nCino, Inc. 10-Q

Item 1. Financial Statements nCino, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) January 31, 2024 October 31, 2024 (Unaudited) Assets Current assets Cash and cash equivalents (VIE: $ 2,277 and $ 1,595 at January 31, 2024 and October 31, 2024, respectively) $ 112,085 $ 257,894 Accounts receivable, less allowances of $ 1,451 and $ 1,172 at January 31, 2024 and October 31, 2024, respectively 112,975 65,013 Costs capitalized to obtain revenue contracts, current portion, net 10,544 12,214 Prepaid expenses and other current assets 15,171 13,523 Total current assets 250,775 348,644 Property and equipment, net 79,145 75,711 Operating lease right-of-use assets, net 19,261 14,938 Costs capitalized to obtain revenue contracts, noncurrent, net 17,425 20,185 Goodwill 838,869 908,559 Intangible assets, net 115,572 128,344 Investments (related party $ 2,500 at January 31, 2024 and October 31, 2024) 9,294 9,294 Long-term prepaid expenses and other assets 10,089 10,931 Total assets $ 1,340,430 $ 1,516,606 Liabilities, redeemable non-controlling interest, and stockholders’ equity Current liabilities Accounts payable $ 11,842 $ 12,123 Accrued compensation and benefits 16,283 16,370 Accrued expenses and other current liabilities 10,847 11,594 Deferred revenue, current portion 170,941 132,382 Financing obligations, current portion 1,474 1,614 Operating lease liabilities, current portion 3,649 4,830 Total current liabilities 215,036 178,913 Operating lease liabilities, noncurrent 16,423 11,829 Deferred income taxes, noncurrent 3,687 10,577 Deferred revenue, noncurrent — 431 Revolving credit facility, noncurrent — 166,000 Financing obligations, noncurrent 52,680 51,624 Other long-term liabilities — 3,726 Total liabilities 287,826 423,100 Commitments and contingencies (Note 12) Redeemable non-controlling interest (Note 3) 3,428 5,243 Stockholders’ equity Preferred stock, $ 0.001 par value; 10,000,000 shares authorized, and none issued and outstanding as of January 31, 2024 and October 31, 2024 — — Common stock, $ 0.0005 par value; 500,000,000 shares authorized as of January 31, 2024 and October 31, 2024; 113,684,299 and 115,650,585 shares issued and outstanding as of January 31, 2024 and October 31, 2024, respectively 57 58 Additional paid-in capital 1,400,881 1,456,411 Accumulated other comprehensive income 996 1,615 Accumulated deficit ( 352,758 ) ( 369,821 ) Total stockholders’ equity 1,049,176 1,088,263 Total liabilities, redeemable non-controlling interest, and stockholders’ equity $ 1,340,430 $ 1,516,606 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . 1 Table of Contents nCino, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited) Three Months Ended October 31, Nine Months Ended October 31, 2023 2024 2023 2024 Revenues Subscription $ 104,759 $ 119,894 $ 301,996 $ 344,211 Professional services and other 17,183 18,903 50,854 55,076 Total revenues 121,942 138,797 352,850 399,287 Cost of revenues Subscription 30,605 33,769 89,481 98,916 Professional services and other 17,420 19,976 52,779 59,940 Total cost of revenues 48,025 53,745 142,260 158,856 Gross profit 73,917 85,052 210,590 240,431 Operating expenses Sales and marketing 38,446 29,729 100,551 89,487 Research and development 29,043 33,039 87,127 97,291 General and administrative 19,334 23,108 59,239 66,046 Total operating expenses 86,823 85,876 246,917 252,824 Loss from operations ( 12,906 ) ( 824 ) ( 36,327 ) ( 12,393 ) Non-operating income (expense) Interest income 685 482 2,057 1,408 Interest expense ( 854 ) ( 1,653 ) ( 3,277 ) ( 4,965 ) Other income (expense), net ( 2,320 ) 432 ( 2,633 ) ( 162 ) Loss before income taxes ( 15,395 ) ( 1,563 ) ( 40,180 ) ( 16,112 ) Income tax provision 1,782 2,589 4,720 1,360 Net loss ( 17,177 ) ( 4,152 ) ( 44,900 ) ( 17,472 ) Net loss attributable to redeemable non-controlling interest (Note 3) ( 320 ) ( 186 ) ( 868 ) ( 409 ) Adjustment attributable to redeemable non-controlling interest (Note 3) ( 478 ) 1,286 ( 526 ) 2,205 Net loss attributable to nCino, Inc. $ ( 16,379 ) $ ( 5,252 ) $ ( 43,506 ) $ ( 19,268 ) Net loss per share attributable to nCino, Inc.: Basic and diluted $ ( 0.15 ) $ ( 0.05 ) $ ( 0.39 ) $ ( 0.17 ) Weighted average number of common shares outstanding: Basic and diluted 112,951,553 115,611,833 112,484,017 114,970,622 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . 2 Table of Contents nCino, Inc. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands) (Unaudited) Three Months Ended October 31, Nine Months Ended October 31, 2023 2024 2023 2024 Net loss $ ( 17,177 ) $ ( 4,152 ) $ ( 44,900 ) $ ( 17,472 ) Other comprehensive income: Foreign currency translation 74 213 214 622 Other comprehensive income 74 213 214 622 Comprehensive loss ( 17,103 ) ( 3,939 ) ( 44,686 ) ( 16,850 ) Less comprehensive loss attributable to redeemable non-controlling interest: Net loss attributable to redeemable non-controlling interest ( 320 ) ( 186 ) ( 868 ) ( 409 ) Foreign currency translation attributable to redeemable non-controlling interest 12 5 2 3 Comprehensive loss attributable to redeemable non-controlling interest ( 308 ) ( 181 ) ( 866 ) ( 406 ) Comprehensive loss attributable to nCino, Inc. $ ( 16,795 ) $ ( 3,758 ) $ ( 43,820 ) $ ( 16,444 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . 3 Table of Contents nCino, Inc. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands, except share data) (Unaudited) Three Months Ended October 31, 2023 Common Stock Additional Paid-in 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 issuance under the employee stock purchase plan — — — — — — 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 Three Months Ended October 31, 2024 Common Stock Additional Paid-in Capital Other Comprehensive Income (Loss) Accumulated Deficit Total Shares Amount Balance, July 31, 2024 115,387,309 $ 58 $ 1,439,245 $ 1,407 $ ( 365,855 ) $ 1,074,855 Exercise of stock options 78,206 — 486 — — 486 Stock issuance upon vesting of restricted stock units 185,070 — — — — — Stock issuance under the employee stock purchase plan — — — — — — Stock-based compensation — — 17,966 — — 17,966 Other comprehensive income — — — 208 — 208 Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 1,286 ) — ( 3,966 ) ( 5,252 ) Balance, October 31, 2024 115,650,585 $ 58 $ 1,456,411 $ 1,615 $ ( 369,821 ) $ 1,088,263 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . 4 Table of Contents nCino, Inc. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands, except share data) (Unaudited) Nine Months Ended October 31, 2023 Common Stock Additional Paid-in Capital Other Comprehensive Income (Loss) Accumulated Deficit Total Shares Amount Balance, January 31, 2023 111,424,132 $ 56 $ 1,333,669 $ 694 $ ( 310,341 ) $ 1,024,078 Exercise of stock options 447,440 1 3,175 — — 3,176 Stock issuance upon vesting of restricted stock units 1,039,074 — — — — — Stock issuance under the employee stock purchase plan 120,084 — 2,698 — — 2,698 Stock-based compensation — — 41,951 — — 41,951 Other comprehensive income — — — 212 — 212 Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — 526 — ( 44,032 ) ( 43,506 ) Balance, October 31, 2023 113,030,730 $ 57 $ 1,382,019 $ 906 $ ( 354,373 ) $ 1,028,609 Nine Months Ended October 31, 2024 Common Stock Additional Paid-in 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 290,917 — 2,223 — — 2,223 Stock issuance upon vesting of restricted stock units 1,581,387 1 ( 1 ) — — — Stock issuance under the employee stock purchase plan 93,982 — 2,514 — — 2,514 Stock-based compensation — — 52,999 — — 52,999 Other comprehensive income — — — 619 — 619 Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 2,205 ) — ( 17,063 ) ( 19,268 ) Balance, October 31, 2024 115,650,585 $ 58 $ 1,456,411 $ 1,615 $ ( 369,821 ) $ 1,088,263 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . 5 Table of Contents nCino, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended October 31, 2023 2024 Cash flows from operating activities Net loss attributable to nCino, Inc. $ ( 43,506 ) $ ( 19,268 ) Net loss and adjustment attributable to redeemable non-controlling interest ( 1,394 ) 1,796 Net loss ( 44,900 ) ( 17,472 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 37,337 26,132 Non-cash operating lease costs 3,581 3,844 Amortization of costs capitalized to obtain revenue contracts 7,368 8,724 Amortization of debt issuance costs 138 60 Stock-based compensation 41,969 53,015 Deferred income taxes 881 ( 2,496 ) Provision for bad debt 1,124 25 Net foreign currency losses (gains) 2,275 ( 658 ) Loss on disposal of long-lived assets 161 35 Change in operating assets and liabilities: Accounts receivable 35,455 50,184 Costs capitalized to obtain revenue contracts ( 5,959 ) ( 13,199 ) Prepaid expenses and other assets 3,374 656 Accounts payable 1,184 1,056 Accrued expenses and other liabilities ( 7,999 ) ( 148 ) Deferred revenue ( 23,789 ) ( 41,604 ) Operating lease liabilities ( 3,063 ) ( 2,936 ) Net cash provided by operating activities 49,137 65,218 Cash flows from investing activities Acquisition of business, net of cash acquired — ( 90,839 ) Acquisition of assets ( 356 ) ( 450 ) Purchases of property and equipment ( 3,083 ) ( 1,466 ) Purchase of investment ( 2,500 ) — Net cash used in investing activities ( 5,939 ) ( 92,755 ) Cash flows from financing activities Investment from redeemable non-controlling interest 983 — Proceeds from borrowings on revolving credit facility — 241,000 Payments on revolving credit facility ( 30,000 ) ( 75,000 ) Payments of debt issuance costs — ( 1,382 ) Exercise of stock options 3,176 2,223 Stock issuance under the employee stock purchase plan 2,698 2,514 Principal payments on financing obligations ( 888 ) ( 916 ) Net cash provided by (used in) financing activities ( 24,031 ) 168,439 Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash ( 762 ) ( 93 ) Net increase in cash, cash equivalents, and restricted cash 18,405 140,809 Cash, cash equivalents, and restricted cash, beginning of period 87,418 117,444 Cash, cash equivalents, and restricted cash, end of period $ 105,823 $ 258,253 Reconciliation of cash, cash equivalents, and restricted cash, end of period: Cash and cash equivalents $ 100,475 $ 257,894 Restricted cash included in prepaid expenses and other current assets 5,000 — Restricted cash included in long-term prepaid expenses and other assets 348 359 Total cash, cash equivalents, and restricted cash, end of period $ 105,823 $ 258,253 6 Table of Contents nCino, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) (Unaudited) Nine Months Ended October 31, 2023 2024 Supplemental disclosure of cash flow information Cash paid for taxes, net of refunds $ 2,244 $ 2,770 Cash paid for interest $ 3,458 $ 4,846 Supplemental disclosure of noncash investing and financing activities Purchase of property and equipment, accrued but not paid $ 200 $ 51 Deferred costs, accrued but not paid $ — $ 120 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements . 7 Table of Contents nCino, Inc. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Note 1. 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, Asia Pacific, and South Africa. The Company’s fiscal year ends on January 31. Note 2. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") as set forth in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") and applicable rules and regulations of the Securities Exchange Commission ("SEC") regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2024 filed with the SEC on March 26, 2024. The unaudited condensed consolidated financial statements include accounts of the Company’s wholly-owned subsidiaries, as well as a variable interest entity in which the Company is the primary beneficiary. All intercompany accounts and transactions are eliminated. The Company is subject to the normal risks associated with technology companies that have not demonstrated sustainable income from operations, including product development, the risk of customer acceptance and market penetration of its products and services and, ultimately, the need to attain profitability to generate positive cash resources. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal 2025 or any future period. Variable Interest Entity: The Company holds an interest in a Japanese company (“nCino K.K.”) that is considered a variable interest entity ("VIE"). nCino K.K. is considered a VIE as it has insufficient equity capital to finance its activities without additional financial support. The Company is the primary beneficiary of nCino K.K. 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 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. and all significant intercompany accounts have been eliminated. The Company will continue to assess whether it has a controlling financial interest and whether it is the primary beneficiary at each reporting period. Other than the Company’s equity investments, the Company has not provided financial or other support to nCino K.K. that it was not contractually obligated to provide. The assets of the VIE can only be used to settle the obligations of the VIE and the creditors of the VIE do not have recourse to the Company. The assets and liabilities of the VIE were not significant to the Company’s consolidated financial statements except for cash which is reflected on the unaudited condensed consolidated balance sheets. See Note 3 "Variable Interest Entity and Redeemable Non-Controlling Interest" for additional information regarding the Company’s variable interest. Redeemable Non-Controlling Interest: Redeemable non-controlling interest relates to minority investors of nCino K.K. An agreement with the minority investors of nCino K.K. 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. 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 8 Table of Contents nCino, Inc. 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.” Use of Estimates: The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by the Company’s management are used for, but not limited to, revenue recognition including determining the nature and timing of satisfaction of performance obligations, variable consideration, and stand-alone selling price; the average period of benefit associated with costs capitalized to obtain revenue contracts; fair value of assets acquired and liabilities assumed for business combinations; the useful lives of intangible assets; income taxes and the related valuation allowance on deferred tax assets; redemption value of redeemable non-controlling interest; and stock-based compensation. The Company assesses these estimates on a regular basis using historical experience and other factors. Actual results could differ from these estimates. 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, 2024 and October 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 10% of accounts receivable and, as of October 31, 2024, one individual customer represented 10 % of accounts receivable. For the three and nine months ended October 31, 2023 and 2024, no individual customer represented more than 10% of the Company’s total revenues. Restricted Cash: Restricted cash primarily consisted of a minimum cash balance the Company maintained with a lender under the Company's revolving credit facility at January 31, 2024. 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 at October 31, 2024. Restricted cash is included in long-term prepaid expenses and other assets and on the unaudited condensed consolidated balance sheets. Allowances: 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. Relevant risk characteristics include customer size and historical loss patterns. This estimate is analyzed quarterly and adjusted as necessary. 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 October 31, Nine Months Ended October 31, 2023 2024 2023 2024 Balance, beginning of period $ 876 $ 1,204 $ 899 $ 1,451 Charged to bad debt expense 368 — 1,124 25 Charged to deferred revenue 981 — 923 — Write-offs and other — ( 32 ) ( 721 ) ( 304 ) Translation adjustments ( 4 ) — ( 4 ) — Balance, end of period $ 2,221 $ 1,172 $ 2,221 $ 1,172 Investments : The Company's investments are non-marketable equity investments without readily determinable fair value and for which the Company does not have control or significant influence. The investments are measured at cost with adjustments for observable changes in price or impairment as permitted by the measurement alternative. The Company assesses 9 Table of Contents nCino, Inc. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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. 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. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). The guidance includes amendments to require public companies to provide additional disclosure about certain costs and expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. 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. Note 3. Variable Interest Entity and Redeemable Non-Controlling Interest In October 2019, the Company entered into an agreement with Japan Cloud Computing, L.P. and M30 LLC (collectively, the “Investors”) to engage in the investment, organization, management, and operation of nCino K.K. that is focused on the distribution of the Company’s products in Japan. 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, 2024, the Company controls a majority of the outstanding common stock in nCino K.K. In October 2023, the Company made a further investment in nCino K.K. of $ 1.0 million that, including additional investments in nCino K.K. of $ 1.0 million by existing third-party investors in October 2023, maintained the Company's ownership of 51 %. All of the common stock held by the Investors is callable by the Company or puttable by the Investors at the option of the Investors or at the option of the Company beginning on the eighth anniversary of the agreement with the Investors. Should the call or put option be exercised, the redemption value would be determined based on a prescribed formula derived from the discrete revenues of nCino K.K. and the Company and may be settled, at the Company’s discretion, with Company stock or cash or a combination of the foregoing. As a result of the put right available to the Investors, the redeemable non-controlling interests in nCino K.K. are classified outside of permanent equity in the Company’s unaudited condensed consolidated balance sheets. 10 Table of Contents nCino, Inc. 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 October 31, Nine Months Ended October 31, 2023 2024 2023 2024 Balance, beginning of period $ 2,995 $ 4,133 $ 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) ( 320 ) ( 186 ) ( 868 ) ( 409 ) Foreign currency translation 12 5 2 3 Adjustment to redeemable non-controlling interest ( 478 ) 1,286 ( 526 ) 2,205 Stock-based compensation expense 1 6 5 18 16 Balance, end of period $ 3,198 $ 5,243 $ 3,198 $ 5,243 1 nCino K.K. stock options granted in accordance with nCino K.K.'s equity incentive plan. Note 4. Fair Value Measurements Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2. Significant other inputs that are directly or indirectly observable in the marketplace. Level 3. 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 October 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 October 31, 2024 and indicates the fair value hierarchy of the valuation: Fair value measurements on a recurring basis as of January 31, 2024 Level 1 Level 2 Level 3 Assets: Money market accounts (included in cash and cash equivalents) $ 38,649 $ — $ — Time deposits (included in long-term prepaid expenses and other assets) 359 — — Total assets $ 39,008 $ — $ — 11 Table of Contents nCino, Inc. 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 October 31, 2024 Level 1 Level 2 Level 3 Assets: Money market accounts (included in cash and cash equivalents) $ 33,606 $ — $ — Time deposits (included in long-term prepaid expenses and other assets) 359 — — Total assets $ 33,965 $ — $ — All of the Company’s money market accounts are classified within Level 1 because the Company’s money market accounts are valued using quoted market prices in active exchange markets including identical assets. Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis 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 and nine months ended October 31, 2023 and 2024. Note 5. Revenues Revenues by Geographic Area Revenues by geographic region were as follows: Three Months Ended October 31, Nine Months Ended October 31, 2023 2024 2023 2024 United States $ 98,526 $ 109,191 $ 288,287 $ 316,357 International 23,416 29,606 64,563 82,930 $ 121,942 $ 138,797 $ 352,850 $ 399,287 The Company disaggregates its revenues from contracts with customers by geographic location. 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 and nine months ended October 31, 2023 and 2024, no country outside the United States represented 10% or more of total revenues. 12 Table of Contents nCino, Inc. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Contract Amounts Accounts Receivable Accounts receivable, less allowance for doubtful accounts, is as follows as of January 31, 2024 and October 31, 2024: As of January 31, 2024 As of October 31, 2024 Trade accounts receivable $ 106,170 $ 48,316 Unbilled accounts receivable 7,699 16,951 Allowance for doubtful accounts ( 1,451 ) ( 1,172 ) Other accounts receivable 557 918 Total accounts receivable, net $ 112,975 $ 65,013 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, 2024, $ 167.9 million of revenues were recognized out of the deferred revenue balance as of January 31, 2024. Remaining performance obligations were $ 1.10 billion as of October 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. Note 6. Property and Equipment Property and equipment, net consisted of the following: As of January 31, 2024 As of October 31, 2024 Furniture and fixtures $ 12,066 $ 11,742 Computers and equipment 8,010 7,109 Buildings and land 56,379 56,379 Leasehold improvements 27,712 28,081 Construction in progress 170 213 104,337 103,524 Less accumulated depreciation ( 25,192 ) ( 27,813 ) $ 79,145 $ 75,711 13 Table of Contents nCino, Inc. 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, 2023 2024 2023 2024 Cost of subscription revenues $ 150 $ 124 $ 437 $ 366 Cost of professional services and other revenues 457 322 1,375 991 Sales and marketing 450 316 1,334 981 Research and development 731 602 2,201 1,830 General and administrative 300 192 889 576 Total depreciation expense $ 2,088 $ 1,556 $ 6,236 $ 4,744 Note 7. Business Combinations DocFox, Inc. (“DocFox”) 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 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. 14 Table of Contents nCino, Inc. 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: Fair Value 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. 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 15 Table of Contents nCino, Inc. 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. 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 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 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 the ILT Acquisition Date: Fair Value Cash and cash equivalents $ 164 Accounts receivable 343 Intangible assets 8,660 Goodwill 11,111 Accounts payable, accrued expenses, and other liabilities, current and noncurrent ( 240 ) Net assets acquired $ 20,038 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 revision as the purchase price allocation is completed. 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 ILT 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 and valuations are finalized. 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, and (iii) 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. 16 Table of Contents nCino, Inc. 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 ILT Acquisition Date: 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. 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 and approximately $ 11.1 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. Note 8. Goodwill and Intangible Assets Goodwill The change in the carrying amounts of goodwill was as follows: Balance, January 31, 2024 $ 838,869 Acquisitions 68,541 Translation adjustments 1,149 Balance, October 31, 2024 $ 908,559 Intangible assets Intangible assets, net are as follows: As of January 31, 2024 As of October 31, 2024 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Developed technology $ 83,468 $ ( 38,010 ) $ 45,458 $ 88,080 $ ( 44,968 ) $ 43,112 Customer relationships 91,704 ( 22,085 ) 69,619 114,421 ( 29,983 ) 84,438 Trademarks and trade name 14,624 ( 14,624 ) — 424 ( 256 ) 168 Other 919 ( 424 ) 495 1,369 ( 743 ) 626 $ 190,715 $ ( 75,143 ) $ 115,572 $ 204,294 $ ( 75,950 ) $ 128,344 During the nine months ended October 31, 2024, the Company wrote off approximately $ 20.6 million of fully amortized intangible assets and the corresponding accumulated amortization. 17 Table of Contents nCino, Inc. 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 October 31, Nine Months Ended October 31, 2023 2024 2023 2024 Cost of subscription revenues $ 3,990 $ 4,404 $ 12,431 $ 12,926 Cost of professional services and other revenues 82 82 247 247 Sales and marketing 12,880 2,871 18,423 8,215 Total amortization expense $ 16,952 $ 7,357 $ 31,101 $ 21,388 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 October 31, 2024 is as follows: Fiscal Year Ending January 31, 2025 (remaining) $ 7,355 2026 28,896 2027 27,628 2028 13,170 2029 13,069 Thereafter 38,226 $ 128,344 The expected amortization expense is an estimate. 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. Note 9. Stock-Based Compensation Stock Options Stock option activity for the nine months ended October 31, 2024 was as follows: Number of Shares Weighted Average Exercise Price Outstanding, January 31, 2024 1,212,704 $ 7.14 Granted — — Expired or forfeited ( 1,375 ) 12.06 Exercised ( 290,917 ) 7.58 Outstanding, October 31, 2024 920,412 $ 7.00 Exercisable, October 31, 2024 920,412 $ 7.00 Fully vested or expected to vest, October 31, 2024 920,412 $ 7.00 18 Table of Contents nCino, Inc. 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 nine months ended October 31, 2024 was as follows: Number of Shares Weighted Average Grant Date Fair Value Nonvested, January 31, 2024 5,626,125 $ 33.19 Granted 3,027,506 33.46 Vested ( 1,581,387 ) 33.59 Forfeited ( 704,777 ) 34.93 Nonvested, October 31, 2024 6,367,467 $ 33.08 As of October 31, 2024, total unrecognized compensation expense related to non-vested RSUs was $ 166.6 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 2.85 years. Employee Stock Purchase Plan The first offering period for the Employee Stock Purchase Plan ("ESPP") began on July 1, 2021 and ended on December 31, 2021. 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, 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: Nine Months Ended October 31, 2023 2024 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 % 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 October 31, Nine Months Ended October 31, 2023 2024 2023 2024 Cost of subscription revenues $ 515 $ 733 $ 1,314 $ 2,088 Cost of professional services and other revenues 2,571 2,940 6,660 8,699 Sales and marketing 4,153 4,394 11,194 12,534 Research and development 4,386 4,208 11,665 13,720 General and administrative 4,198 5,696 11,136 15,974 Total stock-based compensation expense $ 15,823 $ 17,971 $ 41,969 $ 53,015 19 Table of Contents nCino, Inc. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Note 10. Leases Operating Leases 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, 2023 2024 2023 2024 Operating lease expense $ 1,225 $ 1,418 $ 3,842 $ 4,144 Variable lease expense 464 657 1,398 1,927 Short-term lease expense 94 41 328 189 Sublease income $ — $ ( 232 ) $ — $ ( 232 ) Total lease expense $ 1,783 $ 1,884 $ 5,568 $ 6,028 Supplemental cash flow information related to operating leases were as follows: Nine Months Ended October 31, 2023 2024 Cash paid for amounts included in the measurement of operating lease liabilities $ 3,324 $ 3,236 Operating right-of-use assets obtained in exchange for operating lease liabilities 2,142 810 Operating right-of-use assets and operating lease liabilities disposed of 115 1,947 The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of October 31, 2024 were 6.25 years and 6.8 %, respectively. Future minimum lease payments as of October 31, 2024 were as follows: Fiscal Year Ending January 31, Operating Leases 2025 (remaining) $ 1,166 2026 5,088 2027 3,307 2028 2,796 2029 1,729 Thereafter 6,564 Total lease liabilities 20,650 Less: imputed interest ( 3,991 ) Total lease obligations 16,659 Less: current obligations ( 4,830 ) Long-term lease obligations $ 11,829 20 Table of Contents nCino, Inc. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Note 11. Revolving Credit Facility On February 11, 2022, the Company entered into a Credit Agreement (the “2022 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 provided to the Borrower a senior secured revolving credit facility of up to $ 50.0 million (the “2022 Credit Facility”). The 2022 Credit Facility included borrowing capacity available for letters of credit subject to a sublimit of $ 7.5 million. Any issuance of letters of credit would have reduced the amount available under the 2022 Credit Facility. The Company was also required to maintain at least $ 5.0 million of the Company's cash and/or marketable securities with the Lender which was considered restricted cash and was included in long-term prepaid expenses and other assets as of January 31, 2024. On February 9, 2024, the Company entered into a First Amendment to extend the existing maturity date of the 2022 Credit Facility provided for under the 2022 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 2022 Credit Facility to March 17, 2029. Borrowings under the 2022 Credit Facility accrued interest, at the Borrower’s option, at: (i) a base rate equal to the greatest of (a) the Lender’s “prime rate”, (b) the federal funds rate plus 0.50 %, and (c) the Term SOFR rate plus 1.00 % (provided that the base rate shall not be less than 0.00 %), plus a margin of 1.3125 %; or (ii) the Term SOFR rate (provided that the Term SOFR shall not be less than 0.00 %), plus a margin of 2.3125 %, in each case with such margin subject to a step down based on achievement of a certain leverage ratio. The Company was 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 was also required to pay customary letter of credit fees. On October 28, 2024, the Company terminated the 2022 Credit Agreement above and entered into a new Credit Agreement (the "2024 Credit Agreement"), by and among the Company, nCino OpCo, Inc. (the "Borrower"), certain subsidiaries of the Company as guarantors, the lenders party thereto (the "Lenders") and Bank of America, N.A. as administrative agent (the "Agent"). The 2024 Credit Agreement includes a senior secured revolving credit facility of up to $ 250.0 million (the "2024 Credit Facility") with a maturity date of October 28, 2029. The 2024 Credit Facility includes borrowing capacity available for letters of credit subject to a sublimit of $ 45.0 million. Any issuances of letters of credit will reduce the amount available under the 2024 Credit Facility. Borrowings under the 2024 Credit Facility bear interest, at the Borrower’s option, at: (i) a base rate equal to the greatest of (a) the Agent’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 1.00 %; or (ii) the Term SOFR rate (provided that the Term SOFR shall not be less than 0.00 %), plus a margin of 2.00 %, in each case with such margin subject to step ups based on certain leverage ratios. The Company is also required to pay an unused commitment fee to the Lenders of 0.25 % of the average daily unutilized commitments (with step ups based on certain leverage ratios). The Company must also pay customary letter of credit fees. The Company may repay amounts borrowed any time without penalty. Borrowings under the 2024 Credit Facility may be reborrowed. The 2024 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 covenants require the Company and its subsidiaries on a consolidated basis to maintain (i) a Consolidated Total Leverage Ratio not in excess of 4.00 :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, commencing with the fiscal quarter ending January 31, 2025. The 2024 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 21 Table of Contents nCino, Inc. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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 no letters of credit issued under the 2022 Credit Facility as of January 31, 2024. The Company had $ 166.0 million outstanding and no letters of credit issued under the 2024 Credit Facility and was in compliance with all covenants as of October 31, 2024. As of October 31, 2024, the applicable interest rate was 6.72 %. The available borrowing capacity under the 2024 Credit Facility was $ 84.0 million as of October 31, 2024. Note 12. Commitments and Contingencies In addition to the operating lease commitments described in Note 10 "Leases", the Company has additional contractual commitments as described further below. Purchase Commitments 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. Financing Obligations 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, 2024 is as follows: Fiscal Year Ending January 31, Purchase commitments Financing obligations - leased facility 2025 (remaining) $ 20,922 $ 1,143 2026 83,388 4,653 2027 81,195 3,958 2028 74,698 — 2029 1,226 — Thereafter 357 — Total $ 261,786 $ 9,754 Residual financing obligations and assets 49,560 Less: amount representing interest ( 6,076 ) Financing obligations $ 53,238 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, 2024 was 5.7 %. Indemnification In the ordinary course of business, the Company generally includes standard indemnification provisions in its arrangements with third parties, including vendors, customers, and the Company’s directors and officers. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. The Company has not 22 Table of Contents nCino, Inc. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) accrued any material liabilities related to such obligations in the accompanying unaudited condensed consolidated financial statements. 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 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. 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. On September 12, 2024, the Delaware Supreme Court summarily affirmed the dismissal of the complaint in its entirety. Other Commitments and Contingencies The Company may be subject to audits related to its non-income taxes by tax authorities in jurisdictions where it conducts business. These audits may result in assessments of additional taxes that are subsequently resolved with the authorities or potentially through the courts. The Company accrues for any assessments if deemed probable and estimable. Note 13. 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, 2024 and October 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. Note 14. Basic and Diluted Loss per Share Basic loss per share is computed by dividing net loss attributable to nCino, Inc. by the weighted-average number of common shares outstanding for the fiscal period. Diluted loss per share is computed by giving effect to all potential weighted average dilutive common stock, including stock options issued and outstanding, nonvested RSUs issued and outstanding, and shares issuable pursuant to the ESPP. 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 and nine months ended October 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 October 31, Nine Months Ended October 31, 2023 2024 2023 2024 Basic and diluted loss per share: Numerator Net loss attributable to nCino, Inc. $ ( 16,379 ) $ ( 5,252 ) $ ( 43,506 ) $ ( 19,268 ) Denominator Weighted-average common shares outstanding 112,951,553 115,611,833 112,484,017 114,970,622 Basic and diluted loss per share attributable to nCino, Inc. $ ( 0.15 ) $ ( 0.05 ) $ ( 0.39 ) $ ( 0.17 ) 23 Table of Contents nCino, Inc. 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: Nine Months Ended October 31, 2023 2024 Stock options issued and outstanding 1,551,058 920,412 Nonvested RSUs issued and outstanding 5,785,669 6,367,467 Shares issuable pursuant to the ESPP 61,412 77,914 Note 15. Subsequent Event In November 2024, the Company acquired all of the outstanding equity of Artesian Solutions Limited, operating as "FullCircl", a UK-based SaaS platform built to help financial institutions automate and accelerate onboarding and improve client lifecycle management. Approximately $ 129.7 million of the purchase price was funded with proceeds from the 2024 Credit Facility. An additional $ 15.0 million will be retained by the Company for two years as security upon the satisfaction and performance of certain warranties and covenants arising under the Share Purchase Agreement. The acquisition will be accounted for as a business combination under ASC 805, Business Combinations . The Company is in the process of finalizing the accounting for this transaction and will complete the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed by the end of our fourth quarter of fiscal 2025. 24 Table of Contents