nCino, Inc.NCNO
nCino, Inc. Fair Value Disclosure
Fair Value Measurements
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2. Significant other inputs that are directly or indirectly observable in the marketplace.
Level 3. Significant unobservable inputs that are supported by little or no market activity.
The carrying amounts of cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value as of January 31, 2025 and 2026 because of the relatively short duration of these instruments.
The carrying amount of any outstanding borrowings on the Company’s revolving credit facility approximates fair value due to the variable interest rates of the borrowings.
The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following table summarizes the
Company’s financial assets measured at fair value as of January 31, 2025 and 2026 and indicates the fair value hierarchy of the valuation:
| Fair value measurements on a recurring basis as of January 31, 2025 | |||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||
| Assets: | |||||||||||||||||
| Money market accounts (included in cash and cash equivalents) | $ | 38,841 | $ | — | $ | — | |||||||||||
| Time deposits (included in long-term prepaid expenses and other assets) | 339 | — | — | ||||||||||||||
| Total assets | $ | 39,180 | $ | — | $ | — | |||||||||||
| Fair value measurements on a recurring basis as of January 31, 2026 | |||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||
| Assets: | |||||||||||||||||
| Money market accounts (included in cash and cash equivalents) | $ | 10,588 | $ | — | $ | — | |||||||||||
| Time deposits (included in prepaid expenses and other current assets) | 142 | — | — | ||||||||||||||
| Time deposits (included in long-term prepaid expenses and other assets) | 169 | — | — | ||||||||||||||
| Total assets | $ | 10,899 | $ | — | $ | — | |||||||||||
| Liabilities: | |||||||||||||||||
| Contingent consideration (included in accrued expenses and other current liabilities) | $ | — | $ | — | $ | 9,700 | |||||||||||
| Total liabilities | $ | — | $ | — | $ | 9,700 | |||||||||||
All of the Company’s money market accounts are classified within Level 1 because the Company’s money market accounts are valued using quoted market prices in active exchange markets for identical assets.
The following table summarizes the change in fair value of the contingent consideration with significant unobservable inputs:
| Balance, January 31, 2025 | $ | — | |||
| Contingent consideration in connection with business acquisition | 8,100 | ||||
| 1,600 | |||||
| Balance, January 31, 2026 | $ | 9,700 | |||
The contingent consideration consists of the potential earn-out payment related to the Company’s acquisition of Alphapack, Co. dba Sandbox Banking (“Sandbox Banking”) on February 7, 2025, and has a maximum potential payment of $10.0 million. The fair value of the contingent consideration was determined using a probability weighted discounted cash flow model. Changes in the fair value of the contingent consideration can result from changes in assumed discount periods and rates, and from changes pertaining to the estimated or actual achievement of the defined milestones. This contingent liability was classified as Level 3 within the fair value hierarchy. Changes in fair values of contingent consideration are recognized in general and administrative expenses on the Company’s consolidated statements of operations.
The unobservable inputs used in the valuation as of January 31, 2026 included an expected payment in the first half of fiscal 2027, a weighted average expected achievement percentage of 100.0%, and a discount rate of 6.7%.
There were no transfers between levels of the fair value hierarchy during the fiscal years ended January 31, 2025 and 2026.
Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The Company’s assets measured at fair value on a non-recurring basis include the investments accounted for under the measurement alternative. Unrealized gains as a result of an observable price change were $0.2 million, $0.0 million, and $0.5 million for the fiscal years ended January 31, 2024, 2025, and 2026, respectively. Cumulative unrealized gains were $0.7 million for investments accounted for under the measurement alternative as of January 31, 2026. There was no impairment recognized for the fiscal years ended January 31, 2024, 2025, and 2026. Realized gains from the sale of an investment reflect the difference between the sales proceeds and the carrying value of the investment at the beginning of the period or the purchase date, if later. Realized gains were $0.0 million, $0.0 million, and $1.2 million for the fiscal years ended January 31, 2024, 2025, and 2026, respectively. See Note 14 “Related-Party Transactions” for additional information on the sale of an investment.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 31, 2026 | Showing above |
| 2025 | Apr 1, 2025 | |
| 2024 | Mar 26, 2024 | |
| 2023 | Mar 28, 2023 | |
| 2022 | Mar 31, 2022 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.