Summary
UiPath closed the third quarter of fiscal 2023 with revenue of $262.7 million, up 19% from $220.8 million in the prior-year quarter. Revenue for the nine months ended October 31, 2022 reached $750.0 million, up 24% from $602.6 million. Gross profit rose 23.8% in the quarter to $220.0 million. The net loss narrowed to $57.7 million from $122.8 million, and the diluted loss per share narrowed to $0.10 from $0.23.
Gross margin was 83.7%, up 3.2 percentage points from 80.5%. Management tied the improvement to lower employer payroll tax tied to equity transactions and lower stock-based compensation expense. The operating loss was $67.0 million, narrowed from $116.2 million a year earlier, and operating margin was -25.5%, up 27.1 percentage points from -52.6%.
The nine-month numbers follow the same path. The operating loss was $303.1 million, narrowed from $450.1 million, and the net loss was $300.7 million, narrowed from $462.5 million. Diluted loss per share for the year to date was $0.55, narrowed from $1.08.
Cash is the soft spot. Operating cash flow was negative $27.3 million in the quarter, down 7.4% from negative $25.4 million a year earlier. For the nine months ended October 31, 2022, operating cash flow was negative $103.9 million, down 112.3% from negative $48.9 million. Capital expenditures rose 155.8% in the quarter to $5.3 million, and year-to-date capital expenditures of $21.6 million were up 277.9% from $5.7 million. Deferred revenue, current portion only, was $288.4 million, up 13.9% from $253.1 million. Remaining performance obligations were $759.1 million, up 31.0% from $579.5 million.
Annualized renewal run rate was $1,110.1 million at October 31, 2022, up 36% from $818.4 million. Roughly 25% of that growth came from new customers and roughly 75% came from existing customers. The dollar-based net retention rate fell to 126% from 143%. Customers with ARR above $1 million rose to 201 from 135, and customers with ARR above $100 thousand rose to 1,711 from 1,363. The customer count was more than 10,600, up from more than 9,600.
Restructuring is now part of the story. The board approved actions on June 24, 2022 that cut about 5% of the global workforce, then approved a further 6% reduction on November 10, 2022. Management framed both rounds as a way to sharpen go-to-market segmentation and improve operating efficiency. The company also said the macroeconomic environment has affected its business and its customers' businesses.
Two risks stand out in the filings. Foreign currency volatility is one: the company prices in local currency, so swings in global markets affect near-term results and make forecasting harder. Execution is the other. The company notes that its results depend on customers' IT spending levels, competition, pricing, satisfaction with the platform, and renewal and cancellation activity, and it warns that ARR is an operating metric, not a forecast of revenue. The $200.0 million senior secured revolving credit facility matures October 30, 2023, with no borrowings outstanding at October 31, 2022, and during the nine months the company committed $138.1 million for cloud infrastructure services and $82.5 million in service credits with alliance partners. It also loses emerging growth company status as of January 31, 2023 and becomes a large accelerated filer, which brings auditor attestation and fuller compensation disclosure. Beyond that, management points to its partner ecosystem and land-and-expand model as the main growth levers, and says it will keep investing in research and development and in acquisitions such as Re:infer, the natural language processing company it acquired on July 29, 2022.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2023 | Q2 FY2023 | QoQ | Q3 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $262.7M | $242.2M | +8.5% | $220.8M | +19.0% |
| Gross profit | $220.0M | $197.6M | +11.3% | $177.7M | +23.8% |
| Gross margin | 83.7% | 81.6% | +2.1 pp | 80.5% | +3.2 pp |
| Research & development | $67.3M | $67.8M | -0.7% | $61.6M | +9.4% |
| Sales & marketing | $156.5M | $181.5M | -13.8% | $172.9M | -9.5% |
| General & administrative | $63.2M | $68.4M | -7.7% | $59.5M | +6.1% |
| Total operating expenses | $287.0M | $317.8M | -9.7% | $294.0M | -2.4% |
| Operating income (loss) | -$67.0M | -$120.2M | +44.3% | -$116.2M | +42.4% |
| Operating margin | -25.5% | -49.6% | +24.1 pp | -52.6% | +27.1 pp |
| Net income (loss) | -$57.7M | -$120.4M | +52.0% | -$122.8M | +53.0% |
| Net margin | -22.0% | -49.7% | +27.7 pp | -55.6% | +33.6 pp |
| Diluted EPS | -$0.10 | -$0.22 | +$0.12 | -$0.23 | +$0.13 |
| Customers | 10,600 | 10,500 | +1.0% | 9,600 | +10.4% |
Risks
Unfavorable macroeconomic conditions, including inflation, the war in Ukraine, and a strengthening U.S. dollar against the Euro, British Pound Sterling, and Japanese Yen, could reduce customers' software spending. MD&A states foreign exchange volatility may impact near-term results and the ability to predict future results.
Future growth depends on customer renewals and expansion; the dollar-based net retention rate was 126% at October 31, 2022 compared with 143% at October 31, 2021. Renewals and net retention may decline due to economic conditions, customer usage, and competition.
Many management team members are recent hires, including Chris Weber in April 2022, Robert Enslin in May 2022, and Brigette McGinnis Day in August 2022; competition for RPA, AI, and ML engineers and sales professionals is intense. Equity awards may be less attractive given volatility in the Class A common stock price.
The company reported a net loss of $300.7 million for the nine months ended October 31, 2022 and negative operating cash flow of $103.9 million, down 112.3% from the prior-year period. It may need additional equity or debt financing and cannot be certain such financing will be available on acceptable terms.
UiPath approved a 5% global workforce reduction in June 2022 and an additional 6% reduction on November 10, 2022. Cost-saving and restructuring efforts may be costly and disruptive, with charges greater than forecast and savings lower than forecast.
Success depends on sustaining innovation and automation leadership; competition is intense for engineers experienced in RPA, AI, and machine learning. The company must continue significant R&D investment to maintain competitive advantage.
UiPath acquired Re:infer in July 2022 and continues to evaluate acquisitions. Integration may divert management, increase expenses, expose the company to liabilities, and may not achieve anticipated benefits or cost savings.
Because non-affiliate market value exceeded $700 million as of July 31, 2022, UiPath will be a large accelerated filer as of January 31, 2023 and subject to Section 404(b) auditor attestation and additional executive compensation disclosures. Compliance is expected to increase legal and financial costs and divert management attention.
UiPath has issued a baseline ESG report and is determining emissions baselines and corporate goals. Failure to meet evolving investor expectations or accurately track and report ESG metrics could harm reputation and expose it to enforcement actions or litigation.
SaaS KPIs
All quarters →Dollar-Based Net Retention Rate
ARR
Total customers
Summary, forecast, risks and KPIs are extracted from UiPath, Inc.'s SEC filings for Q3 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.