UiPath, Inc. (PATH) Earnings & Analysis

Latest quarter

UiPath reported Q2 FY2027 revenue of $410.3 million, above the $397.6 million consensus and its own $395.0 million–$400.0 million guidance. Adjusted earnings per share of $0.15 matched the consensus.

Revenue rose 13.4% from $361.7 million a year earlier. UiPath’s filing attributed the increase to growth in subscription services, licenses, and professional services and other revenue; it said revenue grew across all geographic regions. Existing customers accounted for 72% of the revenue growth, according to the filing.

Gross margin fell to 80.4% from 82.2%. The filing attributed the decline to a lower proportion of higher-margin license revenue and higher professional services costs, primarily from third-party subcontractors. Operating margin rose to 7.70% from −5.58%; the filing said research and development expense declined, primarily because of lower stock-based compensation expense.

UiPath reported diluted earnings per share of $0.07, compared with $0.00 a year earlier. Free cash flow was $29.3 million, down from $41.6 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Daniel Dines said customers are moving beyond automating individual tasks toward orchestrating longer and more complex business processes. He said 18 of UiPath’s top 20 deals in the quarter included AI, and that customers were adopting more of the platform and, in some cases, consolidating automation and AI workloads onto it.

Dines said UiPath combines AI with deterministic automation, using AI where reasoning is useful and automation where a process needs the same result each time. He said the platform can coordinate agents, robots, systems and people while allowing customers to choose their AI models. During the discussion, Dines said existing customers had a better understanding of when to use AI and automation together, although conversations with prospective customers could differ.

CFO Hitesh Ramani said deals that included AI were larger than deals without it and that the company had considered its platform positioning in its outlook for the coming quarters. Dines also said UiPath was experimenting with pricing models, including transaction-based pricing for process orchestration, and was moving toward outcome-based pricing that would include the tokens needed to complete a transaction.

On investment, Dines said initial work by UiPath’s forward-deployed engineers suggested coding agents reduced effort by nearly 60%. He described the work as being in a proving stage and said the focus was on how much faster customers could realize value, rather than on a hiring target for those engineers.

Dines said non-GAAP operating margin reached 22%, which he attributed to operating efficiency and execution. He also said Ashim Gupta would focus exclusively on his role as chief operating officer, while Ramani succeeds Gupta as CFO. Dines said UiPath had expanded its Cognizant partnership to embed Test Cloud in Cognizant’s testing services.

Guidance

UiPath raised its FY2027 forecast for adjusted operating income. On the call, CFO Hitesh Ramani gave the full-year non-GAAP operating income outlook as approximately $445 million.