What To Expect From nCino’s (NCNO) Q2 Earnings

Anthony Lee /
2023/08/28 6:26 am EDT

Maker of operating system for banks nCino (NASDAQ:NCNO) will be announcing earnings results tomorrow after the bell. Here's what to expect.

Last quarter nCino reported revenues of $113.7 million, up 20.7% year on year, in line with analyst expectations. It was unfortunate to see that total revenue, subscription revenue, adjusted operating profit, and EPS guidance for the next quarter missed analysts' expectations. Additionally, revenue guidance for the full year missed expectations, although adjusted operating profit and EPS guidance for the full year were ahead. Overall, it was a weaker quarter for the company.

Is nCino buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting nCino's revenue to grow 15.4% year on year to $115 million, slowing down from the 49.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.07 per share.

nCino Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 3.78%.

Looking at nCino's peers in the vertical software segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Q2 Holdings delivered top-line growth of 10.1% year on year, beating analyst estimates by 0.19%, and Procore Technologies reported revenues up 32.7% year on year, exceeding estimates by 4.84%. Q2 Holdings traded flat on the results, and Procore Technologies was up 2.9%.

Read our full analysis of Q2 Holdings's results here and Procore Technologies's results here.

Tech stocks have had a rocky start in 2022 and while some of the vertical software stocks have fared somewhat better, they have not been spared, with share price declining 10.8% over the last month. nCino is down 11.3% during the same time and is heading into the earnings with analysts' average price target of $31.5, compared to share price of $28.7.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.