UiPath Inc. (PATH, Financial) recently held its second quarter fiscal year 2024 earnings conference call, where the company's top executives discussed the financial results and future prospects. The company reported a solid quarter, with a 25% year-over-year increase in Annual Recurring Revenue (ARR) to $1.308 billion, driven by net new ARR of $59 million. The company also reported a 19% year-over-year increase in revenue to $287 million.
Key Financial Highlights
UiPath's customer base grew to approximately 10,890, including new logos like Australian Postal Corporation, Leroy Seafood, Holmes Murphy & Associates, Daewoong Pharmaceutical, and Arrow Food Distribution. The number of customers with $1 million or more in ARR increased by over 30% year over year to 254, while customers with $100,000 or more in ARR increased to 1,930.
The company's non-GAAP operating margin improved from negative 5% in the second quarter of last year to positive 10% in the second quarter of this year. This progress is part of the company's journey towards its long-term operating margin target of over 20%. The company also reported $47 million in non-GAAP adjusted free cash flow, reflecting its growing scale and focus on efficiency.
Strategic Initiatives and Market Position
Despite the variable macro environment, UiPath's executives expressed satisfaction with the company's execution and results. The company continues to execute against its strategic initiatives, with a strong pipeline building as it moves into the second half of the year. UiPath's go-to-market strategy, launched two quarters ago, aims to improve productivity, sell the platform, and intensify focus on customers that represent the longest and largest long-term opportunities.
UiPath's partner ecosystem plays a key role in growing its market share and delivering the best outcomes for customers. The company is making significant progress with SAP, engaging with customers and building a joint pipeline. The company's board of directors has also authorized a $500 million stock repurchase program, reflecting confidence in the business, ongoing cash flow generation, and the strength of the balance sheet.
Looking Ahead
Looking forward, UiPath expects the next evolution of generative AI to be a tailwind to the business, helping customers create better, more resilient automations more quickly and opening up novel use cases that facilitate the automation of even more processes. The company is also enhancing developer productivity by reducing barriers to development with copilot-like experiences and project Wingman.
For the fiscal third quarter 2024, UiPath expects ARR in the range of $1.359 billion to $1.364 billion, and revenue in the range of $313 million to $318 million. For the fiscal full year 2024, the company expects ARR in the range of $1.432 billion to $1.437 billion, and revenue in the range of $1.273 billion to $1.278 billion.
