What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-28 compared with 2024-12-04 · 207 added, 208 removed, 209 unchanged (67% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes and other financial information included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended January 31, 2024 filed with the SEC on March 26, 2024.

The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.

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For example, references in this Quarterly Report on Form 10-Q to "fiscal 2026" refer to the fiscal year ended January 31, 2026.

Through its single software-as-a-service ("SaaS") platform, nCino helps financial institutions ("FI") serving corporate and commercial, small business, consumer, and mortgage customers modernize and more effectively onboard clients, open accounts, make loans and navigate the loan lifecycle, and effectively monitor and manage their portfolio.

With the nCino Bank Operating System, FIs can:

• digitally serve their clients across lines of business,

As employees at financial institutions do their daily work and serve their clients, they often face inefficiencies from disparate systems, broken workflows, manual processes, and the inability to harness and utilize data effectively.

This negatively impacts risk management, decision making, and the experiences of bankers and their clients.

To solve the problem, FIs need technology that helps them reengineer every experience, intelligently and with agility as market needs shift, and a partner with the experience to help advise on best practices.

nCino's trusted platform enables FIs to consolidate vendors while optimizing operations by integrating AI and actionable insights to cohesively bring together people and data and thereby enhance strategic decision-making, risk management, and customer satisfaction.

From managing complex credit portfolios to streamlining account onboarding and originating loans, nCino helps FIs of all sizes globally deliver faster, intelligent, and more connected experiences.

With the nCino Platform, FIs can:

• embrace the power of intelligent automation and uncover data-drive insights,

• improve efficiency,

• elevate employee experience and performance,

• manage risk and compliance more effectively,

• establish an active data, audit, and business intelligence hub, and

• embrace the value of intelligent automation and uncover data-driven insights.

nCino was originally founded in a bank to improve that FI’s operations and client service.

After realizing that the same problems—cumbersome legacy technology, fragmented data, disconnected business functions, and a disengaged workforce made it difficult to maintain relevancy in their clients' lives—were endemic across the financial services industry, nCino spun out as a separate company in late 2011.

This heritage is the foundation of our deep banking domain expertise, which differentiates us, continues to drive our strategy, and makes us uniquely qualified to help FIs become more efficient by providing an end-to-end platform that spans business lines and combines capabilities for a seamless experience.

The nCino Bank Operating System was initially designed to help transform commercial and small business lending for community and regional banks.

This solution was introduced to enterprise banks in the United States ("U.S.") in 2014, and then internationally in 2017, and has subsequently expanded across North America, Europe, the Middle East, South Africa and Asia-Pacific.

Throughout this market expansion, we broadened the nCino Bank Operating System by adding functionality for consumer lending, client onboarding, deposit account opening, analytics and artificial intelligence and machine learning.

In fiscal 2020, we made two acquisitions as part of our strategy to build out our nIQ capabilities and we established our nCino K.K joint venture to facilitate our entry into the Japanese market.

An acquisition in fiscal 2022 expanded our capabilities to the U.S.

point-of-sale mortgage market.

On March 20, 2024 (the "DocFox Acquisition Date"), we acquired DocFox, Inc.

("DocFox") which provides a solution for automating onboarding experiences for commercial and business banking, for an aggregate preliminary purchase price of $74.3 million.

We funded the purchase consideration with $75.0 million borrowed under the 2022 Credit Facility as further described in Note 11 "Revolving Credit Facility" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We have included the financial results of DocFox in our unaudited condensed consolidated financial statements from the DocFox Acquisition Date.

We acquired Integrated Lending Technologies, LLC ("ILT") on April 1, 2024 (the "ILT Acquisition Date"), which provides consumer loan origination software that streamlines direct and indirect lending operations, for an aggregate purchase

price of $20.0 million in cash.

We have included the financial results of ILT in our unaudited condensed consolidated financial statements from the ILT Acquisition Date.

See Note 7 "Business Combinations" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on the DocFox and ILT acquisitions.

In November 2024, we acquired Artesian Solutions Limited, operating as ("FullCircl"), a UK-based SaaS platform built to help financial institutions automate and accelerate onboarding and improve client lifecycle management.

We funded $129.7 million of the purchase consideration with borrowings made in October 2024 under the 2024 Credit Facility as further described in Note 11 "Revolving Credit Facility" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

See Note 15 "Subsequent Event" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on the FullCircl acquisition.

We generally offer the nCino Bank Operating System on a subscription basis pursuant to non-cancellable multi-year contracts that typically range from three to five years, and we employ a “land and expand” business model.

The nCino Bank Operating System is designed to scale with our customers, and once our solution is deployed, we seek to have our customers expand adoption within and across lines of business.

• elevate employee and customer experience, and

• manage risk and help ensure compliance more effectively.

nCino was originally founded in a bank to improve that institution’s operations and client service.

After realizing that virtually all banks and credit unions are dealing with the same problems—cumbersome legacy technology, fragmented data, disconnected business functions, and a disengaged workforce that made it difficult to maintain relevancy in their clients' lives— nCino was spun out as a separate company in late 2011 to help more institutions solve these challenges using cloud-based technology.

We initially focused on developing the nCino Platform to transform commercial and small business lending for community and regional banks in the U.S.

We scaled the platform to enterprise banks in the U.S.

in 2014, and then internationally in 2017.

We have subsequently expanded across North America, Europe, the Middle East, Japan and Asia-Pacific ("APAC").

nCino's approach to market expansion includes strategically building products and acquiring technology to continue to fulfill a platform vision.

Over the years, we built and enhanced products internally to ensure innovation and seamless integration across key solution lines of commercial, small business, and consumer banking.

Through the strategic acquisitions of SimpleNexus, DocFox, FullCircl, ILT, Visible Equity, FinSuite and most recently, Sandbox Banking, we significantly augmented nCino's Platform capabilities for mortgage lending, onboarding, account opening, indirect auto lending, and advanced analytics and AI.

This approach has allowed us to create a unified platform of best-in-class intelligent solutions, enabling FIs to replace multiple legacy systems, connect their operations, and streamline workflows and processes across various business lines to achieve desired impact and process improvement.

We generally offer the nCino Platform on a subscription basis pursuant to non-cancellable multi-year contracts that are typically three to five years in duration.

nCino has evolved from being a single product workflow solution to offering a platform of best-in-class, intelligent solutions.

Our new Intelligent Solution Framework pricing model helps ensure the value-based positioning and pricing of our products and creates an opportunity to embed intelligence into all our solutions.

Starting in fiscal 2025, by moving away from a seat-based pricing model to pricing directly correlated to the FI's assets, transaction or processing volumes, we began to more directly align our revenues to the usefulness the nCino Platform provides as nCino creates efficiencies for our customers.

We sell our solutions directly through our business development managers, account executives, field sales engineers, and customer success managers.

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are organized around FIs based on size, whereas internationally, we focus our sales efforts by geography.

As of October 31, 2024, we had 205 sales and sales support personnel in the U.S.

As of April 30, 2025, we had 191 sales and sales support personnel in the U.S.

and 123 sales and support personnel in offices outside the U.S.

To help customers go live with our solutions, we offer professional services including configuration and implementation, training, and advisory services.

For enterprise FIs, we generally work with system integration ("SI") partners such as Accenture, Deloitte, and PwC for the delivery of professional services for the nCino Bank Operating System.

For enterprise FIs, we generally work with system integration ("SI") partners such as Accenture, Deloitte, and PwC for the delivery of professional services for the nCino Platform.

For regional FIs, we work with SIs such as West Monroe Partners, and for community banks, we work with SIs or perform configuration and implementation ourselves.

We expect enterprise FIs to make up a greater proportion of our nCino Bank Operating System sales.

For the three months ended October 31, 2023 and 2024, our total revenues were $121.9 million and $138.8 million, respectively, representing a 13.8% increase.

For the three months ended October 31, 2023 and 2024, our subscription revenues were $104.8 million and $119.9 million, respectively, representing a 14.4% increase.

Due to our investments in growth, we recorded net losses attributable to nCino, Inc.

of $16.4 million and $5.3 million for the three months ended October 31, 2023 and 2024, respectively.

For the nine months ended October 31, 2023 and 2024, our total revenues were $352.9 million and $399.3 million, respectively, representing a 13.2% increase.

For the nine months ended October 31, 2023 and 2024, our subscription revenues were $302.0 million and $344.2 million, respectively, representing a 14.0% increase.

Due to our investments in growth, we recorded net losses attributable to nCino, Inc.

of $43.5 million and $19.3 million for the nine months ended October 31, 2023 and 2024, respectively.

We expect enterprise FIs to make up a greater proportion of our nCino Platform sales.

Current 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 .

On February 7, 2025, (the "Sandbox Acquisition Date) we acquired Alphapack, Co.

dba Sandbox Banking ("Sandbox Banking"), a digital transformation leader serving the financial services industry, for an aggregate purchase price of $62.9 million, inclusive of an additional earn-out opportunity of up to $10.0 million.

This acquisition strengthens our ability to enhance data connectivity and streamline operations for banks and credit unions through an industry-leading Integration Platform as a Service (iPaaS) solution for a more intelligent and harmonious technology platform.

See Note 6 "Business Combinations" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q for additional information.

In March 2025, our Board of Directors authorized a stock repurchase program of up to $100.0 million of our outstanding common stock.

During the three months ended April 30, we repurchased 1.8 million shares of our outstanding common stock for $40.6 million, excluding transaction costs and excise tax associated with the repurchases, if any.

As of April 30, 2025, $59.4 million remained available for future repurchases under the share repurchase program.

See Note 8 "Stockholders' Equity" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q for more information.

We funded the purchase of Sandbox Banking and our share repurchases primarily through borrowings under our credit facility.

For the three months ended April 30, 2024 and 2025, our total revenues were $128.1 million and $144.1 million, respectively, representing a 12.5% increase.

For the three months ended April 30, 2024 and 2025, our subscription revenues were $110.4 million and $125.6 million, respectively, representing a 13.8% increase.

Our total subscriptions revenues include an aggregate of $7.4 million from DocFox, ILT, FullCircl and Sandbox Banking for the three months ended April 30, 2025.

We recorded net income attributable to nCino, Inc.

of $5.6 million for the three months ended April 30, 2025, compared to a net (loss) attributable to nCino, Inc.

of $(3.0) million for the three months ended April 30, 2024.

We have included the financial results of Sandbox Banking in the unaudited condensed consolidated financial statements from the Sandbox Acquisition Date.

For fiscal 2026, our financial results also include the operating results of our fiscal 2025 acquisitions of DocFox, ILT, and FullCircl from their acquisition dates of March 20, 2024, April 1, 2024, and November 5, 2024, respectively.

On May 27, 2025, the Company announced a workforce reduction of approximately seven percent (7%) and office space reductions in certain markets.

See Note 15 "Subsequent Events" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q for more information.

Factors Affecting Our Operating Results

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Our success in growing our customer base and expanding adoption of our solutions by existing customers requires a focused direct sales engagement and the ability to convince key decision makers at FIs to replace legacy third-party point solutions or internally developed software with our solutions.

In addition, growing our customer base will require us to increasingly penetrate markets outside the U.S., which accounted for 21.3% of total revenues for the three months ended October 31, 2024 and 20.8% for the nine months ended October 31, 2024.

For new customers, our sales cycles are typically lengthy, generally ranging from six to nine months for smaller FIs to 12 to 18 months or more for larger FIs.

Our ability to successfully implement our new asset-based pricing model that formally started in fiscal 2025 will also be a key driver.

In addition, growing our customer base will require us to increasingly penetrate markets outside the U.S., which accounted for 21.9% of total revenues for the three months ended April 30, 2025.

For new customers, our sales cycles are typically lengthy, generally ranging from 6 to 9 months for smaller FIs to 12 to 18 months or more for larger FIs.

Key to landing new customers is our ability to successfully take our existing customers live and help them achieve measurable returns on their investment, thereby turning them into referenceable accounts.

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Mix of Subscription and Professional Services Revenues.

The initial deployment of our solutions by our customers requires a period of implementation and configuration services that typically range from three months to 18 months,

depending on the scope.

As a result, during the initial go-live period for a customer on the nCino Bank Operating System, professional services revenues generally make up a substantial portion of our revenues from that customer, whereas over time, revenues from established customers are more heavily weighted to subscriptions.

While professional services revenues will fluctuate as a percentage of total revenues in the future and tend to be higher in periods of faster growth, over time we expect subscription revenues will make up an increasing proportion of our total revenues as our overall business grows.

The initial deployment of our solutions by our customers requires a period of implementation and configuration services that typically average less than six months, but may extend beyond twelve months, depending on scope.

As a result, during the initial go-live period for a customer on the nCino Platform, professional services revenues generally make up a substantial portion of our revenues from that customer, whereas over time, revenues from established customers are more heavily weighted to subscriptions.

While professional services revenues will fluctuate as a percentage of total revenues, we expect subscription revenues will continue to make up an increasing proportion of our total revenues.

Macroeconomic Environment.

We are currently operating in a higher interest rate environment as the U.S.

Federal Reserve has raised interest rates as a means to manage inflation.

These rate increases have had an impact on the real estate market in the U.S.

and specifically, the demand for mortgages and mortgage-related products and services, which has had a negative impact on our nCino Mortgage business.

We are currently operating in a fluctuating interest rate environment with inflationary pressures.

These fluctuations have had an impact on the real estate market in the U.S.

and specifically, the demand for mortgages and mortgage-related products and services, which has had a negative impact on our U.S.

Mortgage business.

We will continue to monitor the impact the macroeconomic environment may have on our business.

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Subscription Revenues .

Our subscription revenues consist principally of fees from customers for accessing our solutions and maintenance and support services that we generally offer under non-cancellable multi-year contracts, which typically range from three to five years for the nCino Bank Operating System and one to three years for nCino Mortgage.

Specifically, we offer:

• Client onboarding, loan origination, and deposit account opening applications targeted at a FI’s commercial, small business, and retail lines of business, for which we generally charge on a per seat basis.

• nIQ for which we generally charge based on the asset size of the customer or on a usage basis.

• Through nCino Mortgage, a digital homeownership solution uniting people, systems, and stages of the mortgage process into a seamless end-to-end journey for which we generally charge on a per seat basis.

• Client onboarding, loan origination, and deposit account opening solutions targeted at a FI’s commercial, small business, and retail lines of business, as well as Banking Advisor and other ancillary products, for which we generally charge on a per seat basis or based upon the asset size of the customer.

As we continue to implement our new pricing model, we expect the number of customers we charge based on asset size will increase considerably.

• Through our U.S.

mortgage business, a digital homeownership solution uniting people, systems, and stages of the mortgage process into a seamless end-to-end journey for which we generally charge on a per seat or anticipated lending volume basis.

• Maintenance and support services as well as internal-use or “sandbox” development licenses, for which we generally charge as a percentage of the related subscription fees.

Our subscription revenues are generally recognized ratably over the term of the contract beginning upon activation.

For new customers, we may activate a portion of seats at inception of the agreement, with the balance activated at contractually specified points in time thereafter, to pattern our invoicing after the customer’s expected rate of implementation and adoption.

For new customers, we typically activate all seats at inception of the agreement with stated price increases.

In these arrangements, the aggregate license fees over the contract term are recognized as revenue in equal amounts annually over the term.

We may also activate a portion of seats at inception of the agreement, with the balance of seats activated at contractually specified points in time thereafter.

Both approaches pattern our invoicing after the customer’s expected rate of implementation and adoption.

Where seats are activated in stages, we charge subscription fees from the date of activation through the anniversary of the initial activation date, and annually thereafter.

Subscription fees associated with the nCino Bank Operating System are generally billed annually in advance while subscription fees for nCino Mortgage are generally billed monthly in advance.

Subscription fees are generally billed annually in advance while subscription fees for U.S.

mortgage are generally billed monthly.

Maintenance and support fees, as well as development licenses, are provided over the same periods as the related subscriptions, so fees are invoiced and revenues are recognized over the same periods.

Subscription fees invoiced are recorded as deferred revenue pending recognition as revenues.

In certain cases, we are authorized to resell access to Salesforce’s CRM solution along with the nCino Bank Operating System.

In certain cases, we are authorized to resell access to Salesforce’s CRM solution along with the nCino Platform.

When we resell such access, we charge a higher subscription price and remit a higher subscription fee to Salesforce for these subscriptions.

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Professional services and other revenues consist of fees for implementation and configuration assistance, training, and advisory services.

For enterprise and larger regional FIs, we generally work with SI partners to provide the majority of implementation services for the nCino Bank Operating System, for which these SI partners bill our customers directly.

We have historically delivered professional services ourselves for

community banks and smaller credit unions and nCino Mortgage has historically provided professional services directly to its customers.

For enterprise and larger regional FIs, we generally work with SI partners to provide the majority of implementation services for the nCino Platform, for which these SI partners bill our customers directly.

We have historically delivered professional services ourselves for community banks, smaller credit unions, and our U.S.

mortgage business.

Revenues for implementation, training, and advisory services are generally recognized on a proportional performance basis, based on labor hours incurred relative to total budgeted hours.

To date, our losses on professional services contracts have not been material.

During the initial go-live period for a customer on the nCino Bank Operating System, professional services revenues generally make up a substantial portion of our revenues from that customer, whereas over time, revenues from established customers are more heavily weighted to subscriptions.

During the initial go-live period for a customer on the nCino Platform, professional services revenues generally make up a substantial portion of our revenues from that customer, whereas over time, revenues from established customers are more heavily weighted to subscriptions.

While professional services revenues will fluctuate as a percentage of total revenues in the future and tend to be higher in periods of faster growth, over time we expect to see subscription revenues make up an increasing proportion of our total revenues.

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Sales and marketing expenses also include outside consulting fees, marketing programs, including lead generation, costs of our annual user conference, advertising, trade shows, other event expenses, amortization of intangible assets, and allocated overhead.

We expect sales and marketing expenses will decrease as a percentage of revenues as we leverage the investments we have made to date.

We expect sales and marketing expenses to increase as a percentage of revenues as we expand more into credit unions in the U.S.

and on the European continent.

Research and Development.

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General and administrative expenses consist primarily of salaries, benefits and stock-based compensation associated with our executive, finance, legal, human resources, information technology, compliance and other administrative personnel.

General and administrative expenses also include accounting, auditing and legal professional services fees, travel and other corporate-related expenses, and allocated overhead, as well as acquisition-related expenses, which are primarily related to legal, consulting and other professional services fees.

We expect general and administrative expenses will decrease as a percentage of revenues over the long term as we leverage the investments we have made to date.

General and administrative expenses also include accounting, auditing and legal professional services fees, travel and other corporate-related expenses, changes in fair value of contingent consideration, and allocated overhead, as well as acquisition-related expenses, such as legal and other professional services fees.

We expect general and administrative expenses will decrease as a percentage of revenues as we leverage the investments we have made to date.

Non-Operating Income (Expense)

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Other Income (Expense), Net.

Other income (expense), net consists primarily of foreign currency gains and losses, the majority of which is due to intercompany transactions denominated in currencies other than the underlying functional currency of the applicable entity.

Income Tax Provision.

Income tax provision consists of federal and state income taxes in the U.S.

Other income (expense), net consists primarily of foreign currency gains and losses, the majority of which is due to the remeasurement of intercompany loans that are denominated in currencies other than the underlying functional currency of the applicable entity.

Income Tax Provision (Benefit).

Income tax provision (benefit) consists of federal and state income taxes in the U.S.

and income taxes in foreign jurisdictions.

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The results of operations presented below should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q.

The following tables present our selected unaudited condensed consolidated statements of operations data for three and nine months ended October 31, 2023 and 2024 in both dollars and as a percentage of total revenues, except as noted.

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

2023 2024 2023 2024

($ in thousands, except share and per share amounts)

The following tables present our selected unaudited condensed consolidated statements of operations data for three months ended April 30, 2024 and 2025 in both dollars and as a percentage of total revenues, except as noted.

Three Months Ended April 30,

($ in thousands)

Subscription revenues $ 110,406 $ 125,588

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Other income (expense), net (744) 16,097

Loss before income taxes (15,395) (1,563) (40,180) (16,112)

Income tax provision 1,782 2,589 4,720 1,360

Net loss (17,177) (4,152) (44,900) (17,472)

Net loss attributable to redeemable non-controlling interest (320) (186) (868) (409)

Net income (loss) before income taxes (5,279) 10,551

Income tax provision (benefit) (2,982) 4,534

Net income (loss) (2,297) 6,017

Net income (loss) attributable to redeemable non-controlling interest (165) 76

Adjustment attributable to redeemable non-controlling interest 844 379

Net loss attributable to nCino, Inc.

Net income (loss) attributable to nCino, Inc.

$ (2,976) $ 5,562

Net loss per share attributable to nCino, Inc.:

Basic and diluted $ (0.15) $ (0.05) $ (0.39) $ (0.17)

Weighted average number of common shares outstanding:

Basic and diluted 112,951,553 115,611,833 112,484,017 114,970,622

1 Includes the operating results of DocFox, ILT, FullCircl and Sandbox Banking from the DocFox Acquisition Date, the ILT Acquisition Date, FullCircl Acquisition Date and the Sandbox Acquisition Date, respectively, see Note 6 "Business Combinations" of the notes to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

The Company recognized stock-based compensation expense as follows:

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

Three Months Ended April 30,

($ in thousands) 2024 2025

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The Company recognized amortization expense for intangible assets as follows:

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

Three Months Ended April 30,

($ in thousands) 2024 2025

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Total amortization expense $ 6,682 $ 9,189

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

2023 2024 2023 2024

Three Months Ended April 30,

Subscription revenues 86.2 % 87.1 %

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Other income (expense), net (0.6) 11.2

Loss before income taxes (12.6) (1.1) (11.3) (3.9)

Income tax provision 1.5 1.9 1.3 0.3

Net loss (14.1) % (3.0) % (12.6) % (4.2) %

Comparison of the Three and Nine Months Ended October 31, 2023 and 2024

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

Net income (loss) before income taxes (4.2) 7.4

Income tax provision (benefit) (2.3) 3.1

Net income (loss) (1.9) % 4.3 %

Comparison of the Three Months Ended April 30, 2024 and 2025

Three Months Ended April 30,

($ in thousands) 2024 2025

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Subscription Revenues

Subscription revenues increased $15.1 million for the three months ended October 31, 2024 compared to the three months ended October 31, 2023, due to initial revenues from customers who did not contribute to subscription revenues during the prior period, and growth from existing customers within and across lines of business.

Of the increase, 64.1% was attributable to increased revenues from existing customers as additional seats were activated in accordance with contractual terms and customers expanded their adoption of our solutions, and 35.9% was attributable to initial revenues from customers who did not contribute to subscription revenues during the three months ended October 31, 2023.

Subscription revenues were 86.4% of total revenues for the three months ended October 31, 2024 compared to 85.9% of total revenues for the three months ended October 31, 2023, primarily due to growth in our installed base.

Subscription revenues increased $42.2 million for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, due to initial revenues from customers who did not contribute to subscription revenues during the prior period, and growth from existing customers within and across lines of business.

Of the increase, 67.4% was attributable to increased revenues from existing customers as additional seats were activated in accordance with contractual terms and customers expanded their adoption of our solutions, and 32.6% was attributable to initial revenues from customers who did not contribute to subscription revenues during the nine months ended October 31, 2023.

Subscription revenues were 86.2% of total revenues for the nine months ended October 31, 2024 compared to 85.6% of total revenues for the nine months ended October 31, 2023, primarily due to growth in our installed base.

Subscription revenues increased $15.2 million for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, due to initial revenues from customers who did not contribute to subscription revenues during the prior period, and growth from existing customers within and across lines of business.

Of the increase, 53.0% was attributable to initial revenues from customers who did not contribute to subscription revenues during the three months ended April 30, 2024 and 47.0% was attributable to increased revenues from existing customers as customers expanded their use and adoption of our solutions.

Subscription revenues were 87.1% of total revenues for the three months ended April 30, 2025 compared to 86.2% of total revenues for the three months ended April 30, 2024, primarily due to growth in our installed base.

Professional Services and Other Revenues

Professional services and other revenues increased $1.7 million for the three months ended October 31, 2024 compared to the three months ended October 31, 2023, primarily due to the addition of new customers as well as expanded adoption by existing customers within and across lines of business where implementation, configuration, and training services were required.

Professional services and other revenues increased $4.2 million for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, primarily due to the addition of new customers as well as expanded adoption by existing customers within and across lines of business where implementation, configuration, and training services were required.

Professional services and other revenues increased $0.9 million for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, primarily due to the addition of new customers as well as expanded adoption by existing customers within and across lines of business where implementation, configuration, and training services were required.

Cost of Revenues and Gross Margin

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

Three Months Ended April 30,

($ in thousands) 2024 2025

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Cost of Subscription Revenues

Cost of subscription revenues increased $3.2 million for the three months ended October 31, 2024 compared to the three months ended October 31, 2023, generating a gross margin for subscription revenues of 71.8% compared to a gross margin of 70.8% for the three months ended October 31, 2023.

Other costs of subscription revenues increased $1.4 million due to costs associated with access to other platforms and data center costs, as we continued to add new customers and sell additional functionality to existing customers.

Personnel costs, including stock-based compensation expense, increased $1.2 million, mainly from an increase in headcount.

The increase in cost of subscription revenues also included an increase of $0.5 million in allocated overhead costs due to growth supporting our business.

We expect the cost of subscription revenues will continue to increase in absolute dollars as the number of users of the nCino Bank Operating System grows.

Cost of subscription revenues increased $9.4 million for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, generating a gross margin for subscription revenues of 71.3% compared to a gross margin of 70.4% for the nine months ended October 31, 2023.

Other costs of subscription revenues increased $3.5 million due to costs associated with access to other platforms and data center costs and costs related to Salesforce user fees increased $2.2 million as we continued to add new customers and sell additional functionality to existing customers.

Personnel costs, including stock-based compensation expense, increased $3.3 million, mainly from an increase in headcount.

The increase in cost of subscription revenues also included an increase of $0.5 million in allocated overhead costs due to growth supporting our business.

We expect the cost of subscription revenues will continue to increase in absolute dollars as the number of users of the nCino Bank Operating System grows.

Cost of subscription revenues increased $4.3 million for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, generating a gross margin for subscription revenues of 71.2% for the three months ended April 30, 2024 and 2025.

The increase was driven primarily by a $3.1 million increase in other data costs, as well as a $0.9 million increase in amortization expense related to acquired intangible assets.

We expect the cost of subscription revenues will continue to increase in absolute dollars as the number of users of the nCino Platform grows.

Cost of Professional Services and Other Revenues

Cost of professional services and other revenues increased $2.6 million for the three months ended October 31, 2024 compared to the three months ended October 31, 2023, generating a gross margin for professional services and other revenues of (5.7)% compared to a gross margin of (1.4)% for the three months ended October 31, 2023.

For the three months ended October 31, 2024, personnel costs, including stock-based compensation expense, increased $1.9 million for professional services compared to the three months ended October 31, 2023, mainly from an increase in headcount.

Cost of professional services and other revenues increased $2.2 million for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, generating a gross margin for professional services and other revenues of (16.3)% compared to a gross margin of (9.7)% for the three months ended April 30, 2024.

For the three months ended April 30, 2025, personnel costs increased $1.6 million for professional services compared to the three months ended April 30, 2024,

mainly from an increase in headcount, primarily due to acquisitions.

The increase in cost of professional services and other revenues also included a $0.4 million increase for third-party costs of professional services.

Cost of professional services and other revenues increased $7.2 million for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, generating a gross margin for professional services and other revenues of (8.8)% compared to a gross margin of (3.8)% for the nine months ended October 31, 2023.

For the nine months ended October 31, 2024, personnel costs, including stock-based compensation expense, increased $6.2 million for professional services compared to the nine months ended October 31, 2023, mainly from an increase in headcount.

The increase in cost of professional services and other revenues also included a $0.8 million increase for third-party professional services costs.

Operating Expenses

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

Three Months Ended April 30,

($ in thousands) 2024 2025

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Sales and Marketing

Sales and marketing expenses decreased $8.7 million for the three months ended October 31, 2024 compared to the three months ended October 31, 2023, primarily attributable to the decrease in amortization expense of $10.7 million due to no amortization for the SimpleNexus trade name intangible asset as a result of the rebranding of the SimpleNexus solution to nCino Mortgage during the third quarter of fiscal 2024, partially offset by an increase of $0.6 million in amortization expense for the DocFox and ILT acquisitions.

The decrease in sales and marketing expenses was also partially offset by an increase of $1.0 million in personnel costs primarily due to an increase in headcount, an increase in stock-based compensation expense, and

an increase in tax equalization expense, partially offset by prior year payroll tax adjustments from certain of our foreign subsidiaries.

Sales and marketing expenses decreased $11.1 million for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, primarily attributable to the decrease in amortization expense of $11.9 million due to no amortization for the SimpleNexus trade name intangible asset as a result of the rebranding of the SimpleNexus solution to nCino Mortgage during fiscal 2024, partially offset by an increase of $1.7 million in amortization expense for the DocFox and ILT acquisitions.

The decrease in sales and marketing expenses also included a decrease of $0.5 million in sales-related travel costs, a decrease of $0.3 million in allocated overhead costs, and a decrease of $0.4 million in personnel costs.

The decrease in personnel costs was due to prior year payroll tax adjustments from certain of our foreign subsidiaries offset by an increase in stock-based compensation expense.

The decrease in sales and marketing expenses was partially offset by an increase of $0.5 million in marketing costs.

Our sales and marketing headcount increased by 7 from October 31, 2023 to October 31, 2024.

We expect sales and marketing expenses will decrease as a percentage of revenues as we leverage the investments we have made to date.

Sales and marketing expenses increased $4.9 million for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, primarily attributable to an increase of $2.2 million in personnel costs driven by an increase in headcount, offset by a decrease of $1.0 million in stock-based compensation expense.

The increase in sales and marketing also included an increase of $1.7 million in allocated overhead, mostly attributable to a $1.6 million increase in amortization expenses for acquired intangible assets.

The increase in sales and marketing expenses also included an increase of $1.0 million in marketing costs.

Our sales and marketing headcount increased by 37 from April 30, 2024 to April 30, 2025, primarily due to acquisitions.

We expect sales and marketing expenses will increase as a percentage of revenues as we expand more into credit unions in the U.S.

and on the European continent.

Research and Development

Research and development expenses increased $4.0 million for the three months ended October 31, 2024 compared to the three months ended October 31, 2023, primarily due to an increase of $2.6 million in personnel costs, mainly from an increase in headcount.

The increase in research and development also included an increase of $1.0 million in third-party professional fees primarily attributable to increased contract research and development spend.

Research and development expenses increased $10.2 million for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, primarily due to an increase of $7.9 million in personnel costs, mainly from an increase in headcount and stock-based compensation expense.

The increase in research and development also included an increase of $1.9 million in third-party professional fees primarily attributable to increased contract research and development spend.

Our research and development headcount increased by 24 from October 31, 2023 to October 31, 2024.

Research and development expenses increased $3.4 million for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, primarily due to an increase of $2.7 million in personnel costs, mainly from an increase in headcount.

Our research and development headcount increased by 52 from April 30, 2024 to April 30, 2025, primarily due to acquisitions.

We expect research and development expenses will decrease as a percentage of revenues as we leverage the investments we have made to date.

General and Administrative

General and administrative expenses increased $3.8 million for the three months ended October 31, 2024 compared to the three months ended October 31, 2023, primarily due to an increase of $2.5 million in personnel costs, mostly attributable to a $1.5 million increase in stock-based compensation expense and headcount.

The increase in general and administrative spend also included an increase of $2.1 million in third-party professional fees, mostly attributable to an increase for acquisition-related expenses for DocFox, ILT, and FullCircl, partially offset by a decrease in other professional fees.

The increase in general and administrative expenses was partially offset by a decrease of $0.8 million in allocated overhead and other general and administrative costs.

General and administrative expenses increased $6.8 million for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, primarily due to an increase of $6.2 million in personnel costs, mostly attributable to a $4.8 million increase in stock-based compensation expense and headcount.

The increase in general and administrative spend also included an increase of $2.7 million in third-party professional fees, mostly attributable to an increase for acquisition-related expenses for DocFox, ILT and FullCircl, partially offset by a decrease in expenses related to litigation expenses and other professional fees.

The increase in general and administrative expenses was partially offset by a decrease of $2.2 million in allocated overhead and other general and administrative costs.

Our general and administrative headcount increased by 15 from October 31, 2023 to October 31, 2024.

General and administrative expenses decreased $0.9 million for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, primarily due to a decrease of $3.1 million in third-party professional fees, mostly attributable to a decrease in acquisition-related expenses and a decrease in other professional fees.

The decrease in general and administrative spend was partially offset by an increase of $1.5 million in personnel costs, mostly attributable to a $0.7 million increase in stock-based compensation expense and headcount.

The decrease in general and administrative expenses was also partially offset by an increase of $0.6 million in allocated overhead and other general and administrative costs.

Our general and administrative headcount increased by 9 from April 30, 2024 to April 30, 2025, primarily due to acquisitions.

We expect general and administrative expenses will decrease as a percentage of revenues as we leverage the investments we have made to date.

Non-Operating Income (Expense)

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

Three Months Ended April 30,

($ in thousands) 2024 2025

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Other income (expense), net (744) (0.6) 16,097 11.2

Interest income decreased $0.2 million for the three months ended October 31, 2024 compared to the three months ended October 31, 2023, due to a decrease in our accounts earning interest.

Interest expense increased $0.8 million for the three months ended October 31, 2024 compared to the three months ended October 31, 2023, due to borrowing on our revolving credit facility.

The decrease of $2.8 million in other income (expense), net for the three months ended October 31, 2024 compared to the three months ended October 31, 2023, was primarily driven by intercompany loans and transactions that are denominated in currencies other than the underlying functional currency of the applicable entity.

Interest income decreased $0.6 million for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, due to a decrease in our accounts earning interest.

Interest expense increased $1.7 million for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, due to borrowing on our revolving credit facility.

The decrease of $2.5 million in other expense, net for the nine months ended October 31, 2024 compared to the nine months ended October 31, 2023, was primarily driven by intercompany loans and transactions that are denominated in currencies other than the underlying functional currency of the applicable entity.

Income Tax Provision

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

Interest income decreased $0.2 million for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, due to balance and rate fluctuations of our accounts earning interest.

Interest expense increased $3.0 million for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, primarily due to borrowings on our revolving credit facility.

The increase of $16.8 million in other income (expense), net for the three months ended April 30, 2025 compared to the three months ended April 30, 2024, was primarily driven by remeasurement of intercompany loans and transactions that are denominated in currencies other than the underlying functional currency of the applicable entity.

Income Tax Provision (Benefit)

Three Months Ended April 30,

($ in thousands) 2024 2025

Income tax provision $ 1,782 1.5 % $ 2,589 1.9 % $ 4,720 1.3 % $ 1,360 0.3 %

Income tax provision was $2.6 million for the three months ended October 31, 2024 compared to a provision of $1.8 million for the three months ended October 31, 2023, and resulted in an effective tax rate of (165.6)% and (11.6)%, respectively.

Income tax provision was $1.4 million for the nine months ended October 31, 2024 compared to a provision of $4.7 million for the nine months ended October 31, 2023, and resulted in an effective tax rate of (8.4)% and (11.7)%, respectively.

The change in the effective tax rate for the nine months ended October 31, 2024 compared to the effective tax rate for the nine months ended October 31, 2023 was primarily due to a reduction of our valuation allowance offset by profitable foreign jurisdictions and uncertain tax positions.

Prior to the DocFox acquisition, we continued to maintain a valuation allowance against our deferred tax assets in several jurisdictions, including the U.S.

On the DocFox Acquisition Date, the Company measured and recorded net U.S.

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

The deferred tax liabilities recognized provide additional positive evidence that a portion of the Company's U.S.

deferred tax assets are realizable.

As a result, the Company reduced the valuation allowance by $3.6 million during the first quarter of the Company’s fiscal 2025.

Income tax provision (benefit) $ (2,982) (2.3) % $ 4,534 3.1 %

Income tax benefit was $3.0 million for the three months ended April 30, 2024 compared to a provision for $4.5 million for the three months ended April 30, 2025, and resulted in an effective tax rate of 56.5% and 43.0%, respectively.

The change in the effective tax rate for the three months ended April 30, 2025 compared to the effective tax rate for the three months ended April 30, 2024 was primarily due to a reduction of our valuation allowance and profitable foreign jurisdictions.

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.

Through acquisitions, the Company recorded a net U.S.

deferred tax liability mostly related to identifiable intangible assets.

The deferred tax liability recognized provides additional positive evidence that a portion of the Company's U.S.

deferred tax are realizable.

As a result, the Company reduced the historical valuation allowance in the U.S.

by $2.0 million during the three months ended April 30, 2025.

Non-GAAP Financial Measure

In addition to providing financial measurements based on GAAP, we provide an additional financial metric that is not prepared in accordance with GAAP (non-GAAP).

In addition to providing financial measurements based on GAAP, we provide non-GAAP operating income as an additional financial metric that is not prepared in accordance with GAAP (non-GAAP).

Our calculation of non-GAAP operating income is described below.

Management uses this non-GAAP financial measure, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes, and to evaluate our financial performance.

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Accordingly, we believe that this financial measure reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, and enhancing the overall understanding of our past performance and future prospects.

Although the calculation of non-GAAP financial measures may vary from company to company, our detailed

presentation may facilitate analysis and comparison of our operating results by management and investors with other peer companies, many of which use a similar non-GAAP financial measure to supplement their GAAP results in their public disclosures.

This non-GAAP financial measure is non-GAAP operating income, as discussed below.

Although the calculation of non-GAAP financial measures may vary from company to company, our detailed presentation may facilitate analysis and comparison of our operating results by management and investors with other peer companies, many of which use a similar non-GAAP financial measure to supplement their GAAP results in their public disclosures.

Non-GAAP operating income.

Non-GAAP operating income is defined as loss from operations as reported in our unaudited condensed consolidated statements of operations excluding the impact of amortization of intangible assets, stock-based compensation expense, acquisition-related expenses, legal expenses related to certain litigation, and restructuring and related charges.

Non-GAAP operating income is widely used by securities analysts, investors, and other interested parties to evaluate the profitability of companies.

Non-GAAP operating income eliminates potential differences in performance caused by these items that are not indicative of the Company's ongoing operating performance and hinders comparability with prior and future performance.

Non-GAAP operating income is defined as loss from operations as reported in our unaudited condensed consolidated statements of operations excluding the following items:

Amortization of Purchased Intangibles.

nCino incurs amortization expense for purchased intangible assets in connection with certain mergers and acquisitions.

Because these costs have already been incurred, cannot be recovered, are

non-cash, and are affected by the inherent subjective nature of purchase price allocations, nCino excludes these expenses for our internal management reporting processes.

nCino’s management also finds it useful to exclude these charges when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods.

Although nCino excludes amortization expense for purchased intangibles from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.

Stock-Based Compensation Expense.

nCino excludes stock-based compensation expenses primarily because they are non-cash expenses that nCino excludes from our internal management reporting processes.

nCino’s management also finds it useful to exclude these expenses when they assess the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods.

Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use, nCino believes excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies.

Acquisition Related Expenses.

nCino excludes expenses related to acquisitions as they limit comparability of operating results with prior periods.

Acquisition-related expenses, include but are not limited to, costs incurred from third-party professional services firms in connection with business combination, change in fair value of contingent consideration, and one-time integration activities.

We believe these costs are non-recurring in nature and outside the ordinary course of business.

Litigation Expenses .

nCino excludes fees and expenses related to certain litigation expenses incurred from legal matters outside the ordinary course of our business as we believe their exclusion from non-GAAP operating expenses will facilitate a more meaningful explanation of operating results and comparisons with prior period results.

Restructuring Costs.

nCino excludes costs incurred related to bespoke restructuring plans and other one-time costs, if any, that are fundamentally different in strategic nature and frequency from ongoing initiatives.

We believe excluding these costs facilitates a more consistent comparison of operating performance over time.

This non-GAAP financial measure does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP.

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The following table reconciles non-GAAP operating income to loss from operations, the most directly comparable financial measure, calculated and presented in accordance with GAAP (in thousands):

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

Three Months Ended April 30,

($ in thousands) 2024 2025

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Litigation expenses 1

153 115 4,502 365

Restructuring and related charges 150 — 627 —

Total adjustments 28,108 26,343

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Liquidity and Capital Resources

As of October 31, 2024, we had $257.9 million in cash and cash equivalents.

In November 2024, we used approximately $129.7 million of our cash for the FullCircl acquisition.

As of October 31, 2024, we had an accumulated deficit of $369.8 million.

Our net losses have been driven by our investments in developing the nCino Bank Operating System and scaling our sales and marketing organization and finance and administrative functions to support our rapid growth.

To date, we have funded our capital needs through issuances of common stock including our initial public offering in July 2020, operating cash flows, and starting fiscal 2023, our revolving line of credit.

As of April 30, 2025, we had $133.2 million in cash and cash equivalents and an accumulated deficit of $379.4 million.

Our net losses have been driven by our investments in developing the nCino Platform and scaling our sales and marketing organization and finance and administrative functions to support our rapid growth.

To date, we have funded our capital needs through issuances of common stock including our initial public offering in July 2020, operating cash flows, and our revolving line of credit.

We generally bill and collect from our customers annually in advance.

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Because we recognize revenues ratably, our deferred revenue balance mirrors the seasonality of our billings.

On March 17, 2024, the Company entered into the Second Amendment for the 2022 Credit Facility which, among other things, increased our borrowing availability to $100.0 million.

In March 2024, we borrowed $75.0 million under the 2022 Credit Facility to fund the acquisition of DocFox.

In April 2024, July 2024, and October 2024 we repaid $20.0 million,

$15.0 million, and $10.0 million, respectively, under the 2022 Credit Facility.

On October 28, 2024, the Company entered into the 2024 Credit Facility, which increased our borrowing availability to $250.0 million.

The Company borrowed $166.0 million under the 2024 Credit Facility to fund the acquisition of FullCircl and repay the $30.0 million outstanding under the 2022 Credit Facility.

The Company expects to pay an additional $15.0 million in two years for the FullCircl acquisition upon the satisfaction and performance of certain warranties and covenants.

As of October 31, 2024, the applicable interest rate was 6.72%.

The Company had $166.0 million outstanding and no letters of credit issued under the 2024 Credit Facility and was in compliance with all covenants as of October 31, 2024.

As of April 30, 2025, the Company had $208.5 million outstanding and no letters of credit issued under the credit facility, was in compliance with all covenants, and had borrowing availability of $41.5 million.

During the three months ended April 30, 2025, the Company had net borrowings of $42.5 million to fund the Sandbox Banking acquisition and repurchase shares of the Company's common stock.

As of April 30, 2025, the applicable interest rate was 6.32%.

See Note 10 "Revolving Credit Facility" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q for more information.

We believe that current cash and cash equivalents as well as borrowings available under the Credit Facility will be sufficient to fund our operations and capital requirements for at least the next 12 months.

Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts to enhance the nCino Bank Operating System and introduce new applications, market acceptance of our solutions, the continued expansion of our sales and marketing activities, capital expenditure requirements, and any potential future acquisitions.

We expect to incur capital expenditures in fiscal 2025 and 2026 for planned office build-outs to accommodate our growth, primarily for an international office, which we estimate to spend approximately $2.0 million and $6.0 million in fiscal 2025 and 2026, respectively.

We believe that current cash and cash equivalents as well as borrowings available under the Credit Facility will be sufficient to fund our operations, capital requirements, and share repurchases for at least the next 12 months.

Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts to enhance the nCino Platform and introduce new solutions, market acceptance of our solutions, the continued expansion of our sales and marketing activities, capital expenditure requirements, and any potential future acquisitions.

We expect to incur capital expenditures for planned office build-outs to accommodate our growth, primarily for an international office, which we estimate to spend approximately $3.9 million in the remainder of fiscal 2026.

We may from time-to-time seek to raise additional capital to support our growth.

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There is no assurance we would be able to obtain future financing on acceptable terms or at all.

Share Repurchase Program

In March 2025, our Board of Directors authorized a stock repurchase program of up to $100.0 million of our outstanding common stock.

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 our Board of Directors.

During the three months ended April 30, 2025, we repurchased 1.8 million shares of our outstanding common stock for $40.6 million, excluding transaction costs and excise tax associated with the repurchases, if any.

As of April 30, 2025, $59.4 million remained available for future repurchases under the share repurchase program.

See Note 8 "Stockholders' Equity" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q for more information.

In fiscal 2020, we established nCino K.K., a Japanese company in which we own a controlling interest, for purposes of facilitating our entry into the Japanese market.

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The balance of the redeemable non-controlling interest is reported on our balance sheet below total liabilities but above stockholders’ equity 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.

As of January 31, 2024 and October 31, 2024, the redeemable non-controlling interest was $3.4 million and $5.2 million, respectively.

As of January 31, 2025 and April 30, 2025, the redeemable non-controlling interest was $8.3 million and $8.7 million, respectively.

As part of our joint venture obligations, we made an additional cash capital contribution of $1.0 million to nCino K.K.

during the third quarter of fiscal 2024.

Summary Cash Flow information for the nine months ended October 31, 2023 and 2024 are set forth below:

Nine Months Ended October 31,

Summary Cash Flow information for the three months ended April 30, 2024 and 2025 are set forth below:

Three Months Ended April 30,

($ in thousands) 2024 2025

1 unchanged sentence

Net cash used in investing activities (91,229) (48,297)

Net cash provided by (used in) financing activities (24,031) 168,439

Net cash provided by financing activities 55,980 2,250

Net Cash Provided by Operating Activities

The $65.2 million provided by operating activities in the nine months ended October 31, 2024 reflects our net loss of $17.5 million, offset by $88.7 million in non-cash charges and $6.0 million used in changes in working capital accounts.

Non-cash charges primarily consisted of stock-based compensation, depreciation and amortization, amortization of costs capitalized to obtain revenue contracts, non-cash operating lease costs, partially offset by deferred income taxes and foreign currency losses related to intercompany loans and transactions.

Cash used in working capital accounts was principally a function of a $41.6 million decrease in deferred revenue due to the timing of billings and revenue recognition, and an increase of $13.2 million of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions, a $2.9 million decrease in operating lease liabilities, and a $0.1 million decrease in accrued expenses and other liabilities.

The cash used in

working capital accounts was partially offset by a $50.2 million decrease in accounts receivable due to the timing of billings and collections from customers, a $1.1 million increase in accounts payable, and a $0.7 million decrease in prepaid expenses and other assets.

The $49.1 million provided by operating activities in the nine months ended October 31, 2023 reflects our net loss of $44.9 million and $0.8 million used in changes in working capital accounts, offset by $94.8 million in non-cash charges.

Non-cash charges primarily consisted of stock-based compensation, depreciation and amortization, amortization of costs capitalized to obtain revenue contracts, non-cash operating lease costs, foreign currency losses related to intercompany loans and transactions, provision for deferred taxes and bad debt.

Cash generated by working capital accounts was principally a function of a $35.5 million decrease in accounts receivable due to timing of billings and collections from customers and a $3.4 million decrease in prepaid expenses and other assets, and a $1.2 million increase in accounts payable.

The cash generated by working capital accounts was offset by a $23.8 million decrease in deferred revenue, due to the timing of billings and revenue recognition and an $8.0 million decrease in accrued expenses and other current liabilities which includes payments of approximately $5.0 million for severance and other employee costs associated with the restructuring plan and changing commission payment plans from a quarterly basis to a monthly basis.

Additional offsets were payments of $6.0 million of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions, and a $3.1 million decrease in operating lease liabilities.

The $54.3 million provided by operating activities in the three months ended April 30, 2025 reflects our net income of $6.0 million, $19.1 million in net non-cash charges and $29.2 million generated by changes in working capital accounts.

Non-cash charges primarily consisted of stock-based compensation, depreciation and amortization, amortization of costs capitalized to obtain revenue contracts, deferred income taxes, non-cash operating lease costs, provision for bad debt, and change in fair value of contingent consideration, partially offset by deferred income taxes and foreign currency gains related to remeasurement of intercompany loans and transactions and gains on investments.

Cash generated by working capital accounts was principally a function of a $45.7 million decrease in accounts receivable due to the timing of billings and collections from customers, $5.2 million increase in deferred revenue due to the timing of billings and revenue recognition, and a $0.5 million increase in accounts payable.

The cash generated by working capital accounts was partially offset by a $15.8 million decrease in accrued expenses and other liabilities primarily due to the payout of bonuses and commission, an increase of $3.2 million of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions, and a $1.5 million increase in prepaid expenses and other assets and a $1.3 million decrease in operating lease liabilities.

The $54.4 million provided by operating activities in the three months ended April 30, 2024 reflects our net loss of $2.3 million, offset by $30.7 million generated by changes in working capital accounts and $26.0 million in non-cash charges.

Non-cash charges primarily consisted of stock-based compensation, depreciation and amortization, deferred income taxes, non-cash operating lease costs, amortization of costs capitalized to obtain revenue contracts, foreign currency losses related to remeasurement of intercompany loans and transactions, and recovery of bad debt.

Cash generated by working capital accounts was principally a function of a $37.5 million decrease in accounts receivable due to timing of billings and collections from customers, a $6.2 million increase in deferred revenue, due to the timing of billings and revenue recognition and a $3.8 million increase in accounts payable which includes acquisition related expenses.

The cash generated by working capital accounts was partially offset by a $8.2 million decrease in accrued expenses and other current liabilities primarily due to the payout of bonuses and commissions, $5.1 million of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions, a $2.1 million increase in prepaid expenses and other assets, and a $1.4 million decrease in operating lease liabilities.

Net Cash Used in Investing Activities

The $92.8 million used in investing activities in the nine months ended October 31, 2024 was comprised of $90.8 million used for the acquisitions of DocFox and ILT, $1.5 million for the purchase of property and equipment and leasehold improvements to support the expansion of our business, and $0.5 million for an asset acquisition.

The $5.9 million used in investing activities in the nine months ended October 31, 2023 was comprised of $3.1 million for the purchase of property and equipment and leasehold improvements to support the expansion of our business, $2.5 million for the purchase of preferred stock in Rich Data Co, and $0.4 million for the final cash consideration relating to an asset acquisition completed in August 2022.

Net Cash Provided by (Used in) Financing Activities

The $168.4 million provided by financing activities in the nine months ended October 31, 2024 was comprised principally of $241.0 million proceeds from borrowings on the 2022 and 2024 Credit Facility to fund the acquisition of DocFox and FullCircl, $2.5 million of proceeds from stock issuances under the employee stock purchase plan, and $2.2 million of proceeds from the exercise of stock options.

The cash provided by financing activities was partially offset by payments of $75.0 million on the 2022 Credit Facility, payments of debt issuance costs of $1.4 million, and principal payments of $0.9 million on financing obligations.

The $24.0 million used in financing activities in the nine months ended October 31, 2023 was comprised principally of payments of $30.0 million on the Credit Facility and principal payments of $0.9 million on financing obligations.

The cash used in financing activities was partially offset by $3.2 million of proceeds from the exercise of stock options, $2.7 million of proceeds from stock issuances under the employee stock purchase plan, and $1.0 million in proceeds from the non-controlling interest in our Japan Joint venture.

The $48.3 million used in investing activities in the three months ended April 30, 2025 was comprised of $50.3 million used for the acquisition of Sandbox, $1.7 million for the purchase of property and equipment and leasehold improvements to support the expansion of our business.

The cash used in investing activities was partially offset by proceeds from the sale of an investment of $3.7 million.

The $91.2 million used in investing activities in the three months ended April 30, 2024 was comprised of $90.7 million used for the acquisition of DocFox and ILT, $0.3 million for the purchase of property and equipment and leasehold improvements to support the expansion of our business, and $0.2 million for an asset acquisition.

Net Cash Provided by Financing Activities

The $2.3 million provided by financing activities in the three months ended April 30, 2025 was comprised principally of $102.5 million proceeds from borrowings on our credit facility, to fund the acquisition of Sandbox Banking and to make repurchases of our common stock under the stock repurchase program, and $0.7 million of proceeds from the exercise of stock options.

The cash provided by financing activities was offset by payments of $60.0 million on our credit facility, repurchases of our common stock of $40.6 million, and principal payments of $0.4 million on financing obligations.

The $56.0 million provided by financing activities in the three months ended April 30, 2024 was comprised principally of payments of $75.0 million proceeds from borrowings on our credit facility to fund the acquisition of DocFox and $1.6 million of proceeds from the exercise of stock options.

The cash provided by financing activities was partially offset by payments of $20.0 million

on the credit facility, principal payments of $0.4 million on financing obligations, and payments of debt issuance costs of $0.3 million.

Contractual Obligations and Commitments

Our estimated future obligations principally consist of leases related to our facilities, purchase obligations related primarily to licenses and hosting services, financing obligations for leases for which we are considered the owners for accounting purposes and the Credit Facility.

See Note 10 "Leases," Note 11 "Revolving Credit Facility," and Note 12 "Commitments and Contingencies" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.

See Note 6 "Business Combinations," "Note 9 "Leases," Note 10 "Revolving Credit Facility," and Note 11 "Commitments and Contingencies" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.

Critical Accounting Policies and Estimates

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Actual results may differ from these judgments and estimates under different assumptions or conditions and any such differences may be significant.

There have been no material changes in our critical accounting policies or estimates as compared to those disclosed in the Annual Report on Form 10-K for the fiscal year ended January 31, 2024 filed with the SEC on March 26, 2024.

Recent Accounting Pronouncements

See Note 2 "Summary of Significant Accounting Policies" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted, if applicable.

See Note 1 "Summary of Business and Significant Accounting Policies" of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted, if applicable.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis