UiPath Q2 FY2026 slides reveal 14% revenue growth, agentic automation focus

Introduction & Market Context

UiPath (NYSE:PATH) reported strong second-quarter fiscal 2026 results on September 4, 2025, with revenue growth of 14% year-over-year and significant margin improvement. The company’s shares rose 0.83% in after-hours trading to $10.97, reflecting positive investor sentiment despite the stock trading well below its 52-week high of $15.93.

The robotic process automation (RPA) leader continues to expand its enterprise customer base while pivoting strategically toward "Agentic Automation" - combining traditional RPA capabilities with advanced AI to create more autonomous, intelligent automation solutions.

Quarterly Performance Highlights

UiPath delivered $362 million in revenue for Q2 FY2026, representing 14% growth compared to the same period last year. The company’s Annualized Renewal Run-rate (ARR) reached $1.723 billion, growing 11% year-over-year, with a dollar-based net retention rate of 108%.

As shown in the following financial summary from the presentation:

Non-GAAP operating income reached $62 million, resulting in a 17% operating margin - a substantial improvement from the 2% margin reported in Q2 FY2025. This performance significantly exceeded analyst expectations, with earnings per share of $0.15 compared to the forecasted $0.09, representing a 66.67% surprise.

The company’s ARR has shown consistent growth over the past ten quarters, demonstrating UiPath’s ability to maintain expansion despite a challenging macroeconomic environment:

Enterprise Customer Expansion

UiPath continues to make significant inroads with large enterprise customers. The number of customers with ARR of $100,000 or more increased to 2,432 in Q2 FY2026, up from 2,163 in the same period last year. More importantly, customers with ARR of $1 million or more grew to 320, compared to 293 in Q2 FY2025, indicating growing adoption at the C-suite level.

The following chart illustrates this enterprise customer momentum:

This growth in large customers underscores UiPath’s success in expanding its footprint within major organizations and increasing the strategic importance of its automation platform.

Strategic Initiatives

UiPath’s presentation highlighted its strategic focus on "Agentic Automation," which combines traditional RPA with AI-powered agents to create more autonomous, intelligent automation solutions. The company’s product architecture illustrates this integrated approach:

Several new product initiatives were introduced to support this strategy:

1. UiPath API Workflows: A new capability that allows users to build API-first automations that can run on demand, on schedule, or in response to real-time events.

2. Coded Agents: A solution that enables developers to package, publish, and deploy Python-coded agents with enterprise-grade reliability, building on open-source frameworks like LangChain and LlamaIndex.

3. UiPath Data Fabric: A unified data layer that makes business, process, and operational data available across all UiPath capabilities without requiring data migration or duplication.

The company also highlighted its end-to-end intelligent document processing capabilities, which allow organizations to extract information from various document types and formats:

Competitive Industry Position

UiPath maintained its leadership position in the RPA market, highlighted by its recognition as a Leader in the Gartner Magic Quadrant for Robotic Process Automation for the seventh consecutive year:

The company’s extensive partner ecosystem represents another competitive advantage, with technology partners including Microsoft, Google, AWS, Salesforce, and SAP, alongside global system integrators such as Accenture, Deloitte, and PwC:

Financial Analysis

UiPath’s GAAP financial results showed significant improvement in operating loss, which decreased to $(20.2) million in Q2 FY2026 from $(103.3) million in Q2 FY2025. GAAP gross margin improved to 82% from 80% year-over-year.

On a non-GAAP basis, operating income reached $62.3 million (17% margin) compared to $6.5 million (2% margin) in the same period last year, demonstrating substantial operational efficiency improvements. Non-GAAP adjusted free cash flow was $44.5 million, slightly down from $48.5 million in Q2 FY2025.

The company’s expense management has been particularly effective, with non-GAAP sales and marketing expenses decreasing to $140.9 million from $148.0 million year-over-year, while research and development expenses declined slightly to $61.5 million from $63.8 million.

Forward-Looking Statements

UiPath provided optimistic guidance for both the upcoming quarter and full fiscal year 2026:

For Q3 FY2026, the company expects revenue between $390-395 million and ARR between $1.771-1.776 billion. For the full fiscal year 2026, UiPath projects revenue of $1.571-1.576 billion, ARR of $1.834-1.839 billion, and non-GAAP operating income of approximately $340 million.

While the company noted that its agentic solutions are not expected to significantly impact the top line in FY2026, management expressed confidence in the long-term growth potential of these offerings.

Conclusion

UiPath’s Q2 FY2026 results demonstrate solid execution on both financial and strategic fronts. The company’s improved profitability metrics, consistent ARR growth, and expanding enterprise customer base provide a strong foundation for future growth. The strategic pivot toward Agentic Automation positions UiPath to capitalize on the convergence of RPA and AI technologies, potentially opening new market opportunities.

However, challenges remain, including increasing competition in the automation space and the need to demonstrate that investments in agentic capabilities will translate into accelerated growth. With the stock trading significantly below its 52-week high despite improving fundamentals, investors appear to be taking a cautious approach while waiting for clearer evidence that UiPath’s strategic initiatives will drive long-term value creation.

Full presentation:

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