UiPath Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Raimo Lenschow - Barclays - Analyst : Congrats on a good quarter. My first question was like, if you think about the -- the changes that 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. What progress have you seen there? And like what are you seeing in the numbers? Is that showing in the numbers already? Is that showing up in pipeline? Talk us through a little bit about the progress you're seeing there.

Question: Raimo Lenschow - Barclays - Analyst : Okay. Okay. Perfect. And then, Ashim, like how do we -- like congrats on the expanded role, like with a lot of other organizations. I mean with so much to do, you're growing at a high scale, at a healthy clip. Do you think that that's a permanent thing for you? Or should we think about this more as a temporary solution?

Question: Mark Murphy - JPMorgan - Analyst : Nice to see the stability in the operating results this quarter. Daniel, we've been noticing the term agenetic is suddenly becoming very popular. Salesforce came out 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 we think of a bot, and it's following predefined workload -- workflows, excuse me, 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 acting independently, they can adapt, right, maybe sometimes 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 RPA might fit into the AI landscape? And then I have a quick follow-up.

Question: Mark Murphy - JPMorgan - Analyst : Okay. That's a great explanation. 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? Like in other words, customers might reeducate 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 -- there was a bit of a temporary period of confusion before customers figured it out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 9:00PM, PATH.N - Q2 2025 UiPath Inc Earnings Call

Question: Bryan Bergin - TD Cowen - Analyst : Congrats Ashim on the expanded role. My first question, just on demand. Is it macro variability has been a pretty consistent message in how you've described, how enterprises are behaving now for several quarters, we understand things deteriorated last quarter, I guess, late March into April. Can you just comment on what you saw through the balance of 2Q and into August as well?

Question: Bryan Bergin - TD Cowen - Analyst : Okay. And then as it relates to 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 you had? And is it going to provide upside there? Or is it more of a means to achieving that?

Question: Mike Richards - RBC Capital Markets - Analyst : This is Mike Richards on for Matt. Maybe going off that last question there. I was wondering if you could provide some more details on the restructuring just in terms of like [resizing] and what areas were impacted. And then also if you're accounting for any disruption between the restructuring or the general organization changes and guidance?

Question: Sanjit Singh - Morgan Stanley - Analyst : This is Sanjit Singh for Keith Weiss. Dan, you laid out a number of initiatives across operations, products, partners, that customer success. I was wondering as you look at the near to midterm, 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.

Question: Sanjit Singh - Morgan Stanley - Analyst : I really appreciate that perspective. And then reason to my follow-up. On the product side of the house, clearly, there's a lot of innovation going on. We have Autopilot GA coming up, communications mining, process orchestration, Dan, what you highlighted. Historically, when you've talked to customers in the past, some of them have commented that the breadth and depth of the product portfolio was a little overwhelming in terms of where to invest that incremental dollar. Can you talk speak to how the pricing packaging side is evolving along with some of the restructuring changes in terms of making the solution more digestible into the enterprise.

Question: Sitikantha Panigrahi - Mizuho Securities USA - Analyst : Ashim, congratulations on the expanded role. So going back to the, let's say, new business, you talked about challenging macro environment and even some confusion between this AI and RPA, where to invest. But if we dig into the expansion side of your installed base, what are the opportunities or challenges you're seeing at this point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 9:00PM, PATH.N - Q2 2025 UiPath Inc Earnings Call

Question: Sitikantha Panigrahi - Mizuho Securities USA - Analyst : That's great. And a 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 the investment you're doing on the product side. But where do you see the sweet spot? Is it more your product is more addressing the installed base that you have, that's where you have the sweet spot? Or do you think you can effectively compete with the new deals against the new set of competitors?

Question: Dominique Masala - Truist Securities - Analyst : This is [Dominique Masala] on for Terry. So just looking at the recently achieved FedRAMP 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?

Question: Michael Turrin - Wells Fargo Securities, LLC - Analyst : We've touched on the transition a bit and the slight shift in priorities with 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? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 9:00PM, PATH.N - Q2 2025 UiPath Inc Earnings Call 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? Any commentary on just new customer additions and what you're seeing there is also helpful.

Question: Scott Berg - Needham & Company Inc. - Analyst : I'll just go with one in the essence of time here. Ashim, one of the things you mentioned was cloud revenues up 65% year over year to, I think it was just over $850 million. Help us understand, I guess, what deal composition looks like. That's a big number. It's up a lot. I know you're pushing that platform or 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 balance is, I guess, squared on those types of use cases in modules versus maybe what you've seen over the last year or two?