Summary
UiPath reported fiscal 2026 second-quarter revenue of $361.73 million, up 14.4% from the prior-year quarter. Year-to-date revenue was $718.35 million, up 10.3% from the prior-year period. The company said total revenue grew across all geographical regions. Gross profit was $297.35 million for the quarter, up 17.6% from the prior-year quarter, and $590.12 million year to date, up 10.8% from the prior-year period. Gross margin rose to 82.2%, up 2.2 percentage points from the prior-year quarter, and year-to-date gross margin was 82.1%, up 0.4 percentage points from the prior-year period.
Profitability improved sharply on a GAAP basis. The quarter produced net income of $1.58 million, a swing from a net loss in the prior-year quarter, and diluted EPS was $0.00, up from a loss per share in the prior-year quarter. Year-to-date net loss narrowed to $20.97 million, and diluted EPS was negative $0.04, an improvement from a loss per share in the prior-year period. The operating loss narrowed to $20.18 million for the quarter and to $36.60 million year to date. Operating margin was negative 5.6% for the quarter, up 27.1 percentage points. Non-GAAP operating income was $62.3 million for the quarter and $131.9 million year to date, showing the gap between GAAP and non-GAAP results. The company attributes much of that gap to stock-based compensation, amortization, employer payroll taxes, restructuring costs, charitable donations, and contingent consideration changes.
Cash generation was mixed. GAAP operating cash flow was $41.59 million for the quarter, down 10.3% from the prior-year quarter, while year-to-date operating cash flow was $160.59 million, up 9.7% from the prior-year period. Non-GAAP adjusted free cash flow was $45 million for the quarter. Capital expenditures were $0.00 million in the quarter, down 100.0% from the prior-year quarter, but year-to-date capital expenditures were $12.83 million, up 383.1% from the prior-year period, primarily for leasehold improvements. Deferred revenue, current portion, was $506.95 million, up 9.6% from the prior-year quarter. Remaining performance obligations were $1.21 billion, up 11.8% from the prior-year quarter.
Operating momentum centered on ARR. Annualized renewal run-rate was $1.723 billion as of July 31, 2025, up 11% year over year. Net new ARR was $31 million. Dollar-based net retention was 108%. The customer base with ARR of at least $1 million grew to 320 from 293, and customers with ARR of at least $100 thousand grew to 2,432 from 2,163. Those larger customers represented 47% and 87% of current period revenue, respectively. UiPath also highlighted a Deloitte collaboration that reached 93% clean core in solution design and 88% clean core across the overall SAP S/4HANA implementation, the appointment of Michael Atalla as chief marketing officer, a seventh straight year as a Leader in the Gartner Magic Quadrant for Robotic Process Automation, and a partnership with HCLTech.
Guidance points to continued growth. For the third quarter of fiscal 2026, the company expects revenue of $390 million to $395 million, ARR of $1.771 billion to $1.776 billion as of October 31, 2025, and non-GAAP operating income of approximately $70 million. For the full fiscal year 2026, it expects revenue of $1.571 billion to $1.576 billion, ARR of $1.834 billion to $1.839 billion as of January 31, 2026, and non-GAAP operating income of approximately $340 million. UiPath does not reconcile non-GAAP operating income guidance to GAAP without unreasonable efforts because of the variability of stock-based compensation and related charges.
Risks remain broad. The MD&A cites macroeconomic pressures from geopolitical relationships, inflation and interest rates, monetary and trade policy changes, government efficiency initiatives, and foreign currency fluctuations. Those factors can affect demand, near-term results, comparability, and forecasting. Interest rate volatility can also affect interest income. The company carries a full valuation allowance on its U.S. federal and state and Romania deferred tax assets, though management sees a reasonable possibility that sufficient positive evidence may become available to release the U.S. allowance within the next six months and the Romania allowance, or a portion, within the next 18 months. Other disclosed risks include customer retention and expansion, platform adoption, competition, key personnel, and reliance on third-party cloud infrastructure. The stock repurchase program is another potential use of cash.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $361.7M | $356.6M | +1.4% | $316.3M | +14.4% |
| Gross profit | $297.3M | $292.8M | +1.6% | $252.9M | +17.6% |
| Gross margin | 82.2% | 82.1% | +0.1 pp | 80.0% | +2.2 pp |
| Research & development | $98.3M | $94.8M | +3.7% | $98.4M | -0.1% |
| Sales & marketing | $166.3M | $159.7M | +4.2% | $194.3M | -14.4% |
| General & administrative | $52.9M | $54.7M | -3.3% | $63.5M | -16.7% |
| Total operating expenses | $317.5M | $309.2M | +2.7% | $356.3M | -10.9% |
| Operating income (loss) | -$20.2M | -$16.4M | -23.0% | -$103.3M | +80.5% |
| Operating margin | -5.6% | -4.6% | -1.0 pp | -32.7% | +27.1 pp |
| Net income (loss) | $1.6M | -$22.6M | +107.0% | -$86.1M | +101.8% |
| Net margin | 0.4% | -6.3% | +6.8 pp | -27.2% | +27.7 pp |
| Diluted EPS | $0.00 | -$0.04 | +$0.04 | -$0.15 | +$0.15 |
| Customers | 242,701 | 258,847 | -6.2% | 264,618 | -8.3% |
Risks
Dollar-based net retention rate declined to 108% at July 31, 2025 from 115% at July 31, 2024, and incremental ARR for the twelve months ended July 31, 2025 fell to $172.8 million from $242.7 million a year earlier, indicating less expansion spend from the existing customer base even as total ARR grew 11%. Weakening net expansion could slow future revenue growth.
MD&A states the company is exposed to changes in geopolitical relationships, fluctuating inflation and interest rates, monetary and trade policy changes, and government efficiency initiatives, and that these have generally disrupted the operations of customers, prospective customers and partners. The disclosure is re-emphasised in this filing relative to the boilerplate summary in Item 1A.
Licenses revenue, which is recognized at a point in time, fell 5% year to date to $240.4 million for the six months ended July 31, 2025, tied in part to the transition to Flex Offerings, and licenses are 34% of year-to-date revenue versus 39% a year earlier. Timing of license start dates or duration directly shifts reported revenue.
Cost of professional services and other revenue increased 43% to $25.0 million in the quarter ended July 31, 2025 and 47% to $49.1 million year to date, driven largely by use of third-party subcontractors, offsetting gains in subscription services margin and pressuring overall cost structure.
The platform is priced in currencies that may not be the functional currency, and MD&A warns heightened global market volatility continues to expose results to foreign currency fluctuations. Other income (expense), net swung to a $4.5 million expense year to date from $18.4 million of income, partly on increased foreign currency transaction losses.
Cash, cash equivalents, marketable securities and restricted cash fell to $1,523.1 million at July 31, 2025 from $1,724.1 million at January 31, 2025, and interest income decreased 10% to $12.0 million in the quarter and 9% to $24.7 million year to date on lower balances and lower rates. Returns on the securities portfolio remain sensitive to rate moves.
Other expense, net year to date included a $5.1 million increase in legal expense related to shareholder litigation, contributing to the $22.8 million swing to a $4.5 million other expense for the six months ended July 31, 2025.
Stock-based compensation expense declined to $78.0 million in the quarter ended July 31, 2025 from $94.3 million a year earlier and to $154.4 million year to date from $183.0 million, while research and development headcount and merit increases pushed R&D personnel costs up $15.1 million year to date. The completed Fiscal Year 2025 Workforce Restructuring and shifting compensation mix create execution and retention exposure.
During the six months ended July 31, 2025 the company entered into a $199.8 million purchase commitment for hosting services, a fixed obligation that increases cost risk if SaaS adoption or demand assumptions are not met. Capital expenditures also rose 383.1% year to date to $12.8 million, largely leasehold improvements.
A full valuation allowance remains on U.S. federal and state and Romania deferred tax assets as of July 31, 2025, but management states there is a reasonable possibility the U.S. allowance could be released within six months and the Romania allowance within 18 months, which would create a tax benefit and add volatility to reported net income.
SaaS KPIs
All quarters →Dollar-Based Net Retention Rate
Net New ARR
Non-GAAP Adjusted Free Cash Flow
Non-GAAP Gross Margin
Non-GAAP Operating Margin
Non-GAAP Operating Income
Net Cash Flow from Operations
GAAP Gross Margin
Cash, Cash Equivalents, and Marketable Securities
Summary, forecast, risks and KPIs are extracted from UiPath, Inc.'s SEC filings for Q2 FY2026 (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.