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What changed in nCino, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of nCino, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+410 added−432 removedSource: 10-K (2025-04-01) vs 10-K (2024-03-26)

Top changes in nCino, Inc.'s 2025 10-K

410 paragraphs added · 432 removed · 299 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThese are just some of the activities achieved through nCino's philanthropic and community service team, nVolve. Through nVolve, nCino prioritizes giving back to our communities and volunteering time by providing all global employees paid volunteer days separate from regular leave or holidays to support organizations and causes that are important to them.
Biggest changeThrough nVolve, nCino's philanthropic and community service approach, we prioritize giving back to our communities by providing all employees paid volunteer days separate from regular leave or holidays to support organizations and causes that are important to them. 6 Table of Contents Total Rewards To ensure our ability to attract and retain the very best global talent, we offer market competitive compensation that is consistently evaluated, opportunities for equity ownership, savings options to help employees invest in their future, and generous, country-specific benefit packages.
How nCino Will Grow We intend to continue growing our business by executing on the following strategies: • Expand Within and Across Our Existing Customers. We believe there is a significant opportunity to further expand within our existing customer base both vertically within business lines and horizontally across business lines.
How nCino Will Grow We intend to continue growing our business by executing on the following strategies: • Expand Within and Across Our Existing Customers. We believe there is a significant opportunity to further expand within our existing customer base both vertically within and horizontally across, business lines.
Pursuant to our agreement with Salesforce, when we sell our client onboarding, loan origination, and/or deposit account opening applications, we include a subscription to the underlying Salesforce Platform and remit a subscription fee to Salesforce. In exchange, Salesforce provides the hosting infrastructure and data center for these applications, as well as configuration, reporting, and other functionality within the Salesforce Platform.
Pursuant to our agreement with Salesforce, when we sell our client onboarding, loan origination, and/or deposit account opening solutions, we include a subscription to the underlying Salesforce Platform and remit a subscription fee to Salesforce. In exchange, Salesforce provides the hosting infrastructure and data center for these applications, as well as configuration, reporting, and other functionality within the Salesforce Platform.
In addition, under our agreement with Salesforce, we are an authorized reseller of Salesforce’s CRM functionality to certain FIs in the U.S. Our original agreement with Salesforce was entered into in December 2011, which was superseded and replaced on June 19, 2020.
Under our agreement with Salesforce, we are an authorized reseller of Salesforce’s CRM functionality to certain FIs in the U.S. Our original agreement with Salesforce was entered into in December 2011, which was superseded and replaced on June 19, 2020.
Research and Development Our research and development organization is responsible for the design, development, and testing of our solutions. We utilize industry best practices, such as continuous integration/continuous deployment, automated testing and distributed version control, to develop new functionality and enhance our existing solutions.
Research and Development Our research and development organization is responsible for the design, development, engineering, and testing of our solutions. We utilize industry best practices, such as continuous integration/continuous deployment, automated testing and distributed version control, to develop new functionality and enhance our existing solutions.
Our agreement with Salesforce automatically renews for additional one-year periods thereafter unless notice of termination is provided. Global Revenue Organization Our Global Revenue Organization includes business development representatives, account executives, field sales engineers, and marketing.
Our agreement with Salesforce automatically renews for additional one-year periods thereafter unless notice of termination is provided. Global Revenue Organization Our Global Revenue Organization includes business development representatives, account executives, field sales representatives, and marketing.
We believe our ability to provide client onboarding, loan origination, deposit account opening, analytics, portfolio management, and AI/ML on a single platform across lines of business, our deep banking domain expertise, our mortgage suite, our reputation for high-quality professional services and customer support, and our strong company culture, distinguish us from our competition.
We believe our ability to provide client onboarding, loan origination, deposit account opening, analytics, portfolio management, and AI on a platform across lines of business, our deep banking domain expertise, our mortgage suite, our reputation for high-quality professional services and customer support, and our strong company culture, distinguish us from our competition.
These teams are responsible for demand and lead generation, driving new business, and helping to manage account relationships and renewals, further driving adoption of our solutions within and across lines of business. These teams maintain close relationships with existing customers and act as an advisor to each FI to help identify and understand their unique needs, challenges, goals, and opportunities.
These teams are responsible for demand and lead generation, driving new business, and helping to manage account relationships and renewals, to drive adoption of our solutions within and across lines of business. These teams maintain close relationships with existing customers and act as an advisor to each FI to help identify and understand their unique needs, challenges, goals, and opportunities.
These laws and regulations are constantly evolving and affect the conduct of financial service providers operations and, as a result, the business of their technology providers.
These laws and regulations are constantly evolving and affect the conduct of financial service providers' operations and, as a result, the business of their technology providers.
Bank; to regional and community banks, like WaFd Bank, M&F Bank, and ConnectOne Bank; to credit unions, such as Navy Federal Credit Union, SAFE Credit Union, Marine Credit Union, and Conexus Credit Union; to new market entrants, such as challenger banks like Recognise Bank and Judo Bank; to independent mortgage banks like Synergy One Lending and Fairway Independent Mortgage Corporation.
Bank; to regional and community banks, like WaFd Bank, and ConnectOne Bank; to credit unions, such as Navy Federal Credit Union, SAFE Credit Union, Marine Credit Union, and Conexus Credit Union; to new market entrants, such as challenger banks like Recognise Bank and Judo Bank; to independent mortgage banks like Synergy One Lending and Fairway Independent Mortgage Corporation.
We promote sales in North America out of our offices in the U.S. and Canada, in APAC out of our offices in Australia, New Zealand, and Japan, and in EMEA out of our offices in the UK and Spain. • Continue Strengthening and Extending Our Product Functionality.
We promote sales in North America out of our offices in the U.S. and Canada, in APAC out of our offices in Australia, New Zealand, and Japan, and in EMEA out of our offices in the UK, South Africa and Spain. • Continue Strengthening and Extending Our Product Functionality.
Global Financial Service Providers Are Highly Regulated Global financial service providers and their solutions are subject to extensive and complex data, security and regulatory guidance and oversight by international, country, federal, state and other regulatory authorities.
Global Financial Service Providers Are Highly Regulated Global financial service providers and their solutions are subject to extensive and complex data, security, privacy, and regulatory oversight by international, country, federal, state and other regulatory authorities.
We believe our success in growing our business will depend on our ability to demonstrate to FIs that our solutions provide superior business outcomes and value to those of third-party vendors or internally developed systems.
We believe our success in growing our business will depend on our ability to demonstrate to FIs that our solutions provide superior business outcomes and value to those of competitors or internally developed systems.
Competition Historically, the primary competition for the nCino Bank Operating System has been point solution vendors and systems developed internally by FIs.
Competition Historically, the primary competition for the nCino Platform has been point solution vendors and systems developed internally by FIs.
For additional information, see the section titled “Risk Factors—The markets in which we participate are intensely competitive and highly fragmented, and pricing pressure, new technologies or other competitive dynamics could adversely affect our business and results of operations.” Intellectual Property Our success depends in part on our ability to protect our core technology and innovations.
For additional information, see Part I, Item 1A of this Annual Report on Form 10-K, “Risk Factors—The markets in which we participate are intensely competitive and highly fragmented, and pricing pressure, new technologies or other competitive dynamics could adversely affect our business and results of operations.” Intellectual Property Our success depends in part on our ability to protect our core technology and innovations.
In addition to developing our solutions organically, we may selectively pursue acquisitions, joint ventures, or other strategic transactions. We expect these transactions to focus on innovation to help strengthen and expand the functionality and features of our solutions and/or expand our global presence.
In addition to developing our solutions organically, we may selectively pursue acquisitions, joint ventures, or other strategic transactions, such as our recent acquisitions of DocFox, FullCircl, ILT, and Sandbox Banking. We expect these transactions to focus on innovation to help strengthen and expand the functionality and features of our solutions and/or expand our global presence.
With FIs needing to replace legacy point products with modern technology and increased consumer demand for digital services, we believe there is a significant opportunity to deliver our solutions and expand our customer base to FIs of all sizes and complexities around the world.
We believe the global market for an intelligent banking platform is large and underserved. With FIs needing to replace legacy point products with modern technology and increased consumer demand for digital services and AI, we believe there is a significant opportunity to deliver our solutions and expand our customer base to FIs of all sizes and complexities around the world.
Fundamental elements of the nCino platform are built on Salesforce (the "Salesforce Platform"), which allows the Company to focus product development efforts on building deep vertical functionality specifically for FIs, while leveraging Salesforce's global infrastructure, reliability, and scalability. nCino also has solutions that leverage the Amazon Web Services ("AWS") platform.
Fundamental elements of the nCino platform are built on Salesforce (the "Salesforce Platform"), which allows the Company to focus product development efforts on building deep vertical functionality specifically for FIs, while leveraging Salesforce's global infrastructure, reliability, and scalability. nCino also has solutions that leverage the Amazon Web Services ("AWS") platform. nCino has evolved from being a single product workflow solution to a platform that offers best-in-class, intelligent solutions.
We provide opportunities for innovation through hackathons and new technology pilots, and we encourage customers to participate in our Product Design Programs to provide us with input on our product development roadmap. Our research and development spend was $117.3 million or 24.6% of total revenues in fiscal 2024.
We provide opportunities for innovation through hackathons and new technology pilots, and we encourage customers to participate in our Product Design Programs to provide us with input on our product development roadmap. Our research and development spend was $129.4 million or 23.9% of total revenues in fiscal 2025.
In the nCino User Community, users can access product guides, technical documents and support articles, engage and share best practices with other users and nCino subject matter experts through a variety of general and solution-focused discussion groups, suggest and vote for future product development ideas, and access training videos, materials and product certifications.
In the nCino Community, users can access product guides and technical documents, engage and share best practices with other users and nCino subject matter experts through various discussion groups, suggest and vote for future product development ideas, and access training videos, materials and product certifications.
In this regard, we are likely to be assessed on a number of factors, including: • breadth and depth of functionality; • ease of deployment, implementation and use; • total cost of ownership and return on investment; • level of customer satisfaction; • brand awareness and reputation; • cloud-based technology platform and pricing model; • quality of implementation and customer support services; • capability for configurability, integration, and scalability; • domain expertise in banking technology; • security and reliability; • ability of our solutions to support compliance with legal and regulatory requirements; • ability to innovate and respond to customer needs quickly; • ability to integrate with third-party applications and systems; and • insights and benchmarking derived from the cross-institution data and transactions that flow through our platform. 6 Table of Contents We believe we compete favorably with respect to these factors, but we expect competition to increase as existing competitors evolve their offerings and as new companies enter the market.
In this regard, we are likely to be assessed on a number of factors, including: • breadth and depth of functionality; • ease of deployment, implementation and use; • total cost of ownership and return on investment; • level of customer satisfaction; • brand awareness and reputation; • cloud-based technology platform, availability of AI capabilities, and pricing model; • quality of implementation and customer support services; • capability for configurability, integration, and scalability; • domain expertise in banking technology; • security and reliability; • ability of our solutions to support compliance with legal and regulatory requirements; • ability to innovate and respond to customer needs quickly; • ability to provide data connectivity and integrate with third-party applications and systems; and 5 Table of Contents • insights and benchmarking derived from the cross-institution data and transactions that flow through our platform.
The nCino Bank Operating System’s automation, workflow and digitization capabilities help eliminate manual processes and redundant efforts, freeing an FI's employees to focus on their clients’ experiences rather than their transactions.
The nCino Platform's automation, workflow and digitization capabilities help eliminate manual processes and redundant efforts, freeing an FI's employees to focus on their clients’ experiences rather than their transactions. • Manage Risk and Compliance More Effectively .
In order to ensure compliance with these laws, financial service providers may be required to implement operating policies and procedures to protect the privacy and security of their, the financial service providers', and their end users' information, and to undergo periodic audits and examinations. 8 Table of Contents Security Is Paramount for Global Financial Service Providers The risks of cybercrime and fraud have always existed in banking and financial services.
In order to ensure compliance with these laws, financial service providers may be required to implement operating policies, procedures, and controls to protect the privacy and security of their, the financial service providers', and their end users' information, and to undergo periodic audits and examinations.
When we work with SIs, we generally field a small team of advisory consultants alongside the SIs to help ensure the success of the engagement. We support our customers with 24/7 access to engineers and other technical support personnel, outcome-based support offerings, release management, managed services, and technical support via online chat.
For SI-led projects, we collaborate with SIs such as Accenture, Deloitte, and PwC, fielding a small team of advisory consultants alongside the SIs to help ensure success. 4 Table of Contents We support our customers with 24/7 access to engineers and technical support personnel, outcome-based support offerings, release management, managed services, and technical support via online chat.
After realizing that the same problems—cumbersome legacy technology, fragmented data, disconnected business functions, and a disengaged workforce made it difficult to maintain relevancy in their clients' lives—were endemic across the financial services industry, nCino spun out as a separate company in late 2011.
After realizing that virtually all banks and credit unions were dealing with the same problems—cumbersome legacy technology, fragmented data, disconnected business functions, and a disengaged workforce that made it difficult to maintain relevancy in their clients' lives—nCino was spun out as a separate company in late 2011 to help more institutions solve these challenges using cloud-based technology.
Once implemented, our solution becomes deeply embedded in our customers’ business processes, enabling mission critical workflow across the FI and allowing our customers to serve their clients anytime, anywhere, from any internet-enabled device.
Once implemented, the nCino Platform becomes deeply embedded in our customers’ business processes, enabling mission critical workflow across the FI and allowing our customers to serve their clients anytime, anywhere, from any internet-enabled device. The nCino Platform combines industry, customer, and process data with advanced analytics, predictive AI, and generative AI to deliver best-in-class, intelligent solutions.
Multi-tenancy is an architectural approach that allows us to operate a single application instance for multiple organizations, treating all customers as separate and virtual isolation from each other.
Technology, Development and Cloud Operations We deliver our solutions as secure, highly scalable cloud computing application and platform services with a multi-tenant technology and shared service-oriented architecture. Multi-tenancy is an architectural approach that allows us to operate a single application instance for multiple organizations, treating all customers as separate and virtual isolation from each other.
We invested 24.6% of our revenues back into research and development in fiscal 2024 and will continue to invest at similar levels in fiscal 2025 to continue to extend the breadth and depth of the nCino Bank Operating System.
We invested 23.9% of our revenues back into research and development in fiscal 2025 and expect to continue to invest in fiscal 2026 to continue to extend the breadth and depth of the nCino Platform.
Furthermore, effective patent, trademark, copyright, and trade secret protection may not be available in every country in which our products are available. As of January 31, 2024, we had 12 issued U.S. patents as well as one patent application pending in the U.S.
Furthermore, effective patent, trademark, copyright, and trade secret protection may not be available in every country in which our products are available. As of January 31, 2025, we had 12 issued patents relating to the nCino Platform in the U.S. We file patent applications where we believe there to be a strategic technological or business reason to do so.
Currently deployed in 19 countries, we have made significant investments to expand our presence in EMEA and APAC, and the nCino Bank Operating System can currently support over 120 languages and over 140 currencies.
Currently deployed in over 20 countries, we have made significant investments to expand our presence in EMEA and APAC.
These groups play an important role in building community and belonging among employees, providing resources to the broader nCino community, recruiting diverse talent and creating opportunities for professional development, mentorship and community outreach.
These groups play an important role in building camaraderie among employees, providing resources to the broader nCino community, building nCino's reputation as an employer of choice for talent, while also creating opportunities for professional development and mentorship. nCino supports many causes and initiatives in the communities in which we operate.
As a pioneer in cloud banking, we have developed trusted relationships and a reputation for successfully implementing our solutions with FIs of all sizes in multiple geographies. Our diverse customer base ranges from global FIs, such as Bank of America, Barclays, Santander, and TD Bank; to enterprise banks, such as Truist Bank and U.S.
Our diverse customer base ranges from global FIs, such as Bank of America, Barclays, Santander, and TD Bank; to enterprise banks, such as Truist Bank and U.S.
These companies represent a cross-section of FIs across asset classes and geographies and each of these customers represent a substantial level of Annual Contract Value ("ACV") in its respective category. As of January 31, 2024, we had 460 FIs that have contracted for the nCino Bank Operating System for client onboarding, loan origination and/or deposit account opening.
These companies represent a cross-section of FIs across asset classes and geographies and each of these customers represent a substantial level of Annual Contract Value ("ACV") in its respective category.
In total, we had over 1,800 customers as of January 31, 2024, of which 501 each generated more than $100,000 in subscription revenues in fiscal 2024. No single customer represented more than 10% of total revenues in fiscal 2024.
We ended fiscal 2025 with 2,789 customers, of which in fiscal 2025 we had 549 that generated more than $100,000 in subscription revenues, 105 that generated more than $1.0 million and 14 that generated more than $5.0 million. No single customer represented more than 10% of total revenues in fiscal 2025.
This strategy has allowed us to benefit from Salesforce’s investment in the continual improvement of the Salesforce Platform. We believe we have a mutually beneficial strategic relationship with Salesforce.
Our Relationship with Salesforce We built fundamental elements of the nCino Platform on the Salesforce Platform to leverage its global infrastructure, reliability, and scalability. This allows us to benefit from continual improvement of the Salesforce Platform. We believe we have a mutually beneficial strategic relationship with Salesforce.
Our ability to remain competitive will depend on our ongoing efforts in research and development, sales and marketing, professional services, customer support, and our business operations generally.
We believe we compete favorably with respect to these factors, but we expect competition to increase as existing competitors evolve their offerings and as new companies enter the market. Our ability to remain competitive will depend on our ongoing efforts in research and development, sales and marketing, professional services, customer support, and our business operations generally.
The nCino Customer Success 5 Table of Contents Management team is the customer’s central touch point, whose primary job is to manage the long-term health and success of each customer. A significant majority of our FI customers, whose employees utilize our client onboarding, loan origination, and/or deposit account opening applications, have joined our online nCino User Community.
The nCino Customer Success Management team is the central contact for our customers, focusing on adoption, FI readiness to capitalize on new innovation, and helping our customers achieve the business value they expect. A significant majority of our FI customers whose employees utilize our client onboarding, loan origination, and deposit account opening solutions have joined our online nCino Community.
We file patent applications where we believe there to be a strategic technological or business reason to do so. Although we actively attempt to utilize patents to protect our technologies, we believe that none of our patents, individually or in the aggregate, are material to our business.
Although we actively attempt to utilize patents to protect our technologies, we believe that none of our patents, individually or in the aggregate, are material to our business. Human Capital Management nCino is in the business of helping FIs around the globe modernize their operations.
As the adoption and use of digital channels increase in financial services, the incidence of cybercrime and fraud has grown substantially. The methods by which criminals seek to commit fraud are constantly changing, requiring financial services providers and their technology providers to continually modify their security protocols and best practices.
The methods by which criminals seek to commit fraud are constantly changing, requiring financial services providers and their technology providers to continually modify their security protocols and best practices. Providing services to the financial services industry requires experience, constant vigilance, and continuous investment to stay informed and guard against these ever-changing threats.
The nCino Bank Operating System was initially designed to help transform commercial and small business lending for community and regional banks. This solution was introduced to enterprise banks in the United States ("U.S.") in 2014, and then internationally in 2017, and has subsequently expanded across North America, Europe, the Middle East, and Asia-Pacific ("APAC").
We initially focused on developing the nCino Platform to transform commercial and small business lending for community and regional banks in the United States ("U.S."). We scaled the platform to enterprise banks in the U.S. in 2014, and then internationally in 2017.
Because nCino is highly configurable, it can adjust as regulations and the FI's risk requirements evolve, including regulatory changes, economic headwinds, sharp pivots, and ongoing volatility. • Establish an Active Data, Audit and Business Intelligence Hub .
The nCino Platform can help FIs reduce regulatory, credit and operational risk through workflow and automation, data reporting, standardized risk rating calculations and financial modeling. Because nCino is highly configurable, it can adjust as regulations and the FI's risk requirements evolve, including regulatory changes and economic headwinds.
Customer Success Once a customer contracts for the nCino Bank Operating System, we provide configuration and implementation services to assist the customer in the deployment, either directly or through our SI partners. Configuration and implementation engagements typically range in duration from three months to 18 months, depending on the scope.
Customer Success Once a customer contracts for the nCino Platform, we provide implementation services to assist in the deployment, either directly or through our SI partner ecosystem. For regional and community banks, we usually handle implementation ourselves. Most of these engagements average less than six months, significantly reducing the time-to-value for our customers.
Culture is a key differentiator; our position as the worldwide leader in cloud banking depends on the people who work at nCino. For these reasons, we have built our company with a cultural foundation based on six core values: Bring Your A-Game, Do the Right Thing, Respect Each Other, Make Someone’s Day, Have Fun and Be a Winner.
Our culture delivers a differentiated employee value proposition that balances innovation, accountability, continuous learning, and career growth, underpinned by a foundation of six core values: Bring Your A-Game, Do the Right Thing, Respect Each Other, Make Someone’s Day, Have Fun and Be a Winner.
As of January 31, 2024, we had 1,653 employees, of which approximately 84% were in the U.S. and 16% were in other locations around the globe. We believe our employee engagement and experience remain strong.
Our unwavering commitment to our customers and employees is reflected across external measurements and outcomes, including numerous workplace awards as well as our Net Promoter Score commentary calling out our people and partnership. As of January 31, 2025, we had 1,833 employees, of which approximately 73% were in the U.S. and 27% were in other locations around the globe.
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Item 1. Business Overview Through its single software-as-a-service ("SaaS") platform, nCino helps financial institutions ("FI") serving corporate and commercial, small business, consumer, and mortgage customers modernize and more effectively onboard clients, open accounts, make loans and navigate the loan lifecycle, and effectively monitor and manage their portfolio.
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Item 1. Business Overview As employees at financial institutions do their daily work and serve their clients, they often face inefficiencies due to disparate systems, broken workflows, manual processes, and the inability to harness and utilize data effectively. This negatively impacts risk management, decision making and the experiences of bankers and their clients.
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Transforming how FIs operate through innovation, reputation and speed, nCino is partnered with more than 1,800 customers globally. With the nCino Bank Operating System, FIs can: • Digitally Serve Their Clients Across Lines of Business .
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To solve the problem, FIs need technology that helps them reengineer every experience, intelligently and with agility as market needs shift, and a partner with the experience to help advise on best practices. nCino's trusted platform enables FIs to consolidate vendors while optimizing operations by integrating AI and actionable insights to cohesively bring together people and data and thereby enhance strategic decision-making, risk management, and customer satisfaction.
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The nCino Bank Operating System delivers distinctive experiences across devices, channels and products, enabling a seamless digital relationship between an FI, its employees, its clients and key third parties. Because nCino is a cloud native platform, employees can serve their customers anywhere, at any time, from any internet-enabled device, empowering them to build deeper relationships.
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From managing complex credit portfolios to streamlining account onboarding and originating loans, nCino helps FIs of all sizes globally deliver faster, intelligent, and more connected experiences. With the nCino Platform, FIs can: • Embrace the Power of Intelligent Automation and Uncover Data-Driven Insights . AI is rapidly changing the financial services industry.
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For consumers who increasingly expect frictionless digital services, this ability is no longer a differentiator for FIs, but a necessity. • Improve Efficiency . nCino customers leverage the platform’s capabilities to drive efficiency by eliminating cumbersome legacy systems, improving client satisfaction and retention, and digitally expanding their brand presence and reach.
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As AI creates new value streams within banking, nCino is simplifying FIs' navigation through this transformative technology by infusing AI into every stage of the banking lifecycle and creating intelligent automation across the nCino Platform. • Improve Efficiency . nCino customers leverage the platform’s capabilities to drive process and knowledge efficiency by connecting previously disjointed functions, breaking down internal silos, and infusing intelligent automation into key workflows across multiple lines of business. • Elevate Employee and Customer Experience .
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By connecting previously disjointed functions and breaking down internal silos, nCino increases transparency at all organizational levels across all lines of business, enabling FIs to measure their operations and maximize performance, productivity and profitability. • Elevate Employee Experience and Performance .
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Our Journey nCino was originally founded in a bank to improve that institution's operations and client service.
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In addition, our intelligent enterprise content management system includes a standardized filing system across applications, providing instant and ongoing access to digital documentation and checklists to help ensure that compliance and credit requirements are met.
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We have subsequently expanded across North America, Europe, the Middle East, Japan and Asia-Pacific ("APAC"). nCino's approach to market expansion includes strategically building products and acquiring technology to continue to fulfill a platform vision. Over the years, we built and enhanced products internally to ensure innovation and seamless integration across key solution lines of commercial, small business and consumer banking.
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For example, client documents are associated with a unique identifier, eliminating the need for repeat document collection and duplicative data input, which means employees only have to ask for information once. • Manage Risk and Compliance More Effectively .
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Through the strategic acquisitions of SimpleNexus, DocFox, FullCircl, ILT, Visible Equity, FinSuite, and our recent acquisition of Sandbox Banking, we significantly augmented the nCino's Platform's capabilities for mortgage lending, onboarding, account opening, indirect auto lending, and advanced analytics and AI.
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The nCino Bank Operating System can help FIs reduce regulatory, credit and operational risk through workflow and automation, data reporting, standardized risk rating calculations and financial modeling. For example, the content management, automated workflow and digital audit trail and snapshot functionality within the nCino Bank Operating System helps our customers more effectively and efficiently prepare for regulatory examinations.
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This strategic approach has allowed us to create a unified platform of best-in-class intelligent solutions, enabling FIs to replace multiple legacy systems, connect their operations, and streamline workflows and processes across various business lines to achieve desired business impact and process improvement. 1 Table of Contents How the nCino Platform Works nCino offers a trusted platform that brings together people and data and enables FIs to enhance strategic decision-making, risk management, and customer satisfaction through the selection of best-in-class intelligent solutions that create experiences to fit their needs.
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Key to the nCino Bank Operating System is infusing intelligence into every stage of the banking lifecycle. nCino provides FIs with innovative technology that helps them meet the challenges of today and tomorrow, including predictive artificial intelligence ("AI") applications like Commercial Pricing and Profitability and Automated Spreading.
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With the flexibility to select and implement multiple solutions simultaneously, or one at a time, institutions have the autonomy to create the experiences they desire with the benefit of an agile platform that scales with their needs and provides integrated functionality with every new product or feature added.
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As a trusted partner, nCino continues to develop solutions powered by nCino IQ ("nIQ") that help FIs integrate predictive and generative AI capabilities when and where it matters most, across the banking lifecycle. • Embrace the Power of Intelligent Automation and Uncover Data-Driven Insights. AI is rapidly changing the financial services industry.
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These solutions empower FIs with process, knowledge, and platform efficiency to optimize operations, enhance decision-making, and enrich banker and client experiences for accelerated growth.
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As AI creates new value streams within banking, nCino is simplifying FIs’ navigation through this transformative technology. nCino provides FIs with innovative technology that helps them meet the challenges of today and tomorrow, including predictive AI applications like Commercial Pricing and Profitability and Automated Spreading. 1 Table of Contents Our Journey nCino was originally founded in a bank to improve that FI’s operations and client service.
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As a result, we have shifted from a seat-based pricing model to a pricing framework that helps ensure value-based positioning and pricing of our products primarily based on the asset size of the FI. This also enables us to embed and monetize intelligence across all our solutions.
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This heritage is the foundation of our deep banking domain expertise, which differentiates us, continues to drive our strategy, and makes us uniquely qualified to help FIs create new efficiencies by providing an end-to-end platform that spans business lines and combines capabilities for a seamless experience.
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Through this evolution, we are aligning our revenues to the value of the nCino Platform and encouraging customer growth as nCino creates more efficiencies for our customers.
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Throughout this market expansion, we broadened the nCino Bank Operating System by adding functionality for consumer lending, client onboarding, deposit account opening, analytics and artificial intelligence and machine learning ("AI/ML").
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Solutions on the nCino Platform The nCino Platform is embedded with data and AI that help FIs digitize and reengineer business processes across multiple lines of business from commercial, consumer and small business banking to mortgage lending to boost efficiencies across the full customer lifecycle. • Onboarding. nCino's onboarding streamlines and enhances the customer onboarding process for FIs through a unified, digital platform.
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On January 7, 2022 (the "Acquisition Date"), nCino acquired SimpleNexus, a leading cloud-based mobile-first homeownership software company in the U.S., which expanded the suite of products to include a suite of mortgage solutions. On September 8, 2023, SimpleNexus began operating as SimpleNexus, LLC d/b/a nCino Mortgage, LLC ("nCino Mortgage") as part of our rebranding effort.
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It supports both credit and non-credit onboarding, commercial account opening, and enterprise-level onboarding, offering features like automation, centralized data, and compliance tools (CDD/KYC). The platform eliminates manual processes, accelerates account opening, and provides a 360-degree customer view, ensuring transparency and efficiency.
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In March 2024, we acquired DocFox, Inc. ("DocFox"), a leading solution provider automating onboarding experiences for commercial and business banking, for an aggregate purchase price of $75.0 million. See Note 20 "Subsequent Events" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
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With intelligent document management, seamless integrations, and personalized customer experiences, nCino helps institutions boost customer satisfaction, operational efficiency, and revenue growth while helping to maintain compliance and reducing errors. • Account Opening. nCino's account opening capabilities are designed to provide a seamless, fast, and user-friendly experience for both consumers and small businesses.
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How the nCino Bank Operating System Works The nCino Bank Operating System connects FIs' employees, their clients and third parties on a single, cloud-based platform, eliminating silos and bringing new levels of coordination and transparency to an FI.
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The Deposit Account Opening (DAO) solution allows customers to open accounts in minutes, whether online or in-branch, with a multi-channel approach that provides data continuity. Key features include automated identity verification, helping to maintain compliance with KYC/AML regulations, and partnerships with companies like Plaid and Alloy to streamline authentication and reduce fraud.
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By utilizing a single platform across business lines, processes and channels, FIs are able to leverage the same data and information across their entire organization to drive efficiency, enhance decision-making, and increase connectivity.
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The solution also integrates digital customer service options, such as chat, audio, and video, to enhance engagement and reduce abandonment rates. • Lending. nCino provides a comprehensive loan origination platform for commercial, consumer, small business, and mortgage lending, that streamlines processes and enhances customer experiences. Our Commercial Loan Origination System automates the entire loan lifecycle, improving collaboration, compliance, and efficiency.
Removed
As a native cloud platform that utilizes a single code base regardless of the size and complexity of the FI, the nCino Bank Operating System is highly scalable and configurable for the specific needs of each FI.
Added
The Consumer Lending solution, offers an omnichannel solution with automated credit decisioning and integrations to reduce cycle times. The Small Business Loan Origination solution leverages automation and machine learning to simplify applications and accelerate approvals, while the Mortgage solution unifies the home buying process, reducing closing times.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeConsistent with the foregoing, we are exposed to a variety of risks, including risks associated with the following: • We derive all of our revenues from customers in the financial services industry, and any downturn or consolidation or decrease in technology spend in the financial services industry could adversely affect our business. • We have a limited operating history at the current scale of our business, which makes it difficult to predict our future operating results, and we may not achieve our expected operating results in the future. • We have a history of losses and while we have achieved profitability in a quarterly period, we may not be able to achieve or sustain profitability on a generally accepted accounting principles in the United States of America ("GAAP") basis in the future. • If we are unable to attract new customers or continue to broaden our existing customers’ use of our solutions, our revenue growth will be adversely affected. • If the market for cloud-based banking technology develops more slowly than we expect or changes in a way that we fail to anticipate, our sales would suffer and our results of operations would be adversely affected. • We may not be able to sustain our revenue growth rate in the future. 9 Table of Contents • Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business. • We may not accurately predict the long-term rate of customer subscription renewals or adoption of our solutions, or any resulting impact on our revenues or operating results. • A breach of our security measures or those we rely on could result in unauthorized access to customer or their clients’ data, which may materially and adversely impact our reputation, business, and results of operations. • Fundamental elements of the nCino Bank Operating System are built on the Salesforce Platform and we rely on our agreement with Salesforce to provide this solution to our customers. • Because we recognize subscription revenues over the term of the contract, downturns or upturns in our business may not be reflected in our results of operations until future periods. • The markets in which we participate are intensely competitive and highly fragmented, and pricing pressure, new technologies, or other competitive dynamics could adversely affect our business and results of operations. • Our increased focus on the development and use of artificial intelligence and machine learning technologies in our solutions and our business, as well as our potential failure to effectively implement, use, and market these technologies, may result in reputational harm or liability, or could otherwise adversely affect our business. • We depend on data centers operated by or on behalf of Salesforce, AWS and other third parties, and any disruption in the operation of these facilities could adversely affect our business and subject us to liability. • We may acquire or invest in companies, or pursue business partnerships, which may divert our management’s attention or result in dilution to our stockholders, and we may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions, investments or partnerships. • Because one of our stockholders holds a substantial amount of our total outstanding common stock, the influence of our public stockholders over significant corporate actions is limited and sales by this stockholder could adversely affect the value of our common stock. • Our customers are highly regulated and subject to a number of challenges and risks.
Biggest changeConsistent with the foregoing, we are exposed to a variety of risks, including risks associated with the following: • We derive most of our revenues from customers in the financial services industry, and any downturn or consolidation or decrease in technology spend in the financial services industry could adversely affect our business. • Our future operating results are difficult to predict, in part because we do not have an extensive operating history at the current scale of our business, and we may not achieve our expected operating results in the future. • We have a history of losses and while we have achieved profitability in a quarterly period, we may not be able to achieve or sustain profitability on a generally accepted accounting principles in the United States of America ("GAAP") basis in the future. • If we are unable to attract new customers or continue to broaden our existing customers’ use of our solutions, our revenue growth will be adversely affected. • As the market for cloud-based banking technology continues to develop, it may do so more slowly than we expect or changes in a way that we fail to anticipate, in which case our sales would suffer and our results of operations would be adversely affected. • We may not be able to sustain our revenue growth rate in the future. • Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business. • We have recently changed our pricing model, and that and other factors may not accurately predict the long-term rate of customer subscription renewals or adoption of our solutions, or any resulting impact on our revenues or operating results. • A breach of our security or privacy measures or those we rely on could result in unauthorized access to, or disclosure of, customer or their clients’ data, which may materially and adversely impact our reputation, business, and results of operations. • Fundamental elements of the nCino Platform are built on the Salesforce Platform and we rely on our agreement with Salesforce to provide this solution to our customers. • Because we recognize subscription revenues over the term of the contract, downturns or upturns in our business may not be reflected in our results of operations until future periods. • The markets in which we participate are intensely competitive and highly fragmented, and pricing pressure, new technologies, including the increasing adoption of artificial intelligence and machine learning ("AI/ML") offerings by our competitors, or other competitive dynamics could adversely affect our business and results of operations. 8 Table of Contents • Our increased focus on the development and use of AI/ML technologies in our solutions and our business, as well as our potential failure to effectively implement, use, and market these technologies, may result in reputational harm or liability, or could otherwise adversely affect our business. • We depend on data centers operated by or on behalf of Salesforce, AWS and other third parties, and any disruption in the operation of these facilities could adversely affect our business and subject us to liability. • We have and may continue to acquire or invest in companies, or pursue business partnerships, which may divert our management’s attention or result in dilution to our stockholders, and we may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions, investments or partnerships. • Our customers are highly regulated.
Our agreement with Salesforce expires on January 31, 2031, unless earlier terminated by either party in the event of the other party’s material breach, bankruptcy, change in control in favor of a direct competitor, or intellectual property infringement, and automatically renews for additional one-year periods thereafter unless notice of non-renewal is provided.
Our agreement with Salesforce expires on January 31, 2031, unless earlier terminated by either party in the event of the other party’s material breach, bankruptcy, change in control in favor of a direct competitor, or intellectual property infringement, and thereafter automatically renews for additional one-year periods unless notice of non-renewal is provided by either party.
Further, on September 21, 2023, the UK Secretary of State for Science, Innovation and Technology established a UK-U.S. data bridge (i.e., a UK equivalent of the Adequacy Decision) and adopted UK regulations to implement the UK-U.S. data bridge ("UK Adequacy Regulations").
Further, on September 21, 2023, the UK Secretary of State for Science, Innovation and Technology established a UK-U.S. data bridge (i.e., a UK equivalent of the Adequacy Decision) and adopted UK regulations to implement the UK-U.S. data bridge.
The market price of our common stock may fluctuate or decline significantly in response to numerous factors, many of which are beyond our control, including: • variations between our actual operating results and the expectations of securities analysts, investors, and the financial community; • any forward-looking financial or operating information we may provide to the public or securities analysts, any changes in this information, or our failure to meet expectations based on this information; • actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow us, or our failure to meet these estimates or the expectations of investors; • additional shares of our common stock being sold into the market by us or our existing stockholders, or the anticipation of such sales; • hedging activities by market participants; • announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • changes in operating performance and stock market valuations of companies in our industry, including our competitors; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole, including inflation and rising interest rates; • lawsuits threatened or filed against us; • developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies; and 27 Table of Contents • other events or factors, political conditions, election cycles, war or incidents of terrorism, or responses to these events.
The market price of our common stock may fluctuate or decline significantly in response to numerous factors, many of which are beyond our control, including: • variations between our actual operating results and the expectations of securities analysts, investors, and the financial community; • any forward-looking financial or operating information we may provide to the public or securities analysts, any changes in this information, or our failure to meet expectations based on this information; • actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow us, or our failure to meet these estimates or the expectations of investors; • additional shares of our common stock being sold into the market by us or our existing stockholders, or the anticipation of such sales; • hedging activities by market participants; • announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • changes in operating performance and stock market valuations of companies in our industry, including our competitors; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole, including inflation and rising interest rates; • lawsuits threatened or filed against us; • developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies; and • other events or factors, political conditions, election cycles, war or incidents of terrorism, or responses to these events.
For example, the higher interest rate environment in the U.S., undertaken as a means to manage inflation, has had an impact on the real estate market in the U.S. and specifically, the demand for mortgage and mortgage-related products and services, which has had a negative impact on our nCino Mortgage business and may continue to adversely impact that business to the extent the higher interest rate environment persists.
For example, the higher interest rate environment in the U.S., undertaken as a means to manage inflation, has had an impact on the real estate market in the U.S. and specifically, the demand for mortgage and mortgage-related products and services, which has had a negative impact on our U.S. mortgage business and may continue to adversely impact that business to the extent the higher interest rate environment persists.
We may not be able to enhance aspects of our solutions successfully or introduce and gain market acceptance of new applications or improvements in a timely manner, or at all. Additionally, we must continually modify and enhance our solutions to keep pace with changes in software applications, database technology, and evolving technical standards and interfaces.
We may not be able to enhance aspects of our solutions successfully or introduce and gain market acceptance of new solutions or improvements in a timely manner, or at all. Additionally, we must continually modify and enhance our solutions to keep pace with changes in software solutions, database technology, and evolving technical standards and interfaces.
An adverse outcome of a dispute may require us to: • pay substantial damages, including treble damages, if we are found to have willfully infringed a third party’s patents or copyrights; • cease developing or selling any elements of our solutions that rely on technology that is alleged to infringe or misappropriate the intellectual property of others; • enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies or intellectual property rights; • expend additional development resources to attempt to redesign our solutions or otherwise develop non-infringing technology, which may not be successful; and • indemnify our customers and other third parties.
An adverse outcome of a dispute may require us to: • pay substantial damages, including treble or statutory damages, if we are found to have willfully infringed a third party’s patents or copyrights, respectively; • cease developing or selling any elements of our solutions that rely on technology that is alleged to infringe or misappropriate the intellectual property of others; • enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies or intellectual property rights; • expend additional development resources to attempt to redesign our solutions or otherwise develop non-infringing technology, which may not be successful; and • indemnify our customers and other third parties.
As we create new applications and enhance our existing solutions, these applications and enhancements may not be attractive to customers. In addition, promoting and selling new and enhanced functionality may require increasingly costly sales and marketing efforts and if customers choose not to adopt this functionality, our business and results of operations could suffer.
As we create new solutions and enhance our existing solutions, these solutions and enhancements may not be attractive to customers. In addition, promoting and selling new and enhanced functionality may require increasingly costly sales and marketing efforts and if customers choose not to adopt this functionality, our business and results of operations could suffer.
The UK GDPR imposes similar restrictions on transfers of personal data from the UK to jurisdictions that the UK does not consider adequate. The UK Government has published its own form of the EU SCCs, known as the International Data Transfer Agreement and an International Data Transfer Addendum to the new EU SCCs.
The UK GDPR also imposes similar restrictions on transfers of personal data from the UK to jurisdictions that the UK government does not consider adequate. The UK Government has published its own form of the EU SCCs, known as the International Data Transfer Agreement and an International Data Transfer Addendum to the new SCCs.
We may, in the future, become subject, from time to time, to other legal proceedings and claims that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes or employment claims made by current or former employees.
In the future, we may become subject, from time to time, to legal proceedings and claims that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes or employment claims made by current or former employees.
Federal and state regulations may require us or our customers to notify individuals of data security incidents involving certain types of personal data or information technology systems, and those laws and regulations continue to evolve to add more reporting requirements on faster timelines.
Federal and state regulations may require us or our customers to notify individuals of data security or privacy incidents involving certain types of personal data or information technology systems, and those laws and regulations continue to evolve to add more reporting requirements on faster timelines.
We may acquire or invest in companies, or pursue business partnerships, which may divert our management’s attention or result in dilution to our stockholders, and we may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions, investments, or partnerships.
We have and may acquire or invest in companies, or pursue business partnerships, which may divert our management’s attention or result in dilution to our stockholders, and we may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions, investments, or partnerships.
These provisions include the following: • establish a classified board of directors so that not all members of our board of directors are elected at one time; 28 Table of Contents • permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships; • provide that directors may only be removed for cause; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • prohibit stockholders from calling special meetings of stockholders; • prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws; • restrict the forum for certain litigation against us to Delaware; and • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
These provisions include the following: • establish a classified board of directors so that not all members of our board of directors are elected at one time; • permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships; • provide that directors may only be removed for cause; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and bylaws; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • prohibit stockholders from calling special meetings of stockholders; • prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws; • restrict the forum for certain litigation against us to Delaware; and • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
We cannot entirely eliminate the risk of improper or unauthorized access to or disclosure of PII or other security events that impact the integrity or availability of PII or our systems and operations, or the related costs we may incur to mitigate the consequences from such events.
We cannot entirely eliminate the risk of improper or unauthorized access to or disclosure of PII or other security or privacy events that impact the integrity or availability of PII or our systems and operations, or the related costs we may incur to mitigate the consequences from such events.
Assertions by third parties of infringement or other violations by us of their intellectual property rights, whether or not correct, could result in significant costs and adversely affect our business and results of operations. Patent and other intellectual property disputes are common in our industry.
Assertions by third parties of infringement or other violations by us of their intellectual property rights, whether or not correct, could result in significant costs and adversely affect our business and results of operations. Intellectual property disputes are common in our industry.
In addition, we face risks in doing business internationally that could adversely affect our business, including: • unanticipated costs; • the need to localize and adapt our solutions for specific countries; • complying with varying and sometimes conflicting data privacy laws and regulations; • difficulties in staffing and managing foreign operations, including employment laws and regulations; • unstable regional, economic, or political conditions; • different pricing environments, longer sales cycles, and collections issues; • new and different sources of competition; • weaker protection for intellectual property and other legal rights than in the U.S. and practical difficulties in enforcing intellectual property and other rights outside of the U.S.; • laws and business practices favoring local competitors; • compliance challenges related to the complexity of multiple, conflicting, and changing governmental laws and regulations, including employment, tax, and anti-bribery laws and regulations; • increased financial accounting and reporting burdens and complexities; • restrictions on the transfer of funds; and • adverse tax consequences.
In addition, we face risks in doing business internationally that could adversely affect our business, including: • unanticipated costs; • the need to localize and adapt our solutions for specific countries; • complying with varying and sometimes conflicting data privacy laws and regulations; • difficulties in staffing and managing foreign operations, including employment laws and regulations; • unstable regional, economic, or political conditions; • different pricing environments, longer sales cycles, and collections issues; • new and different sources of competition; 22 Table of Contents • weaker protection for intellectual property and other legal rights than in the U.S. and practical difficulties in enforcing intellectual property and other rights outside of the U.S.; • laws and business practices favoring local competitors; • compliance challenges related to the complexity of multiple, conflicting, and changing governmental laws and regulations, including employment, tax, and anti-bribery laws and regulations; • increased financial accounting and reporting burdens and complexities; • restrictions on the transfer of funds; and • adverse tax consequences.
In addition, new companies entering our markets may choose to offer cloud-based banking applications at little or no additional cost to the customer by bundling them with their existing applications, including adjacent banking technologies. Competition from these new entrants may make attracting new customers and retaining our current customers more difficult, which may adversely affect our results of operations.
In addition, new companies entering our markets may choose to offer cloud-based banking solutions at little or no additional cost to the customer by bundling them with their existing solutions, including adjacent banking technologies. Competition from these new entrants may make attracting new customers and retaining our current customers more difficult, which may adversely affect our results of operations.
Even if we were to successfully acquire or develop a replacement solution, some customers may decide not to adopt such solution and may, as a result, decide to use a different product.
Even if we were to successfully acquire or develop a replacement solution, some customers may decide not to adopt such solution and may, as a result, decide to use a different solution.
These concerns or other considerations may cause FIs to choose not to adopt cloud-based banking technology such as ours or to adopt them more slowly than we anticipate, either of which would adversely affect us. Our future success also depends on our ability to sell additional applications and functionality to our current and prospective customers.
These concerns or other considerations may cause FIs to choose not to adopt cloud-based banking technology such as ours or to adopt them more slowly than we anticipate, either of which would adversely affect us. Our future success also depends on our ability to sell additional solutions and functionality to our current and prospective customers.
In the past, FIs have experienced consolidation, distress and failure, including in March 2023 when the FDIC took control of Silicon Valley Bank and Signature Bank due to liquidity concerns and a number of other FIs experienced turbulence and a precipitous decline in market value. It is possible these conditions may persist, deteriorate or reoccur.
In the past, FIs have experienced consolidation, distress and failure, including notably recently in March 2023 when the FDIC took control of Silicon Valley Bank and Signature Bank due to liquidity concerns and a number of other FIs experienced turbulence and a precipitous decline in market value. It is possible these conditions may persist, deteriorate or reoccur.
Our business may also be materially and adversely affected by weak economic conditions in the financial services industry. Any downturn or prolonged disruption in the financial services industry may cause our customers to reduce their spending on technology or cloud-based banking applications or to seek to terminate or renegotiate their contracts with us.
Our business may also be materially and adversely affected by weak economic conditions in the financial services industry. Any downturn or prolonged disruption in the financial services industry may cause our customers to reduce their spending on technology or cloud-based banking solutions or to seek to terminate or renegotiate their contracts with us.
Certain elements of our solutions, particularly our analytics applications, process and store personally identifiable information (“PII”) such as banking and personal information of our customers’ clients, and we may also have access to PII during various stages of the implementation process or during the course of providing customer support.
Certain elements of our solutions, particularly our analytics and mortgage solutions, process and store personally identifiable information (“PII”), such as banking and personal information of our customers’ clients, and we may also have access to PII during various stages of the implementation process or during the course of providing customer support.
Further, we could be forced to expend significant financial and operational resources in response to a security breach, including repairing system damage, increasing security protection costs by deploying additional personnel and protection technologies, and defending against and resolving legal and regulatory claims, all of which could be costly and divert resources and the attention of our management and key personnel away from our business operations.
Further, we could be forced to expend significant financial and operational resources in response to a security breach, including repairing system damage, increasing security protection costs by deploying additional personnel and protection technologies, and defending 12 Table of Contents against and resolving legal and regulatory claims, all of which could be costly and divert resources and the attention of our management and key personnel away from our business operations.
If we are unable to renew our agreement with Salesforce, there would be, absent a termination for cause, a wind-down period during which existing customers would be able to continue using the nCino Bank Operating System in conjunction with the Salesforce Platform, but we would be unable to provide this solution to new customers and could be limited in our ability to allow current customers to add additional users.
If we are unable to renew our agreement with Salesforce, there would be, absent a termination for cause, a wind-down period during which existing customers would be able to continue using the nCino Platform in conjunction with the Salesforce Platform, but we would be unable to provide this solution to new customers and could be limited in our ability to allow current customers to add additional users.
Any failure or perceived failure by us, or any third parties with which we do business, to comply with these laws, rules, and regulations, or with other obligations to which we or such third parties are or may become subject, may result in actions or other claims against us by governmental entities or private actors, the expenditure of substantial costs, time, and other 17 Table of Contents resources, or the incurrence of fines, penalties, or other liabilities.
Any failure or perceived failure by us, or any third parties with which we do business, to comply with these laws, rules, and regulations, or with other obligations to which we or such third parties are or may become subject, may result in actions or other claims against us by governmental entities or private actors, the expenditure of substantial costs, time, and other resources, or the incurrence of fines, penalties, or other liabilities.
A breach of our security measures or those we rely on could result in unauthorized access to customer or their clients’ data, which may materially and adversely impact our reputation, business, and results of operations.
A breach of our security or privacy measures or those we rely on could result in unauthorized access to, or disclosure of, customer or their clients’ data, which may materially and adversely impact our reputation, business, and results of operations.
Furthermore, as we develop or acquire additional functionality, such as nCino Mortgage, we may gain greater access to PII. We maintain policies, procedures, and technological safeguards designed to protect the confidentiality, integrity, and availability of this information and our information technology systems. However, we and our third party service providers, frequently defend against and respond to data security incidents.
Furthermore, as we develop or acquire additional functionality, we may gain greater access to PII. We maintain policies, procedures, and technological safeguards designed to protect the confidentiality, integrity, and availability of this information and our information technology systems. However, we and our third party service providers, frequently defend against and respond to data security incidents.
Factors that may cause fluctuations in our quarterly financial results include, without limitation, those listed below: • our ability to retain current customers or attract new customers; • the activation, delay in activation, or cancellation of large blocks of users by customers; • the timing of recognition of professional services revenues; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure; • acquisitions of our customers, to the extent the acquirer elects not to continue using our solutions or reduces subscriptions to our solutions; • significant disruptions or distress in the FI industry; • customer renewal rates; 12 Table of Contents • increases or decreases in the number of users licensed or pricing changes upon renewals of customer contracts; • network outages or security breaches; • general economic, industry, and market conditions; • changes in our pricing policies or those of our competitors; • seasonal variations in sales of our solutions, which have historically been highest in the fourth quarter of our fiscal year; • the timing and amount of litigation and litigation-related expenses; • the timing and success of new product introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers, or strategic partners; and • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill or intangible assets from acquired companies.
Factors that may cause fluctuations in our quarterly financial results include, without limitation, those listed below: • our ability to retain current customers or attract new customers; • the activation, delay in activation, or cancellation of large blocks of users by customers; • the timing of recognition of professional services revenues; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure; • acquisitions of our customers, to the extent the acquirer elects not to continue using our solutions or reduces subscriptions to our solutions; • significant disruptions or distress in the FI industry; • customer renewal rates; • increases or decreases in the number of users licensed or pricing changes upon renewals of customer contracts (including as a result of our new asset-based pricing model); • network outages or security breaches; • general economic, industry, and market conditions; • changes in our pricing policies or those of our competitors; • seasonal variations in sales of our solutions, which have historically been highest in the fourth quarter of our fiscal year; • the timing and amount of litigation and litigation-related expenses; • the timing and success of new product introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers, or strategic partners; and • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill or intangible assets from acquired companies.
All of our revenues are derived from FIs whose industry has experienced significant pressure in recent years due to economic uncertainty, fluctuating interest rates, liquidity concerns and increased regulation.
Most of our revenues are derived from FIs whose industry has experienced significant pressure in recent years due to economic uncertainty, fluctuating interest rates, liquidity concerns and increased regulation.
Errors, defects, or other problems could also result in reduced sales or a loss of, or delay in, the market acceptance of our solutions. 21 Table of Contents If we fail to accurately anticipate and respond to rapid changes in the industry in which we operate, our ability to attract and retain customers could be impaired and our competitive position could be harmed.
Errors, defects, or other problems could also result in reduced sales or a loss of, or delay in, the market acceptance of our solutions. If we fail to accurately anticipate and respond to rapid changes in the industry in which we operate, our ability to attract and retain customers could be impaired and our competitive position could be harmed.
In addition, the Credit Facility is secured by substantially all of our personal property, and the Credit Facility requires us to satisfy certain covenants, including maintaining certain senior secured leverage and interest coverage ratios under the Credit Facility.
In addition, the Credit Facility is secured by substantially all of our personal property, and the Credit Facility requires us to satisfy certain covenants, including maintaining certain total leverage and interest coverage ratios under the Credit Facility.
If we are unable to maintain consistent revenue growth, our business could be adversely affected, the price of our common stock could decline or otherwise be volatile and it may be difficult for us to achieve and maintain profitability. Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.
If we are unable to maintain consistent revenue growth, our business could be adversely affected, the price of our common stock could decline or otherwise be volatile and it may be difficult for us to achieve and maintain profitability. 10 Table of Contents Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.
Risks Relating to Our Business and Industry We derive all of our revenues from customers in the financial services industry, and any downturn or consolidation or decrease in technology spend in the financial services industry could adversely affect our business.
Risks Relating to Our Business and Industry We derive most of our revenues from customers in the financial services industry, and any downturn or consolidation or decrease in technology spend in the financial services industry could adversely affect our business.
We currently use in our solutions, and may use in the future, software that is licensed under “open source,” “free,” or other similar license, where the licensed software is made available to the general public on an “as-is” basis under the terms of a specific non-negotiable license.
We currently use in our solutions, and may use in the future, software that is licensed under “open source,” “free,” or other similar license, where the licensed software is made available to the general public on an “as-is” basis under the terms 24 Table of Contents of a specific non-negotiable license.
The risks described below are not the only ones we face. The occurrence of any of the following 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, or results of operations.
The risks described below are not the only ones we face. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently 7 Table of Contents believe to be immaterial could materially and adversely affect our business, financial condition, or results of operations.
We believe our corporate culture is one of our fundamental strengths, as we believe it enables us to attract and retain top talent and deliver superior results for our customers. As we grow, we may find it difficult to preserve our corporate 20 Table of Contents culture, which could reduce our ability to innovate and operate effectively.
We believe our corporate culture is one of our fundamental strengths, as we believe it enables us to attract and retain top talent and deliver superior results for our customers. As we grow, we may find it difficult to preserve our corporate culture, which could reduce our ability to innovate and operate effectively.
While we have been profitable on a GAAP basis for a quarter, we may not be able to maintain or increase our level of profitability. We intend to continue to support further growth and extend the functionality of our solutions in future periods.
While we have been profitable on a GAAP basis for a quarter, we may not be able to maintain or increase our level of profitability. We intend to continue to 9 Table of Contents support further growth and extend the functionality of our solutions in future periods.
Performance issues, errors and defects, or failure to successfully integrate or license necessary third-party software, content, or services, could cause delays, errors, or failures of our solutions, increases in our expenses, and reductions in our sales, which could materially and adversely affect our business and results of operations.
Performance issues, errors and defects, or failure to successfully integrate or license necessary third-party software, content, or services, could cause delays, errors, or 21 Table of Contents failures of our solutions, increases in our expenses, and reductions in our sales, which could materially and adversely affect our business and results of operations.
If we incur debt, including under the revolving line of credit, the lenders would have rights senior to holders of common stock to make claims on our assets, and the terms of any future debt could restrict our operations, and we may be unable to service or repay the debt.
If we incur debt, including under the Credit Facility, the lenders would have rights senior to holders of common stock to make claims on our assets, and the terms of any future debt could restrict our operations, and we may be unable to service or repay the debt.
We rely on existing customers to act as references for prospective customers, and difficulties in implementation and configuration could therefore adversely affect our ability to attract new customers. Any difficulties or delays in implementation processes could cause customers to delay or forego future purchases of our solutions.
We rely on existing customers to act as references for prospective customers, and difficulties in implementation and configuration could therefore adversely 20 Table of Contents affect our ability to attract new customers. Any difficulties or delays in implementation processes could cause customers to delay or forego future purchases of our solutions.
If we experience one or more ownership changes as a result of future transactions in our stock, then we may be 26 Table of Contents limited in our ability to use our NOL carryforwards, pre-change tax attributes or deductions to offset our future taxable income, if any.
If we experience one or more ownership changes as a result of future transactions in our stock, then we may be limited in our ability to use our NOL carryforwards, pre-change tax attributes or deductions to offset our future taxable income, if any.
If we have to make changes to our internal processes and solutions as result of these regulations, we could be required to invest substantial additional time and funds and divert time and resources from other corporate purposes to remedy any identified deficiency.
If we have to make changes to our 19 Table of Contents internal processes and solutions as result of these regulations, we could be required to invest substantial additional time and funds and divert time and resources from other corporate purposes to remedy any identified deficiency.
As a result, we may in the future be required to change our pricing model, reduce our prices, or accept other unfavorable contract terms, any of which could adversely affect our revenues, gross margin, profitability, financial position, and/or cash flow. Our business faces significant risks from diverse security threats.
As a result, we may in the future be required to implement further changes to our pricing model, reduce our prices, or accept other unfavorable contract terms, any of which could adversely affect our revenues, gross margin, profitability, financial position, and/or cash flow. Our business faces significant risks from diverse security threats.
For example, our revenue growth strategy includes increased penetration of markets outside the U.S. as well as selling our retail applications to existing and new customers, and failure in either respect would adversely affect our revenue growth.
For example, our revenue growth strategy includes increased penetration of markets outside the U.S. as well as selling our solutions to existing and new customers, and failure in either respect would adversely affect our revenue growth.
There also may be technical corrections legislation or other legislative changes proposed with respect to the Tax Cuts and Jobs Act, the effects of which cannot be predicted and may be adverse to us or our stockholders.
There also may be technical corrections 26 Table of Contents legislation or other legislative changes proposed with respect to the Tax Cuts and Jobs Act, the effects of which cannot be predicted and may be adverse to us or our stockholders.
An expiration or termination of our agreement with Salesforce would cause us to incur significant time and expense to acquire rights to, or develop, a replacement solution and we may not be successful in these efforts, which could cause the nCino Bank Operating System to become obsolete.
An expiration or termination of our agreement with Salesforce would cause us to incur significant time and expense to acquire rights to, or develop, a replacement solution and we may not be successful in these efforts, which could cause the nCino Platform to become obsolete.
For example, as a result of obligations under some of our customer contracts, we are required to comply with certain provisions of the Gramm-Leach-Bliley Act ("GLBA") related to the privacy of consumer information and may be subject to other privacy and data security laws because of the solutions we provide to FIs.
For example, as a result of obligations under some of our customer contracts, we are required to comply with certain provisions of the GLBA related to the privacy of consumer information and may be subject to other privacy and data security laws because of the solutions we provide to FIs.
Cyberattacks and other malicious internet-based activity, including increased threats from the use of artificial intelligence, continue to increase and evolve, and cloud-based providers of products and services have been and are expected to continue to be targeted.
Cyberattacks and other malicious internet-based activity, including increased threats from the use of AI, continue to increase and evolve, and cloud-based providers of products and services have been and are expected to continue to be targeted.
Increasing our customer base and expanding customer adoption within and across business lines will depend, to a significant extent, on our ability to effectively expand our sales and marketing operations and activities. We plan to continue to 23 Table of Contents expand our direct sales force both domestically and internationally for the foreseeable future.
Increasing our customer base and expanding customer adoption within and across business lines will depend, to a significant extent, on our ability to effectively expand our sales and marketing operations and activities. We plan to continue to expand our direct sales force both domestically and internationally for the foreseeable future.
A vulnerability in a third-party provider’s software or systems, a failure of our third-party 13 Table of Contents providers’ safeguards, policies or procedures, or a breach of a third-party provider’s software or systems could result in the compromise of the confidentiality, integrity, or availability of our systems or the data housed in our solutions.
A vulnerability in a third-party provider’s software or systems, a failure of our third-party providers’ safeguards, policies or procedures, or a breach of a third-party provider’s software or systems could result in the compromise of the confidentiality, integrity, or availability of our systems or the data housed in our solutions.
Our sales cycles are typically lengthy, generally ranging from six to nine months for smaller FIs and 12 to 18 months or more for larger FIs. We may spend substantial time, effort and money on our sales and marketing efforts without any assurance that our efforts will produce any sales.
Our sales cycles are typically lengthy, generally ranging from 6 to 9 for smaller FIs and 12 to 18 months or more for larger FIs. We may spend substantial time, effort and money on our sales and marketing efforts without any assurance that our efforts will produce any sales.
We also leverage the services of SIs, including Accenture, Deloitte, PwC, and West Monroe Partners, among others, to implement and configure the nCino Bank Operating System for our larger FI customers, while we have historically performed professional services for smaller FIs ourselves.
We also leverage the services of SIs, including Accenture, Deloitte, PwC, and West Monroe Partners, among others, to implement and configure the nCino Platform for our larger FI customers, while we have historically performed professional services for smaller FIs ourselves.
We cannot assure you that such third parties will maintain such software or continue to make it available. We also rely on confidentiality 24 Table of Contents agreements, consulting agreements, work-for-hire agreements, and invention assignment agreements with our employees, consultants, and others.
We cannot assure you that such third parties will maintain such software or continue to make it available. We also rely on confidentiality agreements, consulting agreements, work-for-hire agreements, and invention assignment agreements with our employees, consultants, and others.
We are required to disclose significant changes made in our internal controls procedure on a quarterly basis. 30 Table of Contents Our compliance with Section 404 has required, and will continue to require, that we incur substantial accounting expense and expend significant management efforts.
We are required to disclose significant changes made in our internal controls procedure on a quarterly basis. Our compliance with Section 404 has required, and will continue to require, that we incur substantial accounting expense and expend significant management efforts.
Our revenue growth may also slow or even reverse in future periods due to a number of factors, which may include slowing demand for our solutions, our ability to successfully sell and implement new applications, such as our retail applications, increasing competition, decreasing growth of our overall market, our inability to attract and retain a sufficient number of FI customers, concerns over data security, our failure, for any reason, to capitalize on growth opportunities, or general economic conditions.
Our revenue growth may also slow or even reverse in future periods due to a number of factors, which may include slowing demand for our solutions, our ability to successfully sell and implement new solutions, such as our retail solutions, increasing competition, decreasing growth of our overall market, the adoption of our new asset-based pricing model, our inability to attract and retain a sufficient number of FI customers, concerns over data security, our failure, for any reason, to capitalize on growth opportunities, or general economic conditions.
Use of, and reliance on, cloud-based banking technology continues to evolve and we do not know whether FIs will continue to adopt cloud-based banking technology such as the nCino Bank Operating System in the future, or whether the market will change in ways we do not anticipate.
Use of, and reliance on, cloud-based banking technology continues to evolve and we do not know whether FIs will continue to adopt cloud-based banking technology such as the nCino Platform in the future, or whether the market will change in ways we do not anticipate.
We will also face increased costs associated with growth and the expansion of our customer base and have seen increased costs in being a public company. Our efforts to grow our business may be more costly than we expect, and we may not be able to increase our revenues enough to offset our increased operating expenses.
We will also continue to face increased costs associated with growth and the expansion of our customer base and the costs of being a public company. Our continuing efforts to grow our business may be more costly than we expect, and we may not be able to increase our revenues enough to offset our increased operating expenses.
Fundamental elements of the nCino Bank Operating System are built on the Salesforce Platform and we rely on our agreement with Salesforce to provide this solution to our customers.
Fundamental elements of the nCino Platform are built on the Salesforce Platform and we rely on our agreement with Salesforce to provide this solution to our customers.
In addition, the EU GDPR prohibits the international transfer of personal data from the EEA to countries outside of the EEA unless made to a country deemed to have adequate data privacy laws by the European Commission or a data transfer mechanism in accordance with the EU GDPR has been put in place or a derogation under the EU GDPR can be relied on.
In addition, the EU GDPR prohibits the international transfer of personal data from the EEA to countries outside of the EEA unless made to a country deemed to have adequate data privacy laws by the European Commission or a data transfer mechanism in accordance with the EU GDPR has been put in place (e.g., Standard Contractual Clauses or “SCCs”) or a derogation under the EU GDPR can be relied on.
Many FIs have invested substantial personnel and financial resources in 11 Table of Contents legacy software, and these FIs may be reluctant, unwilling, or unable to convert from their existing systems to our solutions.
Many FIs have invested substantial personnel and financial resources in legacy software, and these FIs may be reluctant, unwilling, or unable to convert from their existing systems to our solutions.
Since our inception, our business has grown rapidly, which has resulted in a large increase in our employee headcount, expansion of our infrastructure, enhancement of our internal systems, and other significant changes and additional complexities. Our revenues increased from $273.9 million for fiscal 2022 to $408.3 million for fiscal 2023 to $476.5 million for fiscal 2024.
Since our inception, our business has grown rapidly, which has resulted in a large increase in our employee headcount, expansion of our infrastructure, enhancement of our internal systems, and other significant changes and additional complexities. Our revenues increased from $408.3 million for fiscal 2023 to $476.5 million for fiscal 2024 and to $540.7 million for fiscal 2025.
In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations. Our customers are highly regulated and subject to a number of challenges and risks.
In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations. Our customers are highly regulated.
These laws and regulations generally prohibit companies and their employees and intermediaries from authorizing, offering, or providing 22 Table of Contents improper payments or benefits to officials and other recipients for improper purposes.
These laws and regulations generally prohibit companies and their employees and intermediaries from authorizing, offering, or providing improper payments or benefits to officials and other recipients for improper purposes.
Our increased focus on the development and use of artificial intelligence and machine learning technologies in our solutions and our business, as well as our potential failure to effectively implement, use, and market these technologies, may result in reputational harm or liability, or could otherwise adversely affect our business.
Our increased focus on the development and use of AI/ML technologies in our solutions and our business, as well as our potential failure to effectively implement, use, and market these technologies, may result in reputational harm or liability, or could otherwise adversely affect our business.
If we are successful in acquiring additional businesses we may not achieve the anticipated benefits from the acquired business due to a number of factors, including: • our inability to integrate or benefit from acquired technologies or services; • unanticipated costs or liabilities associated with the acquisition; • incurrence of acquisition-related costs; • difficulty integrating the technology, accounting systems, operations, control environments, and personnel of the acquired business and integrating the acquired business or its employees into our culture; • difficulties and additional expenses associated with supporting legacy solutions and infrastructure of the acquired business; • difficulty converting the customers of the acquired business to our solutions and contract terms, including disparities in terms; • additional costs for the support or professional services model of the acquired company; • diversion of management’s attention and other resources; • adverse effects to our existing business relationships with business partners and customers; • the issuance of additional equity securities that could dilute the ownership interests of our stockholders; • incurrence of debt on terms unfavorable to us or that we are unable to repay; • incurrence of substantial liabilities; • difficulties retaining key employees of the acquired business; and • adverse tax consequences, substantial depreciation, or deferred compensation charges. 19 Table of Contents In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually.
If we are successful in acquiring additional businesses, we may not achieve the anticipated benefits from the acquired business due to a number of factors, including: • our inability to integrate or benefit from acquired technologies or services; • unanticipated costs or liabilities associated with the acquisition; • incurrence of acquisition-related costs; 18 Table of Contents • difficulty integrating the technology, accounting systems, operations, control environments, and personnel of the acquired business and integrating the acquired business or its employees into our culture; • difficulties and additional expenses associated with supporting legacy solutions and infrastructure of the acquired business; • difficulty converting the customers of the acquired business to our solutions and contract terms, including disparities in terms; • additional costs for the support or professional services model of the acquired company; • diversion of management’s attention and other resources; • adverse effects to our existing business relationships with business partners and customers; • the issuance of additional equity securities that could dilute the ownership interests of our stockholders; • incurrence of debt on terms unfavorable to us or that we are unable to repay; • incurrence of substantial liabilities; • difficulties retaining key employees of the acquired business; and • adverse tax consequences, substantial depreciation, or deferred compensation charges.
Our customers have no obligation to renew their subscriptions for our solutions after the expiration of the initial or current subscription term, and our customers, if they choose to renew at all, may renew for fewer users or on less favorable pricing terms.
Our customers have no obligation to renew their subscriptions for our solutions after the expiration of the initial or current subscription term, and our customers, if they choose to renew at all, may renew for fewer users or on less favorable pricing terms, particularly if they seek to negotiate alternatives to our asset-based pricing model.
The UK Information Commissioner's Office ("ICO") has also published its own version of the TIA and guidance on international transfers, although entities may choose to adopt either the EU or UK-style TIA.
The UK Information Commissioner's Office ("ICO") has also published its own version of the TIA, although entities may choose to adopt either the EU or UK-style TIA.
For instance, we incurred significant costs in connection with the SimpleNexus acquisition. In addition, nCino has limited experience in acquiring other businesses. If an acquired business fails to meet our expectations, our operating results, business, and financial position may suffer.
For instance, we have incurred significant costs in connection with our fiscal 2025 acquisitions. In addition, nCino has limited experience in acquiring other businesses. If an acquired business fails to meet our expectations, our operating results, business, and financial position may suffer.
If we are unable to successfully expand our product offerings beyond our current solutions, our customers could migrate to competitors who may offer a broader or more attractive range of products and services. For example, in fiscal 2022, we launched our Commercial Pricing and Profitability solution, powered by nIQ, and we may fail to achieve market acceptance of this offering.
If we are unable to successfully expand our product offerings beyond our current solutions, our customers could migrate to competitors who may offer a broader or more attractive range of products and services. For example, in fiscal 2025, we launched our Commercial Onboarding and Account Opening solution and we may fail to achieve market acceptance of this offering.
We may face unexpected challenges related to the complexity of our customers’ implementation and configuration requirements. Implementation of our solutions may be delayed or expenses may increase when customers have unexpected data, software, or technology challenges, or unanticipated business requirements, which could adversely affect our relationship with customers and our operating results.
Implementation of our solutions may be delayed or expenses may increase when customers have unexpected data, software, or technology challenges, or unanticipated business requirements, which could adversely affect our relationship with customers and our operating results.
Our revenue growth in recent periods may not be indicative of our future performance. Furthermore, to the extent we grow in future periods, maintaining consistent rates of revenue growth may be difficult.
Furthermore, to the extent we grow in future periods, maintaining consistent rates of revenue growth may be difficult.
In addition, if we are unable to renew our agreement with Salesforce, our customers would need to obtain a separate subscription from Salesforce in order to access the nCino Bank Operating System.
In addition, if we are unable to renew our agreement with Salesforce upon its expiration, our customers would need to obtain a separate subscription from Salesforce in order to access the nCino Platform.
The Credit Facility contains affirmative and restrictive covenants that limit our operating ability including to, among other things, dispose of assets, merge with other companies, incur additional indebtedness and liens, engage in new businesses, acquire certain other companies and modify organizational documents.
As of January 31, 2025, we had $166.0 million outstanding under our Credit Facility. The Credit Facility contains affirmative and restrictive covenants that limit our operating ability including to, among other things, dispose of assets, merge with other companies, incur additional indebtedness and liens, engage in new businesses, acquire certain other companies and modify organizational documents.
It is also possible that the larger FIs that result from 10 Table of Contents business combinations could have greater leverage in negotiating price or other terms with us or could decide to replace some or all of the elements of our solutions.
Additionally, changes in management of our customers could result in delays or cancellations of the implementation of our solutions. It is also possible that the larger FIs that result from business combinations could have greater leverage in negotiating price or other terms with us or could decide to replace some or all of the elements of our solutions.
Any license we may enter into as a result of litigation may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us. Any of the foregoing events could adversely affect our business and results of operations.
Any license we may enter into as a result of litigation may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us.
Our corporate culture has contributed to our success, and if we cannot maintain it as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be adversely affected.
Our corporate culture has contributed to our success, and if we cannot maintain it as we grow, particularly given our recent transition to a new Chief Executive Officer, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be adversely affected.
Fundamental elements of the nCino Bank Operating System, including our client onboarding, loan origination, and deposit account opening applications, are built on the Salesforce Platform and we rely on our agreement with Salesforce to use 14 Table of Contents the Salesforce Platform in conjunction with this solution, including for hosting infrastructure and data center operations.
Fundamental elements of the nCino Platform, including our client onboarding, loan origination, and deposit account opening solutions, are built on the Salesforce Platform and we rely on our agreement with Salesforce to use the Salesforce Platform in conjunction with these solutions, including for hosting infrastructure and data center operations.
Our revenues include the revenues of SimpleNexus from the date of acquisition on January 7, 2022. Our total number of employees increased from 436 as of January 31, 2018 to 1,653 as of January 31, 2024. Managing and sustaining a growing workforce and customer base geographically-dispersed in the U.S. and internationally requires substantial management effort, infrastructure, and operational capabilities.
Our total number of employees increased from 436 as of January 31, 2018 to 1,833 as of January 31, 2025. Managing and sustaining a growing workforce and customer base geographically-dispersed in the U.S. and internationally requires substantial management effort, infrastructure, and operational capabilities.
Non-critical ICT third-party service providers are only indirectly impacted by DORA, by virtue of the mandatory contractual terms that DORA requires financial entities to implement with ICT third-party service providers.
DORA only imposes direct regulatory obligations on ICT third-party service providers that are considered ‘critical’ within the meaning of DORA. Non-critical ICT third-party service providers are only indirectly impacted by DORA, by virtue of the mandatory contractual terms that DORA requires financial entities to implement with ICT third-party service providers.
Accordingly, the effect of significant downturns in sales or market acceptance of our solutions may not be apparent in our current-quarter revenues or reflected in our results of operations until future periods.
However, such a decline will negatively affect our subscription revenues in future quarters. Accordingly, the effect of significant downturns in sales or market acceptance of our solutions may not be apparent in our current-quarter revenues or reflected in our results of operations until future periods.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThreats to security, confidentiality, and availability are identified and assessed as part of our annual and routine risk assessments. nCino’s CISO reports cyber security risk assessment results at Disclosure Committee Meetings, Board and Audit Committee Meetings, and executive subcommittees specializing in cyber security risk management (Risk Information Security Committee). nCino maintains a documented process for when and by whom senior management is informed of a cybersecurity incident and when such information will be reported to affected parties.
Biggest changeAdditional information on the cybersecurity risks we face is discussed in Part I, Item 1A of this Annual Report on Form 10-K, “Risk Factors.” nCino’s CISO reports cyber security risk assessment results at the Enterprise Risk Management Committee, Information Security, and Board and Audit Committee Meetings. nCino uses formal and informal education and training efforts to identify and mitigate cybersecurity risk, which includes external collaboration with peers and industry groups. nCino maintains a documented process for when and by whom senior management is informed of a cybersecurity incident and when such information will be reported to affected parties.
These processes are detailed within our Incident Response Plan which is regularly reviewed and updated by the information security team.
These processes are detailed within our Incident Response Plan which is regularly reviewed and updated by the information security team. 31 Table of Contents
Item 1C. Cybersecurity nCino’s Enterprise Risk Management Program includes a cybersecurity risk management process and a formal Information Security Management System ("ISMS") as foundational components of the program.
The Enterprise Risk Management Program includes a cybersecurity risk management process and a formal Information Security Management System ("ISMS") as foundational components of the program covering cybersecurity.
We routinely assess risks that could affect the organization's ability to meet its business objectives and provide reliable services to our customers. nCino’s Chief Information Security Officer ("CISO") is responsible for identifying, assessing, and managing material cybersecurity 31 Table of Contents risks. nCino’s CISO brings over 25 years of experience in security and risk management to the company and takes the lead on reporting risk to senior management and nCino’s Board of Directors. nCino conducts annual cybersecurity risk and threat assessments which include detailed control analyses for measuring both inherent and residual risk factors.
Within this process, we routinely assess risks that could affect the organization's ability to meet its business objectives and provide reliable services to our customers. nCino’s Chief Information Security Officer ("CISO") is responsible for identifying, assessing, and managing material cybersecurity risks. nCino’s CISO brings over 25 years of experience in security and risk management to the Company, reporting to executive leadership, cybersecurity-focused committees, and nCino’s Board of Directors. nCino conducts annual cybersecurity risk and threat assessments which include detailed control analyses for measuring both inherent and residual risk factors.
These assessments are performed by nCino Information Security as part of the ISO27001 ISMS requirements. Our annual risk assessment is performed by using the nCino ISO27001 risk assessment as a basis for risk identification, with additional assessments to address risks that threaten the achievement of the control objectives as appropriate.
These assessments are performed by nCino Information Security as part of ISO 27001 ISMS requirements, framework and certification. Our annual risk assessment, aligned to ISO 27001 and National Institute of Standards and Technology ("NIST"), is the basis for security risk identification, with additional assessments to address risks that threaten the achievement of established control objectives.
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Item 1C. Cybersecurity nCino has implemented a variety of cybersecurity processes, technologies, and controls to aid in our efforts to identify, assess and manage material risks.
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Our approach includes (i) nCino’s Enterprise Risk Management Program, as managed by the Internal Audit & Enterprise Risk Management Department and overseen by the Audit Committee of the Board; (ii) cybersecurity risk and threat assessments; (iii) vulnerability management programs designed to identify hardware and software vulnerabilities; (iv) variety of tools designed to monitor our networks and systems for suspicious activity; and (v) incident response plans and trainings.
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Threats to security, confidentiality, and availability are identified and assessed as part of our annual and routine risk assessments .

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe have additional domestic offices in the U.S. and international offices in the United Kingdom, Australia, Canada, Japan, Spain and France. All of our offices are leased, and we do not own any real property. We believe our facilities are adequate for our current needs. We believe that we will be able to obtain additional space on commercially reasonable terms.
Biggest changeWe have additional domestic offices in the U.S. and international offices in the United Kingdom, Australia, Canada, Japan, Spain, New Zealand and South Africa. All of our offices are leased, and we do not own any real property. We believe our facilities are adequate for our current needs.
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We believe that we will be able to obtain additional space on commercially reasonable terms.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings We are currently a party to, and may from time to time in the future be involved in, various litigation matters and subject to claims that arise in the ordinary course of business.
Biggest changeItem 3. Legal Proceedings From time to time, we may become involved in various litigation matters and be subject to claims that arise in the ordinary course of business.
For information regarding legal proceedings, see Note 16 "Commitments and Contingencies" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated by reference into this Part I, Item 3.
For information regarding legal proceedings, see Note 15 "Commitments and Contingencies" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated by reference into this Part I, Item 3.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph below compares the cumulative total return to our stockholders on our common stock between July 14, 2020 (the date our common stock commenced trading on the Nasdaq Global Select Market) through January 31, 2024 in comparison to the Russell 2000 Index, and the S&P 1500 Application Software Index.
Biggest changeThe graph below compares the cumulative total return to our stockholders on our common stock between July 14, 2020 (the date our common stock commenced trading on the Nasdaq Global Select Market) through January 31, 2025 in comparison to the Russell 2000 Index and the S&P 1500 Application Software Index.
Stockholders As of January 31, 2024, there were 141 holders of record of our common stock. Because many of such shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Stockholders As of January 31, 2025, there were 90 holders of record of our common stock. Because many of such shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFiscal Year Ended January 31, ($ in thousands, except share and per share amounts) 2022 1 2023 2024 Revenues: Subscription revenues $ 224,854 $ 344,752 $ 409,479 Professional services and other revenues 49,011 63,563 67,064 Total revenues 273,865 408,315 476,543 Cost of revenues: Cost of subscription revenues 64,508 106,265 120,861 Cost of professional services and other revenues 46,905 63,341 70,609 Total cost of revenues 111,413 169,606 191,470 Gross profit 162,452 238,709 285,073 Operating expenses: Sales and marketing 82,901 127,669 130,547 Research and development 79,363 121,576 117,311 General and administrative 71,545 83,477 76,727 Total operating expenses 233,809 332,722 324,585 Loss from operations (71,357) (94,013) (39,512) Non-operating income (expense): Interest income 194 403 2,567 Interest expense (1,514) (2,807) (4,135) Other expense, net (1,277) (1,356) (856) Loss before income taxes (73,954) (97,773) (41,936) Income tax provision (benefit) (23,833) 4,071 1,590 Net loss (50,121) (101,844) (43,526) Net loss attributable to redeemable non-controlling interest (1,569) (1,119) (1,109) Adjustment attributable to redeemable non-controlling interest 894 1,995 (71) Net loss attributable to nCino, Inc. $ (49,446) $ (102,720) $ (42,346) Net loss per share attributable to nCino, Inc.: Basic and diluted $ (0.51) $ (0.93) $ (0.38) Weighted average number of common shares outstanding: Basic and diluted 96,722,464 110,615,734 112,672,397 1 Includes the operating results of SimpleNexus from the Acquisition Date, see Note 7 "Business Combinations" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information. 41 Table of Contents The Company recognized stock-based compensation expense as follows: Fiscal Year Ended January 31, ($ in thousands) 2022 2023 2024 Cost of subscription revenues $ 960 $ 1,430 $ 1,847 Cost of professional services and other revenues 5,195 7,263 9,369 Sales and marketing 7,520 13,283 15,417 Research and development 6,186 11,602 15,942 General and administrative 8,616 16,654 15,460 Total stock-based compensation expense 1 $ 28,477 $ 50,232 $ 58,035 1 Includes $0.2 million benefit incurred for the fiscal year ended January 31, 2023 in connection with the restructuring plan commenced in January 2023.
Biggest changeFiscal Year Ended January 31, ($ in thousands, except share and per share amounts) 2023 2024 2025 1 Revenues: Subscription revenues $ 344,752 $ 409,479 $ 469,168 Professional services and other revenues 63,563 67,064 71,489 Total revenues 408,315 476,543 540,657 Cost of revenues: Cost of subscription revenues 106,265 120,861 134,932 Cost of professional services and other revenues 63,341 70,609 80,937 Total cost of revenues 169,606 191,470 215,869 Gross profit 238,709 285,073 324,788 Operating expenses: Sales and marketing 127,669 130,547 123,231 Research and development 121,576 117,311 129,422 General and administrative 83,477 76,727 90,266 Total operating expenses 332,722 324,585 342,919 Loss from operations (94,013) (39,512) (18,131) Non-operating income (expense): Interest income 403 2,567 1,761 Interest expense (2,807) (4,135) (8,763) Other expense, net (1,356) (856) (10,427) Loss before income taxes (97,773) (41,936) (35,560) Income tax provision (benefit) 4,071 1,590 (2,511) Net loss (101,844) (43,526) (33,049) Net loss attributable to redeemable non-controlling interest (1,119) (1,109) (472) Adjustment attributable to redeemable non-controlling interest 1,995 (71) 5,301 Net loss attributable to nCino, Inc. $ (102,720) $ (42,346) $ (37,878) Net loss per share attributable to nCino, Inc.: Basic and diluted $ (0.93) $ (0.38) $ (0.33) Weighted average number of common shares outstanding: Basic and diluted 110,615,734 112,672,397 115,162,175 1 Includes the operating results of DocFox, ILT and FullCircl from the DocFox Acquisition Date, the ILT Acquisition Date and the FullCircl Acquisition Date, respectively, see Note 6 "Business Combinations" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information. 40 Table of Contents The Company recognized stock-based compensation expense as follows: Fiscal Year Ended January 31, ($ in thousands) 2023 2024 2025 Cost of subscription revenues $ 1,430 $ 1,847 $ 2,891 Cost of professional services and other revenues 7,263 9,369 11,977 Sales and marketing 13,283 15,417 17,016 Research and development 11,602 15,942 17,416 General and administrative 16,654 15,460 22,292 Total stock-based compensation expense $ 50,232 $ 58,035 $ 71,592 The Company recognized amortization expense for intangible assets as follows: Fiscal Year Ended January 31, ($ in thousands) 2023 2024 2025 Cost of subscription revenues $ 17,019 $ 16,306 $ 17,784 Cost of professional services and other revenues 94 330 330 Sales and marketing 11,087 20,590 11,979 Total amortization expense $ 28,200 $ 37,226 $ 30,093 Fiscal Year Ended January 31, 2023 2024 2025 Revenues: Subscription revenues 84.4 % 85.9 % 86.8 % Professional services and other revenues 15.6 14.1 13.2 Total revenues 100.0 100.0 100.0 Cost of revenues (percentage shown in comparison to related revenues): Cost of subscription revenues 30.8 29.5 28.8 Cost of professional services and other revenues 99.7 105.3 113.2 Total cost of revenues 41.5 40.2 39.9 Gross profit 58.5 59.8 60.1 Operating expenses: Sales and marketing 31.3 27.4 22.8 Research and development 29.8 24.6 23.9 General and administrative 20.4 16.1 16.7 Total operating expenses 81.5 68.1 63.4 Loss from operations (23.0) (8.3) (3.3) Non-operating income (expense): Interest income 0.1 0.5 0.3 Interest expense (0.7) (0.9) (1.6) Other expense, net (0.3) (0.2) (1.9) Loss before income taxes (23.9) (8.9) (6.5) Income tax provision (benefit) 1.0 0.3 (0.5) Net loss (24.9) % (9.2) % (6.0) % 41 Table of Contents Comparison of the Fiscal Years Ended January 31, 2024 and 2025 Revenues Fiscal Year Ended January 31, ($ in thousands) 2024 2025 Revenues: Subscription revenues $ 409,479 85.9 % $ 469,168 86.8 % Professional services and other revenues 67,064 14.1 71,489 13.2 Total revenues $ 476,543 100.0 % $ 540,657 100.0 % Subscription Revenues Subscription revenues increased $59.7 million for fiscal 2025 compared to fiscal 2024, due to initial revenues from customers who did not contribute to subscription revenues during the prior period, growth from existing customers within and across lines of business, and acquisitions.
The cash used in financing activities was partially offset by $4.7 million of proceeds from stock issuances under the employee stock purchase plan, $4.5 million of proceeds from the exercise of stock options, and $1.0 million in proceeds from the non-controlling interest in our Japan joint venture.
The cash used in financing activities was partially offset by $4.7 million in proceeds from stock issuances under the employee stock purchase plan, $4.5 million of proceeds from the exercise of stock options, and $1.0 million in proceeds from the non-controlling interest in our Japan joint venture.
Cash used in working capital accounts was principally a function of a $14.3 million increase in accounts receivable due to the timing of billings and collections from customers, payments of $10.3 million of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions, a $6.0 million decrease in accrued expenses and other current liabilities which includes payments of approximately $5.0 million for severance and other employee costs associated with the restructuring plan and changing commission payment plans from a quarterly basis to a monthly basis, and a decrease of $4.1 million in operating lease liabilities.
Cash used in working capital accounts was principally a function of a $14.3 million increase in accounts receivable due to the timing of billings and collections from customers, an increase of $10.3 million of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions, a $6.0 million decrease in accrued expenses and other current liabilities which includes payments of approximately $5.0 million for severance and other employee costs associated with the restructuring plan and changing commission payment plans from a quarterly basis to a monthly basis, and a decrease of $4.1 million in operating lease liabilities.
See Item 7 of this Annual Report on Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Operating Results—Subscription Revenue Retention Rate” for additional information on subscription revenue retention rates. We sell our solutions directly through our business development managers, account executives, field sales engineers, and customer success managers.
See Item 7 of this Annual Report on Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Operating Results—Subscription Revenue Net Retention Rate” for additional information on subscription revenue retention rates. We sell our solutions directly through our business development managers, account executives, field sales engineers, and customer success managers.
If our customers do not continue to see the ability of our solutions to generate return on investment relative to other available solutions or at all, net retention rates could suffer and our operating results could be adversely affected.
If our customers do not continue to see the ability of our solutions to generate return on investment relative to other available solutions or at all, ACV net retention rates could suffer and our operating results could be adversely affected.
We believe that current cash and cash equivalents as well as borrowings available under the Credit Facility will be sufficient to fund our operations and capital requirements for at least the next 12 months.
We believe that current cash and cash equivalents as well as borrowings available under the 2024 Credit Facility will be sufficient to fund our operations and capital requirements for at least the next 12 months.
See Note 12 "Income Taxes" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further details on the components of income tax and a reconciliation of the U.S. federal statutory rate to the effective tax rate.
See Note 11 "Income Taxes" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further details on the components of income tax and a reconciliation of the U.S. federal statutory rate to the effective tax rate.
We determine revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; 49 Table of Contents • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenues when, or as, the Company satisfies a performance obligation.
We determine revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer; 48 Table of Contents • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenues when, or as, the Company satisfies a performance obligation.
We believe our ACV-based net retention of customers over the long term illustrates our success in executing our land and expand strategy, as it demonstrates growing adoption by existing customers, including price increases but net of attrition.
We believe our ACV net retention rate over the long term illustrates our success in executing our land and expand strategy, as it demonstrates growing adoption by existing customers, including price increases but net of attrition.
The cost of professional services revenues has increased in absolute dollars as we have added new customer subscriptions that require professional services and built-out our international professional services capabilities. Realized effective billing and utilization rates drive fluctuations in our professional services and other gross margin on a period-to-period basis. 39 Table of Contents Operating Expenses Sales and Marketing.
The cost of professional services revenues has increased in absolute dollars as we have added new customer subscriptions that require professional services and built-out our international professional services capabilities. Realized effective billing and utilization rates drive fluctuations in our professional services and other gross margin on a period-to-period basis. Operating Expenses Sales and Marketing.
Our fiscal year ends on January 31 of each year and references in this Annual Report on Form 10-K to a fiscal year mean the year in which that fiscal year ends. For example, references in this Annual Report on Form 10-K to "fiscal 2024" refer to the fiscal year ended January 31, 2024.
Our fiscal year ends on January 31 of each year and references in this Annual Report on Form 10-K to a fiscal year mean the year in which that fiscal year ends. For example, references in this Annual Report on Form 10-K to "fiscal 2025" refer to the fiscal year ended January 31, 2025.
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.
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 44 Table of Contents companies, many of which use a similar non-GAAP financial measure to supplement their GAAP results in their public disclosures.
Net Cash Provided by (Used in) Financing Activities The $21.1 million used in financing activities in fiscal 2024 was comprised principally of payments of $30.0 million on the Credit Facility and principal payments of $1.2 million on financing obligations.
The $21.1 million of net cash used in financing activities in fiscal 2024 was comprised principally of payments of $30.0 million on the Credit Facility and principal payments of $1.2 million on the financing obligations.
Recent Accounting Pronouncements See Note 2 "Summary of Significant Accounting Policies" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted, if applicable.
Recent Accounting Pronouncements See Note 1 "Summary of Business and Significant Accounting Policies" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted, if applicable.
Discussions of fiscal 2022 items and year-to-year comparisons between fiscal 2023 and fiscal 2022 that are not included in this Form 10-K can be found in Part II, Item 7, 34 Table of Contents “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2023, filed with the SEC on March 28, 2023.
Discussions of fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Form 10-K can be found in Part II, Item 7, 34 Table of Contents “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on March 26, 2024.
Pursuant to an agreement with the holders of the non-controlling interest in nCino 47 Table of Contents 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.
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.
Non-Operating Income (Expense) Interest Income. Interest income consists primarily of interest earned on our cash and cash equivalents. Interest Expense. Interest expense consists primarily of interest related to our financing obligations along with interest expense on borrowings, commitment fees, and amortization of debt issuance costs associated with our secured revolving credit facility. Other Expense, Net.
Non-Operating Income (Expense) Interest Income. Interest income consists primarily of interest earned on our cash and cash equivalents. Interest Expense. Interest expense consists primarily of interest related to our financing obligations along with interest expense on borrowings, commitment fees, and amortization of debt issuance costs associated with our secured revolving credit facility. 39 Table of Contents Other Expense, Net.
To date, we have funded our capital needs through issuances of common stock including our initial public offering in July 2020, operating cash flows, and during fiscal 2023, our revolving line of credit. We generally bill and collect from our customers annually in advance.
To date, we have funded our capital needs through issuances of common stock including our initial public offering in July 2020, operating cash flows, and our revolving line of credit. We generally bill and collect from our customers annually in advance.
The following section of this Form 10-K discusses our financial condition and results of operations for fiscal 2024 and 2023 and year-to-year comparisons between fiscal 2024 and fiscal 2023.
The following section of this Form 10-K discusses our financial condition and results of operations for fiscal 2025 and 2024 and year-to-year comparisons between fiscal 2025 and fiscal 2024.
To date, our losses on professional services contracts have not been material. During the initial go-live period for a customer on the nCino Bank Operating System, professional services revenues generally make up a substantial portion of our revenues from that customer, whereas over time, revenues from established customers are more heavily weighted to subscriptions.
To date, our losses on professional services contracts have not been material. During the initial go-live period for a customer on the nCino Platform, professional services revenues generally make up a substantial portion of our revenues from that customer, whereas over time, revenues from established customers are more heavily weighted to subscriptions.
These rate increases have had an impact on the real estate market in the U.S. and specifically, the demand for mortgages and mortgage-related products and services, which has had a negative impact on our nCino Mortgage business. We will continue to monitor the impact the macroeconomic environment may have on our business. Continued Investment in Innovation and Growth .
These fluctuations have had an impact on the real estate market in the U.S. and specifically, the demand for mortgages and mortgage-related products and services, which has had a negative impact on our U.S. mortgage business. We will continue to monitor the impact the macroeconomic environment may have on our business. Continued Investment in Innovation and 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.
Any equity financing we may undertake could be dilutive to our existing stockholders, and any debt financing we may undertake could 46 Table of Contents 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.
We expect capital expenditures will be appreciably higher in absolute dollars in fiscal 2025 for planned office build-outs, mainly for an international office, compared to prior fiscal years to accommodate our growth, which we estimate to be approximately $8.5 million. We may from time-to-time seek to raise additional capital to support our growth.
We expect capital expenditures will be appreciably higher in absolute dollars in fiscal 2026 for planned office build-outs, mainly for an international office, compared to prior fiscal years to accommodate our growth, which we estimate to be approximately $8.4 million. We may from time-to-time seek to raise additional capital to support our growth.
As a result, during the initial go-live period for a customer on the nCino Bank Operating System, professional services revenues generally make up a substantial portion of our revenues from that customer, whereas over time, revenues from established customers are more heavily weighted to subscriptions.
As a result, during the initial go-live period for a customer on the nCino Platform, professional services revenues generally make up a substantial portion of our revenues from that customer, whereas over time, revenues from established customers are more heavily weighted to subscriptions.
See Note 14 "Leases," Note 15 "Revolving Credit Facility," and Note 16 "Commitments and Contingencies" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
See Note 6 "Business Combinations," Note 13 "Leases," Note 14 "Revolving Credit Facility," and Note 15 "Commitments and Contingencies" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Professional services and other revenues consist of fees for implementation and configuration assistance, training, and advisory services. For enterprise and larger regional FIs, we generally work with SI partners to provide the majority of implementation services for the nCino Bank Operating System, for which these SI partners bill our customers directly.
Professional services and other revenues consist of fees for implementation and configuration assistance, training, and advisory services. For enterprise and larger regional FIs, we generally work with SI partners to provide the majority of implementation services for the nCino Platform, for which these SI partners bill our customers directly.
In certain cases, we are authorized to resell access to Salesforce’s CRM solution along with the nCino Bank Operating System. When we resell such access, we charge a higher subscription price and remit a higher subscription fee to Salesforce for these subscriptions. Professional Services and Other Revenues .
In certain cases, we are authorized to resell access to Salesforce’s CRM solution along with the nCino Platform. When we resell such access, we charge a higher subscription price and remit a higher subscription fee to Salesforce for these subscriptions. Professional Services and Other Revenues .
Net Cash Used in Investing Activities The $6.3 million used in investing activities in fiscal 2024 was comprised of $3.5 million used for the purchase of property and equipment and leasehold improvements to support the expansion of our business, $2.5 million used for the purchase of preferred stock in Rich Data Co, and $0.4 million for the final cash considerations relating to an asset acquisition completed in August 2022.
The $6.3 million of net cash used in investing activities in fiscal 2024 was comprised of $3.5 million used for the purchase of property and equipment to support the expansion of our business, $2.5 million used for the purchase of preferred stock in Rich Data Co, and $0.4 million for an asset acquisition completed in August 2022.
Our use of subscription revenue retention rate has limitations as an analytical tool, and investors should not consider it in isolation. Other companies in adjacent markets may calculate subscription revenue retention rates or similar metrics differently, which reduces its usefulness as a comparative measure. Long-term ACV Expansion .
Our use of subscription revenue net retention rate has limitations as an analytical tool, and investors should not consider it in isolation. Other companies in adjacent markets may calculate subscription revenue net retention rates or similar metrics differently, which reduces its usefulness as a comparative measure.
Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts to enhance the nCino Bank Operating System and introduce new applications, market acceptance of our solutions, the continued expansion of our sales and marketing activities, capital expenditure requirements, and any potential future acquisitions.
Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts to enhance the nCino Platform and introduce new solutions, market acceptance of our solutions, the continued expansion of our sales and marketing activities, capital expenditure requirements, and any potential future acquisitions.
Our customers typically purchase the nCino Bank Operating System for a defined line of business or to support a specific use case and, once deployed, we seek to convince the customer to adopt our solutions within and across additional lines of business.
Our customers typically purchase the nCino Platform for a defined line of business or to support a specific use case and, once deployed, we seek to convince the customer to adopt our solutions within and across additional lines of business.
See Note 2 "Summary of Significant Accounting Policies" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, for a description of our other significant accounting policies.
See Note 1 "Summary of Business and Significant Accounting Policies" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, for a description of our other significant accounting policies.
Non-cash charges primarily consisted of stock-based compensation, depreciation and amortization, amortization of costs capitalized to obtain revenue contracts, non-cash operating lease costs, foreign currency losses related to intercompany loans and transactions, deferred income taxes, and provision for bad debt.
Non-cash charges primarily consisted of stock-based compensation, depreciation and amortization, amortization of costs capitalized to obtain revenue contracts, foreign currency losses related to intercompany loans and transactions, deferred income taxes, and non-cash operating lease costs.
Professional Services and Other Revenues Professional services and other revenues increased $3.5 million for fiscal 2024 compared to fiscal 2023, primarily due to the addition of new customers as well as expanded adoption by existing customers within and across lines of business where implementation, configuration, and training services were required.
Professional Services and Other Revenues Professional services and other revenues increased $4.4 million for fiscal 2025 compared to fiscal 2024, primarily due to the addition of new customers as well as expanded adoption by existing customers within and across lines of business where implementation, configuration, and training services were required.
See Note 19 "Restructuring" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information.
See Note 18 "Restructuring" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information on the charges related to the restructuring.
Other expense, net consists primarily of foreign currency gains and losses, the majority of which is due to intercompany loans that are denominated in currencies other than the underlying functional currency of the applicable entity. Income Tax Provision (Benefit).
Other expense, net consists primarily of foreign currency gains and losses, the majority of which is due to intercompany loans that are denominated in currencies other than the underlying functional currency of the applicable entity. Income Tax Provision (Benefit). Income tax provision (benefit) consists of federal and state income taxes in the U.S. and income taxes in foreign jurisdictions.
See Note 15 "Revolving Credit Facility" and Note 20 "Subsequent Events" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information.
See Note 14 "Revolving Credit Facility" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information.
The moderation in our subscription revenue retention rate for fiscal 2024 was due to a decline in revenues from customers adversely affected by an increase in mortgage interest rates, from the expiration of licenses utilized for forgiveness monitoring of Paycheck Protection Program loans, and from the acquisition of customers by non-customers.
The moderation in our ACV net retention rate for fiscal 2024 was due to a decline in ACV from customers adversely affected by an increase in mortgage interest rates, from the expiration of licenses utilized for 37 Table of Contents forgiveness monitoring of Paycheck Protection Program loans, and from the acquisition of customers by non-customers.
Of the increase, 86.2% was attributable to increased revenues from existing customers as additional seats were activated in accordance with contractual terms and customers expanded their adoption of our solutions, and 13.8% was attributable to initial revenues from customers who did not contribute to subscription revenues during the prior period.
Of the increase, 70.6% was attributable to increased revenues from existing customers as additional seats were activated in accordance with contractual terms and customers expanded their adoption of our solutions, and 29.4% was attributable to initial revenues from customers who did not contribute to subscription revenues during the prior period.
We have historically delivered professional services ourselves for community banks and smaller credit unions and nCino Mortgage has historically provided professional services directly to its customers. Revenues for implementation, training, and advisory services are generally recognized on a proportional performance basis, based on labor hours incurred relative to total budgeted hours.
We have historically delivered professional services ourselves for community banks and smaller credit unions and our U.S. mortgage business has historically provided professional services directly to its customers. Revenues for implementation, training, and advisory services are generally recognized on a proportional performance basis, 38 Table of Contents based on labor hours incurred relative to total budgeted hours.
Sales and marketing expenses also include outside consulting fees, marketing programs, including lead generation, costs of our annual user conference, advertising, trade shows, other event expenses, amortization of intangible assets, and allocated overhead. We expect sales and marketing expenses will decrease as a percentage of revenues as we leverage the investments we have made to date. Research and Development.
Sales and marketing expenses also include outside consulting fees, marketing programs, including lead generation, costs of our annual user conference, advertising, trade shows, other event expenses, amortization of intangible assets, and allocated overhead. We expect sales and marketing expenses to increase as a percentage of revenues. Research and Development.
At January 31, 2024, we determined that it is more likely than not that the majority of our deferred tax assets will not be realized and as such, recorded a valuation allowance of $148.3 million against our deferred tax assets of $201.9 million as of that date.
At January 31, 2025, we determined that it is more likely than not that the majority of our deferred tax assets will not be realized and as such, recorded a valuation allowance of $160.3 million against our deferred tax assets of $218.0 million as of that date.
For fiscal 2022, 2023, and 2024, we had subscription revenue retention rates of 133%, 148%, and 117%, respectively. The most significant driver of changes in our subscription revenue retention rate each year has historically been the number of new customers in prior years and the associated phased activation schedules for such customers.
For fiscal 2023, 2024, and 2025, we had subscription revenue net retention rates of 144%, 116%, and 110%, respectively. The most significant driver of changes in our subscription revenue net retention rate each year has historically been the number of new customers in prior years and the associated phased activation schedules for such customers.
Income Tax Provision Fiscal Year Ended January 31, ($ in thousands) 2023 2024 Income tax provision $ 4,071 1.0 % $ 1,590 0.3 % Income tax provision was $1.6 million for fiscal 2024 compared to a provision of $4.1 million for fiscal 2023 and resulted in an effective tax rate of (3.8)% compared to (4.2)% in the prior fiscal year.
Income Tax Provision (Benefit) Fiscal Year Ended January 31, ($ in thousands) 2024 2025 Income tax provision (benefit) $ 1,590 0.3 % $ (2,511) (0.5) % Income tax benefit was $2.5 million for fiscal 2025 compared to a provision of $1.6 million for fiscal 2024 and resulted in an effective tax rate of 7.1% compared to (3.8)% in the prior fiscal year.
Contractual Obligations and Commitments Our estimated future obligations principally consist of leases related to our facilities, purchase obligations related primarily to licenses and hosting services, financing obligations for leases for which we are considered the owners for accounting purposes, and the Credit Facility.
Contractual Obligations and Commitments Our estimated future obligations principally consist of an indemnity holdback associated with a business combination, leases related to our facilities, purchase obligations related primarily to licenses and hosting services, financing obligations for leases for which we are considered the owners for accounting purposes, and the Credit Facility.
To date, we have been successful in executing our land and expand strategy as a result of the ability of our solutions to streamline workflow, generate meaningful insights for operational improvement, and help drive improved bottom line results.
To date, we have been successful in executing our land and expand strategy as a result of the ability of our solutions to streamline workflow, generate meaningful insights for operational improvement, and help drive improved bottom line results. Our historical net retention rates may not be predictive of future results.
In addition, other companies may use other measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. 46 Table of Contents The following table reconciles non-GAAP operating income (loss) to loss from operations, the most directly comparable financial measure, calculated and presented in accordance with GAAP (in thousands): Fiscal Year Ended January 31, ($ in thousands) 2022 2023 2024 GAAP loss from operations $ (71,357) $ (94,013) $ (39,512) Adjustments Amortization of intangible assets 4,907 28,200 37,226 Stock-based compensation expense 28,477 50,232 58,035 Acquisition-related expenses 10,006 2,276 878 Litigation expenses 1 10,326 6,147 4,525 Restructuring and related charges 2 — 5,017 627 Total adjustments 53,716 91,872 101,291 Non-GAAP operating income (loss) $ (17,641) $ (2,141) $ 61,779 1 Represents legal expenses related to the Antitrust Matters and a shareholder derivative lawsuit. 2 Stock-based compensation benefit of $0.2 million related to restructuring is included on the stock-based compensation expense line item for the fiscal year ended January 31, 2023.
In addition, other companies may use other measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. 45 Table of Contents The following table reconciles non-GAAP operating income (loss) to loss from operations, the most directly comparable financial measure, calculated and presented in accordance with GAAP (in thousands): Fiscal Year Ended January 31, ($ in thousands) 2023 2024 2025 GAAP loss from operations $ (94,013) $ (39,512) $ (18,131) Adjustments Amortization of intangible assets 28,200 37,226 30,093 Stock-based compensation expense 50,232 58,035 71,592 Acquisition-related expenses 2,276 878 12,245 Litigation expenses 1 6,147 4,525 366 Restructuring and related charges 2 5,017 627 — Total adjustments 91,872 101,291 114,296 Non-GAAP operating income (loss) $ (2,141) $ 61,779 $ 96,165 1 Represents legal expenses related to a closed government antitrust investigation and related civil action and a dismissed shareholder derivative lawsuit. 2 Stock-based compensation benefit of $0.2 million related to restructuring is included on the stock-based compensation expense line item for the fiscal year ended January 31, 2023.
Where seats are activated in stages, we charge subscription fees from the date of activation through the anniversary of the initial activation date, and annually thereafter. Subscription fees associated with the nCino Bank Operating System are generally billed annually in advance while subscription fees for nCino Mortgage are generally billed monthly in advance.
Where seats are activated in stages, we charge subscription fees from the date of activation through the anniversary of the initial activation date, and annually thereafter. Subscription fees are generally billed annually in advance while subscription fees for U.S. mortgage are generally billed monthly in advance.
Our subscription revenue retention rate provides insight into the impact on current year subscription revenues of: • the number and timing of new customers and phased activation of seats purchased by them in prior years, which activation schedules can span several fiscal years for larger contracts; • expanding adoption of our solutions by our existing customers during the current year, excluding any revenues derived from businesses acquired during such year; and • customer attrition.
Our subscription revenue net retention rate provides insight into the impact on current year subscription revenues of: • the number and timing of new customers, subscription fees to be charged existing customers in successive years, and phased activation of seats purchased by them in prior years, which activation schedules can span several fiscal years for larger contracts; • expanding adoption of our solutions by our existing customers during the current year; and • customer attrition.
Subscription revenues were 85.9% of total revenues for fiscal 2024 compared to 84.4% of total revenues for fiscal 2023, primarily due to growth in our installed base.
Subscription revenues were 86.8% of total revenues for fiscal 2025 compared to 85.9% of total revenues for fiscal 2024, primarily due to growth in our installed base.
We continue to maintain a valuation allowance against our deferred tax assets in several jurisdictions, including the U.S. It is determined by management when a valuation allowance should be recorded, utilizing significant judgement and the use of estimates.
We continue to maintain a valuation allowance against our deferred tax assets in several jurisdictions, including the U.S. It is determined by management when a valuation allowance should be recorded, utilizing significant judgement and the use of estimates. In fiscal year 2025, the Company acquired DocFox and recorded a net U.S. deferred tax liability mostly related to identifiable intangible assets.
Cost of Professional Services and Other Revenues Cost of professional services and other revenues increased $7.3 million for fiscal 2024 compared to fiscal 2023, generating a gross margin for professional services and other revenues of (5.3)% compared to a gross margin of 0.3% for fiscal 2023.
Cost of Professional Services and Other Revenues Cost of professional services and other revenues increased $10.3 million for fiscal 2025 compared to fiscal 2024, generating a gross margin for professional services and other revenues of (13.2)% compared to a gross margin of (5.3)% for fiscal 2024.
Liquidity and Capital Resources As of January 31, 2024, we had $112.1 million in cash and cash equivalents, and an accumulated deficit of $352.8 million. Our net losses have been driven by our investments in developing the nCino Bank Operating System and scaling our sales and marketing organization and finance and administrative functions to support our rapid growth.
Liquidity and Capital Resources As of January 31, 2025, we had $120.9 million in cash and cash equivalents, and an accumulated deficit of $385.3 million. Our net losses have been driven by our investments in developing the nCino Platform and scaling our sales and marketing organization and finance and administrative functions to support our rapid growth.
The cash provided by financing activities was partially reduced by payments of $20.0 million on the Credit Facility, principal payments of $1.1 million on the financing obligations, and payments of debt issuance costs of $0.4 million.
The cash provided by financing activities was partially offset by payments of $75.0 million on the 2022 Credit Facility, payments of debt issuance costs of $1.5 million, and principal payments of $1.3 million on financing obligations.
Cash used in working capital accounts was principally a function of a $26.8 million increase in accounts receivable due to the timing of billings and collections from customers, an increase of $12.2 million of capitalized costs to obtain revenue contracts, which primarily related to payments for sales commissions as we expanded our customer base, a decrease of $4.8 million in operating lease liabilities, a $3.4 million increase in prepaid expenses and other assets, and a $1.2 million decrease in accrued expenses and other current liabilities.
Cash used in working capital accounts was principally a function of a $31.4 million increase in accounts receivable due to the timing of billings and collections from customers, an increase of $21.5 million of capitalized costs to obtain revenue contracts, which consisted primarily of sales commissions, a $7.1 million increase in prepaid expenses and other assets, a decrease of $3.8 million in operating lease liabilities, and a $0.2 million decrease in accounts payable.
The company will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate. 45 Table of Contents Comparison of the Fiscal Years Ended January 31, 2022 and 2023 For a discussion of our results of operations for the fiscal year ended January 31, 2023 compared to the fiscal year ended January 31, 2022, please refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023, filed with the SEC on March 28, 2023.
Comparison of the Fiscal Years Ended January 31, 2023 and 2024 For a discussion of our results of operations for the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023, please refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on March 26, 2024.
Fiscal Year Ended January 31, ($ in thousands) 2022 2023 2024 Net cash provided by (used in) operating activities $ (19,229) $ (15,381) $ 57,285 Net cash used in investing activities (278,488) (20,725) (6,328) Net cash provided by (used in) financing activities 15,922 36,712 (21,113) Net Cash Provided by (Used in) Operating Activities The $57.3 million provided by operating activities in fiscal 2024 reflects our net loss of $43.5 million and $16.4 million used in changes in working capital accounts, offset by $117.2 million in non-cash charges.
Fiscal Year Ended January 31, ($ in thousands) 2023 2024 2025 Net cash provided by (used in) operating activities $ (15,381) $ 57,285 $ 55,199 Net cash used in investing activities (20,725) (6,328) (219,177) Net cash provided by (used in) financing activities 36,712 (21,113) 170,478 Net Cash Provided by Operating Activities The $55.2 million of net cash provided by operating activities in fiscal 2025 reflects our net loss of $33.0 million and $38.5 million used in changes in working capital accounts, offset by $126.7 million in non-cash charges.
Upon conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company's consolidated statements of operations.
Upon conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company's consolidated statements of operations. Determining the useful life of an intangible asset also requires judgment as different types of intangible assets have different lives.
In addition, because larger FIs tend to make more sizable purchases with longer activation schedules, we expect variability in our subscription revenue retention rates based on the timing and extent of our continued penetration of this portion of the market.
In addition, because larger FIs tend to make more sizable purchases, we expect variability in our subscription revenue net retention rates based on the timing and extent of our continued penetration of this portion of the market. Excluding our U.S. mortgage business, the subscription revenue net retention rate for fiscal 2023 was 124%.
Subscription arrangements for the nCino Bank Operating System that are cancelable generally have penalty clauses. Professional Services and Other Revenues Professional services and other revenues primarily consist of fees for deployment, configuration, and optimization services, as well as training.
U.S. mortgage contracts are generally billed monthly in advance. Subscription arrangements that are cancelable generally have penalty clauses. Professional Services and Other Revenues Professional services and other revenues primarily consist of fees for deployment, configuration, and optimization services, as well as training.
Our general and administrative headcount decreased by 26 from January 31, 2023 to January 31, 2024, primarily due to our workforce reduction announced in January 2023. We expect general and administrative expenses will decrease as a percentage of revenues as we leverage the investments we have made to date.
Our research and development headcount increased by 22 from January 31, 2024 to January 31, 2025, primarily due to acquisitions. We expect research and development expenses will decrease as a percentage of revenues as we leverage the investments we have made to date.
The $15.4 million used in operating activities in fiscal 2023 reflects our net loss of $101.8 million and $14.9 million used in changes in working capital accounts, partially offset by $101.3 million in non-cash charges.
The $57.3 million of net cash provided by operating activities in fiscal 2024 reflects our net loss of $43.5 million and $16.4 million used in changes in working capital accounts, partially offset by $117.2 million in non-cash charges.
After realizing that the same problems—cumbersome legacy technology, fragmented data, disconnected business functions, and a disengaged workforce made it difficult to maintain relevancy in their clients' lives—were endemic across the financial services industry, nCino spun out as a separate company in late 2011.
After realizing that virtually all banks and credit unions were dealing with the same problems—cumbersome legacy technology, fragmented data, disconnected business functions, and a disengaged workforce made it difficult to maintain relevancy in their clients' lives—nCino was spun out as a separate company in late 2011 to help more institutions solve these challenges using cloud-based technology.
Arrangements with customers do not provide the customer with the right to take possession of the software supporting the cloud-based application service at any time and, as a result, are accounted for as a service contract.
Arrangements with customers do not provide the customer with the right to take possession of the software supporting the cloud-based application service at any time and, as a result, are accounted for as a service contract. Generally, our subscription contracts are three to five years in length, billed annually in advance, are non-cancelable, and do not contain refund-type provisions.
For fiscal 2024, personnel costs increased $6.3 million for professional services and other revenues compared to the prior year period, mainly from an increase in average headcount and a $2.1 million increase in stock-based compensation expense, partially offset by a decrease in restructuring costs incurred in connection with the headcount reductions announced in January 2023.
For fiscal 2025, personnel costs increased $9.0 million for professional services and other revenues compared to the prior year period, mainly from an increase in headcount and a $2.6 million increase in stock-based compensation expense.
The $36.7 million provided by financing activities in fiscal 2023 was comprised principally of $50.0 million of proceeds from borrowings on the Credit Facility to expand our liquidity, $4.5 million in proceeds from stock issuances under the employee stock purchase plan, and $3.8 million of proceeds from the exercise of stock options.
Net Cash Provided by (Used in) Financing Activities The $170.5 million of net cash provided by financing activities in fiscal 2025 was comprised principally of $241.0 million proceeds from borrowings on the 2022 and 2024 Credit Facility to fund the acquisitions of DocFox and FullCircl, $4.5 million of proceeds from stock issuances under the employee stock purchase plan, and $2.8 million of proceeds from the exercise of stock options.
The initial deployment of our solutions by our customers requires a period of implementation and configuration services that typically range from three months to 18 months, depending on the scope.
The initial deployment of our solutions by our customers requires a period of implementation and configuration services that typically average less than six months, but may extend beyond twelve months depending on scope.
Cost of Revenues and Gross Margin Fiscal Year Ended January 31, ($ in thousands) 2023 2024 Cost of revenues (percentage shown in comparison to related revenues): Cost of subscription revenues $ 106,265 30.8 % $ 120,861 29.5 % Cost of professional services and other revenues 63,341 99.7 70,609 105.3 Total cost of revenues $ 169,606 41.5 $ 191,470 40.2 Gross profit $ 238,709 58.5 % $ 285,073 59.8 % Cost of Subscription Revenues Cost of subscription revenues increased $14.6 million for fiscal 2024 compared to fiscal 2023, generating a gross margin for subscription revenues of 70.5% compared to a gross margin of 69.2% for fiscal 2023.
Cost of Revenues and Gross Margin Fiscal Year Ended January 31, ($ in thousands) 2024 2025 Cost of revenues (percentage shown in comparison to related revenues): Cost of subscription revenues $ 120,861 29.5 % $ 134,932 28.8 % Cost of professional services and other revenues 70,609 105.3 80,937 113.2 Total cost of revenues $ 191,470 40.2 $ 215,869 39.9 Gross profit $ 285,073 59.8 % $ 324,788 60.1 % Cost of Subscription Revenues Cost of subscription revenues increased $14.1 million for fiscal 2025 compared to fiscal 2024, generating a gross margin for subscription revenues of 71.2% compared to a gross margin of 70.5% for fiscal 2024.
With the nCino Bank Operating System, FIs can: • digitally serve their clients across lines of business, • improve efficiency, • elevate employee experience and performance, • manage risk and compliance more effectively, • establish an active data, audit, and business intelligence hub, and • embrace the value of intelligent automation and uncover data-driven insights. nCino was originally founded in a bank to improve that FI’s operations and client service.
With the nCino Platform, FIs can: • embrace the power of intelligent automation and uncover data-driven insights, • improve efficiency, • elevate employee and customer experience, • manage risk and helping to ensure compliance more effectively, nCino was originally founded in a bank to improve that institution's operations and client service.
Key to landing new customers is our ability to successfully take our existing customers live and help them achieve measurable returns on their investment, thereby turning them into referenceable accounts.
For new customers, our sales cycles are typically lengthy, generally ranging from 6 to 9 for smaller FIs to 12 to 18 months or more for larger FIs. Key to landing new customers is our ability to successfully take our existing customers live and help them achieve measurable returns on their investment, thereby turning them into referenceable accounts.
Operating Expenses Fiscal Year Ended January 31, ($ in thousands) 2023 2024 Operating expenses: Sales and marketing $ 127,669 31.3 % $ 130,547 27.4 % Research and development 121,576 29.8 117,311 24.6 General and administrative 83,477 20.4 76,727 16.1 Total operating expenses 332,722 81.5 324,585 68.1 Loss from operations $ (94,013) (23.0) % $ (39,512) (8.3) % Sales and Marketing Sales and marketing expenses increased $2.9 million for fiscal 2024 compared to fiscal 2023, primarily attributable to an increase of $9.5 million in trade name amortization expense as a result of accelerated amortization expense in the third quarter of fiscal 2024 to fully amortize the remaining trade name intangible asset as a result of the rebranding of the SimpleNexus solution to nCino Mortgage.
Operating Expenses Fiscal Year Ended January 31, ($ in thousands) 2024 2025 Operating expenses: Sales and marketing $ 130,547 27.4 % $ 123,231 22.8 % Research and development 117,311 24.6 129,422 23.9 General and administrative 76,727 16.1 90,266 16.7 Total operating expenses 324,585 68.1 342,919 63.4 Loss from operations $ (39,512) (8.3) % $ (18,131) (3.3) % Sales and Marketing Sales and marketing expenses decreased $7.3 million for fiscal 2025 compared to fiscal 2024, primarily attributable to a decrease of $11.9 million due to no longer amortizing the SimpleNexus trade name intangible asset as a result of the rebranding of the SimpleNexus solution to nCino Mortgage during fiscal 2024, partially offset by an increase of $2.8 million in amortization expense for fiscal 2025 acquired intangible assets.
Also included in the offset to the increase in sales and marketing expenses was a decrease of $1.3 million in marketing costs, a decrease of $1.2 million in sales-related travel costs, and a decrease of $0.6 million in third-party consulting fees.
The decrease in sales and marketing expenses also included a decrease of $0.5 million sales-related travel costs. The decrease in sales and marketing expenses was partially offset by an increase $1.2 million in personnel costs primarily due to an increase in stock-based compensation expense.
We calculate our subscription revenue retention rate as total subscription revenues in a fiscal year from customers who contracted for any of our solutions as of January 31 of the prior fiscal year, expressed as a 36 Table of Contents percentage of total subscription revenues for the prior fiscal year.
We assess our performance in this area using a metric we refer to as subscription revenue net retention rate. We calculate our subscription revenue net retention rate as total subscription revenues in a fiscal year from customers who contributed subscription revenues in the prior fiscal year, expressed as a percentage of total subscription revenues for the prior fiscal year.
This non-GAAP financial measure is non-GAAP operating income (loss), as discussed below. Non-GAAP operating income (loss). Non-GAAP operating income (loss) is defined as loss from operations as reported in our consolidated statements of operations excluding the impact of amortization of intangible assets, stock-based compensation expense, acquisition-related expenses, legal expenses related to certain litigation, and restructuring and related charges.
This non-GAAP financial measure is non-GAAP operating income (loss), as discussed below. Non-GAAP operating income (loss). Non-GAAP operating income (loss) is defined as loss from operations as reported in our consolidated statements of operations excluding the following items: Amortization of Purchased Intangibles. nCino incurs amortization expense for purchased intangible assets in connection with certain mergers and acquisitions.
Our sales efforts in the U.S. are organized around FIs based on size, whereas internationally, we focus our sales efforts by geography.
Our sales efforts in the U.S. are organized around FIs based on size, whereas 35 Table of Contents internationally, we focus our sales efforts by geography. As of January 31, 2025, we had 194 sales and sales support personnel in the U.S. and 136 sales and support personnel in offices outside the U.S.
Our subscription-based revenues include $3.7 million from SimpleNexus from the Acquisition Date for fiscal 2022 and $59.8 million for fiscal 2023. Due to our investments in growth, we recorded net losses attributable to nCino in fiscal 2022, 2023, and 2024 of $49.4 million, $102.7 million, and $42.3 million, respectively.
We recorded net losses attributable to nCino in fiscal 2023, 2024, and 2025 of $102.7 million, $42.3 million, and $37.9 million, respectively. For fiscal 2025, our financial results include the operating results of DocFox, ILT and FullCircl from the DocFox Acquisition Date, the ILT Acquisition Date, and the FullCircl Acquisition Date, respectively.
The following tables present our selected consolidated statements of operations data for fiscal 2022, 2023, and 2024 in both dollars and as a percentage of total revenues, except as noted.
Results of Operations The results of operations presented below should be reviewed in conjunction with the financial statements and notes included elsewhere in this Annual Report on Form 10-K. The following tables present our selected consolidated statements of operations data for fiscal 2023, 2024, and 2025 in both dollars and as a percentage of total revenues, except as noted.
As of January 31, 2024, the Company had no amounts outstanding, no letters of credit issued under the Credit Facility, was in compliance with all covenants and had borrowing availability of $50.0 million. On March 17, 2024, the Company entered into the Second Amendment for the Credit Facility which, among other things, increased our borrowing availability to $100.0 million.
As of January 31, 2025, the Company had $166.0 million outstanding, no letters of credit issued under the 2024 Credit Facility, was in compliance with all covenants and had borrowing availability of $84.0 million.
The cash used in working capital accounts was partially offset by a $33.5 million increase in deferred revenue, as we expanded our customer base and renewed existing customers.
The cash used in working capital accounts was partially offset by a $13.8 million increase in deferred revenue, as we expanded our customer base and renewed existing customers, a $10.2 million increase in accrued expenses and other current liabilities primarily due to acquisition costs and compensation, and a $1.4 million increase in other long-term liabilities.
Specifically, we offer: • Client onboarding, loan origination, and deposit account opening applications targeted at a FI’s commercial, small business, and retail lines of business, for which we generally charge on a per seat basis. • nIQ for which we generally charge based on the asset size of the customer or on a usage basis. • Through nCino Mortgage, a digital homeownership solution uniting people, systems, and stages of the mortgage process into a seamless end-to-end journey for which we generally charge on a per seat basis. • Maintenance and support services as well as internal-use or “sandbox” development licenses, for which we generally charge as a percentage of the related subscription fees.
As we continue to implement our new pricing model, we expect the number of customers we charge based on asset size will increase considerably. • Through our U.S. mortgage business, a digital homeownership solution uniting people, systems, and stages of the mortgage process into a seamless end-to-end journey for which we generally charge on a per seat basis or anticipated lending volume basis. • Maintenance and support services as well as internal-use or “sandbox” development licenses, for which we generally charge as a percentage of the related subscription fees.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBorrowings bear interest, at the Company's option, at: (i) a base rate equal to the greater of (a) the lender’s “prime rate”, (b) the federal funds rate plus 0.50%, and (c) the Bloomberg Short Term Bank Yield Index ("BSBY") rate plus 1.00%, plus a margin of 0.00% (provided that the base rate shall not be less than 0.00%); or (ii) the BSBY rate (provided that the BSBY shall not be less than 0.00%), plus a margin of 1.00%.
Biggest changeBorrowings bear interest, at the Borrower’s option, at: (i) a base rate equal to the greatest of (a) the Agent’s “prime rate”, (b) the federal funds rate plus 0.50%, and (c) the Term SOFR rate plus 1.00% (provided that the base rate shall not be less than 0.00%), plus a margin of 1.00%; or (ii) the Term SOFR rate (provided that the Term SOFR shall not be less than 0.00%), plus a margin of 2.00%, in each case with such margin subject to step ups based on certain leverage ratios.
See Note 15 "Revolving Credit Facility" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information. 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.
See Note 14 "Revolving Credit Facility" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information. 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.
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 Annual Report on Form 10-K.
However, our historical interest income has not fluctuated significantly. A hypothetical 10% change in interest rates would not have had a 50 Table of Contents material impact on our financial results included in this Annual Report on Form 10-K.
Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates. Interest Rate Risk At January 31, 2024, we had cash, cash equivalents, and restricted cash of $117.4 million, which consisted primarily of bank deposits and money market funds. Interest-earning instruments carry a degree of interest rate risk.
Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates. Interest Rate Risk At January 31, 2025, we had cash, cash equivalents, and restricted cash of $121.3 million, which consisted primarily of bank deposits and money market funds. Interest-earning instruments carry a degree of interest rate risk.
At January 31, 2024, based on the balances of our cash, cash equivalents, and restricted cash denominated in foreign currencies, a hypothetical 10% increase or decrease in foreign currency exchange rates would have had an impact of approximately $6.2 million on our cash, cash equivalents and restricted cash at January 31, 2024. 52 Table of Contents
At January 31, 2025, based on the balances of our cash, cash equivalents, and restricted cash denominated in foreign currencies, a hypothetical 10% increase or decrease in foreign currency exchange rates would have had an impact of approximately $7.5 million on our cash, cash equivalents and restricted cash at January 31, 2025. 51 Table of Contents
As a result, we are exposed to increased interest rate risk as we make draws. At January 31, 2024, we had no amounts outstanding under the Credit Facility. A hypothetical 100 basis point change in interest rates would 51 Table of Contents not have had a material impact on our financial results included in this Annual Report on Form 10-K.
As a result, we are exposed to increased interest rate risk as we make draws. At January 31, 2025, we had $166.0 million outstanding under the Credit Facility. A hypothetical 100 basis point change in interest rates would not have had a material impact on our financial results included in this Annual Report on Form 10-K.
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. On February 11, 2022, we entered into a senior secured revolving credit facility of up to $50.0 million.
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. Our 2024 Credit Facility is a senior secured revolving credit facility of up to $250.0 million.

Other NCNO 10-K year-over-year comparisons