To The Moon

UiPath Inc. (NYSE:PATH) stock fell in premarket trading Friday despite strong second-quarter sales and a higher fiscal 2027 revenue outlook.

The pullback came after a sharp run-up into earnings. UiPath shares had gained 64.59% over the past six months, potentially leaving the stock vulnerable to profit-taking after the results.

The company also promoted Hitesh Ramani to chief financial officer. Ramani has served as chief accounting officer since 2021 and as deputy CFO for the past two years.

Adjusted earnings came in at 15 cents per share, in line with estimates. Revenue rose 13% year over year to $410.26 million, beating the $397.95 million consensus estimate.

Remaining performance obligations rose 14% to $1.378 billion. Current RPO also increased 14% to $901 million.

Adjusted operating income climbed to $89 million, representing a 22% margin. That marked more than 400 basis points of year-over-year margin expansion.

Adjusted free cash flow fell to $31 million from $45 million a year earlier, mainly due to the timing of tax payments.

UiPath ended the quarter with $1.4 billion in cash, cash equivalents and marketable securities and no debt. The company also repurchased 2.4 million shares.

UiPath ARR Growth Remains Strong

Annual recurring revenue grew 12%, supported by $37 million in net new ARR. That compared with $31 million a year earlier.

Cloud ARR, including hybrid and software-as-a-service offerings, reached about $1.3 billion, up more than 19%.

UiPath ended the quarter with about 10,350 customers. Attrition remained concentrated among its smallest accounts.

Customers generating more than $30,000 in ARR increased 6%. Customers with at least $100,000 in ARR rose 10% to 2,660, while those generating at least $1 million increased 21% to 387.

Dollar-based gross retention held at 97%. Dollar-based net retention improved to 109%, up 2 percentage points year to date. On a foreign exchange-adjusted basis, net retention was 108%.

AI Drives UiPath’s Largest Deals

AI products were included in 18 of UiPath’s top 20 deals. Customers are increasingly moving from individual automation projects to broader, end-to-end processes that combine automation and AI.

Key wins included a seven-figure expansion with a global insurer and the Department of War’s Clean Audit initiative. UiPath also secured deals with several financial institutions consolidating their automation programs.

The company said its forward-deployed engineers found that coding agents reduced development effort by nearly 60%.

UiPath also introduced a developer workflow automation tool that supports Cloud Code, Codex, Cursor and GitHub Copilot.

Meanwhile, a Fortune Global 500 manufacturer is using UiPath to automate about 700,000 invoices annually. The system has achieved 96% document-processing accuracy and cut invoice handling time and support needs by 50%.

A major U.S. health system also selected UiPath to automate claims denials and appeals. The deployment could address millions of dollars in previously unreviewed claims.

UiPath Raises Fiscal 2027 Revenue Outlook

For the third quarter, UiPath expects revenue of $440 million to $445 million. The midpoint is roughly in line with the $442.2 million consensus estimate. The forecast includes a $10 million year-over-year foreign exchange headwind.

The company expects ARR of $1.992 billion to $1.997 billion and adjusted operating income of about $100 million.

UiPath raised its fiscal 2027 revenue outlook to $1.789 billion to $1.794 billion from $1.776 billion to $1.781 billion. The new range is above the $1.778 billion consensus estimate.

The company expects fiscal-year ARR of $2.065 billion to $2.07 billion.

PATH Price Action: UiPath shares were down 7.35% at $16.88 during premarket trading on Friday, according to Benzinga Pro data.

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