Challenges in Mortgage Segment Hurt nCino, Analyst Downgrades Stock

Company Performance - Total revenues for the third quarter were $138.8 million, a 14% increase year-over-year [1] - Subscription revenues grew 14% year-over-year to$ 119.9 million [1] - Non-GAAP operating margin improved to 20%, up approximately 350 basis points [1] - Record margin of 20.2% achieved, significantly higher than the previous quarter's 14.6% and the mid-point guidance of 15.7% [4] Analyst Actions and Forecasts - Piper Sandler analyst Brent A. Bracelin downgraded nCino to Neutral from Overweight with a price forecast of $38 [1] - 2025 revenue outlook reduced by about$ 20 million due to lower mortgage and core assumptions, partially offset by FullCircl revenue [2] - FY25 revenue estimates revised down to $539.8 million from$ 541.5 million, but EPS estimate raised to 72 cents from 69 cents [5] Mortgage Segment - Unexpected churn in the mortgage segment (15% of sales) outweighed a $6 million quarter-over-quarter revenue increase, the largest sequential revenue gain in over two years [3] - Fourth-quarter mortgage segment growth expected to slow to 3.5% from 16% last quarter [5] - Slower growth for a$ 74 million product category lowers expectations for a recovery next year until mortgage volumes significantly improve [5] Market Reaction - NCNO shares traded lower by 12.10% to $37.36 at the last check Thursday [6]