UiPath Surpasses Expectations with Strong Q2 Results, Driven by AI-Powered Automation

UiPath tops expectations and swings to a profit on solid AI momentum - SiliconANGLE

UiPath tops expectations and swings to a profit on solid AI momentum UiPath Inc. raised its full-year revenue outlook after cruising past Wall Street's expectations and swinging to a profit in its latest quarterly results, powered by momentum in its artificial intelligence products. The automation software provider reported second-quarter earnings before certain costs such as stock compensation of 15 cents per share, trouncing the analyst consensus estimate, which called for a profit of just seven cents. Revenue for the period jumped 14% to $362 million, surpassing the Street's $347.5 million target. Annual recurring revenue rose 11% from a year earlier to $1.723 billion, while net new ARR clocked in at $31 million. The company also reported an adjusted free cash flow of $45 million, with $1.52 billion in cash and equivalents on its books. The strong performance meant UiPath was able to break out of the red, delivering a net income of $1.6 million in the quarter, up from a loss of $86.1 million a year earlier. UiPath made its name as a pioneer of robotic process automation, selling tools that can help businesses to lower costs and reduce operational errors by automating repetitive tasks such as data entry. This technology is powered by AI models that study how employees perform common tasks, such as data entry, so they can replicate that work with no mistakes. More recently, UiPath has turned its attention to more sophisticated AI agents, sometimes known as "digital laborers," which utilize large language models to perform more complex tasks on behalf of users with minimal supervision. UiPath founder and Chief Executive Daniel Dines (pictured) said the results reflect the growing momentum of these agentic AI capabilities and the company's improved execution. "Our best-in-class products are enabling customers across industries to move beyond pilots into production deployments, orchestrating agents, robots, and humans to achieve real outcomes," Dines said. "Customers consistently tell us that automation and agentic AI are stronger together, and with orchestration, they're delivering real value today." The momentum UiPath is seeing has given it the confidence to raise its full-year revenue guidance, and it's now forecasting total sales of between $1.571 billion to $1.576 billion, up from a previous range of $1.549 billion to $1.554 billion. For the current quarter, it's looking for revenue of $390 million to $395 million. In contrast, Wall Street's guidance is more cautious. Analysts are looking for annual revenue of just $1.55 billion and third-quarter sales of $384.6 million. "The momentum we're seeing from customers and partners around our agentic automation platform, combined with our continued focus on operational efficiency, positions us well as we enter the second half of the year," UiPath's financial chief Ashim Gupta said. Investors liked what they saw, and UiPath's stock gained more than 4% after-hours, having stayed flat during the regular trading session. However, it still has room for improvement, with the stock down 14% in the year to date.

UiPath Revenue Jumps 14 Percent | The Motley Fool

UiPath(PATH -0.28%) reported second quarter fiscal 2026 results (period ended July 31, 2025) on September 4, 2025, delivering 14% year-over-year revenue growth to $362 million (non-GAAP) and 11% annual recurring revenue (ARR) growth to $1.723 billion (non-GAAP), both above the high end of guidance. The company's pivot toward agentic automation and disciplined cost management resulted in non-GAAP operating income of $62 million with a 17% margin, representing over 2,500 basis points of non-GAAP margin expansion year-over-year. This summary unpacks material strategic moves, risks, and execution highlights shaping UiPath's long-term thesis, based strictly on the transcript's content. Cloud annual recurring revenue (ARR) surpassed $1.080 billion at quarter end, growing more than 25% year-over-year as UiPath continued to migrate legacy deployments to hybrid and SaaS models. The May 2025 launch of the AgenTeq orchestration and agent builder offerings resulted in approximately 450 customers actively developing agentic solutions, reflecting demand for next-generation automation across both new and existing customers. "With the launch of our AgenTeq automation platform, we continue to see customers moving to the cloud. We ended the quarter with more than $1.080 billion in cloud ARR, which includes both hybrid and SaaS, an increase of more than 25%. A great example is KLM Royal Dutch Airlines. After saving over 200,000 hours in 2024 with UiPath automation, they are migrating to the cloud, exploring agentic automation initiatives, and implementing UiPath test cloud for SAP. We ended the quarter with approximately 10,820 customers. As with prior quarters, the vast majority of customer attrition continues to be on the lower end. We continue to be successful in signing new enterprise logos that align with our strategy of targeting long-term customers with a propensity to invest. Including newer logos like Henry Schein, a Fortune 500 global healthcare solutions provider, selected UiPath due to the breadth of our agentic automation platform capabilities. And other notable logos in key sectors, like the Watches of Switzerland Group, Community Financial Credit Union, and the Vida Coco Company." -- Ashim Gupta, Chief Operating and Financial Officer This sustained shift in product mix, logo acquisition, and platform adoption signals a durable and growing recurring revenue base anchored by cloud migration and differentiated AI-automation convergence, providing long-term leverage as the customer cohort matures. Operating expenses decreased 6% year-over-year to $243 million, while non-GAAP gross margin held at 84% and software gross margin reached 90%. The company's cost control and completed restructuring enabled a non-GAAP operating income margin of 17%, supported by $1.5 billion in cash, no debt, and the repurchase of 8.3 million shares at $12.10 per share. "We delivered second-quarter overall gross margins of 84%, and software gross margin was 90%. Second-quarter operating expenses were $243 million, a reduction of 6% from the prior year. Second-quarter GAAP operating loss improved $83 million versus the prior year, to $20 million, and included $78 million of stock-based compensation expense. Our continued growth and disciplined expense management for cloud, operating expenses, and stock-based compensation, positions us well to achieve GAAP profitability in the near term. Second-quarter non-GAAP operating income was $62 million, representing a 17% margin, up more than 1,500 basis points year over year and driven by our continued focus on operational efficiency. Second-quarter non-GAAP adjusted free cash flow was $45 million. We ended the quarter with a healthy balance sheet of $1.5 billion in cash, cash equivalents, and marketable securities, and no debt. Our disciplined buyback activity reflects both confidence in our long-term opportunity and our ongoing commitment to return capital to shareholders. During the second quarter, we repurchased 8.3 million shares of our Class A common stock at an average price of $12.10." -- Ashim Gupta, Chief Operating and Financial Officer Robust non-GAAP margin expansion and capital returns, coupled with improved non-GAAP free cash flow, demonstrate effective management response to macroeconomic headwinds and validate UiPath's ability to translate operational momentum into tangible shareholder value. Over 95% of new customers included core automation in their initial purchases, while agentic platform adoption generated close to 1 million agent runs and 170,000 Maestro process orchestrations, with 450 customers developing agents. Multi-solution deals, such as a seven-figure Fortune 15 contract for SAP transformation, highlight cross-sell opportunities enabled by UI, API, and AI-powered automation integration. "For new customers, the terminating automation remains a high ROI low barrier entry point. That's why over 95% of new logos this quarter included our core automation capabilities. For our large installed base, our new AI and Agenty capabilities are translating into real momentum. Since launching our AgenTeq platform, customers executed almost 1 million agent runs. Maestro orchestrated over 170,000 process instances. And over 450 customers are actively developing agents." -- Daniel Dines, Founder and Chief Executive Officer This blended entry and expansion model -- anchored by high-retention core automation and accelerated uptake of advanced agentic features -- positions UiPath to capture higher wallet share, reduce churn risk, and build enduring enterprise relationships as automation complexity grows. Management raised third quarter fiscal 2026 revenue guidance to $390 million-$395 million and full-year revenue guidance to $1.571 billion-$1.576 billion for fiscal 2026, with ARR (non-GAAP) forecasted at $1.834 billion-$1.839 billion for fiscal 2026 and non-GAAP operating income targeted at $340 million for fiscal 2026. Adoption of agentic solutions is expected to remain in the early phases through fiscal 2026, deferring material top-line impact, while non-GAAP adjusted free cash flow is guided to approximately $370 million for fiscal 2026 and non-GAAP gross margins are expected to be about 85% for fiscal 2026. Public sector momentum is embedded with prudence, reflecting recent U.S. federal wins and continued macroeconomic caution.

UiPath Revenue Jumps 15% in Fiscal Q2

UiPath (PATH -0.37%), a leading enterprise automation software provider specializing in artificial intelligence (AI)-powered robotic process automation, It exceeded the high end of guidance for key metrics -- reporting $362 million in GAAP revenue, $1.72 billion in annualized renewal run-rate (ARR), and $62 million in non-GAAP operating income for Q2 FY2026. These results outpaced both earlier forecasts and the prior year's levels. The quarter showed strong execution in top-line revenue and operational efficiency, with non-GAAP earnings and non-GAAP operating margin both making considerable gains. However, growth in net new business (net new ARR) slowed, raising questions about the pace of future expansion even as overall results were solid. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2026 earnings report. UiPath's Business and Strategic Focus UiPath develops and sells automation software that helps businesses automate repetitive tasks using AI and robotic process automation (RPA). Its platform allows organizations to replace manual steps with software robots, which can work with digital information and business processes. UiPath's core offering targets enterprises looking to increase efficiency, reduce costs, and improve productivity across departments like finance, operations, IT, and customer service. In recent years, UiPath has focused on technological innovation by integrating advanced AI with its automation tools. The company has introduced features like agentic automation (orchestration of software agents, robots, and process mining), and expanded its platform capabilities through industry partnerships and acquisitions. Key to its strategy are continued investment in product leadership, scaling up deployments from pilots to full production, and expanding its reach through global partners and enterprise customers. Maintaining rapid innovation, high gross margins, and a robust customer base are crucial to its success in the competitive automation software industry. Quarter Highlights and Notable Developments The quarter saw UiPath outperform its forecasts, with GAAP revenue of $362 million, ahead of its $345-$350 million guidance range. Subscription services grew to $238.4 million year-over-year and now make up approximately two-thirds of total revenue, highlighting a steady shift to recurring, software-based sales. License revenue (GAAP) remained level year over year at $112.2 million, suggesting market demand is shifting towards subscription models typical for software-as-a-service. Gross margins expanded, with GAAP gross margin at 82%, up from 80% in the prior-year quarter, supporting healthy ongoing profitability. Non-GAAP gross margin increased to 84%. Significant reductions in sales and marketing and lower general and administrative expenses contributed to the improved non-GAAP operating margin, which jumped to 17% from 2%. The company's cost discipline played a key part here. Still, Stock-based compensation was $78 million. UiPath continues to prioritize innovation, launching and rolling out its agentic automation product family -- a type of AI-powered workflow platform that combines traditional robotic process automation, task orchestration, and process analysis in one system. The company reported that customer deployments of the new technology are moving beyond pilots to regular use in production. Industry recognition came as UiPath was once again named a leader in the 2025 Gartner Magic Quadrant for Robotic Process Automation tools. Strategic partnerships expanded this quarter, with an agreement announced with HCLTech, a global technology consultancy, to accelerate agentic automation adoption for enterprise customers. Internally, UiPath completed a modernization of its core enterprise software system (SAP S/4HANA), working alongside Deloitte. Not all metrics accelerated. Net new ARR, which measures the value of new subscription contracts, came in at $31 million. This is a slower pace than some prior quarters and highlights a potential deceleration in customer expansion. Similarly, the dollar-based net retention rate -- a measure of the company's ability to grow revenue from existing customers through upselling or renewals -- was 108%. License revenue (GAAP) staying flat, while subscription services (GAAP) rise, reflects a broader industry shift but also signals that growth needs to be led by maintaining or expanding success in subscriptions. Cash generation remained healthy, with $45 million in non-GAAP adjusted free cash flow. Total cash, cash equivalents, and marketable securities was $1.52 billion at quarter end, down from earlier in the year due to share buybacks and ongoing investments. This balance still represents a strong liquidity position to support strategic growth and operations. Outlook and What to Watch Ahead Management raised its guidance for both the next quarter and the full fiscal year. For Q3 FY2026, it projects revenue in the range of $390-$395 million (GAAP) and ARR between $1.771 billion and $1.776 billion. Non-GAAP operating income is expected to reach about $70 million. For FY2026, revenue guidance rises to $1.571-$1.576 billion (from $1.549-$1.554 billion previously), with ARR forecast to reach $1.834-$1.839 billion, and non-GAAP operating income targeted at roughly $340 million, up from $305 million in the prior forecast. In the quarters ahead, investors should watch UiPath's ability to accelerate net new ARR and improve its net retention rate. Both are crucial signals for the durability of the company's growth trajectory as its subscription base grows and the market for automation software evolves. Trends in stock-based compensation and cash spending, the mix between subscription and license revenue, and the pace of adoption for new agentic automation solutions will also be key areas to monitor. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

Why UiPath Rallied Today | The Motley Fool

UiPath delivered second-quarter results last night, handily beating analyst expectations. The results seemed at odds with the current fear among software-as-a-service companies that generative artificial intelligence may be a threat to their business models. In the second quarter, UiPath grew revenue 14.4% to $362 million, while adjusted (non-GAAP) earnings per share more than tripled, albeit off a very low base of $0.04, to $0.15. Both figures handily beat analysts' expectations. Annualized recurring revenue (ARR) was up 11%, and management also guided to ending at $1.834 billion to $1.839 billion in ARR for the current fiscal year, which would amount to 10.2% ARR growth at the midpoint. UiPath appears to have done a good job infusing its automation software with agentic AI, harnessing AI rather than being disrupted. CEO Daniel Dines said on the conference call, "Our AI and agentic solutions are helping us win deals and increase deal sizes faster than traditional automation engagements and now represent a growing share of commercial activity." Part of the reason UiPath is having a good day is that yes, the company beat expectations, but the stock has also struggled in 2025. Even after today's rally, the stock is down 11% for 2025. Many software stocks have struggled this year as generative AI model builders such as OpenAI begin to build enterprise products and could potentially become future competitors. That threat still appears to be a drag on the company's valuation. UiPath trades at just 3.3 times this year's ARR guidance. The company also has $1.45 billion in cash and no debt on the balance sheet. So on an enterprise-basis-to-ARR ratio, the company trades at an even lower 2.5 times. If UiPath is able to harness AI and fend off competition in the space, the stock looks like a potentially great value. However, investors may not know if that's the case for years, so expect the discounted valuation to remain.

Agentic automation company UiPath beats Q2 revenue estimates

UiPath, Inc. is an enterprise automation and artificial intelligence (AI) software company. The Company is principally focused on building and managing automations and developing computer vision technology. The Company provides its customers with a set of capabilities that allow them to discover opportunities for automation, automate using a digital workforce that seamlessly collaborates with humans, and operate a mission-critical automation program at scale. It enables employees to build automations for both existing and new processes and to automate a range of actions including logging into applications, extracting information from documents, moving folders, filling in forms, reading emails, and updating information fields and databases. Its platform allows users to design and combine UI automations, API integrations, and AI-based document understanding in a single workflow. It offers a managed, multi-tenant software as a service (SaaS) version and automation cloud.