Q2 2025 UiPath Inc Earnings Call

Hello, and welcome to the you wanted Pet's second quarter 2025 earnings conference call and webcast. At this time all participants are in listen only mode.

Operator: Hello, and welcome to the Uipath's second quarter, 2025 Earnings Conference Call of Webcast. At this time, all participants listen-only mode. If anyone would require operator assistance, please press star zero on your telephone keypad.

I didn't want you require operator assistance. Please press star zero on your telephone keypad, a question and answer session will follow the formal presentation.

Operator: A question and answer session will follow the formal presentation. You may be placed in the question to any time by pressing star one on your telephone keypad, and we ask you please let me yourself to one question, one follow-up, then return to the queue. As a reminder, this conference is being recorded.

Lonnie: Replacing the question should anytime by pressing star one on your telephone keypad and we ask you. Please limit yourself to one question. One follow up then return to the queue. As a reminder, this conference is being recorded its now my pleasure to turn the call over to at least for Lonnie Investor Relations. Please go ahead.

Allise Furlani: It's not my pleasure to turn the call over to Elise Furlani, Invest relations. Please go ahead.

Allise Furlani: Good afternoon, and thank you for joining us today to review UiPath's second quarter, fiscal 2025 financial results, which we announced in our earnings press release issued after the market closed today. On the call with me are Daniel Dines, UiPath's Chief Executive 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's Invest Relations website, ir.uipath.com. These materials include gaps and on-gap reconciliation, which we will be discussing on today's call.

Lonnie: Good afternoon, and thank you for joining us today to review U Ipass second quarter fiscal 2025 financial results, which we announced in our earnings press release issued after the market close today on the call with me are Daniel guidance, you Ipass Chiefs on Chief Executive Officer, and Ashish <unk>, Chief Financial officer to deliver our prepared comments.

Lonnie: Your questions our earnings press release and financial supplemental materials are posted on the you Ipass Investor Relations website, IR Dot you Ipass Dot com.

Speaker Change: These materials include GAAP to non-GAAP, reconciliations, which we'll be discussing 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 financial guidance for the third quarter and full fiscal year 2020 five actual results may differ materially.

Allise Furlani: This afternoon's call includes four looking statements about our ability to drive growth and operational efficiency and grow our platform, as well as financial guidance for the third 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.

Speaker Change: You really from those expressed in the forward looking statements due to many factors and therefore investors should not place undue reliance on these statements.

Allise Furlani: 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-K for the period ended July 31st, 2024, to be filed with the SEC. For the looking statements made on this call, reflect our views as of today, and we undertake no obligation to update them.

Speaker Change: 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 July 31st 'twenty 'twenty four two.

Speaker Change: He filed with SEC.

Speaker Change: We're looking statements made on this call reflect our views as of today and we undertake no obligation to update them.

Allise Furlani: I would like to highlight that this webcast is being accompanied by slides, which this quarter includes an embedded AI demonstration video. We encourage everyone to join our webcast in order to view the demo. We will post the slides and a copy of our prepared comments to our Investor Relations website immediately following the conclusion of this call. In addition, please note that all comparisons are year-to-year unless otherwise indicated.

Speaker Change: I'd like to highlight that this webcast is being accompanied by slides, which this quarter includes an embedded AI demonstration video we encourage everyone to join our webcast in order to view the demo.

Speaker Change: The slides and a copy of our prepared comments 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: Now I would like to hand the call over to Daniel. Thank you, Alice.

Alicia: Thank you Alicia.

Daniel Dines: Good afternoon, everyone. Thanks for joining us. I want to take a moment to thank our team for their improved execution and everything they do to make UIPUF successful. We are pleased with our second quarter results, which exceeded the high end of our guidance across all key financial metrics. A testament to our improved execution and the compelling value that our AI-powered automation platform delivers to our customers. We ended the quarter with an error of $1,551 billion, an increase of 19% driven by net new error of $43 million. The second quarter revenue was $316 million. Lewis, and we deliver non-GAAP-adjusted, freakish flow of $49 million.

Daniel: Good afternoon, everyone. Thanks for joining us I want to take a moment to thank our team for their improved execution and everything they do to make you eyeball successful. We're pleased we all are second quarter results, which exceeded the high end of our guidance across all key financial metrics.

Speaker Change: The month, while we improve the execution and the compelling value that our AI powered automation platform the leaves us to our customers.

Speaker Change: We ended the quarter with 1 billion $551 billion in.

Speaker Change: An increase of 19% driven by net new <unk> of $43 million.

Speaker Change: Second quarter revenue was $316 million.

Speaker Change: We believe our non-GAAP adjusted free cash flow of $49 million.

Daniel Dines: I'm excited and energized about my first quarter back in the CEO role. I spend much of my time during the last few months traveling to visit customers, partners, prospects, and employees. Customers globally continue to ask for our help, leveraging the power of AI and automation to transform their businesses, and it's becoming more clear to customers that AI is about automation. To quote the CEO of one of our largest customers, we went through a series of workshops internally to develop our AI strategy, and the outcome was more automation. Building an AI-powered automation strategy isn't just about technology; it's about aligning our capabilities with core business challenges to enhance customer experiences and optimize operational efficiency. We continue to strengthen our position as the platform of choice for capturing the opportunities that AI brings to an enterprise.

Speaker Change: I'm excited and energized about whats my first my first quarter back in the CEO role I spend much of my time during the last few months. So they are willing to visit customers partners prospects and employees custom.

Speaker Change: Customers globally continue to us, we're all leveraging the power of AI and automation to transform their businesses and it's becoming more clear to customers that hey, it's about automation.

Speaker Change: To quote the CIO of one of our largest customers.

Speaker Change: We went through a series of workshops internally to develop our AI strategy and the outcome was.

Speaker Change: More automation.

Speaker Change: Building on AI powered automation strategy isn't just about technology, it's about aligning our capabilities with core business challenges to enhance customer experiences and optimize operational efficiency and we continue to strengthen our position as the platform of choice for capturing.

Speaker Change: The opportunities that it brings to an enterprise.

Daniel Dines: On our first quarter earnings call, we discussed our commitment to improving execution and streamlining the organization, driving a deeper strategy around our growth products, continuing to enhance our relationships with meaningful partners, and becoming a more customer-centric organization. I am encouraged with the progress we're making, and I would like to take a few minutes to talk to each of these initiatives in more detail. First, as I have gone deeper into the operational side of the business, I am committed to continuing to sharpen our focus on operational rigor, while learning into areas where the return on investment is the strongest.

Speaker Change: On our first quarter earnings call, we discussed our commitment to improving execution and streamlining the organization.

Speaker Change: Driving a deeper strategy around though gross paradox, continuing to enhance our relationships with meaningful partners and becoming a more customer centric organization.

Speaker Change: I am encouraged with the progress.

Speaker Change: We are making and I would like to take a few minutes to talk to each of these initiatives in more detail.

Speaker Change: First.

Speaker Change: As I have gotten deeper into the operational side of the business I'm committed to continuing to sharpen our focus on operational rigor, while learning into areas, where the return on investment is the strongest.

Daniel Dines: As the leader in enterprise automation, we have, and we will continue to invest in innovation to support our growth initiatives and best serve our customers. With that in mind, our go-forward priority will be balancing these investments while expanding non-GAAP operating margin and delivering sustainable investments, and delivering sustainable non-GAAP adjusted free cash flow.

Speaker Change: As the leader in enterprise automation, we have and we will continue to invest in innovation to support our growth initiatives and best serve our customers.

Speaker Change: With that in mind, our go forward priority will be balancing these investments, while expanding non-GAAP operating margin and delivering sustainable investments.

Speaker Change: And the only building sustainable non-GAAP adjusted free cash flow during the quarter.

Daniel Dines: During the quarter, we made the difficult decision to reduce our workforce. Streamlining the organization and driving further operational efficiencies while better prioritizing our go-to-market investments and continued focus on innovation. With these strategic actions, we now expect non-GAAP operating income of 170 million for full fiscal 2025.

Speaker Change: Made the difficult decision.

Speaker Change: We reduced our workforce.

Speaker Change: Aligning the organization and driving further operational efficiencies.

Speaker Change: Better prioritizing our go to market investments and continued focus on innovation.

Speaker Change: With these strategic actions, we now expect non-GAAP operating income of 170 million for full fiscal.

Speaker Change: 2025.

Daniel Dines: Second, we are focused on driving a deeper strategy around our growth products, and we've begun the process of identifying and prioritizing high potential solutions and use cases, and ensuring all of our teams from sales to partners to services and products are focused on a common set of priorities that have larger, scalable impacts for our customers. Why these changes are in the early stages and will take time to build, these enhancements are already having a positive impact, and I'm particularly excited about the successes we've seen with our IDP solutions. For example, a Central American financial institution began their automation journey by automating back office processes across treasury, management, payments, and customer service, enabling them to reduce their banking transaction clarifications from eight days to one and migrate over 50% of their physical banking transactions to their online channel.

Speaker Change: Second we are focused on driving a deeper strategy around our gross product and we've begun the process of identifying and prioritizing high potential solutions and use cases and ensuring all of our teams from sales to partners to services I'm proud.

Speaker Change: <unk> are focused on a common set of priorities that have largest scalable inbox for our customers.

Speaker Change: While these changes are in the early stages and will take time to build these enhancements are already having a positive impact and I'm, particularly excited about the success, we've seen with our IV solutions.

For example.

Speaker Change: Central American financial institution began their automation journey by automating back office processes across Treasury management payments and customer surveys, enabling them to reduce their banking transaction clarifications from eight days to one and migrate over 50%.

Speaker Change: Their physical banking transactions.

Speaker Change: The online channel.

Daniel Dines: After seeing the substantial benefits from our automation capabilities, they implemented document understanding to digitally onboard over 500,000 clients per year and are now piloting IDP for unstructured documents by leveraging our generative classification, extraction, and validation capabilities. Additionally, they will be implementing communication mining in Salesforce to better understand customer issues and reduce clarifications. Our test suite capabilities are also resonating, enabling customers to accelerate time to value while maintaining the stability and reliability of processes and applications in production.

Speaker Change: After seeing the substantial benefits from our automation capabilities they implemented document understanding.

Speaker Change: Did you tell the onboard over 500000 clients per year and Theres no piloting IDP for unstructured document by leveraging our generative classification extraction and validation capabilities. Additionally, they will be implementing communication mining.

Speaker Change: And sales force to better understand customer issues reduced classifications.

Speaker Change: Our test suite capabilities are also resonating, enabling customers to accelerate time to value, while maintaining the stability and reliability of processes and applications in production.

Daniel Dines: During the quarter, we closed our largest test suite deal ever with one of the world's largest technology companies. With the help of UiPath team, they will be implementing our solution to automate testing for their CPQ process in Salesforce and several other processes including ordering, billing allocation, incentive compensation, and forecasting, with an expected cost saving of approximately $23 million a year.

Speaker Change: During the quarter, we close I would love just this Sweden deal what we've one of the world's largest technology companies.

With the help of U I pass team they will be implementing our solution to automate testing for their <unk> process in sales force and several other processes, including ordering building a location incentive compensation and forecasting with unexpected cost saving of.

Speaker Change: Approximately $23 million a year.

Daniel Dines: Third, partners are a quarter stone of our go-to-market strategy, enabling us to scale our market reach and elevating our customer success initiatives. And I'm excited about our continued progress with SAP, including an expansion deal with an Australian multinational corporation and customer since 2021 who originally used UiPath test suite to support their SAP S/4HANA migration. After successfully completing their migration, they expanded in the quarter and are working with UiPath team to establish an automation program globally, encompassing core automation, testing and AI. Our SAP partnership is also helping us secure new logos. Like Gold Peak Technology Group, we will be automating their order input processes to extract an input data into SAP, eliminating manual inputs and avoiding human error.

Speaker Change: Sure.

Speaker Change: Partners are.

Speaker Change: Cornerstone of our go to market strategy, enabling us to scale, our market reach and elevating our customer success initiatives.

Speaker Change: And I'm excited about with our continued progress we see P, including an expansion deal we've done Australian multinational corporation and customers since 2021 who originally used UA Pasteur suite to support their S. A P S forehand on migration.

Speaker Change: After successfully completing their migration they expanded in the quarter and not working we you're right Buffy to establish an automation program globally and composites in core automation testing and AI. Our Asap partnership is also helping us secure new.

Speaker Change: New logos like Gold peak technology group will be automating the order input processes to extract an input data into ACP, eliminating manual inputs and avoiding human errors.

Daniel Dines: Durant the Quarters, we also expanded our relationship with Deloitte, integrating our capabilities into Deloitte's sand platform to transform SAP project delivery, and help companies accelerate and refine the execution of business transformation. For this program, automations are available across various projects, phases, and SAP functional areas, facilitating an effective and efficient deployment process, fostering an automation-first project delivery, and driving faster value for Deloitte's global customers.

Speaker Change: During the quarter, we also expanded our relationship with Deloitte integrating our capabilities into the Lloyd's ascent platform to transform UCP project delivery.

Speaker Change: And help companies accelerate and refine the execution of business transformation for this program automation is not available across various projects phases, and they say be functional energy us facilitating an effective and efficient deployment process fostering and automation.

Speaker Change: First project delivery and drive.

Speaker Change: Driving faster value for the Lloyds global customers.

Daniel Dines: And finally, our success is deeply rooted in our ability to serve our customers, making a customer centering mindset more crucial than ever. We understand the importance of successful implementation, and the entire company is focused on ensuring our customers achieve it. This includes taking steps to improve alignment and communication between our teams and our customers' deeper account-level reviews, ensuring the appropriate connections happen across all customer stakeholders.

Speaker Change: And finally, our success is deeply rooted in our ability to serve our customers, making a customer centric mindset more crucial than ever.

Speaker Change: We understand the importance of successful implementation and the entire company is focused on ensuring our customers achieved. It. This includes taking steps to improve our alignment and communication between our teams and our customers for deeper account level reviews insuring.

Speaker Change: The appropriate connections happen across all cost them more stakeholders.

Daniel Dines: Turning to product highlights from the quarters. In our July release, we launched a series of product innovations that deeply infuse Geniei into our automation platform. This included new specialized LLMs for IDP, Geniei activities, and the launch of Autopilot for developers and testers. Since launching Autopilot, we've seen great early adoption and positive feedback from customers. A great example is the multinational digital communications company, an early adapter of autopilot for testers. The company's Geniei testing roadmap centers on leveraging our LLM capabilities throughout the entire testing life cycle, from creating user stories to generating test cases and to reporting.

Speaker Change: Turning to product highlights from the quarter.

Speaker Change: And our drug.

Speaker Change: He leaves we launched a series of product innovations that deeply infused Jenny I into our automation platform.

Speaker Change: This included new specialized llm's for I D. P. Gen activities and the launch of autopilot for developers and testers.

Speaker Change: Since launching autopilot, we've seen great early adoption the positive feedback from customers. It's a great example is the Multi-national digital Communications company, an early adopter of autopilot for testers.

Speaker Change: The compound is generative AI testing roadmap centers hour on leveraging our capabilities throughout the entire base.

Speaker Change: Lifecycle from creating user stories to generating test cases and to reporting.

Daniel Dines: With the power of autopilot, they believe they will be able to constantly date the tools using their testing framework and reduce manual testing by up to 50%.

Speaker Change: The power of autopilot. They believe they will be able to consolidate the tools using their testing framework and reduced manual testing by up to 50%.

Daniel Dines: And we are excited for the next phase of Autopilot, Autopilot for everyone, which we expect to launch into general availability this fall. Over the past few months, we've been working closely with the few customers in private preview, and we consistently hear that Autopilot for Everyone is not only giving better responses than other LLM-based chat solutions, but is also more valuable because it provides the ability to immediately automate an action.

Speaker Change: And we are excited for the next phase of autopilot autopilot for everyone.

Speaker Change: Which we expect to launch into general availability this fall.

Speaker Change: Over the past few months, we've been working closely with the few customers in private preview and we consistently hear that autopilot for everyone is not only giving better responses than other land based chat solutions, but there's also more valuable because it.

Speaker Change: It provides the ability to immediately automate and action.

Daniel Dines: To give you an idea of how Autopilot for Everyone is different from other Geniei chat solutions, we like to share a quick demo of a real Autopilot use case. that we have been working to develop with the US-based biotech company. If you have not on the webcast, please go to our Investor Relations website for the demo link. You You You You What differentiates us in the market is our end-to-end automation platform, and the demo you just saw is a great example of an experience that only our platform is able to deliver in a unified experience.

To give you an idea of how autopilot for everyone is different from other generic chat solutions.

Speaker Change: We'd like to share a quick demo of a real autopilot use case.

Speaker Change: That we have been working to develop with the U S based biotech company.

Speaker Change: If you have not won the webcast. Please go to our Investor Relations website for the demo Ling.

Speaker Change: Yeah.

Speaker Change: Yeah.

What differentiates us in the market.

Speaker Change: Our end to end automation platform and the demo you just saw is a great example of an experience that only our platform is able to deliver in a unified experience.

Daniel Dines: To be more specific, we are the only platform that can bring together business documents and data, execute UI and API based automations across systems, and utilize a mix of specialized AI and generative AI grounded in organizational data and process information. These capabilities enable users to take real action on an enterprise-grade platform that is secure and governed.

Speaker Change: To be more specific we are the only platform that can bring together business documents and data execute UI and API based automation across systems and utilize a mix of specialized AI and generative AI grounded in organizational data and process information.

Speaker Change: These capabilities enable users to take real action, an enterprise grade platform that is secure and governed.

Daniel Dines: There are few things I find more satisfying than seeing customers leverage our automation platform to flourish and succeed. Their stories are inspiring; for example, health service executive, a customer since 2020. With automations across their HR, finance, and community care departments, they have processed over 6 million transactions, saving over 700,000 hours and 28 million euros today. Driven by the quick time to value and tangible ROI, they were able to achieve HSE expanded in the quarter to urgently extend these automated solutions across their hospital waitlist. Partnering with Deloitte, they are in the process of accelerating the deployment of this solution to an additional 20 hospitals before the end of 2024.

There are few things I find more satisfying than seeing customer leverage our automation platform to flourish and succeed.

Speaker Change: Their stories are inspiring for example, health services executive customer since 2020.

Speaker Change: With automation across their HR finance and community care Department. They have processed over 6 million transactions saving over 700000 hours and 28 million euros to date.

Speaker Change: Driven by the quick time to value and tangible ROI they were able to achieve HSC expanded in the quarter to urgently extend these automated solutions across their hospital waitlist.

Speaker Change: Partnering with Deloitte.

Speaker Change: We're in the process of accelerating the deployment of these solutions to an additional 20 hospitals before the end of 2024.

Daniel Dines: These stories, along with the conversations I had with customers, partners, and our product team, all directly influence how I think about the strategic direction of our business, and I have never been more enthusiastic about where we stand from a product perspective.

Speaker Change: These stories, along with the conversations I've had with customers partners and our product team all directly influence how I think about the strategic direction of our business and I have never been more enthusiastic about where we stand from a product perspective.

Daniel Dines: As a market leader, it is critical that we continue to innovate to further differentiate our products, and I am excited by the next evolution of our platform, UI Path, Process, Work Frustration, which we launch into private preview in June. While legacy business process management vendors typically start with a top-down approach that is often disconnected from how work really gets done. Our approach differentiates by allowing organizations to build a unified data-driven bottom-up view. This enables customers to discover, automate, optimize, and monitor business processes from start to finish, providing complete visibility into how work is executed by people, automations, and in systems. We believe that process orchestration is the key ingredient for the future of a genetic process automation.

As the market leader, it's critical that we continue to innovate to further differentiate our product and I am excited by the next evolution of our platform UI path process orchestration, which we launch into private preview in June.

Speaker Change: While the legacy business process management vendors typically start with the top down approach that is often disconnected from her work really gets done our approach differentiates by allowing organizations to build a unified data driven bottom up view this enables customer.

Speaker Change: Discover automate optimize and monitor business processes from start to finish providing complete visibility into how work is executed by people automation and in systems.

We believe the process orchestration is the key ingredient for the future agenda process automation.

Daniel Dines: We are really excited about the progress we are making on this vision and our overall product roadmap, and we invite you to join us in person to hear more about this product innovations at our user conference Forward in Las Vegas next month. We hope to see many of you there.

Speaker Change: We are really excited about the progress we are making on this vision and our overall product roadmap and we invite you to join US in person to hear more about this product innovations at our user conference for work in Las Vegas next month.

Speaker Change: We hope to see many of you there.

Speaker Change: Finally.

Daniel Dines: Finally, I wanted to take a moment to thank Asim. He is joining UI path in 2018. He has played an instrumental role in transforming our company with his extensive financial and operational capabilities. Over the last several months, he has also been a driving force behind our efforts to refocus the company on its core strength, improve our operational rigor, and reestablish a customer-centric foundation to support our growth initiatives. Widership will continue to oversee its traditional CFO responsibilities. I am pleased to share that he will now take on an expanded role as Chief Operating Officer, where he will work with me to maximize financial and operating efficiencies across the organization.

Speaker Change: I wanted to take a moment to thank assume since joining UA path in 2018.

Asumu: He has played an instrumental role in transforming our company with his extensive financial and operational capabilities.

Over the last several months. He has also been a driving force behind our efforts to refocus the company on its core strength improve our operational rigor and reestablish our customer centric foundation to support our growth initiatives.

Asumu: Wireless ship will continue to oversee his traditional CFO responsibilities.

Speaker Change: Im pleased to share that he will now take on an expanded role as chief operating officer, where he will work with me to maximize financial and operating efficiencies across the organization with that I'll turn the call over to assume.

Ashim Gupta: With that, I'll turn the call over to Ashim. Thank you, Daniel, and good afternoon, everyone. Unless otherwise indicated, I will be discussing results on a non-GAAP basis in all growth rates or year-over-year. Turning to the second quarter, ARR totalled $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%. A great example is Ontario Power Generation, a customer since 2018, who expanded in the quarter as they begin to migrate to the cloud.

Assume: Thank you Daniel and good afternoon, everyone.

Ashwin: Unless otherwise indicated I will be discussing results on a non-GAAP basis, and all growth rates are year over year.

Assume: Turning to the second quarter <unk> totaled 155, 1 billion, an increase of 19% driven by net new <unk> of $43 million.

Speaker Change: Our cloud first approach is driving adoption across our customer base and we ended the quarter with more than $850 million in cloud <unk>.

Speaker Change: Which includes both hybrid and SaaS, an increase of more than 65%.

Speaker Change: A great example is Ontario power generation customer since 2018, who expanded in the quarter as they begin to migrate to the cloud.

Ashim Gupta: They are also planning to expand to additional departments across the organization, while incorporating document understanding and communications mining into their program. We ended the quarter with approximately 10,810 customers, including new logos like Ixam, Benicis, Mossin Associates, and Piedmont Healthcare.

Speaker Change: They are also planning to expand to additional departments across the organization, while incorporating document understanding and communications mining into their program.

Speaker Change: We ended the quarter with approximately 10810 customers, including new logos like Exxon NSS, Martin Associates and Piedmont healthcare.

Ashim Gupta: Moving on to customer metrics. Customers with $100,000 or more in ARR increased to $2,163, while customers with $1 million or more in ARR increased to $293. Dollar-based gross retention of 97% continues to be best in class, and our dollar-based net retention rate for the quarter was 115%. Expansions are driven by the quick time to value and the broad applicability of our automation platform. A great example is AGS Health, a customer since 2021, that currently uses UIPAP to automate their claims tracking, eligibility verification, and payment posting processes. In a competitive win, they expanded their usage of document understanding, highlighting our unique AI capabilities, such as our AI trust layer, and human-in-the-loop model training as competitive advantages, scaling from 6 million documents to over 20 million documents processed, and saw a 95% accuracy improvement.

Speaker Change: Moving on to customer metrics.

Speaker Change: Customers with $100000 or more in <unk> increased to 2163, while customers with $1 million or more in <unk> increased to 293.

Speaker Change: Dollar base gross retention of 97% continues to be best in class and our dollar based net retention rate for the quarter was 115%.

Speaker Change: Expansions are driven by the quick time to value in the broad applicability of our automation platform. A great example is Ags health a customer since 2021 that currently uses UI path to automate their claims tracking eligibility verification and payment posting processes and a competitor.

Speaker Change: When they expanded their usage of document understanding highlighting our unique AI capabilities, such as our AI trusts layer and human in the loop model training as competitive advantages scaling from 6 million documents to over 20 million documents processed and saw a 95% accuracy improvement.

Ashim Gupta: With support from their CFO and CTO, they will be adopting document understanding across their pair and provider departments for medical record patient indexing. Turning back to our results, revenue grew to $316 million, an increase of 10% year-over-year. Remaining performance obligations increased to $1.081 billion, of 19% year-over-year. Current RPO increased to $686 million. Turning to expenses, we delivered a second quarter overall gross margin of 83%, driven by continued adoption of our cloud products, and software gross margin was 87%. For the full fiscal year 2025, we continue to expect gross margin to be approximately 85%. Second quarter operating expenses were $257 million.

Speaker Change: With support from their CFO and CTO, they will be adopting document understanding across their payer and provider departments for medical record patient indexing.

Speaker Change: Turning back to our results revenue grew to $316 million, an increase of 10% year over year.

Unknown Executive: Hello, and welcome to the Uipath's second quarter, 2025 Earnings Conference Call of Webcast. At this time, all participants listen only mode. If anyone could require operator assistance, please press star zero on your telephone keypad.

Speaker Change: Remaining performance obligations increased to 1.0, a $1 billion at.

Speaker Change: Up 19% year over year.

Unknown Executive: A question and answer session will follow the formal presentation. You may be placed into question to any time by pressing star one on your telephone keypad, and we ask you, please let me yourself ask the one question, one follow-up, then return to the queue. As a reminder, this conference is being recorded.

Speaker Change: Current RPI increased to $686 million.

Speaker Change: Turning to expenses we.

Speaker Change: We delivered a second quarter overall gross margin of 83% driven by continued adoption of our cloud products and software gross margin was 87% for.

Unknown Executive: It's not my pleasure to turn the call over to Elise Frilani and that's relations. Please go ahead.

Speaker Change: For the full fiscal year 2025, we continue to expect gross margin to be approximately 85%.

Elise Frilani: Good afternoon, and thank you for joining us today to review Uipath's second quarter of fiscal 2025 financial results, which we announced in our earnings press release issued after the market closed today. On the call with me are Daniel Dines, Uipath's Chief Executive 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's Investor Relations website, ir.uipath.com.

Speaker Change: Second quarter operating expenses were $257 million GAAP operating loss of $103 million included $94 million of stock based compensation expense.

Ashim Gupta: Gap operating loss of $103 million included $94 million of stock-based compensation expense. Non-GAAP operating income was $6 million, resulting in a second quarter non-GAAP operating margin of 2%. Second quarter non-GAAP adjusted free cash flow was $49 million. As of July 31st, we had $1.7 billion in cash, cash equivalents, and marketable securities, and no debt. Our strong balance combined with our free cash flow generation has enabled us to return capital to our shareholders in a meaningful way through our share repurchase program. During the quarter, we repurchased 16.3 million shares of our Class A common stock at an average price of $12.05 from May 1st, 2024, through July 31st, 2024.

Speaker Change: non-GAAP operating income was $6 million, resulting in a second quarter non-GAAP operating margin of 2%.

Speaker Change: Second quarter non-GAAP adjusted free cash flow was $49 million.

As of July 31, we had $1 $7 billion in cash cash equivalents and marketable securities and no debt or.

Elise Frilani: These materials include gaps in on-gap reconciliation, which we will be discussing on today's call. This afternoon's call includes four-looking statements about our ability to drive growth and operational efficiency and grow our platform, as well as financial guidance for the third 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 under reliance on these statements.

Speaker Change: Our strong balance sheet combined with our free cash flow generation has enabled us to return capital to our shareholders in a meaningful way through our share repurchase program <unk>.

Speaker Change: During the quarter, we repurchased 16 3 million shares of our class a common stock at an average price of $12 five.

Speaker Change: From May one 2024 through July 31, 2024.

Elise Frilani: For a discussion of the material risks and uncertainties that could affect our actual results, please refer to our annual report on form 10K for the year ended January 31st, 2024, and our subsequent reports filed with the SEC, including our quarterly report on form 10Q for the period ended July 31st, 2024, to be filed with the SEC. For the looking statements made on this call, reflect our views as of today, and we undertake no obligation to update them.

Ashim Gupta: Since July 31st, under a 10v5.1 plan, we repurchased an additional 10.7 million shares at an average price of $11.67 through August 30th, 2024.

Speaker Change: Since July 31 under a <unk> one plan, we repurchased an additional $10 7 million shares at an average price of $11 67.

Speaker Change: Through August 32024, and.

Ashim Gupta: And as you may have seen in today's earnings press release, our Board of Directors has approved a $500 million expansion of our share repurchase program, underscoring our confidence in the business, our conviction, and the long-term opportunities ahead, and our commitment to delivering shareholder value. Moving onto guidance, we are pleased with the progress and improved execution that we delivered in the quarter. At the same time, we are taking a prudent approach to guidance, which assumes the global macroeconomic environment continues to be variable. As Daniel mentioned, during the quarter, we took a number of actions to drive operational efficiencies and streamline the business.

Speaker Change: And as you may have seen in today's earnings press release, our board of Directors has approved a $500 million expansion of our share repurchase program underscoring our confidence in the business our conviction in the long term opportunities ahead, and our commitment to delivering shareholder value move.

Elise Frilani: I would like to highlight that this webcast is being accompanied by slides, which this quarter includes an embedded AI demonstration video. We encourage everyone to join our webcast in order to view the demo. We will post the slides and a copy of our prepared comments to our investor relations website, immediately following the conclusion of this call. In addition, please note that all comparisons are year-to-year unless otherwise indicated.

Speaker Change: Moving on to guidance, we are pleased with the progress and improved execution that we delivered in the quarter at the same time, we are taking a prudent approach to guidance, which assumes the global macroeconomic environment continues to be variable.

Speaker Change: As Daniel mentioned during the quarter, we took a number of actions to drive operational efficiencies and streamline the business and as a result, we are raising our non-GAAP operating income and non-GAAP adjusted free cash flow guidance for the full year 2025.

Elise Frilani: Now I would like to hand the call over to Daniel. Thank you, Alice.

Ashim Gupta: And as a result, we are raising our non-GAAP operating income and non-GAAP adjusted free cash flow guidance for the full year 2025. For the third quarter fiscal 2025, we expect revenue in the range of $345 million to $350 million. ARR in the range of $1.6 billion to $1.605 billion. Non-GAAP operating income of approximately $7 million. And we expect third quarter basic share count to be approximately $552 million shares. For the fiscal full year 2025, we expect revenue in the range of $1.420 billion to $1.425 billion. ARR in the range of $1.665 billion to $1.670 billion.

Daniel Dines: Good afternoon, everyone. Thanks for joining us. I want to take a moment to thank our team for their improved execution and everything they do to make UIPUF successful. We are pleased with our second quarter results, which exceeded the high end of our guidance across all key financial metrics, a testament to our improved execution, and the compelling value that our AI-powered automation platform delivers to our customers. We ended the quarter with an error of $1,551 billion, an increase of 19% driven by net new error of $43 million.

Speaker Change: For the third quarter of fiscal 2025, we expect revenue in the range of $345 million to $350 million.

Speaker Change: <unk> in the range of $1 6 billion to $1 $605 billion.

Speaker Change: non-GAAP operating income of approximately $27 million and we expect third quarter basic share count to be approximately 552 million shares.

For the fiscal full year 2025, we expect revenue in the range of $1 420 billion.

Speaker Change: To $145 billion.

Speaker Change: <unk> in the range of $1 665 billion.

Daniel Dines: Second quarter revenue was $316 million, and We Deliver, Non-Gap Adjusted Freakage Flow, $49 Million I'm excited and energized about my first quarter back in the CEO role. I spent much of my time during the last few months travelling to visit customers, partners, prospects, and employees. Customers globally continue to ask for our help leveraging the power of AI and automation to transform their businesses and it's becoming more clear to customers that AI is about automation.

Speaker Change: To one 670 billion.

Ashim Gupta: Non-GAAP operating income of approximately $170 million. And finally, we now expect fiscal year 2025 non-GAAP adjusted free cash flow of approximately $325 million.

Speaker Change: non-GAAP operating income of approximately $170 million.

Speaker Change: And finally, we now expect fiscal year 2025, non-GAAP adjusted free cash flow of approximately $325 million.

Ashim Gupta: Thank you for joining us today, and we look forward to speaking with many of you during the quarter.

Speaker Change: Thank you for joining us today, and we look forward to speaking with many of you during the quarter.

Operator: With that, I will now turn the call over to the operator. Operator, please pull for questions. Thank you. We're now conducting your question and answer session. If you'd like to be placed in the question, Q, please press star one on your telephone keypad.

Speaker Change: With that I will now turn the call over to the operator, operator, please poll for questions.

Speaker Change: Thank you, we'll now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad.

Operator: As a reminder, we ask you, please ask one question and one follow-up, and return to the Q. If you'd like to move your question from the Q, please press star two. Once again, that star one, to be placed in the question, Q, one moment, please. What we pull for questions.

Speaker Change: As a reminder, we ask you. Please ask one question one follow up then return to the queue if.

Speaker Change: If you'd like to remove your question from the queue.

Daniel Dines: To quote the CEO of one of our largest customers, we went through a series of workshops internally to develop our AI strategy and the outcome was more automation. Building an AI-powered automation strategy isn't just about technology, it's about aligning our capabilities with core business challenges to enhance customer experiences and optimize operational efficiency and we continue to strengthen our position as the platform of choice for capturing the opportunities that AI brings to an enterprise.

Speaker Change: Please press star two once again Thats star one to be placed in the question Q1 moment. Please while we poll for questions.

Raimo Lenschow: Our first question today is coming from Raimo Lenschow from Barclays; your line is now live. Hey, perfect. Thank you, and congrats on a good quarter.

Speaker Change: Our first question today is coming from Raimo <unk> from Barclays. Your line is now live.

Raimo <unk>: Perfect. Thank you and congrats on a good quarter.

Daniel Dines: My first question was like, if you think about the changes that you wanted to make in terms of selling more on a departmental level, going back a little bit to your route, Daniel, you talked about it last quarter. What progress have you seen there? What are you seeing in the numbers? Is that showing in the numbers already? Is that showing up in pipelines? Talk a little bit about the progress you're seeing there.

Raimo <unk>: My first question was like if you think about the.

The changes to if you wanted to make in terms of selling more on a departmental level going back a little bit to your roots Daniel you talked about it last quarter.

Speaker Change: What progress have you seen there.

Speaker Change: What are you seeing in the numbers is that showing in the numbers already is that showing up in pipeline.

Daniel Dines: On our first quarter earnings call, we discussed our commitment to improving execution and streamlining the organization, driving a deeper strategy around our growth products, continuing to enhance our relationships with meaningful partners and becoming a more customer centric organization.

Speaker Change: I'll talk I'll talk us through a little bit about the progress you're seeing there.

Daniel Dines: I want to be very specific that we want to address both C-level, suite type of selling with departmental level. It's still early to comment about the progress, but we've made quite a few organizational changes. We have appointed the new leader in North America that I think he was with the company previously, and he can definitely understand our land and expand business while he's very versed into talking to executives. We've done quite a few changes on the central organization on level.

Daniel: Well I want to be very specific that we won.

Speaker Change: There is both C level suite type of selling with departmental local and.

Speaker Change: So it's still early to tell.

Daniel Dines: I am encouraged with the progress we are making and I would like to take a few minutes to talk to each of these initiatives in more detail. First, as I have gone deeper into the operational side of the business, I am committed to continuing to sharpen our focus on operational rigor while learning into areas where the return on investment is the strongest. As the leader in enterprise automation, we have and we will continue to invest in innovation to support our growth initiatives and best serve our customers. With that in mind, our goal forward priority will be balancing these investments while expanding non-gap operating margin and delivering sustainable investments and delivering sustainable non-gap adjusted free cash flow.

Speaker Change: To comment about the progress, but we've made quite a few organizational changes.

Speaker Change: We are we have appointed a new leader in North America, but I think he was with the company previously and he can definitely understand our lend and expand business. While he is very versed into talking to executives.

Speaker Change: We have we've done quite a few changes on.

Speaker Change: No.

Speaker Change: The central organization level, we regionalized some of our functions and.

Raimo Lenschow: We regionalized some of our functions, and we made clear to the entire company that customer centricity is going to be the core principle to our business. Okay, perfect. Thank you.

Speaker Change: We are we made clear to the entire company that cut.

Speaker Change: Customer centricity is going to be the core principle to our business.

Speaker Change: Okay. Okay perfect. Thank you and then Ashish how does like congrats on the expanded role.

Ashim Gupta: And then, Ashim, how do we do, like, congrats on the expanded role? It's a lot of other organizations. I mean, so much to do; you're growing at the high scale, at the healthy clips.

Daniel Dines: During the quarter we made the difficult decision to reduce our workforce, streamlining the organization and driving further operational efficiencies while better prioritizing our go-to-market investments and continued focus on innovation. With these strategic actions, we now expect non-gap operating income of 170 million for full fiscal 2025.

Like.

ashish: It's a lot of other organizations.

ashish: I mean, so much to do with your growing at the high scale at a healthy clip.

Ashim Gupta: Do you think that that's kind of a permanent thing for you, or should we think about this more as a temporary solution? Thank you. Look, I think Daniel looks at it as giving the long-term goals for the company. We don't treat it, but anything could change RIMO from that perspective, as Daniel always will evaluate the organization. My mandate and my goals that Daniel has given is really make sure that our enabling functions really become in service of the customer and of the field and to drive connectivity across our organization, which we talked about is something that we needed to improve on.

Speaker Change: Think that that's kind of a permanent thing for you or should we think about this more as a temporary solution. Thank you.

Speaker Change: Look I think Daniel looked at as giving any long term goals for the company. We don't treat that anything could change from that perspective, as Daniel always will evaluate the organization.

Speaker Change: My mandate in my goals are Daniel has given us really make sure that our enabling functions.

Daniel Dines: Second, we are focused on driving a deeper strategy around our growth product and we have begun the process of identifying and prioritizing high potential solutions and use and ensuring all of our teams from sales to partners to services and products are focused on a common set of priorities that have largest scalable impacts for our customers. Why these changes are in the early stages and will take time to build, these enhancements are already having a positive impact and I'm particularly excited about the successes we've seen with our IDP solutions.

Speaker Change: Really become in service of the customer and over the field and should drive connectivity across our organization, which we talked about is something that we needed to improve on.

Ashim Gupta: And as well as continue to drive the operational efficiency and streamline the organization, you know, and continue to drive and streamline organizational processes. etc. I'm excited about the opportunity, you know, just to continue to work with broader sets of teams. And we look at this as an entire leadership team that, you know, is really focused on the goals that have been laid out on. And, and that's really what we're focused on today.

Speaker Change: And as well as continuing to drive the operational efficiency and streamline the organization.

Speaker Change: And continue to drive and streamline organizational processes et cetera, I'm excited about the opportunity just to continue to work with broader sets of teens and we look at this as an entire leadership team that is really focused on the goals that have been laid out on and and that's really what we're focused on today.

Raimo Lenschow: Okay, thank you.

Okay perfect. Thank you.

Speaker Change: Thank you next question is coming from Mark Murphy from Jpmorgan. Your line is now live.

Thank you and nice to see the stability in the in the operating results this quarter.

Daniel Dines: For example, a Central American financial institution began their automation journey by automating back office processes across treasury, management, paying payments and customer service, enabling them to reduce their banking transaction clarifications from 8 days to 1 and migrate over 50% of their physical banking transactions to their online channel. After seeing the substantial benefits from our automation capabilities, they implemented document understanding to digitally onboard over 500,000 clients that are now piloting IDP for unstructured documents by leveraging our generative classification, extraction and validation capabilities.

Daniel: Daniel we've been noticing the term a gentex is suddenly becoming very popular salesforce came out with its agent force branding recently and part of the notion is that agents are going to have independence and autonomy and I'm wondering how you might think about.

Unknown Attendee: The term agentic is suddenly becoming very popular. Salesforce came out with its Agent Force branding recently. And part of the notion is that agents are going to have independence and autonomy.

Daniel Dines: And I'm wondering how you might think about the line of demarcation. And like if we think of a bot and you know, it's following predefined workload, you know, workflows, excuse me, you know, it feels like predefined logic. You need humans to set up the models and all that. And then if you think about an agent, it's, you know, acting independently; they can adapt, right? Maybe sometimes without instructions. How are you thinking about, you know, that line of demarcation because I think it might be at the root of some of the customer confusion on where RPA might fit into the AI landscape, and then have a quick follow-up.

Speaker Change: The line of demarcation like if if if we think of a bot and it's following predefined workload.

Speaker Change: Workflows excuse me.

Speaker Change: You know it feels like predefined logic you'd need humans to set up the models and all of that and then if you think about an agent. It's it's you know.

Speaker Change: Acting independently they can adapt right, maybe sometimes without without instructions.

How are you thinking about that line of demarcation because I think it might be at the root of some of the customer confusion on where RPM might fit into the AI landscape and then I have a quick follow up.

Daniel Dines: Additionally, they will be implementing communication mining in Salesforce to better understand customer issues and reduce clarifications. Our test suite capabilities are also resonating, enabling customers to accelerate time to value while maintaining the stability and reliability of processes and applications in production. During the quarter, we closed our largest test suite deal ever with one of the world's largest technology companies. With the help of UIPaf team, they will be implementing our solution to automate testing for their CPQ process in Salesforce and several other processes, including ordering, billing allocation, incentive compensation and forecasting with an expected cost saving of approximately $23 million a year.

Speaker Change: Yeah.

Daniel Dines: Yeah, that's a great question mark. We, we really think of agentic process automation as an evolution of robotic process automation. I actually, we started to socialize the agentic process automation term during our tour event in London and Paris at the beginning of the summer. And we introduced the concept of robots and agents working together. And to me, the an AI agent is, it's basically a robot if you want that has some new skills. And I think there will be multiple types of agents. For instance, they will be agents that are capable of extracting information from long and complex documents, and users, human users, will be capable of interacting with these agents asking questions.

Speaker Change: Yes, that's a great question.

Speaker Change: We Oh, we really think of agenda process automation as.

The evolution of robotic process automation actually we started to socialize the adjunctive process automation term during our tour events, and and London and Paris, the beginning of the summer we introduced the concept of robots.

Speaker Change: Agents working together and.

Speaker Change: To me the AI agent is.

Speaker Change: It's basically the robot if you want that has more new skills and I think there will be multiple type of agents for instance, they will be agents that are capable of.

Daniel Dines: Third, partners are a quarter stone of our go-to market strategy, enabling us to scale our market reach and elevating our customer success initiatives. And I'm excited about our continued progress with SAP, including an expansion deal with an Australian multinational corporation and customer since 2021, who originally used UIPaf test suite. After successfully completing their migration, they expanded in the quarter and are working with UIPaf team to establish an automation program globally and encompassing core automation testing and AI.

Speaker Change: Well extracting information from long run complex documents and the use of human users will be capable of interacting with these agents asking questions.

Daniel Dines: And in turn, they can ask the agents to perform actions for them. There will be action; there will be agents that can make more intelligent decisions based on data, and they can route a process in a more dynamic way. As you can, as you know, for sure, robotic means that the series, the steps in a process are stitched together in a fixed way. And agentic workflow might have dynamic routing in as part of the process.

Speaker Change: And thirdly, they can ask the agents to perform actions for them.

Speaker Change: There will be.

Speaker Change: They will be agents that can make more intelligent decisions based on data they can grow to a process and a more dynamic way as you can as you know for sure.

Speaker Change: I think means that the series the steps in the process of stitch together.

Fixed wing and adjourn the call flow.

Daniel Dines: Our SAP partnership is also helping us secure new logos, like Gold Peak Technology Group, who will be automating their order input processes to extract an input data into SAP, eliminating manual inputs and avoiding human errors. Durant the Quarters, we also expanded our relationship with Deloitte, integrating our capabilities into Deloitte's sand platform to transform SAP project delivery, and help companies accelerate and refine the execution of business transformation. For this program, automations are available across various projects, phases and SAP functional areas, facilitating an effective and efficient deployment process, fostering an automation first project delivery, and driving faster value for Deloitte's global customers.

Speaker Change: Right.

Speaker Change: <unk> dynamic.

Speaker Change: And as part of the process.

Daniel Dines: And I want to iterate ways really our strength here. And it is in the combining, actually robotic automation with agentic automation is part of our process orchestration plot.

Speaker Change: Well I wanted to I wanted to iterate, what is really our strength here.

This isn't the combining.

Speaker Change: Surely robotic automation agenda automation as part of our process orchestration platform.

Daniel Dines: and so forth. Because I think the key differentiator in customers deploying agents would be in how well they are integrated within the business platforms. And how well we can orchestrate between robots, agents, and humans. And I think we are really positioned to bring the power of LLM-based agents into our business platforms. And how well we can orchestrate between robots, agents, and humans. And I think we are really positioned to bring the power of LLM-based agents into our platform and also this level of orchestration.

Speaker Change: Because I think the key differentiator.

Speaker Change: In the custom.

Speaker Change: Customers deploying agents will be how will they are integrated within the business platforms.

Speaker Change: And how will we can orchestrate between robots agents in humans and I think we're realistically positioned to bring the power of LNR.

Speaker Change: Home based agents into our platform and offer this level of work the solution.

Unknown Attendee: That's a great explanation.

Yeah, that's a great explanation and Ashish I wanted to ask you.

Daniel Dines: And finally, our success is deeply rooted in our ability to serve our customers, making a customer centering mindset more crucial than ever. We understand the importance of successful implementation, and the entire company is focused on ensuring our customers achieve it. This includes taking steps to improve alignment and communication between our teams, and our customers' deeper account-level reviews, ensuring the appropriate connections happen across all customer stakeholders.

Ashim Gupta: And Ashim, I wanted to ask you, do you see any line of sight to a point in time where some of the AI confusion might dissipate and maybe begin to turn into kind of a full-blown AI tailwind for UiPath. Like in other words, customers might re-educate and understand and how to move jointly with AI and automation. Because I guess I'm curious, could we look on this period of softer ARR growth, could we look back on it? And maybe say that it was just a bit of a temporary period of confusion before customers kind of figured it out.

ashish: Do you see any line of sight to a.

ashish: Point in time, where.

ashish: Some of the AI confusion might anticipate and you know maybe begin to turn into into kind of a full blown AI tailwind for you ipass.

Speaker Change: In other words, the customers might reeducate didn't understand and how.

Speaker Change: How to move jointly with AI and automation.

Because I guess I'm curious could we look on this period of softer AOR growth can we look back on it and maybe say that it was just there was a bit of a temporary period of confusion before before customers kind of figured it out.

Daniel Dines: Turning to product highlights from the quarter. In our July release, we launched a series of product innovations that deeply infuse Geniei into our automation platform. This included new specialized LLMs for IDP, Geniei activities, and the launch of autopilot for developers and testers. Since launching autopilot, we've seen great early adoption and positive feedback from customers. A great example is the multinational digital communications company, an early adapter of autopilot for testers. The company's Geniei testing roadmap centers our on leveraging our LLM capabilities throughout the entire testing lifecycle, from creating user stories to generating test cases and tool reporting. With the power of autopilot, they believe they will be able to constantly date the tools using their testing framework and reduce manual testing by up to 50%.

Ashim Gupta: Look, I want to be careful about giving any type of long-term guidance implied in that mark. At the same time, what I can say is we are investing in the platform and will continue to invest in the platform and our AI capabilities because we see it as a meaningful opportunity to drive value and differentiation with customers, which in our minds reflects on the conviction that we have in the company. You know, in the script and in other areas, Daniels already talked about customer conversations are already becoming clearer for us. Like people are seeing the linkages between AI and automation.

Speaker Change: Yeah look I want to be careful about giving any type of long term guidance implied in that mark at the same time, what I can say is we're investing in the platform and we'll continue to invest in the platform and our AI capabilities, because we see it as a meaningful opportunity to drive value and differentiation with customers, which in our minds.

Speaker Change: It reflects on the conviction that we have in the company.

Speaker Change: In the script and in other areas generals are ray talked about customer conversations are already becoming clearer for us right like people are seeing the linkages between AI and automation. So we're already seeing positive response and more clarity from our customers.

Ashim Gupta: So we're already seeing positive response and more clarity from our customers, how the AI narrative translates in the broader market, confusion moving in and out because of broader factors and as that area evolves. I think we're all going to, you know, we all take it day by day and quarter by quarter. But long-term, we feel very good about what AI is bringing. And we're investing because we do believe it has a meaningful ROI and reinforces the durability of our growth rate.

The AI narrative translates in the broader market confusion moving in and out because of broader factors and as that area evolves I think we're all we all take it day by day and quarter by quarter, but long term, we feel very good about what AI is bringing and we're investing because we do believe it has a meaningful ROI.

Speaker Change: And reinforces the durability of our growth rate.

Unknown Attendee: Thank you very much.

Speaker Change: Thank you very much.

Daniel Dines: And we are excited for the next phase of autopilot, autopilot for everyone, which we expect to launch into general availability this fall. Over the past few months, we've been working closely with the few customers in private preview, and we consistently hear that autopilot for everyone is not only giving better responses than other LLM-based chat solutions, but is also more valuable because it provides the ability to immediately automate an action. To give you an idea of how autopilot for everyone is different from other Geniei chat solutions, we'd like to share a quick demo of a real autopilot use case, that we have been working to develop with the US-based biotech company.

Unknown Attendee: Thank you.

Thank you. Your next question is coming from Bryan Bergin from TD calendar. Your line is now live.

Brian Berking: Next question is coming from Brian Berking from TD County. Or light is that live? Hey guys, good afternoon, and congrats to Scheme on the expanded role. My first question just on demand is that macro variability has been a pretty consistent message in how you've described, you know, how enterprises are behaving now for several quarters. We understand things deteriorated last quarter; I guess late March and April. Can you just comment on what you saw through the balance of 2Q and into August as well? I think we saw things pretty stable, Brian. You know, we still describe the macroeconomic environment as variable.

Speaker Change: Yeah.

Bryan Bergin: Hey, guys good afternoon, and congrats a shame on the expanded role.

Bryan Bergin: My first question just on demand is it macro variability has been a pretty consistent message and how you've described.

Speaker Change: How enterprises are behaving now for several quarters, we understand things deteriorated last quarter I guess late March and April can you just comment on what you saw through the balance of <unk> and into August as well.

Speaker Change: I think we saw things pretty stable Bryan.

Bryan Bergin: Still describe the macroeconomic <unk>.

Bryan Bergin: Environment is variable.

Ashim Gupta: We've talked about the commercial end or the lower end of the market, you know, having a higher degree of impact, and we see that to remain consistent. And we see that, you know, just really broadly across all geographies, etc. I do think that as our execution improves, you know, and as we've made, as we've streamlined different areas, I think we're adopting wealth at the environment, but I do feel like, you know, the environment is stable versus last quarter. And we didn't really see any ups and downs, months and months within the quarter.

Speaker Change: We've talked about the commercial land or the lower end of the market, having a higher degree of impact and we see that to be to remain consistent.

Speaker Change: And we see that just really broadly across all geographies et cetera, I do think that as our execution improves.

Daniel Dines: If you have not on the webcast, please go to our Investor Relations website for the demo link. What differentiates us in the market is our end-to-end automation platform and the demo you just saw is a great example of an experience that only our platform is able to deliver in a unified To be more specific, we are the only platform that can bring together business documents and data, execute UI and API based automations across systems and utilize a mix of specialized AI and generative AI grounded in organizational data and process information. These capabilities enable users to take real action on enterprise grade platform that is secure and governed.

And as we've made as we streamline different areas I think we are adapting well to the environment, but I do feel like.

Speaker Change: The environment is stable versus last quarter, and we didn't really see any ups and downs of month to month within the corner.

Unknown Attendee: Porter.

Unknown Attendee: Okay, and then it relates to the restructuring and how we should think about potential yield from that.

Speaker Change: Okay, and then as it relates to the restructuring and how we should think about potential yield from that can you comment on whether that the restructuring actions, you're taking does that impact that 20% long term adjusted operating margin target.

Ashim Gupta: Can you comment on whether that the restructuring actions you're taking, does that impact that 20% long term adjusted operating more in tar heat add? Is it kind of a kind of provide upside there? Is it more of a means to achieving that?

Speaker Change: Is it kind of doesn't it.

Speaker Change: Provide upside here or is it more of a means to achieving that.

Ashim Gupta: Look, I think that we're going to update our long-term guidance at the appropriate time. What we do feel in our restructuring effort that we've taken and that we're going to continue to look at different ways to streamline the organization. We do feel like there's more efficiency to be had. They're Brian, and then we'll update that on 20 on our long term margins as we go. We have always said that we're going to be 20% plus in terms of our long term margin. So what that plus looks like, that's what we'll update at the appropriate time.

Speaker Change: Look I think that we're going to update our long term guidance at the appropriate time.

Speaker Change: What we do feel in our restructuring efforts that we've taken and that we're going to continue to look at different ways to streamline the organization. We do feel like there's more efficiency to be had there Brian and then we'll update that on 'twenty on that.

Speaker Change: On our long term margins as we go we have always said that we're going to be 20% plus in terms of our long term margin. So what that plus looks like that's what will.

Speaker Change: An update at the appropriate time.

Unknown Attendee: Okay, understood.

Brian: Okay understood. Thank you.

Matthew Hedberg: Thank you. Next question is coming from Matthew Hedberg from RBC Capital Market for a while. Is that live?

Speaker Change: Thank you next question is coming from Matthew Hedberg from RBC capital markets. Your line is now live.

Unknown Attendee: Hey guys, this is Mike Richards on Format. Thanks for taking the question. Maybe go off that last question there.

Speaker Change: Hey, guys. This is Mike Richardson on for Matt. Thanks for taking the question.

Mike Richardson: Going off that last question there I.

Ashim Gupta: I was wondering if you could provide some more details on the restructuring, just in terms like sizing and what areas were impacted, and then also, you know, if you're accounting for any disruption. Between the restructuring or the general organization changes and guidance. Thanks, guys.

Mike Richardson: I was wondering if you could provide some more details on the restructuring just in terms of like <unk>.

Mike Richardson: Sizing and what areas were impacted and then also if you.

Mike Richardson: You're accounting for any disruption between the restructuring or the general organization changes in guidance. Thanks, guys.

Ashim Gupta: Yeah, maybe let me start with the high level over here, and then I let's assume to bring more color. I think largely we have restructured our central functions. And we are like, we were looking at more like sales operation, sales enablement, functions, and especially also part of restructuring. I can tell you we're basically we look in all areas of the company. And I think we our goal is longer term than this restructuring into bringing a great level of efficiency and agility into the company.

Speaker Change: Yeah, maybe let me start with a high level overview on the mainland.

Speaker Change: Ashamed to bring more color I think largely we have to restructure.

Speaker Change: We structure, the our central functions and we are.

Speaker Change: Like we were looking.

Speaker Change: Uh huh.

Speaker Change: More like who says.

Speaker Change: Operation sales enablement.

Speaker Change: Functions.

Speaker Change: And especially.

Speaker Change: So bulk of restructuring I can tell you we are.

Speaker Change: Basically we.

Speaker Change: We look at all areas of the company.

Speaker Change: And I.

Speaker Change: I think we our goal is longer term that this restructuring into bringing a greater level of efficiency and agility into the company.

Ashim Gupta: And then just in terms of disruption, you know, we provided our guidance in the last quarter earnings. I think there's no incremental impact to that that I would say from a disruption standpoint. We would account for it at this time. Again, as Daniel said, when it's a lot of the stream lot, a lot of the central organizations, they didn't really impact the growth of the company, right, and the growth rate of the company. They really were, you know; there was a larger disconnect between those organizations and the field. So that's one of the reasons why we did not see that disruption, or why we don't feel like there is a meaningful disruption that needs to be singled out.

Speaker Change: And then just in terms of disruption.

Speaker Change: We provided our guidance in.

Speaker Change: A lot in the last quarter earnings I think there is no incremental impact to that that I would say from a disruption standpoint, we would account for it. This time again as Daniel said when it's a lot of the streamlined a lot of the central organizations. They didnt really impact the growth of the company right and the growth rate of the company there.

Daniel: Really were.

Daniel: There was a larger disconnect between those organizations in the field. So that's one of the reasons why we did not see that disruption or why we don't feel like there is a meaningful disruption that needs to be singled out.

Unknown Attendee: Thanks, guys. Thank you.

Speaker Change: Thanks, guys.

Speaker Change: Thank you next question is coming from Keith Weiss from Morgan Stanley. Your line is now live.

Keith Weiss: Next question is coming from Keith Weiss from Morgan Stanley. Your line is now live. Yeah, this is the answer to things for Keith. Well, I thank you for taking the question. Daniel, you read up a number of initiatives across operations, products, partners, customers, customer success.

Stan: Yes. This is stan hitting for Keith Weiss. Thank you for taking the questions you might have a number of initiatives across operations product partners.

Stan: Customer success I was wondering as you sort of look at sort of the near to mid mid term, where do you see the lowest hanging fruit in terms of getting back to a better growth trajectory and then I have a follow up.

Daniel Dines: I was wondering, as you sort of look at sort of the near to midterm, where do you see the lowest hanging fruit in terms of getting back to a better growth trajectory? Okay, I think we continue to see, as we said in the last earnings call. We need to make our teams working well together. This is the, this is made basically, it was our first goal to break the silos into the organization and make sure that we align everything in the interests of the customer. So, for example, some of the low hanging fruit was to put back customer success into the region while keeping some kind of centralized program about it.

Stan:

Speaker Change: Look I think.

Speaker Change: We continue to see as we said in the last earnings call.

Speaker Change: We need to make our teams are working well together. This is the this is basically it.

Speaker Change: It was our first go to break the silos into.

Speaker Change: <unk> of the organization and make sure that we we align everything in the interests of the customer.

Daniel Dines: There are few things I find more satisfying than seeing customer leverage our automation platform to flourish and succeed. Their stories are inspiring, for example, health service executive, a customer since 2020. With automations across their HR, finance and community care departments, they have processed over 6 million transactions, saving over 700,000 hours and 28 million euros today. Driven by the quick time to value and tangible ROI, they were able to achieve HSE expanded in the quarter to urgently extend these automated solutions across their hospital waitlist. Partnering with Deloitte, they are in the process of accelerating the deployment of this solution to an additional 20 hospitals before the end of 2024.

Speaker Change: Two.

Daniel Dines: These stories, along with the conversations I had with customers, partners and our product team, all directly influence how I think about the strategic direction of our business and I have never been more enthusiastic about where we stand from a product perspective.

Speaker Change: For example, some of the low hanging fruit was too.

Speaker Change: Put back customer success into the region, while keeping some kind of centralize.

Speaker Change: Program about it.

Ashim Gupta: And same with our technical management. We have simplified some of the raw nomenclature. And, yeah, it's, I think it was a lot about with simplification and moving people into the regions.

Speaker Change: And the same with our technical account management, we have simplified some of the raw nomenclature.

Speaker Change: Yes, it's I think.

Speaker Change: It was a loved the law with simplification.

Speaker Change: And.

Daniel: Moving people into the regions assume anything to comment no I think like I think the first step was improving execution as Daniel said and that meant breaking down the silos and really connecting the teams I do think the investments that we're making that Daniel talked about in terms of agenda.

Ashim Gupta: Ashim, anything to comment? No, I think so. Like, I think the first step was improving execution, as Daniel said, and that meant breaking down the silos and really connecting the teams. I do think the investments that we're making that Daniel talked about in terms of agentic, the investments in process orchestration, the, you know, we gave examples of the test steel, you know, that we won in the quarter. Those are all evidence of different parts of our strategy that is we continue to drive and execute. We feel reinforced the durability of our growth.

Daniel: The investments and process orchestration the.

Daniel: The examples of the test deal that we won in the quarter.

Speaker Change: Those are all evidence of different parts of our strategy that as we continue to drive and execute we feel reinforce the durability of our growth.

Keith Weiss: I really appreciate that perspective. And it sort of leads into my follow-up on the product side of the house. Clearly, there's a lot of innovation going on. We have auto pilot GA coming up, communications, binding process orchestration Daniel, which he highlighted historically. We've talked about the past.

Speaker Change: I really appreciate that perspective.

Speaker Change #100: And so as we head into my follow up on the product side of the house clearly, there's a lot of innovation going on we have autopilot GAA coming up communications binding process orchestration and what you've highlighted historically when you've talked to customers in the past some of them have commented that that's sort of breadth and depth of the product portfolio was a little overwhelming.

Daniel Dines: As a market leader, it is critical that we continue to innovate to further differentiate our products and I am excited by the next evolution of our platform, UIPath, process orchestration which we launch into private preview in June. While legacy business process management vendors typically start with a top-down approach that is often disconnected from how work really gets down. Our approach differentiates by allowing organizations to build a unified data driven bottom-up view.

Daniel Dines: Some of them have commented that the sort of breadth and depth of the product portfolio was a little overwhelming in terms of where to invest that incremental dollar. He sort of talked to how the pricing packaging side is evolving along with some of the restructuring cases in terms of making the solution more digestible into the enterprise. Yeah, we, I think one of the major initiatives that is actually in progress is to look at our pricing and packaging. And, you know, come up with maybe even quite a different model that should tie our pricing more to the value that we deliver.

Speaker Change #101: In terms of where to invest that incremental dollar you sort of talk speak to the how the pricing packaging side evolving along with some of the restructuring changes in terms of making the solution more digestible into the enterprise.

Speaker Change #102: Yeah, we are I.

Daniel Dines: This enables customers to discover, automate, optimize and monitor business processes from start to finish, providing complete visibility into how work is executed by people, automations and in systems. We believe that process orchestration is the key ingredient for the future of a genetic process automation. We are really excited about the progress we are making on this vision and our overall product roadmap and we invite you to join us in person to hear more about this product innovations at our user conference forward in Las Vegas next month. We hope to see many of you there.

Speaker Change #103: I think one of the major initiatives that are.

Speaker Change #103: Is actually in progress is to pursue.

Speaker Change #103: You look at our pricing and packaging and.

<unk> come up with.

Speaker Change #103: Maybe even quite.

Speaker Change #103: A different model that should die our pricing more to the value that we believe I think it's a it's a bit.

Daniel Dines: I think it's a bit too early to comment on this one.

Speaker Change #103: Too early.

Speaker Change #103: Two comments on this one but on the also on the.

Daniel Dines: And also on the platform in itself, we are having some key initiatives. Maybe we talk a little bit about them, but we it's called like internally we call it like unify build time. So we aim to present our platform in a much more consistent way to the developer. So basically, anyone using the platform, we have all the tools better integrated. So they will create an application easier. For instance, to give you an example, if you want to create like an onboarding application, you can start with building the user interface. And then you can connect very easy the user interface with some kind of automations.

Speaker Change #104: Last quarter, I mean itself, we were having some more key initiatives, maybe we talk a little bit about them, but we are it's clearly internally we call it like unified build.

Speaker Change #105: So we aim to present our platform in a much more consistent way to the developer so basically anyone using the plus one we have all the tools better integrated so they will create an application easier for instance to give you an example.

Daniel Dines: Finally, I wanted to take a moment to thank Ashim. He is joining UIPath in 2018. He has played an instrumental role in transforming our company with his extensive financial and operational capabilities. Over the last several months, he has also been a driving force behind our efforts to refocus the company on its core strength, improve our operational rigor and reestablish a customer-centric foundation to support our growth initiatives. To continue to oversee his traditional CFO responsibilities, I am pleased to share that he will now take on an expanded role as Chief Operating Officer, where he will work with me to maximize financial and operating efficiencies across the organization.

Speaker Change #105: If you want to create like an Onboarding application you can start building the user interface and then you can connect very easy to user interface with some kind of automation and then the automation is can they can.

Daniel Dines: And then the automations can take advantage of our communication mining, or document understanding, or data service, and everything will be completely integrated. So it doesn't look like you go to different systems. So I think that will also help customers to understand better our offer.

Speaker Change #106: The advantage of our communication mining more documents understanding our data service and everything will be completely integrated so it doesn't look like you go to different systems. So I think that will also help customers to understand better our offering.

Keith Weiss: I really appreciate the perspective. Thank you very much.

Speaker Change #106: I really appreciate the perspective, thanks Beth.

Unknown Attendee: Thank you. Next question is from C.T. Panigrahi, from Mr. Who's security, Jarliner Zalav. Thanks for taking my question, and same, congratulations on the expanded role. So, going back to the, let's a new business, you talked about challenging macro environment and even some sort of confusion between this AI and RPA work to invest. But if we dig into the expanse on side of this, your install base, one of the opportunities or challenges you are seeing at this point. I think when we look at our expansion, I think the first thing I would just note is like our customers that are, you know, between $100,000 and $1 million, they are continuing to expand at 120 plus percent.

Speaker Change #107: Thank you. Your next question is coming from city pilot Groggy from Mizuho Securities. Your line is now live.

Groggy: Thanks for taking my question and then assume congratulation on the expanded role.

Ashim Gupta: With that, I'll turn the call over to Ashim.

So going back to the list of new business, you've talked about challenging macro environment and even some sort of confusion between this yeah, I am happy of where to invest but if we dig into the expense inside of your installed base one of the opportunities or challenges you're seeing at this point.

Ashim Gupta: Thank you, Daniel, and good afternoon everyone. Unless otherwise indicated, I will be discussing results on a non-gap basis in all growth rates of year-over-year. Turning to the second quarter, ARR totalled $1.551 billion in 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 in increase of more than 65%.

Groggy: Yeah.

I think when we look at our expansion I think the first thing I would just note is like our customers.

Speaker Change #109: That are.

Speaker Change #110: Between 100000 and $1 million, they're continuing to expand at a 120 plus percent.

Sitikantha Panigrahi: So, really, you know, making sure that our customers get to a certain scale, city across our $10,800 customers, that's important. That goes down to a Daniels reinforced of not just the sea level, but the grassroots level of adoption and making sure we're connected at that base area. The second piece is the more people adopt, you know, adopt our full platform and features, you know, document understanding, intelligent document processing. When you look at many of the larger deals in the quarter, they're not core RPA alone, and they haven't been for a while. Those deals have, you know, multiple elements of our platform, if not the entire platform.

Ashim Gupta: A great example is Ontario Power Generation, a customer since 2018, who expanded in the quarter as they begin to migrate to the cloud. They are also planning to expand to additional departments across the organization, while incorporating document understanding and communications mining into their program. We ended the quarter with approximately 10,810 customers, including new logos like Ixam, Benicis, Mossin Associates, and Piedmont healthcare.

Daniel: So really making sure that our customers get to a certain scale Citi across our 10800 customers. That's important that goes down to what Daniel has reinforced of not just the C level, but the grassroots level of adoption and making sure. We're connected at that base area. The second piece is the more people adopt or adapt.

Speaker Change #110: Our full platform and.

Speaker Change #110: And features.

Speaker Change #110: Document understanding intelligent document processing when you look at many of the larger deals in the quarter. They are not core or P. A alone and they haven't been for a while those deals have multiple elements of our platform is not the entire platform and continuing to drive that awareness and continue to driving that within our customer base those are.

Ashim Gupta: Moving on to customer metrics. Customers with $100,000 or more in ARR increased to $2,163, while customers with $1 million or more in ARR increased to $293. Dollar-based gross retention of 97% continues to be best in class, and our dollar-based net retention rate for the quarter was 115%. Expansions are driven by the quick time to value and the broad applicability of our automation platform. A great example is AGS Health, a customer since 2021, that currently uses UIPAP to automate their claims tracking, eligibility verification, and payment posting processes.

Sitikantha Panigrahi: And continuing to drive that awareness and continuing to driving that within our customer base, those are kind of like our two biggest areas. And frankly, the personal productivity side, you know, that is an increasing competitive area. We've always talked about that. That's not the majority of where we want to play. So continue to drive enterprise-grade use cases and solutions with our customer. That also continues to be a priority, you know, that really bolsters; then that's all our expansion rate for us.

Speaker Change #110: Like our two biggest areas and frankly, the personal productivity side.

Speaker Change #110: That is an increasing competitive area, we've always talked about that that's not the majority of where we want to play. So continue to drive enterprise grade use cases and solutions with our customer that also continues to be a priority that really bolsters that net dollar expansion rate for us.

Speaker Change #110: That's great and a follow up to I think Mark Mark's question earlier about the automation.

Daniel Dines: That's great. And I followed to, I think Mark's question earlier about the agentic automation. It's certainly now increasing competition. There are other vendors now with agent AI coming in, but it's good to see the innovation and then investment you're doing on the product side. Where do you see the switch spot? Is it more your product is more, you know, addressing the install base that you have that's where you have the switch spot? But, do you think you can effectively compete with the new deals against the new set of competitors? I think we have some distinctive advantages.

Ashim Gupta: In a competitive win, they expanded their usage of document understanding, highlighting our unique AI capabilities, such as our AI trust layer, and human-in-the-loop model training as competitive advantages, scaling from 6 million documents to over 20 million documents process. And saw a 95% accuracy improvement. With support from their CFO and CTO, they will be adopting document understanding across their payer and provider departments for medical record patient indexing. Turning back to our results, revenue grew to $316 million in increase of 10% year-over- New Year.

Suddenly now increasing competition there are other vendors now with <unk> coming in but it's good to see the innovation and the investment you're doing on the product side, but where do you see the sweet spot is it more Europe.

Speaker Change #111: Product is more.

Speaker Change #112: Addressing the installed base that you have that that's where you have the sweet spot or do you think you can effectively compete with the new deals I guess, the new set of competitors.

Speaker Change #112: Oh I see.

Speaker Change #114: I think we have some distinct.

Speaker Change #112: Vintages.

Daniel Dines: What's the goal? We have a low-code platform that our developers are used to. And yeah, using our low-code platform to build agents as well. A lot of the like new entrants, new startups are targeting more like professional developers. We work more with our automation developers. And it's quite a large population, so we aim to give them all the building blocks to build agents. So that's one of our advantages. Second, these agents are not so useful if you don't pair them with actions. And this is, I think, where we will shine. And we have a unique advantage to actually deliver agents that understand data or can make decisions and can call action.

Speaker Change #112: First of all we have a low code the blocks for that.

Ashim Gupta: Remaining performance obligations increased to $1.081 billion of 19% year-over-year. Current RPO increased to $686 million. Turning to expenses, we delivered a second quarter overall gross margin of 83%, driven by continued adoption of our cloud products, and software gross margin was 87%. For the full fiscal year 2025, we continue to expect gross margin to be approximately 85%. Second quarter operating expenses were $257 million. Gap operating loss of $103 million included $94 million of stock-based compensation expense.

Speaker Change #112: Our developers are they used to and they are using our <unk> platform to build agents as well a lot of the new entrants new startups are.

Speaker Change #112: Our targeting more like professional developers, we work more with Oh or automation developers and it's quite beloved population. So we aim to give them all the building blocks.

Speaker Change #112: To build agents.

Speaker Change #112: So that's the that's one of our advantage second is these agents are not so useful if you don't build them with actions and this is I think where we will shine and we have a unique advantage to actually deliver agents that.

Ashim Gupta: Non-gap operating income was $6 million, resulting in a second quarter non-gap operating margin of 2%. Second quarter non-gap adjusted free cash flow was $49 million. As of July 31st, we had $1.7 billion in cash, cash equivalents, and marketable securities, and no debt. Our strong balance combined with our free cash flow generation has enabled us to return capital to our shareholders in a meaningful way through our share repurchase program. During the quarter, we repurchased 16.3 million shares of our Class A common stock at an average price of $12.05 from May 1st, 2024 through July 31st, 2024.

Speaker Change #112: I understand data or can make decisions and can call actions.

Daniel Dines: And also think about it's not enough to build one single agent. An enterprise will have maybe hundreds and thousands of agents over time. So it's equally important to orchestrate these agents, manage them, offer them in a secure and governed environment. And this is actually built in in our platform. And it's not we we spend many years to build the scalable orchestration platform. It takes really a long time to have it. And we have we have it already. We just are taking the best of other more embedded into our platform and deliver easy to our customers.

Speaker Change #112: And first of all.

Speaker Change #112: Also think about it is not enough to build one single agent <unk>.

Speaker Change #112: In enterprise, we will have maybe hundreds and thousands of agents overtime. So it's equally important to orchestrate these agents manage them.

All for them in the secure and government environment and this is actually built in in our platform and it's not we we spent many years to build the scalable orchestration plus form it takes.

Ashim Gupta: Since July 31st, under a 10v5.1 plan, we repurchased an additional 10.7 million shares at an average price of $11.67 through August 30th, 2024. And as you may have seen in today's earnings press release, our Board of Directors has approved a $500 million expansion of our share repurchase program, underscoring our confidence in the business, our conviction, and the long-term opportunities ahead, and our commitment to delivering shareholder value.

Speaker Change #112: So they need a long time to have it and we hope we have reported we just are taking the best of a little bit more embedded into old blocks and deliveries to our customers.

Sitikantha Panigrahi: It's great. Thanks for the color, Daniel.

Speaker Change #115: Great. Thanks for the color.

Unknown Attendee: Thank you.

Speaker Change #115: Thank you. Our next question is coming from Kirk returned from Evercore. Your line is that life.

Kirk Materne: Next question is coming from Kirk Materne from Ever QueryLine. Is that live?

Chirag Ved: Hi, this is Chirag on for Kirk. Congratulations on the quarter. And thanks for taking the question. So following up on one of the prior themes that was brought up, how are you finding the right balance between selling the automation platform versus selling core RPA? You clearly think success with large customers and platform adoption. But are you finding that certain customers are just looking for core RPA when they land? And what's your philosophy on approaching those accounts? Well, RPA is a pretty powerful technology. And it can go to really a long distance in addressing, you know, customer's automation needs.

Speaker Change #115: Hi, This is for Rob on for Kirk Congratulations on the quarter and thanks for taking the question.

Ashim Gupta: Moving on to guidance, we are pleased with the progress and improved execution that we delivered in the quarter. At the same time, we are taking a prudent approach to guidance, which assumes the global macroeconomic environment continues to be variable. As Daniel mentioned, during the quarter, we took a number of actions to drive operational efficiencies and streamline the business. And as a result, we are raising our non-gap operating income and non-gap adjusted free cash flow guidance for the full year 2025.

Speaker Change #116: So following up on one of the prior team that was brought up.

Speaker Change #117: Are you finding the right balance between selling the automation platform versus selling core RPX, you're clearly seeing success with large customers and platform adoption, but are you finding that certain customers are just looking for core R. P. A when they land and what's your philosophy on approaching.

Speaker Change #117: Those accounts.

Speaker Change #119: Well RPI, it's a pretty powerful technology.

Ashim Gupta: For the third quarter fiscal 2025, we expect revenue in the range of $345 million to $350 million. ARR in the range of $1.6 billion to $1.605 billion. Non-gap operating income of approximately $27 million. And we expect $1.6 billion to $1.670 billion. Non-gap operating income of approximately $170 million. And finally, we now exceed $1.5 billion. ARR in the range of $1.660 billion to $1.670 billion. Non-gap operating income of approximately $170 million. And finally, we now exceed $1.670 billion. We expect fiscal year 2025 non-gap adjusted free cash flow of approximately $325 million.

Speaker Change #120: It can go to.

Speaker Change #121: Or really long distance and addressing remote customers automation needs and if you think of how we build.

Daniel Dines: And if you think of how we build our platform, it is really going after white spaces around RPA. So RPA naturally evolved into a business automation platform. But our ability to emulate human users is the core principle that is behind our platform. In a way, this is why, if you think today, AI fits so naturally, Jennie, I fit so naturally into our platform because Jennie is an imitative of how human mind works type of technology. And that's, again, that's even since our IPO, we made it clear: our platform emulates human users. That's the core tenet of what we are building.

Speaker Change #121: Our platform.

Speaker Change #121: It's really going after white spaces around us.

Speaker Change #121: So RP nature really evolved into a business automation plausible but.

Speaker Change #121: Sure.

Speaker Change #122: Our ability to emulate human users is the core principle that is behind our platform in a way.

Speaker Change #122: This is this is why if you think today.

So naturally January so naturally into our platform because generally I isn't imitative.

Human mind works type of technology, and that's again, that's even since our IPO, we've made it clear that our cloud for.

Ashim Gupta: Thank you for joining us today, and we look forward to speaking with many of you during the quarter.

Speaker Change #122: Emulates human users.

Speaker Change #122: Core tenets of what we are billing so in this sense, it's a natural extension from our P. A to a broader automation too.

Unknown Executive: With that, I will now turn the call over to the operator. Operator, please pull for questions. Thank you. We're now conducting your question and answer session. If you'd like to be placed in the question, Q, please press star one on your telephone keypad. As a reminder, we ask you please ask one question and one follow up and return to the Q. If you'd like to move your question from the Q, please press star two. Once again, that star one to be placed in the question, Q, one moment, please, what we pull for questions.

Daniel Dines: So, in this sense, it's a natural extension from RPA to a broader automation to an AI-powered automation platform. Okay, thank you.

Speaker Change #122: AI powered automation platform.

Speaker Change #123: Okay. Thank you.

Dominique Manenzara: Thank you. Next question is coming from Terry Tillman from True Security. Your line is now live.

Speaker Change #123: Thank you next question is coming from Terry Tillman from true of Securities. Your line is now live.

Daniel Dines: Hi, this is Dominique Manenzara, Amber Terry. Thanks for taking my question. So just looking at the recently achieved Bedramp authorization, could you provide more details on your progress and customer interest in the pipeline you've seen in the public sector so far? And are there any specific government agencies or verticals where you see the greatest potential for automation adoption? Well, I think public sector is one of the fastest growth industries for us. I'm very happy having achieved the FedRAMP authorization. I think this is going to accelerate our business in the public sector. We also are looking forward to take the lessons learned while building FedRAMP into other countries and territories and, you know, power more of our public sector business.

Dominic Melissa: Hi, This is Dominic Melissa on for Terry Thanks for taking my question. So just looking at the recently achieved bedroom authorization could you provide more details on your progress and customer interest in the pipeline you see in the public sector. So far and are there any specific government agencies or verticals, where you see the greatest potential for automation adoption.

Raimo Lenschow: Our first question today is coming from Raimo Lenschow from Barclays, your line is now live. Hey, perfect. Thank you, and congrats on a good quarter.

Daniel Dines: My first question was like, if you think about the changes that you wanted to make in terms of selling more on a departmental level, going back a little bit to your route, Daniel, you talked about it last quarter. What progress have you seen there? What are you seeing in the numbers? Is that showing in the numbers already? Is that showing up in pipelines? Talk us through a little bit about the progress you're seeing there.

Speaker Change #125: Well I think public sector.

So it's one of the fastest growth.

Speaker Change #126: Industry for Us I am very happy having achieved the bedroom or participation I think this is gone the oxalate.

Speaker Change #127: Our our business and public sector.

Speaker Change #128: We also are looking forward to take the lessons learned while building further ramp into other countries and territories and.

Daniel Dines: I want to be very specific that we want to address both sea level, sea type of selling with departmental level. It's still early to comment about the progress, but we've made quite a few organizational changes. We have appointed a new leader in North America that I think he was with the company previously, and he can definitely understand our land and expand business while he's very versed into talking to executives. We've done quite a few changes on the central organization on level. We regionalize some of our functions, and we made clear to the entire company that customer centricity is going to be the core principle to our business.

Speaker Change #128: You know power more of our public sector business. So I think long term, we are seeing an increase of the percentage of revenue in our company coming from the public sector for sure.

Raimo Lenschow: Okay, perfect. Thank you.

Daniel Dines: So I think long term, we are seeing an increase of the percentage of revenue in our company coming from the public sector, for sure. Great.

Speaker Change #129: Great. Thank you.

Michael Turin: Thank you.

Michael <unk>: Thank you next question is coming from Michael <unk> from Wells Fargo. Your line is now live.

Michael Turin: Next question is coming from Michael Turin from Wells Fargo. Your line is out live. Hey, great. Thanks. I appreciate you taking the question. We've touched on the transition a bit and the slight shift in priorities of Daniel stepping back into the CEO role.

Michael <unk>: Hey, great. Thanks, I appreciate you taking the question.

Speaker Change #131: Touched on the transition a bit in the <unk>.

Speaker Change #131: That shift in priorities with Daniel stepping back into the CEO role maybe.

Ashim Gupta: Maybe I'm curious just to go back and if you could provide us with an update on how those efforts are progressing. And in particular, we're looking at the customer metric and noticed an uptick there for the first time in a couple of quarters. And so I'm wondering if that's all reflective of some of the changes and focus you're implementing. Any commentary on just new customer additions and what you're seeing there is also helpful. Thanks. Look, I think we said I think we feel like a better connected team and a more streamlined team will exit you better.

Speaker Change #132: I'm curious just to go back in.

Michael <unk>: If you could provide us with an update on how those efforts are progressing and in particular, we're looking at the customer metric and noticed an uptick there for the first time in a couple of quarters and so I'm wondering if that's at all reflective of some of the changes in focus you're implementing.

Ashim Gupta: And then Ashim, how do we do, like congrats on the expanded role? It's a lot of other organizations. I mean, with so much to do, you're growing at the high scale, at the healthy clips.

Speaker Change #133: Any commentary on just new customer additions and what Youre seeing there is also helpful.

Speaker Change #134: Well I think like we said I think we feel like a better connected team and are in a more streamline team will execute better and I think that should reflect more and more across every part of our core.

Ashim Gupta: Do you think that that's kind of a permanent thing for you or should we think about this more as a temporary solution? Thank you. Look, I think Daniel looks at it as giving the long-term goals for the company. We don't treat it, but anything could change RIMO from that perspective as Daniel always will evaluate the organization. My mandate and my goals that Daniel has given is really make sure that our enabling functions really become in service of the customer and of the field and to drive connectivity across our organization, which we talked about is something that we needed to improve on.

Daniel Dines: And I think that should reflect more and more across every part of our core metrics and our core financial results. What I still say, Michael, is I don't think our philosophy has changed. We're still looking after quality of new logos versus quantity. I think the uptick; it's a good quarter that we have there, but I don't look at that as a change in philosophy or strategy. I just think about it as better execution overall, and it's an area that will continue to monitor. We still feel like the land and expand is an important part of who we are, but that expansion motion also continues to be a primary driver.

Speaker Change #134: <unk> in our core financial results.

Speaker Change #134: You know what I still say Michael is I don't think our philosophy has changed we're still looking after quality of new logos versus quantity I think the uptick.

Michael <unk>: Good quarter that we have there, but I don't look at that as a change in philosophy or strategy I, just think about it as better execution overall and it's an area that we'll continue to monitor them, we still feel like the land and expand is an important part of who we are but that expansion motion also continues to be a primary driver and frankly when we're talking.

Ashim Gupta: And as well as continue to drive the operational efficiency and streamline the organization and continue to drive and streamline organizational processes, etc. I'm excited about the opportunity, you know, just to continue to work with broader sets of teams. And I, we look at this as an entire leadership team that, you know, is really focused on the goals that have been laid out on. And, and that's really what we're focused on today.

Daniel Dines: And frankly, when we're talking into and inspecting our pipeline, looking into our different regions and territories, we ask about both new customers as well as expansions. And we're really pleased with the response of our teams right now, are giving us and the execution levels of this quarter that we're starting to see.

Michael <unk>: Into and inspecting our pipeline looking at are you looking into our different regions and territories, we ask about both new customers as well as expansions and we're really pleased with the response of our teams right now are giving us and the execution levels of this quarter that we're starting to see.

Ashim Gupta: Okay. Thank you.

Unknown Attendee: Thanks and congrats on the expanded roll. Thanks.

Speaker Change #135: Thanks, and congrats on the expanded Rollouts from.

Michael <unk>: Thanks, Michael.

Mark Murphy: Next question is coming from Mark Murphy from JPMorgan, your line is now live. Thank you. Nice to see the stability and the, and the operating results is quarter.

Unknown Attendee: Thank you.

Michael <unk>: Thank you next question is coming from Scott Berg from Needham <unk> Company. Your line is that a lot.

Scott Berg: Next question is coming from Scott Berg from Needleman Company; your life is not alive. Hi everyone, thanks for taking my question here. I will; I'll just go with one in the essence of time here. She, one of the things you mentioned was cloud revenues up 65% year over year to it goes just over $850 million. Help us understand, I guess, what yield composition looks like. That's a big number. It's up a lot. I know you're kind of pushing that platform or some of those some of those modules and use cases more, but as we think about the business, maybe for the balance of the year.

Scott Berg: Hi, everyone. Thanks for taking my question here I will.

Daniel Dines: Daniel, we've been noticing that the term agentic is suddenly becoming very popular. Salesforce came out with its agent force branding recently. And part of the notion is that agents are going to have independence and autonomy. And I'm wondering how you might think about the line of demarcation. Like if, if we think of a bot and, you know, it's following predefined workload, you know, workflows, excuse me. You know, it feels like predefined logic, you need humans to set up the models and all that. And then if you think about an agent, it's, you know, acting independently, they can adapt, right, maybe sometimes without, without instructions.

Scott Berg: I'll just go with one in the essence of time here.

She's one of the things you mentioned was revenues up 65% year over year to just.

Speaker Change #137: Just over $850 million.

Speaker Change #138: Help us understand I guess, we killed composition looks like that's a big number its up a lot I know youre kind of pushing that platform or some of those.

Daniel Dines: How are you thinking about, you know, that line of demarcation because I think it might be at the root of some of the customer confusion on where RPA might, you know, fit into the AI landscape and then have a quick follow up. Yeah, that's a great question mark. We, we really think of agentic process automation as an evolution of robotic process automation. I actually, we started to socialize the agentic process automation term during our tour event in London in Paris, at the beginning of the summer.

Speaker Change #139: Some of those modules and use case, it's more but as we think about that business maybe for the balance of the year, how much of the balances as I guess squared on those types of.

Ashim Gupta: How much of the balance is, I guess, square it on those types of use cases in modules versus maybe what you've seen over the last year. Thank you. Well, I think we've seen a consistent growth rate of like strong and elevated growth rate on our cloud, on our cloud enabled customers and just our cloud in general. You know, one of it is just overall awareness that continues to drive across our customer base, but more so, their own readiness to move to the cloud and start adopting those cloud products. You know, when you look at things like communications mining, when you look at things like document understanding, I think it, you know, the value to move to be a part of the cloud, you know, continues to accrete, and we really like that.

Speaker Change #140: Use cases in modules versus maybe what you've seen over the last year or two thank you.

Speaker Change #141: Well I think we've seen a consistent growth rate of like strong an elevated growth rate on our crowd on our cloud in our cloud enabled customers and just our cloud in general.

Speaker Change #141: One of it is just overall awareness that continues to drive across.

Speaker Change #141: Our customer base, but more so their own readiness to move to the cloud and start adopting those cloud products.

Speaker Change #142: You know when you look at things like communications mining when you look at things like document understanding I think.

Speaker Change #142: The value can move to be a part of the cloud continues to accrete and we really like that at the same time like we've always said, we want to be customer centric in this regard and make sure customers have the flexible choice and Thats really what were providing and allowing them to move to their own journeys I do think as our platform expands.

Ashim Gupta: At the same time, you know, like we've always said, we want to be customer-centric in this regard and make sure customers have the flexible choice, and that's really what we're providing and allowing them to move to their own journeys. I do think as our platform expands, I think, you know, and we have a cloud-first mindset in our releases, et cetera, I think that continues to drive more and more value for that customers can drive for the cloud itself.

Daniel Dines: And we introduced the concept of robots and agents working together. And to me, the, an AI agent is, it's basically a robot if you want that has some new skills. And I think there will be multiple type of agents, for instance, they will be agents that are capable of extracting information from long and complex documents and users, human users will be capable of interacting with these agents, asking questions. And in turn, they can ask the agents to perform actions for them.

Speaker Change #143: I think you know and.

Speaker Change #143: We have a cloud first mindset in our releases et cetera, I think that continues to drive more and more value for that customers can drive for the cloud itself.

Scott Berg: You got it very helpful. Thank you for the question.

Speaker Change #144: Got it very helpful. Thank you for the question.

Operator: Thank you.

Speaker Change #144: Thank you we reached end of our question and answer session I'd like to turn the floor back over for any further or closing comments.

Daniel Dines: We reached out to our question and suggestion; I had to turn the floor back over for any further closing comments. Thank you so much, everyone, for your questions.

Speaker Change #145: Thank you so much everyone for your questions I would like to remind you that our user conference event is coming in just six weeks I would like to see many of you in the Vegas and I'm looking forward to meeting also many of you were you know this.

Operator: I would like to remind you that our user conference event is coming in just six weeks. I would like to see many of you in Vegas, and I'm looking forward to meeting also many of you over, you know, this quarter. Thank you.

Speaker Change #144: Quarter.

Daniel Dines: There will be action, there will be agents that can make more intelligent decisions based on data and they can route a process in a more dynamic way. As you can, as you know, for sure, robotic means that the series, the steps in a process are stitched together in a fixed way. And agentic workflow might have dynamic routing in as part of the process. Well, and I want to iterate ways really our strength here.

Speaker Change #144: Thank you.

Thank you; that just concludes today's teleconference webcast. Let me just connect your line after this time and have a wonderful day. We thank you for your participation today.

Speaker Change #146: Thank you that does conclude today's teleconference and webcast you may disconnect. Your line at this time and have a wonderful day.

Speaker Change #147: If you for your participation today.

Daniel Dines: And it is in the combining, actually robotic automation with agentic automation is part of our process orchestration plot. I think the key differentiator in customers deploying agents would be in how well they are integrated within the business platforms, and how well we can orchestrate between robots, agents, and humans. And I think we are uniquely positioned to bring the power of LLM-based agents into our platform and offer this level of orchestration. That's a great explanation.

Ashim Gupta: And Ashim, I wanted to ask you, do you see any line of sight to a point in time where some of the AI confusion might dissipate and maybe begin to turn into a full-blown AI tailwind for Uipath? In other words, customers might re-educate and understand how to move jointly with AI and automation. Because I guess I'm curious, could we look on this period of software ARR growth? Could we look back on it? And maybe say that it was just a bit of a temporary period of confusion before customers kind of figured it out?

Ashim Gupta: Look, I want to be careful about giving any type of long-term guidance implied in that mark. At the same time, what I can say is, we're investing in the platform and we'll continue to invest in the platform and our AI capabilities because we see it as a meaningful opportunity to drive value and differentiation with customers, which in our minds reflects on the conviction that we have in the company. In the script and in other areas, Daniel has already talked about customer conversations are already becoming clearer for us.

Ashim Gupta: People are seeing the linkages between AI and automation. So we're already seeing positive response and more clarity from our customers. How the AI narrative translates in the broader market, confusion moving in and out because of broader factors and as that area evolves. I think we're all going to, you know, we all take a day by day and quarter by quarter. But long-term, we feel very good about what AI is bringing and we're investing because we do believe it has a meaningful ROI and reinforces the durability of our growth rate.

Unknown Executive: Thank you very much. Thank you.

Brian Berking: Next question is coming from Brian Berking from TD County or light is that live?

Ashim Gupta: Hey guys, good afternoon and congrats to Scheme on the expanded role. My first question just on demand is that macro variability has been a pretty consistent message in how you've described, you know, how enterprises are behaving now for several quarters. We understand things deteriorated last quarter, I guess late March and April. Can you just comment on what you saw through the balance of TQ and into August as well? I think we saw things pretty stable, Brian.

Ashim Gupta: You know, we still describe the macroeconomic environment as variable. We've talked about the commercial end or the lower end of the market, you know, having a higher degree of impact and we see that to remain consistent. And we see that, you know, just really broadly across all geographies, et cetera. I do think that as our execution improves, you know, and as we've made, as we've streamlined different areas, I think we're adopting wealth at the environment. But I do feel like, you know, the environment is stable versus last quarter. And we didn't really see any ups and downs months and months within the quarter.

Ashim Gupta: Porter, Okay, and then it relates to the restructuring and how we should think about potential yield from that. Can you comment on whether that the restructuring actions you're taking? Does that impact that 20% long term adjusted operating more in tar heat add? Is it kind of a kind of provide upside there? Is it more of a means to achieving that?

Ashim Gupta: Look, I think that we're going to update our long term guidance at the appropriate time. What we do feel in our restructuring effort that we've taken and that we're going to continue to look at different ways to streamline the organization. We do feel like there's more efficiency to be had. They're Brian and then we'll update that on 20 on our long term margins as we go. We have always said that we're going to be 20% plus in terms of our long term margin. So what that plus looks like, that's what we'll update at the appropriate time. Okay, understood.

Unknown Executive: Thank you.

Matthew Hedberg: Next question is coming from Matthew Hedberg from RBC Capital Market for a while. Is that live? Hey guys, this is Mike Richards on format. Thanks for taking the question. Maybe go off that last question there. I was wondering if you could provide some more details on the restructuring, just in terms like sizing and what areas were impacted and then also, you know, if you're accounting for any disruption. Between the restructuring or the general organization changes and guidance. Thanks guys.

Ashim Gupta: Yeah, maybe let me start with the high level over here, and then I let's assume to bring more color. I think largely we have restructured our central functions. And we are like, we were looking at more like sales operation, sales enablement, functions, and especially also part of restructuring. I can tell you we're basically we look in all areas of the company. And I think we our goal is longer term that this restructuring into bringing a great level of efficiency and agility into the company.

Ashim Gupta: And then just in terms of disruption, you know, we provided our guidance in the last quarter earnings. I think there's no incremental impact to that that I would say from a disruption standpoint. We would account for it at this time. Again, as Daniel said, when it's a lot of the stream lot, a lot of the central organizations, they didn't really impact the growth of the company, right, and the growth rate of the company.

Ashim Gupta: They really were, you know, there was a larger disconnect between those organizations and the field. So that's one of the reasons why we did not see that disruption or why we don't feel like there is a meaningful disruption that needs to be singled out. Thanks guys.

Ashim Gupta: Thank you.

Keith Weiss: Next question is coming from Keith Weiss from Morgan Stanley. Your line is now live. Yeah, this is the answer to things for Keith.

Daniel Dines: Well, I thank you for taking the question. Daniel, you read up a number of initiatives across operations, products, partners, customers, customer success. I was wondering as you sort of look at sort of the near to midterm, where do you see the lowest hanging fruit in terms of getting back to a better growth trajectory? I think we continue to see as we said in the last earnings call. We need to make our teams working well together.

Daniel Dines: This is made basically, it was our first goal, to break the silos into the organization. And make sure that we align everything in the interests of the customer. So, for example, some of the low hanging fruit was to put back customer success into the region while keeping some kind of centralized program about it. And same with our technical management, we have simplified some of the raw nomenclature. And, yeah, I think it was a lot about simplification and moving people into the regions.

Ashim Gupta: Ashim, anything to comment? No, I think the first step was improving execution, as Daniel said. And that meant breaking down the silos and really connecting the teams. I do think the investments that we're making, that Daniel talked about in terms of agentic, the investments in process orchestration, the, you know, we gave examples of the test steel, you know, that we won in the quarter. Those are all evidence of different parts of our strategy that is we continue to drive and execute. We feel reinforced the durability of our growth.

Daniel Dines: I really appreciate that perspective. And it sort of leads into my follow-up. On the product side of the house, clearly there's a lot of innovation going on. We have auto pilot GA coming up, communications, binding process orchestration, Daniel, which you highlighted. Historically, we've talked about this in the past. Some of them have commented that the sort of breadth and depth of the product portfolio was a little overwhelming in terms of where to invest that incremental dollar.

Daniel Dines: It sort of talks to how the pricing packaging side is evolving along with some of the restructuring cases in terms of making the solution more digestible into the enterprise. Yeah, we, I think one of the major initiatives that is actually in progress is to look at our pricing and packaging and, you know, come up with maybe even quite a different model that should tie our pricing more to the value that we deliver.

Daniel Dines: I think it's a bit too early to comment on this one. And also on the platform in itself, we are having some key initiatives. Maybe we talk a little bit about them, but it's called internally. We call it like unify build time. So we aim to present our platform in a much more consistent way to the developer. So basically anyone using the platform, we have all the tools better integrated. So they will create an application easier, for instance, to give you an example.

Daniel Dines: If you want to create like an onboarding application, you can start with building the user interface, and then you can connect very easy, the user interface with some kind of automations. And then the automations can take advantage of our communication mining or document understanding or data service and everything will be completely integrated. So it doesn't look like you go to different systems. So I think that will also help customers to understand better our offer.

Unknown Executive: I really appreciate the perspective, thank you very much.

Unknown Executive: Thank you.

Sitikantha Panigrahi: Next question is from C.T. Panigrahi from Mr. Who Security, Jarliner Zalav. Thanks for taking my question and same, congratulations on the expanded role.

Sitikantha Panigrahi: So, going back to the, let's a new business, you talked about challenging macro environment and even some sort of confusion between this AI and RPA work to invest. But if we dig into the expanse on side of this, your install base, one of the opportunities or challenges you are seeing at this point. I think when we look at our expansion, I think the first thing I would just notice, like our customers that are, you know, between $100,000 and $1 million, they are continuing to expand at 120 plus percent.

Sitikantha Panigrahi: So, really, you know, making sure that our customers get to a certain scale, city across our $10,800 customers, that's important. That goes down to a Daniels reinforced of not just the sea level, but the grassroots level of adoption and making sure we're connected at that base area. The second piece is the more people adopt of our, you know, adopt our full platform and features, you know, document understanding, intelligent document processing. When you look at many of the larger deals in the quarter, they're not core RPA alone and they haven't been for a while.

Sitikantha Panigrahi: Those deals have, you know, multiple elements of our platform, if not the entire platform. And continuing to drive that awareness and continuing to driving that within our customer base, those are kind of like our two biggest areas. And frankly, the personal productivity side, you know, that is an increasing competitive area. We've always talked about that. That's not the majority of where we want to play. So continue to drive enterprise grade use cases and solutions with our customer. That also continues to be a priority. You know, that really bolsters, then, that's our expansion rate for us. That's great.

Daniel Dines: And if follow up to, I think Mark's question earlier about the agentic automation, it's certainly now increasing competition. There are other vendors now with agent AI coming in. But it's good to see the innovation and then investment you're doing in the product side.

Daniel Dines: But where do you see the sweet spot? Is it more your product is more, you know, addressing the install base that you have? That's where you have the sweet spot. But or do you think you can effectively compete with the new deals against the new set of competitors?

Daniel Dines: Well, I think we have some distinctive advantages. First of all, we have a low-code platform that our developers are used to. And they are using our low-code platform to build agents as well. A lot of the like new entrance, new startups are targeting more like professional developers. We work more with our automation developers. And it's quite a large population. So we aim to give them all the building blocks to build agents. So that's one of our advantages.

Daniel Dines: Second is these agents are not so useful if you don't pair them with actions. And this is, I think, where we will shine. And we have a unique advantage to actually deliver agents that understand data or can make decisions and can call action. And also think about it's not enough to build one single agent. An enterprise will have maybe hundreds and thousands of agents over time. So it's equally important to orchestrate these agents, manage them, offer them in a secure and government environment.

Daniel Dines: And this is actually built in in our platform. And it's not, we spend many years to build the scalable orchestration platform. It takes really a long time to have it. Then we have, we have it already. We just are taking the best of LLM world, embed it into our platform and deliver easy to our customers. It's great.

Sitikantha Panigrahi: Thanks for the color, Daniel.

Unknown Executive: Thank you.

Kirk Materne: Next question is coming from Kirk Materne from Ever QueryLine. Is that live? Hi, this is Chirag on for Kirk. Congratulations on the quarter. And thanks for taking the question. So following up on one of the prior themes that was brought up, how are you finding the right balance between selling the automation platform versus selling core RPA? You clearly think success with large customers and platform adoption. But are you finding that certain customers are just looking for core RPA when they land and what's your philosophy on approaching those accounts?

Kirk Materne: Well, RPA is a pretty powerful technology and it can go to a really long distance in addressing, you know, customer's automation needs. And if you think of how we built our platform is really going after white spaces around RPA. So RPA naturally evolved into a business automation platform, but our ability to emulate human users is the core principle that is behind our platform. In a way, this is, this is why, if you think today, AI fits so naturally, Jenny, I fit so naturally into our platform because Jenny, I, it's an imitative of how human mind works type of technology.

Kirk Materne: And that's, again, that's even since our IPO, we made it clear, our platform emulates human users. That's that's the core tenant of what we are building. So in this sense, it's a natural extension from RPA to a broader automation to an AI powered automation platform. Okay, thank you.

Unknown Executive: Thank you.

Dominique Montenot: Next question is coming from Terry Tillman from truest security. Your line is now live. Hi, this is Dominique Monten saw on retiree. Thanks for taking my question. So just looking at the recently achieved bedroom authorization, could you provide more details on your progress and customer interest and the pipeline you've seen the public sector so far? And are there any specific government agencies or verticals or you see the greatest potential for automation adoption?

Dominique Montenot: Well, I think public sector is one of the fastest growth industry for us. I'm very happy having achieved the FedRAMP authorization. I think this is going to accelerate our business in public sector. We also are looking forward to take the lessons learned while building FedRAMP into other countries and territories and power more of our public sector business. So I think long-term we are seeing an increase of the percentage of revenue in our company coming from the public sector for sure.

Dominique Montenot: Great, thank you.

Michael Turin: Thank you. Next question is coming from Michael Turin from Wells Fargo. Your line is now live. Hey, great. Thanks. Appreciate you taking the question.

Michael Turin: We've touched on the transition a bit and the slight shift in priorities of Daniel stepping back into the CEO role. Maybe I'm curious just to go back and if you could provide us with an update on how those efforts are progressing. In particular, we're looking at the customer metric and noticed an uptick there for the first time in a couple of quarters. And so I'm wondering if that's an all reflective of some of the changes and focus you're implementing any commentary on just new customer additions and what you're seeing there is also helpful.

Michael Turin: Thanks. Look, I think like we said, I think we feel like a better connected team and a more streamlined team will exit you better. And I think that should reflect more and more across every part of our core metrics and our core financial results. What I still say Michael is, I don't think our philosophy has changed. We're still looking after quality of new logos versus quantity. I think the uptick, you know, it's a good quarter that we have there.

Michael Turin: But I don't look at that as a change in philosophy or strategy. I just think about it as a better execution overall. And it's an area that will continue to monitor. We still feel like the land and expand is an important part of who we are. But that expansion motion also continues to be, you know, a primary driver. And frankly, when we're talking into and inspecting, you know, our pipeline looking at our, you're looking into our different regions and territories, we ask about both new customers as well as expansions. And we're really pleased with the responses our teams, you know, right now are giving us. And the execution levels of this quarter that we're starting to see.

Michael Turin: Thanks and congrats on the expanded roll. Thanks. Thank you.

Scott Berg: Next question is coming from Scott Berg from the Human Company, your life is going to lie. Hi, everyone. Thanks for taking my question here. I will, I'll just go with one in the essence of time here. She, one of the things you mentioned was cloud revenues up to 65% year over year. It was just over $850 million. Help us understand, I guess, what yield composition looks like. That's a big number. It's up a lot.

Scott Berg: I know you're kind of pushing that platform or some of those, some of those modules and use cases more. But as we think about the business, maybe for the balance of the year, how much of the balances is, I guess, square it on those types of use cases in modules versus maybe what you've seen over the last year. Thank you. I think we've seen a consistent growth rate of like strong and elevated growth rate on our cloud, cloud enabled customers and just our cloud in general.

Scott Berg: You know, one of it is just overall awareness that continues to drive across our customers, but more so their own readiness to move to the cloud and start adopting those cloud products. You know, when you look at things like communications mining, when you look at things like document understanding, I think it, you know, the value to move to be a part of the cloud, you know, continues to accrete and we really like that.

Scott Berg: At the same time, you know, like we've always said we want to be customer centric in this regard and make sure customers have the flexible choice. And that's really what we're providing and allowing them to move to their own journeys. I do think as our platform expands. I think, you know, and we have a cloud first mindset in our releases, etc. I think that continues to drive more and more value for that customers can drive for the cloud itself. Got it. Very helpful. Thank you for the question. Thank you.

Unknown Executive: We reached out to our question and session.

Daniel Dines: I'd like to turn the floor back over for any further closing comments. Thank you so much everyone for your questions.

Daniel Dines: I would like to remind you that our user conference event is coming in just six weeks. I would like to see many of you in Vegas. And I'm looking forward to meeting also many of you over, you know, this quarter. Thank you.

Unknown Executive: That does conclude today's teleconference. The webcast may disconnect your line after the time and have a wonderful day.

Unknown Executive: We thank you for your participation today.