UiPath, Inc. (NYSE: PATH), a leading enterprise automation software company, announced financial results for its second fiscal quarter 2023 ended July 31, with annual recurring revenue (ARR) surpassing $1 billion to reach $1.043 billion.

Despite the growth on business and customers, UiPath posted a net loss of $120 mln in Q2, deepening the losses in six months up to almost $243 million dollars.

Moreover, UiPath reduced its outlook for fiscal-year revenue citing ‘foreign exchange and macroeconomic volatility’ which caused the stocks to plunge more than 20% in aftermarket trading.

Second Quarter Fiscal 2023 Financial Highlights

• Revenue of $242.2 million increased 24 percent year-over-year.
• ARR of $1.043 billion increased 44 percent year-over-year.
• Net new ARR of $66.2 million.
• Dollar based net retention rate of 132 percent.
• GAAP gross margin was 82 percent.
• Non-GAAP gross margin was 84 percent.
• Net cash used in operations was $23.7 million.
• Non-GAAP adjusted free cash flow was negative $23.3 million.
• Cash, cash equivalents, and marketable securities were $1.7 billion as of July 31, 2022.

Source: Company financial presentation

“We delivered a solid second quarter fiscal 2023 despite increasing FX headwinds and macro uncertainty. While our global footprint is an asset to the business, it exposes us to foreign exchange and macroeconomic volatility which is reflected both in our fiscal second quarter results and our fiscal third quarter and full year 2023 financial outlook,” said Ashim Gupta, UiPath Chief Financial Officer.

“Our go forward priority will be to balance investing for long-term growth while managing the business to consistently expand non-GAAP operating margin and deliver sustainable positive non-GAAP adjusted free cash flow in fiscal year 2024 and beyond. We look forward to sharing more detail during our upcoming Investor Day.”

Financial Outlook

For the third quarter fiscal 2023, UiPath expects:

• Revenue in the range of $243 million to $245 million
• ARR in the range of $1,091 million to $1,093 million as of October 31, 2022
• Non-GAAP operating loss in the range of $(30) million to $(25) million

For the full year fiscal 2023, UiPath expects:

• Revenue in the range of $1,002 million to $1,007 million
• ARR in the range of $1,153 million to $1,158 million as of January 31, 2023
• Non-GAAP operating loss of approximately $(15) million