What changed in this filing

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Item 1. Financial Statements

2023-08-29 compared with 2023-05-31 · 131 added, 85 removed, 558 unchanged (28% of the section changed)

2 unchanged sentences

(In thousands, except share and per share data)

January 31, 2023 April 30, 2023

January 31, 2023 July 31, 2023

Current assets

Cash and cash equivalents (VIE:

$ 2,019 and $ 1,517 at January 31, 2023 and April 30, 2023, respectively)

$ 2,019 and $ 1,081 at January 31, 2023 and July 31, 2023, respectively)

$ 82,036 $ 98,003

Accounts receivable, less allowances of $ 899 and $ 1,037 at January 31, 2023 and April 30, 2023, respectively

Accounts receivable, less allowances of $ 899 and $ 876 at January 31, 2023 and July 31, 2023, respectively

99,497 80,901

7 unchanged sentences

Intangible assets, net 152,825 138,655

Investments (related party $ 2,500 at January 31, 2023 and April 30, 2023)

Other long-term assets 8,101 1,979

Investments (related party $ 2,500 at January 31, 2023 and July 31, 2023)

Long-term prepaid expenses and other assets 8,101 1,579

Total assets $ 1,327,269 $ 1,301,615

5 unchanged sentences

Deferred revenue, current portion 154,871 169,314

Revolving credit facility, current portion — 15,000

Financing obligations, current portion 1,015 1,384

10 unchanged sentences

Preferred stock, $ 0.001 par value;

10,000,000 shares authorized, and none issued and outstanding as of January 31, 2023 and April 30, 2023

10,000,000 shares authorized, and none issued and outstanding as of January 31, 2023 and July 31, 2023

Common stock, $ 0.0005 par value;

500,000,000 shares authorized as of January 31, 2023 and April 30, 2023;

111,424,132 and 112,200,481 shares issued and outstanding as of January 31, 2023 and April 30, 2023, respectively

500,000,000 shares authorized as of January 31, 2023 and July 31, 2023;

111,424,132 and 112,661,660 shares issued and outstanding as of January 31, 2023 and July 31, 2023, respectively

Additional paid-in capital 1,333,669 1,364,757

6 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2023 2022 2023

Subscription $ 84,445 $ 99,897 $ 163,634 $ 197,237

15 unchanged sentences

Interest expense ( 631 ) ( 1,044 ) ( 1,269 ) ( 2,423 )

Other expense, net ( 1,573 ) ( 782 )

Other income (expense), net ( 1,014 ) 469 ( 2,587 ) ( 313 )

Loss before income taxes ( 26,625 ) ( 14,534 ) ( 56,065 ) ( 24,785 )

14 unchanged sentences

(In thousands)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2023 2022 2023

Net loss $ ( 27,424 ) $ ( 16,079 ) $ ( 57,427 ) $ ( 27,723 )

12 unchanged sentences

(In thousands, except share data)

Three Months Ended April 30, 2022

Three Months Ended July 31, 2022

Common Stock Additional

4 unchanged sentences

Shares Amount

Balance, January 31, 2022 109,778,542 $ 55 $ 1,277,258 $ ( 72 ) $ ( 209,616 ) $ 1,067,625

Balance, April 30, 2022 110,128,561 $ 55 $ 1,290,295 $ 762 $ ( 239,275 ) $ 1,051,837

Exercise of stock options 148,419 — 1,084 — — 1,084

Stock issuance upon vesting of restricted stock units 246,834 — — — — —

Stock issuance under the employee stock purchase plan 92,236 — 2,424 — — 2,424

Stock-based compensation — — 12,664 — — 12,664

1 unchanged sentence

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 128 ) — ( 27,117 ) ( 27,245 )

Balance, July 31, 2022 110,616,050 $ 55 $ 1,306,339 $ 1,219 $ ( 266,392 ) $ 1,041,221

Three Months Ended July 31, 2023

Common Stock Additional

Capital Other

Comprehensive

Income (Loss) Accumulated

Deficit Total

Shares Amount

Balance, April 30, 2023 112,200,481 $ 56 $ 1,346,250 $ 818 $ ( 321,705 ) $ 1,025,419

Three Months Ended April 30, 2023

Exercise of stock options 93,150 — 607 — — 607

Stock issuance upon vesting of restricted stock units 247,945 — — — — —

Stock issuance under the employee stock purchase plan 120,084 — 2,698 — — 2,698

Stock-based compensation — — 15,275 — — 15,275

Other comprehensive income — — — 26 — 26

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 73 ) — ( 15,811 ) ( 15,884 )

Balance, July 31, 2023 112,661,660 $ 56 $ 1,364,757 $ 844 $ ( 337,516 ) $ 1,028,141

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements .

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

Six Months Ended July 31, 2022

Common Stock Additional

7 unchanged sentences

Stock issuance upon vesting of restricted stock units 439,878 — — — — —

Stock issuance under the employee stock purchase plan 92,236 — 2,424 — — 2,424

Stock-based compensation — — 25,958 — — 25,958

1 unchanged sentence

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 1,157 ) — ( 56,776 ) ( 57,933 )

Balance, April 30, 2023 112,200,481 $ 56 $ 1,346,250 $ 818 $ ( 321,705 ) $ 1,025,419

Balance, July 31, 2022 110,616,050 $ 55 $ 1,306,339 $ 1,219 $ ( 266,392 ) $ 1,041,221

Six Months Ended July 31, 2023

Common Stock Additional

Capital Other

Comprehensive

Income (Loss) Accumulated

Deficit Total

Shares Amount

Balance, January 31, 2023 111,424,132 $ 56 $ 1,333,669 $ 694 $ ( 310,341 ) $ 1,024,078

Exercise of stock options 340,668 — 2,208 — — 2,208

Stock issuance upon vesting of restricted stock units 776,776 — — — — —

Stock issuance under the employee stock purchase plan 120,084 — 2,698 — — 2,698

Stock-based compensation — — 26,134 — — 26,134

Other comprehensive income — — — 150 — 150

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — 48 — ( 27,175 ) ( 27,127 )

Balance, July 31, 2023 112,661,660 $ 56 $ 1,364,757 $ 844 $ ( 337,516 ) $ 1,028,141

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements .

1 unchanged sentence

(In thousands)

Three Months Ended April 30,

Six Months Ended July 31,

Cash flows from operating activities

11 unchanged sentences

Provision for bad debt 154 756

Net foreign currency losses 1,582 363

Net foreign currency losses (gains) 2,635 ( 38 )

Loss on disposal of property and equipment — 144

Change in operating assets and liabilities:

16 unchanged sentences

Exercise of stock options 1,856 2,204

Stock issuance under the employee stock purchase plan 2,424 2,698

Principal payments on financing obligations ( 303 ) ( 564 )

1 unchanged sentence

Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash ( 1,895 ) 1,166

Net increase (decrease) in cash, cash equivalents, and restricted cash ( 4,330 ) 16,079

Net increase in cash, cash equivalents, and restricted cash 3,131 15,951

Cash, cash equivalents, and restricted cash, beginning of period 88,399 87,418

11 unchanged sentences

Receivables from exercise of stock options $ — $ 4

Net working capital receivable adjustment $ 676 $ —

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements .

72 unchanged sentences

The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash, cash equivalents, restricted cash and accounts receivable.

The Company’s cash and cash equivalents exceeded federally insured limits at January 31, 2023 and April 30, 2023.

The Company’s cash and cash equivalents exceeded federally insured limits at January 31, 2023 and July 31, 2023.

The Company maintains its cash, cash equivalents and restricted cash with high-credit-quality financial institutions.

As of January 31, 2023, no individual customer represented over 10% of accounts receivable and, as of April 30, 2023, one individual customer represented 14 % of accounts receivable.

For the three months ended April 30, 2022 and 2023, no individual customer represented more than 10% of the Company’s total revenues.

As of January 31, 2023, no individual customer represented over 10% of accounts receivable and, as of July 31, 2023, one individual customer represented 10.5 % of accounts receivable.

For the three and six months ended July 31, 2022 and 2023, no individual customer represented more than 10% of the Company’s total revenues.

Restricted Cash:

1 unchanged sentence

The remaining restricted cash consists of deposits held as collateral for the Company's bank guarantees issued in place of security deposits for certain property leases and credit cards.

Restricted cash is included in prepaid expenses and other current assets and other long-term assets at January 31, 2023 and April 30, 2023 on the unaudited condensed consolidated balance sheets.

Restricted cash is included in prepaid expenses and other current assets and other long-term assets at January 31, 2023 and July 31, 2023 on the unaudited condensed consolidated balance sheets.

Accounts Receivable and Allowances:

14 unchanged sentences

A summary of activity in the allowance for doubtful accounts is as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2023 2022 2023

Balance, beginning of period $ 166 $ 1,037 $ 151 $ 899

14 unchanged sentences

In October 2019, the Company initially contributed $ 4.7 million in cash in exchange for 51 % of the outstanding common stock of nCino K.K.

As of April 30, 2023, the Company controls a majority of the outstanding common stock in nCino K.K.

As of July 31, 2023, the Company controls a majority of the outstanding common stock in nCino K.K.

All of the common stock held by the Investors is callable by the Company or puttable by the Investors at the option of the Investors or at the option of the Company beginning on the eighth anniversary of the agreement with the Investors.

3 unchanged sentences

are classified outside of permanent equity in the Company’s unaudited condensed consolidated balance sheets.

The estimated redemption value of the call/put option embedded in the redeemable non-controlling interest was $ 3.2 million at April 30, 2023.

The estimated redemption value of the call/put option embedded in the redeemable non-controlling interest was $ 3.2 million at July 31, 2023.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

The following table summarizes the activity in the redeemable non-controlling interests for the period indicated below:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2023 2022 2023

Balance, beginning of period $ 3,419 $ 3,184 $ 2,882 $ 3,589

11 unchanged sentences

Significant unobservable inputs which are supported by little or no market activity.

The carrying amounts of cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value as of January 31, 2023 and April 30, 2023 because of the relatively short duration of these instruments.

The carrying amounts of cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value as of January 31, 2023 and July 31, 2023 because of the relatively short duration of these instruments.

The carrying amount of any outstanding borrowings on the Company's revolving credit facility approximates fair value due to the variable interest rates of the borrowings.

The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period.

The following table summarizes the Company’s financial assets measured at fair value as of January 31, 2023 and April 30, 2023 and indicates the fair value hierarchy of the valuation:

The following table summarizes the Company’s financial assets measured at fair value as of January 31, 2023 and July 31, 2023 and indicates the fair value hierarchy of the valuation:

Fair value measurements on a recurring basis as of January 31, 2023

5 unchanged sentences

(In thousands, except share and per share amounts and unless otherwise indicated)

Fair value measurements on a recurring basis as of April 30, 2023

Fair value measurements on a recurring basis as of July 31, 2023

Level 1 Level 2 Level 3

6 unchanged sentences

The Company's assets measured at fair value on a nonrecurring basis include the investments accounted for under the measurement alternative.

There was no adjustment or impairment recognized for the three months ended April 30, 2022 and 2023, respectively.

There was no adjustment or impairment recognized for the three and six months ended July 31, 2022 and 2023, respectively.

Revenues by Geographic Area

Revenues by geographic region were as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2023 2022 2023

United States $ 84,678 $ 95,315 $ 164,607 $ 189,761

6 unchanged sentences

Accounts Receivable

Accounts receivable, less allowance for doubtful accounts, is as follows as of January 31, 2023 and April 30, 2023:

As of January 31, 2023 As of April 30, 2023

Accounts receivable, less allowance for doubtful accounts, is as follows as of January 31, 2023 and July 31, 2023:

As of January 31, 2023 As of July 31, 2023

Trade accounts receivable $ 94,729 $ 74,570

3 unchanged sentences

Total accounts receivable, net $ 99,497 $ 80,901

1 Includes $ 0.1 million income tax receivable of as of January 31, 2023 and April 30, 2023.

1 Includes $ 0.1 million and $ 0.3 million income tax receivable of as of January 31, 2023 and July 31, 2023, respectively.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Significant movements in the deferred revenue balance during the period consisted of increases due to payments received or due in advance prior to the transfer of control of the underlying performance obligations to the customer, which were offset by decreases due to revenues recognized in the period.

During the three months ended April 30, 2023, $ 68.5 million of revenues were recognized out of the deferred revenue balance as of January 31, 2023.

During the six months ended July 31, 2023, $ 117.2 million of revenues were recognized out of the deferred revenue balance as of January 31, 2023.

Transaction price allocated to remaining performance obligations represents contracted revenues that have not yet been recognized, which includes both deferred revenue and amounts that will be invoiced and recognized as revenues in future periods.

1 unchanged sentence

The Company applies practical expedients to exclude amounts related to performance obligations that are billed and recognized as they are delivered, optional purchases that do not represent material rights, and any estimated amounts of variable consideration that are subject to constraint.

Remaining performance obligations were $ 914.0 million as of April 30, 2023.

Remaining performance obligations were $ 928.6 million as of July 31, 2023.

The Company expects to recognize approximately 69 % of its remaining performance obligation as revenues in the next 24 months, approximately 28 % more in the following 25 to 48 months, and the remainder thereafter.

1 unchanged sentence

Property and equipment, net consisted of the following:

As of January 31, 2023 As of April 30, 2023

As of January 31, 2023 As of July 31, 2023

Furniture and fixtures $ 10,730 $ 12,017

9 unchanged sentences

The Company recognized depreciation expense as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2023 2022 2023

Cost of subscription revenues $ 86 $ 150 $ 176 $ 287

10 unchanged sentences

Translation adjustments ( 398 )

Balance, April 30, 2023 $ 838,924

Balance, July 31, 2023 $ 839,042

Intangible assets

Intangible assets, net are as follows:

As of January 31, 2023 As of April 30, 2023

As of January 31, 2023 As of July 31, 2023

Amount Accumulated

8 unchanged sentences

The Company recognized amortization expense for intangible assets as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2023 2022 2023

Cost of subscription revenues $ 4,256 $ 4,190 $ 8,518 $ 8,441

2 unchanged sentences

Total amortization expense $ 7,028 $ 7,044 $ 14,061 $ 14,149

The expected future amortization expense for intangible assets as of April 30, 2023 is as follows:

The expected future amortization expense for intangible assets as of July 31, 2023 is as follows:

Fiscal Year Ending January 31,

6 unchanged sentences

Stockholders’ Equity

At April 30, 2023, the Company committed a total of 35,663,524 shares of common stock for future issuance as follows:

At July 31, 2023, the Company committed a total of 35,202,345 shares of common stock for future issuance as follows:

Issued and outstanding stock options 1,664,830

3 unchanged sentences

Stock Options

Stock option activity for the three months ended April 30, 2023 was as follows:

Stock option activity for the six months ended July 31, 2023 was as follows:

Shares Weighted

3 unchanged sentences

Exercised ( 340,668 ) 6.48

Outstanding, April 30, 2023 1,761,555 $ 6.64

Exercisable, April 30, 2023 1,740,055 $ 6.49

Fully vested or expected to vest, April 30, 2023 1,759,405 $ 6.62

As of April 30, 2023, there was $ 0.04 million of total unrecognized compensation expense related to unvested stock-based compensation arrangements under the 2014 Stock Plan ("2014 Plan") and 2019 Equity Incentive Plan (as amended and restated, "2019 Plan").

That cost is expected to be recognized over a weighted average period of 0.43 years.

Outstanding, July 31, 2023 1,664,830 $ 6.62

Exercisable, July 31, 2023 1,655,080 $ 6.53

Fully vested or expected to vest, July 31, 2023 1,663,855 $ 6.61

Restricted Stock Units

RSU activity during the three months ended April 30, 2023 was as follows:

RSU activity during the six months ended July 31, 2023 was as follows:

Shares Weighted Average

4 unchanged sentences

Forfeited ( 214,751 ) 41.16

Nonvested, April 30, 2023 3,103,071 $ 42.12

As of April 30, 2023, total unrecognized compensation expense related to non-vested RSUs was $ 106.6 million, adjusted for estimated forfeitures, based on the estimated fair value of the Company’s common stock at the time of grant.

Nonvested, July 31, 2023 5,784,062 $ 33.75

As of July 31, 2023, total unrecognized compensation expense related to non-vested RSUs was $ 162.7 million, adjusted for estimated forfeitures, based on the estimated fair value of the Company’s common stock at the time of grant.

That cost is expected to be recognized over a weighted average period of 3.05 years.

4 unchanged sentences

(In thousands, except share and per share amounts and unless otherwise indicated)

The fair value of ESPP shares during the three months ended April 30, 2022 and 2023 was estimated at the date of grant using the Black-Scholes option valuation model based on assumptions as follows for ESPP awards:

Three Months Ended April 30,

The fair value of ESPP shares during the six months ended July 31, 2022 and 2023 was estimated at the date of grant using the Black-Scholes option valuation model based on assumptions as follows for ESPP awards:

Six Months Ended July 31,

Expected life (in years) 0.50 0.50

Expected volatility 49.65 % - 84.59 %

61.66 % - 61.86 %

Expected dividends 0.00 % 0.00 %

Risk-free interest rate 0.22 % - 2.52 %

As of April 30, 2023, total unrecognized compensation expense related to the ESPP was $ 0.4 million.

That cost is expected to be recognized over the remaining term of the offering period that began on January 1, 2023 and will end on June 30, 2023.

4.77 % - 5.53 %

Stock-Based Compensation Expense

Total stock-based compensation expense included in our unaudited condensed consolidated statements of operations were as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2023 2022 2023

Cost of subscription revenues $ 352 $ 485 $ 728 $ 799

7 unchanged sentences

The components of lease expense were as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2023 2022 2023

Operating lease expense $ 973 $ 1,312 $ 1,938 $ 2,617

2 unchanged sentences

Total $ 1,404 $ 1,897 $ 2,732 $ 3,785

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts and unless otherwise indicated)

Supplemental cash flow information related to operating leases were as follows:

Three Months Ended April 30,

Six Months Ended July 31,

Cash paid for amounts included in the measurement of operating lease liabilities $ 2,007 $ 2,231

Operating right-of-use assets obtained in exchange for operating lease liabilities 677 132

The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of April 30, 2023 were 3.42 years and 4.6 %, respectively.

Future minimum lease payments as of April 30, 2023 were as follows:

The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of July 31, 2023 were 3.32 years and 4.5 %, respectively.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts and unless otherwise indicated)

Future minimum lease payments as of July 31, 2023 were as follows:

Fiscal Year Ending January 31, Operating Leases

21 unchanged sentences

Consolidated Liquidity is measured as the sum of 100 % of unrestricted and unencumbered cash of the Company and its domestic subsidiaries, 75 % of unrestricted and unencumbered cash of the Company’s foreign subsidiaries and the lesser of Credit Facility availability and $ 25.0 million.

The Company is also required to maintain at least $ 5.0 million of the Company's cash and/or marketable securities with the Lender

The Company is also required to maintain at least $ 5.0 million of the Company's cash and/or marketable securities with the Lender which is considered restricted cash and is included in other long-term assets as of January 31, 2023 and prepaid expenses and other current assets as of July 31, 2023 on the Company's unaudited condensed consolidated balance sheets.

The Credit Facility is guaranteed by the Company and each of its current and future material domestic subsidiaries (the “Guarantors”) and secured by substantially all of the personal property, subject to customary exceptions, of the Borrower and the Guarantors, in each case, now owned or later acquired, including a pledge of all of the Borrower’s capital stock, the capital stock of all of the Company’s domestic subsidiaries, and 65 % of the capital stock of foreign subsidiaries that are directly owned by the Borrower or a Guarantor.

The Company had $ 30.0 million and $ 0.0 million outstanding and no letters of credit issued under the Credit Facility and was in compliance with all covenants as of January 31, 2023 and July 31, 2023, respectively.

The available borrowing capacity under the Credit Facility was $ 50.0 million as of July 31, 2023.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts and unless otherwise indicated)

which is considered restricted cash and is included in other long-term assets as of January 31, 2023 and prepaid expenses and other current assets as of April 30, 2023 on the Company's unaudited condensed consolidated balance sheets.

The Company had $ 30.0 million and $ 15.0 million outstanding and no letters of credit issued under the Credit Facility and was in compliance with all covenants as of January 31, 2023 and April 30, 2023, respectively.

As of April 30, 2023, the applicable interest rate was 5.91 %.

The available borrowing capacity under the Credit Facility was $ 35.0 million as of April 30, 2023.

Commitments and Contingencies

18 unchanged sentences

(In thousands, except share and per share amounts and unless otherwise indicated)

Purchase commitments and future minimum lease payments required under financing obligations as of April 30, 2023 is as follows:

Purchase commitments and future minimum lease payments required under financing obligations as of July 31, 2023 is as follows:

Fiscal Year Ending January 31, Purchase commitments Financing obligations - leased facility

8 unchanged sentences

A portion of the associated lease payments are recognized as interest expense and the remainder reduces the financing obligations.

The weighted-average discount rate for the Company's financing obligations as of April 30, 2023 was 5.7 %.

The weighted-average discount rate for the Company's financing obligations as of July 31, 2023 was 5.7 %.

Indemnification

17 unchanged sentences

On April 28, 2022, the District Court approved settlements between the plaintiff and defendant Live Oak in the amount of approximately $ 3.9 million and unnamed party Apiture in the amount of approximately $ 0.8 million.

Although there can be no assurance with respect to the outcome of this matter, the Company believes the alleged claims are not meritorious and intends to defend itself vigorously.

In July 2023, through mediation, the Company and the plaintiff reached a settlement agreement in principle of approximately $ 2.2 million that remains subject to court approval.

While the Company strongly believes that it would prevail on the merits and that it has not violated the antitrust laws, in order to avoid the distraction and expense of protracted litigation and instead continue to focus on its employees and customers, the Company agreed to settle this matter.

The Company has accrued for the proposed

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share amounts and unless otherwise indicated)

settlement agreement which is included in accrued expenses and other current liabilities as of July 31, 2023 on the Company's unaudited condensed consolidated balance sheets.

On September 26, 2022, a purported stockholder of the Company filed a complaint in the Delaware Court of Chancery in connection with the series of mergers in which the Company became the parent of nCino OpCo and SimpleNexus.

8 unchanged sentences

Pursuant to the rights in its bylaws and Delaware law, the Company is advancing the costs incurred by the director and officer defendants in this action, and the defendants may assert indemnification rights in respect of an adverse judgment or settlement of the action, if any.

Given the uncertainty and preliminary stages of this matter, the Company is unable to reasonably estimate any possible loss or range of loss that may result.

Therefore, the Company has not made an accrual for the above matter in the unaudited condensed consolidated financial statements.

The Company does not presently believe the above matters will have a material adverse effect on its day-to-day operations or the quality of the services, products or innovation it continues to provide to its customers.

However, regardless of the outcome, legal proceedings can have an adverse impact on the Company because of the related expenses, diversion of management resources, and other factors.

Given the uncertainty and preliminary stages of these matters, the Company is unable to reasonably estimate any possible loss or range of loss that may result.

Therefore, the Company has not made an accrual for the above matters in the unaudited condensed consolidated financial statements.

Other Commitments and Contingencies

4 unchanged sentences

On November 1, 2022, the Company's wholly-owned subsidiary, nCino OpCo, acquired preferred shares of ZestFinance, Inc.

(d/b/a ZEST AI) ("Zest AI"), a private company, for $ 2.5 million and is included in investments as of January 31, 2023 and April 30, 2023 on the Company's unaudited condensed consolidated balance sheets.

(d/b/a ZEST AI) ("Zest AI"), a private company, for $ 2.5 million and is included in investments as of January 31, 2023 and July 31, 2023 on the Company's unaudited condensed consolidated balance sheets.

The investment is considered a related party transaction as entities affiliated with Insight Partners, a beneficial owner of the Company, own greater than ten percent of Zest AI.

5 unchanged sentences

The dilutive effect of outstanding awards is reflected in diluted earnings per share by application of the treasury stock method.

Diluted loss per share for the three months ended April 30, 2022 and 2023 and for the three months ended April 30, 2022 and 2023 is the same as the basic loss per share as there was a net loss for those periods, and inclusion of potentially issuable shares was anti-dilutive.

Diluted loss per share for the three months ended July 31, 2022 and 2023 and for the six months ended July 31, 2022 and 2023 is the same as the basic loss per share as there was a net loss for those periods, and inclusion of potentially issuable shares was anti-dilutive.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

The components of basic and diluted loss per share for periods presented are as follows (in thousands, except share and per share data):

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

2022 2023 2022 2023

Basic and diluted loss per share:

5 unchanged sentences

The following potential outstanding common stock were excluded from the diluted loss per share computation because the effect would have been anti-dilutive:

Three Months Ended April 30,

Six Months Ended July 31,

Stock options issued and outstanding 2,308,091 1,664,830

9 unchanged sentences

(In thousands, except share and per share amounts and unless otherwise indicated)

The Company’s restructuring charges for the three months ended April 30, 2023 were as follows:

Three Months Ended April 30, 2023

The Company’s restructuring charges for the three and six months ended July 31, 2023 were as follows:

Three Months Ended

July 31, 2023 Six Months Ended

July 31, 2023

Lease exit fees 1

4 unchanged sentences

General and administrative 2 5

Total 238 $ 477

1 These expenses reduced operating lease right-of-use assets on the unaudited condensed consolidated balance sheets .

The Company had no restructuring charges for the three months ended April 30, 2022.

Subsequent Events

On May 1, 2023, the Company granted 2,975,663 RSUs to the Company's employees, including executive officers.

The Company expects to recognize stock-based compensation expense of $ 72.9 million related to the RSUs over a weighted average period of 4 years.

The Company had no restructuring charges for the three and six months ended July 31, 2022.

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-Q

Item 1. Financial Statements