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01/10 18:56
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Despite a 6% revenue growth and improved financial metrics, concerns about macroeconomic uncertainty, competitive pressures, and retention issues temper optimism. The share repurchase is positive, but lack of clear guidance on federal business and retention trends adds uncertainty. Overall, the sentiment is balanced with positive financials offset by external risks and unclear management responses.
Revenue $357,000,000, an increase of 6% year over year.
Annual Recurring Revenue (ARR) $1,693,000,000, an increase of 12% year over year.
GAAP Operating Loss $16,000,000, improved from a loss of $49,000,000 in the prior year.
Non-GAAP Operating Income $70,000,000, representing a 20% margin, an improvement of 450 basis points year over year.
Adjusted Free Cash Flow $117,000,000, representing a 33% margin, up over 250 basis points year over year.
Gross Margin 84% overall, with software gross margin at 90%.
Dollar-Based Net Retention Rate 108%.
Remaining Performance Obligations (RPO) $1,231,000,000, up 12%.
Current RPO $776,000,000, up 14%.
Customers with $100,000 or more in ARR 2,365, an increase year over year.
Customers with $1,000,000 or more in ARR 316, an increase year over year.
Agentic Automation Platform Launch: The launch of the agentic automation platform has been one of the most important and successful product introductions in UiPath's history, enhancing their end-to-end automation capabilities.
Intelligent Extraction Processing (iXP): Introduced as the next generation IDP solution, iXP transforms how enterprises handle complex unstructured content, enabling faster processing and smoother user experience.
Maestro Orchestration Solution: Maestro, which entered preview in March, has powered over 11,000 process instances, indicating strong early demand for coordinated enterprise-grade agentic automation.
AgentBuilder Adoption: Since launching AgentBuilder in preview this January, customers have created thousands of autonomous agents, generating over 250,000 agent runs to date.
Public Sector Growth: UiPath is seeing progress in its public sector business, highlighted by a deal with the U.S. Air Force to accelerate digital transformation through its Agentic Airmen initiative.
New Customer Acquisition: The company signed valuable new enterprise logos, including McLaren Health and Delta Airlines, who will migrate their current automations to UiPath.
Operational Efficiency: UiPath improved its GAAP operating loss to $16 million from $49 million year-over-year, and achieved a non-GAAP operating income of $70 million, representing a 20% margin.
Cash Flow Generation: First quarter non-GAAP adjusted free cash flow generation was $117 million, representing a 33% margin, up over 250 basis points year-over-year.
Partnership with Google Cloud: A strategic AI partnership with Google Cloud aims to transform healthcare operations through an AI-powered medical record summarization agent.
Expansion of Partner Ecosystem: UiPath launched a new partner program to strengthen its partner ecosystem, which is central to driving adoption and accelerating its market strategy.
Macroeconomic Environment: The company operates in a variable macroeconomic environment, which continues to present uncertainty and challenges for business operations and growth.
Regulatory Issues: There are ongoing pressures related to federal government budgets and procurement processes, which may impact the company's public sector business.
Competitive Pressures: Traditional RPA vendors are struggling to keep pace with innovation, leading to potential consolidation as customers seek to streamline their automation solutions.
Supply Chain Challenges: The company is navigating tariffs and other economic factors that may affect operational efficiency and costs.
Customer Retention: There is pressure on customer retention rates, particularly in the federal sector, which may impact future revenue streams.
Adoption of New Solutions: The adoption of newly launched AgenTic solutions is still in early phases, and the company does not expect a material revenue contribution in fiscal 2026.
Foreign Exchange Impact: Fluctuations in foreign exchange rates have been minimal, but they remain a factor that could impact financial results.
Agentic Automation Platform Launch: The launch of the agentic automation platform has been a significant success, enhancing UiPath's product offerings and driving customer engagement.
Partnerships: Strategic partnerships with Google Cloud and Microsoft are aimed at developing targeted vertical solutions and enhancing integration capabilities.
New Pricing Model: Introduction of a consumption-based pricing SKU to drive adoption of new products.
Public Sector Initiatives: Continued focus on federal customers, including a deal with the U.S. Air Force to enhance automation capabilities.
Partner Program Launch: A new partner program was launched to strengthen the partner ecosystem and drive customer success.
Q2 Revenue Guidance: Expected revenue in the range of $345 million to $350 million.
FY2026 Revenue Guidance: Expected revenue in the range of $1.549 billion to $1.554 billion.
ARR Guidance: Expected ARR in the range of $1.820 billion to $1.825 billion.
Non-GAAP Operating Income Guidance: Expected non-GAAP operating income of approximately $305 million for FY2026.
Free Cash Flow Guidance: Expected non-GAAP adjusted free cash flow of approximately $370 million for FY2026.
Gross Margin Guidance: Expected non-GAAP gross margin of approximately 85% for FY2026.
Share Repurchase: In the first quarter, UiPath repurchased 21,900,000 shares of Class A common stock at an average price of $10.40.
The earnings call summary and Q&A reveal a mixed sentiment. While there are positive elements such as partnerships, AI integration, and improved execution, there are also concerns about unclear guidance on future OpEx investments and monetization strategies. The lack of significant pipeline build from partnerships and vague responses on automation balance add uncertainty. Despite optimistic guidance, the absence of strong catalysts like record high revenue or new partnerships with immediate impact tempers the outlook. Thus, the stock price is likely to remain stable, leading to a neutral sentiment.
The earnings call summary and Q&A suggest a positive outlook. Strong partnerships with Google Cloud and Deloitte, alongside new product launches, indicate growth potential. Revenue guidance is optimistic, and shareholder returns are stable with no debt. The Q&A highlights positive client demand for Agentic solutions and stable go-to-market strategies. While there are macroeconomic uncertainties, the guidance remains prudent. The overall sentiment leans towards positive due to strategic partnerships and product development, despite some cautious guidance.
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