10-Q 1 ncno-20220430.htm 10-Q ncno-20220430
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2022
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __to __
Commission File Number: 001-41211

nCino, Inc.
(Exact name of Registrant as specified in its charter)
Delaware87-4154342
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
6770 Parker Farm Drive
Wilmington, North Carolina 28405
(Address of principal executive offices including zip code)

(888) 676-2466
(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.0005 per shareNCNOThe NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Accelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 110,198,817 shares of common stock, $0.0005 par value per share, as of May 27, 2022.



TABLE OF CONTENTS
Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies and plans, trends, market sizing, competitive position, industry environment, potential growth opportunities and product capabilities, among other things. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as “aim,” “anticipates,” “believes,” “could,” “estimates,” “expects,” “goal,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “strive,” “will,” “would,” or similar expressions and the negatives of those terms.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those described in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this report. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
Any forward-looking statement made by us in this report speaks only as of the date on which it is made. Except as required by law, we disclaim any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
As used in this report, the terms “nCino,” the “Company,” “Registrant,” “we,” “us,” and “our” mean nCino, Inc. and its subsidiaries unless the context indicates otherwise.
i

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
nCino, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
January 31, 2022April 30, 2022
(Unaudited)
Assets
Current assets
Cash and cash equivalents (VIE: $4,183 and $3,388 at January 31, 2022 and April 30, 2022, respectively)
$88,014 $78,684 
Accounts receivable, less allowance for doubtful accounts of $151 and $166 at January 31, 2022 and April 30, 2022, respectively
74,528 72,822 
Costs capitalized to obtain revenue contracts, current portion, net7,583 7,849 
Prepaid expenses and other current assets13,384 13,795 
Total current assets183,509 173,150 
Property and equipment, net60,677 68,371 
Operating lease right-of-use assets, net13,170 11,975 
Costs capitalized to obtain revenue contracts, noncurrent, net16,403 16,176 
Goodwill841,487 841,503 
Intangible assets, net180,122 173,094 
Investment4,031 4,031 
Other long-term assets1,615 8,501 
Total assets$1,301,014 $1,296,801 
Liabilities, redeemable non-controlling interest, and stockholders’ equity
Current liabilities
Accounts payable$11,366 $8,842 
Accrued compensation and benefits21,454 13,900 
Accrued expenses and other current liabilities14,744 11,959 
Deferred revenue, current portion122,643 143,973 
Financing obligations, current portion621 646 
Operating lease liabilities, current portion3,548 3,514 
Total current liabilities174,376 182,834 
Operating lease liabilities, noncurrent11,198 10,005 
Deferred income taxes, noncurrent1,675 1,891 
Deferred revenue, noncurrent44 43 
Financing obligations, noncurrent33,478 33,303 
Construction liability, noncurrent9,736 13,469 
Total liabilities230,507 241,545 
Commitments and contingencies (Notes 12 and 14)
Redeemable non-controlling interest (Note 3)
2,882 3,419 
Stockholders’ equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized, and none issued and outstanding as of January 31, 2022 and April 30, 2022
  
Common stock, $0.0005 par value; 500,000,000 shares authorized as of January 31, 2022 and April 30, 2022; 109,778,542 and 110,128,561 shares issued and outstanding as of January 31, 2022 and April 30, 2022, respectively
55 55 
Additional paid-in capital1,277,258 1,290,295 
Accumulated other comprehensive income (loss)(72)762 
Accumulated deficit(209,616)(239,275)
Total stockholders’ equity1,067,625 1,051,837 
Total liabilities, redeemable non-controlling interest, and stockholders’ equity$1,301,014 $1,296,801 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

nCino, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended April 30,
20212022
Revenues
Subscription$51,033 $79,189 
Professional services and other11,322 15,022 
Total revenues62,355 94,211 
Cost of revenues
Subscription (related party $10,569 and $0, respectively)1
14,946 25,510 
Professional services and other11,353 14,792 
Total cost of revenues26,299 40,302 
Gross profit36,056 53,909 
Operating expenses
Sales and marketing18,425 29,339 
Research and development17,425 29,115 
General and administrative15,680 22,686 
Total operating expenses51,530 81,140 
Loss from operations(15,474)(27,231)
Non-operating income (expense)
Interest income57 2 
Interest expense(268)(638)
Other income (expense), net267 (1,573)
Loss before income taxes(15,418)(29,440)
Income tax provision187 563 
Net loss(15,605)(30,003)
Net loss attributable to redeemable non-controlling interest (Note 3)
(467)(344)
Adjustment attributable to redeemable non-controlling interest (Note 3)
(130)1,029 
Net loss attributable to nCino, Inc.$(15,008)$(30,688)
Net loss per share attributable to nCino, Inc.:
Basic and diluted$(0.16)$(0.28)
Weighted average number of common shares outstanding:
Basic and diluted94,402,265 109,998,637 
1See Note 9 "Reseller Agreement" and Note 15 "Related-Party Transactions."
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

nCino, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
Three Months Ended April 30,
20212022
Net loss$(15,605)$(30,003)
Other comprehensive income (loss):
Foreign currency translation(208)680 
Other comprehensive income (loss)(208)680 
Comprehensive loss(15,813)(29,323)
Less comprehensive loss attributable to redeemable non-controlling interest:
Net loss attributable to redeemable non-controlling interest(467)(344)
Foreign currency translation attributable to redeemable non-controlling interest(129)(154)
Comprehensive loss attributable to redeemable non-controlling interest(596)(498)
Comprehensive loss attributable to nCino, Inc.$(15,217)$(28,825)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

nCino, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share data)
(Unaudited)
Three Months Ended April 30, 2021
Common StockAdditional
Paid-in
Capital
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
SharesAmount
Balance, January 31, 202193,643,759 $47 $585,956 $240 $(161,064)$425,179 
Exercise of stock options1,651,343 1 7,884 — — 7,885 
Stock issuance upon vesting of restricted stock units22,968 — — — — — 
Stock-based compensation— — 7,064 — — 7,064 
Other comprehensive loss— — — (79)— (79)
Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest— — 130 — (15,138)(15,008)
Balance, April 30, 202195,318,070 $48 $601,034 $161 $(176,202)$425,041 
Three Months Ended April 30, 2022

Common Stock
Additional
Paid-in
Capital
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
SharesAmount
Balance, January 31, 2022109,778,542 $55 $1,277,258 $(72)$(209,616)$1,067,625 
Exercise of stock options156,975 — 772 — — 772 
Stock issuance upon vesting of restricted stock units193,044 — — — — — 
Stock-based compensation— — 13,294 — — 13,294 
Other comprehensive income— — — 834 — 834 
Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest— — (1,029)— (29,659)(30,688)
Balance, April 30, 2022110,128,561 $55 $1,290,295 $762 $(239,275)$1,051,837 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

nCino, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended April 30,
20212022
Cash flows from operating activities
Net loss attributable to nCino, Inc.$(15,008)$(30,688)
Net loss and adjustment attributable to redeemable non-controlling interest(597)685 
Net loss(15,605)(30,003)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization2,095 8,460 
Non-cash operating lease costs589 1,160 
Amortization of costs capitalized to obtain revenue contracts1,312 2,010 
Amortization of debt issuance costs 40 
Stock-based compensation7,064 13,300 
Deferred income taxes62 210 
Provision for (recovery of) bad debt(12)16 
Net foreign currency (gains) losses(566)1,582 
Change in operating assets and liabilities:
Accounts receivable(192)529 
Costs capitalized to obtain revenue contracts(1,493)(2,161)
Prepaid expenses and other assets1,076 (2,004)
Accounts payable2,753 (2,317)
Accounts payable, related parties478  
Accrued expenses and other current liabilities(8,782)(10,827)
Deferred revenue19,411 22,444 
Operating lease liabilities(632)(1,191)
Net cash provided by operating activities7,558 1,248 
Cash flows from investing activities
Purchases of property and equipment(522)(4,694)
Net cash used in investing activities(522)(4,694)
Cash flows from financing activities
Proceeds from borrowings on revolving credit facility 20,000 
Payments on revolving credit facility (20,000)
Payments of debt issuance costs (364)
Exercise of stock options7,885 772 
Principal payments on financing obligations(79)(150)
Net cash provided by financing activities7,806 258 
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash437 (1,142)
Net increase (decrease) in cash, cash equivalents, and restricted cash15,279 (4,330)
Cash, cash equivalents, and restricted cash, beginning of period371,425 88,399 
Cash, cash equivalents, and restricted cash, end of period$386,704 $84,069 
Reconciliation of cash, cash equivalents, and restricted cash, end of period:
Cash and cash equivalents$386,515 $78,684 
Restricted cash included in other long-term assets189 5,385 
Total cash, cash equivalents, and restricted cash, end of period$386,704 $84,069 
Supplemental disclosure of cash flow information
Cash paid for taxes, net of refunds$80 $1 
Cash paid for interest$268 $621 
Supplemental disclosure of noncash investing and financing activities
Purchase of property and equipment, accrued but not paid$5,863 $5,808 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)

Note 1. Organization and Description of Business
Organization: On November 16, 2021, nCino, Inc. (now nCino OpCo, Inc., "nCino OpCo") entered into an Agreement and Plan of Merger (the "Merger Agreement") with Penny HoldCo, Inc. (now nCino, Inc., "nCino, Inc."), a Delaware corporation incorporated on November 12, 2021 as a wholly-owned subsidiary of nCino OpCo, and certain other parties. On January 7, 2022, in connection with the closing of the transactions contemplated by the Merger Agreement, Penny HoldCo, Inc. changed its name to nCino, Inc. and nCino, Inc. changed its name to nCino OpCo, Inc. and became a wholly-owned subsidiary of nCino, Inc.
Merger: On January 7, 2022, pursuant to the Merger Agreement, nCino, Inc. and nCino OpCo completed a series of mergers in which nCino, Inc. became the parent of nCino OpCo and SimpleNexus, LLC ("SimpleNexus"). Each share of nCino OpCo common stock, par value $0.0005 per share issued and outstanding was converted into one fully paid and nonassessable share of nCino, Inc. common stock, par value $0.0005. nCino, Inc. became the successor issuer and reporting company to nCino OpCo pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended. On January 10, 2022, shares of nCino OpCo were suspended from trading on the Nasdaq Global Select Market, and shares of nCino, Inc. commenced using nCino OpCo's trading history under the ticker symbol "NCNO".
In these unaudited condensed consolidated financial statements, nCino OpCo and nCino, Inc., are collectively referred to as the "Company."
See Note 7 "Business Combinations" for additional information regarding the SimpleNexus acquisition.
Description of Business: The Company is a software-as-a-service ("SaaS") company that provides software applications to financial institutions to streamline employee and client interactions. The Company is headquartered in Wilmington, North Carolina and has offices in Lehi and Salt Lake City, Utah; Macon, Georgia; London, United Kingdom; Sydney and Melbourne, Australia; Toronto, Canada; and Tokyo, Japan.
Fiscal Year End: The Company’s fiscal year ends on January 31.
Note 2. Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") as set forth in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") and applicable rules and regulations of the Securities Exchange Commission ("SEC") regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2022 filed with the SEC on March 31, 2022. The unaudited condensed consolidated financial statements include accounts of the Company’s wholly-owned subsidiaries, as well as a variable interest entity in which the Company is the primary beneficiary. All intercompany accounts and transactions are eliminated. See the variable interest entity section below and Note 3 "Variable Interest Entity and Redeemable Non-Controlling Interest" for additional information regarding the Company’s variable interest entity.
The Company is subject to the normal risks associated with technology companies that have not demonstrated sustainable income from operations, including product development, the risk of customer acceptance and market penetration of its products and services and, ultimately, the need to attain profitability to generate positive cash resources.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal 2023 or any future period.

6

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
Reclassification: The Company reclassified certain prior year amounts in the unaudited condensed consolidated statement of cash flows within the cash flows from operating activities to conform to the current year presentation. These reclassifications had no impact on the previously reported total assets, liabilities, stockholder’s deficit, or net loss.
Variable Interest Entity: The Company holds an interest in a Japanese company (“nCino K.K.”) that is considered a variable interest entity ("VIE"). nCino K.K. is considered a VIE as it has insufficient equity capital to finance its activities without additional financial support. The Company is the primary beneficiary of nCino K.K. as it has the power over the activities that most significantly impact the economic performance of nCino K.K. and has the obligation to absorb expected losses and the right to receive expected benefits that could be significant to nCino K.K., in accordance with accounting guidance. As a result, the Company consolidated nCino K.K. and all significant intercompany accounts have been eliminated. The Company will continue to assess whether it has a controlling financial interest and whether it is the primary beneficiary at each reporting period. Other than the Company’s equity investment, the Company has not provided financial or other support to nCino K.K. that it was not contractually obligated to provide. The assets of the VIE can only be used to settle the obligations of the VIE and the creditors of the VIE do not have recourse to the Company. The assets and liabilities of the VIE were not significant to the Company’s consolidated financial statements except for cash which is reflected on the unaudited condensed consolidated balance sheets. See Note 3 "Variable Interest Entity and Redeemable Non-Controlling Interest" for additional information regarding the Company’s variable interest.
Redeemable Non-Controlling Interest: Redeemable non-controlling interest relates to minority investors of nCino K.K. An agreement with the minority investors of nCino K.K. contains redemption features whereby the interest held by the minority investors are redeemable either at the option of the (i) minority investors or (ii) the Company, both beginning on the eighth anniversary of the initial capital contribution. If the interest of the minority investors were to be redeemed under this agreement, the Company would be required to redeem the interest based on a prescribed formula derived from the relative revenues of nCino K.K. and the Company. The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest’s share of earnings or losses and other comprehensive income or loss, or its estimated redemption value. The resulting changes in the estimated redemption amount (increases or decreases) are recorded with corresponding adjustments against retained earnings or, in the absence of retained earnings, additional paid-in-capital. These interests are presented on the unaudited condensed consolidated balance sheets outside of equity under the caption “Redeemable non-controlling interest.”
Use of Estimates: The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by the Company’s management are used for, but not limited to, revenue recognition including determining the nature and timing of satisfaction of performance obligations, variable consideration, stand-alone selling price, and other revenue items requiring significant judgement; the average period of benefit associated with costs capitalized to obtain revenue contracts; fair value of assets acquired and liabilities assumed for business combinations; the useful lives of intangible assets; the valuation allowance on deferred tax assets; redemption value of redeemable non-controlling interest; and stock-based compensation. The Company assesses these estimates on a regular basis using historical experience and other factors. Actual results could differ from these estimates.
Concentration of Credit Risk and Significant Customers: The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash, cash equivalents, restricted cash and accounts receivable. The Company’s cash and cash equivalents exceeded federally insured limits at January 31, 2022 and April 30, 2022. The Company maintains its cash, cash equivalents and restricted cash with high-credit-quality financial institutions.
As of January 31, 2022, one individual customer represented more than 12% of accounts receivable and, as of April 30, 2022, one customer represented 16% of accounts receivable. For the three months ended April 30, 2021 and 2022, no individual customer represented more than 10% of the Company’s total revenues.
Restricted Cash: Restricted cash primarily consists of a minimum cash balance the Company maintains with a lender under the Company's revolving credit facility. The remaining restricted cash consists of deposits held as collateral for the Company's bank guarantees issued in place of security deposits for certain property leases and credit cards. Restricted cash is

7

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
included in other long-term assets at January 31, 2022 and April 30, 2022 on the unaudited condensed consolidated balance sheets.
Accounts Receivable and Allowances: A receivable is recorded when an unconditional right to invoice and receive payment exists, such that only the passage of time is required before payment of consideration is due. Timing of revenue recognition may differ from the timing of invoicing to customers. Certain performance obligations may require payment before delivery of the service to the customer. The Company recognizes a contract asset in the form of accounts receivable when the Company has an unconditional right to payment, and the Company records a contract asset in the form of unbilled accounts receivable when revenues earned on a contract exceeds the billings. The Company’s standard billing terms are annual in advance, while SimpleNexus' standard billing terms are monthly in advance. An unbilled accounts receivable is a contract asset related to the delivery of the Company’s subscription services and professional services for which the related billings will occur in a future period. Unbilled accounts receivable consists of (i) revenues recognized for professional services performed but not yet billed and (ii) revenues recognized from non-cancelable, multi-year orders in which fees increase annually but for which the Company is not contractually able to invoice until a future period. Accounts receivable are reported at their gross outstanding balance reduced by an allowance for estimated receivable losses, which includes allowances for doubtful accounts and a reserve for expected credit losses.
The Company records allowances for doubtful accounts based upon the credit worthiness of customers, historical experience, the age of the accounts receivable, current market and economic conditions, and supportable forecasts about the future. Relevant risk characteristics include customer size and historical loss patterns.
A summary of activity in the allowance for doubtful accounts is as follows:
Three Months Ended April 30,
20212022
Balance, beginning of period$88 $151 
Charged to (recovery of) bad debt expense(12)16 
Other(24) 
Translation adjustments (1)
Balance, end of period$52 $166 
Investment: The Company's investment is a non-marketable equity investment without readily determinable fair value and for which the Company does not have control or significant influence. The investment is measured at cost with adjustments for observable changes in price or impairment as permitted by the measurement alternative. The Company assesses at each reporting period if the investment continues to qualify for the measurement alternative. Gains or losses resulting from changes in fair value are recognized currently in the Company's consolidated statement of operations. The Company assesses the investment whenever events or changes in circumstances indicate that the carrying value of the investment may not be recoverable.
Debt Issuance Costs: Debt issuance costs are initially deferred and amortized to interest expense on a straight-line basis over the expected term of the debt. The Company uses the straight-line basis as it approximates the amounts calculated under the effective-interest method. Unamortized debt issuance costs related to the secured revolving credit facility are considered long-term and are included in other long-term assets in the unaudited condensed consolidated balance sheets.
Note 3. Variable Interest Entity and Redeemable Non-Controlling Interest
In October 2019, the Company entered into an agreement with Japan Cloud Computing, L.P. and M30 LLC (collectively, the “Investors”) to engage in the investment, organization, management, and operation of nCino K.K. that is focused on the distribution of the Company’s products in Japan. In October 2019, the Company initially contributed $4.7 million in cash in exchange for 51% of the outstanding common stock of nCino K.K. As of April 30, 2022, the Company controls a majority of the outstanding common stock in nCino K.K.

8

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
All of the common stock held by the Investors is callable by the Company or puttable by the Investors at the option of the Investors or at the option of the Company beginning on the eighth anniversary of the agreement with the Investors. Should the call or put option be exercised, the redemption value would be determined based on a prescribed formula derived from the discrete revenues of nCino K.K. and the Company and may be settled, at the Company’s discretion, with Company stock or cash or a combination of the foregoing. As a result of the put right available to the Investors, the redeemable non-controlling interests in nCino K.K. are classified outside of permanent equity in the Company’s unaudited condensed consolidated balance sheets. The estimated redemption value of the call/put option embedded in the redeemable non-controlling interest was $2.3 million at April 30, 2022.
The following table summarizes the activity in the redeemable non-controlling interests for the period indicated below:
Three Months Ended April 30,
20212022
Balance, beginning of period$3,791 $2,882 
Net loss attributable to redeemable non-controlling interest (excluding adjustment to non-controlling interest)(467)(344)
Foreign currency translation(129)(154)
Adjustment to redeemable non-controlling interest(130)1,029 
Stock-based compensation expense1
 6 
Balance, end of period$3,065 $3,419 
1 nCino K.K. stock options granted in accordance with nCino K.K.'s equity incentive plan.
Note 4. Fair Value Measurements
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2. Significant other inputs that are directly or indirectly observable in the marketplace.
Level 3. Significant unobservable inputs which are supported by little or no market activity.
The carrying amounts of cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of January 31, 2022 and April 30, 2022 because of the relatively short duration of these instruments.
The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following table summarizes the Company’s financial assets measured at fair value as of January 31, 2022 and April 30, 2022 and indicates the fair value hierarchy of the valuation:
Fair value measurements on a recurring basis as of January 31, 2022
Level 1Level 2Level 3
Assets:
Money market accounts (included in cash and cash equivalents)$11,129 $ $ 
Time deposits (included in other long-term assets)385   
Total assets$11,514 $ $ 

9

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
Fair value measurements on a recurring basis as of April 30, 2022
Level 1Level 2Level 3
Assets:
Money market accounts (included in cash and cash equivalents)$12,096 $ $ 
Time deposits (included in other long-term assets)385   
Total assets$12,481 $ $ 
All of the Company’s money market accounts are classified within Level 1 because the Company’s money market accounts are valued using quoted market prices in active exchange markets including identical assets.
Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The Company's assets measured at fair value on a nonrecurring basis include the investment accounted for under the measurement alternative. There was no adjustment or impairment recognized for the three months ended April 30, 2021 and 2022, respectively.
Note 5. Revenues
Revenues by Geographic Area
Revenues by geographic region were as follows:
Three Months Ended April 30,
20212022
United States$53,326 $79,929 
International9,029 14,282 
$62,355 $94,211 
The Company disaggregates its revenues from contracts with customers by geographic location. Revenues by geography are determined based on the region of the Company’s contracting entity, which may be different than the region of the customer. No country outside the United States represented 10% or more of total revenues.

10

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
Contract Amounts
Accounts Receivable
Accounts receivable, less allowance for doubtful accounts, is as follows as of January 31, 2022 and April 30, 2022:
As of January 31, 2022As of April 30, 2022
Trade accounts receivable$71,417 $70,132 
Unbilled accounts receivable2,161 2,052 
Allowance for doubtful accounts(151)(166)
Other accounts receivable1
1,101 804 
Total accounts receivable, net$74,528 $72,822 
1Includes $0.5 million and $0.3 million income tax receivable of as of January 31, 2022 and April 30, 2022, respectively.
Deferred Revenue and Remaining Performance Obligations
Significant movements in the deferred revenue balance during the period consisted of increases due to payments received or due in advance prior to the transfer of control of the underlying performance obligations to the customer, which were offset by decreases due to revenues recognized in the period. During the three months ended April 30, 2022, $53.0 million of revenues were recognized out of the deferred revenue balance as of January 31, 2022.
Transaction price allocated to remaining performance obligations represents contracted revenues that have not yet been recognized, which includes both deferred revenue and amounts that will be invoiced and recognized as revenues in future periods. Transaction price allocated to the remaining performance obligation is influenced by several factors, including the timing of renewals, average contract terms, and foreign currency exchange rates. The Company applies practical expedients to exclude amounts related to performance obligations that are billed and recognized as they are delivered, optional purchases that do not represent material rights, and any estimated amounts of variable consideration that are subject to constraint.
Remaining performance obligations were $905.6 million as of April 30, 2022. The Company expects to recognize approximately 63% of its remaining performance obligation as revenues in the next 24 months, approximately 30% more in the following 25 to 48 months, and the remainder thereafter.
Note 6. Property and Equipment
Property and equipment, net consisted of the following:
As of January 31, 2022As of April 30, 2022
Furniture and fixtures$7,503 $7,601 
Computers and equipment7,496 7,474 
Buildings and land33,977 33,977 
Leasehold improvements14,111 14,135 
Construction in progress1
13,081 21,877 
76,168 85,064 
Less accumulated depreciation(15,491)(16,693)
$60,677 $68,371 
1The increase in construction in progress is primarily due to construction for an additional office building that is on the property of our existing headquarters for which the Company is considered the owner for accounting purposes. See Note 14 "Commitments and Contingencies" for additional details including future commitments.

11

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
The Company recognized depreciation expense as follows:
Three Months Ended April 30,
20212022
Cost of subscription revenues$86 $90 
Cost of professional services and other revenues299 273 
Sales and marketing309 326 
Research and development432 549 
General and administrative155 189 
Total depreciation expense$1,281 $1,427 
Note 7. Business Combinations
SimpleNexus
On January 7, 2022 (the "Acquisition Date") through a series of mergers, the Company acquired all outstanding membership interests of SimpleNexus which provides mobile-first homeownership software that spans engagement, origination, closing and business intelligence, headquartered in Lehi, Utah. The Company acquired SimpleNexus for its complementary products and mobile-first offerings and believes this will provide greater value for new and existing customers. The business combination is considered a related party transaction as entities affiliated with Insight Partners (“Insight Partners”) were equityholders of SimpleNexus and certain other parties in connection with the series of mergers, and other affiliates of Insight Partners are currently significant stockholders of the Company. The Company has included the financial results of SimpleNexus in the consolidated statements of operations from the Acquisition Date. The transaction costs associated with the acquisition were approximately $10.0 million and were recorded in general and administrative expenses for the fiscal year ended January 31, 2022. The Company also recognized $0.2 million in stock issuance costs associated with the share consideration that were reported as a reduction of additional paid-in capital within stockholders' equity.

12

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
The Acquisition-Date estimated fair value of the consideration transferred is as follows:
Total Consideration
Cash consideration to members$286,086 
Voting common stock issued (12,762,146 shares)1
647,509 
Total consideration$933,595 
1The Company assumed a restricted stock award with an estimated fair value of $1.4 million. $0.3 million was allocated to the purchase consideration and $1.1 million was allocated to future services and will be expensed over the service period remaining in fiscal 2023 on a straight-line basis.
Approximately $3.0 million of the cash paid is being held in escrow until the completion of the final post-closing adjustments.
The number of shares for stock consideration was based on a 20-day volume weighted average price fair value of $72.53 established prior to and including November 12, 2021 to determine the number of shares to be issued on the Acquisition Date. On the Acquisition Date, the Company's closing stock price was $50.82 per share.
The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the Acquisition Date:
Fair Value
Cash and cash equivalents$17,038 
Accounts receivable6,100 
Property and equipment, net1,010 
Operating lease right-of-use assets3,549 
Other current and noncurrent assets4,641 
Intangible assets162,000 
Goodwill785,156 
Accounts payable, accrued expenses, and other liabilities, current and noncurrent(8,284)
Deferred revenue, current and noncurrent(8,643)
Operating lease liabilities, current and noncurrent(3,487)
Deferred income taxes(25,485)
Net assets acquired$933,595 
The transaction was accounted for using the acquisition method and, as a result, tangible and intangible assets acquired and liabilities assumed were recorded at their estimated fair values at the Acquisition Date. Any excess consideration over the fair value of the assets acquired and liabilities assumed was recognized as goodwill and is subject to revision as the purchase price allocation is completed.
Due to the timing and the magnitude of the transaction, initial accounting for the acquisition is not complete, and further measurement period adjustments may occur in fiscal year 2023, but no later than one year from the Acquisition Date. The Company has estimated the preliminary fair value of net assets acquired based on information currently available and with the assistance of independent third-party valuations and will continue to adjust those estimates as additional information becomes available, valuations are finalized and the tax returns for the pre-acquisition period are completed. The primary areas of the acquisition accounting that remain preliminary relate to, but are not limited to, (i) finalizing the review and valuation of intangible assets (including key assumptions, inputs and estimates), (ii) finalizing the Company's review of certain assets acquired and liabilities assumed, (iii) finalizing the evaluation and valuation of certain legal matters and/or loss contingencies, including those that the Company may not yet be aware of but meet the requirement to qualify as a pre-acquisition contingency, and (iv) finalizing our estimate of the impact of acquisition accounting on deferred income taxes or liabilities. As the initial

13

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
acquisition accounting is based on preliminary assessments, actual values may differ materially when final information becomes available. The Company believes the information gathered to date provides a reasonable basis for estimating the preliminary fair values of assets acquired and liabilities assumed. The Company will continue to evaluate these items until they are satisfactorily resolved and make necessary adjustments, within the allowable measurement period.
The following table sets forth the components of the preliminary fair value of identifiable intangible assets and their estimated useful lives over which the acquired intangible assets will be amortized on a straight-line basis, as this approximates the pattern in which economic benefits of the assets are consumed as of the Acquisition Date:
Fair ValueUseful Life
Developed technology$77,500 5 years
Customer relationships70,000 10 years
Trade name14,500 6 years
Total intangible assets subject to amortization$162,000 
Developed technology represents the preliminarily estimated fair value of SimpleNexus’ technology. Customer relationships represent the preliminarily estimated fair value of the underlying relationships with SimpleNexus' customers. Trade names represents the preliminarily estimated fair value of SimpleNexus’ company name. The Company continues to assess the rates used in the preliminary valuation methods such as, but not limited to, the discount rates for developed technology, customer relationships and trade name and customer attrition rate for customer relationships.
Goodwill is primarily attributable to expanded market opportunities, synergies expected from the acquisition, and assembled workforce and approximately $189.2 million is expected to be deductible for tax purposes.
Note 8. Goodwill and Intangible Assets
Goodwill
The change in the carrying amounts of goodwill was as follows:
Balance, January 31, 2022$841,487 
Translation adjustments16 
Balance, April 30, 2022$841,503 
Intangible assets
Intangible assets, net are as follows:
As of January 31, 2022As of April 30, 2022
Gross
Amount
Accumulated
Amortization
Net Carrying
Amount
Gross
Amount
Accumulated
Amortization
Net Carrying
Amount
Acquired developed technology$83,625 $(4,804)$78,821 $83,629 $(9,064)$74,565 
Customer relationships91,711 (4,748)86,963 91,712 (6,916)84,796 
Trademarks and trade name14,626 (288)14,338 14,626 (893)13,733 
$189,962 $(9,840)$180,122 $189,967 $(16,873)$173,094 

14

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
The Company recognized amortization expense as follows:
Three Months Ended April 30,
20212022
Cost of subscription revenues$396 $4,262 
Sales and marketing418 2,771 
Total amortization expense$814 $7,033 
The expected future amortization expense for intangible assets as of April 30, 2022 is as follows:
Fiscal Year Ending January 31,
2022 (remaining)$21,088 
202427,419 
202526,587 
202626,587 
202725,545 
Thereafter45,868 
$173,094 
The expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, future changes to expected asset lives of intangible assets, and other events.
Note 9. Reseller Agreement
The Company has a reseller agreement in place with a related party to utilize their platform and to develop the Company’s cloud-based banking software as an application within the related party’s hosted environment. This agreement expires in June 2027 and will automatically renew in annual increments thereafter unless either party gives notice of non-renewal before the end of the initial term or the respective renewal term. Cost of subscription revenues in each of the three months ended April 30, 2021 and 2022 substantially consists of fees paid for access to the related party’s platform, including their hosting infrastructure and data center operations. Based solely on information reported in a Schedule 13G/A filed with the SEC on February 11, 2022, the reseller is no longer considered a related party as of December 31, 2021 and the amounts disclosed related to them are accordingly presented while the reseller was considered a related party. The reseller was considered a related party for the three months ended April 30, 2021 and was no longer considered a related party for the three months ended April 30, 2022. The Company has recorded expenses of $10.6 million for the three months ended April 30, 2021. The Company continues to do business with the reseller. See also Note 15 "Related-Party Transactions."
Note 10. Stockholders’ Equity
At April 30, 2022, the Company committed a total of 31,049,997 shares of common stock for future issuance as follows:
Issued and outstanding stock options2,463,322 
Nonvested issued and outstanding restricted stock units ("RSUs")4,071,125 
Possible issuance under stock plans24,515,550 
31,049,997 

15

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
Note 11. Stock-Based Compensation
Stock Options
Stock option activity for the three months ended April 30, 2022 was as follows:
Number of
Shares
Weighted
Average
Exercise Price
Outstanding, January 31, 20222,629,109 $6.72 
Granted  
Expired or forfeited(8,812)14.34 
Exercised(156,975)4.95 
Outstanding, April 30, 20222,463,322 $6.80 
Exercisable, April 30, 20222,197,707 $5.78 
Fully vested or expected to vest, April 30, 20222,436,761 $6.71 
As of April 30, 2022, there was $0.7 million of total unrecognized compensation expense related to unvested stock-based compensation arrangements under the 2014 Stock Plan ("2014 Plan") and 2019 Equity Incentive Plan (as amended and restated, "2019 Plan"). That cost is expected to be recognized over a weighted average period of 0.91 years.
Restricted Stock Units
RSU activity during the three months ended April 30, 2022 was as follows:
Number of
Shares
Weighted Average
Grant Date Fair
Value
Nonvested, January 31, 20223,012,440 $45.62 
Granted1,355,616 46.87 
Vested(193,044)64.86 
Forfeited(103,887)45.03 
Nonvested, April 30, 20224,071,125 $45.14 
As of April 30, 2022, total unrecognized compensation expense related to non-vested RSUs was $154.7 million, adjusted for estimated forfeitures, based on the estimated fair value of the Company’s common stock at the time of grant. That cost is expected to be recognized over a weighted average period of 3.48 years.
Employee Stock Purchase Plan
The first offering period for the Employee Stock Purchase Plan ("ESPP") began on July 1, 2021 and ended on December 31, 2021. Thereafter, offering periods will begin on January 1 and July 1.
The fair value of ESPP shares during the three months ended April 30, 2022 was estimated at the date of grant using the Black-Scholes option valuation model based on assumptions as follows for ESPP awards: (i) expected life of 0.5 years, (ii) expected volatility of 49.65%, (iii) expected dividends of 0.00%, (iv) risk-free interest rate of 0.22%.
As of April 30, 2022, total unrecognized compensation expense related to the ESPP was $0.3 million. That cost is expected to be recognized over the remaining term of the offering period that began on January 1, 2022 and will end on June 30, 2022.

16

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
Stock-Based Compensation Expense
Total stock-based compensation expense included in our consolidated statements of operations were as follows:
Three Months Ended April 30,
20212022
Cost of subscription revenues$285 $376 
Cost of professional services and other revenues1,332 1,871 
Sales and marketing1,753 3,371 
Research and development1,543 2,832 
General and administrative2,151 4,850 
Total stock-based compensation expense$7,064 $13,300 
Note 12. Leases
Operating Leases
The Company leases its facilities and a portion of its equipment under various non-cancellable agreements, which expire at various times through July 2028, some of which include options to extend the leases for up to five years.
The components of lease expense were as follows:
Three Months Ended April 30,
20212022
Operating lease expense$682 $965 
Short-term lease expense194 281 
Variable lease expense81 82 
Total$957 $1,328 
Supplemental cash flow information related to operating leases were as follows:
Three Months Ended April 30,
20212022
Cash paid for amounts included in the measurement of operating lease liabilities$727 $1,006 
Right-of-use assets obtained in exchange for operating lease liabilities707 10 
The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of April 30, 2022 were 4.34 years and 4.4%, respectively.

17

nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
Future minimum lease payments as of April 30, 2022 were as follows:
Fiscal Year Ending January 31,Operating Leases
2023 (remaining)
$4,029 
20243,454 
20252,945 
20262,219 
20271,013 
Thereafter1,229 
Total lease liabilities14,889 
Less: imputed interest(1,370)
Total lease obligations13,519 
Less: current obligations(3,514)
Long-term lease obligations$10,005 
As of April 30, 2022, the Company had an additional operating lease that had not yet commenced, which is excluded from the table above. The operating lease will commence in fiscal year 2023 and have total undiscounted future payments of $0.7 million with a lease term of 2 years.
Note 13. Revolving Credit Facility
On February 11, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”), by and among the Company, nCino OpCo (the “Borrower”), certain subsidiaries of the Company as guarantors, and Bank of America, N.A. as lender (the “Lender”), pursuant to which the Lender is providing to the Borrower a senior secured revolving credit facility of up to $50.0 million (the “Credit Facility”). The Credit Facility includes borrowing capacity available for letters of credit subject to a sublimit of $7.5 million. Any issuance of letters of credit will reduce the amount available under the Credit Facility.
Borrowings under the Credit Facility bear interest, at the Borrower’s option, at: (i) a base rate equal to the greater of (a) the Lender’s “prime rate,” (b) the federal funds rate plus 0.50%, and (c) the Bloomberg Short Term Bank Yield Index ("BSBY") rate plus 1.00%, plus a margin of 0.00% (provided that the base rate shall not be less than 0.00%); or (ii) the BSBY rate (provided that the BSBY shall not be less than 0.00%), plus a margin of 1.00%. The Company is also required to pay an unused commitment fee to the Lender of 0.25% of the average daily unutilized commitments. The Company must also pay customary letter of credit fees.
Borrowings under the Credit Facility are scheduled to mature on February 11, 2024, and the Company may repay amounts borrowed any time without penalty. Borrowings under the Credit Facility may be reborrowed.
The Credit Agreement contains representations and warranties, affirmative, negative and financial covenants, and events of default that are customary for loans of this type. The financial covenant requires the Company and its subsidiaries on a consolidated basis to maintain Consolidated Liquidity of not less than $50.0 million. Consolidated Liquidity is measured as the sum of 100% of unrestricted and unencumbered cash of the Company and its domestic subsidiaries, 75% of unrestricted and unencumbered cash of the Company’s foreign subsidiaries and the lesser of Credit Facility availability and $25.0 million. The Company is also required to maintain at least $5.0 million of the Company's cash and/or marketable securities with the lender which is considered restricted cash and is included in other long-term assets at April 30, 2022 on the unaudited condensed consolidated balance sheets.
The Credit Facility is guaranteed by the Company and each of its current and future material domestic subsidiaries (the “Guarantors”) and secured by substantially all of the personal property, subject to customary exceptions, of the Borrower and the Guarantors, in each case, now owned or later acquired, including a pledge of all of the Borrower’s capital stock, the capital stock of all of the Company’s domestic subsidiaries, and 65% of the capital stock of foreign subsidiaries that are directly owned by the Borrower or a Guarantor.

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nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
As of April 30, 2022, unamortized debt issuance costs were $0.3 million and are included in other long-term assets.
As of April 30, 2022, the Company had no amounts outstanding or letters of credit issued on the Credit Facility and was in compliance with all covenants. The available borrowing capacity under the Credit Facility was $50.0 million as of April 30, 2022.
Note 14. Commitments and Contingencies
Purchase Commitments
The Company’s purchase commitments consist of non-cancellable agreements to purchase goods and services, primarily licenses and hosting services, entered into in the ordinary course of business.
Financing Obligations and Construction Liabilities
The Company entered into a new lease agreement for the Company's headquarters in November 2020 with a new lessor. The lease goes through 2035 with options to renew. Due to a purchase option contained in the lease, the Company is deemed to have continuing involvement and is considered to be the owner of the Company's headquarters for accounting purposes. As a result, the Company did not meet the criteria to apply sale-leaseback accounting and therefore, recorded an asset and corresponding financing obligation for $16.3 million at inception of the lease. Upon expiration of the purchase option in the lease, the lease will be analyzed for applicable lease accounting. The fair value of the leased property and corresponding financing obligation are included in property and equipment, net and financing obligations on the unaudited condensed consolidated balance sheets, respectively.
In January 2021, the Company entered into an agreement for a parking deck which is an addition to the Company's existing headquarters building. Due to the Company also being deemed to be the owner of the parking deck for accounting purposes, the costs associated with the construction of the parking deck were capitalized as construction in progress with a corresponding construction liability through construction. Upon completion of the parking deck in September 2021, for approximately $17.7 million, the costs of the construction in progress and the corresponding construction liability were reclassified to property and equipment, net and financing obligations on the unaudited condensed consolidated balance sheets, respectively. Upon expiration of the purchase option in the lease, the lease will be analyzed for applicable lease accounting.
In April 2021, the Company entered into a new lease agreement for the construction of an additional office building that is on the property of the Company's existing headquarters. Due to the Company also being deemed to be the owner of the additional building for accounting purposes, the costs associated with the construction of the building will be capitalized as construction in progress with a corresponding construction liability through construction which is estimated to be approximately $24.0 million. Upon completion of the building, the construction liability will be recorded as a financing obligation. Upon expiration of the purchase option in the lease, the lease will be analyzed for applicable lease accounting. The costs of the construction in progress and corresponding construction liability are included in property and equipment, net and construction liability, noncurrent on the unaudited condensed consolidated balance sheets, respectively.

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nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
Purchase commitments and future minimum lease payments required under financing obligations as of April 30, 2022 is as follows:
Fiscal Year Ending January 31,Purchase commitmentsFinancing obligations - leased facility
2023 (remaining)4,073 2,059 
20244,480 2,804 
20253,040 2,867 
20261,503 2,931 
20271,104 2,996 
Thereafter 33,260 
Total$14,200 $46,917 
Residual financing obligations and assets9,975 
Less: amount representing interest(22,943)
Financing obligations$33,949 
Indemnification
In the ordinary course of business, the Company generally includes standard indemnification provisions in its arrangements with third parties, including vendors, customers, and the Company’s directors and officers. Pursuant to these provisions, the Company may be obligated to indemnify such parties for losses or claims suffered or incurred. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any material liabilities related to such obligations in the accompanying unaudited condensed consolidated financial statements.
Legal Proceedings
From time to time, the Company is involved in legal proceedings or is subject to claims arising in the ordinary course of business including the following:
On February 23, 2021, the Company and certain of its officers and other employees were served with grand jury subpoenas wherein the Antitrust Division of the Department of Justice is seeking documents and information in connection with an investigation of the Company’s hiring and wage practices under U.S. federal antitrust laws. The Company has retained outside counsel and is fully cooperating with the authorities. Although there can be no assurance with respect to the outcome of this matter, the Company believes its hiring and wage practices do not violate antitrust laws.
On March 12, 2021, a putative class action complaint was filed in the United States District Court for the Eastern District of North Carolina (the "District Court"). The sole class representative in the suit is one individual alleging a contract, combination or conspiracy between and among the Company, Live Oak Bancshares, Inc. ("Live Oak") and Apiture, Inc. ("Apiture") not to solicit or hire each other’s employees in violation of Section 1 of the Sherman Act and N.C. Gen Stat. §§ 75-1 and 75-2. The complaint seeks treble damages and additional remedies, including restitution, disgorgement, reasonable attorneys’ fees, the costs of the suit, and pre-judgment and post judgment interest. The complaint does not allege any specific damages. On April 28, 2022, the District Court approved settlements between the plaintiff and defendant Live Oak in the amount of approximately $3.9 million and unnamed party Apiture in the amount of approximately $0.8 million. Although there can be no assurance with respect to the outcome of this matter, the Company believes the alleged claims are not meritorious and intends to defend itself vigorously.
The Company does not presently believe the above matters will have a material adverse effect on its day-to-day operations or the quality of the services, products or innovation it continues to provide to its customers. However, regardless of the outcome, legal proceedings can have an adverse impact on the Company because of the related expenses, diversion of management resources, and other factors.

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nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
Given the uncertainty and preliminary stages of these matters, the Company is unable to reasonably estimate any possible loss or range of loss that may result.
Other Commitments and Contingencies
The Company may be subject to audits related to its non-income taxes by tax authorities in jurisdictions where it conducts business. These audits may result in assessments of additional taxes that are subsequently resolved with the authorities or potentially through the courts. The Company accrues for any assessments if deemed probable and estimable.
Note 15. Related-Party Transactions
The Company’s largest vendor is also an equityholder in the Company. Total payments related to the agreement with this party are disclosed in Note 9 "Reseller Agreement." The Company also purchases services from this party to assist in managing its own sales cycle, customer relationship management, and other business functions. The Company has a non-cancellable agreement for the purchase of services. In December 2021, this agreement was renewed for one year and expires in December 2022. Based solely on information reported in a Schedule 13G/A filed with the SEC on February 11, 2022, this vendor is no longer considered a related party as of December 31, 2021, and the amounts disclosed related to them are accordingly presented while the vendor was considered a related party. The vendor was considered a related party for the three months ended April 30, 2021, and was no longer considered a related party for the three months ended April 30, 2022. Total payments for these services recorded to expenses were $0.4 million for the three months ended April 30, 2021. The Company continues to do business with the vendor.
The Company entered into a Merger Agreement on January 7, 2022, as disclosed in Note 1 "Organization and Description of Business" and Note 7 "Business Combinations." Affiliates of Insight Partners were equityholders of SimpleNexus and certain other parties in connection with the Merger Agreement transaction, and other affiliates of Insight Partners are currently significant stockholders of the Company.
Note 16. Basic and Diluted Loss per Share
Basic loss per share is computed by dividing net loss attributable to nCino, Inc. by the weighted-average number of common shares outstanding for the fiscal period. Diluted loss per share is computed by giving effect to all potential weighted average dilutive common stock, including stock options issued and outstanding, nonvested RSUs issued and outstanding, and shares issuable pursuant to the ESPP. The dilutive effect of outstanding awards is reflected in diluted earnings per share by application of the treasury stock method. Diluted loss per share for the three months ended April 30, 2021 and 2022 is the same as the basic loss per share as there was a net loss for those periods, and inclusion of potentially issuable shares was anti-dilutive.

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nCino, Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts and unless otherwise indicated)
The components of basic and diluted loss per share for periods presented are as follows (in thousands, except share and per share data):
Three Months Ended April 30,
20212022
Basic and diluted loss per share:
Numerator
Net loss attributable to nCino, Inc.$(15,008)$(30,688)
Denominator
Weighted-average common shares outstanding94,402,265 109,998,637 
Basic and diluted loss per share attributable to nCino, Inc.$(0.16)$(0.28)
The weighted-average number of shares outstanding used in the computation of diluted loss per share does not include the effect of the following potential outstanding common stock because the effect would have been anti-dilutive:
Three Months Ended April 30,
20212022
Stock options issued and outstanding3,788,794 2,463,322 
Nonvested RSUs issued and outstanding2,526,767 4,071,125 
Shares issuable pursuant to the ESPP 70,817 

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Item 2. 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, 2022 filed with the SEC on March 31, 2022. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K, particularly in the section titled “Risk Factors.” Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Our fiscal year ends on January 31 of each year and references in this Quarterly Report on Form 10-Q to a fiscal year mean the year in which that fiscal year ends. For example, references in this Quarterly Report on Form 10-Q to "fiscal 2023" refer to the fiscal year ended January 31, 2023.
Overview
nCino is a leading global provider of cloud-based software for financial institutions. We empower banks, credit unions, and independent mortgage banks with the technology they need to meet ever-changing client expectations and regulatory requirements, gain increased visibility into their operations and performance, replace legacy systems, and operate digitally and more competitively. Our solution, the nCino Bank Operating System, digitizes, automates, and streamlines inefficient and complex processes and workflow, and utilizes data analytics and artificial intelligence and machine learning ("AI/ML") to enable banks and credit unions to more effectively onboard new clients, make loans and manage the entire loan life cycle, open deposit and other accounts, and manage regulatory compliance. Additionally, SimpleNexus' digital homeownership platform, which we acquired on January 7, 2022 (the "Acquisition Date"), unites people, systems, and stages of the mortgage process into a seamless end-to-end journey. We serve financial institution customers of all sizes and complexities, including global financial institutions, enterprise banks, regional banks, community banks, credit unions, new market entrants, such as challenger banks, and, through SimpleNexus, independent mortgage banks. Our customers deploy and utilize our technology, which can be accessed anytime, anywhere, and from any internet-enabled device, for mission critical functions across their organizations.
Built as a single, multi-tenant SaaS platform, the nCino Bank Operating System transforms the way banks and credit unions operate, go to market, and interact with their clients, while delivering measurable return on investment by enabling them to:
digitally serve their clients across commercial, small business, and retail lines of business,
improve financial results,
operate more efficiently,
manage risk and compliance more effectively, and
establish a data, audit, and business intelligence hub.
We were founded in a bank with the goal of improving that institution’s operations and client service. Realizing the problems we were addressing were endemic to virtually all banks and credit unions, we were spun out as a separate company in late 2011 with the vision of providing a comprehensive solution to onboard clients, originate any type of loan, and open any type of account on a single cloud-based platform. We initially focused the nCino Bank Operating System on transforming commercial and small business lending for community and regional banks. We introduced this solution to enterprise banks in the United States in 2014, and then internationally in 2017, and have subsequently expanded across North America, Europe, and APAC. In fiscal 2020, we acquired nCino Portfolio Analytics, LLC (formerly Visible Equity) and FinSuite and combined the acquired technology with certain of our internally-developed technology to launch nCino IQ ("nIQ"). nIQ helps our customers improve operational and financial performance by using AI/ML to increase efficiency through automation and analytics to gain greater insights into their operations and client interactions. In January 2022, we acquired SimpleNexus, a leading cloud-based mobile-first homeownership software company in the United States.
We offer our solution on a SaaS basis under multi-year contracts and recognize subscription revenues ratably over the term of the contract. Our customers may initially purchase the nCino Bank Operating System for client onboarding, loan
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origination, and/or deposit account opening for a single line of business or geography. Once this initial solution is in production, we seek to deploy additional solutions and expand within and across additional lines of business or geographies. The expansion from our original focus on commercial and small business loan origination to retail loan origination, client onboarding, deposit account opening, and, most recently, analytics and AI/ML solutions, has enhanced our ability to increase adoption of the nCino Bank Operating System by our customers.
We sell our solutions directly through our business development managers, account executives, field sales engineers, and customer success managers. Our sales efforts in the United States are organized around financial institutions based on size, whereas internationally we focus our sales efforts by geography. To drive growth and serve customers in the EMEA region, we continue to expand headcount in our UK office. In fiscal 2020, we opened an office in Tokyo through our joint venture, nCino K.K., giving us another base of operations in APAC in addition to our Australian offices. As of April 30, 2022, we had 282 sales and sales support personnel in the United States, including SimpleNexus, and 84 sales and support personnel in offices outside the United States.
To help customers go live with the nCino Bank Operating System, we offer professional services including configuration and implementation, training and advisory services. For larger financial institutions, we generally work with system integrators ("SIs") such as Accenture, Deloitte, PwC, and West Monroe Partners for the delivery of professional services for the nCino Bank Operating System, while we have historically performed professional services for smaller financial institutions ourselves. We expect larger financial institutions to make up a greater proportion of our nCino Bank Operating System sales and to increasingly outsource professional services for smaller banks and credit unions to SIs in the future. As a result, we expect the mix of our total revenues to become more heavily weighted toward subscription revenues.
To support our growth and capitalize on what we believe is a compelling market opportunity, we have significantly increased our operating expenses across all aspects of our business. In research and development, we have focused on product improvements and the development of new functionality, while simultaneously leveraging the Salesforce Platform such that our development of the nCino Bank Operating System is heavily focused on vertical-specific solutions for financial institutions. Similarly, to grow our customer base, we have invested heavily in sales and marketing both in the United States and internationally. We have also increased our general and administrative spending to support our growing operations and for operating as a public company.
On the Acquisition Date, we acquired SimpleNexus, a leading cloud-based mobile-first homeownership software company in the United States, for an aggregate purchase price of $933.6 million. As a result of the acquisition, SimpleNexus became a wholly owned subsidiary of nCino, Inc. Our consolidated results of operations for the three months ended April 30, 2022 include the operating results of SimpleNexus from the Acquisition Date. See Note 7 "Business Combinations" of the notes to our consolidated financial statements included in of Part I, Item I of this Quarterly Report on Form 10-Q for additional information. Given it was prior to the Acquisition Date, no operating results for SimpleNexus are included in the comparative period for the three months ended April 30, 2021. SimpleNexus offers a suite of products that enables loan officers, borrowers, real estate agents, settlement agents and others to easily engage in the homeownership process from any internet-enabled device.
For the three months ended April 30, 2021 and 2022, our total revenues were $62.4 million and $94.2 million, respectively, representing a 51.1% increase. Our revenues for the three months ended April 30, 2022 include $14.8 million in revenues from SimpleNexus. For the three months ended April 30, 2021 and 2022, our subscription revenues were $51.0 million and $79.2 million, respectively, representing a 55.2% increase. Our subscription-based revenues for the three months ended April 30, 2022 include $13.6 million from SimpleNexus. Due to our continuing investment in growth, we recorded net losses attributable to nCino of $15.0 million and $30.7 million for the three months ended April 30, 2021 and 2022, respectively.
Factors Affecting Our Operating Results
Market Adoption of Our Solution. Our future growth depends on our ability to expand our reach to new financial institution customers and increase adoption with existing customers as they broaden their use of our solutions within and across lines of business. 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 financial institutions 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 United States, which markets accounted for 15.2% of total revenues for the three months ended April 30, 2022. For new customers, our sales cycles are typically lengthy, generally ranging from six to nine months for smaller financial institutions to 12 to 18 months or more for larger financial institutions. Reaching and converting potential customers requires that we continue to invest in the growth and success of our sales force both in the
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United States and internationally. In addition, 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.
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 can generally range from as little as three months to over 18 months for global financial institutions. As a result, during the initial go-live period for a customer on the nCino Bank Operating System, professional services revenues 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.
COVID-19 Effects on Demand for Our Solutions. To help our customers service demand for Paycheck Protection Program ("PPP") loans under the CARES Act beginning in April 2020, we adapted our Small Business Administration loan solution to the requirements of the PPP and rapidly introduced it to the market. Using our PPP solution, since the inception of PPP funding, our financial institution customers have processed hundreds of thousands of applications.
In light of the extraordinary nature of this market demand, we offered our PPP solution on one- or two-year terms as well as on a multi-year basis co-terminus with existing contracts. Seats for our PPP solution were activated immediately, which caused subscription revenues from these seats to be recognized sooner than is typical with the phased seat activations usually offered to customers. We believe that the emergency purchases of our PPP solution, coupled with the disruptive effect of COVID-19 on the economy more generally, may have had the effect of moderating revenue growth rates in fiscal 2022. In addition, our revenue growth rates in fiscal 2023 and our subscription revenue retention rates may be adversely affected upon the expiration of access and use rights to our PPP solution to the extent such rights are not re-purposed for other applications.
Interest Rate Environment. We are continuing to operate in a rising interest rate environment. To date, we have not suffered a material negative impact as a result of rising interest rates, including with respect to our digital homeownership platform revenue, but we continue to monitor the impact the rise in interest rates and any future rise in interest rates may have on our business.
Continued Investment in Innovation and Growth. We have made substantial investments in product development, sales and marketing, and strategic acquisitions since our inception to achieve a leadership position in our market and grow our revenues and customer base. We intend to continue to increase our investment in product development in the coming years to maintain and build on this advantage. We also intend to invest heavily in sales and marketing both in the United States and internationally to further grow our business and increase our general and administrative spending to support our growing operations and for operating as a public company. As such, to capitalize on the market opportunity we see ahead of us, we expect to continue to optimize our operating plans for revenue growth, and as a result continue experiencing operating losses, for the foreseeable future.
Components of Results of Operations
Revenues
We derive our revenues from subscription and professional services and other revenues.
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 SimpleNexus. Specifically, we offer:
Client onboarding, loan origination, and deposit account opening applications targeted at a financial institution’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.
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Through SimpleNexus, digital homeownership platform 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.
Maintenance and support services as well as internal-use or “sandbox” development licenses, for which we 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. 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 SimpleNexus are generally billed monthly in advance. 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. When we resell such access, we charge a higher subscription price and remit a higher subscription fee to Salesforce for these subscriptions.
Professional Services and Other Revenues. Professional services and other revenues consist of fees for implementation and configuration assistance, training, and advisory services. For enterprise and larger regional financial institutions, we generally work with SIs to provide the majority of implementation services for the nCino Bank Operating System, for which these SIs bill our customers directly. We have historically delivered professional services ourselves for community banks and smaller credit unions and SimpleNexus has historically provided professional services directly to its customers. Revenues for implementation, training, and advisory services are 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 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.
Cost of Revenues and Gross Margin
Cost of Subscription Revenues. Cost of subscription revenues consists of fees paid to Salesforce for access to the Salesforce Platform, including Salesforce’s hosting infrastructure and data center operations, along with certain integration fees paid to other third parties. When we resell access to Salesforce’s CRM solution, cost of subscription revenues also includes the subscription fees we remit to Salesforce for providing such access. We also incur costs associated with access to other platforms. 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.
Cost of Professional Services and Other Revenues. Cost of professional services and other revenues consists primarily of personnel-related costs associated with delivery of these services, including salaries, benefits and stock-based compensation expense, travel and related costs, and allocated overhead. 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. Realized effective billing and utilization rates drive fluctuations in our professional services and other gross margin on a period-to-period basis.
Operating Expenses
Sales and Marketing. 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
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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 continue to increase as we expand our direct sales teams in the United States and internationally to address our market opportunity.
Research and Development. Research and development expenses consist primarily of salaries, benefits and stock-based compensation associated with our engineering, product and quality assurance personnel, as well as allocated overhead. Research and development expenses also include the cost of third-party contractors. Research and development costs are expensed as incurred. We expect research and development costs to continue to increase as we develop new functionality and make improvements to our solutions.
General and Administrative. 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 primarily consists of third-party expenses related to the acquisition of SimpleNexus, such as legal and other professional services fees. We expect that general and administrative expenses will continue to increase as we scale our business and as we incur costs associated with being a publicly-traded company, including legal, audit, and consulting fees.
Non-Operating Income (Expense)
Interest Income. Interest income consists primarily of interest earned on our cash and cash equivalents.
Interest Expense. 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 Income (Expense), Net. Other income (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.
Income Tax Provision (Benefit). Income tax provision consists of federal and state income taxes in the United States and income taxes in foreign jurisdictions.
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Results of Operations
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 consolidated statements of operations data for three months ended April 30, 2021 and 2022 in both dollars and as a percentage of total revenues, except as noted.
Three Months Ended April 30,
20212022
($ in thousands, except share and per share amounts)