Executive Summary
UiPath reported a healthy second quarter of fiscal 2026 (QQ2 2026) with strong top-line momentum and expanding margins driven by disciplined cost management and the early monetization of the AgenTik platform. Revenue reached $362 million, up 14% YoY, while ARR rose 11% to $1.723 billion, supported by $31 million of net new ARR. Importantly, cloud ARR exceeded $1.08 billion, up more than 25%, reflecting accelerating cloud adoption as customers migrate to multi-product, open-architecture automation stacks.
From a profitability perspective, non-GAAP operating income rose to $62 million, or 17% margin, up more than 1,500 basis points YoY, underscoring operating leverage as UiPath reorganizes GTM, scales specialists, and emphasizes value-based selling. Gross margins remained robust at 84% overall (software gross margin 90%), while GAAP operating loss narrowed to $20 million (excluding stock-based compensation of $78 million). The company also demonstrated balance-sheet strength with approximately $1.5 billion in cash and no debt, enabling continued buybacks (8.3 million shares repurchased at $12.10 on the quarter).
Management highlighted that AgenTik and IDP are increasingly contributing to deal sizes and multi-solution opportunities, with 450 customers actively developing agents and almost 1 million agent runs executed since launch. While management cautioned that AgenTik’s top-line contribution in FY2026 is not material, the trajectory implies meaningful upside in FY27 as deployments move from POC/pilot to broader production. The guidance raises for Q3 and FY2026 reflect improved visibility, FX tailwinds, and stronger operating discipline, though management remains mindful of macro volatility and currency movements.
Overall, UiPath’s QQ2 outcomes reinforce a multi‑year thesis: (1) an expanding agentic automation stack that combines orchestration, RPA, and API automation; (2) durable revenue retention with a 108% net retention rate and a 98% gross retention rate; (3) continued cloud migration and higher multi‑solution deals; and (4) a clear path to GAAP profitability as the company scales infrastructure, GTM, and product-led growth initiatives. Investors should monitor AgenTik adoption in the back half of FY2026 and the cadence of ARR growth and free cash flow re-acceleration into FY27.
Key Performance Indicators
QoQ: -14.48% | YoY:81.82%
QoQ: 107.02% | YoY:101.84%
QoQ: 107.30% | YoY:102.00%
Key Insights
• Revenue: $361.7–$362.0 million for QQ2 2026, up 14% YoY; FX normalization added ~$9 million to revenue, implying ~12% revenue growth on a constant FX basis.
• ARR: $1.723 billion, up 11% YoY, with net new ARR of $31 million; FX tailwind ~+$5 million; current RPO $789 million, up 15% YoY; remaining RPO $1.209 billion, up 12% YoY.
• Cloud ARR: >$1.080 billion, up >25% YoY, reflecting accelerated cloud adoption and hybrid/SaaS mix.
• Gross margin: Overall 84%; software gross margi...
Financial Highlights
• Revenue: $361.7–$362.0 million for QQ2 2026, up 14% YoY; FX normalization added ~$9 million to revenue, implying ~12% revenue growth on a constant FX basis.
• ARR: $1.723 billion, up 11% YoY, with net new ARR of $31 million; FX tailwind ~+$5 million; current RPO $789 million, up 15% YoY; remaining RPO $1.209 billion, up 12% YoY.
• Cloud ARR: >$1.080 billion, up >25% YoY, reflecting accelerated cloud adoption and hybrid/SaaS mix.
• Gross margin: Overall 84%; software gross margin 90%; implying high-value software sales mix and healthy gross profitability.
• Operating expenses: $243 million, down 6% YoY, demonstrating ongoing cost discipline.
• Operating income: Non-GAAP operating income of $62 million, margin of 17% (YoY improvement >1,500 bps); GAAP operating loss of $20 million (stock-based compensation $78 million).
• Net income / EPS: Net income $1.584 million; basic EPS $0.003; diluted EPS $0.0029; weighted average shares outstanding ~536–543 million.
• Free cash flow: Non-GAAP free cash flow of $45 million in QQ2; operating cash flow of $41.6 million; cash, cash equivalents, and marketable securities ~$1.5 billion; no debt.
• Capital return: Buyback of 8.3 million shares at an average price of $12.10 in QQ2 2026.
• Guidance (FX-adjusted): Q3 2026 revenue $390–$395 million; ARR $1.771–$1.776 billion; Non-GAAP operating income ≈$70 million; Q3 basic shares ~532 million.
• Full-year FY2026 guidance: Revenue $1.571–$1.576 billion; ARR $1.834–$1.839 billion; Non-GAAP operating income ≈$340 million; Non-GAAP adjusted free cash flow ≈$370 million; Non-GAAP gross margin ≈85%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
361.73M |
14.38% |
1.43% |
| Gross Profit |
297.35M |
17.56% |
1.56% |
| Operating Income |
-18.79M |
81.82% |
-14.48% |
| Net Income |
1.58M |
101.84% |
107.02% |
| EPS |
0.00 |
102.00% |
107.30% |
Management Commentary
Themes from management commentary and Q&A on the earnings call:
- Strategy and product leadership: Daniel Dines emphasized that automation and AI are stronger together, with Maestro unifying agents, robots, and humans, and AgenTik AI capabilities accelerating deal sizes and multi-solution opportunities. Quote: “The future isn't about choosing between agents and automation. It's about combining them.” This underpins UiPath’s multi‑product, open-ecosystem approach.
- AgenTik traction and velocity: Since May launch, ~450 customers actively building agents; almost 1 million agent runs; Maestro has orchestrated over 170,000 process instances; 10,820+ customers with expanding enterprise relationships. This supports a longer-term path to larger ARR per customer and higher cross-sell.
- Customer outcomes and ROI: Case studies cited (Voya Financial, Fortune 15 tech company, healthcare provider) illustrate measurable benefits (e.g., 60% reduction in manual effort and up to 75% faster cycle times in some AP processes) and ROI that validate AgenTik and IDP value propositions.
- GTM and operating discipline: Ashim Gupta highlighted restructuring, closer product-field cadence, and stronger pipeline management; non-GAAP operating margin expansion to 17% with improving profitability through cost control and cloud mix. Quote: “Normalizing for the year-over-year FX tailwind of approximately $9 million, revenue grew 12%.”
- Public sector and macro backdrop: Public sector momentum is improving with recent wins (Navy, Veterans Affairs, Coast Guard), and FX tailwinds modestly aided the quarter; management maintains prudence given macro volatility.
- Outlook and guidance: UiPath raised guidance for Q3 and FY2026 with FX tailwinds and improved GTM execution baked in, while cautions regarding AgenTik’s near-term topline contribution and macro risk remain. Management reiterated that AgenTik monetization will be more meaningful in FY27; FX impact is recognized at renewal and contract signing.
- Competitive and ecosystem positioning: Partnerships with Deloitte, SAP, Microsoft, and GSIs strengthen a broader go-to-market and co-creation approach, signaling a shift toward a more channel-driven, open agentic ecosystem.
The future isn't about choosing between agents and automation. It's about combining them.
— Daniel Dines
Normalizing for the year-over-year FX tailwind of approximately $9 million, revenue grew 12%.
— Ashim Gupta
Forward Guidance
UiPath maintains a constructive near-term view with enhanced visibility into Q3 and FY2026, supported by operational discipline and a strengthening GTM motion. Key elements:
- Revenue trajectory: Q3 2026 revenue guidance of $390–$395 million; FY2026 revenue guidance of $1.571–$1.576 billion, reflecting FX tailwinds and a higher quality pipeline. ARR guidance for Q3 and FY2026 implies continued ARR expansion to roughly $1.771–$1.776 billion in Q3 and $1.834–$1.839 billion for the full year.
- Profitability: Non-GAAP operating income guidance around $70 million in Q3 and $340 million for FY2026, with non-GAAP gross margin around 85% for the year. The company expects to achieve GAAP profitability in the near term as cost discipline and cloud transition benefits accrue.
- AgenTik monetization: Management does not expect material top-line contribution from AgenTik in FY2026; however, monetization is expected to accelerate in FY27 as customer deployments scale and cross-sell opportunities mature.
- Key risks and monitoring: FX volatility, macro demand environment (especially public sector budgets), and the pace of AgenTik adoption across enterprise customers. Investors should monitor: (1) progression from POC/pilot to production in agentic deployments, (2) contribution of AgenTik to ARR growth and gross margins, and (3) churn/retention dynamics in the installed base as macro conditions evolve.