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nCino Reports Third Quarter Fiscal Year 2023 Financial Results

November 30, 2022 4:05 PM

WILMINGTON, N.C., Nov. 30, 2022 (GLOBE NEWSWIRE) -- nCino, Inc. (NASDAQ: NCNO), a pioneer in cloud banking and digital transformation solutions for the global financial services industry, today announced financial results for its third quarter of fiscal year 2023, ended October 31, 2022.

“Our team executed extremely well in the third quarter, again exceeding both top and bottom-line expectations,” said Pierre Naudé, Chairman and Chief Executive Officer of nCino. “We are particularly pleased to have posted our first quarter of non-GAAP operating income as a public company. Despite the challenging macro-environment, we believe we are uniquely positioned with the right vision, strategy, product portfolio, and people to continue leading the digital transformation of financial institutions around the world.”

Financial Highlights

Recent Business Highlights

Financial Outlook nCino is providing guidance for its fourth quarter ending January 31, 2023 as follows:

nCino is providing guidance for its fiscal year 2023 ending January 31, 2023 as follows:

Conference CallnCino will host a conference call at 4:30 p.m. ET today to discuss its financial results and outlook. The conference call will be available via live webcast and replay at the Investor Relations section of nCino’s website: https://investor.ncino.com/news-events/events-and-presentations.

About nCinonCino (NASDAQ: NCNO) is the worldwide leader in cloud banking. The nCino Bank Operating System® empowers financial institutions with scalable technology to help them achieve revenue growth, greater efficiency, cost savings and regulatory compliance. In a digital-first world, nCino's single cloud-based platform enhances the employee and client experience to enable financial institutions to more effectively onboard clients, make loans and manage the entire loan life cycle, and open deposit and other accounts across lines of business and channels. Transforming how financial institutions operate through innovation, reputation and speed, nCino is partnered with more than 1,750 financial institutions of all types and sizes on a global basis. For more information, visit www.ncino.com.

Forward-Looking Statements:This press release contains forward-looking statements about nCino's financial and operating results, which include statements regarding nCino’s future performance, outlook, guidance, the assumptions underlying those statements, the benefits from the use of nCino’s solutions, our strategies, and general business conditions. Forward-looking statements generally include actions, events, results, strategies and expectations and are often identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans,” “seeks,” “estimates,” “projects,” “may,” “will,” “could,” “might,” or “continues” or similar expressions and the negatives thereof. Any forward-looking statements contained in this press release are based upon nCino’s historical performance and its current plans, estimates, and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent nCino’s expectations as of the date of this press release. Subsequent events may cause these expectations to change and, except as may be required by law, nCino does not undertake any obligation to update or revise these forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially including, but not limited to risks associated with (i) the impact of the COVID-19 pandemic, including the impact to the financial services industry, the impact on general economic conditions and the impact of government responses, restrictions, and actions; (ii) risks associated with the acquisition of SimpleNexus, (iii) breaches in our security measures or unauthorized access to our customers’ or their clients' data; (iv) the accuracy of management’s assumptions and estimates; (v) our ability to attract new customers and succeed in having current customers expand their use of our solution; (vi) competitive factors, including pricing pressures, consolidation among competitors, entry of new competitors, the launch of new products and marketing initiatives by our competitors, and difficulty securing rights to access or integrate with third party products or data used by our customers; (vii) the rate of adoption of our newer solutions and the results of our efforts to sustain or expand the use and adoption of our more established solutions; (viii) fluctuation of our results of operations, which may make period-to-period comparisons less meaningful; (ix) our ability to manage our growth effectively including expanding outside of the United States; (x) adverse changes in our relationship with Salesforce; (xi) our ability to successfully acquire new companies and/or integrate acquisitions into our existing organization, including SimpleNexus; (xii) the loss of one or more customers, particularly any of our larger customers, or a reduction in the number of users our customers purchase access and use rights for; (xiii) system unavailability, system performance problems, or loss of data due to disruptions or other problems with our computing infrastructure or the infrastructure we rely on that is operated by third parties; (xiv) our ability to maintain our corporate culture and attract and retain highly skilled employees; (xv) adverse changes in the financial services industry, including as a result of customer consolidation; (xvi) adverse changes in economic, regulatory, or market conditions, including as a direct or indirect consequence of the outbreak of hostilities in Ukraine and higher interest rates; and (xvii) the outcome and impact of legal proceedings and related fees and expenses.

Additional risks and uncertainties that could affect nCino’s business and financial results are included in our reports filed with the U.S. Securities and Exchange Commission (available on our web site at www.ncino.com or the SEC's web site at www.sec.gov). Further information on potential risks that could affect actual results will be included in other filings nCino makes with the SEC from time to time.

nCino, Inc.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited)

January 31, 2022 October 31, 2022
Assets
Current assets
Cash and cash equivalents$88,014 $106,451
Accounts receivable, net 74,528 39,627
Costs capitalized to obtain revenue contracts, current portion, net 7,583 8,663
Prepaid expenses and other current assets 13,384 13,219
Total current assets 183,509 167,960
Property and equipment, net 60,677 83,537
Operating lease right-of-use assets, net 13,170 12,047
Costs capitalized to obtain revenue contracts, noncurrent, net 16,403 16,772
Goodwill 841,487 839,918
Intangible assets, net 180,122 159,491
Investment 4,031 4,031
Other long-term assets 1,615 7,447
Total assets$1,301,014 $1,291,203
Liabilities, redeemable non-controlling interest, and stockholders’ equity
Current liabilities
Accounts payable$11,366 $10,840
Accrued compensation and benefits 21,454 18,363
Accrued expenses and other current liabilities 14,744 6,823
Deferred revenue, current portion 122,643 117,281
Financing obligations, current portion 621 697
Operating lease liabilities, current portion 3,548 3,830
Total current liabilities 174,376 157,834
Operating lease liabilities, noncurrent 11,198 9,667
Deferred income taxes, noncurrent 1,675 2,280
Deferred revenue, noncurrent 44 6
Revolving credit facility, noncurrent 30,000
Financing obligations, noncurrent 33,478 32,944
Construction liability, noncurrent 9,736 22,518
Total liabilities 230,507 255,249
Commitments and contingencies
Redeemable non-controlling interest 2,882 4,092
Stockholders’ equity
Common stock 55 55
Additional paid-in capital 1,277,258 1,318,829
Accumulated other comprehensive income (loss) (72) 1,758
Accumulated deficit (209,616) (288,780)
Total stockholders’ equity 1,067,625 1,031,862
Total liabilities, redeemable non-controlling interest, and stockholders’ equity$1,301,014 $1,291,203

nCino, Inc.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except share and per share data)(Unaudited)

Three Months Ended October 31, Nine Months Ended October 31,
2021 2022 2021 2022
Revenues
Subscription$57,085 $88,290 $162,052 $251,924
Professional services and other 12,951 17,006 36,858 47,210
Total revenues 70,036 105,296 198,910 299,134
Cost of revenues
Subscription 15,753 26,844 46,007 78,499
Professional services and other 11,501 16,312 34,121 46,180
Total cost of revenues 27,254 43,156 80,128 124,679
Gross profit 42,782 62,140 118,782 174,455
Gross margin % 61% 59% 60% 58%
Operating expenses
Sales and marketing 20,586 32,423 58,227 94,274
Research and development 19,956 29,471 55,990 88,287
General and administrative 14,964 18,690 45,931 62,575
Total operating expenses 55,506 80,584 160,148 245,136
Loss from operations (12,724) (18,444) (41,366) (70,681)
Non-operating income (expense)
Interest income 57 87 173 115
Interest expense (379) (580) (977) (1,849)
Other income (expense), net (255) (2,911) (325) (5,498)
Loss before income taxes (13,301) (21,848) (42,495) (77,913)
Income tax provision 356 797 1,030 2,159
Net loss (13,657) (22,645) (43,525) (80,072)
Net loss attributable to redeemable non-controlling interest (389) (257) (1,259) (908)
Adjustment attributable to redeemable non-controlling interest 368 1,191 61 2,348
Net loss attributable to nCino, Inc.$(13,636) $(23,579) $(42,327) $(81,512)
Net loss per share attributable to nCino, Inc.:
Basic and diluted$(0.14) $(0.21) $(0.44) $(0.74)
Weighted average number of common shares outstanding:
Basic and diluted 96,431,082 110,897,811 95,510,413 110,434,171

nCino, Inc.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)(Unaudited)

Nine Months Ended October 31,
2021 2022
Cash flows from operating activities
Net loss attributable to nCino, Inc.$(42,327) $(81,512)
Net loss and adjustment attributable to redeemable non-controlling interest (1,198) 1,440
Net loss (43,525) (80,072)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 6,139 25,458
Non-cash operating lease costs 1,847 2,879
Amortization of costs capitalized to obtain revenue contracts 4,157 6,160
Amortization of debt issuance costs 131
Stock-based compensation 20,549 38,476
Deferred income taxes 192 452
Provision for bad debt 84 323
Net foreign currency losses 393 5,608
Change in operating assets and liabilities:
Accounts receivable 21,614 32,497
Costs capitalized to obtain revenue contracts (5,848) (8,033)
Prepaid expenses and other assets (1,430) (446)
Accounts payable 3,934 (1,732)
Accounts payable, related parties 873
Accrued expenses and other current liabilities (2,047) (9,182)
Deferred revenue (3,192) (2,883)
Operating lease liabilities (1,917) (2,997)
Net cash provided by operating activities 1,823 6,639
Cash flows from investing activities
Acquisition of business, net of cash acquired 676
Acquisition of assets (563)
Purchases of property and equipment (3,640) (13,889)
Net cash used in investing activities (3,640) (13,776)
Cash flows from financing activities
Proceeds from borrowings on revolving credit facility 50,000
Payments on revolving credit facility (20,000)
Payments of debt issuance costs (367)
Exercise of stock options 12,620 3,038
Stock issuance under the employee stock purchase plan 2,424
Principal payments on financing obligations (181) (458)
Net cash provided by financing activities 12,439 34,637
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash (632) (4,098)
Net increase in cash, cash equivalents, and restricted cash 9,990 23,402
Cash, cash equivalents, and restricted cash, beginning of period 371,425 88,399
Cash, cash equivalents, and restricted cash, end of period$381,415 $111,801
Reconciliation of cash, cash equivalents, and restricted cash, end of period:
Cash and cash equivalents$381,080 $106,451
Restricted cash included in other long-term assets 335 5,350
Total cash, cash equivalents, and restricted cash, end of period$381,415 $111,801

Non-GAAP Financial MeasuresIn nCino’s public disclosures, nCino has provided non-GAAP measures, which are measurements of financial performance that have not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. In addition to its GAAP measures, nCino uses these non-GAAP financial measures internally for budgeting and resource allocation purposes and in analyzing our financial results. For the reasons set forth below, nCino believes that excluding the following items provides information that is helpful in understanding our operating results, evaluating our future prospects, comparing our financial results across accounting periods, and comparing our financial results to our peers, many of which provide similar non-GAAP financial measures.

There are limitations to using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures provided by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by nCino’s management about which items are adjusted to calculate its non-GAAP financial measures. nCino compensates for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in its public disclosures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. nCino encourages investors and others to review our financial information in its entirety, not to rely on any single financial measure to evaluate our business, and to view our non-GAAP financial measures in conjunction with the most directly comparable GAAP financial measures. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables below.

nCino, Inc.RECONCILIATION OF GAAP TO NON-GAAP MEASURES(In thousands, except share and per share data)(Unaudited)

Three Months Ended October 31, Nine Months Ended October 31,
2021 2022 2021 2022
GAAP total revenues$70,036 $105,296 $198,910 $299,134
GAAP cost of subscription revenues$15,753 $26,844 $46,007 $78,499
Amortization expense - developed technology (388) (4,249) (1,177) (12,767)
Stock-based compensation (179) (392) (721) (1,120)
Non-GAAP cost of subscription revenues$15,186 $22,203 $44,109 $64,612
GAAP cost of professional services and other revenues$11,501 $16,312 $34,121 $46,180
Amortization expense - other (47) (47)
Stock-based compensation (1,209) (1,778) (3,881) (5,564)
Non-GAAP cost of professional services and other revenues$10,292 $14,487 $30,240 $40,569
GAAP gross profit$42,782 $62,140 $118,782 $174,455
Amortization expense - developed technology 388 4,249 1,177 12,767
Amortization expense - other 47 47
Stock-based compensation 1,388 2,170 4,602 6,684
Non-GAAP gross profit$44,558 $68,606 $124,561 $193,953
The following table sets forth reconciling items as a percentage of total revenue for the periods presented.1
GAAP gross margin % 61% 59% 60% 58%
Amortization expense - developed technology 1 4 1 4
Amortization expense - other
Stock-based compensation 2 2 2 2
Non-GAAP gross margin % 64% 65% 63% 65%
GAAP sales & marketing expense$20,586 $32,423 $58,227 $94,274
Amortization expense - customer relationships (418) (2,167) (1,253) (6,502)
Amortization expense - trade name (605) (1,813)
Stock-based compensation (1,685) (3,326) (5,415) (10,144)
Non-GAAP sales & marketing expense$18,483 $26,325 $51,559 $75,815
GAAP research & development expense$19,956 $29,471 $55,990 $88,287
Stock-based compensation (1,351) (3,012) (4,580) (8,457)
Non-GAAP research & development expense$18,605 $26,459 $51,410 $79,830
GAAP general & administrative expense$14,964 $18,690 $45,931 $62,575
Stock-based compensation (1,421) (3,997) (5,952) (13,191)
Acquisition-related expenses (902) (186) (902) (2,070)
Fees and expenses related to the Antitrust Matters (2,021) (1,225) (8,168) (5,093)
Non-GAAP general & administrative expense$10,620 $13,282 $30,909 $42,221
GAAP loss from operations$(12,724) $(18,444) $(41,366) $(70,681)
Amortization expense - developed technology 388 4,249 1,177 12,767
Amortization expense - other 47 47
Amortization expense - customer relationships 418 2,167 1,253 6,502
Amortization expense - trade name 605 1,813
Stock-based compensation 5,845 12,505 20,549 38,476
Acquisition-related expenses 902 186 902 2,070
Fees and expenses related to the Antitrust Matters 2,021 1,225 8,168 5,093
Non-GAAP operating income (loss)$(3,150) $2,540 $(9,317) $(3,913)
The following table sets forth reconciling items as a percentage of total revenue for the periods presented.1
GAAP operating margin % (18)% (18)% (21)% (24)%
Amortization expense - developed technology 1 4 1 4
Amortization expense - other
Amortization expense - customer relationships 1 2 1 2
Amortization expense - trade name 1 1
Stock-based compensation 8 12 10 13
Acquisition-related expenses 1 1
Fees and expenses related to the Antitrust Matters 3 1 4 2
Non-GAAP operating margin % (4)% 2% (5)% (1)%
GAAP net loss attributable to nCino$(13,636) $(23,579) $(42,327) $(81,512)
Amortization expense - developed technology 388 4,249 1,177 12,767
Amortization expense - other 47 47
Amortization expense - customer relationships 418 2,167 1,253 6,502
Amortization expense - trade name 605 1,813
Stock-based compensation 5,845 12,505 20,549 38,476
Acquisition-related expenses 902 186 902 2,070
Fees and expenses related to the Antitrust Matters 2,021 1,225 8,168 5,093
Adjustment attributable to redeemable non-controlling interest 368 1,191 61 2,348
Non-GAAP net loss attributable to nCino$(3,694) $(1,404) $(10,217) $(12,396)
Weighted-average shares used to compute net loss per share, basic and diluted 96,431,082 110,897,811 95,510,413 110,434,171
GAAP net loss attributable to nCino per share$(0.14) $(0.21) $(0.44) $(0.74)
Non-GAAP net loss attributable to nCino per share$(0.04) $(0.01) $(0.11) $(0.11)
Free cash flow
Net cash provided by (used in) operating activities$(19,076) $(4,080) $1,823 $6,639
Purchases of property and equipment (2,368) (4,586) (3,640) (13,889)
Free cash flow$(21,444) $(8,666) $(1,817) $(7,250)
Principal payments on financing obligations2 (86) (155) (181) (458)
Free cash flow less principal payments on financing obligation$(21,530) $(8,821) $(1,998) $(7,708)

1Columns may not foot due to rounding.2These amounts represent the non-interest component of payments towards financing obligations for facilities.

CONTACTS

INVESTOR CONTACTJoAnn HorneMarket Street Partners+1 415.445.3240[email protected]

MEDIA CONTACTKathryn CooknCino+1 919.691.4206[email protected]

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Source: nCino, Inc.

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