What changed in UiPath, Inc.'s 10-K — 2023 vs 2024

Fiscal Year 2024 Highlights • Revenue of $1,308.1 million increased 24% year-over-year. • ARR of $1,463.7 million increased 22% year-over-year. • Gross margin was 85% for fiscal year 2024, compared to 83% for fiscal year 2023. • Cash and cash equivalents, restricted cash, and marketable securities were $1,880.3 million as of January 31, 2024, compared to $1,759.8 million as of January 31, 2023.

Macroeconomic Environment As a corporation with a global presence, we are subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to, the impact of changes in geopolitical relationships, rising inflation and interest rates, monetary policy changes, and foreign currency fluctuations.

Additionally, these macroeconomic impacts have generally disrupted the operations of our customers, prospective customers, and partners. 60 Table of Contents Internationally, we price our platform in currencies that may not be the functional currency.

Accordingly, the heightened volatility of global markets has exposed us and will continue to expose us to foreign currency fluctuations, which may impact demand for our platform, our near-term results, comparison of results to prior periods, and our ability to predict future results.

Further, cash, cash equivalents, and marketable securities represent a significant portion of our total assets; as such, liquidity concerns in the financial services industry may have an effect on our business, financial conditions, and results of operations. Additionally, the return on our cash, cash equivalents, and marketable securities is sensitive to changes in interest rates.

Volatility in the interest rate environment may impact the amount of interest and other income reported on our consolidated statements of operations, the comparability of these amounts to prior periods, and our ability to predict future profitability.

We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. Fiscal Year 2023 Restructuring Actions On June 24, 2022, our board of directors approved restructuring actions to manage our operating expenses.

These actions included an overall reduction of approximately 5% of our global workforce, aimed at simplifying our go-to-market approach to improve market segmentation, increase sales productivity, and provide best-in-class customer experience and outcomes.

On November 10, 2022, our board of directors approved further restructuring actions, including an additional 6% workforce reduction to further support our strategic positioning to drive increased execution velocity, operational efficiency, and customer centricity. Restructuring actions were completed during the second quarter of fiscal year 2024.

Refer to Note 11, Commitments and Contingencies—Fiscal Year 2023 Restructuring Actions included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

Components of Results of Operations Revenue We derive revenue from the sale of: (1) software licenses for use of our proprietary software and related maintenance and support; (2) the right to access certain software products we host (i.e., SaaS); and (3) professional services.

We have a unified commercial offering for software products with both on-premise and cloud deployment options that allows customers the choice of either deployment option throughout the term of the contract. These Flex Offerings are comprised of three types of performance obligations: term license, maintenance and support, and SaaS.

Licenses Our term licenses (typically sold as a portion of Flex Offerings) provide customers the right to use software for a specified period of time.

Revenue for licenses is recognized at the point in time at which the customer is able to use and benefit from the software, which is generally upon delivery to the customer or upon commencement of the renewal term.

Subscription Services We generate subscription services revenue through the provision of: (1) maintenance and support services, which include technical support and unspecified updates and upgrades on a when-and-if-available basis for our licenses, and (2) SaaS products (typically sold as a portion of Flex Offerings).

Maintenance and support and SaaS products represent stand-ready obligations for which revenue is recognized ratably over the term of the arrangements. Professional Services and Other Professional services and other revenue consists of fees associated with professional services for process automation, customer education, and training services.

Our professional services contracts are structured on a time and materials or fixed price basis, and the related revenue is recognized as the services are rendered. 61 Table of Contents Cost of Revenue Licenses Cost of licenses revenue consists of all direct costs to deliver our licenses to customers, amortization of software development costs related to our licenses, and amortization of acquired developed technology.

Subscription Services Cost of subscription services revenue consists of personnel-related expenses of our customer support and technical support teams, including salaries and bonuses, stock-based compensation expense, and employee benefit costs.

Cost of subscription services revenue also includes third-party consulting services, hosting costs related to our SaaS products, amortization of acquired developed technology and capitalized software development costs related to SaaS products, depreciation, and allocated overhead. Overhead is allocated to cost of subscription services r evenue based on applicable headcount. We recognize these expenses as they are incurred.

We expect cost of subscription services revenue to continue to increase in absolute dollars for the foreseeable future as our SaaS business grows. In the future, we expect further expansion of our cloud-based deployments.

As sales of SaaS products become a larger percentage of our total revenue, we expect our gross margin to be impacted by increased hosting fees and cloud infrastructure costs.

Professional Services and Other Cost of professional services and other revenue primarily consists of personnel-related expenses of our professional services team, including salaries and bonuses, stock-based compensation expense, and employee benefit costs. Cost of professional services and other revenue also includes expenses related to subcontracted third-party services, depreciation, and allocated overhead. We recognize these expenses as they are incurred.

We expect cost of professional services and other revenue to continue to increase in absolute dollars for the foreseeable future. Operating Expenses Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses.

Personnel-related expenses are the most significant component of operating expenses and consist of salaries and bonuses, stock-based compensation expense, and employee benefit costs. Operating expenses also include allocated overhead.

Sales and Marketing Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing teams and related sales support teams, including salaries and bonuses, stock-based compensation expense, and employee benefit costs. Sales and marketing expenses also include sales and partner commissions, marketing event costs, advertising costs, travel, trade shows, other marketing materials, and allocated overhead.

We expect that over the longer term our sales and marketing expenses will decrease as a percentage of revenue, although this percentage may fluctuate from period to period due to timing and extent of expenses.

Research and Development Research and development expenses consist primarily of personnel-related expenses, including salaries and bonuses, stock-based compensation expense, and employee benefits costs for our research and development employees, and allocated overhead. Research and development costs are expensed as incurred, with the exception of certain software development costs which are eligible for capitalization.

We expect that our research and development expenses will increase in absolute dollars for the foreseeable future as we continue to invest in efforts to develop new technology and enhance the functionality and capabilities of our existing products and platform infrastructure.

Our research and development expenses may fluctuate as a percentage of revenue from period to period due to the timing and extent of expenses.

General and Administrative General and administrative expenses consist primarily of personnel-related expenses, including salaries and bonuses, stock-based compensation expense, and employee benefits costs associated with our finance, legal, 62 Table of Contents human resources, compliance, and other administrative teams, as well as accounting and legal professional services fees, other corporate-related expenses, and allocated overhead.

We expect that over the longer term our general and administrative expenses will decrease as a percentage of revenue, although this percentage may fluctuate from period to period due to timing and extent of expenses. Interest Income Interest income consists of interest income earned on our cash and cash equivalents and marketable securities.

Other Income (Expense), Net Other inc ome (expense) , net primarily consists of foreign exchange gains and losses. Other income (expense), net also includes amortization of discounts and premiums on marketable securities, as well as gains and losses associated with foreign currency forward contracts for those periods in which such contracts were outstanding.

Provision For Income Taxes Provision for income taxes consists of U.S. federa l and state income taxes and income taxes in foreign jurisdictions in which we conduct business. We maintain a full valuation allowance on our U.S. federal and state, Romanian, and U.K.

DTAs , as we have concluded as of January 31, 2024 that it is more likely than not that these DTAs will not be realized.

Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as by non-deductible expenses as permanent differences, and by ch anges in our valuation allowances.

Results of Operations The following table sets forth selected consolidated statement of operations data for each of the periods indicated (in thousands): Year Ended January 31, 2024 2023 Revenue: Licenses $ 621,392 $ 497,836 Subscription services 649,918 508,823 Professional services and other 36,762 51,922 Total revenue 1,308,072 1,058,581 Cost of revenue: Licenses (1) 10,469 10,421 Subscription services (1)(2)(3)(4) 111,922 87,366 Professional services and other (2)(3)(4) 73,533 82,264 Total cost of revenue 195,924 180,051 Gross profit 1,112,148 878,530 Operating expenses: Sales and marketing (1)(2)(3)(4) 713,130 701,558 Research and development (2)(3)(4) 332,101 285,750 General and administrative (1)(2)(3)(4) 231,637 239,505 Total operating expenses 1,276,868 1,226,813 Operating loss (164,720) (348,283) Interest income 57,130 27,955 Other income, net 31,775 2,767 Loss before income taxes (75,815) (317,561) Provision for income taxes 14,068 10,791 Net loss $ (89,883) $ (328,352) 63 Table of Contents (1) Includes amortization of acquired intangible assets as follows (in thousands): Year Ended January 31, 2024 2023 Cost of licenses revenue $ 3,371 $ 2,754 Cost of subscription services revenue 2,359 1,811 Sales and marketing 2,706 2,153 General and administrative 164 178 Total amortization of acquired intangible assets $ 8,600 $ 6,896 (2) Includes stock-based compensation expense as follows (in thousands): Year Ended January 31, 2024 2023 Cost of subscription services revenue $ 14,750 $ 11,894 Cost of professional services and other revenue 10,958 11,855 Sales and marketing 144,863 154,922 Research and development 117,965 102,546 General and administrative 83,419 88,623 Total stock-based compensation expense $ 371,955 $ 369,840 (3) Includes employer payroll tax expense related to employee equity transactions as follows (in thousands): Year Ended January 31, 2024 2023 Cost of subscription services revenue $ 434 $ 272 Cost of professional services and other revenue 327 263 Sales and marketing 4,176 4,605 Research and development 3,027 1,692 General and administrative 1,924 930 Total employer payroll tax expense related to employee equity transactions $ 9,888 $ 7,762 (4) Includes restructuring expense as follows (in thousands): Year Ended January 31, 2024 2023 Cost of subscription services revenue $ 114 $ 182 Cost of professional services and other revenue — 710 Sales and marketing 1,376 19,491 Research and development 387 494 General and administrative 749 2,569 Total restructuring expense $ 2,626 $ 23,446 64 Table of Contents The following table sets forth our consolidated statement of operations data expressed as a percentage of revenue for the periods indicated: Year Ended January 31, 2024 2023 Revenue: Licenses 47 % 47 % Subscription services 50 % 48 % Professional services and other 3 % 5 % Total revenue 100 % 100 % Cost of revenue: Licenses 1 % 1 % Subscription services 8 % 8 % Professional services and other 6 % 8 % Total cost of revenue 15 % 17 % Gross profit 85 % 83 % Operating expenses: Sales and marketing 55 % 66 % Research and development 25 % 27 % General and administrative 18 % 23 % Total operating expenses 98 % 116 % Operating loss (13) % (33) % Interest income 4 % 3 % Other income, net 3 % — % Loss before income taxes (6) % (30) % Provision for income taxes 1 % 1 % Net loss (7) % (31) % Comparison of Fiscal Year 2024 and Fiscal Year 2023 Revenue Year Ended January 31, 2024 2023 Change % Change (dollars in thousands) Licenses $ 621,392 $ 497,836 $ 123,556 25 % Subscription services 649,918 508,823 141,095 28 % Professional services and other 36,762 51,922 (15,160) (29) % Total revenue $ 1,308,072 $ 1,058,581 $ 249,491 24 % Total revenue increased by $249.5 million, or 24%, for fiscal year 2024 compared to fiscal year 2023, primarily due to a $141.1 million increase in subscription services revenue, related in part to the transition to our Flex Offerings, and a $123.6 million increase in licenses revenue.

As we continued to expand our sales efforts in the U.S. and internationally, our revenue increased across all regions. Of the growth in total revenue, 12% was attributable to new customers and 88% was attributable to existing customers.

Subscription services revenue is recognized ratably over the subscription term; therefore, the increase in subscription services revenue is driven both by sales in prior periods for which we continue to provide maintenance and support and SaaS and by new sales in the current period. 65 Table of Contents Cost of Revenue and Gross Margin Year Ended January 31, 2024 2023 Change % Change (dollars in thousands) Licenses $ 10,469 $ 10,421 $ 48 — % Subscription services 111,922 87,366 24,556 28 % Professional services and other 73,533 82,264 (8,731) (11) % Total cost of revenue $ 195,924 $ 180,051 $ 15,873 9 % Gross margin 85 % 83 % Total cost of revenue increased by $15.9 million, or 9%, for fiscal year 2024 compared to fiscal year 2023, primarily due to an increase in cost of subscription services revenue, partially offset by a decrease in cost of professional services and other revenue.

The increase in cost of subscription services revenue was primarily driven by a $14.3 million increase in personnel-related expenses, which included a $9.7 million increase in salary-related and bonus expenses associated with both increased headcount and merit increases, a $2.9 million increase in stock-based compensation expense, and a $1.4 million increase in employee insurance costs.