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UiPath Reports Second Quarter Fiscal 2025 Financial Results

September 5, 2024 4:10 PM

Revenue of $316 million increases 10 percent year-over-year

ARR of $1.551 billion increases 19 percent year-over-year

Cash flow from operations increases to $46 million and non-GAAP adjusted free cash flow increases to $49 million

Announces $500 million expansion of stock repurchase program

NEW YORK--(BUSINESS WIRE)-- UiPath, Inc. (NYSE: PATH), a leading enterprise automation and AI software company, today announced financial results for its second quarter fiscal 2025 ended July 31, 2024.

“We are pleased with our second quarter results, with ARR growing 19 percent year-over-year, a testament to the team's improved execution and the compelling value that our AI-powered automation platform delivers to our customers,” said Daniel Dines, UiPath Founder and Chief Executive Officer. “Our conversations with customers and partners deepen our conviction that there is an increasing need for AI and automation, and our unwavering commitment to innovation continues to position us as the automation platform of choice for capturing the opportunities that AI brings to an enterprise. As we look to the remainder of the year, we will continue to focus on product innovation, customer-centricity, and driving operational efficiencies across the business.”

Second Quarter Fiscal 2025 Financial Highlights

“We delivered durable growth at scale while driving disciplined decision-making, enabling us to raise our profitability guidance for the full year,” said Ashim Gupta, UiPath Chief Financial Officer. “We are pleased to announce the Board has authorized a $500 million expansion of our share repurchase program underscoring our improved non-GAAP adjusted free cash flow profile, our confidence in our strategy, and our commitment to delivering long-term shareholder value.”

Stock Repurchase Program

UiPath, Inc. today announced that its Board of Directors has authorized an additional share repurchase program authorizing the Company to repurchase up to $500 million of its Class A common stock in a manner deemed in the best interest of the Company and its stockholders, taking into account the economic cost and prevailing market conditions, including the relative trading prices and volumes of the Class A shares. With the new authorization, the Company may repurchase, in aggregate, up to $554 million of its outstanding shares of common stock during the remainder of the programs. The repurchases are expected to be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

Leadership Changes

In a separate release issued today, UiPath announced that Ashim Gupta will be taking on an expanded role as Chief Operating Officer in addition to his responsibilities as Chief Financial Officer, effective September 5, 2024. Mr. Gupta will continue to report to UiPath Chief Executive Officer Daniel Dines and will lead the Company’s operations and finance teams.

Financial Outlook

For the third quarter fiscal 2025, UiPath expects:

For the fiscal full year 2025, UiPath is updating its guidance and expects:

Reconciliation of non-GAAP operating income guidance to the most directly comparable GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to the charges excluded from this non-GAAP measure; in particular, the effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

Recent Business Highlights

Conference Call and Webcast

UiPath will host a conference call today, Thursday, September 5, 2024, at 5:00 p.m. Eastern Time, to discuss the Company's second quarter fiscal 2025 financial results and its guidance for the third quarter and full year fiscal 2025. To access this call, dial 1-201-689-8057 (domestic) or 1-877-407-8309 (international). The passcode is 13748202. A live webcast of this conference call will be available on the "Investor Relations" page of UiPath’s website (https://ir.uipath.com/), and a replay will also be archived on the website for one year.

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About UiPath

UiPath (NYSE: PATH) is on a mission to uplevel knowledge work so more people can work more creatively, collaboratively, and strategically. The AI-powered UiPath Business Automation Platform combines the leading robotic process automation (RPA) solution with a full suite of capabilities to understand, automate, and operate end-to-end processes, offering unprecedented time-to-value. For organizations that need to evolve to survive and thrive through increasingly changing times, UiPath is The Foundation of Innovation™. For more information, visit www.uipath.com.

Forward-Looking Statements

Statements we make in this press release may include statements which are not historical facts and are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, which are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “possible,” “projects,” “outlook,” “seeks,” “should,” “will,” and variations of such words or similar expressions, including the negatives of these words or similar expressions.

We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are making this statement for purposes of complying with those safe harbor provisions.

These forward-looking statements include, but are not limited to, statements regarding our guidance for the third fiscal quarter and full fiscal year 2025, our business strategy, plans and objectives of management for future operations, our future growth, the estimated addressable market opportunity for our platform and statements regarding the growth of the enterprise automation market, the success of our platform and new releases including the incorporation of AI, the success of our collaborations with third parties, our customers’ behaviors and potential automation spend, and details of UiPath’s stock repurchase program. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to, risks and uncertainties related to: our expectations regarding our revenue, annualized renewal run-rate (ARR), expenses, and other operating results; our ability to effectively manage our growth and achieve or sustain profitability; our ability to acquire new customers and successfully retain existing customers; the ability of the UiPath Business Automation Platform to satisfy and adapt to customer demands and our ability to increase its adoption; our ability to grow our platform and release new functionality in a timely manner; future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements; the costs and success of our marketing efforts and our ability to evolve and enhance our brand; our growth strategies; the estimated addressable market opportunity for our platform and for automation in general; our reliance on key personnel and our ability to attract, integrate, and retain highly-qualified personnel and execute management transitions, including our CEO transition; our ability to obtain, maintain, and enforce our intellectual property rights and any costs associated therewith; the effect of significant events with macroeconomic impacts, including but not limited to military conflicts and other changes in geopolitical relationships and inflationary cost trends, on our business, industry, and the global economy; our reliance on third-party providers of cloud-based infrastructure; our ability to compete effectively with existing competitors and new market entrants, including new, potentially disruptive technologies; the size and growth rates of the markets in which we compete; and the price volatility of our Class A common stock.

Further information on risks that could cause actual results to differ materially from our guidance and other forward-looking statements can be found in our Annual Report on Form 10-K for the fiscal year January 31, 2024 filed with the United States Securities and Exchange Commission (SEC) on March 27, 2024, in our Quarterly Reports on Form 10-Q filed with the SEC, and in other filings and reports that we may file from time to time with the SEC. Any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. Except as required by law, we assume no obligation to update these forward-looking statements.

Key Performance Metric

Annualized Renewal Run-rate (ARR) is a key performance metric we use in managing our business because it illustrates our ability to acquire new subscription customers and to maintain and expand our relationships with existing subscription customers. We define ARR as annualized invoiced amounts per solution SKU from subscription licenses and maintenance and support obligations assuming no increases or reductions in customers’ subscriptions. ARR does not include the costs we may incur to obtain such subscription licenses or provide such maintenance and support, and does not reflect any actual or anticipated reductions in invoiced value due to contract non-renewals or service cancellations other than for certain reserves, for example those for credit losses or disputed amounts. ARR does not include invoiced amounts associated with perpetual licenses or professional services. ARR is not a forecast of future revenue, which is impacted by contract start and end dates and duration. ARR should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to replace these items.

Dollar-based net retention rate represents the rate of net expansion of our ARR from existing customers over the preceding 12 months. We calculate dollar-based net retention rate as of a period end by starting with ARR from the cohort of all customers as of 12 months prior to such period end (Prior Period ARR). We then calculate the ARR from these same customers as of the current period end (Current Period ARR). Current Period ARR includes any expansion and is net of any contraction or attrition over the preceding 12 months but does not include ARR from new customers in the current period. We then divide total Current Period ARR by total Prior Period ARR to arrive at dollar-based net retention rate. Dollar-based net retention rate may fluctuate based on the customers that qualify to be included in the cohort used for calculation and may not reflect our actual performance.

Investors should not place undue reliance on ARR or dollar-based net retention rate as an indicator of future or expected results. Our presentation of these metrics may differ from similarly titled metrics presented by other companies and therefore comparability may be limited.

Non-GAAP Financial Measures

Non-GAAP financial measures are financial measures that are derived from the consolidated financial statements, but that are not presented in accordance with generally accepted accounting principles in the United States (GAAP). This earnings press release includes financial measures defined as non-GAAP financial measures by the SEC, including non-GAAP cost of licenses, non-GAAP cost of subscription services, non-GAAP cost of professional services and other, non-GAAP gross profit and margin, non-GAAP sales and marketing expenses, non-GAAP research and development expenses, non-GAAP general and administrative expenses, non-GAAP operating income and margin, and non-GAAP net income and non-GAAP net income per share. These non-GAAP financial measures exclude:

Additionally, this earnings release presents non-GAAP adjusted free cash flow, which is calculated by adjusting GAAP operating cash flows for the impact of purchases of property and equipment, cash paid for employer payroll taxes related to employee equity transactions, net payments/receipts of employee tax withholdings on stock option exercises, and cash paid for restructuring costs.

UiPath uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, by excluding the effects of special items that do not reflect the ordinary earnings of our operations, and as a supplement to GAAP measures. UiPath believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in UiPath’s industry, many of which present similar non-GAAP financial measures to investors. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, our financial performance measures prepared in accordance with GAAP. Further, our non-GAAP information may be different from the non-GAAP information provided by other companies. The information below provides a reconciliation of non-GAAP financial measures used in this earnings press release to the most directly comparable GAAP financial measures. We encourage investors to consider our GAAP results alongside our supplemental non-GAAP measures, and to review the reconciliation between GAAP results and non-GAAP measures that is included at the end of this earnings press release. This earnings press release and any future releases containing such non-GAAP reconciliations can also be found on the Investor Relations page of UiPath’s website at https://ir.uipath.com.

UiPath, Inc.

Condensed Consolidated Statements of Operations

in thousands, except per share data

(unaudited)

Three Months Ended

July 31,

Six Months Ended

July 31,

2024

2023

2024

2023

Revenue:

Licenses

$

112,251

$

119,300

$

252,379

$

253,339

Subscription services

194,673

159,999

379,804

306,351

Professional services and other

9,329

8,011

19,182

17,208

Total revenue

316,253

287,310

651,365

576,898

Cost of revenue:

Licenses

2,393

3,008

4,994

5,555

Subscription services

43,529

26,777

80,283

49,855

Professional services and other

17,398

19,202

33,368

37,244

Total cost of revenue

63,320

48,987

118,645

92,654

Gross profit

252,933

238,323

532,720

484,244

Operating expenses:

Sales and marketing

194,330

169,725

374,469

330,131

Research and development

98,433

86,606

184,036

161,948

General and administrative

63,519

59,577

127,029

116,161

Total operating expenses

356,282

315,908

685,534

608,240

Operating loss

(103,349

)

(77,585

)

(152,814

)

(123,996

)

Interest income

13,370

13,582

27,200

27,430

Other income, net

7,710

7,472

18,389

11,766

Loss before income taxes

(82,269

)

(56,531

)

(107,225

)

(84,800

)

Provision for income taxes

3,828

3,830

7,608

7,462

Net loss

$

(86,097

)

$

(60,361

)

$

(114,833

)

$

(92,262

)

Net loss per share, basic and diluted

$

(0.15

)

$

(0.11

)

$

(0.20

)

$

(0.16

)

Weighted-average shares used in computing net loss per share, basic and diluted

568,042

562,883

568,973

560,422

UiPath, Inc.

Condensed Consolidated Balance Sheets

in thousands

(unaudited)

As of

July 31,

2024

January 31,

2024

Assets

Current assets

Cash and cash equivalents

$

939,313

$

1,061,678

Restricted cash

438

438

Marketable securities

804,061

818,145

Accounts receivable, net of allowance for credit losses of $2,164 and $1,119, respectively

267,706

436,296

Contract assets

101,107

84,197

Deferred contract acquisition costs

76,653

74,678

Prepaid expenses and other current assets

85,056

104,980

Total current assets

2,274,334

2,580,412

Contract assets, non-current

9,232

6,214

Deferred contract acquisition costs, non-current

146,564

154,317

Property and equipment, net

22,040

23,982

Operating lease right-of-use assets

71,033

56,072

Intangible assets, net

11,025

14,704

Goodwill

89,530

89,026

Deferred tax assets

3,763

4,678

Other assets, non-current

73,812

25,353

Total assets

$

2,701,333

$

2,954,758

Liabilities and stockholders' equity

Current liabilities

Accounts payable

$

9,910

$

3,447

Accrued expenses and other current liabilities

82,640

83,997

Accrued compensation and employee benefits

77,444

137,442

Deferred revenue

462,509

486,805

Total current liabilities

632,503

711,691

Deferred revenue, non-current

150,346

161,027

Operating lease liabilities, non-current

78,166

58,713

Other liabilities, non-current

6,737

7,213

Total liabilities

867,752

938,644

Commitments and contingencies

Stockholders' equity

Class A common stock

5

5

Class B common stock

1

1

Treasury stock

(322,047

)

(102,615

)

Additional paid-in capital

4,176,531

4,024,079

Accumulated other comprehensive income

8,105

8,825

Accumulated deficit

(2,029,014

)

(1,914,181

)

Total stockholders’ equity

1,833,581

2,016,114

Total liabilities and stockholders’ equity

$

2,701,333

$

2,954,758

UiPath, Inc.

Condensed Consolidated Statements of Cash Flows

in thousands

(unaudited)

Six Months Ended

July 31,

2024

2023

Cash flows from operating activities

Net loss

$

(114,833

)

$

(92,262

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

9,483

11,160

Amortization of deferred contract acquisition costs

39,392

31,229

Net amortization on marketable securities

(18,527

)

(10,745

)

Stock-based compensation expense

183,032

187,145

Charitable donation of Class A common stock

6,564

4,215

Non-cash operating lease expense

7,562

6,299

Provision for deferred income taxes

752

(57

)

Other non-cash (credits) charges, net

(573

)

965

Changes in operating assets and liabilities:

Accounts receivable

165,781

147,725

Contract assets

(19,773

)

(9,455

)

Deferred contract acquisition costs

(33,898

)

(36,389

)

Prepaid expenses and other assets

6,314

(6,679

)

Accounts payable

6,774

(6,033

)

Accrued expenses and other liabilities

7,018

(4,229

)

Accrued compensation and employee benefits

(59,799

)

(74,184

)

Operating lease liabilities, net

(6,983

)

(7,532

)

Deferred revenue

(31,873

)

(29,547

)

Net cash provided by operating activities

146,413

111,626

Cash flows from investing activities

Purchases of marketable securities

(697,765

)

(709,199

)

Maturities of marketable securities

730,337

338,644

Purchases of property and equipment

(2,656

)

(2,876

)

Purchases of investments

(35,809

)

—

Other investing, net

—

2,754

Net cash used in investing activities

(5,893

)

(370,677

)

Cash flows from financing activities

Repurchases of Class A common stock

(218,752

)

—

Proceeds from exercise of stock options

643

3,904

Payments of tax withholdings on net settlement of equity awards

(45,949

)

(52,832

)

Net receipts (payments) of tax withholdings on sell-to-cover equity award transactions

99

(679

)

Proceeds from employee stock purchase plan contributions

8,642

9,643

Payment of deferred consideration related to business acquisition

(5,570

)

(5,863

)

Net cash used in financing activities

(260,887

)

(45,827

)

Effect of exchange rate changes

(1,998

)

(2,943

)

Net decrease in cash, cash equivalents, and restricted cash

(122,365

)

(307,821

)

Cash, cash equivalents, and restricted cash - beginning of period

1,062,116

1,402,119

Cash, cash equivalents, and restricted cash - end of period

$

939,751

$

1,094,298

UiPath, Inc.

Reconciliation of GAAP Cost of Revenue, Gross Profit and Margin to Non-GAAP Cost of Revenue, Gross Profit and Margin

in thousands, except percentages

(unaudited)

Three Months Ended

July 31,

Six Months Ended

July 31,

2024

2023

2024

2023

GAAP cost of licenses

$

2,393

$

3,008

$

4,994

$

5,555

Less: Amortization of acquired intangible assets

819

851

1,663

1,687

Non-GAAP cost of licenses

$

1,574

$

2,157

$

3,331

$

3,868

GAAP cost of subscription services

$

43,529

$

26,777

$

80,283

$

49,855

Less: Stock-based compensation expense

5,284

3,809

9,560

6,987

Less: Amortization of acquired intangible assets

595

594

1,188

1,178

Less: Employer payroll tax expense related to employee equity transactions

68

85

245

175

Less: Restructuring costs

318

167

318

167

Non-GAAP cost of subscription services

$

37,264

$

22,122

$

68,972

$

41,348

GAAP cost of professional services and other

$

17,398

$

19,202

$

33,368

$

37,244

Less: Stock-based compensation expense

3,015

3,083

5,485

5,782

Less: Employer payroll tax expense related to employee equity transactions

27

68

93

139

Less: Restructuring costs

126

—

126

—

Non-GAAP cost of professional services and other

$

14,230

$

16,051

$

27,664

$

31,323

GAAP gross profit

$

252,933

$

238,323

$

532,720

$

484,244

GAAP gross margin

80

%

83

%

82

%

84

%

Plus: Stock-based compensation expense

8,299

6,892

15,045

12,769

Plus: Amortization of acquired intangible assets

1,414

1,445

2,851

2,865

Plus: Employer payroll tax expense related to employee equity transactions

95

153

338

314

Plus: Restructuring costs

444

167

444

167

Non-GAAP gross profit

$

263,185

$

246,980

$

551,398

$

500,359

Non-GAAP gross margin

83

%

86

%

85

%

87

%

UiPath, Inc.

Reconciliation of GAAP Operating Expenses, Loss, and Margin to Non-GAAP Operating Expenses, Income and Margin

in thousands, except percentages

(unaudited)

Three Months Ended

July 31,

Six Months Ended

July 31,

2024

2023

2024

2023

GAAP sales and marketing

$

194,330

$

169,725

$

374,469

$

330,131

Less: Stock-based compensation expense

37,473

39,007

73,689

72,130

Less: Amortization of acquired intangible assets

298

681

850

1,352

Less: Employer payroll tax expense related to employee equity transactions

577

501

1,800

1,725

Less: Restructuring costs

7,971

1,087

7,971

1,316

Non-GAAP sales and marketing

$

148,011

$

128,449

$

290,159

$

253,608

GAAP research and development

$

98,433

$

86,606

$

184,036

$

161,948

Less: Stock-based compensation expense

32,654

33,071

61,796

57,844

Less: Employer payroll tax expense related to employee equity transactions

288

584

918

1,185

Less: Restructuring costs

1,681

109

1,681

394

Non-GAAP research and development

$

63,810

$

52,842

$

119,641

$

102,525

GAAP general and administrative

$

63,519

$

59,577

$

127,029

$

116,161

Less: Stock-based compensation expense

15,879

23,127

32,502

44,402

Less: Amortization of acquired intangible assets

39

41

78

82

Less: Employer payroll tax expense related to employee equity transactions

175

491

590

869

Less: Restructuring costs

2,516

354

2,516

729

Less: Charitable donation of Class A common stock

—

—

6,564

4,215

Non-GAAP general and administrative

$

44,910

$

35,564

$

84,779

$

65,864

GAAP operating loss

$

(103,349

)

$

(77,585

)

$

(152,814

)

$

(123,996

)

GAAP operating margin

(33

)%

(27

)%

(23

)%

(21

)%

Plus: Stock-based compensation expense

94,305

102,097

183,032

187,145

Plus: Amortization of acquired intangible assets

1,751

2,167

3,779

4,299

Plus: Employer payroll tax expense related to employee equity transactions

1,135

1,729

3,646

4,093

Plus: Restructuring costs

12,612

1,717

12,612

2,606

Plus: Charitable donation of Class A common stock

—

—

6,564

4,215

Non-GAAP operating income

$

6,454

$

30,125

$

56,819

$

78,362

Non-GAAP operating margin

2

%

10

%

9

%

14

%

UiPath, Inc.

Reconciliation of GAAP Net Loss and GAAP Net Loss Per Share to Non-GAAP Net Income and Non-GAAP Net Income Per Share

in thousands, except per share data

(unaudited)

Three Months Ended

July 31,

Six Months Ended

July 31,

2024

2023

2024

2023

GAAP net loss

$

(86,097

)

$

(60,361

)

$

(114,833

)

$

(92,262

)

Plus: Stock-based compensation expense

94,305

102,097

183,032

187,145

Plus: Amortization of acquired intangible assets

1,751

2,167

3,779

4,299

Plus: Employer payroll tax expense related to employee equity transactions

1,135

1,729

3,646

4,093

Plus: Restructuring costs

12,612

1,717

12,612

2,606

Plus: Charitable donation of Class A common stock

—

—

6,564

4,215

Tax adjustments to add-backs

58

1,640

2,182

2,682

Non-GAAP net income

$

23,764

$

48,989

$

96,982

$

112,778

GAAP net loss per share, basic and diluted

$

(0.15

)

$

(0.11

)

$

(0.20

)

$

(0.16

)

GAAP weighted average common shares outstanding, basic and diluted

568,042

562,883

568,973

560,422

Non-GAAP weighted average common shares outstanding, basic

568,042

562,883

568,973

560,422

Plus: Dilutive potential common shares from outstanding equity awards

4,965

11,580

9,625

12,145

Non-GAAP weighted average common shares outstanding, diluted

573,007

574,463

578,598

572,567

Non-GAAP net income per share, basic

$

0.04

$

0.09

$

0.17

$

0.20

Non-GAAP net income per share, diluted

$

0.04

$

0.09

$

0.17

$

0.20

UiPath, Inc.

Reconciliation of GAAP Operating Cash Flow to Non-GAAP Adjusted Free Cash Flow

in thousands

(unaudited)

Six Months Ended

July 31,

2024

2023

GAAP net cash provided by operating activities

$

146,413

$

111,626

Purchases of property and equipment

(2,656

)

(2,876

)

Cash paid for employer payroll taxes related to employee equity transactions

3,267

4,830

Net (receipts) payments of employee tax withholdings on stock option exercises

(9

)

924

Cash paid for restructuring costs

2,762

4,792

Non-GAAP adjusted free cash flow

$

149,777

$

119,296

Investor Relations Contact

Allise Furlani

[email protected]

UiPath

Media Contact

Heather Graubard

[email protected]

UiPath

Source: UiPath, Inc.

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