Summary
UiPath closed fiscal 2023 with fourth-quarter revenue of $308.5 million, up 6.5% from the prior-year quarter. ARR reached $1.204 billion, up 30% year over year, with net new ARR of $93.8 million. The dollar-based net retention rate was 123%, down from 145% a year earlier. GAAP gross margin slipped to 84.5% from 85.8%. The company narrowed its quarterly operating loss to $45.1 million from $50.9 million and its net loss to $27.7 million from $63.1 million. Operating margin improved to negative 14.6% from negative 17.6%. Operating cash flow swung to $94.0 million from negative $6.0 million. Capital expenditures fell 30.3% to $2.2 million.
For the full fiscal year, revenue rose 18.6% to $1.06 billion. Gross margin improved to 83.0% from 81.1%. The full-year operating loss narrowed to $348.3 million from $500.9 million, and the net loss narrowed to $328.4 million from $525.6 million. Diluted loss per share improved to $0.60 from $1.16. Operating margin for the year was negative 32.9%, up from negative 56.1%. Net cash used in operations was $10.0 million, better than the $55.0 million used in the prior year. Capital expenditures climbed 168.2% to $23.8 million. Deferred revenue grew 42.1% to $520.0 million. Remaining performance obligations rose 30.9% to $894.0 million.
Operating metrics showed a mix of expansion and slower net retention. ARR at January 31, 2023 was $1,203.8 million, up from $925.3 million a year earlier. Management said about 25% of ARR growth came from new customers and 75% from existing customers. Customers with ARR of at least $1 million totaled 229, up from 158, and represented 43% of fiscal year revenue. Customers with ARR of at least $100,000 reached 1,785, up from 1,493, and represented 81% of fiscal year revenue. Incremental ARR was $278.6 million for the full year, compared with $344.8 million in the prior year. UiPath was named a leader in the Forrester Wave for robotic process automation in Q1 2023, receiving the highest score in current offering, strategy, and market presence. The company announced partnerships with Orica and Neostella, and expanded its test automation integrations to more than 40 application lifecycle management tools. It also reported a customer satisfaction rating of 94%.
Management took restructuring actions to manage costs. The board approved a 5% workforce reduction in June 2022 and an additional 6% reduction in November 2022. These actions aim to simplify the go-to-market approach and improve operational efficiency. Guidance for the first quarter of fiscal 2024 points to a top-line range of $270 million to $272 million, ARR of $1.245 billion to $1.250 billion as of April 30, 2023, and non-GAAP operating income of approximately $5 million. For the full fiscal year 2024, the company expects a top-line range of $1.253 billion to $1.258 billion, ARR of $1.425 billion to $1.430 billion as of January 31, 2024, and non-GAAP operating income of approximately $120 million. The full-year outlook implies a 350 basis point increase in non-GAAP operating margin and positive non-GAAP adjusted free cash flow.
The quarter showed progress on profitability and cash generation, but ARR growth decelerated from prior levels and net retention fell. UiPath faces macroeconomic headwinds, foreign exchange volatility, inflation, and geopolitical turmoil from the war in Ukraine. The company also cited liquidity concerns in the financial services industry following the closure of Silicon Valley Bank. It had a banking relationship with Silicon Valley Bank but did not experience any adverse impact to liquidity or business operations. Other risks include competition, reliance on existing customers to renew licenses, challenges from rapid growth, and the need to manage cloud infrastructure costs as SaaS products become a larger share of revenue. UiPath expects sales and marketing expenses to decrease as a percentage of revenue over the longer term, while research and development and professional services costs are expected to increase in absolute dollars. The company enters fiscal 2024 with a broad platform, a growing base of large customers, and a guidance range that targets continued margin expansion. The macro environment and currency swings remain the biggest swing factors for near-term results.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $308.5M | $262.7M | +17.4% | $289.7M | +6.5% |
| Gross profit | $260.9M | $220.0M | +18.6% | $248.5M | +5.0% |
| Gross margin | 84.5% | 83.7% | +0.8 pp | 85.8% | -1.3 pp |
| Research & development | $81.9M | $67.3M | +21.6% | $64.4M | +27.1% |
| Sales & marketing | $173.8M | $156.5M | +11.1% | $174.8M | -0.6% |
| General & administrative | $50.4M | $63.2M | -20.2% | $60.2M | -16.4% |
| Total operating expenses | $306.0M | $287.0M | +6.6% | $299.4M | +2.2% |
| Operating income (loss) | -$45.1M | -$67.0M | +32.6% | -$50.9M | +11.3% |
| Operating margin | -14.6% | -25.5% | +10.9 pp | -17.6% | +2.9 pp |
| Net income (loss) | -$27.7M | -$57.7M | +52.0% | -$63.1M | +56.1% |
| Net margin | -9.0% | -22.0% | +13.0 pp | -21.8% | +12.8 pp |
| Diluted EPS | -$0.05 | -$0.10 | +$0.05 | -$0.14 | +$0.09 |
| Customers | 10,100 | 10,600 | -4.7% | — | — |
Risks
Unfavorable macroeconomic conditions, including inflation, geopolitical disruption from Russia's military action in Ukraine, bank failures, and reduced customer software spending, could limit UiPath's growth. MD&A notes macroeconomic factors have affected the company and its customers and that liquidity concerns in financial services may affect results.
Generative AI and rapidly evolving AI technologies may reduce demand if customers feel UiPath's technology is not developing apace, and competitors may respond more quickly to newly emerging generative AI. The filing also notes AI and ML systems are an area of developing laws and regulations.
The automation market is increasingly competitive, with RPA vendors, low-code, iPaaS, process mining, enterprise platform vendors, native cloud providers, and open source alternatives. Pricing pressures and competitors' greater resources may harm UiPath's ability to maintain market acceptance.
UiPath derives a substantial portion of revenue and ARR from its top 10% of customers. As of January 31, 2023, customers with ARR of $1.0 million or more numbered 229 and accounted for approximately 43% of fiscal year revenue, while customers with ARR of $100 thousand or more numbered 1,785 and accounted for approximately 81%.
UiPath's recent rapid growth may not be indicative of future growth. ARR was $1,203.8 million at January 31, 2023, an increase of 30% year over year, and revenue increased 19% year over year, but dollar-based net retention rate was 123% as of January 31, 2023 compared with 145% as of January 31, 2022.
UiPath relies on channel partners and strategic alliances for a substantial amount of revenue, but agreements are generally non-exclusive and partners may favor competitors. Strategic alliances can include non-cancelable commitments that may pressure gross margins if partner products or services cannot be deployed.
Enterprise sales involve longer sales cycles, complex customer requirements, substantial upfront costs, and less predictability. Large customers often deploy on a limited basis but demand configuration, integration, and pricing negotiations, increasing upfront investment without guaranteed broad deployment.
UiPath depends on key executives and employees, and has recently adopted a co-CEO structure and streamlined senior management. Executive turnover, including the recent departure of Chris Weber, and stock price volatility that affects equity award value could impair recruiting and retention.
UiPath completed restructuring actions in fiscal 2023, including an approximately 5% workforce reduction approved in June 2022 and an additional 6% reduction approved in November 2022. Cost-saving initiatives may be costly or disruptive, and estimated savings may be lower than forecasted.
UiPath outsources substantially all cloud infrastructure to third-party providers and has entered non-cancelable multi-year capacity commitments. In fiscal 2023 it committed $138.1 million for cloud infrastructure services and $82.5 million in service credits toward professional services from third-party alliance partners.
Adverse developments in the financial services industry could affect UiPath. MD&A notes it had a banking relationship with Silicon Valley Bank at its closure on March 10, 2023 but did not experience an adverse impact, while uncertainty remains over broader liquidity concerns.
UiPath is subject to stringent and changing data privacy and security obligations, and use and development of AI and machine learning systems is an area of developing laws, rules, and regulations. Actual or perceived noncompliance could lead to regulatory investigations, litigation, fines, and loss of customers.
SaaS KPIs
All quarters →Dollar-Based Net Retention Rate
ARR
Net New ARR
Non-GAAP Adjusted Free Cash Flow
Non-GAAP Operating Margin
Summary, forecast, risks and KPIs are extracted from UiPath, Inc.'s SEC filings for Q4 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.