UiPath(PATH) - 2026 Q2 - Quarterly Results

Executive Summary Q2 FY26 Performance Overview UiPath reported strong financial results for the second quarter of fiscal 2026, exceeding guidance across key metrics, driven by growth in agentic automation capabilities Second Quarter Fiscal 2026 Key Financial Highlights: | Metric | Value | Year-over-Year Change | | :--------------------------------- | :---------------- | :-------------------- | | Revenue | $362 million | +14% | | ARR (as of July 31, 2025) | $1.723 billion | +11% | | Cash flow from operations | $42 million | N/A | | Non-GAAP adjusted free cash flow | $45 million | N/A | CEO & CFO Commentary The CEO highlighted strong ARR growth and the momentum of agentic capabilities, emphasizing the combined strength of automation and agentic AI. The CFO noted strong execution, exceeding guidance, and a focus on operational efficiency positioning the company well for the second half of the year - CEO Daniel Dines stated that ARR growth reflects improved execution and the growing momentum of agentic capabilities, with customers moving beyond pilots into production deployments, orchestrating agents, robots, and humans to achieve real outcomes. He emphasized that automation and agentic AI are stronger together, delivering value and positioning UiPath to lead enterprise transformation[2] - CFO Ashim Gupta highlighted strong execution across the business, exceeding the high end of guidance for all key financial metrics. He noted momentum from customers and partners around the agentic automation platform, combined with a continued focus on operational efficiency, as key factors for a strong second half of the year[4] Financial Highlights & Outlook Second Quarter Fiscal 2026 Financial Highlights UiPath reported significant year-over-year growth in revenue and ARR, alongside improved gross margins and a shift from GAAP operating loss to non-GAAP operating income for Q2 FY26 Q2 Fiscal 2026 Financial Highlights (as of July 31, 2025): | Metric | Value | YoY Change | | :--------------------------------- | :---------------- | :--------- | | Revenue | $362 million | +14% | | ARR | $1.723 billion | +11% | | Net new ARR | $31 million | N/A | | Dollar based net retention rate | 108% | N/A | | GAAP gross margin | 82% | +2 ppts | | Non-GAAP gross margin | 84% | +1 ppt | | GAAP operating loss | $(20) million | Reduced from $(103)M | | Non-GAAP operating income | $62 million | Increased from $6.4M | | Net cash flow from operations | $42 million | N/A | | Non-GAAP adjusted free cash flow | $45 million | N/A | | Cash, cash equivalents, and marketable securities | $1.52 billion | N/A | Financial Outlook (Q3 FY26 & Full Year FY26 Guidance) UiPath provided optimistic financial guidance for Q3 FY26 and the full fiscal year 2026, projecting continued growth in revenue, ARR, and non-GAAP operating income Financial Outlook: | Metric | Q3 Fiscal 2026 Guidance | Full Year Fiscal 2026 Guidance | | :-------------------------- | :-------------------------- | :----------------------------- | | Revenue | $390 million to $395 million | $1.571 billion to $1.576 billion | | ARR (as of period end) | $1.771 billion to $1.776 billion | $1.834 billion to $1.839 billion | | Non-GAAP operating income | Approximately $70 million | Approximately $340 million | - Reconciliation of non-GAAP operating income guidance to GAAP measures is not available without unreasonable efforts due to high variability and low visibility of excluded charges, particularly stock-based compensation expense[4][7] Recent Business Developments Strategic Collaborations & Partnerships UiPath advanced its strategic digital transformation initiatives through key collaborations, including a successful ERP modernization with Deloitte and a strategic partnership with HCLTech to accelerate agentic automation for global enterprises - UiPath collaborated with Deloitte to redefine ERP modernization, successfully migrating to SAP S/4HANA with 93% clean core in solution design and 88% clean core across overall implementation, advancing operational excellence[12] - UiPath announced a strategic partnership with HCLTech to accelerate agentic automation for global enterprises, aiming to drive large-scale transformation and enable more intelligent, self-sufficient operations with minimal human intervention[12] Leadership Appointments UiPath strengthened its leadership team with the appointment of Michael Atalla as Chief Marketing Officer, bringing over 20 years of experience to elevate the company's leadership in agentic AI and orchestration - Michael Atalla was appointed Chief Marketing Officer, responsible for global marketing strategy and elevating UiPath's leadership in agentic AI and orchestration, leveraging over 20 years of experience from F5 and Microsoft[12] Industry Recognition UiPath was recognized as a Leader in the 2025 Gartner Magic Quadrant™ for Robotic Process Automation for the seventh consecutive year, demonstrating its strong ability to execute - UiPath was positioned as a Leader in the 2025 Gartner Magic Quadrant™ for Robotic Process Automation (RPA) for the seventh year in a row, recognized for the highest Ability to Execute[12] Company Information About UiPath UiPath is a global leader in agentic automation, providing a platform that combines controlled agency, developer flexibility, and seamless integration to help enterprises scale AI-driven automation securely and confidently - UiPath is a global leader in agentic automation, enabling enterprises to use AI agents for autonomous execution and optimization of complex business processes[14] - The UiPath Platform™ offers controlled agency, developer flexibility, and seamless integration, supporting enterprises in transitioning to an AI-transformed future with a focus on security, governance, and interoperability[14] Disclaimers & Definitions Forward-Looking Statements This section outlines the company's forward-looking statements, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from projections - Statements in the press release that are not historical facts are considered forward-looking, covered by safe harbor provisions of the Private Securities Litigation Reform Act of 1995[15][16] - Forward-looking statements include financial guidance, growth strategies, market opportunity, platform success, collaborations, customer behavior, and stock repurchase programs, all subject to risks such as revenue variability, ability to manage growth, customer retention, and market competition[17] - Investors are cautioned that actual results may differ materially due to various risks and uncertainties detailed in SEC filings, and the company assumes no obligation to update these statements[17][18][19] Key Performance Metric Definitions This section defines key performance metrics, Annualized Renewal Run-rate (ARR) and Dollar-based net retention rate, used by UiPath to manage its business and evaluate customer relationships - Annualized Renewal Run-rate (ARR) is defined as annualized invoiced amounts per solution SKU from subscription licenses and maintenance/support, excluding perpetual licenses or professional services, and is a key metric for acquiring and expanding customer relationships[20] - Dollar-based net retention rate represents the net expansion of ARR from existing customers over the preceding 12 months, calculated by comparing current period ARR from a cohort of customers to their prior period ARR, net of contraction or attrition[21] - Investors should not unduly rely on ARR or dollar-based net retention rate as indicators of future results, as their presentation may differ from other companies[22] Non-GAAP Financial Measures Explanation This section explains UiPath's use of non-GAAP financial measures, detailing the specific exclusions from GAAP figures and the rationale for their presentation to investors - Non-GAAP financial measures, including gross profit, operating income, and net income, exclude stock-based compensation, amortization of acquired intangibles, employer payroll tax related to equity, restructuring costs, charitable donations, changes in fair value of contingent consideration, and estimated tax adjustments[23] - Non-GAAP adjusted free cash flow is calculated by adjusting GAAP operating cash flows for purchases of property and equipment, cash paid for employer payroll taxes on equity transactions, net payments/receipts of employee tax withholdings, and cash paid for restructuring costs[24] - UiPath uses these non-GAAP measures internally and believes they are useful to investors for evaluating ongoing operating results and trends, and for comparing financial results with industry peers, but they should be considered in addition to, not as a substitute for, GAAP measures[25] Condensed Consolidated Financial Statements (GAAP) Statements of Operations The Condensed Consolidated Statements of Operations show UiPath's GAAP financial performance for the three and six months ended July 31, 2025, and 2024, indicating a significant reduction in net loss year-over-year Condensed Consolidated Statements of Operations (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 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $361,728 | $316,253 | $718,352 | $651,365 | | Total cost of revenue | $64,380 | $63,320 | $128,237 | $118,645 | | Gross profit | $297,348 | $252,933 | $590,115 | $532,720 | | 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, basic | $0.00 | $(0.15) | $(0.04) | $(0.20) | Balance Sheets The Condensed Consolidated Balance Sheets provide a snapshot of UiPath's financial position as of July 31, 2025, compared to January 31, 2025, showing changes in assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands): | Metric | As of July 31, 2025 | As of January 31, 2025 | | :--------------------------------- | :------------------ | :------------------- | | Total current assets | $2,030,736 | $2,338,559 | | Total assets | $2,592,317 | $2,865,270 | | Total current liabilities | $738,417 | $798,920 | | Total liabilities | $926,614 | $1,019,508 | | Total stockholders' equity | $1,665,703 | $1,845,762 | Statements of Cash Flows The Condensed Consolidated Statements of Cash Flows detail UiPath's cash movements from operating, investing, and financing activities for the six months ended July 31, 2025, and 2024, showing increased cash provided by operations Condensed Consolidated Statements of Cash Flows (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) | | Cash, cash equivalents, and restricted cash - end of period | $629,055 | $939,751 | Non-GAAP Reconciliations Cost of Revenue, Gross Profit and Margin Reconciliation This section reconciles GAAP cost of revenue, gross profit, and gross margin to their non-GAAP counterparts, primarily by adjusting for stock-based compensation and amortization of acquired intangibles Reconciliation of GAAP to Non-GAAP Gross Profit and Margin (in thousands, except percentages): | 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 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP gross profit | $297,348 | $252,933 | $590,115 | $532,720 | | GAAP gross margin | 82% | 80% | 82% | 82% | | Non-GAAP gross profit | $304,814 | $263,185 | $605,659 | $551,398 | | Non-GAAP gross margin | 84% | 83% | 84% | 85% | | Adjustments: | | | | | | Stock-based compensation expense | $6,040 | $8,299 | $12,642 | $15,045 | | Amortization of acquired intangible assets | $1,176 | $1,414 | $2,097 | $2,851 | | Employer payroll tax expense related to employee equity transactions | $105 | $95 | $202 | $338 | | Restructuring costs | $145 | $444 | $603 | $444 | Operating Expenses, Loss and Margin Reconciliation This section reconciles GAAP operating expenses and loss to non-GAAP operating expenses and income, highlighting adjustments for stock-based compensation, amortization, and restructuring costs, which significantly improved operating results Reconciliation of GAAP to Non-GAAP Operating Income and Margin (in thousands, except percentages): | 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 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP operating loss | $(20,185) | $(103,349) | $(36,597) | $(152,814) | | GAAP operating margin | (6)% | (33)% | (5)% | (23)% | | Non-GAAP operating income | $62,293 | $6,454 | $131,909 | $56,819 | | Non-GAAP operating margin | 17% | 2% | 18% | 9% | | Adjustments: | | | | | | Stock-based compensation expense | $78,006 | $94,305 | $154,367 | $183,032 | | Amortization of acquired intangible assets | $2,254 | $1,751 | $3,662 | $3,779 | | Employer payroll tax expense related to employee equity transactions | $1,099 | $1,135 | $2,160 | $3,646 | | Restructuring costs | $1,396 | $12,612 | $4,407 | $12,612 | | Charitable donation of Class A common stock | — | — | $4,187 | $6,564 | | Change in fair value of contingent consideration | $(277) | — | $(277) | — | Net Income (Loss) and Net Income (Loss) Per Share Reconciliation This section reconciles GAAP net income (loss) and per share figures to non-GAAP net income and per share, demonstrating a positive non-GAAP net income despite a GAAP net loss, primarily due to adjustments for non-cash expenses Reconciliation of GAAP to Non-GAAP Net Income and Per Share (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 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net income (loss) | $1,584 | $(86,097) | $(20,971) | $(114,833) | | Non-GAAP net income | $80,331 | $23,764 | $140,505 | $96,982 | | GAAP net income (loss) per share, diluted | $0.00 | $(0.15) | $(0.04) | $(0.20) | | Non-GAAP net income per share, diluted | $0.15 | $0.04 | $0.26 | $0.17 | | Adjustments: | | | | | | Stock-based compensation expense | $78,006 | $94,305 | $154,367 | $183,032 | | Amortization of acquired intangible assets | $2,254 | $1,751 | $3,662 | $3,779 | | Employer payroll tax expense related to employee equity transactions | $1,099 | $1,135 | $2,160 | $3,646 | | Restructuring costs | $1,396 | $12,612 | $4,407 | $12,612 | | Charitable donation of Class A common stock | — | — | $4,187 | $6,564 | | Change in fair value of contingent consideration | $(277) | — | $(277) | — | | Tax adjustments to add-backs | $(3,731) | $58 | $(7,030) | $2,182 | Operating Cash Flow to Adjusted Free Cash Flow Reconciliation This section reconciles GAAP operating cash flow to non-GAAP adjusted free cash flow, showing the adjustments made for capital expenditures, payroll taxes, and restructuring costs Reconciliation of GAAP Operating Cash Flow to Non-GAAP Adjusted Free Cash Flow (in thousands): | Metric | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | GAAP net cash provided by operating activities | $160,589 | $146,413 | | Non-GAAP adjusted free cash flow | $161,570 | $149,777 | | Adjustments: | | | | Purchases of property and equipment | $(12,832) | $(2,656) | | Cash paid for employer payroll taxes related to employee equity transactions | $2,270 | $3,267 | | Net payments (receipts) of employee tax withholdings on stock option exercises | $11 | $(9) | | Cash paid for restructuring costs | $11,532 | $2,762 | Additional Information Conference Call and Webcast Details Details for the conference call and webcast discussing UiPath's second quarter fiscal 2026 financial results and guidance - UiPath hosted a conference call on Thursday, September 4, 2025, at 5:00 p.m. Eastern Time to discuss Q2 FY26 financial results and guidance[9] - Access to the call was available via dial-in (1-201-689-8057 domestic, 1-877-407-8309 international) with passcode 13754760, and a live webcast was available on the 'Investor Relations' page of UiPath's website (https://ir.uipath.com), with a replay archived for one year[9] Gartner Disclaimer A standard disclaimer clarifying Gartner's role and the nature of its research publications, emphasizing that Gartner does not endorse vendors and its research consists of opinions, not statements of fact - Gartner is a registered trademark and service mark, and MAGIC QUADRANT is a registered trademark, used with permission[10] - Gartner does not endorse any vendor, product, or service in its research and does not advise technology users to select only top-rated vendors[11] - Gartner research publications consist of opinions and should not be construed as statements of fact, with Gartner disclaiming all warranties regarding the research[11] Investor and Media Contacts Contact information for investor relations and media inquiries - Investor Relations Contact: Allise Furlani, Investor.relations@uipath.com[41] - Media Contact: PR@uipath.com[41]