UiPath Q1 2026 Earnings Call Transcript

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Operator

Greetings, and welcome to the UiPath First Quarter twenty twenty six Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Elise Furlani, Vice President of Investor Relations.

Operator

Thank you, Elise. You may begin.

Allise Furlani
Allise Furlani
VP - IR at UiPath

Good afternoon, and thank you for joining us today to review UiPath's first quarter fiscal twenty twenty six financial results, which we announced in our earnings press release issued after the close of the market today. On the call with me are Daniel Dines, Founder and Chief Executive Officer and Nisin Gupta, Chief Operating and Financial Officer, to deliver our prepared comments and answer questions. Our earnings release and financial supplemental materials are posted on the UiPath Investor Relations website, ir.uipath.com. These materials include GAAP to non GAAP reconciliations. We will be discussing non GAAP metrics on today's call.

Allise Furlani
Allise Furlani
VP - IR at UiPath

This afternoon's call includes forward looking statements regarding our financial guidance for the second quarter and full fiscal year 2026 and our ability to drive and accelerate future growth and operational efficiency and grow our platform, product offerings and market opportunity. Actual results may differ materially from those expressed in the forward looking statements due to many factors, and therefore, investors should not place undue reliance on these statements. For a discussion of the material risks and uncertainties that could affect our actual results, please refer to our annual report on Form 10 ks for the year ended 01/31/2025, and in other filings and reports that we may file from time to time with the SEC. Forward looking statements made on this call reflect our views as of today, and we undertake no obligation to update them. I would like to highlight that this webcast is being accompanied by slides.

Allise Furlani
Allise Furlani
VP - IR at UiPath

We will post the slides and a copy of our prepared comments to our Investor Relations website immediately following the conclusion of this call. In addition, please note that all comparisons are year over year unless otherwise indicated. Now, I'd like to hand the call over to Daniel.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Thank you, Alice. Good afternoon, everyone. Thanks for joining us. Before we dive into the results, I want to take a moment to reflect on the momentum we are seeing across the business, especially around the launch of our agentic automation platform. This has been one of the most important and successful product introductions in our history.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

The progress we've made is a testament to the relentless innovation of our teams, the deep trust of our customers and the strength of our partner ecosystem. Together, we've turned the promise of agentic automation into a powerful reality and we are just getting started. The momentum following our launch has been exciting and was matched by strong first quarter financial performance. We executed with discipline and focus in what continues to be a variable macro economical environment exceeding expectation on the top and bottom line. We delivered first quarter revenue of $357,000,000 and ended the quarter with ARR of $1,693,000,000 an increase of 12% year over year.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Our ongoing emphasis on operational efficiency drove strong bottom line results significantly improving our GAAP operating loss to $16,000,000 compared to a loss of $49,000,000 in the prior year. On a non GAAP basis, we achieved operating income of $70,000,000 representing a 20 margin, an improvement of four fifty basis points year over year. What's driving these results is clear. Our end to end automation platform now enhanced with AgenTeq automation and AgenTeq orchestration capabilities is resonating deeply with customers. Over the last several months, I have spent considerable time deeply engaged in product sessions and customer conversations all centered around the agentic automation.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

The energy and potential I'm seeing are palpable and I've never been more confident about the path we are on. Customer energy has been reinforced by several high impact events this quarter, each amplifying our platform's potential and setting the stage for our next phase of growth. Our annual Agenetic AI Summit and an unforgettable DevCon twenty twenty five laid the foundation for the most significant product launch in UiPath's twenty year history. Over 15,000 participants registered for the launch and our agentic automation products and witnesses firsthand how UiPath transforms work by unifying AI agents, robots and people into a single intelligent system. As we bring our AgenTi platform to market, it's clear we are positioned to lead.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Our right to win is grounded in five powerful advantages. First, our extensive installed base of robots and AI capabilities already operating autonomously across more than 10,000 customers gives us unparalleled insight into real enterprise processes and workflows where agents are a natural extension. Second, we uniquely bridge deterministic automation or RPA and probabilistic automation or agentic, allowing customers to extend automation into more complex adaptive workflows. Third, our vendor agnostic architecture enables seamless integration with any agent framework, whether pro code or low code providing unmatched flexibility. Fourth, we've built a secure compliant and enterprise grade platform that meets the highest standards of governance critical for enterprise grade automation.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

And fifth, our unified end to end platform architecture delivers a fully integrated experience from discovery to deployment, all governed centrally, enabling customers to scale automation with confidence and control. Customers and partners across the industry see our differentiation and are quickly embracing the transformative potential of our newly launched platform. Since launching AgentBuilder in preview this January, we've seen accelerating adoption with customers creating thousands of autonomous agents and generating over 250,000 agent runs to date. Momentum is also building for Maestro, our AgenTic orchestration solution, which entered preview in March and has already powered more than 11,000 process instances, highlighting strong early demand for coordinated enterprise grade, agentic automation. To support this momentum, we've introduced a monetization strategy designed to drive adoption featuring a new consumption based pricing SKU.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Let me share a few examples that reinforce the strength and differentiation of our platform. Organizations are under increasing pressure to accelerate digital transformation and as they embrace AI, the word I hear most from customers is trust. They want confidence in the agents they deploy and that's where our platform stands out. We offer the control, governance and predictability they need to automate complex end to end processes with confidence. A powerful example of this is a Fortune 15 global health company where we are driving AgenTic automation at scale.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

In our first AgenTic deal since launching our products into general availability, they signed a multi year, multi million dollar expansion to adopt UiPath Maestro, an agent builder to design, deploy and many JI agents across complex cross functional workflows. These capabilities enable them to integrate agents into real business processes with the governance, scalability and human in the loop controls requires for enterprise adoption. We're also seeing a fundamental shift in how customers think about automation. It's no longer about isolated tasks, but the move toward more intelligent and connected approach. This is where UiPath Maestro truly differentiates us.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Our vendor agnostic architectures enable seamless orchestration between robots, agents and people and unlocks complex cross functional workflows that traditional automation couldn't address. A great example is the leading global apparel retailer using UiPath Maestro to orchestrate their end to end user query process with the master support agent. With Maestro, they've automated the entire workflow from intelligent task routing and ticket generation to resolution and closure, resulting in a streamlined, highly efficient support operation. By seamlessly connecting robots, AI agents and systems both inside and outside UiPath, Maestro enables smooth coordination across multiple complex automated processes. Leaders across industries see Agenetic Automation as the key to expanding AI's role from supporting operations to actively guiding them and they increasingly recognize the need for both deterministic and probabilistic automation.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Our platform approach uniquely addresses this demand and is helping us win new customers including a competitive display this quarter with the global healthcare technology company. After selecting UiPath to consolidate on a single platform with deep expertise in both AgenTic automation and RPA. They are planning to migrate all of their existing automations to our platform and are designing a solution to automate their complex inbound sales order process by integrating agents, autopilot and RPA with an expected reduction in processing time of 25%. The leadership of UiPath's platform is also validated by industry analysts and we're proud to see continued recognition in intelligent document processing. For the third year in a row, UiPath was named a leader in the Everest Group's IDP product, Peak Metrics Assessment 2025, another strong validation of our innovation performance and industry impact.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

But we are not standing still. This quarter we introduced our next generation IDP solution, Intelligent Extraction Processing or iXP. IXP transforms how enterprises handle complex unstructured content far beyond the limits of traditional IDP, enabling faster processing, a smoother user experience and less friction in even the most challenging workflows. Hub International is a great example of the value iXp delivers with multiple use cases already in development and production. They are leveraging iXp to efficiently extract both structured and unstructured data from documents.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Our iXp solution also enables seamless data extraction across various carrier files supporting their financial reconciliation processes and establishing a scalable solution that can be extended to similar use cases across other business units. The breadth of the UiPath platform continues to drive adoption across high impact use cases, one of the most exciting being agentic testing. Customers are responding enthusiastically to its ability to combine AI powered automation with customizable agents enabling faster, smarter testing across a wide range of enterprise applications. A great example is a competitive win with Continental Resources. We expanded in the quarter by adopting our agentic testing solutions.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

They chose UiPath for our platform sending approach and industry leading capabilities and plan to leverage our testing technology to automate key processes in well operations and support their upcoming SAP migration. As we continue expanding the role of AI across the platform, Autopilot remains the core driver of productivity and continues to gain strong traction across our customer base with monthly engaged users up over 60% sequentially and an 86% increase in actions taken. A great example is the global financial and mobility services provider. After standardizing on the UiPath platform, they deployed Autopilot in their banking services department, where hundreds of employees have realized significant time savings by leveraging it for claims management processes. Building on this success, they are preparing to scale Autopilot to over 5,000 employees across all financial services departments.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

As we continue to build our our the unique horizontal capabilities of the UiPathogenic automation platform, we are also focused on delivering industry specific AI solutions that accelerate adoption, solving complex problems and driving measurable outcomes in line with that strategy. Our integration of PEAK, which was announced last quarter is progressing well and gaining momentum among our customer base. We're encouraged by early customer feedback, particularly as they leverage Peak's inventory pricing capabilities, which are proving even more valuable in today's macroeconomic environment, especially as companies navigate tariffs. This quarter, we announced a strategic AI partnership with Google Cloud aimed at transforming healthcare operations through an AI powered UiPath medical record summarization agent. Leveraging Google's clouds Vertex AI and Gemini models, this solution is designed to dramatically improve efficiency and streamline critical medical workflows with the potential to reduce prior authorization times by up to 50%, a game changer for both healthcare providers and the patients they serve.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

And this is just the beginning. We are committed to continuing to develop targeted vertical solutions. Central to this strategy is deep, focused collaboration with strategic partners where we are able to co create solutions that accelerate customer value and drive measurable outcomes at scale. A great example is our continued partnership with Deloitte, including our recently completed Customer Zero initiative, which led UiPath's internal migration to SAP S4HANA. Working with Deloitte and leveraging our own automation capabilities, we re imagine the entire process and pioneered an automation first, agentic ERP approach that now serves as a model for the market.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

As a result, more than 200 automations were delivered across core processes like quote to cash and treasury with nearly 60% of test cases automated, significantly reducing the load on business users and accelerating delivery timelines. With our internal implementation life, we are now focused on the next phase, embedding AgenTiC AI capabilities into the ERP environment. Powered by UiPath Maestro, this next generation architecture will enable smart AI agents to handle decision making, identify exceptions and orchestrate tasks across SAP and non SAP applications. And we are already replicating this with joint customers, including a recent win with the Fortune 20 oil and gas company in one of the largest SAP implementations to date. They will be leveraging UiPath and Deloitte's automation playbook to significantly reduce implementation time and expect to automate 70% of all manual tests.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

As we scale our AgenTiC solutions across our customer base, technical partnerships remain a key priority, playing a critical role in enabling seamless integrations and driving automation at scale. This quarter we took another big step forward by expanding our collaboration with Microsoft through a new bidirectional integration with Microsoft CoPilot Studio. This integration enables developers to embed UiPath automations and AI agents directly into Copilot Studio and brings Copilot agents into UiPath Studio unlocking powerful new use cases and making cross platform collaboration a reality. Great example is a global diversified technology and industrial company that is currently implementing UiPath agents to work in conjunction with Microsoft Copilot to support their customer invoicing workflow enabling an end to end touchless approach to this process. We also teamed up with LangChain to give developers even more flexibility and power.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Now UiPath developers can bring LanGraph build agents right into their workflows and LanGraph developers can deploy their agents on our secure enterprise grade platform giving them the confidence to scale with compliance and reliability built in. Our end to end automation platform sets us apart and continues to earn third party recognition. We are humbled to be named a leader in the first ever IDC MarketScape Worldwide Business Automation Platform 2025 Vendor Assessment, which we believe is a testament to the strength of our technology, our customer first mindset and our proven ability to deliver meaningful ROI at scale. Lastly, I'd like to provide a quick update on our U. S.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Public sector vertical. We're encouraged by the progress we are seeing in our public sector business as we support federal customers through the transition. The highlight this quarter was our annual public sector on tour event, which brought together senior leaders from the Navy, Air Force, DLA and DHS to share their vision for the future of Agenic Automation and underscore our growing role in helping federal agencies modernize and scale automation across their organizations. Great example is a deal this quarter with the United States Air Force to accelerate digital transformation through its AgenTic Airmen initiative. Building on their successful RPA foundation, the initiative integrates UiPath intelligent digital agents, advanced decision making capabilities and AI driven insights and is designed to reduce operational inefficiencies, enhance mission readiness and standardize automation at scale across 70,000 plus airmen and guardians.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Looking forward, we'll continue building on our conversations with administration officials united by a shared goal of transforming the government. At the same time, we recognize that this transition is still evolving and we remain prudent in our guidance for the remainder of the year. Before I hand it over to Ashim, I'd like to invite you to join a virtual fireside chat and product demonstration at 11AM Eastern Time on June 18, where I'll be joined by our Chief Product Officer, Graham Sheldon to showcase the powerful capabilities of our latest AgenTiKi products. Please reach out to our Investor Relations team for more information. With that, I'll turn the call over to Ashim.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Thank you, Daniel, and good afternoon, everyone. I'd like to begin by providing an update on the key operating priorities we have been focused on. First, we've made meaningful progress in connecting and strengthening our partner ecosystem, which continues to play a central role in driving adoption and accelerating UiPath strategy in the market. This quarter, we officially launched our new partner program, which has been well received and places a strong emphasis on enabling our partners in conjunction with the AgenTic launch. This collaborative approach is becoming a powerful engine for shared customer success.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

At our DevCon event in late April, '4 of our leading GSIs Accenture, Cognizant and CGI showcased live agentic customer use cases that brought our platform's potential to life. In this quarter more than 40 partners including GSIs like Deloitte, and PwC as well as regional partners like Leidonia, TQA and Accelerate completed our AgenTeq Fast Track program, a hands on immersive training automation and a clear reflection of how invested our partners are in driving the AgenTic era forward for our customers. A great example is a leading GSI's close relationship close partnership with Sonic Automotive. Following last year's expansion, our IDP and testing solutions, Sonic expanded in the quarter to purchase our AgenTi capabilities and they work to transform their enterprise with AI. Working with they will begin identifying use cases across their enterprise and finance, supply chain, shared services and customer service.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

And Schulz and Partner, an early adopter of our AgenTeq automation solutions, with support from Cronos Automation, one of our Platinum and Fast Track partners, they're implementing two high impact AgenTeq use cases. One automates the extraction and matching of company data from incoming documents, cutting down on manual research. The other uses multiple agents to analyze client self disclosures and generate tailored settlement offers enabling faster more consistent decision making at scale. We are also pleased with the progress we're making in driving customer adoption supported by tighter cross functional alignment, proactive engagement and clearer accountability and focus. This coordination is fueling real momentum and there's a strong sense of energy and focus as we bring our AgenTic automation solutions to more customers.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Finally, we have substantially completed the overall transformation, which has yielded significant operating leverage as seen in our results. Looking ahead, we are also focused on driving internal adoption of our platform to unlock the next wave of operational efficiency as we scale. By agentifying our internal processes with UiPath Maestro and our new agent capabilities alongside our existing RPA automations, we're setting a powerful example of how our platform can streamline work and deliver measurable value. Turning to the quarter, unless otherwise indicated, I will be discussing results on a non GAAP basis and all growth rates are year over year. I also want to note that since we price and sell in local currency fluctuations in FX rates results impacts results.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

We had a solid start to the year with first quarter revenue growing to $357,000,000 an increase of 6%. ARR totaled $1,693,000,000 an increase of 12% driven by first quarter net new ARR of $27,000,000 We continue to be successful in signing valuable new enterprise logos that align with our strategy for targeting long term customers with the propensity to invest, including new logos like McLaren Health, Paylocity, Norwegian Cruise Line and in a competitive displacement this quarter Delta Airlines, who will be migrating their current automations to UiPath and adopting our full suite of capabilities. Our seamless ability to deliver in the cloud and leading AgenTic automation capabilities were key in choosing UiPath as their automation partner. We ended the quarter with approximately 10,750 customers. As with prior quarters, the vast majority of customer attrition continues to be at the lower end.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Customers with $100,000 or more in ARR increased to 2,365, while customers with $1,000,000 or more in ARR increased to three sixteen. Moving on, dollar based gross retention of 97% continues to be best in class and our dollar based net retention rate as of the first quarter was 108%. Remaining performance obligations increased to $1,231,000,000 up 12%. Current RPO increased $776,000,000 up 14%. Turning to expenses.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

First quarter overall gross margin was 84% and software gross margin was 90%. First quarter operating expenses were $231,000,000 First quarter GAAP operating loss of $16,000,000 included $76,000,000 of stock based compensation expense. Non GAAP operating income in the first quarter was $70,000,000 representing a 20% margin, an improvement of four fifty basis points year over year and a testament to our ongoing focus on operational discipline and efficiency. Our first quarter non GAAP adjusted free cash flow generation was $117,000,000 representing a 33% margin, up over two fifty basis points year over year. We ended the quarter with a healthy balance sheet consisting of $1,600,000,000 in cash,

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

This quarter, we repurchased a significant number of shares reflecting our continued commitment to delivering value to shareholders, repurchasing 21,900,000.0 shares of our Class A common stock at an average price of $10.4 Now turning to guidance. We are pleased with the team's execution in a variable macroeconomic environment that is similar to the first quarter. We continue to guide to what's in front of us and therefore have updated our revenue linearity based on the favorable timing and mix of deals between second and third quarter. We are encouraged by early traction with our newly launched AgenTiC solutions. However, adoption is still in its early phases and as such we don't expect a material revenue contribution in fiscal twenty twenty six.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

We are approaching the year with strong energy and focus, partnering closely with customers to lay the groundwork through pilots, proof of concepts and early deployments. We view fiscal twenty twenty six as a foundational year that will position us to drive meaningful new revenue streams in fiscal twenty twenty seven and beyond as AgenTic Automation scales more broadly across our customer base. Turning to the specifics of our guide. For the second fiscal quarter twenty twenty six, we expect revenue in the range of $345,000,000 to $350,000,000 ARR in the range of 1,715,000,000 to $1,720,000,000 non GAAP operating income of approximately $40,000,000 and we expect second quarter basic share count to be approximately $537,000,000 shares. For the fiscal full year of 2026, we expect revenue in the range of $1,549,000,000 to $1,554,000,000 ARR in the range of $1,820,000,000 to $1,825,000,000 non GAAP operating income of approximately $3.00 $5,000,000 And finally, we continue to expect fiscal year twenty twenty six non GAAP adjusted free cash flow of approximately $370,000,000 and non GAAP gross margin to be approximately 85%.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Thank you for joining us today and we look forward to speaking with many of you during the quarter. With that, I will now turn the call over to the operator. Operator, please poll for questions.

Operator

Thank you. We will now be conducting a question and answer session. You. One moment please while we poll for questions. Thank you.

Operator

Our first question comes from the line of Raimo Lenschow with Barclays. Please proceed.

Sheldon McMeans
Sheldon McMeans
Analyst at Barclays Capital

This is Sheldon McMeans on for Raimo. Thanks for taking the question. When you reported in March, it did seem like we were near peak levels of uncertainty and you prudently factored that into your guidance. It does seem like some of the uncertainty has decreased then. And so would love to hear what a little bit more on what you're seeing, how you factor that in?

Sheldon McMeans
Sheldon McMeans
Analyst at Barclays Capital

And then if I could tie in the second part here. We have seen some dollar weakening since you last reported Bloomberg Dollar Spot Index down about 4% since mid March. If you could flush out the FX impact in the quarter and then the potential tailwind to the full year guide, that would be great.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Yes. Great question, Sheldon. Good hear from you. So look, I think that in many ways, the macroeconomic environment, it's still variable. I think when you talk to customers, even when you read the news, right, every day there's an evolving set of facts and set of circumstances.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

So we look at the environment as variable. I think we're pleased with how we executed through it in the first quarter. We have good line of sight in terms of our second quarter. And therefore, we kind of adjusted our linearity as such, which for me is a favorable move from a revenue standpoint. I think when you look at the overall year, I think there's still uncertainty and variable and we continue to have a prudent economic environment from that standpoint.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

The second thing from an FX standpoint, it really was pretty minimal. We actually specifically looked at the exact FX rates at the time. It was within 2%, three %, so to speak. And I think FX fluctuations are pretty high, meaning they can shift up and down very pretty significantly depending on the day of the month. So we've maintained our FX assumptions materially to have no impact really for the year at this point.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

There's nothing significant or material that we would factor in.

Sheldon McMeans
Sheldon McMeans
Analyst at Barclays Capital

Understood. Great. And a quick follow-up. It was great to see the several new around AI agents coming out and the new monetization strategy there. What's been the customer feedback of the unified pricing model and the platform units?

Sheldon McMeans
Sheldon McMeans
Analyst at Barclays Capital

Thank you.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Well, we have experienced already with the concept of AI units in pricing our more traditional IDP solution. And it's a bit early to tell, but the initial reaction is positive because the new pricing model is tied closer to the adoption of the software. And yes, we went to a long way to simplify the model and make it easier to like create a business model and to understand, especially in this new world of Vergentic, this is one of the most interesting challenge to solve. How you price a use case? And we are working closely with customers in making them really understand better how pricing works and how it's tied to the use cases.

Operator

Thank you. Our next question comes from the line of Mark Murphy with JPMorgan. Please proceed.

Mark Murphy
Mark Murphy
Executive Director at JPMorgan Chase

Thank you very much and congrats on reaching all the targets and exceeding them. Daniel, I wanted to ask you regarding public sector and U. S. Federal. You said you're encouraged.

Mark Murphy
Mark Murphy
Executive Director at JPMorgan Chase

You closed a deal with the U. S. Air Force. You recognize that the transition is still evolving. Could you just help us understand how did your U.

Mark Murphy
Mark Murphy
Executive Director at JPMorgan Chase

S. Federal business perform? Did it grow faster or slower than the broader business? Did you exceed or miss bookings targets? And I think what I'm trying to understand is do you think that public sector is already through the worst of the pressure washing of the budgets?

Mark Murphy
Mark Murphy
Executive Director at JPMorgan Chase

Or do you think that we're do you think that that trough is still out there on the horizon?

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Yes. So I'll let Ashim comment more on the impact on the quarter, but I want to give you my perspective seeing our events, so I was there in DC. I think that there is a really enthusiasm about what agentic automation can bring to bring efficiency into the federal government. And the deal with U. S.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Air Force is very encouraging. It's they come with this initiative called Agentic Airmen that is very ambitious and it aims to a broader transformation across their business. I think at the same time, we see continued they continue to be in a transition. Renewals are progressing well, but there is continued pressure on the new budgets being finalized. Ashim?

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Yes. No, I think Daniel said it well. So like one, I'll reemphasize just super kudos and thanks to our federal team. I think they've done a fantastic job of keeping us apprised and connecting with customers and really managing the enthusiasm that we have from our federal customers. In terms of the exact numbers, Mark, we don't we obviously don't disclose segment information on a quarterly basis.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

So I clearly can't do that here. I would reemphasize, think the renewals were on track as Daniel said. And I think it depends on the agency. Some agencies I feel like performed better than we expected. Some of the moratoriums are lifted policy wise and then some of those moratoriums were also while they're lifted policy wise, they're still finalizing their current procurement routines and you see some of the same slowdown that we saw that's there.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

So on balance, I would say they're in transition and we are going to continue to have a prudent approach as we navigate the year, even though we're encouraged by the competition.

Mark Murphy
Mark Murphy
Executive Director at JPMorgan Chase

It. Thank you very much. And then, Ashim, just

Mark Murphy
Mark Murphy
Executive Director at JPMorgan Chase

as a

Mark Murphy
Mark Murphy
Executive Director at JPMorgan Chase

quick follow-up, commented positively on linearity, which is great to hear in terms of what's happening currently. How do you feel about the quality and depth of the pipeline that's sitting out there toward the end of the year? And I'm curious if you think you can avoid some of the challenges that you might see from time to time coming off of Q3 or coming off of Q4, which then I think would be function of the pipeline and how it closes then?

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Yes. I feel really good. I just a shout out to Ben Feitner and Mark Gibbs, sales leaders. I think they do a good job of not just looking at current quarter, but moving ahead and really taking a good look at our pipeline as our sales ops function does as well. We feel good about the quality.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

And I would say beyond it being kind of like a blanket statement, I think what bolsters that confidence is just the activity that we have on the agentic front. So several of the customer conversations, they've solidified that they feel very good about our niche in their long term architecture or our place in their long term architecture. And they're doing a lot of the agentic exploration pilots and POCs. When you couple that with what we're seeing in the pipeline, it means that the quality feels good. It's not just things that are in there, but it's in there with real new commercial activity as well.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

And that honestly has generated a lot of excitement, a lot of work for us, but a lot of excitement for the business.

Mark Murphy
Mark Murphy
Executive Director at JPMorgan Chase

Okay. It's great to hear. Thank you so much.

Operator

Thank you. Our next question comes from the line of Zeke Robert with William Blair. Please proceed.

Jake Roberge
Equity Research Analyst at William Blair & Company, L.L.C

Yes. Thanks for taking the questions and congrats on the solid results. Helpful commentary on the demand you're seeing for some of your new AI solutions. Just specifically on Maestro, we're obviously hearing about a lot of different agent orchestration solutions in the market. You called out some solid metrics on that front.

Jake Roberge
Equity Research Analyst at William Blair & Company, L.L.C

So can you talk about what you're hearing from customers as to why Maestro is kind of the best fit compared to some of the other solutions in the market?

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Yes. Look, I think what we need to clarify one thing. Many companies when speak about orchestration, they mean mostly an agent to agent orchestration, mean the capability of managing a swarm of agents. Our Maestro is more ambitious in a way. We connect agents with robots and people and its ability to deliver fixed workflows at the enterprise level that can be executed in an autonomous way, it makes it a very powerful proposition in the market.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

We spent a lot of time in order to create better analytics to understand better, you know, how your or how to see to get great insights into your workflows, how your agents operate, how your robots operate, what's the human impact. We even combine process mining data into these insights. So this in itself, it's a very unique proposition in the market. So overall, I think that our argentic orchestration is built on a very new modern technology. It has all the whistles and bells of modern workflow technology plus with amazing insights into your operational data.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

So I think it's a pretty unique offering in the market.

Jake Roberge
Equity Research Analyst at William Blair & Company, L.L.C

Okay, that's helpful. And then, Ashin, just on the go to market and operational changes you've made over the past year, do you feel like things are kind of stable at this point? Or are there any other things that you're looking to tweak in the model this year?

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Yes. So I think I want to be clear on it. I think things are stable. Like I look at our leadership, I look at our core teams, I look at the motions, I look at even some of the supporting functions. We feel really good about the leaders that are in place, their tenure with UiPath as well as the structure.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

So we are substantially complete. Are there tweaks that we will make? I think the activity and the energy around the new Agensix platform is really it's real. So I think we're always going to be looking for ways to go faster, be more focused and address the needs of our customers. But nothing that I see as disruptive.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

I actually think it's going to be more about coping with the opportunity in front of us.

Operator

Thank you. Our next question comes from the line of Sanjit Singh with Morgan Stanley. Please proceed.

Analyst

Hey everyone, thanks for taking the question. This is Ryan on for Sanjit. Just curious any additional color you can provide around the trends you're seeing in retention, just with some continued pressure there in the quarter and maybe how should we think about the trajectory of retention going forward? Thank

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

I think we've always talked about one law of large numbers. But second, I think first quarter and a lot of the transition that we were seeing and the disruption of the macro and of course some the transition with the federal government That explains, as we did in first quarter, the trend around the expansion rate. Look, what we feel positive about is two things. I think first, you look at the energy that we have around the AgenTic, you look at as we continue to we beat our first quarter estimates, our execution is strengthening. So from our perspective, I think we're really reaching at a point where we feel like we can continue to scale our biggest customers.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

I would point to our customers greater than $100,000 growing 13% year over year. So those are the key trends. I think the pressure points are more related right now to macro and federal the way we've talked about it. And we're hoping that those things stabilize as everybody else does. At the same time, we've been prudent in our guidance as we go forward as we mentioned.

Operator

Thank you. Our next question comes from the line of Brian Bergin with TD Cowen. Please proceed.

Bryan Bergin
Managing Director at TD Cowen

Hey guys, good afternoon. Thank you. So as it relates to the fiscal twenty twenty six growth outlook, can you just unpack the comments you made on the favorable timing and mix of deals between the second and third quarter? It sounded like some things shifted around in there versus the prior plan. I'm just curious, is there just better sales cycles in select clients or other factors driving that?

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Yes. No, I think it's just the mix of deals, Brian. And when you look at it, when we were guiding in the first quarter, we obviously had tremendous uncertainty. We guided in what was in front of us. I think as we get to second quarter, I think the shift in the deal mix is favorable.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

And so we wanted to reflect that in our numbers. It's really that simple. And we're encouraged by the activity of what's moving into second quarter, particularly around some of the larger deals that with six zero six obviously drives the favorable revenue recognition.

Bryan Bergin
Managing Director at TD Cowen

Okay. Okay. And then as it relates to the margin outperformance, you had pretty notable leverage on S and M year over year. Can you just talk about where you're being more disciplined to drive that? And are you at an optimized level to allow for a growth acceleration there?

Bryan Bergin
Managing Director at TD Cowen

I'm really just thinking about the trade off of optimization of S and M versus growth potential.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

I think we're continuing to invest to be very clear. We did complete our the substantial portion of our restructuring where we to our minds removed a lot of our efficiency from non customer facing functions. I'll let Daniel comment a little bit on the activity and investment. But we are investing in key areas, key markets. But I think there's enough efficiency that we can self fund some of that, but we're not afraid also to double down where we need to, to capture the opportunity.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Yes. I think the fact that we brought to market in basically in the last two, three quarters, five new products shows our commitment to invest in growth and innovation. And certainly we think of ourselves as a company that can grow faster and AgenTeq is a great opportunity for us and we will continue to focus, you know, AgenTeq automation, it's our top priority as a company.

Bryan Bergin
Managing Director at TD Cowen

All right. Thank you.

Operator

Thank you. Our next question comes from the line of Terry Tillman with Ture Securities. Please proceed.

Terry Tillman
Terry Tillman
Managing Director at Truist Securities

Yes. Good afternoon, Daniel, Shim and Elyse. I had two questions, a question and a follow-up. I heard it several times and I think I'm a relatively good listener, replacements. So I heard large airline, global airline, I think there was another one.

Terry Tillman
Terry Tillman
Managing Director at Truist Securities

I'm curious as AgenTeq and other things are evolving, is this creating a kind of go back and look at our existing vendor base and thinking about maybe we consolidate with vendors that are further along in AgenTic? Or am I reading too much into the word replacement? Because I heard it a couple of times. And then I had a follow-up.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Yes. In a way there are traditional RPA vendors that cannot keep the pace with the innovation. And naturally some of our customers are looking into their portfolio and they want to consolidate. There is a tremendous benefit of combining AI agents with robots. And when you go and decide on an AI agentic automation platform, it's a natural way to think maybe we should bring the robots into the same platform.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Again, the benefits from the security and governance perspective and having agents and robots and managing humans also in the same platform are tremendous. So, yes, replacements will come more naturally into the picture.

Terry Tillman
Terry Tillman
Managing Director at Truist Securities

Yes. Thanks for that. And just a follow-up question. You all kind of redesigned and evolved the partner program. I'm curious and it does like you said include regional partners, large GSIs, etcetera and even ISVs.

Terry Tillman
Terry Tillman
Managing Director at Truist Securities

Going forward, maybe the next two to four quarters, will we see more probably in getting more from your existing customers, whether it's the 100Ks, the $1,000,000 s or the $5,000,000 s? Or is there something that could be more incremental on just bringing new quality customers in the boat? Just trying to understand maybe kind of the relative importance there. Thank you.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

On the partner program, I think one is it's super important that our partners are high quality and properly incentivized because they are often very close to our key customers, especially that mid tier customers. So if I look at that $100,000 plus customers base, yes, we want our RSIs to be growing that base and engaging and driving consumption and adoption. So we look at everything that partners do as net positive. Do we have a specific transfer function between the partner program and the dynamics of those customer cohorts? No, I don't think there's anything that we would fully disclose in terms of a specific transfer function.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

But it is very important that customers who are working with our partners, they're on the same playing field with us in terms of our Agenza capabilities and have the right incentives.

Operator

Thank you. Our next question comes from the line of Kirk Materne with Evercore ISI. Please proceed.

Analyst

Hi, this is Jorag on for Kirk. Congratulations on the results. Can you talk more about the GCP partnership, the partnership with Microsoft Copilot Studio in terms of how the economics of something like that would work for you? And are there opportunities to develop additional vertical solutions beyond what you've talked about? Thank you.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Well, let me start with the vertical solutions. Because we believe that in this early adoption phase of AgenTiK AI is becoming critical to solutionize our offering. Our aim was always to build a horizontal platform that offer the building blocks to build more dedicated solutions. So we this is one of the reason we bought Peak because they offer a great vertical agents for inventory and pricing. And we are leveraging their expertise in building vertical AI solutions into other domains.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

And yes, and this is also it aims to the partnership with GCP, which basically it helps combining our forces to build a vertical solution on medical summarization field. With Microsoft, it's actually a more broader horizontal integration between our technologies. And I in the end, always said we are an open platform and we want to be a good citizen. So if our customers want to use Microsoft Copilot agents and combine with our robots, that's a great way to integrate in this point with our reciprocal connectors and it's kind of the same. We can use various Microsoft technologies and agents from our Maestro orchestration technology.

Operator

Thank you. Our next question comes from the line of Shujit Pangriya with Mizuho Securities. Please proceed.

Siti Panigrahi
Managing Director at Mizuho Securities

Thank you. Thanks for taking my question. Ashim, just wanted to ask on that net NRR, which is, I think 108% slightly down from last quarter. I understand this is a trailing twelve month. But as you're investing in this new platform launched, when do you think we should start seeing some kind of stabilization on the NRR side?

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Yes. I think we've obviously given our guidance for the year. From our standpoint though, we'll as we talked about, I think this year we see POCs particularly on the AgenTik side and no material impact to revenue. So I would I think that some of the discussion we can have in the second half of the year as we progress with our AgenTik launch and going into next year from that standpoint.

Siti Panigrahi
Managing Director at Mizuho Securities

Okay. And then a quick follow-up to your comment on FX. I guess you said it was immaterial. So I assume the net new and other FX adjusted versus probably same as 27%. And what's your assumption in terms of FX impact for your fiscal year guidance?

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

We use the most recent FX rates like over the last couple of days. That's over the last week, that's typically what we do.

Siti Panigrahi
Managing Director at Mizuho Securities

Okay. Thank you.

Operator

Thank you. Our next question comes from the line of Alex Zukin with Wolfe Research. Please proceed.

Alex Zukin
Analyst at Wolfe Research LLC

Yes. Hey, guys. So maybe a lot of my questions have been asked, but just was just maybe double down on what drove so much of the license outperformance in the quarter? Was there any inorganic contribution? Was there kind of FX helping that number?

Alex Zukin
Analyst at Wolfe Research LLC

I know we've talked about it a little bit on the call, but trying to really understand where what drove that? Were they pull ins from prior quarters or push outs?

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

No, I think it's just a mix of deals. Again, with revenue, we have six zero six accounting. So just the mix of deals in terms of both duration as well as deployment method. There's nothing frankly unusual to comment on. We were happy with overall mix of deals and kind of the balance of duration, etcetera.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

But nothing consequential that drove that specifically.

Alex Zukin
Analyst at Wolfe Research LLC

Okay. And then maybe just back to Citi's question, but I'll ask it a little differently. Should we continue to see NRR trend down from the current level as we get through the year and then trough and start to rebound potentially as you start selling a new solution as it troughed at 108? And then just maybe anything in terms of the any further operational adjustments or efficiencies from a go to market perspective? It looked like there was a little bit of restructuring that hit this quarter that maybe gives you the opportunity to further reinvest.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Yes. So the first one, I feel like I've answered the dollar based net retention rate. I think it's embedded within our guidance. We don't see a meaningful shift between expansion and new logos versus historical mix. So I think that calculation can is easily embeddable as you go forward.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

As we talked about, we're very bullish in terms of the early activity on AgenTic. We'll revisit the conversation as we get further into that launch, but for this year there's no material impact. But of course stabilization and acceleration is what we're all playing for. So we'll update on the timing of that. In terms of the reinvestment for go to market, as we said and we've been very transparent, we finished our go to market restructuring in first quarter and we feel very good about the stability of the teams that are there.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

We are investing in specific pockets. So where we see opportunity and the largest opportunities, we are doing that. I think we want to hold ourselves to a discipline as any investor would want us to, to be investing in the highest return segments and really making sure that we have clear focus and accountability in the areas that we are investing. So is there opportunity to reinvest with go to market? Yes, we have been, we'll continue to do so, but we still overall, we'll always look for ways to become more efficient.

Alex Zukin
Analyst at Wolfe Research LLC

Got it. Thank you, guys. Congrats.

Operator

Thank you. Our next question comes from the line of Nick Altman with Scotiabank. Please proceed.

Nick Altmann
Director - U.S. Software Equity Research at Scotiabank

Awesome. Thanks, guys. In the prepared remarks, you guys noted how the agentic automation capabilities are actually driving some net new customers to the platform. You also talked about some competitive displacement. So just in regards to the pipeline, how should we think about the mix of net new ACV maybe changing and tilting a little bit more towards net new customers versus expansion?

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

Yes. I don't honestly don't see that mix that's there. I think we like we definitely want to give examples of the various dynamics, but I don't see a disproportionate amount of replacements coming in. I think we've always expanded beyond RPA with IDP test, document communications mining, etcetera, process discovery that many traditional RPA vendors did not have. So I think that is just a constant consistent flow that's there.

Ashim Gupta
Ashim Gupta
CFO & COO at UiPath

AgenTic is just a further differentiation like putting space in between there. So at this time, would I think the mix is the same, but it is exciting the discussions whether new or an expansion that AgenTic is giving to us and that is really what our aim was in highlighting that.

Operator

Thank you. With that, this concludes the Q and A session. I would like to turn the floor back over to management for closing remarks.

Daniel Dines
Daniel Dines
Founder & CEO at UiPath

Thank you so much for all the questions and we are looking forward to meeting most of you throughout the quarter. Thank you.

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Executives
Analysts

Key Takeaways

  • UiPath delivered $357 M in Q1 revenue (+6% YoY) with ARR of $1.693 B (+12% YoY), improved GAAP operating loss to $16 M and non-GAAP operating income of $70 M (20% margin).
  • The newly launched agentic automation platform saw early traction with AgentBuilder generating over 250,000 agent runs and Maestro powering more than 11,000 process instances, backed by a new consumption-based pricing SKU.
  • For Q2 FY26, UiPath guides revenue of $345 M–$350 M and for full-year FY26 $1.549 B–$1.554 B, noting that material contributions from agentic automation are expected in FY27 and beyond.
  • UiPath generated $117 M in non-GAAP free cash flow (33% margin), ended the quarter with $1.6 B in cash, and repurchased 21.9 M shares at $10.40 on average.
  • Strategic expansions include partnerships with Google Cloud for a medical record summarization agent and integration with Microsoft Copilot Studio, alongside major customer wins like the US Air Force and Delta Airlines.
AI Generated. May Contain Errors.
Earnings Conference Call
UiPath Q1 2026
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