UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~October~~April 3130, ~~2020~~2021

☐ 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: 001-39380

nCino, Inc.

(Exact name of Registrant as specified in its charter)

Delaware						46-4353148
(State or other jurisdiction ofincorporation or organization)						(I.R.S. EmployerIdentification ~~Number~~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 class			Trading Symbol(s)			Name of each exchange on which registered
Common stock, par value $0.0005 per share			NCNO			The 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 ~~and post~~ 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 filer

☒

Smaller 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: 9295,~~294~~434,~~563~~674 shares of common stock, $0.0005 par value per share, as of ~~November~~May 3028, ~~2020~~2021.

Table of Contents

TABLE OF CONTENTS


	TABLE OF CONTENTS

		Page
Cautionary Note Regarding Forward-Looking Statements		i

	Part I. Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of January 31, 2021 and April 30, 2021 (Unaudited)	1
	Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended April 30, 2020 and 2021	2
	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended April 30, 2020 and 2021	3
	Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended April 30, 2020 and 2021	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 30, 2020 and 2021	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

	Part II. Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
	Signatures	36

			Page
Cautionary Note Regarding Forward-Looking Statements			i
Part I. Financial Information			1
Item 1. Financial Statements			1
Condensed Consolidated Balance Sheets as of January 31, 2020 and October 31, 2020 (Unaudited)			1
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended October 31, 2019 and 2020			2
Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended October 31, 2019 and 2020			3
Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended October 31, 2019 and 2020			4
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 31, 2019 and 2020			6
Notes to Unaudited Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			35
Part II. Other Information			36
Item 1. Legal Proceedings			36
Item 1A. Risk Factors			36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			36
Item 3. Defaults Upon Senior Securities			36
Item 4. Mine Safety Disclosures			37
Item 5. Other Information			37
Item 6. Exhibits			38
Signatures			39

Table of Contents

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.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

nCino, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	January 31, 2020		October 31, 2020
	January 31, 2021		April 30, 2021
			(Unaudited)
Assets
Current Assets
Current assets
Cash and cash equivalents (VIE: $8,892 and $8,195 at January 31, 2020 and October 31, 2020, respectively)	$	91,184	$	378,584
Cash and cash equivalents (VIE: $7,425 and $6,254 at January 31, 2021 and April 30, 2021, respectively)	$	371,425	$	386,515
Accounts receivable, less allowance for doubtful accounts of $0 and $342 at January 31, 2020 and October 31, 2020, respectively	34,205		25,350
Accounts receivable, less allowance for doubtful accounts of $88 and $52 at January 31, 2021 and April 30, 2021, respectively	55,517		56,228
Accounts receivable, related parties	9,201		—
Costs capitalized to obtain revenue contracts, current portion, net	4,864		5,033
Costs capitalized to obtain revenue contracts, current portion, net	3,608		4,019
Prepaid expenses and other current assets	10,425		9,404
Prepaid expenses and other current assets	7,079		9,571
Total current assets	442,231		457,180
Total current assets	145,277		417,524
Property and equipment, net	29,943		35,058
Property and equipment, net	13,477		14,307
Operating lease right-of-use assets, net	—		10,665
Costs capitalized to obtain revenue contracts, noncurrent, net	710,~~000~~191		710,~~608~~296
Goodwill	5557,~~840~~149		5657,~~298~~325
Intangible assets, net	2623,~~093~~137		2322,~~790~~352
Other long-term assets	~~2,464~~750		~~869~~889
Total assets	$	~~250~~563,~~151~~401	$	~~520~~593,~~396~~765
Liabilities, Redeemable Non-Controlling Interest, and Stockholders’ Equity
Liabilities, redeemable non-controlling interest, and stockholders’ equity
Current Liabilities
Current liabilities
Accounts payable	$	1,~~258~~634	$	24,~~354~~382
Accounts payable, related parties	34,~~408~~363		4,~~100~~842
Accrued commissions	712,~~862~~500		53,~~237~~943
Other accrued expenses	4,922		5,527
Construction liability, current portion	—		5,097
Deferred rent, current portion	183		204
Other accrued expenses	7,527		7,557
Deferred revenue, current portion	50,929		68,634
Deferred rent, current portion	203		—
Deferred revenue, current portion, related parties	8,013		—
Deferred revenue, current portion	89,141		110,071
Total current liabilities	76,575		86,056
Financing obligation, current portion	324		337
Deferred income taxes, noncurrent	194		290
Operating lease liabilities, current portion	—		2,540
Deferred rent, noncurrent	1,558		1,426
Total current liabilities	115,692		138,769
Deferred revenue, noncurrent	—		1,741
Operating lease liabilities, noncurrent	—		9,771
Other long-term liabilities	195		—
Deferred income taxes, noncurrent	368		429
Total liabilities	78,522		89,513
Deferred rent, noncurrent	1,486		—
Commitments and Contingencies (Notes 8, 11 and 12)
Deferred revenue, noncurrent	946		168
Redeemable non-controlling interest (Note 3)	4,356		4,166
Financing obligation, noncurrent	15,939		15,847
Stockholders’ Equity
Construction liability, noncurrent	—		675
Preferred stock, $0.001 par value; 1,000,000 and 10,000,000 shares authorized as of January 31, 2020 and October 31, 2020, respectively; and none issued and outstanding as of January 31, 2020 and October 31, 2020, respectively	—		—
Total liabilities	134,431		165,659
Common stock, $0.0005 par value; 0 and 500,000,000 shares authorized as of January 31, 2020 and October 31, 2020, respectively; 0 and 91,959,276 shares issued and outstanding as of January 31, 2020 and October 31, 2020, respectively	—		46
Commitments and contingencies (Notes 8, 12, and 13)
Voting common stock, $0.0005 par value; 99,708,247 and 0 shares authorized as of January 31, 2020 and October 31, 2020, respectively; 75,596,007 and 0 shares issued and outstanding as of January 31, 2020 and October 31, 2020, respectively	38		—
Redeemable non-controlling interest (Note 3)	3,791		3,065
Non-voting common stock, $0.0005 par value; 10,291,753 and 0 shares authorized as of January 31, 2020 and October 31, 2020, respectively; 5,931,319 and 0 shares issued and outstanding as of January 31, 2020 and October 31, 2020, respectively	3		—
Stockholders’ equity
Additional paid-in capital	288,564		575,529
Preferred stock, $0.001 par value; 10,000,000 shares authorized, and none issued and outstanding as of January 31, 2021 and April 30, 2021	—		—
Accumulated other comprehensive (loss) income	(408)		201
Common stock, $0.0005 par value; 500,000,000 shares authorized as of January 31, 2021 and April 30, 2021; 93,643,759 and 95,318,070 shares issued and outstanding as of January 31, 2021 and April 30, 2021, respectively	47		48
Accumulated deficit	(120,924)		(149,059)
Additional paid-in capital	585,956		601,034
Total stockholders’ equity	167,273		426,717
Accumulated other comprehensive income	240		161
Total liabilities, redeemable non-controlling interest, and stockholders’ equity	$	250,151	$	520,396
Accumulated deficit	(161,064)		(176,202)
Total stockholders’ equity	425,179		425,041
Total liabilities, redeemable non-controlling interest, and stockholders’ equity	$	563,401	$	593,765

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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nCino, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended October 31,				Nine Months Ended October 31,
	Three Months Ended April 30,
	2019		2020		2019		2020
	2020		2021
Revenues
Subscription (related parties $1,904, $0, $5,771 and $2,439, respectively)	$	27,673	$	43,279	$	71,815	$	117,461
Subscription (related parties $2,439 and $0, respectively)	$	34,831	$	51,033
Professional services	109,~~189~~881		1011,~~950~~322		~~27,861~~		~~30,245~~
Total revenues	3744,~~862~~712		5462,~~229~~355		~~99,676~~		~~147,706~~
Cost of Revenues
Cost of revenues
Subscription1 (related party $5,826, $9,067, $16,246 and $25,277, respectively)	8,243		12,380		21,828		34,399
Subscription1 (related party $7,510 and $10,569, respectively)	10,099		14,946
Professional services1	8,~~646~~767		1011,~~134~~353		~~23,869~~		~~29,568~~
Total cost of revenues	1618,~~889~~866		2226,~~514~~299		~~45,697~~		~~63,967~~
Gross profit	2025,~~973~~846		3136,~~715~~056		~~53,979~~		~~83,739~~
Operating Expenses
Operating expenses
Sales and marketing1	12,~~602~~226		1418,~~175~~425		~~31,070~~		~~42,027~~
Research and development1	910,~~534~~965		1517,~~077~~425		~~25,172~~		~~41,334~~
General and administrative1	56,~~557~~926		1115,~~251~~680		~~15,896~~		~~29,130~~
Total operating expenses	2730,~~693~~117		4051,~~503~~530		~~72,138~~		~~112,491~~
Loss from operations	(64,~~720~~271)		(815,~~788~~474)		~~(18,159)~~		~~(28,752)~~
Non-operating Income (Expense)
Non-operating income (expense)
Interest income	99156		7857		~~682~~		~~289~~
Other	690		(260)		(37)		337
Interest expense	—		(268)
Loss before income tax expense	(5,931)		(8,970)		(17,514)		(28,126)
Other income (expense), net	(520)		267
Income tax expense	158		309		496		709
Loss before income tax expense	(4,635)		(15,418)
Net loss	(6,089)		(9,279)		(18,010)		(28,835)
Income tax expense	197		187
Net loss attributable to redeemable non-controlling interest (Note 3)	(60)		(292)		(60)		(700)
Net loss	(4,832)		(15,605)
Adjustment attributable to redeemable non-controlling interest (Note 3)	—		76		—		343
Net loss attributable to redeemable non-controlling interest (Note 3)	(176)		(467)
Net loss attributable to nCino, Inc.	$	(6,029)	$	(9,063)	$	(17,950)	$	(28,478)
Adjustment attributable to redeemable non-controlling interest (Note 3)	113		(130)
Net loss attributable to nCino, Inc.	$	(4,769)	$	(15,008)
Net loss per share attributable to nCino, Inc.:
Basic and diluted	$	(0.0806)	$	(0.1016)	$	~~(0.23)~~	$	~~(0.33)~~
Weighted average number of common shares outstanding:
Basic and diluted	7981,~~382~~560,~~419~~762		9194,~~600~~402,~~203~~265		~~77,277,039~~		~~85,962,141~~

1Includes stock-based compensation expense as follows:

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

2019

2020

2019

2020

2021

Cost of subscription revenues

7161

~~135~~285

~~208~~

~~438~~

Cost of professional services revenues

~~315~~266

~~810~~1,332

~~938~~

~~3,358~~

Sales and marketing

~~339~~315

1,~~157~~753

~~946~~

~~4,818~~

Research and development

~~315~~309

1,~~066~~543

~~926~~

~~4,406~~

General and administrative

41100

2,~~125~~151

~~1,664~~

~~6,593~~

Total stock-based compensation expense

1,~~081~~051

57,~~293~~064

~~4,682~~

~~19,613~~

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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nCino, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

2019

2020

2019

2020

2021

Net loss

(64,~~089~~832)

(915,~~279~~605)

~~(18,010)~~

~~(28,835)~~

Other comprehensive income (loss):

Foreign currency translation

~~(366)~~312

(3208)

~~776~~

Other comprehensive income (loss)

~~(366)~~312

(3208)

~~776~~

Comprehensive loss

(64,~~455~~520)

(915,~~282~~813)

~~(17,927)~~

~~(28,059)~~

Less comprehensive loss attributable to redeemable non-controlling interest:

Net loss attributable to redeemable non-controlling interest

(60176)

(~~292~~467)

~~(60)~~

~~(700)~~

Foreign currency translation attributable to redeemable non-controlling interest

1091

(2129)

~~167~~

Comprehensive loss attributable to redeemable non-controlling interest

(5085)

(~~294~~596)

~~(50)~~

~~(533)~~

Comprehensive loss attributable to nCino, Inc.

(64,~~405~~435)

(815,~~988~~217)

~~(17,877)~~

~~(27,526)~~

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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nCino, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

(Unaudited)

	Three Months Ended October 31, 2019
	Three Months Ended April 30, 2020
	VotingCommon Stock			Non-votingCommon Stock			AdditionalPaid-inCapital		OtherComprehensiveIncome (Loss)		AccumulatedDeficit		Total
	Shares	Amount		Shares	Amount
Balance, July 31, 2019	71,813,095	$	36	5,701,435	$	3	$	198,720	$	428	$	(105,251)	$	93,936
Balance, January 31, 2020	75,596,007	$	38	5,931,319	$	3	$	288,564	$	(408)	$	(120,924)	$	167,273
Stock issuance, net of issuance costs of $52	3,448,276	2		229,885	—		79,946		—		—		79,948
Exercise of stock options	55,801	—		—	—		122		—		—		122
Stock issuance related to business combinations	63,967	—		—	—		1,392		—		—		1,392
Stock-based compensation	—	—		—	—		1,051		—		—		1,051
Contingent consideration related to business combinations	—	—		—	—		5,857		—		—		5,857
Other comprehensive loss	—	—		—	—		—		221		—		221
Exercise of stock options	110,032	—		—	—		203		—		—		203
Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest	—	—		—	—		(113)		—		(4,656)		(4,769)
Stock-based compensation	—	—		—	—		1,081		—		—		1,081
Balance, April 30, 2020	75,651,808	$	38	5,931,319	$	3	$	289,624	$	(187)	$	(125,580)	$	163,898
Other comprehensive loss	—	—		—	—		—		(376)		—		(376)
Net loss attributable to nCino, Inc.	—	—		—	—		—		—		(6,029)		(6,029)
Balance, October 31, 2019	75,435,370	$	38	5,931,320	$	3	$	287,199	$	52	$	(111,280)	$	176,012

	Three Months Ended October 31, 2020
	Three Months Ended April 30, 2021
	Common Stock			AdditionalPaid-inCapital		Other Comprehensive Income (Loss)		AccumulatedDeficit		Total
	Shares	Amount
Balance, July 31, 2020	91,122,356	$	46	$	567,314	$	202	$	(140,072)	$	427,490
Balance, January 31, 2021	93,643,759	$	47	$	585,956	$	240	$	(161,064)	$	425,179
Exercise of stock options	~~836~~1,~~920~~651,343	—1		27,~~998~~884		—		—		27,~~998~~885
Stock-based compensation	—	—		5,293		—		—		5,293
Stock issuance upon vesting of restricted stock units	22,968	—		—		—		—		—
Other comprehensive loss	—	—		—		(1)		—		(1)
Stock-based compensation	—	—		7,064		—		—		7,064
Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest	—	—		(76)		—		(8,987)		(9,063)
Other comprehensive loss	—	—		—		(79)		—		(79)
Balance, October 31, 2020	91,959,276	$	46	$	575,529	$	201	$	(149,059)	$	426,717
Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest	—	—		130		—		(15,138)		(15,008)
Balance, April 30, 2021	95,318,070	$	48	$	601,034	$	161	$	(176,202)	$	425,041

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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nCino, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

(Unaudited)

	Nine Months Ended October 31, 2019
	VotingCommon Stock			Non-votingCommon Stock			AdditionalPaid-inCapital		OtherComprehensiveIncome (Loss)		AccumulatedDeficit		Total
	Shares	Amount		Shares	Amount
Balance, January 31, 2019	70,186,189	$	35	5,701,435	$	3	$	170,771	$	(21)	$	(104,752)	$	66,036
Cumulative-effect adjustment from adoption of accounting standard	—	—		—	—		—		—		11,422		11,422
Stock issuance, net of issuance costs of $52	3,448,276	2		229,885	—		79,946		—		—		79,948
Stock issuance related to business combinations	1,502,772	1		—	—		25,203		—		—		25,204
Contingent consideration related to business combinations	—	—		—	—		5,857		—		—		5,857
Exercise of stock options	298,133	—		—	—		740		—		—		740
Stock-based compensation	—	—		—	—		4,682		—		—		4,682
Other comprehensive income	—	—		—	—		—		73		—		73
Net loss attributable to nCino, Inc.	—	—		—	—		—		—		(17,950)		(17,950)
Balance, October 31, 2019	75,435,370	$	38	5,931,320	$	3	$	287,199	$	52	$	(111,280)	$	176,012

	Nine Months Ended October 31, 2020
	Common Stock			VotingCommon Stock			Non-voting Common Stock			AdditionalPaid-inCapital		Other Comprehensive Income (Loss)		AccumulatedDeficit		Total
	Shares	Amount		Shares	Amount		Shares	Amount
Balance, January 31, 2020	—	$	—	75,596,007	$	38	5,931,319	$	3	$	288,564	$	(408)	$	(120,924)	$	167,273
Issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions	9,269,000	5		—	—		—	—		268,370		—		—		268,375
Costs in connection with initial public offering	—	—		—	—		—			(4,534)		—		—		(4,534)
Exercise of stock options	837,420	—		325,530	—		—	—		3,859		—		—		3,859
Reclassification of voting and non-voting common stock	81,852,856	41		(75,921,537)	(38)		(5,931,319)	(3)		—		—		—		—
Stock-based compensation	—	—		—	—		—	—		19,613		—		—		19,613
Other comprehensive income	—	—		—	—		—	—		—		609		—		609
Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest	—	—		—	—		—	—		(343)		—		(28,135)		(28,478)
Balance, October 31, 2020	91,959,276	$	46	—	$	—	—	$	—	$	575,529	$	201	$	(149,059)	$	426,717

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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nCino, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended October 31,
	Three Months Ended April 30,
	2019		2020
	2020		2021
Cash Flows from Operating Activities
Cash flows from operating activities
Net loss attributable to nCino, Inc.	$	(174,~~950~~769)	$	(2815,~~478~~008)
Net loss and adjustment attributable to redeemable non-controlling interest	(6063)		(~~357~~597)
Net loss	(184,~~010~~832)		(2815,~~835~~605)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	21,~~894~~743		52,~~425~~095
Amortization of costs capitalized to obtain revenue contracts	2,351		3,521
Non-cash operating lease costs	—		589
Stock-based compensation	4,682		19,613
Amortization of costs capitalized to obtain revenue contracts	1,333		1,312
Deferred income taxes	119		96
Stock-based compensation	1,051		7,064
Provision for (recovery of) bad debt	(105)		342
Deferred income taxes	30		62
Provision for (recovery of) bad debt	167		(12)
Net foreign currency gains	—		(566)
Change in operating assets and liabilities:
Accounts receivable	4(9,~~716~~463)		~~8,535~~(192)
Accounts receivable, related parties	46,~~318~~395		~~9,201~~—
Costs capitalized to obtain revenue contracts	(2,~~416~~436)		(41,~~531~~493)
Prepaid expenses and other assets	~~104~~238		(21,~~652)~~076
Accounts payable and accrued expenses and other liabilities	(24,~~196~~774)		(16,~~551~~029)
Accounts payable, related parties	~~546~~362		~~692~~478
Deferred rent	~~1,074~~(31)		~~(109)~~—
Deferred revenue	918,~~768~~630		19,~~413~~411
Deferred revenue, related parties	~~(5,675)~~16		~~(8,013)~~—
Net cash provided by operating activities	2,170		21,147
Operating lease liabilities	—		(632)
Cash Flows from Investing Activities
Net cash provided by operating activities	8,429		7,558
Acquisition of business, net of cash acquired	(52,267)		—
Cash flows from investing activities
Purchases of property and equipment	(31,~~374~~075)		(~~3,755~~522)
Net cash used in investing activities	(551,~~641~~075)		(~~3,755~~522)
Cash Flows from Financing Activities
Cash flows from financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions	—		268,375
Payments of deferred costs	(233)		—
Payments of costs related to initial public offering	—		(2,524)
Exercise of stock options	122		7,885
Investment from redeemable non-controlling interest	4,513		—
Principal payments on financing obligation	—		(79)
Proceeds from stock issuance	80,000		—
Net cash (used in) provided by financing activities	(111)		7,806
Stock issuance costs	(52)		—
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash	611		437
Payments of deferred costs	(44)		—
Net increase in cash, cash equivalents, and restricted cash	7,854		15,279
Exercise of stock options	740		3,859
Cash, cash equivalents, and restricted cash, beginning of period	91,184		371,425
Net cash provided by financing activities	85,157		269,710
Cash, cash equivalents, and restricted cash, end of period	$	99,038	$	386,704
Effect of foreign currency exchange rate changes on cash and cash equivalents	(84)		298
Cash, cash equivalents, and restricted cash, end of period:
Net increase in cash and cash equivalents	31,602		287,400
Cash and cash equivalents	$	99,038	$	386,515
Cash and Cash Equivalents, beginning of period	74,347		91,184
Restricted cash included in other long-term assets	—		189
Cash and Cash Equivalents, end of period	$	105,949	$	378,584
Total cash, cash equivalents, and restricted cash, end of period	$	99,038	$	386,704
Supplemental disclosure of cash flow information
Cash paid during the year for taxes, net of refunds	$	~~313~~3	$	~~587~~80
Cash paid during the year for interest	$	—	$	268
Supplemental disclosure of noncash investing and financing activities
Purchase of property and equipment, accrued but not paid	$	~~316~~394	$	~~116~~5,863
Fair value of common stock issued as consideration for business acquisition	$	25,204	$	—
Costs related to initial public offering, accrued but not paid	$	—	$	241
Costs related to initial public offering, reclassified from other long term assets to equity	$	—	$	1,769
Fair value of contingent consideration in connection with business acquisition in other long-term liabilities	$	197	$	—
Fair value of contingent consideration in connection with business acquisition included in equity	$	5,857	$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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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)

Note 1. Organization and Description of Business

Description of Business: nCino, Inc. 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 Salt Lake City, Utah; London, United Kingdom; Sydney, Australia; Melbourne, Australia; Toronto, Canada; and Tokyo, Japan.

Initial Public Offering: On July 13, 2020, the Company's Registration Statement on Form S-1 relating to the initial public offering ("IPO") of its common stock was declared effective by the Securities and Exchange Commission ("SEC"). Prior to the closing of the IPO, the Company's certificate of incorporation was amended such that all outstanding shares of voting common stock and non-voting common stock were reclassified into a single class of stock designated as common stock which has one vote per share. In addition, effective upon the closing of the IPO, the Company's certificate of incorporation was amended and restated such that the total number of shares of common stock authorized to issue, par value $0.0005, was increased to 500,000,000 shares and the total number of shares of preferred stock authorized to issue, par value $0.001, was increased to 10,000,000 shares. In connection with the IPO, the Company issued and sold 9,269,000 shares of common stock (including shares issued pursuant to the exercise in full of the underwriters' option to purchase additional shares) at a public offering price of $31.00 per share for net proceeds of $268.4 million, after deducting underwriters' discounts and commissions (excluding other IPO costs as of October 31, 2020).

Prior to the IPO, deferred offering costs, which consist of legal, accounting, consulting and other direct fees and costs relating to the IPO, were capitalized in other long-term assets. Upon consummation of the IPO, these costs were offset against the proceeds from the IPO and recorded in additional paid-in capital.

Secondary Public Offering: On October 13, 2020, the Company completed an underwritten secondary public offering of 7,712,985 shares of common stock (including shares issued pursuant to the exercise in full of the underwriters' option to purchase additional shares) (the "Secondary Offering") held by certain stockholders of the Company (the "Selling Stockholders"). The Company did not offer any shares of common stock in the Secondary Offering and did not receive any proceeds from the sale of the shares of common stock by the Selling Stockholders. The Company incurred costs of $1.0 million in relation to the Secondary Offering for the three and nine months ended October 31, 2020 and such costs are recorded as a component of general and administrative expenses on the unaudited condensed consolidated statement of operations. The Company received $1.7 million in cash (excluding withholding taxes) in connection with the exercise of 554,112 options by certain stockholders participating in this Secondary Offering. In addition, concurrent with the pricing of the Secondary Offering, the underwriters in the Company's IPO released an additional 367,561 shares from lock-up agreements, signed in connection with the IPO, with stockholders who did not participate in the Secondary Offering. The release consisted of both outstanding shares and shares subject to options.

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 ~~for~~in the Company’'s ~~audited~~Annual ~~January 31,~~Report ~~2020~~on ~~consolidated~~Form ~~financial~~10-K ~~statements contained in the Company's final prospectus~~ for the ~~Secondary~~fiscal ~~Offering~~year ~~dated~~ended ~~October 7~~January 31, ~~2020~~2021 ~~and~~ filed with the SEC ~~pursuant to Rule 424(b)(4)~~ on ~~October~~March 931, ~~2020~~2021. 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.

7The 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 year 2022 or any future period.

In March 2021, a Certificate of Amendment was filed with the state of Delaware for Visible Equity, LLC ("Visible Equity"), a wholly-owned subsidiary of the Company, to change its name to nCino Portfolio Analytics, LLC. The state of Delaware effected the name change in April 2021.

Effective February 1, 2021, the Company adopted the requirement of Accounting Standards Update ("ASU") 2016-02, Leases (Topic 842) using the alternative transition method. Under this method, the Company is not required to restate or disclose the effects of applying this ASU for comparative periods. See the Recently Adopted Accounting Guidance section for the adoption of ASU 2016-02, Leases (Topic 842).

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

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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)

~~Company~~significant isto the ~~primary~~Company’s ~~beneficiary.~~consolidated ~~All~~financial ~~intercompany~~statements ~~accounts~~except ~~and~~for ~~transactions~~cash ~~are~~which ~~eliminated.~~is ~~Refer~~reflected toon the ~~variable~~unaudited ~~interest~~condensed ~~entity~~consolidated ~~section~~balance ~~below~~sheets. ~~and~~See 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.

Variable Interest Entity: The Company holds an interest in a Japanese company (“nCino K.K.”) that is considered a variable interest entity or 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. Refer to Note 3 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; fair value of contingent consideration; 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, ~~and~~ cash equivalents and restricted cash. The Company’s cash and cash equivalents exceeded the Federal deposit insurance limit at January 31, ~~2020~~2021 and ~~October~~April 3130, ~~2020~~2021. The Company maintains its cash, ~~and~~ cash equivalents and restricted cash with high-credit-quality financial institutions.

8As of January 31, 2021 and April 30, 2021, no individual customer represented more than 10% of accounts receivable and one customer represented 18%, respectively. For the three months ended April 30, 2020 and 2021, no individual customer represented more than 10% of the Company’s total revenues.

Restricted Cash: Restricted cash consists of deposits held as collateral for the Company's bank guarantees issued in place of security deposits for certain property leases.

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. We recognize a contract asset in the form of accounts receivable when we have an unconditional right to payment, and we record 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. 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 we are 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.

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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)

AsThe ofCompany ~~January 31,~~records ~~2020,~~allowances ~~two~~for ~~customers~~doubtful ~~represented~~accounts ~~22%~~based ofupon ~~accounts~~the ~~receivable,~~credit ~~11%~~worthiness of ~~which~~customers, ~~was~~historical ~~from a customer who is an equity holder. In the quarter ended July 31~~experience, ~~2020,~~ the ~~equity~~age ~~holder ceased to qualify as a related party~~ of the ~~Company~~accounts ~~and~~receivable, ~~the~~current ~~amounts~~market ~~disclosed~~and ~~related~~economic toconditions, ~~such~~and ~~equity~~supportable ~~holder~~forecasts ~~are~~about ~~accordingly~~the ~~presented as a related party through April 30, 2020, only~~future. AsRelevant ofrisk ~~October 31,~~characteristics ~~2020,~~include ~~one~~ customer ~~represented~~size ~~16%~~and ofhistorical ~~accounts~~loss ~~receivable~~patterns. ~~For~~See the ~~three~~Recently ~~and~~Adopted ~~nine~~Accounting ~~months~~Guidance ~~ended~~section ~~October 31,~~for ~~2019~~the ~~and~~adoption ~~2020,~~of noASU ~~individual~~2016-13, ~~customer~~Financial ~~represented~~Instruments–Credit ~~more~~Losses: ~~than~~Measurement ~~10%~~ of ~~the~~Credit ~~Company’s~~Losses ~~total~~on ~~revenues~~Financial Instruments.

The Company records allowances for doubtful accounts based upon the credit worthiness of customers, historical experience, the age of the accounts receivable and current market and economic conditions.

A summary of activity in the allowance for doubtful accounts is as follows:

	Three Months EndedOctober 31,				Nine Months EndedOctober 31,
	Three Months Ended April 30,
	2019		2020		2019		2020
	2020		2021
Balance, beginning of period	$	—	$	~~622~~88	$	~~123~~	$	—
Charged to (recovery of) bad debt expense	—167		(~~277~~12)		~~(105)~~		~~342~~
Write off of uncollectible accounts	—		—		(18)		—
Charged to (recovery of) deferred revenue	—		(24)
Translation adjustments	—		(3)		—		—
Balance, end of period	$	167	$	52
Balance, end of period	$	—	$	342	$	—	$	342

~~Recently~~Leases: ~~Adopted~~The ~~Accounting~~Company ~~Guidance:~~determines if an arrangement is or contains a lease at inception date based on whether there is an identified asset and whether the Company controls the use of the identified asset throughout the period of use. The Company determines the classification of the lease, whether operating or financing, at the lease commencement date, which is the date the leased assets are made available for use. The Company accounts for lease and non-lease components as a single lease component for its facilities and equipment leases. The Company did not have any finance leases as of April 30, 2021.

InOperating ~~August~~lease ~~2018,~~right-of-use ~~the~~("ROU") ~~Financial~~assets ~~Accounting~~and ~~Standards~~lease ~~Board~~liabilities ~~(“FASB”)~~are ~~issued~~recognized ~~Accounting~~at ~~Standards~~the ~~Update~~commencement ~~(“ASU”)~~date ~~2018-13, Fair~~based ~~Value~~on ~~Measurement~~the ~~(Topic~~present ~~820):~~value ~~Disclosure~~of ~~Framework~~lease –payments ~~Changes~~over to the ~~Disclosure~~lease ~~Requirements~~term. ~~for~~The ~~Fair~~lease ~~Value~~term ~~Measurement, which~~reflects ~~eliminates~~the ~~certain~~noncancelable ~~disclosure~~period ~~requirements~~of ~~for~~the ~~fair~~lease ~~value~~together ~~measurements~~with ~~for~~options ~~all~~to ~~entities,~~extend ~~requires~~or ~~public~~terminate ~~entities~~the tolease ~~disclose~~when ~~certain~~it ~~new~~is ~~information~~reasonably ~~and~~certain ~~modifies~~the ~~some~~Company ~~disclosure~~will ~~requirements~~exercise such option. ~~ASU 2018-13~~Variable iscosts, ~~effective~~such ~~for~~as ~~all~~common ~~entities~~area ~~for~~maintenance ~~fiscal~~costs, ~~years~~are ~~beginning~~not ~~after~~included ~~December 15,~~in ~~2019~~the ~~and~~measurement ~~for~~of ~~interim~~the ~~periods~~ROU ~~within~~assets ~~those~~and ~~fiscal~~lease ~~years~~liabilities, ~~and~~but ~~early~~are ~~adoption~~expensed isas ~~permitted~~incurred. AnThe ~~entity~~Company's isleases ~~permitted~~do tonot ~~early~~generally ~~adopt~~provide ~~either~~an ~~the~~implicit ~~entire~~rate; ~~standard~~therefore, ~~or only~~ the ~~provisions~~Company ~~that~~uses ~~eliminate~~its orincremental ~~modify~~borrowing ~~requirements.~~rate ~~The~~in ~~Company~~determining ~~adopted~~ the ~~standard~~present ~~effective~~value ~~February 1,~~of ~~2020.~~the ~~The~~lease ~~adoption~~payments. ofLease ~~this~~expense ~~standard~~is ~~did~~recognized ~~not~~on ~~have~~ a ~~material~~straight-line ~~impact~~basis onover the ~~Company’s~~lease ~~unaudited condensed consolidated financial statements~~term.

InThe ~~August~~Company ~~2018,~~does ~~the~~not ~~FASB~~recognize ~~issued~~ROU ~~ASU~~assets ~~2018-15,~~or ~~Intangibles-Goodwill~~lease ~~and~~liabilities ~~Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting~~ for ~~Implementation~~leases ~~Costs~~with ~~Incurred in~~ a ~~Cloud~~term ~~Computing~~of ~~Arrangement~~12 ~~That~~months isor ~~a Service Contract~~less. ~~This~~Lease ~~standard~~expense ~~aligns the requirements~~ for ~~capitalizing~~such ~~implementation~~leases ~~costs~~is ~~incurred~~recognized inon a ~~hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal~~straight-~~use~~line ~~software.~~basis ~~ASU~~over 2018-15 is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020, with early adoption permitted. The Company prospectively adopted the ~~standard~~lease ~~effective February 1, 2020~~term. ~~The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements.~~

Recently Adopted Accounting Guidance: In ~~October~~February ~~2018~~2016, the FASB issued ASU ~~2018~~2016-1702, ~~Consolidation~~Leases (Topic ~~810~~842). The standard will affect all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, ~~Targeted~~accounting for leases is substantially the same as in prior periods. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to ~~Related~~Topic ~~Party~~842, ~~Guidance~~Leases, to clarify how to apply certain aspects of the new leases standard. ASU 2016-02, as subsequently amended for ~~Variable~~various ~~Interest~~technical ~~Entities~~issues, ~~which~~is ~~addresses~~effective ~~the~~for ~~cost~~emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and ~~complexity~~interim ofperiods ~~financial~~within ~~reporting~~annual ~~associated~~periods ~~with~~beginning after December 15, 2022, and early adoption is permitted. If the Company were to cease meeting the emerging growth company criteria during the fiscal year ending January 31, 2022, this ASU would be effective for the Company for its Annual Report on Form 10-K for the fiscal year ended January 31, 2022. The Company adopted this ASU effective February 1, 2021.

9The Company used the alternative transition method in which the Company is not required to restate or disclose the effects of applying this ASU for comparative periods. The Company elected the package of practical expedients which permits the Company to not reassess prior conclusions pertaining to lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements. In addition, the Company elected ongoing practical expedients including the option to not recognize right-of-use assets and lease liabilities for short term

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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)

~~consolidation~~leases ~~of variable interest entities~~ (~~“VIE”).~~leases ASU 2018-17 is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020, with ~~early~~an ~~adoption~~original ~~permitted.~~term ~~The new guidance must be applied on a retrospective basis as a cumulative-effect adjustment as~~ of ~~the~~twelve ~~date~~months ofor ~~adoption~~less). The ~~adoption of this standard did not impact the~~ Company’s ~~unaudited~~also ~~condensed~~elected ~~consolidated financial statements or related disclosures upon adoption, because~~ the ~~Company~~practical ~~did~~expedient ~~not,~~to ~~and currently does~~ not, ~~have~~separate ~~any~~lease ~~indirect~~and ~~interests~~non-lease ~~through~~components ~~related parties under common control~~ for ~~which~~our itfacilities ~~receives~~and ~~decision-making~~equipment ~~fees~~leases.

~~Recent~~The ~~Accounting~~adoption ~~Pronouncements~~of ~~Not~~this ~~Yet~~ASU ~~Adopted:~~resulted in the recognition of operating right-of-use assets of $10.5 million and lease liabilities of $12.2 million, and the derecognition of deferred rent on the Company's unaudited condensed consolidated balance sheet on February 1, 2021. The adoption of this ASU did not impact the Company's unaudited condensed consolidated statements of operations, comprehensive loss or the unaudited condensed consolidated statements of cash flows. Upon the adoption of this ASU there was no change to the accounting for the Company's financing obligation.

In ~~February~~June 2016, the FASB issued ASU 2016-0213, ~~Leases~~Financial ~~(Topic~~Instruments–Credit ~~842). The~~Losses: ~~standard~~Measurement ~~will affect all entities that lease assets and will require lessees to recognize a lease liability and a right-~~of~~-use~~ ~~asset~~Credit ~~for~~Losses ~~all~~on ~~leases~~Financial ~~(except~~Instruments, ~~for short-term leases that have a duration of less than one year) as of the date on~~ which ~~the~~changes ~~lessor makes~~ the ~~underlying~~impairment ~~asset~~model ~~available to the lessee. For lessors, accounting~~ for ~~leases~~most isfinancial ~~substantially the same as in prior periods~~assets. InThe ~~July~~new ~~2018,~~model ~~the~~uses ~~FASB~~a ~~issued ASU 2018~~forward-~~10, Codification~~looking ~~Improvements~~expected toloss ~~Topic 842~~method, ~~Leases, to~~which ~~clarify~~will ~~how~~generally toresult ~~apply~~in ~~certain~~earlier ~~aspects~~recognition of ~~the~~allowances ~~new~~for ~~leases standard~~losses. ASU 2016-0213, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates infor fiscal years beginning after December 15, ~~2021,~~2022 and for interim periods within ~~annual~~those ~~periods~~fiscal ~~beginning after December 15, 2022, and early adoption is permitted~~years. If the Company were to cease meeting the emerging growth company criteria during the fiscal year ending January 31, 2022, this ASU would be effective for the Company for its Annual Report on Form 10-K for the fiscal year ended January 31, 2022. The Company isadopted ~~currently~~this ~~evaluating~~ASU ~~the~~effective ~~impact~~February 1, 2021. The adoption of this ~~standard~~ASU, towhich impacted the Company's allowance for doubtful accounts, did not have a material impact on the Company's unaudited condensed consolidated financial statements.

In ~~June~~December ~~2016~~2019, the FASB issued ASU ~~2016~~2019-1312, ~~Financial~~ ~~Instruments–Credit~~Income ~~Losses:~~Taxes ~~Measurement~~(Topic of740): ~~Credit~~Simplifying ~~Losses~~the onAccounting ~~Financial~~for ~~Instruments~~Income Taxes, which ~~changes~~is ~~the~~intended ~~impairment~~to ~~model~~simplify ~~for~~various ~~most~~aspects ~~financial~~related ~~assets.~~to ~~The~~accounting ~~new~~for ~~model~~income ~~uses~~taxes. aASU ~~forward~~2019-~~looking~~12 ~~expected~~removes ~~loss~~certain ~~method,~~exceptions ~~which~~to ~~will~~the ~~generally~~general ~~result~~principles in ~~earlier~~Topic ~~recognition~~740 ofand ~~allowances~~also ~~for~~clarifies ~~losses.~~and ~~ASU~~amends ~~2016-13,~~existing asguidance ~~subsequently~~to ~~amended~~improve ~~for~~consistent ~~various~~application. ~~technical~~ASU ~~issues,~~2019-12 is effective for emerging growth companies following private company adoption dates ~~for~~in fiscal years beginning after December 15, ~~2022~~2021, and ~~for~~ interim periods within ~~those~~annual ~~fiscal~~periods ~~years~~beginning after December 15, 2022, with early adoption permitted, including adoption in an interim period. If the Company were to cease meeting the emerging growth company criteria during the fiscal year ending January 31, 2022, this ASU would be effective for the Company for its Annual Report on Form 10-K for the fiscal year ended January 31, 2022. The Company isadopted ~~currently~~this ~~evaluating~~ASU ~~the~~effective ~~impact~~February 1, 2021. The adoption of this ~~standard~~ASU todid not have a material impact on the Company'’s unaudited condensed consolidated financial statements.

In ~~December~~October ~~2019~~2020, the FASB issued ASU ~~2019~~2020-1210, ~~Income~~Codification ~~Taxes~~Improvements. ~~(Topic~~The ~~740):~~guidance ~~Simplifying~~includes ~~the~~amendments ~~Accounting~~to ~~for~~improve ~~Income~~the ~~Taxes,~~codification ~~which~~by isensuring ~~intended~~that toall ~~simplify~~guidance ~~various~~that ~~aspects~~requires ~~related~~or toprovides ~~accounting~~an option for ~~income~~an ~~taxes.~~entity ~~ASU~~to ~~2019-12~~provide ~~removes~~information ~~certain~~in ~~exceptions~~the notes to the ~~general~~financial ~~principles~~statements is codified in ~~Topic~~the ~~740~~disclosure ~~and~~section ~~also~~of ~~clarifies~~the codification and ~~amends~~to ~~existing~~clarify guidance toso ~~improve~~that ~~consistent~~entities ~~application~~can apply guidance more consistently on codifications that are varied in nature where the original guidance may have been unclear. ASU ~~2019~~2020-1210 is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022, ~~with~~and early adoption ~~permitted,~~is ~~including adoption in an interim period~~permitted. If the Company were to cease meeting the emerging growth company criteria during the fiscal year ending January 31, 2022, this ASU would be effective for the Company for its Annual Report on Form 10-K for the fiscal year ended January 31, 2022. The Company isadopted ~~evaluating~~this ~~the~~ASU ~~effect~~effective ofFebruary 1, ~~adopting~~2021. ~~this~~The ~~new~~adoption ~~accounting~~of ~~guidance,~~this ~~but~~ASU ~~does~~did not ~~expect adoption will~~ have a material impact on the Company’s unaudited condensed consolidated financial statements.

InRecent ~~October~~Accounting ~~2020,~~Pronouncements ~~the~~Not ~~FASB~~Yet ~~issued~~Adopted: ~~ASU~~There 2020-10, Codification Improvements. The guidance includes amendments to improve the codification by ensuring that all guidance that requires or provides an option for an entity to provide information in the notes to the financial statements is codified in the disclosure section of the codification and to clarify guidance so that entities can apply guidance more consistently on codifications that are ~~varied~~no in nature where the original guidance may have been unclear. ASU 2020-10 is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022, and early adoption is permitted. If the Company were to cease meeting the emerging growth company criteria during the fiscal year ending January 31, 2022, this ASU would be effective for the Company for its Annual Report on Form 10-K for the fiscal year ended January 31, 2022. The Company is evaluating the effect of adopting this new accounting ~~guidance,~~standards ~~but~~that ~~does~~have not ~~expect~~yet ~~adoption~~been ~~will have a material impact on the Company’s financial statements~~adopted.

10Note 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, 2021, the Company controls a majority of the outstanding common stock in nCino K.K.

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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)

~~Note~~Should 3the 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. ~~Variable~~and ~~Interest~~the ~~Entity~~Company and ~~Redeemable~~may ~~Non~~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~~controlling ~~Interest~~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 $0.3 million at April 30, 2021.

In October 2019, the Company entered into an agreement with Japan Cloud Computing, L.P. and M30 LLC (collectively, the “Investors”) to engage in the investment, organization, management, and operation of nCino K.K. that is focused on the distribution of the Company’s products in Japan. In October 2019, the Company initially contributed $4.7 million in cash in exchange for 51% of the outstanding common stock of nCino K.K. As of October 31, 2020, the Company controls a majority of the outstanding common stock in nCino K.K.

All of the common stock held by the Investors is callable by the Company or puttable by the Investors at the option of the Investors or at the option of the Company beginning on the eighth anniversary of the agreement with the Investors. Should the call or put option be exercised, the redemption value would be determined based on a prescribed formula derived from the discrete revenues of nCino K.K. and the Company and may be settled, at the Company’s discretion, with Company stock or cash or a combination of the foregoing. As a result of the put right available to the Investors, the redeemable non-controlling interests in nCino K.K. are classified outside of permanent equity in the Company’s unaudited condensed consolidated balance sheets. The estimated redemption value of the call/put option embedded in the redeemable non-controlling interest was $0.3 million at October 31, 2020.

The following table summarizes the activity in the redeemable non-controlling interests for the period indicated below:

	Three Months EndedOctober 31,				Nine Months EndedOctober 31,
	Three Months Ended April 30,
	2019		2020		2019		2020
	2020		2021
Balance, beginning of period	$	—4,356	$	43,~~384~~791	$	—	$	~~4,356~~
Investment by redeemable non-controlling interest	4,513		—		4,513		—
Net loss attributable to redeemable non-controlling interest (excluding adjustment to non-controlling interest)	(176)		(467)
Net loss attributable to redeemable non-controlling interest	(60)		(292)		(60)		(700)
Foreign currency translation	91		(129)
Foreign currency translation	10		(2)		10		167
Adjustment to redeemable non-controlling interest	113		(130)
Adjustment to redeemable non-controlling interest	—		76		—		343
Balance, end of period	$	4,384	$	3,065
Balance, end of period	$	4,463	$	4,166	$	4,463	$	4,166

Note 4. Fair Value of Financial Instruments

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, ~~and~~ accounts payable and accrued expenses approximate fair value as of January 31, ~~2020~~2021 and ~~October~~April 3130, ~~2020~~2021 because of the relatively short duration of these instruments.

11The 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, 2021 and April 30, 2021 and indicates the fair value hierarchy of the valuation:


	Fair value measurements on a recurring basis as of January 31, 2021
	Level 1		Level 2		Level 3
Assets:
Money market accounts (included in cash and cash equivalents)	$	332,541	$	—	$	—
Total assets	$	332,541	$	—	$	—


	Fair value measurements on a recurring basis as of April 30, 2021
	Level 1		Level 2		Level 3
Assets:
Money market accounts (included in cash and cash equivalents)	$	347,407	$	—	$	—
Time deposits (included in other long-term assets)	189		—		—
Total assets	$	347,596	$	—	$	—

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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 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, 2020 and October 31, 2020 and indicates the fair value hierarchy of the valuation:

	Fair value measurements on a recurring basis as of January 31, 2020
	Level 1		Level 2		Level 3
Assets:
Money market accounts (included in cash and cash equivalents)	$	67,119	$	—	$	—
Total assets	$	67,119	$	—	$	—
Liabilities:
Contingent consideration (included in other long-term liabilities)	$	—	$	—	$	195
Total liabilities	$	—	$	—	$	195

	Fair value measurements on a recurring basis as of October 31, 2020
	Level 1		Level 2		Level 3
Assets:
Money market accounts (included in cash and cash equivalents)	$	349,482	$	—	$	—
Total assets	$	349,482	$	—	$	—
Liabilities:
Contingent consideration (included in other accrued expenses)	$	—	$	—	$	204
Total liabilities	$	—	$	—	$	204

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.

The Company added contingent consideration, a Level 3 measurement, on October 18, 2019 with the acquisition of FinSuite Pty Ltd ("FinSuite"). Changes in fair value of the contingent consideration are recorded in the unaudited condensed consolidated statements of operations within other income. The Company’s contingent consideration is valued using a probability weighted discounted cash flow analysis. A reconciliation of the balance for contingent consideration obligations for the three ~~and nine~~ months ended ~~October~~April 3130, 2020 and 2021 is as follows:

	Three Months EndedOctober 31,				Nine Months EndedOctober 31,
	Three Months Ended April 30,
	2019		2020		2019		2020
	2020		2021
Balance, beginning of period	$	—195	$	~~209~~—	$	—	$	~~195~~
Acquisitions	~~197~~—		—		~~197~~		—
Change in fair value	—		—		—		—
Translation adjustments	4(5)		~~(5)~~—		4		9
Balance, end of period	$	~~201~~190	$	~~204~~—	$	~~201~~	$	~~204~~

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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

Note 5. Revenues

Revenues by Geographic Area

Revenues by geographic region were as follows:

	Three Months EndedOctober 31,				Nine Months EndedOctober 31,
	Three Months Ended April 30,
	2019		2020		2019		2020
	2020		2021
United States	$	3440,~~537~~471	$	4753,~~635~~326	$	~~91,869~~	$	~~132,155~~
International	34,~~325~~241		69,~~594~~029		~~7,807~~		~~15,551~~
	$	3744,~~862~~712	$	5462,~~229~~355	$	~~99,676~~	$	~~147,706~~

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.

Contract Amounts

Accounts Receivable

Accounts receivable, less allowance for doubtful accounts, is as follows as of January 31, ~~2020~~2021 and ~~October~~April 3130, ~~2020~~2021:

	As of January 31,2020		As of October 31,2020
	As of January 31, 2021		As of April 30, 2021
Trade accounts receivable	$	3253,~~686~~272	$	2353,~~679~~799
Unbilled accounts receivable	1,~~425~~814		1,~~792~~844
Allowance for doubtful accounts	—(88)		(~~342~~52)
Other accounts receivable	94519		~~221~~637
Total accounts receivable, net	$	3455,~~205~~517	$	2556,~~350~~228

Deferred Revenue and Remaining Performance Obligation

Significant movements in the deferred revenue balance during the period consisted of increases due to payments received or due in advance prior to the transfer of control of the underlying performance obligations to the customer, which were offset by decreases due to revenues recognized in the period. During the nine months ended October 31, 2020, $53.8 million of revenues were recognized that were included in the balance of deferred revenue as of January 31, 2020.

Transaction price allocated to remaining performance obligations represents contracted revenues that have not yet been recognized, which includes deferred revenue and unbilled amounts that will be 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.11

Remaining performance obligations were $452.9 million as of October 31, 2020. The Company expects to recognize approximately 66% of its remaining performance obligation as revenues in the next 24 months, approximately 31% more in the following 25 to 48 months, and the remainder thereafter.

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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)

~~Note~~were 6offset by decreases due to revenues recognized in the period. ~~Business~~During ~~Combinations~~the three months ended April 30, 2021, $40.6 million of revenues were recognized out of the deferred revenue balance as of January 31, 2021.

~~Visible~~Transaction ~~Equity~~price allocated to remaining performance obligations represents contracted revenues that have not yet been recognized, ~~LLC~~which includes deferred revenue and unbilled amounts that will be 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.

OnRemaining ~~July 8,~~performance ~~2019,~~obligations ~~the~~were ~~Company~~$611.3 ~~acquired~~million as ~~all outstanding membership interests~~ of ~~Visible Equity~~ April 30, ~~LLC~~2021. ~~(“Visible~~The ~~Equity”)~~Company ~~which~~expects ~~provides~~to ~~financial~~recognize ~~analytics,~~approximately ~~portfolio~~62% ~~management~~of ~~and~~its ~~compliance~~remaining ~~solutions~~performance toobligation ~~banks~~as ~~and~~revenues ~~credit~~in ~~unions.~~the ~~The~~next ~~Company~~24 ~~acquired~~months, ~~Visible~~approximately ~~Equity~~30% ~~for~~more ~~its~~in ~~product offerings and~~ the ~~domain~~following ~~expertise~~25 ofto ~~its~~48 ~~employees.~~months, ~~Visible~~and ~~Equity~~the isremainder ~~headquartered in Salt Lake City, Utah~~thereafter.

~~The~~Note ~~acquisition-date~~6. ~~fair~~Property ~~value~~and ~~of the consideration transferred is as follows:~~Equipment

	TotalConsideration
Cash consideration to members	$	49,428
Voting common stock issued (1,438,805 shares)	23,812
Total consideration	$	73,240

Property and equipment, net consisted of the following:

The transaction was accounted for using the acquisition method and, as a result, 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. The measurement period ended one year from the acquisition date.


	As of January 31, 2021		As of April 30, 2021
Furniture and fixtures	$	6,706	$	6,711
Computers and equipment	5,039		5,297
Buildings and land	16,300		16,300
Leasehold improvements	11,581		11,590
Construction in progress	277		6,372
	39,903		46,270
Less accumulated depreciation	(9,960)		(11,212)
	$	29,943	$	35,058

~~FinSuite~~The ~~Pty~~Company ~~Ltd~~recognized depreciation expense as follows:

On October 18, 2019, the Company, through its wholly-owned subsidiary, nCino APAC Pty Ltd, acquired all of the outstanding shares of FinSuite. The Company acquired FinSuite to enhance the Company’s data recognition capabilities, including of complex, unstructured data. FinSuite is headquartered in Melbourne, Australia.


	Three Months Ended April 30,
	2020		2021
Cost of revenues	$	287	$	385
Sales and marketing	267		309
Research and development	280		432
General and administrative	113		155
Total depreciation expense	$	947	$	1,281

The ~~acquisition-date~~increase ~~fair~~in ~~value~~construction in progress is primarily due to construction for a parking deck and an additional office building that is on the property of our existing headquarters for which we are considered the ~~consideration~~owners ~~transferred~~of isfor asaccounting ~~follows:~~purposes. See Note 12 "Commitments and Contingencies" for additional details including future commitments.

	TotalConsideration
Cash consideration to shareholders	$	3,928
Cash consideration to settle debt	137
Voting common stock issued (63,967 shares)	1,392
Contingent consideration - cash payment	197
Contingent consideration - common stock	5,857
Total consideration	$	11,511

Contingent consideration includes two tranches of earn-out arrangements based upon the attainment of post-acquisition product development milestones. The first tranche includes an earn-out opportunity of $0.1 million of cash and the issuance of 142,846 shares of common stock (together, the “Initial Tranche Earn-Out”). The Initial Tranche Earn-Out is conditioned upon the development of a stated product in accordance with mutually agreed upon functional requirements within a certain period from the date of acquisition. The second tranche includes an earn-out opportunity of $0.1 million of cash and the issuance of 142,846 shares of common stock (together, the “Final Tranche Earn-Out”). The Final Tranche Earn-Out is conditioned upon a customer’s use of the stated product in a production environment according to the mutually agreed upon functional requirements within a certain period from the date of acquisition. The Final Tranche Earn-Out is not conditioned upon the achievement of the Initial Tranche Earn-Out.

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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~~Note ~~cash portion of the contingent consideration of $0~~7.~~2 million~~ isGoodwill ~~included in other long-term liabilities~~ and ~~other~~Intangible accrued expenses in the accompanying unaudited condensed consolidated balance sheet as of January 31, 2020 and October 31, 2020, respectively. The share portion of the contingent consideration was recorded as of the acquisition date and is reflected as a component of stockholders’ equity in the accompanying unaudited condensed consolidated balance sheet as of January 31, 2020 and October 31, 2020. Assets

The Initial Tranche Earn-Out was earned during the quarter ended October 31, 2020 and the Final Tranche Earn-Out was earned in November 2020. The Company paid $0.2 million for the cash portion of the contingent consideration and issued 285,692 shares of common stock for the common stock contingent consideration for the Initial Tranche Earn-Out and Final Tranche Earn-Out in November 2020. Goodwill

~~Note~~The 7.change ~~Intangible~~in ~~Assets~~the ~~and~~carrying ~~Goodwill~~amounts of goodwill was as follows:


	Three Months Ended April 30,
	2020		2021
Balance, beginning of period	$	55,840	$	57,149

Translation adjustments	(210)		176
Balance, end of period	$	55,630	$	57,325

Intangible assets

Intangible assets, net are as follows:

As of January 31, 2020

As of October 31, 2020

As of January 31, 2021

As of April 30, 2021

GrossAmount

AccumulatedAmortization

Net CarryingAmount

GrossAmount

AccumulatedAmortization

Net CarryingAmount

Acquired developed technology

6,~~008~~320

(~~695~~2,295)

54,~~313~~025

6,~~117~~362

(12,~~848~~706)

43,~~269~~656

Customer relationships

21,~~706~~721

(~~937~~2,609)

2019,~~769~~112

21,~~711~~723

(23,~~190~~027)

1918,~~521~~696

Trademarks

~~125~~128

(~~114~~128)

11—

~~126~~129

(~~126~~129)

—

2728,~~839~~169

(15,~~746~~032)

2623,~~093~~137

2728,~~954~~214

(45,~~164~~862)

2322,~~790~~352

The Company recognized amortization expense as follows:

	Three Months EndedOctober 31,				Nine Months EndedOctober 31,
	Three Months Ended April 30,
	2019		2020		2019		2020
	2020		2021
Cost of revenues	$	259	$	386	$	319	$	1,133
Cost of subscription revenues	$	369	$	396
Sales and marketing	~~415~~417		~~417~~418		~~520~~		~~1,252~~
General and administrative	5210		—		64		10
Total amortization expense	$	~~726~~796	$	~~803~~814	$	~~903~~	$	~~2,395~~

The expected future amortization expense for intangible assets as of ~~October~~April 3130, ~~2020~~2021 is as follows:

Fiscal Year Ending January 31,
2021 (remaining)	$	799
2022 (remaining)	$	2,445
2022	3,198
2023	3,260
2023	3,198
2024	2,545
2024	2,501
2025	1,671
2025	1,670
2026	1,671
Thereafter	1210,~~424~~760
	$	2322,~~790~~352

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.

1513

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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)

Goodwill

The carrying amount of goodwill was $55.8 million and $56.3 million as of January 31, 2020 and October 31, 2020, respectively. The change in the carrying amounts of goodwill was as follows:

	Three Months EndedOctober 31,				Nine Months EndedOctober 31,
	2019		2020		2019		2020
Balance, beginning of period	$	46,584	$	56,527	$	—	$	55,840
Acquisitions	9,405		—		55,989		—
Translation adjustments	122		(229)		122		458
Balance, end of period	$	56,111	$	56,298	$	56,111	$	56,298

Note 8. 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. In June 2020, this agreement was renegotiated and 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 ~~and nine~~ months ended ~~October~~April 3130, ~~2019~~2020 and ~~2020~~2021 substantially consists of fees paid for access to the related party’s platform, including their hosting infrastructure and data center operations. The Company has recorded expenses of $57.85 million and $910.16 million for the three months ended ~~October~~April 3130, ~~2019 and~~ 2020, ~~respectively~~ and ~~$16.2 million and $25.3 million for the nine months ended October 31~~2021, ~~2019 and 2020,~~ respectively. See also Note 1213 "Related-Party Transactions."

Note 9. Stockholders’ Equity

~~Pursuant~~At toApril 30, ~~the~~2021, ~~fourth certificate of amendment to~~ the Company's ~~third~~committed ~~amended~~a ~~and~~total ~~restated certificate~~ of ~~incorporation dated July 6~~26, ~~2020~~457,630 ~~each~~shares ~~share~~ of ~~voting and non-voting~~ common stock ~~issued~~for ~~and~~future ~~outstanding~~issuance ~~prior to the effectiveness was reclassified into a single class of stock designated~~ as common stock which has one vote per share. Subsequent to the effectiveness of the Company's amended and restated certificate of incorporation, the Company's common stock consists of 500,000,000 authorized shares, par value $0.0005 per share and the Company's preferred stock consists of 10,000,000 authorized shares, par value $0.001 per share.follows:

At October 31, 2020, the Company committed a total of 23,966,108 shares of common stock for future issuance as follows:


Issued and outstanding stock options			3,788,794
Nonvested issued and outstanding restricted stock units ("RSUs")			2,526,767
Possible issuance under stock plans			20,142,069
			26,457,630

Issued and outstanding stock options			6,620,274
Nonvested issued and outstanding restricted stock units ("RSUs") and vested RSUs not issued and outstanding			2,059,799
Possible issuance under stock plans			15,286,035
			23,966,108

Note 10. Stock-Based Compensation

~~Equity~~Stock ~~Incentive Plans~~Options

~~The~~Stock ~~Company~~option ~~has~~activity ~~stock-based compensation plans that provide~~ for the ~~award~~three ofmonths ~~equity~~ended ~~incentives,~~April ~~including stock options~~30, ~~stock~~2021 ~~appreciation~~was rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based award and other stock-based awards. As of October 31, 2020, the Company had stock options outstanding under the 2014 Stock Plan ("2014 Plan") and the 2019 Equity Incentive Plan (as ~~amended and restated, "2019 Plan") had stock options and RSUs outstanding. As of October 31, 2020, the Company also has an employee stock purchase plan.~~follows:


	Number of Shares	Weighted Average Exercise Price
Outstanding, January 31, 2021	5,467,012	$	6.00
Granted	—	—
Expired or forfeited	(26,875)	9.54
Exercised	(1,651,343)	4.77
Outstanding, April 30, 2021	3,788,794	$	6.51
Exercisable, April 30, 2021	3,000,517	$	4.82
Fully vested or expected to vest, April 30, 2021	3,709,966	$	6.37

As of April 30, 2021, there was $2.7 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 1.71 years.

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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)

In connection with the IPO, the Board of Directors adopted and stockholders approved the 2019 Plan to, among other things as defined in the 2019 Plan document, increase the available shares under the Plan to 15,250,000, plus an annual increase added on the first day of each fiscal year, beginning with the fiscal year ending January 31, 2022, and continuing until, and including, the fiscal year ending January 31, 2031. The annual increase will be equal to the lesser of (i) 5% of the number of shares issued and outstanding as of January 31 of the immediately preceding fiscal year and (ii) an amount determined by the Company's Board of Directors. The Company ceased granting awards under the 2014 Plan during the fiscal year ended January 31, 2020, and all shares that remained available for issuance under the 2014 Plan were transferred to the 2019 Plan prior to the closing of the IPO. Additionally, the number of shares available under the 2019 Plan shall be increased by the number of shares outstanding under the 2014 Plan that expire, terminate or are canceled without having been exercised or settled in full.

Stock Options

Stock option activity during the nine months ended October 31, 2020 was as follows:

	Number ofShares	WeightedAverageExercise Price
Outstanding, January 31, 2020	7,837,023	$	5.39
Granted	—	—
Expired or forfeited	(53,799)	11.60
Exercised	(1,162,950)	3.32
Outstanding, October 31, 2020	6,620,274	$	5.71
Exercisable, October 31, 2020	5,026,583	$	4.56
Fully vested or expected to vest, October 31, 2020	6,460,905	$	5.62

As of October 31, 2020, there was $4.3 million of total unrecognized compensation expense related to unvested stock-based compensation arrangements under the 2014 and 2019 Plans. That cost is expected to be recognized over a weighted average period of 1.92 years.

Restricted Stock Units

~~Restricted stock unit (“~~RSU”) activity during the ~~nine~~three months ended ~~October~~April 3130, ~~2020~~2021 was as follows:

	Number ofShares	Weighted AverageGrant Date FairValue
Nonvested, January 31, 2020	948,119	$	21.75
Nonvested, January 31, 2021	1,848,296	$	22.07
Granted	1723,~~125,804~~492	2070.3682
Vested1	(225,173)	21.61
Vested	(22,968)	20.52
Forfeited	(1422,~~124~~053)	2540.4748
Nonvested, October 31, 2020	1,834,626	$	20.88
Nonvested, April 30, 2021	2,526,767	$	35.88

~~1Includes~~As ~~225~~of April 30,~~173~~ 2021, total unrecognized compensation expense related to non-vested RSUs ~~that~~was ~~were~~$68.6 ~~not~~million, ~~issued~~adjusted ~~and~~for ~~outstanding~~estimated asforfeitures, based on the estimated fair value of ~~October 31,~~the ~~2020~~Company’s common stock at the time of grant. The weighted-average period to be recognized is 3.61 years.

~~The~~Employee ~~RSUs~~Stock ~~granted~~Purchase prior to the IPO vest upon the satisfaction of both a service-based, generally over 4 years, vesting 25% annually, and liquidity event-based vesting condition. For RSUs granted to the non-employee members of the Board of Directors, some vest in less than a year, some annually and some over three years. The liquidity event-based condition was satisfied upon the IPO and the Company recognized an expense of $12.2 million in cost of revenues and operating expenses for RSUs as of that date, using the accelerated attribution recognition method.Plan

AsThere ofwas ~~October 31,~~no ~~2020,~~activity ~~total~~during ~~unrecognized~~the ~~compensation~~three ~~expense~~months ~~related~~ended toApril ~~non-vested RSUs was $26.4 million~~30, ~~adjusted~~2021 ~~for~~under ~~estimated forfeitures, based on~~ the ~~estimated fair value of the~~ Company’'s ~~common~~Employee ~~stock~~Stock atPurchase ~~the time of grant~~Plan. ~~The weighted-average period to be recognized is 3.29 years.~~

17Note 11. 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 for the three months ended April 30, 2021 were as follows:


	Amount
Operating lease expense	$	682
Short-term lease expense	194
Variable lease expense	81
Total	$	957

Supplemental cash flow information for the three months ended April 30, 2021 related to operating leases was as follows:


Cash paid for amounts included in the measurement of operating lease liabilities	$	727
Right-of-use assets obtained in exchange for operating lease liabilities	707

The weighted-average remaining lease term and weighted-average discount rate for the Company's operating lease liabilities as of April 30, 2021 were 5.40 years and 4.4%, 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)

~~Employee~~Future ~~Stock~~minimum ~~Purchase~~lease ~~Plan~~payments as of April 30, 2021 were as follows:

In July 2020, the Board of Directors adopted and stockholders approved the Employee Stock Purchase Plan (the "ESPP"), which became effective immediately prior to the closing of the IPO. The ESPP includes two components, one component is intended to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Internal Revenue Code (the "Code) and a component that does not qualify as an "employee stock purchase plan" under Section 423 of the Code. The ESPP initially reserved and authorized the issuance of up to a total of 1,800,000 shares of common stock to participating employees. The aggregate number of shares of the Company's common stock under the ESPP will automatically increase on the first day of each fiscal year, beginning with the first fiscal year ending January 31, 2022 and continuing until the fiscal year ended January 31, 2031, by an amount equal to the lesser of (i) 1% of the shares of the Company's common stock issued and outstanding on January 31 of the immediately preceding fiscal year, (ii) 1,800,000 shares of the Company's common stock or (iii) an amount determined by the Board of Directors. As of October 31, 2020, 1,800,000 shares of common stock remain available for grant under the ESPP.


Fiscal Year Ending January 31,	Operating Leases
2022 (remaining)	$	2,884
2023	2,857
2024	2,188
2025	1,642
2026	1,626
Thereafter	2,183
Total lease liabilities	13,380
Less: imputed interest	(1,069)
Total lease obligations	12,311
Less: current obligations	(2,540)
Long-term lease obligations	$	9,771

~~The~~Future ~~ESPP~~minimum ~~permits~~lease ~~employees~~payments toas ~~purchase~~of ~~the Company's common stock through payroll deductions during six month offerings. The offering periods begin each~~ January 31, ~~1 and July 1~~2021, orprior ~~such other period determined by the compensation committee. Eligible employees will purchase the shares at a price per share equal~~ to ~~the~~our ~~lesser~~adoption of ~~(i) 85% of~~ the ~~fair~~new ~~market~~lease value of a share of the Company's common stock on the first business day of such offering period and (ii) 85% of the fair market value of share of the Company's common stock on the last business day of such offering periodASU, ~~although~~were ~~the~~as ~~compensation committee has discretion to change the purchase price with respect to future offering periods, subject to terms of the ESPP.~~follows:

Note 11. Commitments and Contingencies


Fiscal Year Ending January 31,	Operating Leases
2022	$	2,445
2023	1,937
2024	1,942
2025	1,630
2026	1,679
Thereafter	2,544
Total lease liabilities	$	12,177

~~Operating~~Note ~~Leases~~12. Commitments and Contingencies

~~The~~In ~~Company~~addition ~~leases~~to ~~its~~the ~~facilities~~operating ~~and~~lease acommitments ~~portion~~described ofin ~~its~~Note ~~equipment~~11 ~~and licenses under various non-cancellable agreements~~"Leases", ~~which~~the ~~expire~~Company athas ~~various~~additional ~~times~~contractual ~~through~~commitments ~~July~~as ~~2028~~described ~~and~~further ~~require various minimum annual rentals~~below.

~~The~~Purchase Company’s agreements for the facilities and certain services provide the Company with the option to renew. The Company’s future contractual obligations would change if the Company exercised these options.Commitments

The ~~terms of the lease agreements provide for rental payments on a graduated basis. The~~ Company’s ~~recognizes~~purchase ~~rent~~commitments ~~expense~~consist onof ~~a straight~~non-~~line~~cancellable ~~basis~~agreements ~~over~~to ~~the~~purchase ~~lease~~goods ~~period~~ and ~~has~~services, ~~accrued~~primarily ~~for~~licenses, ~~rent~~entered ~~expense~~into ~~incurred~~in ~~but~~the ~~not~~ordinary ~~paid~~course of business.

~~Total~~In ~~lease~~May ~~expense~~2021, ~~amounted~~the toCompany ~~$2.3~~entered ~~million~~into ~~and~~an ~~$3.0~~agreement ~~million~~ for ~~the~~approximately ~~three months ended October 31, 2019 and 2020, respectively and~~ $6.2 ~~million and $8~~.46 million for ~~the~~renovations ~~nine~~to ~~months~~our ~~ended~~existing ~~October~~headquarters ~~31, 2019 and 2020, respectively~~building.

Financing Obligation and Construction Liabilities

The Company entered into a new lease agreement for our 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 our 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

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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)

are included in property and equipment, net and financing obligation 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 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 will be capitalized as construction in progress with a corresponding construction liability through construction which is estimated to be approximately $18.0 million. Upon completion of the parking deck, 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, current on the unaudited condensed consolidated balance sheets, respectively.

In April 2021, the Company entered into a new lease agreement for the construction of an additional office building that is on the property of our 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.

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.

~~Note~~Legal ~~12. Related-Party Transactions~~Proceedings

~~The~~From ~~Company’s~~time ~~main~~to ~~vendor~~time, ~~is also an equity holder in~~ the Company. ~~Total~~may ~~payments~~become ~~related~~involved ~~to the agreement with the related party are disclosed~~ in ~~Note~~legal 8.proceedings ~~The~~or ~~Company~~be ~~also~~subject ~~purchases services from this related party~~ to ~~assist~~claims inincluding ~~managing its own sales cycle, customer relationship management, and other business functions. The Company has a non-cancellable agreement with~~ the ~~related party for the purchase of services. In December 2020, this agreement was renewed for~~ following:

18On 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 sole class representative in the suit is one individual alleging a contract, combination or conspiracy between and among the Company, Live Oak Bancshares, Inc. and Apiture LLC 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. 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.

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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)

~~one year and expires in December 2021. Total payments to~~ the ~~related party for these services recorded to expenses were $0.3 million and $0.3 million for the three months ended October 31~~outcome, ~~2019~~legal ~~and~~proceedings ~~2020,~~can ~~respectively,~~have ~~and~~an ~~$0.8~~adverse ~~million~~impact ~~and~~on ~~$0.9~~us ~~million~~because ~~for~~of the ~~nine~~related ~~months ended October 31~~expenses, ~~2019~~diversion ~~and 2020, respectively and $1.1 million and $0.2 million were in prepaid expenses and other current assets as~~ of ~~January 31,~~management ~~2020 and October 31~~resources, ~~2020, respectively. Accounts payable to the related party were $3.3 million~~ and ~~$4.1~~other ~~million at January 31, 2020 and October 31, 2020, respectively, included in accounts payable, related parties~~factors.

InGiven the ~~quarter~~uncertainty ~~ended July 31, 2020 certain equity holders ceased to qualify as related parties of the Company~~ and ~~the~~preliminary ~~amounts~~stages ~~disclosed related to them are accordingly presented through April 30, 2020 only. Included in revenues from three equity holders, who are also customers~~ of ~~the~~these ~~Company~~matters, iswe ~~$2.0~~cannot ~~million~~reasonably ~~for~~estimate ~~the~~any ~~three~~possible ~~months~~loss ~~ended~~or ~~October~~range ~~31, 2019, and $6.3 million and $2.8 million for the nine months ended October 31, 2019 and 2020, respectively. Deferred revenue, current portion, related parties was $8.0 million as~~ of ~~January 31,~~loss ~~2020. Accounts~~that ~~receivable,~~may ~~related parties was $9~~result.~~2 million as of January 31, 2020.~~

~~The~~Other ~~Company~~Commitments has a banking relationship with one of its former equity holders who was considered a related party. In the quarter ended July 31, 2020, the equity holder ceased to qualify as a related party of the Company and the amounts disclosed related to such former equity holder are accordingly presented as a related party through April 30, 2020, only. Included in interest income is $0.1 million for the three months ended October 31, 2019, and $0.5 million and $0.1 million for the nine months ended October 31, 2019 and 2020, respectively.Contingencies

The Company ~~entered~~is ~~into~~subject anto ~~agreement~~audits ~~with~~by ~~one~~tax ofauthorities ~~its equity holders~~ in ~~May~~jurisdictions ~~2016~~where toit ~~spend~~conducts anbusiness, ~~agreed-upon~~including ~~amount~~currently ofbeing ~~funds~~audited ~~over~~in a ~~three-year~~jurisdiction ~~period~~with regard to ~~further~~indirect ~~the~~tax ~~alliance between the two companies~~matters. InThese ~~October~~audits ~~2019,~~may ~~the~~result ~~agreement~~in ~~was~~assessments ~~extended~~of ~~for an~~ additional ~~three~~taxes ~~years.~~that Asare ofsubsequently ~~October 31,~~resolved ~~2020,~~with the ~~Company~~authorities ~~was~~or inpotentially ~~compliance~~through ~~with~~ the ~~terms of the agreement~~courts. InThe ~~the~~Company ~~quarter~~believes ~~ended~~it ~~July 31,~~has ~~2020,~~adequately ~~the~~provided ~~equity~~for ~~holder~~any ~~ceased~~assessments todeemed ~~qualify~~probable ~~as a related party of the Company~~ and ~~the~~estimable ~~amounts~~from ~~disclosed~~these ~~related~~audits; ~~to such equity holder are accordingly presented as a related party through April 30~~however, ~~2020,~~final ~~only. For the three months ended October 31~~assessments, ~~2019,~~if ~~$0.04 million was spent~~any, ~~and~~could ~~$0.06~~be ~~million~~different ~~and~~than ~~$0.0 million for~~ the ~~nine~~amounts ~~months~~recorded ~~ended~~in ~~October~~the ~~31,~~unaudited ~~2019~~condensed ~~and~~consolidated ~~2020,~~financial ~~respectively~~statements.

Note 13. ~~Basic~~Related-Party ~~and Diluted Loss per Share~~Transactions

~~Basic~~The ~~loss~~Company’s ~~per~~main ~~share~~vendor is ~~computed~~also byan ~~dividing~~equity ~~net~~holder ~~loss~~in ~~attributable~~the toCompany. ~~nCino,~~Total ~~Inc.~~payments byrelated to the ~~weighted-average~~agreement ~~number~~with ofthe ~~common~~related ~~shares~~party ~~outstanding~~are ~~for~~disclosed ~~the~~in ~~fiscal~~Note ~~period~~8. ~~Diluted~~The ~~loss~~Company ~~per~~also ~~share~~purchases isservices ~~computed~~from bythis ~~giving~~related ~~effect~~party to ~~all~~assist ~~potential~~in ~~weighted~~managing ~~average~~its ~~dilutive~~own ~~common~~sales ~~stock~~cycle, ~~including~~customer ~~options~~relationship management, and other business functions. The ~~dilutive~~Company ~~effect~~has a non-cancellable agreement with the related party for the purchase of ~~outstanding~~services. ~~awards~~In isDecember ~~reflected~~2020, inthis ~~diluted~~agreement ~~earnings~~was ~~per~~renewed ~~share~~for byone ~~application~~year ofand expires in December 2021. Total payments to the ~~treasury~~related ~~stock~~party ~~method~~for these services recorded to expenses were $0.3 ~~Diluted~~million ~~loss~~and ~~per~~$0.4 ~~share~~million for the three months ended ~~October~~April 3130, ~~2019~~2020 and ~~2020~~2021, respectively and ~~for~~$1.3 ~~the~~million ~~nine~~and ~~months~~$0.9 ~~ended~~million ~~October~~were in prepaid expenses and other current assets as of January 31, ~~2019~~2021 and ~~2020~~April 30, is2021, ~~the~~respectively. ~~same~~Accounts aspayable to the ~~basic~~related ~~loss~~party ~~per~~were ~~share~~$4.4 asmillion ~~there~~and ~~was~~$4.8 amillion ~~net~~at ~~loss~~January 31, ~~for~~2021 ~~those~~and ~~periods~~April 30, ~~and~~2021, ~~inclusion~~respectively, ofincluded ~~potentially~~in ~~issuable~~accounts ~~shares~~payable, ~~was~~related ~~anti-dilutive~~parties.

19In the quarter ended July 31, 2020, certain equity holders ceased to qualify as related parties of the Company and the amounts disclosed related to them are accordingly presented through April 30, 2020 only. Included in revenues from three equity holders, who are also customers of the Company, is $2.8 million for the three months ended April 30, 2020.

The Company has a banking relationship with one of its former equity holders who was considered a related party. In the quarter ended July 31, 2020, the equity holder ceased to qualify as a related party of the Company and the amounts disclosed related to such former equity holder are accordingly presented as a related party through April 30, 2020 only. Included in interest income is $0.1 million for the three months ended April 30, 2020.

The Company entered into an agreement with one of its equity holders in May 2016 to spend an agreed-upon amount of funds over a three-year period to further the alliance between the two companies. In April 2019, the agreement was extended for an additional three years. As of April 30, 2021, the Company was in compliance with the terms of the agreement. In the quarter ended July 31, 2020, the equity holder ceased to qualify as a related party of the Company and the amounts disclosed related to such equity holder are accordingly presented as a related party through April 30, 2020 only. No funds were spent under the agreement during the three months ended April 30, 2020.

Note 14. Basic and Diluted Loss per Share

Basic loss per share is computed by dividing net loss attributable to nCino, Inc. by the weighted-average number of common shares outstanding for the fiscal period. Diluted loss per share is computed by giving effect to all potential weighted average dilutive common stock, including options. 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, 2020 and 2021 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 EndedOctober 31,				Nine Months EndedOctober 31,
	Three Months Ended April 30,
	2019		2020		2019		2020
	2020		2021
Basic loss per share:
Basic and diluted loss per share:
Numerator
Net loss attributable to nCino, Inc.	$	(64,~~029~~769)	$	(915,~~063~~008)	$	~~(17,950)~~	$	~~(28,478)~~
Denominator
Weighted-average common shares outstanding1	79,382,419		91,600,203		77,277,039		85,962,141
Weighted-average common shares outstanding	81,560,762		94,402,265
Basic loss per share attributable to nCino, Inc.	$	(0.08)	$	(0.10)	$	(0.23)	$	(0.33)
Basic and diluted loss per share attributable to nCino, Inc.	$	(0.06)	$	(0.16)
Dilutive loss per share:
Numerator
Net loss attributable to nCino, Inc.	$	(6,029)	$	(9,063)	$	(17,950)	$	(28,478)
Denominator
Weighted-average common shares outstanding1	79,382,419		91,600,203		77,277,039		85,962,141
Dilutive loss per share attributable to nCino, Inc.	$	(0.08)	$	(0.10)	$	(0.23)	$	(0.33)

1Includes 207,673 vested RSUs that were not issued and outstanding and contingent consideration of 142,846 shares of common stock that was earned but not issued and outstanding for the three months ended October 31, 2020 and 225,173 vested RSUs that were not issued and outstanding and contingent consideration of 142,846 shares of common stock that was earned but not issued and outstanding for the nine months ended October 31, 2020.

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:

	October 31,
	Three Months Ended April 30,
	2019	2020
	2020	2021
Stock options issued and outstanding	7,~~873~~744,~~032~~722	63,~~620~~788,~~274~~794
Nonvested RSUs issued and outstanding	~~835~~972,~~627~~494	12,~~834~~526,~~626~~767

~~Note 14. Subsequent Event~~19

On November 29, 2020, the Company entered into a lease (the “Lease”) with a new lessor (the “Landlord”), pursuant to which the Company will continue to lease approximately 89,975 square feet of space for its existing corporate headquarters (the "Premises").

The date on which the Lease will commence will be no later than the Closing, defined below, currently estimated to occur on or before December 22, 2020 (the “Commencement Date”). The Lease will have a fifteen-year term concluding December 31, 2035, which, upon execution of the New Building Lease, as defined below, would be extended to be coterminous with the New Building Lease. The Company has the option to extend the Lease for two eight-year terms. The Company’s monthly base rent for the Premises will be approximately $0.1 million per month, and will increase on January 1, 2022 and each anniversary of such date by approximately 2.25% per annum, subject to an anticipated increase in base rent to account for development of a parking deck. The Company will also be obligated to pay certain other expenses under the Lease pursuant to a triple net return obligation to the Landlord.

The Company is currently in possession of the Premises pursuant to the Office Lease dated March 10, 2017 (as amended) between the Company and the previous lessor (the “Prior Lease”). The Prior Lease will be terminated by an agreement of the Company and the previous lessor in connection with the Landlord’s acquisition of record title to the property the Premises is located on (the "Property") pursuant to the purchase option provided in the Prior Lease (which is expected to be

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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)

assigned by the Company to the Landlord), for a purchase price of $16.3 million (the “Closing”) and the effectiveness of the Lease, such that the Company’s possession of the Premises shall be uninterrupted.

The Lease is conditioned upon the Closing. In the event the Closing has not occurred on or before December 22, 2020, the Lease shall be deemed automatically terminated, and the Company shall then be obligated to acquire the Property pursuant to the same purchase option provided in the Prior Lease no later than December 30, 2020.

Pursuant to a separate agreement to be entered into by the Company and the Landlord prior to Closing, the (i) Landlord is obligated to negotiate an amendment to the Lease to allow for construction of a 648-space parking deck on the Property for the Company, the development costs of which will be added to base rent under the Lease, and (ii) Company will have the option (the “New Building Option”) to require the Landlord to enter into negotiations for a new lease agreement (the “New Building Lease”) for a term of fifteen years, to allow for the construction by the Landlord and leasing by the Company of an additional three-story office building of approximately 90,000 rentable square feet (the “New Building”) on the Property, which lease would commence upon completion of construction of the New Building and tenant improvements therein. The Company may exercise the New Building Option on or before the fourth anniversary of the Closing.

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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 ~~final~~Annual ~~prospectus~~Report on Form 10-K for the ~~Secondary~~fiscal ~~Offering~~year ~~dated~~ended ~~October 7~~January 31, ~~2020~~2021 ~~and~~ filed with the SEC ~~pursuant to Rule 424(b)(4)~~ on ~~October~~March 931, ~~2020~~2021. 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 202022" refer to the fiscal year ended January 31, ~~2020~~2022.

Overview

nCino is a leading global provider of cloud-based software for financial institutions. We empower banks and credit unions 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 financial institutions to more effectively onboard new clients, make loans and manage the entire loan life cycle, open deposit and other accounts, and manage regulatory compliance. We serve financial institution customers of all sizes and complexities, including global financial institutions, enterprise banks, regional banks, community banks, credit unions, and new market entrants, such as challenger banks. Our customers deploy and utilize our digital platform, 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 financial institutions 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 our 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 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. The state of Delaware effected the name change of Visible Equity to nCino Portfolio Analytics, LLC in April 2021.

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 our solution for client onboarding, loan 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 applications 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 applications, has enhanced our ability to increase adoption of our solution by our customers.~~

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Weopening, ~~sell our solution directly through our business development managers~~and, ~~account~~most ~~executives~~recently, ~~field~~analytics ~~sales engineers~~ and ~~customer~~AI/ML ~~success managers. Our sales efforts in the United States are organized around financial institutions based on size~~applications, ~~whereas~~has ~~internationally~~enhanced ~~we focus~~ our ~~sales~~ability ~~efforts by geography. To drive growth and serve customers in the EMEA region, we continue~~ to ~~expand~~increase ~~headcount~~adoption inof our UKsolution ~~office.~~by ~~In fiscal 2020, we opened an office in Tokyo through~~ our ~~joint venture, nCino K~~customers.~~K.,~~ giving us another base of operations in APAC in addition to our Australian offices. As of October 31, 2020, we had 144 sales and sales support personnel in the United States, and 58 sales and support personnel in offices outside the United States.

ToWe ~~help~~sell ~~customers~~our gosolution ~~live~~directly ~~with~~through our ~~solution~~business ~~and~~development ~~achieve~~managers, ~~success~~account executives, wefield ~~offer~~sales ~~professional~~engineers, ~~services~~and ~~including~~customer ~~configuration~~success ~~and~~managers. ~~implementation,~~Our ~~training~~sales ~~and~~efforts ~~advisory~~in ~~services.~~the ~~For~~United ~~larger~~States are organized around financial institutions based on size, wewhereas ~~generally~~internationally ~~work~~we ~~with~~focus ~~systems~~our ~~integrators~~sales ~~("SIs")~~efforts ~~such~~by asgeography. ~~Accenture,~~To ~~Deloitte,~~drive ~~PwC~~growth and ~~West~~serve ~~Monroe~~customers ~~Partners~~in ~~for~~ the ~~delivery~~EMEA ~~of professional services~~region, ~~while~~ we ~~have~~continue ~~historically~~to ~~performed~~expand ~~professional~~headcount ~~services~~in ~~for~~our ~~smaller~~UK ~~financial institutions ourselves~~office. WeIn ~~expect~~fiscal ~~larger~~2020, ~~financial~~we ~~institutions~~opened toan ~~make~~office upin aTokyo ~~greater~~through ~~proportion of~~ our ~~sales~~joint ~~and~~venture, tonCino ~~increasingly~~K.K., ~~outsource~~giving ~~professional~~us ~~services~~another ~~for~~base ~~smaller~~of ~~banks~~operations ~~and~~in ~~credit~~APAC ~~unions~~in addition to ~~SIs~~our inAustralian ~~the future~~offices. As aof ~~result~~April 30, 2021, we ~~expect~~had 162 sales and sales support personnel in the ~~mix~~United ofStates, ~~our~~and ~~total~~68 ~~revenues~~sales toand ~~become~~support ~~more~~personnel ~~heavily~~in ~~weighted~~offices ~~toward~~outside ~~subscription~~the ~~revenues~~United States.

To help customers go live with our solution and achieve success, 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, 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 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 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 newly public company.

For the three months ended ~~October~~April 3130, 2020 and ~~2019~~2021, our total revenues were $5444.27 million and $3762.94 million, respectively, representing a 4339.25% increase, and our subscription revenues were $4334.38 million and $2751.70 million, respectively, representing a 5646.45% increase. WeDue ~~had net losses attributable~~ to ~~nCino of $9.1 million and $6.0 million for the three months ended October 31, 2020 and 2019, respectively. For the nine months ended October 31, 2020 and 2019,~~ our ~~total~~continuing ~~revenues~~investment ~~were~~in ~~$147.7 million and $99.7 million~~growth, ~~respectively,~~we ~~representing~~recorded ~~a 48.2% increase, and our subscription revenues were $117.5 million and $71.8 million, respectively, representing a 63.6% increase. We had~~ net losses attributable to nCino of $284.58 million and $1815.0 million for the ~~nine~~three months ended ~~October~~April 3130, 2020 and ~~2019~~2021, respectively.

Recent ~~Development~~Developments

Initial Public Offering. On July 13, 2020, our Registration Statement on Form S-1 relating to the initial public offering ("IPO") of our common stock was declared effective by the SEC. In connection with the IPO, we issued and sold 9,269,000 shares of common stock (including shares issued pursuant to the exercise in full of the underwriters' option to purchase additional shares) at a public offering price of $31.00 per share for net proceeds of $268.4 million, after deducting underwriters' discounts and commissions (excluding other IPO costs as of ~~October~~ January 31, ~~2020~~2021).

Secondary Public Offering. On October 13, 2020, the Company completed a secondary public offering (the "Secondary Offering"). The Company did not offer any shares of common stock in the Secondary Offering and did not receive any proceeds from the sale of the shares of common stock by the ~~Selling~~selling ~~Stockholders~~stockholders. The Company incurred costs of approximately $1.0 million in relation to the Secondary Offering for ~~the~~fiscal ~~three~~2021 and ~~nine months ended October 31, 2020 and~~ such costs are recorded as a component of general and administrative expenses on the ~~unaudited condensed~~ consolidated statement of operations. The Company received $1.7 million in cash (excluding withholding taxes) in connection with the exercise of 554,112 options by certain stockholders participating in the Secondary Offering. In addition, concurrent with the pricing of the Secondary Offering, the underwriters in the Company's IPO released an additional 367,561 shares from lock-up agreements signed in connection with the IPO, with stockholders who did not participate in the Secondary Offering. The release consisted of both outstanding shares and shares subject to options.

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 the nCino Bank Operating System within and across lines of business. Our success in growing our customer base and expanding adoption of our solution 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 the nCino Bank Operating System. In addition, growing our customer base will require us to increasingly penetrate markets outside the United States, which markets accounted for 1214.25% of ~~our~~ total revenues for the three months ended ~~October~~April 3130, ~~2020,~~2021. ~~and~~For ~~10.5%~~new ~~for~~customers, ~~the~~our ~~nine~~sales

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~~months ended October 31, 2020. 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 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 the nCino Bank Operating System by our customers requires a period of implementation and configuration services that can range from as little as three months for community banks to over 18 months for global financial institutions. As a result, during the initial go-live period for a customer, 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 will make up an increasing proportion of our total revenues as our overall business grows.

COVID-19 Effects on Demand for Our Solution. 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 ~~and have provided more than $50 billion in funding for their small business clients~~.

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 ~~may have had the effect of pulling forward demand that might have otherwise materialized as new business later in the fiscal year and that~~, coupled with the disruptive effect of COVID-19 on the economy more generally, may have the effect of ~~reducing new business later in fiscal 2021 and~~ moderating revenue growth rates in fiscal 2022. In addition, 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.

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 newly 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.

Non-GAAP Financial Measure

In addition to providing financial measurements based on GAAP, we provide an additional financial metric that is not prepared in accordance with GAAP (non-GAAP). 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. We believe that this non-GAAP financial measure helps us to identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of the non-GAAP financial measure.

Accordingly, we believe that this financial measure reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, and enhancing the overall understanding of our past performance and future prospects. Although the calculation of non-GAAP financial measures may vary from company to company, our detailed presentation may facilitate analysis and comparison of our operating results by management and investors with other peer companies, many of which use a similar non-GAAP financial measure to supplement their GAAP results in their public disclosures. This non-GAAP financial measure is Non-GAAP ~~Operating~~operating ~~Loss~~loss, as discussed below.

24Non-GAAP operating loss. Non-GAAP operating loss is defined as loss from operations as reported in our unaudited condensed consolidated statements of operations excluding the impact of amortization of intangible assets, stock-based compensation expense, and expenses related to the government antitrust investigation and related civil action disclosed in

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~~Non-GAAP~~Part ~~Operating~~II, ~~Loss.~~Item ~~Non-GAAP~~I ~~Operating~~of ~~Loss~~this isQuarterly ~~defined~~Report ason ~~loss~~Form ~~from~~10Q ~~operations as reported in our unaudited condensed consolidated statements of operations excluding~~ (the ~~impact~~"Antitrust ~~of amortization of intangible assets and stock-based compensation expense~~Matters"). Non-GAAP ~~Operating~~operating ~~Loss~~loss is widely used by securities analysts, investors, and other interested parties to evaluate the profitability of companies. Non-GAAP ~~Operating~~operating ~~Loss~~loss eliminates potential differences in performance caused by variations in the extent to which intangible assets are identifiable (affecting relative amortization expense). We do not believe the fees and expenses related to the Antitrust Matters relate to the operating business and are operating expenses that would not have otherwise been incurred by the Company in the normal course of our business.

This non-GAAP financial measure does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. There are limitations in the use of non-GAAP measures because they do not include all of the expenses that must be included under GAAP and because they involve the exercise of judgment concerning exclusions of items from the comparable non-GAAP financial measure. 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~~non-GAAP ~~Operating~~operating ~~Loss~~loss to ~~Loss~~loss from ~~Operations~~operations, the most directly comparable financial measure, calculated and presented in accordance with GAAP (in thousands):

	Three Months EndedOctober 31,				Nine Months EndedOctober 31,
	Three Months Ended April 30,
(in thousands)	2019		2020		2019		2020
($ in thousands)	2020		2021
GAAP Loss from Operations	$	(6,720)	$	(8,788)	$	(18,159)	$	(28,752)
GAAP loss from operations	$	(4,271)	$	(15,474)
Adjustments
Amortization of Intangible Assets	726		803		903		2,395
Amortization of intangible assets	796		814
Stock-based Compensation Expense	1,081		5,293		4,682		19,613
Stock-based compensation expense	1,051		7,064
Total Adjustments	1,807		6,096		5,585		22,008
Fees and expenses related to the Antitrust Matters	—		3,263
Non-GAAP Operating Loss	$	(4,913)	$	(2,692)	$	(12,574)	$	(6,744)
Total adjustments	1,847		11,141
Non-GAAP operating loss	$	(2,424)	$	(4,333)

Components of Results of Operations

Revenues

We derive our revenues from subscription and professional services fees.

Subscription Revenues. Our subscription revenues consist principally of fees from customers for accessing the nCino Bank Operating System and maintenance and support services that we offer under non-cancellable multi-year contracts, which typically range from three to five years. 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, first introduced in fiscal 2020, for which we generally charge based on the asset size of the customer or on a usage basis. Prior to our acquisitions of Visible Equity and FinSuite in fiscal 2020, they generally licensed their products under annual contracts that could be cancelled on 30-days’ notice. We will continue to support these customers under their legacy contracts until such contracts are renewed, cancelled, or expire.

•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. Subscription fees are generally charged annually in advance. 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. 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~~

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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 Revenues. Professional services 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 which these SIs bill our customers directly. We have historically delivered professional services ourselves for community banks and smaller credit unions. 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, 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 primarily consists of fees paid to Salesforce for access to the Salesforce Platform, including Salesforce’s hosting infrastructure and data center operations. 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. 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 Revenues. Cost of professional services 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 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. Beginning with fiscal 2020 and the adoption of Accounting Standards Update (ASU) No. 2014-09, 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 4four 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 acquired customer relationships, 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 the nCino Bank Operating System.

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. 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 new publicly-traded company, including legal, audit, and consulting fees.

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Stock-Based Compensation

We have historically recorded stock-based compensation expense associated with stock options in cost of revenues and operating expenses as the related options vest. Beginning in the quarter ended July 31, 2020, we recorded stock-based compensation expenses associated with RSUs as cost of revenues and operating expenses as ~~the~~a liquidity-based vesting condition was satisfied upon the IPO. ~~For~~This ~~the~~contributed ~~three~~to ~~and~~increased ~~nine~~stock-based compensation expense for the three months ended ~~October~~April 3130, ~~2020,~~2021 werelative ~~recognized~~to ~~$4.6~~April 30, ~~million and $16~~2020.8 ~~million of stock~~Stock-based ~~based~~ compensation expense, ~~respectively,~~was ~~related~~$1.1 tomillion ~~RSUs~~and ~~being~~$7.1 ~~recognized~~million ~~upon~~for the ~~effective~~three ~~date~~months ofended ~~the~~April 30, ~~IPO~~2020 and ~~additional~~2021, ~~vesting of RSUs since such time ($12~~respectively.2 ~~million~~After ~~of which was recognized on~~ the ~~effective date of the~~ IPO~~). Going forward~~, stock-based compensation expense for both stock options and RSUs ~~will~~is be recognized as the time-based vesting conditions under such awards are met.

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 ~~statement~~statements of operations data for three ~~and nine~~ months ended ~~October~~April 3130, ~~2019~~2020 and ~~2020~~2021 in both dollars and as a percentage of total revenues, except as noted.

	Three Months EndedOctober 31,				Nine Months EndedOctober 31,
	Three Months Ended April 30,
	2019		2020		2019		2020
	2020		2021
($ In thousands, except share and per share amounts)
($ in thousands, except share and per share amounts)
Revenues:
Subscription revenues	$	2734,~~673~~831	$	4351,~~279~~033	$	~~71,815~~	$	~~117,461~~
Professional services revenues	109,~~189~~881		1011,~~950~~322		~~27,861~~		~~30,245~~
Total revenues	3744,~~862~~712		5462,~~229~~355		~~99,676~~		~~147,706~~
Cost of revenues:
Cost of subscription revenues1	810,~~243~~099		1214,~~380~~946		~~21,828~~		~~34,399~~
Cost of professional services revenues1	8,~~646~~767		1011,~~134~~353		~~23,869~~		~~29,568~~
Total cost of revenues	1618,~~889~~866		2226,~~514~~299		~~45,697~~		~~63,967~~
Gross profit	2025,~~973~~846		3136,~~715~~056		~~53,979~~		~~83,739~~
Operating expenses:
Sales and marketing1	12,~~602~~226		1418,~~175~~425		~~31,070~~		~~42,027~~
Research and development1	910,~~534~~965		1517,~~077~~425		~~25,172~~		~~41,334~~
General and administrative1	56,~~557~~926		1115,~~251~~680		~~15,896~~		~~29,130~~
Total operating expenses	2730,~~693~~117		4051,~~503~~530		~~72,138~~		~~112,491~~
Loss from operations	(64,~~720~~271)		(815,~~788~~474)		~~(18,159)~~		~~(28,752)~~
Non-operating income (expense):
Interest income	99156		7857		~~682~~		~~289~~
Other	690		(260)		(37)		337
Interest expense	—		(268)
Loss before income tax expense	(5,931)		(8,970)		(17,514)		(28,126)
Other income (expense), net	(520)		267
Income tax expense	158		309		496		709
Loss before income tax expense	(4,635)		(15,418)
Net loss	(6,089)		(9,279)		(18,010)		(28,835)
Income tax expense	197		187
Net loss attributable to non-controlling interest	(60)		(292)		(60)		(700)
Net loss	(4,832)		(15,605)
Adjustment attributable to non-controlling interest	—		76		—		343
Net loss attributable to non-controlling interest	(176)		(467)
Net loss attributable to nCino, Inc.	$	(6,029)	$	(9,063)	$	(17,950)	$	(28,478)
Adjustment attributable to non-controlling interest	113		(130)
Net loss attributable to nCino, Inc.	$	(4,769)	$	(15,008)
Net loss per share attributable to nCino, Inc.:
Basic and diluted	$	(0.0806)	$	(0.1016)	$	~~(0.23)~~	$	~~(0.33)~~
Weighted average number of common shares outstanding:
Basic and diluted	7981,~~382~~560,~~419~~762		9194,~~600~~402,~~203~~265		~~77,277,039~~		~~85,962,141~~

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1Includes stock-based compensation expense as follows:


	Three Months Ended April 30,
($ in thousands)	2020		2021
Cost of subscription revenues	$	61	$	285
Cost of professional services revenues	266		1,332
Sales and marketing	315		1,753
Research and development	309		1,543
General and administrative	100		2,151
Total stock-based compensation expense	$	1,051	$	7,064

The Company recognized amortization expense as follows:


	Three Months Ended April 30,
($ in thousands)	2020		2021
Cost of subscription revenues	$	369	$	396
Sales and marketing	417		418
General and administrative	10		—
Total amortization expense	$	796	$	814


	Three Months Ended April 30,
	2020		2021
Revenues:
Subscription revenues	77.9	%	81.8	%
Professional services revenues	22.1		18.2
Total revenues	100.0		100.0
Cost of revenues (percentage shown in comparison to related revenues):
Cost of subscription revenues	29.0		29.3
Cost of professional services revenues	88.7		100.3
Total cost of revenues	42.2		42.2
Gross profit	57.8		57.8
Operating expenses:
Sales and marketing	27.3		29.5
Research and development	24.5		27.9
General and administrative	15.5		25.1
Total operating expenses	67.3		82.5
Loss from operations	(9.5)		(24.7)
Non-operating income (expense)
Interest income	0.3		0.1
Interest expense	0.0		(0.4)
Other income (expense), net	(1.2)		0.4
Loss before income tax expense	(10.4)		(24.6)
Income tax expense	0.4		0.3
Net loss	(10.8)	%	(24.9)	%

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	Three Months EndedOctober 31,				Nine Months EndedOctober 31,
	2019		2020		2019		2020
Cost of subscription revenues	$	71	$	135	$	208	$	438
Cost of professional services revenues	315		810		938		3,358
Sales and marketing	339		1,157		946		4,818
Research and development	315		1,066		926		4,406
General and administrative	41		2,125		1,664		6,593
Total stock-based compensation expense	$	1,081	$	5,293	$	4,682	$	19,613

Comparison of the Three Months Ended April 30, 2020 and 2021

	Three Months EndedOctober 31,				Nine Months EndedOctober 31,
	2019		2020		2019		2020
Revenues:
Subscription revenues	73.1	%	79.8	%	72.0	%	79.5	%
Professional services revenues	26.9		20.2		28.0		20.5
Total revenues	100	%	100	%	100	%	100	%
Cost of Revenues (percentage shown in comparison to related revenues):
Cost of subscription revenues	29.8		28.6		30.4		29.3
Cost of professional services revenues	84.9		92.5		85.7		97.8
Total cost of revenues	44.6		41.5		45.8		43.3
Gross profit	55.4		58.5		54.2		56.7
Operating Expenses:
Sales and marketing	33.3		26.1		31.2		28.5
Research and development	25.2		27.8		25.3		28.0
General and administrative	14.7		20.7		15.9		19.7
Total operating expenses	73.2		74.6		72.4		76.2
Loss from operations	(17.8)		(16.1)		(18.2)		(19.5)
Non-operating Income (Expense)
Interest income	0.3		0.1		0.7		0.2
Other	1.8		(0.5)		—		0.2
Loss before income tax expense	(15.7)		(16.5)		(17.5)		(19.1)
Income tax expense	0.4		0.6		0.5		0.5
Net loss	(16.1)	%	(17.1)	%	(18.0)	%	(19.6)	%

Comparison of the Three and Nine Months Ended October 31, 2019 and 2020

Revenues

	Three Months Ended October 31,								Nine Months Ended October 31,
	Three Months Ended April 30,
($ in thousands)	~~2019~~2020				~~2020~~2021				~~2019~~				~~2020~~
Revenues:
Subscription revenues	$	2734,~~673~~831	7377.19	%	$	4351,~~279~~033	7981.8	%	$	~~71,815~~	~~72.0~~	%	$	~~117,461~~	~~79.5~~	%
Professional services revenues	109,~~189~~881		2622.91		1011,~~950~~322		2018.2		~~27,861~~		~~28.0~~		~~30,245~~		~~20.5~~
Total revenues	$	3744,~~862~~712	100.0	%	$	5462,~~229~~355	100.0	%	$	~~99,676~~	~~100.0~~	%	$	~~147,706~~	~~100.0~~	%

Subscription Revenues

Subscription revenues increased $1516.62 million for the three months ended ~~October~~April 3130, ~~2020~~2021 compared to the three months ended ~~October~~April 3130, ~~2019~~2020, primarily due to ~~new~~initial ~~customer~~revenues ~~additions,~~from ~~expansion~~customers who did not contribute to subscription revenues during the prior period and growth from existing customers within and across lines of business. ~~and~~Of ~~price~~the ~~increases~~increase, ~~and~~82.8% anwas ~~approximately~~attributable ~~$1.0~~to ~~million~~increased ~~one-time~~revenues ~~catch-up~~from ~~revenue~~existing ~~benefit~~customers ~~related~~as toadditional aseats ~~consortium~~were ~~that~~activated ~~utilized~~in ~~our~~accordance ~~software~~with tocontractual ~~process~~terms ~~PPP~~and ~~loans~~customers expanded their adoption of our solution and 17.2% Inwas ~~the~~attributable ~~future,~~to weinitial ~~expect~~revenues anfrom ~~immaterial~~customers ~~revenue~~who ~~contribution~~did ~~related~~not contribute to ~~this~~subscription ~~consortium.~~revenues Ofduring the ~~increase~~three months ended April 30, 882020.1 Subscription revenues were 81.8% ~~was~~of ~~attributable~~total revenues for the three months ended April 30, 2021 compared to ~~increased~~77.9% of total revenues ~~from~~for ~~existing~~the ~~customers~~three asmonths ~~additional~~ended ~~seats~~April 30, 2020, reflecting the growth in our installed base.

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were activated in accordance with contractual terms and customers expanded their adoption of our solution, and 11.9% was attributable to revenues from new nCino Bank Operating System customers. Subscription revenues were 79.8% of total revenues for the three months ended October 31, 2020 compared to 73.1% of total revenues for the three months ended October 31, 2019, reflecting the growth in our installed base.

Subscription revenues increased $45.6 million for the nine months ended October 31, 2020 compared to the nine months ended October 31, 2019, primarily due to new customer additions, including customers added as a result of our acquisitions of Visible Equity and FinSuite, expansion from existing customers within and across lines of business and price increases, and an approximate $1.0 million one-time catch-up revenue benefit related to a consortium that utilized our software to process PPP loans. In the future, we expect an immaterial revenue contribution related to this consortium. Of the increase, 80.9% 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 solution, 11.4% was attributable to revenues from Visible Equity and FinSuite, and 7.7% was attributable to revenues from new nCino Bank Operating System customers. Subscription revenues were 79.5% of total revenues for the nine months ended October 31, 2020 compared to 72.0% of total revenues for the nine months ended October 31, 2019, reflecting the growth in our installed base.

Professional Services Revenues

Professional services revenues increased $01.84 million for the three months ended ~~October~~April 3130, ~~2020~~2021 compared to the three months ended ~~October~~April 3130, ~~2019~~2020, 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 revenues increased $2.4 million for the nine months ended October 31, 2020 compared to the nine months ended October 31, 2019, primarily due to the addition of new customers as well as expanded adoption by existing customers within and across lines of business where implementation, configuration and training services were required.

Cost of Revenues and Gross Margin

	Three Months Ended October 31,								Nine Months Ended October 31,
	Three Months Ended April 30,
($ in thousands)	~~2019~~2020				~~2020~~2021				~~2019~~				~~2020~~
Cost of Revenues (percentage shown in comparison to related revenues):
Cost of revenues (percentage shown in comparison to related revenues):
Cost of subscription revenues	$	810,~~243~~099	29.80	%	$	1214,~~380~~946	2829.63	%	$	~~21,828~~	~~30.4~~	%	$	~~34,399~~	~~29.3~~	%
Cost of professional services revenues	8,~~646~~767		8488.97		1011,~~134~~353		92100.53		~~23,869~~		~~85.7~~		~~29,568~~		~~97.8~~
Total cost of revenues	$	1618,~~889~~866	4442.62		$	2226,~~514~~299	4142.52		$	~~45,697~~	~~45.8~~		$	~~63,967~~	~~43.3~~
Gross profit	$	2025,~~973~~846	5557.48	%	$	3136,~~715~~056	5857.58	%	$	~~53,979~~	~~54.2~~		$	~~83,739~~	~~56.7~~

Cost of Subscription Revenues

Cost of subscription revenues increased $4.18 million for the three months ended ~~October~~April 3130, ~~2020~~2021 compared to the three months ended ~~October~~April 3130, ~~2019~~2020, generating a gross margin for subscription revenues of 7170.47% compared to a gross margin of 7071.20% for the three months ended ~~October~~April 3130, ~~2019~~2020. Costs related to Salesforce user fees increased $3.21 million as we continued to add new customers and sell additional functionality to existing customers, and personnel costs increased $01.62 million as we added new employees. Stock-based compensation expense, included in personnel costs, increased $0.13 million ~~related~~for to vesting of RSUs ~~since~~that started after the effective date of the IPO. ~~Allocated~~Other ~~overhead~~ costs of subscription revenues increased $0.14 million ~~compared to the prior year period~~ due to ~~growth~~data ~~supporting~~services ~~our~~purchased ~~continued~~for ~~business expansion~~resale. ~~Amortization~~We ~~expense~~expect ~~for acquired developed technology related to~~ the ~~acquisition~~cost of ~~Visible~~subscription ~~Equity~~revenues ~~and~~will ~~FinSuite~~continue ~~increased $0.1 million due~~ to ~~amortization~~increase ~~expense~~in ~~during~~absolute ~~the~~dollars ~~full~~as ~~period for~~ the ~~three~~number ~~months~~of ~~ended~~users ~~October 31, 2020. Other costs~~ of ~~subscription~~the ~~revenues~~nCino ~~increased~~Bank ~~$0.1~~Operating ~~million~~System ~~due to data services purchased for resale~~grows.

Cost of subscription revenues increased $12.6 million for the nine months ended October 31, 2020 compared to the nine months ended October 31, 2019, generating a gross margin for subscription revenues of 70.7% compared to a gross margin of 69.6% for the nine months ended October 31, 2019. Costs related to Salesforce user fees increased $9.0 million as we continued to add new customers and sell additional functionality to existing customers, and personnel costs increased $1.7 million as we added new employees. Stock-based compensation expense increased $0.3 million, mostly attributable to RSUs being recognized upon the effective date of the IPO. Allocated overhead costs increased $0.2 million compared to the prior year period due to growth supporting our continued business expansion. Amortization expense for acquired developed technology related to the acquisitions of Visible Equity and FinSuite increased $0.8 million due to amortization expense during the full period for the nine months ended October 31, 2020. Other costs of subscription revenues increased $0.6 million due to data

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

Cost of Professional Services Revenues

Cost of professional services revenues increased $12.56 million for the three months ended ~~October~~April 3130, ~~2020~~2021 compared to the three months ended ~~October~~April 3130, ~~2019~~2020, generating a gross margin for professional services of 7(0.53)% compared to a gross margin of 1511.13% for the three months ended ~~October~~April 3130, ~~2019~~2020. Excluding the effect of additional stock-based compensation expense ~~related~~attributable to ~~vesting of~~ RSUs vesting since the effective date of the IPO, gross margin for professional services for the three months ended October 31, 2020 was 13.7%. For the three months ended October 31, 2020, personnel costs increased $1.6 million for the professional services team compared to the prior year period due to increased headcount. Stock-based compensation expense increased $0.7 million related to vesting of RSUs since the effective date of the IPO. Allocated overhead costs increased $0.3 million compared to the prior year period due to growth supporting our continued business expansion. These increases were partially offset by a $0.8 million decrease in reimbursable, and a $0.3 million decrease in non-reimbursable, travel and related expenses for the professional service organization due to COVID-19-related travel restrictions. The decrease in our professional services gross margin for the three months ended October 31, 2020 was primarily due to additional stock-based compensation expense and continued investment in expansion of our international professional services teams.

Cost of professional services revenues increased $5.7 million for the nine months ended October 31, 2020 compared to the nine months ended October 31, 2019, generating a gross margin for professional services of 2.2% compared to a gross margin of 14.3% for the nine months ended October 31, 2019. Excluding the effect of additional stock-based compensation expense, mostly attributable to RSUs being recognized upon the effective date of the IPO and also additional vesting of RSUs since the effective date of the IPO, gross margin for professional services for the nine months ended October 31, 2020 was 11.1%. For the nine months ended October 31, 2020, personnel costs increased $4.9 million for the professional services team compared to the prior year period due to increased headcount. Stock-based compensation expense increased $2.7 million mostly attributable to RSUs being recognized upon the effective date of the IPO and also additional vesting of RSUs since the effective date of the IPO. Allocated overhead costs increased $0.6 million compared to the prior year period due to growth supporting our continued business expansion. These increases were partially offset by a $1.9 million decrease in reimbursable, and a $0.6 million decrease in non-reimbursable, travel and related expenses for the professional service organization due to COVID-19-related travel restrictions. The decrease in our professional services gross margin for the nine months ended October 31, 2020 was primarily due to additional stock-based compensation expense and continued investment in expansion of our international professional services teams. 27

~~Excluding~~Table ~~the effect~~ of IPO associated expenses related to RSUs, we expect the cost of professional services revenues to increase in absolute dollars in the near term as we add new customer subscriptions that require professional services. For the balance of fiscal 2021, we expect reduced professional services gross margins as utilization is adversely affected by travel restrictions and work-from-home restrictions resulting from COVID-19.Contents

months ended April 30, 2021 was 10.4%. For the three months ended April 30, 2021, personnel costs increased $2.8 million for the professional services team compared to the prior year period due to increased headcount. Stock-based compensation expense, included in personnel costs, increased $1.2 million for vesting of RSUs that started after the effective date of the IPO. These increases were partially offset by a $0.3 million decrease in reimbursable travel and related expenses for the professional service organization due to COVID-19-related travel restrictions. The decrease in our professional services gross margin for the three months ended April 30, 2021 was primarily due to additional stock-based compensation expense and continued investment in expansion of our international professional services teams.

We expect the cost of professional services revenues to increase in absolute dollars in the near term as we add new customer subscriptions where we provide professional services.

Operating Expenses

Three Months Ended October 31,

Nine Months Ended October 31,

Three Months Ended April 30,

($ in thousands)

~~2019~~2020

~~2020~~2021

~~2019~~

~~2020~~

Operating Expenses:

Operating expenses:

Sales and marketing

12,~~602~~226

3327.3

1418,~~175~~425

2629.15

~~31,070~~

~~31.2~~

~~42,027~~

~~28.5~~

Research and development

910,~~534~~965

2524.25

1517,~~077~~425

27.89

~~25,172~~

~~25.3~~

~~41,334~~

~~28.0~~

General and administrative

56,~~557~~926

1415.75

1115,~~251~~680

2025.71

~~15,896~~

~~15.9~~

~~29,130~~

~~19.7~~

Total operating expenses

2730,~~693~~117

7367.23

4051,~~503~~530

7482.65

~~72,138~~

~~72.4~~

~~112,491~~

~~76.2~~

Loss from operations

(64,~~720~~271)

(179.85)

(815,~~788~~474)

(1624.17)

~~(18,159)~~

~~(18.2)~~

~~(28,752)~~

~~(19.5)~~

Sales and Marketing

Sales and marketing expenses increased $1.6.2 million for the three months ended ~~October~~April 3130, ~~2020~~2021 compared to the three months ended ~~October~~April 3130, ~~2019~~2020, primarily due to an increase of $25.49 million in personnel costs resulting from an increase in headcount on the sales and marketing teams and an increase of $0.5 million in marketing costs. Stock-based compensation expense, included in personnel costs, increased $1.06 million ~~related~~for to vesting of RSUs ~~since~~that started after the effective date of the IPO. ~~The increase in sales~~ and ~~marketing~~$1.2 ~~expenses~~million ~~also~~related ~~included~~to aexpatriate ~~$0.1~~tax ~~million~~equalization ~~increase~~expense included in ~~allocated~~personnel ~~overhead~~ costs. The increase in sales and marketing expenses for the three months ended ~~October~~April 3130, ~~2020~~2021 was partially offset by a decrease of $0.5 million in sales-related travel costs due to COVID-19-related travel restrictions.

Our sales and marketing headcount grew by 41 from April 30, 2020 to April 30, 2021. We expect sales and marketing expenses to increase in absolute dollars as we invest in expanding our customer base and user adoption.

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partially offset by a decrease of $0.6 million in marketing costs and a decrease of $1.3 million in sales-related travel costs due to COVID-19-related travel restrictions.

Sales and marketing expenses increased $11.0 million for the nine months ended October 31, 2020 compared to the nine months ended October 31, 2019, primarily due to an increase of $8.8 million in personnel costs resulting from an increase in headcount on the sales and marketing teams. Stock-based compensation expense increased $4.1 million mostly attributable to RSUs being recognized upon the effective date of the IPO and also additional vesting of RSUs since the effective date of the IPO. The increase in sales and marketing expenses also included a $0.9 million increase in allocated overhead costs and a $0.4 million increase in outside consulting fees due to growth supporting our continued business expansion. Amortization expense for acquired customer relationships related to the acquisition of Visible Equity increased $0.7 million due to amortization expense during the full period for the nine months ended October 31, 2020. The increase in sales and marketing expenses for the nine months ended October 31, 2020 was partially offset by a decrease of $1.0 million in marketing costs and a decrease of $2.9 million in sales-related travel costs due to COVID-19-related travel restrictions.

Our sales and marketing headcount grew by 34 from October 31, 2019 to October 31, 2020. Excluding the effect of IPO associated expenses related to RSUs, we expect sales and marketing expenses to increase in absolute dollars as we invest in expanding our customer base and user adoption.

Research and Development

Research and development expenses increased $56.5 million for the three months ended ~~October~~April 3130, ~~2020~~2021 compared to the three months ended ~~October~~April 3130, ~~2019~~2020, primarily due to an increase of $34.68 million in personnel costs resulting from a continued ~~growth~~increase in headcount, and a $0.53 million increase in allocated overhead costs due to growth supporting our continued business expansion. Stock-based compensation expense, ~~and~~included anin ~~increase~~personnel ofcosts, increased $01.84 million infor vesting of RSUs that started after the ~~use~~effective date of ~~third-party~~the ~~contractors~~IPO. ~~Stock-based~~Third ~~compensation~~party ~~expense~~professional fees increased $01.84 million ~~related~~for tothe ~~vesting~~three ofmonths ~~RSUs~~ended ~~since~~April 30, 2021 compared to the ~~effective~~three ~~date~~months ended April 30, 2020, attributable to an increase of ~~the~~contract ~~IPO.~~research and development spend.

~~Research~~Our research and development ~~expenses~~headcount ~~increased~~grew ~~$16.2~~by ~~million~~87 ~~for~~from ~~the nine months ended October 31~~April 30, 2020 ~~compared~~ to ~~the nine months ended October 31~~April 30, ~~2019, primarily due to an increase of $10~~2021.8 We ~~million~~expect inresearch ~~personnel costs resulting from continued growth in headcount~~ and adevelopment ~~$1.3~~expenses ~~million~~to increase in ~~allocated~~absolute ~~overhead~~dollars ~~costs~~ due to ~~growth~~higher ~~supporting~~headcount ~~our~~as ~~continued~~we ~~business~~continue ~~expansion. Stock-based compensation expense increased $3.5 million mostly attributable~~ to ~~RSUs~~develop ~~being~~new ~~recognized~~applications ~~upon the effective date of the IPO~~ and ~~also~~further ~~additional~~enhance ~~vesting of RSUs since~~ the ~~effective~~nCino ~~date~~Bank ofOperating ~~the IPO~~System.

Our research and development headcount grew by 96 from October 31, 2019 to October 31, 2020. Excluding the effect of IPO associated expenses related to RSUs, we expect research and development expenses to increase in absolute dollars due to higher headcount as we continue to develop new applications and further enhance the nCino Bank Operating System.

General and Administrative

General and administrative expenses increased $58.78 million for the three months ended ~~October~~April 3130, ~~2020~~2021 compared to the three months ended ~~October~~April 3130, ~~2019, primarily due to stock-based compensation expense of $2~~2020.0 ~~million related~~Personnel tocosts ~~vesting~~increased ~~of RSUs since the effective date of the IPO, a~~ $13.65 million ~~increase to personnel costs~~ from ~~increased~~additional headcount as we continued to scale our business and toalso anincreased ~~increase~~due into ~~third~~stock-based ~~party~~compensation ~~professional~~expense ~~fees~~and ofassociated ~~$1.0~~employer ~~million,~~taxes ~~mostly~~with ~~attributable~~the toexercises ~~costs~~of ~~related~~certain tostock-based ~~the Company's Secondary Offering~~transactions. ~~Allocated~~Stock-based ~~overhead~~compensation ~~and~~expense, ~~other~~included ~~general~~in ~~and~~personnel ~~administrative~~ costs, increased $12.31 million, ~~which~~for ~~consisted~~vesting ~~primarily~~ of ~~increased~~RSUs ~~insurance~~that ~~costs~~started ~~associated~~after ~~with~~the ~~being~~effective adate ~~public~~of ~~company.~~the ~~The~~IPO ~~increase~~and ina ~~general~~$0.7 ~~and~~million ~~administrative~~increase ~~expenses~~related ~~for~~to ~~the~~employer ~~three~~taxes ~~months~~associated ~~ended~~with ~~October~~equity ~~31,~~transactions ~~2020~~in ~~was~~personnel ~~partially~~costs. ~~offset~~Third byparty aprofessional ~~decrease~~fees of increased $04.20 million ~~travel~~for ~~costs~~the ~~due~~three tomonths ~~COVID-19-related travel restrictions.~~

General and administrative expenses increased $13.2 million for the nine months ended October 31, 2020 compared to the nine months ended October 31, 2019, primarily due to stock-based compensation expense of $6.2 million mostly attributable to RSUs being recognized upon the effective date of the IPO and also additional vesting of RSUs since the effective date of the IPO, partially offset by $1.2 million of stock-based compensation expense for the accelerated vesting of an executive's stock options for the nine months ended October 31, 2019 that did not occur for the nine months ended October 31, 2020. Personnel costs increased $3.6 million from increased headcount as we continued to scale our business. Third party professional fees increased $2.0 million for the nine months ended October 31, 2020 compared to the nine months ended October 31, 2019, mostly attributable to costs related to the Company’s IPO and Secondary Offering. Allocated overhead and other general and administrative costs increased $3.0 million, which consisted primarily of bad debt expense, charitable contributions and insurance costs associated with being a public company. The increase in general and administrative expenses 28

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~~for~~ended April 30, 2021 compared to the ~~nine~~three months ended ~~October~~April 3130, 2020, ~~was~~mostly ~~partially~~attributable ~~offset~~to byfees aand ~~decrease~~expenses related to the Antitrust Matters of $03.43 million ~~travel~~and costs ~~due~~associated towith ~~COVID-19-related~~being ~~travel~~a ~~restrictions~~public company. Allocated overhead and other general and administrative costs increased $1.2 million, which consisted primarily of an increase in insurance costs associated with being a public company.

Our general and administrative headcount grew by 3418 from ~~October~~April 3130, ~~2019~~2020 to ~~October~~April 3130, ~~2020~~2021. ~~Excluding~~We ~~the effect of IPO associated expenses related to RSUs, we~~ expect general and administrative expenses to increase in absolute dollars in the near term, primarily due to higher headcount to support our continued growth, fees and expenses related to the Antitrust Matters, and additional expenses for our transition to, and continuing costs of, being a public company.

Effects of COVID-19

COVID-19 began affecting our business in our first quarter fiscal 2021. To date, we have not experienced a material increase in customers’ delaying purchase decisions or cancellations nor have we had a material impact from vendors and third-party service providers we rely on. Beginning in mid-March 2020, we implemented a company-wide work-from-home requirement for all of our employees and suspended all work-related travel. We have recently eased some of these restrictions, but substantially all of our employees continue to work remotely and work-related travel remains very limited. In addition, we shifted our conferences and other marketing events to virtual-only for the foreseeable future. We expect these restrictions to stay in effect ~~during the fourth quarter of fiscal 2021 and could extend further~~ into future ~~quarters~~periods. To the extent COVID-19 has measurably affected our historical financial results, we have noted such effects in the discussion above. We are aware that there are effects of the COVID-19 pandemic in terms of efficiency, productivity, workforce retention and other matters that are not directly measurable. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments unknown and unpredictable at this time, including the ultimate duration, severity and spread of the pandemic, the ~~effects~~effectiveness of COVID-19 vaccinations, the effects of pandemic on financial institutions generally as well as on our customers, their clients and on our business partners in particular, restrictions on travel and other actions that may be taken by governmental authorities and other factors. For further information, please see, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Operating Results—COVID-19 Effects on Demand for Our Solutions” and “Risk Factors—Uncertain or weakened economic conditions, including as a result of ~~the recent coronavirus outbreak~~COVID-19, may adversely affect our industry, business, and results of operations,”" included in ~~the~~our ~~Company's~~Annual ~~prospectus~~Report on Form 10-K for the ~~Secondary~~fiscal ~~Offering~~year ~~dated~~ended ~~October 7~~January 31, ~~2020~~2021 ~~and~~ filed with the SEC ~~pursuant to Rule 424(b)(4)~~ on ~~October~~March 931, ~~2020~~2021.

Liquidity and Capital Resources

As of ~~October~~April 3130, ~~2020~~2021, we had $~~378~~386.65 million in cash and cash equivalents, and an accumulated deficit of $~~149~~176.12 million. Our net losses have been driven by our investments in developing the nCino Bank Operating System, expanding our sales and marketing organization, and scaling our finance and administrative functions to support our rapid growth. We expect to continue to incur operating losses for the foreseeable future.

To date, we have funded our capital needs through issuances of common stock and collections from our customers. In July 2020, we closed our IPO of 9,269,000 shares of common stock (including shares issued pursuant to the exercise in full of the underwriters' options to purchase additional shares) at a public offering price of $31.00 per share, resulting in aggregate net proceeds to us of $268.4 million after deducting underwriting discounts and commissions. We ~~paid $2.5 million in additional IPO related costs during the nine months ended October 31, 2020. We~~ generally bill and collect from our customers annually in advance. Our billings are subject to seasonality, with billings in the first and fourth quarters of our fiscal year substantially higher than in the second and third quarters. Because we recognize revenues ratably, our deferred revenue balance mirrors the seasonality of our billings. In addition, our advanced billing and collection coupled with our recent growth has resulted in our cash used in operating activities generally being less than our net operating losses in recent periods.

We believe that current cash and cash equivalents will be sufficient to fund our operations and capital requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts to enhance the nCino Bank Operating System and introduce new applications, market acceptance of our solution, the continued expansion of our sales and marketing activities, investments in office facilities and other capital expenditure requirements, and any potential future acquisitions. 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. There is no assurance we would be able to obtain future financing on acceptable terms or at all.

~~nCino K.K.~~29

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~~condition of~~ nCino K.K. since its inception. Pursuant to an agreement with the holders of the non-controlling interest in nCino K.K., beginning in 2027 we may redeem the non-controlling interest, or be required to redeem such interest by the holders thereof, 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 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, 2020 and October 31, 2020, the redeemable non-controlling interest of non-controlling interests in nCino K.K. was $4.4 million and $4.2 million, respectively.

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. We have consolidated the results of operations and financial condition of nCino K.K. since its inception. Pursuant to an agreement with the holders of the non-controlling interest in nCino K.K., beginning in 2027 we may redeem the non-controlling interest, or be required to redeem such interest by the holders thereof, 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 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, 2021 and April 30, 2021, the redeemable non-controlling interest was $3.8 million and $3.1 million, respectively.

Cash Flows

Summary Cash Flow information for the ~~nine~~three months ended ~~October~~April 3130, ~~2019~~2020 and ~~2020~~2021 are set forth below.

	Nine Months EndedOctober 31,
	Three Months Ended April 30,
(In thousands)	2019		2020
($ in thousands)	2020		2021
Net cash provided by operating activities	$	28,~~170~~429	$	217,~~147~~558
Net cash used in investing activities	(551,~~641~~075)		(~~3,755~~522)
Net cash provided by financing activities	85,157		269,710
Net cash (used in) provided by financing activities	(111)		7,806

Net Cash Provided by Operating Activities

The $217.16 million provided by operating activities in the ~~nine~~three months ended ~~October~~April 3130, ~~2020~~2021 reflects our net loss of $2815.86 million, offset by $2910.05 million in non-cash charges and $2012.96 million generated by changes in working capital accounts. Non-cash charges primarily consisted of stock-based compensation, depreciation and amortization, and amortization of costs capitalized to obtain revenue contracts, partially offset by foreign currency gains related to intercompany loans and transactions. Cash generated by working capital accounts was principally a function of a $1119.4 million increase in ~~our~~ deferred revenue, as we expanded our customer base and renewed existing customers, and a $171.71 million decrease in ~~accounts~~prepaid ~~receivable~~expenses and other assets. The cash generated by working capital accounts was partially offset by a $5.6 million decrease in accounts payable and accrued expenses and other liabilities, payments of $41.5 million of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions, a $~~2.7 million increase in prepaid expenses and other assets, a $~~0.96 million decrease in ~~accounts~~operating ~~payable~~lease ~~and accrued expenses and other~~ liabilities, and a ~~decrease of~~ $0.12 million increase in ~~deferred~~accounts ~~rent~~receivable.

The $28.24 million provided by operating activities in the ~~nine~~three months ended ~~October~~April 3130, ~~2019~~2020 reflects our net loss of $184.08 million, offset by $94.93 million in non-cash charges and $108.39 million generated by changes in working capital accounts. Non-cash charges primarily consisted of stock-based compensation, depreciation and amortization, and amortization of costs capitalized to obtain revenue contracts. Cash generated by working capital accounts was principally a function of a $418.16 million increase in our deferred revenue, as we expanded our customer base and renewed existing customers, ~~a $1.1 million increase in deferred rent, a $9.0 million decrease in accounts receivable,~~ and a $0.12 million decrease in prepaid expenses and other assets. The cash generated by working capital accounts was partially offset by a $14.64 million decrease in accounts payable and accrued expenses and other liabilities, a $3.1 million increase in accounts receivable, and payments of $2.4 million of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions.

Net Cash Used in Investing Activities

We used $30.85 million in investing activities in the ~~nine~~three months ended ~~October~~April 3130, ~~2020~~2021 for the purchase of property and equipment and leasehold improvements to support the expansion of our business. The $551.61 million used in investing activities in the ~~nine~~three months ended ~~October~~April 3130, ~~2019~~2020 ~~comprised~~was ~~of $3.4 million~~ used for the purchase of property and equipment and leasehold improvements to support the expansion of our business ~~and $52~~.~~3 million used in the acquisition of Visible Equity and FinSuite.~~

Net Cash (Used in) Provided by Financing Activities

The $~~269.~~7.8 million provided by financing activities in the ~~nine~~three months ended ~~October~~April 3130, ~~2020~~2021 was comprised ~~$268.4~~principally ~~million in proceeds from the IPO in July 2020, net~~ of ~~underwriting discounts and commissions and~~ $37.89 million of proceeds from the exercise of stock options. The cash provided by financing activities was partially reduced by principal payments of $20.51 million inon ~~costs related to~~ the ~~IPO. The $85.2 million provided by~~ financing ~~activities in the nine months ended October 31, 2019 was comprised principally of $79~~obligation.9 ~~million~~The ~~in proceeds from equity financings, net of issuance costs, as well as~~ $~~4.5 million in proceeds from the non-controlling interest for our Japan joint venture and $~~0.71 million ofused ~~proceeds~~in ~~from~~financing ~~the exercise of stock options.~~

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activities in the three months ended April 30, 2020 was comprised principally of payments of $0.2 million for deferred costs, partially offset by $0.1 million of proceeds from the exercise of stock options.

Contractual Obligations and Commitments

~~There~~In ~~were~~April no2021, ~~material~~the ~~changes~~Company toentered ~~our~~into ~~contractual~~a ~~obligations~~new ~~and~~lease ~~commitments~~agreement asfor the construction of ~~October 31,~~an ~~2020~~additional ~~compared~~office tobuilding ~~January 31,~~that ~~2020~~is ason ~~disclosed~~the inproperty of our ~~final~~existing ~~prospectus~~headquarters. ~~for~~Due to the ~~Secondary~~Company ~~Offering~~also ~~dated~~being ~~October~~deemed 7to be the owner of the additional building for accounting purposes, ~~2020~~the ~~and~~costs ~~filed~~associated with the ~~SEC~~construction ~~pursuant~~of the building will be capitalized as construction in progress with a corresponding construction liability through construction which is estimated to ~~Rule~~be ~~424(b)(4)~~approximately on$24.0 ~~October~~million. 9Upon completion of the building, ~~2020~~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.

OnIn ~~November~~May 292021, ~~2020,~~ the Company entered into aan ~~lease~~agreement ~~with~~for ~~a new lessor with changed terms and amounts and subject to additional agreements, pursuant to which the Company will continue to lease~~ approximately ~~89,975~~$2.6 ~~square~~million ~~feet of space~~ for ~~its~~renovations ~~existing corporate headquarters. See Note 14, Subsequent Event of the notes~~ to our ~~unaudited~~existing ~~condensed~~headquarters ~~consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q for the full description~~building.

~~Critical~~For ~~Accounting~~additional ~~Policies~~discussion on our leases and ~~Estimates~~other contractual commitments, see Note 11 "Leases" and Note 12 "Commitments and Contingencies" of the notes to our unaudited condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q. There were no material changes, other than the agreement referred to above, to our contractual obligations and commitments as of April 30, 2021 compared to January 31, 2021 as disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2021 filed with the SEC on March 31, 2021.

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these judgments and estimates under different assumptions or conditions and any such differences may be significant.

There have been no material changes in our critical accounting policies or estimates as compared to those disclosed in the final prospectus for the Secondary Offering dated October 7, 2020 and filed with the SEC pursuant to Rule 424(b)(4) on October 9, 2020.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

There have been no material changes in our critical accounting policies or estimates as compared to those disclosed in the Annual Report on Form 10-K for the fiscal year ended January 31, 2021 filed with the SEC on March 31, 2021.

Recent Accounting Pronouncements

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

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates.

Interest Rate Risk

At ~~October~~April 3130, ~~2020~~2021, we had cash, ~~and~~ cash equivalents and restricted cash of $~~378~~386.65 million, which consisted primarily of bank deposits and money market ~~funds~~accounts. Interest-earning instruments carry a degree of interest rate risk. However, our historical interest income has not fluctuated significantly. A hypothetical 10% change in interest rates would not have had a material impact on our financial results included in this Quarterly Report on Form 10-Q. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.

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impact on our financial results included in this Quarterly Report on Form 10-Q. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.

Foreign Currency Exchange Risk

Our reporting currency is the U.S. dollar and the functional currency of each of our subsidiaries is its local currency. The assets and liabilities of each of our subsidiaries are translated into U.S. dollars at exchange rates in effect at each balance sheet date. Revenues and expenses are translated using the average exchange rate for the relevant period. Equity transactions are translated using historical exchange rates. Decreases in the relative value of the U.S. dollar to other currencies may negatively affect revenues and other operating results as expressed in U.S. dollars. Foreign currency translation adjustments are accounted for as a component of accumulated other comprehensive income (loss) within stockholders’ equity. Gains or losses due to transactions in foreign currencies are included in “Non-operating income (expense), Other” in our consolidated statements of operations. Furthermore, our customers outside of the United States typically pay us in local currency. We have not engaged in hedging of foreign currency transactions to date, although we may choose to do so in the future. We do not believe that an immediate 10% increase or decrease in the relative value of the U.S. dollar to other currencies would have a material effect on operating results or financial condition.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in the reports it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures at ~~October~~April 3130, ~~2020~~2021, the last day of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, at ~~October~~April 3130, ~~2020~~2021, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

Effective February 1, 2021 we adopted ASU 2016-02, Leases (Topic 842) which resulted in changes to our processes related to lease accounting and underlying control activities. There ~~was~~were no ~~change~~other changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Disclosure Controls and Procedures

In designing and evaluating our disclosure controls and procedures and internal control over financial reporting, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and our management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any disclosure controls and procedures and internal control over financial reporting also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

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The design of any disclosure controls and procedures and internal control over financial reporting also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in legal proceedings or be subject to claims ~~arising~~including in the ordinary course of business. We are not presently party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.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.

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 us because of the related expenses, diversion of management resources, and other factors.

Item 1A. Risk Factors

There are no material changes to the risk factors in the Company's ~~final~~Annual ~~prospectus~~Report on Form 10-K for the ~~Secondary~~fiscal ~~Offering~~year ~~dated~~ended ~~October 7~~January 31, ~~2020~~2021 ~~and~~ filed with the SEC ~~pursuant to Rule 424(b)(4)~~ on ~~October~~March 931, ~~2020~~2021 under the heading "Risk Factors". " You should consider and read carefully these risks, as well as other information included in this Quarterly Report on Form 10-Q, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our unaudited condensed consolidated financial statements and related notes before making an investment decision with respect to our common stock. Those risks are not the only ones we face. The occurrence of any of those risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition, and results of operation. In such case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

In October 2020 and again in November 2020, 142,846 shares of common stock were earned as the share portion of contingent consideration in connection with our acquisition of FinSuite. These 285,692 shares of common stock issued in November 2020 were made to non-U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933), in an offshore transaction relying on Regulation S of the Securities Act of 1933, as amended. See Note 6, Business Combinations of the notes to our unaudited condensed consolidated financial statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q for further information regarding the share portion of contingent consideration regarding this acquisition.

Use of Proceeds from our IPO

On July 16, 2020, we completed our IPO, selling 9,269,000 shares of our common stock at a price of $31.00 per share (including shares subject to the underwriters’ over-allotment option) for an aggregate price of $287.3 million. The offer and sale of the shares in the IPO was registered under the Securities Act pursuant to a registration statement on Form S-1 (File NoNos. 333-239335 and 333-239844), which was declared effective by the SEC on July 13, 2020. We raised approximately $268.4 million in net proceeds after deducting underwriting discounts and commissions of approximately $18.9 million.

We intend to use the net proceeds from the IPO for general corporate purposes, including working capital and capital expenditures such as additional office facilities. We may also use a portion of the net proceeds to acquire, invest in or obtain rights to complementary technologies, products, services or businesses. The underwriters of the offering were BofA Securities, Inc. and Barclays Capital Inc. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates, other than payments in the ordinary course of business to officers for salaries.

There has been no material change in the planned use of the IPO proceeds as described in our final prospectus for the IPO dated July 13, 2020 and filed with the SEC on July 14, 2020, pursuant to Rule 424(b) of the Securities Act.

Item 3. Defaults Upon Senior Securities

Not applicable.

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Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

EXHIBIT INDEX

ExhibitNumber

Description

Incorporated by Reference

31.1*

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

ExhibitNumber

Description of Exhibit

Form

File No.

Exhibit

Filing Date

Filed Herewith

31.2*

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

3.1

Form of Amended and Restated Certificate of Incorporation of nCino, Inc.

S-1/A

333-239335

3.1

July 6, 2020

32.1*

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

3.2

Form of Amended and Restated Bylaws of nCino, Inc.

S-1/A

333-239335

3.2

July 6, 2020

32.2*

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

10.1

Second Amendment to Office Lease by and between nCino, Inc. and Cloud Real Estate Holdings, LLC, dated April 5, 2021

101.INS

XBRL Instance Document

10.2

Lease by and between nCino, Inc. and Cloud Real Estate Holdings, LLC, dated April 5, 2021

8-K

001-39380

10.1

April 7, 2021

101.SCH

XBRL Taxonomy Extension Schema Document

31.1

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

31.2

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

32.1*

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

32.2*

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

101.INS

XBRL Instance Document

Filed herewith.

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

The certifications furnished in Exhibit 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed "filed" for purpose of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	nCino, Inc.
Date: December 10, 2020	By:	/s/ Pierre Naudé
Date: June 2, 2021	By:	/s/ Pierre Naudé
		Pierre NaudéPresident and Chief Executive Officer; Director(Principal Executive Officer)
Date: December 10, 2020	By:	/s/ David Rudow
Date: June 2, 2021	By:	/s/ David Rudow
		David RudowChief Financial Officer and Treasurer(Principal Financial Officer)

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