nCino, Inc. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm ( PCAOB ID: 42 ) 53 Consolidated Balance Sheets 57 Consolidated Statements of Operations 58 Consolidated Statements of Comprehensive Loss 59 Consolidated Statements of Stockholders' Equity 60 Consolidated Statements of Cash Flows 61 Notes to Consolidated Financial Statements 63 52 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of nCino, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of nCino, Inc. (the Company) as of January 31, 2024 and 2025, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended January 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”) . In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2024 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of January 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated April 1, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates . 53 Table of Contents Revenue Recognition Description of the Matter As discussed in Note 1, the Company derives revenues primarily from subscription services and professional services. Revenues are recognized when a contract exists between the Company and a customer and upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company assesses terms and conditions associated with contracts that can include various combinations of subscription and professional services, which may be capable of being distinct and accounted for as separate performance obligations, or in the case of offerings such as subscription services and support, accounted for as a single performance obligation. For contracts that contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The audit effort in evaluating the Company’s accounting for revenue recognition was extensive and required auditor judgment for certain customer contracts to evaluate the terms and conditions, identify distinct performance obligations and support the allocation of transaction price. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s revenue recognition process, including controls designed to mitigate the risk of override of controls. This included testing controls over management’s review of customer contracts and review of manual revenue journal entries. To test the Company’s accounting for revenue recognition, we performed audit procedures that included, among others, selecting a sample of revenue transactions to test for occurrence and to evaluate contract terms and conditions for accounting in accordance with ASC 606. This testing included reperforming the Company’s assessment of the distinct performance obligations within the arrangement, determination of the allocation of transaction price to the respective performance obligations, as well as testing the application of the revenue recognition requirements including reperforming the calculations of revenue recognized and testing the underlying data used in the calculations. We also assessed the appropriateness of the related disclosures in the consolidated financial statements. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2016. Raleigh, North Carolina April 1, 2025 54 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of nCino, Inc. Opinion on Internal Control Over Financial Reporting We have audited nCino, Inc.’s internal control over financial reporting as of January 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, nCino, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of January 31, 2025, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of DocFox, Inc. acquired on March 20, 2024, Integrated Lending Technologies, LLC acquired on April 1, 2024 and Artesian Solutions Limited (“FullCircl”) on November 5, 2024 (together the “acquired entities”), which are included in the fiscal 2025 consolidated financial statements of the Company and on a combined basis accounted for approximately 0.7% and 0.1% of total and net assets, respectively, as of January 31, 2025 and 1.9% and 2.5% of revenues and net loss, respectively for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of acquired entities. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of January 31, 2024 and 2025, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended January 31, 2025, and the related notes and our report dated April 1, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 55 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Raleigh, North Carolina April 1, 2025 56 Table of Contents nCino, Inc. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) January 31, 2024 January 31, 2025 Assets Current assets Cash and cash equivalents (VIE: $ 2,277 and $ 2,254 at January 31, 2024 and January 31, 2025, respectively) $ 112,085 $ 120,928 Accounts receivable, less allowances of $ 1,451 and $ 1,229 at January 31, 2024 and January 31, 2025, respectively 112,975 146,787 Costs capitalized to obtain revenue contracts, current portion, net 10,544 13,462 Prepaid expenses and other current assets 15,171 21,072 Total current assets 250,775 302,249 Property and equipment, net 79,145 74,953 Operating lease right-of-use assets, net 19,261 16,026 Costs capitalized to obtain revenue contracts, noncurrent, net 17,425 23,735 Goodwill 838,869 1,019,375 Intangible assets, net 115,572 154,571 Investments (related party $ 2,500 at January 31, 2024 and January 31, 2025) 9,294 9,294 Long-term prepaid expenses and other assets 10,089 10,178 Total assets $ 1,340,430 $ 1,610,381 Liabilities, redeemable non-controlling interest, and stockholders’ equity Current liabilities Accounts payable $ 11,842 $ 13,640 Accrued compensation and benefits 16,283 23,626 Accrued expenses and other current liabilities 10,847 16,239 Deferred revenue 170,941 191,174 Financing obligations, current portion 1,474 1,680 Operating lease liabilities, current portion 3,649 5,153 Total current liabilities 215,036 251,512 Operating lease liabilities, noncurrent 16,423 12,819 Deferred income taxes, noncurrent 3,687 13,851 Deferred revenue, noncurrent — 269 Revolving credit facility, noncurrent — 166,000 Financing obligations, noncurrent 52,680 51,172 Other long-term liabilities — 17,160 Total liabilities 287,826 512,783 Commitments and contingencies (Note 15) Redeemable non-controlling interest (Note 2) 3,428 8,286 Stockholders’ equity Preferred stock, $ 0.001 par value; 10,000,000 shares authorized, and none issued and outstanding as of January 31, 2024 and January 31, 2025 — — Common stock, $ 0.0005 par value; 500,000,000 shares authorized as of January 31, 2024 and January 31, 2025; 113,684,299 and 115,996,852 shares issued and outstanding as of January 31, 2024 and January 31, 2025, respectively 57 58 Additional paid-in capital 1,400,881 1,474,413 Accumulated other comprehensive income 996 176 Accumulated deficit ( 352,758 ) ( 385,335 ) Total stockholders’ equity 1,049,176 1,089,312 Total liabilities, redeemable non-controlling interest, and stockholders’ equity $ 1,340,430 $ 1,610,381 The accompanying notes are an integral part of these consolidated financial statements . 57 Table of Contents nCino, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) Fiscal Year Ended January 31, 2023 2024 2025 Revenues Subscription $ 344,752 $ 409,479 $ 469,168 Professional services and other 63,563 67,064 71,489 Total revenues 408,315 476,543 540,657 Cost of revenues Subscription 106,265 120,861 134,932 Professional services and other 63,341 70,609 80,937 Total cost of revenues 169,606 191,470 215,869 Gross profit 238,709 285,073 324,788 Operating expenses Sales and marketing 127,669 130,547 123,231 Research and development 121,576 117,311 129,422 General and administrative 83,477 76,727 90,266 Total operating expenses 332,722 324,585 342,919 Loss from operations ( 94,013 ) ( 39,512 ) ( 18,131 ) Non-operating income (expense) Interest income 403 2,567 1,761 Interest expense ( 2,807 ) ( 4,135 ) ( 8,763 ) Other expense, net ( 1,356 ) ( 856 ) ( 10,427 ) Loss before income taxes ( 97,773 ) ( 41,936 ) ( 35,560 ) Income tax provision (benefit) 4,071 1,590 ( 2,511 ) Net loss ( 101,844 ) ( 43,526 ) ( 33,049 ) Net loss attributable to redeemable non-controlling interest (Note 2) ( 1,119 ) ( 1,109 ) ( 472 ) Adjustment attributable to redeemable non-controlling interest (Note 2) 1,995 ( 71 ) 5,301 Net loss attributable to nCino, Inc. $ ( 102,720 ) $ ( 42,346 ) $ ( 37,878 ) Net loss per share attributable to nCino, Inc.: Basic and diluted $ ( 0.93 ) $ ( 0.38 ) $ ( 0.33 ) Weighted average number of common shares outstanding: Basic and diluted 110,615,734 112,672,397 115,162,175 The accompanying notes are an integral part of these consolidated financial statements . 58 Table of Contents nCino, Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands) Fiscal Year Ended January 31, 2023 2024 2025 Net loss $ ( 101,844 ) $ ( 43,526 ) $ ( 33,049 ) Other comprehensive income (loss): Foreign currency translation 572 315 ( 813 ) Other comprehensive income (loss) 572 315 ( 813 ) Comprehensive loss ( 101,272 ) ( 43,211 ) ( 33,862 ) Less comprehensive loss attributable to redeemable non-controlling interest: Net loss attributable to redeemable non-controlling interest ( 1,119 ) ( 1,109 ) ( 472 ) Foreign currency translation attributable to redeemable non-controlling interest ( 194 ) 13 7 Comprehensive loss attributable to redeemable non-controlling interest ( 1,313 ) ( 1,096 ) ( 465 ) Comprehensive loss attributable to nCino, Inc. $ ( 99,959 ) $ ( 42,115 ) $ ( 33,397 ) The accompanying notes are an integral part of these consolidated financial statements . 59 Table of Contents nCino, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands, except share data) Common Stock Additional Paid-in Capital Other Comprehensive Income (Loss) Accumulated Deficit Total Shares Amount Balance, January 31, 2022 109,778,542 $ 55 $ 1,277,258 $ ( 72 ) $ ( 209,616 ) $ 1,067,625 Exercise of stock options 579,662 1 3,749 — — 3,750 Stock issuance upon vesting of restricted stock units 883,561 — — — — — Stock issuance under the employee stock purchase plan 182,367 — 4,450 — — 4,450 Stock-based compensation — — 50,207 — — 50,207 Other comprehensive income — — — 766 — 766 Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 1,995 ) ( 100,725 ) ( 102,720 ) Balance, January 31, 2023 111,424,132 56 1,333,669 694 ( 310,341 ) 1,024,078 Exercise of stock options 785,794 1 4,468 — — 4,469 Stock issuance upon vesting of restricted stock units 1,277,625 — — — — — Stock issuance under the employee stock purchase plan 196,748 — 4,661 — — 4,661 Stock-based compensation — — 58,012 — — 58,012 Other comprehensive income — — — 302 — 302 Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — 71 — ( 42,417 ) ( 42,346 ) Balance, January 31, 2024 113,684,299 57 1,400,881 996 ( 352,758 ) 1,049,176 Exercise of stock options 399,727 — 2,796 — — 2,796 Stock issuance upon vesting of restricted stock units 1,745,202 1 ( 1 ) — — — Stock issuance under the employee stock purchase plan 167,624 — 4,468 — — 4,468 Stock-based compensation — — 71,570 — — 71,570 Other comprehensive loss — — — ( 820 ) — ( 820 ) Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest — — ( 5,301 ) — ( 32,577 ) ( 37,878 ) Balance, January 31, 2025 115,996,852 $ 58 $ 1,474,413 $ 176 $ ( 385,335 ) $ 1,089,312 The accompanying notes are an integral part of these consolidated financial statements . 60 Table of Contents nCino, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Fiscal Year Ended January 31, 2023 2024 2025 Cash flows from operating activities Net loss attributable to nCino, Inc. $ ( 102,720 ) $ ( 42,346 ) $ ( 37,878 ) Net loss and adjustment attributable to redeemable non-controlling interest 876 ( 1,180 ) 4,829 Net loss ( 101,844 ) ( 43,526 ) ( 33,049 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 34,652 45,264 36,345 Non-cash operating lease costs 3,840 4,534 4,960 Amortization of costs capitalized to obtain revenue contracts 8,459 9,934 12,003 Amortization of debt issuance costs 177 184 131 Stock-based compensation 50,232 58,035 71,592 Deferred income taxes 1,627 ( 2,340 ) ( 7,118 ) Provision for bad debt 806 1,081 85 Net foreign currency losses 1,548 670 8,675 Unrealized gain on investment — ( 263 ) — Loss on disposal of long-lived assets — 150 35 Change in operating assets and liabilities: Accounts receivable ( 26,795 ) ( 14,325 ) ( 31,389 ) Costs capitalized to obtain revenue contracts ( 12,235 ) ( 10,348 ) ( 21,453 ) Prepaid expenses and other assets ( 3,433 ) 1,872 ( 7,060 ) Accounts payable 35 525 ( 190 ) Accrued expenses and other current liabilities ( 1,210 ) ( 5,981 ) 10,165 Deferred revenue 33,527 15,902 13,807 Operating lease liabilities ( 4,767 ) ( 4,083 ) ( 3,785 ) Other long-term liabilities — — 1,445 Net cash provided by (used in) operating activities ( 15,381 ) 57,285 55,199 Cash flows from investing activities Acquisition of business, net of cash acquired 676 — ( 216,911 ) Acquisition of assets ( 563 ) ( 356 ) ( 450 ) Purchases of property and equipment ( 18,338 ) ( 3,515 ) ( 1,816 ) Proceeds from sale of property and equipment — 43 — Purchase of investments (related party $ 2,500 , $ 0 , and $ 0 , respectively) ( 2,500 ) ( 2,500 ) — Net cash used in investing activities ( 20,725 ) ( 6,328 ) ( 219,177 ) Cash flows from financing activities Investment from redeemable non-controlling interest — 983 — Proceeds from borrowings on revolving credit facility 50,000 — 241,000 Payments on revolving credit facility ( 20,000 ) ( 30,000 ) ( 75,000 ) Payments of debt issuance costs ( 367 ) — ( 1,484 ) Exercise of stock options 3,750 4,469 2,796 Stock issuance under the employee stock purchase plan 4,450 4,661 4,468 Principal payments on financing obligations ( 1,121 ) ( 1,226 ) ( 1,302 ) Net cash provided by (used in) financing activities 36,712 ( 21,113 ) 170,478 Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash ( 1,587 ) 182 ( 2,677 ) Net increase (decrease) in cash, cash equivalents, and restricted cash ( 981 ) 30,026 3,823 Cash, cash equivalents, and restricted cash, beginning of period 88,399 87,418 117,444 Cash, cash equivalents, and restricted cash, end of period $ 87,418 $ 117,444 $ 121,267 61 Table of Contents nCino, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) Fiscal Year Ended January 31, 2023 2024 2025 Reconciliation of cash, cash equivalents, and restricted cash, end of period: Cash and cash equivalents $ 82,036 $ 112,085 $ 120,928 Restricted cash included in long-term prepaid expenses and other assets 5,382 5,359 339 Total cash, cash equivalents, and restricted cash, end of period $ 87,418 $ 117,444 $ 121,267 Supplemental disclosure of cash flow information Cash paid for taxes, net of refunds $ 664 $ 3,165 $ 3,565 Cash paid for interest $ 2,617 $ 4,315 $ 8,745 Supplemental disclosure of noncash investing and financing activities Building-leased facility acquired through financing obligation $ 22,402 $ — $ — Accrued purchase price related to acquisitions $ 356 $ — $ 13,155 Measurement period adjustment relating to business acquisition $ 1,285 $ — $ — The accompanying notes are an integral part of these consolidated financial statements . 62 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Note 1. Summary of Business and Significant Accounting Policies Description of Business: nCino, Inc. and its wholly-owned subsidiaries, collectively the Company, is a software-as-a-service ("SaaS") company that provides software solutions to financial institutions to streamline employee and client interactions. The Company is headquartered in Wilmington, North Carolina and has various locations in the United States, North America, Europe, Asia Pacific and South Africa. Unless otherwise indicated or the context otherwise requires, references to “we,” “us,” “our,” “nCino,” and the “Company” refer to nCino, Inc. and its consolidated subsidiaries. Fiscal Year End: The Company’s fiscal year ends on January 31. References to fiscal year 2025, for example, refer to the fiscal year ended January 31, 2025. Principles of Consolidation and Basis of Presentation: The accompanying 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"). The 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 balances and transactions have been eliminated in consolidation. Use of Estimates: The preparation of 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 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. Segments: The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker ("CODM"), which is the Company’s Chief Executive Officer, in deciding how to make operating decisions, allocate resources, and assess performance. The Company’s CODM allocates resources and assesses performance at the consolidated level. 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 January 31, 2025. The Company maintains its cash, cash equivalents, and restricted cash with high-credit-quality financial institutions. As of January 31, 2024 and January 31, 2025, no individual customer represented more than 10% of accounts receivable. For the fiscal years ended January 31, 2023, 2024, and 2025, no individual customer represented more than 10% of the Company’s total revenues. Revenue Recognition: The Company derives revenues primarily from subscription services and professional services. Revenues are recognized when a contract exists between the Company and a customer and upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of subscription and professional services, which may be capable of being distinct and accounted for as separate performance obligations, or in the case of offerings such as subscription services and support, accounted for as a single performance obligation. Revenues are recognized net of allowances and any taxes collected from customers, which are subsequently remitted to governmental authorities. 63 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) The Company determines revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenues when, or as, the Company satisfies a performance obligation. Subscription Revenues Subscription revenues primarily consist of fees for providing customers access to the Company’s solutions, with routine customer support and maintenance related to email and phone support, bug fixes, and unspecified software updates, and upgrades released when and if available during the maintenance term. Revenues are generally recognized on a ratable basis over the contract term beginning on the date that the Company’s service is made available to the customer, which the Company believes best reflects the manner in which the Company’s customers utilize the Company’s subscription offerings. Arrangements with customers do not provide the customer with the right to take possession of the software supporting the Company's solutions at any time and, as a result, are accounted for as a service contract. Generally, the Company’s subscription contracts are three to five years in length, billed annually in advance, are non-cancelable, and do not contain refund-type provisions. U.S. mortgage contracts are generally billed monthly in advance. Subscription arrangements that are cancelable generally have penalty clauses. Professional Services and Other Revenues Professional services revenues primarily consist of fees for deployment, configuration, and optimization services, as well as training. The majority of the Company’s professional services contract revenues are recognized over time based on a proportional performance methodology which utilizes input methods. The Company’s professional services contracts are billed on a time and materials or fixed fee basis. Contracts with Multiple Performance Obligations Most of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price (“SSP”) basis. The Company determines SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where services are sold, price lists, the Company’s go-to-market strategy, historical sales, and contract prices. As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP. Given the variability of pricing, the Company uses a range of SSP. The Company determines the SSP range using information that may include market conditions or other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of products and services by customer size. Costs Capitalized to Obtain Revenue Contracts The Company capitalizes incremental costs of obtaining a non-cancelable subscription and support revenue contract if the Company expects the benefit of those costs to be longer than one year. The capitalized amounts are subsequently amortized over the estimated life of the contract. Capitalized amounts consist primarily of sales commissions paid to the Company’s direct sales force. Capitalized amounts also include (1) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired and (2) the associated payroll taxes and fringe benefit costs associated with the payments to these employees. Capitalized costs related to 64 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) new revenue contracts or on upsell of existing contracts are amortized on a straight-line basis over four to five years , which, although longer than the typical initial contract period, reflects the average period of benefit, including expected contract renewals. In arriving at this average period of benefit, the Company evaluated both qualitative and quantitative factors which included the estimated life cycles of its offerings and its customer attrition. Commissions paid relating to contract renewals are not commensurate with sales commissions paid on initial contracts and as such are deferred and amortized over the related renewal period. The capitalized amounts are recoverable through future revenue streams under all non-cancelable customer contracts. The Company periodically evaluates whether there have been any changes in its business, the market conditions in which it operates, or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment. Any changes in the anticipated period of benefit or the average renewal term are recognized on a prospective basis upon occurrence. Amortization of capitalized costs to obtain revenue contracts is included in sales and marketing expense in the accompanying consolidated statements of operations. Judgments Contracts with customers may include multiple services requiring allocation of the transaction price across the different performance obligations. Standalone selling price is established by maximizing the amount of observable inputs, primarily actual historical selling prices for performance obligations where available and includes consideration of factors such as go-to-market model and customer size. Where standalone selling price may not be observable (e.g., the performance obligation is not sold separately), the Company maximizes the use of observable inputs by using information that may include reviewing pricing practices, performance obligations with similar customers, and selling models. At times, the Company provides credits or incentives to its customers. Known and estimable credits and incentives represent a form of variable consideration, which are determined at contract inception and reduce the revenues recognized for a particular contract. At the end of each reporting period, the Company reviews and updates its estimates as additional information becomes available. The Company believes that there will not be significant changes to its estimates of variable consideration as of January 31, 2025. The Company evaluates whether it is the principal or agent with respect to vendor reseller agreements pursuant to which the Company resells certain third-party solutions along with the Company’s solutions. Where the Company is the principal, it first obtains control of the inputs to the specific good or service and directs their use to create the combined output. The Company’s control is evidenced by its involvement in the integration of the good or service on its platform before it is transferred to its customers and is further supported by the Company being primarily responsible to its customers and having a level of discretion in establishing pricing. The Company has determined that, generally, the Company is acting as the principal and reports revenues from these types of contracts on a gross basis, meaning the amounts billed to customers are recorded as revenues and expenses incurred are recorded as cost of revenues. Deferred Revenue: Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription services, including non-cancellable and non-refundable committed funds and deposits. Deferred revenue is recognized as revenue recognition criteria has been met. Customers are typically invoiced for these agreements in advance of regular annual installments and revenues are recognized ratably over the contractual subscription period. The deferred revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, size, and new business linearity. Deferred revenue does not represent the total contract value of annual or multi-year non-cancellable subscription agreements. Deferred revenue that will be recognized during the succeeding 12-month period are recorded as deferred revenue, current portion, and the remaining portion is recorded as deferred revenue, net of current portion on the consolidated balance sheets. Payment terms vary by contract, although terms generally include a requirement of payment within 30 to 45 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing services, such as invoicing at the beginning of a subscription term with revenues recognized ratably over the contract period, and not to provide financing to customers. Any implied financing costs are considered insignificant in the context of the Company’s contracts. 65 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Cash and Cash Equivalents: The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at fair value. Restricted Cash: Restricted cash primarily consisted of a minimum cash balance the Company maintained with a lender under the Company's revolving credit facility for fiscal year 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 January 31, 2025. Restricted cash is included in long-term prepaid expenses and other assets at January 31, 2024 and January 31, 2025 on the consolidated balance sheets. Accounts Receivable and Allowances: A receivable is recorded when an unconditional right to invoice and receive payment exists, such that only the passage of time is required before payment of consideration is due. Timing of revenue recognition may differ from the timing of invoicing to customers. Certain performance obligations may require payment before delivery of the service to the customer. The Company recognizes a contract asset in the form of accounts receivable when the Company has an unconditional right to payment, and the Company records a contract asset in the form of unbilled accounts receivable when revenues earned on a contract exceeds the billings. The Company’s standard billing terms are annual in advance, while U.S. mortgage standard billing terms are monthly in advance. An unbilled accounts receivable is a contract asset related to the delivery of the Company’s subscription services and professional services for which the related billings will occur in a future period. Unbilled accounts receivable consists of (i) revenues recognized for professional services performed but not yet billed and (ii) revenues recognized from non-cancelable, multi-year orders in which fees increase annually but for which the Company is not contractually able to invoice until a future period. Accounts receivable are reported at their gross outstanding balance reduced by an allowance for estimated receivable losses, which includes allowances for doubtful accounts and a reserve for expected credit losses. 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 consolidated statements of operations, included in general and administrative expenses, up to the amount of revenues recognized to date. Any incremental allowance is recorded as an offset to deferred revenue on the consolidated balance sheets. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. A summary of activity in the allowance for doubtful accounts and reserve for expected credit losses is as follows: Fiscal Year Ended January 31, 2023 2024 2025 Balance, beginning of period $ 151 $ 899 $ 1,451 Charged to bad debt expense 806 1,081 85 Charged to deferred revenue — 747 — Write-offs and other ( 55 ) ( 1,275 ) ( 304 ) Translation adjustments ( 3 ) ( 1 ) ( 3 ) Balance, end of period $ 899 $ 1,451 $ 1,229 Leases: The Company determines if an arrangement is or contains a lease at inception date based on whether there is an identified asset and whether the Company controls the use of the identified asset throughout the period of use. The Company determines the classification of the lease, whether operating or financing, at the lease commencement date, which is the date the leased assets are made available for use. The Company accounts for lease and non-lease components as a single lease component for its facilities and equipment leases. The Company did not have any finance leases as of January 31, 2024 or January 31, 2025. Operating lease right-of-use ("ROU") assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The lease term reflects the non-cancelable period of the lease together with options to extend or terminate the lease when it is reasonably certain the Company will exercise such option. Variable costs, such as common area maintenance costs, are not included in the measurement of the ROU assets and lease liabilities, but 66 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) are expensed as incurred. If an implicit rate is not readily determined by the Company's leases, the Company uses its incremental borrowing rate in determining the present value of the lease payments. Lease expense is recognized on a straight-line basis over the lease term. The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less. Lease expense for such leases is recognized on a straight-line basis over the lease term. Property and Equipment: Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets and commences once the asset is placed in service or is ready for its intended use. The estimated useful lives by asset classification are generally as follows: Asset Classification Estimated Useful Life Furniture and fixtures 3 - 7 years Computers and equipment 3 years Buildings 40 years Leasehold improvements Shorter of remaining life of the lease term or estimated useful life Repairs and maintenance are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation or amortization are removed from their respective accounts, and any gain or loss on such retirement is reflected in operating expenses. Financing Obligations: The Company records assets and liabilities for lease arrangements where the Company has continued involvement due to purchase options and is deemed to be the owner for accounting purposes. Intangible Assets: Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Impairment Assessment: The Company evaluates intangible assets and long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions, or other events that indicate an asset’s carrying amount may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of an asset or asset group to the estimated future undiscounted cash flows the asset or asset group is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets or asset group, the carrying amount of such assets is reduced to fair value. There were no material impairments of intangible assets or long-lived assets during the fiscal years ended January 31, 2023, 2024, and 2025. Goodwill: Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill is not amortized, but rather the carrying amounts of these assets are assessed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Goodwill is tested for impairment annually on November 1, the first day of the fourth quarter of the fiscal year, or more frequently if circumstances indicate an impairment may have occurred between annual impairment tests. The Company has one reporting unit, therefore the Company evaluates goodwill for impairment at the entity level. To perform its impairment testing, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of its single reporting unit is less than its carrying amount. The qualitative factors we consider include, but are not limited to, macroeconomic conditions, industry and market conditions, company-specific events, changes in circumstances, and our share price. If the qualitative factors indicate that the fair value of the reporting unit is greater than the carrying value of the net assets assigned to the reporting unit, then we do not consider the assigned goodwill to be impaired. If it is determined that it is more likely than not that the fair value of the Company is less than the carrying amount, a quantitative assessment is performed by comparing the fair value of a reporting unit with its carrying amount. The Company may elect to bypass the qualitative assessment and perform the quantitative assessment. An impairment loss is recognized in an amount equal to the excess of the reporting unit’s carrying value over its fair value, up to the amount of goodwill allocated to the reporting unit. There is no goodwill impairment for the fiscal years ended January 31, 2023, 2024, and 2025. 67 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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 consolidated balance sheets. See Note 2 "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 (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 consolidated balance sheets outside of equity under the caption “Redeemable non-controlling interest.” Business Combinations: Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and may be subject to refinement due to unanticipated events and circumstances. For intangible assets, the Company typically uses income-based methods of valuation (for example, the multi-period excess earnings method is used to estimate the fair value estimate of customer relationships and the relief from royalty method is used in the fair value estimate of developed technologies). These methods typically start with a forecast of all of the expected future net cash flows for each asset. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. Some of the more significant estimates and assumptions inherent in these methods are forecasted revenues, obsolescence life and factor, customer attrition rate, and the discount rate among other assumptions. Determining the useful life of an intangible asset also requires judgment as different types of intangible assets will have different useful lives and certain assets may even be considered to have indefinite useful lives. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. For acquisitions involving additional consideration to be transferred to the selling parties in the event certain future events occur or conditions are met (“contingent consideration”), the Company recognizes the acquisition-date fair value of contingent consideration as part of the consideration transferred in exchange for the business combination. Contingent consideration meeting the criteria to be classified as equity in the consolidated balance sheets is not remeasured, and its subsequent settlement is recorded within stockholders’ equity. Contingent consideration classified as a liability is remeasured to fair value at each reporting date until the contingency is resolved, with any changes in fair value recognized in the Company’s consolidated statements of operations. 68 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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 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 consolidated statement 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. Debt Issuance Costs: Debt issuance costs are initially deferred and amortized to interest expense on a straight-line basis over the expected term of the debt. The Company uses the straight-line basis as it approximates the amounts calculated under the effective-interest method. Unamortized debt issuance costs related to the secured revolving credit facility are considered long-term and are included in long-term prepaid expenses and other assets in the consolidated balance sheets. Cost of Revenues: Cost of subscription and support revenues consists of costs related to hosting the Company’s software solutions and employee-related costs, including stock-based compensation expenses and allocated overhead associated with customer support. Cost of professional services and other revenues consist of employee-related costs associated with these services, including stock-based compensation expenses, and allocated overhead, and the cost of subcontractors. Allocated overhead includes costs such as information technology infrastructure, rent and occupancy charges, along with employee benefit costs, and taxes based upon a percentage of total compensation expense. As such, general overhead expenses are reflected in each cost of revenues and operating expenses category. In addition, subscription cost of revenues includes amortization of acquired developed technology. Research and Development : Research and development expenses consist primarily of salaries, benefits and stock-based compensation associated with our engineering, product and quality assurance personnel, as well as allocated overhead. Research and development expenses also include the cost of third-party contractors. Research and development costs are expensed as incurred. Advertising: Advertising costs are expensed as incurred and consist of advertising, third-party marketing, branded marketing, and conference and event expenses. Advertising expenses are recorded in sales and marketing expenses in the consolidated statements of operations and were $ 8.7 million, $ 7.7 million, and $ 8.7 million for the fiscal years ended January 31, 2023, 2024, and 2025, respectively. Income Taxes: Deferred income taxes are determined using the asset and liability method, whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are also recorded for any tax attributes, such as net operating losses and tax credit carryforwards. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates on the date of enactment within income tax expense. The Company reflects the expected amount of income taxes to be paid or refunded during the year as current income tax expense or benefit, as applicable. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The Company follows the accounting standards on accounting for uncertainty in income taxes, which addresses the determination of whether tax benefits claimed, or expected to be claimed, on a tax return should be recorded in the consolidated financial statements. Under this guidance, the Company may recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities based on the technical merits of the tax position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the benefit having a greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification, interest and penalties on income taxes, and accounting interim periods. When and if applicable, potential interest and penalties are accrued as incurred, within the income tax provision. 69 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Other Comprehensive Income (Loss): Accumulated other comprehensive income (loss) is reported as a component of stockholders’ equity and includes unrealized gains and losses on foreign currency translation adjustments. Foreign Currency: The functional currency of the Company’s foreign subsidiaries is generally the local currency. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the consolidated statements of comprehensive loss recorded in foreign currency translation line item. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. Foreign currency transaction gains and losses due to transactions denominated in a currency other than the functional currency are included in other expense, net in the consolidated statements of operations and were $( 1.4 ) million, $( 1.2 ) million, and $( 10.5 ) million for the fiscal years ended January 31, 2023, 2024, and 2025, respectively, primarily related to various intercompany loans. Stock-Based Compensation: As further described in Note 10 "Stock-Based Compensation," the Company records compensation expense associated with stock options and other equity-based compensation in accordance with ASC 718, Compensation – Stock Compensation. The Company establishes fair value as the measurement objective in accounting for share-based payment transactions with employees and recognizes expense on a straight-line basis, net of estimated forfeitures, over the applicable vesting period. The estimated forfeiture rate applied is based on historical forfeiture rates. Basic and Diluted Loss per Common Share: Basic loss per share is calculated by dividing the net loss attributable to nCino, Inc. by the weighted-average number of shares of common stock outstanding for the period. Diluted loss per share is calculated by giving effect to all potentially dilutive common stock, which is comprised of stock options issued and outstanding, nonvested RSUs issued and outstanding, and shares issuable pursuant to the Employee Stock Purchase Plan (the "ESPP") when determining the weighted-average number of common shares outstanding. For purposes of the diluted loss per share calculation, basic and diluted loss per share were the same, as the effect of all potentially dilutive securities would have been anti-dilutive. Recently Adopted Accounting Pronouncements: 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. The Company adopted ASU 2023-07 for the fiscal year ended January 31, 2025 on a retrospective basis. See Note 19 "Segment Information" for additional information. Recent Accounting Pronouncements Not Yet Adopted: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance includes amendments to enhance existing income tax disclosure requirements, primarily related to the rate reconciliation and income taxes paid disclosures. The ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis with the option to apply the ASU retrospectively. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on the Company’s consolidated financial statements. 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, on a prospective basis with the option to apply the ASU retrospectively. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on the Company’s consolidated financial statements. Note 2. 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 70 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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. 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 %. As of January 31, 2025, the Company controls a majority of the outstanding common stock in nCino K.K. All of the common stock held by the Investors is callable by the Company or puttable by the Investors at the option of the Investors or at the option of the Company beginning on the eighth anniversary of the agreement with the Investors. 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 consolidated balance sheets. The following table summarizes the activity in the redeemable non-controlling interests for the period indicated below: Fiscal Year Ended January 31, 2023 2024 2025 Balance, beginning of period $ 2,882 $ 3,589 $ 3,428 Investment by redeemable non-controlling interest — 983 — Net loss attributable to redeemable non-controlling interest (excluding adjustment to non-controlling interest) ( 1,119 ) ( 1,109 ) ( 472 ) Foreign currency translation ( 194 ) 13 7 Adjustment to redeemable non-controlling interest 1,995 ( 71 ) 5,301 Stock-based compensation expense 1 25 23 22 Balance, end of period $ 3,589 $ 3,428 $ 8,286 1 nCino K.K. stock options granted in accordance with nCino K.K.'s equity incentive plan. Note 3. 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 January 31, 2025 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. 71 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following table summarizes the Company’s financial assets measured at fair value as of January 31, 2024 and January 31, 2025 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 $ — $ — Fair value measurements on a recurring basis as of January 31, 2025 Level 1 Level 2 Level 3 Assets: Money market accounts (included in cash and cash equivalents) $ 38,841 $ — $ — Time deposits (included in long-term prepaid expenses and other assets) 339 — — Total assets $ 39,180 $ — $ — 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. Fair value changes were immaterial for the years ended January 31, 2023, 2024 and 2025. There was no impairment recognized for the fiscal years ended January 31, 2023, 2024, and 2025. In March 2025, we recorded a realized gain of $ 1.2 million from the sale of one of these investments. See Note 16 "Related-Party Transactions" and Note 20 "Subsequent Events" for additional information. Note 4. Revenues Disaggregation of Revenue Disaggregated revenues by source and geographic region were as follows: Fiscal Year Ended January 31, 2023 2024 2025 United States Subscriptions - non-mortgage $ 241,394 $ 273,044 $ 303,546 Subscriptions - mortgage 59,804 68,040 73,782 Professional services and other 45,296 46,117 47,104 Total United States 346,494 387,201 424,432 International Subscriptions 43,554 68,395 91,840 Professional services and other 18,267 20,947 24,385 Total International 61,821 89,342 116,225 Total Revenue $ 408,315 $ 476,543 $ 540,657 72 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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. During the fourth quarter of fiscal year 2025, the Company changed the presentation of disaggregated revenues from a classification primarily based on geographic region to a classification to include sources by geographic region. The prior period presentation of disaggregated revenues has been reclassified to conform with the current period presentation. Contract Amounts Accounts Receivable Accounts receivable, less allowance for doubtful accounts, is as follows as of January 31, 2024 and January 31, 2025: As of January 31, 2024 2025 Trade accounts receivable $ 106,170 $ 122,394 Unbilled accounts receivable 7,699 23,662 Allowance for doubtful accounts ( 1,451 ) ( 1,229 ) Other accounts receivable 557 1,960 Total accounts receivable, net $ 112,975 $ 146,787 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 and $ 8.3 million from acquisitions, which were offset by decreases due to revenues recognized in the period. During the fiscal year ended January 31, 2025, $ 170.5 million of revenues were recognized out of the deferred revenue balance as of January 31, 2024. Transaction price allocated to remaining performance obligations represents contracted revenues that have not yet been recognized, which includes both deferred revenue and amounts that will be invoiced and recognized as revenues in future periods. Transaction price allocated to the remaining performance obligation is influenced by several factors, including the timing of renewals, average contract terms, and foreign currency exchange rates. The Company applies practical expedients to exclude amounts related to performance obligations that are billed and recognized as they are delivered, optional purchases that do not represent material rights, and any estimated amounts of variable consideration that are subject to constraint. Remaining performance obligations were $ 1.2 billion as of January 31, 2025. 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. Costs Capitalized to Obtain Revenue Contracts During the fiscal years ended January 31, 2023, 2024, and 2025, the Company amortized $ 8.5 million, $ 9.9 million, and $ 12.0 million of capitalized contract acquisition costs within sales and marketing expense, respectively. The Company did not incur any impairment losses. Capitalized contract acquisition costs were $ 28.0 million and $ 37.2 million as of January 31, 2024 and January 31, 2025, of which $ 17.4 million and $ 23.7 million was long-term in the consolidated balance sheets, respectively. The remaining balance of the capitalized costs to obtain contracts was current. 73 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Note 5. Property and Equipment Property and equipment, net consisted of the following: As of January 31, 2024 2025 Furniture and fixtures $ 12,066 $ 11,712 Computers and equipment 8,010 7,193 Buildings and land 56,379 56,379 Leasehold improvements 27,712 28,046 Construction in progress 170 627 104,337 103,957 Less accumulated depreciation ( 25,192 ) ( 29,004 ) $ 79,145 $ 74,953 The Company recognized depreciation expense as follows: Fiscal Year Ended January 31, 2023 2024 2025 Cost of subscription revenues $ 399 $ 567 $ 480 Cost of professional services and other revenues 1,301 1,775 1,313 Sales and marketing 1,452 1,734 1,291 Research and development 2,435 2,819 2,399 General and administrative 865 1,143 769 Total depreciation expense $ 6,452 $ 8,038 $ 6,252 Note 6. Business Combinations DocFox, Inc. (“DocFox”) On March 20, 2024 (the "DocFox Acquisition Date"), the Company acquired 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 fiscal year ended January 31, 2025. 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 fiscal year ended January 31, 2025. 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. 74 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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. The Company determined the acquisition date contract assets and liabilities in accordance with ASC 606. The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the DocFox Acquisition Date, including measurement period adjustments: 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 57,329 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 ( 6,306 ) Net assets acquired $ 72,365 Initial accounting for the acquisition is not complete, and further measurement period adjustments may occur in fiscal year 2026, but no later than one year from the DocFox Acquisition Date. The area of the acquisition that remains preliminary relates to finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities, including uncertain tax positions. 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 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 fair value of DocFox's technology. Customer relationships represent the fair value of the underlying relationships with DocFox's customers. Trade names represents the fair value of DocFox’s company name. Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce. The goodwill is not deductible for tax. The financial results of DocFox since the DocFox Acquisition Date through January 31, 2025 are included in the Company's 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 consolidated financial statements. Integrated Lending Technologies, LLC (“ILT”) 75 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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. 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 fiscal year ended January 31, 2025. The Company paid a total of $ 19.9 million 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 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. The Company determined the acquisition date contract assets and liabilities in accordance with ASC 606. The following table summarizes the final 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 During the fiscal year ended January 31, 2025, within the one year measurement period, we finalized the fair value of the assets acquired and liabilities assumed in the acquisition, and the amounts presented above are now final. The following table sets forth the components of the fair value of identifiable intangible assets and their estimated useful lives over which the acquired intangible assets will be amortized on a straight-line basis, as this approximates the pattern in which economic benefits of the assets are consumed as of the 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 estimated fair value of ILT’s technology. Customer relationships represent the estimated fair value of the underlying relationships with ILT’s customers. Trade name represents the estimated fair value of ILT’s company name. Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce and approximately $ 11.1 million is deductible for tax purposes. The financial results of ILT since the ILT Acquisition Date are included in the Company's 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 consolidated financial statements. 76 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Artesian Solutions Limited ("FullCircl") On November 5, 2024 (the "FullCircl Acquisition Date"), the Company acquired the outstanding equity interests of FullCircl, which provides an onboarding and customer lifecycle intelligence platform. The Company acquired FullCircl for its complementary products and believes this will provide greater value for new and existing customers. The Company has included the financial results of FullCircl in the consolidated statements of operations from the FullCircl Acquisition Date. Transaction costs associated with the FullCircl acquisition were approximately $ 3.6 million and were recorded in general and administrative expenses for the fiscal year ended January 31, 2025. The purchase consideration was $ 142.4 million, of which the Company paid a total of $ 129.2 million in cash at the FullCircl Acquisition Date. The purchase consideration includes a deferred payment of $ 15.0 million, with a present value of $ 13.2 million at the FullCircl Acquisition Date, relating to an indemnity holdback amount to be paid in 24 months following the FullCircl Acquisition Date which is included in other long-term liabilities at January 31, 2025 on the consolidated balance sheets. In addition, the Company issued 52,877 RSUs with an approximate fair value of $ 2.0 million to certain employees of FullCircl, which will vest over four years subject to such employees' continued employment. The RSUs will be recorded as stock-based compensation expense post-acquisition as the RSUs vest and has been excluded from the purchase consideration. The 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 FullCircl 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. The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the FullCircl Acquisition Date: Fair Value Cash and cash equivalents $ 3,182 Accounts receivable 1,814 Property and equipment, net 66 Operating lease right-of-use assets, net 198 Other current and noncurrent assets 211 Intangible assets 37,000 Goodwill 117,935 Accounts payable, accrued expenses, and other liabilities, current and noncurrent ( 3,776 ) Deferred revenue, current and noncurrent ( 4,773 ) Operating lease liabilities, current and noncurrent ( 198 ) Deferred income taxes ( 9,250 ) Net assets acquired $ 142,409 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 2026, but no later than one year from the FullCircl 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 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, and (iii) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities, including uncertain tax positions. 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 77 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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 FullCircl Acquisition Date: Fair Value Useful Life Trade name $ 1,100 1 year Customer relationships 26,500 10 years Developed technology 9,400 5 years Total intangible assets subject to amortization $ 37,000 Developed technology represents the preliminary fair value of FullCircl's technology. Customer relationships represent the preliminary fair value of the underlying relationships with FullCircl's customers. Trade names represents the preliminary fair value of FullCircl’s company name. The Company continues to assess the rates used in the preliminary valuation methods such as, but not limited to, the discount rates for developed technology, customer relationships and trade name and customer attrition rate for customer relationships. Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce. The goodwill is not expected to be deductible for tax. The financial results of FullCircl since the FullCircl Acquisition Date are included in the Company's consolidated financial statements and are not material to the Company. The Company has not disclosed pro-forma revenue and earnings attributable to FullCircl as they did not have a material effect on the Company’s consolidated financial statements. Note 7. Goodwill and Intangible Assets Goodwill The change in the carrying amounts of goodwill was as follows: Balance, as of January 31, 2023 $ 839,440 Translation adjustments ( 571 ) Balance, as of January 31, 2024 838,869 Acquisitions 186,375 Translation adjustments ( 5,869 ) Balance, as of January 31, 2025 $ 1,019,375 78 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Intangible assets Intangible assets, net are as follows: As of January 31, 2024 As of January 31, 2025 Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Weighted Average Remaining Useful Life (Years) Developed technology $ 83,468 $ ( 38,010 ) $ 45,458 $ 97,029 $ ( 49,819 ) $ 47,210 2.9 Customer relationships 91,704 ( 22,085 ) 69,619 139,315 ( 33,315 ) 106,000 8.1 Trademarks and trade name 14,624 ( 14,624 ) — 1,461 ( 615 ) 846 0.7 Other 919 ( 424 ) 495 1,369 ( 854 ) 515 2.3 $ 190,715 $ ( 75,143 ) $ 115,572 $ 239,174 $ ( 84,603 ) $ 154,571 6.5 During the fiscal year ended January 31, 2025, the Company wrote off approximately $ 20.6 million of fully amortized intangible assets and the corresponding accumulated amortization. The Company recognized amortization expense for intangible assets as follows: Fiscal Year Ended January 31, 2023 2024 2025 Cost of subscription revenues $ 17,019 $ 16,306 $ 17,784 Cost of professional services and other revenues 94 330 330 Sales and marketing 11,087 20,590 11,979 Total amortization expense $ 28,200 $ 37,226 $ 30,093 During the third quarter of fiscal 2024, the Company rebranded the SimpleNexus solution to nCino Mortgage, resulting in a change to the trade name useful life. As a result, the Company recorded accelerated amortization to fully amortize the remaining trade name intangible asset in fiscal 2024. The expected future amortization expense for intangible assets as of January 31, 2025 is as follows: Fiscal Year Ending January 31, 2026 $ 33,962 2027 31,907 2028 17,449 2029 17,349 2030 15,059 Thereafter 38,845 $ 154,571 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 8. Reseller Agreement The Company has a reseller agreement in place with our largest vendor to utilize their platform and to develop the Company’s cloud-based banking software as an application within their hosted environment. This agreement was amended 79 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) during fiscal 2024 extending its term through January 31, 2031, and will automatically renew in annual increments thereafter unless either party gives notice of non-renewal before the end of the initial term or the respective renewal term. Note 9. Stockholders’ Equity A summary of the rights and key provisions affecting each class of the Company’s stock as of January 31, 2025, is as follows: Preferred Stock: The Board of Directors is authorized to establish one or more series of preferred stock and to fix the number of shares constituting such series and the designation of such series, including the voting powers, preferences, limitations, restrictions, and other special rights thereof. The Company's preferred stock consists of 10,000,000 authorized shares, par value $ 0.001 per share. Common stock: The Company's common stock consists of 500,000,000 authorized shares, par value $ 0.0005 per share. At January 31, 2025, the Company committed a total of 38,688,209 shares of common stock for future issuance as follows: Issued and outstanding stock options 811,602 Nonvested issued and outstanding restricted stock units ("RSUs") 6,105,459 Possible issuance under stock plans 31,771,148 38,688,209 Note 10. Stock-Based Compensation Equity Incentive Plans The Company has two equity incentive plans: the nCino, Inc. 2014 Omnibus Stock Ownership and Long-Term Incentive Plan (the “2014 Plan”) and the 2019 Amended and Restated Equity Incentive Plan (the “2019 Plan” and together with the 2014 Plan, the “Incentive Plans”). Under the 2014 Plan, the Board of Directors had allotted 15,025,666 shares of common stock for incentive options or non-qualified options as of January 31, 2025. Non-qualified options may be granted to Company employees, non-employee directors, and consultants. The exercise price of options is determined by the Board of Directors, but cannot be less than 100 % of the fair market value of the Company’s common stock on the date of the grant. The options generally vest in one of two ways: • In equal annual installments over four years from the grant date. • Upon a change in control transaction (with respect to certain Incentive Plan participants). All options expire ten years from the grant date and, with respect to certain Incentive Plan participants, provide for accelerated vesting if there is a change in control of the Company. In July 2019, the Company established the 2019 Equity Incentive Plan for the issuance of awards in the form of options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based awards, and other stock-based awards. In connection with the Company's initial public offering ("IPO"), the Company's Board of Directors adopted and the Company's stockholders approved the 2019 Plan which amended and restated the 2019 Equity Incentive Plan. All awards shall be granted within ten years from the effective date of the 2019 Plan and can only be granted to employees, officers, directors, and consultants and generally vest over four years . Under the 2019 Plan, the number of available shares was increased to 15,250,000 , plus an annual increase added on the first day of each fiscal year, beginning with the fiscal year ending January 31, 2022, and continuing until, and including, 80 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) the fiscal year ending January 31, 2031. The annual increase will be equal to the lesser of (i) 5 % of the number of shares issued and outstanding as of January 31 of the immediately preceding fiscal year and (ii) an amount determined by the Company's Board of Directors. The Company ceased granting awards under the 2014 Plan during the fiscal year ended January 31, 2020, and all shares that remained available for issuance under the 2014 Plan were transferred to the 2019 Plan prior to the closing of the IPO. Additionally, the number of shares available under the 2019 Plan shall be increased by the number of shares outstanding under the 2014 Plan that expire, terminate or are canceled without having been exercised or settled in full. The 2014 Plan governs outstanding awards granted prior to the adoption of the 2019 Plan. RSUs vest upon the satisfaction of a time-based condition. RSUs are generally earned over a service period of four years . For RSUs granted to the non-employee members of the Board of Directors, some vest in less than a year, some annually and some over three years. The compensation expense related to these awards is based on the grant date fair value of the RSUs and is recognized on a ratable basis over the applicable service period. As of January 31, 2025, the Company had stock options outstanding under the 2014 Plan and the 2019 Plan had stock options and RSUs outstanding. Stock Options Stock option activity for the fiscal year ended January 31, 2025 was as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In thousands) Outstanding, January 31, 2024 1,212,704 $ 7.14 3.21 $ 29,516 Granted — — Expired or forfeited ( 1,375 ) 12.06 Exercised ( 399,727 ) 6.96 10,890 Outstanding, January 31, 2025 811,602 $ 7.22 2.27 $ 21,742 Exercisable, January 31, 2025 811,602 $ 7.22 2.27 $ 21,742 Fully vested or expected to vest, January 31, 2025 811,602 $ 7.22 2.27 $ 21,742 The total intrinsic value of options exercised during the fiscal years ended January 31, 2023, 2024, and 2025 was $ 16.2 million, $ 19.0 million, and $ 10.9 million, respectively. Aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the option exercise price and the estimated fair value of the Company’s common stock at the time such option exercises. This intrinsic value changes based on changes in the fair value of the Company’s underlying stock. Restricted Stock Units RSU activity during the fiscal year ended January 31, 2025 was as follows: Number of Shares Weighted Average Grant Date Fair Value Nonvested, January 31, 2024 5,626,125 $ 33.19 Granted 3,193,433 33.65 Vested ( 1,745,202 ) 34.84 Forfeited ( 968,897 ) 34.75 Nonvested, January 31, 2025 6,105,459 $ 32.78 The weighted average grant date fair value for RSUs granted during the fiscal years ended January 31, 2023, 2024, and 2025 was $ 41.54 , $ 25.65 , and $ 33.65 , respectively. 81 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) The total fair value of RSUs vested for the fiscal years ended January 31, 2023, 2024, and 2025 was $ 39.7 million, $ 48.2 million, and $ 60.8 million, respectively. As of January 31, 2025, total unrecognized compensation expense related to non-vested RSUs was $ 145.7 million, adjusted for estimated forfeitures, based on the estimated fair value of the Company’s common stock at the time of grant. That cost is expected to be recognized over a weighted average period of 2.73 years. Employee Stock Purchase Plan In July 2020, the Board of Directors adopted and stockholders approved the ESPP, which became effective immediately prior to the closing of the IPO. The ESPP includes two components, one component is intended to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Internal Revenue Code (the "Code") and a component that does not qualify as an "employee stock purchase plan" under Section 423 of the Code. The ESPP initially reserved and authorized the issuance of up to a total of 1,800,000 shares of common stock to participating employees. The aggregate number of shares of the Company's common stock under the ESPP will automatically increase on the first day of each fiscal year, beginning with the first fiscal year ending January 31, 2022 and continuing until the fiscal year ended January 31, 2031, by an amount equal to the lesser of (i) 1 % of the shares of the Company's common stock issued and outstanding on January 31 of the immediately preceding fiscal year, (ii) 1,800,000 shares of the Company's common stock or (iii) an amount determined by the Board of Directors. As of January 31, 2025, 5,484,024 shares of common stock remain available for grant under the ESPP. The ESPP permits employees to purchase the Company's common stock through payroll deductions during six month offerings. The offering periods begin each January 1 and July 1, or such other period determined by the compensation committee. Eligible employees will purchase the shares at a price per share equal to the lesser of (i) 85 % of the fair market value of a share of the Company's common stock on the first business day of such offering period and (ii) 85 % of the fair market value of share of the Company's common stock on the last business day of such offering period, although the compensation committee has discretion to change the purchase price with respect to future offering periods, subject to terms of the ESPP. The first offering period for the ESPP began on July 1, 2021 and ended on December 31, 2021. Thereafter, offering periods will begin on January 1 and July 1. The fair value of ESPP shares is estimated at the date of grant using the Black-Scholes option valuation model based on assumptions as follows for ESPP awards: Expected life. The expected life reflects the period for which the Company believes the ESPP will remain outstanding. The expected term for the ESPP award approximates the offering period of six months. Expected volatility. The expected volatility is based on the historical volatility of the Company's common stock. Expected dividends. The expected dividend yield is zero as the Company has not and does not expect to pay dividends. Risk-free interest rate. The risk-free interest rate reflects the U.S. Treasury yield for a similar expected life instrument in effect at the time of the grant of the ESPP share. 82 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) The assumptions utilized for the ESPP shares for the fiscal years ended January 31, 2023, 2024, and 2025 were as follows: Fiscal Year Ended January 31, 2023 2024 2025 Expected life (in years) 0.50 0.50 0.50 Expected volatility 49.65 % - 84.59 % 38.70 % - 61.86 % 38.70 % - 40.74 % Expected dividends 0.00 % 0.00 % 0.00 % Risk-free interest rate 0.22 % - 4.77 % 4.77 % - 5.53 % 4.25 % - 5.37 % As of January 31, 2025, total unrecognized compensation expense related to the ESPP was $ 0.7 million. That cost is expected to be recognized over the remaining term of the offering period that began on January 1, 2025 and will end on June 30, 2025. Stock-Based Compensation Expense Total stock-based compensation expense included in our consolidated statements of operations were as follows: Fiscal Year Ended January 31, 2023 2024 2025 Cost of subscription revenues $ 1,430 $ 1,847 $ 2,891 Cost of professional services and other revenues 7,263 9,369 11,977 Sales and marketing 13,283 15,417 17,016 Research and development 11,602 15,942 17,416 General and administrative 16,654 15,460 22,292 Total stock-based compensation expense 1 $ 50,232 $ 58,035 $ 71,592 1 Includes $ 0.2 million benefit incurred for the fiscal year ended January 31, 2023 in connection with the restructuring plan commenced in January 2023. See Note 18 "Restructuring" for more information. Note 11. Income Taxes The components of loss before income taxes by domestic and foreign jurisdictions were as follows: Fiscal Year Ended January 31, 2023 2024 2025 United States $ ( 100,223 ) $ ( 61,994 ) $ ( 26,326 ) Foreign 2,450 20,058 ( 9,234 ) Loss before income taxes $ ( 97,773 ) $ ( 41,936 ) $ ( 35,560 ) 83 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) The components of the income tax provision (benefit) consisted of the following: Fiscal Year Ended January 31, 2023 2024 2025 Current: Federal $ — $ — $ 498 State 81 489 487 Foreign 2,363 3,441 3,622 Total 2,444 3,930 4,607 Deferred: Federal 1,339 819 ( 2,870 ) State 438 629 ( 1,200 ) Foreign ( 150 ) ( 3,788 ) ( 3,048 ) Total 1,627 ( 2,340 ) ( 7,118 ) Total income tax provision (benefit) $ 4,071 $ 1,590 $ ( 2,511 ) The differences between income taxes expected at the U.S. federal statutory income tax rate and the reported income tax (provision) benefit are summarized as follows: Fiscal Year Ended January 31, 2023 2024 2025 Income taxes at statutory rate of 21% for 2023, 2024, and 2025 21.0 % 21.0 % 21.0 % State income tax (provision) benefit, net of federal impact ( 0.4 ) ( 2.7 ) 1.6 Tax credits 0.0 23.9 9.7 Changes in valuation allowance ( 21.6 ) ( 10.5 ) 7.7 Federal return to provision ( 0.2 ) ( 19.7 ) 1.3 Foreign rate differential 0.5 ( 1.7 ) 1.2 Other ( 0.2 ) 0.2 ( 1.0 ) Stock-based compensation 0.1 ( 1.0 ) ( 1.3 ) Nondeductible expenses ( 0.2 ) ( 1.0 ) ( 1.3 ) Deferred adjustments 0.0 0.0 ( 1.5 ) Effects of non-US operations ( 0.1 ) ( 0.5 ) ( 1.6 ) GILTI inclusion ( 0.6 ) ( 6.8 ) ( 2.2 ) Transaction costs ( 0.1 ) 0.0 ( 3.1 ) Executive compensation ( 2.4 ) ( 5.0 ) ( 8.2 ) Uncertain tax positions 0.0 0.0 ( 15.2 ) ( 4.2 ) % ( 3.8 ) % 7.1 % 84 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Significant components of the Company’s net deferred tax assets and liabilities were as follows: As of January 31, 2024 2025 Deferred tax assets: Net operating losses $ 115,187 $ 118,820 Research and development 39,305 48,056 Tax credits 15,444 17,104 Financing obligations and lease liabilities 17,343 16,591 Equity compensation 9,085 11,108 Reserves and accruals 3,900 4,747 Other 1,613 1,587 Total deferred tax assets 201,877 218,013 Less valuation allowance ( 148,270 ) ( 160,289 ) Total deferred tax assets, net of valuation allowances 53,607 57,724 Deferred tax liabilities: Intangible assets ( 26,216 ) ( 38,429 ) Depreciation ( 15,066 ) ( 13,522 ) Contract acquisition costs ( 7,112 ) ( 9,254 ) Lease asset ( 4,453 ) ( 4,048 ) Deferred revenue ( 310 ) ( 121 ) Total deferred tax liabilities ( 53,157 ) ( 65,374 ) Net deferred tax liabilities $ 450 $ ( 7,650 ) The Company’s net deferred tax liabilities were adjusted during fiscal 2025 to include $ 15.1 million of net deferred tax liabilities related to business combinations. Net deferred tax liabilities were included in the consolidated balance sheets as follows: As of January 31, 2024 2025 Long-term prepaid expenses and other assets $ 4,137 $ 6,201 Deferred income taxes, noncurrent ( 3,687 ) ( 13,851 ) Net deferred tax liabilities $ 450 $ ( 7,650 ) Income taxes payable, which is included in accrued expenses and other current liabilities on the consolidated balance sheets as of January 31, 2024 and 2025 were $ 2.0 million and $ 1.2 million, respectively. The Company continually assesses the realizability of its deferred tax assets based on an evaluative process that considers all available positive and negative evidence. The Company has established a valuation allowance in the amount of $ 148.3 million and $ 160.3 million as of January 31, 2024 and 2025, respectively, because the Company believes it is not more likely than not the deferred tax asset in jurisdictions excluding several foreign jurisdictions will be realized. We continue to maintain a valuation allowance against our deferred tax assets in several jurisdictions, including the U.S. It is determined by management when a valuation allowance should be recorded, utilizing significant judgement and the use of estimates. In fiscal year 2025, the Company acquired DocFox and FullCircl. As part of the DocFox acquisition, the Company recorded a net U.S. deferred tax liability mostly related to identifiable intangible assets. The deferred tax liability 85 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) recognized provides additional positive evidence that a portion of the Company’s U.S. deferred tax assets are realizable. As a result, the Company reduced the historical valuation allowance in the U.S. by $ 3.6 million. For the fiscal years ended January 31, 2023, 2024, and 2025, the valuation allowance increased by $ 29.3 million, $ 9.9 million, and $ 12.0 million, respectively. The Company maintains its assertion of the Company’s intent for certain foreign earnings to be indefinitely reinvested. As of January 31, 2025, the Company has not recorded taxes on approximately $ 26.7 million of cumulative undistributed earnings of the Company’s non-U.S. subsidiaries. The Company generally does not provide for taxes related to the Company’s undistributed earnings because such earnings either would not be taxable when remitted or they are indefinitely reinvested. If in the foreseeable future, the Company can no longer demonstrate that these earnings are indefinitely reinvested, a tax liability will be recognized, which could include other taxes such as withholding tax. The determination of the amount of the unrecognized tax liability is directly influenced by the Company’s net operating loss and valuation allowance position in the U.S. If the Company were to repatriate the undistributed earnings, the tax liability is $ 1.2 million. The net operating loss and tax credit carryforwards as of January 31, 2025 were as follows: As of January 31, 2025 First Fiscal Year Expiring Federal net operating loss carryforwards 1 354,217 None State net operating loss carryforwards 1 254,212 2030 State net operating loss carryforwards 1 81,394 None Foreign net operating loss carryforwards 8,790 2031 Foreign net operating loss carryforwards 1 102,385 None Federal tax credit carryforwards 1 14,840 2037 State tax credit carryforwards 2,788 2032 Foreign tax credit carryforward 61 None 1 The Company acquired a portion of these carryforwards through mergers and acquisitions. These acquired carryforwards will be subject to limitations which could limit the Company's utilization in future periods. In 2021, the Organization of Economic Cooperation and Development introduced its Pillar Two Framework Model Rules ("Pillar 2"). The Company is under the revenue threshold where Pillar 2 would not apply and is not subject to tax under these rules. The Company will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate. A reconciliation of the gross beginning and ending balance of total unrecognized tax benefits is as follows: Fiscal Year Ended January 31, 2023 2024 2025 Balance, beginning of period $ — $ — $ — Additions for current year tax positions — — 1,813 Additions for prior year tax positions — — 4,356 Additions for current year acquisitions — — 2,536 Balance, end of period $ — $ — $ 8,705 As of January 31, 2025 gross unrecognized tax benefits related to uncertain tax positions were $ 8.7 million. The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate would be $ 3.7 million for the year ended January 31, 2025. The Company's policy for classifying interest and penalties with unrecognized tax benefits is to include such items in income tax expense. The total amount of interest and penalties associated with income tax benefits is $ 2.0 million for the year ended January 31, 2025. The Company anticipates insignificant change to unrecognized tax benefits over the next year. 86 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) The Company is subject to taxation in the U.S. federal and various state and foreign jurisdictions. As of January 31, 2025 the Company is no longer subject to U.S. federal and state examinations by tax authorities for tax years prior to 2021. However, amounts reported as net operating losses and tax credit carryforwards from these tax periods remain subject to review by most tax authorities. Note 12. Defined Contribution Plan The Company has a 401(k) plan for its employees in the United States who meet the plan requirements. The Company, at its discretion, may make matching contributions. Employees are immediately vested in their contributions. The Company also has a Registered Retirement Savings Plan covering all eligible employees in Canada. Employer contributions for the fiscal years ended January 31, 2023, 2024, and 2025 were $ 7.0 million, $ 3.3 million, and $ 5.4 million, respectively. Note 13. 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: Fiscal Year Ended January 31, 2023 2024 2025 Operating lease expense $ 4,066 $ 4,940 $ 5,575 Variable lease expense 1,276 1,979 2,581 Short-term lease expense 508 451 272 Sublease income — — ( 382 ) Total $ 5,850 $ 7,370 $ 8,046 Supplemental cash flow information related to operating leases were as follows: Fiscal Year Ended January 31, 2023 2024 2025 Cash paid for amounts included in the measurement of operating lease liabilities $ 4,993 $ 4,489 $ 4,400 Operating right-of-use assets obtained in exchange for operating lease liabilities 2,050 13,152 3,349 Modification to reduce operating right-of-use assets and operating lease liabilities 842 — — Operating right-of-use assets and operating lease liabilities disposed of — 115 1,995 The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of January 31, 2025 were 5.77 years and 6.9 %, respectively. 87 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Future minimum lease payments as of January 31, 2025 were as follows: Fiscal Year Ending January 31, Operating Leases 2026 $ 5,814 2027 4,847 2028 3,162 2029 1,700 2030 397 Thereafter 5,881 Total lease liabilities 21,801 Less: imputed interest ( 3,829 ) Total lease obligations 17,972 Less: current obligations ( 5,153 ) Long-term lease obligations $ 12,819 Note 14. Revolving Credit Facility On February 11, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”), by and among the Company, nCino OpCo (the “Borrower”), certain subsidiaries of the Company as guarantors, and Bank of America, N.A. as lender (the “Lender”), pursuant to which the Lender is providing to the Borrower a senior secured revolving credit facility of up to $ 50.0 million (the “2022 Credit Facility”). The Credit Facility includes borrowing capacity available for letters of credit subject to a sublimit of $ 7.5 million. Any issuance of letters of credit will reduce the amount available under the Credit Facility. 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 88 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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 stock, the capital stock of all of the Company’s domestic subsidiaries, and 65 % of the capital stock of foreign subsidiaries that are directly owned by the Borrower or a Guarantor. As of January 31, 2024 and 2025, unamortized debt issuance costs were $ 0.0 million and $ 1.4 million, respectively, and are included in long-term prepaid expenses and other assets. 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 January 31, 2025. As of January 31, 2025, the applicable interest rate was 6.31 %. The available borrowing capacity under the 2024 Credit Facility was $ 84.0 million as of January 31, 2025. In February 2025, the Company borrowed an additional $ 52.5 million on the 2024 Credit Facility to fund an acquisition and in March 2025, the Company repaid $ 50.0 million on the 2024 Credit Facility, see Note 20 "Subsequent Events" for additional information. Note 15. Commitments and Contingencies In addition to the operating lease commitments described in Note 13 "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 entered into a lease agreement for the Company's headquarters in November 2020 in connection with a new lessor acquiring the property. Due to a purchase option contained in that lease, the Company is deemed to have continuing involvement and is considered to be the owner of the Company's headquarters for accounting purposes. As a result, the Company did not meet the criteria to apply sale-leaseback accounting and therefore, recorded an asset and corresponding financing obligation for $ 16.3 million at inception of that lease. The fair value of the leased property and corresponding financing obligation are included in property and equipment, net and financing obligations on the consolidated balance sheets, respectively. In January 2021, the Company entered into an amendment to its November 2020 headquarters lease to provide for construction of a parking deck, which upon completion was subject to exclusive use by the Company. Due to the Company also being deemed to be the owner of the parking deck for accounting purposes, the costs associated with the construction of the parking deck were capitalized as construction in progress with a corresponding construction liability through construction. Upon completion of the parking deck in September 2021, for approximately $ 17.7 million, the costs of the construction in 89 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) progress and the corresponding construction liability were reclassified to property and equipment, net and financing obligations on the consolidated balance sheets, respectively. In April 2021, the Company entered into a new lease agreement for the construction of an additional office building that is on the same parcel of land as the Company's existing headquarters. Due to a purchase option contained in that April 2021 lease, the Company is also deemed to be the owner of the additional building for accounting purposes, the costs associated with the construction of the additional building were capitalized as construction in progress with a corresponding construction liability through construction. Upon completion of the additional building in November 2022, for approximately $ 22.4 million, the costs of the construction in progress and the corresponding construction liability were reclassified to property and equipment, net and financing obligations on the consolidated balance sheets, respectively, and the term of the Company's November 2020 lease for its headquarters and the related parking deck became coterminous with the April 2021 lease. The term of the April 2021 lease expires in October 2037 with options to extend. The purchase option expires if not exercised on or before November 30, 2026. The 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 January 31, 2025 is as follows: Fiscal Year Ending January 31, Purchase commitments Financing obligations - leased facility 2026 $ 88,090 $ 4,653 2027 80,665 3,958 2028 74,152 — 2029 — — 2030 — — Thereafter — — Total $ 242,907 $ 8,611 Residual financing obligations and assets 49,617 Less: amount representing interest ( 5,376 ) Financing obligations $ 52,852 A portion of the associated lease payments are recognized as interest expense and the remainder reduces the financing obligations. The weighted-average discount rate for the Company's financing obligations as of January 31, 2025 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 accrued any material liabilities related to such obligations in the accompanying 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 90 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) 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 16. 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 January 31, 2025 on the Company's consolidated balance sheets. The investment was considered a related party transaction as entities affiliated with Insight Partners, a beneficial owner of the Company, owned greater than ten percent of Zest AI. In March 2025, we recorded a realized gain of $ 1.2 million from the sale of all our shares in Zest AI. Note 17. 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 fiscal years ended January 31, 2023, 2024, and 2025 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): Fiscal Year Ended January 31, 2023 2024 2025 Basic and diluted loss per share: Numerator Net loss attributable to nCino, Inc. $ ( 102,720 ) $ ( 42,346 ) $ ( 37,878 ) Denominator Weighted-average common shares outstanding 110,615,734 112,672,397 115,162,175 Basic and diluted loss per share attributable to nCino, Inc. $ ( 0.93 ) $ ( 0.38 ) $ ( 0.33 ) The following potential outstanding common stock were excluded from the diluted loss per share computation because the effect would have been anti-dilutive: Fiscal Year Ended January 31, 2023 2024 2025 Stock options issued and outstanding 2,009,323 1,212,704 811,602 Nonvested RSUs issued and outstanding 3,531,387 5,626,125 6,105,459 Shares issuable pursuant to the ESPP 21,079 105,227 106,440 91 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Note 18. Restructuring In the fourth quarter of fiscal 2023, the Company announced a workforce reduction of approximately 7 % and office space reductions in certain markets (collectively, the “restructuring plan”) in furtherance of its efforts to improve operating margins and advance the Company’s objective of profitable growth. Lease termination costs were accounted for in accordance with ASC 842, Leases. The Company paid $ 0.8 million in the fourth quarter of fiscal 2023 to exercise an early termination clause to exit a facility during fiscal 2024, which was accounted for as a lease modification. The Company incurred charges in the fourth quarter of the Company’s fiscal 2023 of $ 4.8 million in connection with the restructuring plan. The accrual for severance and related benefit costs of $ 5.0 million for terminated employees was included in accrued compensation and benefits on the consolidated balance sheets as of January 31, 2023 and was paid in the first quarter of the Company’s fiscal 2024. The Company’s restructuring charges were as follows: Fiscal Year Ended January 31, 2023 2024 Severance and other employee costs Stock-based compensation (benefit) Lease exit fees 1 Total Severance and other employee costs Stock-based compensation (benefit) Lease exit fees 1 Total Cost of subscription revenues $ — $ — $ 4 $ 4 $ — $ — $ 51 $ 51 Cost of professional services and other revenues 324 ( 9 ) 9 324 — — 118 118 Sales and marketing 1,324 ( 31 ) 9 1,302 — — 100 100 Research and development 2,105 ( 141 ) 30 1,994 — — 352 352 General and administrative 1,210 ( 29 ) 2 1,183 — — 6 6 Total $ 4,963 $ ( 210 ) $ 54 $ 4,807 $ — $ — $ 627 $ 627 1 These expenses reduced operating lease right-of-use assets on the consolidated balance sheets. The Company had no restructuring charges for the fiscal year ended January 31, 2025. Note 19. Segment Information The Company's chief operating decision maker ("CODM") is the Company's Chief Executive Officer, who reviews financial information on a consolidated basis. The Company brings together people and data to enable financial institutions to enhance strategic decision-making, risk management, and customer satisfaction through the selection of intelligent solutions provided by the nCino Platform as a SaaS company. As such, the Company has one operating and reportable segment. The CODM uses consolidated net loss in deciding how to make operating decisions, allocate resources, and assess performance. 92 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) The following table presents selected financial information that is provided to our CODM: Fiscal Year Ended January 31, 2023 2024 2025 Revenues $ 408,315 $ 476,543 $ 540,657 Less: Adjusted cost of revenues (1) 143,463 163,449 182,887 Adjusted sales and marketing expense (1) 101,966 94,440 94,190 Adjusted research and development expense (1) 107,839 101,017 111,110 Adjusted general and administrative expense (1) 57,188 55,858 56,305 Other segment items (2) 91,872 101,291 114,296 Interest income ( 403 ) ( 2,567 ) ( 1,761 ) Interest expense 2,807 4,135 8,763 Other expense, net 1,356 856 10,427 Income tax provision (benefit) 4,071 1,590 ( 2,511 ) Net loss $ ( 101,844 ) $ ( 43,526 ) $ ( 33,049 ) (1) Cost of revenue, sales and marketing expense, research and development expense, general and administrative expense and other expense, net in the consolidated statements of operations, adjusted to exclude amortization of intangible assets, stock-based compensation expense, acquisition-related expenses, certain litigation expenses, and restructuring and related charges. (2) Other segment items are the adjustments described in the note above. Revenues by geographic region were as follows: Fiscal Year Ended January 31, 2023 2024 2025 United States $ 346,494 $ 387,201 $ 424,432 United Kingdom 28,535 41,894 56,517 Other 33,286 47,448 59,708 $ 408,315 $ 476,543 $ 540,657 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 fiscal years ended January 31, 2023, 2024, and 2025, no other country represented 10% or more of total revenues for the periods presented. Long-lived assets, which consist of property and equipment, net and operating ROU assets, net by geographic region were as follows: As of January 31, 2024 2025 United States $ 84,136 $ 79,115 United Kingdom 12,446 9,760 Other 1,824 2,104 $ 98,406 $ 90,979 93 Table of Contents nCino, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts and unless otherwise indicated) Note 20. Subsequent Events Effective February 1, 2025, Pierre Naudé retired as the Company's Chairman and Chief Executive Officer and Sean Desmond was appointed to succeed Mr. Naudé as the Company's new President and Chief Executive Officer and as a member of the Company's Board of Directors. On the same date, Mr. Naudé was appointed Executive Chairman of the Board. In February 2025, the Company's wholly-owned subsidiary, nCino OpCo, acquired all of the outstanding equity of Alphapack, Co. dba Sandbox Banking ("Sandbox Banking"), a digital transformation leader serving the financial services industry. The aggregate purchase price for the Sandbox Banking acquisition totaled $ 52.5 million, subject to customary adjustments, with an additional earn-out opportunity of up to $ 10.0 million and was funded with proceeds from the 2024 Credit Facility. The acquisition will be accounted for as a business combination under ASC 805, Business Combinations . The Company is in the process of finalizing the accounting for this transaction and will complete the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed by the end of our first quarter of fiscal 2026. In March 2025, the Company repaid $ 50.0 million on the 2024 Credit Facility. In March 2025, we recorded a realized gain of $ 1.2 million from the sale of all our shares in Zest AI. See Note 16 "Related-Party Transactions" for additional information. In March 2025, our Board of Directors authorized a stock repurchase program to acquire up to $ 100.0 million of the Company's common stock. Under the stock repurchase program, the Company may make repurchases, from time to time, through open market purchases, block trades, in privately negotiated transactions, accelerated stock repurchase transactions, or by other means. Open market repurchases will be structured to occur in accordance with applicable federal securities laws. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases under this authorization. The volume, price, timing, and manner of any repurchases will be determined at the Company’s discretion, subject to general market conditions, as well as the Company’s management of capital, general business conditions, other investment opportunities, regulatory requirements and other factors. The repurchase program does not obligate the Company to repurchase any specific amount of common stock, has no time limit, and may be modified, suspended, or discontinued at any time without notice at the discretion of nCino’s Board of Directors. The stock repurchase program will be funded using existing cash and cash equivalents, credit facility capacity and/or future cash flows. 94 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.