UiPath(PATH) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported fourth quarter net new ARR of $86 million, ending the year with a total ARR of $1.46 billion, an increase of 22% year-over-year [10] - Record quarterly revenue reached $405 million, up 31% year-over-year, with a non-GAAP operating margin of 27% for the fourth quarter, leading to a fiscal year non-GAAP operating margin of 18%, an increase of over 1,100 basis points year-over-year [10][27] - The company achieved its first quarter of GAAP profitability as a public company, delivering operating income of $15 million [27] Business Line Data and Key Metrics Changes - In the fourth quarter, 65 of the top 100 deals included intelligent document processing, indicating strong customer engagement [17] - The Test Suite customer base grew more than 75% year-over-year in the fourth quarter, showcasing its increasing relevance in the application testing market [19] - Customers with ARR of $100,000 accounted for approximately 86% of total revenue, while those with ARR of $1 million or more accounted for 52% of revenue [26] Market Data and Key Metrics Changes - The company ended the year with over 10,830 customers, including new logos like Five Guys and Coca-Cola Beverages Florida [51] - The dollar-based net retention rate as of the fourth quarter was 119%, driven by quick time to ROI and broad applicability of automation [25] - Current remaining performance obligations increased to $707 million, up 26% year-over-year [26] Company Strategy and Development Direction - The company is focusing on a cloud-first approach, driving adoption across its customer base, with cloud ARR reaching over $650 million, up 70% year-over-year [51] - Strategic investments in technology, particularly in intelligent document processing and generative AI, are planned to capture a growing market [56] - The company aims to deliver growth and profitability in fiscal year 2025, targeting at least 100 basis points of non-GAAP operating margin expansion year-over-year [56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic role the company plays for its customers, emphasizing the importance of AI-driven automation in fulfilling organizational objectives [38] - The company anticipates continued momentum into 2025, supported by strong demand for its platform and successful customer engagements [50] - Management highlighted the importance of operational excellence and profitable growth initiatives in navigating a variable economic environment [51] Other Important Information - The company announced a co-innovation market collaboration with Deloitte, focusing on automations tailored for early-stage innovative companies [15] - A new UiPath large language model is set to be unveiled at the upcoming AI Summit, combining open-source LLMs with specialized AI capabilities [46] - The company has no debt and ended the fiscal year with $1.9 billion in cash, cash equivalents, and marketable securities [55] Q&A Session Summary Question: What drove the significant jump in licenses this quarter? - Management noted that the fourth quarter is typically a heavier quarter, with a significant number of license deliveries from both prior deals and current quarter deals [62] Question: Are there specific use cases where AI and automation are resonating? - Management highlighted strong traction in the healthcare insurance space with intelligent document processing and noted the growing relevance of the Test Suite [66] Question: What is the outlook for GAAP profitability in fiscal 2025? - Management did not provide specific guidance on GAAP profitability but expressed optimism about the overall trend and cost discipline [120] Question: How is the partner contribution evolving? - Management indicated that over 70% of deals are influenced by partners, with a focus on driving more partner connections in the future [75] Question: What is the expected mix of cloud ARR in fiscal 2025? - Management expressed confidence that the cloud mix will continue to grow as the company scales its offerings [123]