UiPath (PATH) Q1 2025 Earnings Call Transcript

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UiPath (PATH -2.40%)
Q1 2025 Earnings Call
May 29, 2024, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the UiPath first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Allise Furlani, senior director of investor relations. Thank you, Elias. You may begin.

Allise Furlani — Senior Director, Investor Relations

Good afternoon, and thank you for joining us today to review UiPath’s first quarter fiscal 2025 financial results, which we announced in our earnings press release issued after the close of the market today. On the call with me are Daniel Dines, UiPath’s founder and chief innovation officer; and Ashim Gupta, chief financial officer, to deliver our prepared comments and answer questions. Our earnings press release and financial supplemental materials are posted on the UiPath investor relations website, ir.uipath.com. These materials include GAAP to non-GAAP reconciliations we will be discussing non-GAAP metrics on today’s call.

This afternoon’s call includes forward-looking statements about our ability to drive growth and operational efficiency and grow our platform, as well as our financial guidance for the second quarter and full fiscal year 2025. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, and therefore, investors should not place undue reliance on these statements. For a discussion of the material risks and uncertainties that could affect our actual results, please refer to our annual report on Form 10-K for the year ended January 31st, 2024, and our subsequent reports filed with the SEC including our quarterly report on Form 10-Q for the period ended April 30th, 2024, to be filed with the SEC. Forward-looking statements made on this call reflect our views as of today.

We undertake no obligation to update them. I would like to highlight that this webcast is being accompanied by slides. We will post the slides and a copy of our prepared remarks to our investor relations website immediately following the conclusion of this call. In addition, please note that all comparisons are year over year, unless otherwise indicated.

Now, I would like to hand the call over to Daniel.

Daniel Dines — Co-Founder, Chief Innovation Officer

Thank you, Allise. Good afternoon, everyone. Thanks for joining us. I’d like to start today by addressing the announcement we made this afternoon and then I’ll give a quick summary of our first quarter results and revised outlook including an update on our path forward.

I will then walk through a few highlights from the quarter before I hand it over to Ashim to go through our financials and guidance in more detail. As you may have seen in our press release this afternoon, Rob Enslin is leaving the company and has also resigned as a member of the board. Rob played a significant role over the last two years, and I know I’m speaking for the entire company when I say that we are very grateful for his contribution to UiPath. With Rob leaving the company, I’m excited to step back into the CEO role and look forward to leading us through our next phase of profitable growth and innovation.

During the past year, I had the privilege of immersing myself in our product and engineering efforts. This experience gives me invaluable clarity on our path forward. At the time, when companies are looking to optimize costs and drive efficiencies without sacrificing innovation, especially around generative our platform enables them to harness the power of the AI to achieve actionable outcomes. As we look to the future of automation, our focus isn’t just on boosting productivity and efficiency, it’s also about redefining what’s possible with the breadth of our AI-powered platform as capabilities.

The impact that the combination of generative AI and automation provides our customers is significant and it’s expanding from our early customers like SMBC and Orange to customers that have grown and expanded significantly over the last year, like USDA and ACA, they continue to emphasize how the combination of automation and AI deliver through our platform is transforming their business and enabling them to thrive in today’s environment. We view generative AI as a secular tailwind that will continue to benefit our business and the catalysts for continuing to innovate across our platform to expand our competitive moat. Turning to our first quarter results. ARR grew 21% year over year to $1.508 billion, driven by first quarter net new ARR of $44 million excluding the FX headwind of $3 million net new ARR totaled $47 million.

Revenue grew to $335 million, an increase of 16% year over year, normalizing for the FX headwind of approximately $8 million, revenue grew 18% year over year. While our top-line results were generally in line with our guidance range, we are not satisfied with our performance and I’d like to give you more color on a few key factors that impacted first quarter results. First, while we had a healthy start to the quarter, we saw the pace slow as we progressed through the second half of March and into April. This was primarily due to the impact of a challenging macroeconomic environment that we see persisting with mid-market customers, as well as a change in customer behavior, particularly with large multiyear deals.