nCino (NASDAQ:NCNO) Delivers Impressive Q3 CY2025, Stock Soars

Banking software provider nCino (NASDAQ:NCNO) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 9.6% year on year to $152.2 million. The company expects next quarter’s revenue to be around $147.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.31 per share was 49.9% above analysts’ consensus estimates.

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• Revenue: $152.2 million vs analyst estimates of $147.3 million (9.6% year-on-year growth, 3.3% beat)

• Adjusted EPS: $0.31 vs analyst estimates of $0.21 (49.9% beat)

• Adjusted Operating Income: $39.86 million vs analyst estimates of $32.74 million (26.2% margin, 21.8% beat)

• Revenue Guidance for Q4 CY2025 is $147.5 million at the midpoint, roughly in line with what analysts were expecting

• Management raised its full-year Adjusted EPS guidance to $0.91 at the midpoint, a 15.3% increase

• Operating Margin: 7.7%, up from -0.6% in the same quarter last year

• Free Cash Flow Margin: 3.2%, down from 8.5% in the previous quarter

• Market Capitalization: $2.83 billion

“I’m extremely proud of our team’s strong execution in the third quarter, delivering results that exceeded expectations while advancing our AI leadership position,” said Sean Desmond, CEO at nCino.

Born from the internal technology needs of a community bank in 2011, nCino (NASDAQ:NCNO) provides cloud-based software that helps financial institutions streamline client onboarding, loan origination, and account opening processes.

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, nCino’s 25.8% annualized revenue growth over the last five years was solid. Its growth beat the average software company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. nCino’s recent performance shows its demand has slowed as its annualized revenue growth of 12.7% over the last two years was below its five-year trend.

This quarter, nCino reported year-on-year revenue growth of 9.6%, and its $152.2 million of revenue exceeded Wall Street’s estimates by 3.3%. Company management is currently guiding for a 4.3% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 5.6% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges.

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The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.

It’s relatively expensive for nCino to acquire new customers as its CAC payback period checked in at 51.6 months this quarter. The company’s slow recovery of its sales and marketing expenses indicates it operates in a highly competitive market and must invest to stand out, even if the return on that investment is low.

We were impressed by nCino’s optimistic EPS guidance for next quarter, which blew past analysts’ expectations. We were also glad its full-year EPS guidance trumped Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 5.5% to $26.97 immediately following the results.

Indeed, nCino had a rock-solid quarterly earnings result, but is this stock a good investment here? 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 for active Edge members.