UiPath Q2 Earnings Strong, Raises Guidance

UiPath, Inc. (PATH) reported double-digit revenue growth for the quarter ended July 31, 2026, alongside GAAP profitability, and raised fiscal 2027 revenue guidance in a Sept. 3 press release, citing increased demand for AI-driven automation.

Results and Profitability

UiPath’s Form 8-K filed Sept. 3 showed revenue of $410.3 million for Q2 fiscal 2027, a 13% year-over-year increase. Management said revenue would be about 16% higher on a currency-normalized basis after an $8 million foreign-exchange headwind.

Annualized recurring revenue (ARR) reached $1.938 billion as of July 31, up 12% year over year. Net new ARR for the quarter was $37 million, compared with $31 million in the prior quarter.

The company serves roughly 10,350 customers, including 2,666 with $100,000 or more of ARR, up 10% year over year, and 387 with $1 million or more of ARR, up 21%. Dollar-based gross retention was 97%, and dollar-based net retention was 109%.

The filing showed GAAP operating income of $31.6 million and GAAP net income of $36.1 million. Non-GAAP operating income was $89 million, equal to a 22% non-GAAP operating margin, an expansion of about 400 basis points year over year. Non-GAAP net income was $80.9 million, with adjusted non-GAAP earnings per share of $0.15, marking the company’s fourth consecutive GAAP-profitable quarter.

UiPath reported a GAAP gross margin of 80%, a non-GAAP gross margin of 82%, and a software gross margin near 90%. Net cash provided by operations was $31 million, and non-GAAP adjusted free cash flow was $31 million, down from $45 million a year earlier mainly due to the timing of tax payments.

Stock-based compensation expense totaled $45 million, a 42% decline year over year and about 11% of revenue. Operating expenses also fell, with sales and marketing at $164.6 million (down from $166.3 million), research and development at $83.4 million (down from $98.3 million), and general and administrative at $50.1 million (down from $52.9 million).

Guidance, AI Adoption, and Capital

In its Sept. 3 press release, UiPath raised fiscal 2027 revenue guidance to a range of $1.789 billion to $1.794 billion and set full-year ARR guidance at $2.065 billion to $2.070 billion. The company also projected roughly $445 million of non-GAAP operating income for the year.

Management highlighted AI and orchestration as key demand drivers, noting that 18 of its 20 largest deals included AI components. Cloud ARR exceeded $1.3 billion, growing more than 19% year over year. The company cited early productivity gains of nearly 60% in certain coding-agent use cases and described demand as stable with growing momentum. CEO Daniel Dines said, “I am pleased with our second quarter results, demonstrating disciplined execution and the growing momentum across our platform.”

UiPath held $1.405 billion in cash, cash equivalents, and marketable securities as of July 31 and reported no debt. It repurchased roughly 2.4 million shares at an average price of $9.63 during the period.

Total remaining performance obligations (RPO) stood at $1.378 billion, up about 14% year over year (16% on a currency-normalized basis). Current RPO, expected to be recognized within 12 months, totaled $901 million, also up 14%.

Some analysts revised forecasts after the results, with a subset issuing downgrades citing valuation concerns and noting that UiPath’s growth of roughly 12% trails some faster-growing AI software peers despite improving margins and cash generation. This tension between stronger profitability and comparative growth may influence investor debate over valuation.