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Item 1. Financial Statements

2024-08-27 compared with 2024-05-29 · 169 added, 128 removed, 557 unchanged (35% of the section changed)

2 unchanged sentences

(In thousands, except share and per share data)

January 31, 2024 April 30, 2024

January 31, 2024 July 31, 2024

Current assets

Cash and cash equivalents (VIE:

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

$ 2,277 and $ 1,963 at January 31, 2024 and July 31, 2024, respectively)

$ 112,085 $ 121,410

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

Accounts receivable, less allowances of $ 1,451 and $ 1,204 at January 31, 2024 and July 31, 2024, respectively

112,975 78,819

7 unchanged sentences

Intangible assets, net 115,572 135,524

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

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

Long-term prepaid expenses and other assets 10,089 15,328

20 unchanged sentences

Preferred stock, $ 0.001 par value;

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

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

Common stock, $ 0.0005 par value;

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

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

113,684,299 and 115,387,309 shares issued and outstanding as of January 31, 2024 and July 31, 2024, respectively

Additional paid-in capital 1,400,881 1,439,245

6 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended April 30,

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

2023 2024 2023 2024

Subscription $ 99,897 $ 113,911 $ 197,237 $ 224,317

15 unchanged sentences

Interest expense ( 1,044 ) ( 1,835 ) ( 2,423 ) ( 3,312 )

Other expense, net ( 782 ) ( 744 )

Other income (expense), net 469 150 ( 313 ) ( 594 )

Loss before income taxes ( 14,534 ) ( 9,270 ) ( 24,785 ) ( 14,549 )

4 unchanged sentences

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

73 75 ( 48 ) 919

Net loss attributable to nCino, Inc.

7 unchanged sentences

(In thousands)

Three Months Ended April 30,

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

2023 2024 2023 2024

Net loss $ ( 16,079 ) $ ( 11,023 ) $ ( 27,723 ) $ ( 13,320 )

Other comprehensive income (loss):

Other comprehensive income:

Foreign currency translation 26 540 140 409

Other comprehensive income (loss) 114 ( 131 )

Other comprehensive income 26 540 140 409

Comprehensive loss ( 16,053 ) ( 10,483 ) ( 27,583 ) ( 12,911 )

8 unchanged sentences

(In thousands, except share data)

Three Months Ended April 30, 2023

Three Months Ended July 31, 2023

Common Stock Additional

4 unchanged sentences

Shares Amount

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

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

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

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

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

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

1 unchanged sentence

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

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

Three Months Ended July 31, 2024

Common Stock Additional

Capital Other

Comprehensive

Income (Loss) Accumulated

Deficit Total

Shares Amount

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

Three Months Ended April 30, 2024

Exercise of stock options 13,411 — 136 — — 136

Stock issuance upon vesting of restricted stock units 940,029 1 (1) — — —

Stock issuance under the employee stock purchase plan 93,982 — 2,514 — — 2,514

Stock-based compensation — — 18,833 — — 18,833

Other comprehensive income — — — 535 — 535

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 75 ) — ( 10,965 ) ( 11,040 )

Balance, July 31, 2024 115,387,309 $ 58 $ 1,439,245 $ 1,407 $ ( 365,855 ) $ 1,074,855

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

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

Six Months Ended July 31, 2023

Common Stock Additional

7 unchanged sentences

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

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

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

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

Other comprehensive income — — — 150 — 150

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

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

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

Six Months Ended July 31, 2024

Common Stock Additional

Capital Other

Comprehensive

Income (Loss) Accumulated

Deficit Total

Shares Amount

Balance, January 31, 2024 113,684,299 $ 57 $ 1,400,881 $ 996 $ ( 352,758 ) $ 1,049,176

Exercise of stock options 212,711 — 1,737 — — 1,737

Stock issuance upon vesting of restricted stock units 1,396,317 1 (1) — — —

Stock issuance under the employee stock purchase plan 93,982 — 2,514 — — 2,514

Stock-based compensation — — 35,033 — — 35,033

Other comprehensive income — — — 411 — 411

Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 919 ) — ( 13,097 ) ( 14,016 )

Balance, July 31, 2024 115,387,309 $ 58 $ 1,439,245 $ 1,407 $ ( 365,855 ) $ 1,074,855

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

1 unchanged sentence

(In thousands)

Three Months Ended April 30,

Six Months Ended July 31,

Cash flows from operating activities

10 unchanged sentences

Deferred income taxes 790 ( 2,656 )

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

Net foreign currency losses 363 756

Provision for bad debt 756 25

Net foreign currency losses (gains) ( 38 ) 392

Loss on disposal of long-lived assets 144 30

Change in operating assets and liabilities:

17 unchanged sentences

Exercise of stock options 2,204 1,737

Stock issuance under the employee stock purchase plan 2,698 2,514

Principal payments on financing obligations ( 564 ) ( 722 )

9 unchanged sentences

Total cash, cash equivalents, and restricted cash, end of period $ 103,369 $ 126,765

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(In thousands)

Six Months Ended July 31,

Supplemental disclosure of cash flow information

12 unchanged sentences

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.

26 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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 revenues of nCino K.K.

and the Company.

The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest’s share of earnings or losses and other comprehensive income or loss, or its estimated redemption value.

The resulting changes in the estimated redemption amount (increases or decreases) are recorded with corresponding adjustments against retained earnings or, in the absence of retained earnings, additional paid-in-capital.

The resulting changes in the estimated redemption amount

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(increases or decreases) are recorded with corresponding adjustments against retained earnings or, in the absence of retained earnings, additional paid-in-capital.

These interests are presented on the unaudited condensed consolidated balance sheets outside of equity under the caption “Redeemable non-controlling interest.”

12 unchanged sentences

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

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

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

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

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.

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

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

Restricted cash is included in long-term prepaid expenses and other assets at January 31, 2024 and July 31, 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.

5 unchanged sentences

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

Three Months Ended April 30,

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

2023 2024 2023 2024

Balance, beginning of period $ 1,037 $ 1,100 $ 899 $ 1,451

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

Charged to bad debt expense 458 156 756 25

Write-offs and other ( 622 ) ( 52 ) ( 779 ) ( 272 )

1 unchanged sentence

Balance, end of period $ 876 $ 1,204 $ 876 $ 1,204

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Investments :

2 unchanged sentences

The Company assesses at each reporting period if the investments continue to qualify for the measurement alternative.

Gains or losses resulting from observable price changes are recognized currently in the Company's unaudited condensed consolidated statements of operations.

Gains or losses resulting from

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

observable price changes are recognized currently in the Company's unaudited condensed consolidated statements of operations.

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

17 unchanged sentences

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

As of April 30, 2024, the Company controls a majority of the outstanding common stock in nCino K.K.

As of July 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.

6 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 $ 4.1 million at April 30, 2024.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

Three Months Ended April 30,

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

2023 2024 2023 2024

Balance, beginning of period $ 3,184 $ 4,105 $ 3,589 $ 3,428

5 unchanged sentences

stock options granted in accordance with nCino K.K.'s equity incentive plan.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Fair Value Measurements

4 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, 2024 and April 30, 2024 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 July 31, 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.

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

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

3 unchanged sentences

Total assets $ 39,008 $ — $ —

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

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

Level 1 Level 2 Level 3

5 unchanged sentences

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.

There was no adjustment or impairment recognized for the three and six months ended July 31, 2023 and 2024.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Revenues by Geographic Area

Revenues by geographic region were as follows:

Three Months Ended April 30,

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

2023 2024 2023 2024

United States $ 95,315 $ 104,925 $ 189,761 $ 207,166

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.

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

For the three and six months ended July 31, 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, 2024 and April 30, 2024:

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

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

As of January 31, 2024 As of July 31, 2024

Trade accounts receivable $ 106,170 $ 66,411

4 unchanged sentences

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

During the six months ended July 31, 2024, $ 134.3 million of revenues were recognized out of the deferred revenue balance as of January 31, 2024.

Remaining performance obligations were $ 1.04 billion as of July 31, 2024.

The Company expects to recognize approximately 67 % of its remaining performance obligation as revenues in the next 24 months, approximately 27 % more in the following 25 to 48 months, and the remainder thereafter.

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.

Property and Equipment

Property and equipment, net consisted of the following:

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

As of January 31, 2024 As of July 31, 2024

Furniture and fixtures $ 12,066 $ 12,003

8 unchanged sentences

The Company recognized depreciation expense as follows:

Three Months Ended April 30,

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

2023 2024 2023 2024

Cost of subscription revenues $ 150 $ 121 $ 287 $ 242

13 unchanged sentences

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 $ 2.0 million is included within general and administrative expense for the three months ended April 30, 2024.

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

1 unchanged sentence

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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

19 unchanged sentences

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:

7 unchanged sentences

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.

The Company continues to assess the rates used in the preliminary

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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.

3 unchanged sentences

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.

On April 1, 2024 (the "ILT Acquisition Date”), the Company acquired all outstanding membership interests of ILT, which provides 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.

2 unchanged sentences

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:

The net working capital adjustment was finalized in July 2024, resulting in an increase to the purchase price of $ 0.1 million which was recorded to goodwill.

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of July 31, 2024:

Cash and cash equivalents $ 164

5 unchanged sentences

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.

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 completed.

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

5 unchanged sentences

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)

16 unchanged sentences

Translation adjustments 590

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)

Balance, July 31, 2024 $ 908,000

Intangible assets

Intangible assets, net are as follows:

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

As of January 31, 2024 As of July 31, 2024

Amount Accumulated

7 unchanged sentences

$ 190,715 $ ( 75,143 ) $ 115,572 $ 204,109 $ ( 68,585 ) $ 135,524

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.

During the six months ended July 31, 2024, the Company wrote off approximately $ 20.6 million of fully amortized intangible assets and the corresponding accumulated amortization.

NOTES TO UNAUDITED CONDENSED 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:

Three Months Ended April 30,

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

2023 2024 2023 2024

Cost of subscription revenues $ 4,190 $ 4,404 $ 8,441 $ 8,522

3 unchanged sentences

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:

The expected future amortization expense for intangible assets as of July 31, 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.

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 three months ended April 30, 2024 was as follows:

Stock option activity for the six months ended July 31, 2024 was as follows:

Shares Weighted

3 unchanged sentences

Exercised ( 212,711 ) 8.16

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

Outstanding, July 31, 2024 998,618 $ 6.92

Exercisable, July 31, 2024 998,618 $ 6.92

Fully vested or expected to vest, July 31, 2024 998,618 $ 6.92

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Restricted Stock Units

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

RSU activity during the six months ended July 31, 2024 was as follows:

Shares Weighted Average

4 unchanged sentences

Forfeited ( 426,301 ) 35.97

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.

Nonvested, July 31, 2024 6,362,337 $ 33.19

As of July 31, 2024, total unrecognized compensation expense related to non-vested RSUs was $ 178.6 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 2.93 years.

2 unchanged sentences

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

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,

The fair value of ESPP shares during the six months ended July 31, 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:

Six Months Ended July 31,

Expected life (in years) 0.50 0.50

Expected volatility 61.66 % - 61.86 %

38.70 % - 38.91 %

Expected dividends 0.00 % 0.00 %

Risk-free interest rate 4.77 % - 5.53 %

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

5.24 % - 5.37 %

Stock-Based Compensation Expense

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

Three Months Ended April 30,

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

2023 2024 2023 2024

Cost of subscription revenues $ 485 $ 793 $ 799 $ 1,355

4 unchanged sentences

Total stock-based compensation expense $ 15,281 $ 18,839 $ 26,146 $ 35,044

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Operating Leases

1 unchanged sentence

The components of lease expense were as follows:

Three Months Ended April 30,

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

2023 2024 2023 2024

Operating lease expense $ 1,312 $ 1,392 $ 2,617 $ 2,726

3 unchanged sentences

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

Three Months Ended April 30,

Six Months Ended July 31,

Cash paid for amounts included in the measurement of operating lease liabilities $ 2,231 $ 2,212

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 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:

The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of July 31, 2024 were 6.21 years and 6.8 %, respectively.

Future minimum lease payments as of July 31, 2024 were as follows:

Fiscal Year Ending January 31, Operating Leases

6 unchanged sentences

Long-term lease obligations $ 12,508

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Revolving Credit Facility

14 unchanged sentences

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.

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 July 31, 2024 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 $ 0.0 million and $ 40.0 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 July 31, 2024, respectively.

As of July 31, 2024, the applicable interest rate was 7.38 %.

The available borrowing capacity under the Credit Facility was $ 60.0 million as of July 31, 2024.

Commitments and Contingencies

2 unchanged sentences

The Company’s purchase commitments consist of non-cancellable agreements to purchase goods and services, primarily licenses and hosting services, entered into in the ordinary course of business.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Financing Obligations

1 unchanged sentence

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 April 30, 2024 is as follows:

Purchase commitments and future minimum lease payments required under financing obligations as of July 31, 2024 is as follows:

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

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2028 71,226 —

Thereafter 357 —

Total $ 258,721 $ 10,869

3 unchanged sentences

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

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

The weighted-average discount rate for the Company's financing obligations as of July 31, 2024 was 5.7 %.

Indemnification

3 unchanged sentences

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

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

Legal Proceedings

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 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").

The sole class representative in the suit is one individual alleging a contract, combination or conspiracy between and among the Company, Live Oak Bancshares, Inc.

("Live Oak") and Apiture, Inc.

("Apiture") not to solicit or hire each other’s employees in violation of Section 1 of the Sherman Act and N.C.

§§ 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 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.

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.

8 unchanged sentences

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

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

Given the uncertainty and preliminary stages of this matter, the Company is unable to reasonably estimate any possible

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

loss or range of loss that may result.

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

1 unchanged sentence

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.

The Company does not presently believe the above matter 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.

5 unchanged sentences

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

(d/b/a ZEST AI) ("Zest AI"), a private company, for $ 2.5 million and is included in investments as of January 31, 2024 and April 30, 2024 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 July 31, 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 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.

Diluted loss per share for the three and six months ended July 31, 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 April 30,

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

2023 2024 2023 2024

Basic and diluted loss per share:

4 unchanged sentences

$ ( 0.14 ) $ ( 0.10 ) $ ( 0.24 ) $ ( 0.12 )

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

Three Months Ended April 30,

Six Months Ended July 31,

Stock options issued and outstanding 1,664,830 998,618

2 unchanged sentences

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