Summary
UiPath crossed the $1 billion ARR mark in the second quarter of fiscal 2023. ARR reached $1.043 billion, up 44 percent year over year. Net new ARR was $66.2 million. Revenue for the quarter ended July 31, 2022, was $242.2 million, up 23.9 percent year over year. Gross profit rose 23.6 percent to $197.6 million. GAAP gross margin was 81.6%, down 0.2 percentage points from a year earlier. Operating margin was -49.6%, an improvement of 0.4 percentage points. The top line kept growing, but the profit lines moved in opposite directions on a quarterly and year-to-date basis. UiPath also said it would unveil its 2022.10 platform release at its FORWARD 5 user conference later in September. It was named a Leader in the 2022 Gartner Magic Quadrant for Robotic Process Automation for the fourth consecutive year and a Leader and Star Performer in Everest Group's PEAK Matrix for Process Mining Technology Vendors for the third consecutive year.
The quarter showed widening losses. Operating loss widened 22.9 percent to $120.2 million. Net loss widened 20.3 percent to $120.4 million. Diluted EPS was -$0.22. Operating cash flow was -$23.7 million, down 295.6 percent from the prior-year quarter. Capital expenditures were $6.6 million, up 358.4 percent. Non-GAAP adjusted free cash flow was negative $23.3 million. The company began restructuring actions in the second quarter of fiscal 2023, and those actions added employee termination benefits to sales and marketing expense. The year-to-date picture was different. For the six months ended July 31, 2022, revenue was $487.3 million, up 27.6 percent. Operating loss narrowed 29.3 percent to $236.1 million. Net loss narrowed 28.5 percent to $242.9 million. Operating cash flow for the six months was -$76.6 million, down 225.7 percent.
Customer metrics showed expansion. Dollar-based net retention was 132 percent, down from 144 percent a year earlier. About 25 percent of ARR growth came from new customers and about 75 percent from existing customers. The company had more than 10,500 customers at July 31, 2022, compared with over 9,100 a year earlier. That base included 190 customers with ARR above $1 million and 1,660 customers with ARR above $100,000. Deferred revenue was $292.3 million, up 24.1 percent year over year. Remaining performance obligations were $709.0 million, up 36.4 percent. The RPO figure suggests a healthy backlog, while the lower net retention rate points to some moderation in expansion within the existing customer base.
Management is repositioning the company. UiPath acquired Re:infer, a London-based natural language processing company, on July 29, 2022. It also announced integrations with Snowflake and Workday. The company guided for fiscal 2023 third-quarter revenue growth, ARR of $1,091 million to $1,093 million as of October 31, 2022, and a non-GAAP operating loss of $30 million to $25 million. For the full fiscal year 2023, the outlook calls for revenue growth, ARR of $1,153 million to $1,158 million as of January 31, 2023, and a non-GAAP operating loss of approximately $15 million. Management cited increasing FX headwinds and macro uncertainty. The company's global footprint exposes it to foreign exchange and macroeconomic volatility, which affected both the second-quarter results and the fiscal third-quarter and full-year outlook. Other risks include inflationary cost pressures, the war in Ukraine, reliance on renewals, competition, and the possibility that recent rapid growth is not indicative of future growth. The CFO said the go-forward priority is to balance long-term growth with consistent non-GAAP operating margin expansion and sustainable positive non-GAAP adjusted free cash flow in fiscal year 2024 and beyond.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2023 | Q1 FY2023 | QoQ | Q2 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $242.2M | $245.1M | -1.2% | $195.5M | +23.9% |
| Gross profit | $197.6M | $200.1M | -1.2% | $159.9M | +23.6% |
| Gross margin | 81.6% | 81.6% | -0.0 pp | 81.8% | -0.2 pp |
| Research & development | $67.8M | $68.7M | -1.2% | $57.6M | +17.7% |
| Sales & marketing | $181.5M | $189.8M | -4.3% | $144.3M | +25.8% |
| General & administrative | $68.4M | $57.5M | +19.0% | $55.8M | +22.6% |
| Total operating expenses | $317.8M | $316.0M | +0.6% | $257.7M | +23.3% |
| Operating income (loss) | -$120.2M | -$116.0M | -3.7% | -$97.8M | -22.9% |
| Operating margin | -49.6% | -47.3% | -2.3 pp | -50.0% | +0.4 pp |
| Net income (loss) | -$120.4M | -$122.6M | +1.8% | -$100.0M | -20.3% |
| Net margin | -49.7% | -50.0% | +0.3 pp | -51.2% | +1.5 pp |
| Diluted EPS | -$0.22 | -$0.23 | +$0.01 | -$0.19 | -$0.03 |
| Customers | 10,500 | 10,300 | +1.9% | 9,100 | +15.4% |
Risks
Dependence on Daniel Dines and other key employees is heightened because many management team members are recent hires, including Robert Enslin, Co-CEO, who joined in May 2022, and Brigette McGinnis Day, Chief People Officer, who joined in August 2022. Volatility in the Class A common stock may reduce the perceived value of equity awards and impair hiring and retention of RPA, AI, and ML talent.
Unfavorable macroeconomic conditions, including inflation, the Russia-Ukraine military conflict, and reductions in IT spending, could disrupt key industry events and cause delays or reductions in customer spending. Revenue may be disproportionately affected if customers view the platform as costly or difficult to deploy or migrate to.
The dollar-based net retention rate declined to 132% as of July 31, 2022 from 144% as of July 31, 2021, and future results depend on customers renewing and expanding licenses. Renewals and net retention may fluctuate due to customer business strength, economic conditions, pricing, competition, and consolidation, among other factors.
The company has a history of operating losses and reported a net loss of $120.4 million in the quarter ended July 31, 2022, which widened from a net loss of $100.0 million in the prior-year quarter. It also has non-cancelable multi-year cloud infrastructure commitments and restructuring actions beginning in the second quarter of fiscal 2023 that may be costly or disruptive.
In July 2022 the company acquired Re:infer, following the March 2021 acquisition of Cloud Elements, and it may continue to pursue acquisitions. Limited acquisition experience and integration challenges could divert management, increase expenses, and fail to deliver anticipated benefits.
Because non-affiliate market value exceeded $700 million as of July 31, 2022, the company will become a large accelerated filer as of January 31, 2023 and face additional disclosure and compliance requirements, including auditor attestation under Section 404(b). Compliance is expected to increase legal and financial costs and divert management attention.
SaaS KPIs
All quarters →Dollar-Based Net Retention Rate
ARR
Net New ARR
Non-GAAP Adjusted Free Cash Flow
Non-GAAP Gross Margin
Total customers
Summary, forecast, risks and KPIs are extracted from UiPath, Inc.'s SEC filings for Q2 FY2023 (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.