Why a $125 Million Exit From nCino Matters as Shares Are Down 29% This Past Year
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Strong fundamentals did not stop one major investor from heading for the exit.On November 14, New York City-based Insight Holdings Group disclosed a full exit from nCino (NCNO +3.04%), selling nearly 4.5 million shares for an estimated $124.7 million.What HappenedAccording to a November 14 SEC filing, Insight Holdings Group liquidated its entire holding in nCino (NCNO +3.04%) during the third quarter. The firm sold nearly 4.5 million shares, with the estimated trade value based on quarterly average pricing at $124.7 million. The fund’s reportable U.S. equity assets fell by 32% quarter over quarter, reflecting broader portfolio downsizing.What Else to KnowInsight's nCino position previously represented 5.2% of AUM as of the prior quarter.Top holdings after the filing: NYSE:HNGE: $541.3 million (33.4% of AUM)NASDAQ:UDMY: $266.6 million (16.5% of AUM)NYSE:S: $148.4 million (9.2% of AUM)NASDAQ:MSFT: $112.6 million (7% of AUM)NASDAQ:NVDA: $87 million (5.4% of AUM)As of Wednesday, nCino shares were priced at $24.97, down 29% over the past year and well underperforming the S&P 500, which is up 12% in the same period.Company OverviewMetricValueRevenue (TTM)$586.5 millionNet Income (TTM)($21.8 million)Price (as of Wednesday)$24.97One-Year Price Change(29%)Company SnapshotnCino offers cloud-based software applications, including the nCino Bank Operating System and SimpleNexus, focused on digitizing and automating banking processes such as client onboarding, loan management, and regulatory compliance.The company serves a broad range of financial institutions, including global and enterprise banks, regional and community banks, credit unions, and independent mortgage banks.It leverages advanced analytics and artificial intelligence to deliver automation and actionable insights across the loan lifecycle.nCino, Inc. is a leading provider of cloud-based banking software, enabling financial institutions to streamline operations and enhance regulatory compliance. With a focus on recurring SaaS revenue and a diverse customer base, nCino positions itself as a strategic partner for banks and credit unions seeking digital transformation and operational efficiency.Foolish TakeWhen a holding grows large enough, trimming or exiting can say more about risk management than fundamentals. nCino’s latest quarter showed tangible operational progress. Revenue rose 10% year over year to $152.2 million, driven by 11% subscription growth, while GAAP operating margin flipped positive to 8%. On a non-GAAP basis, operating margin expanded to 26%, up roughly 600 basis points from last year. The company also generated positive free cash flow and completed a $100 million share repurchase program, underscoring improving financial discipline.Yet despite those improvements, the stock has lagged, down nearly 30% over the past year and trailing the broader market. That disconnect helps explain why an investor with a shrinking overall portfolio might prioritize liquidity and concentration control, especially as nCino previously represented more than 5% of assets. Within the remaining portfolio, capital is now tilted toward larger, more liquid technology and platform businesses like Microsoft and Nvidia, alongside a dominant holding in Hinge Health. For patient investors, nCino’s expanding margins and recurring revenue base still offer a long runway, but this exit highlights the volatility tolerance required when execution and share price move on different timelines.Glossary13F: A quarterly SEC filing required from institutional investment managers to disclose their U.S. equity holdings.AUM (Assets Under Management): The total market value of investments managed by a fund or firm on behalf of clients.Liquidated: Sold off an entire investment position, converting it to cash or cash equivalents.Quarter over quarter: A comparison of financial or operational results between one fiscal quarter and the previous quarter.AdvertisementPortfolio downsizing: The process of reducing the number or value of investments held within a portfolio.Cloud-based software: Applications delivered and accessed over the internet rather than installed locally on computers.Regulatory compliance: Adhering to laws, regulations, and guidelines relevant to a business or industry.SaaS (Software as a Service): A software delivery model where applications are accessed online via subscription rather than purchased and installed.TTM: The 12-month period ending with the most recent quarterly report.Loan lifecycle: The complete process of managing a loan, from application through repayment or closure.Actionable insights: Data-driven findings that can be used to make informed business decisions.Digital transformation: The adoption of digital technology to improve business processes and outcomes.About the AuthorJonathan Ponciano is a contributing stock market analyst at The Motley Fool. He has nearly a decade of experience as a financial journalist, most recently as an editor and senior reporter at Forbes focused on markets, technology, and entrepreneurship. Jonathan has also written for Investopedia and the Los Angeles Business Journal. He holds a dual B.A. in Business Journalism and Economics from the University of North Carolina at Chapel Hill and an M.B.A. from Columbia Business School. A North Carolina native now based in New York City, Jonathan has also lived in Mexico City and Los Angeles.CMFjonponc