(Rob Enslin speaking at UiPath Forward © UiPath)
Enterprise automation software vendor UiPath achieved its first quarter of GAAP profitability as a public company, in a strong close to the fiscal year. The robust Q4 report made for a positive affirmation of the strategic and leadership decisions made over the last year, despite a variable environment.
Revenue growth for Q4 was $405 million, an increase of 31% year-over-year. ARR totaled $1.464 billion, an increase of 22%, driven by net new ARR of $86 million. It ended the year with over $650 million in cloud ARR, up 70% year-over-year. Cash flow from operations and non-GAAP adjusted free cash flow reached $146 million.
As of the end of fourth quarter, UiPath customers with ARR of $100,000 accounted for approximately 86% of total revenue, while customers with ARR of $1 million or more accounted for 52% of its revenue. Strategic investments made by customers also drove growth, which increased to $1.16 billion, up 30%. Current RPO increased to $707 million, up 26%.
Full year highlights included:
- Revenue of $1.308 billion increased 24% year-over-year.
- Net new ARR of $260 million.
- GAAP gross margin was 85%.
- Non-GAAP gross margin was 87%.
- GAAP operating loss was $165 million.
- Non-GAAP operating income was $233 million.
- Net cash flow from operations was $299 million.
- Non-GAAP adjusted free cash flow was $309 million.
Customer examples
In his first earnings call as sole CEO, Rob Enslin shared some examples of customers which have increased their investment in UiPath’s automation and AI platform over time as trust has built up:
A leading UAS based financial services firm and one of our top 25 customers started their automation journey with RPA in 2018 and have since adopted our full platform. This includes process mining, document understanding and test suite. As the automation program has expanded across business lines they have over 15,000 robots in production with automations across several thousand processes. And as part of a seven figure fourth quarter deal, they plan to deploy communications mining in the corporate investment bank, commercial bank and HR department.
Along with customers expanding their existing investments, UiPath has also drawn across new customers looking for strategic change. Enslin referenced a large retail and wholesale company from Switzerland:
Disappointed with the performance of a competitive RPA and application performance monitoring solutions, they are migrating both of these to UiPath. They’re also in the process of rolling out document understanding to automate invoice processing with the goal of expanding company-wide.
Document understanding has been a substantial part of UiPath’s appeal this quarter – 65 of its top 100 deals included Intelligent Document Processing. Customers are reaping the benefits from efficiencies which adds more weight to UiPath’s approach.
One such example is CareSource which has been with UiPath since 2019. As part of its digital transformation, UiPath’s core automation and document understanding has enabled them to efficiently process over 2.5 million transactions in 2023, before expanding document understanding across finance and claims processing departments, with plans to move into medical records processing.
Strategic partnerships
During the quarter, UiPath has built on its strategic partnerships with Google Cloud, SAP and Deloitte.
Last month it announced integrations with services like Google Vision, Google Text Translate, and Google Text Analysis, that allow UiPath customers to leverage machine learning models for image and video insights, language translation, and sentiment analysis.
This includes features such as consolidated billing, reduced procurement cycles, cost savings against existing Google Cloud commitments, and seamless management and deployment on Google Cloud. The availability of UiPath on Google Cloud Marketplace simplifies access for customers while the integration with Google Workspace streamlines workflow productivity through seamless automation activities.
UiPath’s earnings report also shed light on its expanding global footprint as part of its strategic partnerships.
Leading Indonesian communications provider Indosat expanded to the full UiPath platform this quarter. Together with Deloitte, the company plans to work towards hundreds of automations as part of its roadmap. Enslin added that as well as Indosat’s internal use, it is forming a strategic go-to-market collaboration in Indonesia to empower local businesses to revolutionize operations, equipping workers to focus on higher-value tasks.
Over in the UK, the Scottish Government doubled the adoption of UiPath by automating core areas of finance and HR and expanding to additional departments such as Social Security, Student Awards, Scottish Public Pension Agency, and Agriculture and Rural Economy.
The healthcare vertical has been mentioned several times at events by Enslin, and developments in document understanding are progressing in healthcare insurance with some positive use cases hinted at through the use of UiPath’s Test Suite. Enslin noted that the Autopilot tool is proving to be popular among early adopters, with up to 1,000 companies looking at it – the largest preview in the history of UiPath.
My take
A strong end to the year for UiPath, and a positive picture compared to six months ago when the ever fickle stock market was making gloomier prognostications. UiPath has forged strategic alliances with industry leaders, and is showing a commitment to providing customers with integrated solutions that address their evolving needs, and driving social impact through automation.
Looking ahead to the future, UiPath is going into the next fiscal year with some long-standing customer relationships built on trust and commitment. Businesses have had plenty of opportunities to shop around as automation offerings have emerged – but UiPath has not just held on to its customers but deepened integrations and expanded across organizations. We’ll be looking for some customers who are willing to share their stories.
