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 ending January 31, 2027.
Overview
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 utilize their data effectively. This negatively impacts risk management, decision making, and the experiences of bankers and their clients. Financial Institutions (“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 FIs, enables the nCino Platform to deliver AI-driven capabilities across our solutions. With the nCino Platform, FIs can:
•operate more intelligently,
•improve efficiency,
•elevate employee and client experiences, and
•manage risk and compliance continuously rather than reactively.
nCino was originally founded in a bank to improve that institution’s operations and client service. Its founders quickly realized that virtually all banks and credit unions faced the same core problems—cumbersome legacy technology, fragmented data, disconnected business functions, and a disengaged workforce. 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 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, Japan and Asia-Pacific (“APAC”).
Over the years, we’ve built and enhanced our products to ensure innovation and seamless integration across key solution lines of commercial, small business, and consumer banking, including mortgage. We have strategically built and acquired technology, including SimpleNexus, DocFox, FullCircl, ILT, Visible Equity, FinSuite, and Sandbox Banking, to significantly augment the capabilities of the nCino Platform for mortgage lending, onboarding, account opening, indirect auto lending, and advanced analytics and AI. This 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 impacts and process improvements.
We generally offer the nCino Platform on a subscription basis pursuant to non-cancelable multi-year contracts that are typically three to five years in duration. nCino has evolved from a single product workflow solution to a platform of best-in-class, intelligent solutions. Our 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.
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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 July 31, 2026, we had 184 sales and sales support personnel in the U.S. and 132 sales and support personnel in offices outside the U.S.
To help customers go live with our solutions, we offer professional services including configuration and implementation, training, and advisory services. For enterprise FIs, we generally work with system integration (“SI”) partners such as Accenture, Deloitte, and PwC for the delivery of professional services for the nCino Platform. For regional FIs, we work with SIs such as West Monroe Partners, and for community banks, we work with SIs or perform configuration and implementation ourselves. We expect enterprise FIs to make up a greater proportion of our nCino Platform sales.
Current Events
On March 30, 2026, the Company entered into an Incremental Facility Amendment (the “First Amendment”) to the 2024 Credit Agreement. Pursuant to the First Amendment, the Lenders provided to nCino OpCo, Inc. (the “Borrower”) a senior secured incremental term loan of $200.0 million (the “Term Loan”), which matures on October 28, 2029. The Term Loan requires scheduled quarterly principal payments of $2.5 million, with the remaining balance due at maturity. The Term Loan may be voluntarily prepaid at any time without penalty; however, any repaid amounts may not be reborrowed. The interest rate terms, guarantee structure, collateral provisions, and financial covenants applicable to the Term Loan are consistent with those governing the 2024 Credit Facility. The proceeds were used to reduce a portion of the outstanding balance on our revolving credit facility and to finance an accelerated share repurchase program discussed below. See Note 10 “Debt” 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 additional information.
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 aggregate purchase price, based on an initial price of $14.98 per share. On June 2, 2026, upon final settlement of the ASR agreement we received additional shares of our common stock based on a price of $16.57 per 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 July 31, 2025 and 2026, our total revenues were $148.8 million and $161.0 million, respectively, representing an 8.2% increase. For the three months ended July 31, 2025 and 2026, our subscription revenues were $130.8 million and $143.5 million, respectively, representing a 9.7% increase. We recorded net income attributable to nCino, Inc. of $5.1 million for the three months ended July 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 $18.7 million for the six months ended July 31, 2026, compared to a net loss attributable to nCino, Inc. of $9.7 million for the six months ended July 31, 2025.
Factors Affecting Our Operating Results
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 22.6% of total revenues for the three months ended July 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.
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Mix of Subscription and Professional Services Revenues. The initial deployment of our solutions by our customers requires a period of implementation and configuration services that typically average less than six months, but may extend beyond twelve months, depending on scope. As a result, during the initial go-live period for a customer on the nCino Platform, professional services revenues generally make up a substantial portion of our revenues from that customer, whereas over time, revenues from established customers are more heavily weighted to subscriptions. While professional services revenues will fluctuate as a percentage of total revenues, we expect subscription revenues will continue to make up an increasing proportion of our total revenues.
Macroeconomic Environment. We are currently operating in a fluctuating interest rate environment with inflationary pressures. These fluctuations have had an impact on the real estate market in the U.S. and specifically, the demand for mortgages and mortgage-related products and services, which has had a negative impact on our U.S. mortgage business.
We will continue to monitor the impact the macroeconomic environment may have on our business.
Continued Investment in Innovation and Growth. We have made substantial investments in product development, sales and marketing, and strategic acquisitions since our inception to achieve a leadership position in our market and grow our revenues and customer base. We intend to continue to increase our investment in product development in the coming years to maintain and build on this advantage. We also intend to invest in sales and marketing both in the U.S. and internationally to further grow our business. To capitalize on the market opportunity we see ahead of us, we expect to continue to optimize our operating plans for revenue growth and profitability.
Components of Results of Operations
Revenues
We derive our revenues from subscription and professional services and other revenues.
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-cancelable multi-year contracts, which are typically three to five years in 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 our asset-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 or anticipated lending volume basis.
•Maintenance and support services as well as internal-use or “sandbox” development licenses, for which we generally charge as a percentage of the related subscription fees.
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. Both approaches pattern the amount of our invoicing to customers after their 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. 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.
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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, smaller credit unions, and our U.S. mortgage 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 Revenues and Gross Margin
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 based on the relative mix of revenues from our solutions, including the resale of Salesforce’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, 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 increased in absolute dollars as we have added new customer subscriptions that require professional services and built out our international professional services capabilities. Realized effective billing and utilization rates drive fluctuations in our professional services and other gross margin on a period-to-period basis.
Operating Expenses
Sales and Marketing. 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 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, benefits, 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, 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 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.
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Non-Operating Income (Expense)
Interest Income. Interest income consists primarily of interest earned on our cash and cash equivalents.
Interest Expense. Interest expense consists primarily of interest related to our financing obligations along with interest expense on our debt, commitment fees, and amortization of debt issuance 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 intercompany loans and transactions that are denominated in currencies other than the underlying functional currency of the applicable entity.
Income Tax Provision. Income tax provision consists of federal and state income taxes in the U.S. and income taxes in foreign jurisdictions.
Results of Operations
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 July 31, 2025 and 2026 in both dollars and as a percentage of total revenues, except as noted.
Three Months Ended July 31, Six Months Ended July 31,
2025 2026 2025 2026
($ in thousands)
Revenues:
Subscription revenues $ 130,752 $ 143,462 $ 256,340 $ 284,391
Professional services and other revenues 18,063 17,539 36,612 36,024
Total revenues 148,815 161,001 292,952 320,415
Cost of revenues:
Cost of subscription revenues 37,992 39,927 74,117 79,171
Cost of professional services and other revenues 22,698 20,303 44,268 39,535
Total cost of revenues 60,690 60,230 118,385 118,706
Gross profit 88,125 100,771 174,567 201,709
Operating expenses:
Sales and marketing 37,265 36,948 70,236 70,673
Research and development 34,667 31,030 68,008 59,895
General and administrative 25,489 19,179 47,132 36,408
Total operating expenses 97,421 87,157 185,376 166,976
Income (loss) from operations (9,296) 13,614 (10,809) 34,733
Non-operating income (expense):
Interest income 513 274 930 640
Interest expense (4,444) (5,214) (8,894) (9,695)
Other income (expense), net 717 (750) 16,814 (1,083)
Income (loss) before income taxes (12,510) 7,924 (1,959) 24,595
Income tax provision 1,209 1,526 5,743 3,206
Net income (loss) (13,719) 6,398 (7,702) 21,389
Net income (loss) attributable to redeemable non-controlling interest (74) 714 2 1,361
Adjustment attributable to redeemable non-controlling interest 1,612 603 1,991 1,306
Net income (loss) attributable to nCino, Inc. $ (15,257) $ 5,081 $ (9,695) $ 18,722
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The Company recognized stock-based compensation expense as follows:
Three Months Ended July 31, Six Months Ended July 31,
($ in thousands) 2025 2026 2025 2026
Cost of subscription revenues $ 830 $ 697 $ 1,494 $ 1,352
Cost of professional services and other revenues 3,315 3,276 6,069 5,900
Sales and marketing 3,746 4,097 6,674 7,258
Research and development 3,685 4,262 7,800 7,331
General and administrative 7,040 5,670 12,393 10,065
Total stock-based compensation expense $ 18,616 $ 18,002 $ 34,430 $ 31,906
The Company recognized amortization expense for intangible assets as follows:
Three Months Ended July 31, Six Months Ended July 31,
($ in thousands) 2025 2026 2025 2026
Cost of subscription revenues $ 5,115 $ 5,112 $ 10,190 $ 10,225
Cost of professional services and other revenues 83 — 165 —
Sales and marketing 4,043 3,669 8,075 7,349
Total amortization expense $ 9,241 $ 8,781 $ 18,430 $ 17,574
Three Months Ended July 31, Six Months Ended July 31,
2025 2026 2025 2026
Revenues:
Subscription revenues 87.9 % 89.1 % 87.5 % 88.8 %
Professional services and other revenues 12.1 10.9 12.5 11.2
Total revenues 100.0 100.0 100.0 100.0
Cost of revenues (percentage shown in comparison to related revenues):
Cost of subscription revenues 29.1 27.8 28.9 27.8
Cost of professional services and other revenues 125.7 115.8 120.9 109.7
Total cost of revenues 40.8 37.4 40.4 37.0
Gross profit 59.2 62.6 59.6 63.0
Operating expenses:
Sales and marketing 25.0 22.9 24.0 22.1
Research and development 23.3 19.3 23.2 18.7
General and administrative 17.1 11.9 16.1 11.4
Total operating expenses 65.4 54.1 63.3 52.2
Income (loss) from operations (6.2) 8.5 (3.7) 10.8
Non-operating income (expense):
Interest income 0.3 0.2 0.3 0.2
Interest expense (3.0) (3.2) (3.0) (3.0)
Other income (expense), net 0.5 (0.5) 5.7 (0.3)
Income (loss) before income taxes (8.4) 5.0 (0.7) 7.7
Income tax provision 0.8 0.9 2.0 1.0
Net income (loss) (9.2) % 4.1 % (2.7) % 6.7 %
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Comparison of the Three and Six Months Ended July 31, 2025 and 2026
Revenues
Three Months Ended July 31, Six Months Ended July 31,
($ in thousands) 2025 2026 2025 2026
Revenues:
Subscription revenues $ 130,752 87.9 % $ 143,462 89.1 % $ 256,340 87.5 % $ 284,391 88.8 %
Professional services and other revenues 18,063 12.1 17,539 10.9 36,612 12.5 36,024 11.2
Total revenues $ 148,815 100.0 % $ 161,001 100.0 % $ 292,952 100.0 % $ 320,415 100.0 %
Subscription Revenues
Subscription revenues increased $12.7 million for the three months ended July 31, 2026 compared to the three 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, 65.9% was attributable to increased revenues from existing customers as customers expanded their use and adoption of our solutions, and 34.1% was attributable to revenues from customers that began contributing to subscription revenues after July 31, 2025. Subscription revenues were 89.1% of total revenues for the three months ended July 31, 2026 compared to 87.9% of total revenues for the three months ended July 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
Professional services and other revenues decreased $0.5 million and $0.6 million for the three and six months ended July 31, 2026 compared to the three and six months ended July 31, 2025, respectively, primarily attributable to the mix of solutions being implemented.
Cost of Revenues and Gross Margin
Three Months Ended July 31, Six Months Ended July 31,
($ in thousands) 2025 2026 2025 2026
Cost of revenues (percentage shown in comparison to related revenues):
Cost of subscription revenues $ 37,992 29.1 % $ 39,927 27.8 % $ 74,117 28.9 % $ 79,171 27.8 %
Cost of professional services and other revenues 22,698 125.7 20,303 115.8 44,268 120.9 39,535 109.7
Total cost of revenues $ 60,690 40.8 $ 60,230 37.4 $ 118,385 40.4 $ 118,706 37.0
Gross profit $ 88,125 59.2 % $ 100,771 62.6 % $ 174,567 59.6 % $ 201,709 63.0 %
Cost of Subscription Revenues
Cost of subscription revenues increased $1.9 million for the three months ended July 31, 2026 compared to the three months ended July 31, 2025, generating a gross margin for subscription revenues of 70.9% and 72.2% for the three months ended July 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.
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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; and
•a $1.4 million increase in third-party data 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
Cost of professional services and other revenues decreased $2.4 million for the three months ended July 31, 2026 compared to the three months ended July 31, 2025, generating a gross margin for professional services and other revenues of (25.7)% and (15.8)% for the three months ended July 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 July 31, 2026 was primarily attributable to a decrease in headcount, coupled with higher effective billing and utilization rates.
The decrease for the three months ended July 31, 2026 primarily consisted of:
•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;
•a $0.4 million decrease for third-party costs of professional 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 $0.3 million decrease in allocated overhead.
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Operating Expenses
Three Months Ended July 31, Six Months Ended July 31,
($ in thousands) 2025 2026 2025 2026
Operating expenses:
Sales and marketing $ 37,265 25.0 % $ 36,948 22.9 % $ 70,236 24.0 % $ 70,673 22.1 %
Research and development 34,667 23.3 31,030 19.3 68,008 23.2 59,895 18.7
General and administrative 25,489 17.1 19,179 11.9 47,132 16.1 36,408 11.4
Total operating expenses 97,421 65.4 87,157 54.1 185,376 63.3 166,976 52.2
Income (loss) from operations $ (9,296) (6.2) % $ 13,614 8.5 % $ (10,809) (3.7) % $ 34,733 10.8 %
Sales and Marketing
Sales and marketing expenses decreased $0.3 million for the three months ended July 31, 2026 compared to the three months ended July 31, 2025, and increased $0.4 million for the six months ended July 31, 2026 compared to the six months ended July 31, 2025.
The decrease for the three months ended July 31, 2026 primarily consisted of:
•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:
• a $0.4 million increase in stock-based compensation 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 increased by 13 from July 31, 2025 to July 31, 2026.
Research and Development
Research and development expenses decreased $3.6 million for the three months ended July 31, 2026 compared to the three months ended July 31, 2025, and decreased $8.1 million for the six months ended July 31, 2026 compared to the six months ended July 31, 2025.
The decrease for the three months ended July 31, 2026 primarily consisted of:
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• 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 $0.6 million increase in stock-based compensation expense; and
•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;
•partially offset by a $0.8 million increase in allocated overhead primarily attributable to internal investments in AI technology.
Research and development headcount decreased by 9 from July 31, 2025 to July 31, 2026.
General and Administrative
General and administrative expenses decreased $6.3 million for the three months ended July 31, 2026 compared to the three months ended July 31, 2025, and decreased $10.7 million for the six months ended July 31, 2026 compared to the six months ended July 31, 2025.
The decrease for the three months ended July 31, 2026 primarily consisted of:
•a $2.4 million decrease in allocated overhead and other general and administrative costs, primarily attributable to a decrease in exit costs and asset write-offs from our restructuring in the second quarter of fiscal 2026;
•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;
•a $1.4 million decrease in stock-based compensation expense; and
•a $0.6 million decrease in third-party professional fees, mostly attributable to a decrease in transaction-related expenses and professional fees.
The decrease for the six months ended July 31, 2026 primarily consisted of:
•a $3.5 million decrease in allocated overhead and other general and administrative costs, primarily attributable to a decrease in exit costs and asset write-offs from our restructuring in the second quarter of fiscal 2026;
•a $2.8 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;
•a $2.3 million decrease in stock-based compensation expense; and
•a $1.9 million decrease in third-party professional fees, mostly attributable to a decrease in transaction-related expenses and professional fees.
General and administrative headcount decreased by 3 from July 31, 2025 to July 31, 2026.
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Non-Operating Income (Expense)
Three Months Ended July 31, Six Months Ended July 31,
($ in thousands) 2025 2026 2025 2026
Interest income $ 513 0.3 % $ 274 0.2 % $ 930 0.3 % $ 640 0.2 %
Interest expense (4,444) (3.0) (5,214) (3.2) (8,894) (3.0) (9,695) (3.0)
Other income (expense), net 717 0.5 (750) (0.5) 16,814 5.7 (1,083) (0.3)
Interest income decreased $0.2 million for the three months ended July 31, 2026 compared to the three months ended July 31, 2025, primarily attributable to balance and rate fluctuations of our accounts earning interest. Interest expense increased $0.8 million for the three months ended July 31, 2026 compared to the three months ended July 31, 2025 due to our outstanding borrowings on our revolving credit facility and term loan. The decrease of $1.5 million in other income (expense), net for the three months ended July 31, 2026 compared to the three months ended July 31, 2025, was primarily attributable to certain intercompany loans and transactions in fiscal 2026 that were denominated in currencies other than the underlying functional currency of the applicable entity.
Interest income decreased $0.3 million for the six months ended July 31, 2026 compared to the six months ended July 31, 2025, primarily attributable to balance and rate fluctuations of our accounts earning interest. Interest expense increased $0.8 million for the six months ended July 31, 2026 compared to the six months ended July 31, 2025, due to our outstanding borrowings on our revolving credit facility and term loan. The decrease of $17.9 million in other income (expense), net for the six months ended July 31, 2026 compared to the six months ended July 31, 2025, was primarily attributable to intercompany loans and transactions that are denominated in currencies other than the underlying functional currency of the applicable entity.
Income Tax Provision
Three Months Ended July 31, Six Months Ended July 31,
($ in thousands) 2025 2026 2025 2026
Income tax provision $ 1,209 0.8 % $ 1,526 0.9 % $ 5,743 2.0 % $ 3,206 1.0 %
Income tax provision was $1.2 million for the three months ended July 31, 2025, compared to a provision of $1.5 million for the three months ended July 31, 2026, and resulted in an effective tax rate of (9.7)% and 19.3%, respectively. Income tax provision was $5.7 million for the six months ended July 31, 2025 compared to an income tax provision of $3.2 million for the six months ended July 31, 2026, and resulted in an effective tax rate of (293.1)% and 13.0%, respectively. The change in the effective tax rate for the six months ended July 31, 2025 compared to the effective tax rate for the six months ended July 31, 2026 was primarily due to changes in our valuation allowance and profitability.
We continue to maintain a valuation allowance against our deferred tax assets at both January 31, 2026 and July 31, 2026 in several jurisdictions, including the U.S. and U.K. We intend to maintain a valuation allowance on the deferred tax assets in these jurisdictions until, based on the weight of all available evidence, we conclude all or a portion thereof is more-likely-than-not to be realized. We believe it is reasonably possible within the next 12 months that there will be sufficient positive evidence to reach a conclusion that some or all of the U.S. valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period in which the release is recorded.
Non-GAAP Financial Measure
In addition to providing financial measurements based on GAAP, we provide non-GAAP operating income as an additional financial metric that is not prepared in accordance with GAAP (“non-GAAP”). Our calculation of non-GAAP operating income is described below. Management uses this non-GAAP financial measure, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes, and to evaluate our financial performance. We believe that this non-GAAP financial measure helps us to identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of the non-GAAP financial measure.
Accordingly, we believe that this financial measure reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, and enhancing the overall understanding of our past performance and future
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prospects. Although the calculation of non-GAAP financial measures may vary from company to company, our detailed presentation may facilitate analysis and comparison of our operating results by management and investors with other peer companies, many of which use a similar non-GAAP financial measure to supplement their GAAP results in their public disclosures.
Non-GAAP operating income. Non-GAAP operating income is defined as Income (loss) from operations as reported in our unaudited condensed consolidated statements of operations excluding the following items:
Amortization of Purchased Intangibles. nCino incurs amortization expense for purchased intangible assets in connection with certain mergers and acquisitions. 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.
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.
Transaction-Related Expenses. nCino excludes expenses related to mergers and acquisitions or divestitures as they limit comparability of operating results with prior periods. Transaction-related expenses include but are not limited to, costs incurred from third-party professional services firms, change in fair value of contingent consideration, and one-time integration activities. We believe these costs are non-recurring in nature and outside the ordinary course of business.
Litigation Expenses. nCino excludes fees and expenses related to certain litigation expenses incurred from legal matters outside the ordinary course of our business as we believe their exclusion from non-GAAP operating expenses will facilitate a more meaningful explanation of operating results and comparisons with prior period results.
Restructuring Costs. nCino excludes costs incurred related to bespoke restructuring plans and other one-time costs, if any, that are fundamentally different in strategic nature and frequency from ongoing initiatives. We believe excluding these costs facilitates a more consistent comparison of operating performance over time.
This non-GAAP financial measure does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. There are limitations in the use of non-GAAP measures because they do not include all of the expenses that must be included under GAAP and because they involve the exercise of judgment concerning exclusions of items from the comparable non-GAAP financial measure. In addition, other companies may use other measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.
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The following table reconciles non-GAAP operating income to GAAP income (loss) from operations, the most directly comparable financial measure, calculated and presented in accordance with GAAP:
Three Months Ended July 31, Six Months Ended July 31,
($ in thousands) 2025 2026 2025 2026
GAAP income (loss) from operations $ (9,296) $ 13,614 $ (10,809) $ 34,733
Adjustments
Amortization of intangible assets 9,241 8,781 18,430 17,574
Stock-based compensation expense 18,616 18,002 34,430 31,906
Transaction-related expenses 1,384 433 2,724 1,128
Restructuring and related charges 10,065 — 10,065 —
Total adjustments 39,306 27,216 65,649 50,608
Non-GAAP operating income $ 30,010 $ 40,830 $ 54,840 $ 85,341
Liquidity and Capital Resources
As of July 31, 2026, we had $83.3 million in cash and cash equivalents. We have a history of losses, and while we have achieved profitability in certain periods, our accumulated deficit is $355.7 million as of July 31, 2026. Our historical net losses have been driven by our investments in developing the nCino Platform and scaling our sales and marketing organization and finance and administrative functions to support our rapid growth.
To date, we have funded our capital needs through operating cash flows, issuances of common stock including our initial public offering in July 2020, our revolving credit facility, and term loan. In March 2026, we entered into an amendment to the 2024 Credit Agreement for an incremental term loan of $200.0 million. The proceeds were used to reduce a portion of the outstanding balance on our revolving credit facility and to finance an accelerated share repurchase program discussed below. We generally bill and collect from our customers annually in advance. Our billings are subject to seasonality, with billings in the first and fourth quarters of our fiscal year substantially higher than in the second and third quarters. Because we recognize revenues ratably, our deferred revenue balance mirrors the seasonality of our billings.
The 2024 Credit Agreement matures on October 28, 2029. We are currently in compliance with all covenants, have used borrowing capacity of $78.5 million and have an outstanding letter of credit for $0.1 million to secure leased office space under our $250.0 million revolving credit facility. See Note 10 “Debt” 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.
We believe that current cash and cash equivalents as well as borrowings available under the 2024 Credit Facility will be sufficient to fund our operations and capital requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts to enhance the nCino Platform and introduce new solutions, market acceptance of our solutions, the continued expansion of our sales and marketing activities, capital expenditure requirements, repurchases of our common stock, and any potential future acquisitions. We may from time to time seek to raise additional capital to support our growth. Any equity financing we may undertake could be dilutive to our existing stockholders, and any debt financing we may undertake could require debt service and financial and operational covenants that could adversely affect our business. There is no assurance we would be able to obtain future financing on acceptable terms or at all.
Stock Repurchase Programs
In March 2025, our Board of Directors authorized the March 2025 Stock Repurchase Program of up to $100.0 million of our outstanding common stock which was 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.
In March 2026, our Board of Directors authorized the ASR of up to $100.0 million of our outstanding common stock which was finalized on June 2, 2026.
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During the six months ended July 31, 2026, we repurchased 10.8 million shares of our outstanding common stock for $175.7 million including costs and excise taxes under the December 2025 Stock Repurchase Program and the ASR. As of July 31, 2026, $0.02 million remained available for future repurchases under the December 2025 Stock Repurchase Program. 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.
In August 2026, our Board of Directors authorized an additional stock repurchase program of up to $100.0 million of our outstanding common stock. See Note 15 “Subsequent Event” 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.
nCino K.K.
In fiscal 2020, we established nCino K.K., a Japanese company in which we own a controlling interest, for purposes of facilitating our entry into the Japanese market. We have consolidated the results of operations and financial condition of nCino K.K. since its inception. Pursuant to an agreement with the holders of the non-controlling interest in nCino K.K., beginning in 2027 we may redeem the non-controlling interest, or be required to redeem such interest by the holders thereof, based on a prescribed formula derived from the relative revenues of nCino K.K. and the Company. The balance of the redeemable non-controlling interest is reported on our balance sheet below total liabilities but above stockholders’ equity at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest’s share of earnings or losses and other comprehensive income or loss, or its estimated redemption value. As of January 31, 2026 and July 31, 2026, the redeemable non-controlling interest was $12.7 million and $15.4 million, respectively.
Cash Flows
Summary Cash Flow information for the six months ended July 31, 2025 and 2026 is set forth below:
Six Months Ended July 31,
($ in thousands) 2025 2026
Net cash provided by operating activities $ 72,056 $ 115,604
Net cash used in investing activities (53,445) (809)
Net cash used in financing activities (20,184) (119,305)
Net Cash Provided by Operating Activities
The $115.6 million provided by operating activities in the six months ended July 31, 2026 reflects our net income of $21.4 million, $65.5 million in net non-cash charges, and $28.7 million generated by changes in working capital accounts. Non-cash charges primarily consisted of stock-based compensation, depreciation and amortization, amortization of costs capitalized to obtain revenue contracts, non-cash operating lease costs, deferred income taxes, change in fair value of contingent consideration, foreign currency losses, amortization of debt issuance costs, provision for bad debt, and losses on the disposal of property and equipment. Cash generated by working capital accounts was principally a function of a $42.9 million decrease in accounts receivable due to the timing of billings and collections from customers, a $12.0 million increase in deferred revenue due to the timing of billings and revenue recognition, a $1.6 million decrease in prepaid expenses, and a $0.3 million increase in accounts payable. The cash generated by working capital accounts was partially offset by a $17.9 million decrease in accrued expenses and other liabilities primarily due to the payment of bonuses and commissions and contingent consideration, an increase of $8.4 million of capitalized costs to obtain revenue contracts which consisted primarily of sales commissions, and a $2.0 million decrease in operating lease liabilities.
The $72.1 million provided by operating activities in the six months ended July 31, 2025 reflects our net loss of $7.7 million, offset by $54.7 million in net non-cash charges and $25.0 million generated by changes in working capital accounts. Non-cash charges primarily consisted of stock-based compensation, depreciation and amortization, amortization of costs capitalized to obtain revenue contracts, deferred income taxes, non-cash operating lease costs, loss on disposal of long-lived assets, change in fair value of contingent consideration, provision for bad debt, and amortization of debt issuance costs, partially offset by foreign currency gains related to remeasurement of intercompany loans and transactions and gains on investments. Cash generated by working capital accounts was principally a function of a $51.8 million decrease in accounts receivable due to the timings of billings and collections from customers, a $1.6 million decrease in prepaid expenses and other assets, and a $0.7 million increase in accounts payable. The cash generated by working capital accounts was partially offset by a $16.4 million decrease in accrued expenses and other liabilities primarily due to the payout of bonuses and commission, an
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increase of $6.6 million of capitalized costs to obtain revenue contracts which consisted primarily of sales commissions, a $3.4 million decrease in deferred revenue, due to the timing of billings and revenue recognition, and a $2.6 million decrease in operating lease liabilities.
Net Cash Used in Investing Activities
The $0.8 million used in investing activities in the six months ended July 31, 2026 was for the purchase of property and equipment and leasehold improvements. The $53.4 million used in investing activities in the six months ended July 31, 2025 was comprised of $50.3 million used for the acquisition of Sandbox Banking and $6.9 million for the purchase of property and equipment and leasehold improvements to support the expansion of our business primarily for one of our international offices. The cash used in investing activities was partially offset by proceeds from the sale of an investment of $3.7 million.
Net Cash Used in Financing Activities
The $119.3 million used in financing activities in the six months ended July 31, 2026 was comprised principally of repurchases of our common stock of $175.7 million, payments of $150.0 million on our credit facility, payment of contingent consideration of $8.1 million, payments of $2.5 million on our term loan, and principal payments of $0.6 million on financing obligations. The cash used in financing activities was offset by $199.3 million proceeds from borrowings on our term loan, net of debt issuance costs to pay down a portion of our revolving credit facility and make repurchases of our common stock under stock repurchase programs, $15.0 million of proceeds from borrowings on our credit facility, $2.1 million of proceeds from stock issuances under the employee stock purchase plan, and $1.2 million of proceeds from the exercise of stock options. The $20.2 million used in financing activities in the six months ended July 31, 2025 was comprised principally of payments of $65.0 million on our credit facility, repurchases of our common stock of $60.6 million, and principal payments of $0.8 million on financing obligations. The cash used in financing activities was offset by $102.5 million proceeds from borrowings on our credit facility to fund the acquisition of Sandbox Banking and to make repurchases of our common stock under a stock repurchase program, $2.4 million of proceeds from stock issuances under the employee stock purchase plan, and $1.3 million of proceeds from the exercise of stock options.
Contractual Obligations and Commitments
Our estimated future obligations principally consist of leases related to our facilities, purchase obligations related primarily to licenses and hosting services, financing obligations for leases for which we are considered the owners for accounting purposes, acquisition liabilities, the 2024 Credit Facility, and the Term Loan. See Note 5 “Balance Sheet Components,” Note 9 “Leases,” Note 10 “Debt,” and Note 11 “Commitments and Contingencies” 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.
Critical Accounting Policies and Estimates
Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these judgments and estimates under different assumptions or conditions and any such differences may be significant.
There have been no material changes in our critical accounting policies or estimates as compared to those disclosed in the Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the SEC on March 31, 2026.
Recent Accounting Pronouncements
See Note 1 “Summary of Business and Significant Accounting Policies” 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 recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted, if applicable.
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