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Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-04-01 · 207 added, 190 removed, 345 unchanged (54% of the section changed)

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The following section of this Form 10-K discusses our financial condition and results of operations for fiscal 2026 and 2025 and year-to-year comparisons between fiscal 2026 and fiscal 2025.

Discussions of fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Form 10-K can be found in Part II, Item 7,

“Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on March 26, 2024.

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.

Discussions of fiscal 2024 items and year-to-year comparisons between fiscal 2025 and fiscal 2024 that are not included in this Form 10-K can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2025, filed with the SEC on April 1, 2025.

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.

FIs need a unified platform that helps them reengineer every experience, from managing complex credit portfolios to streamlining account onboarding and loan origination.

nCino helps FIs of all sizes optimize their operations by embedding banking intelligence directly into the tools FI employees already use.

nCino’s data foundation, which was developed from the workflows, decisions, and outcomes of financial institutions, enables our platform to deliver AI-driven capabilities across our solutions.

With the nCino Platform, FIs can:

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

• operate more intelligently,

• improve efficiency,

• elevate employee and customer experience,

• manage risk and helping to ensure compliance more effectively,

• elevate employee and client experiences, and

• manage risk and compliance continuously rather than reactively.

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 were dealing with 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—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 United States ("U.S.").

Its founders quickly realized that virtually all banks and credit unions faced the same core problems—cumbersome legacy technology, fragmented data, disconnected business functions, and a disengaged workforce.

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 solutions lines of commercial, small business and consumer banking.

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

This strategic 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 business 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.

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, we are aligning our revenues to the usefulness the nCino Platform provides as nCino creates efficiencies for our customers.

For fiscal 2025, we had a subscription revenue net retention rate of 110%.

See Item 7 of this Annual Report on Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Operating Results—Subscription Revenue Net Retention Rate” for additional information on subscription revenue retention rates.

We have subsequently expanded across North America, Europe, the Middle East, Japan, and APAC.

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

We have strategically built and acquired technology, including SimpleNexus, DocFox, FullCircl, ILT, Visible Equity, FinSuite, and Sandbox Banking, to significantly augment the nCino Platform’s 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, underpinned by our rich data foundation, enabling FIs to replace multiple legacy systems, connect their operations, and streamline workflows and processes across various business lines to achieve desired impacts and process improvements.

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

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

Our 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.

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

Our sales efforts in the U.S.

are organized around FIs based on size, whereas

internationally, we focus our sales efforts by geography.

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

As of January 31, 2026, we had 185 sales and sales support personnel in the U.S.

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

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 our revolving credit facility.

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.

On November 5, 2024 (the "FullCircl Acquisition Date"), we acquired Artesian Solutions Limited, operating as FullCircl ("FullCircl"), a UK-based SaaS platform built to help FIs automate and accelerate onboarding and improve client lifecycle management.

We funded $129.2 million of the purchase consideration with borrowings made in October 2024 under our revolving credit facility.

See Note 6 "Business Combinations" and Note 14 "Revolving Credit Facility" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

We have included the financial results of DocFox, ILT and FullCircl in the consolidated financial statements from the DocFox Acquisition Date, the ILT Acquisition Date, and the FullCircl Acquisition Date, respectively.

Our total revenues were $408.3 million, $476.5 million, and $540.7 million for fiscal 2023, 2024, and 2025, respectively, representing a 15.1% compound annual growth rate.

Our total revenues were $476.5 million, $540.7 million, and $594.8 million for fiscal 2024, 2025, and 2026, respectively, representing an 11.7% compound annual growth rate.

Our subscription revenues were $409.5 million, $469.2 million, and $523.1 million for fiscal 2024, 2025, and 2026, representing a 13.0% compound annual growth rate.

Our total subscription revenues include an aggregate of $12.3 million from DocFox, ILT, and FullCircl for fiscal 2025.

We recorded net losses attributable to nCino in fiscal 2023, 2024, and 2025 of $102.7 million, $42.3 million, and $37.9 million, respectively.

For fiscal 2025, our financial results include the operating results of DocFox, ILT and FullCircl from the DocFox Acquisition Date, the ILT Acquisition Date, and the FullCircl Acquisition Date, respectively.

In February 2025, we acquired Alphapack, Co.

dba Sandbox Banking ("Sandbox Banking"), a digital transformation leader serving the financial services industry, for an aggregate purchase price of $52.5 million, subject to customary adjustments, with 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 20 "Subsequent Events" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

We recorded net income (loss) attributable to nCino in fiscal 2024, 2025, and 2026 of $(42.3) million, $(37.9) million, and $5.2 million, respectively.

For fiscal 2026, our total subscription revenues include $17.3 million of inorganic revenues not present in comparative prior periods, consisting of FullCircl for the first three quarters of fiscal 2026 and Sandbox Banking following its acquisition on February 7, 2025 (the “Sandbox Acquisition Date”).

We have included the financial results of Sandbox Banking in the 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 (the “DocFox Acquisition Date”), April 1, 2024 (the “ILT Acquisition Date”), and November 5, 2024 (the “FullCircl Acquisition Date”), respectively.

Significant Events in Fiscal 2026

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 1, 2026, Mr.

Naudé transitioned to serving as a non-employee director and Chairman of the Board.

On 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 iPaaS solution for a more intelligent and harmonious technology platform.

See Note 6 “Business Combinations” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K 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 (the “March 2025 Stock Repurchase Program”) which we completed in the third quarter of fiscal 2026.

In December 2025, our Board of Directors authorized the December 2025 Stock Repurchase Program of up to $100.0 million of our outstanding common stock pursuant to which we repurchased 1.0 million shares of our outstanding common stock for $25.0 million, excluding transaction costs and excise tax associated with the repurchases, in fiscal 2026.

As of January 31, 2026, $75.0 million remained available for future repurchases under the December 2025 Stock Repurchase Program.

To date we have not repurchased any shares in fiscal 2027.

See Note 8 “Stockholders’ Equity and Stock-Based Compensation” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

We funded the purchase of Sandbox Banking and our purchases under the Stock Repurchase Programs primarily through borrowings under our credit facility.

On May 27, 2025, we announced a workforce reduction of approximately 7% and office space reductions in certain markets (collectively, the “2026 Restructuring Plan”) in furtherance of our efforts to improve operational efficiencies.

We incurred charges of $10.1 million for the year ended January 31, 2026, in connection with the 2026 Restructuring Plan.

See Note 16 “Restructuring” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional 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.

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

Our ability to successfully implement our asset-based pricing model, which we began implementing in fiscal 2025, and our success in implementing AI capabilities in ways that our customers perceive as adding value, will also be key drivers.

In addition, growing our customer base will require us to increasingly penetrate markets outside the U.S., which accounted for 22.1% of total revenues for fiscal 2026.

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

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.

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.

If we are unable to successfully address the foregoing challenges, our ability to grow our business and achieve profitability will be adversely affected, which may in turn reduce the value of our common stock.

If we are unable to successfully address the foregoing challenges, our ability to grow our business and sustain profitability will be adversely affected, which may in turn reduce the value of our common stock.

Mix of Subscription and Professional Services Revenues.

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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.

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.

Subscription Revenue Net Retention Rate .

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We calculate our subscription revenue net retention rate as total subscription revenues in a fiscal year from customers who contributed subscription revenues in the prior fiscal year, expressed as a percentage of total subscription revenues for the prior fiscal year.

In accordance with this definition, subscription revenues from customers obtained through an acquisition will first be included in the calculation in the fiscal year subsequent to such acquisition, for the periods they were a customer of nCino.

In accordance with this definition, subscription revenues from customers obtained through an acquisition will first be included in the calculation in the fiscal year subsequent to such

acquisition, for the periods they were a customer of nCino.

Our subscription revenue net retention rate provides insight into the impact on current year subscription revenues of:

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For fiscal 2024, 2025, and 2026, we had subscription revenue net retention rates of 116%, 110%, and 110%, respectively.

The most significant driver of changes in our subscription revenue net retention rate each year has historically been the number of new customers in prior years and the associated phased activation schedules for such customers.

In addition, because larger FIs tend to make more sizable purchases, we expect variability in our subscription revenue net retention rates based on the timing and extent of our continued penetration of this portion of the market.

Excluding our U.S.

mortgage business, the subscription revenue net retention rate for fiscal 2023 was 124%.

The moderation in our subscription revenue net retention rate for fiscal 2024 was due to a decline in revenues from customers adversely affected by an increase in mortgage interest rates, from the expiration of licenses utilized for forgiveness monitoring of Paycheck Protection Program loans, and from the acquisition of certain customers by entities that do not currently use our solutions.

The moderation in our subscription revenue net retention rate for fiscal 2025 was due primarily to a decline in revenues from customers adversely affected by an increase in mortgage interest rates, and from the acquisition of certain customers by entities that do not currently use our solutions.

Historically, the number of new customers in prior years and the associated phased activation schedules for such customer were a significant driver of changes in our subscription revenue net retention rate.

Upon transitioning to asset-based pricing, growth in FI assets supported by nCino, the timing of deal signatures in current and comparative periods, and the degree to which customers expand or contract their commitments upon renewal will be more significant drivers of changes in subscription revenue net retention rate.

Our use of subscription revenue net retention rate has limitations as an analytical tool, and investors should not consider it in isolation.

Other companies in adjacent markets may calculate subscription revenue net retention rates or similar metrics differently, which reduces its usefulness as a comparative measure.

For fiscal 2025, we refined our methodology for calculating subscription revenue net retention rate to align with the details disclosed in Item 7 of this Annual Report on Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations regarding the change in subscription revenues.

Using our prior calculation methodology, subscription revenue retention rate was 148%, 117%, 112% for fiscal 2023, 2024, and 2025, respectively.

ACV Net Retention Rate .

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We define ACV net retention rate as total ACV at the end of a fiscal year from customers with ACV as of the end of the prior fiscal year, expressed as a percentage of ACV as of the end of the prior fiscal year, converted to U.S.

dollar with foreign exchange rates in effect as of the end of the applicable period.

dollars with foreign exchange rates in effect as of the end of the applicable period.

We define ACV as the highest annualized subscription fee obligation under customer contracts in effect at the end of the reporting period.

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Our ACV net retention rate was 102%, 106%, and 112% for fiscal 2024, 2025, and 2026, respectively.

The moderation in our ACV net retention rate for fiscal 2024 was due to a decline in ACV from customers adversely affected by an increase in mortgage interest rates, from the expiration of licenses utilized for

forgiveness monitoring of Paycheck Protection Program loans, and from the acquisition of customers by non-customers.

The increase in our ACV net retention rate for fiscal 2025 was attributable to increased ACV from customers who expanded their adoption of our solutions, offset in part due to a decline in ACV from customers adversely affected by an increase in mortgage rates.

In fiscal 2025, the increase in our ACV net retention rate was attributable to increased ACV from customers who expanded their adoption of our solutions, offset in part due to a decline in ACV from customers adversely affected by an increase in mortgage rates.

In fiscal 2026, the increase in our ACV net retention rate was attributable to increased ACV from customers who expanded their adoption of our solutions including nCino’s AI capabilities.

Macroeconomic Environment .

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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 are typically three to five years in length, we offer:

Specifically, we offer:

• 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.

As we continue transitioning to our asset-based 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 basis 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 at specified intervals over the contract term.

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 the amount of our invoicing to customers after their 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 are generally billed annually in advance while subscription fees for U.S.

mortgage are generally billed monthly in advance.

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.

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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 and smaller credit unions and our U.S.

mortgage business has historically provided professional services directly to its customers.

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.

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.

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In addition, cost of subscription revenues includes personnel-related costs associated with delivering maintenance and support services, including salaries, benefits and stock-based compensation expense, travel and related costs, amortization of acquired developed technology, and allocated overhead.

Our subscription gross margin will vary from period to period as a function of the utilization of support personnel and the extent to which we recognize subscription revenues from the resale of Salesforce’s CRM solution.

Our subscription gross margin will vary from period to period based

on the relative mix of revenues from our solutions, including the resale of Salesforce's CRM solution, and the utilization of support personnel.

We expect the cost of subscription revenues will continue to increase in absolute dollars as we grow our business.

Cost of Professional Services and Other Revenues .

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The cost of providing professional services is significantly higher as a percentage of the related revenues than for our subscription services due to direct labor costs.

The cost of professional services revenues has increased in absolute dollars as we have added new customer subscriptions that require professional services and built-out our international professional services capabilities.

The cost of professional services revenues increases in absolute dollars as we have added new customer subscriptions that require professional services and built out our international professional services capabilities.

Realized effective billing and utilization rates drive fluctuations in our professional services and other gross margin on a period-to-period basis.

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Sales and marketing expenses consist primarily of personnel costs of our sales and marketing employees, including salaries, sales commissions and incentives, benefits and stock-based compensation expense, travel and related costs.

We capitalize incremental costs incurred to obtain contracts, primarily consisting of sales commissions, and subsequently amortize these costs over the expected period of benefit, which we have determined to be approximately four years.

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 to increase as a percentage of revenues.

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

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

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, such as legal and other professional services fees.

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 transaction-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.

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Interest expense consists primarily of interest related to our financing obligations along with interest expense on borrowings, commitment fees, and amortization of debt issuance costs associated with our secured revolving credit facility.

Other Expense, Net.

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

Also included is interest expense accretion for a deferred payment on the acquisition of FullCircl.

Other Income (Expense), Net.

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).

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Total operating expenses 324,585 342,919 356,442

Loss from operations (94,013) (39,512) (18,131)

Income (loss) from operations (39,512) (18,131) 3,727

Non-operating income (expense) :

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Interest expense (4,135) (8,763) (17,457)

Other expense, net (1,356) (856) (10,427)

Loss before income taxes (97,773) (41,936) (35,560)

Other income (expense), net (856) (10,427) 19,008

Income (loss) before income taxes (41,936) (35,560) 6,707

Income tax provision (benefit) 1,590 (2,511) (2,996)

Net loss (101,844) (43,526) (33,049)

Net loss attributable to redeemable non-controlling interest (1,119) (1,109) (472)

Net income (loss) (43,526) (33,049) 9,703

Net income (loss) attributable to redeemable non-controlling interest (1,109) (472) 141

Adjustment attributable to redeemable non-controlling interest (71) 5,301 4,382

Net loss attributable to nCino, Inc.

Net income (loss) attributable to nCino, Inc.

$ (42,346) $ (37,878) $ 5,180

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

1 Includes the operating results of DocFox, ILT and FullCircl from the DocFox Acquisition Date, the ILT Acquisition Date and the FullCircl Acquisition Date, respectively, see Note 6 "Business Combinations" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

(1 ) Includes the operating results of DocFox, ILT, and FullCircl from the DocFox Acquisition Date, the ILT Acquisition Date, and FullCircl Acquisition Date, see Note 6 “Business Combinations” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

(2 ) Includes the operating results of Sandbox Banking from the Sandbox Acquisition Date, see Note 6 “Business Combinations” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

The Company recognized stock-based compensation expense as follows:

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Total stock-based compensation expense $ 58,035 $ 71,592 $ 73,884

$ 50,232 $ 58,035 $ 71,592

The Company recognized amortization expense for intangible assets as follows:

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Total operating expenses 68.1 63.4 59.9

Loss from operations (23.0) (8.3) (3.3)

Income (loss) from operations (8.3) (3.3) 0.7

Non-operating income (expense):

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Interest expense (0.9) (1.6) (2.9)

Other expense, net (0.3) (0.2) (1.9)

Loss before income taxes (23.9) (8.9) (6.5)

Other income (expense), net (0.2) (1.9) 3.2

Income (loss) before income taxes (8.9) (6.5) 1.2

Income tax provision (benefit) 0.3 (0.5) (0.5)

Net loss (24.9) % (9.2) % (6.0) %

Net income (loss) (9.2) % (6.0) % 1.7 %

Comparison of the Fiscal Years Ended January 31, 2025 and 2026

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Subscription Revenues

Subscription revenues increased $59.7 million for fiscal 2025 compared to fiscal 2024, due to initial revenues from customers who did not contribute to subscription revenues during the prior period, growth from existing customers within and across lines of business, and acquisitions.

Of the increase, 70.6% 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 29.4% was attributable to initial revenues from customers who did not contribute to subscription revenues during the prior period.

Subscription revenues increased $54.0 million for fiscal 2026 compared to fiscal 2025, primarily attributable to growth from existing customers within and across lines of business, initial revenues from customers who did not contribute to subscription revenues during the prior period, and acquisitions.

Of the increase, 87.8% was attributable to increased revenues from existing customers as customers expanded their use and adoption of our solutions, and 12.2% was attributable to initial revenues from customers who did not contribute to subscription revenues during the prior period.

Subscription revenues were 88.0% of total revenues for fiscal 2026 compared to 86.8% of total revenues for fiscal 2025, primarily due to growth in our installed base.

Professional Services and Other Revenues

Professional services and other revenues increased $4.4 million for fiscal 2025 compared to fiscal 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.

Professional services and other revenues were essentially flat for fiscal 2026 compared to fiscal 2025, primarily attributable to the mix of solutions being implemented.

Cost of Revenues and Gross Margin

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Cost of Subscription Revenues

Cost of subscription revenues increased $14.1 million for fiscal 2025 compared to fiscal 2024, generating a gross margin for subscription revenues of 71.2% compared to a gross margin of 70.5% for fiscal 2024.

Other costs of subscription revenues increased $6.3 million due to other data costs.

Personnel costs, including stock-based compensation expense, increased $4.0 million, mainly from an increase in overall headcount.

Costs related to Salesforce user fees increased $2.3 million as we continued to add new customers and sell additional functionality to existing customers.

The increase in cost of subscription revenues also included an increase of $1.5 million in amortization expense related to acquired intangibles.

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 subscription revenues increased $14.6 million for fiscal 2026, generating a gross margin of 71.4% compared to a gross margin of 71.2% for fiscal 2025.

The increase primarily consisted of:

• $9.5 million increase in third party data costs,

• $2.8 million increase in allocated overhead, inclusive of a $2.6 million increase in amortization expense related to acquired intangibles,

• $1.2 million increase in costs related to Salesforce user fees as we continued to add new customers and sell additional functionality to existing customers,

• $0.9 million increase in personnel costs, including $0.4 million in severance charges under the 2026 Restructuring Plan and compensation increases, and

• a $0.2 million increase in stock-based compensation expense.

Cost of Professional Services and Other Revenues

Cost of professional services and other revenues increased $10.3 million for fiscal 2025 compared to fiscal 2024, generating a gross margin for professional services and other revenues of (13.2)% compared to a gross margin of (5.3)% for fiscal 2024.

For fiscal 2025, personnel costs increased $9.0 million for professional services and other revenues compared to the prior year period, mainly from an increase in headcount and a $2.6 million increase in stock-based compensation expense.

The increase in cost of professional services and other revenue also included an increase of $1.2 million in third-party costs of

professional services.

The decrease in our professional services and other gross margin for fiscal 2025 was primarily due to a decline in realized effective billing rates in our professional services teams.

Cost of professional services and other revenues increased $4.1 million for fiscal 2026, generating a gross margin of (18.7)% compared to a gross margin of (13.2)% for fiscal 2025, primarily attributable to strategic investments in expanding our professional service capabilities, coupled with lower effective billing and utilization rates.

The increase primarily consisted of:

• $2.8 million increase in personnel costs, primarily due to an increase in average headcount during the year due to acquisitions, compensation increases, and $0.5 million severance charges under the 2026 Restructuring Plan,

• $1.2 million increase in allocated overhead primarily attributable to internal investments in AI technology, and

• a $0.4 million increase in stock-based compensation expense.

Operating Expenses

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Total operating expenses 342,919 63.4 356,442 59.9

Loss from operations $ (39,512) (8.3) % $ (18,131) (3.3) %

Income (loss) from operations $ (18,131) (3.3) % $ 3,727 0.7 %

Sales and Marketing

Sales and marketing expenses decreased $7.3 million for fiscal 2025 compared to fiscal 2024, primarily attributable to a decrease of $11.9 million due to no longer amortizing 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 $2.8 million in amortization expense for fiscal 2025 acquired intangible assets.

The decrease in sales and marketing expenses also included a decrease of $0.5 million sales-related travel costs.

The decrease in sales and marketing expenses was partially offset by an increase $1.2 million in personnel costs primarily due to an increase in stock-based compensation expense.

The decrease in sales and marketing expenses was also partially offset by an increase of $1.1 million in marketing costs.

Our sales and marketing headcount increased by 54 from January 31, 2024 to January 31, 2025, primarily due to acquisitions.

We expect sales and marketing expenses to increase as a percentage of revenues.

Sales and marketing expenses increased $13.3 million for fiscal 2026 compared to fiscal 2025, primarily attributable to:

• $5.0 million increase in allocated overhead, inclusive of a $3.9 million increase in amortization expenses for acquired intangible assets,

• $7.4 million increase in personnel costs, primarily driven by increased commissions for higher bookings and compensation increases, inclusive of $1.3 million in severance charges under the 2026 Restructuring Plan,

• $3.5 million increase in marketing costs,

• $0.5 million increase for sales-related travel costs,

• partially offset by a $2.7 million decrease in stock-based compensation expense, and

• a $0.4 million decrease in third-party professional fees.

Our sales and marketing headcount decreased by 22, fiscal year 2026 over fiscal year 2025, primarily attributable to the 2026 Restructuring Plan.

Research and Development

Research and development expenses increased $12.1 million for fiscal 2025 compared to fiscal 2024, primarily attributable to a $9.2 million increase in personnel cost, mainly from an increase in headcount due to acquisitions and an increase in stock-based compensation expense.

The increase in research and development expenses also included an increase of $2.1 million in third-party professional fees as a result of increased contract research and development spend, and an increase of $0.5 million in allocated overhead costs due to growth supporting our continued business expansion.

Our research and development headcount increased by 22 from January 31, 2024 to January 31, 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.

Research and development expenses decreased $1.9 million for fiscal 2026 compared to fiscal 2025, primarily attributable to:

• $1.9 million decrease in third-party professional fees,

• $1.6 million decrease in stock-based compensation expense,

• personnel costs were flat, driven by $3.7 million in severance charges under the 2026 Restructuring Plan which were offset by lower costs from reduced headcount, and

• partially offset by a $1.6 million increase in allocated overhead primarily attributable to internal investments in AI technology.

Our research and development headcount decreased by 53, fiscal year 2026 over fiscal year 2025, primarily attributable to the 2026 Restructuring Plan.

General and Administrative

General and administrative expenses increased $13.5 million for fiscal 2025 compared to fiscal 2024, primarily due to an increase of $9.8 million in personnel costs, mostly attributable to a $6.8 million increase in stock-based compensation expense, and an increase in headcount.

The increase in general and administrative expenses also included an increase of $5.2 million in third-party professional fees, mostly attributable to an increase for acquisition-related expenses for fiscal 2025 acquisitions offset by a decrease in litigation expenses and other professional fees.

The increase in general and administrative spend was partially offset by a decrease of $1.6 million in allocated overheard and other general and administrative costs.

Our general and administrative headcount increased by 18 from January 31, 2024 to January 31, 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.

General and administrative expenses increased $2.1 million for fiscal 2026 compared to fiscal 2025, primarily attributable to:

• $6.0 million increase in non-cash stock-based compensation expense primarily due to modifications of equity awards for our Chairman transition,

• $2.3 million increase in restructuring costs for exit costs and asset write-offs associated with the 2026 Restructuring Plan,

• $1.6 million increase in the fair value of contingent consideration,

• $1.6 million increase in bad debt expense,

• $0.2 million increase in personnel costs, driven by $1.1 million in severance charges under the 2026 Restructuring Plan, partially offset by lower costs from reduced headcount,

• partially offset by an $8.7 million decrease in third-party professional fees, mostly attributable to a decrease in transaction-related expenses and professional fees, and

• a $0.9 million decrease in allocated overhead and other general and administrative costs.

Our general and administrative headcount decreased by 18, fiscal year 2026 over fiscal year 2025, primarily attributable to the 2026 Restructuring Plan.

Non-Operating Income (Expense)

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Interest expense (8,763) (1.6) (17,457) (2.9)

Other expense, net (856) (0.2) (10,427) (1.9)

Interest income decreased $0.8 million for fiscal 2025 compared to fiscal 2024, due to the mix of our accounts earning interest and interest rates.

Other income (expense), net (10,427) (1.9) 19,008 3.2

Interest income decreased $0.3 million for fiscal 2026 compared to fiscal 2025, primarily attributable to balance and rate fluctuations of our accounts earning interest.

Interest expense increased $8.7 million for fiscal 2026 compared to fiscal 2025, due to borrowing on our revolving credit facility.

The increase of $9.6 million in other expense, net was primarily driven by intercompany loans and transactions that are denominated in currencies other than the underlying functional currency of the applicable entity resulting in remeasurement losses.

Income Tax Provision (Benefit)

The increase of $29.4 million in other income (expense), net 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 Benefit

Fiscal Year Ended January 31,

($ in thousands) 2025 2026

Income tax provision (benefit) $ 1,590 0.3 % $ (2,511) (0.5) %

Income tax benefit was $2.5 million for fiscal 2025 compared to a provision of $1.6 million for fiscal 2024 and resulted in an effective tax rate of 7.1% compared to (3.8)% in the prior fiscal year.

Income tax benefit $ (2,511) (0.5) % $ (2,996) (0.5) %

Income tax benefit was $3.0 million for fiscal 2026 compared to $2.5 million for fiscal 2025 and resulted in an effective tax rate of (44.7)% compared to 7.1% in the prior fiscal year.

See Note 9 “Income Taxes” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further details on the components of income tax and a reconciliation of the U.S.

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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 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 assets are realizable.

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

by $3.6 million.

Management determines when a valuation allowance should be recorded, utilizing significant judgment and the use of estimates.

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

deferred tax liability mostly related to identifiable intangible assets, reducing the valuation allowance in the United States by $2.0 million.

Additionally, the Company reduced the valuation allowance in the U.K.

by $2.8 million due to the ability to utilize acquired deferred tax attributes as part of corporate reorganizations related to foreign acquisitions during the Company’s fiscal 2026.

Comparison of the Fiscal Years Ended January 31, 2024 and 2025

For a discussion of our results of operations for the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023, please refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on March 26, 2024.

For a discussion of our results of operations for the fiscal year ended January 31, 2025 compared to the fiscal year ended January 31, 2024, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2025, filed with the SEC on April 1, 2025.

Non-GAAP Financial Measure

In addition to providing financial measurements based on generally accepted accounting principles in the United States of America ("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.

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 (loss), as discussed below.

Non-GAAP operating income (loss).

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

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 Income (loss) from operations as reported in our consolidated statements of operations excluding the following items:

Amortization of Purchased Intangibles.

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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.

Stock-Based Compensation Expenses.

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

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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 and one-time integration activities.

Transaction-Related Expenses.

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

Transaction-related expenses include, but are not limited to, costs incurred from third-party professional services firms, 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.

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Restructuring Costs.

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

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.

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In addition, other companies may use other measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

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

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

Fiscal Year Ended January 31,

($ in thousands) 2024 2025 2026

GAAP loss from operations $ (94,013) $ (39,512) $ (18,131)

GAAP income (loss) from operations $ (39,512) $ (18,131) $ 3,727

Amortization of intangible assets 37,226 30,093 36,459

Stock-based compensation expense 58,035 71,592 73,884

Acquisition-related expenses 2,276 878 12,245

Transaction-related expenses 878 12,245 5,264

Litigation expenses (1)

6,147 4,525 366

Restructuring and related charges

Total adjustments 101,291 114,296 125,684

Non-GAAP operating income (loss) $ (2,141) $ 61,779 $ 96,165

1 Represents legal expenses related to a closed government antitrust investigation and related civil action and a dismissed shareholder derivative lawsuit.

2 Stock-based compensation benefit of $0.2 million related to restructuring is included on the stock-based compensation expense line item for the fiscal year ended January 31, 2023.

Non-GAAP operating income $ 61,779 $ 96,165 $ 129,411

(1) Represents legal expenses related to a closed government antitrust investigation and related settled civil action and a dismissed shareholder derivative lawsuit.

Liquidity and Capital Resources

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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.

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

As of January 31, 2025, the Company had $166.0 million outstanding, no letters of credit issued under the 2024 Credit Facility, was in compliance with all covenants and had borrowing availability of $84.0 million.

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.

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 pay the outstanding amount 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.

During fiscal 2025, we repaid $75.0 million on the 2022 and 2024 Credit Facilities.

As of January 31, 2025, the applicable interest rate was 6.31%.

As of January 31, 2026, we had $213.5 million outstanding, borrowing availability of $36.5 million, and no letters of credit issued under our 2024 Credit Facility, and we were in compliance with all covenants thereunder.

During fiscal 2026, we had net borrowings of $47.5 million under the 2024 Credit Facility to fund the acquisition of Sandbox Banking and

repurchase shares of our common stock.

As of January 31, 2026, the applicable interest rate under the 2024 Credit Facility was 5.68%.

See Note 12 “Revolving Credit Facility” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

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.

We believe that current cash and cash equivalents as well as borrowings available under the 2024 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 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 capital expenditures will be appreciably higher in absolute dollars in fiscal 2026 for planned office build-outs, mainly for an international office, compared to prior fiscal years to accommodate our growth, which we estimate to be approximately $8.4 million.

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

Any equity financing we may undertake could be dilutive to our existing stockholders, and any debt financing we may undertake could

require debt service and financial and operational covenants that could adversely affect our business.

Any equity financing we may undertake could be dilutive to our existing stockholders, and any debt financing we may undertake could require debt service and financial and operational covenants that could adversely affect our business.

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

Subsequent to January 31, 2026, we entered into an Incremental Facility Amendment to the 2024 Credit Agreement for a senior secured incremental term loan of $200.0 million.

The proceeds will be used to reduce a portion of the outstanding balance on our revolving credit facility and to finance an accelerated share repurchase program discussed below.

See Note 18 “Subsequent Events” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

Stock Repurchase Programs

In March 2025, our Board of Directors authorized the March 2025 Stock Repurchase Program of up to $100.0 million of our outstanding common stock.

As of January 31, 2026, we had completed the March 2025 Stock Repurchase Program.

In December 2025, our Board of Directors authorized the December 2025 Stock Repurchase Program of up to $100.0 million of our outstanding common stock.

As of January 31, 2026, $75.0 million remains available for future repurchases under the Stock Repurchase Program.

During the fiscal year ended January 31, 2026, we repurchased an aggregate of 5.0 million shares of our outstanding common stock for $125.0 million under our repurchase programs, excluding transaction costs and excise tax associated with the repurchases.

The volume, price, timing, and manner of repurchases were determined at our discretion, subject to general market conditions, as well as our management of capital, general business conditions, other investment opportunities, regulatory requirements and other factors.

Subsequent to January 31, 2026, we entered into an additional $100.0 million share repurchase program to be completed under an accelerated share repurchase program effective March 31, 2026.

See Note 18 “Subsequent Events” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K 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 January 31, 2025, the redeemable non-controlling interest was $3.4 million and $8.3 million, respectively.

Summary Cash Flow information for fiscal 2023, 2024, and 2025 are set forth below.

As of January 31, 2025 and 2026, the redeemable non-controlling interest was $8.3 million and $12.7 million, respectively.

Summary Cash Flow information for fiscal 2024, 2025, and 2026 is set forth below.

Fiscal Year Ended January 31,

($ in thousands) 2024 2025 2026

Net cash provided by (used in) operating activities $ (15,381) $ 57,285 $ 55,199

Net cash provided by operating activities $ 57,285 $ 55,199 $ 90,065

Net cash used in investing activities (6,328) (219,177) (54,080)

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Net Cash Provided by Operating Activities

The $55.2 million of net cash provided by operating activities in fiscal 2025 reflects our net loss of $33.0 million and $38.5 million used in changes in working capital accounts, offset by $126.7 million in non-cash charges.

The $90.1 million of net cash provided by operating activities in fiscal 2026 reflects our net income of $9.7 million, $34.8 million of cash used in working capital accounts, and net adjustments on $115.1 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, provision for bad debt, change in fair value of contingent consideration, loss on disposal of long-lived assets, partially offset by foreign currency gains related to intercompany loans and transactions, deferred income taxes, and gains on investments.

Cash used in working capital accounts was principally a function of a $25.1 million increase of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions, $16.2 million increase in accounts receivable due to the timing of billings and collections from customers, $4.1 million decrease in operating lease liabilities, and $2.1 million decrease in accrued expenses and other current liabilities.

Cash used in working capital accounts was partially offset by a $10.9 million increase in deferred revenue, as we continued to expand our customer base and renewed existing customers, $1.1 million increase in accounts payable, $0.6 million increase in other long-term liabilities, and $0.2 million decrease in prepaid expenses and other assets.

The $55.2 million of net cash provided by operating activities in fiscal 2025 reflects our net loss of $33.0 million and $38.5 million used in working capital accounts, offset by $126.7 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, foreign currency losses related to intercompany loans and transactions, deferred income taxes, and non-cash operating lease costs.

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The cash used in working capital accounts was partially offset by a $13.8 million increase in deferred revenue, as we expanded our customer base and renewed existing customers, a $10.2 million increase in accrued expenses and other current liabilities primarily due to acquisition costs and compensation, and a $1.4 million increase in other long-term liabilities.

The $57.3 million of net cash provided by operating activities in fiscal 2024 reflects our net loss of $43.5 million and $16.4 million used in changes in working capital accounts, partially offset by $117.2 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, deferred income taxes, provision for bad debt, foreign currency losses related to intercompany loans and transactions, and an unrealized gain on investment.

Cash used in working capital accounts was principally a function of a $14.3 million increase in accounts receivable due to the timing of billings and collections from customers, an increase of $10.3 million of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions, a $6.0 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, and a decrease of $4.1 million in operating lease liabilities.

The cash used in working capital accounts was partially offset by a $15.9 million increase in deferred revenue, as we expanded our customer base and renewed existing customers, a $1.9 million decrease in prepaid expenses and other assets, and a $0.5 million increase in accounts payable.

Net Cash Used in Investing Activities

improvements to support the expansion of our business, and $0.5 million for the acquisition of certain technology.

The $6.3 million of net cash used in investing activities in fiscal 2024 was comprised of $3.5 million used for the purchase of property and equipment to support the expansion of our business, $2.5 million used for the purchase of preferred stock in Rich Data Co, and $0.4 million for an asset acquisition completed in August 2022.

The $54.1 million of net cash used in investing activities in fiscal 2026 was comprised of $50.3 million used for the acquisition of Sandbox Banking, $7.5 million for the purchase of property and equipment and leasehold improvements to support the expansion of our business primarily for one of our international offices, partially offset by proceeds from the sale of an investment of $3.7 million.

The $219.2 million of net cash used in investing activities in fiscal 2025 was comprised of $216.9 million used for the acquisition of DocFox, ILT, and FullCircl, $1.8 million for the purchase of property and equipment and leasehold improvements to support the expansion of our business, and $0.5 million for the acquisition of certain technology.

Net Cash Provided by (Used in) Financing Activities

The $170.5 million of net cash provided by financing activities in fiscal 2025 was comprised principally of $241.0 million proceeds from borrowings on the 2022 and 2024 Credit Facility to fund the acquisitions of DocFox and FullCircl, $4.5 million of proceeds from stock issuances under the employee stock purchase plan, and $2.8 million of proceeds from the exercise of stock options.

The $73.0 million of net cash used in financing activities in fiscal 2026 was comprised principally of repurchases of our common stock of $125.1 million, payments of $65.0 million on our credit facility, and principal payments of $1.6 million on financing obligations.

The cash used in financing activities was partially offset by $112.5 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 programs, $4.2 million of proceeds from stock issuances under the employee stock purchase plan, and $2.0 million of proceeds from the exercise of stock options.

The $170.5 million of net cash provided by financing activities in fiscal 2025 was comprised principally of $241.0 million proceeds from borrowings on the credit facilities to fund the acquisitions of DocFox and FullCircl, $4.5 million of proceeds from stock issuances under the employee stock purchase plan, and $2.8 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 credit facility, payments of debt issuance costs of $1.5 million, and principal payments of $1.3 million on financing obligations.

The $21.1 million of net cash used in financing activities in fiscal 2024 was comprised principally of payments of $30.0 million on the Credit Facility and principal payments of $1.2 million on the financing obligations.

The cash used in financing activities was partially offset by $4.7 million in proceeds from stock issuances under the employee stock purchase plan, $4.5 million of proceeds from the exercise of stock options, and $1.0 million in proceeds from the non-controlling interest in our Japan joint venture.

Contractual Obligations and Commitments

Our estimated future obligations principally consist of an indemnity holdback associated with a business combination, 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.

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, acquisition liabilities, and the 2024 Credit Facility.

See Note 6 “Business Combinations,” Note 11 “Leases,” Note 12 “Revolving Credit Facility,” and Note 13 “Commitments and Contingencies” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

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Subscription revenues primarily consist of fees for providing customers access to our 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 our service is made available to the customer, which we believe best reflects the manner in which our customers utilize our subscription offerings.

Revenues are generally recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer, which we believe best reflects the

manner in which our customers utilize our subscription offerings.

Arrangements with customers do not provide the customer with the right to take possession of the software supporting the cloud-based application service at any time and, as a result, are accounted for as a service contract.

Generally, our subscription contracts are three to five years in length, billed annually in advance, are non-cancelable, and do not contain refund-type provisions.

mortgage contracts are generally billed monthly in advance.

mortgage contracts are generally billed monthly.

Subscription arrangements that are cancelable generally have penalty clauses.

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These estimates can include, but are not limited to:

• future expected cash flows from subscriptions contracts and acquired developed technologies;

• future expected cash flows from subscription contracts and acquired developed technologies;

• historical and expected customer attrition rates and anticipated growth in revenue from acquired customers;

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As a result, 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.

Upon 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.

Upon 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.

Determining the useful life of an intangible asset also requires judgment as different types of intangible assets have different lives.

Contingent consideration arising from business combinations is recorded at fair value as a liability on the acquisition date and remeasured at each reporting date until the contingency is resolved.

We estimate the fair value of any contingent consideration using Level 3 unobservable inputs.

Our estimates of fair value are based upon assumptions believed to be reasonable but which are uncertain and can involve significant judgments by management.

Changes in fair value are recognized in general and administrative expenses on the Company’s consolidated statements of operations.

Accrued income taxes are reported as a component of either prepaid expenses and other current assets or accrued expenses and other current liabilities, as appropriate, in our consolidated balance sheets and reflect our estimate of income taxes to be paid or received.

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A valuation allowance is provided against a deferred tax asset when we determine that it is more likely than not that all, or a portion of, the balance will not be realized.

This requires management to utilize significant judgement and the use of estimates.

Any realization of the Company’s deferred tax assets is based upon the evaluation of four sources of taxable income, the future reversals of taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in prior carryback years, and tax-planning strategies.

This requires management to utilize significant judgment and the use of estimates.

Any realization of the Company’s deferred tax assets is based upon the evaluation of four sources of taxable income:

the future reversals of taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in prior carryback years, and tax-planning strategies.

At January 31, 2026, we determined that it is more likely than not that the majority of our deferred tax assets will not be realized and as such, recorded a valuation allowance of $151.7 million against our deferred tax assets of $225.8 million as of that date.

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The tax laws and regulations in each jurisdiction may be interpreted differently in certain situations, which could result in differing financial results.

The Company is required to exercise judgement regarding the application of these tax laws and regulations.

Through this judgement process, the Company will evaluate and recognize any tax liabilities related to any income tax uncertainties.

The Company is required to exercise judgment regarding the application of these tax laws and regulations.

Through this judgment process, the Company will evaluate and recognize any tax liabilities related to any income tax uncertainties.

Due to the complexity of any uncertainty, the ultimate resolution may result in a remittance that is different from the current estimate of any tax liabilities.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis