cloudedjudgement.substack.com · 2020-06-24 · 2171d

nCino: Benchmarking the S-1 Data

Jamin Ball analyzes nCino's S-1 IPO filing by benchmarking its financial metrics against 44 comparable cloud IPOs dating back to 2012, examining revenue growth, gross margins, net revenue retention, and CAC payback. He concludes nCino will trade at an 18x NTM revenue multiple (similar to Twilio) resulting in a $3-3.5B valuation at IPO, positioning the company between high-growth SaaS (25x) and financial services vertical software (11x) multiples. The analysis highlights nCino's exceptional unit economics (150% NRR, strong CAC payback) and large $10B TAM despite below-average gross margins and mixed organic vs. inorganic growth composition.

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Metrics in this report

Global Enterprise IT Spending (Banking)

376billions USD

actual

Banking industry IT spending in 2018 per Gartner; cited by nCino as TAM validation

NTM Revenue Multiple (Financial Services Vertical Software)

11x revenue

median

Vertical software providers serving financial services (Q2, Fiserv, FIS, Temenos, Black Knight, Jack Henry, Blackline, Guidewire, AppFolio) as of Q2 2020

NTM Revenue Multiple (High-Growth SaaS)

25x revenue

median

Cloud SaaS companies with >30% YoY growth as of Q2 2020

NTM Revenue Multiple (Overall SaaS Universe)

13x revenue

median

All public SaaS companies as of Q2 2020

nCino Average Contract Length

3-5years

actual

Typical customer contract duration; cited as reason for inflated NRR metric

nCino Gross Margin

55percent

actual

nCino LTM gross margin as of S-1 filing

nCino Implementation Timeline Range

3-18months

actual

Professional services deployment period; 3 months for community banks to 18+ months for global institutions

nCino LTM Revenue Growth (YoY)

50percent

actual

nCino reported growth rate over most recent 12 months

nCino NTM Revenue Multiple (Predicted)

18x revenue

target

nCino implied valuation at IPO trading launch

nCino Net Revenue Retention

150percent

best-in-class

nCino annual cohort NRR; noted as exceptional relative to comparable SaaS companies

nCino Organic Revenue Growth (YoY Adjusted)

40percent

actual

nCino organic growth after removing ~19% inorganic contribution from Visible Equity and FinSuite acquisitions

nCino Predicted Valuation (IPO Entry)

3250millions USD

target

Midpoint of $3.0-3.5B valuation range at IPO trading debut

nCino Serviceable Addressable Market (SAM)

10000millions USD

actual

nCino Bank Operating System market opportunity per S-1 disclosure and internal analysis

nCino Subscription Revenue Percentage

76percent

actual

Subscription revenue as % of total revenue (professional services remainder)