What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-26 compared with 2023-03-28 · 230 added, 246 removed, 1039 unchanged (31% of the section changed)

12 unchanged sentences

We have audited the consolidated balance sheets of nCino, Inc.

(the Company) as of January 31, 2022 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended January 31, 2023, and the related notes, as well as the financial statement schedule listed in the Index at Item 15.2.

(collectively referred to as the “consolidated financial statements”).

(the Company) as of January 31, 2023 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended January 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2023 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2024, in conformity with U.S.

12 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition

Description of the

Matter As discussed in Note 2, the Company derives revenues primarily from subscription services and professional services.

Description of the Matter As discussed in Note 2, the Company derives revenues primarily from subscription services and professional services.

Revenues are recognized when a contract exists between the Company and a customer and upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.

The Company enters into contracts that can include various combinations of subscription and professional services, which may be capable of being distinct and accounted for as separate performance obligations, or in the case of offerings such as subscription services and support, accounted for as a single performance obligation.

The Company assesses terms and conditions associated with contracts that can include various combinations of subscription and professional services, which may be capable of being distinct and accounted for as separate performance obligations, or in the case of offerings such as subscription services and support, accounted for as a single performance obligation.

For contracts that contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct.

The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis.

The audit effort in evaluating the Company’s accounting for revenue recognition was extensive and required auditor judgment for certain customer contracts to evaluate the terms and conditions, identify distinct performance obligations and support the estimation of the standalone selling price (SSP) of each performance obligation which is based in part on customer pricing, customer demographic and geographic area where services are sold.

How We Addressed

the Matter in Our

Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s revenue recognition processes, including controls designed to mitigate the risk of override of controls.

The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s revenue recognition processes, including controls designed to mitigate the risk of override of controls.

This included testing controls over management’s review of customer contracts and review of manual revenue journal entries.

To test the Company’s accounting for revenue recognition, we performed audit procedures that included, among others, data analytics to validate that the revenue recorded correlated to the deferred revenue and accounts receivable amounts and the accounts receivable amounts ultimately settled in cash.

Our audit procedures also included testing a sample of revenue transactions for each of the significant service offerings.

For the samples selected, we evaluated terms and conditions, reperformed management’s assessment of distinct performance obligations and allocation of consideration within the arrangement as well as tested the application of the revenue recognition accounting requirements, including reperforming calculations of revenue recognized and testing the underlying data used in the calculations.

To test the Company’s accounting for revenue recognition, we performed audit procedures that included, among others, selecting a sample of revenue transactions to test for occurrence and to evaluate contract terms and conditions for accounting in accordance with ASC 606.

This testing included reperforming the Company’s assessment of the distinct performance obligations within the arrangement, determination of the allocation of transaction price to the respective performance obligations, as well as testing the application of the revenue recognition requirements including reperforming the calculations of revenue recognized and testing the underlying data used in the calculations.

We also assessed the appropriateness of the related disclosures in the consolidated financial statements.

Business Combination

Description of the

Matter As explained in Note 7 to the consolidated financial statements, on January 7, 2022 through a series of mergers, the Company completed the acquisition of SimpleNexus, LLC (“SimpleNexus”) for total purchase consideration of approximately $933.0 million.

The acquisition was accounted for as a business combination.

The Company recorded intangible assets from this acquisition, including customer relationships and developed technology of $70.0 million and $77.5 million respectively.

The Company used the multi-period excess earning method to estimate the fair value of the customer relationships and the relief from royalty method to estimate the fair value of the developed technology, each of which are based on management’s estimates and assumptions.

Auditing the Company's accounting for its acquisition of SimpleNexus was complex and subjective due to the significant estimation uncertainty in determining the fair value of the above mentioned identified intangible assets, which was primarily due to the sensitivity of the respective fair values to the underlying assumptions.

The significant assumptions used in the fair value estimate of the customer relationships intangible asset included the forecasted customer revenues, attrition rate, and discount rate.

The significant assumptions used in the fair value estimate of the developed technology intangible asset included forecasted revenues, obsolescence life and factor, and the discount rate.

Certain of these significant assumptions for each of the identified intangible assets are forward-looking and could be affected by future economic and market conditions.

How We Addressed

the Matter in Our

Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the estimation process supporting the recognition and measurement of customer relationships and developed technologies, including consideration of any measurement period adjustments.

Our tests included controls over the estimation process and valuation models to estimate the fair values of the above identified intangible assets, as well as controls over management’s review of the valuation methodologies and significant assumptions discussed above.

To test the estimated fair values of the customer relationship and developed technology intangible assets, we performed, with the assistance of our valuation specialists, audit procedures that included evaluating the Company's selection of the valuation methodologies, testing the significant assumptions, and testing the completeness and accuracy of the underlying data.

For example, we compared the significant assumptions in the prospective financial information, including the forecasted revenue growth rates, to current industry and market trends, as well as to the historical performance of the acquired business.

We also tested the underlying source information used in the valuation model including the determination of the discount rates and the mathematical accuracy of the calculations as well as independently calculated the fair value estimates to compare to the Company's recorded amounts.

/s/ Ernst & Young LLP

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of January 31, 2022 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended January 31, 2023, and the related notes, as well as the financial statement schedule listed in the Index at Item 15.2., and our report dated March 28, 2023 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of January 31, 2023 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended January 31, 2024, and the related notes and our report dated March 26, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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Intangible assets, net 152,825 115,572

Investments (related party $ 0 and $ 2,500 at January 31, 2022 and January 31, 2023, respectively)

Other long-term assets 1,615 8,101

Investments (related party $ 2,500 at January 31, 2023 and January 31, 2024)

Long-term prepaid expenses and other assets 8,101 10,089

Total assets $ 1,327,269 $ 1,340,430

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Accrued expenses and other current liabilities 10,897 10,847

Deferred revenue, current portion 122,643 154,871

Deferred revenue 154,871 170,941

Financing obligations, current portion 1,015 1,474

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Deferred income taxes, noncurrent 2,797 3,687

Deferred revenue, noncurrent 44 —

Revolving credit facility, noncurrent 30,000 —

Financing obligations, noncurrent 54,365 52,680

Construction liability, noncurrent 9,736 —

Total liabilities 299,602 287,826

8 unchanged sentences

Additional paid-in capital 1,333,669 1,400,881

Accumulated other comprehensive income (loss) ( 72 ) 694

Accumulated other comprehensive income 694 996

Accumulated deficit ( 310,341 ) ( 352,758 )

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2022 2023 2024

Subscription (related parties $ 2,439 , $ 0 , and $ 0 , respectively)

$ 162,439 $ 224,854 $ 344,752

Subscription $ 224,854 $ 344,752 $ 409,479

Professional services and other 49,011 63,563 67,064

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Interest expense ( 1,514 ) ( 2,807 ) ( 4,135 )

Other income (expense), net 1,693 ( 1,277 ) ( 1,356 )

Other expense, net ( 1,277 ) ( 1,356 ) ( 856 )

Loss before income taxes ( 73,954 ) ( 97,773 ) ( 41,936 )

31 unchanged sentences

(In thousands, except share data)

Common Stock Voting

Common Stock Non-voting

Common Stock Additional

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Deficit Total

Shares Amount Shares Amount Shares Amount

Shares Amount

Balance, January 31, 2021 93,643,759 $ 47 $ 585,956 $ 240 $ ( 161,064 ) $ 425,179

Issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions 9,269,000 5 — — — — 268,370 — — 268,375

Costs in connection with initial public offering — — — — — — ( 4,534 ) — — ( 4,534 )

Stock issuance related to business combinations, net of issuance costs of $ 210

12,762,146 7 647,292 — — 647,299

Exercise of stock options 2,758,904 1 13,906 — — 13,907

Reclassification of voting and non-voting common stock 81,852,856 41 ( 75,921,537 ) ( 38 ) ( 5,931,319 ) ( 3 ) — — — —

Stock issuance upon vesting of restricted stock units 559,191 — — — — —

Stock issuance of contingent consideration 285,692 — — — — — — — — —

Stock issuance under the employee stock purchase plan 54,542 — 2,543 — — 2,543

Stock-based compensation — — 28,455 — — 28,455

Other comprehensive income — — — — — — — 648 — 648

Other comprehensive loss — — — ( 312 ) — ( 312 )

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 894 ) ( 48,552 ) ( 49,446 )

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

Stock issuance related to business combination, net of issuance costs of $ 210

12,762,146 7 — — — — 647,292 — — 647,299

Exercise of stock options 579,662 1 3,749 — — 3,750

2 unchanged sentences

Stock-based compensation — — 50,207 — — 50,207

Other comprehensive loss — — — — — — — ( 312 ) — ( 312 )

Other comprehensive income — — — 766 — 766

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 1,995 ) — ( 100,725 ) ( 102,720 )

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Provision for bad debt 90 806 1,081

Net foreign currency (gains) losses ( 1,691 ) 1,860 1,548

Net foreign currency losses 1,860 1,548 670

Unrealized gain on investment — — ( 263 )

Loss on disposal of long-lived assets — — 150

Change in operating assets and liabilities:

Accounts receivable ( 13,507 ) ( 26,795 ) ( 14,325 )

Accounts receivable, related parties 9,201 — —

Costs capitalized to obtain revenue contracts ( 11,045 ) ( 12,235 ) ( 10,348 )

3 unchanged sentences

Accrued expenses and other current liabilities 7,311 ( 1,210 ) ( 5,981 )

Deferred rent ( 52 ) — —

Deferred revenue 24,317 33,527 15,902

Deferred revenue, related parties ( 8,013 ) — —

Operating lease liabilities ( 2,580 ) ( 4,767 ) ( 4,083 )

4 unchanged sentences

Purchases of property and equipment ( 5,463 ) ( 18,338 ) ( 3,515 )

Proceeds from sale of property and equipment — — 43

Purchase of investments (related party $ 0 , $ 2,500 , and $ 0 , respectively)

2 unchanged sentences

Cash flows from financing activities

Proceeds from initial public offering, net of underwriting discounts and commissions 268,375 — —

Payments of costs related to initial public offering ( 2,765 ) — —

Investment from redeemable non-controlling interest — — 983

Proceeds from borrowings on revolving credit facility — 50,000 —

4 unchanged sentences

Stock issuance under the employee stock purchase plan 2,543 4,450 4,661

Contingent consideration payments ( 197 ) — —

Principal payments on financing obligations ( 318 ) ( 1,121 ) ( 1,226 )

Net cash provided by financing activities 274,121 15,922 36,712

Net cash provided by (used in) financing activities 15,922 36,712 ( 21,113 )

Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash ( 1,231 ) ( 1,587 ) 182

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Cash and cash equivalents $ 88,014 $ 82,036 $ 112,085

Restricted cash included in other long-term assets — 385 5,382

Restricted cash included in long-term prepaid expenses and other assets 385 5,382 5,359

Total cash, cash equivalents, and restricted cash, end of period $ 88,399 $ 87,418 $ 117,444

6 unchanged sentences

Fair value of common stock issued as consideration for business acquisition $ 647,509 $ — $ —

Costs related to initial public offering, reclassified from other long term assets to equity $ 1,769 $ — $ —

Accrued purchase price related to acquisitions $ 54 $ 356 $ —

25 unchanged sentences

See Note 7 "Business Combinations" for additional information regarding the SimpleNexus acquisition.

September 8, 2023, SimpleNexus began operating as SimpleNexus, LLC d/b/a nCino Mortgage, LLC ("nCino Mortgage").

Unless otherwise indicated or the context otherwise requires, references to “we,” “us,” “our,” “nCino,” and the “Company” refer to nCino, Inc.

3 unchanged sentences

The Company is a software-as-a-service ("SaaS") company that provides software applications to financial institutions to streamline employee and client interactions.

The Company is headquartered in Wilmington, North Carolina and has various locations in the US, North America, Europe and Asia Pacific.

The Company is headquartered in Wilmington, North Carolina and has various locations in the U.S., North America, Europe, and Asia Pacific.

Fiscal Year End:

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The Company is subject to the normal risks associated with technology companies that have not demonstrated sustainable income from operations, including product development, the risk of customer acceptance and market penetration of its products and services and, ultimately, the need to attain profitability to generate positive cash resources.

Initial Public Offering:

On July 13, 2020, the Company's Registration Statement on Form S-1 relating to the initial public offering ("IPO") of its common stock was declared effective by the Securities and Exchange Commission ("SEC").

Prior to the closing of the IPO, the Company's certificate of incorporation was amended such that all outstanding shares of voting common stock and non-voting common stock were reclassified into a single class of stock designated as common stock which has one vote per share.

In addition, effective upon the closing of the IPO, the Company's certificate of incorporation was amended and restated such that the total number of shares of common stock authorized to issue, par value $ 0.0005 , was increased to 500,000,000 shares and the total number of shares of preferred stock authorized to issue, par value

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

$ 0.001 , was increased to 10,000,000 shares.

In connection with the IPO, the Company issued and sold 9,269,000 shares of common stock (including shares issued pursuant to the exercise in full of the underwriters' option to purchase additional shares) at a public offering price of $ 31.00 per share for net proceeds of $ 268.4 million, after deducting underwriters' discounts and commissions.

Prior to the IPO, deferred offering costs, which consisted of legal, accounting, consulting and other direct fees, and costs relating to the IPO, were capitalized in other long-term assets.

Upon consummation of the IPO, these costs were offset against the proceeds from the IPO and recorded in additional paid-in capital.

Secondary Public Offering:

On October 13, 2020, the Company completed an underwritten secondary public offering of 7,712,985 shares of common stock (including shares issued pursuant to the exercise in full of the underwriters' option to purchase additional shares) (the "Secondary Offering") held by certain stockholders of the Company (the "Selling Stockholders").

The Company did not offer any shares of common stock in the Secondary Offering and did not receive any proceeds from the sale of the shares of common stock by the Selling Stockholders.

The Company incurred costs of $ 1.0 million in relation to the Secondary Offering for the fiscal year ended January 31, 2021 and such costs are recorded as a component of general and administrative expenses on the consolidated statements of operations.

The Company received $ 1.7 million in cash (excluding withholding taxes) in connection with the exercise of 554,112 options by certain stockholders participating in the Secondary Offering.

In addition, concurrent with the pricing of the Secondary Offering, the underwriters in the Company's IPO released an additional 367,561 shares from lock-up agreements, signed in connection with the IPO, with stockholders who did not participate in the Secondary Offering.

The release consisted of both outstanding shares and shares subject to options.

Use of Estimates:

5 unchanged sentences

income taxes and the related valuation allowance on deferred tax assets;

redemption value of redeemable non-controlling interest;

redemption value of redeemable non-controlling

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

and stock-based compensation.

1 unchanged sentence

Actual results could differ from these estimates.

See Note 8 "Goodwill and Intangible Assets" for a change in estimate of the useful life of the SimpleNexus trade name.

Operating Segments:

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

As of January 31, 2022, one individual customer represented more than 12 % of accounts receivable and, as of January 31, 2023, no individual customer represented over 10% of accounts receivable.

As of January 31, 2023 and January 31, 2024, no individual customer represented more than 10 % of accounts receivable.

For the fiscal years ended January 31, 2022, 2023, and 2024, no individual customer represented more than 10% of the Company’s total revenues.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Revenues are recognized net of allowances and any taxes collected from customers, which are subsequently remitted to governmental authorities.

10 unchanged sentences

Generally, the Company’s subscription contracts are three years or longer in length, billed annually in advance, are non-cancelable, and do not contain refund-type provisions.

SimpleNexus contracts typically range from one to three years and are generally billed monthly in advance.

nCino Mortgage contracts typically range from one to three years and are generally billed monthly in advance.

Subscription arrangements that are cancelable generally have penalty clauses.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Professional Services and Other Revenues

Professional services revenues primarily consist of fees for deployment, configuration, and optimization services, training.

Professional services revenues primarily consist of fees for deployment, configuration, and optimization services, as well as training.

The majority of the Company’s professional services contract revenues are recognized over time based on a proportional performance methodology which utilizes input methods.

12 unchanged sentences

The Company capitalizes incremental costs of obtaining a non-cancelable subscription and support revenue contract if the Company expects the benefit of those costs to be longer than one year.

The capitalized amounts are subsequently

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

amortized over the estimated life of the contract.

The capitalized amounts are subsequently amortized over the estimated life of the contract.

Capitalized amounts consist primarily of sales commissions paid to the Company’s direct sales force.

10 unchanged sentences

The Company evaluated qualitative and quantitative factors to determine the period of amortization, including contract length, renewals, customer life, and the useful lives of our products and acquired products.

When the expected period of benefit of an asset which would be capitalized is less than one year, the Company expenses the amount as incurred, utilizing the practical expedient.

When the expected period of benefit of an asset which would be capitalized is less than one

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

year, the Company expenses the amount as incurred, utilizing the practical expedient.

The Company regularly evaluates whether there have been changes in the underlying assumptions and data used to determine the amortization period.

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Deferred revenue does not represent the total contract value of annual or multi-year non-cancellable subscription agreements.

Deferred revenue that will be recognized during the succeeding 12-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

month period are recorded as deferred revenue, current portion, and the remaining portion is recorded as deferred revenue, net of current portion on the consolidated balance sheets.

Deferred revenue that will be recognized during the succeeding 12-month period are recorded as deferred revenue, current portion, and the remaining portion is recorded as deferred revenue, net of current portion on the consolidated balance sheets.

Payment terms vary by contract, although terms generally include a requirement of payment within 30 to 45 days.

8 unchanged sentences

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 other long-term assets at January 31, 2022 and January 31, 2023 on the consolidated balance sheets.

Restricted cash is included in long-term prepaid expenses and other assets at January 31, 2023 and January 31, 2024 on the consolidated balance sheets.

Accounts Receivable and Allowances:

3 unchanged sentences

The Company recognizes a contract asset in the form of accounts receivable when the Company has an unconditional right to payment, and the Company records a contract asset in the form of unbilled accounts receivable when revenues earned on a contract exceeds the billings.

The Company’s standard billing terms are annual in advance, while SimpleNexus' standard billing terms are monthly in advance.

The Company’s standard billing terms are annual in advance, while nCino Mortgage's standard billing terms are monthly in advance.

An unbilled accounts receivable is a contract asset related to the delivery of the Company’s subscription services and professional services for which the related billings will occur in a future period.

Unbilled accounts receivable consists of (i) revenues recognized for professional services performed but not yet billed and (ii) revenues recognized from non-cancelable, multi-year orders in which fees increase annually but for which the Company is not contractually able to invoice until a future period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

annually but for which the Company is not contractually able to invoice until a future period.

Accounts receivable are reported at their gross outstanding balance reduced by an allowance for estimated receivable losses, which includes allowances for doubtful accounts and a reserve for expected credit losses.

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This estimate is analyzed quarterly and adjusted as necessary.

The Company records the allowance against bad debt expense through the consolidated statements of operations, included in general and administrative expenses, up to the amount of revenues recognized to date.

Any incremental allowance is recorded as an offset to deferred revenue on the consolidated balance sheets.

Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success.

A summary of activity in the allowance for doubtful accounts and reserve for expected credit losses is as follows:

3 unchanged sentences

Charged to bad debt expense 90 806 1,081

Charged to deferred revenue — — 747

Write-offs and other ( 24 ) ( 55 ) ( 1,275 )

4 unchanged sentences

The Company accounts for lease and non-lease components as a single lease component for its facilities and equipment leases.

The Company did not have any finance leases as of January 31, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company did not have any finance leases as of January 31, 2023 or January 31, 2024.

Operating lease right-of-use ("ROU") assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

The lease term reflects the noncancelable period of the lease together with options to extend or terminate the lease when it is reasonably certain the Company will exercise such option.

The lease term reflects the non-cancelable period of the lease together with options to extend or terminate the lease when it is reasonably certain the Company will exercise such option.

Variable costs, such as common area maintenance costs, are not included in the measurement of the ROU assets and lease liabilities, but are expensed as incurred.

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Leasehold improvements Shorter of remaining life of the lease term or estimated useful life

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Repairs and maintenance are charged to expense as incurred.

When assets are retired or otherwise disposed of, the cost and accumulated depreciation or amortization are removed from their respective accounts, and any gain or loss on such retirement is reflected in operating expenses.

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If it is determined that it is more likely than not that the fair value of the Company is less than the carrying amount, a quantitative assessment is performed by comparing the fair value of a reporting unit with its carrying amount.

The Company may elect to bypass the qualitative

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

assessment and perform the quantitative assessment.

The Company may elect to bypass the qualitative assessment and perform the quantitative assessment.

An impairment loss is recognized in an amount equal to the excess of the reporting unit’s carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit.

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The Company will continue to assess whether it has a controlling financial interest and whether it is the primary beneficiary at each reporting period.

Other than the Company’s equity investment, the Company has not provided financial or other support to nCino K.K.

Other than the Company’s equity investments, the Company has not provided financial or other support to nCino K.K.

that it was not contractually obligated to provide.

6 unchanged sentences

contains redemption features whereby the interest held by the minority investors are redeemable either at the option of the (i) minority investors or (ii) the Company, both beginning on the eighth anniversary of the initial capital contribution.

If the interest of the minority investors were to be redeemed under this agreement, the Company would be required to redeem the interest based on a prescribed formula derived from the relative revenues of nCino K.K.

If the interest of the minority investors were to be redeemed under this

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

agreement, the Company would be required to redeem the interest based on a prescribed formula derived from the relative revenues of nCino K.K.

and the Company.

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For acquisitions involving additional consideration to be transferred to the selling parties in the event certain future events occur or conditions are met (“contingent consideration”), the Company recognizes the acquisition-date fair value of contingent consideration as part of the consideration transferred in exchange for the business combination.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

consideration meeting the criteria to be classified as equity in the consolidated balance sheets is not remeasured, and its subsequent settlement is recorded within stockholders’ equity.

Contingent consideration meeting the criteria to be classified as equity in the consolidated balance sheets is not remeasured, and its subsequent settlement is recorded within stockholders’ equity.

Contingent consideration classified as a liability is remeasured to fair value at each reporting date until the contingency is resolved, with any changes in fair value recognized in the Company’s consolidated statements of operations.

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The Company uses the straight-line basis as it approximates the amounts calculated under the effective-interest method.

Unamortized debt issuance costs related to the secured revolving credit facility are considered long-term and are included in other long-term assets in the consolidated balance sheets.

Unamortized debt issuance costs related to the secured revolving credit facility are considered long-term and are included in long-term prepaid expenses and other assets in the consolidated balance sheets.

Cost of Revenues:

1 unchanged sentence

Cost of professional services and other revenues consist of employee-related costs associated with these services, including stock-based compensation expenses, and allocated overhead, and the cost of subcontractors.

Allocated overhead includes costs such as information technology infrastructure, rent and occupancy charges, along with employee benefit costs, and taxes based upon a percentage of total compensation expense.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

overhead includes costs such as information technology infrastructure, rent and occupancy charges, along with employee benefit costs, and taxes based upon a percentage of total compensation expense.

As such, general overhead expenses are reflected in each cost of revenues and operating expenses category.

15 unchanged sentences

The tax benefits recognized in the consolidated financial statements from such a position are measured based on the benefit having a greater than 50% likelihood of being realized upon ultimate settlement.

The guidance on

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

accounting for uncertainty in income taxes also addresses de-recognition, classification, interest, and penalties on income taxes, and accounting interim periods.

The guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification, interest and penalties on income taxes, and accounting interim periods.

When and if applicable, potential interest and penalties are accrued as incurred, within income tax provision.

1 unchanged sentence

Accumulated other comprehensive income (loss) is reported as a component of stockholders’ equity and includes unrealized gains and losses on foreign currency translation adjustments.

Foreign Currency Exchange:

Foreign Currency:

The functional currency of the Company’s foreign subsidiaries is generally the local currency.

1 unchanged sentence

dollars are recorded as a separate component on the consolidated statements of comprehensive loss recorded in foreign currency translation line item.

Foreign currency transaction gains and losses due to transactions from assets and liabilities denominated in a currency other than the functional currency are included in other expense in the consolidated statements of operations and were $ 1.5 million, $( 2.0 ) million, and $( 1.4 ) million for the fiscal years ended January 31, 2021, 2022, and 2023, respectively, primarily related to various intercompany loans.

All assets and liabilities denominated in a foreign currency are translated into U.S.

2 unchanged sentences

Equity transactions are translated using historical exchange rates.

Foreign currency transaction gains and losses due to transactions denominated in a currency other than the functional currency are included in other expense, net in the consolidated statements of operations and were $( 2.0 ) million, $( 1.4 ) million, and $( 1.2 ) million for the fiscal years ended January 31, 2022, 2023, and 2024, respectively, primarily related to various intercompany loans.

Stock-Based Compensation:

As further described in Note 11 "Stock-Based Compensation," the Company records compensation expense associated with stock options and other equity-based compensation in accordance with ASC 718, Compensation – Stock Compensation.

The Company establishes fair value as the measurement objective in accounting for share-based payment transactions with employees and recognizes expense on a straight-line basis over the applicable vesting period.

The Company establishes fair value as the measurement objective in accounting for

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

share-based payment transactions with employees and recognizes expense on a straight-line basis over the applicable vesting period.

Basic and Diluted Loss per Common Share:

3 unchanged sentences

For purposes of the diluted loss per share calculation, basic and diluted loss per share were the same, as the effect of all potentially dilutive securities would have been anti-dilutive.

Recent Accounting Pronouncements Not Yet Adopted:

In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The guidance includes amendments to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The ASU is effective for fiscal years beginning after December 15, 2023 on a retrospective basis, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact that the adoption of this standard will have on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The guidance includes amendments to enhance existing income tax disclosure requirements, primarily related to the rate reconciliation and income taxes paid disclosures.

The ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis with the option to apply the ASU retrospectively.

Early adoption is permitted.

The Company is currently evaluating the impact that the adoption of this standard will have on the Company’s consolidated financial statements.

Variable Interest Entity and Redeemable Non-Controlling Interest

4 unchanged sentences

As of January 31, 2024, the Company controls a majority of the outstanding common stock in nCino K.K.

In October 2023, the Company made a further investment in nCino K.K.

of $ 1.0 million that, including additional investments in nCino K.K.

of $ 1.0 million by existing third-party investors in October 2023, maintained the Company's ownership of 51 %.

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.

10 unchanged sentences

Balance, beginning of period $ 3,791 $ 2,882 $ 3,589

Investment by redeemable non-controlling interest — — 983

Net loss attributable to redeemable non-controlling interest (excluding adjustment to non-controlling interest) ( 1,569 ) ( 1,119 ) ( 1,109 )

20 unchanged sentences

Money market accounts (included in cash and cash equivalents) $ 17,149 $ — $ —

Time deposits (included in other long-term assets) 385 — —

Time deposits (included in long-term prepaid expenses and other assets) 382 — —

Total assets $ 17,531 $ — $ —

2 unchanged sentences

Money market accounts (included in cash and cash equivalents) $ 38,649 $ — $ —

Time deposits (included in other long-term assets) 382 — —

Time deposits (included in long-term prepaid expenses and other assets) 359 — —

Total assets $ 39,008 $ — $ —

1 unchanged sentence

Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

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 fiscal years ended January 31, 2021, 2022, and 2023, respectively.

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

During the fiscal year ended January 31, 2024, the Company recorded an unrealized gain of $ 0.3 million on one of our investments as a result of an observable price change and is recorded in other expense, net on the consolidated statements of operations.

No unrealized gain or loss was recognized for the fiscal years ended January 2022 and 2023 and there was no impairment recognized for the fiscal years ended January 31, 2022, 2023, and 2024.

Revenues by Geographic Area

7 unchanged sentences

Revenues by geography are determined based on the region of the Company’s contracting entity, which may be different than the region of the customer.

No country outside the United States represented 10% or more of total revenues.

For the fiscal years ended January 31, 2022, 2023, and 2024, no country outside the United States represented 10% or more of total revenues.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16 unchanged sentences

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 $ 944.1 million as of January 31, 2023.

Remaining performance obligations were $ 1.0 billion as of January 31, 2024.

The Company expects to recognize approximately 66 % 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.

12 unchanged sentences

Buildings and land 56,379 56,379

33,977 56,379

Leasehold improvements 28,702 27,712

3 unchanged sentences

$ 84,442 $ 79,145

1 See Note 16 "Commitments and Contingencies."

The Company recognized depreciation expense as follows:

17 unchanged sentences

The Company has included the financial results of SimpleNexus in the consolidated statements of operations from Acquisition date.

The transaction costs associated with the acquisition were approximately $ 10.0 million and were recorded in general and administrative expenses for the fiscal year

The transaction costs associated with the acquisition were approximately $ 10.0 million and were recorded in general and administrative expenses for the fiscal year ended January 31, 2022.

The Company also recognized $ 0.2 million in stock issuance costs associated with the share consideration that were reported as a reduction of additional paid-in capital within stockholders' equity.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

ended January 31, 2022.

The Company also recognized $ 0.2 million in stock issuance costs associated with the share consideration that were reported as a reduction of additional paid-in capital within stockholders' equity.

The fair value of the consideration transferred was $ 933.6 million on the Acquisition Date, subject to a net working capital adjustment.

25 unchanged sentences

Net assets acquired $ 932,919

During the fiscal year ended January 31, 2023, within the one year measurement period, we finalized the fair value of the assets acquired and liabilities assumed in the acquisition, and the amounts presented above are now final.

During the fiscal year ended January 31, 2023, within the one year measurement period, the Company finalized the fair value of the assets acquired and liabilities assumed in the acquisition.

The Company recorded measurement period adjustments that included a $ 2.0 million adjustment to decrease goodwill for a $ 1.3 million deferred income tax adjustment and a $ 0.7 million net working capital adjustment.

The transaction was accounted for using the acquisition method and, as a result, tangible and intangible assets acquired and liabilities assumed were recorded at their estimated fair values at the Acquisition Date.

Any excess consideration

Any excess consideration over the fair value of the assets acquired and liabilities assumed was recognized as goodwill.

The Company determined the acquisition date deferred revenue balance in accordance with Topic 606.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

over the fair value of the assets acquired and liabilities assumed was recognized as goodwill.

The Company determined the acquisition date deferred revenue balance in accordance with Topic 606.

The following table sets forth the components of the fair value of identifiable intangible assets and their estimated useful lives over which the acquired intangible assets will be amortized on a straight-line basis, as this approximates the pattern in which economic benefits of the assets are consumed as of the Acquisition Date:

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Trade names represents the fair value of SimpleNexus’ company name.

See Note 8 "Goodwill and Intangible Assets" for a change in estimate related to the useful life of the SimpleNexus trade name during the third quarter of fiscal 2024.

Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce and approximately $ 189.2 million is deductible for tax purposes.

The Company's consolidated statements of operations include the revenues and net loss for SimpleNexus for the period from the Acquisition Date through January 31, 2022, of $ 3.9 million and $ 3.6 million, respectively.

The unaudited pro forma statements of operations for the years ended January 31, 2021 and January 31, 2022, shown in the table below, give effect to the SimpleNexus acquisition, described above, as if it had occurred on February 1, 2020.

These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of SimpleNexus to reflect amortization of intangible assets, transaction accounting adjustments for non-recurring items and acquisition related costs, interest expense related to debt paid off, Topic 842 lease payment adjustments, stock-based compensation, and related items since the beginning of the Company's fiscal year 2021.

This unaudited pro forma data is presented for informational purposes only and is not indicative of future results of operations.

The table below shows the unaudited pro forma statements of operations for the respective years ending January 31:

Revenues $ 225,307 $ 311,796

Net loss attributable to nCino, Inc.

( 166,032 ) ( 96,189 )

Goodwill and Intangible Assets

1 unchanged sentence

Balance, as of January 31, 2022 $ 841,487

Acquisition of SimpleNexus 785,156

Measurement period adjustments relating to the acquisition of SimpleNexus ( 1,961 )

Translation adjustments ( 86 )

Balance, as of January 31, 2023 839,440

Measurement period adjustments relating to the acquisition of SimpleNexus ( 1,961 )

Translation adjustments ( 571 )

Balance, as of January 31, 2024 $ 838,869

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Intangible assets

11 unchanged sentences

$ 190,860 $ ( 38,035 ) $ 152,825 $ 190,715 $ ( 75,143 ) $ 115,572 6.1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company recognized amortization expense for intangible assets as follows:

4 unchanged sentences

Sales and marketing 2,303 11,087 20,590

General and administrative 10 — —

Total amortization expense $ 4,907 $ 28,200 $ 37,226

During the third quarter of fiscal 2024, the Company rebranded the SimpleNexus solution to nCino Mortgage, resulting in a change to the trade name useful life.

As a result, the Company recorded accelerated amortization to fully amortize the remaining trade name intangible asset.

The effect of this change in estimate for the year ended January 31, 2024 was an increase in sales and marketing amortization expense of $ 9.5 million, which resulted in an increase in loss of operations and net loss attributable to nCino, Inc.

of $ 9.5 million, or $ 0.08 per basic and diluted share.

The expected future amortization expense for intangible assets as of January 31, 2024 is as follows:

5 unchanged sentences

Reseller Agreement

The Company has a reseller agreement in place with a former related party to utilize their platform and to develop the Company’s cloud-based banking software as an application within the related party’s hosted environment.

This agreement was renegotiated and expires in June 2027 and will automatically renew in annual increments thereafter unless either party gives notice of non-renewal before the end of the initial term or the respective renewal term.

Cost of subscription revenues in each of the fiscal years ended January 31, 2021, 2022, and 2023 includes fees paid for access to the related party’s platform, including their hosting infrastructure and data center operations.

Based solely on information reported in a Schedule 13G/A filed with the SEC on February 11, 2022 the reseller is no longer considered a related party as of December 31, 2021 and the amounts disclosed related to them are accordingly presented while the reseller was considered a related party.

The reseller was

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

considered a related party for the year ended January 31, 2022 and was no longer considered a related party for the year ended January 31, 2023.

The Company has recorded expenses of $ 34.8 million and $ 41.4 million for the fiscal years ended January 31, 2021 and 2022, respectively.

The Company continues to do business with the reseller.

This agreement was amended during fiscal 2024 extending its term through January 31, 2031, and will automatically renew in annual increments thereafter unless either party gives notice of non-renewal before the end of the initial term or the respective renewal term.

Cost of subscription revenues in each of the fiscal years ended January 31, 2022, 2023, and 2024 includes fees paid for access to their platform, including their hosting infrastructure and data center operations.

Based solely on information reported in a Schedule 13G/A filed with the SEC on February 11, 2022 the reseller was no longer considered a related party as of December 31, 2021 and the amounts disclosed related to them are accordingly presented while the reseller was considered a related party.

The Company continues to do business with the reseller and transactions after December 31, 2021 are no longer disclosed.

The Company has recorded expenses of $ 41.4 million for the fiscal year ended January 31, 2022.

See also Note 17 "Related-Party Transactions."

2 unchanged sentences

Preferred Stock:

The Board of Directors is authorized to establish one or more series of preferred stock and to fix the number of shares constituting such series and the designation of such series, including the voting powers, preferences, limitations, restrictions, and other special rights thereof.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

limitations, restrictions, and other special rights thereof.

The Company's preferred stock consists of 10,000,000 authorized shares, par value $ 0.001 per share.

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In July 2019, the Company established the 2019 Equity Incentive Plan for the issuance of awards in the form of options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based awards, and other stock-based awards.

In connection with the IPO, the Company's Board of Directors adopted and the Company's stockholders approved the 2019 Plan which amended and restated the 2019 Equity Incentive Plan.

In connection with the Company's initial public offering ("IPO"), the Company's Board of Directors adopted and the Company's stockholders approved the 2019 Plan which amended and restated the 2019 Equity Incentive Plan.

All awards shall be granted within ten years from the effective date of the 2019 Plan and can only be granted to employees, officers, directors, and consultants and generally vest over four years .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Under the 2019 Plan, the number of available shares was increased to 15,250,000 , plus an annual increase added on the first day of each fiscal year, beginning with the fiscal year ending January 31, 2022, and continuing until, and including, the fiscal year ending January 31, 2031.

3 unchanged sentences

The 2014 Plan governs outstanding awards granted prior to the adoption of the 2019 Plan.

RSUs issued prior to the Company's IPO were subject to time-based and performance-based vesting conditions.

RSUs issued subsequent to the Company's IPO vest upon the satisfaction of a time-based condition only.

RSUs vest upon the satisfaction of a time-based condition.

RSUs are generally earned over a service period of four years .

For RSUs granted to the non-employee members of the Board of Directors, some vest in less than a year, some annually

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

and some over three years.

The compensation expense related to these awards is based on the grant date fair value of the RSUs and is recognized on a ratable basis over the applicable service period.

13 unchanged sentences

This intrinsic value changes based on changes in the fair value of the Company’s underlying stock.

As of January 31, 2023, there was $ 0.1 million of total unrecognized compensation expense related to unvested stock-based compensation arrangements under the 2014 and 2019 Plans.

That cost is expected to be recognized over a weighted average period of 0.59 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Restricted Stock Units

7 unchanged sentences

Nonvested, January 31, 2024 5,626,125 $ 33.19

1 Includes 88,303 RSUs that were not issued and outstanding as of January 31, 2023.

The weighted average grant date fair value for RSUs granted during the fiscal years ended January 31, 2021, 2022, and 2023 was $ 22.30 , $ 60.99 , and $ 41.54 .

The total fair value of RSUs vested for the fiscal years ended January 31, 2021, 2022, and 2023 was $ 5.5 million, $ 12.2 million, and $ 39.7 million.

The RSUs granted prior to the IPO vest upon the satisfaction of both a time-based, generally over 4 years, vesting 25 % annually, and liquidity event-based vesting condition.

For RSUs granted to the non-employee members of the Board of Directors, some vest in less than a year, some annually and some over three years.

The liquidity event-based condition was satisfied upon the IPO and the Company recognized an expense of $ 12.2 million in cost of revenues and operating expenses for RSUs as of that date, using the accelerated attribution recognition method for the fiscal year ended January 31, 2021.

The weighted average grant date fair value for RSUs granted during the fiscal years ended January 31, 2022, 2023, and 2024 was $ 60.99 , $ 41.54 , and $ 25.65 , respectively.

The total fair value of RSUs vested for the fiscal years ended January 31, 2022, 2023, and 2024 was $ 12.2 million, $ 39.7 million, and $ 48.2 million, respectively.

As of January 31, 2024, total unrecognized compensation expense related to non-vested RSUs was $ 141.6 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 2.71 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Employee Stock Purchase Plan

9 unchanged sentences

Thereafter, offering periods will begin on January 1 and July 1.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The fair value of ESPP shares is estimated at the date of grant using the Black-Scholes option valuation model based on assumptions as follows for ESPP awards:

9 unchanged sentences

Treasury yield for a similar expected life instrument in effect at the time of the grant of the ESPP share.

The assumptions utilized for the ESPP shares for the fiscal year ended January 31, 2023 were as follows:

The assumptions utilized for the ESPP shares for the fiscal years ended January 31, 2022, 2023, and 2024 were as follows:

Fiscal Year Ended January 31,

2022 2023 2024

Expected life (in years) 0.50 0.50 0.50

1 unchanged sentence

49.65 % - 84.59 %

38.70 % - 61.86 %

Expected dividends 0.00 % 0.00 % 0.00 %

1 unchanged sentence

0.22 % - 4.77 %

4.77 % - 5.53 %

As of January 31, 2024, total unrecognized compensation expense related to the ESPP was $ 0.6 million.

That cost is expected to be recognized over the remaining term of the offering period that began on January 1, 2024 and will end on June 30, 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Stock-Based Compensation Expense

11 unchanged sentences

See Note 19 "Restructuring" for more information.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The components of loss before income taxes by domestic and foreign jurisdictions were as follows:

16 unchanged sentences

Total income tax provision (benefit) $ ( 23,833 ) $ 4,071 $ 1,590

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The differences between income taxes expected at the U.S.

5 unchanged sentences

State income tax (provision) benefit, net of federal impact 4.1 ( 0.4 ) ( 2.7 )

Foreign rate differential 0.9 0.7 0.5

Stock-based compensation 59.9 48.8 0.1

Tax credits 4.1 0.0 23.9

1 unchanged sentence

Transaction costs ( 1.3 ) ( 0.1 ) 0.0

Nondeductible expenses ( 0.2 ) ( 0.1 ) ( 0.2 )

Other 0.0 ( 0.3 ) ( 0.3 )

Nondeductible expenses ( 0.1 ) ( 0.2 ) ( 1.0 )

Stock-based compensation 48.8 0.1 ( 1.0 )

Foreign rate differential 0.7 0.5 ( 1.7 )

Executive compensation ( 3.7 ) ( 2.4 ) ( 5.0 )

GILTI inclusion 0.0 ( 0.6 ) ( 6.8 )

Changes in valuation allowance ( 44.1 ) ( 21.6 ) ( 10.5 )

Federal return to provision 0.0 ( 0.2 ) ( 19.7 )

32.2 % ( 4.2 ) % ( 3.8 ) %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Significant components of the Company’s net deferred tax assets and liabilities were as follows:

4 unchanged sentences

Financing obligations and lease liabilities 15,960 17,343

Equity compensation 6,972 8,400

Tax credits 3,527 15,444

Equity compensation 8,400 9,085

Reserves and accruals 4,008 3,900

9 unchanged sentences

Lease asset ( 2,678 ) ( 4,453 )

Other ( 166 ) —

Deferred revenue — ( 310 )

Total deferred tax liabilities ( 55,935 ) ( 53,157 )

Net deferred tax liabilities $ ( 1,888 ) $ 450

The Company's net deferred tax liabilities were adjusted during 2022 to include $ 25.5 million of net deferred tax liabilities related to business combinations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Net deferred tax liabilities were included in the consolidated balance sheets as follows:

As of January 31,

Other long-term assets $ 106 $ 909

Long-term prepaid expenses and other assets $ 909 $ 4,137

Deferred income taxes, noncurrent ( 2,797 ) ( 3,687 )

3 unchanged sentences

The Company has established a valuation allowance in the amount of $ 138.4 million and $ 148.3 million as of January 31, 2023 and 2024, respectively, because the Company believes it is not more likely than not the deferred tax asset in jurisdictions excluding several foreign jurisdictions will be realized.

Based on all available positive and negative evidence, having demonstrated sustained profitability and cumulative pre-tax book income for the past three years, which is objective and verifiable, the Company concluded that it is more likely than not that the Company’s United Kingdom deferred tax assets will be realizable.

As a result, the Company released the valuation allowance against the United Kingdom deferred tax assets and reflected the release as a component of income tax provision (benefit) in the amount of $ 3.7 million as of the fiscal year ended January 31, 2024.

For the fiscal years ended January 31, 2022, 2023, and 2024, the valuation allowance increased by $ 39.0 million, $ 29.3 million, and $ 9.9 million, respectively.

Prior to the SimpleNexus acquisition, the Company recorded a net U.S.

1 unchanged sentence

On the Acquisition Date, the Company recorded net U.S.

deferred tax liabilities, most of which relate to

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

identifiable finite-life intangible assets.

deferred tax liabilities, most of which relate to identifiable finite-life intangible assets.

The Company evaluated this positive evidence and determined a portion of these deferred tax liabilities allow the Company to recognize $ 24.6 million of the Company’s U.S.

8 unchanged sentences

If the Company were to repatriate the undistributed earnings, the tax liability is $ 1.1 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The net operating loss and tax credit carryforwards as of January 31, 2024 were as follows:

22 unchanged sentences

The Company completed its analysis of the tax effects of the GILTI provisions as of January 31, 2024 and elected to account for these tax effects as period costs when incurred.

In 2021, the Organization of Economic Cooperation and Development introduced its Pillar Two Framework Model Rules ("Pillar 2").

The Company does not expect Pillar 2 to impact its tax liability and will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate.

The Company recognizes the income tax benefits of any uncertain tax positions only when, based upon the technical merits of the position, it is more likely than not that the position is sustainable upon examination.

With the information available, the Company has performed an analysis and as of January 31, 2023 and 2024, the Company has not recognized any unrecognized tax benefits, interest or penalties for any income tax positions.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Defined Contribution Plan

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Operating Leases

The Company leases its facilities and a portion of its equipment under various non-cancellable agreements, which expire at various times through July 2028, some of which include options to extend the leases for up to five years .

The Company leases its facilities and a portion of its equipment under various non-cancellable agreements, which expire at various times through December 2033, some of which include options to extend for up to five years .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The components of lease expense were as follows:

Fiscal Year Ended January 31,

2022 2023 2024

Operating lease expense $ 2,945 $ 4,066 $ 4,940

Short-term lease expense 885 1,276

Variable lease expense 885 1,276 1,979

Short-term lease expense 281 508 451

Total $ 4,111 $ 5,850 $ 7,370

Supplemental cash flow information for the fiscal year ended January 31, 2023 related to operating leases was as follows:

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

Fiscal Year Ended January 31,

2022 2023 2024

Cash paid for amounts included in the measurement of operating lease liabilities $ 3,082 $ 4,993 $ 4,489

1 unchanged sentence

Modification to reduce operating right-of-use assets and operating lease liabilities — 842 —

Operating right-of-use assets and operating lease liabilities disposed of — — 115

The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of January 31, 2024 were 6.72 years and 5.6 %, respectively.

7 unchanged sentences

Long-term lease obligations $ 16,423

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Revolving Credit Facility

4 unchanged sentences

Borrowings under the Credit Facility bear interest, at the Borrower’s option, at:

(i) a base rate equal to the greater of (a) the Lender’s “prime rate,” (b) the federal funds rate plus 0.50 %, and (c) the Bloomberg Short Term Bank Yield Index ("BSBY") rate plus 1.00 %, plus a margin of 0.00 % (provided that the base rate shall not be less than 0.00 %);

(i) a base rate equal to the greater of (a) the Lender’s “prime rate,” (b) the federal funds rate plus 0.50 %, and (c) the Bloomberg Short Term Bank Yield Index

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

("BSBY") rate plus 1.00 %, plus a margin of 0.00 % (provided that the base rate shall not be less than 0.00 %);

or (ii) the BSBY rate (provided that the BSBY shall not be less than 0.00 %), plus a margin of 1.00 %.

1 unchanged sentence

The Company must also pay customary letter of credit fees.

Borrowings under the Credit Facility are scheduled to mature on February 11, 2024, and the Company may repay amounts borrowed any time without penalty.

The Company may repay amounts borrowed any time without penalty.

Borrowings under the Credit Facility may be reborrowed.

2 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 which is considered restricted cash and is included in other long-term assets at January 31, 2023 on the Company's consolidated balance sheets.

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 long-term prepaid expenses and other assets as of January 31, 2023 and January 31, 2024 on the Company's 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.

As of January 31, 2023, unamortized debt issuance costs were $ 0.2 million and are included in other long-term assets.

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

As of January 31, 2023, the applicable interest rate was approximately 5.57 %.

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 January 31, 2024, respectively.

The available borrowing capacity under the Credit Facility was $ 50.0 million as of January 31, 2024.

See Note 20 "Subsequent Events" for additional information.

Commitments and Contingencies

3 unchanged sentences

Financing Obligations

The Company entered into a lease agreement for the Company's headquarters in November 2020 in connection with the new lessor acquiring the property.

The Company entered into a lease agreement for the Company's headquarters in November 2020 in connection with a new lessor acquiring the property.

Due to a purchase option contained in that lease, the Company is deemed to have continuing involvement and is considered to be the owner of the Company's headquarters for accounting purposes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

the Company did not meet the criteria to apply sale-leaseback accounting and therefore, recorded an asset and corresponding financing obligation for $ 16.3 million at inception of that lease.

As a result, the Company did not meet the criteria to apply sale-leaseback accounting and therefore, recorded an asset and corresponding financing obligation for $ 16.3 million at inception of that lease.

The fair value of the leased property and corresponding financing obligation are included in property and equipment, net and financing obligations on the consolidated balance sheets, respectively.

2 unchanged sentences

Upon completion of the parking deck in September 2021, for approximately $ 17.7 million, the costs of the construction in progress and the corresponding construction liability were reclassified to property and equipment, net and financing obligations on the consolidated balance sheets, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

In April 2021, the Company entered into a new lease agreement for the construction of an additional office building that is on the same parcel of land as the Company's existing headquarters.

15 unchanged sentences

Financing obligations $ 54,154

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

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 January 31, 2024 was 5.7 %.

2 unchanged sentences

Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred.

It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

indemnification claims and the unique facts and circumstances involved in each particular provision.

It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision.

To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any material liabilities related to such obligations in the accompanying consolidated financial statements.

1 unchanged sentence

From time to time, the Company is involved in legal proceedings or is subject to claims arising in the ordinary course of business including the following:

On February 23, 2021, the Company and certain of its officers and other employees were served with grand jury subpoenas wherein the Antitrust Division of the Department of Justice (the “DOJ”) was seeking documents and information in connection with an investigation of the Company’s hiring and wage practices under US federal antitrust laws.

On February 8, 2023, the DOJ informed the Company that the investigation is closed.

No fines, sanctions, actions, or penalties were imposed or taken against the Company or its officers or other employees in connection with this matter, and the costs the Company was incurring cooperating with the investigation have now ceased.

On March 12, 2021, a putative class action complaint was filed in the United States District Court for the Eastern District of North Carolina (the "District Court").

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§§ 75-1 and 75-2.

The complaint seeks treble damages and additional remedies, including restitution, disgorgement, reasonable attorneys’ fees, the costs of the suit, and pre-judgment and post judgment interest.

The complaint seeks treble damages and additional remedies, including restitution, disgorgement, reasonable

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

attorneys’ fees, the costs of the suit, and pre-judgment and post judgment interest.

The complaint does not allege any specific damages.

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.

The Company remitted the $ 2.2 million settlement to an escrow agent in the fourth quarter of fiscal 2024, and the District Court entered the Final Judgement of Dismissal on March 14, 2024.

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.

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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 consolidated financial statements.

On December 28, 2023, the Delaware Court of Chancery granted in full defendants' motions to dismiss the complaint.

On January 25, 2024, the plaintiff filed a notice of appeal.

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 consolidated financial statements.

Other Commitments and Contingencies

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The Company accrues for any assessments if deemed probable and estimable.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Related-Party Transactions

The Company’s largest vendor is also an equityholder in the Company.

The Company’s largest vendor was also an equityholder in the Company.

Total payments related to the reseller agreement with this party are disclosed in Note 9 "Reseller Agreement." The Company also purchases services from this party to assist in managing its own sales cycle, customer relationship management, and other business functions.

The Company has a non-cancellable agreement for the purchase of services.

In December 2022, this agreement was renewed for one year and expires in December 2023.

Based solely on information reported in a Schedule 13G/A filed with the SEC on February 11, 2022, this vendor is no longer considered a related party as of December 31, 2021, and the amounts disclosed related to them are accordingly presented while the vendor was considered a related party.

The vendor was considered a related party for a portion of the year ended January 31, 2022 and was no longer considered a related party as of January 31, 2022.

The Company continues to do business with the vendor and balances at January 31, 2022 are no longer presented as related party.

Total payments for these services recorded to expenses were $ 1.2 million and $ 1.5 million for the fiscal years ended January 31, 2021 and 2022, respectively.

In the quarter ended July 31, 2020, certain equityholders ceased to qualify as related parties of the Company and the amounts disclosed related to them are accordingly presented only while they were considered a related party.

Included in revenues from three equityholders, who are also customers of the Company, was $ 2.8 million for the fiscal year ended January 31, 2021.

The Company has a banking relationship with one of its former equityholders who was considered a related party.

In the quarter ended July 31, 2020, the equityholder ceased to qualify as a related party of the Company and the amounts disclosed related to such former equityholder are accordingly presented only while they were considered a related party.

Included in interest income is $ 0.1 million for the fiscal year ended January 31, 2021.

Based solely on information reported in a Schedule 13G/A filed with the SEC on February 11, 2022, this vendor was no longer considered a related party as of December 31, 2021, and the amounts disclosed related to them are accordingly presented while the vendor was considered a related party.

The Company continues to do business with the vendor and transactions after December 31, 2021 are no longer disclosed.

Total payments for these services recorded to expenses were $ 1.5 million for the fiscal year ended January 31, 2022.

The Company entered into the Merger Agreement on January 7, 2022, as disclosed in Note 1 "Organization and Description of Business" and Note 7 "Business Combinations." Affiliates of Insight Partners were equityholders of SimpleNexus and certain other parties in connection with the Merger Agreement transaction, and other affiliates of Insight Partners are currently significant stockholders of the Company.

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.

(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 January 31, 2024 on the Company's 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.

On May 23, 2023, the Company announced a strategic partnership with Zest AI to build an integration into the Company's consumer banking solution to enable lenders with streamlined access to consumer credit lending insights.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Basic and Diluted Loss per Share

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Diluted loss per share for the fiscal years ended January 31, 2022, 2023, and 2024 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 CONSOLIDATED FINANCIAL STATEMENTS

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

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

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Restructuring

On January 18, 2023, the Company announced a workforce reduction of approximately seven percent 7 % and office space reductions in certain markets (collectively, the “restructuring plan”) in furtherance of its efforts to improve operating margins and advance the Company’s objective of profitable growth.

Lease termination costs are accounted for in accordance with ASC 842, Leases.

In the fourth quarter of fiscal 2023, the Company announced a workforce reduction of approximately 7 % and office space reductions in certain markets (collectively, the “restructuring plan”) in furtherance of its efforts to improve operating margins and advance the Company’s objective of profitable growth.

Lease termination costs were accounted for in accordance with ASC 842, Leases.

The Company paid $ 0.8 million in the fourth quarter of fiscal 2023 to exercise an early termination clause to exit a facility during fiscal 2024, which was accounted for as a lease modification.

The Company incurred charges in the fourth quarter of the Company’s fiscal 2023 of $ 4.8 million in connection with the restructuring plan.

As of January 31, 2023, the accrual for severance and related benefit costs of $ 5.0 million for terminated employees was included in accrued compensation and benefits on the consolidated balance sheets and is expected to be paid in the first quarter of the Company’s fiscal 2024.

The Company had no restructuring charges for the fiscal years ended January 31, 2021 and 2022.

The accrual for severance and related benefit costs of $ 5.0 million for terminated employees was included in accrued compensation and benefits on the consolidated balance sheets as of January 31, 2023 and was paid in the first quarter of the Company’s fiscal 2024.

The Company had no restructuring charges for the fiscal year ended January 31, 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company’s restructuring charges for the fiscal year ended January 31, 2023 were as follows:

The Company’s restructuring charges were as follows:

Fiscal Year Ended January 31,

Severance and other employee costs Stock-based compensation (benefit) Lease exit fees 1

Total Severance and other employee costs Stock-based compensation (benefit) Lease exit fees 1

Cost of subscription revenues $ — $ — $ 4 $ 4 $ — $ — $ 51 $ 51

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

Subsequent Events

On February 9, 2024, the Company entered into a First Amendment to extend the existing maturity date of the Credit Facility provided for under the Credit Agreement to February 11, 2025.

On March 17, 2024, the Company entered into the Second Amendment which increased our borrowing availability to $ 100.0 million and extended the existing maturity date of the Credit Facility under the Credit Facility to March 17, 2029.

Borrowings under the Credit Facility bear interest, at the Borrower’s option, at:

(i) a base rate equal to the greatest of (a) the Lender’s “prime rate”, (b) the federal funds rate plus 0.50 %, and (c) the Term SOFR rate plus 1.00 % (provided that the base rate shall not be less than 0.00 %), plus a margin of 1.3125 %;

or (ii) the Term SOFR rate (provided that the Term SOFR shall not be less than 0.00 %), plus a margin of 2.3125 %, in each case with such margin subject to a step down based on achievement of a certain leverage ratio.

The Company is also required to pay an unused commitment fee to the Lender of 0.30 % of the average daily unutilized commitments (with a step down based on achievement of a certain leverage ratio).

The Company must also pay customary letter of credit fees.

The financial covenants require the Company and its subsidiaries on a consolidated basis to maintain (i) a Consolidated Senior Secured Leverage Ratio not in excess of 2.50 :1.00 as of the end of any fiscal quarter, and (ii) a Consolidated Interest Coverage Ratio not less than 3.00 :1.00 as of the end of any fiscal quarter beginning with the second quarter of fiscal year 2025.

On March 18, 2024, the Company borrowed $ 75.0 million under the Credit Facility.

The interest rate at time of borrowing was 7.36 %.

In March 2024, the Company's wholly-owned subsidiary, nCino OpCo, acquired all of the outstanding equity of DocFox, Inc.

("DocFox"), a leading solution provider automating onboarding experiences for commercial and business banking.

The aggregate purchase price for the DocFox acquisition totaled $ 75.0 million and was funded with proceeds from the Credit Facility and available cash on hand.

The acquisition will be accounted for as a business combination under ASC 805, Business Combinations .

The Company is in the process of finalizing the accounting for this transaction and will complete the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed by the end of our first quarter of fiscal 2025.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data