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PATH
Earnings call · Jul 2026 (Q2 FY27)

UiPath Q2 FY27 earnings call PATH

Sep 3, 2026 Source

Executive summary

UiPath Q2 FY27 — Strong ARR Growth and Operating Margin Expansion Driven by AI Integration

UiPath delivered a strong Q2 FY27, marked by continued ARR growth and significant non-GAAP operating margin expansion, driven by improved execution and strategic integration of AI into its platform. The company is increasingly seen as a critical partner for AI transformation, offering a differentiated approach that combines deterministic automation with AI for optimal business outcomes. Leadership transitions were announced to enhance operational focus and financial discipline, positioning the company for scalable growth.

Highlights

5

  • ARR grew 12% year-over-year to $1.938 billion.

  • Non-GAAP operating margin expanded to 22%, up over 400 basis points year-over-year.

  • Fourth consecutive quarter of GAAP profitability, with GAAP operating income of $32 million.

  • 18 of the top 20 deals included AI, demonstrating increased deal size and platform adoption.

  • Net new ARR increased to $37 million, up from $31 million in the prior year quarter.

Concerns

3

  • Third quarter ARR guidance includes a $1 million incremental FX headwind and a $4 million year-over-year FX headwind.

  • Full year FY27 revenue guidance includes a $1 million incremental FX headwind and a $20 million year-over-year FX headwind.

  • Non-GAAP adjusted free cash flow for Q2 was $31 million, down from $45 million in the prior year, primarily due to timing of tax-related payments.

Guidance & targets

CategoryTargetConfidence
Revenue
$440 million to $445 million
high materiality
High
ARR
$1.992 billion to $1.997 billion
high materiality
High
Non-GAAP operating income
approximately $100 million
medium materiality
High
Revenue
$1.789 billion to $1.794 billion
high materiality
High
ARR
$2.065 billion to $2.070 billion
high materiality
High
Non-GAAP operating income
approximately $445 million
medium materiality
High
Non-GAAP adjusted free cash flow
approximately $425 million
medium materiality
High
Non-GAAP gross margin
approximately 84%
medium materiality
High

PATH operating KPIs by quarter

PATH operating KPIs stated on its earnings calls, by fiscal quarter
KPI Jan 2026 Q4 FY26 Apr 2026 Q1 FY27This call Jul 2026 Q2 FY27Change vs prior quarter
Annual recurring revenue (ARR)
$1.853B Fourth quarter ARR reached $1.853 billion, up 11% year-over-year, driven by $70 million of net new ARR and the revenue of $481 million, up 14% year-over-year. Source transcript
$1.901B First quarter ARR reached $1.901 billion, up 12% year-over-year, driven by $49 million of net new ARR and revenue of $418 million, up 17% year-over-year. Source transcript
$1.938B The 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. Source transcript
+1.9%
Annual recurring revenue (ARR) Cloud
$1.2B+ We ended the year with over $1.2 billion in cloud ARR, which includes both hybrid and SaaS, up over 20% year-over-year. Source transcript
—
~$1.3B We ended the quarter with approximately $1.3 billion in cloud ARR, which includes both hybrid and SaaS and an increase of more than 19%. Source transcript
—
Customers
~10.75K We ended the quarter with approximately 10,750 customers. Source transcript
~10.55K We ended the quarter with approximately 10,550 customers. Source transcript
~10.35K We ended the quarter with approximately 10,350 customers with attrition continuing to be concentrated among our smallest customers, while customers with more than $30,000 in ARR increased 6% year-over-year. Source transcript
—
Customers above an annual spend threshold ARR $100,000 or more
2,565 Customers with $100,000 or more in ARR increased to 2,565, while customers in $1 million or more in ARR increased to 357. Source transcript
2,624 Customers with $100,000 or more in ARR increased 11% to 2,624 and customers with $1 million or more in ARR, increased 18% to 374. Source transcript
2,666 Customers with $100,000 or more in ARR increased 10% to 2,666 while customers with $1 million or more in ARR, increased 21% to 387. Source transcript
+1.6%
Customers above an annual spend threshold ARR $1 million or more
357 Customers with $100,000 or more in ARR increased to 2,565, while customers in $1 million or more in ARR increased to 357. Source transcript
374 Customers with $100,000 or more in ARR increased 11% to 2,624 and customers with $1 million or more in ARR, increased 18% to 374. Source transcript
387 Customers with $100,000 or more in ARR increased 10% to 2,666 while customers with $1 million or more in ARR, increased 21% to 387. Source transcript
+3.5%
Dollar-based gross retention
97% Dollar-based gross retention was best-in-class at 97%, and our dollar-based net retention rate remained at 107%. Source transcript
97% Our dollar-based gross retention -- gross retention rates remained best-in-class at 97% and our dollar-based net retention rate was 109%, underscoring the durability of our customer base as they embrace our agentic automation solutions. Source transcript
97% Our dollar-based gross retention remained best-in-class at 97%, and our dollar-based net retention rate was 109%, a 2-point increase year-to-date, demonstrating stabilization across the business. Source transcript
0 pt
Net revenue retention rate
107% Dollar-based gross retention was best-in-class at 97%, and our dollar-based net retention rate remained at 107%. Source transcript
109% Our dollar-based gross retention -- gross retention rates remained best-in-class at 97% and our dollar-based net retention rate was 109%, underscoring the durability of our customer base as they embrace our agentic automation solutions. Source transcript
109% Our dollar-based gross retention remained best-in-class at 97%, and our dollar-based net retention rate was 109%, a 2-point increase year-to-date, demonstrating stabilization across the business. Source transcript
0 pt
Net revenue retention rate FX adjusted
106% Adjusting for FX, dollar-based net retention was 106%. Source transcript
108% Adjusting for FX, dollar-based net retention rate was 108%, demonstrating stabilization across our business. Source transcript
108% Adjusting for FX, dollar-based net retention rate was 108%. Source transcript
0 pt
Remaining performance obligation (RPO)
$1.475B Remaining performance obligations increased to $1.475 billion, up 19%. Source transcript
$1.413B Remaining performance obligations increased to $1.413 billion, up 15%. Source transcript
$1.378B Remaining performance obligations increased to $1.378 billion, up 14% normalizing for the FX headwind, which was approximately $19 million, RPO grew 16%. Source transcript
-2.5%
Remaining performance obligation (RPO) Current
$913M Current RPO increased to $913 million, up 13%. Source transcript
$908M Current RPO increased to $908 million, up 17%. Source transcript
$901M Current RPO increased to $901 million, up 14%. Source transcript
-0.8%

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Remaining performance obligations (RPO) $1.378 billion end of Q2 FY27

up 14%

RPO grew 16% normalizing for the FX headwind of approximately $19 million.

Current RPO $901 million end of Q2 FY27

up 14%

Product announcements

ProductTypeDetails
New developer-friendly workflow automation toollaunch

Deals & partnerships

Global insurance provider Modernizing beneficiary claims, expanding use of IXP Maestro agents and robots. 7-figure expansion

The provider is modernizing beneficiary claims, expanding their use of 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 in one governed process.

Department of War Expanded partnership to support its clear audit initiative across military services.

Building on a deterministic foundation, the department is adding autopilot, IDP solutions, and test automation to automate critical audit and reconciliation work.

Leading financial institution Chose UiPath as its single platform for end-to-end processes.

The institution chose UiPath over other orchestration providers because Maestro was the only solution able to orchestrate across homegrown applications while meeting governance and compliance requirements at scale. It's already in production on a critical revenue channel process.

Leading U.S. regional bank Consolidating its entire automation program onto UiPath.

The bank is using Test Cloud for conversion testing and agentic processes across broader compliance to help manage risk to a significant module.

One of Canada's largest financial services companies Migrating its entire automation footprint to UiPath.

Working with actioning partners to migrate its entire automation footprint to UiPath and intends to use cutting agents to power that migration with the goal of lowering maintenance costs and accelerating time to value.

Fortune 200 financial services company Moving all their automation needs onto UiPath in a CIO-driven initiative. multimillion dollar

The company is expanding their use of Test Cloud to test the investment management software they deploy to customers.

Cognizant Expanded partnership to embed UiPath Test Cloud into its testing as a service and managed services offering.

This will help customers move from manual script-based testing towards agentic testing. Cognizant will also help scale Test Cloud onboarding and adoption through its global delivery model.

Yaz Appointment to the Board of Directors.

Yaz brings deep technology, operations, and enterprise transformation experience from Kaiser Permanente, Walmart, and Proctor & Gamble.

Risks & headwinds

Macroeconomic environment variability ongoing

variable macroeconomic environment

Mitigation:Maintain a prudent outlook and rely on strong team execution.

Foreign exchange headwinds Q3 FY27 and FY27

Q3 FY27 revenue: $10 million YoY headwind; FY27 revenue: $20 million YoY headwind (inclusive of $2 million H1 and $18 million H2); Q3 FY27 ARR: $4 million YoY headwind; FY27 ARR: $5 million YoY tailwind (net of $10 million H1 tailwind and H2 headwinds).

Mitigation:Company prices and sells in local currency; FX impacts are explicitly provided in guidance.

What to watch in Q3 FY27

Net new ARR acceleration

Q3 FY27 and H2 FY27
Current $37 million in Q2 FY27, up from $31 million YoY
Target Continued acceleration, contributing to higher end of FY27 ARR guidance.

Why it matters

Key indicator of demand and platform adoption, especially with AI integration, driving overall revenue growth.

Net new ARR was $37 million, up from $31 million in the prior year quarter.

Q&A highlights

How much incremental capacity are you getting per FTE with coding agents reducing implementation effort, and does this change hiring plans?

Initial results are very encouraging, showing a nearly 60% reduction in effort for forward-deployed engineers. The primary focus is on accelerating customer time to value, which is equally important for partners, rather than directly impacting FTE hiring plans. The company is continuously working to improve coding agent performance.

“Our initial results are very encouraging. And if -- I believe that we are seeing a positive trajectory. And I think this is not so much about how many FTEs we plan to hire. But it's about how much our customers can accelerate their time to them.”

asked by Unknown Analyst · answered by Daniel Dines

3 min read 8 chapters

Detailed narrative

AI and Automation Strategy

UiPath emphasizes a differentiated approach combining AI for intelligence and deterministic automation for exactness, reliability, and cost efficiency. This model-agnostic strategy allows customers to choose the best technology for each process step, delivering better economics and ROI at scale, and is critical for orchestrating complex, long-running business processes. The company provides the 'rails for running the business' while customers choose their AI models, ensuring governance and intellectual property remain with the enterprise.

Leadership Transition and Operational Focus

Daniel Dines announced Ashim Gupta's exclusive focus on COO duties to drive operational discipline and go-to-market execution, while Hitesh Ramani succeeded him as CFO. This planned transition aims to enhance focus across operations and finance with proven leaders, building on the financial rigor established over the past years. Both leaders will continue to work closely together in their new roles.

Customer Adoption and Platform Consolidation

The company is seeing customers expand from individual automation use cases to broader end-to-end processes, adopting more of the UiPath platform and consolidating point solutions. 18 of the top 20 deals in Q2 included AI, leading to larger expansions and demonstrating how central AI has become to customer engagement. This trend is seen across new logos and existing customer expansions, including a top Canadian bank and a Fortune 200 financial services company.

Impact of Coding Agents

Initial results from coding agents show a nearly 60% reduction in effort for forward-deployed engineers, significantly improving customers' time to value and total cost of ownership. This technology is expanding the automation market by lowering the cost and effort required to build automations, making the entire automation life cycle faster and more governed, as exemplified by a U.S. energy company using Cursor with UiPath.

Vertical and Outcome-Oriented Solutions

UiPath is pairing its horizontal platform strength with vertical and outcome-oriented solutions. Examples include the Office of the CFO invoice solution, automating approximately 700,000 invoices annually for a Fortune 500 manufacturer with 96% document processing accuracy, and a denial resolution solution for healthcare, helping a U.S. health system pursue millions of dollars in claims.

Partner Ecosystem Expansion

The partnership with Cognizant was expanded to embed UiPath Test Cloud into Cognizant's testing-as-a-service and managed services offerings. This collaboration aims to help customers move from manual script-based testing to agentic testing and scale Test Cloud adoption through Cognizant's global delivery model.

Federal Business Trajectory

The federal business is performing exceptionally well, with strong pipeline opportunities. The team is closely engaging with customers and agencies, partnering on transformative work, such as the Department of War's clear audit initiative. The company is applying learnings from its healthcare business to government processes, contributing to a positive trajectory.

Net New ARR Acceleration

Net new ARR increased to $37 million from $31 million year-over-year, driven by larger deal values and more strategic customer engagements. The integration of AI into deals is leading to higher ROI for customers and enabling UiPath to tackle larger, more complex problems, which increases customer stickiness and contributes to the positive ARR trajectory.

AI-generated summary of the company's earnings call. Not investment advice.