Q4 2025 UiPath Inc Earnings Call
Greetings, and welcome to the Uipath's fourth quarter, 2025 Earnings Conference Call. Welcome to the Uipath's fourth quarter, 2020 Earnings Conference Call.
At this time all participants are in the listen only mode.
A Question and Answer session will follow the formal presentation.
Good afternoon, and thank you for joining us today to review Uipath's fourth quarter and full year fiscal 2025 financial results, which we announce in our earnings press release issued after the close of the market today.
Speaker Change: On the call with me are Daniel Dines, Founder, and Chief Executive Officer, and Ashim Gupta, Chief Operating and Financial Officer, to deliver prepared comments and answer questions.
Speaker Change: Our earnings, press release, and financial supplemental materials are posted on the Uipath Investor Relations website. These materials include gap to non-GAAP reconciliation, which we will be discussing non-gab metrics on today's call.
Speaker Change: for the first quarter and full fiscal year, 2026, and our ability to drive and accelerate future growth and operational efficiency and grow our platform, product offerings and market opportunity, actual results.
Speaker Change: For a discussion of these 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.
Daniel Dines: to our Ambassador Relations website and immediately following the conclusion of the call. In addition, please note that all comparisons are year-to-year unless otherwise indicated. Now, I would like to turn the call over to Daniel.
Daniel Dines: Thank you, Allise. Good afternoon, everyone. Thanks for joining us. I'd like to thank the Uipath team and our partners for their hard work and focus throughout the year as well as our customers for placing their trust in us. I'd like to thank the Uipath team and our partners for placing their trust in us.
Daniel Dines: Excluding a 2 million FX headwind revenue would have totaled $426 million. We ended the year with ARR stuff
These results included an impact from the ongoing geopolitical climate.
Daniel Dines: While we remain confident in our public sector business, the transition in the government. [inaudible]
Daniel Dines: That began in January , impacted the timing of deal closures and as a result, we came in slightly below our expectations for ARR in the fourth quarter.
Daniel Dines: We continue to work closely with our federal customers and their feedback is consistent. Our Agente platform drives tangible efficiency efficiencies and is a part of their go-forward roadmap.
Daniel Dines: At the same time we acknowledge that in the short term the government is working through administration priorities which we will work to support and we have factor this into our linearity and our overall guidance for the year.
Daniel Dines: There has also been a significant increase in volatility in the overall macroeconomic environment, particularly in the last two weeks.
Daniel Dines: In recent discussions with customers, the external environment has created uncertainty around their budgets.
We are taking a major approach for fiscal 2026. [inaudible]
Daniel Dines: Adding additional prudence to our overall guidance, given the volatile environment.
Daniel Dines: We are confident that we are appropriately factoring in the macro trends as we see them today.
Looking beyond this near term headwinds. [inaudible]
Daniel Dines: We have done a lot of work to strengthen the company. We have built a strong foundation.
Daniel Dines: While we are seeing uncertainty in the market, we are focused on positioning the company for long-term success and believe we are in a strong position to weather the current environment.
As we look ahead for fiscal 2026.
We remain focused on three key strategic priorities.
Daniel Dines: and continuing to drive operational rigor and efficiencies across the organization.
Daniel Dines: I continue to spend the majority of my time traveling and engaging with customers, partners and our team. Our product and engineering teams are innovating faster than ever, delivering cutting-edge solutions to our customers and our innovation roadmap is driving deeper and more meaningful relationships with customers and strategic partners.
Daniel Dines: We have also made strong progress executing against the priorities we laid down with last year, and our own track to complete our go-to-market changes and restructuring.
Daniel Dines: Our sales leaders continue to drive alignment across their teams while enhancing our focus on customer centricity. The team is energized and we are fully aligned on our strategy to drive success for our customers in fiscal 2026 and the end.
Daniel Dines: Over the last six months we completed in-depth reviews of our top customers to understand their respective health and creative programmatic executive-sponsored plans to accelerate adoption and co-innovation and maximize ROI.
These initiatives are already generating strong customer engagement and momentum.
Fiscal 2025 was Uipath, most innovative year. [inaudible]
Daniel Dines: Delivering ground-breaking products and capabilities like autopilot, agent builder, agenteic orchestration, healing agent, intelligent extraction processing, agenteic testing, the AI trust layer, context grounding, and expanded genAI connectors.
Daniel Dines: And we are just getting started. Agenteic automation is transforming the way businesses operate.
Daniel Dines: and we continue to redefine what's possible with what we believe is the most advanced and comprehensive agentic automation platform in the industry.
Daniel Dines: After testing competitive agentic vendors, a leading provider of scientific instruments and supplies has chosen our platform because of our unique ability to use agents that work across applications.
Daniel Dines: They are now in the process of building and deploying agentic use cases with Uipath agent builder for customer relations, customer due diligence and equipment warranty data.
Daniel Dines: Another great example is one of the largest global semiconductor companies who sign a seven-figure deal in the quarter purchasing our authentic products to elevate their employee experience and drive competitive differentiation.
Daniel Dines: Is our most successful preview and company history. Hundreds of customers are testing use cases that spend revolving, resolving vendor disputes.
Daniel Dines: processing claims, streamlining sales operations, fraud detection and compliance, customer complaints, coordination of benefits, optimizing revenue cycle management and improving logistics operations.
Anthony Azim, among both partners and customers. [inaudible]
Daniel Dines: has been very strong and we are seeing incredible engagement across the board with approximately 3,000 agents created in mission critical processes
For example, alleges global solutions. [inaudible]
is piloting adding agents in their workflows for invoice reconciliation.
Daniel Dines: and driving increased scalability of their automation program through a 50% reduction in development time.
Daniel Dines: Building high quality agents is valuable, but what truly delivers transformative outcomes is orchestrating agents, robots and people together to optimize and to end enterprise business processes.
Daniel Dines: That's where our new, agentic orchestration product comes into play. Launching to public preview this week, agentic orchestration provides real differentiation for our platform for its unique ability to orchestrate teams of specialized agents that are focused on executing their goal-based tasks.
Daniel Dines: While working in tandem with Robas to execute the Terministing task and collaborating with people as needed.
Daniel Dines: I can't emphasize enough, the power of robots and agents working together to control this the level of autonomy that an agent provides ensuring that when money is changing hands.
Daniel Dines: Patient Records are being updated, where claims are being paid, our platform delivers accurate and dependable business outcomes.
Daniel Dines: And we are not only doing this within the Uipath ecosystem, but a genetic orchestration will be able to orchestrate agents across an enterprise's entire application ecosystem including APIs, models and now agents.
Daniel Dines: Moreover, we plan to add support to host, manage and orchestrate agents built with leading open source
Daniel Dines: We believe that orchestrating these agents together makes our platform unique as the most integrating and comprehensive way for our customers to tackle complex end-to-end processes while avoiding
An example is a multinational food and beverage corporation. [inaudible]
Daniel Dines: They plan to leverage the solution to streamline and optimize their supply chain planning process, orchestrating robots, agents and people across applications to reduce manual interventions and drive a more streamlined approach.
Hour, Hour of the Box Agent, Autopilot for Testors,
Daniel Dines: Speeds up the entire testing life cycle by enabling a genetic test design, test automation and test management.
Daniel Dines: While Adrian Builder empowers our customers to build their own custom agents tailored to the specific testing needs.
Daniel Dines: We continue to see healthy adoption of our application testing products, including an expansion deal with the global animal health company in the quarter.
Daniel Dines: In a competitive win, they expanded their test program to support automated application testing for their European migration.
Daniel Dines: They plan to have 90% of their application testing automating with an overall cost saving of approximately 5 million dollars.
We are also focused.
Strengthening our vertical specialized agents. [inaudible]
Turning to autopilot for entry one
It's...
He's of use, an enhanced user experience. [inaudible]
Daniel Dines: continues to drive adoption, including a sequential increase of over 300 percent in unique customers in the quarter, including a financial technology and services company, who recently implemented autopilot to stream by their merchant category validation process. [inaudible]
Daniel Dines: Autopilot now troubleshoots these workflows by identifying errors and optimizing performance, enabling the company to operationalize AI
Daniel Dines: The innovation of our product roadmap has also re-energized our partner ecosystem and we continue to drive new avenues for growth through strategic partnerships.
Daniel Dines: We are excited to strengthen our partnership with Deloitte by jointly launching an agentic ERP solution to integrate Uipath agentic automation with industry-leading ERP platforms.
Daniel Dines: Ultimately, this collaboration is not just about cost savings, it's about operating at unprecedented levels of efficiency and intelligence that will unlock dynamic decisions making and competitive advantage. [inaudible]
CVP, ISB, and Digital Native Team at Microsoft.
Daniel Dines: We share a common vision for a genetic automation and we are excited to partner with Uipath to bring the best of Azure, Microsoft 365, and co-pilot to customers with Uipath agents.
Daniel Dines: This collaboration highlights our commitment to innovation, driving value for our customers and setting new standards in the industry that leverage the combined agenting capabilities of Microsoft and Uipath.
Daniel Dines: A testament to our relentless focus on innovation and the power of our holistic automation platform delivers for our customers.
Daniel Dines: Finally, we invite you to join our annual Agente Gay Summit where we will showcase how Agente's automation is transforming businesses.
Daniel Dines: The event will be live stream on our website on March 25th. Please reach out to our investor relations
With that, I'll turn the call over to Ashim.
Ashim Gupta: Before turning to the financials, I would like to share an update on our key operating priorities. [inaudible]
Ashim Gupta: Starting with our partner ecosystem, we have made significant progress over the last nine months, driving alignment across our organization. This has resulted in a more connected team with an improved overall incentive structure that is better aligned to performance and rewards higher performing partners.
Ashim Gupta: We have also more closely integrated our partners with our go-to-market teams and have been proactively focusing on enabling them to drive adoption of our agenda solutions along with our professional services team.
Ashim Gupta: Overall, our operational rigor is improving, thanks to the effective and cross functional collaboration of our teams.
Ashim Gupta: I'm pleased by the progress we have made in fiscal 2025 and believe our highly differentiated, gentle platform transforms, automation platform positions us well for long-term growth and profitability.
Daniel Dines: As we move forward, as Daniel has said, innovation is our number one priority, and we will continue to invest in driving AI and
Daniel Dines: Turning to the quarter, unless otherwise indicated, I will be discussing results on a non-GAAP basis in all growth rates our year over year. I also want to note that since we price and sell in local currency, fluctuations in FX impacts results.
Daniel Dines: Excluding an FX headwind of $2 million, revenue would have totalled $426 million. [inaudible]
Daniel Dines: Total Revenue for Fiscal Year 2025 was $1.43 billion, an increase of 9% euro-rear and an increase of 9% euro-rear-rear-rear-rear-rear-rear
Daniel Dines: ARR totaled $1.666 billion in increase of 14% driven by net new ARR of $60 million.
Daniel Dines: Excluding the FX headwind, net new ARR would have totaled $61 million.
Daniel Dines: As we have discussed, our AI products and our overall platform are key differentiators driving both growth and customer retention.
Daniel Dines: Over the last several years, we have introduced products like document understanding and communications mining.
Daniel Dines: Our sales team has done a great job integrating them into customer solutions and driving adoption, which has resulted in an AI product attachory of approximately 20% of our total customers.
Daniel Dines: More importantly, for our customers with greater than $1 million in AERR, our attach rate is over 85%.
Daniel Dines: An example of this is one of our largest customers a leading U S financial services firm, who expanded in the quarter as they migrate their extensive automation program spanning thousands of processes across multiple divisions to the cloud.
Daniel Dines: With this transition he plans to accelerate their adoption of autopilot communications mining and I D. P. While enabling a faster integration of our agenda capabilities to drive efficiency and innovation.
Daniel Dines: We ended the quarter with approximately 10750 customers normalizing for customer hierarchy changes our customer count was flat year over year, we continue to be a six be successful in signing valuable new enterprise logos that align with our strategy for targeting long term customers with the propensity to invest.
Daniel Dines: Including new logos like New panics Lake, Michigan Credit Union, Southern Illinois Hospital services, Acs industries and living spaces.
Daniel Dines: As with prior quarters, the vast majority of customer attrition continues to be at the lower end to provide a bit more color. When we take a closer look into our total logo count customers that spend over 30000 in air or increased 7% year over year.
Daniel Dines: This is also reinforced by our continued growth in customers with $100000 or more in Iraq, which increased to 2292 and customers with $1 million or more in <unk>, which increased to 317.
Our largest customers are continuing to expand on our platform and during fiscal year 2025 customers with $5 million or more in <unk> grew 30%.
Daniel Dines: Moving on dollar based gross retention of 98% continues to be best in class and our dollar based net retention rate as of the fourth quarter was 110%.
Daniel Dines: Remaining performance obligations increased to one point to $43 billion up 7%.
Current RPE L increased to $806 million up 14%.
Daniel Dines: Turning to expenses fourth quarter overall gross margin was 87% and software gross margin was 91%.
Daniel Dines: Fourth quarter operating expenses were $236 million, we ended the year with 3868 total employees.
Daniel Dines: In the fourth quarter, we achieved GAAP profitability for the second year in a row and delivered GAAP operating income of $34 million. This included $88 million of stock based compensation expense.
Full year, GAAP operating loss was $163 million, including $358 million of stock based compensation.
Daniel Dines: non-GAAP operating income in the fourth quarter was $134 million, resulting in a record non-GAAP operating margin of 32%.
Movement of over 400 basis points year over year, and a reflection of our continued efforts to streamline the business.
Daniel Dines: Full year non-GAAP operating income was $241 million in full year non-GAAP operating margin was 17%.
I am pleased with our non-GAAP adjusted free cash flow generation for the fourth quarter and full year of $145 million $328 million respectively.
Daniel Dines: We ended the year with a healthy balance sheet of $1 $7 billion in cash cash equivalents and marketable securities and no debt.
During the fourth quarter, we continued to return capital to shareholders repurchasing 744000 shares of our class a common stock at an average price of $12 57.
Daniel Dines: For the full fiscal year, we returned approximately $390 million to shareholders through share repurchases repurchasing 31, 8 million shares of our common stock at an average price of $12 30 per share.
Daniel Dines: Since January 31st under our <unk>, one plan, we repurchased an additional 151 4 million shares at an average price of $12 in 19th.
Daniel Dines: Through March 11 2025.
Daniel Dines: Now turning to guidance our guidance philosophy remains unchanged and we continue to guide to what we see in front of us while factoring in relevant trends opportunities and potential constraints.
Daniel Dines: We are actively monitoring the many moving parts in the macroeconomic landscape, including the U S public sector and global economic conditions, our guidance takes into account the following.
First as Daniel mentioned, while we remain optimistic about the long term opportunity in the U S. Public sector. The ongoing transition has created short term uncertainty for deal closures and we have factored this into our guidance for fiscal 2026 with a more pronounced impact in the first half of the year.
Daniel Dines: Second we have seen an increase in volatility and the overall macroeconomic environment, particularly in the last two weeks and as a result, we have made prudent assumptions to our guidance.
Daniel Dines: Third we are pleased with the progress of our customers are making to move more of their workloads to the cloud, particularly as customers continue to adopt our AI product and plan their agenda Roadmaps well. This is an overall positive we expect growth in our SaaS offering offerings to be a 2% headwind to full year revenue.
Growth this year.
Daniel Dines: Turning to the specifics of our guide for the first fiscal quarter 2026, we expect revenue in the range of $330 million to $335 million are are in the range of $1.686 billion to $1 691 billion non-GAAP.
Daniel Dines: Operating income of approximately $45 million and we expect first quarter basic share count to be approximately 553 million shares.
Daniel Dines: For the fiscal full year 2026, we expect revenue in the range of $1.5 billion to $5 billion to $1 $530 billion.
Daniel Dines: There are in the range of $1.816 billion to $1 $8 billion to $1 billion non-GAAP operating income of approximately $270 million.
Daniel Dines: Before I close I want to leave you with a few final modeling points, including the following.
First half revenue to be approximately $665 million first half net new air are to be approximately $448 million in second half net new IRR and revenue to reflect similar seasonality as fiscal year 2025.
Daniel Dines: Well, we have substantially completed our go to market transition, we expect the final stages to create a more pronounced seasonal pattern in fiscal 'twenty six with the second half of the year being stronger than the first.
Daniel Dines: Fiscal year non-GAAP gross margin to be approximately 85% as we scale our cloud offerings.
non-GAAP operating income to reflect similar seasonality to our top line metrics.
Daniel Dines: Fiscal year 2026, non-GAAP adjusted free cash flow of approximately $370 million also to follow normal seasonal patterns.
Daniel Dines: Lastly, we are committed to managing stock based compensation and for fiscal year 2026, we expect dilution to be between 2% to 3% year over year.
Daniel Dines: Thank you for joining us today, and we look forward to speaking with many of you during the quarter with that I will now turn the call over to the operator operator, please poll for questions.
Daniel Dines: Thank you well now be conducting a question and answer session.
Speaker Change: He would like to ask a question. Please press star one on your telephone keypad. He called for me since I will indicate your line is in the question queue.
Speaker Change: You May press star two if he would like to remove your question from the Q4.
Speaker Change: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the psyche.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: Thank you first question comes from the line of equal Bearish with William Blair. Please proceed.
Equal Bearish: Hey, Thanks for taking the questions just wanted to follow up on the headwinds that you've seen over the past few weeks I understand the public sector dynamic in January but could you flesh out those comments about the significant volatility over the past two weeks and just what what you're starting to see and hear from customers on that front.
Equal Bearish: Well I would say the two.
Speaker Change: Everybody's seeing the volatility, it's not only us and.
Equal Bearish: We are in constant contact with customers and the.
Equal Bearish: Well some of the deals are being a delay.
Equal Bearish: For instance, we were talking this week on Monday with the Canadian Bank.
Equal Bearish: And they told us that the all approval in the last 90 days are now being reviewed.
And Oh, we have full.
Equal Bearish: They seem to be appropriate prudence for giving that of what we are seeing right now.
Equal Bearish: Yeah.
Equal Bearish: Yeah.
Okay. That's helpful and then great to hear about that the 3000 agents that have already been created on the platform.
Equal Bearish: Can you talk a little bit more about that early areas of use cases that you're gaining traction with agents and then maybe just compare and contrast, how agents are being monetized versus.
Equal Bearish: Here's the thing or P a deployment.
Equal Bearish: Yeah look we are we're focused on delivering agents that the.
Equal Bearish: We're in the context of our end to end enterprise.
Equal Bearish: These processes. So I think many many agents that we were seeing so far.
Equal Bearish: We're more like Chuck based agents like chatting chop out what type of agents, we're delivering agents that base.
Basically there are three good by enterprise Warfel D receives data they process data and they make action recommendations and after a few months to review they are they.
Equal Bearish: They the recommendation loss carried one by Atwood robots, so where we're seeing the.
Equal Bearish: And many industries, we are actually collecting you'll know quite a swift.
Equal Bearish: Use cases, especially across our financial services and health care.
Equal Bearish: I can give you you know top of my mind examples like in General Ledger called thing, where health care priority for these Asian denials and insurance claims processing. So all across the spectrum of processes. There are pockets, where we can apply.
Equal Bearish: Agents and it really works into our strength and it goes away as the as our initial deployments thought that used to go after all the processes, where we already have robots in place and really look at what is the human input in.
Equal Bearish: Conjunction leaves the robots and we then well lets bring somebody just they've helped the people and their job and this is also how we come with this concept of agenda orchestration because as we take more and more of the tests that humans used to do we have more and more the need to orchestrate agents robots.
Equal Bearish: And a few months.
Bryan Bergin: Thank you. Our next question comes from the line of Bryan Bergin with TD Cowen. Please proceed.
Bryan Bergin: Hi, guys. Thanks for taking my questions.
Bryan Bergin: First on the public sector pressure is there any way you can help frame the scale of that so maybe the mix of business that is for you, particularly the U S federal within public sector and just maybe how you see that part of the portfolio performing just so we can segment that out from the broader commercial portfolio.
Bryan Bergin: Yeah generally we are not breaking it but certainly has been one of our best performing for the house and we have confidence with our federal customers, but government is going through a transition.
Bryan Bergin: And the way we are staying close to our customers we saw the disruption stuffing in January.
Bryan Bergin: And the conversations with customers. The disruption has continued and we expect it to continue for the near future.
Brian: So Brian I would add if you go back to or industrial conference. It's a it's it's it's our third largest vertical you know across them across the company and just add a little bit more flavor.
Bryan Bergin: And some of the cases, there are moratoriums on procurement for new contracts. So while something may be funded they're working through reconciliation bills overall things and they are just you know working through that transition and that is really changing some of the procurement processes again, we're in constant touch with them our customers there.
Bryan Bergin: Everybody feels good about the value actually they see us as a real avenue to meet a lot of diligence goals, but you know we have to give the appropriate space to let them work through the transition and continue to demonstrate our partnership and value.
Bryan Bergin: Okay understood.
Speaker Change: And then just as we think about the shape of 26 as you see it now any finer points on how and maybe something that new air comments, you out to see them based on your current plan and give us a sense of where you see that stabilization of our trough potentially up net new AOR as you move through the year.
Yeah, I think when you look at the guidance that we provided both in terms of the modeling points for the first half in the second half you can you can clearly see that first quarter and first half is gonna be under pressure just given the macroeconomic environment, giving the public sector space and time to kind of stabilize themselves from our.
Speaker Change: Team's perspective, frankly, like we feel really good about the stabilization in progress on a number of areas health care financial services I'm certain geographies that are really performing well you know we feel really good about the progress that they've made there and you can see that you know in the second half.
Speaker Change: While our overall you know while we baked in prudence for overall during the year and we have you know we can see more pronounced seasonality in the first half.
Thank you.
Mark Murphy: Our next question comes from the line of Mark Murphy with J P. Morgan. Please proceed.
Speaker Change: Hey, Thanks for taking the question. This is already on for Mark Murphy.
Speaker Change: Yeah as you're seeing this increased uncertainty in the market you know out there kind of probably putting a damper on customer willingness to invest in new technologies. As you know one could extrapolate that to a high but do.
Speaker Change: Do you think there's incremental uncertainty has kind of been up.
Speaker Change: Our customers are a little bit less reluctant to invest in new technologies that they think they're going to see it as you know maybe the way out of our you know what's going on in the lever for more efficiency and cost savings.
Speaker Change: No I don't think this is related in any way with our investing in new technologies or not but I think the uncertainty it's.
Speaker Change: It's you'll know it as a place to all sorts of investments on.
Speaker Change: On the contrary in our discussions with our customers we have seen quite a good pool towards adjourn to adjourn thinks it really opens up many doors.
Speaker Change: In Florida, we were talking with the waiver.
Speaker Change: With the CIO of a major bank here in New York. So they he saw you know he sold the demo of our product basically is that because you are you are onto something good.
Speaker Change: Really really cool that it's quite differentiated in the market. Then we are interested in it so the pool.
Speaker Change: Exists there, but the reluctance it's really related to uncertainty yeah, I would just add to it I think you know just in the CFO position, if you and I talked to a few of the CFO over the last two.
Speaker Change: Two weeks I think everybody's feeling the uncertainty and so the general reaction is to make sure that your budgets are kind of a per end controls are put in place to make sure that you are measured as the you know as more clarity comes about in a macroeconomic standpoint, you know so while we while we see that on the deal closure and while we see that in <unk>.
Speaker Change: Budgets tightening, we really don't see that in the short term in terms of the activity of P. O sees in the interest around the Gentex. In fact, you know we are shifting more and more of our teams to cope with the demand of getting to understand the gentex running the pilots and running the P. O sees and that continues to be a positive sign for us.
Speaker Change: So that's you know that's just from my perspective as well.
Speaker Change: And just as a quick follow up if we're kind of looking at the commercial side of things.
Speaker Change: You see any difference in the impact of these trusts are as to the U S versus Europe or kind of any other international markets or is it pretty evenly distributed.
Speaker Change: And I think it's a general statement I think the entire globe is feeling the environment you know the environmental pressures I will say you know what is going to stay closer to our Canadian customers like of course with kind of the current events that are there there's definitely more pronounced sensitivity around you know just as Daniel.
Some of those examples, but we see that really broad spread whether it's around health care financial services or different geographies I think everybody's feeling the uncertainty of the current environment.
Speaker Change: Thank you.
Next question comes from the line of Raimo <unk> with Barclays. Please proceed.
Hi, This is Sheldon mcmeans on for Raimo, Thanks for taking our question.
Speaker Change: You I path has worked with federal government agencies like the IRS to increase automation and efficiency and I think the rois clearly there, but when there's a widespread efficiency initiative like we're seeing a there could be screens that show a shelf, where that's not indicative of value, particularly for the I R. S that sees more activity around this.
Speaker Change: Time of year. My question is is there an opportunity to shift to more of a consumption based model to help more tangibly online monetization to value or could you give us any more color on what proactive approaches you're taking here.
Speaker Change: Yeah look.
I know this is a big customer for our document understanding.
Speaker Change: Solution, which is in fact to monetize based on a consumption.
Speaker Change: And yes of course, we are we believe that our platform is really aligned with the new administration also government efficiency.
Speaker Change: We are looking forward to.
Speaker Change: To really help achieving these goals and at the same time you know you you mentioned the wireless I I think they are one of the agencies the thought on under the moratorium for 50 days, we still worked closely.
Many of our agencies the interest the interest is there.
Speaker Change: But it's it's prudent I think to not assume very much for the time being.
Speaker Change: Understood. Thanks for the color there and a few quarters ago, you called out some hesitation in decision, making due to the rapidly evolving AI landscape and I was wondering is that part of the change that you're seeing maybe customers are waiting for more maturity around gently AI before putting new automation center automation use.
Speaker Change: Cases into production.
Yeah, you know what if I can say there is a continuous wave of like confusion and Claudia two or a one day I I.
Speaker Change: I I would say no way.
Speaker Change: Initially everybody before these are you know the new AE will do basically everything will replace everything I think know custom ones I'm thinking a much more.
Speaker Change: You know.
Speaker Change: Moderate or stance to AI. This is why agenda is.
Speaker Change: <unk> getting a lot of interest because agenda is pragmatic.
Speaker Change: And Uh huh.
Speaker Change: Promise is real value because I think we all.
Speaker Change: Even if you think about what experience with robots with just kind of it's it's it's suspicious of AI that you meet these people. So I think we have a lot of experience in.
In delivering tangible.
We're used to our customers.
Speaker Change: Real value is when you can shift work from people then you can delete autonomously. This is the real deal.
Speaker Change: Through for our slot for unattended.
Speaker Change: What was the Levered you know more revenue and more bad before all across the World then we attended.
Speaker Change: Robots not to say that they ended up my father as well, but you know the issue that must be cause issues into autonomously.
Speaker Change: S cases.
Speaker Change: Thank you. Our next question comes from the line of Sandeep Singh with Morgan Stanley. Please proceed.
Speaker Change: Yes. Thank you for taking the question Dan I was wondering if we could get an update and then sort of follows on the previous question about monetization with respect to are some of the government use cases, but broadly can you walk us through your pricing your monetization strategy for your agent portfolio.
Speaker Change: Yeah. So we are we are going to monetize our our agents and the genting orchestration.
Speaker Change: All consumption based model, we are the we haven't gone to announce pretty soon or our monetization strategy is we plan to.
Speaker Change: And the N G E and Oh.
So towards the end of April beginning of May.
Speaker Change: Yeah.
Speaker Change: Understood what.
Speaker Change: Well definitely look out for that I keep going back to federal I guess I'm sort of two related questions. Do you have confidence that federal will be a long term customer of UI path and if that's the case. This year for this year is this gonna be a headwind because of course is there any.
Speaker Change: The way you can sort of frame out the underlying growth of the business ex federal how that shaped up either in Q4, what do you think that looks like for the balance of the year.
Speaker Change: Yeah, we're not.
Speaker Change: We talked about we're not breaking it out specifically.
We said, it's one of our highest performing verticals and we do have tremendous confidence in our connections with our federal customers. So this is very much of a short term disruption or uncertainty that we're facing and as we go forward I think we are like and in every conversation.
Speaker Change: We're constantly in touch with our federal customers. They reinforce actually the impact we're having on productivity, which is very commensurate with the with the goals of dose. So we look at there's something more as a short term and short term impact as kind of the the transition happens with the government.
Speaker Change: Thank you. Our next question comes from the line of Michael <unk> with Wells Fargo. Please proceed.
Speaker Change: Hey, Thanks very much appreciate you taking the questions I guess I shouldn't last quarter and I. Appreciate there's a lot going on last quarter that the the.
Speaker Change: Commentary was more around the stable net any way or is it fair for us to sign it it sounds like it maybe is the case that the delta between that and what were at.
Speaker Change: Today, just to the increasing uncertainty you're calling out and just is there anything you can comment on just what you're able to do to ensure your at least in the federal conversational appreciating that it's something that's somewhat outside of your control and then as kind of the the third part to the follow up on the AI products, how should we think.
Speaker Change: Those as a potential offset and maybe just speak overall, how you're embedding any newer products into initial forecast. Thank you Yeah. Let me, let me breakdown questions for it so.
Speaker Change: One is yes. The majority of the impact we were talking about is around the macro environment inclusive of the public sector. So you know from a stabilization standpoint, we honestly are very encouraged by the progress we've made on execution and the changes in go to market and the stabilization of our teams and so.
Speaker Change: So we feel good about the stabilization of it really you know since January the public sector changes began where the the administration transition began and we're seeing that continue with a you know I think everybody has been looking at the news and kind of talking to customers and seeing different companies react to the you know it's in.
Speaker Change: The latest developments in the geopolitical climate. So we feel good about the stabilization the headwind that we are breaking into our guidance and into our guidance is really around those two factors and.
Daniel Dines: For <unk>. We obviously are excited also about a gentex Andy I, we see those both of those products is continuing to gain traction we disclose the attach rate of 20% for AI based products and as Daniel commentary really the momentum on agenda, we have and response from our customers has been positive and that.
Daniel Dines: Of course, we baked in a two point headwind first for SaaS headwind, which explains some of the revenue decrease as well from from current consensus our current models.
Speaker Change: In terms of staying close to our customers I'll, let Daniel also comment on that but you know we have very good executive sponsorship, we frequent Washington quite often both between our go to market leadership as well as our executive leadership and we are connected to very good levels within the agencies.
Speaker Change: And stay connected stay connected throughout and we lastly, just overall on the AI and Egencia. We are incredibly excited about our customer momentum that we're seeing there and the metrics that we're seeing from our private preview. We're still in the early innings of that we're focused on getting that successful with our customers.
Speaker Change: And while we expect momentum build throughout the year, we don't expect it to be a material contributor to revenue in fiscal year 2026.
Speaker Change: Thanks very much.
Speaker Change: Thank you our.
Speaker Change: Our next question comes from the line of Alex Zukin with Wolfe Research. Please proceed.
Speaker Change: Hey, guys. This is Steven here for Alex. Thank you for taking my question.
Speaker Change: First of all on the on the acquisition that you announced like can you share a little bit more about the strategic rationale.
Speaker Change: And also to what extent can we see the contribution of the acquisition of FY 'twenty six and then I had a quick follow up.
Speaker Change: Yeah. We are we're pretty excited about what the peak we are Oh, we are welcoming him well.
Speaker Change: The team of Great there you call them.
Speaker Change: And.
We we long plan to enter into more vertical lies a gentex space.
Speaker Change: This is gonna be but team that will help us build around them. We're starting with these two use cases are all with the <unk>.
Speaker Change: On the inventory.
Speaker Change: And they also have a really good theme of.
Speaker Change: Practitioners data scientist that can help also.
Speaker Change: For a more thorough or overall a gentle push.
Speaker Change: They are based in UK, where we already have a very strong though.
Speaker Change: A team we are building a lot of little Doug So from a consolidation perspective. It was really it was really good.
Speaker Change: I Love I love to assume comment more on the yeah, a lot of implications yeah, I think it's really immaterial to our overall year as with previous acquisitions. We you know we really view these as tuck in acquisitions. So we don't they're not disclose them a level and they're not material from an overall impact.
Speaker Change: For our for our company so we don't disclose it.
Speaker Change: Got it. Thank you guys and then really quickly on the go to market changes. So I know you guys went through a lot of changes last year and you talked about it a little bit in this call as well. So we assume that like the go to market changes are sort of behind that and we are in the steady state now.
Speaker Change: Yeah Oh.
Speaker Change: Sure as we mentioned in the script our go to market change you saw is largely complete.
Speaker Change: Think about it we've been a we've been only three quarters into really a big change for the company I am pleased with the level of change I think the energy level.
Levels in our company is getting to healthy levels people people believe in our Argentic second leg.
Speaker Change: We are where we havent gone to execute we stability towards our strategy and our plans.
Speaker Change: Thank you our next.
Speaker Change: Next question comes from the line of Kirk <unk> with Evercore ISI. Please proceed.
Speaker Change: Hi, This is shrug on for Kirk. Thanks, so much for taking the question.
Speaker Change: There's been a lot of energy and in Austin is India, Gentex space, especially at initial POC stages.
On the call you highlighted your attach rates be.
Speaker Change: Innovation and some customer deals.
Speaker Change: But just at a high level, how would you characterize your wife's has competitive advantage and right to win in this category when looking out over him over the next year next two years. Thank you.
Speaker Change: Yeah I.
Well I always thought the G on the Gen six is quite simple.
Speaker Change: We have stopped doing around when the old existing deployments.
Speaker Change: And we are giving our community.
Speaker Change: Shouldn't be able to which is a no quote tool.
Speaker Change: Yes.
Speaker Change: Helps our technical business users to create agents.
Speaker Change: So in this way, it's it's a very easy wins. So we can have our in our existing deployment, we can enhance the capabilities.
Speaker Change: Capabilities of our robots with agents and almost on the top of it.
We bring more capabilities for end to end process automation with our agenda orchestration capability.
Speaker Change: This is a clear path for us and it's a.
Speaker Change: I would say, it's a must have when and the traction and the response from our customers. It's <unk>.
Speaker Change: Spot on on this one.
Speaker Change: Second we have realized that.
Speaker Change: Our agent buildup cannot cover all possible use cases, it's more kit the long tail of use cases and for technical business users. This is why.
We know that there is a lot of interest in open source frameworks like Kuwait lunching the other fuels.
Speaker Change: We plan to support integration with agents, creating these frameworks and by integration I mean actually hosting deploying managing orchestrating integrating with all war robots for actions both of our orchestration plus four.
So we they leave out a very comprehensive agenda plus four by taking this open approach.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: If I.
I don't remember you know any odd that a company like <unk> that has a stimulus through it. It's it helps avoid thing.
Speaker Change: Vendor lock in its helps internal data science teams that build agents to actually manage them host them work with them in a more efficient way.
Speaker Change: And that will help us to extend into other white spaces in them.
Speaker Change: And we've seen our customer more suddenly than new logos.
Speaker Change: And so it's all we're verticalizing stood out that we.
Speaker Change: We have started with an acquisition and the role that we have.
Speaker Change: We plan to build more specialized agents, particularly in health care and information services.
Speaker Change: These type of agents can help with.
Speaker Change: You'll know faster sales cycle easier sales conversation.
Speaker Change: Our platform was it's been always a horizontal platform and.
We need the degree of especially organization in order to help all would go to market teams.
Speaker Change: Don't have a more meaningful conversations with our customers.
Speaker Change: Really appreciate it thank you.
Speaker Change: Okay.
Yeah.
Thank you.
Speaker Change: Our next question comes from the line of Scott Berg with Needham and company. Please proceed.
Speaker Change: Hi, everyone. Thanks for taking my questions I guess to get to probably quick ones here.
Speaker Change: Ashish, you're you're you're cloudy or have showed nice growth I think you said over 50% for the year to $975 million.
Speaker Change: Within that growth how much of that is coming from customers that are moving their workloads from behind the firewall to your cloud solutions or is the majority of it problems.
Speaker Change: Net new business actually actually it's you know I think our sales team has done a great job on new logos I'm going directly to the cloud.
Speaker Change: As you know our cloud platform and what our product and engineering teams have done has been actually quite remarkable in terms of the capabilities in the cloud first mentality that Daniel was driven across the teams is really has really done just that but we are seeing as I noted the financial services firm.
Speaker Change: Moving a lot of there are moving more and more of their workloads and their footprint to the cloud and one of the reasons is because our pace of innovation has also increased and people want to take advantage of the AI products and they can do that faster and more efficiently by being on a cloud platform. So you know, it's honestly broad based and.
Speaker Change: That's why you see the growth rates that you're seeing there from both.
Speaker Change: <unk> as well as hybrid and the last thing to note is I think a gentex only you know only furthers this.
Speaker Change: And customers are realizing that value and that is another reason why we see continued cloud growth in SaaS growth in our business.
Got it helpful. And then my follow ups is on Aegis 3000 agents is a big number but you have nearly 11000 customers today or are you seeing customers kind of start small with let's say pilots when they're when they're thinking about it the gentex strategy with you know Onesies twosies, you'll just kind of starting to match it to get a feel for it.
Speaker Change: Or are you seeing any customers kind of jump all in right away and it deployed maybe tens or dozens of these agents at a distance.
Speaker Change: Well.
Speaker Change: We're seeing both the vast majority of customers are indeed doing multiple fuels since they they need to understand the technology better, but we have we have a few customers already jumped into large deployments. We mentioned one in the foot in the third quarter.
Speaker Change: But he was another one in the fourth quarter with significantly larger deals.
So we already have three customers in a in an.
Speaker Change: An hour, it's it's a very limited G. So we've built a G. Because they are so excited too.
Speaker Change: Ooh Bush agents into production. So we created the limited.
Speaker Change: Give them all the support they need so they excitement it's there but it's still includes the early innings of seeing some political thing.
Speaker Change: Understood very helpful. Thanks for taking my questions.
Speaker Change: Yeah.
Speaker Change: Thank you there are no further questions at this time I'd like to pass it back over to management for any closing remarks.
Speaker Change: Thank you so much for your questions and we are looking forward to meeting many of you during the quarter. Thank you.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Speaker Change: Yeah.
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Speaker Change:
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: [music].