NCNO 10-K & 10-Q changes, risk factors and insider trading
nCino, Inc. · Nasdaq · Services-Prepackaged Software · CIK 1902733 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our growth strategy increasingly depends on the adoption and effective use of our AI capabilities by our customers, and if customer adoption rates or usage do not meet our expectations, our business, results of operations, and competitive position could be adversely affected.”
New heading “The markets in which we participate are intensely competitive and highly fragmented, and pricing pressure, rapidly evolving technologies, including the increasing adoption of AI/ML offerings by our competitors, or other competitive dynamics could adversely affect our business and results of operations.”
New heading “If we fail to accurately anticipate and respond to rapid technological changes in the cloud-based financial services industry in which we operate, including AI/ML developments, our ability to attract and retain customers could be impaired and our competitive position could be harmed.”
New heading “We cannot guarantee that any stock repurchase program will be fully consummated or that it will enhance stockholder value, and stock repurchases could affect the price of our common stock.”
Removed heading “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. If that occurs, or we fail to market our solutions effectively, our sales would suffer and our results of operations would be adversely affected.”
Removed heading “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.”
Removed heading “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.”
Removed heading “Operating as a public company requires us to incur substantial costs and requires substantial management attention.”
Largest changes
“We expect that there will continue to be new proposed and adopted laws, regulations, and industry standards concerning privacy, data protection, and information security in the U.S., the EU, and other jurisdictions in which we operate. For instance, the California Consumer Privacy Act (the “CCPA”) became effective on January 1, 2020. …”see in full comparison
“We expect that there will continue to be new proposed and adopted laws, regulations, and industry standards concerning privacy, data protection, and information security in the U.S., the EU, and other jurisdictions in which we operate. For instance, the California Consumer Privacy Act (the "CCPA") became effective on January 1, 2020. …”see in full comparison
“Privacy and cybersecurity laws continue to evolve to impose ever stricter standards for the collection, use, dissemination, security, transfer and localization of personally identifiable information, including financial information. …”see in full comparison
“Privacy and cybersecurity laws continue to evolve to impose ever stricter standards for the collection, use, dissemination and security of personally identifiable information, including financial information. Actual, potential, or perceived violations of such laws could result in regulatory investigations, fines, orders to cease/change our use of such technologies and processing of personal data, as well as civil claims including class actions, reputational damage and ongoing compliance costs, any of which could harm our business, results of operations and financial condition. …”see in full comparison
“Our customers and prospective customers are highly regulated and are generally required to comply with stringent regulations in connection with performing business functions that our solutions address. As a provider of technology to FIs, we have been, and expect to continue to be, examined on a periodic basis by various regulatory agencies and may be required to review certain of our suppliers and partners. …”see in full comparison
“Our customers and prospective customers are highly regulated and are generally required to comply with stringent regulations in connection with performing business functions that our solutions address. As a provider of technology to FIs, we have been, and expect to continue to be, examined on a periodic basis by various regulatory agencies and may be required to review certain of our suppliers and partners. …”see in full comparison
Full comparison: every changed paragraph (115)
•Our growth strategy increasingly depends on the adoption and effective use of our AI capabilities by our customers, and if customer adoption rates or usage do not meet our expectations, our business, results of operations, and competitive position could be adversely affected.
•The markets in which we participate are intensely competitive and highly fragmented, and pricing pressure, rapidly evolving technologies, including the increasing adoption of AI/ML offerings by our competitors, or other competitive dynamics could adversely affect our business and results of operations.
•We derive most of our revenues from customers in the cloud-based financial services industry, and any downturn or consolidation or decrease in technology spend in the cloud-based financial services industry could adversely affect our business.
•We have a history of losseslosses, and while we have achieved profitability in a quarterly period,profitability, 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 fail to accurately anticipate and respond to rapid technological changes in the cloud-based financial services industry in which we operate, including AI/ML developments, our ability to attract and retain customers could be impaired and our competitive position could be harmed.
•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 or increase our revenue growth rate in the future.
•The failure to attract and retain additional qualified personnel could prevent us from executing our business strategy.
•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.
•Our business faces significant risks from diverse and evolving cybersecurity threats, including increased threats from the use of AI/ML. 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.
•Privacy and data security concerns, data collection and transfer restrictions and related domestic or foreign regulations may limit the use and adoption of our solutions and adversely affect our business and results of operations.
•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.
•We depend on data centers operated by or on behalf of Salesforce, AWSAWS, 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 failure to comply with laws and regulations applicable to us as a technology provider to FIs could adversely affect our business and results of operations, increase costscosts, and impose constraints on the way we conduct our business.
•We have and may continue to acquire or invest in companies, pursue business partnerships or divest products or assets, 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, partnerships, or divestitures.
•Any legal proceedings against us could adversely affect our operations and prospects, damage our reputation, and be costly and time-consuming to defend.
Our growth strategy increasingly depends on the adoption and effective use of our AI capabilities by our customers, and if customer adoption rates or usage do not meet our expectations, our business, results of operations, and competitive position could be adversely affected.
We have invested, and expect to continue to invest, significant resources in developing and integrating AI-driven features and functionality into our platform. The success of these investments depends in part on our customers’ willingness and ability to adopt, implement, and utilize our AI capabilities in a manner that generates measurable operational efficiencies, enhanced decision-making, and other tangible benefits. If customers are slow to adopt our AI offerings, choose not to enable or fully deploy AI features, or limit their usage to pilot programs or narrow use cases, we may not realize the anticipated return on our investments.
Even where customers adopt our AI capabilities, they may not use them in ways that generate meaningful value. Customers may lack the internal expertise, data quality, governance frameworks, management processes, or risk tolerance necessary to effectively leverage AI-driven tools. Regulatory uncertainty, data privacy concerns, model risk management requirements, or internal compliance policies may also restrict how customers use AI functionality. If customers fail to achieve expected productivity gains, cost savings, revenue enhancements, or other benefits from our AI offerings, they may reduce usage, decline to expand deployments, delay renewals, negotiate lower pricing, or elect not to purchase additional AI-enabled solutions. If we are unable to effectively quantify and communicate the benefits of our AI capabilities, our sales cycles may lengthen, expansion opportunities may decrease, and our ability to justify pricing or drive incremental AI-related revenue may be adversely affected.
Our revenue growth and competitive positioning increasingly depend on our ability to differentiate our platform through AI-enabled innovation. If customers do not broadly embrace our AI capabilities, or if competing solutions offer AI features that are perceived as more effective, easier to deploy, more transparent, more compliant, less expensive, or better aligned with customer needs, we may experience reduced demand for our solutions. Competitors, including established financial technology providers, may be able to devote greater resources to AI research and development, respond more quickly to evolving customer expectations, or offer more compelling pricing models. Failure to achieve widespread, value-generating adoption of our AI offerings could diminish our brand perception as an innovation leader and negatively impact customer acquisition, retention, and expansion.
Moreover, if anticipated AI-driven efficiencies do not materialize at the pace or scale we expect, our operating margins may be adversely affected, particularly if we continue to incur significant research and development, infrastructure, and compliance costs associated with AI initiatives without corresponding revenue growth. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations, and long-term growth prospects.
AI/ML is being embedded throughout nCino’s platform to help our customers maximize their productivity. We increasingly have incorporated and may continue to incorporate AI/ML solutions and features into our solutions, and otherwise within our business, and these solutions and features continue to become more vital to our operations and to our future growth over time. There can be no assurance that we will realize the desired or anticipated benefits from AI/ML, or at all, and we may fail to properly implement or market our AI/ML solutions and features. The legal, regulatory, and policy environments around AI/ML are evolving rapidly, and we may become subject to new legal and other obligations in connection with our use of AI/ML, which could require us to make significant changes to our policies and practices, necessitating expenditure of significant time, expense, and other resources. For example, in the EU/UK, laws and regulations regarding AI are developing at a fast pace. On August 1, 2024, the EU’s standalone law to govern the offering and use of AI systems in the EU (the “AI Act”) entered into force - which becomes enforceable in a gradual manner between 2025 and 2027 depending on the specific requirements. The U.K. has not to date adopted dedicated AI legislation, instead looking to rely on a principles-based, sector-specific approach to AI regulation. In the United States, several states, such as Colorado, Utah, and California, have passed or are considering legislation or regulation governing development or use of AI technologies, or supplementing the existing privacy, consumer protection and other regulatory guidance that may apply to the use of AI technologies in our business, and which may impact our use of technology.
More generally, our use of AI/ML technologies may present additional risks and challenges that could affect their adoption and therefore our business. For example, the development of our AI/ML solutions may present ethical or social issues. If we enable or offer solutions that draw controversy due to their perceived or actual impact in privacy, employment, or in other social contexts, we may experience new or enhanced governmental or regulatory scrutiny, brand or reputational harm, competitive harm or legal liability, especially in the context of an environment with heightened geopolitical volatility. Inadequate or ineffective AI/ML development, deployment, content labeling or governance by us or others that result in controversy could also impair the acceptance of AI/ML solutions or result in unintended performance of the services. This in turn could undermine confidence in the decisions, predictions, analysis or other content that our AI/ML solutions produce, subjecting us to competitive harm, legal liability and brand or reputational harm. The rapid evolution of AI/ML will require the application of resources to develop, test and maintain our products and services to help ensure that AI/ML is implemented ethically and compliantly in order to minimize unintended, harmful impact. Uncertainty around new and emerging AI/ML applications such as generative AI content creation and AI/ML agents will require additional investment in compliance, governance and the licensing or development of proprietary datasets, machine learning models and systems to test for accuracy, safety, security, bias and other variables, which are often complex, may be costly and could impact our results of operations and financial condition. Moreover, the development of generative AI/ML solutions brings additional risks and responsibility. Known risks of generative AI/ML currently include risks related to accuracy, bias, toxicity, privacy and security and data provenance. For example, AI/ML technologies, including generative AI, may create content that appears correct but may be factually inaccurate or flawed, or contain copyrighted or other protected material, and if our customers or others use this flawed or protected content to their detriment, or the owners of such copyrighted material seek to enforce their rights, we may be exposed to brand or reputational harm, competitive harm and/or legal liability. Developing, testing and deploying AI/ML systems may also increase the cost profile of our offerings due to the nature of the computing costs involved in such systems. If we are unable to mitigate these risks, or if we incur excessive expenses in our efforts to do so, our reputation, business, operating results and financial condition may be harmed.
The markets in which we participate are intensely competitive and highly fragmented, and pricing pressure, rapidly evolving technologies, including the increasing adoption of AI/ML offerings by our competitors, or other competitive dynamics could adversely affect our business and results of operations.
We currently compete with providers of technology and services in the cloud-based financial services industry, primarily point solution vendors that focus on building functionality that competes with specific components of our solutions. From time to time, we also compete with systems internally developed by FIs. Many of our competitors have significantly more financial, technical, marketing and other resources than we have, may devote greater resources to the development, promotion, sale and support of their systems than we can, have more extensive customer bases and broader customer relationships than we have and have longer operating histories and greater name recognition than we do.
We may also face competition from systems internally developed by FIs leveraging large language models as well as new companies entering our markets, which may include large established businesses that decide to develop, market or resell competitive technology, acquire one of our competitors or form a strategic alliance with one of our competitors or with Salesforce. 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.
If we are unable to compete in this environment, sales and renewals of the nCino Platform could decline and adversely affect our business and results of operations. With the introduction of rapidly evolving technologies and potential new entrants into the cloud-based banking technology market, we expect competition to intensify in the future, which could harm our ability to increase sales and maintain profitability.
We derive most of our revenues from customers in the cloud-based financial services industry, and any downturn or consolidation or decrease in technology spend in the cloud-based financial services industry could adversely affect our business.
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. In therecent past,years, some 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 concernsfailure 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. If, as a result of these or other factors, any of our customers merge with or are acquired by other entities, such as FIs that have internally developed banking technology solutions or that are not our customers or use our solutions less, we may lose business. 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. 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. Moreover, economic fluctuations caused by factors such as the U.S. Federal Reserve changing interest rates may cause potential new customers and existing customers to forego or delay purchasing our solutions or reduce the amount of spend with us, which would materially and adversely affect our business.
We have a history of losses, and while we have achieved profitability in a quarterly period,profitability, we may not be able to achieve or sustain profitability on a GAAP basis in the future.
We began operations in late 2011 and have experienced net losses sinceuntil inception.fiscal 2026. We generated net lossesincome (loss) attributable to nCino of $102.7$(42.3) million, $42.3$(37.9) million, and $37.9$5.2 million for the fiscal years ended January 31, 2023,2024, 2024,2025, and 2025,2026, respectively. We had an accumulated deficit of $385.3$375.8 million at January 31, 2025.2026. While we have been profitable on a GAAP basis for a quarter,basis, 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. 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. We expect,may, depending on a number of factors, to continue to incur losses on a GAAP basis as we continue to invest in product development, and we cannot predict whether or when we will achieve or sustain profitability on a GAAP basis. If we are unable to achieve and sustain profitability, the value of our business and common stock may significantly decrease.
If we fail to accurately anticipate and respond to rapid technological changes in the cloud-based financial services industry in which we operate, including AI/ML developments, our ability to attract and retain customers could be impaired and our competitive position could be harmed.
The cloud-based financial services industry is subject to rapid change and the introduction of new technologies to meet the needs of this industry will continue to have a significant effect on competitive conditions in our market. The introduction of new technologies, including AI/ML, continues to significantly affect competitive conditions. Competitors may introduce new or alternative solutions, particularly AI-enabled offerings, that reduce demand for our platform or render aspects of our solutions less competitive. If we are unable to successfully expand our product offerings, enhance existing functionality or develop and commercialize new technologies in a timely and cost-effective manner, 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 the market acceptance we expect of this or other new offerings. Developing and integrating new technologies, particularly AI/ML-enabled capabilities, is complex, costly, and time-consuming and may require significant investment in specialized personnel, data, infrastructure, and third-party technology. If we fail to keep pace with industry and technological developments, our business, financial condition, and results of operations could 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. If that occurs, or we fail to market our solutions effectively, our sales would suffer and our results of operations would be adversely affected.
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. 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. Furthermore, these FIs may be reluctant, unwilling, or unable to use cloud-based banking technology due to various concerns, such as the security of their data and reliability of the delivery model. 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. 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. If FIs are unwilling or unable to transition from their legacy systems, or if the demand for our solutions does not meet our expectations, our results of operations and financial condition will be adversely affected.
We may not be able to sustain or increase our revenue growth rate in the future.
Our revenues increased from $408.3 million for fiscal 2023 to $476.5 million for fiscal 2024 and to $540.7 million for fiscal 2025.2025 However,and weto $594.8 million for fiscal 2026 which represents a declining rate of growth year over year. We may not be able to sustain revenue growth consistent with our recent history, if at all. Ourabsolute revenue growth in recent periods may not be indicative of our future performance.growth. Furthermore, to the extent we grow in future periods, maintaining consistent rates of revenue growth may be difficult. 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,model we began implementing in fiscal 2025, 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. 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 of operations, including the levels of our revenues, gross margin, profitability, cash flow, and deferred revenue, may vary significantly in the future and, accordingly, period-to-period comparisons of our results of operations may not be meaningful. Thus, the results of any one quarter should not be relied upon as an indication of future performance. Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, and may not fully or accurately reflect the underlying performance of our business. Further, while subscriptions with our customers generally include multi-year non-cancellablenon-cancelable terms, in a limited number of contracts, customers have an option to buy out of the contract for a specified termination fee. If such customers exercise this buy-out option, or if we negotiate an early termination of a contract at a customer’s request, any termination fee would be recognized in full at the time of termination, which would favorably affect subscription revenues in that period and unfavorably affect subscription revenues in subsequent periods. Fluctuation in quarterly results may negatively impact the value of our common stock. Factors that may cause fluctuations in our quarterly financial results include, without limitation, those listed below:
•increases or decreases in the numberusage of usersour licensedsolutions or pricing changes upon renewals of customer contracts (including as a result of our new asset-based pricing model we began implementing in fiscal 2025);
We must attract and retain highly qualified personnel. In particular, we are dependent upon the services of our senior leadership team, and the loss of any member of this team could adversely affect our business. Competition for executive officers, software developers, sales personnel, and other key employees in our industry is intense, particularly with AI/ML expertise. In particular, we compete with many other companies for software developers with high levels of experience in designing, developing, and managing cloud-based software, as well as for skilled sales and operations professionals. As we continue to incorporate AI/ML capabilities into our platform, we face heightened competition for personnel with specialized expertise in AI and competition for such talent is intense not only within the financial technology industry but also across large technology companies, financial institutions, and emerging AI-focused companies, many of which have substantially greater financial resources and brand recognition than we do.
Our principal operations are in Wilmington, North Carolina, where the pool of potential employees with the skills we need is more limited than it may be in larger markets, and we are sometimes required to induce prospective employees to relocate. Many of the companies with which we compete for experienced personnel have greater resources than we do. Compensation levels for AI/ML professionals have increased significantly in recent years, and we may be required to offer higher levels of cash compensation, equity awards, or other incentives to attract and retain such personnel, which could increase our operating expenses and adversely affect our margins. If we fail to attract new personnel or fail to retain and motivate our current personnel, our growth prospects could be severely harmed. In addition, job candidates and existing employees often consider the actual and potential value of the equity awards they receive as part of their overall compensation. Thus, if the perceived value or future value of our stock declines, our ability to attract and retain highly skilled employees may be adversely affected.
We havehave, recentlyand adoptedmay in the future, be required to change our pricing model. For example, in fiscal 2025, we introduced a new pricing model, which sets the pricing for our solutions primarily on the asset size of the FI customer, and began implementing it in fiscal 2025.customer. While we believe this new model responds to how we have observed customers using our solutions and evolving market conditions, there is no assurance that our existing customers will react favorably to it, or that potential new customers will adopt it. It is also possible that the new pricing model we began implementing in fiscal 2025 will not generate the revenues we expect from it for other reasons. Any of these factors could lead to an adverse effect on our results of operations or financial conditions and have a negative impact on the price of our common stock.
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 historic average initial term of our customer agreements has been generally three to five years in length, billed annually in advance, and our fees and services have generally been non-cancelable and have not contained refund-type provisions. U.S. mortgage contracts are generally billed monthly in advance.monthly. Subscription arrangements that are cancelable generally have penalty clauses. Although we have observed some trends at our current scale with respect to customer subscription renewals, we cannot be certain of how actual renewal rates will compare to what we anticipate. Our renewal rates may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our pricing or our solutions or their ability to continue their operations or spending levels.
Our business faces significant risks from diverse securityand threats.evolving cybersecurity threats, including increased threats from the use of AI/ML. 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.
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. 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 partythird-party service providers, frequently defend against and respond to data security incidents. 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. Further, our products are flexible and complex software solutions and there is a risk that configurations of, or defects in, our solutions or errors in implementation could create vulnerabilities to security breaches. There may be continued unlawful attempts to disrupt or gain access to our information technology systems or those of our third-party service providers or the PII or other data of our customers or their clients that may disrupt our or our customers’ operations.
In addition, some of our customers contractually require notification of data security compromises and include representations and warranties in their contracts with us that our solutions comply with certain legal and technical standards related to data security and privacy and meetsmeet certain service levels. In certain of our contracts, a data security compromise or operational disruption impacting us or one of our critical vendors, or system unavailability or damage due to other circumstances, may constitute a material breach and give rise to a customer’s right to terminate their contract with us. In these circumstances, it may be difficult or impossible to cure such a breach in order to prevent customers from potentially terminating their contracts with us. Furthermore, although our customer contracts typically include limitations on our potential liability, there can be no assurance that such limitations of liability would be adequate. We also cannot be sure that our existing general liability insurance coverage and coverage for errors or omissions will be available on acceptable terms or will be available in sufficient amounts to cover one or more claims, or that our insurers will not deny or attempt to deny coverage as to any future claim. The successful assertion of one or more claims against us, the inadequacy or denial of coverage under our insurance policies, litigation to pursue claims under our policies, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or coinsurance requirements, could materially and adversely affect our business and results of operations.
As cyber threats have evolved and continue to evolve, vulnerabilities in our solutions and information technology systems have been and will in the future be detected,identified, and we expect to expend additional resources to remediate such vulnerabilities and continue to modify or enhance our layers of defense to remediate such vulnerabilities.defense. System enhancements and updates create risks associated with implementing new systems and integrating them with existing ones, including risks associated with the effectiveness of our, our customers'customers’ and our third-party providers'providers’ software development lifecycles. Due to the complexity and interconnectedness of our systems and solutions, the process of enhancing our layers of defense, including addressing hardware-based vulnerabilities, can itself create a risk of systems disruptions and security issues. Customer utilization of older versions of our solutions can increase the risk and complexity of security vulnerabilities and the resources and time required to address them.
For more information on our current cybersecurity risk management practices, see Part I, Item 1C of this Annual Report on Form 10-K, “Cybersecurity.”
Personal privacy, information security, and data protection, including with respect to the use of AI technologies, are significant issues in the U.S., the European Union (“EU”), the United Kingdom (“UK”) and a number of other jurisdictions where we offer our solutions. The regulatory framework governing the collection, processing, storage, and use of certain information, particularly financial and other PII, is rapidly evolving. Any failure or perceived failure by us to comply with applicable privacy, security, or data protection laws, regulations, or industry standards may materially and adversely affect our business and results of operations.
We expect that there will continue to be new proposed and adopted laws, regulations, and industry standards concerning privacy, data protection, and information security in the U.S., the EU, and other jurisdictions in which we operate. For instance, the California Consumer Privacy Act (the “CCPA”) became effective on January 1, 2020. The CCPA gives California residents expanded rights to access and delete their personal information, receive detailed information about how their personal information is used and shared by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined), and provide such consumers rights to opt-out of certain sales of personal information. The CCPA provides for potential civil penalties for violations, as well as a limited private right of action for data breaches caused as a result of unreasonable information security practices that can heighten post-incident litigation risk. The California Privacy Rights Act (the “CPRA”), which expands the CCPA, passed in November 2020 and went into effect on January 1, 2023, expands privacy rights further and expands compliance requirements. Among other things, the CPRA imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It has also created a new California data protection agency authorized to issue substantive regulations which could result in increased privacy and information security enforcement. In 2025, new CCPA regulations were approved, going into effect starting in 2026. These regulations impose new requirements including with respect to automated decision-making technologies (“ADMT”). The CCPA includes a number of limited exceptions, including an exception for data that is collected, processed, sold or disclosed pursuant to the Gramm-Leach-Bliley-Act (“GLBA”) and an exemption that includes some types of data covered by the Fair Credit Reporting Act (“FCRA”). These exceptions, however, do not apply to the limited private cause of action afforded to individuals for incidents caused by a company’s failure to implement and maintain reasonable security measures to protect consumers’ personal information. Additionally, the CCPA applies to the personal information of California residents collected in the employment, job applicant and business-to-business settings.
Twenty U.S. states have enacted comprehensive privacy laws and several others are proposing and enacting laws and regulations that impose obligations similar to the CCPA or that otherwise involve significant obligations and restrictions. These laws and regulations are constantly evolving and add layers of complexity to compliance in the U.S. market. The CCPA and similar new state laws and regulations will require additional resources to ensure compliance, and may have potentially conflicting requirements that would make compliance challenging.
The GLBA and FCRA impose privacy and information security requirements on FIs, including obligations to protect and safeguard consumers’ nonpublic personal information and creditworthiness information, respectively, and limitations on the use and disclosure of such information. The GLBA requires appropriate administrative, technical, and physical safeguards to ensure the security, confidentiality, integrity, availability, and the proper disposal of nonpublic personal information, and the FCRA imposes similar information security requirements regarding the protection of creditworthiness information.
The Federal Trade Commission (“FTC”) and many state attorneys general are interpreting existing federal and state consumer protection laws to impose evolving standards for the collection, use, dissemination and security of personal information. Courts may also adopt the standards for fair information practices promulgated by the FTC, which concern consumer notice, choice, security and access. Consumer protection laws require us to publish statements that describe how we handle personal information and choices individuals may have about the way we handle their personal information. If such information that we publish is considered untrue, we may be subject to government claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences. Furthermore, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5 of the FTC Act.
Privacy and cybersecurity laws continue to evolve to impose ever stricter standards for the collection, use, dissemination, security, transfer and localization of personally identifiable information, including financial information. Actual, potential, or perceived violations of such laws could result in regulatory investigations, fines, orders to cease/change our use of such technologies and processing of personal data, as well as civil claims including class actions, reputational damage and ongoing compliance costs, any of which could harm our business, results of operations and financial condition. Moreover, several states have enacted or are considering AI-specific regulations, which could increase compliance burdens and heighten the risks associated with the training, development, deployment, and use of AI technologies.
Similarly, the European Economic Area (the “EEA”) (comprised of the EU Member States and Iceland, Liechtenstein and Norway) adopted the General Data Protection Regulation (2016/679) (the “EU GDPR”) in May 2018 and the UK implemented the EU GDPR by virtue of section 3 of the European Union (Withdrawal) Act 2018 which sits alongside the UK Data Protection Act 2018 (as amended by the U.K. Data (Use and Access) Act 2025) (known as the “UK GDPR,” and together with the “EU GDPR,” the “GDPR”). The GDPR has a direct effect where an entity is established in the EEA or the UK and has extra-territorial effect where an entity established outside of the EEA or UK processes personal data in relation to the offering of goods or services to individuals in the EEA and/or the UK or the monitoring of their behavior. The GDPR imposes a number of obligations on controllers, including, among others: (i) accountability and transparency requirements which require controllers to demonstrate and record compliance with the GDPR and to provide detailed information to data subjects regarding processing; (ii) requirements for obtaining valid consent where consent is the lawful basis for processing; (iii) obligations to consider data protection as any new products or services are developed and to limit the amount of personal data processed in relation to the purpose for which they are processed; (iv) obligations to comply with data protection rights of data subjects including a right of access to and rectification of personal data, a right to obtain restriction of processing or to object to processing of personal data and a right to ask for a copy of personal data to be provided to a third party in a usable format and erasing personal data in certain circumstances and the right not to be subject to solely automated decision-making; (v) obligations to implement appropriate technical and organizational security measures to safeguard personal data; and (vi) obligations to report certain personal data breaches to the relevant supervisory authority without undue delay (and no later than 72 hours where feasible) and to affected individuals, where the personal data breach is likely to result in a high risk to their rights and freedoms, without undue delay. Processors are required to notify the controller without undue delay after becoming aware of a personal data breach.
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. 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. 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. Personal data may be transferred from the UK under the UK-U.S. data bridge through the UK extension to the DPF to organizations self-certified under the UK extension to DPF. This may have implications for our cross-border data flows and may result in additional compliance costs.
On January 17, 2023, the EU Network and Information Systems Security 2 Directive (“NISD2”) entered into force. Member States had until October 17, 2024 to transpose NISD2 into EU Member State law. As of February 2026, most Member States have now implemented NISD2. The European Commission initiated infringement procedures, in November 2024, by sending letters of formal notice to 23 Member States for failing to fully transpose NISD2 by this deadline. Under NISD2, stringent cybersecurity and incident reporting requirements are imposed on ‘essential’ and ‘important’ entities, which include information and communication technology (“ICT”) managed service providers.
The EU Digital Operational Resilience Act (“DORA”), which took effect on January 17, 2025, imposes regulatory obligations to reinforce the digital operational resilience of regulated entities operating in the financial services industry, and to adequately manage and remediate risks related to the engagement of 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.
Fundamental elements of the nCino Platform, including our client onboarding, loan origination, and deposit account opening solutions,Platform 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. Any termination of our relationship with Salesforce would result in a materially adverse impact on our business model.
Management's Discussion & Analysis (MD&A)
New heading “Significant Events in Fiscal 2026”
New heading “Stock Repurchase Programs”
Removed heading ““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.”
Largest changes
“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. 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. …”see in full comparison
“As of January 31, 2025, the Company had $166.0 million outstanding, no letters of credit issued under the 2024 Credit Facility, was in compliance with all covenants and had borrowing availability of $84.0 million. On March 17, 2024, the Company entered into the Second Amendment for the 2022 Credit Facility which, among other things, increased our borrowing availability to $100.0 million. In March 2024, we borrowed $75.0 million under the 2022 Credit Facility to fund the acquisition of DocFox. …”see in full comparison
“On May 27, 2025, we announced a workforce reduction of approximately 7% and office space reductions in certain markets (collectively, the “2026 Restructuring Plan”) in furtherance of our efforts to improve operational efficiencies. We incurred charges of $10.1 million for the year ended January 31, 2026, in connection with the 2026 Restructuring Plan. See Note 16 “Restructuring” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.”see in full comparison
“As of January 31, 2026, we had $213.5 million outstanding, borrowing availability of $36.5 million, and no letters of credit issued under our 2024 Credit Facility, and we were in compliance with all covenants thereunder. During fiscal 2026, we had net borrowings of $47.5 million under the 2024 Credit Facility to fund the acquisition of Sandbox Banking and repurchase shares of our common stock. As of January 31, 2026, the applicable interest rate under the 2024 Credit Facility was 5.68%. …”see in full comparison
““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.”see in full comparison
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. We define ACV net retention rate as total ACV at the end of a fiscal year from customers with ACV as of the end of the prior fiscal year, expressed as a percentage of ACV as of the end of the prior fiscal year, converted to U.S.see in full comparisondollardollars with foreign exchange rates in effect as of the end of the applicable period. We define ACV as the highest annualized subscription fee obligation under customer contracts in effect at the end of the reporting period. ACV net retention rate can occasionally moderate from one period to the next, from customer attrition for example. Our ACV net retention rate was105%,102%,102%,106%, and106%112% for fiscal2023,2024,2024,2025, and2025,2026, respectively.The moderation in our ACV net retention rate forIn fiscal2024 was due to a decline in ACV from customers adversely affected by an increase in mortgage interest rates, from2025, theexpiration of licenses utilized for forgiveness monitoring of Paycheck Protection Program loans, and from the acquisition of customers by non-customers. Theincrease in our ACV net retention ratefor fiscal 2025was attributable to increased ACV from customers who expanded their adoption of our solutions, offset in part due to a decline in ACV from customers adversely affected by an increase in mortgage rates. In fiscal 2026, the increase in our ACV net retention rate was attributable to increased ACV from customers who expanded their adoption of our solutions including nCino’s AI capabilities.
Full comparison: every changed paragraph (125)
The following section of this Form 10-K discusses our financial condition and results of operations for fiscal 2026 and 2025 and year-to-year comparisons between fiscal 2026 and fiscal 2025. Discussions of fiscal 2024 items and year-to-year comparisons between fiscal 2025 and fiscal 2024. Discussions of fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Form 10-K can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2025, filed with the SEC on April 1, 2025.
“Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on March 26, 2024.
As employees at financial institutions do their daily work and serve their clients, they often face inefficiencies from disparate systems, broken workflows, manual processes, and the inability to harnessutilize and utilizetheir data effectively. This negatively impacts risk management, decision makingmaking, and the experiences of bankers and their clients. FIs need a unified platform that helps them reengineer every experience, from managing complex credit portfolios to streamlining account onboarding and loan origination.
nCino helps FIs of all sizes optimize their operations by embedding banking intelligence directly into the tools FI employees already use. nCino’s data foundation, which was developed from the workflows, decisions, and outcomes of financial institutions, enables our platform to deliver AI-driven capabilities across our solutions. With the nCino Platform, FIs can:
•operate more intelligently,
To solve the problem, FIs need technology that helps them reengineer every experience, intelligently and with agility as market needs shift, and a partner with the experience to help advise on best practices.
nCino's trusted platform enables FIs to consolidate vendors while optimizing operations by integrating AI and actionable insights to cohesively bring together people and data and thereby enhance strategic decision-making, risk management, and customer satisfaction.
From managing complex credit portfolios to streamlining account onboarding and originating loans, nCino helps FIs of all sizes globally deliver faster, intelligent, and more connected experiences. With the nCino Platform, FIs can:
•embrace the power of intelligent automation and uncover data-driven insights,
•elevate employee and customerclient experience,experiences, and
•manage risk and compliance continuously rather than reactively.
•manage risk and helping to ensure compliance more effectively, nCino was originally founded in a bank to improve that institution'sinstitution’s operations and client service. AfterIts realizingfounders quickly realized that virtually all banks and credit unions were dealing withfaced the same core problems—cumbersome legacy technology, fragmented data, disconnected business functions, and a disengaged workforceworkforce. made it difficult to maintain relevancy in their clients' lives—nCino was spun out as a separate company in late 2011 to help more institutions solve these challenges using cloud-based technology.
We initially focused on developing the nCino Platform to transform commercial and small business lending for community and regional banks in the United States ("U.S."). We scaled the platform to enterprise banks in the U.S. in 2014, and then internationally in 2017. We have subsequently expanded across North America, Europe, the Middle East, JapanJapan, and Asia-Pacific ("APAC").APAC.
nCino's approach to market expansion includes strategically building products and acquiring technology to continue to fulfill a platform vision. Over the years, wewe’ve built and enhanced our products internally to ensure innovation and seamless integration across key solutionssolution lines of commercial, small business and consumer banking.banking Throughincluding themortgage. strategicWe acquisitionshave ofstrategically built and acquired technology, including SimpleNexus, DocFox, FullCircl, ILT, Visible Equity, FinSuite, and our recent acquisition of Sandbox Banking, weto significantly augmentedaugment the nCino'snCino Platform'sPlatform’s capabilities for mortgage lending, onboarding, account opening, indirect auto lending, and advanced analytics and AI. This strategic approach has allowed us to create a unified platform of best-in-class intelligent solutions, underpinned by our rich data foundation, enabling FIs to replace multiple legacy systems, connect their operations, and streamline workflows and processes across various business lines to achieve desired business impactimpacts and process improvement.improvements.
We generally offer the nCino Platform on a subscription basis pursuant to non-cancellablenon-cancelable multi-year contracts that are typically three to five years.years in duration. nCino has evolved from being a single product workflow solution to offering a platform of best-in-class, intelligent solutions. Our new Intelligent Solution Framework pricing model helps ensure the value-based positioning and pricing of our products and creates an opportunity to embed intelligence into all our solutions. Starting in fiscal 2025, by moving away from a seat-based pricing model to pricing directly correlated to the FI's assets, we are aligning our revenues to the usefulness the nCino Platform provides as nCino creates efficiencies for our customers. For fiscal 2025, we had a subscription revenue net retention rate of 110%. See Item 7 of this Annual Report on Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Operating Results—Subscription Revenue Net Retention Rate” for additional information on subscription revenue retention rates.
On March 20, 2024 (the "DocFox Acquisition Date"), we acquired DocFox, Inc. ("DocFox") which provides a solution for automating onboarding experiences for commercial and business banking, for an aggregate preliminary purchase price of $74.3 million. We funded the purchase consideration with $75.0 million borrowed under our revolving credit facility. We acquired Integrated Lending Technologies, LLC ("ILT") on April 1, 2024 (the "ILT Acquisition Date"), which provides consumer loan origination software that streamlines direct and indirect lending operations, for an aggregate purchase price of $20.0 million in cash. On November 5, 2024 (the "FullCircl Acquisition Date"), we acquired Artesian Solutions Limited, operating as FullCircl ("FullCircl"), a UK-based SaaS platform built to help FIs automate and accelerate onboarding and improve client lifecycle management. We funded $129.2 million of the purchase consideration with borrowings made in October 2024 under our revolving credit facility. See Note 6 "Business Combinations" and Note 14 "Revolving Credit Facility" of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information. We have included the financial results of DocFox, ILT and FullCircl in the consolidated financial statements from the DocFox Acquisition Date, the ILT Acquisition Date, and the FullCircl Acquisition Date, respectively.
Our total revenues were $408.3$476.5 million, $476.5$540.7 million, and $540.7$594.8 million for fiscal 2023,2024, 2024,2025, and 2025,2026, respectively, representing aan 15.1%11.7% compound annual growth rate. Our subscription revenues were $344.8$409.5 million, $409.5$469.2 million, and $469.2$523.1 million for fiscal 2023,2024, 2024,2025, and 2025,2026, representing a 16.7%13.0% compound annual growth rate. Our total subscription revenues include an aggregate of $12.3 million from DocFox, ILT, and FullCircl for fiscal 2025. We recorded net lossesincome (loss) attributable to nCino in fiscal 2023,2024, 2024,2025, and 20252026 of $102.7$(42.3) million, $42.3$(37.9) million, and $37.9$5.2 million, respectively. For fiscal 2025,2026, our total subscription revenues include $17.3 million of inorganic revenues not present in comparative prior periods, consisting of FullCircl for the first three quarters of fiscal 2026 and Sandbox Banking following its acquisition on February 7, 2025 (the “Sandbox Acquisition Date”). We have included the financial results of Sandbox Banking in the consolidated financial statements from the Sandbox Acquisition Date. For fiscal 2026, our financial results also include the operating results of our fiscal 2025 acquisitions of DocFox, ILTILT, and FullCircl from their acquisition dates of March 20, 2024 (the “DocFox Acquisition Date,Date”), April 1, 2024 (the “ILT Acquisition Date,Date”), and November 5, 2024 (the “FullCircl Acquisition Date,Date”), respectively.
Significant Events in Fiscal 2026
Effective February 1, 2025, Pierre Naudé retired as the Company’s Chairman and Chief Executive Officer and Sean Desmond was appointed to succeed Mr. Naudé as the Company’s new President and Chief Executive Officer and as a member of the Company’s Board of Directors. On the same date, Mr. Naudé was appointed Executive Chairman of the Board. On February 1, 2026, Mr. Naudé transitioned to serving as a non-employee director and Chairman of the Board.
InOn Februarythe 2025,Sandbox Acquisition Date, we acquired Alphapack, Co. dba Sandbox Banking ("“Sandbox Banking"”), a digital transformation leader serving the financial services industry, for an aggregate purchase price of $52.5$62.9 million, subjectinclusive to customary adjustments, withof an additional earn-out opportunity of up to $10.0 million. This acquisition strengthens our ability to enhance data connectivity and streamline operations for banks and credit unions through an industry-leading Integration Platform as a Service (iPaaS) solution for a more intelligent and harmonious technology platform. See Note 206 "Subsequent“Business Events"Combinations” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
In March 2025, our Board of Directors authorized a stock repurchase program of up to $100.0 million of our outstanding common stock (the “March 2025 Stock Repurchase Program”) which we completed in the third quarter of fiscal 2026. In December 2025, our Board of Directors authorized the December 2025 Stock Repurchase Program of up to $100.0 million of our outstanding common stock pursuant to which we repurchased 1.0 million shares of our outstanding common stock for $25.0 million, excluding transaction costs and excise tax associated with the repurchases, in fiscal 2026. As of January 31, 2026, $75.0 million remained available for future repurchases under the December 2025 Stock Repurchase Program. To date we have not repurchased any shares in fiscal 2027. See Note 8 “Stockholders’ Equity and Stock-Based Compensation” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
We funded the purchase of Sandbox Banking and our purchases under the Stock Repurchase Programs primarily through borrowings under our credit facility.
On May 27, 2025, we announced a workforce reduction of approximately 7% and office space reductions in certain markets (collectively, the “2026 Restructuring Plan”) in furtherance of our efforts to improve operational efficiencies. We incurred charges of $10.1 million for the year ended January 31, 2026, in connection with the 2026 Restructuring Plan. See Note 16 “Restructuring” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
Market Adoption of Our Solution. Our future growth depends on our ability to expand our reach to new FI customers and increase adoption with existing customers as they broaden their use of our solutions within and across lines of business. Our success in growing our customer base and expanding adoption of our solutions by existing customers requires a focused direct sales engagement and the ability to convince key decision makers at FIs to replace legacy third-party point solutions or internally developed software with our solutions. Our ability to successfully implement our new asset-based pricing modelmodel, thatwhich formallywe startedbegan implementing in fiscal 20252025, and our success in implementing AI capabilities in ways that our customers perceive as adding value, will also be a key driver.drivers. In addition, growing our customer base will require us to increasingly penetrate markets outside the U.S., which accounted for 21.5%22.1% of total revenues for fiscal 2025.2026. For new customers, our sales cycles are typically lengthy, generally ranging from 6six to 9nine months for smaller FIs to 12 to 18 months or more for larger FIs. Key to landing new customers is our ability to successfully take our existing customers live and help them achieve measurable returns on their investment, thereby turning them into referenceable accounts. If we are unable to successfully address the foregoing challenges, our ability to grow our business and achievesustain profitability will be adversely affected, which may in turn reduce the value of our common stock.
For fiscal 2024, 2025, and 2026, we had subscription revenue net retention rates of 116%, 110%, and 110%, respectively. Historically, the number of new customers in prior years and the associated phased activation schedules for such customer were a significant driver of changes in our subscription revenue net retention rate. Upon transitioning to asset-based pricing, growth in FI assets supported by nCino, the timing of deal signatures in current and comparative periods, and the degree to which customers expand or contract their commitments upon renewal will be more significant drivers of changes in subscription revenue net retention rate. Our use of subscription revenue net retention rate has limitations as an analytical tool, and investors should not consider it in isolation. Other companies in adjacent markets may calculate subscription revenue net retention rates or similar metrics differently, which reduces its usefulness as a comparative measure.
For fiscal 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. In addition, because larger FIs tend to make more sizable purchases, we expect variability in our subscription revenue net retention rates based on the timing and extent of our continued penetration of this portion of the market. Excluding our U.S. mortgage business, the subscription revenue net retention rate for fiscal 2023 was 124%. The moderation in our subscription revenue net retention rate for fiscal 2024 was due to a decline in revenues from customers adversely affected by an increase in mortgage interest rates, from the expiration of licenses utilized for forgiveness monitoring of Paycheck Protection Program loans, and from the acquisition of certain customers by entities that do not currently use our solutions. The moderation in our subscription revenue net retention rate for fiscal 2025 was due primarily to a decline in revenues from customers adversely affected by an increase in mortgage interest rates, and from the acquisition of certain customers by entities that do not currently use our solutions. Our use of subscription revenue net retention rate has limitations as an analytical tool, and investors should not consider it in isolation. Other companies in adjacent markets may calculate subscription revenue net retention rates or similar metrics differently, which reduces its usefulness as a comparative measure. For fiscal 2025, we refined our methodology for calculating subscription revenue net retention rate to align with the details disclosed in Item 7 of this Annual Report on Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations regarding the change in subscription revenues. Using our prior calculation methodology, subscription revenue retention rate was 148%, 117%, 112% for fiscal 2023, 2024, and 2025, respectively.
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. We define ACV net retention rate as total ACV at the end of a fiscal year from customers with ACV as of the end of the prior fiscal year, expressed as a percentage of ACV as of the end of the prior fiscal year, converted to U.S. dollardollars with foreign exchange rates in effect as of the end of the applicable period. We define ACV as the highest annualized subscription fee obligation under customer contracts in effect at the end of the reporting period. ACV net retention rate can occasionally moderate from one period to the next, from customer attrition for example. Our ACV net retention rate was 105%,102%, 102%,106%, and 106%112% for fiscal 2023,2024, 2024,2025, and 2025,2026, respectively. The moderation in our ACV net retention rate forIn fiscal 2024 was due to a decline in ACV from customers adversely affected by an increase in mortgage interest rates, from2025, the expiration of licenses utilized for forgiveness monitoring of Paycheck Protection Program loans, and from the acquisition of customers by non-customers. The increase in our ACV net retention rate for fiscal 2025 was attributable to increased ACV from customers who expanded their adoption of our solutions, offset in part due to a decline in ACV from customers adversely affected by an increase in mortgage rates. In fiscal 2026, the increase in our ACV net retention rate was attributable to increased ACV from customers who expanded their adoption of our solutions including nCino’s AI capabilities.
Subscription Revenues. Our subscription revenues consist principally of fees from customers for accessing our solutions and maintenance and support services that we generally offer under non-cancellable multi-year contracts, which are typically three to five years in length,length. Specifically, we offer:
•Client onboarding, loan origination, and deposit account opening solutions targeted at a FI’s commercial, small business, and retail lines of business, as well as Banking Advisor and other ancillary products, for which we generally charge on a per seat basis or based upon the asset size of the customer. As we continue transitioning to implement our newasset-based pricing model, we expect the number of customers we charge based on asset size will increase considerably.
•Through our U.S. mortgage business, a digital homeownership solution uniting people, systems, and stages of the mortgage process into a seamless end-to-end journey for which we generally charge on a per seat basis or anticipated lending volume basis.
Our subscription revenues are generally recognized ratably over the term of the contract beginning upon activation. For new customers, we typically activate all seats at inception of the agreement with stated price increases at specified intervals over the contract term. In these arrangements, the aggregate license fees over the contract term are recognized as revenue in equal amounts annually over the term. We may also activate a portion of seats at inception of the agreement, with the balance of seats activated at contractually specified points in time thereafter,thereafter. toBoth approaches pattern the amount of our invoicing to customers after the customer’stheir expected rate of implementation and adoption. Where seats are activated in stages, we charge subscription fees from the date of activation through the anniversary of the initial activation date, and annually thereafter. Subscription fees are generally billed annually in advance while subscription fees for U.S. mortgage are generally billed monthly in advance.monthly. Maintenance and support fees, as well as development licenses, are provided over the same periods as the related subscriptions, so fees are invoiced and revenues are recognized over the same periods. Subscription fees invoiced are recorded as deferred revenue pending recognition as revenues. In certain cases, we are authorized to resell access to Salesforce’s CRM solution along with the nCino 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. 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. We have historically delivered professional services ourselves for community banks andbanks, smaller credit unionsunions, and our U.S. mortgage business has historically provided professional services directly to its customers.business. Revenues for implementation, training, and advisory services are generally recognized on a proportional performance basis, based on labor hours incurred relative to total budgeted hours. To date, our losses on professional services contracts have not been material. During the initial go-live period for a customer on the nCino Platform, professional services revenues generally make up a substantial portion of our revenues from that customer, whereas over time, revenues from established customers are more heavily weighted to subscriptions. While professional services revenues will fluctuate as a percentage of total revenues in the future and tend to be higher in periods of faster growth, over time we expect to see subscription revenues make up an increasing proportion of our total revenues.
Cost of Subscription Revenues. Cost of subscription revenues consists of fees paid to Salesforce for access to the Salesforce Platform, including Salesforce’s hosting infrastructure and data center operations, along with certain integration fees paid to other third parties. When we resell access to Salesforce’s CRM solution, cost of subscription revenues also includes the subscription fees we remit to Salesforce for providing such access. We also incur costs associated with access to other platforms. In addition, cost of subscription revenues includes personnel-related costs associated with delivering maintenance and support services, including salaries, benefits and stock-based compensation expense, travel and related costs, amortization of acquired developed technology, and allocated overhead. Our subscription gross margin will vary from period to period asbased aon functionthe relative mix of revenues from our solutions, including the resale of Salesforce's CRM solution, and the utilization of support personnelpersonnel. andWe expect the extentcost to which we recognizeof subscription revenues fromwill thecontinue resaleto ofincrease Salesforce’sin CRMabsolute solution.dollars as we grow our business.
Cost of Professional Services and Other Revenues. Cost of professional services and other revenues consists primarily of personnel-related costs associated with delivery of these services, including salaries, benefits and stock-based compensation expense, travel and related costs, and allocated overhead. The cost of providing professional services is significantly higher as a percentage of the related revenues than for our subscription services due to direct labor costs. The cost of professional services revenues has increasedincreases in absolute dollars as we have added new customer subscriptions that require professional services and built-outbuilt 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.
Sales and Marketing. Sales and marketing expenses consist primarily of personnel costs of our sales and marketing employees, including salaries, sales commissions and incentives, benefits and stock-based compensation expense, travel and related costs. We capitalize incremental costs incurred to obtain contracts, primarily consisting of sales commissions, and subsequently amortize these costs over the expected period of benefit, which we have determined to be approximately four to five years. Sales and marketing expenses also include outside consulting fees, marketing programs, including lead generation, costs of our annual user conference, advertising, trade shows,shows and other event expenses, amortization of intangible assets, and allocated overhead. We expect sales and marketing expenses to increasedecrease as a percentage of revenues.revenues as we leverage investments made to date.
General and Administrative. General and administrative expenses consist primarily of salaries, benefits and stock-based compensation associated with our executive, finance, legal, human resources, information technology, compliance and other administrative personnel. General and administrative expenses also include accounting, auditing and legal professional services fees, travel and other corporate-related expenses, changes in fair value of contingent consideration, and allocated overhead, as well as acquisition-relatedtransaction-related expenses, such as legal and other professional services fees. We expect general and administrative expenses will decrease as a percentage of revenues as we leverage the investments we have made to date.
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. Also included is interest expense accretion for a deferred payment on the acquisition of FullCircl.
Other Expense,Income (Expense), Net. Other expense,income (expense), net consists primarily of foreign currency gains and losses, the majority of which is due to the remeasurement of intercompany loans that are denominated in currencies other than the underlying functional currency of the applicable entity.
1Includes(1 ) Includes the operating results of DocFox, ILTILT, and FullCircl from the DocFox Acquisition Date, the ILT Acquisition DateDate, 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.
(2 ) Includes the operating results of Sandbox Banking from the Sandbox Acquisition Date, see Note 6 “Business Combinations” of the notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
Subscription revenues increased $59.7$54.0 million for fiscal 20252026 compared to fiscal 2024,2025, dueprimarily attributable to growth from existing customers within and across lines of business, initial revenues from customers who did not contribute to subscription revenues during the prior period, growth from existing customers within and across lines of business, and acquisitions. Of the increase, 70.6%87.8% was attributable to increased revenues from existing customers as additional seats were activated in accordance with contractual terms and customers expanded their use and adoption of our solutions, and 29.4%12.2% was attributable to initial revenues from customers who did not contribute to subscription revenues during the prior period. Subscription revenues were 88.0% of total revenues for fiscal 2026 compared to 86.8% of total revenues for fiscal 2025 compared to 85.9% of total revenues for fiscal 2024,2025, primarily due to growth in our installed base.
Professional services and other revenues increasedwere $4.4essentially millionflat for fiscal 20252026 compared to fiscal 2024,2025, primarily dueattributable to the additionmix of newsolutions customersbeing as well as expanded adoption by existing customers within and across lines of business where implementation, configuration, and training services were required.implemented.
Cost of subscription revenues increased $14.6 million for fiscal 2026, generating a gross margin of 71.4% compared to a gross margin of 71.2% for fiscal 2025.
The increase primarily consisted of:
•$9.5 million increase in third party data costs,
•$2.8 million increase in allocated overhead, inclusive of a $2.6 million increase in amortization expense related to acquired intangibles,
•$1.2 million increase in costs related to Salesforce user fees as we continued to add new customers and sell additional functionality to existing customers,
•$0.9 million increase in personnel costs, including $0.4 million in severance charges under the 2026 Restructuring Plan and compensation increases, and
•a $0.2 million increase in stock-based compensation expense.
Cost of subscription revenues increased $14.1 million for fiscal 2025 compared to fiscal 2024, generating a gross margin for subscription revenues of 71.2% compared to a gross margin of 70.5% for fiscal 2024. Other costs of subscription revenues increased $6.3 million due to other data costs. Personnel costs, including stock-based compensation expense, increased $4.0 million, mainly from an increase in overall headcount. Costs related to Salesforce user fees increased $2.3 million as we continued to add new customers and sell additional functionality to existing customers. The increase in cost of subscription revenues also included an increase of $1.5 million in amortization expense related to acquired intangibles. We expect the cost of subscription revenues will continue to increase in absolute dollars as the number of users of the nCino Platform grows.
Cost of professional services and other revenues increased $4.1 million for fiscal 2026, generating a gross margin of (18.7)% compared to a gross margin of (13.2)% for fiscal 2025, primarily attributable to strategic investments in expanding our professional service capabilities, coupled with lower effective billing and utilization rates.
The increase primarily consisted of:
•$2.8 million increase in personnel costs, primarily due to an increase in average headcount during the year due to acquisitions, compensation increases, and $0.5 million severance charges under the 2026 Restructuring Plan,
•$1.2 million increase in allocated overhead primarily attributable to internal investments in AI technology, and
•a $0.4 million increase in stock-based compensation expense.
Cost of professional services and other revenues increased $10.3 million for fiscal 2025 compared to fiscal 2024, generating a gross margin for professional services and other revenues of (13.2)% compared to a gross margin of (5.3)% for fiscal 2024. For fiscal 2025, personnel costs increased $9.0 million for professional services and other revenues compared to the prior year period, mainly from an increase in headcount and a $2.6 million increase in stock-based compensation expense. The increase in cost of professional services and other revenue also included an increase of $1.2 million in third-party costs of professional services. The decrease in our professional services and other gross margin for fiscal 2025 was primarily due to a decline in realized effective billing rates in our professional services teams.
Sales and marketing expenses increased $13.3 million for fiscal 2026 compared to fiscal 2025, primarily attributable to:
•$5.0 million increase in allocated overhead, inclusive of a $3.9 million increase in amortization expenses for acquired intangible assets,
•$7.4 million increase in personnel costs, primarily driven by increased commissions for higher bookings and compensation increases, inclusive of $1.3 million in severance charges under the 2026 Restructuring Plan,
•$3.5 million increase in marketing costs,
What changed in the latest 10-Q
Risk Factors
There are no material changes to the risk factors in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the SEC on March 31, 2026 under the heading “Risk Factors.” You should consider and read carefully these risks, as well as other information included in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our unaudited condensed consolidated financial statements and related notes before making an investment decision with respect to our common stock. Those risks are not the only ones we face. The occurrence of any of those risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition, and results of operations. In such case, the trading price of our common stock could decline, and you may lose all or part of your investment.
Full comparison: every changed paragraph (1)
There are no material changes to the risk factors in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the SEC on March 31, 2026 under the heading “Risk Factors.” You should consider and read carefully these risks, as well as other information included in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our unaudited condensed consolidated financial statements and related notes before making an investment decision with respect to our common stock. Those risks are not the only ones we face. The occurrence of any of those risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition, and results of operation.operations. In such case, the trading price of our common stock could decline, and you may lose all or part of your investment.
Management's Discussion & Analysis (MD&A)
Largest changes
“•a $0.5 million net decrease in personnel costs, consisting of a $1.5 million decrease primarily attributable to our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs, partially offset by a $1.0 million increase in capitalized commission amortization expense;”see in full comparison
“•personnel costs were flat due to a $2.0 million decrease primarily attributable to our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs, offset by a $2.0 million increase in capitalized commission amortization expense,”see in full comparison
see in full comparisonGeneral•a $3.5 million decrease in allocated overhead and other general and administrativeheadcount decreased by 19 from April 30, 2025 to April 30, 2026,costs, primarily attributable to a decrease in exit costs and asset write-offs from ourworkforce reductionrestructuring in the second quarter of fiscal2026.2026;
“•partially offset by a $1.5 million decrease in personnel costs primarily attributable to lower headcount following our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs.”see in full comparison
“•partially offset by a $1.7 million decrease in personnel costs primarily attributable to lower headcount following our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs.”see in full comparison
“•an $8.4 million decrease in personnel costs primarily attributable to lower headcount following our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs; and”see in full comparison
Full comparison: every changed paragraph (94)
The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and other financial information included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the SEC on March 31, 2026. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K, particularly in the section titled “Risk Factors.” Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Our fiscal year ends on January 31 of each year and references in this Quarterly Report on Form 10-Q to a fiscal year mean the year in which that fiscal year ends. For example, references in this Quarterly Report on Form 10-Q to “fiscal 2027” refer to the fiscal year endedending January 31, 2027.
nCino helps FIs of all sizes optimize their operations by embedding banking intelligence directly into the tools FI employees already use. nCino'snCino’s data foundation, which was developed from the workflows, decisions, and outcomes of FIs, enables ourthe platformnCino Platform to deliver AI-driven capabilities across our solutions. With the nCino Platform, FIs can:
We sell our solutions directly through our business development managers, account executives, field sales engineers, and customer success managers. Our sales efforts in the U.S. are organized around FIs based on size, whereas internationally, we focus our sales efforts by geography. As of AprilJuly 30,31, 2026, we had 182184 sales and sales support personnel in the U.S. and 125132 sales and support personnel in offices outside the U.S.
On March 31, 2026, the Company entered into an Accelerated Share Repurchase (“ASR”) agreement with Wells Fargo Bank, N.A., authorized by the Board of Directors, for $100.0 million. The initial delivery of shares for the full purchase price of $100.0 million represented approximately 80% of the totalaggregate sharespurchase toprice, bebased repurchased.on Thean final number of shares to be repurchased will be determined generally by the volume-weighted averageinitial price of nCino's$14.98 per share. On June 2, 2026, upon final settlement of the ASR agreement we received additional shares of our common stock duringbased theon terma price of the$16.57 transaction,per less a discount and subject to adjustments. Final settlement is expected to occur in the second quarter of fiscal 2027.share. See Note 8 “Stockholders’ Equity and Stock-Based Compensation” of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.
For the three months ended AprilJuly 30,31, 2025 and 2026, our total revenues were $144.1$148.8 million and $159.4$161.0 million, respectively, representing aan 10.6%8.2% increase. For the three months ended AprilJuly 30,31, 2025 and 2026, our subscription revenues were $125.6$130.8 million and $140.9$143.5 million, respectively, representing a 12.2%9.7% increase. We recorded net income attributable to nCino, Inc. of $13.6$5.1 million for the three months ended AprilJuly 30,31, 2026, compared to a net loss attributable to nCino, Inc. of $15.3 million for the three months ended July 31, 2025. For the six months ended July 31, 2025 and 2026, our total revenues were $293.0 million and $320.4 million, respectively, representing a 9.4% increase. For the six months ended July 31, 2025 and 2026, our subscription revenues were $256.3 million and $284.4 million, respectively, representing a 10.9% increase. We recorded net income attributable to nCino, Inc. of $5.6$18.7 million for the threesix months ended AprilJuly 30,31, 2026, compared to a net loss attributable to nCino, Inc. of $9.7 million for the six months ended July 31, 2025.
Market Adoption of Our Solution. Our future growth depends on our ability to expand our reach to new FI customers and increase adoption with existing customers as they broaden their use of our solutions within and across lines of business. Our success in growing our customer base and expanding adoption of our solutions by existing customers requires a focused direct sales engagement and the ability to convince key decision makers at FIs to replace legacy third-party point solutions or internally developed software with our solutions. Our ability to successfully implement our asset-based pricing model, which we began implementing in fiscal 2025, and our success in implementing AI capabilities in ways that our customers perceive as adding value, will also be key drivers. In addition, growing our customer base will require us to increasingly penetrate markets outside the U.S., which accounted for 22.8%22.6% of total revenues for the three months ended AprilJuly 30,31, 2026 and 22.7% for the six months ended July 31, 2026. For new customers, our sales cycles are typically lengthy, generally ranging from six to nine months for smaller FIs to 12 to 18 months or more for larger FIs. Key to landing new customers is our ability to successfully take our existing customers live and help them achieve measurable returns on their investment, thereby turning them into referenceable accounts. If we are unable to successfully address the foregoing challenges, our ability to grow our business and sustain profitability will be adversely affected, which may in turn reduce the value of our common stock.
Subscription Revenues. Our subscription revenues consist principally of fees from customers for accessing our solutions and maintenance and support services that we generally offer under non-cancellablenon-cancelable multi-year contracts, which are typically three to five years in length. Specifically, we offer:
Cost of Subscription Revenues. Cost of subscription revenues consists of fees paid to Salesforce for access to the Salesforce Platform, including Salesforce’s hosting infrastructure and data center operations, along with certain integration fees paid to other third parties. When we resell access to Salesforce’s CRM solution, cost of subscription revenues also includes the subscription fees we remit to Salesforce for providing such access. We also incur costs associated with access to other platforms. In addition, cost of subscription revenues includes personnel-related costs associated with delivering maintenance and support services, including salaries, benefitsbenefits, and stock-based compensation expense, travel and related costs, amortization of acquired developed technology, and allocated overhead. Our subscription gross margin will vary from period to period based on the relative mix of revenues from our solutions, including the resale of Salesforce'sSalesforce’s CRM solution, and the utilization of support personnel. We expect the cost of subscription revenues will continue to increase in absolute dollars as we grow our business.
Cost of Professional Services and Other Revenues. Cost of professional services and other revenues consists primarily of personnel-related costs associated with delivery of these services, including salaries, benefitsbenefits, and stock-based compensation expense, travel and related costs, and allocated overhead. The cost of providing professional services is significantly higher as a percentage of the related revenues than for our subscription services due to direct labor costs. The cost of professional services revenues has increased in absolute dollars as we have added new customer subscriptions that require professional services and built out our international professional services capabilities. Realized effective billing and utilization rates drive fluctuations in our professional services and other gross margin on a period-to-period basis.
Sales and Marketing. Sales and marketing expenses consist primarily of personnel costs of our sales and marketing employees, including salaries, sales commissions and incentives, benefitsbenefits, and stock-based compensation expense, travel and related costs. We capitalize incremental costs incurred to obtain revenue contracts, primarily consisting of sales commissions, and subsequently amortize these costs over the expected period of benefit, which we have determined to be approximately four to five years. Sales and marketing expenses also include outside consulting fees, marketing programs, including lead generation, costs of our annual user conference, advertising, trade shows and other event expenses, amortization of intangible assets, and allocated overhead. We expect sales and marketing expenses to decrease as a percentage of revenues as we leverage investments made to date.
Research and Development. Research and development expenses consist primarily of salaries, benefitsbenefits, and stock-based compensation associated with our engineering, product and quality assurance personnel, as well as allocated overhead. Research and development expenses also include the cost of third-party contractors. Research and development costs are expensed as incurred. We expect research and development costs will decrease as a percentage of revenues as we leverage the investments we have made to date.
General and Administrative. General and administrative expenses consist primarily of salaries, benefitsbenefits, and stock-based compensation associated with our executive, finance, legal, human resources, information technology, compliance and other administrative personnel. General and administrative expenses also include accounting, auditing and legal professional services fees, travel and other corporate-related expenses, changes in fair value of contingent consideration, and allocated overhead, as well as transaction-related expenses, such as legal and other professional services fees. We expect general and administrative expenses will decrease as a percentage of revenues as we leverage the investments we have made to date.
Interest Expense. Interest expense consists primarily of interest related to our financing obligations along with interest expense on borrowings,our debt, commitment fees, and amortization of debt issuance costs associated with our secured revolving credit facility.costs. Also included is interest expense accretion for a deferred payment on the acquisition of FullCircl.
Other Income (Expense), Net. Other income (expense), net consists primarily of foreign currency gains and losses, the majority of which is due to the remeasurement of intercompany loans and transactions that are denominated in currencies other than the underlying functional currency of the applicable entity.
The results of operations presented below should be reviewed in conjunction with the financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q. The following tables present our selected unaudited condensed consolidated statements of operations data for the three and six months ended AprilJuly 30,31, 2025 and 2026 in both dollars and as a percentage of total revenues, except as noted.
Comparison of the Three and Six Months Ended AprilJuly 30,31, 2025 and 2026
Subscription revenues increased $15.3$12.7 million for the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025, primarily attributable to initial revenues from customers who did not contribute to subscription revenues during the prior period, and growth from existing customers within and across lines of business.business, and revenues from customers that began contributing to subscription revenues after July 31, 2025. Of the increase, 72.6%65.9% was attributable to increased revenues from existing customers as customers expanded their use and adoption of our solutions, and 27.4%34.1% was attributable to initial revenues from customers whothat didbegan not contributecontributing to subscription revenues duringafter theJuly three months ended April 30,31, 2025. Subscription revenues were 88.4%89.1% of total revenues for the three months ended AprilJuly 30,31, 2026 compared to 87.1%87.9% of total revenues for the three months ended AprilJuly 30,31, 2025, primarily due to growth in our installed base.
Subscription revenues increased $28.1 million for the six months ended July 31, 2026 compared to the six months ended July 31, 2025, primarily attributable to growth from existing customers within and across lines of business, and revenues from customers that began contributing to subscription revenues after July 31, 2025. Of the increase, 71.0% was attributable to increased revenues from existing customers as customers expanded their use and adoption of our solutions, and 29.0% was attributable to revenues from customers that began contributing to subscription revenues after July 31, 2025. Subscription revenues were 88.8% of total revenues for the six months ended July 31, 2026 compared to 87.5% of total revenues for the six months ended July 31, 2025, primarily due to growth in our installed base.
Professional services and other revenues weredecreased essentially$0.5 flatmillion and $0.6 million for the three and six months ended AprilJuly 30,31, 2026 compared to the three and six months ended AprilJuly 30,31, 2025, respectively, primarily attributable to the mix of solutions being implemented.
Cost of subscription revenues increased $3.1$1.9 million for the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025, generating a gross margin for subscription revenues of 71.2%70.9% and 72.2% for the three months ended AprilJuly 30,31, 2025 and 2026, respectively. Cost of subscription revenues increased $5.1 million for the six months ended July 31, 2026 compared to the six months ended July 31, 2025, generating a gross margin for subscription revenues of 71.1% and 72.2% for the six months ended July 31, 2025 and 2026, respectively.
The increase for the three months ended July 31, 2026 primarily consisted of:
•a $2.1 million increase in costs related to Salesforce user fees as we continued to add new customers and sell additional functionality to existing customers,customers; and
•a $1.1$1.4 million increase in third partythird-party data costs.costs,
•partially offset by a $1.5 million decrease in personnel costs primarily attributable to lower headcount following our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs.
The increase for the six months ended July 31, 2026 primarily consisted of:
• a $4.2 million increase in costs related to Salesforce user fees as we continued to add new customers and sell additional functionality to existing customers; and
•a $2.5 million increase in third-party data costs,
•partially offset by a $1.7 million decrease in personnel costs primarily attributable to lower headcount following our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs.
Cost of professional services and other revenues decreased $2.3$2.4 million for the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025, generating a gross margin for professional services and other revenues of (16.325.7)% and (4.015.8)% for the three months ended AprilJuly 30,31, 2025 and 2026, respectively. Cost of professional services and other revenues decreased $4.7 million for the six months ended July 31, 2026 compared to the six months ended July 31, 2025, generating a gross margin for professional services and other revenues of (20.9)% and (9.7)% for the six months ended July 31, 2025 and 2026, respectively. The increase in our professional services and other gross margin for the three and six months ended AprilJuly 30,31, 2026 was primarily attributable to a decrease in headcount, coupled with higher effective billing and utilization rates.
•a $1.8 million decrease in personnel costs primarily attributable to lower headcount following our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs;
The decrease primarily consisted of:
• $1.9 million decrease in personnel costs and
•a $0.4 million decrease for third-party costs of professional services.services; and
•a $0.4 million decrease in allocated overhead.
The decrease for the six months ended July 31, 2026 primarily consisted of:
•a $3.7 million decrease in personnel costs primarily attributable to lower headcount following our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs;
•a $0.8 million decrease for third-party costs of professional services; and
•a $0.3 million decrease in allocated overhead.
Sales and marketing expenses increaseddecreased $0.8$0.3 million for the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025, primarilyand attributableincreased $0.4 million for the six months ended July 31, 2026 compared to: the six months ended July 31, 2025.
•a $0.6 million decrease in amortization expense, primarily attributable to intangible assets that became fully amortized; and
•a $0.5 million net decrease in personnel costs, consisting of a $1.5 million decrease primarily attributable to our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs, partially offset by a $1.0 million increase in capitalized commission amortization expense;
partially offset by:
•$0.5 million increase in personnel costs, primarily driven by increased commission expense, and
• a $0.2$0.4 million increase in stock-based compensation expense.expense; and
•a $0.4 million increase in sales-related travel costs.
The increase for the six months ended July 31, 2026 primarily consisted of:
•a $0.6 million increase in stock-based compensation expense;
•personnel costs were flat due to a $2.0 million decrease primarily attributable to our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs, offset by a $2.0 million increase in capitalized commission amortization expense,
•a $0.5 million increase in sales-related travel costs; and
•partially offset by a $0.7 million decrease in amortization expense, primarily attributable to intangible assets that became fully amortized.
Sales and marketing headcount decreasedincreased by 1813 from AprilJuly 30,31, 2025 to AprilJuly 30, 2026, primarily attributable to our workforce reduction in the second quarter of fiscal31, 2026.
Research and development expenses decreased $4.5$3.6 million for the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025, primarilyand attributabledecreased $8.1 million for the six months ended July 31, 2026 compared to: the six months ended July 31, 2025.
• a $4.4 million decrease in personnel costs primarily attributable to lower headcount following our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs;
partially offset by:
• a $4.0 million decrease in personnel costs due to lower costs from reduced headcount,
•a $1.0$0.6 million decreaseincrease in stock-based compensation expense,expense; and
•partially offset by a $0.4 million increase in allocated overhead primarily attributable to internal investments in AI technology.
The decrease for the six months ended July 31, 2026 primarily consisted of:
•an $8.4 million decrease in personnel costs primarily attributable to lower headcount following our second quarter fiscal 2026 workforce reduction and the non-recurrence of the associated restructuring costs; and
•a $0.5 million decrease in stock-based compensation expense;
NCNO insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 19 filings (5 insiders, 11 trade dates, 211,975 shares, about $4.0M; 8 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -211,975 (purchases minus sales); net value about -$4.0M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-05 | Desmond Sean |
Option exercise |
8,064 | $4.98 | $40.2K |
| 2026-10-05 | Desmond Sean |
Open-market sale |
8,064 | $18.69 | $150.7K |
| 2026-09-15 | Rieger April |
Open-market sale | 6,098 | $21.98 | $134.0K |
| 2026-09-03 | Desmond Sean |
Option exercise |
8,064 | $4.98 | $40.2K |
| 2026-09-03 | Desmond Sean |
Open-market sale |
8,064 | $23.66 | $190.8K |
| 2026-08-27 | Sellers Jeanette |
Open-market sale | 690 | $22.71 | $15.7K |
| 2026-08-05 | Sellers Jeanette |
Open-market sale |
1,536 | $19.53 | $30.0K |
| 2026-08-05 | Desmond Sean |
Option exercise |
8,064 | $4.98 | $40.2K |
| 2026-08-05 | Desmond Sean |
Open-market sale |
11,815 | $19.53 | $230.7K |
| 2026-08-04 | Sellers Jeanette |
Open-market sale |
887 | $19.22 | $17.0K |
| 2026-08-04 | Rieger April |
Open-market sale | 7,852 | $19.22 | $150.9K |
| 2026-08-04 | Orenstein Gregory |
Open-market sale | 11,780 | $19.22 | $226.4K |
| 2026-08-04 | Naude Pierre |
Open-market sale | 4,677 | $19.22 | $89.9K |
| 2026-08-04 | Desmond Sean |
Open-market sale |
28,675 | $19.22 | $551.1K |
| 2026-07-06 | Desmond Sean |
Option exercise |
8,064 | $4.98 | $40.2K |
| 2026-07-06 | Desmond Sean |
Open-market sale |
8,064 | $17.47 | $140.9K |
| 2026-06-18 | Yasutake Andrew Hideki |
Grant/award | 12,911 | — | — |
| 2026-06-18 | Dugatkin Diego German |
Grant/award | 12,911 | — | — |
| 2026-06-18 | Naude Pierre |
Grant/award | 12,911 | — | — |
| 2026-06-18 | Nyweide Justin C. |
Grant/award | 12,911 | — | — |
| 2026-06-18 | Ruh William J |
Grant/award | 12,911 | — | — |
| 2026-06-18 | Spruill William R |
Grant/award | 12,911 | — | — |
| 2026-06-18 | Kilday Pamela |
Grant/award | 12,911 | — | — |
| 2026-06-18 | Doyle Jonathan J |
Grant/award | 12,911 | — | — |
| 2026-06-03 | Desmond Sean |
Open-market sale |
8,064 | $16.26 | $131.1K |
| 2026-06-03 | Desmond Sean |
Option exercise |
8,064 | $4.98 | $40.2K |
| 2026-05-05 | Sellers Jeanette |
Open-market sale |
3,695 | $18.04 | $66.7K |
| 2026-05-05 | Desmond Sean |
Open-market sale |
16,589 | $18.04 | $299.3K |
| 2026-05-05 | Desmond Sean |
Option exercise |
8,065 | $4.98 | $40.2K |
| 2026-05-04 | Sellers Jeanette |
Open-market sale | 1,486 | $18.02 | $26.8K |
| 2026-05-04 | Rieger April |
Open-market sale | 9,693 | $18.02 | $174.7K |
| 2026-05-04 | Orenstein Gregory |
Open-market sale | 14,650 | $18.02 | $264.0K |
| 2026-05-04 | Naude Pierre |
Open-market sale | 35,650 | $18.02 | $642.4K |
| 2026-05-04 | Desmond Sean |
Open-market sale | 22,073 | $18.02 | $397.8K |
| 2026-05-01 | Sellers Jeanette |
Grant/award | 15,446 | — | — |
| 2026-05-01 | Kettell Keith |
Grant/award | 228,832 | — | — |
| 2026-05-01 | Rieger April |
Grant/award | 177,345 | — | — |
| 2026-05-01 | Orenstein Gregory |
Grant/award | 274,599 | — | — |
| 2026-05-01 | Desmond Sean |
Grant/award | 703,661 | — | — |
| 2026-04-14 | Sellers Jeanette |
Open-market sale | 1,873 | $17.55 | $32.9K |
| 2026-04-14 | Ruh William J |
Gift | 3,200 | — | — |
Well-known investors holding NCNO (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 7,102,050 | $112.4M | 0.04% | Added 190% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 1,210,961 | $19.8M | 0.05% | Added 49% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 1,053,603 | $15.8M | — | Sold out |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 310,823 | $5.1M | 0.0% | Reduced 68% |
| Millennium Management (Israel Englander) | 2026-06-30 | 289,882 | $4.7M | 0.0% | Reduced 93% |
| Bridgewater Associates | 2026-06-30 | 37,116 | $606.8K | 0.0% | New position |