nCino, Inc.NCNO
nCino, Inc. Stock Compensation Disclosure
Stock-Based Compensation
Equity Incentive Plans
The Company has two equity incentive plans: the nCino, Inc. 2014 Omnibus Stock Ownership and Long-Term Incentive Plan (the “2014 Plan”) and the 2019 Amended and Restated Equity Incentive Plan (the “2019 Plan” and together with the 2014 Plan, the “Incentive Plans”). Under the 2014 Plan, the Board of Directors had allotted 15,025,666 shares of common stock for incentive options or non-qualified options as of January 31, 2025. Non-qualified options may be granted to Company employees, non-employee directors, and consultants. The exercise price of options is determined by the Board of Directors, but cannot be less than 100% of the fair market value of the Company’s common stock on the date of the grant. The options generally vest in one of two ways:
•In equal annual installments over four years from the grant date.
•Upon a change in control transaction (with respect to certain Incentive Plan participants).
All options expire ten years from the grant date and, with respect to certain Incentive Plan participants, provide for accelerated vesting if there is a change in control of the Company.
In July 2019, the Company established the 2019 Equity Incentive Plan for the issuance of awards in the form of options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based awards, and other stock-based awards.
In connection with the Company's initial public offering ("IPO"), the Company's Board of Directors adopted and the Company's stockholders approved the 2019 Plan which amended and restated the 2019 Equity Incentive Plan. All awards shall be granted within ten years from the effective date of the 2019 Plan and can only be granted to employees, officers, directors, and consultants and generally vest over four years.
Under the 2019 Plan, the number of available shares was increased to 15,250,000, plus an annual increase added on the first day of each fiscal year, beginning with the fiscal year ending January 31, 2022, and continuing until, and including,
the fiscal year ending January 31, 2031. The annual increase will be equal to the lesser of (i) 5% of the number of shares issued and outstanding as of January 31 of the immediately preceding fiscal year and (ii) an amount determined by the Company's Board of Directors. The Company ceased granting awards under the 2014 Plan during the fiscal year ended January 31, 2020, and all shares that remained available for issuance under the 2014 Plan were transferred to the 2019 Plan prior to the closing of the IPO. Additionally, the number of shares available under the 2019 Plan shall be increased by the number of shares outstanding under the 2014 Plan that expire, terminate or are canceled without having been exercised or settled in full. The 2014 Plan governs outstanding awards granted prior to the adoption of the 2019 Plan.
RSUs vest upon the satisfaction of a time-based condition. RSUs are generally earned over a service period of four years. For RSUs granted to the non-employee members of the Board of Directors, some vest in less than a year, some annually and some over three years. The compensation expense related to these awards is based on the grant date fair value of the RSUs and is recognized on a ratable basis over the applicable service period.
As of January 31, 2025, the Company had stock options outstanding under the 2014 Plan and the 2019 Plan had stock options and RSUs outstanding.
Stock Options
Stock option activity for the fiscal year ended January 31, 2025 was as follows:
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In thousands) | ||||||||||||||||||||
| Outstanding, January 31, 2024 | 1,212,704 | $ | 7.14 | 3.21 | $ | 29,516 | |||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Expired or forfeited | (1,375) | 12.06 | |||||||||||||||||||||
| Exercised | (399,727) | 6.96 | 10,890 | ||||||||||||||||||||
| Outstanding, January 31, 2025 | 811,602 | $ | 7.22 | 2.27 | $ | 21,742 | |||||||||||||||||
| Exercisable, January 31, 2025 | 811,602 | $ | 7.22 | 2.27 | $ | 21,742 | |||||||||||||||||
| Fully vested or expected to vest, January 31, 2025 | 811,602 | $ | 7.22 | 2.27 | $ | 21,742 | |||||||||||||||||
The total intrinsic value of options exercised during the fiscal years ended January 31, 2023, 2024, and 2025 was $16.2 million, $19.0 million, and $10.9 million, respectively. Aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the option exercise price and the estimated fair value of the Company’s common stock at the time such option exercises. This intrinsic value changes based on changes in the fair value of the Company’s underlying stock.
Restricted Stock Units
RSU activity during the fiscal year ended January 31, 2025 was as follows:
| Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
| Nonvested, January 31, 2024 | 5,626,125 | $ | 33.19 | ||||||||
| Granted | 3,193,433 | 33.65 | |||||||||
Vested | (1,745,202) | 34.84 | |||||||||
| Forfeited | (968,897) | 34.75 | |||||||||
| Nonvested, January 31, 2025 | 6,105,459 | $ | 32.78 | ||||||||
The weighted average grant date fair value for RSUs granted during the fiscal years ended January 31, 2023, 2024, and 2025 was $41.54, $25.65, and $33.65, respectively.
The total fair value of RSUs vested for the fiscal years ended January 31, 2023, 2024, and 2025 was $39.7 million, $48.2 million, and $60.8 million, respectively.
As of January 31, 2025, total unrecognized compensation expense related to non-vested RSUs was $145.7 million, adjusted for estimated forfeitures, based on the estimated fair value of the Company’s common stock at the time of grant. That cost is expected to be recognized over a weighted average period of 2.73 years.
Employee Stock Purchase Plan
In July 2020, the Board of Directors adopted and stockholders approved the ESPP, which became effective immediately prior to the closing of the IPO. The ESPP includes two components, one component is intended to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Internal Revenue Code (the "Code") and a component that does not qualify as an "employee stock purchase plan" under Section 423 of the Code. The ESPP initially reserved and authorized the issuance of up to a total of 1,800,000 shares of common stock to participating employees. The aggregate number of shares of the Company's common stock under the ESPP will automatically increase on the first day of each fiscal year, beginning with the first fiscal year ending January 31, 2022 and continuing until the fiscal year ended January 31, 2031, by an amount equal to the lesser of (i) 1% of the shares of the Company's common stock issued and outstanding on January 31 of the immediately preceding fiscal year, (ii) 1,800,000 shares of the Company's common stock or (iii) an amount determined by the Board of Directors. As of January 31, 2025, 5,484,024 shares of common stock remain available for grant under the ESPP.
The ESPP permits employees to purchase the Company's common stock through payroll deductions during six month offerings. The offering periods begin each January 1 and July 1, or such other period determined by the compensation committee. Eligible employees will purchase the shares at a price per share equal to the lesser of (i) 85% of the fair market value of a share of the Company's common stock on the first business day of such offering period and (ii) 85% of the fair market value of share of the Company's common stock on the last business day of such offering period, although the compensation committee has discretion to change the purchase price with respect to future offering periods, subject to terms of the ESPP.
The first offering period for the ESPP began on July 1, 2021 and ended on December 31, 2021. Thereafter, offering periods will begin on January 1 and July 1.
The fair value of ESPP shares is estimated at the date of grant using the Black-Scholes option valuation model based on assumptions as follows for ESPP awards:
Expected life. The expected life reflects the period for which the Company believes the ESPP will remain outstanding. The expected term for the ESPP award approximates the offering period of six months.
Expected volatility. The expected volatility is based on the historical volatility of the Company's common stock.
Expected dividends. The expected dividend yield is zero as the Company has not and does not expect to pay dividends.
Risk-free interest rate. The risk-free interest rate reflects the U.S. Treasury yield for a similar expected life instrument in effect at the time of the grant of the ESPP share.
The assumptions utilized for the ESPP shares for the fiscal years ended January 31, 2023, 2024, and 2025 were as follows:
| Fiscal Year Ended January 31, | |||||||||||||||||
| 2023 | 2024 | 2025 | |||||||||||||||
| Expected life (in years) | 0.50 | 0.50 | 0.50 | ||||||||||||||
| Expected volatility | 49.65% - 84.59% | 38.70% - 61.86% | 38.70% - 40.74% | ||||||||||||||
| Expected dividends | 0.00% | 0.00% | 0.00% | ||||||||||||||
| Risk-free interest rate | 0.22% - 4.77% | 4.77% - 5.53% | 4.25% - 5.37% | ||||||||||||||
As of January 31, 2025, total unrecognized compensation expense related to the ESPP was $0.7 million. That cost is expected to be recognized over the remaining term of the offering period that began on January 1, 2025 and will end on June 30, 2025.
Stock-Based Compensation Expense
Total stock-based compensation expense included in our consolidated statements of operations were as follows:
| Fiscal Year Ended January 31, | |||||||||||||||||
| 2023 | 2024 | 2025 | |||||||||||||||
| Cost of subscription revenues | $ | 1,430 | $ | 1,847 | $ | 2,891 | |||||||||||
| Cost of professional services and other revenues | 7,263 | 9,369 | 11,977 | ||||||||||||||
| Sales and marketing | 13,283 | 15,417 | 17,016 | ||||||||||||||
| Research and development | 11,602 | 15,942 | 17,416 | ||||||||||||||
| General and administrative | 16,654 | 15,460 | 22,292 | ||||||||||||||
Total stock-based compensation expense1 | $ | 50,232 | $ | 58,035 | $ | 71,592 | |||||||||||
1Includes $0.2 million benefit incurred for the fiscal year ended January 31, 2023 in connection with the restructuring plan commenced in January 2023. See Note 18 "Restructuring" for more information.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.