Greetings, and welcome to the UiPath First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Allise Furlani, Vice President of Investor Relations. Allise Furlani, you may begin. Good afternoon, and thank you for joining us today.

To review UiPath's first quarter fiscal 2026 financial results which we announced in our earnings press release issued after the close of the market today. On the call with me are Daniel Dines, founder and chief executive officer, and Ashim Gupta, chief operating and financial officer, to deliver our prepared comments and answer questions. Our earnings release and financial supplemental materials are posted on the UiPath Investor Relations website ir.uipath.com. These materials include GAAP to non-GAAP reconciliations. We will be discussing non-GAAP metrics on today's call. This afternoon's call includes forward-looking statements regarding our financial guidance for the second 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 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. For a discussion of the material risks and uncertainties, that could affect our actual results, please refer to our annual report on Form 10-Ks for the year ended 01/31/2025, and in other filings and reports that we may file from time to time with the SEC. Forward-looking statements made on this call reflect our views as of today, and we undertake no obligation to update them. I would like to highlight that this webcast will be accompanied by slides. 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 over year unless otherwise indicated. Now I'd like to hand the call over to Daniel. Thank you, Allise.

Good afternoon, everyone. Thanks for joining us. Before we dive into the results, I want to take a moment to reflect on the momentum we are seeing across the business. Especially around the launch of our agentic automation platform. This has been one of the most important and successful product introductions in our history. The progress we've made is a testament to the relentless innovation of our teams, the deep trust of our customers, and the strength of our partner ecosystem. Together, we've turned the promise of agentic automation into a powerful reality and we are just getting started. The momentum following our launch has been exciting and was matched by strong first-quarter financial performance. We executed with discipline and focus in what continues to be a variable macroeconomic environment, exceeding expectations on the top and bottom line. We delivered first-quarter revenue of $357 million and ended the quarter with ARR of $1.693 billion, an increase of 12% year over year. Our ongoing emphasis on operational efficiency drove strong bottom-line results, significantly improving our GAAP operating loss to $16 million compared to a loss of $49 million in the prior year. On a non-GAAP basis, we achieved operating income of $70 million representing a 20% margin, an improvement of 450 basis points year over year. What's driving these results is clear. Our end-to-end automation platform, now enhanced with the automation and AgenTeq orchestration capabilities, is resonating deeply with customers. Over the last several months, I have spent considerable time deeply engaged in product sessions and customer conversations all centered around the agentic automation. The energy and potential I'm seeing are palpable and I've never been more confident about the path we are on. Customer energy has been reinforced by several high-impact events this quarter. Each amplifying our platform's potential and…

Thank you, Daniel, and good afternoon, everyone. I'd like to begin by providing an update on the key operating priorities we have been focused on. First, we've made meaningful progress in connecting and strengthening our partner ecosystem. Which continues to play a central role in driving adoption and accelerating UiPath strategy in the market. This quarter, we officially launched our new partner program, which has been well received and places a strong emphasis on enabling our partners in conjunction with the Agentic launch. This collaborative approach is becoming a powerful engine for shared customer success. At our DevCon event in late April, four of our leading GSIs Accenture, Cognizant, and CGI showcased live customer use cases that brought our platform's potential to life. In this quarter, more than 40 partners, including GSIs like Deloitte, and PwC, as well as regional partners like Leidonia, TQA, and Accelerate, completed our Agentic Fast Track program. A hands-on immersive training in Agentic automation. And a clear reflection of how invested our partners are in driving the Agentic era forward for our customers. A great example is a leading GSI's close partnership with Sonic Automotive. Following last year's expansion, our IDP and testing solutions Sonic expanded in the quarter to purchase our Agentic capabilities and they work to transform their enterprise with AI. Working with them, they will begin identifying use cases across their enterprise and finance, supply chain, shared services, and customer service. And Schulz and Partner, an early adopter of our Agentic automation solutions, with support from Cronos Automation, one of our platinum and fast-track partners, they're implementing two high-impact Agentic use cases. One automates the extraction and matching of company data from incoming documents. Cutting down on manual research. The other uses multiple agents to analyze client self-disclosures, and generate tailored settlement…

Thank you. We will now be conducting a question and answer session. So that we may address questions from as many participants as possible, we ask that you limit yourself to one question and one follow-up. If you have additional questions, you may requeue and time permitting, those questions will be addressed. Thank you. Our first question comes from the line of Raimo Lenschow with Barclays. Please proceed.

This is Sheldon McMeans on for Raimo. Thanks for taking the question. When you reported in March, it did seem like we were near peak levels of uncertainty and you prudently factored that into your guidance. It does seem like some of the uncertainty has decreased then. And so would love to hear a little bit more on what you're seeing, how you factored that in. And then if I could tie in a second part here, we have seen some dollar weakening since you last reported Bloomberg dollar spot index down about 4% since mid-March? If you could flush out the FX impact in the quarter and then the potential tailwind to the full-year guide, that would be great.

Yes. Great question, Sheldon. Good to hear from you. So look, I think that in many ways, the macroeconomic environment, it's still variable. I think when you talk to customers, even when you read the news, right, every day, there's an evolving set of facts and set of circumstances. So we look at the environment as variable. I think we're pleased with how we executed through it in the first quarter. We have a good line of sight in terms of our second quarter. And therefore, we kind of adjusted our linearity as such, which, you know, for me is a favorable move from a revenue standpoint. I think when you look at the overall year, I think there's still uncertainty and variability, and we continue to have a prudent economic environment, from that standpoint. Second thing from an FX standpoint, it really was pretty minimal. We actually specifically looked at the exact FX rates at the time was, you know, within 2-3%, so to speak. And I think FX fluctuations are pretty high, meaning, you know, they can shift up and down very, you know, pretty depending on the day of the month. So we've maintained our FX assumptions materially to have no impact really for the year at this point. There's nothing significant or material that we would factor in.

Understood. Great. And a quick follow-up. It was great to see the several new solutions around AI agents, coming out and then the new monetization strategy there. What's been the customer feedback of the unified pricing model and the platform units? Thank you.

Well, we have experience already with the concept of AI units in pricing our more traditional IDP solution. And it's a bit early to tell, but the initial reaction is positive because the new pricing model is tied closer to the adoption of the software and yeah, we went a long way to simplify the model and make it easier to create a business model and to understand especially in this new world of Agentic, this is one of the most interesting challenges to solve. How can you price a use case? And we are working closely with customers in making them really understand better how pricing works and how it's tied to the use cases.

Our next question comes from the line of Mark Murphy with JPMorgan. Please proceed.

Thank you very much and congrats on reaching all the targets and exceeding them. Daniel, I wanted to ask you regarding public sector and U.S. Federal. You said you're encouraged. You closed a deal with the U.S. Air Force. You recognize that the transition is still evolving. Could you just help us understand how did your U.S. Federal business perform? Did it grow faster or slower than the broader business? Did you exceed or miss bookings targets? And what I think what I'm trying to understand is do you think that public sector is already through the worst of the pressure washing of the budgets? Or do you think that that trough is still out there on the horizon?

Yeah. So let Ashim comment more on the impact on the quarter. But I want to give you my perspective seeing our events. So I was there in DC. I think that there is a real enthusiasm about what agentic automation can bring to bring efficiency into the federal government. And yeah, the deal with the USAF Air Force is very encouraging. They come with this initiative called Agentic Airmen. That is very ambitious and it aims to a broader transformation across their business. I think at the same time, they continue to be in a transition. Renewals are progressing well. But there is continued pressure on the new budgets being finalized. Ashim?

Yeah. No. I think Daniel said it well. So, like, one, just I'll reemphasize just super kudos and thanks to our federal team. I think they've done a fantastic job of keeping us apprised and connecting with customers and really managing the enthusiasm that we have from our federal customers. In terms of the exact numbers, Mark, we don't, you know, we obviously don't disclose segment information on a quarterly basis. So I clearly can't do that here. I would reemphasize, I think, the renewals were on track, as Daniel said. I think it depends on the agency. Some agencies, I feel like, you know, performed better. We expected. Some of the moratoriums are lifted policy-wise, and then some of those moratoriums were also while they're lifted policy-wise, they're still finalizing current procurement routines. And you see, you know, some of the same slowdown that we saw there. So on balance, I would say, you know, they're in transition, and we are gonna continue to have a prudent approach as we navigate the year. Even though we're encouraged by the company.

Encouraged by okay. Got it. Thank you very much. And then, Ashim, just as a quick follow-up, you commented positively on linearity. Which is great to hear in terms of what's happening currently. How do you feel about the quality and depth of the pipeline that's sitting out there toward the end of the year and curious if you think you can avoid some of the challenges that you might see from time to time coming off of Q3 or coming off of Q4, which then I think would be a function of the pipeline and how it closes then?

Yeah. I feel really good. I just, you know, a shout out to the like Aaron Mark Gibbs, our sales leaders. I think they do a good job of not just looking at the current quarter, but moving ahead and really taking a good look at our pipeline as our sales ops function does as well. Feel good about the quality. And I would say beyond it being kind of like a blanket statement, I think what bolsters that confidence is just the activity that we have on the agentic front. So, you know, several of the customer conversations, you know, they've solidified that they feel very good about our niche in their long-term architecture or our place in their long-term architecture. And they're doing a lot of the agentic exploration pilots and POCs. When you couple that with what we're seeing in the pipeline, it means that the quality feels good. You know? It's not just things that are in there, but it's in there with real new commercial activity as well. And that, you know, that honestly has generated a lot of excitement, a lot of work for us, but a lot of excitement for the business.

Okay. It's great to hear. Thank you so much. Thank you.

Our next question comes from the line of Jake Roberge with William Blair. Please proceed.

Yes, thanks for taking the questions and congrats on the solid results. Helpful commentary on the demand you're seeing for some of your new AI solutions. Just specifically on Maestro, we're obviously hearing about a lot of different agent orchestration solutions in the market. You called out some solid metrics on that front. So can you talk about what you're hearing from customers as to why Maestro is kind of the best fit compared to some of the other solutions in the market?

Yeah. Look, I think we need to clarify one thing. Many companies when they speak about orchestration, they mean mostly an agent-to-agent orchestration. I mean, the capability of managing a swarm of agents. Our Maestro is more ambitious in a way. We connect agents with robots and people. And its ability to deliver fixed workflows at the enterprise level that can be executed in an autonomous way makes it a very powerful proposition in the market. We spend a lot of time in order to create better analytics. To understand better how your or how to see to get great insights into your workflows, how your agents operate, how your robots operate, what's the human impact. We even combine process mining data into these insights. So this itself is a very unique proposition in the market. So overall, I think that our organic orchestration is built on a very new modern technology. It has all the whistles and bells of modern workflow technology. Plus with amazing insights into your operational data. So I think it's a pretty unique offering in the market.

Okay. That's helpful. And then, Ashim, just on the go-to and operational changes you've made over the past year, do you feel like things are kind of stable at this point? Or are there any other things that you're looking to tweak in the model this year?

Yeah. So I think I want to be clear on it. I think things are stable. Like, I look at our leadership. I look at our core teams. I look at the motions. I look at even some of the supporting functions. We feel really good about the leaders that are in place. Their tenure with UiPath, as well as the structure. So we are substantially complete. Are there tweaks that we will make? I think, you know, the activity and the energy around the new Agentic platform is really, you know, it's real. So I think we're always going to be looking for ways to go faster, be more focused, and address the needs of our customers. Nothing that I see as disruptive. I actually think it's going to be more about coping with the opportunity in front of us.

Thank you.

Our next question comes from the line of Sanjit Singh with Morgan Stanley. Please proceed.

Hey, everyone. Thanks for taking the question. This is Ryan on for Sanjit. Just curious, any additional color you can provide around the trends you're seeing in retention just with some continued pressure there in the quarter and maybe how we think about the trajectory of retention going forward? Thank you.

You know, I think we've always talked about, you know, one law of large numbers. But second, I think first quarter, and a lot of the transition that we were seeing and the disruption of the macro, you know, and, of course, you know, some of the transition with the federal government. That explains, as we did in the first quarter, the trend around the expansion rate. Look. What we feel positive about is two things. I think first, you know, you look at the energy that we have around the Agentic. You look at as we continue to we beat our first-quarter estimates, our execution is strengthening. So from our perspective, I think we're really reaching a point where we feel like we can continue to scale our biggest customers. I would point to our customers greater than $100,000 growing 13% year over year. So those are the key trends. I think pressure points are more related right now to macro and federal the way we've talked about it. And, you know, we're hoping, you know, that those things stabilize as everybody else does. At the same time, we've been prudent in our guidance as we go forward, as we mentioned.

Thank you.

Our next question comes from the line of Bryan Bergin with TD Cowen. Please proceed.

Hey guys, good afternoon. Thank you. So as it relates to the fiscal 2026 growth, can you just unpack the comments you made on the favorable timing and mix of deals in the second and third quarter? It sounded like some things shifted around in there versus the prior plan. I mean, just curious, is there better sales cycles in select clients or other factors driving that?

Yeah. No. I think it's just the mix of deals, Bryan. And when you look at it, you know, when we were guiding in the first quarter, we obviously had tremendous uncertainty. We guided in front of what was in front of us. I think as we get to the second quarter, I think the shift in the deal mix is favorable. And so we wanted to reflect that in our numbers. It's really that simple. And we're encouraged by, you know, the activity of what's moving into the quarter, particularly around some of the larger deals, you know, that with 606 obviously drives the favorable revenue recognition.

Okay. Okay. And then as it relates to the margin outperformance, you had pretty notable leverage on S&M year over year. Can you just talk about where you're being more disciplined to drive that? And are you at an optimized level to allow for a growth acceleration there? I'm really just thinking about the trade-off of optimization of S&M versus growth potential.

I think we're continuing to invest to be very clear. We did complete the substantial portion of our restructuring where we, to our minds, removed a lot of our gut efficiency from non-customer-facing functions. I'll let Daniel comment a little bit on the activity and investment. But, you know, we are investing in key areas, key markets. But I think there's, you know, there's enough efficiency that we can self-fund some of that, but we're not afraid also to double down where we need to capture the opportunity.

Yeah. I think the fact that we brought to market in basically in the last two, three quarters five new products shows our commitment to invest in growth and innovation. And certainly, we think of ourselves as a company that can grow faster and Agentic is a great opportunity for us and we will continue to focus, you know, Agentic automation is our top priority as a company.

Alright. Thank you.

Thank you. Our next question comes from the line of Terry Tillman with Truist Securities. Please proceed.

Yes. Good afternoon, Daniel, Ashim, and Allise. I had two questions, a question and a follow-up. I heard it several times and I think I'm a relatively good listener, replacements. So I heard large airlines, global airlines. I think there was another one. I'm curious as Agentic and other things are evolving, is this creating a kind of go back and look at our existing vendor base and thinking about maybe we consolidate with vendors that are further along in Agentic or am I reading too much into the word replacement? Because I heard it a couple of times, and then I had a follow-up.

Yeah. In a way, the traditional RPA vendors that cannot keep pace with the innovation. And naturally, some of our customers are looking into their portfolio and they want to consolidate. There is a tremendous benefit of combining AI agents with robots. And when you go and decide on an AI agentic automation platform, it's a natural way to think maybe we should bring the robot into the same platform. Again, the benefits from the security and governance perspective and having agents and robots and managing humans also on the same platform, are tremendous. So yes, replacements will come more naturally into the picture.

Yes, thanks for that. And just a follow-up question. You all kind of redesigned and evolved the partner program. I'm curious and it does, like you said, include regional partners, large GSIs, etcetera, and even ISVs. Going forward, maybe the next two to four quarters, will we see more probably in getting more from your existing customers, whether it's a hundred k's, the one million's or the five million's? Or is there something that could be more incremental on just bringing new quality customers in the boat? Just trying to understand maybe kind of the relative importance there. Thank you.

On the partner program, I think one is it's super important that our partners are high quality and properly incentivized because they are often very close to our key customers, especially, you know, that mid-tier customer. So if I look at that hundred thousand dollar plus customers, base yes. You know, we want our RSIs to be growing that base and engaging and driving consumption in adoption. So we look at, you know, everything that partners do as net positive. Do we have a specific transfer function between the partner program, and the dynamics of those customer cohorts? No. I don't think there's anything that we would fully disclose in terms of, you know, a specific transfer function. But it is very important that customers who are working with our partners they're on the same playing field with us in terms of our agenda capabilities. Have the right incentives.

Thank you. Our next question comes from the line of Chirag Ved with Evercore ISI. Please proceed.

Hi, this is Chirag on for Kirk. And congratulations on the results. Can you talk more about the GCP partnership and the partnership with Microsoft Copilot Studio in terms of how the economics of something like that would work for you? And are there opportunities to develop additional vertical solutions beyond what you've talked about? Thank you.

Let me start with the vertical solutions. Because when we believe that in this early adoption phase of Agentic, it is becoming critical to solutionize our offering. Our aim was always to build a horizontal platform that offered the building blocks to build more dedicated solutions. So this is one of the reasons we bought PEAK. Because they offer great vertical agents. For inventory and pricing. And we're leveraging their expertise in building vertical AI solutions into other domains. And yeah. And this also aims to the partnership with GCP. Which basically it helps combine our forces to build the solution on the medical summarization field. With Microsoft, it's actually a more broader horizontal integration between our technologies. And in the end, we always said we are an open platform and we want to be a good citizen. So if our customers want to use Microsoft Copilot agents and combine them with our robots, that's a great way to integrate. In this point with our reciprocal connectors. And it's kind of the same orchestration. We can use various Microsoft technologies and agents from our technology.

Thank you.

Our next question comes from the line of Siti Panigrahi with Mizuho Securities. Please proceed.

Thank you. Thanks for taking my question. Ashim, just wanted to ask on the net NRR which is, I think, 8% slightly. Down from last quarter. I understand it's a trailing twelve months. But as you are investing in this new platform launched, when do you think we should start seeing some kind of stabilization on the NRR side?

Yeah. I think, you know, we've obviously given our guidance for the year. From our standpoint though, we, you know, we'll as we talked about, I think this year, we see POCs particularly on the Agentic side. And no material impact to revenue. So I would I think that some of the discussion we can have in the second half of the year as we progress with our Agentic launch. And going into next year. From that standpoint.

Okay. And then a quick follow-up to your comment on FX. I guess you said it was so I assume the net new and other FX adjusted, this is probably the same as 27%. And what's your assumption in terms of FX impact for your fiscal year guidance?

We use the most recent FX rates, like, the last couple of days. That's, you know, over the last week, that's typically what we do.

Okay. Thank you.

Thank you. Our next question comes from the line of Alex Zukin with Wolfe Research. Please proceed.

Yes. Hey, guys. So maybe a lot of my questions have been asked, but just was just maybe double down on what drove so much of the license outperformance in the quarter? Was there any inorganic contribution? Was there kind of FX helping that number? We've talked about it a little bit on the call, but trying to really understand where what drove that? Were there pull-ins from prior quarters or push-outs?

No. I think it's just the mix of deals from again, with revenue, we have 606 accounting. So just a mix of deals. In terms of both duration as well as deployment method. There's nothing, frankly, unusual to comment on. We were happy with, you know, the overall mix of deals and kind of the balance of duration, etcetera. But nothing consequential that drove that specifically.

Okay. And then maybe just back to Siti's question, but I'll ask it a little differently. Should we continue to see an NRR trend down from the current level as we get through the year? And then trough and start to rebound potentially as you start selling a new solution as it troughed at $1.08, and then just maybe anything in terms of any further operational adjustments or efficiencies from a go-to-market perspective? It looked like there was a little bit of restructuring that hit this quarter that maybe gives you the opportunity to further reinvest?

Yeah. So the first one, I feel like I'd answered the dollar-based net retention rate. I think it's embedded within our guidance. We don't see a meaningful shift between expansion and new logos versus historical mix. So I think that calculation is easily embeddable as you go forward. We talked about, you know, we're very bullish in terms of the early activity on Agentic. We'll revisit the conversation as we get further into that launch. But for this year, there's no material impact. Of course, you know, stabilization and acceleration is what we're all playing for. So we'll update on the timing of that. In terms of the reinvestment for go-to-market, as we said, and we've been very transparent, we finished our go-to-market restructuring in the first quarter. And we feel very good about the stability of the teams that are there. We are investing in specific pockets. So where we see opportunity and the largest opportunities, we are doing that. I think we want to hold ourselves to a discipline as any investor would want us to be investing in the highest return segments and really making sure that we have clear focus accountability in the areas that we are investing. So is there an opportunity to reinvest with go-to-market? Yes. We have been. We'll continue to do so, but we still know, overall, we'll always look for ways to become more efficient.

Got it. Thank you, guys. Congrats.

Thank you. Our next question comes from the line of Nick Altman with Scotiabank. Please proceed.

Awesome. Thanks, guys. In the prepared remarks, you guys noted how the agentic automation capabilities are actually driving some net new customers to the platform. You also talked about some competitive displacement. So just in regards to the pipeline, how should we think about the mix of net new ACV maybe changing and tilting a little bit more towards net new customers versus expansion?

Yeah. I don't honestly, I don't see that mix at there. I think we like we definitely want to give examples of the various dynamics. I don't see a disproportionate amount of replacements coming in. I think we've always expanded beyond RPA. With IDP test, you know, document communications mining, etcetera, process discovery. That many traditional RPA vendors did not have. So I think that is just a constant consistent flow that's there. Agentic is just a further differentiation. Like, you know, putting space in between there. So at this time, I would I think the mix is the same, but it is exciting. The discussions whether new or an expansion that Agentic is giving to us. And that is really what our aim was in highlighting that.

Thank you. With that, this concludes the Q&A session. I would like to turn the floor back over to management for closing remarks.

Thank you so much for all the questions. And we are looking forward to meeting most of you throughout the quarter. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.