What changed in this filing

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Item 1A. Risk Factors

2023-03-28 compared with 2022-03-31 · 145 added, 125 removed, 460 unchanged (37% of the section changed)

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Consistent with the foregoing, we are exposed to a variety of risks, including risks associated with the following:

• We have a limited operating history, which makes it difficult to predict our future operating results, and we may not achieve our expected operating results in the future.

• We have a history of operating losses and may not achieve or sustain profitability in the future.

• We derive all of our revenues from customers in the financial services industry, and any downturn or consolidation or decrease in technology spend in the financial services industry could adversely affect our business.

• We have a limited operating history at the current scale of our business, which makes it difficult to predict our future operating results, and we may not achieve our expected operating results in the future.

• We have a history of operating losses and may not achieve or sustain profitability on a generally accepted accounting principles in the United States of America ("GAAP") basis in the future.

• If we are unable to attract new customers or continue to broaden our existing customers’ use of our solutions, our revenue growth will be adversely affected.

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• Because we recognize subscription revenues over the term of the contract, downturns or upturns in our business may not be reflected in our results of operations until future periods.

• The markets in which we participate are intensely competitive and highly fragmented, and pricing pressure, new technologies, or other competitive dynamics could adversely affect our business and results of operations.

• We depend on data centers operated by or on behalf of Salesforce, Amazon Web Services ("AWS") and other third parties, and any disruption in the operation of these facilities could adversely affect our business and subject us to liability.

• We depend on data centers operated by or on behalf of Salesforce, AWS and other third parties, and any disruption in the operation of these facilities could adversely affect our business and subject us to liability.

• We may acquire or invest in companies, or pursue business partnerships, which may divert our management’s attention or result in dilution to our stockholders, and we may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions, investments or partnerships.

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• Our customers are highly regulated and subject to a number of challenges and risks.

Our failure to comply with laws and regulations applicable to us as a technology provider to financial institutions could adversely affect our business and results of operations, increase costs and impose constraints on the way we conduct our business.

• We are presently subject to a government investigation and a civil suit involving alleged violations of antitrust laws relating to our hiring and wage practices.

Our failure to comply with laws and regulations applicable to us as a technology provider to FIs could adversely affect our business and results of operations, increase costs and impose constraints on the way we conduct our business.

• We are presently subject to a putative class action civil suit involving alleged violations of antitrust laws relating to our hiring and wage practices and a purported stockholder derivative lawsuit alleging violation of fiduciary duties with the series of mergers in which we became the parent of nCino OpCo and SimpleNexus.

These matters or future litigation against us could adversely affect our operations and prospects, damage our reputation, and be costly and time consuming to defend.

Risks Relating to Our Business and Industry

We have a limited operating history, which makes it difficult to predict our future operating results, and we may not achieve our expected operating results in the future.

As a result of our limited operating history, our ability to forecast our future operating results, including revenues, cash flows, and profitability, is limited and subject to a number of uncertainties.

We derive all of our revenues from customers in the financial services industry, and any downturn or consolidation or decrease in technology spend in the financial services industry could adversely affect our business.

All of our revenues are derived from FIs whose industry has experienced significant pressure in recent years due to economic uncertainty, fluctuating interest rates, liquidity concerns and increased regulation.

In the past, FIs have experienced

consolidation, distress and failure, including as recently as March 2023 when the FDIC took control of Silicon Valley Bank and Signature Bank due to liquidity concerns and a number of other FIs experienced turbulence and a precipitous decline in market value.

It is possible these conditions may persist, deteriorate or reoccur.

If any of our customers merge with or are acquired by other entities, such as FIs that have internally developed banking technology solutions or that are not our customers or use our solutions less, we may lose business.

Additionally, changes in management of our customers could result in delays or cancellations of the implementation of our solutions.

It is also possible that the larger FIs that result from business combinations could have greater leverage in negotiating price or other terms with us or could decide to replace some or all of the elements of our solutions.

Our business may also be materially and adversely affected by weak economic conditions in the financial services industry.

Any downturn or prolonged disruption in the financial services industry may cause our customers to reduce their spending on technology or cloud-based banking applications or to seek to terminate or renegotiate their contracts with us.

Moreover, economic fluctuations caused by factors such as the U.S.

Federal Reserve changing interest rates may cause potential new customers and existing customers to forego or delay purchasing our solutions or reduce the amount of spend with us, which would materially and adversely affect our business.

We have a limited operating history at the current scale of our business, which makes it difficult to predict our future operating results, and we may not achieve our expected operating results in the future.

As a result of our limited operating history at the current scale of our business, our ability to forecast our future operating results, including revenues, cash flows, and profitability, is limited and subject to a number of uncertainties.

We have encountered and will encounter risks and uncertainties frequently experienced by growing companies in the technology industry, such as the risks and uncertainties described in this Annual Report on Form 10-K.

If our assumptions regarding these risks and uncertainties are incorrect or change due to changes in our markets, or if we do not address these risks successfully, our operating and financial results may differ materially from our expectations and our business may suffer.

We have a history of operating losses and may not achieve or sustain profitability in the future.

We have a history of operating losses and may not achieve or sustain profitability on a GAAP basis in the future.

We began operations in late 2011 and have experienced net losses since inception.

We generated net losses attributable to nCino of $40.5 million, $49.4 million, and $102.7 million for the fiscal years ended January 31, 2021, 2022, and 2023, respectively.

Our net loss for fiscal 2022 includes the results of operations of SimpleNexus from the Acquisition Date.

Our net loss includes the results of operations of SimpleNexus from the date of acquisition on January 7, 2022.

We had an accumulated deficit of $310.3 million at January 31, 2023.

We will need to generate and sustain increased revenue levels in future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability.

We intend to continue to expend significant resources to support further growth and extend the functionality of the nCino Bank Operating System, expand our sales and product development headcount, increase our marketing activities, and grow our international operations.

We will also face increased costs associated with growth and the expansion of our customer base and have seen increased costs in becoming a public company.

Even if we become profitable on a GAAP basis, we may not be able to maintain or increase our level of profitability.

We intend to continue to support further growth and extend the functionality of our solutions in future periods.

We will also face increased costs associated with growth and the expansion of our customer base and have seen increased costs in being a public company.

Our efforts to grow our business may be more costly than we expect, and we may not be able to increase our revenues enough to offset our increased operating expenses.

We expect to incur losses for the foreseeable future as we continue to invest in product development, and we cannot predict whether or when we will achieve or sustain profitability.

We expect to incur losses on a GAAP basis for the foreseeable future as we continue to invest in product development, and we cannot predict whether or when we will achieve or sustain profitability on a GAAP basis.

If we are unable to achieve and sustain profitability, the value of our business and common stock may significantly decrease.

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To increase our revenues, we will need to continue to attract new customers and succeed in having our current customers expand the use of our solutions across their institution.

For example, our revenue growth strategy includes increased penetration of markets outside the United States as well as selling our retail applications to existing and new customers, and failure in either respect would adversely affect our revenue growth.

For example, our revenue growth strategy includes increased penetration of markets outside the U.S.

as well as selling our retail applications to existing and new customers, and failure in either respect would adversely affect our revenue growth.

In addition, for us to maintain or improve our results of operations, it is important that our customers renew their subscriptions with us on the same or more favorable terms to us when their existing subscription term expires.

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If the market for cloud-based banking technology develops more slowly than we expect or changes in a way that we fail to anticipate, our sales would suffer and our results of operations would be adversely affected.

Use of, and reliance on, cloud-based banking technology is still at an early stage and we do not know whether financial institutions will continue to adopt cloud-based banking technology such as the nCino Bank Operating System in the future, or whether the market will change in ways we do not anticipate.

Many financial institutions have invested substantial personnel and financial resources in legacy software, and these institutions may be reluctant, unwilling, or unable to convert from their existing systems to our solutions.

Furthermore, these financial institutions may be reluctant, unwilling, or unable to use cloud-based banking technology due to various concerns such as the security of their data and reliability of the delivery model.

These concerns or other considerations may cause financial institutions to choose not to adopt cloud-based banking technology such as ours or to adopt them more slowly than we anticipate, either of which would adversely affect us.

Use of, and reliance on, cloud-based banking technology is still at an early stage and we do not know whether FIs will continue to adopt cloud-based banking technology such as the nCino Bank Operating System in the future, or whether the market will change in ways we do not anticipate.

Many FIs have invested substantial personnel and financial resources in legacy software, and these FIs may be reluctant, unwilling, or unable to convert from their existing systems to our solutions.

Furthermore, these FIs may be reluctant, unwilling, or unable to use cloud-based banking technology due to various concerns such as the security of their data and reliability of the delivery model.

These concerns or other considerations may cause FIs to choose not to adopt cloud-based banking technology such as ours or to adopt them more slowly than we anticipate, either of which would adversely affect us.

Our future success also depends on our ability to sell additional applications and functionality, such as nIQ and SimpleNexus, to our current and prospective customers.

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In addition, promoting and selling new and enhanced functionality may require increasingly costly sales and marketing efforts and if customers choose not to adopt this functionality, our business and results of operations could suffer.

If financial institutions are unwilling or unable to transition from their legacy systems, or if the demand for our solutions does not meet our expectations, our results of operations and financial condition will be adversely affected.

If FIs are unwilling or unable to transition from their legacy systems, or if the demand for our solutions does not meet our expectations, our results of operations and financial condition will be adversely affected.

We may not be able to sustain our revenue growth rate in the future.

Our revenues increased from $204.3 million for fiscal 2021 to $273.9 million for fiscal 2022 to $408.3 million for fiscal 2023.

Our revenues for fiscal 2022 include the revenues of SimpleNexus from the Acquisition Date.

Our revenues include the revenues of SimpleNexus from the date of acquisition on January 7, 2022.

We may not be able to sustain revenue growth consistent with our recent history, if at all.

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Furthermore, to the extent we grow in future periods, maintaining consistent rates of revenue growth may be difficult.

Our revenue growth may also slow or even reverse in future periods due to a number of factors, which may include slowing demand for our solutions, our ability to successfully sell and implement new applications, such as our retail applications, increasing competition, decreasing growth of our overall market, the impact of COVID-19, our inability to attract and retain a sufficient number of financial institution customers, concerns over data security, our failure, for any reason, to capitalize on growth opportunities, or general economic conditions.

Our revenue growth may also slow or even reverse in future periods due to a number of factors, which may include slowing demand for our solutions, our ability to successfully sell and implement new applications, such as our retail applications, increasing competition, decreasing growth of our overall market, our inability to attract and retain a sufficient number of FI customers, concerns over data security, our failure, for any reason, to capitalize on growth opportunities, or general economic conditions.

If we are unable to maintain consistent revenue growth, the price of our common stock could decline or otherwise be volatile and it may be difficult for us to achieve and maintain profitability.

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Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, and may not fully or accurately reflect the underlying performance of our business.

For example, purchases of our Paycheck Protection Program ("PPP") solution during the COVID pandemic may have had the effect of accelerating demand that might have otherwise materialized as new business in later periods as well as accelerating the activation of the licenses and

recognition of subscription revenues associated with the PPP solution.

Further, while subscriptions with our customers generally include multi-year non-cancellable terms, in a limited number of contracts, customers have an option to buy out of the contract for a specified termination fee.

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• acquisitions of our customers, to the extent the acquirer elects not to continue using our solutions or reduces subscriptions to our solutions;

• significant disruptions or distress in the FI industry;

• customer renewal rates;

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• network outages or security breaches;

• general economic, industry, and market conditions (particularly those affecting financial institutions);

• general economic, industry, and market conditions;

• changes in our pricing policies or those of our competitors;

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• the timing and success of new product introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers, or strategic partners;

• the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies.

• the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill or intangible assets from acquired companies.

We may not accurately predict the long-term rate of customer subscription renewals or adoption of our solutions, or any resulting impact on our revenues or operating results.

Our customers have no obligation to renew their subscriptions for our solutions after the expiration of the initial or current subscription term, and our customers, if they choose to renew at all, may renew for fewer users or on less favorable pricing terms.

Since the average initial term of our customer agreements is three to five years, and we only began selling the nCino Bank Operating System in 2012, we have limited historical data with respect to rates of customer subscription renewals and cannot be certain of anticipated renewal rates.

The average initial term of our customer agreements is three to five years for the nCino Bank Operating System and one to three years for SimpleNexus.

We have a limited operating history at the current scale of our business with respect to rates of customer subscription renewals and cannot be certain of anticipated renewal rates.

Our renewal rates may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our pricing or our solutions or their ability to continue their operations or spending levels.

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Additionally, as the markets for our solutions develop, we may be unable to attract new customers based on the same subscription model we have used historically.

Moreover, large or influential financial institution customers may demand more favorable pricing or other contract terms from us.

As a result, we may in the future be required to change our pricing

model, reduce our prices, or accept other unfavorable contract terms, any of which could adversely affect our revenues, gross margin, profitability, financial position, and/or cash flow.

Moreover, large or influential FI customers may demand more favorable pricing or other contract terms from us.

As a result, we may in the future be required to change our pricing model, reduce our prices, or accept other unfavorable contract terms, any of which could adversely affect our revenues, gross margin, profitability, financial position, and/or cash flow.

A breach of our security measures or those we rely on could result in unauthorized access to customer or their clients’ data, which may materially and adversely impact our reputation, business, and results of operations.

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We cannot entirely eliminate the risk of improper or unauthorized access to or disclosure of PII or other security events that impact the integrity or availability of PII or our systems and operations, or the related costs we may incur to mitigate the consequences from such events.

Further, our products are flexible and complex software solutions and there is a risk that configurations of, or defects in, our solutions or errors in implementation could create vulnerabilities to security breaches.

Further, our products are flexible and complex software solutions and

there is a risk that configurations of, or defects in, our solutions or errors in implementation could create vulnerabilities to security breaches.

There may be continued unlawful attempts to disrupt or gain access to our information technology systems or the PII or other data of our customers or their clients that may disrupt our or our customers’ operations.

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Furthermore, although our customer contracts typically include limitations on our potential liability, there can be no assurance that such limitations of liability would be adequate.

We also cannot be sure that our existing general

liability insurance coverage and coverage for errors or omissions will be available on acceptable terms or will be available in sufficient amounts to cover one or more claims, or that our insurers will not deny or attempt to deny coverage as to any future claim.

We also cannot be sure that our existing general liability insurance coverage and coverage for errors or omissions will be available on acceptable terms or will be available in sufficient amounts to cover one or more claims, or that our insurers will not deny or attempt to deny coverage as to any future claim.

The successful assertion of one or more claims against us, the inadequacy or denial of coverage under our insurance policies, litigation to pursue claims under our policies, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or coinsurance requirements, could materially and adversely affect our business and results of operations.

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Privacy and data security concerns, data collection and transfer restrictions and related domestic or foreign regulations may limit the use and adoption of our solutions and adversely affect our business and results of operations.

Personal privacy, information security, and data protection are significant issues in the United States, the European Union (“EU”), and a number of other jurisdictions where we offer our solutions.

Personal privacy, information security, and data protection are significant issues in the U.S., the European Union (“EU”), and a number of other jurisdictions where we offer our solutions.

The regulatory framework governing the collection, processing, storage, and use of certain information, particularly financial and other PII, is rapidly evolving.

Any failure or perceived failure by us to comply with applicable privacy, security, or data protection laws, regulations, or industry standards may materially and adversely affect our business and results of operations.

We expect that there will continue to be new proposed and adopted laws, regulations, and industry standards concerning privacy, data protection, and information security in the United States, the EU, and other jurisdictions in which we operate.

We expect that there will continue to be new proposed and adopted laws, regulations, and industry standards concerning privacy, data protection, and information security in the U.S., the EU, and other jurisdictions in which we operate.

For instance, the California Consumer Privacy Act (the "CCPA") became effective on January 1, 2020.

gives California residents expanded rights to access and delete their personal information, receive detailed information about how their personal information is used and shared by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined), and provide such consumers rights to opt-out of certain sales of personal information.

The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.

Although there are exemptions for certain personal information and the CCPA’s implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, the CCPA may increase our compliance costs and potential legal privacy and cybersecurity risks.

The California Privacy Rights Act (the "CPRA"), which expands the CCPA, passed in November 2020.

The CPRA will, among other things, impose additional data protection obligations on companies doing business in California, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data.

The CCPA gives California residents expanded rights to access and delete their personal information, receive detailed information about how their personal information is used and shared by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined), and provide such consumers rights to opt-out of certain sales of personal information.

The CCPA provides for potential civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.

Although the CCPA’s implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, the CCPA may increase our compliance costs and potential legal privacy and cybersecurity risks.

The California Privacy Rights Act (the "CPRA"), which expands the CCPA, passed in November 2020 and went into effect on January 1, 2023, potentially requiring still to be determined additional compliance investment and potential business process changes.

Among other things, the CPRA imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data.

It has also created a new California data protection agency authorized to issue substantive regulations which could result in increased privacy and information security enforcement.

The majority of the CPRA provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required.

Following the CPRA, Virginia and Colorado have enacted similar, but not completely consistent, comprehensive privacy legislation that will also go into effect in January and July 2023, respectively.

Many other states are considering similar legislation in addition to the consideration of comprehensive privacy legislation at the federal level.

Following the CPRA, Virginia (effective January 1, 2023), Colorado (effective July 1, 2023), Connecticut (effective July 1, 2023), and Utah (effective December 1, 2023) have enacted similar, but not completely consistent, comprehensive privacy legislation that go into effect throughout 2023.

Many other states are considering similar

legislation in addition to the consideration of comprehensive privacy legislation at the federal level.

If passed, such laws will require additional resources to ensure compliance, and may have potentially conflicting requirements that would make compliance challenging.

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In July 2020, the Court of Justice of the European Union (the "CJEU") in its Schrems II ruling invalidated the EU-U.S.

Privacy Shield framework, a self-certification mechanism that facilitated the lawful transfer of personal data from the EEA to the United States, with immediate effect.

Privacy Shield framework, a self-certification mechanism that facilitated the lawful transfer of personal data from the EEA to the U.S., with immediate effect.

The CJEU upheld the validity of standard contractual clauses ("SCCs") as a legal mechanism to transfer personal data but companies relying on SCCs will need to carry out a transfer privacy impact assessment which, among other things, assesses laws governing access to personal data in the recipient country and considers whether supplementary measures that provide privacy protections additional to those provided under SCCs will need to be implemented to ensure an ‘essentially equivalent’ level of data protection to that afforded in the EEA.

The EU and U.S.

governments have recently advanced the EU-U.S.

Data Privacy Framework to foster EU-to-U.S.

data transfers and address the concerns raised in the aforementioned CJEU decision, but it is uncertain whether this framework will be overturned in court like the previous two EU-U.S.

bilateral cross-border transfer mechanism to replace the EU-US Privacy Shield framework.

The UK GDPR imposes similar restrictions on transfers of personal data from the UK to jurisdictions that the UK does not consider adequate.

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Any such laws, rules, and regulations may be inconsistent among different jurisdictions, subject to differing interpretations or may conflict with our current or future practices.

Additionally, we may be bound by contractual requirements applicable to our collection, use, processing, and disclosure of various types of information including financial and PII, and may be bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters that may further change as laws, rules, and regulations evolve.

Additionally, we may be bound by contractual requirements

applicable to our collection, use, processing, and disclosure of various types of information including financial and PII, and may be bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters that may further change as laws, rules, and regulations evolve.

Any failure or perceived failure by us, or any third parties with which we do business, to comply with these laws, rules, and regulations, or with other obligations to which we or such third parties are or may become subject, may result in actions or other claims against us by governmental entities or private actors, the expenditure of substantial costs, time, and other resources, or the incurrence of fines, penalties, or other liabilities.

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Because we recognize subscription revenues over the term of the contract, downturns or upturns in our business may not be reflected in our results of operations until future periods.

We generally recognize subscription revenues ratably over the terms of our customer contracts, which typically range from three to five years.

We generally recognize subscription revenues ratably over the terms of our customer contracts.

Most of the subscription revenues we report each quarter are derived from the recognition of deferred revenue relating to subscriptions activated in previous quarters.

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Accordingly, the effect of significant downturns in sales or market acceptance of our solutions may not be reflected in our results of operations until future periods.

All of our revenues are derived from financial institutions whose industry has experienced significant pressure in recent years due to economic uncertainty, low interest rates, liquidity concerns and increased regulation.

In the past, financial institutions have experienced consolidation, distress and failure.

It is possible these conditions may reoccur.

If any of our customers merge with or are acquired by other entities, such as financial institutions that have internally developed banking technology solutions or that are not our customers or use our solutions less, we may lose business.

Additionally, changes in management of our customers could result in delays or cancellations of the implementation of our solutions.

It is also possible that the larger financial institutions that result from business combinations could have greater leverage in negotiating price or other terms with us or could decide to replace some or all of the elements of our solutions.

Our business may also be materially and adversely affected by weak economic conditions in the financial services industry.

Any downturn in the financial services industry may cause our customers to reduce their spending on technology or cloud-based banking applications or to seek to terminate or renegotiate their contracts with us.

Moreover, even if the overall economy is robust, economic fluctuations caused by things such as the U.S.

The markets in which we participate are intensely competitive and highly fragmented, and pricing pressure, new technologies or other competitive dynamics could adversely affect our business and results of operations.

We currently compete with providers of technology and services in the financial services industry, primarily point solution vendors that focus on building functionality that competes with specific components of our solutions.

From time to time, we also compete with systems internally developed by financial institutions.

Many of our competitors have significantly more financial, technical, marketing and other resources than we have, may devote greater resources to the development,

promotion, sale and support of their systems than we can, have more extensive customer bases and broader customer relationships than we have and have longer operating histories and greater name recognition than we do.

From time to time, we also compete with systems internally developed by FIs.

Many of our competitors have significantly more financial, technical, marketing and other resources than we have, may devote greater resources to the development, promotion, sale and support of their systems than we can, have more extensive customer bases and broader customer relationships than we have and have longer operating histories and greater name recognition than we do.

We may also face competition from new companies entering our markets, which may include large established businesses that decide to develop, market or resell cloud-based banking technology, acquire one of our competitors or form a strategic alliance with one of our competitors or with Salesforce.

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From time to time, we consider potential strategic transactions, including acquisitions of, or investments in, businesses, technologies, services, solutions, and other assets.

For example, in fiscal 2022 we acquired SimpleNexus, our largest acquisition to date.

For example, in fiscal 2022 we acquired SimpleNexus, our

largest acquisition to date.

We also may enter into relationships with other businesses to expand our solutions, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing, or investments in other companies.

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• difficulties and additional expenses associated with supporting legacy solutions and infrastructure of the acquired business;

• difficulty converting the customers of the acquired business to our solutions and contract terms, including disparities in licensing terms;

• difficulty converting the customers of the acquired business to our solutions and contract terms, including disparities in terms;

• additional costs for the support or professional services model of the acquired company;

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Our customers are highly regulated and subject to a number of challenges and risks.

Our failure to comply with laws and regulations applicable to us as a technology provider to financial institutions could adversely affect our business and results of operations, increase costs, and impose constraints on the way we conduct our business.

Our failure to comply with laws and regulations applicable to us as a technology provider to FIs could adversely affect our business and results of operations, increase costs, and impose constraints on the way we conduct our business.

Our customers and prospective customers are highly regulated and are generally required to comply with stringent regulations in connection with performing business functions that our solutions address.

As a provider of technology to financial institutions, we have been, and expect to continue to be, examined on a periodic basis by various regulatory agencies and may be required to review certain of our suppliers and partners.

In addition, while much of our operations are not directly subject to the same regulations applicable to financial institutions, we are generally obligated to our customers to provide software solutions and maintain internal systems and processes that comply with certain federal and state regulations applicable to them.

For example, as a result of obligations under some of our customer contracts, we are required to comply with certain provisions of the Gramm-Leach-Bliley Act related to the privacy of consumer information and may be subject to other privacy and data security laws because of the solutions we provide to financial institutions.

Matters subject to review and examination by federal and state financial institution regulatory agencies and external auditors include our internal information technology controls in connection with our performance of data processing services, the agreements giving rise to those processing activities, and the design of our solutions.

As a provider of technology to FIs, we have been, and expect to continue to be, examined on a periodic basis by various regulatory agencies and may be required to review certain of our suppliers and partners.

In addition, while much of our operations are not directly subject to the same regulations applicable to FIs, we are generally obligated to our customers to provide software solutions and maintain internal systems and processes that comply with certain federal and state regulations applicable to them.

Matters subject to review and examination by federal and state FI regulatory agencies and external auditors include our internal information technology controls in connection with our performance of data processing services, the agreements giving rise to those processing activities, and the design of our solutions.

Any inability to satisfy these examinations and maintain compliance with applicable regulations could adversely affect our ability to conduct our business, including attracting and maintaining customers.

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Any legal proceedings against us could adversely affect our operations and prospects, damage our reputation, and be costly and time-consuming to defend.

We are presently subject to a government investigation and a putative class action civil suit involving alleged violations of antitrust laws.

We are presently subject to a putative class action civil suit involving alleged violations of antitrust laws and a purported stockholder derivative lawsuit alleging violation of fiduciary duties with the series of mergers in which we became the parent of nCino OpCo and SimpleNexus.

We may, in the future, become subject, from time to time, to other legal proceedings and claims that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes or employment claims made by current or former employees.

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Implementation of our solutions may be delayed or expenses may increase when customers have unexpected data, software, or technology challenges, or unanticipated business requirements, which could adversely affect our relationship with customers and our operating results.

In general, the revenues related to implementation and other professional services we provide are recognized on a proportional performance basis, and delays and difficulties in these engagements could result in losses on these contracts.

In general, the revenues related to implementation and other professional services we

provide are recognized on a proportional performance basis, and delays and difficulties in these engagements could result in losses on these contracts.

In addition, our customers often require complex acceptance testing related to the implementation of our solutions.

We also leverage the services of SIs, including Accenture, Deloitte, PwC, and West Monroe Partners, among others, to implement and configure the nCino Bank Operating System for our larger financial institution customers, and we are increasingly using other SIs for smaller engagements as we continue to scale our business.

While SIs generally contract directly with our customers, any failure or delay by the SIs we work with in providing adequate service and support would likely adversely affect our brand and reputation.

We also leverage the services of SIs, including Accenture, Deloitte, PwC, and West Monroe Partners, among others, to implement and configure the nCino Bank Operating System for our larger FI customers, while we have historically performed professional services for smaller FIs ourselves.

While SI partners generally contract directly with our customers, any failure or delay by the SI partners we work with in providing adequate service and support would likely adversely affect our brand and reputation.

For implementations we conduct ourselves, project delays may result in recognizing revenues later than expected.

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Our revenues increased from $204.3 million for fiscal 2021 to $273.9 million for fiscal 2022 to $408.3 million for fiscal 2023.

Our revenues for fiscal 2022 include the revenues of SimpleNexus from the Acquisition Date.

Our total number of employees increased from 436 as of January 31, 2018 to 1,681 as of January 31, 2022, which includes SimpleNexus.

Managing and sustaining a growing workforce and customer base geographically-dispersed in the United States and internationally will require substantial management effort, infrastructure, and operational capabilities.

Our revenues include the revenues of SimpleNexus from the date of acquisition on January 7, 2022.

Our total number of employees increased from 436 as of January 31, 2018 to 1,791 as of January 31, 2023.

Managing and sustaining a growing workforce and customer base geographically-dispersed in the U.S.

and internationally requires substantial management effort, infrastructure, and operational capabilities.

To support our growth, we must continue to improve our management resources and our operational and financial controls and systems, and these improvements may increase our expenses more than anticipated and result in a more complex business.

We will also have to expand and enhance

the capabilities of our sales, relationship management, implementation, customer service, research and development, and other personnel to support our growth and continue to achieve high levels of customer service and satisfaction.

Our success will depend on our ability to plan for and manage this growth effectively.

We also have to expand and enhance the capabilities of our sales, relationship management, implementation, customer service, research and development, and other personnel to support our growth and continue to achieve high levels of customer service and satisfaction.

Our success depends on our ability to plan for and manage this growth effectively.

If we fail to anticipate and manage our growth or are unable to continue to provide high levels of customer service, our reputation, as well as our business and results of operations, could be materially and adversely affected.

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If we are unable to successfully expand our product offerings beyond our current solutions, our customers could migrate to competitors who may offer a broader or more attractive range of products and services.

For example, we recently launched our Commercial Pricing and Profitability solution, powered by nIQ, and we may fail to achieve market acceptance of this offering.

For example, in fiscal 2022, we launched our Commercial Pricing and Profitability solution, powered by nIQ, and we may fail to achieve market acceptance of this offering.

Unexpected delays in releasing new or enhanced versions of our solutions, or errors following their release, could result in loss of sales, delay in market acceptance, or customer claims against us, any of which could adversely affect our business.

The success of any new solution depends on several factors, including timely completion, adequate quality testing, and market acceptance.

We may not be able to enhance aspects of our solutions successfully or introduce and gain market acceptance of new applications or improvements in a timely manner, or at all.

not be able to enhance aspects of our solutions successfully or introduce and gain market acceptance of new applications or improvements in a timely manner, or at all.

Additionally, we must continually modify and enhance our solutions to keep pace with changes in software applications, database technology, and evolving technical standards and interfaces.

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We may fail to successfully expand internationally.

In addition, sales to customers outside the United States or with international operations expose us to risks inherent in international sales, which may include a marked increase in expenses.

For the fiscal years ended January 31, 2021 and 2022, sales to customers outside the United States accounted for 11.4% and 15.9%, respectively, of our total revenues.

In addition, sales to customers outside the U.S.

or with international operations expose us to risks inherent in international sales, which may include a marked increase in expenses.

For the fiscal years ended January 31, 2022 and 2023, sales to customers outside the U.S.

accounted for 15.9% and 15.1%, respectively, of our total revenues.

Our revenues include the revenues of SimpleNexus from the date of acquisition on January 7, 2022.

A key element of our growth strategy is to further expand our international operations and worldwide customer base.

We have begun expending significant resources to build out our sales and professional services organizations outside of the United States and we may not realize a suitable return on this investment in the near future, if at all.

We have expended significant resources to build out our sales and professional services organizations outside of the U.S.

and we may not realize a suitable return on this investment in the near future, if at all.

We have limited operating experience in international markets, and we cannot assure you that our international expansion efforts will be successful.

Our experience in the United States may not be relevant to our ability to expand in any international market.

Operating in international markets requires significant resources and management attention and subjects us to regulatory, economic, and political risks that are different from those in the United States.

Export control regulations in the United States may increasingly be implicated in our operations as we expand internationally.

These regulations may limit the export of our solutions and provision of our solutions outside of the United States, or may require export authorizations, including by license, a license exception, or other appropriate government authorizations, including annual or semi-annual reporting and the filing of an encryption registration.

Our experience in the U.S.

may not be relevant to our ability to expand in any international market.

Operating in international markets requires significant resources and management attention and subjects us to regulatory, economic, and political risks that are different from those in the U.S.

Export control regulations in the U.S.

may increasingly be implicated in our operations as we expand internationally.

These regulations may limit the export of our solutions and provision of our solutions outside of the U.S., or may require export authorizations, including by license, a license exception, or other appropriate government authorizations, including annual or semi-annual reporting and the filing of an encryption registration.

Changes in export or import laws, or corresponding sanctions, may delay the introduction and sale of our solutions in international markets, or, in some cases, prevent the export or import of our solutions to certain countries, regions, governments, persons, or entities altogether, which could adversely affect our business, financial condition, and results of operations.

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• new and different sources of competition;

• weaker protection for intellectual property and other legal rights than in the United States and practical difficulties in enforcing intellectual property and other rights outside of the United States;

• weaker protection for intellectual property and other legal rights than in the U.S.

and practical difficulties in enforcing intellectual property and other rights outside of the U.S.;

• laws and business practices favoring local competitors;

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Increasing our customer base and expanding customer adoption within and across business lines will depend, to a significant extent, on our ability to effectively expand our sales and marketing operations and activities.

From January 31, 2021 to January 31, 2022, our sales and marketing teams increased from 258 to 418 employees, which includes SimpleNexus.

We plan to continue to expand our direct sales force both domestically and internationally for the foreseeable future.

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Effective customer training and high-quality, ongoing customer support are critical to the successful marketing, sale, and adoption of our solutions and for the renewal of existing customer contracts.

As we grow our customer base, we will need to further invest in and expand our customer support and training organization, which could strain our team and infrastructure and reduce profit margins.

As we grow our customer base, we will

need to further invest in and expand our customer support and training organization, which could strain our team and infrastructure and reduce profit margins.

If we do not help our customers adopt our solutions, quickly resolve any post-implementation matters, and provide effective ongoing customer support and training, our ability to expand sales to existing and future customers and our reputation would be adversely affected.

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Prospective customers often undertake a prolonged evaluation process, which typically involves not only our solutions, but also those of our competitors.

Our sales cycles are typically lengthy, generally ranging from six to

nine months for smaller financial institutions and twelve to eighteen months or more for larger financial institutions.

Our sales cycles are typically lengthy, generally ranging from six to nine months for smaller FIs and 12 to 18 months or more for larger FIs.

We may spend substantial time, effort and money on our sales and marketing efforts without any assurance that our efforts will produce any sales.

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Our future success and competitive position depend in part on our ability to protect our intellectual property and proprietary technologies.

To safeguard these rights, we rely on a combination of patent, trademark, copyright, and trade secret laws and contractual protections in the United States and other jurisdictions, all of which provide only limited protection and may not now or in the future provide us with a competitive advantage.

As of January 31, 2022, we had 12 issued patents and one patent application pending relating to the nCino Bank Operating System in the United States.

To safeguard these rights, we rely on a combination of patent, trademark, copyright, and trade secret laws and contractual protections in the U.S.

and other jurisdictions, all of which provide only limited protection and may not now or in the future provide us with a competitive advantage.

As of January 31, 2023, we had 12 issued patents and one patent application pending relating to the nCino Bank Operating System in the U.S.

We cannot assure you that any patents will issue from any patent applications, that patents that may be issued from such applications will give us the protection we seek or that any such patents will not be challenged, invalidated, or circumvented.

Any patents that may issue in the future from our pending or future patent applications may not provide sufficiently broad protection and may not be enforceable in actions against alleged infringers.

We have registered the “nCino” name and logo in the United States and certain other countries and we have registrations and/or pending applications for additional marks including the “Bank Operating System” and “nIQ” in the United States and certain other countries.

We have registered the “nCino” name and logo in the U.S.

and certain other countries and we have registrations and/or pending applications for additional marks including “nIQ” in the U.S.

and certain other countries.

However, we cannot assure you that any future trademark registrations will be issued for pending or future applications or that any registered trademarks will be enforceable or provide adequate protection of our proprietary rights.

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Further, the contractual provisions that we enter into may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual property rights.

Moreover, policing unauthorized use of our technologies, trade secrets, and intellectual property is difficult, expensive, and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak.

and where mechanisms for enforcement of intellectual

property rights may be weak.

We may be unable to determine the extent of any unauthorized use or infringement of our solutions, technologies, or intellectual property rights.

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Because few courts have interpreted open source licenses, the manner in which these licenses may be interpreted and enforced is subject to some uncertainty.

There is a risk that open source software licenses could be construed in a manner that imposes unanticipated

conditions or restrictions on our ability to market or provide our solutions.

There is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market or provide our solutions.

As a result of using open source software subject to such licenses, we could be required to release proprietary source code, pay damages, re-engineer our solutions, limit or discontinue sales, or take other remedial action, any of which could adversely affect our business.

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We have funded our operations since inception primarily through equity financings and receipts generated from customers.

During our fiscal year 2023, we supplemented our liquidity with a revolving credit facility of up to $50.0 million (the "Credit Facility").

As of January 31, 2023 we had $30.0 million outstanding under our Credit Facility.

We cannot be certain when or if our operations will generate sufficient cash to fund our ongoing operations or the growth of our business.

We intend to continue to make investments to support our business and may require additional funds.

Moreover, we do not expect to be profitable for the foreseeable future.

Moreover, we do not expect to be profitable for the foreseeable future on a GAAP basis.

Additional financing may not be available on favorable terms, if at all.

If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could adversely affect our business and results of operations.

If we incur debt, the lenders would have rights senior to holders of common stock to make claims on our assets, the terms of any debt could restrict our operations, and we may be unable to service or repay the debt.

If we incur debt, including under the revolving line of credit, the lenders would have rights senior to holders of common stock to make claims on our assets, and the terms of any future debt could restrict our operations, and we may be unable to service or repay the debt.

Furthermore, if we issue additional equity securities, stockholders may experience dilution, and the new equity securities could have rights senior to those of our common stock.

Because our decision to issue securities in a future offering will depend on numerous considerations, including factors beyond our control, we cannot

predict or estimate the impact any future incurrence of debt or issuance of equity securities will have on us.

Because our decision to issue securities in a future offering will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the impact any future incurrence of debt or issuance of equity securities will have on us.

Any future incurrence of debt or issuance of equity securities could adversely affect the value of our common stock.

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economy in light of the COVID-19 pandemic, including temporary beneficial changes to the treatment of net operating losses, interest deductibility limitations, and payroll tax matters.

Many of the provisions of the Tax Cuts and Jobs Act and CARES Act still require guidance through the issuance and/or finalization of regulations by the U.S.

Treasury Department in order to fully assess their effects, and there may be substantial delays before such regulations are promulgated and/or finalized, increasing the uncertainty as to the ultimate effects of the Tax Cuts and Jobs Act and CARES Act on us and our stockholders.

There also may be technical corrections legislation or other legislative changes proposed with respect to the Tax Cuts and Jobs Act and CARES Act, the effects of which cannot be predicted and may be adverse to us or our stockholders.

Many of the provisions of the Tax Cuts and Jobs Act still require

guidance through the issuance and/or finalization of regulations by the U.S.

There also may be technical corrections legislation or other legislative changes proposed with respect to the Tax Cuts and Jobs Act, the effects of which cannot be predicted and may be adverse to us or our stockholders.

Risks Relating to Ownership of Our Common Stock

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• changes in operating performance and stock market valuations of companies in our industry, including our competitors;

• price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

• price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole, including inflation and rising interest rates;

• lawsuits threatened or filed against us;

• developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies;

• other events or factors, including those resulting from COVID-19, political conditions, election cycles, war or incidents of terrorism, or responses to these events.

• other events or factors, political conditions, election cycles, war or incidents of terrorism, or responses to these events.

In addition, extreme price and volume fluctuations in the stock markets have affected and continue to affect many technology companies’ stock prices.

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This variability and unpredictability could also result in our failing to meet the expectations of industry or financial analysts or investors for any period.

If our revenues or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially.

of our common stock could decline substantially.

Such a stock price decline could occur even when we have met any previously publicly stated revenue or earnings forecasts that we may provide.

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Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

However, our amended and

restated certificate of incorporation contains a federal forum provision which provides that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

However, our amended and restated certificate of incorporation contains a federal forum provision which provides that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to this provision.

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General Risks

Uncertain or weakened economic conditions, including as a result of COVID-19, may adversely affect our industry, business, and results of operations.

Uncertain or weakened economic conditions, including inflation and rising interest rates and geopolitical uncertainties, may adversely affect our industry, business, and results of operations.

Our overall performance depends on economic conditions, which may be challenging at various times in the future.

Financial developments seemingly unrelated to us or our industry may adversely affect us.

Domestic and international economies have from time-to-time been impacted by falling demand for a variety of goods and services, tariffs and other trade issues, threatened sovereign defaults and ratings downgrades, restricted credit, threats to major multinational companies, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies, and overall uncertainty.

For example, COVID-19 has created and may continue to create significant uncertainty in global financial markets and the long-term economic impact of COVID-19 is highly uncertain.

We cannot predict the timing, strength, or duration of the current or any future potential economic slowdown in the United States or globally.

Financial developments, monetary and other developments seemingly unrelated to us or our industry may adversely affect us.

For example, the current rising interest rate environment in the U.S., undertaken as a means to manage inflation, has had an impact on the real estate market in the U.S.

and specifically, the demand for mortgage and mortgage-related products and services, which has had a negative impact on our SimpleNexus business and may continue to adversely impact that business to the extent the rising interest rate environment persists.

Moreover, domestic and international economies have from time-to-time been impacted by falling demand for a variety of goods and services, tariffs and other trade issues, threatened sovereign defaults and ratings downgrades, restricted credit, threats to major multinational companies, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies, and overall uncertainty.

We cannot predict the timing, strength, or duration of the current or any future potential economic slowdown in the U.S.

These conditions affect the rate of technology spending generally and could adversely affect our customers’ ability or willingness to purchase our solutions, delay prospective customers’ purchasing decisions, reduce the value or duration of their subscriptions, or affect renewal rates, any of which could adversely affect our results of operations.

Natural or man-made disasters and other similar events, including the COVID-19 pandemic, may significantly disrupt our business, and negatively impact our business, financial condition, and results of operations.

Natural or man-made disasters and other similar events may significantly disrupt our business, and negatively impact our business, financial condition, and results of operations.

A significant portion of our employee base, operating facilities, and infrastructure are centralized in Wilmington, North Carolina.

Any of our facilities may be harmed or rendered inoperable by natural or man-made disasters, including hurricanes, tornadoes, wildfires, floods, earthquakes, nuclear disasters, acts of terrorism or other criminal activities, infectious disease outbreaks or pandemic events, including the COVID-19 pandemic, power outages, and other infrastructure failures, which may render it difficult or impossible for us to operate our business for some period of time.

Any of our facilities may be harmed or rendered inoperable by natural or man-made disasters, including hurricanes, tornadoes, wildfires, floods, earthquakes, nuclear disasters, acts of terrorism or other criminal activities, infectious disease outbreaks or pandemic events, power outages, and other infrastructure failures, which may render it difficult or impossible for us to operate our business for some period of time.

Our facilities would likely be costly to repair or replace, and any such efforts would likely require substantial time.

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In addition, the facilities of our third-party providers, including Salesforce and AWS, may be harmed or rendered inoperable by such natural or man-made disasters, which may cause disruptions, difficulties, or otherwise materially and adversely affect our business.

Additionally, to the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this ‘‘Risk Factors’’ section, such as our ability to achieve profitability in the future, our ability to attract new customers or continue to broaden our existing customers’ use of our solutions, and the impact of any decrease in technology spend by customers and potential customers in the financial services industry where we derive all of our revenues.

If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business, or our market, or if they change their recommendations regarding our common stock adversely, the trading price or trading volume of our common stock could decline.

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On an annual basis, this assessment includes disclosure of any material weaknesses identified by our management in our internal controls over financial reporting.

Because we are no longer an “emerging growth company”, as defined in the JOBS Act, as of January 31, 2022, our independent registered public accounting firm is required to annually attest to the effectiveness of our internal controls over financial reporting.

We will be required to disclose significant changes made in our internal controls procedure on a quarterly basis.

Our independent registered public accounting firm is required to annually attest to the effectiveness of our internal controls over financial reporting.

We are required to disclose significant changes made in our internal controls procedure on a quarterly basis.

Our compliance with Section 404 has required, and will continue to require, that we incur substantial accounting expense and expend significant management efforts.

We currently do not have an internal audit group, and we may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge to comply with Section 404.

During the evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our internal controls over financial reporting, we will be unable to assert that our internal controls over financial reporting are effective.

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For example, we are subject to the reporting requirements of the Exchange Act, the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules and regulations of the SEC, and the rules and regulations of The Nasdaq Global Select Market.

As part of the new requirements, we have established and maintain effective disclosure and financial controls and made changes to our corporate governance practices.

As part of these requirements, we established and maintain effective disclosure and financial controls and make changes to our corporate

governance practices.

Compliance with these requirements has and will continue to increase our legal and financial compliance costs and will make some activities more time-consuming.

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In particular, we incur significant expense and devote substantial management effort to complying with the requirements of Section 404 of the Sarbanes-Oxley Act.

We are in the process of hiring additional accounting and financial staff with appropriate public company experience and technical accounting knowledge.

The terms of our Credit Facility contain restrictive covenants that may limit our operating flexibility.

On February 11, 2022, we entered into Credit Agreement by and among the Company, nCino OpCo, Inc., certain subsidiaries of the Company as guarantors, and Bank of America, N.A.

as lender, pursuant to which we received access to a revolving credit facility of up to $ 50.0 million (the “Credit Facility”).

as lender, pursuant to which we received access to a revolving Credit Facility of up to $50.0 million.

As of January 31, 2023, we had $30.0 million outstanding under our Credit Facility.

The Credit Facility contains affirmative and restrictive covenants that limit our operating ability including to, among other things, dispose of assets, merge with other companies, incur additional indebtedness and liens, engage in new businesses, acquire certain other companies and modify organizational documents.

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Any inability to make scheduled payments, meet the financial or other covenants in our Credit Facility would adversely affect our business.

Further, at any time, if we violate the terms of the Credit Facility or otherwise fail to meet our covenants, we may not be able to

obtain a waiver from the lenders under satisfactory terms, if at all, which would limit our operating flexibility and/or liquidity and which would have an adverse effect on our business and prospects.

Further, at any time, if we violate the terms of the Credit Facility or otherwise fail to meet our covenants, we may not be able to obtain a waiver from the lenders under satisfactory terms, if at all, which would limit our operating flexibility and/or liquidity and which would have an adverse effect on our business and prospects.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors