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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2020
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __to __
Commission File Number: 001-39380

nCino, Inc.
(Exact name of Registrant as specified in its charter)
Delaware46-4353148
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
6770 Parker Farm Drive
Wilmington, North Carolina 28405
(Address of principal executive offices including zip code)

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

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

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

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

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

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

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

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 91,149,949 shares of common stock, $0.0005 par value per share, as of August 31, 2020.



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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations and expenses, business strategies and plans, trends, market sizing, competitive position, industry environment, potential growth opportunities and product capabilities, among other things. Forward-looking statements include all statements that are not historical facts and, in some cases, can be identified by terms such as “aim,” “anticipates,” “believes,” “could,” “estimates,” “expects,” “goal,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “strive,” “will,” “would,” or similar expressions and the negatives of those terms.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those described in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this report. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
Any forward-looking statement made by us in this report speaks only as of the date on which it is made. Except as required by law, we disclaim any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
As used in this report, the terms “nCino,” the “Company,” “Registrant,” “we,” “us,” and “our” mean nCino, Inc. and its subsidiaries unless the context indicates otherwise.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
nCino, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
January 31, 2020July 31, 2020
(Unaudited)
Assets
Current Assets
Cash and cash equivalents (VIE: $8,892 and $8,635 at January 31, 2020 and July 31, 2020, respectively)
$91,184 $388,191 
Accounts receivable, less allowance for doubtful accounts of $0 and $622 at January 31, 2020 and July 31, 2020, respectively
34,205 30,228 
Accounts receivable, related parties9,201  
Costs capitalized to obtain revenue contracts, current portion, net3,608 4,007 
Prepaid expenses and other current assets7,079 7,152 
Total current assets145,277 429,578 
Property and equipment, net13,477 14,591 
Costs capitalized to obtain revenue contracts, noncurrent, net7,000 7,817 
Goodwill55,840 56,527 
Intangible assets, net26,093 24,636 
Other long-term assets2,464 650 
Total assets$250,151 $533,799 
Liabilities, Redeemable Non-Controlling Interest, and Stockholders’ Equity
Current Liabilities
Accounts payable$1,258 $2,188 
Accounts payable, related parties3,408 4,018 
Accrued commissions7,862 4,701 
Other accrued expenses4,922 4,820 
Deferred rent, current portion183 208 
Deferred revenue, current portion50,929 84,288 
Deferred revenue, current portion, related parties8,013  
Total current liabilities76,575 100,223 
Deferred income taxes, noncurrent194 234 
Deferred rent, noncurrent1,558 1,468 
Other long-term liabilities195  
Total liabilities78,522 101,925 
Commitments and Contingencies (Notes 8, 11 and 12)
Redeemable non-controlling interest (Note 3)4,356 4,384 
Stockholders’ Equity
Preferred stock, $0.001 par value; 1,000,000 and 10,000,000 shares authorized as of January 31, 2020 and July 31, 2020, respectively; and none issued and outstanding as of January 31, 2020 and July 31, 2020, respectively
  
Common stock, $0.0005 par value; 0 and 500,000,000 shares authorized as of January 31, 2020 and July 31, 2020, respectively; 0 and 91,122,356 shares issued and outstanding as of January 31, 2020 and July 31, 2020, respectively
 46 
Voting common stock, $0.0005 par value; 99,708,247 and 0 shares authorized as of January 31, 2020 and July 31, 2020, respectively; 75,596,007 and 0 shares issued and outstanding as of January 31, 2020 and July 31, 2020, respectively
38  
Non-voting common stock, $0.0005 par value; 10,291,753 and 0 shares authorized as of January 31, 2020 and July 31, 2020, respectively; 5,931,319 and 0 shares issued and outstanding as of January 31, 2020 and July 31, 2020, respectively
3  
Additional paid-in capital288,564 567,314 
Accumulated other comprehensive (loss) income(408)202 
Accumulated deficit(120,924)(140,072)
Total stockholders’ equity167,273 427,490 
Total liabilities, redeemable non-controlling interest, and stockholders’ equity
$250,151 $533,799 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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nCino, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended July 31,Six Months Ended July 31,
2019202020192020
Revenues
Subscription (related parties $2,112, $0, $3,867 and $2,439, respectively)
$23,110 $39,351 $44,142 $74,182 
Professional services8,868 9,414 17,672 19,295 
Total revenues31,978 48,765 61,814 93,477 
Cost of Revenues
Subscription1 (related party $5,361, $8,700, $10,420 and $16,210, respectively)
7,083 11,920 13,585 22,019 
Professional services1
7,687 10,667 15,223 19,434 
Total cost of revenues14,770 22,587 28,808 41,453 
Gross profit17,208 26,178 33,006 52,024 
Operating Expenses
Sales and marketing1
10,453 15,626 18,468 27,852 
Research and development1
8,272 15,292 15,638 26,257 
General and administrative1
6,430 10,953 10,339 17,879 
Total operating expenses25,155 41,871 44,445 71,988 
Loss from operations(7,947)(15,693)(11,439)(19,964)
Non-operating Income (Expense)
Interest income265 55 583 211 
Other(618)1,117 (727)597 
Loss before income tax expense(8,300)(14,521)(11,583)(19,156)
Income tax expense202 203 338 400 
Net loss(8,502)(14,724)(11,921)(19,556)
Net loss attributable to redeemable non-controlling interest (Note 3) (232) (408)
Adjustment attributable to redeemable non-controlling interest (Note 3) 154  267 
Net loss attributable to nCino, Inc.$(8,502)$(14,646)$(11,921)$(19,415)
Net loss per share attributable to nCino, Inc.:
Basic and diluted$(0.11)$(0.17)$(0.16)$(0.23)
Weighted average number of common shares outstanding:
Basic and diluted76,420,098 84,629,777 76,206,900 83,112,132 
1Includes stock-based compensation expense as follows:
Three Months Ended
July 31,
Six Months Ended
July 31,
2019202020192020
Cost of subscription revenues$69 $242 $137 $303 
Cost of professional services revenues302 2,282 623 2,548 
Sales and marketing315 3,346 607 3,661 
Research and development305 3,031 611 3,340 
General and administrative1,501 4,368 1,623 4,468 
Total stock-based compensation expense$2,492 $13,269 $3,601 $14,320 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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nCino, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
Three Months Ended July 31,Six Months Ended July 31,
2019202020192020
Net loss$(8,502)$(14,724)$(11,921)$(19,556)
Other comprehensive income:
Foreign currency translation391 467 449 779 
Other comprehensive income391 467 449 779 
Comprehensive loss(8,111)(14,257)(11,472)(18,777)
Less comprehensive loss attributable to redeemable non-controlling interest:
Net loss attributable to redeemable non-controlling interest (232) (408)
Foreign currency translation attributable to redeemable non-controlling interest 78  169 
Comprehensive loss attributable to redeemable non-controlling interest (154) (239)
Comprehensive loss attributable to nCino, Inc.$(8,111)$(14,103)$(11,472)$(18,538)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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nCino, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share data)
(Unaudited)
Three Months Ended July 31, 2019
Voting
Common Stock
Non-voting
Common Stock
Additional
Paid-in
Capital
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
SharesAmountSharesAmount
Balance, April 30, 201970,318,021 $35 5,701,435 $3 $172,152 $37 $(96,749)$75,478 
Stock issuance related to business combinations
1,438,805 1   23,811   23,812 
Exercise of stock options56,269    265   265 
Stock-based compensation    2,492   2,492 
Other comprehensive income     391  391 
Net loss attributable to nCino, Inc.      (8,502)(8,502)
Balance, July 31, 201971,813,095 $36 5,701,435 $3 $198,720 $428 $(105,251)$93,936 
Three Months Ended July 31, 2020
Common StockVoting
Common Stock
Non-voting
Common Stock
Additional
Paid-in
Capital
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
SharesAmountSharesAmountSharesAmount
Balance, April 30, 2020 $ 75,651,808 $38 5,931,319 $3 $289,624 $(187)$(125,580)$163,898 
Issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions
9,269,000 5     268,370   268,375 
Costs in connection with initial public offering
      (4,534)  (4,534)
Exercise of stock options500  269,729    739   739 
Reclassification of voting and non-voting common stock
81,852,856 41 (75,921,537)(38)(5,931,319)(3)    
Stock-based compensation      13,269   13,269 
Other comprehensive income       389  389 
Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest
      (154) (14,492)(14,646)
Balance, July 31, 202091,122,356 $46  $  $ $567,314 $202 $(140,072)$427,490 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.




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nCino, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share data)
(Unaudited)
Six Months Ended July 31, 2019
Voting
Common Stock
Non-voting
Common Stock
Additional
Paid-in
Capital
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
SharesAmountSharesAmount
Balance, January 31, 201970,186,189 $35 5,701,435 $3 $170,771 $(21)$(104,752)$66,036 
Cumulative-effect adjustment from adoption of accounting standard
      11,422 11,422 
Stock issuance related to business combinations
1,438,805 1   23,811   23,812 
Exercise of stock options188,101    537   537 
Stock-based compensation    3,601   3,601 
Other comprehensive income     449  449 
Net loss attributable to nCino, Inc.      (11,921)(11,921)
Balance, July 31, 201971,813,095 $36 5,701,435 $3 $198,720 $428 $(105,251)$93,936 
Six Months Ended July 31, 2020
Common StockVoting
Common Stock
Non-voting
Common Stock
Additional
Paid-in
Capital
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
SharesAmountSharesAmountSharesAmount
Balance, January 31, 2020 $ 75,596,007 $38 5,931,319 $3 $288,564 $(408)$(120,924)$167,273 
Issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions
9,269,000 5     268,370   268,375 
Costs in connection with initial public offering
     (4,534)  (4,534)
Exercise of stock options500  325,530    861   861 
Reclassification of voting and non-voting common stock
81,852,856 41 (75,921,537)(38)(5,931,319)(3)    
Stock-based compensation      14,320   14,320 
Other comprehensive income       610  610 
Net loss attributable to nCino, Inc., including adjustment to redeemable non-controlling interest
      (267) (19,148)(19,415)
Balance, July 31, 202091,122,356 $46  $  $ $567,314 $202 $(140,072)$427,490 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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nCino, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
July 31,
20192020
Cash Flows from Operating Activities
Net loss attributable to nCino, Inc.$(11,921)$(19,415)
Net loss and adjustment attributable to redeemable non-controlling interest (141)
Net loss(11,921)(19,556)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization1,451 3,500 
Amortization of costs capitalized to obtain revenue contracts1,532 2,430 
Stock-based compensation3,601 14,320 
Deferred income taxes76 40 
Provision for (recovery of) bad debt(105)619 
Change in operating assets and liabilities:
Accounts receivable38 3,365 
Accounts receivable, related parties4,178 9,201 
Costs capitalized to obtain revenue contracts(1,836)(3,615)
Prepaid expenses and other assets(131)(13)
Accounts payable and accrued expenses and other liabilities(2,085)(4,115)
Accounts payable, related parties453 620 
Deferred rent1,066 (65)
Deferred revenues18,173 33,188 
Deferred revenues, related parties(3,783)(8,013)
Net cash provided by operating activities10,707 31,906 
Cash Flows from Investing Activities
Acquisition of business, net of cash acquired(48,219) 
Purchases of property and equipment(2,624)(2,936)
Net cash used in investing activities(50,843)(2,936)
Cash Flows from Financing Activities
Proceeds from initial public offering, net of underwriting discounts and commissions 268,375 
Payments of costs related to initial public offering (1,345)
Exercise of stock options537 861 
Net cash provided by financing activities537 267,891 
Effect of foreign currency exchange rate changes on cash and cash equivalents534 146 
Net (decrease) increase in cash and cash equivalents(39,065)297,007 
Cash and Cash Equivalents, beginning of period74,347 91,184 
Cash and Cash Equivalents, end of period$35,282 $388,191 
Supplemental disclosure of cash flow information
Cash paid during the year for taxes, net of refunds$289 $236 
Supplemental disclosure of noncash investing and financing activities
Purchase of property and equipment, accrued but not paid$138 $86 
Fair value of common stock issued as consideration for business acquisition$23,812 $ 
Costs related to initial public offering, accrued but not paid$ $1,420 
Costs related to initial public offering, reclassified from other long term assets to equity$