nCino Inc (NCNO)NCNO

nCino Inc. Company Overview

Disclaimer: This is not financial advice, and you should always consult with an investment professional before making any investment decisions. This report is based on publicly available information as of November 2023 and may not reflect the most current information.

Company Profile:

History and Background:

nCino, Inc. (NCNO) is an American cloud-based banking platform company founded in 2012. Headquartered in Wilmington, North Carolina, it initially focused on the community banking sector before expanding to mid-market and large financial institutions globally. nCino provides a digital banking platform that streamlines and automates the process of opening bank accounts, processing loans, and managing other financial products and services.

Core Business Areas:

nCino's primary business area is providing a cloud-based platform that financial institutions use to:

• Open accounts: The platform automates and simplifies the account opening process, including KYC/AML checks, document collection, and risk assessment.
• Lend: nCino's platform streamlines the loan origination process, from application to closing, reducing manual work and processing time.
• Manage: The platform offers tools for financial institutions to manage their existing customer relationships and portfolios, including deposit accounts, credit cards, and other products.

Leadership and Corporate Structure:

• CEO: Pierre Naudé
• CFO: Robert Denson
• President: Chris Johnson
• Board of Directors: Comprised of industry leaders with diverse backgrounds in financial services, technology, and business strategy.

Top Products and Market Share:

Top Products:

• nCino Bank Operating System: The core platform offering encompassing various modules like account opening, loan origination, deposit management, etc.
• nCino Sales Cloud: Focused on automating and managing the sales process for financial institutions.
• nCino IQ: Advanced analytics and reporting tools for data-driven insights and decision-making.

Market Share:

nCino holds a significant market share in the cloud-based financial services software market segment. However, precise market share figures are elusive due to variations in reporting methodologies and lack of publicly available data on specific segments. Nevertheless, nCino is considered a market leader in this space, catering to over 1,400 financial institutions globally.

Total Addressable Market:

The global market for financial services software is estimated to reach $49.32 billion by 2027, growing at a CAGR of approximately 9.5%. Within this broad market, the cloud-based segment is experiencing even faster growth, creating significant opportunities for nCino.

Financial Performance:

Recent Performance:

• Revenue: NCNO witnessed 43.6% year-over-year (YoY) growth in its fiscal year 2023 (ended March 2023), exceeding analyst expectations and reaching $728.7 million.
• Net Income: Though nCino has yet to turn a profit, net loss for the year was $72.56 million, a significant improvement from the $93.58 million loss in the previous fiscal year.
• EPS: Loss per share for the year was negative $0.64, an improvement from $0.85 in the earlier year.

Cash Flow and Balance Sheet:

• nCino generated $499.84 million in cash from operations during FY 2023.
• Total assets reached $2.74 billion, exceeding liabilities of $621.74 million.

Dividends and Shareholder Returns:

Dividends:

As of November 2023, nCino does not yet pay dividends, prioritizing reinvestment of profits toward future growth.

Shareholder Returns:

NCNO stock has delivered strong returns to investors, with a 5-year total return exceeding 650%. However, it's important to note that past performance is no guarantee of future success.

Growth Trajectory:

Historical Growth:

nCino has shown impressive historical growth during its early years as it expanded its client base and product offerings.

• Revenue increased from $70.40 million in FY 2019 to $728.70 million in FY 2023, showcasing a compound annual growth rate of 82.26%.

Future Prospects:

Analysts anticipate continued growth for nCino, driven by increasing demand for cloud-based banking solutions and continued product development.

Recent Initiatives:

The company continuously unveils new features and modules within its platform and actively pursues strategic acquisitions to reinforce its position in the market.

Market Dynamics:

Overview:

• The overall banking industry undergoes significant transformation, adopting innovative technologies and seeking efficiency improvements.
• Cloud-based platforms like nCino's stand as a key growth driver within this evolving landscape.
• Demand for mobile-first solutions and personalized customer experiences fuels the adoption of such technologies.

nCino's Positioning:

nCino is well-positioned to benefit from these market trends because it:

• Focuses on the cloud-based banking market, poised for continued growth.
• Offers a scalable platform designed to adapt to ever-changing customer needs and regulatory requirements.

Competition:

Key Competitors:

• Finastra (FSTN.SW)
• Temenos (SIX:TEMN)
• Fiserv (FISV)
• Jack Henry & Associates (JKHY)

Competitive Advantages:

• nCino holds an early mover advantage in the cloud-based banking software market.
• Its platform's comprehensive functionality and intuitive design attract financial institutions of various sizes and specialties.