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UiPath, Inc. (PATH)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 beat across key metrics: revenue $355M (+9% YoY), ARR $1.607B (+17% YoY), and non-GAAP operating income $50M; management said results exceeded the high end of guidance across all key metrics .
  • Non-GAAP diluted EPS was $0.11; GAAP gross margin 82% and non-GAAP gross margin 85%; non-GAAP operating margin 14% aided by restructuring and efficiency initiatives .
  • Q4 FY2025 guidance initiated: revenue $422–$427M, ARR $1.669–$1.674B, non-GAAP operating income ≈$100M; FY2025 adjusted FCF maintained at ≈$325M .
  • Strategic catalysts: Agentic Automation roadmap (Agent Builder, Agentic Orchestration) and SAP SolEx integration; largest deal of the quarter tied to Autopilot for Everyone agentic use case .
  • Demand backdrop stable; duration recovered to “somewhat normal” versus earlier in the year; continued best-in-class dollar-based gross retention (97%) and net retention (113%) .

What Went Well and What Went Wrong

What Went Well

  • Exceeded high end of guidance across all key financial metrics; ARR up 17% to $1.607B with net new ARR of $56M; revenue $355M; non-GAAP operating income $50M .
  • Agentic Automation momentum: over 1,000 organizations registered for private preview; largest deal in quarter tied to Autopilot for Everyone; management positioning UiPath as “Switzerland of agents” orchestrating own and third-party agents plus robots and humans .
  • SAP partnership deepening via SolEx integration; examples of new logos and expansions influenced by SAP channel; agentic test automation gaining traction (B. Braun, test suite momentum) .

What Went Wrong

  • YoY revenue growth only 9% and GAAP operating loss of $(43)M (includes $87M SBC); company still managing macro variability and earlier-year execution issues (comp plan changes, multiyear deal scrutiny) .
  • Dollar-based net retention decelerated to 113% from 115% (Q2) and 118% (Q1), indicating slower expansion vs prior quarters .
  • Q&A highlighted investor concerns around monetization and cadence for agentic initiatives, cloud mix disclosure cadence, and the need for continued sales enablement and go-to-market streamlining to sustain margin and ARR improvements .

Financial Results

Income Statement and Margins vs Prior Quarters

MetricQ1 FY2025Q2 FY2025Q3 FY2025
Revenue ($USD Millions)$335.112 $316.253 $354.653
GAAP Gross Margin (%)83% 80% 82%
Non-GAAP Gross Margin (%)86% 83% 85%
GAAP Net Loss Per Share ($)$(0.05) $(0.15) $(0.02)
Non-GAAP Operating Margin (%)15% 2% 14%
Non-GAAP Diluted EPS ($)$0.13 $0.04 $0.11

Revenue Breakdown (Licenses vs Subscription vs Professional Services)

Revenue Component ($USD Millions)Q1 FY2025Q2 FY2025Q3 FY2025
Licenses$140.128 $112.251 $137.174
Subscription Services$185.131 $194.673 $206.922
Professional Services and Other$9.853 $9.329 $10.557
Total Revenue$335.112 $316.253 $354.653

KPIs and Customer Metrics

KPIQ1 FY2025Q2 FY2025Q3 FY2025
ARR ($USD Billions)$1.508 $1.551 $1.607
Net New ARR ($USD Millions)$44 $43 $56
Dollar-Based Net Retention (%)118% 115% 113%
Dollar-Based Gross Retention (%)98% 97% 97%
RPO ($USD Billions)$1.101 $1.081 $1.128
Current RPO ($USD Millions)$683 $686 $718
Customers (Approx.)~10,800 ~10,810 ~10,790
Customers ≥$100K ARR2,092 2,163 2,235
Customers ≥$1M ARR288 293 302

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q4 FY2025N/A$422–$427 Initiated
ARR ($USD Billions)Q4 FY2025 (as of Jan 31, 2025)N/A$1.669–$1.674 Initiated
Non-GAAP Operating Income ($USD Millions)Q4 FY2025N/A≈$100 Initiated
Basic Share Count (Millions)Q4 FY2025N/A≈551 Initiated
Adjusted Free Cash Flow ($USD Millions)FY2025≈$325 (raised in Q2) ≈$325 (maintained) Maintained
Gross Margin (%)FY2025≈85 ≈85 Maintained
Q3 Revenue vs Q3 Guidance ($USD Millions)Q3 FY2025$345–$350 Actual: $354.653 Beat
Q3 ARR vs Q3 Guidance ($USD Billions)Q3 FY2025$1.600–$1.605 Actual: $1.607 Beat
Q3 Non-GAAP Op Income vs Guidance ($USD Millions)Q3 FY2025≈$27 Actual: $49.721 Beat

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 and Q2)Current Period (Q3)Trend
Agentic Automation (agents + robots + orchestration)Introduced vision linking AI and automation; Autopilot GA planned; clarified agentic vs RPA distinction Major focus; Agent Builder private preview with >1,000 orgs; “Switzerland of agents”; largest deal tied to Autopilot for Everyone; orchestration public preview planned Q1 FY2026 Strengthening narrative; commercialization ramp
SAP Partnership (SolEx)Deepening SAP relationship; Deloitte Ascend integration SAP Build Process Automation SolEx integration; driving new logos and expansions; rev rec under normal ASC 606 Building pipeline and credibility
Go-to-Market Restructuring & ExecutionIdentified comp plan/execution issues; workforce streamlining; COO role expanded Margin beat attributed to restructuring and efficiency; sales enablement prioritized; duration recovered to “somewhat normal” Improving execution and discipline
Macro/Demand & DurationVariable macro; multiyear deal scrutiny; prudent guidance Demand stable; duration recovered; guidance provided for Q4 with seasonality commentary Stabilizing backdrop
Public Sector/FedRAMP & CloudFedRAMP achieved; cloud ARR >$850M (+65%) Federal momentum; majority deployments hybrid; cloud adoption maturing Continued adoption
Test Automation & IDPLargest Test Suite deal closed; IDP highlighted Agentic testing momentum; B. Braun adopting Test Suite; IDP expansion stories Growing opportunity

Management Commentary

  • “Our third quarter results exceeded the high end of our guidance across all key financial metrics” — Daniel Dines, CEO .
  • “We aim to be a Switzerland of agents… orchestrate our own agents, other companies’ agents, our robots, and bring humans in the loop for increased security and governance” — Daniel Dines .
  • “Third quarter non-GAAP operating margin of 14%… benefited from our previously announced restructuring, combined with our continued efforts to drive further operational efficiencies” — Ashim Gupta, CFO/COO .
  • “We are planning a public preview of Agentic orchestration in the first quarter of fiscal 2026” — Daniel Dines .
  • “Duration… recovered back to somewhat normal from earlier this year” — Ashim Gupta .

Q&A Highlights

  • Positioning vs large platform agents: UiPath to orchestrate third-party agents and robots; differentiation via governance and cross-app actions .
  • Mechanics of maintenance/support revenue strength: benefited from cumulative net new ARR and duration recovery; largest customers growing and extending contracts .
  • Guidance clarity: net new ARR dollars expected to stabilize in FY2026; Q4 guidance initiated; noted typical seasonality from Q4 to Q1 in net new ARR .
  • SAP SolEx impact and rev rec: early innings but pipeline building; revenue recognition follows normal ASC 606 policies .
  • Deployment mix: majority hybrid; cloud becoming more attractive as capabilities launch cloud-first .

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 FY2025 revenue and EPS was unavailable at time of query; as a result, comparison to consensus cannot be provided at this time. The company stated it exceeded the high end of its own guidance across key metrics .
  • We will update estimate comparisons when S&P Global data becomes available.

Key Takeaways for Investors

  • Improving execution: two consecutive quarters of beats vs guidance; Q3 non-GAAP operating margin rebounded to 14% vs 2% in Q2, aided by restructuring and spend discipline .
  • Growth durability signals: ARR +17% with net new ARR acceleration to $56M; retention metrics remain best-in-class, though DBNRR moderated to 113% .
  • Strategic product catalyst: Agentic Automation (Agent Builder and Orchestration) and Autopilot for Everyone are resonating with enterprise customers; largest deal tied to agentic use case .
  • Partner leverage: SAP SolEx and Deloitte integrations broaden reach and drive new logos/expansions; credibility and pipeline likely to build through FY2026 .
  • Q4 setup: Guidance calls for revenue $422–$427M and non-GAAP operating income ≈$100M; typical seasonality flagged into Q1 FY2026 for net new ARR .
  • Capital allocation: ongoing buybacks (13.8M shares at $11.81 avg during quarter); strong balance sheet with $1.6B cash and no debt .
  • Trading lens: Narrative is shifting to commercialization of agents and orchestration plus improving duration/execution—watch for Q4 delivery vs guide and early agentic wins as potential stock catalysts .