nCino (NCNO) risk factors, FY2025 10-K

Risks Relating to Our Business and Industry

1. 01We derive most of our revenues from customers in the financial services industry, and any downturn or consolidation or decrease in technology spend in the financial services industry could adversely affect our business
2. 02Our future operating results are difficult to predict, in part because we do not have an extensive operating history at the current scale of our business, and we may not achieve our expected operating results in the future
3. 03We have a history of losses, and while we have achieved profitability in a quarterly period, we may not be able to achieve or sustain profitability on a GAAP basis in the future
4. 04If we are unable to attract new customers or continue to broaden our existing customers’ use of our solutions, our revenue growth will be adversely affected
5. 05As the market for cloud-based banking technology continues to develop, it may do so more slowly than we expect or changes in a way that we fail to anticipate. If that occurs, or we fail to market our solutions effectively, our sales would suffer and our results of operations would be adversely affected
6. 06We may not be able to sustain our revenue growth rate in the future
7. 07Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business
8. 08We may not accurately predict the long-term rate of customer subscription renewals or adoption of our solutions, or any resulting impact on our revenues or operating results
9. 09Our business faces significant risks from diverse security threats. A breach of our security or privacy measures or those we rely on could result in unauthorized access to, or disclosure of, customer or their clients’ data, which may materially and adversely impact our reputation, business, and results of operations
10. 10against and resolving legal and regulatory claims, all of which could be costly and divert resources and the attention of our management and key personnel away from our business operations
11. 11Fundamental elements of the nCino Platform are built on the Salesforce Platform and we rely on our agreement with Salesforce to provide this solution to our customers
12. 12Privacy and data security concerns, data collection and transfer restrictions and related domestic or foreign regulations may limit the use and adoption of our solutions and adversely affect our business and results of operations
13. 13Because we recognize subscription revenues over the term of the contract, downturns or upturns in our business may not be reflected in our results of operations until future periods
14. 14The markets in which we participate are intensely competitive and highly fragmented, and pricing pressure, new technologies or other competitive dynamics could adversely affect our business and results of operations
15. 15Our increased focus on the development and use of AI/ML technologies in our solutions and our business, as well as our potential failure to effectively implement, use, and market these technologies, may result in reputational harm or liability, or could otherwise adversely affect our business
16. 16protection and other regulatory guidance that may apply to the use of AI technologies in our business, and which may impact our use of technology
17. 17We depend on data centers operated by or on behalf of Salesforce, Amazon Web Services ("AWS"), and other third parties, and any disruption in the operation of these facilities could adversely affect our business and subject us to liability
18. 18Our customers are highly regulated. Our failure to comply with laws and regulations applicable to us as a technology provider to FIs could adversely affect our business and results of operations, increase costs, and impose constraints on the way we conduct our business
19. 19internal processes and solutions as result of these regulations, we could be required to invest substantial additional time and funds and divert time and resources from other corporate purposes to remedy any identified deficiency
20. 20Any legal proceedings against us could adversely affect our operations and prospects, damage our reputation, and be costly and time-consuming to defend
21. 21Our corporate culture has contributed to our success, and if we cannot maintain it as we grow, particularly given our recent transition to a new Chief Executive Officer, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be adversely affected
22. 22We may encounter implementation challenges, including in situations in which we rely on SIs, which would materially and adversely affect our business and results of operations
23. 23affect our ability to attract new customers. Any difficulties or delays in implementation processes could cause customers to delay or forego future purchases of our solutions
24. 24Defects, errors, or other performance problems in our solutions could harm our reputation, result in significant costs to us, impair our ability to sell our solutions, and subject us to substantial liability
25. 25If we fail to accurately anticipate and respond to rapid changes in the industry in which we operate, our ability to attract and retain customers could be impaired and our competitive position could be harmed
26. 26failures of our solutions, increases in our expenses, and reductions in our sales, which could materially and adversely affect our business and results of operations
27. 27The failure to attract and retain additional qualified personnel could prevent us from executing our business strategy
28. 28Failure to effectively expand our sales capabilities could harm our ability to increase our customer base
29. 29If we fail to provide effective customer training on our solutions and high-quality customer support, our business and reputation would suffer
30. 30If we are unable to effectively integrate our solutions with other systems used by our customers, or if there are performance issues with such third-party systems, our solutions will not operate effectively and our business and reputation will be adversely affected
31. 31Our sales cycle can be unpredictable, time-consuming and costly
32. 32Failure to protect our proprietary technology and intellectual property rights could adversely affect our business and results of operations
33. 33We use “open source” software in our solutions, which may restrict how we use or distribute our solutions, require that we release the source code of certain software subject to open source licenses, or subject us to litigation or other actions that could adversely affect our business
34. 34Assertions by third parties of infringement or other violations by us of their intellectual property rights, whether or not correct, could result in significant costs and adversely affect our business and results of operations
35. 35Any license we may enter into as a result of litigation may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us. Any of the foregoing events could adversely affect our business and results of operations
36. 36Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
37. 37Amendments to existing tax laws, rules, or regulations, or enactment of new unfavorable tax laws, rules, or regulations could have an adverse effect on our business and operating results

Risks Relating to Ownership of Our Common Stock

1. 38The market price of our common stock may be volatile or may decline steeply or suddenly regardless of our operating performance and we may not be able to meet investor or analyst expectations and you may lose all or part of your investment
2. 39We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock
3. 40Future securities issuances could result in significant dilution to our existing stockholders and impair the market price of our common stock
4. 41Delaware law and provisions in our amended and restated certificate of incorporation and bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of our common stock
5. 42To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder

General Risks

1. 43Uncertain, volatile, or weakened economic conditions, including inflation and rising interest rates, tariffs and trade issues, and geopolitical uncertainties, may adversely affect our industry, business, and results of operations
2. 44Natural or man-made disasters and other similar events may significantly disrupt our business, and negatively impact our business, financial condition, and results of operations
3. 45If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business, or our market, or if they change their recommendations regarding our common stock adversely, the trading price or trading volume of our common stock could decline
4. 46Failure to maintain the adequacy of internal controls over financial reporting may adversely affect investor confidence in our company and, as a result, the value of our common stock
5. 47Our compliance with Section 404 has required, and will continue to require, that we incur substantial accounting expense and expend significant management efforts
6. 48Operating as a public company requires us to incur substantial costs and requires substantial management attention
7. 49The terms of our Credit Facility contain restrictive covenants that may limit our operating flexibility