UiPath Q2 Earnings Call Highlights

Key Points

• UiPath exceeded its Q2 fiscal 2027 guidance: ARR rose 12% year over year to $1.938 billion, revenue increased 13% to $410 million, and non-GAAP operating income reached $89 million. The company also posted its fourth consecutive quarter of GAAP profitability.
• AI adoption is strengthening the platform: 18 of the company’s 20 largest deals included AI, as customers increasingly use UiPath to orchestrate AI agents, robots, APIs and human workflows. UiPath also reported early coding-agent productivity gains of nearly 60% and growing traction in industry-specific solutions.
• UiPath reaffirmed its fiscal 2027 outlook for revenue of $1.789 billion to $1.794 billion, ARR of $2.065 billion to $2.070 billion and approximately $445 million in non-GAAP operating income. The company ended the quarter with $1.4 billion in cash and no debt while transitioning to Hitesh Ramani as CFO.

UiPath NYSE: PATH reported second-quarter fiscal 2027 results that exceeded its guidance, with annualized recurring revenue, revenue and profitability all rising as the company emphasized demand for its automation, orchestration and artificial intelligence capabilities.

Founder and Chief Executive Officer Daniel Dines said ARR reached $1.938 billion, up 12% year over year, while revenue rose 13% to $410 million. The company generated $37 million in net new ARR during the quarter and posted non-GAAP operating income of $89 million, representing a 22% margin. UiPath also recorded its fourth consecutive quarter of GAAP profitability, with GAAP operating income of $32 million compared with a GAAP operating loss of $20 million a year earlier.

“We delivered another strong quarter with continued execution,” Dines said, pointing to improved go-to-market performance, operational discipline and product innovation.

AI, Deterministic Automation Drive Platform Positioning

Management said customers are increasingly using UiPath’s platform to manage complex business processes that incorporate AI agents, software robots, application programming interfaces and human decision-making. Dines described the company’s approach as combining AI for tasks where reasoning adds value with deterministic, or rules-based, automation where enterprises require consistent execution and lower costs.

According to Dines, 18 of UiPath’s top 20 deals during the quarter included AI. He said AI-related platform adoption is contributing to larger expansions and helping customers consolidate automation and AI workloads onto UiPath’s platform.

The company cited several customer deployments, including an expansion with a global insurance provider that is using UiPath IXP, Maestro agents and robots to modernize beneficiary claims processing. UiPath also said the Department of Defense expanded its partnership to support audit and reconciliation work, adding Autopilot, intelligent document processing and test automation capabilities.

A leading financial institution selected UiPath as a platform for end-to-end process orchestration after determining that Maestro could coordinate homegrown applications while meeting governance and compliance requirements, management said.

Dines said customers are seeking platforms that can “build, orchestrate, test, and govern the entire process,” rather than relying on separate point solutions. The company also highlighted a top Canadian bank as one of its largest new customer wins, saying the bank selected UiPath for agentic workflows involving third-party demands processes.

Coding Agents and Vertical Solutions

UiPath said it is seeing early productivity gains from coding agents used alongside its forward-deployed engineers. Dines said initial results indicate coding agents have reduced effort by nearly 60%, though he characterized the work as still being in a proving stage.

During the question-and-answer session, Dines said the focus is less on changing the number of forward-deployed engineers and more on reducing customers’ time to value. He added that the technology could also benefit implementation partners and customers that use partner-delivered services.

The company also announced a developer-oriented workflow automation tool in public preview. The offering is designed to allow developers to use coding agents such as Raw Code, Codex, Cursor and GitHub Copilot to orchestrate processes and automate manual tasks through APIs and agents, while maintaining enterprise governance.

UiPath said it is pairing its horizontal automation platform with more vertical, outcome-oriented offerings. During the quarter, a Fortune Global 500 manufacturer selected its Office of the CFO invoice solution for accounts-payable operations covering roughly 700,000 invoices annually. UiPath said the proof of concept delivered 96% document-processing accuracy and a 50% reduction in invoice-handling time and support.

In healthcare, a U.S. health system selected UiPath’s denials resolution offering for medical-claim denials. Management said the customer expects the solution to automate appeals across inpatient and outpatient operations and pursue claims that had previously fallen below the threshold for manual review.

Dines also cited traction in revenue-cycle management, financial-crimes and compliance offerings, accounts-payable automation and loan origination. UiPath said its WorkFusion integration is progressing according to plan and is building customer pipeline in financial services.

Margins, Retention and Balance Sheet

Chief Operating Officer Ashim Gupta said revenue growth was 16% after normalizing for an approximately $8 million year-over-year foreign-exchange headwind. ARR received a $1 million year-over-year FX tailwind.

Cloud ARR, including hybrid and software-as-a-service deployments, exceeded $1.3 billion and increased more than 19%. UiPath ended the quarter with about 10,350 customers. Customers with more than $30,000 in ARR increased 6%, while customers with at least $100,000 in ARR rose 10% to 2,666. The number of customers generating $1 million or more in ARR increased 21% to 387.

• Dollar-based gross retention was 97%.
• Dollar-based net retention was 109%, up two points year to date; it was 108% after adjusting for FX.
• Remaining performance obligations rose 14% to $1.378 billion, or 16% excluding FX effects.
• Overall gross margin was 82%, while software gross margin was 90%.
• Non-GAAP adjusted free cash flow was $31 million, compared with $45 million a year earlier, primarily due to the timing of tax-related payments.
• UiPath ended the quarter with $1.4 billion in cash equivalents and marketable securities and no debt.

Stock-based compensation expense declined 42% to $45 million and represented 11% of revenue, down more than 1,000 basis points from the prior-year period. The company repurchased 2.4 million shares at an average price of $9.63 during the quarter.

Leadership Transition and Outlook

UiPath announced that Gupta will focus exclusively on his role as COO, while Hitesh Ramani succeeds him as CFO. Ramani joined UiPath in 2021 as chief accounting officer and had served as deputy CFO for the previous two years. Dines said the transition was planned and expected to provide continuity across the finance organization.

For the third fiscal quarter, UiPath forecast revenue of $440 million to $445 million, ARR of $1.992 billion to $1.997 billion and non-GAAP operating income of about $100 million. The revenue outlook includes an expected $10 million year-over-year FX headwind, while ARR guidance includes a $4 million FX headwind.

For fiscal 2027, the company expects revenue of $1.789 billion to $1.794 billion, ARR of $2.065 billion to $2.070 billion and non-GAAP operating income of approximately $445 million. UiPath reaffirmed expectations for about $425 million in non-GAAP adjusted free cash flow and an approximately 84% non-GAAP gross margin for the full year.

Management said it plans to provide additional detail on its longer-term strategy and product roadmap at its Investor Day on Sept. 22, followed by its FUSION user conference in Las Vegas from Sept. 23 through Sept. 25.

About UiPath (NYSE:PATH)

UiPath Inc provides an end-to-end automation platform that offers a range of robotic process automation (RPA) solutions primarily in the United States, Romania, the United Kingdom, the Netherlands, and internationally. The company offers a suite of interrelated software to build, manage, run, engage, measure, and govern automation within the organization. Its platform's embedded AI, ML, and NLP capabilities improve decisioning and information processing; emulate human behavior allows organizations to address a myriad of use cases; emulate human behavior allows organizations to address a myriad of use cases; multi-tenant platform enterprise deployment with security and governance and Automation Cloud, which enables customers to begin automating without the need to provision infrastructure, install applications, or perform additional configurations; intuitive interface and low-code, drag-and-drop functionality; signed to enable people and automations to work together; and tracks, measures, and forecasts the performance of automations, enables customers to gain powerful insights and generate key performance indicators with actionable metric.

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