- ARR: $1.551 billion, an increase of 19%.
- Net New ARR: $43 million.
- Revenue: $360 million, an increase of 10% year over year.
- Non-GAAP Adjusted Free Cash Flow: $49 million.
- Cloud ARR: More than $850 million, an increase of over 65%.
- Customer Count: Approximately 10,810 customers.
- Customers with $100,000+ ARR: 2,163.
- Customers with $1 million+ ARR: 293.
- Dollar-Based Gross Retention Rate: 97%.
- Dollar-Based Net Retention Rate: 115%.
- Remaining Performance Obligations (RPO): $1.081 billion, up 19% year over year.
- Current RPO: $686 million.
- Overall Gross Margin: 83%.
- Software Gross Margin: 87%.
- GAAP Operating Loss: $103 million.
- Non-GAAP Operating Income: $6 million.
- Non-GAAP Operating Margin: 2%.
- Cash, Cash Equivalents, and Marketable Securities: $1.7 billion.
- Share Repurchase: 16.3 million shares at an average price of $12.05; additional 10.7 million shares at an average price of $11.67.
- Q3 Fiscal 2025 Revenue Guidance: $345 million to $350 million.
- Q3 Fiscal 2025 ARR Guidance: $1.6 billion to $1.605 billion.
- Q3 Fiscal 2025 Non-GAAP Operating Income Guidance: $27 million.
- Full Year Fiscal 2025 Revenue Guidance: $1.420 billion to $1.425 billion.
- Full Year Fiscal 2025 ARR Guidance: $1.665 billion to $1.670 billion.
- Full Year Fiscal 2025 Non-GAAP Operating Income Guidance: $170 million.
- Full Year Fiscal 2025 Non-GAAP Adjusted Free Cash Flow Guidance: $325 million.
Release Date: September 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- UiPath Inc (PATH, Financial) exceeded the high end of its guidance across all key financial metrics for the second quarter of fiscal 2025.
- Annual Recurring Revenue (ARR) increased by 19% year-over-year to $1.551 billion.
- Second quarter revenue was $360 million, with a non-GAAP adjusted free cash flow of $49 million.
- The company has seen strong adoption of its AI-powered automation platform, with significant customer success stories.
- UiPath Inc (PATH) has made strategic partnerships and expansions, including with SAP and Deloitte, enhancing its market reach and customer success.
Negative Points
- The company had to make the difficult decision to reduce its workforce to streamline operations and drive efficiencies.
- Despite the positive financial metrics, the macroeconomic environment remains variable, impacting customer behavior.
- There is ongoing confusion among customers about the integration of AI and RPA, which could affect adoption rates.
- The company reported a GAAP operating loss of $103 million, including $94 million of stock-based compensation expense.
- UiPath Inc (PATH) is still in the early stages of implementing several strategic changes, and the full impact of these changes is yet to be seen.
Q & A Highlights
Q: What progress have you seen in selling more on a departmental level, and is it showing in the numbers or pipeline?
A: We are addressing both C-level suite and departmental level selling. It's early to comment on the progress, but we've made organizational changes, including appointing a new leader in North America and regionalizing some functions. Customer centricity is now a core principle.
Q: Ashim, with your expanded role, is this a permanent change or a temporary solution?
A: The expanded role is focused on making enabling functions serve the customer and field better, driving connectivity across the organization, and improving operational efficiency. While anything could change, the current focus is on these long-term goals.
Q: How do you view the line of demarcation between bots and agents, especially with the rise of agentic process automation?
A: Agentic process automation is an evolution of robotic process automation. AI agents are essentially robots with new skills, capable of extracting information, making intelligent decisions, and dynamically routing processes. Our strength lies in combining robotic and agentic automation within our process orchestration platform.
Q: Do you see any line of sight to when AI confusion might turn into a full-blown AI tailwind for UiPath?
A: While it's hard to give long-term guidance, we are investing in our AI capabilities because we see meaningful opportunities to drive value and differentiation. Customer conversations are already becoming clearer, and we are seeing positive responses.
Q: Can you comment on the macro variability and what you saw through the balance of 2Q and into August?
A: The macroeconomic environment remains variable, particularly impacting the commercial end of the market. However, we saw stability through the quarter and did not experience significant month-to-month fluctuations.
Q: Does the restructuring impact your long-term adjusted operating margin target, and will it provide upside?
A: We will update our long-term guidance at the appropriate time. We believe there is more efficiency to be had, and we have always aimed for 20%-plus long-term margins. The restructuring is expected to bring more efficiency and agility.
Q: Can you provide more details on the restructuring in terms of resizing and impacted areas?
A: The restructuring largely impacted central functions like sales operations and sales enablement. The goal is to bring greater efficiency and agility. We do not expect significant disruption from these changes.
Q: Where do you see the lowest hanging fruit in terms of getting back to a better growth trajectory?
A: The first step is improving execution by breaking down silos and aligning everything in the interest of the customer. Simplifying roles and moving people into regions are some of the low-hanging fruits.
Q: How are you balancing selling the automation platform versus core RPA?
A: RPA is powerful and can address many automation needs. Our platform evolves from RPA to a broader business automation platform, integrating AI naturally. The core principle is emulating human users, making it a natural extension from RPA to AI-powered automation.
Q: Can you provide more details on your progress and customer interest in the public sector after achieving FedRAMP authorization?
A: The public sector is one of our fastest-growing industries. Achieving FedRAMP authorization will accelerate our business in this sector. We plan to apply lessons learned to other countries and territories, increasing our revenue from the public sector.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
