nCino Reports First Quarter Fiscal Year 2022 Financial Results

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Technology For You
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First Quarter Total Revenues of $62.4M, up 39% year-over-year
First Quarter Subscription Revenues of $51.0M, up 47% year-over-year

WILMINGTON, N.C., June 02, 2021 (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 first quarter of fiscal year 2022 ended April 30, 2021.

“We are very pleased with the strong start to the year, reflecting a solid sales quarter and ending with yet another record pipeline for the Company,” said Pierre Naudé, CEO of nCino. “We saw particular strength internationally, including signing our first German bank, as well as closing a commercial deal with one of Canada’s top five banks. In addition to our strong sales momentum, we continued to innovate this quarter by introducing new solutions and product enhancements across the nCino Bank Operating System® as part of our Spring Release. Our emphasis on data, machine learning and analytics in our platform roadmap aligns with financial institutions’ need to differentiate based on insights and personalization. This is just one of the trends driving the digital transformation of financial services, and nCino is excited to be leading this effort around the globe.”

Financial Highlights

  • Revenues: Total revenues for the first quarter were $62.4 million, a 39% increase from $44.7 million in the first quarter of fiscal 2021. Subscription revenues for the first quarter were $51.0 million, up from $34.8 million one year ago, an increase of 47%.
  • Loss from Operations: GAAP loss from operations in the first quarter was ($15.5) million compared to ($4.3) million in the same quarter of fiscal 2021. Non-GAAP operating loss in the quarter was ($4.3) million compared to ($2.4) million in the first quarter of fiscal 2021.
  • Net Loss Attributable to nCino: GAAP net loss attributable to nCino in the first quarter was ($15.0) million compared to ($4.8) million in the first quarter of fiscal 2021. Non-GAAP net loss attributable to nCino in the first quarter was ($3.9) million compared to ($2.9) million in the first quarter of fiscal 2021.
  • Net Loss Attributable to nCino per Share: GAAP net loss attributable to nCino in the first quarter was ($0.16) per share compared to ($0.06) per share in the first quarter of fiscal 2021. Non-GAAP net loss attributable to nCino in the first quarter was ($0.04) per share compared to ($0.04) per share in the first quarter of fiscal 2021.
  • Cash: Cash and cash equivalents were $386.5 million as of April 30, 2021.

Recent Business Highlights

  • Signed a new Commercial Banking deal with a top five Canadian bank.     
  • Signed our first customer in Germany, Hamburg Commercial Bank, which will use nCino’s Commercial Banking Solution to simplify and automate existing financing processes and better serve its clients.
  • Customers are now live across three continents on Automated Spreading, part of our nCino IQ (nIQ) analytics platform.
  • Increased innovation across the platform, including introducing our nIQ Commercial Pricing and Profitability solution to early adopters and launching a no-touch experience for unsecured retail loans.
  • Hosted our annual nSight User Conference, a virtual experience with 2,200 registered attendees representing more than 350 customers and partner companies from 24 countries.

Financial Outlook
nCino is providing guidance for its second quarter ending July 31, 2021 as follows:

  • Total revenues between $63 million and $64 million.
  • Subscription revenues between $51.5 million and $52.5 million.
  • Non-GAAP operating loss between ($5.5) million and ($6.5) million.
  • Non-GAAP net loss attributable to nCino per share of ($0.05) to ($0.06).

nCino is providing guidance for its fiscal year 2022 ending January 31, 2022 as follows:

  • Total revenues between $258 million and $260 million.
  • Subscription revenues between $212.5 million and $214.5 million.
  • Non-GAAP operating loss between ($22.5) million and ($24.5) million.
  • Non-GAAP net loss attributable to nCino per share of ($0.21) to ($0.23).

Conference Call
nCino will host a conference call at 4:30 p.m. ET today to discuss its financial results and outlook with the investment community. 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 nCino
nCino (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 digital platform enhances the employee and client experience to enable financial institutions to more effectively onboard new 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 works with more than 1,200 financial institutions globally, whose assets range in size from $30 million to more than $2 trillion. 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, and 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) breaches in our security measures or unauthorized access to our customers’ or their clients’ data; (iii) the accuracy of management’s assumptions and estimates; (iv) our ability to attract new customers and succeed in having current customers expand their use of our solution; (v) 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; (vi) 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; (vii) fluctuation of our results of operations, which may make period-to-period comparisons less meaningful; (viii) our ability to manage our growth effectively including expanding outside of the United States; (ix) adverse changes in our relationship with Salesforce; (x) our ability to successfully acquire new companies and/or integrate acquisitions into our existing organization; (xi) 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; (xii) 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; (xiii) our ability to maintain our corporate culture and attract and retain highly skilled employees; (xiv) adverse changes in the financial services industry, including as a result of customer consolidation; (xv) adverse changes in economic, regulatory, or market conditions; and (xvi) 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, 2021   April 30, 2021
Assets      
Current assets      
Cash and cash equivalents $ 371,425     $ 386,515  
Accounts receivable, net 55,517     56,228  
Costs capitalized to obtain revenue contracts, current portion, net 4,864     5,033  
Prepaid expenses and other current assets 10,425     9,404  
Total current assets 442,231     457,180  
Property and equipment, net 29,943     35,058  
Operating lease right-of-use assets, net —     10,665  
Costs capitalized to obtain revenue contracts, noncurrent, net 10,191     10,296  
Goodwill 57,149     57,325  
Intangible assets, net 23,137     22,352  
Other long-term assets 750     889  
Total assets $ 563,401     $ 593,765  
Liabilities, redeemable non-controlling interest, and stockholders’ equity      
Current liabilities      
Accounts payable $ 1,634     $ 4,382  
Accounts payable, related parties 4,363     4,842  
Accrued commissions 12,500     3,943  
Construction liability, current portion —     5,097  
Other accrued expenses 7,527     7,557  
Deferred rent, current portion 203     —  
Deferred revenue, current portion 89,141     110,071  
Financing obligation, current portion 324     337  
Operating lease liabilities, current portion —     2,540  
Total current liabilities 115,692     138,769  
Operating lease liabilities, noncurrent —     9,771  
Deferred income taxes, noncurrent 368     429  
Deferred rent, noncurrent 1,486     —  
Deferred revenue, noncurrent 946     168  
Financing obligation, noncurrent 15,939     15,847  
Construction liability, noncurrent —     675  
Total liabilities 134,431     165,659  
Commitments and contingencies      
Redeemable non-controlling interest 3,791     3,065  
Stockholders’ equity      
Common stock 47     48  
Additional paid-in capital 585,956     601,034  
Accumulated other comprehensive income 240     161  
Accumulated deficit (161,064 )   (176,202 )
Total stockholders’ equity 425,179     425,041  
Total liabilities, redeemable non-controlling interest, and stockholders’ equity $ 563,401     $ 593,765  
               

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

  Three Months Ended April 30,
  2020   2021
Revenues      
Subscription $ 34,831     $ 51,033  
Professional services 9,881     11,322  
Total revenues 44,712     62,355  
Cost of revenues      
Subscription1 10,099     14,946  
Professional services1 8,767     11,353  
Total cost of revenues 18,866     26,299  
Gross profit 25,846     36,056  
Gross margin % 58     58  
Operating expenses      
Sales and marketing1 12,226     18,425  
Research and development1 10,965     17,425  
General and administrative1 6,926     15,680  
Total operating expenses 30,117     51,530  
Loss from operations (4,271 )   (15,474 )
Non-operating income (expense)      
Interest income 156     57  
Interest expense —     (268 )
Other income (expense), net (520 )   267  
Loss before income tax expense (4,635 )   (15,418 )
Income tax expense 197     187  
Net loss (4,832 )   (15,605 )
Net loss attributable to redeemable non-controlling interest (176 )   (467 )
Adjustment attributable to redeemable non-controlling interest 113     (130 )
Net loss attributable to nCino, Inc. $ (4,769 )   $ (15,008 )
Net loss per share attributable to nCino, Inc.:      
Basic and diluted $ (0.06 )   $ (0.16 )
Weighted average number of common shares outstanding:      
Basic and diluted 81,560,762     94,402,265  
           

1Includes stock-based compensation expense as follows:

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

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

  Three Months Ended April 30,
  2020   2021
Cash flows from operating activities      
Net loss attributable to nCino, Inc. $ (4,769 )   $ (15,008 )
Net loss and adjustment attributable to redeemable non-controlling interest (63 )   (597 )
Net loss (4,832 )   (15,605 )
Adjustments to reconcile net loss to net cash provided by operating activities:      
Depreciation and amortization 1,743     2,095  
Non-cash operating lease costs —     589  
Amortization of costs capitalized to obtain revenue contracts 1,333     1,312  
Stock-based compensation 1,051     7,064  
Deferred income taxes 30     62  
Provision for (recovery of) bad debt 167     (12 )
Net foreign currency gains —     (566 )
Change in operating assets and liabilities:      
Accounts receivable (9,463 )   (192 )
Accounts receivable, related parties 6,395     —  
Costs capitalized to obtain revenue contracts (2,436 )   (1,493 )
Prepaid expenses and other assets 238     1,076  
Accounts payable and accrued expenses and other liabilities (4,774 )   (6,029 )
Accounts payable, related parties 362     478  
Deferred rent (31 )   —  
Deferred revenue 18,630     19,411  
Deferred revenue, related parties 16     —  
Operating lease liabilities —     (632 )
Net cash provided by operating activities 8,429     7,558  
Cash flows from investing activities      
Purchases of property and equipment (1,075 )   (522 )
Net cash used in investing activities (1,075 )   (522 )
Cash flows from financing activities      
Payments of deferred costs (233 )   —  
Exercise of stock options 122     7,885  
Principal payments on financing obligation —     (79 )
Net cash (used in) provided by financing activities (111 )   7,806  
Effect of foreign currency exchange rate changes on cash, cash equivalents, and restricted cash 611     437  
Net increase in cash, cash equivalents, and restricted cash 7,854     15,279  
Cash, cash equivalents, and restricted cash, beginning of period 91,184     371,425  
Cash, cash equivalents, and restricted cash, end of period $ 99,038     $ 386,704  
       
Cash, cash equivalents, and restricted cash, end of period:      
Cash and cash equivalents $ 99,038     $ 386,515  
Restricted cash included in other long-term assets —     189  
Total cash, cash equivalents, and restricted cash, end of period $ 99,038     $ 386,704  
               

Non-GAAP Financial Measures
In 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.

  • Stock-Based Compensation Expenses. nCino excludes stock-based compensation expenses primarily because they are non-cash expenses that nCino excludes from our internal management reporting processes. nCino’s management also finds it useful to exclude these expenses when they assess the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use, nCino believes excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies.
  • Amortization of Purchased Intangibles. nCino incurs amortization expense for purchased intangible assets in connection with acquisitions of certain businesses and technologies. Because these costs have already been incurred, cannot be recovered, are non-cash, and are affected by the inherent subjective nature of purchase price allocations, nCino excludes these expenses for our internal management reporting processes. nCino’s management also finds it useful to exclude these charges when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. Although nCino excludes amortization expense for purchased intangibles from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.
  • Antitrust related fees and expenses. nCino excludes fees and expenses related to the government antitrust investigation and related civil action disclosed in our SEC filings as we do not believe these matters relate to the operating business and their exclusion from non-GAAP operating expenses will facilitate a more meaningful explanation of operating results and comparisons with prior period results.

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 April 30,
  2020   2021
GAAP total revenues $ 44,712     $ 62,355  
       
GAAP cost of subscription revenues $ 10,099     $ 14,946  
Amortization expense – developed technology (369 )   (396 )
Stock-based compensation (61 )   (285 )
Non-GAAP cost of subscription revenues $ 9,669     $ 14,265  
       
GAAP cost of professional services revenues $ 8,767     $ 11,353  
Stock-based compensation (266 )   (1,332 )
Non-GAAP cost of professional services revenues $ 8,501     $ 10,021  
       
GAAP gross profit $ 25,846     $ 36,056  
Amortization expense – developed technology 369     396  
Stock-based compensation 327     1,617  
Non-GAAP gross profit $ 26,542     $ 38,069  
Non-GAAP gross margin % 59 %   61 %
       
GAAP sales & marketing expense $ 12,226     $ 18,425  
Amortization expense – customer relationships (417 )   (418 )
Stock-based compensation (315 )   (1,753 )
Non-GAAP sales & marketing expense $ 11,494     $ 16,254  
       
GAAP research & development expense $ 10,965     $ 17,425  
Stock-based compensation (309 )   (1,543 )
Non-GAAP research & development expense $ 10,656     $ 15,882  
       
GAAP general & administrative expense $ 6,926     $ 15,680  
Amortization expense – trademarks (10 )   —  
Stock-based compensation (100 )   (2,151 )
Antitrust related fees and expenses —     (3,263 )
Non-GAAP general & administrative expense $ 6,816     $ 10,266  
       
GAAP loss from operations $ (4,271 )   $ (15,474 )
Amortization expense – developed technology 369     396  
Amortization expense – customer relationships 417     418  
Amortization expense – trademarks 10     —  
Stock-based compensation 1,051     7,064  
Antitrust related fees and expenses —     3,263  
Non-GAAP operating loss $ (2,424 )   $ (4,333 )
Non-GAAP operating margin (5 )%   (7 )%
       
GAAP net loss attributable to nCino $ (4,769 )   $ (15,008 )
Amortization expense – developed technology 369     396  
Amortization expense – customer relationships 417     418  
Amortization expense – trademarks 10     —  
Stock-based compensation 1,051     7,064  
Antitrust related fees and expenses —     3,263  
Non-GAAP net loss attributable to nCino $ (2,922 )   $ (3,867 )
       
Weighted-average shares used to compute net loss per share, basic and diluted 81,560,762     94,402,265  
       
GAAP net loss attributable to nCino per share $ (0.06 )   $ (0.16 )
Non-GAAP net loss attributable to nCino per share $ (0.04 )   $ (0.04 )
       
Free cash flow      
Net cash provided by operating activities $ 8,429     $ 7,558  
Purchases of property and equipment (1,075 )   (522 )
Free cash flow $ 7,354     $ 7,036  
Principal payments on financing obligation1 —     (79 )
Free cash flow less principal payments on financing obligation $ 7,354     $ 6,957  

1These amounts represent the non-interest component of payments towards financing obligations for facilities.

CONTACTS

INVESTOR CONTACT
JoAnn Horne
Market Street Partners
+1 415.445.3240
jhorne@marketstreetpartners.com

MEDIA CONTACT
Kathryn Cook
nCino
+1 919.691.4206
Kathryn.cook@ncino.com

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