitions (DocFox, FullCircl) expand onboarding capabilities and data aggregation, enabling cross-sell opportunities and TAM expansion.
Solid cash position and improving profitability trajectory; RPO remains robust at ~$1.10B.
Weaknesses
Mortgage churn remains elevated due to IMB activity and higher churn risk; sensitivity to mortgage cycle and rates with potential revenue volatility.
GAAP profitability temporarily constrained by ongoing investments and acquisition-related costs; quarterly net income still negative though improving YoY.
Dependence on large enterprise deals and cross-border expansion can introduce execution risk and longer sales cycles.
Opportunities
International expansion (Japan, Nordics, Luxembourg) with potential for new large banks and cross-border deployments.
AI-enabled capabilities (Banking Advisor, ISF, data analytics) to improve cross-sell, efficiency and client lifecycle management.
Regulatory-driven demand (DORA, onboarding, KYC/AML automation) supporting platform adoption across Europe and beyond.
Upside from FullCircl’s data integration and enhanced onboarding efficiency, expanding SAM and wallet share.
Threats
Macro headwinds in mortgage market and potential policy shifts affecting consumer lending volume.
Regulatory compliance and data privacy constraints in AI-enabled product features could slow adoption or require extra controls.
Competitive pressure from other cloud platforms targeting financial institutions and fintech incumbents; integrations and ecosystem lock-in risk.