Summary
UiPath closed FY2022 Q2 with revenue of $195.5 million, up 40.3% year over year. Gross profit rose 28.3% year over year to $159.9 million, but gross margin slipped 7.7 percentage points year over year to 81.8%. The operating loss widened year over year to $97.8 million, and operating margin fell 37.8 percentage points year over year to negative 50.0%. Net loss was $100.0 million, a swing from profitability in the prior-year quarter, and diluted EPS was negative $0.19. These GAAP results show a business growing quickly while absorbing much higher costs.
ARR reached $726.5 million as of July 31, 2021, up 60% year over year. Net new ARR was $73.9 million, up 33%. Management said the growth came from new customer additions and expansion within existing accounts. The company ended the quarter with more than 9,100 customers and a dollar-based net retention rate of 144%. Those metrics point to a healthy land-and-expand model. The MD&A reports that about 30% of the ARR growth rate came from new customers and about 70% from existing customers. As of July 31, 2021, 1,247 customers had ARR of $100 thousand or more, and 118 customers had ARR of $1 million or more. Non-GAAP gross margin was 86%, while GAAP gross margin was 81.8%. The gap between the two figures reflects the excluded items in the non-GAAP measure, and it is useful because the GAAP margin is under pressure.
Cash generation turned negative. Operating cash flow was negative $6.0 million for the quarter, down 121.3% year over year. Capital expenditures were $1.4 million, up 1034.6% year over year. Non-GAAP adjusted free cash flow was negative $3.5 million, which is a different measure from operating cash flow. On a year-to-date basis, revenue was $381.7 million, up 51.2%. Gross profit for the six months was $297.1 million, up 32.6%. Operating cash flow for the six months was negative $23.5 million, and net loss was $339.7 million. Deferred revenue was $235.5 million, and remaining performance obligations were $519.9 million. The company is investing ahead of growth, and the cash flow profile reflects that choice.
The year-to-date figures also show margin and profit pressure. Gross margin for the six months was 77.8%, down 10.9 percentage points year over year. Operating margin for the six months was negative 87.4%, down 62.9 percentage points year over year. Operating loss for the six months was $333.8 million, and diluted EPS for the six months was negative $0.91. Revenue growth remains strong, but the expense base is expanding faster than revenue on a GAAP basis. Management has said it will keep investing heavily to capture a large market rather than optimize for near-term profitability or cash flow.
Guidance points to more growth but continued losses. For the fiscal third quarter 2022, UiPath expects ARR of $796 million to $798 million as of October 31, 2021. Revenue is guided to $207 million to $209 million. Non-GAAP operating loss is expected in the range of $30 million to $15 million. For the full fiscal year 2022, the company expects ARR of $876 million to $881 million as of January 31, 2022. The company does not provide GAAP operating loss guidance, citing variability in stock-based compensation and related charges. The outlook keeps the focus on expansion rather than near-term profitability.
The main risks sit where the growth story meets the cost structure. The 10-Q lists rapid growth that may not be indicative of future growth, limited operating history, the ability to manage growth, customer renewals, competitive markets, reliance on third-party cloud infrastructure, and the COVID-19 pandemic. Margin pressure is already visible in the GAAP numbers: gross margin fell 7.7 percentage points year over year to 81.8%, and operating margin fell 37.8 percentage points year over year to negative 50.0%. Deferred revenue was $235.5 million, and remaining performance obligations were $519.9 million. Those balances depend on renewals and contract timing, so they do not remove execution risk. The quarter shows strong demand for automation, but also a company spending heavily to capture it.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $195.5M | $186.2M | +5.0% | — | — |
| Gross profit | $159.9M | $137.2M | +16.6% | — | — |
| Gross margin | 81.8% | 73.7% | +8.1 pp | — | — |
| Research & development | $57.6M | $93.0M | -38.0% | — | — |
| Sales & marketing | $144.3M | $205.8M | -29.9% | — | — |
| General & administrative | $55.8M | $74.4M | -25.0% | — | — |
| Total operating expenses | $257.7M | $373.2M | -30.9% | — | — |
| Operating income (loss) | -$97.8M | -$236.0M | +58.6% | — | — |
| Operating margin | -50.0% | -126.7% | +76.7 pp | — | — |
| Net income (loss) | -$100.0M | -$239.7M | +58.3% | — | — |
| Net margin | -51.2% | -128.7% | +77.5 pp | — | — |
| Diluted EPS | -$0.19 | — | — | — | — |
| Customers | 9,100 | 8,500 | +7.1% | — | — |
Risks
The ongoing COVID-19 pandemic, including new variant strains, could disrupt marketing events, sales cycles, and customer spending. MD&A notes the majority of employees continue to work remotely and offices are reopening selectively, while the filing says the pandemic may heighten other risks including guidance and customer expansion.
The company has a history of operating losses; for the six months ended July 31, 2021 net loss was $339.7 million, and the loss widened from $47.9 million in the prior-year period. MD&A states it intends to invest heavily to grow rather than optimize for profitability or cash flow in the near future.
Recent rapid growth may not be indicative of future growth; ARR grew 60% to $726.5 million at July 31, 2021, and revenue was up 40.3% for the quarter and up 51.2% for the six months ended July 31, 2021. The company expects ARR and revenue growth rates to decline as the business matures and competition increases.
The RPA market is increasingly competitive, with competitors including Appian, Automation Anywhere, Blue Prism, Microsoft, NICE, Pegasystems, and others. Native cloud providers may enter with lower-priced offerings and open source alternatives may pressure pricing, and MD&A emphasizes the need to sustain innovation and automation leadership.
A limited number of customers represent a substantial portion of revenue and ARR; as of July 31, 2021, customers with ARR of $100 thousand or more accounted for approximately 75% of revenue and those with ARR of $1.0 million or more accounted for approximately 35%. Loss of or reduced purchasing by significant customers could materially reduce revenue and ARR.
Gross margin decreased to 81.8% for the quarter from 89.5% and to 77.8% for the six months from 88.8%, largely due to stock-based compensation from IPO-related performance conditions. Operating margin was -50.0% for the quarter, down 37.8 pp, and -87.4% for the six months, down 62.9 pp, and MD&A expects costs to increase.
Substantial revenue is derived from channel partners, and agreements are generally non-exclusive so partners may work with competitors. MD&A says the partner ecosystem includes more than 4,700 system integrators, resellers, business consultants, technology partners, and public cloud vendors; failure to expand or manage channels could cause revenue decline.
The company targets large enterprises and government agencies, involving longer sales cycles, more complex requirements, higher contractual risk, substantial upfront sales costs, and less predictability. MD&A says the key go-to-market focus is the largest organizations and top 25 countries by GDP, which may pressure near-term results.
Success depends on executive officers and key employees, and several executives have served in current roles for a short period. Competition is intense for RPA, AI, and ML engineers and experienced sales professionals, and post-IPO equity award perceptions may affect recruiting and retention.
Cloud-based products rely on third-party hosting providers; any disruption, capacity limitation, or cyber incident at those providers could impede onboarding, expand usage, and harm financial condition. MD&A notes growth depends in part on adoption of cloud offerings.
The company and its independent registered public accounting firm identified a material weakness in internal control over financial reporting in the past. Any failure to maintain effective internal control could harm public reporting and business operations.
The dual-class structure concentrates voting control with CEO, Co-Founder, and Chairman Daniel Dines, who beneficially owned shares representing approximately 88% voting power as of July 31, 2021. This limits other stockholders' ability to influence important decisions.
The restricted period expired for 87,172,130 Class A shares on June 10, 2021, and before September 9, 2021, 397,217,247 shares and securities exercisable for or convertible into Class A common stock will become eligible for sale. Future sales or the perception of sales could depress the Class A common stock price.
SaaS KPIs
All quarters →Dollar-Based Net Retention Rate
ARR
Net New ARR
Non-GAAP Adjusted Free Cash Flow
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Total customers
Summary, forecast, risks and KPIs are extracted from UiPath, Inc.'s SEC filings for Q2 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.