Core Insights - UiPath Inc. (NYSE:PATH) is recognized as an exciting AI stock, with RBC Capital analyst Matthew Hedberg maintaining a Sector Perform rating and a price target of $12.00 following the latest quarterly results [1][3] - The company demonstrated a stable quarter with outperformance across various metrics, despite the presence of foreign exchange tailwinds [1][3] - UiPath is experiencing growing momentum in its agentic opportunity, leading to larger deal sizes and increased core automation usage [2][3] Financial Performance - The latest quarterly results indicate improved execution and stability, contributing to the overall positive performance metrics [3] - The macroeconomic environment is described as variable but consistent, with the Federal Reserve returning to normal operations [3] Market Position - UiPath is positioned as a software as a service (SaaS) enterprise that focuses on AI-powered automation platforms aimed at transforming business operations [3] - Despite the potential of UiPath as an investment, there are suggestions that other AI stocks may offer greater upside potential with less downside risk [4]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7][8] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a looming question regarding the energy supply needed to sustain this growth [2] - AI data centers, such as those powering large language models, consume energy equivalent to that of a small city, indicating a significant strain on global power grids [2] - The company in focus is positioned to benefit from the anticipated surge in demand for electricity driven by AI advancements [3][6] Company Profile - The company is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and playing a crucial role in U.S. LNG exportation [5][7] - It is noted for its debt-free status and substantial cash reserves, which amount to nearly one-third of its market capitalization, providing a strong financial foundation [8][10] - The company also holds a significant equity stake in another AI-related venture, offering investors indirect exposure to multiple growth opportunities in the AI sector [9][10] Market Positioning - The company is recognized for its ability to execute large-scale engineering, procurement, and construction projects across various energy sectors, including nuclear energy, which is seen as vital for future power strategies [7][8] - It is suggested that the company is undervalued, trading at less than seven times earnings, which presents a compelling investment opportunity [10][11] Future Outlook - The ongoing technological revolution driven by AI is expected to create substantial investment returns, with projections of over 100% potential returns within 12 to 24 months [15][19] - The influx of talent into the AI sector is anticipated to lead to rapid advancements and innovative ideas, further solidifying AI's role as a key driver of future economic growth [12][13]

Core Insights - The article provides a comprehensive comparison of Microsoft against its key competitors in the Software industry, focusing on financial metrics, market position, and growth prospects to offer insights for investors [1] Company Overview - Microsoft develops and licenses consumer and enterprise software, known for its Windows operating systems and Office productivity suite, organized into three segments: productivity and business processes, intelligence cloud, and more personal computing [2] Financial Metrics - Microsoft has a Price to Earnings (P/E) ratio of 36.52, which is 0.33x less than the industry average, indicating potential for growth at a reasonable price [5] - The Price to Book (P/B) ratio is 10.78, which is 0.82x the industry average, suggesting potential undervaluation [5] - The Price to Sales (P/S) ratio is 13.2, surpassing the industry average by 1.08x, indicating possible overvaluation in terms of sales performance [5] - Return on Equity (ROE) stands at 8.19%, which is 0.97% above the industry average, reflecting efficient use of equity to generate profits [5] - EBITDA is reported at $44.43 billion, which is 57.7x above the industry average, indicating stronger profitability and robust cash flow generation [5] - Gross profit is $52.43 billion, indicating 35.19x above the industry average, showcasing stronger profitability from core operations [5] - Revenue growth is at 18.1%, significantly below the industry average of 60.28%, suggesting potential struggles in increasing sales volume [5] Debt-to-Equity Ratio - Microsoft has a lower debt-to-equity (D/E) ratio of 0.18, indicating less reliance on debt financing and a healthier balance between debt and equity compared to peers [11] - The D/E ratio is a critical measure for evaluating financial health and risk profile, aiding in informed decision-making [8] Comparative Analysis - The P/E and P/B ratios suggest that Microsoft is undervalued compared to peers, indicating growth potential, while the high P/S ratio implies possible overvaluation based on revenue [9] - High ROE, EBITDA, and gross profit ratios indicate strong profitability and operational efficiency, but low revenue growth may raise concerns for future performance compared to industry peers [9]

Core Insights - UiPath Inc. (NYSE:PATH) is gaining attention as a prominent AI stock on Wall Street, with a recent coverage initiation by DA Davidson analyst Lucky Schreiner, who assigned a Neutral rating and a price target of $12.00, down from $14.00 [1][2] - The company reported strong second-quarter fiscal 2026 results, achieving a larger than typical annual recurring revenue (ARR) beat and providing better-than-expected guidance, which positively impacted share prices [1][2] Company Performance - UiPath's recent go-to-market changes are facilitating the acquisition of higher quality customers, who are currently testing the company's Agents [2] - Management has expressed an incrementally positive outlook, although there is a cautious approach regarding consistent execution before fully embracing growth potential [2] Market Position - While UiPath shows potential as an investment, there are other AI stocks perceived to offer greater upside potential with less downside risk [3]

Core Insights - UiPath Inc. (PATH) shares have increased by 13% over the past month, significantly outperforming the industry average of less than 1% [1][9] - The company is positioned to capitalize on the growing demand for AI-driven solutions within the Robotic Process Automation (RPA) market [3][15] Company Performance - In Q2 of fiscal 2026, UiPath reported revenues of $362 million, reflecting a 14% year-over-year growth, while annual recurring revenues (ARR) increased by 11% to $1.72 billion [5][9] - The company maintains a high customer retention rate with a net retention rate of 108%, indicating strong customer loyalty and expansion within existing accounts [5][15] Financial Stability - As of the fiscal second quarter, UiPath holds $628.6 million in cash with no debt, providing financial flexibility for growth initiatives [10][15] - The current ratio stands at 2.95, significantly above the industry average of 1.78, indicating strong liquidity and the ability to cover short-term liabilities [11][15] Strategic Partnerships - UiPath has established critical partnerships with major technology companies such as Microsoft, Amazon, and Salesforce, enhancing its market reach and credibility [4][6][15] Future Projections - The Zacks Consensus Estimate projects third-quarter fiscal 2026 earnings at 13 cents per share, representing an 18.2% increase from the previous year, with revenues expected to reach $390.4 million, indicating a 10% year-over-year growth [12][15]

PART I. FINANCIAL INFORMATION [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The company's balance sheet reflects a decrease in total assets, driven by lower cash and accounts receivable, alongside an increase in goodwill from acquisitions Key Balance Sheet Data (Amounts in thousands) | Metric | July 31, 2025 | January 31, 2025 | | :------------------------------------------ | :-------------- | :--------------- | | Total Assets | $2,592,317 | $2,865,270 | | Cash and cash equivalents | $628,617 | $879,196 | | Accounts receivable, net | $269,810 | $451,131 | | Goodwill | $120,800 | $87,304 | | Total Liabilities | $926,614 | $1,019,508 | | Total Stockholders' Equity | $1,665,703 | $1,845,762 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company achieved profitability in the recent quarter and significantly reduced its net loss for the six-month period, driven by revenue growth - Total revenue increased by **14%** for the three months ended July 31, 2025, and by **10%** for the six months ended July 31, 2025, compared to the respective prior year periods[18](index=18&type=chunk) Key Operations Data (Amounts in thousands, except per share data) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $361,728 | $316,253 | $718,352 | $651,365 | | Operating Loss | $(20,185) | $(103,349) | $(36,597) | $(152,814) | | Net Income (Loss) | $1,584 | $(86,097) | $(20,971) | $(114,833) | | Net Income (Loss) per share, diluted | $0.00 | $(0.15) | $(0.04) | $(0.20) | [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) Comprehensive income improved significantly year-over-year, reflecting a reduced net loss and positive impacts from other comprehensive income items Key Comprehensive Income Data (Amounts in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $1,584 | $(86,097) | $(20,971) | $(114,833) | | Other comprehensive (loss) income, net | $(4,776) | $3,365 | $29,637 | $(720) | | Comprehensive (loss) income | $(3,192) | $(82,732) | $8,666 | $(115,553) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased due to substantial stock repurchases, which were partially offset by stock-based compensation and other comprehensive income - Accumulated other comprehensive income (loss) significantly increased from **$(4,890)k** as of January 31, 2025, to **$24,747k** as of July 31, 2025, primarily due to foreign currency translation adjustments[23](index=23&type=chunk)[106](index=106&type=chunk) Key Stockholders' Equity Changes (Amounts in thousands) | Metric | Six Months Ended July 31, 2025 | | :------------------------------------ | :----------------------------- | | Balance as of January 31, 2025 | $1,845,762 | | Repurchase of Class A Common Stock | $(329,101) | | Stock-based compensation | $154,370 | | Other comprehensive income, net | $29,637 | | Net loss | $(20,971) | | Balance as of July 31, 2025 | $1,665,703 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated positive operating cash flow, but a net decrease in cash resulted from significant stock repurchases and business acquisition activities - Cash provided by operating activities increased by **9.7%** year-over-year for the six months ended July 31, 2025[27](index=27&type=chunk) Key Cash Flow Data (Amounts in thousands) | Metric | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $160,589 | $146,413 | | Net cash used in investing activities | $(80,578) | $(5,893) | | Net cash used in financing activities | $(346,806) | $(260,887) | | Net decrease in cash, cash equivalents, and restricted cash | $(250,579) | $(122,365) | [Note 1. Organization and Description of Business](index=10&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) UiPath operates an intelligent platform that unifies AI agents, robots, and people to enable scalable, flexible, and compliant business automation - UiPath Platform™ unifies AI agents, robots, and people on a single intelligent system for **scalable, flexible, and compliant automation**[29](index=29&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) The company's accounting policies, prepared under U.S. GAAP, remain consistent with the prior fiscal year and are managed as a single operating segment - Unaudited condensed consolidated financial statements are prepared in accordance with **U.S. GAAP** and SEC interim reporting regulations, with no significant changes to policies from the 2025 Form 10-K[30](index=30&type=chunk)[31](index=31&type=chunk) - The Chief Executive Officer (CODM) reviews financial information at the consolidated level, managing business activities as **one operating and reportable segment**[42](index=42&type=chunk) - The company is evaluating the impact of **ASU No. 2023-09** (Income Tax Disclosures) and **ASU No. 2024-03** (Expense Disaggregation Disclosures), effective for annual periods beginning after December 15, 2024, and December 15, 2026, respectively[45](index=45&type=chunk)[46](index=46&type=chunk) Foreign Currency Transaction Gains (Losses) (Amounts in thousands) | Period | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Three Months Ended July 31, | $8,900 | $(600) | | Six Months Ended July 31, | $(4,300) | $2,200 | [Note 3. Revenue Recognition](index=13&type=section&id=Note%203.%20Revenue%20Recognition) Revenue growth was primarily driven by the Americas and EMEA regions, with the majority of remaining performance obligations expected to be recognized within 12 months - As of July 31, 2025, remaining performance obligations totaled **$1,208.7 million**, with **65%** expected to be recognized as revenue over the next 12 months[51](index=51&type=chunk) - Amortization of deferred contract acquisition costs was **$44.2 million** for the six months ended July 31, 2025, up from **$39.4 million** in the prior year period[52](index=52&type=chunk) Revenue by Geographical Region (Three Months Ended July 31, Amounts in thousands) | Region | 2025 Amount | 2025 % of Revenue | 2024 Amount | 2024 % of Revenue | | :---------------------------- | :---------- | :---------------- | :---------- | :---------------- | | Americas | $181,081 | 50 % | $150,591 | 48 % | | Europe, Middle East, and Africa | $113,026 | 31 % | $97,989 | 31 % | | Asia-Pacific | $67,621 | 19 % | $67,673 | 21 % | | Total revenue | $361,728 | 100 % | $316,253 | 100 % | Revenue by Geographical Region (Six Months Ended July 31, Amounts in thousands) | Region | 2025 Amount | 2025 % of Revenue | 2024 Amount | 2024 % of Revenue | | :---------------------------- | :---------- | :---------------- | :---------- | :---------------- | | Americas | $342,488 | 48 % | $303,702 | 47 % | | Europe, Middle East, and Africa | $236,690 | 33 % | $202,616 | 31 % | | Asia-Pacific | $139,174 | 19 % | $145,047 | 22 % | | Total revenue | $718,352 | 100 % | $651,365 | 100 % | [Note 4. Marketable Securities](index=14&type=section&id=Note%204.%20Marketable%20Securities) The company's marketable securities portfolio, primarily in U.S. government securities, holds minor unrealized losses attributed to market conditions rather than credit risk - Unrealized losses of **$630k** as of July 31, 2025, are primarily due to changes in market conditions and are **not believed to be credit-related**[54](index=54&type=chunk)[56](index=56&type=chunk) Marketable Securities Summary (As of July 31, 2025, Amounts in thousands) | Type | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | | :-------------------------------- | :------------- | :--------------------- | :---------------------- | :------------------- | | Treasury bills and U.S. government securities | $792,532 | $— | $(539) | $791,993 | | Corporate bonds | $87,145 | $— | $(90) | $87,055 | | Commercial paper | $14,974 | $— | $(1) | $14,973 | | Total marketable securities | $894,651 | $— | $(630) | $894,021 | [Note 5. Fair Value Measurement](index=15&type=section&id=Note%205.%20Fair%20Value%20Measurement) The majority of the company's financial assets are valued using observable market inputs (Level 1), with a smaller portion relying on unobservable inputs - **Level 3 assets**, such as convertible bonds of private companies and contingent consideration liability, rely on **unobservable inputs** for valuation[58](index=58&type=chunk) Fair Value Hierarchy of Financial Assets (As of July 31, 2025, Amounts in thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :-------------------------------- | :-------- | :-------- | :-------- | :-------- | | Money market funds | $183,542 | $— | $— | $183,542 | | Treasury bills and U.S. government securities | $791,993 | $— | $— | $791,993 | | Corporate bonds | $— | $87,055 | $— | $87,055 | | Commercial paper | $— | $14,973 | $— | $14,973 | | Other investments carried at fair value | $— | $— | $13,375 | $13,375 | | Total Financial Assets | $975,535 | $102,028 | $13,375 | $1,090,938 | [Note 6. Business Acquisition](index=16&type=section&id=Note%206.%20Business%20Acquisition) The acquisition of Peak AI Limited for $40.1 million aims to integrate specialized technology and customer relationships, resulting in $28.0 million of goodwill - Acquired Peak AI Limited on March 7, 2025, for **$40.1 million**, consisting of **$30.3 million** initial cash and **$9.8 million** in deferred and contingent consideration[60](index=60&type=chunk)[61](index=61&type=chunk) - The acquisition generated **$28.0 million in goodwill**, representing expected synergies and acquired skilled workforce[61](index=61&type=chunk) Identifiable Intangible Assets Acquired (Amounts in thousands) | Asset Type | Fair Value | Estimated Useful Life (years) | | :------------------------ | :--------- | :-------------------------- | | Customer relationships | $9,228 | 3.0 | | Developed technology | $6,447 | 5.0 | | Trade names and trademarks | $506 | 3.0 | | Total | $16,181 | | [Note 7. Intangible Assets and Goodwill](index=16&type=section&id=Note%207.%20Intangible%20Assets%20and%20Goodwill) Goodwill increased substantially to $120.8 million due to the Peak AI acquisition, while net intangible assets stood at $21.6 million - Goodwill increased from **$87.3 million** as of January 31, 2025, to **$120.8 million** as of July 31, 2025, primarily due to the acquisition of Peak AI (**$28.0 million**) and foreign currency translation effects (**$5.5 million**)[65](index=65&type=chunk) - Amortization of acquired intangible assets was **$3.7 million** for the six months ended July 31, 2025[63](index=63&type=chunk) Intangible Assets, Net (As of July 31, 2025, Amounts in thousands) | Asset Type | Intangible Assets, Net | Weighted Average Remaining Useful Life (years) | | :------------------------ | :--------------------- | :--------------------------------------------- | | Developed technology | $11,724 | 3.3 | | Customer relationships | $8,813 | 2.6 | | Trade names and trademarks | $472 | 2.7 | | Other intangibles | $595 | 6.1 | | Total | $21,604 | | [Note 8. Operating Leases](index=17&type=section&id=Note%208.%20Operating%20Leases) The company's operating lease commitments for real estate and vehicles have increased, with total future undiscounted payments amounting to $110.8 million - As of July 31, 2025, the weighted-average remaining lease term is **9.6 years**, and the weighted-average discount rate is **7.6%**[67](index=67&type=chunk) - Total operating lease liabilities as of July 31, 2025, are **$79.3 million**, with future undiscounted payments totaling **$110.8 million**[67](index=67&type=chunk) Lease Costs (Amounts in thousands) | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $5,314 | $4,086 | $8,691 | $7,562 | | Short-term lease cost | $696 | $1,024 | $1,356 | $2,147 | | Variable lease cost | $711 | $411 | $1,649 | $934 | | Total | $6,721 | $5,521 | $11,696 | $10,643 | [Note 9. Condensed Consolidated Balance Sheet Components](index=19&type=section&id=Note%209.%20Condensed%20Consolidated%20Balance%20Sheet%20Components) Detailed balance sheet components show significant increases in other current assets, net property and equipment, and accrued liabilities Prepaid Expenses and Other Current Assets (Amounts in thousands) | Metric | July 31, 2025 | January 31, 2025 | | :-------------------------------- | :-------------- | :--------------- | | Prepaid expenses and service credits | $57,453 | $65,334 | | Other current assets | $52,938 | $20,942 | | Total | $110,391 | $86,276 | Property and Equipment, Net (Amounts in thousands) | Metric | July 31, 2025 | January 31, 2025 | | :------------------------ | :-------------- | :--------------- | | Property and equipment, gross | $84,471 | $72,400 | | Less: accumulated depreciation | $(42,926) | $(39,660) | | Property and equipment, net | $41,545 | $32,740 | Accrued Expenses and Other Current Liabilities (Amounts in thousands) | Metric | July 31, 2025 | January 31, 2025 | | :------------------------------------ | :-------------- | :--------------- | | Accrued expenses | $38,470 | $16,005 | | Deferred consideration for business acquisition | $8,000 | $— | | Contingent consideration for business acquisition | $1,545 | $— | | Total | $145,856 | $83,923 | [Note 10. Commitments and Contingencies](index=20&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) The company faces various commitments and contingencies, including ongoing litigation, significant tax audits, and non-cancelable purchase obligations - The Fiscal Year 2025 Workforce Restructuring was completed during the three months ended July 31, 2025, incurring **$4.4 million** in restructuring costs for the six-month period[80](index=80&type=chunk)[81](index=81&type=chunk) - Ongoing litigation includes the **2023 Securities Action** (claims of misstatements in 2021-2022, with some claims dismissed) and the **2024 Securities Action** (claims of misstatements in 2023-2024, with the amended complaint dismissed but leave to refile)[84](index=84&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk) - Tax audits include a **$14.3 million** VAT assessment paid and appealed in Romania, an estimated possible loss of **$13.0 million** for an ongoing Romanian VAT audit, and a preliminary inquiry for **$45.6 million** GST in India[92](index=92&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - Non-cancelable purchase obligations totaled **$356.2 million** as of July 31, 2025, primarily for hosting services and software[99](index=99&type=chunk) [Note 11. Stockholders' Equity](index=23&type=section&id=Note%2011.%20Stockholders'%20Equity) Stockholders' equity activities were highlighted by an expanded stock repurchase program and a significant increase in accumulated other comprehensive income - The board authorized an additional **$500.0 million** for Class A common stock repurchases on August 30, 2024, bringing the total authorization to **$1.0 billion**[100](index=100&type=chunk) - The company repurchased **30.2 million shares** of Class A common stock for **$329.1 million** during the six months ended July 31, 2025[103](index=103&type=chunk) - **5.0 million shares** of Class B common stock beneficially owned by CEO Daniel Dines were converted into Class A common stock on March 13, 2025[105](index=105&type=chunk) Changes in Accumulated Other Comprehensive Income (Loss) (Six Months Ended July 31, Amounts in thousands) | Metric | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Balance as of January 31, | $(4,890) | $8,825 | | Other comprehensive income (loss), net of tax | $29,637 | $(720) | | Balance as of July 31, | $24,747 | $8,105 | [Note 12. Equity Incentive Plans and Stock-Based Compensation](index=24&type=section&id=Note%2012.%20Equity%20Incentive%20Plans%20and%20Stock-Based%20Compensation) The company recorded $154.4 million in stock-based compensation expense for the six-month period under its various equity incentive plans - As of July 31, 2025, **229.8 million shares** of Class A common stock are reserved under the 2021 Plan, and **32.7 million shares** under the ESPP[107](index=107&type=chunk)[110](index=110&type=chunk) Unrecognized Stock-Based Compensation Expense (As of July 31, 2025, Amounts in thousands) | Award Type | Unrecognized Compensation Expense | Weighted-Average Remaining Period | | :------------------------------------ | :-------------------------------- | :------------------------------ | | Stock options | $70,000 | 1.9 years | | Restricted Stock Units (RSUs) | $349,700 | 2.2 years | | Performance Stock Units (PSUs) | $6,300 | 2.7 years | | Employee Stock Purchase Plan (ESPP) | $1,900 | 0.4 years | Total Stock-Based Compensation Expense by Function (Amounts in thousands) | Functional Area | Three Months Ended July 31, 2025 | Six Months Ended July 31, 2025 | | :------------------------------------ | :------------------------------- | :----------------------------- | | Cost of subscription services revenue | $3,682 | $7,556 | | Sales and marketing | $23,402 | $46,988 | | Research and development | $36,087 | $70,682 | | General and administrative | $12,477 | $24,055 | | Total | $78,006 | $154,367 | [Note 13. Income Taxes](index=26&type=section&id=Note%2013.%20Income%20Taxes) The company maintains a full valuation allowance on U.S. and Romania deferred tax assets and is assessing the impact of new international tax regulations - A **full valuation allowance** is maintained on U.S. and Romania deferred tax assets, with a reasonable possibility of reversal within the next **6 to 18 months**[126](index=126&type=chunk) - Gross unrecognized tax benefits totaled **$1.6 million** as of July 31, 2025, with a liability of **$0.9 million**[127](index=127&type=chunk) - The company anticipates a Qualified Domestic Minimum Top-up Tax (QDMTT) of **$1.9 million** in Romania for the current fiscal year due to OECD Pillar Two rules. The One Big Beautiful Bill Act (OBBBA) is **not expected to have a significant impact** on the consolidated tax position[130](index=130&type=chunk)[133](index=133&type=chunk) Provision for Income Taxes and Effective Tax Rate | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Provision for income taxes | $1,743k | $3,828k | $4,570k | $7,608k | | Effective tax rate | 52.4% | (4.7)% | (27.9)% | (7.1)% | [Note 14. Net Income (Loss) Per Share](index=28&type=section&id=Note%2014.%20Net%20Income%20(Loss)%20Per%20Share) The company's diluted earnings per share improved to $0.00 for the quarter and showed a reduced loss per share for the six-month period Net Income (Loss) Per Share, Diluted | Metric | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Class A common stock | $0.00 | $(0.15) | $(0.04) | $(0.20) | | Class B common stock | $0.00 | $(0.15) | $(0.04) | $(0.20) | Anti-Dilutive Common Stock Equivalents Excluded (Amounts in thousands) | Type | Three Months Ended July 31, 2025 | Six Months Ended July 31, 2025 | | :------------------------------------ | :------------------------------- | :----------------------------- | | Unvested RSUs | 10,610 | 27,239 | | Outstanding stock options | 2,198 | 8,870 | | Shares issuable under ESPP | 416 | 900 | | Total | 13,224 | 37,570 | [Note 15. Related Party Transactions](index=29&type=section&id=Note%2015.%20Related%20Party%20Transactions) The company incurred expenses for the business use of an aircraft owned by its CEO, Daniel Dines - UiPath incurred **$0.9 million** in expenses for the business use of an aircraft owned by CEO Daniel Dines for the six months ended July 31, 2025, compared to none in the prior year period[137](index=137&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's transition to an AI-powered platform, detailing revenue growth, improved margins, and key performance metrics like ARR [Overview](index=30&type=section&id=Overview) - UiPath has evolved from a Robotic Process Automation (RPA) tool to an **AI-powered automation platform**, unifying AI agents, robots, and people on a single intelligent system[140](index=140&type=chunk)[141](index=141&type=chunk) - The Fiscal Year 2025 Workforce Restructuring was completed during the three months ended July 31, 2025, aimed at **streamlining the organization and prioritizing AI investments**[147](index=147&type=chunk) Business Highlights (Amounts in millions) | Metric | Three Months Ended July 31, 2025 | Six Months Ended July 31, 2025 | | :------------------------------------ | :------------------------------- | :----------------------------- | | Revenue | $361.7 (+14% YoY) | $718.4 (+10% YoY) | | ARR (as of July 31, 2025) | N/A | $1,723.4 (+11% YoY) | | Gross Margin | 82% (vs 80% in 2024) | 82% (vs 82% in 2024) | | Cash flow from operations | N/A | $160.6 (vs $146.4 in 2024) | [Key Performance Metric](index=31&type=section&id=Key%20Performance%20Metric) - Annualized Renewal Run-rate (ARR) is the key performance metric used to measure the ability to **acquire and expand relationships** with subscription customers[149](index=149&type=chunk) - ARR growth of **11%** was driven **26%** by new customers and **74%** by existing customers[149](index=149&type=chunk) ARR-Related Data (As of July 31, Amounts in thousands) | Metric | 2025 | 2024 | | :------------------------------------ | :----------- | :----------- | | ARR | $1,723,401 | $1,550,605 | | Incremental ARR (12 months ended) | $172,796 | $242,701 | | Customers with ARR ≥ $1 million | 320 | 293 | | Percent of current period revenue (ARR ≥ $1 million) | 47 % | 43 % | | Customers with ARR ≥ $100 thousand | 2,432 | 2,163 | | Percent of current period revenue (ARR ≥ $100 thousand) | 87 % | 83 % | | Dollar-based net retention rate | 108 % | 115 % | [Components of Results of Operations](index=32&type=section&id=Components%20of%20Results%20of%20Operations) - Revenue is derived from software licenses (point-in-time recognition), subscription services (ratable recognition for maintenance, support, and SaaS), and professional services (recognized as rendered)[152](index=152&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - Cost of subscription services revenue is expected to **increase in absolute dollars** due to SaaS business growth and increased cloud-based deployments, potentially impacting gross margin due to higher hosting fees[158](index=158&type=chunk) - Sales and marketing and general and administrative expenses are expected to **decrease as a percentage of revenue** over the longer term, while research and development expenses are expected to **increase in absolute dollars** due to continued investment in new technology and platform enhancements[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) - The company maintains a **full valuation allowance** on U.S. federal and state and Romania deferred tax assets, with a reasonable possibility of reversal within **6 to 18 months**[167](index=167&type=chunk) [Results of Operations - Three Months Ended July 31, 2025 and 2024](index=35&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20July%2031,%202025%20and%202024) - Gross margin increased to **82%** from 80%, primarily driven by increased subscription services revenue and margin[172](index=172&type=chunk) - Sales and marketing expense decreased by **$28.0 million (-14%)**, mainly due to a **$30.7 million** decrease in personnel-related expenses, including reduced stock-based compensation and salary expenses[173](index=173&type=chunk)[174](index=174&type=chunk) - General and administrative expense decreased by **$10.6 million (-17%)**, primarily due to a **$6.2 million** decrease in personnel-related expenses and reductions in other taxes and software costs[176](index=176&type=chunk) Revenue Comparison (Three Months Ended July 31, Amounts in thousands) | Revenue Type | 2025 | 2024 | Change | Change % | | :-------------------------- | :----- | :----- | :----- | :------- | | Licenses | $112,161 | $112,251 | $(90) | — % | | Subscription services | $238,363 | $194,673 | $43,690 | 22 % | | Professional services and other | $11,204 | $9,329 | $1,875 | 20 % | | Total revenue | $361,728 | $316,253 | $45,475 | 14 % | [Results of Operations - Six Months Ended July 31, 2025 and 2024](index=40&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20July%2031,%202025%20and%202024) - Gross margin remained relatively constant at **82%**[184](index=184&type=chunk) - Sales and marketing expense decreased by **$48.5 million (-13%)**, primarily due to a **$51.9 million** decrease in personnel-related expenses[185](index=185&type=chunk) - Research and development expense increased by **$9.1 million (+5%)**, driven by a **$15.1 million** increase in personnel-related expenses, partially offset by decreased hosting and software services costs[186](index=186&type=chunk) - General and administrative expense decreased by **$19.5 million (-15%)**, mainly due to an **$11.4 million** decrease in personnel-related expenses, a **$4.4 million** decrease in other taxes, and a **$2.4 million** decrease in charitable donations[187](index=187&type=chunk)[188](index=188&type=chunk) Revenue Comparison (Six Months Ended July 31, Amounts in thousands) | Revenue Type | 2025 | 2024 | Change | Change % | | :-------------------------- | :----- | :----- | :----- | :------- | | Licenses | $240,447 | $252,379 | $(11,932) | (5)% | | Subscription services | $455,666 | $379,804 | $75,862 | 20 % | | Professional services and other | $22,239 | $19,182 | $3,057 | 16 % | | Total revenue | $718,352 | $651,365 | $66,987 | 10 % | [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) - As of July 31, 2025, principal sources of liquidity included **$1,522.6 million** in cash, cash equivalents, and marketable securities[192](index=192&type=chunk) - Net cash used in financing activities was primarily driven by **$329.1 million** in repurchases of Class A common stock under the stock repurchase program[203](index=203&type=chunk) - Material cash requirements include working capital, employee compensation, tax withholdings, operating lease liabilities (**$79.3 million** total), and non-cancelable purchase commitments (**$356.2 million**)[205](index=205&type=chunk)[207](index=207&type=chunk) - Management believes existing liquidity and customer payments will be **sufficient to fund anticipated cash requirements** for the next 12 months and the long term[195](index=195&type=chunk) Cash Flows Summary (Six Months Ended July 31, Amounts in thousands) | Activity | 2025 | 2024 | | :------------------------------------ | :----------- | :----------- | | Net cash provided by operating activities | $160,589 | $146,413 | | Net cash used in investing activities | $(80,578) | $(5,893) | | Net cash used in financing activities | $(346,806) | $(260,887) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's exposure to interest rate and foreign currency exchange risks is not expected to have a material impact on its financial statements - A hypothetical **10% change in interest rates** would not have a material impact on the condensed consolidated financial statements for the six months ended July 31, 2025[213](index=213&type=chunk) - For the six months ended July 31, 2025, approximately **52% of revenues** and **40% of expenses** were denominated in non-U.S. dollar currencies, resulting in net foreign currency transaction losses of **$4.3 million**[214](index=214&type=chunk) - A hypothetical **10% change in foreign currency exchange rates** would amount to a **$34.1 million** translation impact for the six months ended July 31, 2025[214](index=214&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, following the implementation of a new ERP system during the quarter - Disclosure controls and procedures were **effective at a reasonable assurance level** as of July 31, 2025[217](index=217&type=chunk) - A **new ERP system** was implemented during the three months ended July 31, 2025, leading to updated processes and control activities, with ongoing assessment for effectiveness[218](index=218&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 10 for a detailed description of the company's current legal proceedings - Current legal proceedings are described in detail in **Note 10, Commitments and Contingencies—Litigation**[221](index=221&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - **No material changes** to the risk factors previously disclosed in the 2025 Form 10-K[223](index=223&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities and continued its stock repurchase program, with $180.3 million remaining available - **No recent unregistered sales** of equity securities[224](index=224&type=chunk) - As of July 31, 2025, approximately **$180.3 million remained available** for repurchase under the stock repurchase program[225](index=225&type=chunk) Class A Common Stock Repurchase Activity (Three Months Ended July 31, 2025, Amounts in thousands, except per share data) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :----------- | :------------------------------- | :--------------------------- | | May 1 - 31 | — | $— | | June 1 - 30 | — | $— | | July 1 - 31 | 8,276 | $12.08 | | Total | 8,276 | | [Item 3. Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that the company has not experienced any defaults upon senior securities - **No defaults** upon senior securities[227](index=227&type=chunk) [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are **not applicable**[228](index=228&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) This section discloses that several directors and officers adopted Rule 10b5-1 trading plans during the quarter - CFO Ashim Gupta adopted a Rule 10b5-1 trading plan on July 10, 2025, to sell up to **808,292 Class A shares** through April 8, 2026[229](index=229&type=chunk) - CEO Daniel Dines, through IceVulcan Investments Limited, adopted a Rule 10b5-1 trading plan on July 11, 2025, to sell up to **5,000,000 Class A shares** through April 17, 2026[229](index=229&type=chunk) - Chief Accounting Officer Hitesh Ramani adopted a Rule 10b5-1 trading plan on July 14, 2025, to sell up to **75,000 Class A shares** through July 13, 2026[229](index=229&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including officer certifications and XBRL data files - Exhibits include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2), XBRL Taxonomy Extension Documents (101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE), and the Cover Page Interactive Data File (104)[230](index=230&type=chunk) [Signatures](index=50&type=section&id=Signatures) This section contains the official signature block confirming the report's submission by the Chief Financial Officer and Chief Operating Officer - The report is signed by **Ashim Gupta, Chief Financial Officer and Chief Operating Officer**, on behalf of UiPath, Inc[233](index=233&type=chunk)

Core Insights - UiPath has been recognized as a Leader in the inaugural Gartner® Magic Quadrant™ for Intelligent Document Processing (IDP) [1] Company Positioning - The recognition by Gartner highlights UiPath's strong capabilities and market position in the Intelligent Document Processing sector [1] Industry Impact - This positioning may influence the competitive landscape within the Intelligent Document Processing industry, potentially attracting more clients and partnerships for UiPath [1]

Core Insights - The article emphasizes the importance of conducting personal in-depth research and due diligence before making investment decisions, highlighting the inherent risks involved in trading [3]. Group 1 - The analysis is intended solely for informational purposes and should not be interpreted as professional investment advice [3]. - There is a clear disclaimer regarding the lack of any stock, option, or similar derivative positions in the companies mentioned, indicating a neutral stance [2]. - The article expresses that past performance does not guarantee future results, reinforcing the need for careful consideration by investors [4].

Core Insights - UiPath Inc. reported fiscal second-quarter results that exceeded Wall Street expectations, leading to a 5% increase in stock price [1] - The company's strong performance is attributed to the growing enterprise adoption of its agentic automation platform [1] Financial Performance - For the quarter ending July 31, UiPath achieved an adjusted EPS of $0.15, surpassing the consensus estimate of $0.09 [2] - Revenue for the quarter was $361.7 million, reflecting a 14% year-over-year increase and exceeding the estimated $347.4 million [2] - Annual Recurring Revenue (ARR) rose by 11% to $1.723 billion, with net new ARR amounting to $31 million [2] - Non-GAAP operating income reached $62 million, while free cash flow was reported at $45 million [2] Future Guidance - For Q3, UiPath projects revenue between $390 million and $395 million, which is above the consensus estimate of $384.6 million [3] - The full-year revenue forecast is set at $1.571 billion to $1.576 billion, also exceeding Street estimates [3]

Group 1 - The investment landscape in the AI sector has been challenging in the current year, with a noticeable divide between stocks perceived as winners and those that are not [1] - Many technology companies are claiming expertise in AI solutions, indicating a trend of increased focus on artificial intelligence across the industry [1] - Gary Alexander, with extensive experience in technology and startups, provides insights into the themes currently shaping the AI industry [1]