UiPath, Inc. 2027 Q2 Earnings Call

Good afternoon, and thank you for joining us today to review UiPath's second quarter fiscal 2027 financial results, which we announced in our earnings press release issued after the close of the market today. On the call with me are Daniel Dines, founder and Chief Executive Officer, Ashim Gupta, Chief Operating Officer, and Hitesh Ramani, Chief Financial Officer, to deliver our prepared comments and answer questions. Our earnings press release and financial supplemental materials are posted on the UiPath investor relations website. These materials include GAAP to non-GAAP reconciliations. We will be discussing non-GAAP measures on today's call. This afternoon's call includes forward-looking statements regarding our financial guidance for the third quarter and full fiscal year 2027 and our ability to drive and accelerate future growth and operational efficiency and grow our platform, product offerings, and market opportunity.

Actual results may differ materially from these expressed in the forward-looking statements due to many factors, and therefore, investors should not place undue reliance on these statements. For a discussion of material risks and uncertainties that could affect our actual results, please refer to our annual report on Form 10-K for the year ended January 31, 2026 and our subsequent reports filed with the SEC. Forward-looking statements made on this call reflect our views as of today, and we undertake no obligation to update them. I would like to highlight that this webcast is being accompanied by slides. We will post the slides and a copy of our prepared remarks to our investor relations website immediately following the conclusion of this call. In addition, please note, all comparisons are year-over-year unless otherwise indicated. Now, I'd like to turn the call over to Daniel.

Thank you, Allise, and thank you for joining us. We delivered another strong quarter with continued execution. ARR grew 12%. Non-GAAP operating margin expanded to 22%, and we delivered our fourth consecutive quarter of GAAP profitability. Over the past two years, we've been transforming UiPath for the next phase of our growth. We've evolved our platform around business orchestration, agentic, and software testing, significantly improved our go-to-market execution and operating discipline, and re-accelerated the pace of innovation within the company. We're a stronger company today, and increasingly, customers are looking to UiPath not just to automate individual tasks, but to orchestrate complex, long-running, and exception-heavy business processes and be a critical partner in their AI transformation. We've talked a lot about how AI is changing software. The bigger question now is how enterprises turn AI into real business value. Customers aren't choosing between AI and deterministic automation.

They are choosing the best way to achieve an outcome. AI is exceptional at reasoning, but it's probabilistic and can be expensive at scale. Many enterprise processes don't need reasoning at every step. They need exactness, the same result every time, securely, reliably, and at the lowest possible cost. That's why we give customers the choice of deterministic or tokenless automation alongside AI. Our approach is simple. Use AI where intelligence creates value and deterministic automation where exactness matters. That gives customers the benefits of AI without paying for AI reasoning at every step, and ultimately, better economics and better ROI at scale. That's where UiPath is differentiated. We deliver business outcomes by orchestrating end-to-end processes across agents, robots, API systems, and people, using the right technology for each step to deliver the best combination of intelligence, reliability, and cost.

We are also model agnostic, giving customers the freedom to use the AI models and technologies that are best for the work rather than locking them into a single ecosystem. As AI expands what enterprises can automate, we believe that combination of choice, orchestration, and governance becomes even more valuable. So the opportunity now is to scale what we've built, expanding adoption across our customer base, extending our reach into the business, and continuing to translate our innovation into durable growth. As we scale, strong execution and connectivity across the company become even more important. That's why Ashim will now focus exclusively on his role as Chief Operating Officer. Ashim has been one of my closest partners and one of the leaders most responsible for the financial and operational discipline we've built over the past several years.

As COO, he will focus exclusively on the day-to-day operations of the company, driving greater discipline and consistency across our go-to-market organization, strengthening execution across functions, and leading key strategic priorities across the business. With Ashim focusing fully on the operations of the company, we are making a planned leadership transition in finance, with Hitesh Ramani succeeding him as Chief Financial Officer. This is a logical next step and reflects the strength and depth of the leadership team we've built. Hitesh joined us in 2021 as Chief Accounting Officer and has served as Deputy CFO for the past two years, working closely alongside Ashim across the finance organization. He has been a critical partner through every major milestone, including our IPO, and has helped build the financial rigor and discipline we have today.

Given Hitesh's existing responsibilities and deep knowledge of the business, we expect a very smooth transition and significant continuity across the finance organization. With Ashim remaining as COO, he and Hitesh will continue to work closely together in their respective roles. Together, these changes give us greater focus across operations and finance, with two proven leaders in critical roles as we scale. I am excited to continue working closely with Ashim and Hitesh, and I am confident in the leadership team we have in place and our ability to execute against the opportunity ahead. Now, turning to our quarterly results. We delivered a strong second quarter, once again beating guidance across the top and bottom line. ARR reached $1.938 billion, up 12% year over year, driven by $37 million of net new ARR and revenue of $410 million, up 13% year over year.

We grew second quarter non-GAAP operating income to $89 million, a 22% margin, and up over 400 basis points year over year, driven by improved operational efficiency and disciplined execution across the business. Behind these results, we are seeing the strategy I just described play out with customers. 18 of our top 20 deals this quarter included AI, demonstrating how increasingly central AI has become to our largest customer engagements. Customers are expanding from individual automation use cases into broader end-to-end processes, adopting more of the UiPath platform, and in a number of cases, consolidating automation and AI workloads onto UiPath. We are seeing this result in larger expansions where AI is attached to the deal. A global insurance provider is a strong example. In a seven-figure expansion, they are modernizing beneficiary claims, expanding their use of UiPath IXP, Maestro agents, and robots.

With UiPath FORWARD deployed engineers supporting implementation, Maestro connects document intake, beneficiary analysis, orchestration, exceptions, and human in the loop work into one governed end-to-end process. Because UiPath was already embedded in their ecosystem, they could move quickly on this use case and build on the same foundation as they modernize additional processes across the organization. In the public sector, the Department of Defense expanded its partnership with UiPath to support its clean audit initiative across the military services. Building on its deterministic foundation, the department is adding UiPath Autopilot, our IDP solutions, and test automation to automate critical audit and reconciliation work. We are also seeing governance and reliability become real competitive differentiators. A leading financial institution chose UiPath over other orchestration providers as its single platform for end-to-end processes.

Maestro was the only solution able to orchestrate across their homegrown applications while meeting the governance and compliance requirements at scale. It is already in production on a critical revenue channel process, combining deterministic automation with human in the loop safeguards. These are not isolated examples. Across both new logos and expansions, we are seeing customers standardize on UiPath and consolidate point solutions onto our platform. A leading U.S. regional bank is consolidating its entire automation program onto UiPath using UiPath Test Cloud for conversion testing and agentic processes across fraud and compliance to help manage risk through a significant module. One of Canada's largest financial services companies is working with Ashling Partners to migrate its entire automation footprint to UiPath, and plans to use coding agents to power that migration with the goal of lowering maintenance costs and accelerating time to value.

On the expansion side, a Fortune 200 financial services firm is moving all their automation needs onto UiPath in a multimillion-dollar CIO-driven initiative while expanding their use of UiPath Test Cloud to test the investment management software they deploy to customers. The common thread across these wins is consolidation. As customers think about automation and AI together, we are increasingly seeing them look for one platform that can build, orchestrate, test, and govern the entire process. I am excited about the results we are seeing from coding agents pilots and implementation. Our initial results from our forward-deployed engineers are that coding agents reduce effort by nearly 60%. As we build on this, it has transformational impacts on our customers' time to value and overall TCO. We are seeing the same potential with customers like a leading U.S. energy company.

They are using Cursor with UiPath across the entire automation lifecycle, from architecture and development, from testing, code review, and production deployment. The coding agent directly creates UiPath workflows, while our platform keeps the development process governed and standardized. This isn't just about AI writing code faster, it's about making the entire automation lifecycle faster. That's an important part of why we believe AI expands the automation market. It doesn't just create new use cases, it lowers the cost and effort required to build them. Moreover, to speed up the implementation even further, we announced a new developer-friendly workflow automation tool in public preview. It lets developers use coding agents they already work with, like Raw Code, Codex, Cursor, and GitHub Copilot, to both orchestrate business processes and automate manual tasks via API and agents, combining the speed of AI-native development with the governance enterprises need.