Company: NCNO
Filing Date: 2025-05-28
Form Type: 10-Q
Source: 0001902733-25-000076
Chunk: 148

Company: nCino, Inc.
Filing Date: 2025-05-28
Form: 10-Q
Item: Part I, Item 2
Chunk 148
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 currency of the applicable entity.

Income Tax Provision (Benefit)

Three Months Ended April 30,($ in thousands)20242025Income tax provision (benefit)$(2,982)(2.3)%$4,534 3.1 %

Income tax benefit was $3.0 million for the three months ended April 30, 2024 compared to a provision for $4.5 million for the three months ended April 30, 2025, and resulted in an effective tax rate of 56.5% and 43.0%, respectively. The change in the effective tax rate for the three months ended April 30, 2025 compared to the effective tax rate for the three months ended April 30, 2024 was primarily due to a reduction of our valuation allowance and profitable foreign jurisdictions.

We continue to maintain a valuation allowance against our deferred tax assets in several jurisdictions, including the U.S. It is determined by management when a valuation allowance should be recorded, utilizing significant judgement and the use of estimates. Through acquisitions, the Company recorded a net U.S. deferred tax liability mostly related to identifiable intangible assets. The deferred tax liability recognized provides additional positive evidence that a portion of the Company's U.S. deferred tax are realizable. As a result, the Company reduced the historical valuation allowance in the U.S. by $2.0 million during the three months ended April 30, 2025. 

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 prospects. Although the calculation of non-GAAP financial measures may vary from company