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Item 1. Financial Statements

2024-05-29 compared with 2023-11-29 · 236 added, 251 removed, 449 unchanged (52% of the section changed)

2 unchanged sentences

(In thousands, except share and per share data)

January 31, 2023 October 31, 2023

January 31, 2024 April 30, 2024

Current assets

Cash and cash equivalents (VIE:

$ 2,019 and $ 2,555 at January 31, 2023 and October 31, 2023, respectively)

$ 2,277 and $ 1,983 at January 31, 2024 and April 30, 2024, respectively)

$ 112,085 $ 129,481

Accounts receivable, less allowances of $ 899 and $ 2,221 at January 31, 2023 and October 31, 2023, respectively

Accounts receivable, less allowances of $ 1,451 and $ 1,100 at January 31, 2024 and April 30, 2024, respectively

112,975 78,508

7 unchanged sentences

Intangible assets, net 115,572 142,705

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

Investments (related party $ 2,500 at January 31, 2024 and April 30, 2024)

Long-term prepaid expenses and other assets 10,089 14,484

5 unchanged sentences

Accrued expenses and other current liabilities 10,847 8,816

Deferred revenue 154,871 130,308

Deferred revenue, current portion 170,941 179,835

Financing obligations, current portion 1,474 1,520

3 unchanged sentences

Deferred income taxes, noncurrent 3,687 10,288

Deferred revenue, noncurrent — 656

Revolving credit facility, noncurrent — 55,000

Financing obligations, noncurrent 52,680 52,275

Other long-term liabilities — 2,577

Total liabilities 287,826 355,910

3 unchanged sentences

Preferred stock, $ 0.001 par value;

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

10,000,000 shares authorized, and none issued and outstanding as of January 31, 2024 and April 30, 2024

Common stock, $ 0.0005 par value;

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

111,424,132 and 113,030,730 shares issued and outstanding as of January 31, 2023 and October 31, 2023, respectively

500,000,000 shares authorized as of January 31, 2024 and April 30, 2024;

113,684,299 and 114,339,887 shares issued and outstanding as of January 31, 2024 and April 30, 2024, respectively

Additional paid-in capital 1,400,881 1,417,838

6 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended October 31, Nine Months Ended October 31,

2022 2023 2022 2023

Three Months Ended April 30,

Subscription $ 97,340 $ 110,406

17 unchanged sentences

Loss before income taxes ( 10,251 ) ( 5,279 )

Income tax provision 797 1,782 2,159 4,720

Income tax provision (benefit) 1,393 ( 2,982 )

Net loss ( 11,644 ) ( 2,297 )

2 unchanged sentences

Adjustment attributable to redeemable non-controlling interest (Note 3)

1,191 ( 478 ) 2,348 ( 526 )

Net loss attributable to nCino, Inc.

7 unchanged sentences

(In thousands)

Three Months Ended October 31, Nine Months Ended October 31,

2022 2023 2022 2023

Three Months Ended April 30,

Net loss $ ( 11,644 ) $ ( 2,297 )

Other comprehensive income:

Other comprehensive income (loss):

Foreign currency translation 114 ( 131 )

Other comprehensive income 472 74 1,581 214

Other comprehensive income (loss) 114 ( 131 )

Comprehensive loss ( 11,530 ) ( 2,428 )

8 unchanged sentences

(In thousands, except share data)

Three Months Ended October 31, 2022

Common Stock Additional

Capital Other

Comprehensive

Income (Loss) Accumulated

Deficit Total

Shares Amount

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

Exercise of stock options 145,753 — 1,182 — — 1,182

Stock issuance upon vesting of restricted stock units 181,766 — — — — —

Stock-based compensation — — 12,499 — — 12,499

Other comprehensive income — — — 539 — 539

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 1,191 ) — ( 22,388 ) ( 23,579 )

Balance, October 31, 2022 110,943,569 $ 55 $ 1,318,829 $ 1,758 $ ( 288,780 ) $ 1,031,862

Three Months Ended October 31, 2023

Common Stock Additional

Capital Other

Comprehensive

Income (Loss) Accumulated

Deficit Total

Shares Amount

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

Exercise of stock options 106,772 1 967 — — 968

Stock issuance upon vesting of restricted stock units 262,298 — — — — —

Stock-based compensation — — 15,817 — — 15,817

Other comprehensive income — — — 62 — 62

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — 478 — ( 16,857 ) ( 16,379 )

Balance, October 31, 2023 113,030,730 $ 57 $ 1,382,019 $ 906 $ ( 354,373 ) $ 1,028,609

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)

Nine Months Ended October 31, 2022

Three Months Ended April 30, 2023

Common Stock Additional

7 unchanged sentences

Stock issuance upon vesting of restricted stock units 528,831 — — — — —

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

Stock-based compensation — — 10,859 — — 10,859

1 unchanged sentence

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — 121 — ( 11,364 ) ( 11,243 )

Balance, October 31, 2022 110,943,569 $ 55 $ 1,318,829 $ 1,758 $ ( 288,780 ) $ 1,031,862

Nine Months Ended October 31, 2023

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

Three Months Ended April 30, 2024

Common Stock Additional

7 unchanged sentences

Stock issuance upon vesting of restricted stock units 456,288 — — — — —

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

Stock-based compensation — — 16,200 — — 16,200

Other comprehensive income — — — 212 — 212

Other comprehensive loss — — — ( 124 ) — ( 124 )

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 844 ) — ( 2,132 ) ( 2,976 )

Balance, October 31, 2023 113,030,730 $ 57 $ 1,382,019 $ 906 $ ( 354,373 ) $ 1,028,609

Balance, April 30, 2024 114,339,887 $ 57 $ 1,417,838 $ 872 $ ( 354,890 ) $ 1,063,877

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

1 unchanged sentence

(In thousands)

Nine Months Ended October 31,

Three Months Ended April 30,

Cash flows from operating activities

10 unchanged sentences

Deferred income taxes 332 ( 3,441 )

Provision for bad debt 323 1,124

Provision for (recovery of) bad debt 298 ( 131 )

Net foreign currency losses 363 756

Loss on disposal of long-lived assets — 161

Change in operating assets and liabilities:

3 unchanged sentences

Accounts payable ( 259 ) 3,812

Accrued expenses and other current liabilities ( 9,182 ) ( 7,999 )

Accrued expenses and other liabilities ( 13,227 ) ( 8,192 )

Deferred revenue 16,755 6,175

5 unchanged sentences

Purchases of property and equipment ( 1,605 ) ( 342 )

Purchase of investment — ( 2,500 )

Net cash used in investing activities ( 1,961 ) ( 91,229 )

Cash flows from financing activities

Investment from redeemable non-controlling interest — 983

Proceeds from borrowings on revolving credit facility — 75,000

2 unchanged sentences

Exercise of stock options 1,388 1,601

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

Principal payments on financing obligations ( 244 ) ( 359 )

7 unchanged sentences

Restricted cash included in prepaid expenses and other current assets 5,160 —

Restricted cash included in other long-term assets 5,350 348

Restricted cash included in long-term prepaid expenses and other assets 201 5,357

Total cash, cash equivalents, and restricted cash, end of period $ 103,497 $ 134,838

4 unchanged sentences

Purchase of property and equipment, accrued but not paid $ 182 $ —

Deferred costs, accrued but not paid $ — $ 140

Receivables from exercise of stock options $ 213 $ —

Accrued purchase price related to acquisitions $ — $ 300

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

1 unchanged sentence

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

Organization and Description of Business

Organization:

On November 16, 2021, nCino, Inc.

(now nCino OpCo, Inc., "nCino OpCo") entered into an Agreement and Plan of Merger (the "Merger Agreement") with Penny HoldCo, Inc.

(now nCino, Inc., "nCino, Inc."), a Delaware corporation incorporated on November 12, 2021 as a wholly-owned subsidiary of nCino OpCo, and certain other parties.

On January 7, 2022, in connection with the closing of the transactions contemplated by the Merger Agreement, Penny HoldCo, Inc.

changed its name to nCino, Inc.

and nCino, Inc.

changed its name to nCino OpCo, Inc.

and became a wholly-owned subsidiary of nCino, Inc.

On January 7, 2022, pursuant to the Merger Agreement, nCino, Inc.

and nCino OpCo completed a series of mergers in which nCino, Inc.

became the parent of nCino OpCo and SimpleNexus, LLC ("SimpleNexus").

Each share of nCino OpCo common stock, par value $ 0.0005 per share, issued and outstanding was converted into one fully paid and nonassessable share of nCino, Inc.

common stock, par value $ 0.0005 .

became the successor issuer and reporting company to nCino OpCo pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended.

On January 10, 2022, shares of nCino OpCo were suspended from trading on the Nasdaq Global Select Market, and shares of nCino, Inc.

commenced using nCino OpCo's trading history under the ticker symbol "NCNO".

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

Description of Business

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 U.S., North America, Europe and Asia Pacific.

Fiscal Year End:

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

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

The Company’s fiscal year ends on January 31.

13 unchanged sentences

as it has the power over the activities that most significantly impact the economic performance of nCino K.K.

and has the obligation to absorb expected

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

losses and the right to receive expected benefits that could be significant to nCino K.K., in accordance with accounting guidance.

and has the obligation to absorb expected losses and the right to receive expected benefits that could be significant to nCino K.K., in accordance with accounting guidance.

As a result, the Company consolidated nCino K.K.

10 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 agreement, the Company would be required to redeem the interest based on a prescribed formula derived from the relative

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

revenues of nCino K.K.

and the Company.

13 unchanged sentences

Actual results could differ from these estimates.

See Note 7 "Goodwill and Intangible Assets" for a change in estimate for the useful life of the SimpleNexus trade name.

Concentration of Credit Risk and Significant Customers:

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 October 31, 2023.

The Company’s cash and cash equivalents exceeded federally insured limits at January 31, 2024 and April 30, 2024.

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

As of January 31, 2023 and October 31, 2023, no individual customer represented over 10% of accounts receivable.

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

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

As of April 30, 2024, one individual customer represented 15 % of accounts receivable.

For the three months ended April 30, 2023 and 2024, 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 other long-term assets at January 31, 2023 and in prepaid expenses and other current assets and other long-term assets at October 31, 2023 on the unaudited condensed consolidated balance sheets.

Accounts Receivable and Allowances:

A receivable is recorded when an unconditional right to invoice and receive payment exists, such that only the passage of time is required before payment of consideration is due.

Timing of revenue recognition may differ from the timing of invoicing to customers.

Certain performance obligations may require payment before delivery of the service to the customer.

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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

unbilled accounts receivable when revenues earned on a contract exceeds the billings.

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.

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.

Restricted cash is included in long-term prepaid expenses and other assets at January 31, 2024 and April 30, 2024 on the unaudited condensed consolidated balance sheets.

The Company records allowances for doubtful accounts based upon the credit worthiness of customers, historical experience, the age of the accounts receivable, current market and economic conditions, and supportable forecasts about the future.

1 unchanged sentence

This estimate is analyzed quarterly and adjusted as necessary.

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

Three Months Ended October 31, Nine Months Ended October 31,

2022 2023 2022 2023

The Company records the allowance against bad debt expense through the unaudited condensed 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 unaudited condensed 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:

Three Months Ended April 30,

Balance, beginning of period $ 899 $ 1,451

Charged to bad debt expense 169 368 323 1,124

Charged to deferred revenue — 981 — 923

Charged to (recovery of) bad debt expense 298 ( 131 )

Write-offs and other ( 157 ) ( 220 )

1 unchanged sentence

Balance, end of period $ 1,037 $ 1,100

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Investments :

4 unchanged sentences

The Company assesses the investments whenever events or changes in circumstances indicate that the carrying value of the investments may not be recoverable.

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 unaudited condensed 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 unaudited condensed consolidated financial statements.

Variable Interest Entity and Redeemable Non-Controlling Interest

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

As of April 30, 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 exiting third-party investors in October 2023, maintained the Company's ownership of 51 %.

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.

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 $ 2.8 million at October 31, 2023.

The estimated redemption value of the call/put option embedded in the redeemable non-controlling interest was $ 4.1 million at April 30, 2024.

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 October 31, Nine Months Ended October 31,

2022 2023 2022 2023

Three Months Ended April 30,

Balance, beginning of period $ 3,589 $ 3,428

Investment by redeemable non-controlling interest — 983 — 983

Net loss attributable to redeemable non-controlling interest (excluding adjustment to non-controlling interest) ( 280 ) ( 165 )

10 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 October 31, 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, 2024 and April 30, 2024 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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 October 31, 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, 2024 and April 30, 2024 and indicates the fair value hierarchy of the valuation:

Fair value measurements on a recurring basis as of January 31, 2024

1 unchanged sentence

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 $ — $ —

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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Fair value measurements on a recurring basis as of April 30, 2024

Level 1 Level 2 Level 3

Money market accounts (included in cash and cash equivalents) $ 31,030 $ — $ —

Time deposits (included in other long-term assets) 348 — —

Time deposits (included in long-term prepaid expenses and other assets) 357 — —

Total assets $ 31,387 $ — $ —

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 three and nine months ended October 31, 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.

There was no adjustment or impairment recognized for the three months ended April 30, 2023 and 2024.

Revenues by Geographic Area

Revenues by geographic region were as follows:

Three Months Ended October 31, Nine Months Ended October 31,

2022 2023 2022 2023

Three Months Ended April 30,

United States $ 94,446 $ 102,241

3 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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

For the three months ended April 30, 2023 and 2024, no country outside the United States represented 10% or more of total revenues.

Contract Amounts

Accounts Receivable

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

As of January 31, 2023 As of October 31, 2023

Accounts receivable, less allowance for doubtful accounts, is as follows as of January 31, 2024 and April 30, 2024:

As of January 31, 2024 As of April 30, 2024

Trade accounts receivable $ 106,170 $ 68,564

3 unchanged sentences

Total accounts receivable, net $ 112,975 $ 78,508

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

Deferred Revenue and Remaining Performance Obligations

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 nine months ended October 31, 2023, $ 149.9 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.

Transaction price allocated to the remaining performance obligation is influenced by several factors, including the timing of renewals, average contract terms, and foreign currency exchange rates.

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 $ 917.1 million as of October 31, 2023.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

were offset by decreases due to revenues recognized in the period.

During the three months ended April 30, 2024, $ 78.9 million of revenues were recognized out of the deferred revenue balance as of January 31, 2024.

Remaining performance obligations were $ 1.07 billion as of April 30, 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.

1 unchanged sentence

Property and equipment, net consisted of the following:

As of January 31, 2023 As of October 31, 2023

As of January 31, 2024 As of April 30, 2024

Furniture and fixtures $ 12,066 $ 12,060

7 unchanged sentences

$ 79,145 $ 77,701

1 See Note 12 "Commitments and Contingencies."

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company recognized depreciation expense as follows:

Three Months Ended October 31, Nine Months Ended October 31,

2022 2023 2022 2023

Three Months Ended April 30,

Cost of subscription revenues $ 137 $ 121

4 unchanged sentences

Total depreciation expense $ 2,026 $ 1,608

Business Combinations

On March 20, 2024 (the "DocFox Acquisition Date"), the Company acquired through a merger the outstanding equity interests of DocFox, which provides a solution to automate onboarding experiences for commercial and business banking.

The Company acquired DocFox for its complementary product set, which helps simplify and automate the onboarding and account opening process.

The Company has included the financial results of DocFox in the consolidated statements of operations from the DocFox Acquisition Date.

Including the $ 2.0 million in post combination expense referenced below, transaction costs associated with the DocFox acquisition were approximately $ 3.9 million and were recorded in general and administrative expenses for the three months ended April 30, 2024.

The Company paid a total of $ 74.3 million in cash as of the DocFox Acquisition Date.

Included in the total cash paid was $ 6.2 million for DocFox common stock options that were cash settled on the DocFox Acquisition Date.

The $ 6.2 million fair value of the DocFox common stock options was allocated between consideration transferred and post combination expense in the amounts of $ 4.2 million and $ 2.0 million, respectively.

As there was no future service requirement due to accelerated vesting of these options, the entire $ 2.0 million was recorded as transaction cost immediately following the acquisition and not in consideration transferred.

The $ 2.0 million is included within general and administrative expense for the

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

three months ended April 30, 2024.

The estimated fair value of the consideration transferred was $ 72.4 million on the DocFox Acquisition Date.

In addition, the Company issued 198,505 RSUs with an approximate fair value of $ 6.1 million to certain employees of DocFox, which will vest over four years subject to such employees' continued employment.

The RSUs will be recorded as stock-based compensation expense post-acquisition as the RSUs vest and has been excluded from the purchase consideration.

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the DocFox Acquisition Date:

Cash and cash equivalents $ 1,400

Accounts receivable 1,898

Operating lease right-of-use assets, net 405

Other current and noncurrent assets 444

Intangible assets 24,600

Goodwill 57,430

Accounts payable, accrued expenses, and other liabilities, current and noncurrent ( 3,495 )

Deferred revenue, current and noncurrent ( 3,505 )

Operating lease liabilities, current and noncurrent ( 405 )

Deferred income taxes ( 6,407 )

Net assets acquired $ 72,365

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 DocFox Acquisition Date.

Any excess consideration over the fair value of the assets acquired and liabilities assumed was recognized as goodwill and is subject to revision as the purchase price allocation is complete.

The Company determined the acquisition date contract assets and liabilities in accordance with ASC 606.

Due to the timing of the transaction, initial accounting for the acquisition is not complete, and further measurement period adjustments may occur in fiscal year 2025, but no later than one year from the DocFox Acquisition Date.

The Company has estimated the preliminary fair value of net assets acquired based on information currently available and with the assistance of independent third-party valuations and will continue to adjust those estimates as additional information becomes available, valuations are finalized and the tax returns for the pre-acquisition period are completed.

The primary areas of the acquisition accounting that remain preliminary relate to, but are not limited to, (i) finalizing the review and valuation of intangible assets (including key assumptions, inputs and estimates), (ii) finalizing the Company's review of certain assets acquired and liabilities assumed, (iii) finalizing the evaluation and valuation of certain legal matters and/or loss contingencies, including those that the Company may not yet be aware of but meet the requirement to qualify as a pre-acquisition contingency, (iv) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities, including uncertain tax positions, and (v) finalizing the Company’s review of the acquired contracts and related contract assets and liabilities.

As the initial acquisition accounting is based on preliminary assessments, actual values may differ materially when final information becomes available.

The Company believes the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed.

The Company will continue to evaluate these items until they are satisfactorily resolved and make necessary adjustments, within the allowable measurement period.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The following table sets forth the components of the preliminary 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 DocFox Acquisition Date:

Fair Value Useful Life

Trade name $ 200 1 year

Customer relationships 16,400 10 years

Developed technology 8,000 5 years

Total intangible assets subject to amortization $ 24,600

Developed technology represents the preliminary fair value of DocFox's technology.

Customer relationships represent the preliminary fair value of the underlying relationships with DocFox's customers.

Trade names represents the preliminary fair value of DocFox’s company name.

The Company continues to assess the rates used in the preliminary valuation methods such as, but not limited to, the discount rates for developed technology, customer relationships and trade name and customer attrition rate for customer relationships.

Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce.

The goodwill is not expected to be deductible for tax.

The financial results of DocFox since the DocFox Acquisition Date are included in the Company's unaudited condensed consolidated financial statements and are not material to the Company.

The Company has not disclosed pro-forma revenue and earnings attributable to DocFox as they did not have a material effect on the Company’s unaudited condensed consolidated financial statements.

Integrated Lending Technologies, LLC (“ILT”)

On April 1, 2024 (the "ILT Acquisition Date”), the Company acquired all outstanding membership interests of ILT, which provides industry-leading consumer loan origination software that streamlines direct and indirect lending operations.

The Company acquired ILT for its complementary products and believes this will provide greater value for new and existing customers.

The Company has included the financial results of ILT in the consolidated statements of operations from the ILT Acquisition Date.

Transaction costs associated with the ILT acquisition were approximately $ 0.9 million and were recorded in general and administrative expenses for the three months ended April 30, 2024.

The fair value of the consideration transferred was $ 19.9 million and paid in cash on the ILT Acquisition Date, subject to a net working capital adjustment.

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the ILT Acquisition Date:

Cash and cash equivalents $ 164

Accounts receivable 343

Intangible assets 8,660

Goodwill 11,009

Accounts payable, accrued expenses, and other liabilities, current and noncurrent ( 240 )

Net assets acquired $ 19,936

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 ILT Acquisition Date.

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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

revision as the purchase price allocation is completed.

The Company determined the acquisition date contract assets and liabilities in accordance with ASC 606.

As the initial acquisition accounting is based on preliminary assessments, actual values may differ materially when final information becomes available.

The Company believes the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed.

The Company will continue to evaluate these items until they are satisfactorily resolved and make necessary adjustments, within the allowable measurement period.

Fair Value Useful Life

Trade name $ 210 1 year

Customer relationships 5,870 10 years

Developed technology 2,580 5 years

Total intangible assets subject to amortization $ 8,660

Developed technology represents the preliminary estimated fair value of ILT’s technology.

Customer relationships represent the preliminary estimated fair value of the underlying relationships with ILT’s customers.

Trade name represents the preliminary estimated fair value of ILT’s company name.

Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce and approximately $ 11.0 million is expected to be deductible for tax purposes.

The financial results of ILT since the ILT Acquisition Date are included in the Company's unaudited condensed consolidated financial statements and are not material to the Company.

The Company has not disclosed pro-forma revenue and earnings attributable to ILT as they did not have a material effect on the Company’s condensed consolidated financial statements.

Goodwill and Intangible Assets

1 unchanged sentence

Balance, January 31, 2024 $ 838,869

Acquisitions 68,439

Translation adjustments 205

Balance, October 31, 2023 $ 838,585

Balance, April 30, 2024 $ 907,513

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Intangible assets

Intangible assets, net are as follows:

As of January 31, 2023 As of October 31, 2023

As of January 31, 2024 As of April 30, 2024

Amount Accumulated

7 unchanged sentences

$ 190,715 $ ( 75,143 ) $ 115,572 $ 203,938 $ ( 61,233 ) $ 142,705

During the three months ended April 30, 2023 and 2024, the Company wrote off approximately $ 0.0 million and $ 20.6 million of fully amortized intangible assets and the corresponding accumulated amortization, respectively.

The Company recognized amortization expense for intangible assets as follows:

Three Months Ended October 31, Nine Months Ended October 31,

2022 2023 2022 2023

Three Months Ended April 30,

Cost of subscription revenues $ 4,251 $ 4,118

2 unchanged sentences

Total amortization expense $ 7,105 $ 6,682

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 three and nine months ended October 31,

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

2023 was an increase in sales and marketing amortization expense of $ 10.1 million, which resulted in an increase in loss of operations and net loss attributable to nCino, Inc.

of $ 10.1 million, or $ 0.09 per basic and diluted share.

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

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 and recorded incremental amortization of $ 10.1 million to fully amortize the remaining trade name intangible asset.

The expected future amortization expense for intangible assets as of April 30, 2024 is as follows:

Fiscal Year Ending January 31,

3 unchanged sentences

Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, future changes to expected asset lives of intangible assets, and other events.

Stockholders’ Equity

At October 31, 2023, the Company committed a total of 34,833,275 shares of common stock for future issuance as follows:

Issued and outstanding stock options 1,551,058

Nonvested issued and outstanding restricted stock units ("RSUs") 5,785,669

Possible issuance under stock plans 27,496,548

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Stock-Based Compensation

Stock Options

Stock option activity for the nine months ended October 31, 2023 was as follows:

Stock option activity for the three months ended April 30, 2024 was as follows:

Shares Weighted

3 unchanged sentences

Exercised ( 199,300 ) 8.03

Outstanding, October 31, 2023 1,551,058 $ 6.42

Exercisable, October 31, 2023 1,548,183 $ 6.39

Fully vested or expected to vest, October 31, 2023 1,550,771 $ 6.41

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Outstanding, April 30, 2024 1,012,404 $ 6.96

Exercisable, April 30, 2024 1,012,404 $ 6.96

Fully vested or expected to vest, April 30, 2024 1,012,404 $ 6.96

Restricted Stock Units

RSU activity during the nine months ended October 31, 2023 was as follows:

RSU activity during the three months ended April 30, 2024 was as follows:

Shares Weighted Average

4 unchanged sentences

Forfeited ( 322,795 ) 35.94

Nonvested, October 31, 2023 5,785,669 $ 33.89

As of October 31, 2023, total unrecognized compensation expense related to non-vested RSUs was $ 155.3 million, adjusted for estimated forfeitures, based on the estimated fair value of the Company’s common stock at the time of grant.

Nonvested, April 30, 2024 7,054,446 $ 32.23

As of April 30, 2024, total unrecognized compensation expense related to non-vested RSUs was $ 190.2 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 3.08 years.

2 unchanged sentences

Thereafter, offering periods begin each year on January 1 and July 1.

The fair value of ESPP shares during the nine months ended October 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:

Nine Months Ended October 31,

The fair value of ESPP shares during the three months ended April 30, 2023 and 2024 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,

Expected life (in years) 0.50 0.50

Expected volatility 61.86 %

61.66 % - 61.86 %

Expected dividends 0.00 % 0.00 %

Risk-free interest rate 4.77 %

4.77 % - 5.53 %

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Stock-Based Compensation Expense

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

Three Months Ended October 31, Nine Months Ended October 31,

2022 2023 2022 2023

Three Months Ended April 30,

Cost of subscription revenues $ 314 $ 562

4 unchanged sentences

Total stock-based compensation expense $ 10,865 $ 16,205

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 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 .

The components of lease expense were as follows:

Three Months Ended October 31, Nine Months Ended October 31,

2022 2023 2022 2023

Three Months Ended April 30,

Operating lease expense $ 1,305 $ 1,334

3 unchanged sentences

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

Nine Months Ended October 31,

Three Months Ended April 30,

Cash paid for amounts included in the measurement of operating lease liabilities $ 1,106 $ 1,087

1 unchanged sentence

Operating right-of-use assets and operating lease liabilities disposed of — 1,947

The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of October 31, 2023 were 3.25 years and 4.7 %, respectively.

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

The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of April 30, 2024 were 6.18 years and 6.7 %, 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 April 30, 2024 were as follows:

Fiscal Year Ending January 31, Operating Leases

6 unchanged sentences

Long-term lease obligations $ 13,423

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Revolving Credit Facility

On February 11, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”), by and among the Company, nCino OpCo (the “Borrower”), certain subsidiaries of the Company as guarantors, and Bank of America, N.A.

as lender (the “Lender”), pursuant to which the Lender is providing to the Borrower a senior secured revolving credit facility of up to $ 50.0 million (the “Credit Facility”).

as lender (the “Lender”), pursuant to which the Lender provided to the Borrower a senior secured revolving credit facility of up to $ 50.0 million (the “Credit Facility”).

The Credit Facility includes borrowing capacity available for letters of credit subject to a sublimit of $ 7.5 million.

Any issuance of letters of credit will reduce the amount available under the Credit Facility.

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 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 %);

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

The Company is also required to pay an unused commitment fee to the Lender of 0.25 % of the average daily unutilized commitments.

(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.

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.

The Credit Agreement contains representations and warranties, affirmative, negative and financial covenants, and events of default that are customary for loans of this type.

The financial covenant requires the Company and its subsidiaries on a consolidated basis to maintain Consolidated Liquidity of not less than $ 50.0 million.

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 as of January 31, 2023 and prepaid expenses and other current assets as of October 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 October 31, 2023, respectively.

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

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.

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, 2024 and April 30, 2024 on the Company's unaudited condensed consolidated balance sheets.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 $ 0.0 million and $ 55.0 million outstanding and no letters of credit issued under the Credit Facility and was in compliance with all covenants as of January 31, 2024 and April 30, 2024, respectively.

As of April 30, 2024, the applicable interest rate was 7.36 %.

The available borrowing capacity under the Credit Facility was $ 45.0 million as of April 30, 2024.

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 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.

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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

financing obligation are included in property and equipment, net and financing obligations on the unaudited condensed consolidated balance sheets, respectively.

In January 2021, the Company entered into an amendment to its November 2020 headquarters lease to provide for construction of a parking deck, which upon completion was subject to exclusive use by the Company.

Due to the Company also being deemed to be the owner of the parking deck for accounting purposes, the costs associated with the construction of the parking deck were capitalized as construction in progress with a corresponding construction liability through construction.

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 unaudited condensed consolidated balance sheets, respectively.

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.

Due to a purchase option contained in that April 2021 lease, the Company is also deemed to be the owner of the additional building for accounting purposes, the costs associated with the construction of the additional building were capitalized as construction in progress with a corresponding construction liability through construction.

Upon completion of the additional building in November 2022, for approximately $ 22.4 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 unaudited condensed consolidated balance sheets, respectively, and the term of the Company's November 2020 lease for its headquarters and the related parking deck became coterminous with the April 2021 lease.

The term of the April 2021 lease expires in October 2037 with options to extend.

The purchase option expires if not exercised on or before November 30, 2026.

The Company's financing obligations consist of leases for the Company's headquarters and parking deck in which the Company is deemed the owner of for accounting purposes.

The leases will be analyzed for applicable lease accounting upon expiration of the purchase option, if not exercised.

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

Purchase commitments and future minimum lease payments required under financing obligations as of April 30, 2024 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 October 31, 2023 was 5.7 %.

The weighted-average discount rate for the Company's financing obligations as of April 30, 2024 was 5.7 %.

Indemnification

2 unchanged sentences

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 unaudited condensed consolidated financial statements.

The Company has not accrued any material liabilities related to such obligations in the accompanying unaudited condensed consolidated financial statements.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

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 U.S.

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 the 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").

6 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.

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

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.

10 unchanged sentences

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

4 unchanged sentences

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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Related-Party Transactions

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 October 31, 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, 2024 and April 30, 2024 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.

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 UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Basic and Diluted Loss per Share

3 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 October 31, 2022 and 2023 and for the nine months ended October 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.

Diluted loss per share for the three months ended April 30, 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.

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 October 31, Nine Months Ended October 31,

2022 2023 2022 2023

Three Months Ended April 30,

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:

Nine Months Ended October 31,

Three Months Ended April 30,

Stock options issued and outstanding 1,761,555 1,012,404

1 unchanged sentence

Shares issuable pursuant to the ESPP 98,750 106,134

Restructuring

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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

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’s restructuring charges for the three and nine months ended October 31, 2023 were as follows:

Three Months Ended

October 31, 2023 Nine Months Ended

October 31, 2023

Lease exit fees 1

Cost of subscription revenues 12 $ 51

Cost of professional services and other revenues 26 118

Sales and marketing 24 100

Research and development 87 352

General and administrative 1 6

Total 150 $ 627

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 and nine months ended October 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