UiPath, Inc. · Q2 FY2027 call

Customers aren’t choosing between AI and deterministic automation. They’re choosing the best way to achieve an outcome. AI is exceptional at reasoning, but it’s probabilistic and can be expensive at scale. Many enterprise processes don’t need reasoning at every step. They need exactness, the same result every time, securely, reliably, and at the lowest possible cost.

That’s why Ashim will now focus exclusively on his role as Chief Operating Officer. […] With Ashim focusing fully on the operations of the company, we’re making a planned leadership transition in finance, with Hitesh Ramani succeeding him as Chief Financial Officer.

18 of our top 20 deals this quarter included AI, demonstrating how increasingly central AI has become to our largest customer engagements.

Our initial results from our forward deployed engineers are that coding agents reduce effort by nearly 60%. As we build on this, it has transformational impacts on our customers' time to value and overall TCO.

Second quarter revenue grew to $410 million, an increase of 13%. Normalizing for the year-over-year FX headwind of approximately $8 million, revenue grew 16%, this included an incremental $1 million FX headwind since the time of guidance on our first quarter earnings call.

We ended the quarter with approximately $1.3 billion in cloud ARR, which includes both hybrid and SaaS, an increase of more than 19%.

We ended the quarter with approximately 10,350 customers, with attrition continuing to be concentrated among our smallest customers, while customers with more than $30,000 in ARR increased 6% year over year.

Customers with $100,000 or more in ARR increased 10% to 2,666, while customers with $1 million or more in ARR increased 21% to 387.

Our dollar-based gross retention remained best in class at 97%, and our dollar-based net retention rate was 109%, a 2 point increase year-to-date demonstrating stabilization across the business. Adjusting for FX, dollar-based net retention rate was 108%.

Remaining performance obligations increased to $1.378 billion, up 14%. Normalizing for the FX headwind, which was approximately $19 million, RPO grew 16%. […] Current RPO increased to $901 million, up 14%.

And, we expect third quarter basic share count to be approximately 523 million shares.

Revenue in the range of $1.789 billion to $1.794 billion, this includes a $1 million incremental FX headwind since the time of our last guide, and a $20 million year over year FX headwind, inclusive of the $2 million headwind that was realized in the first half of the year, and an expected headwind of $18 million in the second half of the year.

And, finally, we continue to expect fiscal full year 2027 non-GAAP adjusted free cash flow of approximately $425 million and non-GAAP gross margin of approximately 84%.

We ended last year at 106%, so we are up three points already, as we move to that goal. I would say the trajectory is upward in a stable way, which I think is really good versus kind of up and down.

So besides tests, we are seeing increased demand around revenue cycle management and, of course, on financial crimes where we see good pipeline creation, but also office of the CFO is a place where we are traditionally extremely strong, and also we launched recently our solution in financial services for loan originating.

But there is an interesting limitation of AI, which I want to point it to, which is the AI cannot learn on the job. […] In every question you ask AI, you basically have to provide the entire modus operandi of your enterprise.

I think we are still experiencing with different pricing model on our agentic. We introduced recently a transaction-based pricing that it's all-inclusive in our process orchestration of all the necessary calls that one has to do to complete a transaction. I would say that probably we are going more towards outcome-based pricing that would be inclusive of the tokens required to complete a transaction.