UiPath(US:PATH)2025-03-12 22:02Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $424 million, a 5% increase year over year, with an adjusted revenue of $426 million excluding a $2 million FX headwind [24][6] - Annual recurring revenue (ARR) reached $1.666 billion, reflecting a 14% year-over-year increase driven by net new ARR of $60 million [25][6] - Full year revenue totaled $1.43 billion, marking a 9% increase year over year [24] Business Line Data and Key Metrics Changes - The company reported a dollar-based gross retention rate of 98% and a dollar-based net retention rate of 110% as of Q4 [29] - The attach rate for AI products among total customers is approximately 20%, and over 85% for customers with ARR greater than $1 million [25] - Cloud ARR exceeded $975 million, up over 50% year over year, indicating strong growth in cloud offerings [26] Market Data and Key Metrics Changes - The company experienced a significant impact from geopolitical factors and macroeconomic volatility, affecting deal closures and customer budgets [9][7] - Customer count remained flat year over year at approximately 10,750, with a 7% increase in customers spending over $30,000 in ARR [27][28] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating innovation across the AgenTic roadmap, increasing customer adoption, and driving operational efficiencies [10] - The recent acquisition of PEAK AI aims to enhance vertical specialization in agentic automation, particularly in price and inventory use cases [17][18] - The company plans to support open-source agentic frameworks, enhancing its platform's integration capabilities and avoiding vendor lock-in [90] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term uncertainties in the public sector due to government transitions, impacting deal closures [33][46] - The company remains optimistic about long-term opportunities in the public sector and is closely monitoring macroeconomic conditions [32][33] - Management expects the first half of fiscal 2026 to be under pressure, with a stronger second half anticipated as conditions stabilize [48][49] Other Important Information - The company achieved GAAP profitability for the second consecutive year, with a GAAP operating income of $34 million in Q4 [30] - Non-GAAP operating income for Q4 was $134 million, resulting in a record non-GAAP operating margin of 32% [31] - The company repurchased approximately $390 million worth of shares during the fiscal year [30] Q&A Session Summary Question: Can you elaborate on the recent volatility and its impact on customer budgets? - Management noted that the volatility is affecting all sectors, leading to delays in deal approvals and a cautious approach from customers regarding budgets [38][39] Question: How is the public sector performing, particularly in the U.S. Federal space? - The public sector, especially federal, has been a strong vertical, but ongoing transitions are causing short-term disruptions in procurement processes [44][46] Question: What is the company's strategy for monetizing its agent portfolio? - The company plans to implement a consumption-based model for monetizing agents and agentic orchestration, with details to be announced soon [65] Question: How is the company addressing the uncertainty in the market regarding new technology investments? - Management indicated that while there is uncertainty, there is still strong interest in AgenTic solutions, with ongoing pilots and POCs being conducted [55][56] Question: Can you provide insights on the growth of cloud ARR and its sources? - The growth in cloud ARR is attributed to both new logos and existing customers migrating workloads to the cloud, driven by the pace of innovation [96] Question: Are customers starting small with agents, or are there larger deployments? - Most customers are starting with small pilots, but there are also significant deployments occurring as excitement builds around the technology [100]