Q3 2025 Summary
Published Feb 25, 2025, 2:22 AM UTC- Strong adoption of UiPath's Agentic Automation products is leading to larger deals and higher average selling prices. The company's largest deal in the quarter was an Agentic deal, indicating significant market interest and revenue potential. Daniel Dines stated, "I'm really positive that the ASP can be increased by... agents." Additionally, customers are increasingly adopting AI products like IDP Autopilot, contributing to net new ARR growth.
- Improved operational efficiency and execution have led to strong margin performance and confidence in future profitability. Ashim Gupta highlighted that the company is "really pleased with the progress we've made on the execution front" and that they "feel very good about the trajectory and profitability for the company." The company expects net new ARR dollars to stabilize, reflecting improved execution and positive impact of changes made by management.
- Strategic partnerships, such as the SolEx deal with SAP, significantly expand UiPath's market reach and credibility with enterprise customers. Daniel Dines mentioned, "We are now really an integral part of the SAP solution. And our reach is much bigger." The partnership is creating growth opportunities, and their Test Suite product is gaining momentum, positioning UiPath as a thought leader in automation testing, including Agentic testing with Gen AI.
- Persistent execution challenges impacting growth: UiPath acknowledged execution misses in the first quarter and is still implementing changes to improve execution, indicating ongoing operational challenges that may hinder growth prospects.
- Stable demand environment with no signs of improvement: The company stated that the demand environment remains stable with no signs of degradation or improvement, which could limit future revenue growth as macroeconomic factors are not providing tailwinds.
- Uncertainty in key markets like the U.S. federal sector: UiPath mentioned uncertainty due to the election cycle affecting federal customers, which could impact sales and expansion in this significant market segment.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +8.8% (from $325.9M in Q3 2024 to $354.65M in Q3 2025) | **The revenue increase is largely driven by robust growth in subscription services and strong regional performance—especially in EMEA—coupled with an evolving revenue mix toward recurring revenue, building on gains from prior periods. ** |
Subscription Services | +23.6% (from $167.5M to $206.92M) | **The significant uplift in subscription revenue reflects increased customer adoption, enhanced cloud offerings, and stronger sales initiatives that leveraged previous momentum, indicating a successful transition to recurring revenue models. ** |
Licenses | -7.4% (from $148.1M to $137.17M) | **The decline in licenses revenue is attributable to a strategic shift away from traditional license models toward Flex Offerings, reducing upfront license recognition compared to the prior period as the business emphasizes subscription-based models. ** |
EMEA Revenue | +20.5% (from $93.8M in Q3 2024 to $113.0M in Q3 2025) | **This strong performance in the EMEA region, outperforming other regions, is likely due to aggressive regional expansion, targeted industry vertical initiatives, and improved go‑to‑market execution building on earlier momentum. ** |
APAC Revenue | +8.5% (to $62.8M in Q3 2025) | **Moderate growth in APAC suggests steady customer adoption and localized sales efforts; however, the lower percentage increase compared to EMEA indicates varied regional dynamics and market maturity relative to previous quarters. ** |
Americas Revenue | +2.6% (to $178.8M in Q3 2025) | **A modest increase in the Americas reflects market saturation and competitive pressures, compounded by a revenue mix shift from licenses to subscriptions, which tempered growth relative to stronger regions in the previous period. ** |
Operating Income | Improved by ~22% (loss narrowed from –$55.82M to –$43.36M) | **The improvement in operating income is driven by cost management, restructuring, and efficiency gains that have moderated expenses relative to revenue, continuing the trend from earlier periods but still falling short of profitability. ** |
Net Income | Loss narrowed from –$31.54M to –$10.66M | **A substantial reduction in net loss results from improved operational performance, better cost controls, and a beneficial revenue mix that built on previous period improvements, signaling progress toward profitability. ** |
EPS | Improved from –$0.06 to –$0.02 | **EPS improvement mirrors the net income gains and is further supported by share repurchase activity, which reduces the number of shares outstanding—a positive trend building on past operational efficiencies. ** |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q3 2025 | $345 million to $350 million | no current guidance | no current guidance |
Annualized Recurring Revenue (ARR) | Q3 2025 | $1.6 billion to $1.605 billion | no current guidance | no current guidance |
Non-GAAP Operating Income | Q3 2025 | Approximately $27 million | no current guidance | no current guidance |
Basic Share Count | Q3 2025 | Approximately 552 million shares | no current guidance | no current guidance |
Revenue | FY 2025 | $1.420 billion to $1.425 billion | no current guidance | no current guidance |
Annualized Recurring Revenue (ARR) | FY 2025 | $1.665 billion to $1.670 billion | no current guidance | no current guidance |
Non-GAAP Operating Income | FY 2025 | Approximately $170 million | no current guidance | no current guidance |
Non-GAAP Adjusted Free Cash Flow | FY 2025 | Approximately $325 million | no current guidance | no current guidance |
Revenue | Q4 2025 | no prior guidance | $422 million to $427 million | no prior guidance |
Annual Recurring Revenue (ARR) | Q4 2025 | no prior guidance | $1.669 billion to $1.674 billion | no prior guidance |
Non-GAAP Operating Income | Q4 2025 | no prior guidance | Approximately $100 million | no prior guidance |
Basic Share Count | Q4 2025 | no prior guidance | Approximately 551 million shares | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Execution and Operational Efficiency | In Q2 2025, Q1 2025, and Q4 2024 calls, UiPath detailed improved execution through initiatives in cost discipline, streamlined go‐to‐market operations, and efforts to overcome challenges (e.g., contract execution issues, sales compensation misalignments, and leadership transitions). | In Q3 2025, the focus is on further operational discipline with improvements in go-to-market execution, the creation of a new customer-centricity office, and higher internal energy around Agentic Automation, while still noting stable demand and the need for ongoing adjustments. | Positive improvement with a sharper customer-centric and streamlined approach; persistent challenges remain but are increasingly managed. |
Cloud Adoption and ARR Growth | Prior earnings calls (Q2 2025, Q1 2025, Q4 2024) emphasized a cloud-first strategy, significant ARR growth rates, and hybrid as well as SaaS offerings driving revenue expansion. | Q3 2025 continues to report healthy ARR growth (17% YoY increase driven by $56 million net new ARR) and an increasing trend in cloud adoption as capabilities mature, while also noting a hybrid installation approach. | Consistent momentum in ARR and cloud adoption with an evolving emphasis on hybrid-cloud strategy. |
Strategic Partnerships | Earlier periods highlighted a broad partnership portfolio including major alliances with SAP, Microsoft, and Google Cloud – with specific examples of joint deals and integrations driving customer wins. | In Q3 2025, the narrative centers almost exclusively on the partnership with SAP through the SAP Build Process Automation solution and its commercial success, with no explicit mention of Microsoft or Google Cloud. | Shifted focus towards SAP-centric integrations; reduced emphasis on Microsoft and Google Cloud partnerships in the current period. |
AI and Automation Investments | Across Q1 2025 and Q2 2025, there was extensive discussion about investments in Agentic Automation, IDP/Autopilot, and generative AI integration—with explicit mentions of Microsoft Copilot in Q1 complementing broader AI strategies. | Q3 2025 continues a strong focus on Agentic Automation and the rollout of Autopilot solutions—with detailed product roadmaps and engagement from large customers—but does not mention Microsoft Copilot. | Heightened focus on agentic and autopilot capabilities with ongoing generative AI integration, while omitting previous references to Microsoft Copilot. |
Macroeconomic and Market Uncertainty | Q1 and Q2 2025 earnings calls discussed a variable global macroeconomic environment impacting deal execution and sales cycles, with heightened caution over large multiyear deals and mid-market customer behavior. Q4 2024 also noted the variable macro environment alongside strong execution. | In Q3 2025, executives describe the macro environment as more stable than before while still variable, and they emphasize stable demand along with readiness to benefit from any positive tailwinds. | A cautiously stable outlook emerges, with acknowledgment of external variability but greater confidence in navigating the environment. |
Profitability and Operating Margin Guidance | Previous calls (especially Q1 and Q4 2024) provided evolving guidance—from near breakeven in Q1 to strong non‐GAAP operating margins and free cash flow targets, reflecting a steady push for higher profitability and efficient cost management. | In Q3 2025, UiPath reported a non‐GAAP operating margin of 14% and provided optimistic forward guidance (e.g., $100 million non‐GAAP operating income in Q4), reaffirming a disciplined, efficiency-focused strategy. | Steady improvement in margin guidance, with optimistic near-term profitability targets reinforcing operational discipline. |
Public Sector Engagement and FedRAMP Authorization | Q1 and Q2 2025 earnings calls featured robust updates on public sector engagement—with events such as “AI at Work Public Sector,” FedRAMP authorization achieved, and detailed customer deals—emphasizing growth in government business. Q4 2024 also reflected strong public sector wins. | In Q3 2025, while there is general mention of government interest (e.g., references to notable government customers and innovation in functions like the IRS), explicit references to FedRAMP authorization or dedicated public sector initiatives are not provided. | A reduced emphasis on detailed public sector and FedRAMP updates in Q3, contrasting with earlier periods of robust public sector engagement. |
Leadership Changes and Organizational Restructuring | Earlier periods (notably Q1 and Q2 2025) discussed significant leadership transitions (the departure of Rob Enslin, CEO role changes) along with major restructuring initiatives such as regionalizing functions and breaking down silos to enhance agility. | In Q3 2025, the narrative shifts from headline leadership changes to ensuring operational stability through continued streamlining and refined organizational structures, with a focus on improved sales enablement and customer-centric realignment. | Shift from high-profile leadership shifts to stable, post-restructuring operational efficiency and a more mature internal organization. |
Legacy Revenue Dependency and ARR Stabilization Concerns | Earlier calls (particularly in Q1 2025) touched on execution challenges that indirectly affected ARR growth, but there was little explicit focus on legacy revenue dependencies. | In Q3 2025, UiPath explicitly reassures investors about ARR stabilization—citing reliable net new ARR and emphasizing their unique ability to handle both new and legacy systems as part of their strategy. | Emergence of a clearer focus on stabilizing ARR while addressing legacy system integration, representing a new or more emphasized narrative. |
SAP End-of-Support Deadline Opportunity for ERP Migration | In Q4 2024, there was strong emphasis on the opportunity presented by the SAP end-of-support deadline in 2027, along with detailed discussions on leveraging Test Suite for ERP migration. Q2 2025 also referenced deals that capitalized on SAP migration opportunities, while Q1 2025 had only brief mentions. | Q3 2025 does not explicitly mention the SAP end-of-support deadline opportunity, although the SAP partnership continues to be a focus. | Declining explicit emphasis on the SAP deadline opportunity in the current period relative to the strong focus observed in Q4 2024 and earlier references in Q2 2025. |
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Net New ARR Stabilization
Q: What gives confidence net new ARR will stabilize next year?
A: Ashim Gupta stated that improved execution, momentum with Agentic, and better sales pipeline management give them confidence that net new ARR will stabilize next year. They feel good about the progress and the business continues to progress positively. -
Agentic Models Strategy
Q: How will UiPath collaborate with other companies' Agentic models?
A: Daniel Dines explained that UiPath aims to be the "Switzerland of agents," orchestrating their own agents as well as those built by others. Their focus is on creating an Agentic orchestration layer that can call various agents and robots, bringing humans into the loop for increased security and governance. This approach leverages their strength in automating processes that span multiple systems, both modern and legacy. , -
Improving Execution and Go-to-Market Changes
Q: What changes are needed to return to steady execution?
A: Ashim Gupta noted that most streamlining changes are complete. They are now focusing on prioritizing investments where they have the highest return, especially functions closest to customers. They also emphasized sales enablement for Agentic and messaging from their FORWARD conference to drive improved execution. -
Agentic Deals and ASP Impact
Q: Can Agentic deals lead to larger ASPs?
A: Daniel Dines affirmed that Agentic deals can drive larger deals. The largest deal this quarter was an Agentic deal which included "Autopilot for Everyone" and opened up new pricing models, such as pricing per use case. This helps them get closer to the value unlocked for customers and increase average selling prices. -
Customer Interest Post-FORWARD Conference
Q: What feedback did customers give after the FORWARD conference?
A: Daniel Dines described the conference as transformational, with extreme interest in their Agentic offering from customers worldwide. Customers are very interested and are starting proofs of concept quickly. This new messaging is reinvigorating discussions and making it easier to engage C-level executives. -
SolEx Partnership with SAP
Q: What's the progress and impact of the SolEx partnership with SAP?
A: Daniel Dines expressed excitement about the SolEx deal, which makes UiPath an integral part of the SAP solution, increasing their reach and credibility with enterprise customers. They are seeing improvements in pipeline creation influenced by this partnership and are bullish about its potential over the coming years. -
Demand Environment Stability
Q: How has the demand environment changed since last quarter?
A: Daniel Dines stated that the demand environment is stable and continues as seen in the past two quarters, with no signs of degradation or improvement. -
Maintenance and Support Revenue Growth
Q: Why is maintenance and support revenue growing strongly?
A: Ashim Gupta explained that the maintenance line benefits from cumulative net new ARR building and recovery of duration from earlier in the year. Their largest customers are growing and continuing to extend contracts, which helps the maintenance and support revenue stream. -
US Government Market Opportunity
Q: How is the market opportunity with the US Government?
A: Daniel Dines noted they see a great opportunity ahead and are experiencing positive energy and fast innovation. Ashim Gupta added that the federal government responds well to innovation, and they see good momentum with functions like the IRS. Efficiency is a positive sign, and they continue to partner well with the government. -
Customer Renewals and Product Adoption
Q: Any products gaining traction in customer renewals and expansions?
A: Ashim Gupta mentioned continued adoption of growth products like Intelligent Document Processing (IDP) and AI products like Autopilot. The largest deal in the quarter had Agentic elements and included "Autopilot for Everyone." Expansions are happening where their overall platform is well positioned. -
Revenue Recognition for SolEx Deals
Q: How are SolEx deals recognized in revenue?
A: Ashim Gupta clarified that SolEx deals follow their normal 606 accounting practices, with no unique treatment. The portion of software sold through SolEx goes through their normal ARR accounting and revenue recognition policies. -
Hybrid Cloud and Agentic Capabilities
Q: How does deployment model affect leveraging Agentic AI?
A: Daniel Dines explained that their hybrid offering is a differentiator, as many customers still have on-prem systems. Robots deployed on-prem can provide agents secure and precise access to data, giving agents exactly the data they need for informed decisions, which cannot be achieved in any other way. -
Factors Driving Margin Beat
Q: What drove the strong margin beat this quarter?
A: Ashim Gupta attributed the margin beat to the execution and discipline in driving efficiency and the pace of streamlining the company. These results showed in the third quarter, and they feel very good about the trajectory and profitability. -
Duration Recovery
Q: Has contract duration recovered since earlier in the year?
A: Ashim Gupta stated that duration has recovered back to somewhat normal levels from earlier in the year, where there were execution misses in the first quarter. Progress was made as they changed incentive compensation plans and refocused the sales team. -
Ability to Leverage Budget Flush
Q: Do you expect a year-end budget flush and tap into Gen AI budgets?
A: Daniel Dines indicated the demand environment is stable, with no signs of change. Ashim Gupta added that while they don't look for quick wins, their sales team is equipped to take advantage of any opportunities, focusing on long-term sustainable growth. -
Effect of Improved Spending Environment
Q: How would improved spending impact ARR growth?
A: Ashim Gupta mentioned that any positive movements in the market could be advantageous, but it's a variable environment. They're also excited about their position in the Agentic wave, with product innovation and execution providing confidence going forward. -
Cloud Deployment Mix
Q: What's the mix of hybrid cloud and pure SaaS deployments?
A: Ashim Gupta stated they don't routinely provide that information but noted that the majority of installations are on a hybrid basis, using both on-prem and cloud. Their cloud offering is becoming more adopted and attractive as it matures and offers cloud-first capabilities. -
Testing Suite Momentum
Q: How impactful is Test Suite and S/4HANA upgrades?
A: Daniel Dines noted they are seeing tremendous momentum with their Test Suite, not only for SAP migration but also for other large business applications. They are a thought leader in Agentic testing, bringing more Gen AI into testing, aiming to automate even exploratory testing and significantly reduce manual testing.