Executive Summary
UiPath reported a solid QQ2 2025 quarter with meaningful progress on ARR growth, cloud adoption, and AI-enabled product momentum, signaling a durable shift toward a cloud-first, AI-powered automation platform. Revenue rose 10% YoY to $316.3 million, while ARR reached $1.551 billionâup 19% year over yearâdriven by net new ARR of $43 million. Cloud ARR exceeded $850 million, climbing more than 65% YoY, underscoring the companyâs successful push toward cloud-based deployments and hybrid SaaS models. Despite a negative GAAP bottom line in the quarter, the company posted a positive nonâGAAP operating income of $6 million (2% nonâGAAP operating margin) and non-GAAP adjusted free cash flow of $49 million, with a robust balance sheet including roughly $940 million in cash and no debt.
Management attributes the improved execution to organizational realignment and a sharper customer-centric GTM approach, including regionalizing functions, tightening focus on highâROI growth initiatives, and accelerating the integration of AI across the platform (IDP, Autopilot, and process orchestration). Notable wins and initiatives include a large test-suite deal with a leading technology company, SAP/Deloitte partnerships expanding automation programs, and FedRAMP authorization advancing UiPathâs publicâsector pipeline. Management increased full-year guidance across key metrics, reflecting confidence that AI-enabled automation and cloud adoption will sustain growth and improve margins over time.
Looking forward, Q3 revenue guidance is $345â$350 million, with ARR of $1.60â$1.605 billion and non-GAAP operating income of about $27 million. For FY2025, UiPath now targets revenue of $1.420â$1.425 billion, ARR of $1.665â$1.670 billion, and non-GAAP adjusted free cash flow of approximately $325 million, with non-GAAP operating income around $170 million. While the growth trajectory remains challenged by macro variability and nearâterm profitability pressure, the companyâs cloud-first strategy, expanding AI capabilities, and strategic partnerships provide a clear path to longerâterm margin expansion and durable ARR growth.
Key Performance Indicators
QoQ: -108.93% | YoY:-33.21%
QoQ: -199.61% | YoY:-42.64%
QoQ: -197.62% | YoY:-36.36%
Key Insights
Revenue: $316.3M, +10.1% YoY; Gross margin: 83% (software gross margin 87%); Operating income: -$103.3M; EBITDA: -$98.8M; Net income: -$86.1M; EPS: -$0.15; Non-GAAP operating income: $6.0M; Non-GAAP margin: 2%; ARR: $1.551B, +19% YoY; Cloud ARR: >$850M, +>65% YoY; RPO: Remaining $1.081B, +19% YoY; Current RPO: $686M; Customers: ~10,810; Customers with ARR â„$100k: 2,163; â„$1M: 293; NRR: 115%; Gross retention: 97%; Operating cash flow: $46.4M; Free cash flow: $44.96M; Net cash (debt): ap...
Financial Highlights
Revenue: $316.3M, +10.1% YoY; Gross margin: 83% (software gross margin 87%); Operating income: -$103.3M; EBITDA: -$98.8M; Net income: -$86.1M; EPS: -$0.15; Non-GAAP operating income: $6.0M; Non-GAAP margin: 2%; ARR: $1.551B, +19% YoY; Cloud ARR: >$850M, +>65% YoY; RPO: Remaining $1.081B, +19% YoY; Current RPO: $686M; Customers: ~10,810; Customers with ARR â„$100k: 2,163; â„$1M: 293; NRR: 115%; Gross retention: 97%; Operating cash flow: $46.4M; Free cash flow: $44.96M; Net cash (debt): approximately -$856.7M (net cash position); Cash: $939.8M; Debt: $82.6M; Shares (weighted avg): 568.0M; Guidance (QoQ/YoY ranges provided in note): Q3 revenue $345â$350M; FY25 revenue $1.420â$1.425B; FY25 ARR $1.665â$1.670B; Non-GAAP OI: ~$27M in Q3; FY25 non-GAAP OI: ~$170M; FY25 non-GAAP FCF: ~$325M; Major oneâoffs: $23M annual savings from a large test-suite deployment; Share repurchase expansion approved by the Board.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
316.25M |
10.07% |
-5.63% |
| Gross Profit |
252.93M |
6.13% |
-9.41% |
| Operating Income |
-103.35M |
-33.21% |
-108.93% |
| Net Income |
-86.10M |
-42.64% |
-199.61% |
| EPS |
-0.15 |
-36.36% |
-197.62% |
Key Financial Ratios
operatingProfitMargin
-32.7%
operatingCashFlowPerShare
$0.08
freeCashFlowPerShare
$0.08
priceEarningsRatio
-20.07
Management Commentary
- Execution and guidance: Daniel Dines stated that QQ2 exceeded the high end of guidance across key metrics and highlighted ARR of $1.551B (+19%) and cloud ARR >$850M (+65%), underscoring acceleration in AI-powered automation adoption. Quote: âARR of $1.551 billion, an increase of 19%, driven by net new ARR of $43 million. Our cloud-first approach is driving adoption across our customer base and we ended the quarter with more than $850 million in cloud ARR, which includes both hybrid and SaaS, an increase of more than 65%.â
- AI and product momentum: UiPath emphasized GenAI integrations (IDP, Autopilot) and the upcoming Autopilot for everyone, with early adopter case studies illustrating productivity gains. Quote: âAutopilot for testers⊠reduce manual testing by up to 50%,â and confirmation that âAutopilot for everyoneâ will launch in general availability this fall.
- Strategic partnerships and customer wins: The company highlighted SAP and Deloitte collaborations, expanded SAP projects (e.g., Gold Peak Technology and others), and the Deloitte Ascend platform integration to accelerate SAP project delivery, signaling a strong GTM ecosystem. Additional color on customer outcomes included Health Service Executive, processing >6 million transactions and EUR28M in savings, and a large test-suite deployment with a top technology company forecasting ~$23M annual savings.
- Public sector and regulatory progress: UiPath achieved FedRAMP authorization, positioning it for growth in the public sector; Daniel Dines called public sector a fastâgrowing area and noted the FedRAMP milestone as a meaningful accelerator.
- Operational discipline: The leadership highlighted a restructuring program to improve efficiency and prioritize customer outcomes, alongside a renewed focus on regionally tailored customer success. Ashim Gupta outlined the ongoing drive to convert enabling functions into customer-centric support and to streamline processes, with no incremental disruption to growth both in execution and in guidance.
"ARR of $1.551 billion, an increase of 19%, driven by net new ARR of $43 million. Our cloud-first approach is driving adoption across our customer base and we ended the quarter with more than $850 million in cloud ARR, which includes both hybrid and SaaS, an increase of more than 65%."
â Daniel Dines
"Autopilot for testers⊠reduce manual testing by up to 50%. And we are excited for the next phase of Autopilot, Autopilot for everyone, which we expect to launch into general availability this fall."
â Daniel Dines
Forward Guidance
UiPath issued updated guidance reflecting improved execution and disciplined cost management. Near-term outlook remains sensitive to macro variability, but the company is optimistic about AI-enabled growth and cloud adoption driving ARR expansion. Key guidance points: Q3 revenue of $345â$350M; ARR of $1.60â$1.605B; Q3 non-GAAP operating income about $27M; FY25 revenue $1.420â$1.425B; FY25 ARR $1.665â$1.670B; FY25 non-GAAP adjusted free cash flow about $325M; FY25 non-GAAP operating income about $170M. Managementâs cadence suggests a deliberate path toward profitability via ongoing structural efficiencies and growth investments in high-ROI AI capabilities. Achievability hinges on: (1) continued cloud-driven expansion and cross-sell among existing customers; (2) successful execution of the department-led selling model and GTM realignment; (3) traction of Autopilot and IDP in large enterprise deals; (4) macro stability.
Key monitoring factors for investors: cloud ARR growth pace vs. total ARR, net dollar expansion (NRR) trends, uptime and test-suite adoption, pipeline quality in the public sector, and the pace of margin improvement toward the long-term >20% GAAP/Non-GAAP operating margin target. The cost structure evolution and potential buffer outcomes from restructuring costs should be watched for any incremental impact on margins in subsequent quarters.