UiPath Reports Q2 Revenue Growth and Profitability

UiPath reported second-quarter fiscal 2027 revenue of $410 million, a 13% increase year over year. The company achieved $89 million in non-GAAP operating income, representing a 22% margin, while GAAP operating income stood at $32 million. This marks the fourth consecutive quarter of GAAP profitability for the automation software provider, reversing a prior-year loss of $20 million.

Annualized Renewal Run-rate (ARR) reached $1.938 billion, growing 12% as the company expanded its customer base. Net New ARR increased to $37 million from $31 million in the same quarter last year, driven by larger deal sizes that increasingly include artificial intelligence components. According to earnings data provided by GN markets, 18 of the top 20 deals signed during the period included AI features, reflecting a shift toward integrated automation solutions.

Enterprise Consolidation Drives Retention

Large customer adoption remains a key growth driver, with 387 customers holding over $1 million in ARR, a 21% increase. The dollar-based net retention rate improved to 109%, a two-point year-over-year gain, while gross retention held steady at 97%. Management attributed these metrics to organizations consolidating point solutions onto the UiPath platform, particularly in hybrid and SaaS environments where Cloud ARR grew 19% to $1.3 billion.

The company manages approximately 700,000 invoices annually for a Fortune Global 500 manufacturer using its office of the CFO solution. In vertical accounting, UiPath reported 96% accuracy in proof-of-concept document processing. These operational efficiencies are part of a broader strategy to reduce implementation efforts, with initial results showing nearly 60% less work in development and testing through the use of coding agents.

Balance Sheet Strengthens With Cash

UiPath ended the quarter with $1.4 billion in cash and marketable securities and no debt. Stock-based compensation decreased 42% year over year to $45 million, now representing 11% of revenue. The company repurchased 2.4 million shares for $23.1 million at an average price of $9.63. Non-GAAP software gross margin remained high at 90%, supporting an overall non-GAAP gross margin of 82%.

Guidance Reflects Macro Headwinds

For the full fiscal year, UiPath guides revenue between $1.789 billion and $1.794 billion, incorporating a $20 million currency headwind. ARR is expected to land between $2.065 billion and $2.070 billion, while non-GAAP operating income is projected at $445 million. Adjusted free cash flow is guided at $425 million. Management noted a year-over-year foreign exchange headwind of approximately $8 million in the current quarter, citing a variable macroeconomic environment.

Remaining Performance Obligations increased 14% to $1.378 billion, indicating a strong backlog of future revenue. While attrition remains concentrated among smaller customers, the overall stability in retention rates and the expansion of large enterprise accounts suggest a maturing revenue model. The company continues to focus on efficiency and disciplined execution to maintain profitability in a competitive landscape.